District of New Jersey
Press releases recorded for this federal judicial district.
Three Charged for Fraudulently Seeking $2.9 Billion in COVID-19 Tax CreditsRead the Press Release
NEWARK, N.J. – Three individuals were charged today for falsely seeking more than $2.9 billion from the IRS by filing 131 false tax forms claiming COVID-19 related employment tax credits, U.S. Attorney Philip R. Sellinger announced.
Rudolph Johnson, Frantz Pasteur, and Frederick Anderson, all of Irvington, New Jersey, are each charged by complaint with one count of conspiracy to file false claims against the government and one count of conspiracy to commit wire and mail fraud. Additionally, Johnson is charged with three counts of money laundering, Pasteur with two counts of money laundering, and Anderson with three counts of money laundering. Johnson and Pasteur appeared today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and were released on bail. Anderson will appear at a later date.
According to the documents filed in this case and statements made in court:
In response to the COVID-19 pandemic and its economic impact, Congress authorized an employee retention tax credit (ERC) that a small business could use to reduce the employment tax it owed to the IRS.
To qualify, the business had to have been in operation in 2020 and to have experienced at least a partial suspension of its operations because of a government order related to COVID-19 (for example, an order limiting commerce, group meetings or travel) or a significant decline in profits. The credit was an amount equal to a set percentage of the wages that the business paid to its employees during the relevant time period, subject to a maximum amount. Congress also authorized the IRS to give a credit against employment taxes to reimburse businesses for the wages paid to employees who were on sick or family leave and could not work because of COVID-19.
From June 2021 to November 2023, Johnson, Pasteur, and Anderson established a slew of sham entities and filed fraudulent IRS forms in the names of these entities claiming fraudulent entitlement to tax refunds, including the ERC. These entities had limited tax histories, never paid any W-2 wages, and made only nominal, if any, payments to the IRS. In total, the defendants claimed $2.9 billion in tax benefits, and as a result, the U.S. Treasury issued $1.03 million in refunds. Subsequently, the defendants deposited the falsely claimed refunds into their bank accounts and used the money to purchase various items such as luxury cars to fraudulently enrich themselves.
The conspiracy to file false claims against the government offense carries a maximum penalty of 10 years in prison and a $250,000 fine. The conspiracy to commit wire and mail fraud offense carries a maximum penalty of 20 years in prison and a $250,000 fine. Each of the money laundering offenses carries a maximum penalty of 10 years in prison and a $250,000 fine or twice the value of the criminally derived property.
U.S. Attorney Sellinger credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins; and postal inspectors from the U.S. Postal Service, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division, with the investigation leading to today’s charges. A civil referral from the IRS Office of Fraud Enforcement contributed to the indictments in this criminal complaint.
The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.
The government is represented by Assistant U.S. Attorney Dong Joo Lee of the Cybercrime Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
johnsonetal.complaint.pdfBank Insider Charged with Obstruction after Making False Statements to Agents About Accepting BribesRead the Press Release
NEWARK, N.J. – A Florida-based employee of an international financial institution was arrested today for obstruction of justice after making false statements to agents about accepting bribes, U.S. Attorney Philip R. Sellinger announced.
Gerardo Fermin Aquino Vargas, 38, of Hollywood, Florida, is charged by complaint with one count of obstruction of justice. Aquino had his initial appearance today before U.S. Magistrate Judge Jared M. Strauss in Miami, Florida federal court and was released on $100,000 bond.
According to documents filed in this case and statements made in court:
Aquino worked for an international financial institution at a branch located in Hollywood. Starting in April 2022, Aquino repeatedly and corruptly accepted bribes from individuals in exchange for opening accounts in the names of straw owners who were not present at the account openings. In exchange for the bribes, Aquino also issued debit cards for these accounts and unblocked debit cards that had been flagged for potential fraud by the financial institution. These accounts were used to transfer millions of dollars from the United States to Colombia.
When Aquino was interviewed by law enforcement in November 2023, he made false statements, including that he had only opened one or two accounts when the purported owners were not present at the bank and that he had never received payment for such actions. In fact, Aquino opened at least 28 accounts in this manner and accepted thousands of dollars in bribes for doing so. Aquino’s false statements obstructed a grand jury investigation being conducted in the District of New Jersey.
The charge of obstruction carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross amount of any pecuniary gain that any persons derived from the offense, or twice the gross amount of any pecuniary loss sustained by any victims of the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents and task force officers of the Internal Revenue Service – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; special agents and task force officers of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Denise Foster in San Juan, Puerto Rico; and special agents of the Federal Deposit Insurance Corporation – Office of Inspector General, New York Division, under the direction of Special Agent in Charge Patricia Tarasca with the investigation leading to the charges. He also thanked the U.S. Attorney’s Office for the Southern District of Florida; U.S. Customs and Border Protection in Atlanta, Georgia; Internal Revenue Service – Criminal Investigation in Miami, Florida; Federal Deposit Insurance Corporation – Office of Inspector General, South Florida Division; U.S. Drug Enforcement Administration in Miami, Florida; and U.S. Customs and Border Protection in Miami and Fort Lauderdale, Florida for their assistance with the investigation.
The government is represented by Assistant U.S. Attorney Marko Pesce of the Economic Crimes Unit in Newark and Trial Attorneys D. Zachary Adams, Chad Davis, and Chelsea Rooney of the Justice Department’s Money Laundering and Asset Recovery Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
aquino.complaint.pdfPharmaceutical Company Settles Allegations it Received Improper Paycheck Protection Program LoanRead the Press Release
NEWARK, N.J. – A pharmaceutical manufacturer based in Puerto Rico entered into a settlement agreement with the United States resolving allegations that the company violated the False Claims Act by taking a loan from the Paycheck Protection Program (PPP) to which the company was not entitled, U.S. Attorney Philip Sellinger announced today.
According to the allegations in the complaint and the contentions of the United States in the settlement agreement:
On March 4, 2021, Caribe Holdings Cayman Co. Ltd. (Caribe) applied for a PPP loan totaling $1.2 million. The company certified that it was eligible to receive a PPP loan and specifically that it was not an “an entity created in or organized under the laws of the People’s Republic of China” and that no such entity owned or held 20 percent or more of the economic interest in Caribe. That certification was not true at the time Caribe submitted the application and Caribe would not have qualified for the PPP loan if it answered the question accurately. After receiving the PPP loan, Caribe sought and received forgiveness of the total amount of the loan.
U.S. Attorney Philip R. Sellinger“The Paycheck Protection Program was just one of several efforts by the United States to help companies and people through the COVID-19 pandemic. Unfortunately, too many entities saw these programs as opportunities to line their pockets with money to which they weren’t entitled. Our office is always on the lookout to find anyone who has tried to take advantage of programs like this, and ensure that they are held accountable for taking taxpayer money that they weren’t entitled to.”
Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses.
Caribe fully cooperated in the investigation and resolution of this matter. In accordance with the terms of the settlement agreement, Caribe has paid the United States $1.99 million. The settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties, called relators, to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. In this matter, the relator is receiving $199,103 as his share in the recovery.
The government is represented by Assistant U.S. Attorney David V. Simunovich of the Health Care Fraud Unit in Newark.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The qui tam case is captioned United States ex rel. GNGH2, Inc. v. PuraCap International LLC, et al., Civil Action No. 23-2068 (D.N.J.).
caribe.settlement.pdfFormer Telecommunications Company Manager Admits Role in SIM Swapping SchemeRead the Press Release
CAMDEN, N.J. – A former manager of a telecommunications company from Burlington County, New Jersey, admitted swapping the Subscriber Identity Module (SIM) numbers of cell phone customers into mobile devices controlled by another individual, who was paying the former manager for the unauthorized swaps, Attorney for the United States Vikas Khanna announced today.
Jonathan Katz, aka “Luna,” 42, of Marlton, New Jersey, pleaded guilty before Chief U.S. District Judge Renée Marie Bumb in Camden federal court on March 12, 2024, to an information charging Katz with conspiracy to gain unauthorized access to a protected computer.
According to documents filed in this case and statements made in court:
In May 2021, Katz was employed as a manager at a telecommunications store and accessed several customer accounts by using managerial credentials. Katz swapped the SIM numbers associated with the customers’ phone numbers into mobile devices controlled by another individual, enabling this other individual to control the customers’ phones and access the customers’ electronic accounts – including email, social media, and cryptocurrency accounts. In exchange for the swaps, Katz was paid in Bitcoin, which was traced back to Katz’s cryptocurrency account.
The conspiracy to gain unauthorized access to a computer offense carries a statutory maximum of five years in prison and a fine of not more than $250,000 or twice the pecuniary gain to the defendant or twice the gross loss involved, whichever is greater. Sentencing is scheduled for July 16, 2024.
Attorney for the United States Khanna credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Dong Joo Lee of the U.S. Attorney’s Cybercrime Unit.
katz.information.pdfFormer Atlantic City Councilman Admits Submitting False Voter RegistrationsRead the Press Release
CAMDEN, N.J. – A former Atlantic City councilman today admitted falsifying voter registrations, U.S. Attorney Philip R. Sellinger announced.
MD Hossain Morshed, 50, a former councilman of Atlantic City’s Fourth Ward, pleaded guilty today before Chief U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging him with fraudulent procurement and submission of voter registration applications.
U.S. Attorney Philip R. Sellinger“This defendant admitted that he attempted to deprive residents of New Jersey of a fair election by obtaining false voter registration applications and facilitating their submission. Working with our law enforcement partners, we were able to uncover Morshed’s efforts to garner votes from residents who were not allowed to vote for him. We are committed to investigating and prosecuting those who unlawfully attempt to compromise the integrity of our elections.”
“When you sign up to serve in public office, you are, and should be, held to a higher standard. Morshed admits he knowingly committed voter fraud, and then directed others to lie about it,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Our voting processes and electoral functions are the bedrock of our democracy, and even a single elected official breaking to law in the hopes of returning to power creates cracks in the foundation. We must do all we can as law enforcement to protect our fundamental structure.”
According to documents filed in this case and statements made in court:
In April 2019, in advance of the June 2019 primary election, Morshed gave a prospective voter a New Jersey voter registration application that had already been filled out and which falsely asserted that the prospective voter had a residential address in the Fourth Ward (in Atlantic City), the ward that Morshed represented on the Atlantic City Council. Even though the address written on the form was not where the voter actually lived, Morshed urged the prospective voter to sign the application. Subsequently, Morshed visited the prospective voter at the voter’s actual residence and presented the prospective voter with a vote-by-mail application to sign which included the same false Fourth Ward Atlantic City address that was on the voter registration application and listed yet another false Atlantic City address for where the mail-in ballot should be sent to the voter.
The Atlantic County Superintendent of Elections subsequently received the falsified voter registration application that Morshed had the prospective voter sign and thereafter, the Atlantic County Board of Elections received the prospective voter’s completed mail-in ballot, and that ballot was counted towards the June 2019 primary election. The prospective voter later admitted that the voter did not receive, complete, or return the mail-in ballot. During lawfully recorded conversations between this voter and Morshed concerning possible questioning by law enforcement, Morshed directed the voter, if questioned by law enforcement, to make false representations about where the voter lived and who filled out the voter forms that Morshed had given to the voter. Sentencing is scheduled for July 16, 2024.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Dennehy; the FBI’s Newark, Atlantic City Resident Agency’s Public Corruption Task Force, including the Atlantic County Prosecutor's Office, under the direction of Prosecutor William Reynolds; the Atlantic City Police Department, under the direction of Officer-in-Charge Chief James A. Sarkos; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; and the Cape May County Prosecutor's Office, under the direction of Prosecutor Jeffrey H. Sutherland; as well as special agents of the U.S. Department of Labor, Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone; and postal inspectors of the U.S. States Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge Christopher A. Nielsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Eric A. Boden, Attorney-in-Charge of the Trenton Branch Office and Assistant U.S. Attorney James H. Graham of the Organized Crime/Gangs Unit, under the supervision of the Special Prosecutions Division.
morshed.information.pdfExecutive Assistant U.S. Attorney to Leave Office after Stellar 14-Year CareerRead the Press Release
NEWARK, N.J. – U.S. Attorney Philip R. Sellinger announced today that Executive Assistant U.S. Attorney Lee M. Cortes Jr. is leaving the office for private practice after a 14-year career in the District of New Jersey, during which he served in a variety of key roles and made immense contributions to the cause of justice.
Cortes, who came to the office in 2010, oversaw the office’s Health Care Fraud Unit and was deputy chief of the Special Prosecutions Division before taking over as Executive U.S. Attorney. He also worked as a line attorney in the office, trying several federal criminal trials, as well as investigating and taking guilty pleas in some of the office’s most significant matters.
U.S. Attorney Philip R. Sellinger“Lee Cortes is one of the finest attorneys to have worked at the U.S. Attorney’s Office. He has worked on and supervised some of our most complex and important matters and has always conducted himself in the highest traditions of the office. As Executive Assistant U.S. Attorney, Lee has been part of my core management team, overseeing a staff of more than 300 as we work together every day to keep New Jersey safe. In his 14 years with the office, Lee has set a standard of excellence that serves as a model for all of our Assistant U.S. Attorneys.”
While serving as chief of the Health Care Fraud Unit, Cortes supervised a dozen Assistant U.S. Attorneys and directed criminal and civil investigations and prosecutions of corporations, executives, doctors, pharmacies, and others for health care-related offenses. These included health care fraud and violations of the Anti-Kickback Statute, the Federal Food, Drug, and Cosmetic Act, and the Foreign Corrupt Practices Act. He also directed the unit’s qui tam practice and supervised health care-related False Claims Act actions.
As deputy chief of the Special Prosecutions Division, Cortes supervised a dozen federal prosecutors handing public corruption matters, including prosecutions for civil rights violations.
“As a prosecutor, Lee has always acted with integrity, demonstrated an unwavering commitment to fairness, and worked extraordinarily hard to ensure just outcomes,” U.S. Attorney Sellinger said. “His achievements will be remembered, and his presence will be missed.”
Camden County Businessman Admits Filing False Tax ReturnsRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, businessman admitted filing false tax returns that failed to report all of his income, U.S. Attorney Philip R. Sellinger announced today.
Anthony Cardellia, 59, of Blackwood, New Jersey, pleaded guilty before U.S. District Judge Christine P. O’Hearn in Camden federal court on March 12, 2024, to an information charging him with one count of making and subscribing a false income tax return.
According to documents filed in this case and statements made in court:
Barreras owned, operated, and worked at home improvement contractors in the Philadelphia metropolitan area. Cardellia admitted that during 2016 and 2017, he used a commercial check casher to negotiate over $1.9 million of revenue checks for the home improvement businesses at which he worked. Cardellia kept about $190,000 of the cash proceeds, which he failed to report as income on his individual income tax returns. Cardellia admitted that he caused a tax loss of more than $45,000.
The count of making and subscribing a false tax return carries a maximum penalty of three years in prison and a fine of up to $250,000. Sentencing is scheduled for July 18, 2024.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
cardellia.information.pdfEssex County Man Charged with Possession of Firearm and FentanylRead the Press Release
NEWARK, N.J. – An Essex County man has been arrested on drug and weapons charges, U.S. Attorney Philip R. Sellinger announced today.
