District of New Jersey
Press releases recorded for this federal judicial district.
Former New Jersey Corrections Officer Charged with Cryptocurrency Fraud Scheme that Targeted Law Enforcement, Fire Personnel, and Other First RespondersRead the Press Release
NEWARK, N.J. – A former New Jersey corrections officer was arrested today for orchestrating two different fraud schemes, including a cryptocurrency scheme that resulted in losses of more than $600,000, U.S. Attorney Philip R. Sellinger announced.
John DeSalvo, 47, of Marmora, New Jersey, is charged by criminal complaint with two counts of wire fraud, two counts of securities fraud, and two counts of money laundering related to the two fraud schemes. He is scheduled to appear this afternoon before U.S. Magistrate Judge André M. Espinosa in Newark federal court.
“This defendant, a former New Jersey corrections officer, is alleged to have committed two brazen investment fraud schemes in which he falsely promised huge returns to obtain hundreds of thousands of dollars from unsuspecting investors. In one scheme, DeSalvo is alleged to have targeted law enforcement and first responders to invest in a digital token that he falsely claimed was SEC-approved and listed on cryptocurrency exchanges. In the other, he is alleged to have obtained investments by promising extraordinary rates of return that we allege were too good to be true. Once DeSalvo got his investors’ money, he is alleged to have spent it on himself, paying personal expenses and funding his own investments. This Office is committed to rooting out investment and securities fraud and protecting investors. By today’s charges, we intend to hold this defendant accountable for these alleged fraud schemes and prevent him from potentially victimizing anyone else.”
U.S. Attorney Philip R. Sellinger
“We allege DeSalvo created and marketed a cryptocurrency to first responders as a ‘crypto pension’ that could supplement their existing pensions,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Our investigation shows instead of actually making the rate of return he boasted about, he allegedly used hard-earned money from firefighters, police officers, EMTs and other public servants as his personal bank account. We are asking anyone who may believe they are a victim of DeSalvo to please reach out to the FBI at 1-800-CALL-FBI.”
According to documents filed in this case and statements made in court:
The Blazar Token Fraud
DeSalvo was the creator and promoter of a digital token known as “Blazar Token,” (Blazar) which DeSalvo marketed to police, fire personnel, EMTs, and other first responders as a “crypto pension” that could be used to supplement investors’ existing pension plans. DeSalvo promised investors that Blazar would offer “more stability than any other token” and that the value of Blazar would “continue to rise over time similar to any investment fund, only at a much higher rate of success.”
Beginning in late 2021, DeSalvo used social media platforms to fraudulently solicit investments in Blazar through a series of misrepresentations including that: Blazar was in the process of becoming, or was already, a securitized token approved by the Securities and Exchange Commission; and Blazar could be purchased through payroll deductions and ACH transactions. DeSalvo additionally falsely told investors that Blazar had been approved for inclusion on several well-known cryptocurrency exchanges and guaranteed investors rates of return of more than 20 percent with “ZERO risk.”
In total, DeSalvo raised more than $620,000 from more than 200 investors in Blazar. After receiving investor funds, DeSalvo frequently used the funds for various illicit purposes unrelated to Blazar including personal expenses, day-trading in various volatile cryptocurrencies, and payments to prior investors in the manner of a Ponzi scheme.
In May 2022, DeSalvo sold off more than 41 billion of his own Blazar tokens, which caused the price of the token to drop precipitously. The value of Blazar never recovered, causing most investors to lose their entire investments.
The Brokerage-1 Fraud
Between January 2021 and May 2021, DeSalvo managed and solicited investment in an investment group through Brokerage-1, an online trading platform. DeSalvo marketed the investment group largely through social media posts in which DeSalvo falsely touted his success as an investor. DeSalvo claimed to potential investors, “I have been averaging close to 1200 % over the last 2 years. I am in the top 1,000th percent in the world. That’s the truth, the return rates I have been averaging are so high that I have people throwing money at me to invest.”
In total, DeSalvo solicited approximately $100,000 in investments from approximately 20 individuals for the investment group. After receiving the funds, DeSalvo engaged in trading activities for a brief period of time before transferring all the funds out of the investment group’s account at Brokerage-1 and into personal accounts held by DeSalvo at Brokerage-1 and Coinbase. DeSalvo then used the funds for various non-investment purposes such as credit card payments, personal trading in volatile cryptocurrencies, and payments to a contractor who performed work on DeSalvo’s personal residence.
After draining the investment group’s account, DeSalvo advised the investment group investors that their funds had been lost due to poor market conditions and provided the investors with false trading records purporting to show the trading activity that DeSalvo engaged in on behalf of the investment group.
The counts of wire fraud carry a maximum potential penalty of 20 years in prison and a fine of $250,000. The counts of securities fraud carry a maximum potential penalty of 20 years in prison and a fine of $5 million. The counts of money laundering carry a maximum potential penalty of 20 years in prison and a fine of $500,000.
The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against DeSalvo today based on the same conduct.
U.S. Attorney Sellinger credited special agents of the FBI - Newark Atlantic City Resident Agency, under the direction of Special Agent in Charge Dennehy, and detectives from the New Jersey Division of Criminal Justice, Cyber Crimes Bureau, under the direction of Acting Director Derek Nececkas, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Anthony Torntore, Chief of the U.S. Attorney’s Cybercrime Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
desalvo.complaint.pdfUnion County Investment Advisor Sentenced to 42 Months in Prison for Stealing Client MoneyRead the Press Release
NEWARK, N.J. – A former investment advisor who stole over $600,000 from his clients to fund his gambling and personal expenses was sentenced today to 42 months in prison, U.S. Attorney Philip R. Sellinger announced today.
Mario E. Rivero Jr., 39, of Elizabeth, New Jersey, pleaded guilty on Feb. 2, 2023, before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count each of wire fraud and securities fraud. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From April 2018 through November 2020, Rivero, while serving in his capacity as an investment advisor employed by a large brokerage firm, misappropriated $626,478 from five clients. Rivero, who had been entrusted to manage client funds responsibly, instead perpetrated a scheme to defraud multiple clients. He obtained his clients’ money under the fraudulent pretense that he would invest the funds, but instead, Rivero unlawfully diverted the funds to enrich himself and others.
In addition to the prison term, Judge Arleo sentenced Rivero 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 postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Shawn Barnes, Chief of the OCDETF/Narcotics Unit in Newark.
Florida Man Admits $3.6 Million Health Care Fraud SchemeRead the Press Release
TRENTON, N.J. – A Florida man today admitted his role in a durable medical equipment kickback scheme, U.S. Attorney Philip R. Sellinger announced.
Patrick Fitchner, 51, of Orlando, Florida, pleaded guilty today 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.
“The defendant admitted that he and his conspirators submitted millions of dollars’ worth of claims to Medicare and other health benefits programs that they knew were procured through the payment of kickbacks and bribes. Their scheme caused Medicare to pay out $3.6 million in fraudulently obtained reimbursements. Protecting our healthcare system from schemers like this is a full-time job, and we will use all the tools at our disposal to do so.”
U.S. Attorney Philip R. Sellinger
“The defendant admitted that he and his conspirators submitted millions of dollars’ worth of claims to Medicare and other health benefits programs that they knew were procured through the payment of kickbacks and bribes,” U.S. Attorney Sellinger said. “Their scheme caused Medicare to pay out $3.6 million in fraudulently obtained reimbursements. Protecting our healthcare system from schemers like this is a full-time job, and we will use all the tools at our disposal to do so.”
“Many scammers who commit healthcare fraud may believe the system is so complex that no one will miss a few thousand dollars here or a few million dollars there,” FBI – Newark Special Agent in Charge James E. Dennehy said. “The problem with that premise is we are paying attention, and our job as the FBI is to protect the general public from criminals who think they can game the system. Fitchner and his conspirators are now paying for their crimes, and others looking to follow suit should take note.”
“Violations of the Anti-Kickback Statute that involve durable medical equipment can jeopardize the supply of equipment and federal health care benefits for others,” Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General said. “Individuals who 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.”
According to documents filed in the case and statements made in court:
Fitchner 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. Fitchner 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.
Fitchner 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 Jan. 9, 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 today’s guilty plea.
The government is represented by Assistant U.S. Attorneys DeNae M. Thomas of the Health Care Fraud Unit in Newark and Sean M. Sherman of the U.S. Attorney’s Office in the Eastern District of New York.
fitchner.information.pdfPharmacy Operations Manager Admits Role in Multimillion-Dollar Health Care Fraud and Kickback SchemeRead the Press Release
TRENTON, N.J. – The former operations manager of a Union City, New Jersey, pharmacy today admitted his role in multimillion-dollar conspiracies to defraud health care insurers, including Medicare and Medicaid, and to pay kickbacks and bribes to health care professionals, U.S. Attorney Philip R. Sellinger announced.
Ruben Sevumyants, 40, of Marlboro, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court 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.
U.S. Attorney Philip R. Sellinger“This defendant admitted taking part in a scheme to steal millions of dollars from the health care system. From bribing doctors to billing for medication refills that were never provided, this conspiracy gamed the system, and Sevumyants profited along the way. He will now face the appropriate punishment for his crimes. Our office will always be on the lookout for those who try to turn our health insurance system into an ATM.”
"It can be hard to see why investigations like this matter to the general public going about their lives. However, healthcare professionals and pharmacies are meant to keep us healthy, not inflict harm. As healthcare recipients, we all end up footing the bills for fraudsters because our premiums increase to cover the cost of their crimes. We can't do it alone. We're asking anyone who is a victim of this type of fraud or sees it happening, to call us at 1-800-CALL-FBI and report it."
“New Jersey residents need to be able to trust their doctors and pharmacists are acting in the best interest of their overall health,” Tammy Tomlins, Special Agent in Charge, IRS - Criminal Investigation, Newark Field Office, said. “By paying bribes to doctors to induce them to steer prescriptions to Prime Aid, Sevumyants helped to illegally enrich himself and others at Prime and this type of illegal activity erodes away at the trust we place in our medical professionals.”
“Pharmacy employees who submit fraudulent claims to Medicare and Medicaid and bribe medical providers to induce prescriptions put health care benefits for older people and vulnerable populations at risk,” Naomi Gruchacz, Special Agent in Charge with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), said. “HHS-OIG will continue to hold accountable individuals who exploit federal health care programs for their own greed.”
Charges against two conspirators – Samuel “Sam” Khaimov and Yana Shtindler, both of Glen Head, New York – remain pending. Sevumyants’s other conspirators in the kickback scheme are Igor Fleyshmakher, of Holmdel, New Jersey and Alex Fleyshmakher of Morganville, New Jersey. Alex Fleyshmakher previously pleaded guilty to his role in the conspiracy and is awaiting sentencing; Igor Fleyshmakher previously pleaded guilty and was sentenced in November 2021 to 41 months in prison.
According to documents filed in this case and statements made in court:
The Prime Aid Pharmacies – now closed – operated as “specialty pharmacies” in Union City, New Jersey, and Bronx, New York, processing expensive medications used to treat various conditions, including Hepatitis C, Crohn’s disease, and rheumatoid arthritis. Sevumyants was Prime Aid Union City’s operations manager. Khaimov was a co-owner of Prime Aid Union City and the lead pharmacist of Prime Aid Bronx. Khaimov’s wife, Shtindler, was Prime Aid Union City’s administrator. Alex Fleyshmakher worked at Prime Aid Union City and was an on-paper owner of Prime Aid Bronx. His father, Igor Fleyshmakher, was a co-owner of Prime Aid Union City.
Initially, the Prime Aid Pharmacies obtained retail network agreements with several pharmacy benefit managers (PBMs), which allowed them to receive reimbursement payments to prescription medications, including specialty medications. PBMs acted as intermediaries on behalf of Medicare, Medicaid, and private healthcare insurance providers, so that when a pharmacy received a prescription, the pharmacy then submitted 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 doctors’ offices to steer prescriptions to the Prime Aid Pharmacies. The bribes included expensive meals and payments by cash, check, and wire transfers. Another method of bribery also 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 fraudulent practice of billing health insurance providers 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. From 2013 through 2017, Prime Aid Union City received tens of millions of dollars in reimbursement payments from Medicare, Medicaid, and private insurers for medications that Prime Aid Union City not only failed to give patients, but never ordered or had in stock at the pharmacy.
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 PBMs. 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 they were not.
The conspiracy to commit healthcare fraud count is punishable by a maximum of 10 years in prison and 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 Dec. 20, 2023.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge 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 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 plea.
The government is represented by Assistant U.S. Attorneys Joshua L. Haber, Chief of the Economic Crimes Unit and Aaron L. Webman of the Opioid Abuse Prevention and Enforcement Unit of the U.S. Attorney’s Office in Newark.
The charges against and allegations in the information pertaining to Khaimov and Shtindler are merely accusations, and those two defendants are presumed innocent unless and until proven guilty.
sevumyants.sindictment.pdfMorris County Sonography Company Enters into Deferred Prosecution Agreement, Agrees to Pay $95,000 to Settle Kickback AllegationsRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, sonography company has entered into a deferred prosecution agreement (DPA) to resolve criminal charges relating to kickback allegations and will pay $95,000 to resolve the civil claims, U.S. Attorney Philip R. Sellinger announced today.
As part of the resolution, a criminal information was filed on Aug. 17, 2023, charging H&D Sonography LLC of Parsippany, New Jersey, with this conduct. H&D entered into a three-year DPA that requires it to abide by certain measures to avoid conviction. H&D also entered into a civil settlement agreement under which it has agreed to pay $95,000 to the United States to resolve civil claims under the federal False Claims Act.
The criminal matter has been assigned to the U.S. Magistrate Judge Jessica S. Allen in Newark federal court.
Criminal Resolution
According to H&D’s admissions in the DPA:
From January 2015 through December 2018 in the District of New Jersey, H&D and others agreed to pay rent in excess of reasonable value to physicians to induce the physicians to refer patients for diagnostic testing to H&D. These agreements called for inflated rent payments from H&D to the physicians, purportedly to use space in the physicians’ offices for a set number of hours each week in order to perform diagnostic tests. H&D agreed to pay for significantly more hours than the technicians actually used, as a method to funnel payments to physicians. H&D structured the payments as sublease payments for the physicians’ shared offices. The sublease payments that H&D paid the physicians were more than the value of the total rent that the physicians actually paid for the shared offices. After H&D began making payments, the physicians in receipt of those payments began to refer patients to H&D for diagnostic tests, which were then billed to Medicare.
