District of New Jersey
Press releases recorded for this federal judicial district.
Three New York Men Charged with Conspiring to Kidnap New Jersey ManRead the Press Release
NEWARK, N.J. – Three New York men were charged today with conspiring to kidnap and hold for ransom a Fort Lee resident, U.S. Attorney Philip R. Sellinger announced.
Fa Deng, 42, of Staten Island, New York, and Albert Ferrelli, 50, and Chiahao Lee, 30, both of Queens, New York, are charged by complaint with conspiring to commit kidnapping. The three defendants appeared today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and were detained.
According to documents filed in this case and statements made in court:
On April 5, 2022, Deng, Ferrelli, Lee, and another conspirator drove to the victim’s home in Fort Lee. Ferrelli and the other conspirator entered the victim’s home wearing masks. They bound the victim’s hands, placed duct tape over his eyes and mouth, and forced him into a vehicle.
Law enforcement received information that kidnappers had sent the victim’s wife a photograph of the victim bound and duct-taped, demanding a ransom of approximately $680,000. When law enforcement responded to the victim’s home, they located what appeared to be duct tape with pieces of latex gloves stuck to it. After reviewing local surveillance footage, law enforcement identified a gray minivan used in the abduction. Other surveillance footage showed the minivan crossing the George Washington Bridge shortly after the kidnapping, and subsequently crossing into the Bronx and then into Queens.
The following day, New York Police Department personnel responded to Prince Street in Queens, where they encountered Ferrelli guarding the door to the building. When officers approached Ferrelli, they heard a man screaming for help inside the building. Officers entered the building and found the victim with his hands bound, and duct tape over his eyes and mouth. Surveillance footage obtained by law enforcement showed that during this captivity, the victim attempted to escape by running out of the building where he was eventually found. The video showed Ferrelli tackle the victim to prevent him from escaping, engage in a physical scuffle, and pull him back into the building.
Law enforcement located the gray minivan used in the kidnapping parked in the driveway of Lee’s home in Queens. Records showed that the minivan had been rented by Lee’s wife at LaGuardia Airport on April 4, 2022.
The maximum penalty for the offense is life imprisonment.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of George M. Crouch Jr.; the Bergen County Prosecutor’s Office under the direction of Prosecutor Mark Musella; officers of the Fort Lee Police Department, under the direction of Chief Matthew J. Hintze; and the New York Police Department under the direction of Commissioner Keechant L. Sewell with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Carolyn Silane of the Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Pennsylvania Man Admits Bank Fraud Conspiracy that Operated in South Jersey and Southeastern PennsylvaniaRead the Press Release
CAMDEN, N.J. – A Pennsylvania man today admitted to his role in a bank fraud conspiracy that targeted 12 different financial institutions in southern New Jersey and southeastern Pennsylvania, U.S. Attorney Philip R. Sellinger announced.
Ahmed Bamidele Ponle, 42, of Darby, Pennsylvania, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court an information charging him with one count of conspiracy to commit bank fraud,.
According to documents filed in this case and statements made in court:
Ponle was part of a multi-defendant, Nigerian-based, multi-layered criminal organization that engaged in a massive bank fraud conspiracy in several states, including New Jersey, Pennsylvania, Maryland, and Rhode Island, between June 2016 and March 2020. Members of the group acquired numerous business checks that were stolen from the United States mail, altered the payee on the checks to a fraudulent name. They deposited the checks into bank accounts that had been opened with forged foreign passport documents and fraudulent U.S. visas that matched the names on the stolen checks. Once the banks credited all or a portion of the funds to the accounts, but before the checks had cleared, the defendants withdrew the funds from ATMs or purchased money orders, using debit cards associated with the fraudulent accounts. Members of the organization have used over 400 fraudulent accounts opened with fake identity documents to defraud the victim banks. To date, the total loss to the victim banks is approximately $6 million.
Ponle admitted his role in the conspiracy, which included using several false identities to open fraudulent bank accounts. He then made numerous deposits of stolen checks to these accounts and withdrew funds from the accounts.
As part of his plea, Ponle agreed to forfeit his interest in approximately $90,000 worth of money orders which were proceeds of the bank fraud and which were seized from a public storage facility in Philadelphia used by the conspirators to store additional fraudulent identity documents and proceeds of the bank fraud.
The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for Aug. 10, 2022.
U.S. Attorney Sellinger credited special agents of the U.S. Postal Inspection Service, Bellmawr office and Philadelphia Division Office, under the direction of Damon E. Wood, Inspector in Charge, Philadelphia Division; U.S. Postal Inspection Service, Washington, D.C. Division Office, under the direction of Peter R. Rendina, Washington Division Inspector in Charge; the Department of Homeland Security, Homeland Security Investigations, Cherry Hill Office and Newark Division Office, under the direction of Special Agent in Charge Jason J. Molina; Homeland Security Investigations Philadelphia Division Office, under the Direction of Acting Special Agent in Charge William S. Walker; Homeland Security Investigations Maryland Division Office, under the direction of James R. Mancuso, Special Agent in Charge, Baltimore; Homeland Security Investigations Rhode Island Office, under the direction of Matthew Millhollin, Special Agent in Charge, Boston Division Office; and the U.S. Department of State’s Diplomatic Security Service (DSS), under the direction of R. Mike Escott, Resident Agent in Charge, Philadelphia Resident Office, with the investigation leading to today’s guilty plea.
Three other conspirators have pleaded guilty and are awaiting sentencing before Judge Hillman. Charges against eight other defendants remain pending before the District Court.
The government is represented by Assistant U.S. Attorney Patrick C. Askin of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the pending complaints and indictments against the remaining eight conspirators are merely accusations, and the defendants in those cases are presumed innocent unless and until proven guilty.
Monmouth County Man Admits Orchestrating Multimillion-Dollar Accounts Receivable Factoring SchemeRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted defrauding lenders of approximately $50 million dollars in connection with an invoice factoring scheme perpetrated over nearly a decade, U.S. Attorney Philip R. Sellinger announced.
Vincent Galano, 59, of Oceanport, New Jersey, pleaded guilty by videoconference before U.S. District Judge Zahid N. Quraishi to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
Accounts receivable factoring (factoring), also known as invoice financing, is a financial transaction through which a company obtains cash by selling its unpaid invoices, ordinarily at a discount, to a factor. Factoring clients send their debtors notices of assignment naming the factor as the assignee of the debt owed on the invoices. The factor, in turn, collects invoiced amounts owed by the clients’ debtors and, upon collection of the entire invoiced amount, pays its clients the balance of the invoice, deducting the factor’s fees.
Galano formed Prime Financial Funding LLC (PF Funding) in 1996 for the purpose of factoring accounts receivables for various corporate clients. In 2007, PF Funding entered into a secured lending relationship with a single-purpose entity created to finance PF Funding’s factoring business. Shortly thereafter, the factoring lender established a line of credit as a means to provide PF Funding capital to grow its receivables portfolio. Over the next several years, PF Funding grew its factoring business by drawing from the line of credit while maintaining as current its loan obligations to the factoring lender. However, beginning in 2011, Galano, through PF Funding, purchased increasingly greater numbers of invoices for which he was unable to collect the debt owed on the receivables. To justify PF Funding’s continued draws from the line of credit, Galano concealed this bad debt from the factoring lender by misrepresenting the bad invoices as collectible on reports he routinely provided to the factoring lender. In other instances, Galano mischaracterized invoices that had already been paid and collected as outstanding and capable of being factored, in essence double-counting to drive up the outstanding receivables. In the reports provided to the factoring lender, Galano manipulated the overall value of PF Funding’s portfolio of outstanding invoices in an amount proportional to the funds he needed to draw from the unsecured line of credit to maintain as current the principal and interest payments on his outstanding loans.
Engaging in this pattern of misrepresentation over nearly a decade, by 2020 PF Funding had ultimately defaulted under its loan obligations, owing approximately $50 million to its lenders by virtue of the scheme. During a May 2020 telephone call with his lenders, Galano admitted that he had concealed significant losses suffered by PF Funding over many years. He further admitted that he had routinely distributed to lenders over that prolonged period fabricated reports that overstated the number and value of outstanding invoices which the reports represented as payable.
The wire fraud charge to which Galano pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross pecuniary gain/loss from the scheme, whichever is greatest. Sentencing is scheduled for July 14, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Illinois Man Admits Stealing Unemployment Insurance Benefits while IncarceratedRead the Press Release
NEWARK, N.J. – An Illinois man today admitted that he used other individuals’ personal identification information to fraudulently obtain unemployment insurance benefits while he was incarcerated, U.S. Attorney Philip R. Sellinger announced.
Devontae Stokes, 27, of Country Club Hills, Illinois, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with conspiring to commit wire fraud.
According to documents filed in the case and statements made in court:
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created a new temporary federal unemployment insurance program called Pandemic Unemployment Assistance (PUA), which provided unemployment insurance benefits for individuals who were not eligible for other types of unemployment (e.g., the self-employed, independent contractors, gig economy workers). The CARES Act also created a new temporary federal program called Federal Pandemic Unemployment Assistance (FPUC) that provided an additional weekly benefit to those eligible for PUA and regular unemployment insurance benefits.
Between August 2020 and November 2020, Stokes was incarcerated at FCI Fort Dix, a federal correctional institutional with an adjacent satellite camp located in Fort Dix, New Jersey. Stokes and his conspirators obtained personal identification information (PII), including names, dates of birth, and Social Security numbers belonging to other individuals without those individuals’ knowledge and consent. Stokes and his conspirators then used the PII to make fraudulent unemployment insurance benefits applications and obtained more than $140,000 in benefits.
The charge of conspiring to commit 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 to Stokes or twice the gross loss suffered by the victims, whichever is greatest. Sentencing is scheduled for Aug. 23, 2022.
U.S. Attorney Sellinger credited special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Jonathan Mellone, in New York; special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., in Newark; and special agents with the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.
Gloucester County Man Charged with Filing False Tax ReturnsRead the Press Release
CAMDEN, N.J. – A Gloucester County, New Jersey, man was arrested by federal agents today on charges of filing false claims against the IRS, U.S. Attorney Philip R. Sellinger announced.
Christian L. Whittaker, 41, of Williamstown, New Jersey, is charged by indictment with making false claims against the IRS. 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:
Whittaker knowingly and willfully prepared, electronically signed, and filed with the IRS false U.S. Individual Income Tax Returns (Forms 1040) for the tax years 2016, 2017, 2018, and 2019. Whittaker knew the information contained in the returns was not true and correct as to every material matter. He used fraudulent income amounts and business losses to prepare the returns, which resulted in $372,278 in federal refunds being paid to or on behalf of Whittaker.
In addition to filings with the IRS, Whittaker prepared, signed, and filed with the New Jersey Department of Treasury false state tax returns for the tax years 2016, 2017, 2018, and 2019, with fictitious income, expenses, and withholdings, which would have paid Whittaker $49,208 in state refunds for tax years 2016 through 2019. However, the New Jersey Department of Treasury did not pay out any refunds to Whittaker for the tax years under investigation.
The charges each carry a maximum penalty of five years in prison.
U.S. Attorney Sellinger credited special agents of the IRS, under the direction of Michael Montanez, with the investigation leading to today’s arrest.
The government is represented by Special Assistant U.S. Attorney John Crockett of the U.S. Attorney’s Office in Camden.
Former Associate Director Admits Embezzling Hundreds of Thousands of Dollars from Global Maritime Service Group and Tax ChargeRead the Press Release
NEWARK, N.J. – A former associate director of a global maritime service group today admitted embezzling hundreds of thousands of dollars and to failing to collect, account for, and pay over hundreds of thousands in federal payroll taxes, U.S. Attorney Philip R. Sellinger announced.
David Buckingham, 38, of Chatham, New Jersey, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to a superseding information charging him with one count of wire fraud and one count of failure to collect, account for, and pay over federal payroll taxes. Buckingham was originally charged by indictment in December 2019 with five counts of wire fraud.
According to documents filed in this case and statements made in court:
Buckingham held the title of associate director and head of the New York office of a global maritime service group headquartered in London, England. From 2016 through 2018, Buckingham used his position and access to the company’s bank accounts to embezzle hundreds of thousands of dollars by writing checks to himself or to “cash.” Buckingham falsified the company’s books and records in an effort to make the payments appear to be legitimate business expenses and to cover up his fraud. From in or around February 2016 to October 2018, Buckingham also willfully failed to account for and pay over to the IRS payroll taxes for the employees of the company in the amount of $277,051.
The wire fraud count carries a potential maximum penalty of 20 years in prison and a $250,000 fine. The tax count carries a potential maximum penalty of five years in prison and a $10,000 fine. Sentencing is scheduled for Sept. 14, 2022.
U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, and postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit.
Convicted Felon Admits Trying to Bring Loaded Gun on Plane at Newark Liberty International AirportRead the Press Release
NEWARK, N.J. – A Newburgh, New York, man today admitted possessing a stolen and loaded firearm that he tried to get through security at Newark Liberty International Airport, U.S. Attorney Philip R. Sellinger announced.
Desmond Herring, 48, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an information charging him with one count of possession of a firearm and ammunition by a convicted felon and one count of carrying a weapon on an aircraft.
According to documents filed in this case and statements made in court:
On Nov. 29, 2021, Herring submitted a carry-on bag for inspection at Newark Liberty International Airport. During the screening of Herring’s luggage, a Transportation Security Administration (TSA) agent identified ammunition and a suspected firearm and contacted the Port Authority Police Department. Upon seeing that his bag had attracted additional attention, Herring left the security checkpoint area without his bag and walked to a departure gate for his flight to Atlanta, Georgia.