William Elliot, 42, of Newark, is charged by complaint with one count of possession of a firearm by a convicted felon, one count of possession with intent to distribute fentanyl and cocaine, and one count of possession of a firearm in furtherance of a drug trafficking crime. He appeared before U.S. Magistrate Judge André M. Espinosa in Newark federal court on March 7, 2024, and was detained.
According to documents filed in this case and statements made in court:
On March 6, 2024, law enforcement officers responded to Elliot’s residence and executed lawful searches of his residence and two vehicles, recovering over 40 grams of fentanyl labeled “GMA” and “SRT,” over 300 grams of cocaine, ammunition, and a Ruger Model P94 .40 caliber firearm.
The count of being a felon in possession of a weapon is punishable by a maximum of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest; the count of possession with intent to distribute fentanyl and cocaine is punishable by a statutory minimum of five years in prison, a maximum of 40 years in prison and a fine of $5 million, or twice the gross gain or loss, whichever is greatest. The count of possession of a firearm in furtherance of a drug crime in punishable by a mandatory minimum of five years in prison, a maximum of live in prison, and a fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest.
The charges carry a mandatory minimum prison sentence of 10 years.
U.S. Attorney Sellinger credited special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Bryan Miller; and the Jersey City Police Department Intelligence Unit, under the direction of Public Safety Director James Shea, with the investigation leading to the charges.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Assistant U.S. Attorney Megan Linares of the Organized Crime/Gang 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.
elliot.complaint.pdfCalifornia Man Charged with Possession with Intent to Distribute FentanylRead the Press Release
NEWARK, N.J. – A California man was charged today with possession with intent to distribute fentanyl, U.S. Attorney Philip R. Sellinger announced.
Timothy Alan Blank, 54, of California is charged by complaint with one count of knowingly and intentionally possessing with the intent to distribute a quantity of a mixture and substance containing a detectable amount of fentanyl in Bergen County, New Jersey, and elsewhere. He appeared before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and was detained.
According to documents filed in this case and statements made in court:
On March 3, 2024, Blank traveled in an SUV from Los Angeles, California, to the District of New Jersey with approximately 5 kilograms of fentanyl inside of the vehicle. On March 8, 2024, New Jersey state law enforcement observed Blank commit a motor vehicle violation, and upon stopping the vehicle and conducting an inspection, located the narcotics within the trunk of the SUV.
The fentanyl count carries a maximum penalty of 20 years in prison and a $1 million fine.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso, with the investigation leading to the charge. He also thanked the Bergen County Sheriff’s Office, the Fort Lee Police Department and the U.S. Customs and Border Protection Air and Marine Operations.
The government is represented by Assistant U.S. Vincent D. Romano of the U.S. Attorney’s Narcotics/Organized Crime Drug Enforcement Task Force (OCDETF) 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.
blank.complaint.pdfInvestment Firm Owner Charged with Defrauding at Least 30 Victim Investors over Three DecadesRead the Press Release
NEWARK, NJ. – A Monmouth County, New Jersey, man who owned and operated a purported investment firm was arrested today and charged with engaging in a decades-long scheme to defraud at least 30 victims of more than $5 million, U.S. Attorney Philip R. Sellinger announced today.
Vincent Dispoto Jr., 66, of Belmar, New Jersey, is charged by complaint with one count of wire fraud. He is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge André M. Espinosa in Newark federal court.
According to documents filed in the case and statements made in court:
Dispoto owned and operated Giddeon Financial Services, a purported investment services firm, and Liberty Mortgage Services, an alleged mortgage company. Beginning in 1988, Dispoto raised money through these and other entities by falsely claiming to victims, many of whom were elderly, that he would invest their money in low-risk investment products with guaranteed rates of return, including municipal bonds and certificates of deposits. Dispoto also told some victims that he was using their investments to fund loans and mortgages for medical professionals, which would generate long-term returns through interest payments. To perpetuate his fraud, Dispoto mailed victims false and fraudulent financial statements that purported to show significant increases in the value of their investments.
In reality, Dispoto did not invest the victims’ money as promised. Instead, he used it to make Ponzi-like payments to other victims, which he falsely claimed to be “returns” on investments. He also misappropriated victim money to fund his gambling and other personal expenses. Dispoto’s scheme collectively resulted in more than $5 million in losses to victims.
The wire fraud charge carries a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys Jennifer Kozar of the U.S. Attorney’s Office Economic 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.
dispoto.complaint.pdfGang Member Sentenced to Seven Years in Prison on Racketeering Charge and Related CrimesRead the Press Release
NEWARK, N.J. – A member of the Rollin’ 60s Neighborhood Crips gang was sentenced today to 84 months in prison for his role a racketeering conspiracy, U.S. Attorney Philip R. Sellinger announced today.
Amir Edmonds, aka “G Baby,” 22, of Newark, pleaded guilty on Sept. 13, 2023, before U.S. District Judge Susan D. Wigenton to a superseding indictment that charged him with Racketeer Influenced and Corrupt Organizations (RICO) conspiracy, possession with intent to distribute fentanyl and cocaine and possessing a firearm in furtherance of a drug trafficking crime. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2015 through Sept. 22, 2022, Edmonds was a member of the Rollin’ 60s Neighborhood Crips, a criminal enterprise responsible for acts of violence and the distribution of controlled substances in the District of New Jersey and elsewhere. Edmonds previously admitted to working with at least one other member of the enterprise to distribute controlled substances. On Jan. 7, 2020, Edmonds possessed with intent to distribute cocaine and fentanyl, and possessed a firearm in furtherance of that drug offense.
In addition to the prison term, Judge Wigenton sentenced Edmonds to four years of supervised release.
U.S. Attorney Sellinger credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Bryan Miller; investigators of the U.S. Marshals Service, under the direction of Marshal Juan Mattos; the Irvington Police Department, under the direction of Police Division Director Tracy Bowers; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; the Newark Police Department, under the direction of Public Safety Director Fritz Fragé; the Bloomfield Police Department, under the direction of Director of Public Safety Samuel A. DeMaio; the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; the East Orange Police Department, under the direction of Chief Phyllis L. Bindi; the Elizabeth Police Department, under the direction of Police Director Earl J. Graves; the Edison Police Department, under the direction of Chief of Police Tom Bryan; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Union County Prosecutor’s Office, under the direction of Prosecutor William A. Daniel; the Spotswood Police Department, under the direction of Chief Philip Corbisiero; and the North Carolina State Bureau of Investigation Fugitive and Missing Person Task Force, which includes members of the FBI, with the investigations leading to the charges in the Rollin 60’s Neighborhood Crips investigation.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The government is represented by Assistant U.S. Attorney Francesca Liquori of the Special Prosecutions Division.
Union County Man Sentenced to 41 Months in Prison for Role in Interstate Car Theft RingRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man was sentenced today to 41 months in prison for his role in a conspiracy to steal and transport across state lines luxury cars stolen from towns in New York, Connecticut, and New Jersey, U.S. Attorney Philip Sellinger announced.
Malik Baker, 30, of Vauxhall, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of conspiring to transport stolen vehicles in interstate commerce and one count of receiving a stolen vehicle that had crossed state lines after being stolen. Judge Salas imposed the sentence today in Newark federal court.
Baker’s conspirators – Hakeem Smith, Nafique Goodwyn, and Bilal Cureton – previously pleaded guilty to related charges. Smith was sentenced on April 25, 2023, to 41 months in prison. Goodwyn was sentenced on Feb. 27, 2024, to time served. Cureton is awaiting sentencing.
According to documents filed in this case and statements made in court:
Since as early as July 2019, the defendants and others stole and conspired to steal at least 10 luxury cars from towns in New York, Connecticut, and New Jersey, and hid those cars at a location in Irvington, New Jersey. The cars include a 2019 BMW X4 M40i, stolen from Greenwich, Connecticut, on July 19, 2019; a 2017 BMW Alpina, stolen from Hewlett Bay Park, New York, on July 22, 2019; a 2017 Maserati GranTurismo, stolen from Manalapan, New Jersey, on Aug. 5, 2019; a 2018 Range Rover and a 2019 Porsche Cayenne, stolen from New City, New York, on Aug. 6, 2019; a 2017 Mercedes S550 and a 2019 Rolls Royce, stolen from Hewlett Bay Park, New York, on Aug. 13, 2019; a 2019 Land Rover, stolen from Kensington, New York, on Aug. 22, 2019; a 2019 Mercedes Maybach, stolen from Quogue, New York, on Aug. 29, 2019; a 2014 Lexus GS, stolen from West Long Branch, New Jersey, on Aug. 29, 2019; a 2017 BMW M4, stolen from Marlton, New Jersey, on Sept. 7, 2019; and a 2017 Mercedes AMG S63, stolen from Orangeburg, New York, in September 2019.
The defendants often used the stolen cars to steal more cars, and, in one instance, they used a Maserati GranTurisimo they stole from Manalapan to steal a Range Rover and a Porsche Cayenne. When law enforcement attempted to conduct a stop of the Maserati, the Maserati accelerated and crashed head-on into a police vehicle before the suspects fled the scene in another stolen vehicle. Law enforcement recovered one of the stolen cars in a shipping container at the port in Newark en route to Ghana, Africa.
In addition to the prison term, Judge Salas sentenced Baker to three years of supervised release.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and the Newark Police Department, under the direction of Public Safety Director Fritz G. Fragé. He also thanked officers with the Irvington Township Police Department, under the direction of Director Tracy Bowers; the Clarkstown Police Department, under the direction of Chief Jeffrey Wanamaker; the Wall Township Police Department, under the direction of Chief Sean O’Halloran; the Marlboro Township Police Department, under the direction of Chief Peter Pezzullo; the Tewksbury Township Police Department, under the direction of Chief Tim Barlow; the Port Authority Police Department, under the direction of Superintendent Edward Cetnar; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Hunterdon County Prosecutor’s Office, under the direction of Prosecutor Renée M. Robeson. He also thanked officers with Customs and Border Protection, New York Field Office, under the direction of Director of Field Operations Francis J. Russo; special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Robert Kurtz; and the Department of Commerce-Office of Export Enforcement, under the direction of Special Agent in Charge Jonathan Carson in New York, with the investigation leading to the charges.
This investigation is part of the Violent Crime Initiative (VCI) in Newark. The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety to combat violent crime in and around Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA New Jersey Division, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Board of Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
The government is represented by Assistant U.S. Attorney Christopher Amore, Chief of the General Crimes Unit.
New York Acupuncturist Admits $9 Million Health Care Fraud Targeting AmtrakRead the Press Release
NEWARK, N.J. – A New York acupuncturist today admitted participating in a $9 million health care fraud scheme to defraud Amtrak, U.S. Attorney Philip R. Sellinger announced.
Punson Figueroa, aka “Susie,” 57, of Long Island City, New York, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging her with conspiracy to commit health care fraud.
“This defendant has admitted to fleecing the health care system for millions of dollars in illicit claims,” U.S. Attorney Sellinger said. “Submitting fraudulent claims to steal money harms the public and the health care system. My office and our partners are committed to stopping health care scams and ensure that guilty participants are punished.”
“We remain fully committed to bringing justice to those who target Amtrak’s health care plans, including Amtrak employees who wrongly accept payments for the use of their insurance information to further such schemes,” said Amtrak’s Inspector General, Kevin H. Winters. “We hope this case serves as a deterrent for health care providers and Amtrak employees who may choose to engage in such schemes, and we ask anyone who suspects or observes such fraud to report it to our fraud, waste, and abuse hotline.”
“This investigation unveiled the mastermind behind a $9 million health care fraud scheme,” DEA – New York Special Agent in Charge Frank Tarentino said. “I applaud our law enforcement partners whose diligent work put an end to this conspiracy and brought Punson Figueroa to justice to face the consequences of her illegal actions.”
“This case demonstrates Amtrak’s resolve to work alongside all our law enforcement partners to investigate and hold accountable those who attempt to defraud the system,” Chief Sam Dotson said. “We are grateful for the collaborative law enforcement effort that led to this guilty plea, and we will continue to be vigilant in safeguarding Amtrak’s assets.”
According to documents filed in this case and statements made in court:
From January 2019 through June 2022, Figueroa and her conspirators agreed to engage in a scheme to bill the Amtrak health care plan for fraudulent claims for services that never were provided and were medically unnecessary. Figueroa recruited Amtrak employees to participate in the scheme by paying them cash in return for allowing her to use their personal and insurance information to submit false and fraudulent claims. Figueroa conspired with dozens of Amtrak employees and paid hundreds of thousands of dollars in cash kickbacks to Amtrak employees over the course of the scheme.
On June 16, 2021, an undercover law enforcement agent posing as an Amtrak employee met with Figueroa at Figueroa’s office in New York. Figueroa instructed the undercover agent to sign his name about 30 times for services received and instructed the undercover agent not to date the signatures. Figueroa caused false claims to be submitted to Amtrak’s health care plan indicating that the undercover agent had visited providers at least seven times in May 2021, purportedly receiving acupuncture and physical therapy services.
The undercover agent visited Figueroa’s office on only one other occasion, on July 29, 2021. At this meeting, Figueroa handed the undercover agent an envelope filled with $1,000. Thereafter, Figueroa continued to use the undercover agent’s personal and insurance information to submit dozens of fraudulent claims to the Amtrak health care plan.
In total, Figueroa caused Amtrak to pay out over $9 million in false and fraudulent insurance claims.
The charge of conspiracy to commit health care fraud carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for July 16, 2024.
U.S. Attorney Sellinger credited special agents of the Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters, special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Frank A. Tarentino III in New York, and the Amtrak Police Department, under the direction of Chief of Police Sam Dotson, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Katherine M. Romano and Jessica R. Ecker of the Health Care Fraud Unit in Newark.
figueroa.information.pdfNew York Acupuncturist Admits $9 Million Health Care Fraud Targeting AmtrakRead the Press Release
NEWARK, N.J. – A New York acupuncturist today admitted participating in a $9 million health care fraud scheme to defraud Amtrak, U.S. Attorney Philip R. Sellinger announced.
Punson Figueroa, aka “Susie,” 57, of Long Island City, New York, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging her with conspiracy to commit health care fraud.
U.S. Attorney Philip R. Sellinger“This defendant has admitted to fleecing the health care system for millions of dollars in illicit claims. Submitting fraudulent claims to steal money harms the public and the health care system. My office and our partners are committed to stopping health care scams and ensure that guilty participants are punished.”
“We remain fully committed to bringing justice to those who target Amtrak’s health care plans, including Amtrak employees who wrongly accept payments for the use of their insurance information to further such schemes,” said Amtrak’s Inspector General, Kevin H. Winters. “We hope this case serves as a deterrent for health care providers and Amtrak employees who may choose to engage in such schemes, and we ask anyone who suspects or observes such fraud to report it to our fraud, waste, and abuse hotline.”
“This investigation unveiled the mastermind behind a $9 million health care fraud scheme,” DEA – New York Special Agent in Charge Frank Tarentino said. “I applaud our law enforcement partners whose diligent work put an end to this conspiracy and brought Punson Figueroa to justice to face the consequences of her illegal actions.”