Civil Resolution
According to the contentions of the United States set forth in the civil settlement agreement:
From Jan. 1, 2015, through Dec. 31, 2018, H&D knowingly and willingly paid renumeration to referring physicians in the form of space rental payments that were above fair market value and commercially unreasonable for the purpose of inducing diagnostic testing, in violation of the federal Anti-Kickback Statute.
The civil allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act brought by Dr. Richard Chesbrough. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Chesbrough will receive approximately 17 percent of the proceeds of the civil settlement.
U.S. Attorney Sellinger credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Acting Special Agent in Charge Naomi Gruchacz, with the investigation leading to the resolution.
The criminal case was prosecuted by Assistant U.S. Attorney Ray Mateo of the Opioid Abuse Prevention and Enforcement Unit; the civil case was handled by Assistant U.S. Attorney Kruti Dharia of the Opioid Abuse Prevention and Enforcement Unit.
hd.complaint.pdf hd.settlement.pdf hd.dpa_.pdfFormer Pharmacy President Admits $32 Million Health Care Kickback SchemeRead the Press Release
NEWARK, N.J. – A former president of a pharmacy business admitted his role in a health care kickback conspiracy involving prescriptions for Medicare and TRICARE beneficiaries, Attorney for the United States Vikas Khanna announced today.
Elan Yaish, 53, of Israel, pleaded guilty on Aug. 16, 2023, before U.S. District Judge Esther Salas in Newark federal court to an information charging him with conspiracy to violate the Federal Anti-Kickback statute.
According to documents filed in this case and statements made in court:
From September 2017 to around December 2020, Yaish participated in operating pharmacies, including Apogee Bio-Pharm LLC, in Edison, New Jersey. Yaish and others agreed to engage in a scheme to pay marketing companies to direct prescriptions for expensive medications to the pharmacies.
The marketing companies identified Medicare and TRICARE beneficiaries to target for expensive drugs and contacted the beneficiaries by telephone to pressure them to agree to try expensive medications, such as pain creams, scar creams, eczema creams, and migraine medication. The marketing companies then transmitted recordings of telephone calls with the beneficiaries, together with pre-marked prescription pads for particular drugs that would yield exorbitant reimbursements, to telemedicine companies. The marketers paid the telemedicine companies kickbacks for every beneficiary referred for a prescription, and the telemedicine companies paid doctors to approve the prescriptions. The marketing companies then directed the prescriptions to pharmacies, including Apogee, with which they had kickback arrangements. The pharmacies filled the prescriptions and sought reimbursement from federal health care benefit programs, including Medicare and TRICARE. The pharmacies, including Apogee, then paid a portion of each reimbursement to the marketing companies as a kickback. As a result of the scheme, Yaish and his conspirators caused a loss to Medicare and other federal health care benefit programs of over $32 million.
The charge of conspiracy to violate the Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison, and a maximum fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Dec. 20, 2023.
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 U.S. Department of Health and Human Services Office of Inspector General, under the direction of Special Agent in Charge Naomi Gruchacz; and U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Patrick J. Hegarty, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Katherine M. Romano of the Health Care Fraud Unit and Barbara Ward, Senior Trial Counsel of the Asset Recovery and Money Laundering Unit, in Newark.
yaish.information.pdfEssex County Man Indicted for Sex Trafficking Minor and Transportation to Engage in Prostitution OffensesRead the Press Release
TRENTON, N.J. – An Essex County, New Jersey, man was arraigned today on charges of sex trafficking and prostitution-related offenses, U.S. Attorney Philip R. Sellinger announced.
Amin Sharif, 48, of Newark, is charged in a five-count indictment with one count of attempted transportation of a victim with intent to engage in prostitution, one count of sex trafficking of a minor, one count of use of an interstate facility to promote unlawful activity, one count of transporting a victim with intent to engage in prostitution, and one count of persuading a victim to travel to engage in prostitution. Sharif was previously charged by criminal complaint in January 2022 on charges of sex trafficking and is detained. He was arraigned today before U.S. Magistrate Judge Michael A. Shipp in Trenton federal court and entered a plea of not guilty.
According to documents filed in this case and statements made in court:
Since January 2021, law enforcement has been investigating Sharif for transporting and attempting to transport women and minors from various states to New Jersey and elsewhere for the purpose of engaging in commercial sex acts and other illicit conduct. Sharif used several social media platforms and profiles to recruit women and minors to engage in sex acts for money. He advertised women and at least one underage girl online for commercial sex acts. The indictment charges Sharif with conduct related to four different victims.
The sex trafficking of a minor charge carries a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison. The transporting victim with intent to engage in prostitution charges each carry a maximum penalty of 30 years in prison, and the persuading a victim to travel to engage in prostitution charge carries a maximum penalty of 60 years in prison. The use of an interstate facility to promote unlawful activity charge carries a maximum penalty of five years in prison. Each count also carries a potential fine of up to $250,000.
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.
The government is represented by Assistant U.S. Attorney Farhana C. Melo of the Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
sharif.indictment.pdfSaudi Arabian National Indicted for Interstate Transportation of Stolen School BusRead the Press Release
NEWARK, N.J. – A Saudi Arabian man was indicted for transporting a stolen school bus across state lines. Bader Alzahrani, 22, of Saudi Arabia, is charged by indictment with one count of receipt of a stolen vehicle and one count of transportation of a stolen vehicle. He was charged by complaint with the same offenses earlier this year. The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
alzahrani.indictment.pdfFlorida Man Under Indictment for Timeshare Fraud Ordered to Shutter All Telemarketing BusinessesRead the Press Release
CAMDEN, N.J. – A Florida man who was out on bail on wire fraud and other charges stemming from his operation of a telemarketing business was ordered to shut down his new telemarketing businesses for allegedly committing new fraud through them, U.S. Attorney Philip R. Sellinger announced today.
According to documents filed in this case and statements made in court:
William O’Hanlon, aka “Patrick Burns,” aka “William Burns,” 59, of Loxahatchee, Florida, was arrested on April 4, 2023, pursuant to an indictment charging wire fraud and wire fraud conspiracy arising out of his operation of Williams Andrews Burns LLC (WAB). WAB was a telemarketing business which offered services to timeshare owners in return for upfront fees.
O’Hanlon was released on bail subject to the following conditions, among others: (1) that he not have access to the personal identifying information (PII) of others; and (2) that he not commit another federal, state or local crime. At the time of his release, O’Hanlon operated Ryan James & Daniels Corp. (RJD) and related entities, which were also telemarketing businesses which offered services to timeshare owners in return for upfront fees.
While on bail, O’Hanlon allegedly continued to defraud timeshare owners through his operation of RJD. O’Hanlon allegedly caused the mass mailing of letters to timeshare owners telling them that they had been identified as potential victims of timeshare fraud and offering to collect restitution monies for them. The letters cited to a lawsuit filed by the Federal Trade Commission (FTC) and allegedly claimed that the FTC had collected $500 million to be refunded to victims of timeshare fraud. In actuality, however, the lawsuit referenced in the letters was more than 20 years old, and the FTC had not collected any funds for timeshare victims.as a result of that suit.
At the conclusion of a bail review hearing on Aug. 7, 2023, U.S. Magistrate Judge Elizabeth A. Pascal found probable cause to believe that O’Hanlon had committed mail and wire fraud through RJD while he was on pretrial release on the previously filed indictment. Judge Pascal stated that based upon the allegedly false claims in the letters, “[t]here can be no other inference drawn, at this point, than [that] the letter[s were] intended to defraud people of money.” Judge Pascal ordered O’Hanlon to cause the following entities to cease operations as of Aug. 7, 2023: Ryan James & Daniels Corp.; RJD Collect Inc.; RJD Investments Inc.; RJD Recovery Group Inc.; RJD Corp. Fraud Collectors Timeshare Exit; Williams & Burns Inc.; Harold O’Hanlon Inc.; Resort BNB Inc.; and Next Step Sober House Inc. (collectively RJD). Judge Pascal also found that O’Hanlon had access to the personal identifying information (PII) of others, in violation of his bail conditions.
If you believe you or a family member may be a victim of the alleged fraud by RJD, or have additional information about this matter, please contact your local FBI Office or 1-800-Call-FBI (1-800-225-5324).
U.S. Attorney Sellinger credited agents of the FBI’s Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire, with the investigation.
The government is represented by Assistant U.S. Attorneys Diana Vondra Carrig and Elisa T. Wiygul of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the indictment and stated during the bail proceedings are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
ohanlon.order_.pdfBurlington County Man Admits $4 Million Money Laundering SchemeRead the Press Release
CAMDEN, N.J. – A Burlington County, New Jersey, man admitted today that he illegally laundered the proceeds of a mail fraud scheme, U.S. Attorney Philip R. Sellinger announced.
Pablo Estrada, 26, of Florence, New Jersey, pleaded guilty before Chief U.S. District Judge Renée Marie Bumb in Camden federal court to an information charging him with one count of money laundering.
According to documents filed in this case and statements made in court:
From August 2020 through January 2023, Estrada received money from victims of various scams, including a lottery scam – an advance fee fraud which begins with victims receiving an unexpected notification that they have won large sums of money in a lottery, but are required to pay various fees and expenses before their winnings can be released to them. Estrada deposited the money into various bank accounts that he maintained for purposes of receiving criminal proceeds. He transferred the funds to other bank accounts, keeping a percentage for himself. Estrada laundered more than $4 million in this manner.
The money laundering charge carries a maximum penalty of 10 years in prison, a fine of $250,000 or twice the gross profits or gross loss, whichever is greatest. Sentencing is scheduled for Dec. 19, 2023.
U.S. Attorney Sellinger credited postal inspectors with the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Christopher A. Nielsen, Philadelphia Division; special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark, with the investigation leading to today’s guilty plea. He also thanked the Burlington County Prosecutors Office under the direction of LaChia L. Bradshaw and the Florence Township Police Department under the direction of Brian Boldizar for their assistance.
The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.
estrada.information_.pdfUnion County Man Sentenced to 50 Months in Prison for Role in Conspiracy to Target Asian Homeowners in Residential BurglariesRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man was sentenced today to 50 months in prison for his role in a conspiracy that targeted Asian and Asian-American homeowners for residential burglaries, U.S. Attorney Philip R. Sellinger announced.
Randi Barr, 42, of Vauxhall, New Jersey, previously pleaded guilty before U.S. District Judge Evelyn Padin to an information charging him with one count of conspiracy to commit interstate transportation of stolen property. Judge Padin imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From Dec. 2, 2016, to March 20, 2019, Barr and others participated in a conspiracy to burglarize the residences of certain Asian small business owners living in New Jersey, New York, Pennsylvania, and Delaware of large sums of money, valuable jewelry, and other items, and then transport the stolen goods in interstate commerce, including to Barr’s residences in New Jersey and Pennsylvania.
In addition to the prison term, Judge Padin ordered restitution and forfeiture of $127,661.
U.S. Attorney Sellinger credited FBI Newark’s Transnational Organized Crime Task Force, under the direction of Special Agent in Charge James E. Dennehy, in Newark, with the investigation leading to today’s sentencing. He also thanked the Middlesex County Prosecutor’s Office, South Plainfield, Hazlet Police Department, and Edison police departments, the New Jersey State Police, the Port Authority of New York and New Jersey, the U.S. Department of Labor, the U.S. Department of State, the Drug Enforcement Administration, the U.S. Customs and Border Protection, the U.S. Department of Transportation, the U.S. Postal Inspection Service, the Union County Prosecutor’s Office, and the Bernards Township, Bethlehem Township, Cherry Hill, Cinnaminson, Clark, Colonial Regional, Cranford, Delran, East Brunswick, East Hanover, Eatontown, Elizabeth, Evesham Township, Exeter Township, Fair Lawn, Forks Township, Fort Lee, Franklin Township, Glassboro, Gloucester Township, Hackensack, Haverstraw, Highland Park, Hillside, Hillsborough Township, Howell Township, Jackson, Kenilworth, Lawrence Township, Linden, Lyndhurst, Mahwah, Marlboro Township, Maywood, Middletown, Montgomery County, Montville, Morris Township, Mount Laurel, Mountainside, New Castle County, New Providence, North Brunswick, North Plainfield, Old Bridge, Paramus, Parsippany, Phillipsburg, Piscataway, Pocono Mountain Regional, Pocono Township, Raritan, Roselle Park, Sayreville, Somerville, South Brunswick, South River, South Whitehall Township, Spotswood, Town of Tuxedo, Tinton Falls, Toms River, Township of Ocean, Union, Upper Macungie Township, Wall Township, Warren, Washington Township, Watchung, Westfield, Whitehall Township, and Woodbridge Township police departments.
The government is represented by Assistant U.S. Attorneys Dong Joo Lee and Barry O’Connell of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.
California Man Admits Selling Guns and Methamphetamine over InternetRead the Press Release
NEWARK, N.J. – A California man today admitted conspiring to unlawfully sell firearms and methamphetamine via the internet, U.S. Attorney Philip R. Sellinger announced.
Angelo Chavez, 23, of Manteca, California, pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count each of conspiracy to unlawfully deal in firearms and conspiracy to distribute methamphetamine.
According to documents filed in this case and statements made in court:
Starting in August 2020, undercover law enforcement agents began communicating with Chavez and several conspirators via a social media platform, where Chavez and his conspirators advertised for sale various narcotics and firearms. From August 2020 and December 2021, undercover law enforcement agents purchased 13 firearms from Chavez and his conspirators, including six AR-15 firearms, two of which were shipped with auto sear switches which enable the firearms to function as fully automatic machine guns. Undercover agents also purchased methamphetamine from Chavez and his conspirators. Chavez and his conspirators were paid mostly in cryptocurrency and mailed the drugs and guns from addresses in California to New Jersey.
The conspiracy to unlawfully deal in firearms charge carries a statutory maximum of five years in prison and a fine of $250,000. The conspiracy to distribute methamphetamine charge carries a maximum of 20 years in prison and a fine of $1 million. Sentencing is scheduled for Dec. 21, 2023.
U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Christopher A. Nielsen, Philadelphia Division; and special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Bryan Miller, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Vera Varshavsky of the U.S. Attorney’s Criminal Division in Newark.
chavez.information.pdfUnion County Man Arrested for Corporate Tax EvasionRead the Press Release
NEWARK, N.J. – A Union County contractor was arrested today for tax evasion, U.S. Attorney Philip R. Sellinger announced.