Further investigation of Herring’s bag revealed that it contained a 9 millimeter pistol, 10 rounds of 9 millimeter ammunition loaded into a magazine, and 150 additional rounds of 9 millimeter ammunition. Herring was prohibited from possessing a firearm due to a 2010 federal conviction for conspiracy to distribute controlled substances.
Both charges carry a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 17, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; officers of the Port Authority Police Department, under the direction of Superintendent Edward Cetnar; and officers of the TSA with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office National Security Unit in Newark.
Colorado CEO and Fund Manager Admits to $11 Million Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – A Denver, Colorado, CEO today admitted conducting a securities scheme to fraudulently obtain $11 million from investors through various misrepresentations about fund operations, his background, and his contribution to the fund, U.S. Attorney Philip R. Sellinger announced.
Samuel J. Mancini, 55, pleaded guilty before U.S. District Court Judge Cecchi in Newark federal court to an information charging him with one count of securities fraud.
According to documents filed in this case and statements made in court:
Mancini managed and controlled Outdoor Capital Partners LLC (OCP), which he purported to be a venture capital and private equity firm. OCP served as the managing director of OCP Italia Fund LLC (OCP Italia), a private investment fund. Mancini used OCP and OCP Italia to engage in the fraudulent scheme.
From February 2020 through July 2021, Mancini promised investors that he was raising $20 million, including $5 million of his own money, for OCP Italia to invest solely in acquiring controlling interests in three Italian cycling companies. Mancini represented to investors that the acquisitions would take place soon after the fund closed. To induce investments, Mancini promised investors approximately 70 percent of OCP Italia’s operating profits.
Mancini repeatedly misrepresented his finances and his contribution to OCP Italia. Mancini also misrepresented OCP Italia’s ability to close on the acquisitions. OCP Italia never acquired any of the Italian cycling companies. Instead, Mancini defaulted on contracts, diverted investor funds out of OCP Italia, and, in certain instances, paid investor funds to other investors seeking redemption.
Mancini also misled investors about his educational background by representing himself as a graduate of a prestigious military academy when, in fact, Mancini had failed to graduate from the academy due to an ethical violation.
When confronted with requests for transparency and redemptions by certain investors in OCP Italia, Mancini failed to honor the redemption requests, made misrepresentations about his inability to honor the redemption requests, misstated and omitted material facts, and provided certain investors with forged, modified, or otherwise fraudulent documentation and financial records. Mancini fraudulently obtained approximately $11 million from victims.
The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for Aug. 17, 2022.
The U.S. Securities and Exchange Commission has filed a civil complaint against Mancini based on the allegations underlying the securities fraud scheme to which Mancini pleaded guilty today.
U.S. Attorney Sellinger credited special agents and intelligence analysts of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea. He also thanked the FBI Denver Field Office, under the direction of Special Agent in Charge Michael H. Schneider, for its assistance.
The government is represented by Assistant U.S. Attorney Lauren E. Repole, Chief of the General Crimes Unit.
Bronx, New York, Man Admits Scheme to Steal Checks from Mail and Defraud Banks of $550,000Read the Press Release
NEWARK, N.J.– A Bronx, New York, man today admitted his role in a scheme to steal checks from the mail, alter them and deposit them in bank accounts he controlled, U.S. Attorney Philip R. Sellinger announced.
Alique Jordan Clarke, 21, of the Bronx, New York, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiracy to commit bank fraud and one count of conspiracy to receive and possess stolen mail.
According to documents filed in the case and statements made in court:
From February 2020 to November 2020, Clarke and two conspirators stole over 290 checks from mailboxes in and around Morris, Essex, Somerset, and Passaic counties, altered the stolen checks, and then deposited the altered checks into bank accounts controlled by Clarke and his conspirators. After the stolen checks were deposited, Clarke and his conspirators withdrew cash from the accounts totaling more than $550,000.
The conspiracy to commit bank fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine, and the conspiracy to receive and possess stole mail carries a maximum sentence of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 8, 2022.
U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Blake Coppotelli of the U.S. Attorney’s Office Economic Crimes Unit.
Pennsylvania Man Admits Bank Fraud Conspiracy that Operated in South Jersey and Southeastern PennsylvaniaRead the Press Release
CAMDEN, N.J. – A Pennsylvania man today admitted his role in a bank fraud conspiracy that targeted 12 financial institutions in southern New Jersey and southeastern Pennsylvania, U.S. Attorney Philip R. Sellinger announced.
Tunde Adeowo, 41, of Lansdowne, Pennsylvania, pleaded guilty before U.S. district Judge Noel L. Hillman in Camden federal court to an information charging him with one count of conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
Adeowo was part of a multi-defendant, Nigerian-based, multi-layered criminal organization that engaged in a massive bank fraud conspiracy in several states, including New Jersey, Pennsylvania, Maryland, and Rhode Island, between June 2016 and March 2020. Members of the group acquired numerous business checks that were stolen from the United States mail, altered the payee on the checks to a fraudulent name. They deposited the checks into bank accounts that had been opened with forged foreign passport documents and fraudulent U.S. visas that matched the names on the stolen checks. Once the banks credited all or a portion of the funds to the accounts, but before the checks had cleared, the defendants withdrew the funds from ATMs or purchased money orders, using debit cards associated with the fraudulent accounts. Members of the organization have used over 400 fraudulent accounts opened with fake identity documents to defraud the victim banks. To date, the total loss to the victim banks is approximately $6 million.
Adeowo admitted his role in the conspiracy, which included using several false identities to open fraudulent bank accounts. He then made numerous deposits of stolen checks to these accounts and withdrew funds from the accounts.
As part of his plea, Adeowo agreed to forfeit his interest in approximately $90,000 worth of money orders which were proceeds of the bank fraud and which were seized from a public storage facility in Philadelphia used by the conspirators to store additional fraudulent identity documents and proceeds of the bank fraud.
The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled for Aug. 11, 2022.
U.S. Attorney Sellinger credited special agents of the U.S. Postal Inspection Service, Bellmawr office and Philadelphia Division Office, under the direction of Damon E. Wood, Inspector in Charge, Philadelphia Division; U.S. Postal Inspection Service, Washington, D.C. Division Office, under the direction of Peter R. Rendina, Washington Division Inspector in Charge; the Department of Homeland Security, Homeland Security Investigations, Cherry Hill Office and Newark Division Office, under the direction of Special Agent in Charge Jason J. Molina; Homeland Security Investigations Philadelphia Division Office, under the Direction of Acting Special Agent in Charge William S. Walker; Homeland Security Investigations Maryland Division Office, under the direction of James R. Mancuso, Special Agent in Charge, Baltimore; Homeland Security Investigations Rhode Island Office, under the direction of Matthew Millhollin, Special Agent in Charge, Boston Division Office; and the U.S. Department of State’s Diplomatic Security Service (DSS), under the direction of R. Mike Escott, Resident Agent in Charge, Philadelphia Resident Office, with the investigation leading to today’s guilty plea.
Two other conspirators have previously pleaded guilty and are awaiting sentencing before Judge Hillman. Charges against nine other defendants remain pending before the District Court.
The government is represented by Assistant U.S. Attorney Patrick C. Askin of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the pending complaints and indictments against the nine conspirators are merely accusations, and the defendants in those cases are presumed innocent unless and until proven guilty.
Four Florida Men and One Texas Man Convicted for Conspiracy and Interstate Transportation of over $2 Million of Stolen PerfumeRead the Press Release
NEWARK, N.J. – Five men were convicted today for their roles in a conspiracy to transport over $2 million worth of stolen perfume products out of New Jersey to Florida, U.S. Attorney Philip R. Sellinger announced.
Carlos Duvergel, 57, of Texas, and Juan Crespo, 45, Felix Castillo, 49, Asnay Fernandez, 31, and Ismael Manzano-Suarez, 24, all of Hialeah, Florida, were charged by superseding indictment with conspiring to transport stolen property in interstate commerce and transportations of stolen property in interstate commerce. They were convicted following an eight-day trial before U.S. District Judge Peter G. Sheridan in Trenton federal court.
According to documents filed in this case and statements made in court:
In November 2017, the defendants broke into a warehouse storing perfume products in Edison, New Jersey, and drove away with two tractor trailers filled with stolen perfume products. The value of the stolen perfume products is estimated to be over $2 million. The defendants were arrested in May 2018 attempting to break into another perfume warehouse in East Brunswick, New Jersey.
The count of conspiring to transport stolen property in interstate commerce carries a maximum penalty five years in prison; the count of transportations of stolen property in interstate commerce carries a maximum penalty of 10 years in prison. Both charges also carry a $250,000 fine, or twice the gross gain or loss from the offenses, whichever is greatest. Sentencing for all five defendants is scheduled for Sept. 27, 2022.
U.S. Attorney Sellinger credited special agents and officers with the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; officers of the Edison Police Department, under the direction of Chief Tom Bryan; officers of the East Brunswick Police Department, under the direction of Chief Frank LoSacco; and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Yolanda Ciccone, with the investigation leading to today’s convictions.
The government is represented by Assistant U.S. Attorney Christopher D. Amore of the National Security Unit and Special Assistant U.S. Attorney Timothy P. Shaughnessy of the Organized Crime and Gangs Unit in Newark.
Union County Man Admits Robbing BankRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man today admitted robbing a bank in Rutherford, New Jersey, U.S. Attorney Philip R. Sellinger announced.
Seneca Wilson, 43, of Clark, New Jersey, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an indictment charging him with one count of bank robbery.
According to documents filed in this case and statements made in court:
On April 7, 2021, at approximately 4:12 p.m., Wilson entered the Kearny Bank in Rutherford. He handed the teller a note in which he demanded money with no straps on the bills. The teller then put approximately $2,300 in United States currency into a white plastic bag that Wilson had provided. Wilson then took the bag of cash and walked out of the bank.
The bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 16, 2022.
U.S. Attorney Sellinger credited special agents of the FBI’s Violent Crimes/Interstate Theft Task Force, under the direction of Special Agent in Charge George M. Crouch in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office National Security Unit in Newark.
Cumberland County Man Sentenced to Two Years in Prison for Participating in Straw Purchases to Obtain FirearmsRead the Press Release
TRENTON, N.J. – A Cumberland County, New Jersey, man with a prior felony conviction was sentenced today to 24 months in prison for participating in straw purchases to obtain firearms that he was not permitted to purchase, U.S. Attorney Philip R. Sellinger announced.
Darick Nollett, 32, of Heislerville, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with one count of aiding and abetting the making of a false statement during the purchase of a firearm. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Nollett was not legally permitted to purchase firearms because of a 2015 felony conviction. In 2018 and 2019, in order to obtain firearms, Nollett caused other individuals to purchase five firearms for him. These individuals falsely stated on U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF) Firearm Transaction that they were the actual buyer/transferee of the firearm when, in fact, Nollett was the actual buyer/transferee. In 2020, Nollett ordered “fuel filters” from China that he intended to modify and use as firearms silencers. Law enforcement officers executing a court-authorized search warrant of Nollett’s property in May 2020 recovered more than 30 firearms, as well as ammunition and firearm accessories.
In addition to the prison term, Judge Shipp sentenced Nollett to three years of supervised release and ordered Nollett to forfeit or abandon the firearms, ammunition, and firearm accessories recovered from his property.
U.S. Attorney Sellinger credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark; special agents of the ATF Newark Field Division, under the direction of Special Agent in Charge Jeffrey L. Matthews; postal inspectors of the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge Damon E. Wood; officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McRae, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.
California Man Sentenced to 42 Months in Prison for Defrauding Victims in Vineland, New JerseyRead the Press Release
CAMDEN, N.J. – A California man was sentenced today to 42 months in prison for defrauding elderly victims through a bogus investment scheme, U.S. Attorney Philip R. Sellinger announced.
Christopher Glynn, 59, of Burbank, California, previously pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a superseding information charging him with one count of wire fraud and one count of money laundering.
According to documents filed in this case and statements made in court:
Glynn maintained a variety of corporate entities, including U.S. Grant Distribution Group, PG Philanthropic Initiative, Perrarus Global Philanthropic Initiative, and others. Glynn also claimed affiliation with an international trust that purportedly was funded with billions of dollars.
Glynn approached two victims in Vineland, New Jersey, and offered them an opportunity to “invest” hundreds of thousands of dollars in a “business development loan.” Glynn told the victims that this business development loan would be used for authorized business and legal expenses related to his entities and the international trust. The loan also would be used for expenses related to an animal welfare charitable foundation and shelter that Glynn was helping the victims to set up. Glynn assured the victims that the international trust would guarantee their business development loan, the loan would generate specific returns for the victims, and the victims could use the returns to fund their animal welfare charitable foundation and shelter.
Glynn sent emails and other correspondence and contracts to the victims. Glynn also arranged for conference calls between himself, his associates, and the victims, including one call that Glynn claimed included “a direct representative from the NSA (National Security Agency), and a representative from either DHS (Department of Homeland Security) or the FBI.” Glynn took these steps in order to convince the victims that they were investing in a legitimate business opportunity.
Glynn ultimately directed the victims to wire funds to various bank accounts that Glynn controlled, in order to fund the “business development loan.” The victims did so, relying on Glynn’s representations about how the funds would be used. In addition, Glynn also convinced the victims to open credit cards in the name of their forthcoming animal welfare charitable foundation, to which Glynn and his associates would have access.
Instead of using the “business development loan” and the credit cards in the manner that Glynn had promised, Glynn and his associates misappropriated the victims’ money and used it for unauthorized personal expenses such as personal travel, tanning services, and luxury retail purchases.