“This case demonstrates Amtrak’s resolve to work alongside all our law enforcement partners to investigate and hold accountable those who attempt to defraud the system,” Chief Sam Dotson said. “We are grateful for the collaborative law enforcement effort that led to this guilty plea, and we will continue to be vigilant in safeguarding Amtrak’s assets.”
According to documents filed in this case and statements made in court:
From January 2019 through June 2022, Figueroa and her conspirators agreed to engage in a scheme to bill the Amtrak health care plan for fraudulent claims for services that never were provided and were medically unnecessary. Figueroa recruited Amtrak employees to participate in the scheme by paying them cash in return for allowing her to use their personal and insurance information to submit false and fraudulent claims. Figueroa conspired with dozens of Amtrak employees and paid hundreds of thousands of dollars in cash kickbacks to Amtrak employees over the course of the scheme.
On June 16, 2021, an undercover law enforcement agent posing as an Amtrak employee met with Figueroa at Figueroa’s office in New York. Figueroa instructed the undercover agent to sign his name about 30 times for services received and instructed the undercover agent not to date the signatures. Figueroa caused false claims to be submitted to Amtrak’s health care plan indicating that the undercover agent had visited providers at least seven times in May 2021, purportedly receiving acupuncture and physical therapy services.
The undercover agent visited Figueroa’s office on only one other occasion, on July 29, 2021. At this meeting, Figueroa handed the undercover agent an envelope filled with $1,000. Thereafter, Figueroa continued to use the undercover agent’s personal and insurance information to submit dozens of fraudulent claims to the Amtrak health care plan.
In total, Figueroa caused Amtrak to pay out over $9 million in false and fraudulent insurance claims.
The charge of conspiracy to commit health care fraud carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for July 16, 2024.
U.S. Attorney Sellinger credited special agents of the Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters, special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Frank A. Tarentino III in New York, and the Amtrak Police Department, under the direction of Chief of Police Sam Dotson, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Katherine M. Romano and Jessica R. Ecker of the Health Care Fraud Unit in Newark.
figueroa.information.pdfSussex County Man Admits Distribution of Child PornographyRead the Press Release
NEWARK, N.J. – A Sussex County, New Jersey, man admitted distributing videos and images of child sexual abuse, U.S. Attorney Philip R. Sellinger announced today.
Gaetano Lapegna, 65, of Franklin, New Jersey pleaded guilty on March 5, 2024, before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with one count of distribution of child pornography.
According to documents filed in this case and statements made in court:
From December 2022 to March 2023, Lapegna distributed videos and images of child sexual abuse via a publicly available online peer-to-peer (P2P) file-sharing program. During the course of the investigation, an undercover law enforcement officer conducted online sessions using the P2P program, during which a user shared hundreds of videos and images of child sexual abuse from an IP address traced to Lapegna’s address.
Subsequent to a lawful search of his residence on March 30, 2023, law enforcement officers recovered over 100 items depicting child pornography on Lapegna’s thumb drive. Law enforcement also found that Lapegna’s computer was running the same version of the P2P program from which law enforcement downloaded child pornography from Lapegna.
The count of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for July 23, 2024.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso, with the investigation leading to the guilty plea. He also thanked the U.S. Postal Inspection Service, Sussex County Prosecutor’s Office, and Franklin Borough Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Farhana C. Melo of the U.S. Attorney’s Office’s Criminal Division in Newark.
lapegna.information.pdfPassaic County Man Admits Transportation and Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man today admitted transporting and possessing videos and images of child sexual abuse, U.S. Attorney Philip R. Sellinger announced.
Edward M. O’Hagan, 50, of Hawthorne, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court one count of transportation of child pornography and one count of possession of child pornography.
According to documents filed in this case and statements made in court:
Law enforcement officials learned that on Jan. 19, 2023, O’Hagan transmitted video files containing images of child sexual abuse through the internet. O’Hagan’s email addresses utilized an encrypted file storage platform to upload and create files containing images of child sexual abuse, which was accessed from an IP address at O’Hagan’s address. Subsequent to a lawful search of O’Hagan’s residence on May 22, 2023, law enforcement officers recovered hundreds of images and videos depicting child sexual abuse on O’Hagan’s electronic devices.
The count of transportation of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison, and a fine of $250,000. The count of possession of child pornography carries a maximum penalty of 10 years in prison and a fine of $250,000. Sentencing is scheduled for July 18, 2024.
U.S. Attorney Sellinger credited the Newark Child Exploitation and Human Trafficking Task force, under the direction of FBI Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to today’s guilty plea. He also thanked the Hawthorne Police Department and the Passaic County Sheriff’s Office.
The government is represented by Assistant U.S. Attorney Farhana C. Melo of the U.S. Attorney’s Office’s Criminal Division in Newark.
ohagan.information.pdfEssex County Woman Convicted of Possession with Intent to Distribute Cocaine and MethamphetamineRead the Press Release
CAMDEN, N.J. – An Essex County woman was convicted for possession with intent to distribute cocaine and methamphetamine, U.S. Attorney Philip R. Sellinger announced today.
Mahogany Hawkins, 32, of Newark, was convicted on one count possession with intent to distribute cocaine and methamphetamine.
According to documents filed in this case and the evidence at trial:
In March 2021, two FedEx parcels addressed to “John Brown” in Newark were lawfully intercepted by law enforcement and found to contain cocaine. On March 15, 2021, an undercover officer delivered the packages to the addressee, and a woman – later identified as Hawkins – answered the door and accepted the packages. Officers again knocked on Hawkins’s door, this time identifying themselves as law enforcement. Hawkins said she was “getting dressed” but didn’t open the door. The officers forced entry and found Hawkins standing in the bedroom.
After obtaining a search warrant, the officers searched Hawkins’s apartment and entered a backroom – locked by a keypad – that was a workstation for packaging narcotics. The two FedEx packages from the controlled delivery were found inside a garbage can in the backroom, and the room also contained methamphetamine pills, two plastic bags containing additional cocaine, numerous empty vials used for packaging narcotics, and a heat sealer. Laboratory analysis confirmed substances were cocaine and methamphetamine. Officers also found a loaded handgun and an extended magazine.
The possession with intent to distribute count of which Hawkins was convicted carries a maximum potential penalty of 20 years imprisonment, and a $250,000 fine.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso; U.S. Customs and Border Protection officers, under the direction of Port Director TenaVel Thomas, Port of New York/Newark; and members of the Newark Department of Public Safety, under the direction of Director Fritz Fragé, with the investigation leading to the conviction. He also thanked the Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz Ortiz, and the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark.
The government is represented by Assistant U.S. Attorneys Rebecca A. Sussman and Jake A. Nasar of the U.S. Attorney’s Office’s Criminal Division in Newark.
Essex County Man Charged with Producing and Possessing Child PornographyRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was charged for allegedly inducing two minors to send him sexually explicit videos via text message and possessing child pornography, U.S. Attorney Philip R. Sellinger announced today.
Abdur-Razzaaq Henderson, 26, of East Orange, New Jersey, is charged by complaint with two counts of producing child pornography and one count of possessing child pornography. Henderson appeared this afternoon before U.S. Magistrate Judge André M. Espinosa and was released on $100,000 unsecured bond.
According to documents filed in this case and statements made in court:
In April 2023, Henderson communicated via text message with a minor victim located outside of New Jersey. At Henderson’s request, the minor victim created and sent Henderson via text messages videos of the victim engaging in sexually explicit conduct.
In July 2023, Henderson communicated via text message with another minor victim located outside of New Jersey. At Henderson’s request, the second minor victim created and sent Henderson via text messages videos of the victim engaging in sexually explicit conduct. Henderson then engaged the second minor victim in a conversation about sexually assaulting a younger sibling.
On March 5, 2024, Henderson was found with a cell phone that contained multiple videos depicting child sexual abuse material.
The production of child pornography charges are each punishable by a mandatory minimum penalty of 15 years in prison and a maximum potential penalty of 30 years in prison and a $250,000 fine. The child pornography possession charge is punishable by up to 10 years in prison and a $250,000 fine.
U.S. Attorney Sellinger credited the Newark Child Exploitation and Human Trafficking Task force, under the direction of FBI Special Agent in Charge James E. Dennehy, with the investigation leading to the arrest.
The government is represented by Assistant U.S. Attorneys Rebecca Sussman and Eli Jacobs of the Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
henderson.complaint.pdfDual U.S. and Greek National Arrested for Multimillion-Dollar Bank Fraud ConspiracyRead the Press Release
NEWARK, N.J. – A dual U.S. and Greek national was charged for a multimillion-dollar bank fraud conspiracy, U.S. Attorney Philip R. Sellinger announced today.
Dino Koutsogiannis, 57, of Fairview, New Jersey, is charged by complaint with one count of conspiracy to commit bank fraud. Koutsogiannis made his initial appearance on March 4, 2024, before U.S. Magistrate Judge André M. Espinosa in Newark federal court and was detained.
According to documents filed in this case and statements made in court:
From July 2022 to July 2023, Koutsogiannis and others conspired to defraud multiple financial institutions by conducting a “bust-out” debit card conspiracy. As part of the scheme, Koustogiannis and his conspirators would create shell companies and open bank accounts in those companies’ names. Koustogiannis and the conspirators would then fund those accounts with nominal funds. Then, after a few months with no activity, Koutsogiannis and the conspirators would fund the accounts via transfers from external sources, including accounts controlled by Koustogiannis and the conspirators. Several weeks later, Koutsogiannis and the conspirators would make very large debit purchases over the course of several days from those accounts, causing those accounts to accrue significantly negative balances, frequently in the amount of hundreds of thousands of dollars.
After the bust-out was complete and the accounts were left in significant negative balances, the victim financial institutions would then close the accounts. But Koutsogiannis and his conspirators would nevertheless continue executing the scheme with bank accounts at other financial institutions. Koustigannis and the conspirators executed this scheme numerous times at six victim financial institutions between July 2022 and July 2023, causing those institutions approximately $2.8 million in losses.
The charge carries a maximum penalty of 30 years and a fine of up to $1 million.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso, with the investigation leading to the charges. He also thanked the Springfield Police Department, the Teaneck Police Department, and the New Jersey State Police.
The government is represented by Assistant U.S. Attorney Chana Y. Zuckier of the 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.
koutsogiannis.complaint.pdfBrothers Indicted for Conspiracy to Distribute 49 Kilograms of CocaineRead the Press Release
NEWARK, N.J. – A federal grand jury returned an indictment charging two brothers with conspiring to distribute and possessing with intent to distribute 49 kilograms of cocaine, U.S. Attorney Philip R. Sellinger announced today.
Nelson Santos Munoz, 30, and his brother, Amauris Santos Munoz, 31, both of Miami, Florida, are charged by indictment with one count of conspiracy to distribute and possess with intent to distribute cocaine and one count of possession with intent to distribute cocaine. The Santos Brothers appeared on March 5, 2024, before U.S. District Judge Zahid N. Quraishi in Trenton federal court. They were charged by criminal complaint in May 2023.
According to documents filed in this case and statements made in court:
On Jan. 26, 2023, law enforcement stopped a vehicle in Woodbridge, New Jersey, with three individuals, including the Santos brothers. During a search of the vehicle, law enforcement discovered approximately 49 kilograms of suspected cocaine, individually wrapped in packages with cellphone/plastic wrap in several suitcases and a backpack. A review of cell phone communications revealed that the Santos brothers traveled to the Dominican Republic and conspired to purchase cocaine and transport it to the United States for distribution. After importing the cocaine into the United States, the Santos brothers traveled from Florida to New Jersey with the intent to distribute the cocaine.
Each count carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life imprisonment, and a maximum fine of $10 million.
U.S. Attorney Sellinger credited members of the Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz, New Jersey Division, with the investigation leading to the charges. He also thanked the Woodbridge Police Department for its assistance.
The government is represented by Assistant U.S. Attorney Farhana C. Melo of the OCDETF/Narcotics Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
santosmunoz.indictment.pdfFlorida Man Admits over $3.6 Million Health Care Fraud SchemeRead the Press Release
TRENTON, N.J. – A Florida man admitted his role in a durable medical equipment kickback scheme, U.S. Attorney Philip R. Sellinger announced today.
Steve Chicoye, 55, of Orlando, Florida, pleaded guilty on Feb. 29, 2024, before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit health care fraud.
According to documents filed in the case and statements made in court:
Chicoye and his conspirators solicited and received kickbacks and bribes in exchange for providing durable medical equipment (DME) companies with completed doctors’ orders for medically unnecessary DME, such as orthotic braces. Chicoye and his conspirators utilized the service of telemedicine companies to obtain these prescriptions for DME, and the DME orders were subsequently fraudulently billed to Medicare and other health care benefit programs.
Chicoye and his conspirators were paid approximately $2.1 million in kickbacks for these DME orders and caused losses to Medicare and other health care benefit programs of at least $3.6 million.
The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. Sentencing is scheduled for Aug. 6, 2024.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney DeNae Thomas of the Health Care Fraud Unit in Newark.
chicoye.information.pdfFive Passaic County Residents Charged with Armed RobberyRead the Press Release
NEWARK, N.J. – Five Passaic County, New Jersey, residents were charged with the armed robbery of a residence in Saddle Brook, New Jersey, U.S. Attorney Philip R. Sellinger announced today.
Jamere Dixon, aka “Rebels,” 23; Jahad Foxworth, aka “Hadie,” 25; Tyra Jones, 24; Jancarlos Rodriguez, aka “M’s,” 23; and Lanasia Smith, aka “Lay,” 24, all of Paterson, New Jersey, are charged by complaint with one count of conspiracy to commit Hobbs Act robbery and one count of conspiracy to use and carry a firearm during and in relation to a crime of violence. The defendants appeared on Feb. 28, 2024, before U.S. Magistrate Judge André M. Espinosa in Newark federal court. Dixon, Foxworth, and Rodriguez were detained. Jones and Smith were each released on $100,000 unsecured bond.
According to documents filed in this case and statements made in court:
In the early morning hours of June 28, 2022, Foxworth, Rodriguez, and Dixon entered a residence in Saddle Brook and held two victims at gunpoint. The three defendants stole money, credit cards, and suspected controlled substances, among other items. Prior to the robbery, Smith was a guest at the residence and provided Foxworth, Rodriguez, and Dixon with access to the home by leaving the front door unlocked. The investigation revealed that hours before the robbery Smith sent to Rodriguez a picture of a safe located in the residence. After the robbery, the suspects fled in a vehicle driven by Jones. Rodriguez, Jones, and Smith were later seen on surveillance footage attempting to use the stolen credit cards at gas stations and a convenience store in Paterson.
The conspiracy to commit Hobbs Act robbery and conspiracy to use and carry a firearm during and in relation to a crime of violence counts each carry a maximum potential penalty of 20 years in prison, a fine of up to $250,000, or twice the gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Bryan Miller; the Passaic County Sheriff’s Office, under the direction of Acting Sheriff Gary Giardina; the Bergen County Prosecutor’s Office, under the direction of Acting Chief Matthew Finck, the New Jersey State Police, under the direction of Col. Patrick J. Callahan; and the Saddle Brook Police Department, under the direction of Officer in Charge Captain John A. Zotollo Jr.; and with the investigation leading to the charges.