Joel Konopka, 45, of Elizabeth, New Jersey, is charged by indictment with four counts of corporate tax evasion, two counts of filing false corporate tax returns, and two counts of failing to file corporate tax returns. He appeared this afternoon before U.S. Magistrate Judge Jessica Stein Allen in Newark federal court and was detained.
According to documents filed in this case and statements made in court:
From 2014 through 2017, Konopka was the owner and sole shareholder of Konopka Construction Inc., a business which provided construction, contracting and snow plowing services in northern New Jersey. Under the tax laws of the United States, Konopka was responsible for filing truthful and accurate corporate tax returns, Form 1120s, on behalf of Konopka Construction reporting all of the company’s income. From 2014 through 2017, Konopka Construction realized business income of at least $3.3 million, including more than $1 million in 2016. Konopka did not truthfully and accurately report that income. For tax years 2014 and 2015, Konopka filed corporate returns which reported no income for Konopka Construction for both years. For tax years 2016 and 2017, Konopka failed to file any corporate returns as required. From 2014 through 2017, Konopka caused no payments to be made to the IRS for any corporate tax.
Konopka disguised the income realized by Konopka Construction by operating almost exclusively in cash. Konopka received hundreds of checks annually made payable to Konopka Construction for services rendered totaling hundreds of thousands of dollars and cashed all but one check at check cashing businesses in Essex and Ocean counties.
The tax evasion charges are punishable by a maximum potential penalty of five years in prison and a maximum $500,000 fine per count. The filing of false tax returns charges are punishable by a maximum penalty of three years in prison and a $500,000 maximum fine per count. The failure to file tax return charges are punishable by a maximum of one year in prison and a $100,000 fine per count.
U.S. Attorney Sellinger credited special agents with IRS - Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, and special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys Mark J. McCarren and Francesca Liquori of the Special Prosecutions Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
konopka.indictment.pdfPassaic County Man Sentenced to 186 Months in Prison for Producing Child Pornography and Online EnticementRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 186 months in prison for producing one or more images of child sexual abuse and enticing a minor to engage in sexually explicit conduct, U.S. Attorney Philip R. Sellinger announced today.
Jose Minaya, 27, of Paterson, New Jersey, previously pleaded guilty before U.S. District Judge Julien X. Neals to an information charging him with one count of production of child pornography and one count of online enticement. Judge Neals imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
In July 2019, Minaya used a web-based application to engage a child in a sexually explicit conversation online. Minaya persuaded the child to take sexually explicit photographs of the child and send them to him. Minaya was arrested at his home in May 2020, at which time agents seized multiple electronic devices. Further investigation revealed that Minaya had used another application to entice an additional minor to engage in sexually explicit conduct.
In addition to the prison term, Judge Neals sentenced Minaya to lifetime supervised release and ordered him to register as a sex offender.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel, with the investigation leading to today’s sentencing. He also thanked the Passaic County Sheriff’s Office for its assistance.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.
Essex County Mother and Son Admit Roles in Scheme to Harbor Non-U.S. Citizens Through Marriage FraudRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, woman and her son admitted conspiring to commit marriage fraud, U.S. Attorney Philip R. Sellinger announced today.
Andrea Torres, 56, of Newark, pleaded guilty on Aug. 10, 2023, before U.S. District Judge Esther Salas in Newark federal court to a two-count superseding indictment charging her and others with conspiracy to harbor non-U.S. citizens by orchestrating fraudulent marriages between the non-citizens and U.S. citizens. Her son, Philip Torres, 27, also of Newark, pleaded guilty to Count Two of the superseding indictment.
According to documents filed in this case and statements made in court:
From September 2016 through March 2021, Andrea Torres and her sister, Regina Johnson, arranged and facilitated sham marriages for non-U.S. citizens who wished to remain in the United States despite the lack of legal status or proper documentation. Andrea Torres and Johnson recruited U.S. citizen potential spouses and paid them a fee in exchange for those U.S. citizens entering into sham marriages with Andrea Torres’ and Johnson’s non-citizen clients.
From March 2021 through June 2021, Andrea Torres’ son, Philip, also participated in the scheme by, among other things, officiating some of the sham marriages. Andrea Torres and Johnson arranged for the “couples” to obtain fraudulent marriage licenses and even arranged and charged their clients for wedding ceremonies and after parties that were staged to make the sham marriages appear legitimate. Andrea Torres and Johnson further advised their clients to open joint bank accounts and to meet frequently with their U.S. spouses. Clients were also advised to take photographs in a variety of locations and in different clothing to memorialize the relationship and to give the appearance of cohabitation, even though none of the clients ever resided or intended to reside with their U.S. spouses. Andrea Torres and Johnson then helped their clients complete immigration forms to obtain permanent residency on the basis of the materially false misrepresentations. Johnson previously pleaded guilty to the charge in Count One of the superseding indictment.
Each count of conspiracy to which Andrea Torres and Philip Torres pleaded guilty carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss resulting from the offense, whichever is greatest. Sentencing for both is scheduled for Dec. 14, 2023.
U.S. Attorney Sellinger credited special agents and members of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel, with the investigation leading to the guilty pleas. He also thanked U.S. Citizenship and Immigrations Services for its assistance.
The government is represented by Assistant U.S. Attorney Sammi Malek of the National Security Unit and Assistant U.S. Attorney Blake A. Coppotelli of the Economic Crimes Unit in Newark.
torres.sindictment.pdfTwo Men Arrested After Another Pleads Guilty in $470,000 Kickback Scheme Involvintg Jersey City Condo ComplexRead the Press Release
NEWARK, N.J. – Two New Jersey men were charged, and another previously pleaded guilty, for participating 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 today.
Ranaldo Bennett, 40, of Jersey City, and Jonathan Smith, 56, of Montclair, New Jersey, were each charged in a three-count complaint with conspiracy to commit wire fraud and money laundering. Smith was arrested earlier today and will have his initial appearance this afternoon before U.S. Magistrate Judge Edward S. Kiel in Newark federal court. Bennett was arrested earlier in the week and had his initial appearance before Judge Kiel on Aug. 7, 2023.
Nathaniel Obedos, 56, of Jersey City, pleaded guilty on July 6, 2023, before U.S. District Judge Karen M. Williams in Camden federal court to an information charging him with conspiracy to commit wire fraud.
According to the publicly filed documents and statements made in Court:
From November 2018 through October 2020, Obedos conspired with Bennett and Smith 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 in exchange for kickbacks from Obedos. 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. In total, 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 over $10,700 in kickbacks to Smith.
The charge of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years, and the money laundering charges each carry a maximum penalty of 10 years in prison. Each charge also carries a maximum fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest. Obedos’ sentencing is scheduled for Nov. 9, 2023.
U.S. Attorney Philip R. 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 plea and arrests.
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 and Smith are merely accusations, and they are presumed innocent unless and until proven guilty.
obedos.information.pdf
bennetsmith.complaint.pdfNew York Man Charged with Fraudulently Obtaining More Than $1 MillionRead the Press Release
NEWARK, N.J. B A New York man was arrested this morning on charges he fraudulently obtained more than $1 million in a COVID-19 scheme, U.S. Attorney Philip R. Sellinger announced.
Terrell Fuller, 33, of Brooklyn, New York, is charged by complaint with one count of wire fraud. Fuller is scheduled to appear this afternoon 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 Coronavirus Aid, Relief, and Economic Security (CARES) Act was a federal law enacted in or around March 2020 that was designed to provide emergency financial assistance to Americans suffering the economic effects of the COVID-19 pandemic. The CARES Act enabled the Small Business Association (SBA) to offer funding through the Economic Injury Disaster Loan (EIDL) program to business owners negatively affected by the COVID-19 pandemic.
In September 2021, a fraudulent EIDL application was made to the SBA on behalf of a business. The SBA provided $1.2 million in response to the application. According to a representative of the business, the business did not make the application. Approximately $400,000 of the funds paid out by the SBA in response to the application were eventually deposited into bank accounts to which Fuller was the sole signatory.
The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits or twice the gross loss suffered to the victims of his 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, and special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, with the investigation leading to today’s arrest. He also thanked the U.S. Postal Inspection Service in Newark, the New York Police Department and FBI – New York for their assistance.
The government is represented by Senior Trial Counsel Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.
The charge and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
fuller.complaint.pdfTwo New York Men Admit Fentanyl DistributionRead the Press Release
NEWARK, NJ. – Two New York men today admitted their roles in a fentanyl distribution conspiracy, and one of the men also admitted conspiring with seven separately charged individuals to defraud multiple states to obtain COVID-19 unemployment benefits, U.S. Attorney Philip R. Sellinger announced.
Billy Castro, 33, of Queens, New York, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to a three-count information charging him with conspiracy to distribute and possess with intent to distribute fentanyl, possessing with intent to distribute fentanyl, and conspiracy to commit wire fraud.
Juan De La Cruz Infante Torres, 52, of Brooklyn, New York, pleaded guilty before Judge Shipp on June 14, 2023, to an information charging him with one count of conspiracy to distribute and possess with intent to distribute fentanyl and one count of possessing with intent to distribute fentanyl.
According to documents filed in this and other cases and statements made in court:
In May and June 2021, Castro and Infante conspired with others to distribute fentanyl. On June 15, 2021, Castro and Infante took approximately two kilograms of fentanyl from Castro’s apartment to Clifton, New Jersey, where they were arrested trying to sell it. Law enforcement agents then searched Castro’s apartment and found approximately two additional kilograms of fentanyl. The agents also found driver’s licenses, Social Security cards, debit cards, tax forms, bills, and other documents – including COVID-19 unemployment benefits applications and debit cards – in the names of approximately 100 individual victims.
On April 24, 2023, the following individuals were separately charged by complaint with conspiracy to commit wire fraud:
Rafael Josmin Nunez Duarte, 33; Natanael Valdez Brito, aka “El Pocho,” 34; Josmin Rafael Nunez Duarte, aka “Mello,” 33; and Alexander Arismendy Alix Hernandez, 22, all of Bronx, New York; Leonel Frias Espaillat, 32, of Allentown, Pennsylvania; and Abrahan Rivas Rojas, aka “Milandro,” 36, and Yarisa Espaillat, aka“Yari,” 34, both of the Dominican Republic.
A subsequent investigation revealed that Castro conspired with Nunez, Valdez, Duarte, Alix, Frias, Rivas, Espaillat, and others to use the personal identifying information of thousands of individual victims to create fictitious online profiles claiming to be real people seeking unemployment benefits as a result of the COVID-19 pandemic. Using these fake profiles, the conspirators submitted fraudulent applications to the departments of labor of Puerto Rico and numerous states, including Pennsylvania, New York, and New Jersey. Once the fraudulent unemployment benefit applications were approved, the conspirators received unemployment benefit funds through debit cards, which they either cashed out at ATMs or used to make purchases. To date, law enforcement has identified that the victims’ information was used to fraudulently obtain approximately $25 million in unemployment benefits from 29 different states.
The charges of conspiracy to distribute and possess with intent to distribute fentanyl each carry a statutory maximum prison sentence of 20 years and a statutory maximum fine of $1 million. The charge of conspiracy to commit wire fraud carries a statutory maximum prison sentence of 20 years and a fine of the greatest of $250,000, twice the gross amount of any pecuniary gain or loss, whichever is greatest.
Sentencing for Castro is scheduled for Dec. 14, 2023. Sentencing for Infante is scheduled for Oct. 25, 2023.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark with the investigation leading to the guilty pleas and charges. He also thanked the U.S. Department of Labor, Pennsylvania Department of Labor and Industry, and New York Department of Labor for their assistance in the investigation.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. 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 Mark J. Pesce of the Economic Crimes Unit in Newark.
The charges and allegations against Nunez, Valdez, Duarte, Alix, Frias, Rivas, and Espaillat are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
castro.information.pdf
infante.information.pdfOcean County Businessman Admits Failing to Pay over $10 Million in Payroll TaxesRead the Press Release
TRENTON, N.J. – An Ocean County man today admitted failing to pay over $10 million in payroll taxes stemming from his ownership of several businesses, U.S. Attorney Philip R. Sellinger announced.
Josef Neuman, 37, of Lakewood, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp to an information charging him with willful failure to pay over payroll taxes for one of his businesses in 2018.
According to documents filed in this case and statements made in court:
Neuman was chief executive officer of a business in Lakewood. The company provided administrative services to operators of nursing homes and other health care facilities, including at least approximately 20 entities co-owned and operated by Neuman. As a person who controlled the companies’ financial affairs, Neuman had the responsibility to collect, truthfully account for, and pay over to the IRS the companies’ payroll taxes. During tax years 2017 and 2018, Neuman failed to pay over to the IRS over $10 million in payroll taxes owed by the companies. Neuman knew that payroll taxes were due and owing to the IRS at this time, but continued to pay other business expenses and employee salaries, instead of the unpaid taxes, while tax liabilities continued to accrue.
The charge to which Neuman pleaded guilty carries a maximum penalty of five years in prison and a maximum fine of $10,000. Sentencing is scheduled for Dec. 13, 2023.
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 Katherine Romano of the Health Care Fraud Unit in Newark.
neuman.information.pdfEssex County Woman Admits Role in Scheme to Harbor Non-U.S. Citizens Through Marriage FraudRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, woman admitted conspiring to commit marriage fraud, U.S. Attorney Philip R. Sellinger announced today.
Regina Johnson, 59, of Newark, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court on Aug. 8, 2023, to one count of a superseding indictment charging her and others with conspiracy to harbor non-U.S. citizens by orchestrating fraudulent marriages between the non-citizens and U.S. citizens.
According to documents filed in this case and statements made in court:
From September 2016 through July 2019, Regina Johnson and her sister, Andrea Torres, arranged and facilitated sham marriages for non-U.S. citizens who wished to remain in the United States despite the lack of legal status or proper documentation. Torres and Johnson recruited U.S. citizen potential spouses and paid them a fee in exchange for those U.S. citizens entering into sham marriages with Torres’ and Johnson’s non-citizen clients.
Torres’ son, Philip Torres, also charged in the superseding indictment, participated in the scheme by officiating some of the sham marriages. Andrea Torres and Johnson arranged for the “couples” to obtain fraudulent marriage licenses and even arranged and charged their clients for wedding ceremonies and after parties that were staged to make the sham marriages appear legitimate. Andrea Torres and Johnson further advised their clients to open joint bank accounts and to meet frequently with their U.S. spouses. Clients were also advised to take photographs in a variety of locations and in different clothing to memorialize the relationship and to give the appearance of cohabitation, even though none of the clients ever resided or intended to reside with their U.S. spouses. Andrea Torres and Johnson then helped their clients complete immigration forms to obtain permanent residency on the basis of the materially false misrepresentations.