In addition to the prison term, Judge Kugler sentenced Glynn to three years of supervised release.
U.S. Attorney Philip R. Sellinger credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Sara A. Aliabadi and Andrew B. Johns of the U.S. Attorney’s Office Criminal Division in Camden.
New York Man Sentenced to 56 Months in Prison for Defrauding Investors of More Than $3.5 Million Through Securities Offering SchemeRead the Press Release
TRENTON, N.J. – A New York man was sentenced to 56 months in prison on March 31, 2022 for perpetrating a scheme to defraud more than 70 investors through a long-running securities offering fraud that raised more than $4 million and caused investor losses of more than $3.5 million, U.S. Attorney Philip R. Sellinger announced.
Donald A. Milne III, 57, of Massapequa, New York, previously pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with one count of securities fraud. Judge Shipp imposed the sentence in Trenton federal court.
According to documents filed in this case and statements made in court:
Beginning in 2012, Milne founded Instaprin Pharmaceuticals Inc. (Instaprin), a purported pharmaceutical corporation that operated in New York, for the stated purpose of developing a fast-acting form of powdered aspirin that could instantly stop heart attacks and strokes. Instaprin was a successor entity to another New York corporation, SPI Acquisition Corp. (SPI), which Milne founded in 2010 for the stated purpose of acquiring assets for the development of the same fast-acting form of powdered aspirin. Milne was the founder, president, and chief executive officer of Instaprin and SPI, and exercised complete and exclusive control over them, including the offer, marketing, and sale of securities issued by those entities.
From as early as 2013 and through 2018, Milne executed a scheme to defraud dozens of investors in Instaprin and SPI securities through multiple and ongoing material misrepresentations concerning, among other things, how the victims’ investment money would be used and how their past investments had performed, so that Milne could misappropriate substantial sums of the investors’ money for his own personal gain and enrichment. Through at least four separate unregistered securities offerings that he caused Instaprin or SPI to issue between 2013 and 2016, Milne received more than $4 million in investment proceeds from victim investors across the country, and deposited the investment funds in one or more bank accounts that he controlled.
Milne misrepresented to victim investors the manner in which he and Instaprin/SPI would maintain and use the funds raised through Instaprin securities offerings. Milne falsely represented in the offering materials that he had assembled “a very strong world renowned board of directors and medical advisory board” that included industry leaders in fields of science and finance. Milne also misrepresented to investors that specific individuals had joined Instaprin as directors, advisors, and/or shareholders of Instaprin, made numerous false and misleading statements in investment updates distributed to investors between April 2014 and September 2018, and also represented that Instaprin was in negotiations with large pharmaceutical corporations for joint business ventures.
Milne misappropriated a substantial majority of the investors’ funds to pay out distributions to other investors in a Ponzi-scheme fashion; pay for Milne’s personal expenses, including a Caribbean vacation, boating expenses, divorce payments, clothing, and spa treatments; and to sustain and operate Island Raceway & Hobby Inc., a toy race car business that Milne separately owned.
In May 2019, the Securities and Exchange Commission filed a civil complaint against Milne and Instaprin in New Jersey federal court regarding the fraudulent scheme to which Milne pleaded guilty. That matter was resolved through the entry of final judgments permanently enjoining Milne and Instaprin from violating the charged provisions of the federal securities laws, ordering full disgorgement, prejudgment interest, and civil penalties.
In addition to the prison term, Judge Shipp sentenced Milne to three years of supervised release.
U.S. Attorney Sellinger credited special agents of the FBI Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the sentencing. He also thanked the SEC’s Philadelphia Regional Office, under the direction of Kelly L. Gibson, for its substantial assistance with the investigation.
The government is represented by Assistant U.S. Attorney J. Brendan Day, Attorney-in-Charge of the U.S. Attorney’s Office’s Trenton Office, and Assistant U.S. Attorney Heather Suchorsky of the Economic Crimes Unit in Newark.
Defense counsel: Joseph Mure Jr. Esq., Brooklyn, New York
Cumberland County Man Sentenced to 51 Months in Prison for Role in Conspiracy to Distribute Five Kilograms of FentanylRead the Press Release
NEWARK, N.J. – A Cumberland County, New Jersey, man was sentenced to 51 months in prison on March 31, 2022 for conspiring to distribute and possessing with intent to distribute 400 grams or more of fentanyl, U.S. Attorney Philip R. Sellinger announced.
Emanuel Figueroa-Martinez, 36, of Millville, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with conspiracy to distribute 400 grams or more of fentanyl and possession with intent to distribute 400 grams or more of fentanyl.
According to documents filed in this case and statements made in court:
In April 2020, Figueroa-Martinez conspired to distribute five kilograms of fentanyl. On April 24, 2020, Figueroa-Martinez transported the fentanyl to a location in Monmouth County, New Jersey. Upon arrival, he was arrested, and the fentanyl was recovered from his car.
In addition to the prison term, Judge Vazquez sentenced Figueroa-Martinez to two years of supervised release.
U.S. Attorney Sellinger credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, the Asbury Park Police Department, under the direction of Chief David Kelso, and the Neptune Township Police Department, under the direction of Chief James Hunt, with the investigation leading to the sentencing.
The government is represented by Assistant U.S. Attorney Francesca Liquori of the Organized Crime and Gangs Unit.
Defense counsel: Justin Capek Esq., Philadelphia
NHA Director of Information Technology Admits Embezzling Funds to Purchase Thousands of Electronic DevicesRead the Press Release
NEWARK, N.J. – Newark Housing Authority (NHA)’s former director of information technology admitted using his position to embezzle NHA funds to purchase cellular telephones and other electronic devices, U.S. Attorney Philip R. Sellinger announced.
Venancio Diaz, 56, of Jersey City, New Jersey, pleaded guilty before U.S. District Judge Brian Martinotti in Newark federal court on March 30, 2022, to an information charging him with committing theft from an agency receiving federal funds.
According to documents filed in this case and statements made in court:
From December 2013 to Aug. 10, 2021, Diaz bought, on behalf of NHA and using NHA funds, 1,509 electronic devices, primarily cellular telephones and tablets, from a telecommunications company. Diaz then caused those devices to be activated on NHA’s account on the company’s network for a short period of time – often only days or weeks. After the brief period of activation ended, Diaz posed as the owner of the devices and sold them to two different online electronics resale marketplaces. Diaz directed all the proceeds of the sales – a total of $594,425 – to his own bank accounts and kept the money for his own personal use.
The count of theft from an agency receiving federal funds carries a maximum sentence of 10 years in prison and a maximum potential fine of $250,000 or twice the gross amount of pecuniary gain that any person derived from the offense, whichever is greater. Sentencing is scheduled for August 4, 2022.
U.S. Attorney Sellinger credited special agents of the U.S. Department of Housing and Urban Development – Office of the Inspector General, under the direction of Special Agent in Charge Christina D. Scaringi in Newark; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea. He also thanked the IRS-Criminal Investigations for its assistance.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the Special Prosecutions Division in Newark.
Defense counsel: Joel Silberman Esq., Jersey City
Bergen County Man Sentenced to 97 Months in Prison for Decade-Long $60 Million Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was sentenced to 97 months in prison on March 30, 2022 for orchestrating a long-running bank and securities fraud scheme, which led to large-scale losses for financial institutions and investors, U.S. Attorney Philip R. Sellinger announced.
Seth Levine, 53, of Teaneck, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of conspiracy to commit bank fraud and one count of securities fraud. U.S. District Judge Susan D. Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Levine was the founding partner, owner, and managing member of Norse Holdings, which was the parent company to more than 70 subsidiary companies. Each of the subsidiary companies owned one or more multifamily buildings, located primarily in New Jersey. From 2009 through August 2019, Levine directed a scheme to fraudulently refinance the multifamily properties by providing materially false information to financial institutions about the rents collected, the number of apartments leased, the expenses, and the true owners of the properties. Levine and others provided lenders fake documents, including falsified leases that created the appearance that vacant spaces were occupied and that overstated the rent paid by tenants; fake personal financial statements; fake expense documents; and fake operating agreements that misrepresented ownership interests in the multifamily properties. Levine also forged signatures on some of the fraudulent documents submitted to lenders. As a result of the fraudulent refinances, Levine received cash payouts from the lenders, which Levine and others used for their own enrichment and to continue the fraud scheme.
Many of the lenders who approved mortgages based on the false statements of Levine and others in turn sold those mortgages to the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae). Because the refinances were obtained with fraudulent data regarding the properties’ income and expenses, the multifamily properties were overvalued and rents and other income from the properties did not cover the mortgage payments and other expenses associated with the properties. To cover the shortfalls, Levine obtained additional cash-out refinances, thereby increasing his total debt incurred. In total, Levine controlled at least 70 multifamily properties, comprising approximately 2,500 apartments. At the time the fraud was discovered, the outstanding balance of the fraudulently obtained mortgages on the multifamily properties was more than $150 million, including 40 mortgages held by Freddie Mac with an outstanding loan balance of approximately $103 million. At the time of sentencing, the bank fraud conspiracy resulted in losses to victim lenders of at least $47 million.
While defrauding the lending financial institutions, Levine also carried out a securities fraud scheme to defraud investors in the multifamily properties. He solicited investors to invest in the multifamily properties based on materially false statements and promises about the condition of the properties and the use of investor funds. Levine represented to investors that his conduct would be limited by an operating agreement. However, after Levine acquired the multifamily properties, he violated representations made to the investors, including by selling off portions of Levine’s ownership interest in the properties without investor consent, bringing on additional investors without consent, and refinancing the multifamily properties without investor consent. Levine provided fraudulent documents to investors, such as operating agreements that overstated Levine’s personal investment in the multifamily properties and documents bearing signatures forged by Levine. He also co-mingled investor funds and used the funds in violation of representations to investors, by using investor money to support other multifamily properties, make payments to other investors, and further the fraud. At the time of sentencing, the securities fraud victims lost more than $13 million.
In addition to the prison term, Judge Wigenton sentenced Levine to five years of supervised release.
Individuals who believe they may have information about this case may contact the FBI at 1-800-CALL-FBI (225-5324).
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge, Robert Manchak, with the investigation leading to the sentencing. The U.S. Securities and Exchange Commission has filed a civil complaint against Levine based on allegations underlying the securities fraud charge.
The government is represented by Assistant U.S. Attorney Heather Suchorsky of the Economic Crimes Unit and Special Assistant U.S. Attorney Charlie L. Divine of the Federal Housing Finance Agency, Office of Inspector General.
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Defense counsel: Benjamin Brafman Esq. and Jacob Kaplan Esq., New York
Federal Employee Arrested for Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A U.S. Environmental Protection Agency (EPA) employee was arrested for possession of child pornography on his EPA computer, the U.S. Attorney Philip R. Sellinger announced today.
John Struble, 63, of Fair Lawn, New Jersey, is charged by complaint with one count of possession of child pornography. He appeared by videoconference before U.S. Magistrate Judge Leda Dunn Wettre on March 29, 2022.
According to documents filed in this case and statements made in court:
The EPA alerted the U.S. Department of Homeland Security, Homeland Security Investigations, (HSI) that it discovered images of child pornography on a computer that it issued to Struble. HSI learned that Struble had navigated to websites containing sexual content and viewed child pornography using his EPA computer. HSI located a cache folder containing approximately 100 images constituting child pornography, which Struble had accessed from Fair Lawn using his EPA computer. HSI further determined that Struble accessed the child pornography on his EPA computer using a web browser that was not authorized by the EPA for installation on the computer.
The count of possession of child pornography is punishable by a maximum penalty of 20 years in prison and a fine of $250,000.
U.S. Attorney Sellinger credited special agents of HSI, New Jersey Division, under the direction of Special Agent in Charge Jason J. Molina, and the EPA, Office of Inspector General, Electronic Crimes Division, under the direction of Special Agent in Charge Justin Link. He also thanked the Fair Lawn Police Department for their assistance with the investigation.
The government is represented by Assistant U.S. Attorney Kimberly Mitchell of the Organized Crime/Gangs 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.
Pennsylvania Man Admits Role in $35 Million Pharmacy Compounded Medication SchemeRead the Press Release
NEWARK, N.J. – A Langhorne, Pennsylvania, man today admitted participating in a massive compounded-medication kickback scheme that he and others ran out of a pharmacy in Clifton, New Jersey, U.S. Attorney Philip R. Sellinger announced.
Robert Schneiderman, 79, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to two counts of an indictment charging him with one count of conspiracy to commit health care fraud and one count of conspiracy to violate the Anti-Kickback Statute.
According to documents filed in this case and statements made in court:
From 2014 through 2016, Schneiderman and his conspirators used Main Avenue Pharmacy, a mail-order pharmacy with a storefront in Clifton, to run a fraud and kickback scheme involving compounded drugs like scar creams, pain creams, migraine mediation, and vitamins. Schneiderman was the President of Main Avenue Pharmacy and was a founder and CEO of its corporate parent.
The scheme revolved around identifying compounded drugs that would yield exorbitant reimbursements from health insurers, including both federal and commercial payers. Once Main Avenue identified lucrative formulas for compounds, it would create large prescription pads with precisely those formulas on it. The prescription pad was extremely easy to use – it included check boxes for doctors to select a particular compounded formula. This increased the likelihood that the doctor would not alter the high-paying formula. There was also a place to select up to a dozen refills and a box authorizing the pharmacy to alter the ingredients itself in case an insurer wasn’t covering a particular compounded medication.
Once the prescription pad was set, Main Avenue would disseminate it to its stable of marketers across the country, with whom it had contractual relationships. The marketing companies would in turn distribute the prescription pad to telemedicine companies and doctors with whom they had a financial arrangement.