This case is part of the Violent Crime Initiative (VCI), which was formed in 2020 by the U.S. Attorney’s Office for the District of New Jersey, the Passaic County Prosecutor’s Office, and the City of Paterson’s Department of Public Safety for the purpose of combatting violent crime in and around Paterson. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration, the U.S. Marshals, the Paterson Department of Public Safety, the Paterson Police Department, the Passaic County Prosecutor’s Office, the Passaic County Sheriff’s Office, N.J. State Parole, Passaic County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, and N.J. Department of Corrections.
The government is represented by Assistant U.S. Attorneys Jake A. Nasar of the Organized Crime and Gangs Unit and Farhana C. Melo of the OCDETF/Narcotics 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.
rodriguezetal.complaint.pdfBucks County, Pennsylvania, Registered Sex Offender Charged with Sexually Exploiting and Online Enticement of MinorRead the Press Release
TRENTON, N.J. – A Bucks County, Pennsylvania, man made his initial appearance on charges of producing videos and images depicting child sexual abuse and coercing and enticing a minor to engage in criminal sexual conduct, U.S. Attorney Philip R. Sellinger announced today.
Gregory J. Barger, 38, of Morrisville, Pennsylvania, was indicted on Feb. 15, 2024, on one count of sexual exploitation of a child – production of child pornography – and one count of coercion and enticement – online enticement of a minor. Barger had previously been charged by criminal complaint with the production offense. Barger was arraigned on Feb. 28, 2024, before U.S. District Judge Michael A. Shipp in Trenton federal court and was detained pending trial.
According to documents filed in this case and statements made in court:
From Aug. 5, 2020, through April 7, 2022, Barger – a previously convicted, registered sex offender – used an electronic messaging application to communicate with a minor victim located in the United Kingdom. He induced, enticed, and coerced the minor victim to engage in sexual conduct with Barger. In February 2022, Barger traveled to the United Kingdom and produced images and videos of Barger engaged in sexual conduct with the minor victim. Law enforcement later recovered those images and videos from Barger’s cellular phone, which was seized from Barger at the time of his arrest on April 7, 2022, in Hamilton, New Jersey.
Because of Barger’s prior conviction, the charge of production of child pornography carries a mandatory minimum penalty of 25 years in prison and a maximum potential penalty of 50 years in prison, as well as a $250,000 fine. The charge of online enticement of a minor carries a mandatory minimum penalty of 10 years in prison and a maximum potential penalty of life in prison, as well as a $250,000 fine.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso, and members of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo J. Onofri, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Alexander E. Ramey of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
barger.indictment.pdfOmaha Man Sentenced to 1 ½ Years’ Imprisonment for Gun ChargeRead the Press Release
United States Attorney Susan Lehr announced that Shawn David Johnson, 40, of Omaha, Nebraska, was sentenced February 28, 2024, in federal court in Omaha for being a felon in possession of a firearm. United States District Court Judge Brian C. Buescher sentenced Johnson to 18 months’ imprisonment. There is no parole in the federal system. After Johnson’s release from prison, he will begin a 2-year term of supervised release.
On February 1, 2022, a cooperating witness working with law enforcement purchased a 9mm handgun with a 6-round capacity magazine from Johnson inside of his Omaha residence. At the time, Johnson was a convicted felon. Law enforcement has since determined that the handgun had been shipped in interstate commerce prior to the transaction.
This case was investigated by the Bureau of Alcohol, Tobacco and Firearms.
Leader of Real Estate Investment Firm Admits Role in $658 Million Ponzi Scheme and Multimillion-Dollar Tax Evasion ConspiracyRead the Press Release
NEWARK, N.J. – The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) today admitted orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.
Thomas Nicholas Salzano, aka “Nicholas Salzano,” 65, of Secaucus, New Jersey, pleaded guilty before U.S. District Judge Evelyn Padin in Newark federal court to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes. He also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends.
U.S. Attorney Philip R. Sellinger“For years, Salzano told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors. His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, to ensure that those who engage in rampant fraud are punished with long jail sentences and are ordered to make their victims whole.”
“Many people who decide to invest have to put a lot of faith in so-called financial experts, hoping their money grows and doesn’t one day disappear,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Salzano admits he played a role in a scam that cost investors $658 million. History has shown over and over and over again, Ponzi schemes don't ever pay out, yet criminals keep trying to beat the system. FBI Newark and our law enforcement partners are doing all we can to help the victims in this case. We want others who may have faced a similar situation to contact us so we can help you as well.”
“Salzano not only victimized thousands of investors, but he also defrauded honest taxpayers by concealing his income from the IRS and evading his tax liability to the tune of millions of dollars,” IRS – Criminal Investigation Special Agent in Charge Harry T. Chavis Jr., Boston Field Office, said. “Today’s guilty plea by Salzano demonstrates how IRS – Criminal Investigation will continue to use their financial expertise to identify and investigate these types of investor fraud schemes with our law enforcement partners.”
As part of his plea agreement, Salzano has agreed to a prison term of eight to 12 years, a forfeiture money judgment in the amount of $8.52 million, and he has agreed to pay full restitution of $507.4 million to the victims of his offenses.
According to documents filed in this case and statements made in court:
From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC (the “Fund”), a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. These included the financial position of NRIA, the manner in which the defendants and their conspirators used Fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.
The defendants executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead Fund investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of their own capital into the business, the defendants misappropriated millions of dollars of investor money to support their lavish lifestyles, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.
Salzano concealed his true managerial role at NRIA in an effort to avoid scrutiny from investors of Salzano’s history of fraud at a large telecommunications company. In addition to defrauding investors, Salzano orchestrated a separate conspiracy to obstruct, impede, and impair the IRS in its effort to collect millions of dollars in outstanding taxes Salzano owed to the U.S. Treasury by, among other things, lying to the IRS, using a web of nominees, opening bank accounts in the names of phony entities, and using false and fraudulent company documents.
Conspiring to defraud the United States carries a maximum penalty of five years in prison and a $250,000 fine. The securities fraud count and the wire fraud conspiracy count are both punishable by a maximum penalty of 20 years in prison and a $250,000 fine. Pursuant to the terms of his plea agreement, the maximum prison term that can be imposed on Salzano is 12 years. Sentencing is scheduled for Aug. 6, 2024.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Chavis in Boston; and special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark, with the investigation, with assistance from FBI Headquarters Criminal Investigative Division and the Department of Justice Tax Division.
The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Lauren E. Repole, and John Mezzanotte, all of the U.S. Attorney’s Office’s Criminal Division, with assistance from Trial Attorney Samuel B. Bean of the U.S. Department of Justice, Tax Division.
salzano.indictment.pdfIndia- and New Jersey-Based Jeweler Charged with Multimillion-Dollar International Trade Fraud Scheme and Unlicensed Money TransmittingRead the Press Release
NEWARK, N.J. – An India- and New Jersey-based man who operated jewelry companies in New York City’s Diamond District was charged with spearheading a scheme to illegally evade customs duties for millions of dollars of jewelry imports into the United States and with illegally processing millions of dollars through unlicensed money transmitting businesses, U.S. Attorney Philip R. Sellinger announced today.
Monishkumar Kirankumar Doshi Shah, aka “Monish Doshi Shah,” 39, of Mumbai, India, and Jersey City, New Jersey, was charged by complaint with one count of conspiracy to commit wire fraud and one count of operating and aiding and abetting the operation of an unlicensed money transmitting business. He was arrested over the weekend and appeared appear on Feb. 26, 2024, before U.S. Magistrate Judge André M. Espinosa in Newark federal court. Shah was released on $100,000 bond, with home detention and location monitoring.
According to documents filed in this case and statements made in court:
From January 2015 through September 2023, Shah engaged in a scheme to evade duties for shipments of jewelry from Turkey and India to the United States. Shah would ship or instruct his conspirators to ship goods from Turkey or India – which would have been subject to an approximately 5.5 percent duty if shipped directly to the United States – to one of Shah’s companies in South Korea. Shah’s conspirators in South Korea would change the labels on the jewelry to state that they were from South Korea instead of Turkey or India, and then ship them to Shah or his customers in the United States, thereby unlawfully evading the duty. Shah would also make and instruct his customers to make fake invoices and packing lists to make it look like Shah’s South Korean companies were actually ordering jewelry from Turkey or India. During the scheme, Shah shipped millions of dollars of jewelry from South Korea to the United States.
From July 2020 through November 2021, Shah operated numerous purported jewelry companies in New York City’s Diamond District, including MKore LLC (MKore), MKore USA Inc. (MKore USA), and Vruman Corp. (Vruman). Shah used these entities to conduct millions of dollars in illegal financial transactions for customers – including converting cash to checks or wire transfers. Shah would also collect cash from customers and use conspirators’ jewelry companies, which were also located in the Diamond District, to convert the cash into wires or checks. At times, Shah and his conspirators moved more than a million dollars of cash in a single day. In exchange for their services, Shah and his conspirators charged a fee. None of Shah’s or his conspirators’ companies were registered as money transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN).
The wire fraud conspiracy charge is punishable by a maximum of 20 years in prison. The charge of operating and aiding and abetting the operation of an illegal money transmitting business carries a maximum penalty of five years in prison. Each count is also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents and task force officers of IRS - Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; special agents with Homeland Security Investigations New York, under the direction of Acting Special Agent in Charge Erin Keegan; special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso; and officers with U.S. Customs and Border Protection at the Port of New York/Newark, under the direction of Port Director TenaVel Thomas, with the investigation leading to the charges. He also thanked U.S. Customs and Border Protection in New York; Homeland Security Investigations in Seoul, South Korea; the Korea Customs Service in South Korea; the Seoul Customs Special Investigation Office in South Korea; the U.S. Drug Enforcement Administration in Paterson; the Parsippany-Troy Hills Police Department; the Morristown Police Department; the Federal Deposit Insurance Corporation – Office of Inspector General; and the Justice Department’s Money Laundering and Asset Recovery Section (MLARS) for their assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Marko Pesce and Olta Bejleri of the Economic Crimes Unit in Newark, with assistance from William Kanellis of the Department of Justice Trade Fraud Task Force.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
shah.complaint.pdfHackensack Tax Preparer Admits Tax Evasion, Assisting in Preparation of 50 False Tax Returns, and Filing False Declarations on Quarterly Tax Returns for BusinessRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, woman today admitted to tax evasion, to helping her clients file falsified tax returns that generated larger refunds, and to filing false declarations on quarterly tax returns for her tax return preparation business, U.S. Attorney Philip R. Sellinger announced.
Joshlyn Raye, 49, of Elmwood Park, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging her with one count of aiding and assisting in the preparation of a false and fraudulent tax return; one count of tax evasion; and one count of filing a false declaration under penalty of perjury concerning a quarterly tax return on behalf of her tax return business.
According to documents filed in this case and statements made in court:
From March 2010 to September 2023, Raye was the owner of JB Tax Services, a tax return preparation business in Hackensack, New Jersey. She knowingly and willfully evaded her personal income taxes over three of those years; filed 50 false tax returns on behalf of her clients; and filed three false quarterly employment tax returns on behalf of her tax return preparation business. Raye used fabricated and inflated figures, including expenses and itemized deductions.
The counts of aiding or assisting in the preparation of a false income tax return and filing a false declaration under penalty of perjury each carry a maximum penalty of three years in prison and a $250,000 fine. The count of tax evasion carries a maximum penalty of five years in prison and a $250,000 fine. As part of her plea agreement, Raye has agreed to pay the government restitution of $676,168, and to file amended tax returns. Sentencing is scheduled for Aug. 6, 2024.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the National Security Unit in Newark.
California Man Charged in $10 Million Health Care Fraud, Wire Fraud, and Kickback ConspiracyRead the Press Release
NEWARK, N.J. – A California man was arraigned today on charges relating to his role in a fraud and kickback scheme that caused more than $10 million in losses to Medicare, Attorney for the United States Vikas Khanna announced.
Adam Wayne Owens, 43, of Riverside, California, is charged in a superseding indictment with one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to violate the federal Anti-Kickback Statute. Owens appeared today before U.S. District Judge Michael E. Farbiarz in Newark and was released on a $500,000 unsecured bond.
According to documents filed in the case and statements made in court:
From November 2018 to January 2020, Owens participated in a kickback and bribery scheme with testing companies and telemedicine providers, resulting in the submission of false and fraudulent claims to Medicare. Owens owned and controlled marketing companies in California through which he and his conspirators identified Medicare beneficiaries to target for at-home cancer genetic tests (CGX). Owens and his conspirators used a variety of methods to obtain personal and medical information from the Medicare beneficiaries, including making unsolicited telephone calls to elderly cancer patients. Owens and his conspirators then caused CGX testing kits to be sent to the beneficiaries regardless of whether they needed or wanted them. Once the CGX tests were completed and returned, Owens’ conspirators submitted claims for reimbursement to Medicare. In exchange for Owens’ role in the conspiracy, his companies received kickback payments ranging from $1,700 to $2,000 for each CGX test resulting in Medicare reimbursement.
To conceal the scheme, the testing companies wired various kickback payments to a shell company in New Zealand, which then wired the payments to bank accounts controlled by Owens in the United States. To further conceal the scheme, Owens entered into a sham contract with the New Zealand shell company which made it appear that one of Owens’ marketing companies was engaged in and being paid for legitimate marketing and referral services. Owens then generated invoices falsely purporting that the marketing company was providing hourly referral services for the New Zealand shell company. Instead, Owens received payments from the New Zealand shell company based solely on the number of CGX tests that Medicare reimbursed.
Owens and his conspirators caused a loss to Medicare of more than $10 million.
Conspiracy to commit health care fraud and wire fraud is punishable by a maximum potential penalty of 20 years in prison. Conspiracy to violate the federal Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison. Each count is also punishable by a fine of $250,000, or twice the gain or loss from the offense, whichever is greatest.
Attorney for the United States Khanna credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Acting Special Agent in Charge Brian J. Solecki; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Garrett J. Schuman of the Health Care Fraud Unit and Senior Trial Counsel Barbara A. Ward of the Asset Recovery and Money Laundering Unit.
The charges and allegations contained in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
owens.sindictment.pdfBronx, New York, Man Admits Soliciting Kickbacks in Multimillion-Dollar COVID-19 Testing Kickback ConspiracyRead the Press Release
NEWARK, N.J. – A Bronx, New York, man admitted his role in a kickback conspiracy involving COVID-19 testing, U.S. Attorney Philip R. Sellinger announced today.
David Weathers, 61, of Bronx, New York, pleaded guilty before U.S. District Judge Brian R. Martinotti in Newark federal court on Feb. 26, 2024, to an indictment charging him with conspiring to violate the Anti-Kickback Statute by soliciting kickbacks for the referral of COVID-19 test samples.
U.S. Attorney Philip R. Sellinger“The defendant in this case has admitted to seeking payments for sending COVID-19 tests to a particular lab for processing. There is no place in our health care system for illegal payments made in attempt to influence medical decisions. My office will continue to prosecute those who attempt to corrupt the health care system.”
“It took fraudsters no time at all to hunt for a get rich quick scheme when the pandemic started,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Weathers and his conspirators set their eyes on the federal government and the funding made available under the CARES Act. He now admits to asking a lab in New Jersey for kickbacks when he provided COVID-19 test samples, which were ultimately paid for by federal funding. Anyone who believes they will get away with their crimes as time passes should take note of this case, you will be brought to justice.”