The charge of conspiracy to which Johnson pleaded guilty carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss resulting from the offense, whichever is greatest. Sentencing is scheduled for Dec. 14, 2023.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel, with the investigation leading to the guilty plea. He also thanked U.S. Citizenship and Immigration Services for its assistance.
The government is represented by Assistant U.S. Attorney Sammi Malek of the National Security Unit and Assistant U.S. Attorney Blake A. Coppotelli of the Economic Crimes Unit in Newark.
The charges and allegations contained in the superseding indictment against Andrea Torres and Philip Torres are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
johnson.sindictment.pdfAtlantic County Man Charged with Possessing Destructive DevicesRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man was charged today with possessing destructive devices, U.S. Attorney Philip R. Sellinger announced.
Robert J. Moser, 31, of Mays Landing, New Jersey, was charged by complaint with one count of possessing destructive devices. He is scheduled to appear today before U.S. Magistrate Judge Matthew J. Skahill in Camden federal court.
According to documents filed in this case and statements made in court:
On March 17, 2023, law enforcement officers responded to Moser’s residence after receiving a 911 call that Moser was unconscious after a possible drug overdose. One of the officers who responded to assist Moser in his bedroom observed in plain view numerous suspicious devices covered in tape with exposed fuses. Officers secured the scene and recovered at least two destructive devices. One of the destructive devices contained explosive powder, metal ball bearings, and metal eye hooks, and a second destructive device contained explosive powder and metal dart tips.
The possession of a destructive device charge carries a maximum penalty of 10 years in prison and a fine of up to $250,000.
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; officers of the Township of Hamilton Police Department, under the direction of Chief Gregory K. Ciambrone; members of the Atlantic City Police Department Bomb Squad, under the direction of Chief James A. Sarkos; and personnel from the Atlantic City Prosecutor’s Office, under the direction of Prosecutor William Reynolds, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
moser.complaint.pdfOcean County Man Charged with Sexually Exploiting MinorsRead the Press Release
TRENTON, N.J. – An Ocean County, New Jersey man was arrested yesterday for enticing minors to produce videos and images of child exploitation material and for receiving videos and images depicting child pornography, U.S. Attorney Philip R. Sellinger announced.
Daniel Nilla, 35, Brick, New Jersey, was charged by complaint with two counts of sexual exploitation of a minor and one count of receipt of child pornography. He made his initial appearance on Aug. 3, 2023, before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court and was detained.
According to documents filed in this case and statements made in court:
From on or about December 12, 2021, to on or about April 28, 2023, Nilla was communicating with and receiving images and videos containing child exploitation material from five minor victims on a multimedia instant messaging application. Nilla induced at least two of those minor victims to send him images and videos of themselves engaging in sexually explicit conduct.
The charges of sexual exploitation of a minor each carry a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine. The charge of receipt of child exploitation material carries a mandatory minimum penalty of 5 years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.
U.S. Attorney Sellinger credited special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation. U.S. Attorney Sellinger also thanked special agents of the FBI Kansas City, Kansas Division, under the direction of Special Agent in Charge Charles A. Dayoub, and the City of Edwardsville, Kansas Police Department, under the direction of Chief of Police Mark Mathies.
The government is represented by Assistant U.S. Attorney Ashley Super Pitts of the 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.
nilla.complaint.pdfUnion County Man Sentenced to 61 Months in Prison for Illegally Possessing Firearm and Drug TraffickingRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man was sentenced to 61 months in prison for illegally possessing fentanyl, heroin, cocaine, and oxycodone for distribution and possessing a firearm in furtherance of drug trafficking, U.S. Attorney Philip R. Sellinger announced today.
William Murphy, 45, of Elizabeth, New Jersey, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of being a previously convicted felon in possession of a firearm and ammunition, one count of possession with intent to distribute controlled substances, and one count of possession of a firearm in furtherance of a drug trafficking crime. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On July 30, 2020, law enforcement officers executed search warrants at Murphy’s residence and found oxycodone pills; knotted bags containing mixtures of cocaine, heroin, and fentanyl; a digital scale; a money counter; numerous empty vacuum sealed bags; and approximately $13,000 in cash. The officers also recovered a 9mm Taurus handgun, loaded with 12 rounds of 9mm ammunition, a magazine loaded with 12 rounds of 9mm ammunition, and a box containing 50 rounds of 9mm ammunition.
In addition to the prison term, Judge Arleo sentenced Murphy to three years of supervised release.
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; and Elizabeth Police Department, under the direction of Chief Giacommo Sacca, with the investigation leading to the sentencing.
The government is represented by Assistant U.S. Attorneys Dong Joo Lee and Vince D. Romano of the Narcotics/Organized Crime and Drug Enforcement Task Force Unit.
Maryland Man Admits Fraudulently Obtaining More Than $2 Million in Wire Fraud SchemeRead the Press Release
CAMDEN, N.J. – The owner of a New Jersey-based scrap metal company admitted illegally obtaining more than $2 million through a multi-year scheme that victimized more than 10 businesses, U.S. Attorney Philip R. Sellinger announced today.
Creed White, 64, of Freeland, Maryland, pleaded guilty before U.S. District Judge Christine P. O’Hearn on Aug. 2, 2023, to an information charging him with one count of wire fraud.
According to documents filed in the case and statements made in court:
From 2010 through September 2020, White used his Camden-based business, American Scrap LLC, to victimize at least 13 businesses. White fraudulently purported to engage in the business of shipping scrap metal. He obtained payments from certain victims for shipments of scrap metal that he never shipped and obtained scrap metal from certain victims and then failed to pay those victims for the materials he obtained. White’s scheme defrauded the victim companies of more than $2.1 million.
The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profits or gross loss suffered by the victims of his 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 the guilty plea.
The government is represented by Assistant U.S. Attorney Desiree Grace, Deputy Chief of the Criminal Division in Newark.
white.information.pdfNew Jersey Tax Preparer Arrested for Fraudulently Seeking over $124 Million in COVID-19 Employment Tax CreditsRead the Press Release
NEWARK N.J. – A New Jersey tax preparer was arrested today for fraudulently seeking more than $124 million from the IRS by filing over 1,000 false tax forms claiming COVID-19-related employment tax credits, U.S. Attorney Philip R. Sellinger and Acting Deputy Assistant Attorney General Stuart M. Goldberg announced today.
Leon Haynes, 49, of Teaneck, New Jersey, is charged by complaint with eight counts of aiding and assisting the filing of false tax returns and one count of mail fraud. He is scheduled to have his initial appearances this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
“While our country was fighting the spread of the virus and its profound economic impact, Haynes allegedly scammed the system in a massive scheme to line his own pockets,” U.S. Attorney Philip R. Sellinger said. “As described in the complaint, Haynes abused his position as a tax preparer to steal millions of dollars by submitting over 1,000 false applications for funds set aside to help legitimately struggling businesses. My office and our partners will continue to find and prosecute fraudsters who exploited the pandemic for personal gain.”
“Today’s arrest demonstrates IRS Criminal Investigation and our law enforcement partners commitment to holding accountable those who exploited the pandemic for personal gain,” Tammy Tomlins, Special Agent in Charge of the Newark Field Office, said. “We are committed to rooting out pandemic-related fraud and holding accountable anyone seeking to profit from the public health emergency.”
“This arrest demonstrates our commitment to pursue those who attempt to defraud pandemic-related assistance programs through SSN misuse,” Gail S. Ennis, Inspector General for the Social Security Administration, said. “These programs provided aid to businesses and employees during a crisis; we will continue to collaborate with other law enforcement agencies to investigate those who allegedly misused them for personal and selfish gain,” said “I thank the IRS – Criminal Investigation, and the U.S. Postal Service for their investigative efforts and the U.S. Attorney’s Office for working this case.”
“As many of us suffered through the pandemic, Leon Haynes found a way to line his pockets at our expense,” Christopher Nielsen, Postal Inspector in Charge of the Philadelphia Division, said. “He allegedly filed over $100 million worth of fraudulent tax returns, stealing money from programs designed to support suffering businesses. Working with our colleagues at the IRS Criminal Investigative Division and the United States Attorney’s Office, we have begun the process of holding him accountable for his frauds.”
According to 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. This “paid sick and family leave credit” was equal to the wages the business paid the employees during the sick or family leave, also subject to a maximum amount.
From November 2020 to May 2023, Haynes, acting as a tax preparer, repeatedly exploited these programs by preparing and submitting 1,387 false forms to the IRS claiming COVID-related tax credits on behalf of himself and clients. Haynes falsely told his clients that the government was giving out COVID-relief money for businesses and that they were eligible for the money simply because they had a business. Without consulting with his clients, Haynes then submitted forms to the IRS on behalf of their businesses that grossly overstated the number of employees and amount of paid wages. Haynes submitted similarly false forms for three of his own companies. Based on these and other misrepresentations, Haynes fraudulently sought $124.8 million in tax refunds on behalf of his companies and numerous other businesses in his clients’ names.
Based on Haynes’ false claims about his own companies, the U.S. Treasury mailed him multiple tax refund checks totaling more than $1 million. The U.S. Treasury also disbursed at least $31.6 million in tax refunds to Haynes’ clients based on the false tax forms that Haynes submitted. Haynes charged each client up to a 15 percent fee based on the tax refunds the client received from the U.S. Treasury. At Haynes’ request, many clients paid him those fees in cash.
Each count of aiding and assisting in the preparation of false returns carries a maximum penalty of three years in prison and a $250,000 fine. The mail fraud charge carries a maximum penalty of 20 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 IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott, and postal inspectors from the U.S. Postal Service, under the direction of Inspector in Charge Christopher Nielsen, Philadelphia Division, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the Economic Crimes Unit in Newark and Trial Attorney Samuel B. Bean of the U.S. Department of Justice, Tax Division.
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 charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
haynes.complaint.pdfMonmouth County Man Sentenced to 20 Years in Prison for Producing Child PornographyRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 240 months in prison for producing multiple videos depicting him sexually assaulting a minor, U.S. Attorney Philip R. Sellinger announced.
Christian Importuna, 27, of Englishtown, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to one count of an indictment charging him with production of child pornography. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
In March 2020, Importuna produced at least two videos that showed him sexually assaulting a pre-pubescent victim. The videos came to the attention of law enforcement on March 24, 2020, when Importuna attempted to trade images of child pornography with an undercover law enforcement official on an internet-based application. Law enforcement officials initially linked the videos to Importuna through business records indicating that they were sent from his Englishtown residence. The investigation linked Importuna to the production of the images through physical identifiers that were visible in the subject videos.
In addition to the prison term, Judge Sheridan sentenced Importuna to lifetime supervised release and ordered him to pay $28,000 in restitution.
U.S. Attorney Sellinger credited special agents the FBI Newark Child Exploitation and Human Trafficking Task force, under the direction of Special Agent in Charge James E. Dennehy, with the investigation leading to today’s sentencing.
The government is represented by Assistant United States Attorney Shawn Barnes, Chief of the OCDETF/Narcotics Unit in Newark.
Gloucester County Man Admits Conspiring to Commit Bank Fraud and Credit Card FraudRead the Press Release
CAMDEN, N.J. – A Gloucester County, New Jersey, man today admitted participating in schemes to negotiate fraudulent checks with forged signatures and to use credit cards without authorization, U.S. Attorney Philip R. Sellinger announced.
Misty Sarfo-Adu, 28, of Sewell, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count of bank fraud conspiracy and one count of access device fraud conspiracy.
According to documents filed in this case and statements made in court:
Sarfo-Adu conspired with Eugene Koranteng, Emmanuel Yirenkyi, and others to commit bank fraud by obtaining blank checks containing the names and account information of unsuspecting customers of a credit card company. They made the checks payable to members of the conspiracy, forged the customers’ signatures on the checks, and negotiated the checks at financial institutions. In a separate scheme, Sarfo-Adu and Yirenkyi also conspired to use credit cards without the account holders’ knowledge or authorization. Sarfo-Adu admitted that the fraud schemes caused a loss to the credit card company of more than $150,000.
The count of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a fine of up to $1 million. The count of conspiracy to commit access device fraud carries a maximum penalty of five years in prison and a fine of up to $250,000. Sentencing is scheduled for Nov. 28, 2023.
Koranteng and Yirenkyi remain charged in criminal complaints. The charges and allegations contained in the complaints against Koranteng and Yirenkyi are merely accusations, and they are presumed innocent unless and until proven guilty.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel, with the investigation leading to today’s guilty plea. U.S. Attorney Sellinger also thanked the Moorestown Police Department for its assistance in the investigation.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
sarfoadu.information.pdfNew York Man Sentenced to 11 Years in Prison for Conspiring to Distribute Fentanyl, Methamphetamine and HeroinRead the Press Release
NEWARK, N.J. – A New York man was sentenced to 132 months in prison for participating in a conspiracy to distribute fentanyl, methamphetamine and heroin in New Jersey from locations in Manhattan, U.S. Attorney Philip R. Sellinger announced today.
Juan Carlos Merced Moreno, aka “Samuel,” 45, of Manhattan, New York, pleaded guilty by videoconference on Dec. 20, 2022, before U.S. District Judge Claire C. Cecchi to a superseding information charging him with one count of conspiracy to distribute and possess with intent to distribute 40 grams or more of a mixture and substance containing fentanyl, 50 grams or more of a mixture and substance containing methamphetamine, and 100 grams or more of a mixture and substance containing a detectable amount of heroin. Judge Cecchi imposed the sentence on July 25, 2023, in Newark federal court.
According to documents filed in this case and statements made in court:
Moreno admitted that from November 2020 through January 2021 he conspired with others to distribute and possess with intent to distribute fentanyl, methamphetamine, and heroin. He admitted participating in the conspiracy from locations in Manhattan and that some of the controlled substances were transported to New Jersey.
In addition to the prison term, Judge Cecchi sentenced Moreno to four years of supervised release.
U.S. Attorney Sellinger credited members of the Department of Homeland Security, Homeland Security Investigations, New York City Airport Border Enforcement Security Task Force under the direction of Ivan J. Arvelo; special agents of Homeland Security Investigations Newark Airport Border Enforcement Security Task Force, under the direction of Special Agent in Charge Ricky J. Patel; members of the New York Police Department, under the direction of Commissioner Edward Caban; and investigators and assistant prosecutors from the Hudson County Prosecutor’s Office, under the direction of Hudson County Prosecutor Esther Suarez, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office National Security Unit in Newark.