Physicians who signed prescriptions for compounded medications that were filled at Main Avenue often had never even spoken to the patient, let alone examined him or her. Once the prescriptions were signed by a doctor, they would be returned to Main Avenue Pharmacy. Main Avenue would then fill the prescription regardless of its medical necessity and then submit claims to health care benefit programs for reimbursement. They did so with federal payers like Medicare and Tricare and with commercial payers in New Jersey and elsewhere.
After Main Avenue obtained reimbursement from the health insurers, they would pay kickbacks to the marketers who had generated the prescriptions based on the overall adjudication amount. Main Avenue signed contracts with many of the marketers, and the contracts themselves spelled out the kickback arrangement, which called for Main Avenue to pay each marketer money based on the volume of referrals of compounded prescriptions and the reimbursement amount that Main Avenue received.
As part of the scheme, Main Avenue would routinely waive co-payments of the patients to whom they were sending multiple prescriptions. It did this to ensure that the patients would keep the medications that Main Avenue had sent regardless of whether the patient wanted them. On some occasions, Main Avenue Pharmacy paid the co-payments on behalf of the patients, and falsified money orders from the patients to Main Avenue to make it appear as if the patients had paid their co-payments when they had not.
On compounded medications alone, Main Avenue received over $34 million in reimbursements from health care benefit programs. Approximately $8 million of that total was paid by federal payers. Schneiderman himself earned over $400,000 through the course of the scheme.
The count of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison. The count of conspiracy to violate the Anti-Kickback Statute carries a maximum penalty of five years in prison. Both counts also are punishable by a maximum fine of $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Sept. 16, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch in Newark; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty; special agents of the Department of Health and Human Services – Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Christopher Algieri, with the investigation leading to today’s guilty plea.
The government is represented by Health Care Fraud Unit Chief Jason S. Gould of the U.S. Attorney’s Office in Newark.
New York Man Sentenced to 15 Years in Prison for Role in KidnappingRead the Press Release
NEWARK, N.J. – A Bronx, New York, man was sentenced today to 180 months in prison for his role in a kidnapping in Paterson, New Jersey, U.S. Attorney Philip R. Sellinger announced.
Maurice Cottman, 42, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of kidnapping. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Oct. 8, 2020, Cottman and his conspirator, Reginald Law, entered a retail store in Paterson and assaulted the victim, who was working in the store. Cottman and Law dragged the victim from the store, threw him into the back of a U-Haul truck and drove to New York. Cottman and Law pistol whipped the victim in the head and face. Later that morning, Cottman called the victim’s family, told them that he had the victim and demanded amounts as high as $200,000 for his return.
That afternoon, law enforcement officers went to Harlem, New York, where they saw the U-Haul parked on the street. When the officers approached, Cottman and Law fled in the U-Haul and were pursued. After some distance, the U-Haul crashed, and a foot pursuit ensued. Ultimately, the officers apprehended Cottman. The officers found the victim in the rear of the U-Haul. Law was arrested on May 26, 2021.
In addition to the prison term, Judge Chesler sentenced Cottman to five years of supervised release.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing. He also thanked the FBI New York Field Office and the Paterson Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Shontae D. Gray of the OCDETF/Narcotics Unit.
The charges against Law remain pending, and he is presumed innocent unless and until proven guilty.
Brooklyn Company Admits Price Gouging KN95 Masks During COVID-19 PandemicRead the Press Release
NEWARK, N.J. – A New York company admitted its role in price gouging a chain of New Jersey grocery stores in connection with the sale of KN95 masks during the COVID-19 pandemic, U.S. Attorney Philip R. Sellinger announced today.
Milk & Honey Ventures LLC (MHV), a company based in Brooklyn, New York, pleaded guilty by videoconference before U.S. Magistrate Judge Jessica S. Allen on March 28, 2022, to an information charging it with price gouging in violation of the Defense Production Act.
According to documents filed in this case and statements made in court:
In March 2020, MHV and two partners purchased 250,000 KN95 filtering facepiece respirators from a foreign manufacturer. MHV and one of those partners then sold 100,000 of those masks to a chain of New Jersey grocery stores at prices in excess of prevailing market prices. MHV sold the masks at a price of $5.25 per mask, which amounted to a markup of more than 400 percent from its acquisition cost. Prior to the spread of COVID-19, MHV had no history of selling personal protective equipment.
A violation of the Defense Production Act carries a maximum fine of $200,000, or twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss sustained by any victims of the offense, whichever is greatest. Sentencing for MHV is scheduled for Aug. 9, 2022.
U.S. Attorney Sellinger credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Peter Fitzhugh in New York, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney David V. Simunovich of the Government Fraud Unit in Newark and Nicholas P. Grippo, Chief of the Criminal Division in Newark.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit: https://www.justice.gov/coronavirus.
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 (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
U.S. Attorney Sellinger Announces Creation of Civil Rights DivisionRead the Press Release
NOTE: To see U.S. Attorney Sellinger's announcement, click here.
NEWARK, N.J. – U.S. Attorney Philip R. Sellinger announced today the creation of a Civil Rights Division whose sole focus will be the enforcement of federal civil rights laws in New Jersey. The new division, which will report directly to the U.S. Attorney and the U.S. Attorney’s front office, will enforce both civil and criminal civil rights laws. The division will also engage with local community members, advocacy groups, and other federal and state agencies to protect civil rights. This is the first and largest division in the district’s history to focus entirely on enforcing and protecting civil rights.
“No one should ever be subject to acts of discrimination or hate because of where they are from, what they look like, whom they love, or how they worship,” said U.S. Attorney Sellinger. “Hate crimes and unlawful bias incidents are antithetical to the core principles underlying our democracy, and the U.S. Attorney’s Office will do all it can to combat these threats to constitutional and civil rights. The Department of Justice was founded to protect the civil rights guaranteed by the 13th, 14th, and 15th Amendments. Building on this legacy, I am creating a Civil Rights Division within the U.S. Attorney’s Office, which will focus all its efforts on protecting and upholding the civil rights of those in our community. To that end, I have nearly doubled the number of civil and criminal attorneys who will carry out this important mission – all of whom will work together in this newly created division.”
The U.S. Attorney’s Office’s Civil Rights Division will be led by Division Chief Michael E. Campion. It will combine the Office’s longstanding Civil Rights Unit, which conducted civil enforcement as part of the Office’s Civil Division, with seasoned federal prosecutors from the Office’s Criminal Division, who will focus on federal criminal civil rights prosecutions. By increasing the number of attorneys dedicated to civil rights enforcement and merging civil and criminal civil rights enforcement into one Civil Rights Division, the U.S. Attorney’s Office will be able to prioritize and coordinate protecting and advancing civil rights for all in New Jersey.
The Civil Rights Division will continue the Office’s past efforts – often in partnership with the Justice Department’s Civil Rights Division – in bringing criminal civil rights prosecutions, as well as its efforts in bringing civil enforcement actions involving discrimination, fair housing, fair lending, the rights of institutionalized persons, police misconduct, voting rights, and the rights of veterans and servicemembers. Significant actions taken by the Office to advance civil rights in New Jersey include:
- A consent decree to end unlawful sexual harassment by an Elizabeth landlord who required sex acts in exchange for housing benefits from numerous women and gay or bisexual men; this historic settlement provided for the largest victim compensation fund in the Justice Department’s history of sexual harassment in housing matters;
- A consent decree to end a pattern or practice of Eighth Amendment violations and protects prisoners from sexual abuse by facility staff at the Edna Mahan Correctional Facility for Women.
- A Letter of Findings in the investigation into the Cumberland County Jail for failing to take measures to prevent inmate suicides, including the failure to provide medication to treat opioid use disorder.
- A consent decree to reform the Newark Police Department’s unconstitutional practices.
- Settlement agreements with the Union County and Ocean County Boards of Election under the Americans with Disability Act to ensure that voters with disabilities have access to polling places.
- Guilty pleas by several Paterson Police officers for violating civil rights, using excessive force, and filing false police reports.
- Settlements with several municipalities to end religious discrimination and burdens on the practice of religion resulting from unlawful zoning ordinances and zoning denials regarding mosques, synagogues, and other houses of worship.
- A consent decree with Hudson City Savings Bank to end redlining and pay $27 million to ensure equal lending services to predominantly Black and Hispanic communities.
- A consent decree with New Jersey’s student lending authority to provide damages to servicemembers who were subjected to unlawful default judgments with respect to student loans.
- A settlement with Newark Public Schools to require the district to provide effective English learner services.
Members of the public may report possible civil rights violations through the https://www.justice.gov/usao-nj/civil-rights-enforcement or may call the U.S. Attorney’s Civil Rights Hotline at (855) 281-3339.
Nevada Man Admits Money Laundering and Tax Offenses Related to BitClub Network Fraud SchemeRead the Press Release
NEWARK, N.J. – A Nevada man today admitted his role in laundering funds solicited for BitClub Network, a $722 million fraudulent cryptocurrency scheme, U.S. Attorney Philip R. Sellinger announced.
Gordon Brad Beckstead, 57, of Henderson, Nevada, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an information charging him with one count of conspiracy to commit money laundering and one count of aiding in the preparation of a false tax return.
According to documents filed in this case and statements made in court:
From April 2014 through December 2019, the BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme. Matthew Brent Goettsche, BitClub Network’s creator and operator, and Silviu Catalin Balaci, Russ Albert Medlin, Jobadiah Sinclair Weeks, and Joseph Frank Abel, were charged by indictment in December 2019 in connection with the BitClub Network scheme.
Beckstead, a BitClub Network investor, admitted conspiring with Goettsche and others to launder funds earned by Goettsche through his operation of the BitClub Network. At the direction of Goettsche, Beckstead created and controlled various entities that were used by Beckstead, Goettsche, and others to shield Goettsche’s association with the BitClub Network and to disguise income derived by Goettsche through his operation of the BitClub Network.
Beckstead further admitted to controlling bank accounts associated with the entities and directing transfers to and from the accounts exceeding $50 million. Beckstead acknowledged that the transfers were designed to conceal the source of Goettsche’s income, disguise Goettsche’s ownership of certain property and assets paid for with BitClub Network proceeds, and to help Goettsche evade tax reporting requirements. Beckstead also admitted that he and others provided false and misleading information to financial institutions to conceal the source of Goettsche’s income.
Beckstead, a former CPA, also admitted to aiding at least two different tax preparers in the preparation of Goettsche’s false 2017 and 2018 federal tax returns. Beckstead provided the tax preparers with documents and records to assist in the preparation of the returns. Beckstead admitted that he and Goettsche knew the 2017 and 2018 tax returns were fraudulent in that they failed to report more than $60 million in total income earned by Goettsche through his operation of the BitClub Network. This allowed Goettsche to avoid paying more than $20 million in federal income taxes.
The money laundering conspiracy charge to which Beckstead pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $500,000, or twice the value of the property involved in the transaction, whichever is greater. The tax charge to which Beckstead pleaded guilty carries a maximum penalty of three years in prison and a fine of $100,000. Sentencing is scheduled for Aug. 9, 2022.
U.S. Attorney Sellinger credited special agents and task force officers of the FBI Los Angeles Division’s West Covina Resident Agency, under the direction of Assistant Director in Charge Kristi K. Johnson; and special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, who conducted this investigation under the initiative of the Joint Chiefs of Global Tax Enforcement, with the investigation leading to today’s guilty plea.
Anyone who believes they may be a victim of the BitClub Network may visit www.justice.gov/usao-nj/bitclub. Victims can find more information about the case, including a questionnaire for victims to fill out and submit.
The government is represented by Assistant U.S. Attorneys Anthony P. Torntore and Jamie L. Hoxie of the Cybercrime Unit, and Unit Chief Sarah Devlin and Assistant U.S. Attorney Joseph Minish of the Asset Recovery and Money Laundering Unit, of the U.S. Attorney’s Office in Newark.
Former Paraguayan Congresswoman Sentenced to 33 Months in Prison for Role in International Money Laundering ConspiracyRead the Press Release
TRENTON, N.J. – A former member of Paraguay’s Congress was sentenced today to 33 months in prison for her role in an international money laundering conspiracy, U.S. Attorney Philip R. Sellinger announced.
Cynthia Elizabeth Tarrago Diaz, 42, pleaded guilty on Sept. 15, 2020, before Chief Judge Freda L. Wolfson to an information charging her with conspiracy to commit money laundering. Judge Wolfson imposed Tarrago’s sentence today by videoconference. Tarrago’s husband, Raimundo Va, 46, pleaded guilty on Sept. 16, 2020, before Judge Wolfson to an information charging him with one count of conspiracy to commit money laundering, and is scheduled to be sentenced on April 14, 2022.
Tarrago and Va were arrested by the FBI on Nov. 21, 2019, after they arrived in Newark as part of their unlawful money laundering activities, and were charged in a criminal complaint along with a third individual, Rodrigo Alvarenga Paredes, who remains in Paraguay.
According to documents filed in this case and statements made in court:
Until January 2019, Tarrago was a member of Paraguay’s Congress and, in late 2019, had publicly announced her intention to run for mayor of the capital district of Asunción. While in office, Tarrago and Va agreed to accept at least $2 million in United States currency from two individuals who represented themselves to be narcotics traffickers, believing the money to be proceeds of unlawful narcotics trafficking and to launder the funds through an international network of accounts in order to disguise the unlawful source of the proceeds. Tarrago and Va traveled to New Jersey and Florida on multiple occasions and accepted approximately $800,000 in United States currency from the purported drug traffickers. They then caused those funds to be laundered through the conspiracy’s network of accounts and ultimately to be transferred back to an account maintained by the purported drug traffickers. To disguise the illicit source of the funds, members of the conspiracy generated fraudulent invoices that stated legitimate business reasons for the transfers of laundered funds to the purported drug traffickers’ account. On multiple occasions during the purported drug dealers’ meetings with Tarrago and Va, Tarrago indicated that she would be able to assist the purported drug dealers with procuring large quantities of cocaine from Paraguay at an inexpensive price.