According to documents filed in the case and statements made in court:
Weathers and his conspirators solicited kickbacks in exchange for providing COVID-19 test samples to Metpath Laboratories, a clinical laboratory located in Parsippany, New Jersey, that, among other things, conducted testing to detect the presence of COVID-19 in samples obtained from individual patients. Metpath paid kickbacks for the referrals of COVID-19 test samples and subsequently billed Medicare and other health care benefit programs for the tests, causing a loss of more than $3.5 million to federal programs.
The charge of conspiracy to violate the Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest. Sentencing is scheduled for July 10, 2024.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney DeNae Thomas of the Health Care Fraud Unit in Newark.
weathers.indictment.pdfBergen County Man Indicted for Multimillion-Dollar Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man who collected millions of dollars in fees from victims seeking funding for their commercial projects that he misappropriated in part for his personal benefit while failing to secure the promised financing was indicted, U.S. Attorney Philip R. Sellinger announced today.
Jeffrey Kahn, 55, of Ridgewood, New Jersey, is charged with six counts of wire fraud and one count of money laundering. Kahn was previously charged by complaint with two counts of wire fraud for the same scheme in November 2021.
According to documents filed in this case and statements made in court:
From March 2018 through March 2020, Kahn devised a plan to defraud multiple victims of millions of dollars that were paid at Kahn’s direction to various accounts – including bank accounts in the name of Kahn’s financial advisory firm, Kahn Advisors, LLC – and characterized by Kahn as insurance premium payments, advance fees or taxes, in exchange for a promise of financing, including through an individual and a lender. To induce victims to pay money to Kahn, Kahn misrepresented to certain victims that he had conducted multiple successful financial transactions through the individual and the lender. Kahn continued to vouch for the individual, even after Kahn received information that there was a strong likelihood that the individual, who claimed to have an office in Teaneck, New Jersey, but who is instead believed to reside abroad and to have used an alias in his dealings with Kahn – was not a legitimate lender. Kahn also caused others to make misrepresentations to certain victims regarding their purported successful financing deals with Kahn and/or the individual. In reality, Kahn never obtained any financing from the individual or the lender for the victims.
Kahn further misrepresented to certain victims that the money they sent to Kahn and Kahn Advisors would continue to be held upon receipt until the victims provided their consent to the release of the funds. Instead, Kahn caused the victims’ funds to be transferred to other accounts, including bank accounts that Kahn controlled, without the victims’ prior consent, and then used portions of those amounts to pay for Kahn’s personal expenses and to pay back other victims.
As a result of the scheme, Kahn caused the victims to transfer more than $5 million in funds to accounts controlled by Kahn or provided to Kahn by the individual. Kahn misappropriated approximately $800,000 of those funds for his own personal benefit, and used an additional portion of those funds – approximately $447,000 – to pay back other victims of the scheme.
Each wire fraud count is punishable by a maximum of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. The count of money laundering carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Jennifer S. Kozar of the Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
kahn.indictment.pdfBayside State Prison Corrections Officer Admits Violating Inmates’ Civil RightsRead the Press Release
NEWARK, N.J. – A former corrections officer at Bayside State Prison in Leesburg, New Jersey, today admitted to depriving two inmates of their civil rights by failing to intervene when the inmates were being assaulted and suffered bodily injury, U.S. Attorney Philip R. Sellinger announced.
Joshua Hand, 34, of Millville, New Jersey, pleaded guilty before U.S. District Judge Karen M. Williams in Camden federal court to an information charging him with depriving two inmates of their right not to be subjected to cruel and unusual punishment.
According to documents filed in this case and statements made in court:
In December 2019, while working as a corrections officer, Hand was inside the officers’ quarters within the kitchen area of Bayside State Prison when the first victim was summoned to that room. Shortly after that victim entered the officer’s quarters, the exit door was blocked and in the presence of Hand, the victim was assaulted simultaneously by several inmates and taken down to the floor. Hand watched and did not attempt to intervene when multiple inmates pinned and restrained the victim on the floor while other inmates delivered multiple punches and other blows to the victim’s torso, arms, and legs. Hand did not report this assault to his supervisors or medical personnel despite knowing that he was required to do so.
Later that day, a second victim was in the officers’ quarters at the prison with Hand and another corrections officer. Without provocation, the other corrections officer struck the second victim in the legs multiple times with a broomstick. During the assault of second victim, Hand remained within arm’s reach of the assault and had a reasonable opportunity to intervene but did not attempt to do so. Once again, Hand did not report this assault to his supervisors or medical personnel.
Violating the civil rights of others carries a maximum sentence of 10 years in prison and a maximum potential fine of the greater of $250,000, twice the gross amount of pecuniary gain that any person derived from the offense, or twice the gross amount of pecuniary loss that any person suffered from the offense, whichever is greatest. Sentencing is scheduled for July 2, 2024.
U.S. Attorney Sellinger credited special agents of the FBI Atlantic City Resident Agency, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation. He also thanked the New Jersey Department of Corrections, under the direction of Commissioner Victoria Kuhn, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Thomas S. Kearney of the Special Prosecutions Division in Newark.
hand.information.pdfGang Member Admits Racketeering and Firearms ChargesRead the Press Release
NEWARK, N.J. – A member of the Rollin’ 60s Neighborhood Crips gang admitted to his role in a racketeering conspiracy and to possessing firearms and ammunition as a convicted felon, U.S. Attorney Philip R. Sellinger announced today.
Amir Warden, aka “Stamps,” aka “Killa,” 31, pleaded guilty on Feb. 22, 2024, before U.S. District Judge Susan D. Wigenton in Newark federal court to two counts of a superseding information that charged him with Racketeer Influenced and Corrupt Organizations (RICO) conspiracy and possession of firearms and ammunition by a convicted felon.
According to documents filed in this case and statements made in court:
From 2015 through Sept. 22, 2022, Warden was a member of the Rollin’ 60s Neighborhood Crips, a criminal enterprise responsible for acts of violence and the distribution of controlled substances in the District of New Jersey and elsewhere. Warden held a leadership role within the enterprise and conspired with other members and associates to distribute controlled substances. On Aug. 19, 2019, he distributed heroin. On Sept. 29, 2022, Warden, a convicted felon, knowingly possessed three loaded firearms, three high-capacity drum magazines, and approximately 1,300 rounds of assorted ammunition.
Warden faces a maximum sentence of 20 years in prison and a fine of up to $250,000 on the racketeering conspiracy and a maximum sentence of 15 years in prison and a fine of up to $250,000 on the firearms charge. Sentencing is scheduled for June 25, 2024.
U.S. Attorney Sellinger credited special agents of the DEA, under the direction of Special Agent in Charge Cheryl Ortiz; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge Bryan Miller, with the investigation leading to the guilty plea. He also thanked investigators of the U.S. Marshals Service, under the direction of Marshal Juan Mattos; the Irvington Police Department, under the direction of Police Division Director Tracy Bowers; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II;, the Newark Police Department, under the direction of Public Safety Director Fritz Fragé; the Bloomfield Police Department, under the direction of Director of Public Safety Samuel A. DeMaio; the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; the East Orange Police Department, under the direction of Chief Phyllis L. Bindi; the Elizabeth Police Department, under the direction of Police Director Earl J. Graves; the Edison Police Department, under the direction of Chief of Police Tom Bryan; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Union County Prosecutor’s Office, under the direction of Prosecutor William A. Daniel; the Spotswood Police Department, under the direction of Chief Philip Corbisiero; and the North Carolina State Bureau of Investigation Fugitive and Missing Person Task Force.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The government is represented by Assistant U.S. Attorney Francesca Liquori of the Special Prosecutions Unit.
warden.sinformation.pdfEssex County Member of Newark Drug Trafficking Organization Responsible for Distribution of over 1 Kilogram of Heroin Sentenced to 210 Months in PrisonRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced to 210 months in prison for his role in a conspiracy to distribute and possess with intent to distribute over one kilogram of heroin, U.S. Attorney Philip R. Selling announced today.
Furad Loyal, 42, of Newark, was convicted at trial on May 9, 2023, before U.S. District Judge Susan D. Wigenton on three counts of the indictment against him: conspiracy to distribute and possess with intent to distribute more than one kilogram of heroin, possession with intent to distribute heroin, and being a felon in possession of a firearm. He was acquitted on one count of possession of a firearm in furtherance of a drug trafficking crime. Judge Wigenton imposed the sentence on Feb. 21, 2024, in Newark federal court.
According to documents filed in this case and the evidence at trial:
Loyal was a heroin supplier and a member of a drug trafficking organization (DTO) that operated in and around Hayes Street and 14th Avenue in the area of the New Community Corporation community development (NCC) in Newark. In addition to selling narcotics in and around NCC, the members shared narcotics supply, narcotics proceeds, and customers. On Nov. 21, 2017, Loyal was found inside the apartment of an NCC resident where he was stashing his heroin, his firearm, and over $11,000 in cash.
From March to August 2018, Loyal and 27 other members of the DTO were charged by criminal complaint with conspiracy to distribute heroin and cocaine base; Loyal also was charged with firearms offenses. The other 27 defendants have all since pleaded guilty to crimes in connection with their roles in the DTO.
In addition to the prison term, Judge Wigenton sentenced Loyal to five years of supervised release.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and members of the Newark Department of Public Safety, under the direction of Director Fritz Fragé, with the investigation leading to the sentencing. He also thanked the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the New Jersey Department of Corrections, New Jersey State Parole, and the U.S. Marshals for their assistance.
This case is part of the original Violent Crime Initiative (VCI). The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the sole purpose of combatting violent crime in and around the Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is comprised of the U.S. Attorney’s Office, the FBI, the ATF, the DEA’s New Jersey Division, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, New Jersey State Parole, Union County Jail, New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center, New Jersey Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Christopher D. Amore of the U.S. Attorney’s Office’s Criminal Division in Newark.
Doctor to Pay Nearly $700,000 to Resolve False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – A doctor in Ramsey, New Jersey, has agreed to pay nearly $700,000 to resolve allegations that he and his practice violated the False Claims Act, U.S. Attorney Philip R. Sellinger announced today.
Arun Sehgal and his medical practice, Preventive & Diagnostic Medical Center P.A., have agreed to pay $693,490 plus interest to resolve allegations that they violated the False Claims Act by upcoding physician services, billing for more services than they could possibly provide in one day, and billing for services that Sehgal never provided. Sehgal is the former medical director at the New Jersey Veterans Memorial Home in Paramus, New Jersey.
The settlement announced today resolves three sets of allegations from Jan. 1, 2017, to June 1, 2022:
- The defendants regularly upcoded certain Current Procedural Terminology (CPT) codes typically used to report more complex services, or services longer in duration, relating to the evaluation and management of patients. Upcoding is alleged fraudulent medical billing in which a claim is submitted for payment regarding a service that is more expensive than the service that was performed.
- The defendants knowingly submitted claims to Medicare for services that Sehgal did not provide to patients by regularly billing for impossible days. An impossible day occurs when a physician purports to provide such a high volume of services or procedures in one day that there is no way the physician reasonably could have performed them all. For example, on March 2, 2018, the time associated with CPT codes billed by the defendants for services that Sehgal provided exceeded 43 hours.
- Sehgal allegedly purported to provide services to Medicaid beneficiaries in New Jersey on days when Sehgal was not physically in the United States.
The government is represented by Assistant U.S. Attorney Robert L. Toll of the U.S. Attorney’s Office, District of New Jersey’s Opioid Abuse Prevention and Enforcement Unit, and Trial Attorney Daniel Meyler of the Department of Justice’s Civil Division Fraud Section, with assistance from HHS-OIG.
The government’s pursuit of this matter illustrates its efforts to combat healthcare fraud. One of the strongest tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only and there has been no determination of liability.
sehgal.settlement.pdfPhiladelphia Man Admits Receiving Child Pornography and Transferring Obscene Images to MinorRead the Press Release
CAMDEN, N.J. – A Philadelphia man today admitted causing a minor victim to create and send him sexually explicit images and videos and sending the victim obscene images of himself, U.S. Attorney Philip R. Sellinger announced.
Francisco Andres-Medina, 33, pleaded guilty before Chief U.S. District Judge Renée Marie Bumb in Camden federal court to two counts of an indictment charging him with receipt of child pornography and transfer of obscene material to a minor.
According to documents filed in this case and statements made in court:
In March and April 2020, Medina communicated over the internet with a 15-year-old victim located in Camden County, New Jersey. After learning that his victim was 15 years old, Medina sent her obscene photographs of his exposed penis. Medina also caused the victim to produce videos and images of the victim engaged in sexually explicit conduct. Medina then caused the victim to send him the sexually explicit images and videos. Medina also directed the victim to send him a video of the victim having sex with another individual.
The count of receiving child pornography is punishable by a mandatory minimum penalty of five years in prison and a maximum of 20 years in prison. The count of transferring obscene material to a minor is punishable by a maximum of 10 years in prison. Each count carries a fine of up to $250,000. Sentencing is scheduled for June 26, 2024.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso, and the Camden County Prosecutor’s Office High Tech Crimes and Special Victims Units, under the direction of Prosecutor Grace C. MacAulay, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jeffrey Bender and Josephine Park of the U.S. Attorney’s Office in Camden.
andresmedina.indictment.pdfMiddlesex County Man Sentenced to 33 Months in Prison for Role in COVID-19 Fraud Schemes Totaling over $2.1 MillionRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man was sentenced today to 33 months in prison for his role in fraudulently obtaining over $2.1 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL), U.S. Attorney Philip R. Sellinger announced.
Arlen G. Encarnacion, 38, of Perth Amboy, New Jersey, previously pleaded guilty before U.S. District Judge Georgette Castner in Trenton federal court to a two-count information charging him with conspiracy to commit wire fraud and money laundering.
On Aug. 8, 2023, Jacquelyn Pena, 38, and Kent Encarnacion, 30, both of Perth Amboy, also separately pleaded guilty before Judge Castner to informations charging each of them with conspiracy to commit wire fraud and money laundering and were each sentenced to probation.
U.S. Attorney Philip R. Sellinger“This defendant fraudulently obtained funds earmarked for struggling Americans who needed financial relief during the COVID 19 pandemic. Today’s sentence demonstrates that those who used the pandemic to illegally enrich themselves will be held accountable. My office will continue to bring to justice individuals who have engaged in COVID-related fraud.”
“Brazen schemes have callously defrauded COVID-19 relief programs and caused undue financial harm to both hardworking Americans and businesses alike,” Christopher A. Nielsen, Inspector in Charge, U.S. Postal Inspection Service, Philadelphia Division, said. “Today’s sentencing illustrates that Postal Inspectors will continue its efforts to identify and hold accountable, those individuals who steal pandemic funds to fulfill their own greed.”
“IRS Criminal Investigation and our law enforcement partners are committed to investigating and prosecuting those who engage in acts of COVID-related fraud,” said Tammy Tomlins, Special Agent in Charge of Newark Field Office. “Today, Mr. Encarnacion was held accountable for fraudulently obtaining over $2.1 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL). His conscious decision to participate in this illicit scheme has cost him his freedom.”