Monmouth County Man Sentenced to 45 Months in Prison for Role in $1 Million ‘Upfront-Fee’ SchemeRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, man was sentenced today to 45 months in prison for his role in defrauding multiple victims through a $1 million “upfront-fee” scheme, U.S. Attorney Philip R. Sellinger announced.
Jerrid Douglas, 49, of Freehold, New Jersey, was convicted on Oct. 21, 2022, of wire fraud conspiracy and four counts of wire fraud following a five-week jury trial before U.S. District Judge John Michael Vazquez, who imposed the sentence today in Newark federal court. Two co-defendants were sentenced in June 2023 for their respective roles: Roy Johannes Gillar, 51, of Las Vegas, was sentenced to six years in prison, and Harold Mignott, 60, of Voorhees, New Jersey, was sentenced to three years in prison.
According to documents in this case and evidence at trial:
From March 2016 through June 2016, Douglas, Gillar, and Mignott, along with a fourth conspirator, agreed to defraud the owners of the victim company of approximately $1 million. The defendants fraudulently induced the two victim company owners to enter a joint venture agreement with the defendants’ New Jersey-based shell company. The defendants falsely represented that their company could acquire and provide a “standby letter of credit” (SBLC) backed by either €1 billion in cash or highly lucrative Mexican gold bonds. An SBLC is a guarantee of payment issued by a bank on behalf of a client that is used should the client fail to fulfill a contractual commitment with a third party.
The victim company wanted access to the standby letter of credit so it could purchase raw gold overseas and sell it to gold refineries. As part of the joint venture agreement, the company agreed to pay the defendants $1 million for the bank fee associated with the standby letter of credit.
In order to cover up the scheme and convince the victims to approve the transfer of the funds, the defendants made numerous verbal and written misrepresentations, including providing the victims with a phony letter from a major international bank saying that it was ready, willing, and able to provide a €1 billion SBLC to the defendants’ shell company.
However, after the victim company owners transmitted $800,000 of the $1 million to the defendants, the defendants failed to provide an SBLC or anything of value. Instead, the defendants misappropriated the money for their personal use.
In addition to the prison term, Judge Vazquez sentenced Douglas to three years of supervised release, restitution of $1.1 million, and forfeiture of $44,750.
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 sentencing.
The government is represented by Assistant U.S. Attorneys Jason S. Gould and Joshua L. Haber of the U.S. Attorney’s Office Criminal Division in Newark.
Federal Inmate Admits Possessing Child PornographyRead the Press Release
CAMDEN, N.J. – A federal inmate serving a 10-year sentence for possessing child pornography admitted today to possessing images and videos of child sexual abuse while incarcerated, U.S. Attorney Philip R. Sellinger announced.
Daniel Baldwin, 32, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count of possession of child pornography.
According to documents filed in this case and statements made in court:
In June 2022, corrections officers found an SD card hidden in Daniel Baldwin’s clothing. A subsequent search of the SD card revealed hundreds of images and videos of child abuse, including depictions of prepubescent minors.
Because Baldwin has a prior federal conviction for possessing child pornography, the charge of possession of child pornography depicting prepubescent children carries a mandatory minimum penalty of 10 years in prison, a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 28, 2023.
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 guilty plea. He also thanked FCI Fort Dix staff for their assistance in the investigation.
The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.
baldwin.information.pdfCamden County Man Admits Possession of Child PornographyRead the Press Release
CAMDEN, N.J. – Camden County, New Jersey, man today admitted possessing images of child sexual abuse, U.S. Attorney Philip R. Sellinger announced.
Robert Giles, 71, of Collingswood, New Jersey, pleaded guilty before Chief U.S. District Judge Renée Marie Bumb in Camden federal court to an indictment charging him with one count of possession of child pornography.
According to documents filed in this case and statements made in court:
On April 15, 2022, agents with FBI served a search warrant at Giles’s residence and discovered electronic devices that belonged to Giles. A forensic examination of those devices revealed over 45,000 unique files containing videos and images of children being sexually abused.
The charge of possession of child pornography carries a maximum penalty of 20 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Nov. 29, 2023.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia, with the investigation leading to today’s guilty plea. He also thanked the Collingswood Police Department for their assistance in the investigation.
The government is represented by Assistant U.S. Attorney Andrew Johns of the Criminal Division in Camden.
giles.indictment.pdfFormer Political Staffer Sentenced to Eight Months’ Home Confinement, Three Years’ Probation, for Role in Scheme to Defraud Campaigns and Political Action CommitteesRead the Press Release
NEWARK, N.J. – A Union County man who previously served as a staff member in the New Jersey Senate was sentenced today to eight months of home confinement and three years of probation for his role in a conspiracy to falsely inflate the invoices that a political consultant submitted to various campaigns, political action committees, and IRS 501(c)(4) organizations, U.S. Attorney Philip R. Sellinger announced.
Antonio Teixeira, 44, of Elizabeth, New Jersey, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion. Judge Vazquez imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2014 to 2018, Teixeira conspired with Sean Caddle, and Caddle’s political consulting firms, to defraud various campaigns, political action committees, and 501(c)(4) organizations. Teixeira then failed to report this illicit income on tax forms that he filed with the IRS during those same years.
Caddle was hired by a former New Jersey state senator to create the PACs and 501(c)(4)s so that they could raise and spend money to advocate on a variety of issues, including supporting particular candidates in local races around New Jersey. Teixeira served as the senator’s chief of staff and wielded influence over the consultants that the campaigns and organizations hired and the budgets that each of these organizations would receive.
Teixeira and Caddle conspired to falsely inflate the invoices that Caddle’s consulting firms submitted to the campaigns, PACs and 501(c)(4)s with phony campaign-related expenditures. Caddle and Teixeira were fraudulently padding the invoices because they agreed to split the difference between Caddle’s actual campaign expenditures and the overage charged to the organizations. Caddle paid a portion of Teixeira’s share to him in cash and funneled the remainder to Teixeira via checks made to out to Teixeira’s relatives in order to conceal that campaign money was being kicked back to Teixeira. In total, Teixeira received more than $100,000. Although Teixeira pocketed these fraudulent proceeds and used the money for personal expenses, he never reported the money on the tax forms that he filed with the IRS during the course of the scheme.
In addition to the prison term, Judge Vazquez ordered Teixeira to pay restitution.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tammy L. Tomlins, with the investigation leading to today’s sentencing.
The government is represented by Executive Assistant U.S. Attorney Lee M. Cortes Jr., Sean Farrell, Chief, New York Office, Department of Justice, Antitrust Division.
Texas and Missouri Physicians and Medical Practice Agree to Pay over $525,000 to Settle Kickback Allegations Involving Laboratory TestingRead the Press Release
NEWARK, N.J. – Two physicians and a medical practice in Missouri have agreed to pay more than $520,000 to resolve kickback allegations, U.S. Attorney Philip R. Sellinger for the District of New Jersey and Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division, announced today.
Imran Chishti M.D. and his medical practice, C Care LLC, both of Chesterfield, Missouri; Shamim Justin Badiyan, of Frisco, Texas; and Psych Care Consultants LLC, of St. Louis, Missouri, have agreed to pay $525,610 to resolve False Claims Act allegations that they received illegal kickbacks in violation of the Anti-Kickback Statute in return for referring patients for laboratory testing, and both have agreed to cooperate with the Department of Justice’s investigations of, and litigation against, other participants in the alleged schemes.
U.S. Attorney Philip R. Sellinger“Kickbacks can undermine the integrity of our healthcare system. Patients should be able to count on their doctors’ ordering tests and recommending treatment based on what is best for them, and not because they are receiving payments on the side. We will continue to pursue anyone responsible for unlawful actions that can put at risk the medical decision-making process.”
“The prohibition against paying or receiving kickbacks is an important safeguard for ensuring the objectivity of medical decisions that affect federal health care beneficiaries,” Principal Deputy Assistant Attorney General Boynton said. “We will continue to pursue those who knowingly violate the law and undermine the integrity of our federal healthcare system.”
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The settlement announced today resolves allegations that Chishti and his medical practice, Badiyan, and Psych Care Consultants received kickbacks in violation of the Anti-Kickback Statute in return for making referrals to laboratories in New Jersey, Texas, and Florida.
- Chishti and C Care have agreed to pay $125,504 to resolve two allegations. First, from July 2016 to August 2018, C Care allegedly received thousands of dollars in payments from a purported management service organization (MSO) named Infinity Nine Health Group MSO LLC (Infinity) in return for Chishti ordering laboratory tests from American Institute of Toxicology Inc. d/b/a HealthTrackRx, a clinical laboratory in Denton, Texas, and InHealth Diagnostic LLC d/b/a RealLab (InHealth), a clinical laboratory in Dallas, Texas. Second, from August 2018 to July 2020, C Care allegedly received thousands of dollars in payments from a purported MSO named Alari Group LLC (Alari) in return for Chishti ordering laboratory tests from Genesis Reference Laboratories LLC (Genesis), a clinical laboratory in Orlando, Florida, and RDx Bioscience Inc. (RDx), a clinical laboratory in Kenilworth, New Jersey.
- Badiyan has agreed to pay $182,676 to resolve allegations that from November 2018 to June 2022, he received thousands of dollars in payments from a purported MSO named Avior Group LLC (Avior) in return for ordering laboratory tests from RDx and Genesis. RDx and Genesis allegedly paid commissions to an independent contractor recruiter, Corum Group LLC (Corum), which used Avior to pay kickbacks to Badiyan and other healthcare providers in return for their referrals.
- Psych Care Consultants has agreed to pay $217,430 to resolve allegations that from January 2019 to March 2020, it received thousands of dollars in payments from Alari in return for ordering laboratory tests from Genesis and InHealth. Genesis and InHealth allegedly paid commissions to Corum, which used Alari to pay kickbacks to Psych Care Consultants and other healthcare providers in return for their referrals.
“Those who participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients,” Special Agent in Charge Naomi Gruchacz of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) said. “Our agency collaborates frequently with our law enforcement partners to investigate parties alleged to violate the Anti-Kickback Statute.”
The settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG.
The government is represented by Assistant U.S. Attorney Kruti Dharia of the U.S. Attorney’s Office, District of New Jersey, Opioid Abuse Prevention and Enforcement Unit and Senior Trial Counsel Christopher Terranova in the Civil Division’s Commercial Litigation Branch (Fraud Section).
The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful 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 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
chishti.settlement.pdfPassaic County Man Charged with Being Felon in Possession of AmmunitionRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was charged today with being a convicted felon in possession of ammunition, U.S. Attorney Philip R. Sellinger announced.
Justin Pope, 36, of Clifton, New Jersey, was indicted by a federal grand jury on two counts of being a convicted felon in possession of ammunition. He was arrested on July 13, 2023, and was charged by complaint with the same two counts. Pope appeared before U.S. Magistrate James B. Clark III on the complaint earlier this week and was detained without bail.
According to documents filed in this case and statements made in court:
On July 12, 2023, law enforcement officers responded to a report of shots fired in a public parking lot in Clifton, New Jersey. A review of the surveillance footage from the area showed Pope and a female individual engaged in an altercation while inside of a vehicle. As the female individual exited the vehicle, Pope pointed a handgun and fired multiple shots at the victim at close range.
The following day law enforcement reviewed a video on a social media account depicting Pope firing a gun in the air in which he stated, “Can’t find me . . . Police. Y’all never gonna find me.”
Pope was arrested a few hours later after he attempted to board a bus in New York City and brandished a firearm to bus employees. At the time of his arrest, law enforcement recovered a firearm from Pope, which was later identified as a privately made 9mm firearm with a large capacity magazine attached and which was loaded with one round of 9mm ammunition.
The felon in possession of ammunition charges each carry a maximum penalty of 15 years in prison and a fine of up to $250,000.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; officers of the Clifton Police Department, under the direction of Chief Thomas Rinaldi; officers of the Paterson Police Department, under Officer in Charge Isa M. Abbassi; officers of the Passaic County Sheriff's Department under Sheriff Richard H. Berdnik; officers of the Passaic Police Department, under Chief Luis Guzman; and officers of New York City Police Department, under the direction of Commissioner Edward Caban, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Rachelle M. Navarro of the U.S. Attorney’s Office’s 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.
pope.complaint.pdf pope.indictment.pdfMissouri and Texas Physicians and Medical Practices Agree to Pay over $525,000 to Settle Kickback Allegations Involving Laboratory TestingRead the Press Release
Imran Chishti, M.D. and his medical practice, C Care LLC, both of Chesterfield, Missouri; Shamim Justin Badiyan, M.D., of Frisco, Texas, and Psych Care Consultants LLC, of St. Louis, Missouri, have agreed to pay a total of $525,610 to resolve False Claims Act allegations that they received illegal kickbacks in violation of the Anti-Kickback Statute in return for referring patients for laboratory testing. The parties have agreed to cooperate with the Department of Justice’s investigations of, and litigation against, other participants in the alleged schemes.
“The prohibition against paying or receiving kickbacks is an important safeguard for ensuring the objectivity of medical decisions that affect federal health care beneficiaries,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue those who knowingly violate the law and undermine the integrity of our federal health care system.”
The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded health care programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.
The settlement announced today resolves allegations that Dr. Chishti and his medical practice, Badiyan, and Psych Care Consultants received kickbacks in violation of the Anti-Kickback Statute in return for making referrals to laboratories in New Jersey, Texas, and Florida.
- Chishti and C Care. Chishti and his medical practice, C Care, have agreed to pay $125,504 to resolve two allegations. First, from July 2016 to August 2018, C Care allegedly received thousands of dollars in payments from a purported management service organization (MSO) named Infinity Nine Health Group MSO LLC (Infinity) in return for Dr. Chishti ordering laboratory tests from American Institute of Toxicology Inc. doing business as HealthTrackRx, a clinical laboratory in Denton, Texas, and InHealth Diagnostic LLC doing business as RealLab (InHealth), a clinical laboratory in Dallas. Second, from August 2018 to July 2020, C Care allegedly received thousands of dollars in payments from a purported MSO named Alari Group LLC (Alari) in return for Dr. Chishti ordering laboratory tests from Genesis Reference Laboratories LLC (Genesis), a clinical laboratory in Orlando, Florida, and RDx Bioscience Inc. (RDx), a clinical laboratory in Kenilworth, New Jersey.