Unbeknownst to Tarrago and Va, the currency that they accepted from the purported drug traffickers and caused to be laundered was not actually illicit drug proceeds, but was provided to Tarrago and Va by two undercover FBI agents as part of an extensive investigation of the money laundering network. The undercover agents met with Tarrago and Va in the United States on numerous occasions and obtained substantial video and audio recordings of their interactions with Tarrago and Va, during which details of the money laundering network were discussed. The evidence obtained revealed that Alvarenga Paredes, operating through the auspices of a money-exchange company in Paraguay, coordinated the laundering of the funds that the undercover agents provided to Tarrago and Va.
In addition to the prison term, Judge Wolfson ordered Tarrago to forfeit $119,049.
U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr., with the investigation leading to today’s sentencing. He also thanked the Department of Justice’s Office of International Affairs for its assistance in the case.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko of the Criminal Division in Trenton and J. Brendan Day, Attorney in Charge of the Trenton Office of the U.S. Attorney’s Office.
Connecticut Man Admits Role in a Murder for HireRead the Press Release
NEWARK, N.J. – A Connecticut man today admitted his role in a murder for hire scheme in which a New Jersey-based political consultant paid him and another man to kill a longtime associate, U.S. Attorney Philip R. Sellinger announced.
George Bratsenis, 73, of Monroe, Connecticut, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit murder for hire. Bratsenis’ conspirators – Sean Caddle and Bomani Africa – previously pleaded guilty before Judge Vazquez to their roles in the murder scheme.
“Eight years ago, these three individuals – Caddle, Bratsenis, and Africa – conspired to brutally murder the victim,” U.S. Attorney Sellinger said. “At Caddle’s direction, Bratsenis and Africa stabbed the victim to death in the victim’s apartment, and then set it ablaze. These guilty pleas bring a measure of justice to the victim’s memory and for his family. I commend the efforts of the FBI, the Hudson County Prosecutor’s Office, and my Office for their determination over many years to bring this matter to resolution.”
“This defendant conspired in the ultimate crime – murder for money,” FBI Newark Special Agent in Charge George M. Crouch Jr. said. “Those who devalue life – whether out of greed or animus – need to know that the FBI is dedicated to keeping our citizens safe, and nothing will stop us from accomplishing that mission. When you break the law, you will be brought to justice no matter how long it takes.”
According to documents filed in this case and statements made in court:
In April of 2014, Caddle solicited Bratsenis to commit a murder on Caddle’s behalf in exchange for thousands of dollars. Bratsenis recruited Africa, a longtime accomplice from Philadelphia, to join the plot. After Bratsenis confirmed his and Africa’s interest in the job, Caddle told Bratsenis that the target was a longtime associate who had worked for Caddle on various political campaigns.
On May 22, 2014, Bratsenis and Africa traveled from out of state to the victim’s apartment in Jersey City. After entering the apartment, Bratsenis and Africa stabbed the victim to death and then set fire to the victim’s apartment. After Caddle learned that the victim had been murdered, the following day, he met Bratsenis in the parking lot of a diner in Elizabeth, New Jersey. Caddle paid Bratsenis thousands of dollars in exchange for the murder, and Bratsenis shared a portion of those proceeds with Africa.
Bratsenis faces a maximum potential penalty of life imprisonment and a $250,000 fine. Sentencing is scheduled for Aug. 2, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Crouch in Newark, with the investigation leading to today’s guilty plea. He also thanked the Hudson County Prosecutor’s Office for its assistance.
The government is represented by Executive Assistant U.S. Attorney Lee M. Cortes Jr. and Assistant U.S. Attorney Sean Farrell, Chief of the U.S. Attorney’s Office Cybercrime Unit.
Two California Men Charged with Selling Drugs and Guns over the InternetRead the Press Release
NEWARK, N.J. – Two California men were arrested for conspiring to sell methamphetamine and fentanyl and to unlawfully transport numerous firearms via the internet, U.S. Attorney Philip R. Sellinger announced.
Angelo Chavez, 22, of Stockton, California, and Phillip Luevano, 21, of Manteca, California, were arrested on March 22, 2022, in California and charged by complaint with conspiracy to distribute and possess with intent to distribute methamphetamine and fentanyl, conspiracy to unlawfully transport firearms, and possession and transportation of unregistered firearms. The defendants are scheduled to appear today before U.S. Magistrate Judge Deborah Barnes in the Eastern District of California.
According to documents filed in this case and statements made in court:
From August 2020 and December 2021, undercover law enforcement agents began communicating with Chavez and Luevano via a social media platform, where the defendants advertised for sale various narcotics and firearms. Agents made numerous purchases from Chavez and Luevano, including
- 150 pills of oxycodone purchased from Luevano, which contained fentanyl and another synthetic opioid;
- 50 grams of heroin purchased from Chavez;
- 100 grams of MDMA (ecstasy) purchased from Luevano;
- 100 grams of methamphetamine purchased from Chavez and Luevano;
- a Springfield Armory Model 1911 A1 .45 caliber firearm, an AK-47 firearm, and an AR-15 firearm with “We The People” engraved on the barrel were purchased from Chavez and Luevano;
- Numerous additional firearms were purchased from Chavez including: a Glock 27 .40 caliber firearm, an Ithaca sawed-off 12-guage shotgun, a Springfield XD45 .45 caliber firearm, approximately 5 different AR-15 firearms, and numerous auto sear switches which convert a semi-automatic firearm into a fully automatic firearm; and
- An additional AR-15 firearm was purchased from Luevano.
Chavez and Luevano were paid mostly in cryptocurrency, and mailed the drugs and guns from addresses in California to New Jersey.
The count of conspiracy to distribute and possess with intent to distribute methamphetamine carries a mandatory minimum of five years in prison, a maximum of 40 years in prison and a maximum fine of $5 million. The count of conspiracy to distribute and possess with intent to distribute fentanyl carries a statutory maximum of 20 years in prison and a maximum fine of $1 million. The count of conspiracy to unlawfully transport firearms carries a statutory maximum of five years in prison and a fine of $250,000. The count of possession of unregistered firearms carries a statutory maximum of 10 years in prison and a fine of $10,000.
U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, 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 Jeffrey L. Matthews, with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Vera Varshavsky of the U.S. Attorney’s Cybercrime Unit in Newark.
The charges and accusations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
New Jersey Husband and Wife Admit Selling Misbranded and Unapproved New DrugsRead the Press Release
NEWARK, N.J. – A Middlesex County husband and wife pleaded guilty in connection with a scheme to market and distribute over $3 million worth of misbranded drugs and unapproved new drugs, U.S. Attorney Philip R. Sellinger announced today.
Sylvia Kovaleski, 43, of South Amboy, New Jersey, pleaded guilty On March 22, 2022, by videoconference before U.S. District Judge Susan D. Wigenton to one count of conspiring to distribute misbranded drugs and unapproved new drugs. Her husband, Keith Kovaleski, 57, pleaded guilty to the same charge on March 21, 2022.
According to documents filed in this case and statements made in court:
The Kovaleskis owned and operated All American Peptide (AAP). From 2014 to January 2019, AAP used its website to market and distribute substances primarily used by bodybuilders and others engaged in weight training to enhance performance and mitigate the side effects of performance enhancing substances.
The Kovaleskis, though AAP, sold: prescription drugs, such as tadalafil, the active ingredient in Cialis; SARMS, used by bodybuilders as an alternative to steroids; peptides, also used as performance enhancing substances; and other drugs that had not been approved for human use, for example, clenbuterol, a drug sold in foreign markets but not approved by the U.S. Food and Drug Administration.
The Kovaleskis used their South Amboy basement as a manufacturing facility to make and label AAP products, including homemade capsules containing significantly higher dosages of tadalafil than the highest recommended dosage. The Kovaleskis failed to provide adequate directions for use for their products, such as frequency of administration, dosage information, or warnings about side effects.
The conspiracy charge carries a maximum potential penalty of up to five years in prison and a maximum potential fine of up to $250,000 or twice the gross gain or loss, whichever is greatest. As part of their plea agreements, the Kovaleskis must forfeit over $3 million in criminal proceeds. Sentencing for both defendants is scheduled for July 26. 2022.
U.S. Attorney Philip R. Sellinger credited special agents of the Food and Drug Administration Criminal Investigation’s New York Field Office, under the direction of Acting Special Agent in Charge Michael Felezzola; special agents of the Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael Waters; and postal inspectors with the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorneys Cari Fais, Chief of the Opioid Abuse Prevention and Enforcement Unit, and Barbara Ward of the Asset Forfeiture and Money Laundering Unit.
Man Sentenced to 99 Months in Prison for Committing Mail Fraud while Serving Federal Sentence for Previous FraudRead the Press Release
CAMDEN, N.J. – The president of a company providing goods to government agencies was sentenced today to 99 months in prison – 87 months for attempting to defraud businesses in connection with government contracting and an additional 12 months for violating his supervised release – U.S. Attorney Philip R. Sellinger announced.
Keith Fisher Sr., 64, of Philadelphia, Pennsylvania, and Burlington, New Jersey, previously pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to an indictment charging him with one count of mail fraud. Fisher also pleaded guilty to violating the conditions of his supervised release from a prior conviction.
According to documents filed in this case and statements made in court:
On July 18, 2017, Fisher was sentenced by Judge Bumb to 60 months in prison for conspiring to commit mail fraud using various companies he owned and controlled. In that case, Fisher and his companies won bids for U.S. government contracts; subcontracted with victim-businesses to provide goods to the government pursuant to the contracts; collected payments from the government for fulfilling the contracts; and then failed to pay the subcontractor victim-businesses that actually provided the goods.
The fraud scheme sentenced today involved another company, Atlantic Safety Corp., controlled by Fisher, and began when Fisher was nearing the end of his previous prison sentence. Fisher used Atlantic Safety to bid on federal contracts through a reverse auction online marketplace that enabled government agencies to post requirements for goods. Upon submitting a winning bid, Atlantic Safety was awarded a contract to provide goods to a government agency.
Fisher orchestrated his fraud by using an alias to subcontract with a third-party vendor to provide goods directly to the government agency. Fisher induced the third-party vendor to ship the goods to the government agency on credit by falsely promising to pay the vendor for the goods. Fisher also made fraudulent representations to other potential subcontractor vendors about the creditworthiness and financial status of Atlantic Safety.
In addition to the prison term, Judge Bumb also sentenced Fisher to 54 months of additional supervised release.
U.S. Attorney Sellinger credited special agents with the U.S. Naval Criminal Investigative Service, Economic Crimes Field Office, under the direction of Special Agent in Charge Eric Maddox; special agents with the General Services Administration Office of Inspector General, Office of Investigations Mid-Atlantic Division, under the direction of Special Agent in Charge Eric D. Radwick; and special agents with the U.S. Department of State Office of Inspector General, Office of Investigations, under the direction of Special Agent in Charge Michael Speckhardt, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
Indiana Man Convicted of Multiple Sex OffensesRead the Press Release
TRENTON, N.J. – A Lebanon, Indiana, man was convicted today on four counts of sex offenses, U.S. Attorney Philip R. Sellinger announced.
Randal Wise, 45, was convicted of attempted online enticement of a minor, transportation of child pornography, possession of child pornography, and attempted transfer of obscenity to a minor following a three-day trial before U.S. District Judge Michael A. Shipp.
According to documents in this case, and the evidence at trial:
On Oct. 24, 2019, Wise traveled into New Jersey, approached an individual he believed was a 14-year-old boy on an internet dating application, and started a sexual dialogue. The individual was actually an undercover officer posing as a minor. Wise sent the undercover officer multiple photographs of his genitalia and requested similar photographs from him. The following day, Wise approached another individual that he believed was a minor boy on the same application. Unbeknownst to Wise, this individual was a second undercover officer posing as a minor. Wise engaged the second undercover officer in a highly sexual dialogue over the ensuing 24-hour period, sending sexually explicit photographs, questioning the second undercover officer about his sexual preferences and interests, and inviting the individual to his hotel for sex. On Oct. 26, 2019, Wise traveled to the second undercover officer’s location to engage in sexual activity with a minor, at which time he was arrested.
Law enforcement seized Wise’s phone and subsequently discovered multiple items of child pornography embedded in a sexually graphic conversation.
The attempted online enticement of a minor charge carries a maximum potential penalty of life in prison, and a mandatory minimum prison sentence of 10 years. Because of a prior conviction, the transportation of child pornography charge carries a maximum potential penalty of 40 years, and a mandatory minimum of 15 years. Because of a prior conviction the possession of child pornography charge carries a maximum of 20 years, and a mandatory minimum prison sentence of 10 years. The attempted transfer of obscenity to a minor count carries a maximum potential penalty of 10 years. All of the counts carry a maximum $250,000 fine. Sentencing is scheduled for July 22, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s conviction. He also thanked the Somerset County Prosecutor’s Office, under the direction of Acting Prosecutor Thomas J. Chirichella, detectives with the Bayonne Police Department, and detectives with the Indianapolis Police Department.
The government is represented by Assistant U.S. Attorneys Ray Mateo and Shawn Barnes of the U.S. Attorney’s Office, Criminal Division in Newark.