According to the documents filed in these cases and statements made in court:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and was designed to provide emergency financial assistance to the millions of Americans who were suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. The CARES Act also authorized the Small Business Administration to provide EIDLs of up to $2 million to eligible small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.
To obtain a PPP or EIDL loan, a qualifying small business was required to apply and provide information on its operations, including the number of employees and expenses. In addition, businesses generally had to provide supporting documentation.
Arlen Encarnacion submitted 11 fraudulent PPP loan applications and three fraudulent EIDL applications on behalf of purported businesses. Kent Encarnacion helped submit one of the fraudulent PPP applications, and Pena helped submit three of the other fraudulent PPP applications. Each application contained false representations, including bogus federal tax return documentation and fabricated information about the number of employees and wages paid. Based on these alleged misrepresentations, lenders, Federal Home Loan Bank members, and the Small Business Administration collectively provided the purported businesses with approximately $2.1 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Arlen Encarnacion received the bulk of the fraudulent proceeds, and together with Kent Encarnacion and Pena, they misappropriated all of the funds.
In addition to the prison term, Judge Castner sentenced Encarnacion to three years of supervised release and ordered restitution of $2.18 million.
U.S. Attorney Philip Sellinger credited postal inspectors of U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Nielsen, Philadelphia Division; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tomlins; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the Social Security Administration – Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the Federal Housing Finance Agency – Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau New York Regional Office, under the direction of Special Agent in Charge Brian Tucker; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Michael Alfonso; with the investigation leading to today’s sentencing. He also thanked the Middlesex County Prosecutor’s Office and the Perth Amboy Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
Florida Man Indicted for Health Care Fraud, Wire Fraud, Illegal Kickbacks in $97 Million SchemeRead the Press Release
NEWARK, N.J. – A Florida man was charged in an indictment unsealed today for his role in durable medical equipment (DME) kickback scheme that caused $97 million in losses to Medicare, Attorney for the United States Vikas Khanna announced today.
Raheel Naviwala, 35, of Coral Springs, Florida, is charged in a 10-count indictment with one count of conspiracy to commit health care fraud and wire fraud, three counts of health care fraud, two counts of wire fraud, one count of conspiracy to violate the federal Anti-Kickback Statute, and three counts of illegal kickbacks.
According to documents filed in the case and statements made in court:
Naviwala and his conspirators owned and operated multiple call centers through which they obtained doctors’ orders for durable medical equipment – orthotic braces – for Medicare beneficiaries, without regard to medical necessity. Naviwala and his conspirators obtained the DME orders through the use of marketing call centers and telemedicine companies. Naviwala and his conspirators provided these DME orders in exchange for bribes from certain companies of $125 to $450 per brace. Naviwala and his conspirators caused losses to Medicare in excess of $97 million and received kickbacks in excess of $46 million.
Conspiracy to commit health care fraud and wire fraud is punishable by a maximum potential penalty of 20 years in prison. Each count of health care fraud is punishable by a maximum potential penalty of 10 years in prison. Each count of wire fraud is punishable by a maximum potential penalty of 20 years in prison. Conspiracy to violate the federal Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison. Each count of illegal kickbacks is punishable by a maximum potential penalty of 10 years in prison. Each count is also punishable by a fine.
Attorney for the United States Khanna credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark and Acting Special Agent in Charge is Maged Behnam in Miami, Florida; the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Acting Special Agent in Charge Brian J. Solecki; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorneys Matthew Specht and Ray Mateo of the Opioid Abuse Prevention & Enforcement Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
naviwala.indictment.pdfU.S. and U.K. Disrupt LockBit Ransomware VariantRead the Press Release
NEWARK, N.J. – The Department of Justice joined the United Kingdom and international law enforcement partners in London today to announce the disruption of the LockBit ransomware group, one of the most active ransomware groups in the world that has targeted over 2,000 victims, received more than $120 million in ransom payments, and made ransom demands totaling hundreds of millions of dollars.
The U.K. National Crime Agency’s Cyber Division, working in cooperation with the Justice Department, FBI, and other international law enforcement partners disrupted LockBit’s operations by seizing numerous public-facing websites used by LockBit to connect to the organization’s infrastructure and seizing control of servers used by LockBit administrators, thereby disrupting the ability of LockBit actors to attack and encrypt networks and extort victims by threating to publish stolen data.
“For years, LockBit associates have deployed these kinds of attacks again and again across the United States and around the world. Today, U.S. and U.K. law enforcement are taking away the keys to their criminal operation,” said Attorney General Merrick B. Garland. “And we are going a step further — we have also obtained keys from the seized LockBit infrastructure to help victims decrypt their captured systems and regain access to their data. LockBit is not the first ransomware variant the Justice Department and its international partners have dismantled. It will not be the last.”
“Today’s actions are another down payment on our pledge to continue dismantling the ecosystem fueling cybercrime by prioritizing disruptions and placing victims first,” said Deputy Attorney General Lisa Monaco. “Using all our authorities and working alongside partners in the United Kingdom and around the world, we have now destroyed the online backbone of the Lockbit group, one of the world’s most prolific ransomware gangs. But our work does not stop here: together with our partners, we are turning the tables on Lockbit — providing decryption keys, unlocking victim data, and pursuing Lockbit’s criminal affiliates around the globe.”
Additionally, the National Crime Agency, in cooperation with the FBI and international law enforcement partners, has developed decryption capabilities that may enable hundreds of victims around the world to restore systems encrypted using the LockBit ransomware variant. Beginning today, victims targeted by this malware are encouraged to contact the FBI at https://lockbitvictims.ic3.gov/ to enable law enforcement to determine whether affected systems can be successfully decrypted.
The Justice Department also unsealed an indictment obtained in the District of New Jersey charging Russian nationals Artur Sungatov and Ivan Kondratyev, also known as Bassterlord, with deploying LockBit against numerous victims throughout the United States, including businesses nationwide in the manufacturing and other industries, as well as victims around the world in the semiconductor and other industries. Today, additional criminal charges against Kondratyev were unsealed in the Northern District of California related to his deployment in 2020 of ransomware against a victim located in California.
Finally, the Department also unsealed two search warrants issued in the District of New Jersey that authorized the FBI to disrupt multiple U.S.-based servers used by LockBit members in connection with the LockBit disruption. As disclosed by those search warrants, those servers were used by LockBit administrators to host the so-called “StealBit” platform, a criminal tool used by LockBit members to organize and transfer victim data.
“Today, the FBI and our partners have successfully disrupted the LockBit criminal ecosystem, which represents one of the most prolific ransomware variants across the globe,” said FBI Director Christopher A. Wray. “Through years of innovative investigative work, the FBI and our partners have significantly degraded the capabilities of those hackers responsible for launching crippling ransomware attacks against critical infrastructure and other public and private organizations around the world. This operation demonstrates both our capability and commitment to defend our nation's cybersecurity and national security from any malicious actor who seeks to impact our way of life. We will continue to work with our domestic and international allies to identify, disrupt, and deter cyber threats, and to hold the perpetrators accountable.”
According to the indictment obtained in the District of New Jersey, from at least as early as January 2021, Sungatov allegedly deployed LockBit ransomware against victim corporations and took steps to fund additional LockBit attacks against other victims. Sungatov allegedly deployed LockBit ransomware against manufacturing, logistics, insurance, and other companies located in Minnesota, Indiana, Puerto Rico, Wisconsin, Florida, and New Mexico. Additionally, as early as August 2021, Kondratyev similarly began to allegedly deploy LockBit against multiple victims. Kondratyev, operating under the online alias “Bassterlord,” allegedly deployed LockBit against municipal and private targets in Oregon, Puerto Rico, and New York, as well as additional targets located in Singapore, Taiwan, and Lebanon. Both Sungatov and Kondratyev are alleged to have joined in the global LockBit conspiracy, also alleged to have included Russian nationals Mikhail Pavlovich Matveev and Mikhail Vasiliev, as well as other LockBit members, to develop and deploy LockBit ransomware and to extort payments from victim corporations.
U.S. Attorney Philip R. Sellinger“Today’s indictment, unsealed as part of a global coordinated action against the most active ransomware group in the world, brings to five the total number of LockBit members charged by my office and our FBI and Computer Crime and Intellectual Property Section partners for their crimes. And, even with today’s disruption of LockBit, we will not stop there. Our investigation will continue, and we remain as determined as ever to identify and charge all of LockBit’s membership — from its developers and administrators to its affiliates. We will put a spotlight on them as wanted criminals. They will no longer hide in the shadows.”
“Sheer terror fills everyone at hospitals, schools, companies, and government offices when they log into their computer systems and see they’ve been hacked,” FBI – Newark Special Agent in Charge James E. Dennehy said. “There's an immediate mad scramble to figure out how to get back their most vital information, and then a heated debate begins about whether or not to pay the demanded ransom. The chaos is the point. Most of the criminals who operate LockBit are just after the cash, but for the most notorious, it’s all about being savvier and smarter than everyone else. This intense investigation shows the FBI Newark, and our international law enforcement partners are disrupting these cyber groups, and more importantly - we are getting victims their information back. It’s incredible to think even starting way behind them, we catch up.”
With the indictment unsealed today, a total of five LockBit members have now been charged for their participation in the LockBit conspiracy. In May 2023, two indictments were unsealed in Washington, D.C., and the District of New Jersey charging Matveev with using different ransomware variants, including LockBit, to attack numerous victims throughout the United States, including the Washington, D.C., Metropolitan Police Department. Matveev is currently the subject of a reward of up to $10 million through the U.S. Department of State’s Transnational Organized Crime Rewards Program, with information accepted through the FBI tip website at www.tips.fbi.gov/. In November 2022, a criminal complaint was filed in the District of New Jersey charging Vasiliev in connection with his participation in the LockBit global ransomware campaign. Vasiliev, a dual Russian-Canadian national, is currently in custody in Canada awaiting extradition to the United States. In June 2023, Russian national Ruslan Magomedovich Astamirov was charged by criminal complaint in the District of New Jersey for his participation in the LockBit conspiracy, including his deployment of LockBit against victims in Florida, Japan, France, and Kenya. Astamirov is currently in custody in the United States awaiting trial.
Kondratyev, according to the indictment obtained in the Northern District of California and unsealed today, is also charged with three criminal counts arising from his use of the Sodinokibi, also known as REvil, ransomware variant to encrypt data, exfiltrate victim information, and extort a ransom payment from a corporate victim based in Alameda County, California.
The LockBit ransomware variant first appeared around January 2020 and, leading into today’s operation, had grown into one of the most active and destructive variants in the world. LockBit members have executed attacks against more than 2,000 victims in the United States and around the world, making at least hundreds of millions of U.S. dollars in ransom demands and receiving over $120 million in ransom payments. The LockBit ransomware variant, like other major ransomware variants, operates in the “ransomware-as-a-service” (RaaS) model, in which administrators, also called developers, design the ransomware, recruit other members — called affiliates — to deploy it, and maintain an online software dashboard called a “control panel” to provide the affiliates with the tools necessary to deploy LockBit. Affiliates, in turn, identify and unlawfully access vulnerable computer systems, sometimes through their own hacking or at other times by purchasing stolen access credentials from others. Using the control panel operated by the developers, affiliates then deploy LockBit within the victim computer system, allowing them to encrypt and steal data for which a ransom is demanded to decrypt or avoid publication on a public website maintained by the LockBit developers, often called a data leak site.
The FBI Newark Field Office is investigating the LockBit ransomware variant.
Assistant U.S. Attorneys Andrew M. Trombly, David E. Malagold, and Vinay Limbachia for the District of New Jersey and Trial Attorneys Jessica C. Peck, Debra Ireland, and Jorge Gonzalez of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the charges against Sungatov and Kondratyev unsealed today in the District of New Jersey. The Justice Department’s Cybercrime Liaison Prosecutor to Eurojust and Office of International Affairs also provided significant assistance.
The disruption announced today was the result of a joint operation between the FBI; National Crime Agency, South West Regional Organised Crime Unit; France’s Gendarmerie Nationale Cyberspace Command; Germany’s Landeskriminalamt Schleswig-Holstein and the Bundeskriminalamt; Switzerland’s Federal Office of Police, Public Prosecutor’s Office of the Canton of Zurich, and Zurich Cantonal Police; Japan’s National Policy Agency; Australian Federal Police; Sweden’s Polismyndighetens; Royal Canadian Mounted Police; Politie Dienst Regionale Recherche Oost-Brabant of the Netherlands; Finland’s Poliisi; Europol; and Eurojust.
The FBI Phoenix Field Office and Assistant U.S. Attorney Helen L. Gilbert are investigating and prosecuting the case against Kondratyev in the Northern District of California.
Additionally, the Department of the Treasury’s Office of Foreign Assets Control announced today that it is designating Sungatov and Kondratyev for their roles in launching cyberattacks.
As mentioned above, victims of LockBit should contact the FBI at https://lockbitvictims.ic3.gov for further information. Additional details on protecting networks against LockBit ransomware are available at StopRansomware.gov. These include Cybersecurity and Infrastructure Security Agency Advisories AA23-325A, AA23-165A, and AA23-075A.
Watch the Attorney General’s remarks at www.youtube.com/watch?v=-jKykhKKMZw.
An indictment is merely an allegation. Under U.S. law, all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
prs_lockbit_remarks.pdf
lockbit.indictment.pdfConvicted Ponzi Schemer and Alleged Conspirator Indicted for Multimillion-Dollar Fraud Scheme and Obstruction of JusticeRead the Press Release
NEWARK, N.J. – A New Jersey man whose 24-year federal prison sentence was commuted after being twice convicted of defrauding investors of a total of $230 million was indicted today with one other conspirator in another fraud scheme, U.S. Attorney Philip R. Sellinger announced.
The indictment charges Eliyahu “Eli” Weinstein, aka Mike Konig, 48, and Aryeh “Ari” Bromberg, 49, with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, four counts of wire fraud, and conspiracy to obstruct justice. Three of Weinstein and Bromberg’s alleged conspirators, Christopher Anderson, 47, Richard Curry, 36, and Alaa Mohamed Hattab, 35, previously pleaded guilty to conspiracy to commit securities fraud and are awaiting sentencing. Charges via criminal complaint are still pending against two of Weinstein and Bromberg’s alleged conspirators, Joel Wittels and Shlomo Erez.
U.S. Attorney Philip R. Sellinger“A federal grand jury in New Jersey has charged Weinstein and Bromberg with defrauding victim investors out of tens of millions of dollars. As alleged, soon after Weinstein got out of jail after receiving a Presidential commutation, he picked his Ponzi schemer’s playbook back up and allegedly started ripping off victims again. Weinstein allegedly used a fake name and worked with Bromberg and others to falsely promise access to deals involving scarce medical supplies, baby formula, and first-aid kits supposedly destined for wartime Ukraine. Weinstein didn’t try to make his prior victims whole – he made more victims, as alleged in the indictment. This office will aggressively investigate and prosecute fraudsters who allegedly prey on innocent investors.”
“The adage ‘history repeats itself’ proves true in the case we’ve built against Weinstein and his co-conspirators,” FBI – Newark Special Agent in Charge James E. Dennehy said. “We allege he persuaded investors to put money into several ventures, based on taking advantage of the COVID pandemic, the baby formula shortage, and even the war in Ukraine. Our investigation shows those ventures weren’t real, and to use the exact words the subjects used - it was a Ponzi scheme. Weinstein squandered his pardon from the highest office in this country for similar criminal behavior. He now faces justice, a second time.”