- Badiyan. Badiyan has agreed to pay $182,676 to resolve allegations that, from November 2018 to June 2022, he received thousands of dollars in payments from a purported MSO named Avior Group LLC (Avior) in return for ordering laboratory tests from RDx and Genesis. RDx and Genesis allegedly paid commissions to an independent contractor recruiter, Corum Group LLC (Corum), which used Avior to pay kickbacks to Dr. Badiyan and other health care providers in return for their referrals.
- Psych Care Consultants. Psych Care Consultants has agreed to pay $217,430 to resolve allegations that, from January 2019 to March 2020, it received thousands of dollars in payments from Alari in return for ordering laboratory tests from Genesis and InHealth. Genesis and InHealth allegedly paid commissions to Corum, which used Alari to pay kickbacks to Psych Care Consultants and other health care providers in return for their referrals.
“Kickbacks can undermine the integrity of our health care system,” said U.S. Attorney Philip R. Sellinger for the District of New Jersey. “Patients should be able to count on their doctors ordering tests and recommending treatment based on what is best for them, and not because they are receiving payments on the side. We will continue to pursue anyone responsible for unlawful actions that can put at risk the medical decision-making process.”
“Those who 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,” said Special Agent in Charge Naomi Gruchacz of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency collaborates frequently with our law enforcement partners to investigate parties alleged to violate the Anti-Kickback Statute.”
The settlements were the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-OIG. The settlements announced today were handled by Senior Trial Counsel Christopher Terranova in the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorney Kruti Dharia for the District of New Jersey. The United States has recovered over $33 million relating to conduct involving MSO kickbacks to health care providers, including False Claims Act settlements with three dozen physicians.
The pursuit of these matters illustrates the government’s emphasis on combating health care fraud. One of the most powerful 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 1-800-HHS-TIPS (800-447-8477).
The claims resolved by the settlements are allegations only, and there has been no determination of liability.
Middlesex County Man Sentenced to 12 Months in Prison for Filing False Corporate Tax ReturnRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey man was sentenced to one year and one day in prison for filing a false tax return on behalf of his company, U.S. Attorney Philip R. Sellinger, Acting Assistant Attorney General David A. Hubbert, and Acting Deputy Assistant Attorney General Stuart M. Goldberg announced today.
Gabriel M. Ferrari of Edison, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to Count Four of an indictment that charged him with subscribing to a false tax return. Judge Chesler sentenced Ferrari on July 19, 2023, in Newark federal court.
According to documents filed in this case and statements made in court:
Ferrari was the sole owner of Buses and Trucks Inc., an automotive repair business in Linden, New Jersey. In January 2015, Ferrari subscribed to and caused to be filed a corporate tax return for Buses and Trucks for tax year 2011. As Ferrari knew at the time, that return was false in that it understated Buses and Trucks’ gross receipts for tax year 2011. In fact, Ferrari had diverted Buses and Trucks’ gross receipts to pay personal expenses, including gambling on horse races, and did not report those diverted receipts on the Buses and Trucks 2011 corporate tax return.
In addition to the prison term, Judge Chesler sentenced Ferrari to one year of supervised release and ordered to pay restitution of $87,926.
U.S. Attorney Sellinger, Acting Assistant Attorney General Hubbert, and Acting Deputy Assistant Attorney General Goldberg credited special agents of IRS Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew M. Trombly, Chief of the General Crimes Unit, and Trial Attorney Ann M. Cherry of the Tax Division in Washington, D.C.
Former Newark Restaurant Owner Admits Failing to Collect and Pay Payroll TaxesRead the Press Release
CAMDEN, N.J. – An Essex County man admitted failing to withhold and pay over payroll taxes stemming from his ownership of two formerly prominent Newark restaurants, U.S. Attorney Philip R. Sellinger announced.
Jorge Fernandes, 76, of West Orange, New Jersey pleaded guilty before U.S. District Judge Christine P. O’Hearn to an information charging him with two counts of failing to collect payroll taxes for the tax period of 2016 through 2017.
According to documents filed in this case and statements made in court:
Fernandes was the 50-percent owner of two restaurants in the Ironbound section of Newark, Iberia Tavern and Iberia Peninsula. Fernandes was fully aware of his legal obligation to collect payroll taxes from the restaurants’ employees, but instead paid a number of the employees “off the books,” or “under the table,” failing to collect any payroll taxes from them. Fernandes’ conduct caused the government a total tax loss of $715,780 for tax years 2016 through 2017.
The failing to collect payroll taxes charges to which Fernandes pleaded guilty each carry a maximum penalty of five years in prison and a $10,000 fine. Sentencing is scheduled for Nov. 20, 2023.
U.S. Attorney Sellinger credited special agents of the IRS - Criminal Investigation under the direction of Special Agent in Charge Tammy Tomlins, and special agents with the U.S. Department of Labor, Office of the Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Shawn Barnes, Chief of the OCDETF/Narcotics Unit in Newark.
fernandes.information.pdfEssex County Man Charged with Bank RobberyRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was arrested and charged with bank robbery, U.S. Attorney Philip R. Sellinger announced today.
Sufyan A. Abdullah, 54, of Newark, is charged by complaint with two counts of bank robbery. He appeared on July 20, 2023, before U.S. Magistrate Judge James B. Clark III in Newark federal court and was detained.
According to documents filed in this case and statements made in court:
On July 8, 2023, Abdullah entered a bank in Elizabeth, New Jersey, and handed a note to a teller claiming to have multiple firearms and threatening a “mass shooting.” Abdullah fled the bank without obtaining any money. On July 15, 2023, Abdullah entered a bank in Springfield, New Jersey, and placed an object – which he claimed to be an explosive device – on the counter in front of a teller, demanding money and threatening to blow up the bank. The teller gave Abdullah cash, and Abdullah said he would blow up the bank if anyone followed him or he heard sirens. Law enforcement subsequently determined that the purported explosive device was an imitation explosive device.
The counts of bank robbery each carry a maximum penalty of 20 years in prison, and a fine of $250,000.
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 Springfield Police Department, under the direction of Chief of Police John Cook, and the Elizabeth Police Department, under the direction of Police Chief Giacommo Sacca, for their assistance in the investigation.
The government is represented by Assistant U.S. Attorney Christopher Fell of the Narcotics/OCDETF 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.
abdullah.complaint.pdfNorth Carolina Man Sentenced to 151 Months in Prison for Heroin Distribution and Firearms OffensesRead the Press Release
TRENTON, N.J. – A Raleigh, North Carolina, man with ties to Trenton was sentenced to 151 months in prison for distributing heroin and unlawfully possessing a firearm as a convicted felon, U.S. Attorney Philip R. Sellinger announced today.
Dennis Cheston Jr., aka “Beans,” 42, previously pleaded guilty before former Chief U.S. District Judge Freda L. Wolfson to two counts of an indictment charging him with distributing heroin and unlawfully possessing a firearm as a convicted felon. Following Judge Wolfson’s retirement, the case was assigned to U.S. District Judge Georgette Castner, who imposed the sentence on July 18, 2023, in Trenton federal court.
According to documents filed in this case and statements made in court:
From October 2017 to October 2018, law enforcement investigated a large narcotics conspiracy that operated in Trenton and elsewhere. Conspirators Jakir Taylor, aka “Jak,” and Jerome Roberts, aka “Righteous,” obtained regular supplies of hundreds of bricks of heroin from conspirator David Antonio, aka “Papi,” which Taylor, Roberts, and their conspirators then redistributed for profit in Trenton and elsewhere.
On multiple occasions, Cheston – a convicted felon with ties to the Trenton area – traveled from North Carolina to Trenton and obtained quantities of heroin from Taylor for redistribution. During one intercepted telephone call between Taylor and Cheston, Cheston advised Taylor that the heroin bearing an ink stamp that read “Top Secret” was of high quality and that Cheston’s customers in North Carolina liked it. During the course of these drug transactions, Cheston agreed to travel from North Carolina to Trenton to supply Taylor with multiple firearms in exchange for future supplies of heroin. Cheston had previously brought multiple firearms from North Carolina to New Jersey, but had provided them to other individuals instead of Taylor. In an Aug. 25, 2018, intercepted call however, Cheston promised to bring all future guns to Taylor first. On Sept. 8, 2018, law enforcement tracked Cheston as he traveled from North Carolina to Trenton. Shortly after his arrival, law enforcement officers arrested Cheston as he exited the Trenton Transit Center. During a subsequent search of Cheston’s backpack, law enforcement recovered a 9-millimeter Smith & Wesson handgun – one of the guns that Cheston had agreed to provide to Taylor over the wiretap.
In addition to the prison term, Judge Castner sentenced Cheston to three years of supervised release. Taylor and Antonio previously pleaded guilty and Roberts was previously convicted at trial.
U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of under the direction of Special Agent in Charge James E. Dennehy in Newark; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Office, under the direction of Special Agent in Charge Bryan Miller; officers of the Trenton Police Department, under the direction of Police Director Steve Wilson; officers of the Princeton Police Department, under the direction of Chief Jonathan Bucchere; officers of the Ewing Police Department, under the direction of Chief Albert Rhodes; officers of the Burlington Township Police Department, under the direction of chief John Fine; and detectives of the Burlington County Prosecutor’s Office, under the direction of Prosecutor LaChia L. Bradshaw, with the investigation leading to today’s sentencing. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the New Jersey State Board of Parole for their assistance in the investigation and prosecution of the case.
The government is represented by Assistant U.S. Attorney Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. 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.
Gloucester County Man Convicted of Drug Conspiracy and Firearms OffensesRead the Press Release
NEWARK, N.J. – A federal jury convicted a Gloucester County, New Jersey, man for narcotics trafficking and firearms offenses, U.S. Attorney Philip R. Sellinger announced today.
Javier Osorio, 43, of Deptford, New Jersey, was convicted following a one-week trial before U.S. District Judge Brian R. Martinotti in Newark federal court. Osorio was convicted of conspiracy to distribute and possess with the intent to distribute heroin and cocaine, possession with the intent to distribute heroin, possession of a firearm in furtherance of a drug trafficking crime, and unlawful possession of a firearm by a convicted felon.
According to documents in this case and the evidence at trial:
Osorio conspired with others to distribute cocaine and over one kilogram of heroin, which was recovered from his apartment. Osorio was arrested while driving with his conspirators from New Jersey to Brooklyn to sell an additional quantity of heroin, which was recovered from the vehicle. In addition to the drugs recovered from his apartment, law enforcement also recovered a loaded stolen firearm from under Osorio’s mattress.
At sentencing, Osorio faces a maximum potential penalty of 20 years on each count of conspiracy to distribute heroin and cocaine and possession with the intent to distribute heroin is punishable by a maximum penalty of life in prison. The count of possession of a firearm in furtherance of a drug trafficking crime carries a mandatory minimum penalty of five years in prison, which must be served consecutively to any other prison term; the count of unlawful possession of a firearm by a convicted felon carries a maximum potential penalty of 10 years in prison. Each count also carries a potential $250,000 fine.
U.S. Attorney Sellinger credited special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz, with the investigation leading to these charges. He also credited the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez for its assistance.
The government is represented by Assistant U.S. Attorney George L. Brandley of the Office’s Health Care Fraud Unit in Newark, and Assistant U.S. Attorney Kendall Randolph of the Office’s Organized Crime/Gangs Unit in Newark.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. 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.
Five Individuals Charged in Multi-State COVID-19 Relief Program Fraud SchemeRead the Press Release
riveraetal.complaint.pdfCAMDEN, N.J. – Five individuals were charged for their roles in fraudulently obtaining federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) and for laundering the loan proceeds, U.S. Attorney Philip R. Sellinger announced today. Two other individuals pleaded guilty to fraudulently obtaining PPP and EIDL loans.
Eric Rivera, 43, of Norcross, Georgia, is charged by complaint with one count of conspiracy to commit bank fraud, one count of conspiracy to commit wire fraud, and one count of conspiracy to commit money laundering. He made is initial appearance in federal court in the Northern District of Georgia and was released on $10,000 unsecured bond. Lisa Smith, 60, of Cornelius, North Carolina, and Sieff Robert Sargeant, 43, of Island Park, New York, are charged by complaint with one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering. Smith had her initial appearance in the Western District of North Carolina and was released on $25,000 unsecured bond. Sargeant is scheduled to make his initial appearance today before Magistrate Judge Ann Marie Donio in Camden federal court.
Adrienne Ponzo, 48, of Bear, Delaware, is charged by complaint with one count of conspiracy to commit wire fraud, and remains at-large. James Wessels, 53, of Middletown, Delaware, is charged by complaint with one count of conspiracy to commit money laundering. He made his initial appearance before Judge Donio and was released on $100,000 unsecured bond.
According to the criminal complaints:
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 are 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 a program referred to as the Paycheck Protection Program (PPP). The CARES Act also authorized the Small Business Administration to provide Economic Injury Disaster Loans (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.
According to documents filed in these cases and statements made in court:
In one conspiracy, Rivera conspired with Smith, Sargeant, and others to defraud the PPP loan program. Rivera recruited individuals – including Sargeant – who owned businesses with minimal operations, employees, revenues, and profits, and introduced them to Smith. Smith prepared fraudulent PPP applications for these businesses and created false tax returns that were created solely for purposes of applying for the PPP and EIDL loans and were never submitted to the IRS. The applicants, including Sargeant, electronically signed the applications, which were then submitted to lenders. Rivera received payments of 15 to 50 percent of the loan proceeds for his role in orchestrating this scheme.
In the second conspiracy, Rivera conspired with Ponzo and others to defraud the EIDL loan program. He recruited individuals who owned businesses with minimal operations, employees, revenues, and profits and introduced them to Ponzo, who prepared fraudulent EIDL applications for these businesses and caused them to be electronically submitted to the Small Business Administration. Rivera received payments of 15 to 50 percent of the loan proceeds for his role in orchestrating this scheme.
In the third conspiracy, Rivera conspired with Smith, Wessels, and Sargeant to structure the PPP loan proceeds and paperwork to conceal that the proceeds actually were being spent on non-payroll expenses. Rivera and Smith introduced Sargeant to Wessels, who created fake payroll checks and provided them to Sargeant. Sargeant distributed the fake payroll checks to friends and family members, who cashed the checks and returned the majority of the cash to Sargeant. Smith then used the fake payroll documentation to submit a loan forgiveness application for Sargeant’s business that falsely stated that Sargeant spent 66 percent of the loan amount on payroll expenses.