Former Freight Company Executive Sentenced to 18 Months in Prison for Embezzlement SchemeRead the Press Release
NEWARK, N.J. – A former program manager of an international freight forwarding company was sentenced today to 18 months in prison for his role in a scheme to embezzle over $550,000 from the company, U.S. Attorney Philip R. Sellinger announced.
Morten Nielsen, 37, a Danish national residing in Maine, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of wire fraud. Judge Wigenton imposed the sentence today via videoconference.
According to documents filed in this case and statements made in court:
As program manager for the freight forwarding company, Nielsen was responsible for the company’s contract relating to the Egyptian Foreign Military Sales program (EFMP), a program between the government of Egypt and the U.S. Department of Defense (DoD) that facilitated the sale and repair of military equipment from the DoD to Egypt. Nielsen was responsible for ensuring all logistics for the transportation of certain material between the United States and Egypt and for submitting all paperwork and billing invoices on behalf of the company to the Egyptian government. Once approved, those invoices were forwarded to the DoD for payment to the company.
From July 2017 through July 2019, Nielsen submitted fraudulent invoices from a sham company that he controlled to the freight forwarding company for work that the sham company never performed. Nielsen then sent the fraudulent invoices on behalf of his employer to the Egyptian government. The fraudulent invoices were approved by Egypt and, the DoD reimbursed the freight forwarding company. Nielsen caused his employer to pay the sham company he created approximately $559,000 over the course of two years, and then transferred those funds into his personal account.
In addition to the prison term, Judge Wigenton sentenced Nielsen to three years of supervised release and ordered him to pay $559,000 in restitution.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service under the direction of Special Agent in Charge Patrick Hegarty; and special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the U.S. Attorney’s Office Government Fraud Unit in Newark.
Essex County Man Sentenced to Nine Years in Prison for Role in Armed CarjackingRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 108 months in prison for his role in a carjacking in which a firearm was brandished, U.S. Attorney Philip R. Sellinger announced.
Jared Walker, 24, of Newark, previously pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to a three-count indictment charging him with carjacking, possession of a firearm by a convicted felon, and brandishing a firearm during and in relation to a crime of violence.
According to documents filed in this case and statements made in court:
On Jan. 6, 2020, the driver of a 2008 Ford E-350 van was carjacked at gunpoint in Newark. Walker approached the van, which was parked in Newark, and drove it away while the victim was still inside. Walker brandished a firearm during the carjacking. The victim ultimately escaped from the vehicle, and Walker was apprehended a short time later. When law enforcement recovered the gun, officers discovered that it was loaded with 13 rounds of ammunition. In 2015, Walker was convicted of unlawful possession of a handgun in New Jersey Superior Court – a felony offense – and is prohibited under federal law from possessing firearms and ammunition.
In addition to the prison term, Judge Cecchi sentenced Walker to four years of supervised release.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch in Newark, and officers of the Newark Police Department, under the direction of Public Safety Director Brian O’Hara, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Samantha C. Fasanello of the Violent Crimes Unit.
Bronx Man Charged with Conspiracy to Traffic Fentanyl and CocaineRead the Press Release
NEWARK, N.J. – A New York man was arrested today on charges of conspiring to possess with intent to distribute fentanyl and cocaine, U.S. Attorney Philip R. Sellinger announced.
David Patrick Williams, 36, of the Bronx, was charged by complaint, made his initial appearance before U.S. Magistrate Judge Edward S. Kiel in Newark federal court and was released on $100,000 unsecured bond.
According to documents filed in this case and statements made in court:
On March 30, 2020, Williams and two other individuals conspired and agreed to possess with intent to distribute approximately one kilogram of fentanyl and approximately one kilogram of cocaine, and attempted to take delivery of a shipment containing those substances.
The charges of conspiracy to possess with intent to distribute fentanyl and cocaine each carry a statutory mandatory minimum sentence of 10 years in prison, a maximum sentence of life in prison, and a maximum fine of $10 million.
U.S. Attorney Sellinger credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the Organized Crime/Gangs 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.
Essex County Man Sentenced to 33 Months in Prison for Conspiring to Fraudulently Obtain More Than $700,000Read the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 33 months in prison for conspiring to fraudulently obtain more than $700,000, U.S. Attorney Philip R. Sellinger announced.
Jefferson Robert, 31, of Newark, previously pleaded guilty by videoconference before U.S. District Judge Julien X. Neals to an information charging him with conspiring to commit wire fraud. Judge Neals imposed the sentence by videoconference today.
According to documents filed in the case and statements made in court:
On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law. The CARES Act created a new temporary federal program unemployment insurance program called Pandemic Unemployment Assistance (PUA), which provides unemployment insurance benefits (UIB) for individuals who are not eligible for other types of unemployment (e.g., self-employed, independent contractors, gig economy workers). The CARES Act also created a new temporary federal program that provides an additional $600 weekly benefit to those eligible for PUA and regular UIB. The Washington State Employment Security Department (ESD) administers and manages the regular unemployment and PUA programs in the State of Washington.
Robert opened bank accounts with a fraudulent passport in another individual’s name. He and his conspirators then caused an application to be made to ESD for UIB in the name of a victim. In response, ESD caused UIB to be deposited into one of the fraudulent bank accounts. Robert and his conspirators: partook in business email scams, including causing a victim to transfer approximately $28,000 into one of the bank accounts; partook in romance scams, including causing a victim to make five deposits into one of the bank accounts totaling approximately $19,000; and fraudulently obtained money from the IRS by causing the IRS to transfer payments in four victims’ names into one of the bank accounts. Once the fraudulently obtained money was in the bank accounts, Roberts moved the money, including through the purchase of money orders. Robert and his conspirators caused more than $700,000 in losses.
In addition to the prison term, Judge Neals sentenced Robert to three years of supervised release and ordered him to pay restitution of $675,371.
U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division; special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Jonathan Mellone in New York; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.
Union County Man Charged with Illegally Possessing Firearm and Drug TraffickingRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man was charged today with illegally possessing a firearm and possession of controlled substances with intent to distribute, U.S. Attorney Philip R. Sellinger announced.
Shaquan Little-Bethea, 28, of Elizabeth, New Jersey, is charged by complaint with one count of being a previously convicted felon in possession of a firearm and ammunition and one count of possession with intent to distribute controlled substances. Little-Bethea will have his initial appearance at a date to be determined.
According to documents filed in this case and statements made in court:
Law enforcement officers received information that Little-Bethea was distributing controlled dangerous substances in Elizabeth. On June 2, 2022, Little-Bethea arranged to meet with an undercover law enforcement agent to sell him the drugs. Just before the meeting, however, Little-Bethea drove away in his car before fleeing on foot. After a pursuit, law enforcement officers apprehended Little-Bethea and recovered an H&K, model VP9, 9mm semi-automatic pistol, with 16 rounds of ball ammunition, along with 38 clear vials containing suspected crack cocaine and 17 glassine envelopes of suspected heroin.
The narcotics offense carries a maximum potential penalty of 20 years in prison, and a fine of $1 million. The count of being a felon in possession of a firearm and ammunition carries a maximum potential penalty of 10 years in prison and a fine of $250,000.
U.S. Attorney Sellinger credited the members of the Elizabeth Police Department, under the direction of Director Earl J. Graves and Police Chief Giacommo Sacca; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Jeffrey L. Matthews, Newark Field Division, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Dong Joo Lee of the Narcotics/Organized Crime and Drug Enforcement Task Force Unit and Assistant U.S. Attorney Matthew DeSaro of the General Crimes Unit, in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former Owner of New Jersey Marketing Company Admits Role in $6 Million Compounded Prescription Drug SchemeRead the Press Release
NEWARK, N.J. – The former owner of a New Jersey marketing company admitted his role in a scheme to defraud public and private health benefits programs of over $6 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Philip R. Sellinger announced today.
Michael Drobish, 43, of Cedar Grove, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez on March 16, 2022, to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounding is a practice in which a pharmacist or physician combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. The Food and Drug Administration does not approve compounded drugs and thus does not verify the safety, potency, effectiveness, or manufacturing quality of compounded drugs. Generally, a physician may prescribe compounded drugs when an FDA-approved drug does not meet the health needs of a particular patient.
Between April 2014 and January 2017, Drobish conspired with others to submit fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.
Drobish hired sales representatives through his marketing company to target individuals who had insurance plans that covered compounded medications. The sales representatives then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. The individuals were then directed to certain telemedicine companies, which the marketing company or its affiliates paid to issue the prescriptions. The prescribing physicians at the telemedicine companies would then write the prescriptions without performing any examination or after deliberately conducting cursory examinations that were insufficient to legitimately deem a compounded drug medically necessary.
Once the prescriptions were written, they were filled by certain compounding pharmacies with which Drobish conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Drobish’s marketing company a percentage of the reimbursement amount. Drobish would retain a portion of the payment and provide a “commission” payment to the relevant sales representative.
The conspiracy to commit health care fraud charge carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense. As part of his plea agreement, Drobish must forfeit $532,650 in criminal proceeds and pay restitution of at least $6.1 million. Sentencing is scheduled for July 19, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., and the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Adam Baker of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.
Essex County Man Admits Obstructing Justice while on Pre-Trial ReleaseRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted obstructing justice while on pre-trial release, U.S. Attorney Philip R. Sellinger announced.
Robert Alexander, 45, of Newark, pleaded guilty by videoconference before U.S. District Judge Brian Martinotti to a superseding indictment charging him with obstructing justice while on pre-trial release.
According to documents filed in this case and statements made in court:
On Jan.14, 2019, Alexander pleaded guilty to an information charging him with one count of making a false statement on a loan application in a criminal case that was pending before Chief U.S. District Judge Freda L. Wolfson. On Sept. 4, 2019, Judge Wolfson sentenced Alexander to 46 months in prison.
On Oct. 8, 2019 – the day before Alexander was scheduled to voluntarily surrender to the Bureau of Prisons to begin serving his sentence – he caused a forged medical note to be submitted to Judge Wolfson in support of a request to delay the date of his voluntary surrender. The forged medical note contained falsified information and was submitted with the specific intent to influence and impede Judge Wolfson in the discharge of her duties as the judge presiding over his case. At the time of the offense, Alexander was on pre-trial release.
The obstruction of justice count carries a maximum penalty of 10 years in prison and a $250,000 fine. The commission of the offense while on pre-trial release carries a maximum penalty of 10 years in prison; any term of imprisonment imposed for committing the offense while on pre-trial release must be consecutive to the term imposed on the obstruction of justice charge. Sentencing is scheduled for July 27, 2022.
U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division, with the investigation leading to today’s guilty plea.
The government is represented by U.S. Attorneys Catherine R. Murphy, Chief of the Economic Crimes Unit, and Ryan L. O’Neill of the U.S. Attorney’s Office Health Care Fraud Unit.
Middlesex County Man Admits $1.6 Million Paycheck Protection Program and Economic Injury Disaster Loan Fraud SchemeRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man today admitted his role in a scheme to defraud lenders and the Small Business Administration (SBA) by fraudulently obtaining approximately $1.6 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL), U.S. Attorney Philip R. Sellinger announced.
Jordan C. Larkins, 32, of Edison New Jersey, pleaded guilty before U.S. District Judge Zahid N. Qurashi by videoconference to an information charging him with one count wire fraud, one count bank fraud, and one count money laundering.
According to documents filed in this case and statements made in court:
From May 2020 through July 2020, Larkins submitted three fraudulent PPP loan applications to three different lenders and 11 EIDL applications to SBA on behalf of numerous purported businesses.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, 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 up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses. The EIDL program was an SBA program that provided low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters. The CARES Act authorized the SBA to provide EIDLs of up to $2 million to eligible small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.
On his 14 fraudulent PPP and EIDL applications, Larkins made false representations to the participating lenders and the SBA, including fake federal tax return documentation for his purported businesses and fake bank statements. He also fabricated the identities of certain individuals listed as applicants and the corresponding driver’s licenses of those purported applicants.
Based on Larkins’ misrepresentations, he obtained approximately $1.6 million in PPP and EIDL funds. Larkins then misused the funds by making a series of cash withdrawals, transferring funds to foreign banks, and for various other personal expenses.
The charge of bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine; the charge of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine; the charge of money laundering carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. Sentencing is scheduled for July 21, 2022.
U.S. Attorney Sellinger credited inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Inspector in Charge Damon Wood; special agents of the IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the U.S. Attorney’s Office’s Government Fraud Unit in Newark.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
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.
Two Men Admit Roles in Burlington County Drug Trafficking OrganizationRead the Press Release
TRENTON, N.J. – Two members of an extensive drug-trafficking organization, including the leader of the organization, today admitted distributing large amounts of cocaine and crack cocaine throughout Burlington County, U.S. Attorney Philip Sellinger said.
Herbert Mays, 65, of Willingboro, New Jersey, pleaded guilty before U.S. District Judge Zahid N. Quraishi in Trenton federal court to Counts One and Two of a superseding indictment charging him with conspiracy to distribute and possess with intent to distribute more than five kilograms of cocaine and conspiracy to distribute and possess with intent to distribute more than 280 grams of crack cocaine.
Julius Thigpen, 60, of Philadelphia, Pennsylvania, another member of the same organization, pleaded guilty to a superseding information charging him with one count of conspiracy to distribute and possess with intent to distribute more than 500 grams of cocaine.
Ten other members of the drug trafficking conspiracy – Andre Perkins, Brandon Watts, Craig Moore, John Petrovich, Mecca Grant, Nathaniel McCoy, Ronnie Dawson, Samantha Bolhert, Teron Huggins, and Tracy Williams – previously pleaded guilty. The charges against eight other defendants remain pending.