According to documents filed in this case and statements made in court:
Weinstein was convicted two times in New Jersey federal court for defrauding investors. His first case involved a real estate Ponzi scheme, and his second case stemmed from additional fraud Weinstein committed while on pretrial release. For these crimes, which resulted in combined losses to investors of approximately $230 million, Weinstein was sentenced to serve 24 years in prison, followed by three years of supervised release. On Jan. 19, 2021, after Weinstein had served less than eight years, the President of the United States at that time commuted Weinstein’s term to time served, leaving intact the rest of his sentence.
Soon after being released from prison, Weinstein began orchestrating a new scheme to solicit money from investors through a company called Optimus Investments Inc. (Optimus). Using the fake name “Mike Konig,” Weinstein ran Optimus with Bromberg and Wittels. They kept Weinstein’s true name and identity hidden because, as Weinstein acknowledged in a secretly recorded conversation, investors wouldn’t give them “a penny” if they learned of Weinstein’s involvement.
Weinstein, Bromberg, and Wittels received the bulk of investor money through a second company, Tryon Management Group LLC, which was owned and controlled by Anderson and Curry. Tryon promised these individual investors – consisting mostly of friends and family – lucrative opportunities to invest in deals involving COVID-19 masks, scarce baby formula, and first-aid kits supposedly bound for wartime Ukraine. Posing as Mike Konig, Weinstein provided the information for these supposed deals. Based on that information, investors gave money to Tryon, believing the deals were legitimate and not knowing about Weinstein’s involvement. In turn, Tryon transferred those funds to Weinstein, through Optimus.
In February 2022, almost immediately after Tryon and Optimus started receiving investor money, Tryon was unable to pay its investors. Rather than reveal this information to investors, the conspirators agreed to pool money from existing investors of both Optimus and Tryon and use it to make monthly payments to other investors in a Ponzi-like fashion. The conspirators concealed this arrangement from investors by falsely telling investors that the payments derived from legitimate investment returns, not other investors’ money.
In late August 2022, Weinstein revealed his true identity to Anderson and Curry, admitting in a secretly recorded meeting, “I am Eli Weinstein.” In another recorded August 2022 meeting, Weinstein admitted to misappropriating Tryon investor money and making various false statements and sending fake documents concerning the purported Optimus deals. Weinstein acknowledged that he was conducting a Ponzi scheme, stating, “I finagled, and Ponzied, and lied to people to cover us.”
Once Anderson and Curry learned that Mike Konig was actually Weinstein, they agreed with Weinstein, Bromberg, and other conspirators to continue concealing Weinstein’s identity from investors and to raise additional money to pay off existing Tryon investors, all in an effort to stop the Ponzi scheme from falling apart and to cover up the fraud.
In addition to defrauding investors, Weinstein and Bromberg also conspired to obstruct justice. They helped hide Weinstein’s assets that should have been used to pay over $200 million in restitution that he still owes his previous victims. They also concealed Weinstein’s myriad business activities, which he was required to disclose to the court and which were expressly prohibited by the terms of his supervised release. In multiple secretly recorded conversations, Weinstein discussed his intent to conceal his various assets from the government. In one such conversation, Weinstein referenced hidden assets that he “can’t touch” while on supervised release because he’d otherwise “go to jail.” Weinstein then boasted, “I just told you something that no one in the world knows because I hid money. Get it?”
The conspiracy and substantive securities fraud charges are each punishable by a maximum of 5 years in prison and a $5 million fine. The conspiracy and substantive charges of wire fraud are punishable by a maximum of 20 years in prison and a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest. The obstruction conspiracy charge is punishable by a maximum of five years in prison and a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy, with the investigation leading to the charges in this case. He also expressed appreciation for the Securities and Exchange Commission, under the direction of Antonia Apps, Director of the SEC’s New York Regional Office.
The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Carolyn Silane, and Marko Pesce of the Economic Crimes Unit in Newark.
The charges and allegations against Weinstein, Bromberg, Wittels, and Erez are merely allegations, and they are presumed innocent unless and until proven guilty.
weinsteinbromberg.indictment.pdfFormer Commodities Trader Charged with Multimillion-Dollar Wire and Commodoties Fraud SchemeRead the Press Release
NEWARK, N.J. – A Chicago man was charged today in a fraud scheme that defrauding victims of over $3.7 million, U.S. Attorney Philip R. Sellinger announced.
Phillip Galles, 57, is charged by indictment with one count each of wire fraud and commodities fraud.
U.S. Attorney Philip R. Sellinger“As alleged, Phillip Galles defrauded multiple victims by falsely posing as a successful hedge fund manager who would invest their money in commodity futures through his Chicago-based investment company Tyche Asset Management,” U.S. Attorney Sellinger said. “In reality, Galles made virtually no real investments, spent time working as a dog walker and not a fund manager, and misappropriated over $3.7 million in victims’ money. We will continue to work relentlessly to pursue those who prey on investors through lies and deception.”
According to documents filed in this case and statements made in court:
Galles, a former commodities trader, defrauded his victims by falsely claiming that he would invest their money in commodity futures through his purported investment company called Tyche Asset Management, based in Chicago. As part of the scheme, Galles and those working for him falsely told prospective investors that Tyche had a history of success using proprietary trading strategies, with extraordinary annual rates of return exceeding 100 percent. In reality, Tyche made virtually no legitimate investments in commodity futures or otherwise. Galles instead ran Tyche like a Ponzi scheme and used investor money to pay back other investors and for his own personal expenses.
Galles met with an undercover agent in New Jersey purporting to be an investment manager looking to make a large investment. Galles repeatedly lied during those meetings about Tyche and his own personal history. He falsely claimed that Tyche had annual returns of 336 percent, raised over $2 billion within 60 days of starting the fund, and had prominent investors, including a Kuwaiti sovereign fund and a well-known owner of a professional sports team. Galles also falsely claimed that he graduated from a prominent university in the Midwest. In total, Galles defrauded more than a dozen victims of more than $3.7 million.
The counts with which Galles is charged are each punishable by a maximum of 20 years in prison and a fine of $250,000 or twice the gross gain or loss involved in the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney in Newark, and postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Christopher A. Nielsen, Philadelphia Division, with the investigation leading to the charges. He also expressed appreciation to the Commodity Futures Trading Commission and the National Futures Association.
The government is represented by Assistant U.S. Attorney Carolyn Silane of the Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
galles.indictment.pdfUnion County Man Sentenced to 80 Months in Prison for Receiving Child PornographyRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man was sentenced today to 80 months in prison for receiving videos and images of child sexual abuse, U.S. Attorney Philip R. Sellinger announced.
Joshua Cremosnik, 50, of Rahway, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Julien Xavier Neals to an information charging him with one count of receipt of child pornography. Judge Neals imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From April to August 2021, Cremosnik received videos of child sexual abuse via a publicly available online peer-to-peer (P2P) file-sharing program. Subsequent to a lawful search of his residence, law enforcement officers recovered numerous videos and images of child sexual abuse on Cremosnik’s laptop and electronic storage media. Cremosnik acknowledged using the P2P network to request and receive child pornography materials and stored those materials on his laptop and electronic storage media.
In addition to the prison term, Judge Neals sentenced Cremosnik to five years of supervised release and ordered restitution of $208,694.
U.S. Attorney Sellinger credited the Newark Child Exploitation and Human Trafficking Task force, under the direction of FBI Special Agent in Charge James E. Dennehy, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Farhana C. Melo of the Criminal Division in Newark.
California Pharmaceutical Company to Pay $750,000 to Resolve False Claims Act Liability for Allegedly Paying Kickbacks to Induce Prescriptions of Opioid ProductsRead the Press Release
NEWARK, N.J. – A California pharmaceutical company has agreed to pay $750,000 to resolve allegations that it violated the False Claims Act by causing the submission of claims for certain opioids in violation of the federal Anti-Kickback Statute, U.S. Attorney Philip R. Sellinger announced today.
From Dec. 1, 2015, through Aug. 31, 2016, Sentynl Therapeutics Inc., of Solana Beach, California, a specialty pharmaceutical company, marketed and sold prescription opioids Abstral and Levorphanol Tartrate (Levorphanol).
The settlement resolves allegations that, during the relevant time period, Sentynl knowingly caused the submission of claims for Abstral and Levorphanol medications to Medicare in violation of the federal Anti-Kickback Statute. These allegedly false claims resulted from Sentynl’s alleged indirect payment of kickbacks to a physician. Specifically, the United States contends that Sentynl hired the girlfriend of a physician who was a top prescriber of Transmucosal Immediate Release Fentanyl (TIRF) medications to act as a sales representative in South Florida – the same region in which the physician practiced. Sentynl hired, employed, and made salary and bonus payments to the physician’s girlfriend to induce the physician to prescribe its Abstral and Levorphanol medications.
U.S. Attorney Philip R. Sellinger“The opioid crisis has had devastating impacts here in New Jersey and for the country at large. This office is committed to combatting this crisis at every level of the healthcare system, from the prescribers to the manufacturers. Here, this pharmaceutical company is alleged to have indirectly paid unlawful kickbacks to a doctor by employing his girlfriend in an effort to improperly induce him to prescribe their opioid products. Today’s settlement holds them accountable for this alleged wrongdoing and reflects law enforcement’s ongoing commitment to protecting the integrity of medical decision-making and combatting the opioid crisis.”
"Pharmaceutical companies that sold opioids are being held accountable for improper inducements offered to prescribers,” FBI – Newark Special Agent in Charge James E. Dennehy said. The Newark FBI and our law enforcement partners will continue our pursuit of those who continue to believe the rules don’t apply to them.”
“Pharmaceutical companies are not exempt from their responsibilities to operate within the confines of the law,” Special Agent in Charge Cheryl Ortiz of the Drug Enforcement Administration’s New Jersey Field Division said. “We are glad our diversion investigators were able to assist efforts to bring this matter to a resolution.”
“Some violations of the Anti-Kickback Statute, like those alleged here, can induce physicians’ imprudent prescribing of controlled substances,” stated Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General. “Individuals and entities that participate in the federal health care system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients.”
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; investigators of the U.S. Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Cheryl Ortiz; special agents of the U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz, with the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorney Susan J. Pappy of the U.S. Attorney’s Office, District of New Jersey’s Health Care Fraud Unit and Robert L. Toll of the Office’s Opioid Abuse Prevention and Enforcement Unit, and Trial Attorney Douglas J. Rosenthal of the Department of Justice’s Civil Division, Commercial Litigation Branch (Fraud Section).
The government’s pursuit of this matter illustrates its efforts to combat healthcare fraud. One of the strongest tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The claims resolved by the settlement are allegations only and there has been no determination of liability.
sentynl.settlement.pdfMiddlesex County Man Charged with Sexual Exploitation, Online Enticement, and Child PornographyRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, man was arrested today for allegedly inducing a minor to send him sexually explicit pictures and videos and engaging in sexually explicit conduct over an online chat platform, U.S. Attorney Philip R. Sellinger announced.
Jeremy Greenwald, 45, of South Amboy, New Jersey, is charged by complaint with one count of sexual exploitation of a child, one count of online enticement of a minor to engage in criminal sexual conduct, and one count of receipt of child pornography. Greenwald appeared this afternoon before U.S. Magistrate Judge Rukhsanah L. Singh in Trenton federal court and was detained.
According to documents filed in this case and statements made in court:
From May 2022 through February 2023, Greenwald used an online chat application to communicate with a minor victim located outside of New Jersey. At Greenwald’s request, the minor victim created and sent Greenwald over the online platform images and videos of the victim engaging in sexually explicit conduct. He directed the victim to perform certain sexual activities, even using items Greenwald had purchased and sent the victim to use during the videos, including sex toys and costumes. Greenwald also paid the victim to produce and send to Greenwald the images and videos of the victim engaged in sexually explicit conduct.
The sexual exploitation charge is punishable by a mandatory minimum penalty of 15 years in prison and a maximum potential penalty of 30 years in prison and a $250,000 fine. The charge of online enticement carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $250,000 fine. The charge of receipt of child pornography carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.
U.S. Attorney Sellinger credited the Newark Child Exploitation and Human Trafficking Task force, under the direction of FBI Special Agent in Charge James E. Dennehy, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Tracey Agnew of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
greenwald.complaint.pdfMiddlesex County Man Charged with Possession, Receipt, and Distribution of Child PornographyRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey man was charged with possessing, receiving, and distributing images of child sexual abuse, U.S. Attorney Philip R. Sellinger announced today.
Francisco Villafane, 37, of Perth Amboy, New Jersey, was charged by complaint with one count of possession, one count of receiving, and one count of distributing child pornography. Villafane was arrested on Feb. 12, 2024, made his initial appearance on Feb. 13, 2024, before U.S. Magistrate Judge Jessica S. Allen in Newark federal court, and was detained.
According to documents filed in this case and statements made in court:
In 2020, Villafane communicated with a minor victim over text message. They lost contact but they communicated again in late 2023. Villafane exchanged sexually explicit content with the victim and solicited explicit material from victim, including videos of the victim engaging in sexual acts at Villafane’s request.
The charge of possession of child pornography carries a maximum penalty of 10 years in prison and a $250,000 fine. The charges of receipt and distribution of child pornography each carry a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison, and a $250,000 fine.
U.S. Attorney Sellinger credited the Newark Child Exploitation and Human Trafficking Task force, under the direction of FBI Special Agent in Charge James E. Dennehy in Newark, and the Perth Amboy Police Department under the direction of Chief of Police Larry Cattano, with the investigation.
The government is represented by Assistant U.S. Attorney Daniel H. Rosenblum of the 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.
villafane.complaint.pdfFour Individuals Charged in Stolen Vehicles ConspiracyRead the Press Release
NEWARK, N.J. – Four individuals were charged for their roles in a conspiracy to receive, retitle, and “re-VIN” stolen vehicles, U.S. Attorney Philip R. Sellinger announced today.
Nathaniel Bell, aka “David Jones,” 26, of Linden, New Jersey; Johnathan Tanksley, 30, of Orange; L’Hubermane Felix, 24, of Miami, Florida; and Dayanna Sarango-Hidalgo, 28, of Newark, are each charged by complaint with one count of conspiracy to receive stolen vehicles. Bell is additionally charged with five counts of altering or removing motor vehicle identification numbers (VIN) and one count of transportation of stolen vehicles. Felix made his initial appearance today before U.S. Magistrate Judge Jessica S. Allen in Newark federal court. Bell, Tanksley and Sarango-Hidalgo made their initial appearances earlier this month before U.S. Magistrate Judge Edward S. Kiel in Newark federal court.
According to documents filed in this case and statements made in court:
The defendants conspired to obtain stolen vehicles from New Jersey, New York, Florida, and other states, obtained fraudulent titles for the stolen vehicles, and altered vehicle identification numbers to conceal the fact that the vehicles were stolen. The stolen cars were then sold to dealerships or individual purchasers so the defendants could make a profit. In at least one instance, the defendants sold a stolen car to an individual purchaser and then stole it back so they could sell it again. They accomplished this by placing Apple AirTags in the stolen vehicles to track the location of the vehicle after its sale.