The counts of conspiracy to commit bank fraud are each punishable by a maximum of 30 years in prison and a $1 million fine. The counts of conspiracy to commit wire fraud are each punishable by a maximum of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The count of conspiracy to commit money laundering is punishable by a maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest.
Earlier this month, Yasha Barjona, 67, and William Ingram, 43, each pleaded guilty before U.S. District Judge Karen Williams to one count of bank fraud conspiracy.
According to documents filed in these cases and statements made in court:
Ingram and Barjona owned businesses with minimal operations, employees, revenues, and profits. Rivera introduced Ingram and Barjona to Ponzo and Smith. Ponzo prepared fraudulent EIDL applications for Ingram’s and Barjona’s businesses and Smith prepared fraudulent PPP applications for Ingram’s and Barjona’s businesses. Ingram and Barjona electronically signed and submitted these applications, which contained materially false and fraudulent information about the businesses and included false tax returns that were created solely for purposes of applying for the PPP and EIDL loans and were never submitted to the IRS. Ponzo and Smith also prepared fraudulent EIDL and PPP applications for businesses controlled by associates of Barjona.
Barjona and his associates received approximately $724,300 in PPP and EIDL proceeds and paid kickbacks to Rivera of approximately 50 percent of the loan amounts. Ingram received approximately $551,600 in PPP and EIDL proceeds and paid kickbacks to Rivera of approximately 15 percent of the loan amounts. After Ingram received the PPP loans, Rivera and Smith introduced Ingram to Wessels, who prepared fake payroll documents to conceal that the proceeds were being spent on non-payroll expenses. Sentencing for Ingram’s sentencing is scheduled for Nov. 7, 2023, and for Barjona, Nov. 15, 2023.
U.S. Attorney Sellinger credited special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Patricia Tarasca, Special Agent-in-Charge, New York Regional Office; special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; 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; and special agents of the U.S. Department of Labor, Office of the Inspector General, Northeast Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the charges and guilty pleas.
The government is represented by Assistant U.S. Attorney Daniel A. Friedman and Attorney-in-Charge Jason M. Richardson of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
barjona.information.pdf riveraetal.complaint.pdf
ingram.information.pdfConvicted Ponzi Schemer, Four Other Men, Charged with Multimillion-Dollar Fraud Scheme and Obstructing 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 charged today with four other men for committing additional crimes, including conspiring to defraud investors of more than $35 million, and with conspiracy to obstruct justice, U.S. Attorney Philip R. Sellinger announced.
A criminal complaint was unsealed today charging each of the five defendants with one count of wire fraud conspiracy and one count of conspiracy to obstruct justice. The defendants are: Eliyahu “Eli” Weinstein, aka Mike Konig, 48, Aryeh “Ari” Bromberg, 49, and Joel Wittels, 57, all of Lakewood, New Jersey, along with Shlomo Erez, 55, a citizen and resident of Israel, and Alaa Hattab, 34, of Otttowa, Canada. The three defendants who were arrested are scheduled to make their initial appearances today before U.S. Magistrate Judge Tonianne Bongiovanni in Trenton federal court; Wittels and Hattab remain at large.
U.S. Attorney Philip R. Sellinger“As alleged in the complaint, Weinstein, along with four other individuals, has once again perpetrated a sophisticated fraud scheme causing losses of millions of dollars. He did so by using a fake name and falsely promising access to deals involving scarce medical supplies, baby formula, and first-aid kits supposedly destined for wartime Ukraine. These were brazen and sophisticated crimes that involved multiple conspirators and drew right from Weinstein’s playbook of fraud. No matter how many times someone attempts to prey on innocent investors, my office will dedicate whatever resources are necessary to root out and punish fraudsters.”
“We allege Mr. Weinstein took part in a new scheme to rip off investors by hiding his real identity,” Special in Charge James E. Dennehy of the Newark FBI said. “He was aware his actions were against the terms of his release on a previous investment fraud conviction, and we allege he engaged in criminal activity anyway. I want to commend everyone who worked on this investigation. Cases like this can be tedious, and at times very frustrating, but the investigative team does the work to prevent more people from being victimized and to ensure career criminals face the justice they deserve."
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 two other conspirators. 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, Weinstein, Bromberg, and Wittels agreed with Tryon’s owners 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. Bromberg, Wittels, and the Tryon owners 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 the Tryon owners, 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 about 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.”
Erez claimed to be Weinstein’s attorney and helped conceal Weinstein’s true identity by, among other things, receiving and managing money on Weinstein’s behalf.. Hattab served as a broker for Optimus and helped conceal Weinstein’s involvement from investors and his business activities from the United States Probation Office.
Once the Tryon owners learned that Mike Konig was actually Weinstein, they agreed with the defendants 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, the defendants 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. The defendants 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 wire fraud conspiracy charge is punishable by a maximum of 20 years in prison. The obstruction conspiracy charge is punishable by a maximum 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.
The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Weinstein, Bromberg, Wittels, Hattab, and two other individuals based on the same and additional conduct.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge 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 and Emma Spiro of the Economic 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.
weinstein_et_al_revised_remarks.pdf weinsteinetal.complaint.pdfMercer County Man Sentenced to 25 Years in Prison for Heroin Trafficking, Unlawful Possession of Firearms, and Possession of Firearm in Furtherance of Heroin TraffickingRead the Press Release
TRENTON, N.J. – A Mercer County, New Jersey, man was sentenced today to 300 months in prison for heroin trafficking and firearms charges, U.S. Attorney Philip R. Sellinger announced.
Timothy Wimbush, aka “Young Money,” 33, was convicted in October 2021 of conspiracy to distribute 100 grams or more of heroin, distribution of heroin, possession of a firearm in furtherance of his heroin distribution, and unlawful possession of firearms and ammunition by a convicted felon following a three-week trial before former Chief U.S. District Judge Freda L. Wolfson. Following Judge Wolfson’s retirement, the case was assigned to U.S. District Judge Georgette Castner, who imposed the sentence today in Trenton federal court.
According to documents filed in the case and the evidence at trial:
In 2018, defendant Wimbush and others participated in a large drug trafficking conspiracy that operated in various areas of Trenton, which sought to profit from the distribution of heroin.
On Sept. 6, 2018, law enforcement officers stopped Wimbush’s green 2002 Volkswagen Passat after observing Wimbush’s co-defendant, Taquan Williams, a previously convicted felon, enter the vehicle carrying a yellow plastic bag believed to contain contraband. The Passat was driven by and registered to Wimbush, who also was a previously convicted felon. During a subsequent search of Wimbush’s vehicle, law enforcement recovered from a secret trap compartment installed under the rear passenger’s seat 57 bricks of heroin, four semiautomatic firearms – including a .223 caliber assault rifle linked to a shooting in Trenton four days earlier – hundreds of rounds of ammunition, and the yellow plastic bag that Williams had carried into the vehicle moments earlier. Law enforcement discovered in the yellow bag two boxes of .45 caliber ammunition and three .45 caliber firearm magazines, which matched one of the semiautomatic firearms also found in the trap compartment. One of the firearms concealed in Wimbush’s secret trap compartment was used in connection with a violent and reckless shooting in the City of Trenton. On Sept. 2, 2018, four of Wimbush’s associates, including one of his co-defendants, one of his relatives, and one of co-defendant Williams’s relatives, were shot in a drive-by shooting in the area of Stuyvesant and Bryn Mawr Avenues in Trenton. Evidence also showed that a likely retaliatory shooting in the area of Lee and West State Street occurred shortly thereafter the same day. Ballistics analysis of a shell casing recovered from the site of the Lee and West State Street shooting conclusively linked the .223 caliber assault rifle Wimbush possessed in the trap compartment of his vehicle on September 6 with the Lee and West State Street shooting on September 2. Telephone communications intercepted during the court-authorized wiretap between Wimbush’s conspirators linked Wimbush and his associates to back-and-forth shootings on and after September 2 and to heroin trafficking activity in the City of Trenton.
Law enforcement identified the heroin in the trap compartment of Wimbush’s vehicle as having been supplied by Wimbush’s conspirators, including Jakir Taylor and Tacques Hall. Taylor pleaded guilty to conspiracy to distribute heroin and firearms charges and was sentenced by Judge Wolfson earlier this year. Hall pleaded guilty to conspiracy to distribute heroin and was sentenced by Judge Wolfson in 2019. Wimbush’s codefendant Taquan Williams was convicted at trial of possessing firearms or ammunition as a convicted felon and was sentenced by Judge Wolfson in 2022.
U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of under the direction of Special Agent in Charge James E. Denney in Newark; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Satellite Office, under the direction of Special Agent in Charge Bryan Miller; officers of the Trenton Police Department, under the direction of Police Director Steve Wilson; officers of the Princeton Police Department, under the direction of Chief Jonathan Bucchere; officers of the Ewing Police Department, under the direction of Chief Albert Rhodes; officers of the Burlington Township Police Department, under the direction of chief John Fine; and detectives of the Burlington County Prosecutor’s Office, under the direction of Prosecutor LaChia L. Bradshaw, with the investigation leading to today’s sentencing. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the New Jersey State Board of Parole for their assistance in the investigation and prosecution of the case.
The government is represented by Assistant U.S. Attorney Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.
This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. 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.
Bergen County Man and New York Woman Charged with Fentanyl TraffickingRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man and a New York woman were charged for their roles in a fentanyl trafficking conspiracy operating in and around Bergen County, U.S. Attorney Philip R. Sellinger announced today.
Plinio Junior Pineda Lopez, 33, of Oakland, New Jersey, is charged by complaint with one count of conspiracy to distribute and possess with intent to distribute fentanyl; Lorendy Diaz Beltre De Inoa, 27, of Yonkers, New York, is charged by complaint with possession with intent to distribute fentanyl. They appeared on July 12, 2023, before U.S. Magistrate Judge José R. Almonte in Newark federal court. Lopez was detained and De Iona was released with electronic monitoring.
According to documents filed in this case and statements made in court:
Lopez conspired with others to distribute large quantities of fentanyl between Florida and New Jersey out of his home. On July 11, 2023, Lopez and De Inoa were arrested in Wallington, New Jersey, while attempting to conduct a drug deal. Law enforcement officers found on De Inoa 1.5 kilograms of fentanyl. Following the arrest, and pursuant to a court-authorized search warrant, law enforcement conducted a search of Lopez’s home and recovered further kilograms of fentanyl hidden throughout the home. The home also contained packaging materials and paraphernalia consistent with those used to package controlled substances. Law enforcement officers recovered a total in excess of approximately 9 kilograms of fentanyl and 1 kilogram of cocaine.
The count charging Lopez with conspiracy to distribute controlled substances carries a maximum potential penalty of life imprisonment, a mandatory minimum penalty of 10 years in prison, and a fine of $1 million. The count charging De Inoa with possession with intent to distribute fentanyl carries a maximum punishment of 20 years in prison and a fine of $1 million.
U.S. Attorney Sellinger credited special agents of Homeland Security Investigations (HSI) Newark, under the direction of Special Agent in Charge Ricky J. Patel; HSI Miami; HSI Jacksonville, Florida; Customs and Border Protection Air and Marine Operations and CBP Office of Field Operations; the Jacksonville Sheriff’s Office; Drug Enforcement Administration NY Z-43; the Bergen County Prosecutor's Office; the Oakland Police Department; and the Paterson Police Department with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Jason Goldberg of the Organized Crime/Gang 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.
lopezdeinoa.complaint.pdfTwo Firefighters Sentenced to Prison for Roles in Multimillion-Dollar Health Care Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – Two New Jersey firefighters were sentenced to prison today for their respective roles in a multi-million-dollar health care fraud conspiracy, Attorney for the United States Vikas Khanna announced.
Thomas Sher, 50, of Northfield, New Jersey, was sentenced to 96 months in prison. Sher, a Margate firefighter, was found guilty on Sept. 8, 2022, of one count of conspiracy to commit health care fraud and three counts of health care fraud following a 12-day trial before U.S. District Judge Robert B. Kugler in Camden federal court.
Christopher Broccoli, 51, of West Deptford, New Jersey, was sentenced to 24 months in prison. Broccoli, a Camden firefighter, pleaded guilty before Judge Kugler on July 28, 2022, to a superseding information charging him with one count of conspiracy to commit health care fraud.
According to documents filed in these cases, statements made in court, and the evidence at trial:
Sher and Broccoli were part of a criminal conspiracy in which state and local government employees were recruited and compensated to receive medically unnecessary compound prescription medications. Sher and his direct conspirators recruited almost 70 people into the scheme and caused the pharmacy benefits administrator to pay out more than $7 million for medically unnecessary compound prescription medications. Sher directly received approximately $115,000 from the scheme. At today’s sentencing, Judge Kugler likewise found that Sher obstructed justice when he lied during his trial testimony and when he attempted to tamper with witnesses and devise a cover-up story in advance of trial.
Broccoli caused the pharmacy benefits administrator to pay out millions of dollars for medically unnecessary compound prescription medications for individuals he recruited into the scheme and directly received $150,315.
To date, 50 people have been charged in the overarching conspiracy, and 46 defendants have pleaded guilty or been convicted at trial.
Attorney for the United States Khanna credited special agents of the FBI’s Atlantic City Resident Agency, 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; and the U.S. Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to the sentencings.
The government is represented by Christina O. Hud, Senior Trial Counsel of the Office’s Health Care Fraud Unit; Desiree L. Grace, Deputy Chief of the Criminal Division; and R. David Walk Jr., Deputy Chief of the Criminal Division.
Middlesex County Man Admits Communicating Threats to Attack SynagogueRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, man today admitted transmitting via the internet a manifesto containing threats to attack a synagogue and Jewish people, U.S. Attorney Philip R. Sellinger announced today.
Omar Alkattoul, 19, of Sayreville, New Jersey, pleaded guilty before U.S. District Judge Robert Kirsch in Trenton federal court to an information charging him with one count of transmitting a threat in interstate and foreign commerce on or about Nov. 1, 2022.
“This defendant admitted using social media to send a manifesto containing a threat to attack a synagogue based on his hatred of Jews. This prompted a state-wide alert and put the community on edge, ” U.S. Attorney Sellinger said. “Alkattoul will now face sentencing for his crime, and we intend to seek a sentence that will hold him accountable. No one should be targeted for violence or with acts of hate because of how they worship. Protecting our communities of faith and places of worship is at the heart of this office’s mission.”