According to the documents filed in this case and statements made in court:
Between July 2019 and September 2019, the defendants and others engaged in a narcotics conspiracy that operated primarily in municipalities throughout Burlington County – including Willingboro, Burlington City, Burlington Township, Bordentown Township, and Edgewater Park – and which sought to profit from the distribution of cocaine and crack cocaine. Law enforcement officials learned that defendants obtained regular supplies of cocaine from co-conspirators in the Philadelphia area and elsewhere and then redistributed that cocaine, portions of which defendants converted into crack cocaine, for profit, to other conspirators, distributors, sub-dealers, and end users throughout Burlington County and elsewhere. Law enforcement officials intercepted numerous communications by and between the conspirators regarding such issues as cocaine and crack cocaine quality and availability, pricing, packaging, quantity, and customer satisfaction.
The counts to which Mays pleaded guilty each carry a mandatory penalty of 10 years in prison, a maximum potential penalty of a life in prison, and up to a $10 million fine. The count to which Thipgen pleaded guilty carries a mandatory penalty of five years in prison, a maximum potential penalty of 40 years in prison, and up to a $5 million fine. Sentencing for both defendants is scheduled for July 20, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, Newark Field Office, Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr.; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Jeffrey L. Matthews; detectives of the Burlington County Prosecutor’s Office, under the direction of Prosecutor Scott Coffina; officers of the Burlington Township Police Department, under the direction of Director of Public Safety Bruce Painter; officers of the Willingboro Police Department, under the direction of Director of Public Safety Ian Bucs; officers of the Burlington City Police Department, under the direction of Chief John Fine; officers of the Florence Police Department, under the direction of Chief Brian Boldizar; officers of the Bordentown Township Police Department, under the direction of Chief Brian Pesce; officers of the Edgewater Park Police Department, under the direction of Chief Robert Hess; officers of the Ewing Police Department, under the direction of Chief Albert Rhodes; officers of the Westampton Police Department, under the direction of Chief Stephen Ent; officers of the Trenton Police Department, under the direction of Director Steve Wilson with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorneys Martha K. Nye of the U.S. Attorney’s Office’s Criminal Division in Trenton and Andrew B. Johns of the Criminal Division in Camden.
The charges and allegations contained in the complaints against the eight remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Nine Defendants Indicted for Drug and Firearms ConspiraciesRead the Press Release
NEWARK, N.J. – Nine people were arraigned today on illegal drug and firearms charges contained in a 17-count indictment, U.S. Attorney Philip R. Sellinger announced.
Gilbert Bermudez, aka “Troub,” 29; Brian Elijah Mitchell, aka “Slash,” 32; Jaahan Mitchell, 32; Keith Rogers, aka “Dog,” aka “Z,” 45; Isaiah Bullock, 26; Jennifer Rivera, 41; and Shamika Richardson, 25, all of Newark; Mark Washington, 58, of Irvington, New Jersey; and Torell Brown, 46, of Orangeburg, South Carolina were indicted on various drug and weapons charges last month.
According to documents filed in these case and statements made in court:
On May 14, 2021, in the vicinity of the Pennington Court housing complex in Newark, Bermudez, Brian Mitchell, and Jaahan Mitchell were involved in a shooting. On May 20, 2021, the firearm that Bermudez used in that shooting was recovered from his Essex County residence, loaded with seven rounds of 9mm ammunition.
From April 2021 through May 18, 2021, Brown, a convicted felon, conspired to unlawfully sell firearms. He trafficked six firearms and a large quantity of ammunition from South Carolina to New Jersey, with the intent to sell these weapons to at least one New Jersey resident. On May 18, 2021, Washington attempted to thwart law enforcement from recovering certain of these firearms.
From March 2021 through May 18, 2021, Brown also conspired with Brian Mitchell and Rogers to traffic firearms and ammunition into New Jersey from at least one other state and to use those firearms and ammunition in connection with at least one other felony offense.
From October 2020 through July 23, 2021, Rogers, Bullock, Rivera, and Richardson conspired to distribute 40 grams or more of fentanyl, 100 grams or more of heroin, and a quantity of cocaine base. Rogers and Bullock, both convicted felons, possessed firearms. The four defendants maintained two Pennington Court residences for the purpose of unlawfully manufacturing, storing, distributing, and using a controlled substance, and possessed with the intent to distribute controlled substances.
Each firearms trafficking conspiracy carries a maximum potential penalty of five years in prison and a $250,000 fine. The counts of possession of a firearm and ammunition by a convicted felon carry a maximum penalty of 10 years in prison and a $250,000 fine. The drug conspiracy count, and the count of possession with intent to distribute 40 grams or more of fentanyl, each carry a mandatory minimum of five years in prison, a maximum potential penalty of 40 years in prison and a $5 million. Each count of maintaining a drug-involved premises carries a maximum potential penalty of 20 years in prison and a $500,000 fine. The counts of possession with intent to distribute cocaine base each carry a maximum potential penalty of 20 years in prison and a $1 million fine. The counts of possession of a firearm in furtherance of a drug trafficking crime each carry a mandatory minimum term of five years in prison, a maximum potential penalty of life imprisonment, and a $250,000 fine.
The investigation 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.
It is also part of the Violent Crime Initiative (VCI) in Newark. The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety to combat violent crime in and around Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA New Jersey Division, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Board of Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
U.S. Attorney Sellinger credited special agents and task force officers of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; and special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Division, under the direction of Special Agent in Charge Jeffrey L. Matthews, with the investigations leading to the charges. He also thanked the Newark Police Department, under the direction of Director Brian O’Hara, the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, for their significant assistance with these cases.
The government is represented by Assistant U.S. Attorney Francesca Liquori, Chief of the OCDETF/Narcotics Unit and Assistant U.S. Attorney Samantha Fasanello of the Organized Crime and Gangs Unit.
The charges and allegations contained in the superseding indictment and all related complaints are merely accusations and the defendants are presumed innocent unless and until proven guilty.
Newark City Council Member Admits Scheming to Obtain Bribes and Kickbacks and Subscribing to False Tax ReturnRead the Press Release
NEWARK, N.J. – A member of the Newark Municipal Council and Board of Directors of the Newark Community Economic Development Corporation (NCEDC) today admitted scheming to obtain bribes and kickbacks and subscribing to a false personal tax return for 2018, U.S. Attorney Philip R. Sellinger announced.
Joseph A. McCallum Jr., 66, of Newark, pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of wire fraud for devising a scheme, using interstate wire communications, to defraud Newark and the NCEDC of the right to McCallum’s honest services and one count of subscribing to a false personal tax return for calendar year 2018.
According to documents filed in these cases and statements made in court:
As a member of the Newark City Council, representing the West Ward, and of the NCEDC (now known as Invest Newark!), from 2017 through February 2020, McCallum schemed to receive concealed bribes and kickbacks from an associate, funded by developers, contracting companies, and other businesses seeking contracts and approvals principally related to development, construction, and real estate projects and deals in Newark. These developers and others were solicited by the associate to hire his consulting company for “access,” and were introduced to McCallum as the councilman behind the particular project or deal of interest to them. McCallum then received and planned to receive concealed bribes and kickbacks derived from the fees that the associate obtained from those who retained his company.
In exchange, McCallum used his official positions to assist those who retained the associate’s company. For those who refused or hesitated to pay, McCallum and the associate intended to prevent them from obtaining contracts and work from the NCEDC and the City of Newark. McCallum and the associate used interstate emails and phone calls to further this scheme and took significant steps to conceal these bribes and kickbacks.
The bribes and kickbacks received and sought by McCallum through the associate included the following:
- A $16,000 bribe funded by a payment from a contracting company;
- a $25,000 bribe and kickback funded by a payment from a developer’s company; and
- $500 in cash to cover travel expenses for an out-of-country trip and an attempt to receive part of a $50,000 payment from a second developer.
The honest services wire fraud charge in Count 1 of the information to which McCallum pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims, whichever is greatest. The false tax return charge in Count 3 of the information to which McCallum pleaded guilty carries a maximum potential penalty of three years in prison and a maximum $250,000 fine, or twice the pecuniary gain to the defendant or loss to the victim, whichever is greatest. Sentencing for is scheduled for July 21, 2022.
U.S. Attorney Sellinger credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge in Newark George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea by McCallum.
The government is represented by Deputy Chief Jihee G. Suh and Assistant U.S. Attorney Elaine K. Lou of the U.S. Attorney’s Office’s Special Prosecutions Division.
Mercer County Man Admits Participating in Armed Robbery Spree Spanning Multiple Counties in New Jersey and PennsylvaniaRead the Press Release
TRENTON, N.J. – Omar Feliciano-Estremera, 44, of Trenton, today admitted participating in a string of armed robberies of businesses in New Jersey and Pennsylvania in May and June of 2019, U.S. Attorney Philip R. Sellinger announced.
Feliciano pleaded guilty court before U.S. District Judge Peter G. Sheridan in Trenton federal court to a five-count information charging him with one count of conspiracy to commit Hobbs Act robbery, three substantive counts of Hobbs Act robbery, and one count of aiding and abetting the possession of a firearm which was discharged during a crime of violence.
According to documents filed in this case and statements made in court:
Feliciano and his conspirator Gabriel Lopez, [deceased], formerly of Trenton, committed a string of armed robberies in May and June of 2019 of businesses located in Mercer County, New Jersey, Union County, New Jersey, and Bucks County, Pennsylvania. Lopez entered the businesses, brandished a handgun, and demanded money from the store clerks working the register. After stealing the money, Lopez fled the scene with the assistance of Feliciano, who acted as the getaway driver. While fleeing the scene of one of the robberies, in Union County, New Jersey, Lopez fired a handgun at passing witnesses, shortly before being picked up by Feliciano. Feliciano admitted to conspiring with Lopez to commit eight robberies and aiding and abetting three robberies, including the Union County robbery at which a firearm was discharged.
Each of the Hobbs Act charges carries a maximum penalty of 20 years in prison. The charge of aiding and abetting the possession of a firearm that was discharged during a crime of violence carries a maximum penalty of life in prison and a mandatory minimum sentence of 10 years in prison. Each count also carries a maximum fine of up to $250,000 or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for July 18, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea. He also thanked officers of the Hamilton Township, Trenton, Rahway, Morrisville, Bristol Township, and Lawrence Township Police Departments for their assistance.
The government is represented by Assistant U.S. Attorney Alexander E. Ramey of the U.S. Attorney’s Office Criminal Division in Trenton.
Former Bank Employee Indicted in $8 Million Fraud and Bribery SchemeRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, man was indicted for his role in a conspiracy to bilk millions of dollars from a bank, U.S. Attorney Philip R. Sellinger announced today.
Kurt Phelps, 53, of Flanders, New Jersey, is charged by indictment returned March 11, 2022, with one count of conspiracy to commit bank fraud and one count of bank bribery. Three of Phelps’ conspirators previously pleaded guilty in connection with the fraud scheme.
According to documents filed in this case and statements made in court:
From 2013 through 2019, Phelps and his conspirators carried out a scheme to defraud Phelps’ employer, a bank. They obtained millions of dollars of credit from the bank for Starnet Business Solutions Inc. (Starnet), a now-defunct New Jersey based printing company, where Phelps’ conspirators worked. Phelps’ conspirators paid him large cash bribes in connection with the fraud scheme.
In 2013, Starnet received a line of credit from the bank after providing materially false financial information. The bank not only allowed Starnet to maintain the line of credit, at various times it increased the line of credit. By 2018, the line of credit was worth approximately $8 million, and Starnet has not repaid it.
Phelps was aware that financial information Starnet provided to the bank for the line of credit was materially false, and coached Starnet on how to defraud the bank. Phelps would review draft financial information for Starnet and provide feedback on how his conspirators should falsify the information before submission. Phelps also worked to ensure that the bank did not detect the fraud scheme by helping Starnet avoid audits and other quality control measures employed by the bank.
Phelps solicited large cash bribes – tens of thousands of dollars at a time – from Starnet in connection with the fraud scheme. Phelps’s conspirators pooled cash to pay Phelps bribe payments. Over the course of the conspiracy, Phelps accepted hundreds of thousands of dollars in cash bribes.
The conspiracy to commit bank fraud and bank bribery charges each carry a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Heather Suchorsky of the
Economic Crimes Unit.
The charges and allegations contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
United States Attorney Sellinger Announces Diverse Leadership TeamRead the Press Release
NEWARK, N.J. – U.S. Attorney Philip R. Sellinger announced today that he is naming an experienced team of women and men to lead the Office’s enforcement of criminal and civil laws. His leadership team, which will include 18 women and people of diverse backgrounds (including 13 women and seven otherwise diverse attorneys), will be among the most diverse in the history of the office.
“Since taking the oath of office almost three months ago, I have been impressed by the depth and variety of experience in the Office, which is a credit to my predecessors and in line with the long and proud history of the U.S. Attorney’s Office for the District of New Jersey,” U.S. Attorney Sellinger said. “I am reaching into that well of talent to staff the Office’s leadership positions with a roster of exceptional attorneys who are eminently qualified and experienced, and whose diversity reflects the people of New Jersey. Moreover, hiring, retaining, and promoting diverse personnel is a bedrock value of this Office, and my leadership team and I will continue to prioritize it moving forward.”