Each defendant faces up to five years in prison on the conspiracy charge. The maximum penalty that Bell faces for each count of altering or removing a motor vehicle identification number is five years in prison, and the maximum penalty for transporting a stolen vehicle is 10 years.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the charges. He also thanked the New Jersey State Police Auto Theft Task Force; the Port Authority of New York and New Jersey; the New Jersey Motor Vehicle Commission; the Union County Prosecutor’s Office; the National Insurance Crime Bureau; the Jersey City Police Department; the Belleville Police Department; the Rahway Police Department; the Linden Police Department; the Roselle Police Department; the Eatontown Police Department; the Freehold Police Department; the Elizabeth Police Department; the Miami Police Department (Florida); the Florida Highway Patrol; Florida Fish and Wildlife Conservation Commission; the Howard County Police Department (Maryland); the New York Police Department; the Nassau County Police Department (New York); the Georgia Department of Revenue; the New Jersey Division of Criminal Justice; the Deputy Attorney General’s Office; the FBI Miami Office; the FBI Cleveland Office; and the FBI Milwaukee Office.
The government is represented by Assistant U.S. Attorney Alison Thompson of the General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
belletal.complaint.pdfEssex County Man Sentenced to 138 Months in Prison for Armed Robberies of Three PharmaciesRead the Press Release
CAMDEN, N.J. – An Essex County, New Jersey, man was sentenced today to 138 months in prison for committing three armed robberies of pharmacies in Elizabeth, New Jersey, for oxycodone and other prescription medication, U.S. Attorney Philip R. Sellinger announced.
Charles Johnson, 28, of Irvington, New Jersey, previously pleaded guilty before U.S. District Judge Karen M. Williams to an information charging him with three counts of Hobbs Act robbery and one count of brandishing a firearm during a crime of violence. Judge Williams imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Throughout June and July 2022, Johnson robbed three different pharmacies in Elizabeth using a similar approach for each of the robberies, including brandishing a firearm, committing the robberies in the morning, demanding that employees of the pharmacies provide Johnson with oxycodone, promethazine, and other prescription medication, and threatening to shoot individuals in the pharmacies with a firearm. Law enforcement officials collected extensive video surveillance footage that linked Johnson to the robberies.
In addition to the prison term, Judge Williams sentenced Johnson to three years of supervised release.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; the Union County Prosecutor’s Office, under the direction of Prosecutor William A. Daniel; and the Elizabeth Police Department, under the direction of Chief Giacomo Sacca, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Joseph Stern of the General Crimes Unit in Newark.
Paterson Police Officer Admits Civil Rights ViolationsRead the Press Release
NEWARK, N.J. – A Paterson Police Department officer today admitted using excessive force during two separate arrests, U.S. Attorney Philip R. Sellinger announced.
Kevin Patino, 32, of Wayne, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to a superseding information charging him with two counts of violating an individual’s civil rights.
According to documents filed in this case and statements made in court:
On Nov. 26, 2020, Patino responded to a call for backup from another officer who was attempting to disperse a crowd of people on Main Street in Paterson. Patino observed the other officer engaged in a verbal exchange with the first victim. Patino directed the victim to move away from the officer, but the victim initially declined to do so. Patino then pushed the victim away from the other officer and the victim walked away from Patino. Patino also began to walk away but then returned to confront the victim, who did not pose a danger to Patino or anyone else, and pushed the victim into the street. Patino then grabbed the victim, threw the victim to the ground, and proceeded to repeatedly strike the victim while the victim was on the ground. Another police officer intervened while Patino was striking the victim and handcuffed the victim.
On Dec. 14, 2020, Patino responded with another officer in an unmarked police vehicle to a call regarding a suspicious person on Madison Avenue in Paterson. Patino, along with other officers, encountered an individual who appeared to be the person described in the call. While the officers were engaged with this individual, the second victim walked towards the officers and observed their interaction with the individual, before walking away. After the officers ended their encounter with the individual, Patino and another officer drove away in their unmarked police vehicle. The officer who was driving the unmarked vehicle then made a sharp turn towards the second victim, who was walking down the street, and parked the vehicle. Patino got out of the vehicle and struck the victim, who did not pose a danger to Patino or anyone else, in the face and body several times. After the other officer grabbed hold of the victim and brought the victim to the ground, Patino continued to repeatedly strike the victim.
Patino agreed that in each instance his repeated use of force against each victim was unreasonable and excessive, in violation of the Fourth Amendment to the United States Constitution.
Each violation of civil rights count carries a maximum penalty of one year in prison and a maximum fine of $100,000. Sentencing is scheduled for July 23, 2024.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; the New Jersey Attorney General’s Office, under the direction of Attorney General Matthew J. Platkin; the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes; and the North Jersey Public Corruption Task Force composed of members of FBI and New Jersey State Police.
The government is represented by Assistant U.S. Attorneys Bernard J. Cooney of the Criminal Division and the Civil Rights Division’s Criminal Civil Rights Task Force, and Joseph Gribko, Deputy Chief of the U.S. Attorney’s Office’s Civil Rights Division.
patino.sinformation.pdfEssex County Man Admits Wire Fraud in $470,000 Kickback Scheme Involving Jersey City Condo ComplexRead the Press Release
CAMDEN, N.J. – An Essex County, New Jersey, man today admitted conspiring with two others in a kickback scheme to defraud the owner of a condominium complex in Jersey City of $470,000, U.S. Attorney Philip R. Sellinger announced.
Jonathan Smith, 56, of Montclair, New Jersey, pleaded guilty before U.S. District Judge Karen M. Williams in Camden to an information charging him with one count of conspiracy to commit wire fraud.
Smith’s conspirator, Nathaniel Obedos, pleaded guilty on July 6, 2023, before Judge Williams and is awaiting sentencing. Ranaldo Bennett, Smith’s other conspirator, was arrested and charged for the same conduct, and his case is still pending.
According to the publicly filed documents and statements made in Court:
From November 2018 through July 2020, Smith conspired with Bennett and Obedos to engage in a kickback scheme to defraud the owner of the condominium complex. Bennett was the complex’s lead property manager and Smith was its superintendent. Bennett and Smith steered repair and maintenance work to Obedos and his company. Bennett and Smith requested and received kickbacks from Obedos. To fund these kickbacks, Bennett and Smith falsified invoices that grossly inflated the value of Obedos’s work. Relying on those fake invoices, the complex paid Obedos the inflated prices, and Obedos then used the excess money to pay Bennett and Smith kickbacks. The complex paid Obedos and his company over $1 million for work that was actually valued at $500,000. Obedos used the overpayments to pay $460,000 in kickbacks to Bennett and approximately $30,000 in kickbacks to Smith.
The charge of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years and a maximum fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing for Smith is scheduled for June 10, 2024.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the today’s guilty plea.
The government is represented by Assistant U.S. Attorney Blake Coppotelli of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations against Bennett are merely accusations, and he is presumed innocent unless and until proven guilty.
smith.information.pdfBarred Broker Dealer Sentenced to 45 Months in Prison for $1.2 Million Investment Fraud and Fraudulent $96,000 CARES Act LoanRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 45 months for defrauding 14 victims of more than $1.2 million and fraudulently obtaining a loan of approximately $96,000 meant for small businesses during the COVID-19 pandemic, U.S. Attorney Philip R. Sellinger announced.
Anthony Mastroianni Jr., 49, of Manalapan, New Jersey, pleaded guilty on Sept. 13, 2023, before U.S. District Judge Robert Kirsch to an information charging him with two counts of wire fraud. Judge Kirsch imposed sentence today in Trenton federal court.
U.S. Attorney Philip R. Sellinger“This defendant admitted defrauding investors by taking the money they entrusted to him and using it for his personal benefit, rather than investing it. He did this after already having agreed never to work as broker. Investors need to know their money is being used for their best interest, and not to line the pockets of criminals. Mastroianni is now realizing the price that must be paid for stealing from innocent victims.”
According to documents filed in this case and statements made in court:
In 2016, Mastroianni consented to being permanently barred by the Financial Industry Regulatory Authority (FINRA), which prohibited him from acting as a broker or intermediary in securities transactions. Despite that debarment, Mastroianni admitted that from January 2017 to August 2022 he defrauded victim investors, many of whom were senior citizens, by falsely and fraudulently claiming that he would generate large investment profits for them through his company, Global Business Development & Consulting Corporation. Instead of investing the money as promised, Mastroianni used victim funds on personal expenses. In total, Mastroianni defrauded 14 victims of approximately $1.2 million.
Mastroianni also exploited the ongoing global pandemic by submitting a false and fraudulent application to obtain approximately $96,300 from a federal COVID-19 emergency relief loan meant for distressed small businesses. As with his investment fraud scheme, Mastroianni misused the loan proceeds to make personal purchases and cash withdrawals.
In addition to the prison term, Judge Kirsch also sentenced Mastroianni to three years of supervised release and ordered restitution of $1.3 million.
U.S. Attorney Sellinger credited special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Carolyn Silane of the Economic Crimes Unit in Newark.
Pharmacy Owner and Administrator Admit Roles in Multimillion-Dollar Health Care Fraud and Kickback SchemeRead the Press Release
TRENTON, N.J. – The co-owner and the administrator of a Union City, New Jersey, pharmacy today admitted their roles in conspiracies to defraud pharmacy benefit managers and health care benefit providers, including Medicare and Medicaid, of more than $65 million and to pay kickbacks and bribes to health care professionals and their staffs in exchange for referrals of prescriptions, U.S. Attorney Philip R. Sellinger announced.
Samuel “Sam” Khaimov, 52, and his wife, Yana Shtindler, 48, both of Glen Head, New York, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court. Khaimov pleaded guilty to two counts of a superseding indictment charging him with conspiring to commit health care fraud and conspiring to violate the federal anti-kickback statute. Shtindler pleaded guilty to conspiring to commit health care fraud. Khaimov and Shtindler’s codefendants, Ruben Sevumyants of Marlboro, New Jersey, and Alex Fleyshmakher of Morganville, New Jersey, have already pleaded guilty to counts in the superseding indictment and are awaiting sentencing.
U.S. Attorney Philip R. Sellinger“These defendants admitted taking part in an elaborate and years-long scheme to use their specialty pharmacy to rip off Medicare, Medicaid and private insurers. They paid bribes, kickbacks, set up phony jobs in doctors’ offices. They took reimbursements for medications that never dispensed and falsified records, defrauding insurers via pharmacy benefits managers of more than $65 million. Protecting the integrity of our healthcare system at all levels is a top priority for this office. We will continue to work relentlessly with our enforcement partners to ensure those who commit healthcare fraud or undermine the integrity of medical decision-making through bribes and kickbacks face justice, like the defendants in this case.”
“The impacts of health care fraud are far-reaching,” FBI – Newark Special Agent in Charge James E. Dennehy said. “These schemes not only put a tremendous amount of strain on our resources, but also have significant impacts on insurance costs and chip away at the foundation of trust we have in our health care providers. Bottom line, the conspirators in this case put personal greed above quality patient care. While we are happy to see Khaimov, Shtindler and their crew face justice, we will remain at work for the American public and continue seeking out and shutting down these scams.”
“The defendants’ role in the conspiracies to defraud pharmacy benefit managers, health care benefit providers, and taxpayers via Medicare and Medicaid of more than $65 million is deplorable,” Tammy Tomlins, Special Agent in Charge of the IRS - Criminal Investigation Newark Field Office, said. “IRS - Criminal Investigation and our law enforcement partners will continue to pursue those who knowingly violate the law and undermine the integrity of our federal healthcare system.”
“The additional pleas in this investigation demonstrate that HHS-OIG will continue to hold accountable individuals who exploit federal health care programs for their own greed,” Naomi Gruchacz, Special Agent in Charge with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), said. “Pharmacy employees who submit fraudulent claims to Medicare and Medicaid and bribe medical providers to induce prescriptions put health care benefits for vulnerable populations at risk.”
According to documents filed in this case and statements made in court:
The Prime Aid Pharmacies – now closed – operated as “specialty pharmacies” out of locations in Union City and the Bronx, New York. As specialty pharmacies, they processed expensive medications used to treat various conditions, including Hepatitis C, Crohn’s disease, and rheumatoid arthritis. Khaimov was a co-owner of Prime Aid Union City and the lead pharmacist of Prime Aid Bronx. Shtindler was Prime Aid Union City’s administrator. Sevumyants was Prime Aid Union City’s operations manager. Alex Fleyshmakher worked at Prime Aid Union City and was an on-paper owner of Prime Aid Bronx. His father, Igor Fleyshmakher, a co-owner of Prime Aid Union City, pleaded guilty to separate federal charges.
Initially, the Prime Aid Pharmacies obtained retail network agreements with several pharmacy benefits managers (PBM), which allowed them to receive reimbursement payments for prescription medications, including specialty medications. PBMs acted as intermediaries on behalf of Medicare, Medicaid, and other health benefit providers, so when one of the Prime Aid Pharmacies received a prescription, the pharmacy would typically submit a claim for reimbursement to the PBM that represented the beneficiary’s drug plan.
Starting in 2009, to obtain a higher volume of prescriptions, Khaimov, Sevumyants, Alex Fleyshmakher, and other Prime Aid employees paid bribes to doctors and doctors’ employees to induce the doctors and their staffs to steer prescriptions to the Prime Aid Pharmacies. The bribes included payments by cash, check, and wire transfers, as well as expensive meals and other things of value. Another method of bribery involved paying an employee to work inside a doctor’s office.
Prime Aid Union City – at the direction of Sevumyants, Shtindler, and Khaimov – also engaged in the pervasive and fraudulent practice of billing health benefit providers and PBMs for medications that were never provided to patients. While Prime Aid generally provided medications for initial prescriptions it received, it systematically billed for refills for those same medications without ever dispensing them to patients. According to the superseding indictment, from 2013 through 2017, Prime Aid Union City received at least $65 million in reimbursement payments from Medicare, Medicaid, and private health benefit providers for medications that Prime Aid Union City not only failed to give patients, but that Prime Aid Union City also never even ordered or had in stock at the pharmacy.
Over time, PBMs conducted routine audits of Prime Aid Union City and discovered its practice of billing but not dispensing medications. In response to these audits, Shtindler instructed Prime Aid employees to falsify records submitted to the PMBs. In addition, Sevumyants, with Shtindler’s knowledge and approval, forged shipping records of a private commercial shipping company to make it appear as if medications were shipped to the patients when, in fact, they were not.
The conspiracy to commit healthcare fraud count is punishable by a maximum of 10 years in prison. The conspiracy to pay illegal kickbacks is punishable by a maximum of five years in prison. Both counts are also punishable by a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for June 13, 2024.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; special agents of the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz; the N.J. Office of the Insurance Fraud Prosecutor, Medicaid Fraud Unit, under the direction of Interim Insurance Fraud Prosecutor Al Garcia, and the N.J. Office of the State Comptroller, under the direction of Acting Comptroller Kevin Walsh, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorneys Martha K. Nye of the U.S. Attorney’s Office in Trenton and Jordann R. Conaboy and Aaron L. Webman of the Opioid Abuse Prevention and Enforcement Unit of the U.S. Attorney’s Office in Newark.
kahimov.sindictment.pdf