“The laws of our nation allow for everyone to express themselves,” FBI-Newark Special Agent in Charge James E. Dennehy said. “However, when that expression turns into a specific threat toward others, the FBI and other law enforcement agencies must take action. We allege Alkattoul posted and planned to carry out his online manifesto targeting synagogues in our communities, and specifically stated it was an intended attack on Jews. I want to commend the incredibly quick response by the Newark Joint Terrorism Task Force and our partners. Crime driven by hate has no place in our society.”
According to documents filed in this case and statements made in court:
On Nov. 1, 2022, Alkattoul used a social media application to send an individual a link to a document entitled “When Swords Collide” and admitted to this individual that he wrote the document. He admitted targeting a synagogue. He stated in the document: “It’s in the context of an attack on Jews.” According to a second individual, Alkattoul also sent the document to at least five other people using another social media application.
The charge of transmitting a threat in interstate and foreign commerce to which Alkattoul pleaded guilty is punishable by a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 14, 2023.
U.S. Attorney Sellinger credited special agents of the FBI and task force officers of the Joint Terrorism Task Force, under the direction of Special Agent in Charge Dennehy in Newark, with the investigation leading to today’s guilty plea. He also thanked agents of the FBI Field Office in Tampa, Florida, under the direction of Special Agent in Charge David Walker; the FBI Field Office in New York, under the direction of Assistant Director in Charge James Smith; and the FBI Washington Field Office, under the direction of Assistant Director in Charge Steven D’Antuono; as well as the New Jersey Office of the Attorney General, under the direction of Attorney General Matthew J. Platkin; the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Yolanda Ciccone; and officers of the Sayreville Police Department, under the direction of Chief Daniel Plumacker.
The government is represented by Christopher Amore, Co-Chief of the U.S. Attorney’s Office’s General Crimes Unit, and Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office’s National Security Unit, with assistance from the U.S. Department of Justice’s Counterterrorism Section of the National Security Division.
alkattoul.information.pdfPassaic County Husband and Wife Sentenced for Sex TraffickingRead the Press Release
NEWARK, N.J. – A husband and wife from Passaic County, New Jersey, have been sentenced to prison for their roles in a sex trafficking scheme, U.S. Attorney Philip Sellinger announced today.
Enna Gonzalez, 58, of Paterson, New Jersey, was sentenced on July 6, 2023, by U.S. District Judge Madeline Cox Arleo to four years in prison and five years of supervised release. Gonzalez previously pleaded guilty to an indictment charging her with conspiracy to commit sex trafficking.
Gonzalez husband, Jean Noriega, 52, of Paterson, was sentenced June 14, 2023, to 20 years in prison and five years of supervised release. Noriega previously pleaded guilty to an indictment charging him with conspiracy to commit sex trafficking and the sex trafficking of six different victims. Judge Arleo imposed the sentences in Newark federal court.
According to documents filed in this case and statements made in court:
From 2016 through 2017, Noriega coerced multiple women to engage in commercial sex acts in New Jersey and New York. Noriega used violence, threats of violence, threats of drug withdrawal, and other means, to compel the victims to engage in commercial sex for his profit, including after his incarceration in New York on unrelated charges in 2017. Gonzalez helped Noriega control the victims through various means, including, collecting the proceeds of the commercial sex acts. She also carried out Noriega’s sex trafficking activities while Noriega was incarcerated.
U.S. Attorney Sellinger credited special agents of the FBI’s Newark Child Exploitation Human Trafficking Task Force, under the direction of Special Agent in Charge James E. Dennehy in Newark, and the Passaic County Prosecutor’s Office’s Human Trafficking Unit, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to the sentencings.
The government is represented by Assistant U.S. Attorney Sophie E. Reiter of the U.S. Attorney’s Cybercrime Unit in Newark.
U.S. Army Financial Counselor Charged with Defrauding Gold Star FamiliesRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, financial counselor with the United States Army and major in the U.S. Army Reserves who allegedly defrauded two dozen Gold Star families has been indicted, U.S. Attorney Philip R. Sellinger announced today.
Caz Craffy, a/k/a “Carz Craffey,” 41, of Colts Neck, New Jersey, is charged by indictment with six counts of wire fraud and one count each of securities fraud, making false statements in a loan application, committing acts furthering a personal financial interest, and making false statements to a federal agency. Craffy is expected to make his initial appearance today before U.S. Magistrate Judge Tonianne J. Bongiovanni at the Trenton Federal Courthouse.
“Stealing from Gold Star families whose loved ones made the ultimate sacrifice in service to our nation is a shameful crime,” said Attorney General Merrick B. Garland. “As alleged in the indictment, the defendant in this case used his position as an Army financial counselor to defraud Gold Star families, steal their money, and enrich himself. Predatory conduct that targets the families of fallen American service members will be met with the full force of the Justice Department.”
“The families of our fallen service members have laid the dearest sacrifice on the altar of freedom,” U.S. Attorney Sellinger said. “These Gold Star families deserve our utmost respect and compassion, as well as some small measure of financial security from a grateful nation. They must be off-limits for fraudsters. But, as the indictment alleges, this defendant took advantage of his role as an Army financial counselor to prey upon these families, using lies and deception to steer their investments in a way that would make him money. There is no room for those who seek to rip off families of fallen servicemembers to make a buck. We will use every means at our disposal to ensure that those who defraud military families are held accountable.”
“Those who prey on the family members of fallen soldiers, will be sought out and held accountable,” said Special Agent in Charge Joel Kirch, Department of the Army Criminal Investigation Division, Northeast Field Office. “The hard work, long hours, and dedication of our partners within the Task Force, from the United States Attorney’s Office, Defense Criminal Investigative Service, FBI, Homeland Security Investigations, and our own investigative analyst, resulted in this investigation’s swift resolution.”
“The families of service members who lost their lives while serving their country deserve to be treated with compassion, dignity and respect by individuals entrusted to assist them in obtaining survivor benefits,” said James R. Ives, Principal Deputy Director of the Defense Criminal Investigative Service, the law enforcement arm of the DoD Office of Inspector General. “Today’s announcement reflects DCIS and our law enforcement partners’ steadfast commitment to holding accountable those who use their official positions to take advantage of grieving military families.”
"Gold Star families are given a title no one would choose because it means they’ve paid the ultimate sacrifice for this country,” said Special in Charge James E. Dennehy of the Newark FBI. The soldier, sailor, marine or airman they loved died during a time of conflict – defending this nation. They are given money and assistance to help ease the burden that comes with losing their loved one, however no amount of money can replace what they’ve lost. We allege Craffy took advantage of his position and defrauded families already going through a tremendous amount of suffering.”
“Craffy disgraced the position he was entrusted in to care for our nation’s military families when he allegedly took advantage of them during a vulnerable time of grief,” said Homeland Security Investigations Newark Special Agent in Charge Ricky J. Patel. “No family, especially our Gold Star families, should have to face further heartache after a loved one’s death by having their financial security ripped out from under them by fraudsters.”
According to documents filed in this case and statements made in court:
When a member of the Armed Services dies during active duty, his or her surviving beneficiary, now a member of a Gold Star family, is entitled to a $100,000 death gratuity and the soldier’s life insurance of up to $400,000. These payments are disbursed to the beneficiary in a matter of weeks or months following the servicemember’s death. To assist the beneficiaries in this time of need, the military provides a number of services to the servicemember’s family, including the assistance of a financial counselor.
From November 2017 to January 2023, Craffy was a civilian employee of the U.S. Army, working as a financial counselor with the Casualty Assistance Office. He was also a major in the U.S. Army Reserves, where he has been enlisted since 2003. Craffy was responsible for providing general financial education to the surviving beneficiaries. He was prohibited from offering any personal opinions regarding the surviving beneficiary’s benefits decisions. Craffy was not permitted to participate personally in any government matter in which he had an outside financial interest. However, without telling the Army, Craffy simultaneously maintained outside employment with two separate financial investment firms.
Craffy used his position as an Army financial counselor to identify and target Gold Star families and other military families. He encouraged the Gold Star families to invest their survivor benefits in investment accounts that he managed in his outside, private employment. Based upon Craffy’s false representations and omissions, the vast majority of the Gold Star families mistakenly believed that Craffy’s management of their money was done on behalf of and with the Army’s authorization.
From May 2018 to November 2022, Craffy obtained more than $9.9 million from Gold Star families to invest in accounts managed by Craffy in his private capacity. Once in control of this money, Craffy repeatedly executed trades, often without the family’s authorization. These unauthorized trades earned Craffy high commissions. During the timeframe of the alleged scheme, the Gold Star family accounts had lost more than $3.4 million, while Craffy personally earned more than $1.4 million in commissions, drawn from the family accounts.
The wire fraud and securities fraud charges are each punishable by a maximum of 20 years in prison. The charge of submitting a false statement on a loan application is punishable by a maximum of two years in prison. The charges of acts affecting a personal interest and false statements to a federal agent are each punishable by five years in prison. All counts but the securities fraud count are also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest. The securities fraud count is punishable by a maximum fine of either $5 million or twice the gain or loss from the offense, whichever is greatest.
The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Craffy today based on the same and additional conduct. Craffy has been permanently prohibited from association with any member of the Financial Industry Regulatory Authority Inc. (FINRA).
U.S. Attorney Sellinger credited special agents of the Department of the Army Criminal Investigation Division, under the direction of Special Agent in Charge Kirch; special agents of DCIS, under the direction of Principal Deputy Director Ives; special agents of the FBI, under the direction of Special Agent in Charge Dennehy; and special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Patel with the investigation leading to the indictment. He also expressed appreciation for the Securities and Exchange Commission, under the direction of Gurbir S. Grewal, Director, Division of Enforcement, and FINRA, under the direction of Acting Head of Enforcement Christopher J. Kelly.
The government is represented by Assistant U.S. Attorneys Martha K. Nye of the Criminal Division in Trenton, and Carolyn Silane of the Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
craffy.indictment.pdf usa_sellinger_remarks.pdfThree East Orange Gang Members Sentenced to Prison for Gang-Related MurdersRead the Press Release
NEWARK, N.J. – Three members and associates of a drug trafficking enterprise who were also members of a neighborhood street gang in Essex County, New Jersey, were sentenced today to prison for their respective roles in multiple gang-related murders, including the murder of a federal informant, U.S. Attorney Philip R. Sellinger announced today.
Thomas Zimmerman, 28, was sentenced to 37 years in prison, Tyquan Daniels, 27, was sentenced to 35 years in prison, and Ali Hill, 30, was sentenced to 25 years in prison. All of the defendants were also sentenced to five years of supervised release. All of the defendants are East Orange residents, and all were sentenced by U.S. District Judge John Michael Vazquez in Newark federal court.
According to documents filed in this case and statements made in court:
In February, 2018, the leader of a Newark, New Jersey-based drug trafficking enterprise operating in East Orange, Newark, New York City, Maryland and California, among other states, found out that one of his conspirators in the drug enterprise was cooperating with federal law enforcement by providing information against the drug enterprise. The gang leader ordered members of the Brick City Brims Bloods (“BCB”) in East Orange, of which all three defendants were active members, to kill the informant. On February 3, 2018, outside the informant’s residence in Bloomfield, New Jersey, Zimmerman and other gang members shot and killed an innocent bystander, believing the bystander was the informant. Hill conspired with Zimmerman and later Daniels in the plot to kill the informant.
Realizing they killed the wrong person, the defendants planned another attempt to murder the informant. On March 12, 2018, in Bloomfield, Zimmerman and other BCB members approached the informant and fired multiple shots at him at close range, killing him.
Daniels aided the murder conspiracy by helping to hide the murder weapon after the fact. Daniels was also sentenced for the separate murder of a rival gang member committed in furtherance of the activities of the BCB, specifically to protect the BCB’s drug territory. Daniels shot and killed the rival gang member in Orange, New Jersey on May 13, 2018.
Hill was sentenced after pleading guilty to racketeering conspiracy for his role in the planning of the murder of the informant in March 2018.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of special agent in charge James E. Dennehy in Newark; the Newark Police Department, under the direction of Public Safety Director Fritz G. Fragé; the Essex County Prosecutors Office; the Union County Prosecutor’s Office, East Orange PD; Montclair PD, and the Maryland Department of Public Safety and Correctional Services, Intelligence and Investigative Division, under the direction of Secretary Robert Green with the investigation leading to sentencings.
The government is represented by Senior Trial Counsel Robert Frazer of the U.S. Attorney’s Office Organized Crime/Gang Unit in Newark.
Somerset County Man Charged with Drug Distribution Resulting in DeathRead the Press Release
NEWARK, N.J. – A Somerset County man appeared in federal court yesterday on charges including drug distribution that resulted in a death, U.S. Attorney Philip Sellinger announced today.
Thomas Kane Miller, 38, of Somerset, New Jersey, is charged by federal complaint with one count of possession with the intent to distribute fentanyl and heroin and one count of distribution of fentanyl and heroin that resulted in a death. Miller had an initial appearance before the Honorable Jessica S. Allen, United States Magistrate Judge, in Newark federal court and was detained.
According to documents filed in this case:
In October 2022, Miller distributed a mixture of fentanyl and heroin to an individual who died as a result of using the substance. Law enforcement located the deceased victim at a residence in Plainfield, New Jersey. Inside the victim’s residence were two wax folds containing fentanyl and heroin bearing a unique stamp, which law enforcement linked to Miller. Shortly before the victim’s death, the victim and Miller were communicating about arranging to meet.
Miller is also charged with possession with intent to distribute fentanyl and heroin arising from an incident ten days prior where he was found in possession of multiple wax folds of heroin and fentanyl bearing the same unique stamp.
The count of drug distribution resulting in death carries a maximum potential penalty of life imprisonment, a mandatory minimum penalty of 20 years’ imprisonment, and a fine of $1 million. The count of possession with intent to distribute fentanyl and heroin carries a maximum punishment of 20 years in prison and a fine of $1 million.
U.S. Attorney Sellinger credited special agents of the New York DEA Strike Force, under the direction of Special Agent in Charge Frank A. Tarentino, III, and members of the Somerset County Prosecutor’s Office, under the direction of Prosecutor John P. McDonald, and members of the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Yolanda Ciccone, with the investigation, leading to the charges.
This investigation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. The arrest was the result of an investigation by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.
The government is represented by Assistant U.S. Attorney Jenny Chung of the Office’s 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.
miller.complaint.pdf