U.S. Attorney Sellinger announced the executive leadership of the Office:
The First Assistant U.S. Attorney is Vikas Khanna, who returns to the Office from the private sector, where he worked as a partner at an international law firm in New York. Mr. Khanna previously served in the Office as an Assistant United States Attorney for almost nine years, during which he handled some of the Office’s most significant prosecutions of individuals and corporations. During Mr. Khanna’s previous tenure, he served as a line assistant in the General Crimes Unit and the Special Prosecutions Division, before being appointed as Deputy Chief of the Health Care and Government Fraud Unit in June 2017 and then as Deputy Chief of the Criminal Division in June 2018. In the latter role, Mr. Khanna supervised criminal and civil AUSAs in the Health Care and Government Fraud, Opioid Abuse Prevention and Enforcement, and Asset Recovery and Money Laundering Units. Before becoming an AUSA, he served in the private sector from 2007 to 2010 and, in 2006, clerked for the Honorable Mark Wolf, Chief Judge in the District of Massachusetts.
“I am thrilled to welcome Vikas back to the Office as First Assistant U.S. Attorney,” U.S. Attorney Sellinger said. “Vikas is a highly respected alumnus of our Office, celebrated by AUSAs, the defense bar, and members of the judiciary for his exceptional intellect and judgment. I am confident he will be an extraordinary leader of the Office, and I look forward to working together to advance the cause of justice for the people of New Jersey.”
The Executive Assistant U.S. Attorney is Lee M. Cortes Jr., who has been with the Office for 11 years, most recently as Chief of the Health Care Fraud Unit. Caroline Sadlowski, Counsel to the U.S. Attorney, remains in that role. She has been with the office for 19 years, including nine years in the Appeals Division and six years in the Civil Division, where she also served as Chief of the Division. Andrew Carey remains as Deputy U.S. Attorney, overseeing the Trenton and Camden Vicinages. He worked as an Assistant U.S. Attorney for eight years and returned to the Office in 2019 after serving as the Middlesex County Prosecutor for six years.
According to U.S. Attorney Sellinger, “Lee, Caroline, and Andrew are three of the finest attorneys in the Office and have deep experience, leadership skills, and impeccable integrity. I am pleased that they agreed to join my front office.”
U.S. Attorney Sellinger also announced additional leadership positions:
- Bruce Keller has been appointed as Special Counsel to the Front Office.
- Nicholas Grippo will continue as Chief of the Criminal Division, while Daniel Shapiro, Osmar Benvenuto, and Desiree Grace will continue as Deputy Chiefs of the Criminal Division, and are joined by Jamel Semper, who also has been appointed Division Deputy Chief.
- J. Andrew Ruymann will continue as the Chief of the Civil Division, while Kristin Vassallo and Elizabeth Pascal will continue to serve as Deputy Chiefs of the Civil Division.
- Mark Coyne remains the Chief of the Appeals Division
- Ronnell Wilson has been appointed Chief of the Special Prosecutions Division, and Jihee Suh will serve as Deputy Division Chief.
- Michael Campion has been appointed as the Chief of the newly created Civil Rights Division.
- Molly Lorber and J. Brendan Day will continue to serve as Attorneys-in-Charge of the Camden and Trenton branch offices, respectively.
U.S. Attorney Sellinger also announced the leadership of the Criminal Division Units:
- Lauren Repole and Michelle Gasparian have been appointed as Co-Unit Chiefs of the newly created General Crimes Unit.
- R. David Walk has been appointed Chief of the Government Frauds Unit, and David Dauenheimer will continue as the Unit’s Deputy Chief.
- Jason Gould has been appointed Chief of the Health Care Fraud Unit.
- Sarah Devlin will continue to serve as Chief of the Assert Recovery and Money Laundering Unit.
- Joyce Malliet has been appointed as Chief of the National Security Unit.
- Sean Farrell will continue as Chief of the Cybercrime Prevention and Enforcement Unit.
- Catherine Murphy will continue as Chief of the Economic Crimes Unit.
- Cari Fais will continue as Chief of the Opioid Abuse Prevention and Enforcement Unit.
- Francesca Liquori will continue as Chief of the Narcotics/Organized Crime Drug Enforcement Task Force.
- James Donnelly has been appointed as Chief of the Organized Crime/Gangs Unit.
“The District of New Jersey is fortunate to have such an outstanding group of public servants to lead this Office,” U.S. Attorney Sellinger said. “They have the skill, experience, judgment, and integrity needed to continue this Office’s mission: to protect the public, enforce the laws, promote fairness and equality, and do justice. I am extremely proud of this leadership team and know that they will continue this Office’s longstanding commitment to the pursuit of justice.”
Union County Investment Advisor Arrested for Stealing Client MoneyRead the Press Release
NEWARK, N.J. – A former investment advisor from Union County, New Jersey, was arrested today for allegedly stealing more than $500,000 from multiple clients to fund his gambling and personal expenses, U.S. Attorney Philip R. Sellinger announced.
Mario E. Rivero Jr., 38, of Elizabeth, New Jersey was charged by complaint with two counts of wire fraud, one count of investment advisor fraud, and one count of securities fraud. Rivero was arrested at his home and is scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer 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 at least $529,870 from four 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.
Each of the wire fraud counts carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The investment adviser fraud count carries a maximum potential penalty of five years in prison and a $10,000 fine, or twice the gross gain or loss from the offense. The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Registered Sex Offender Sentenced to 10 Years in Prison for Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 120 months’ imprisonment for possessing multiple images and videos depicting child sexual abuse, U.S. Attorney Philip R. Sellinger announced.
Robert Klemt, 35, of Wayne, New Jersey previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an Information charging him with one count of possessing child pornography. Judge Hayden imposed the sentence today by videoconference.
According to documents filed in this case and statements made in court:
In June 2020, agents with the Department of Homeland Security – Homeland Security Investigations approached Klemt at his residence after receiving information suggesting that Klemt had accessed a website containing images of child sexual abuse. Law enforcement subsequently discovered on Klemt’s laptop computer over 70 images and videos depicting the sexual abuse of children.
Klemt was previously convicted of endangering the welfare of a child/distribution of child pornography in Essex County in 2014.
In addition to the prison term, Judge Hayden also sentenced Klemt to 10 years of supervised release. Klemt must also register as a sex offender.
U.S. Attorney Sellinger credited special agents with the Department of Homeland Security – Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Criminal Division in Newark.
Ohio Man Admits Role in Multimillion-Dollar Scheme to Defraud Health Care Benefit ProgramsRead the Press Release
NEWARK, N.J. – An Ohio man pleaded guilty today to his role in a large-scale, multilevel marketing scheme to defraud private and federally funded health care benefit programs, U.S. Attorney Philip R. Sellinger announced.
Kent Courtheyn, 38, of Kent, Ohio, owner and operator of two marketing companies involved in the sales and marketing of compounded medications – IntegriMed Solutions LLC (IntegriMed) and KA Compounding LLC (KA Compounding) – pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with conspiracy to defraud the United States by committing health care fraud and violating the anti-kickback statute.
According to documents filed in this case and statements made in court:
TRICARE is a health care entitlement program of the U.S. Department of Defense (DoD) Military Health System that provides coverage for DoD beneficiaries worldwide, including active duty service members, National Guard and Reserve members, retirees, their families, and survivors. Compounded medications are specialty medications prepared by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a medical professional determines that an FDA-approved medication does not meet the health needs of a particular patient, such as when a patient is allergic to a dye or other ingredient or when a patient cannot consume a medication by traditional means.
From July 2014 through July 2016, Courtheyn, a former medical device sales representative, ran a large-scale scheme to defraud federally funded health care benefit programs, such as TRICARE, as well as privately funded health care benefit programs. Through IntegriMed and KA Compounding, Courtheyn recruited individuals to submit fraudulent claims for medically unnecessary compounded medications, such as pain creams, scar creams, wound creams, and metabolic vitamins, without regard to medical necessity. In total, Courtheyn defrauded health care benefit programs, including TRICARE, of at least $5.8 million.
Courtheyn faces a statutory maximum of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for July 20, 2022.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; and the 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 ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto, Deputy Chief of the Criminal Division in Newark.
Camden County Man Admits Fraudulently Obtaining Paycheck Protection Program LoanRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, man today admitted fraudulently obtaining a federal Paycheck Protection Program (PPP) loan of $237,500, U.S. Attorney Philip R. Sellinger announced.
Cornell McCoy, 49, of Lawnside, New Jersey, pleaded guilty by videoconference before U.S. District Judge Karen M. Williams in Camden federal court to an information charging him with one count of bank fraud.
According to documents filed in this case and statements made in court:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and was designed to provide emergency financial assistance to the millions of Americans who 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 (the “PPP”). To obtain a PPP loan, a qualifying small business must apply and provide information on its operations, including the number of employees and payroll expenses. Businesses generally had to provide supporting documentation.
In February 2021, McCoy applied for a PPP loan on behalf of Silver Cup Services Group LLC, a company that he owned. McCoy stated on the application that Silver Cup had 12 employees and an average monthly payroll of $95,000. He also submitted federal tax forms and returns that purported to show that Silver Cup paid $300,000 in wages during each quarter of 2019 and that McCoy earned more than $800,000 in income from Silver Cup in 2019. In fact, Silver Cup had no employees other than McCoy himself and paid no wages in 2019. The tax forms submitted with the application were forged. In April 2021, the lender approved the loan based on the fraudulent application and disbursed $237,500 to a bank account controlled by McCoy.
The charge of bank fraud carries a maximum penalty of 30 years in prison and a fine of $1 million. As part of his guilty plea, McCoy agreed to make restitution in the full amount of the PPP loan and agreed to forfeit the contents of the bank account to which the loan proceeds were disbursed. Sentencing is scheduled for July 20, 2022.
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 Social Security Administration, Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; and special agents of the U.S. Department of Labor, Office of the Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to today’s guilty plea.
The government is represented by Senior Trial Counsel Jason M. Richardson and Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.
Medical Assistant Admits Health Care Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – A former medical assistant today admitted defrauding New Jersey state and local health benefits programs and other insurers of more than $1 million by submitting fraudulent claims for medically unnecessary prescriptions, Attorney for the United States Vikas Khanna announced.
Aaron Jones, 27, of Willingboro, New Jersey, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to a superseding information charging him with one count of conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Jones previously worked for a medical practice in Stratford, New Jersey, owned by Dr. Michael Goldis. Jones was paid by a pharmaceutical sales representative, Richard Zappala, to identify patients at the medical practice who had insurance plans that would cover compounded prescription medications. Jones forged Goldis’ signature on numerous compounded medication prescriptions, including on prescriptions for individuals who were not Goldis’ patients. Jones also arranged for Goldis to sign prescriptions for the compounded medications, regardless of whether or not the individuals receiving the prescriptions had a medical necessity for them. Jones received approximately $10,000 in cash for his role in the scheme.
Jones was previously indicted for conspiracy to commit health care fraud and wire fraud and other offenses, along with Goldis, Steven Monaco, and Dr. Daniel Oswari. Oswari pleaded guilty in December 2019 to fraud and kickback charges. Goldis pleaded guilty in June 2020 to four counts of making false statements relating to health care matters. Zappala pleaded guilty to conspiracy to commit health care fraud in September 2017. The charges remain pending against Monaco, who is scheduled for trial before Judge Kugler in Camden federal court on April 4, 2022.
Jones faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 12, 2022.
Attorney for the United States Khanna credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and special agents of 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 today’s guilty plea.
The government is represented by Assistant U.S. Attorneys R. David Walk, Jr. and Christina O. Hud of the Criminal Division.
The charges and allegations against Monaco are merely accusations, and he is presumed innocent unless and until proven guilty.
Former Resident of Bergen County Sentenced to 29 Months in Prison for $1.5 Million Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A former New Jersey resident was sentenced today to 29 months in prison for his role in an investment scheme through which he fraudulently obtained more than $1.52 million from at least three families from 2017 through 2019, U.S. Attorney Philip R. Sellinger announced.
Matthew Benjamin, 54, formerly of Englewood, New Jersey, and now of New York, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of wire fraud and one count of securities fraud. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From May 2017 through August 2019, Benjamin falsely represented to at least three families that his company, Clear Solutions Group LLC, had lucrative contracts to purchase closeout or excess cosmetic inventory from a company, which he would then resell at a mark-up to a second company. Benjamin told the victims that he had access to these closeout goods through his contacts in the cosmetics and fragrance industry, which he purportedly made through his work at his family’s cosmetic wholesale and distribution business prior to starting Clear Solutions Group. Benjamin induced the victims to provide him with money to purchase the inventory from the first company and promised significant profits in return. Instead of investing the money as he promised, Benjamin misappropriated the investors’ money for his own use and benefit.
Benjamin provided the victims with falsified documents, including fake purchase orders, invoices, promissory notes and bank records showing inflated assets of Clear Solutions Group. To lull victims and induce them to continue investing, Benjamin provided them with documents that purported to detail the investors’ profits.
Benjamin misrepresented to certain investors that portions of their profits on the investment contracts were being reinvested in additional deals to purchase and sell cosmetics, which in turn would generate more profits. From time to time, Benjamin made payments to the investors that were purportedly their profits on certain cosmetics contracts.
In reality, Benjamin misappropriated the investors’ money by making payments to other investors in Clear Solutions Group, which were characterized as those investors’ profits from the nonexistent cosmetic contracts, thereby enabling Benjamin to continue to perpetuate his fraudulent scheme and funding Benjamin’s lifestyle, including paying for car and house rental payments, food, international travel, legal fees, technology equipment, and summer camp tuition for his family members.
In addition to the prison term, Judge Cecchi sentenced Benjamin to three years of supervised release and ordered forfeiture of $1.53 million and restitution of $909,539.
The U.S. Securities and Exchange Commission has filed a civil complaint against Benjamin based on allegations underlying the securities fraud charge.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jennifer S. Kozar and Catherine R. Murphy, Chief of the Economic Crimes Unit of the U.S. Attorney’s Office.