District of New Jersey

NEWARK, N.J. – An investment fund manager was sentenced today to 109 months in prison for orchestrating a $100 million securities fraud scheme, U.S. Attorney Philip R. Sellinger announced.

Brenda Smith, 61, of Philadelphia, previously pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to Count Seven of an indictment charging her with securities fraud. Judge Arleo imposed the sentence today in Newark federal court.

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

Smith managed and controlled Broad Reach Capital LP, a pooled investment fund/hedge fund that was established in February 2016 and was open to accredited investors with a minimum investment of $1 million.

From February 2016 through August 2019, Smith orchestrated a scheme in which she made misrepresentations to investors and promised that she would invest their funds in particular trading strategies that Broad Reach Capital was allegedly optimally situated to execute. Smith referred to these strategies as dividend capture, VIX Convergence, and opportunistic trading. 

Smith misrepresented the success and performance of Broad Reach Capital to investors and prospective investors. She touted Broad Reach Capital as a trade-focused investment fund that was highly liquid and employed a robust risk management program. Smith distributed written materials about Broad Reach Capital to investors and prospective investors that included purported historical performance information, such as claimed annual returns of over 33 percent in 2017 and positive monthly returns in 2018. In fact, the total cash and securities in the Broad Reach Capital bank and brokerage accounts decreased from approximately December 2016 through June 2019. For example, the written materials claimed that Broad Reach Capital had a 1.76 percent return in February 2018 when in reality, Broad Reach Capital’s brokerage accounts lost approximately 50 percent of their value.

To lull investors and induce them to continue investing, Smith provided monthly account statements to investors that falsely showed that their investments were safe and earning significant returns. Smith also falsely represented that she was personally invested in Broad Reach Capital and provided a fictitious account statement to at least one investor.

Over the course of the scheme, Smith collected more than $100 million of cash into Broad Reach Capital from approximately 40 investors. At its peak, however, the value of cash and securities in the Broad Reach Capital bank and brokerage accounts did not exceed approximately $32 million. Instead of investing the money as she promised, Smith transferred tens of millions of dollars out of Broad Reach Capital to entities she controlled for purposes inconsistent with the trading strategies, including more than approximately $10 million for mineral mining operations and approximately $2 million for American Express credit card bills.  When investors requested redemption of their investments, Smith diverted other investors’ funds to pay the requested redemption amounts. 

In addition to the prison term, Judge Arleo sentenced Smith to three years of supervised release and ordered her to pay restitution of $47.2 million.

The U.S. Securities and Exchange Commission (SEC) Philadelphia Regional Office previously filed a civil complaint against Smith based on the same conduct.

U.S. Attorney Sellinger credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Jacqueline Maguire, and special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, with the investigation leading to today’s sentencing. She also thanked the U.S. Securities and Exchange Commission’s Philadelphia Regional Office, under the direction of Co-Acting Regional Directors Scott Thompson and Joy G. Thompson, for its assistance.

The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office in Newark.

NEWARK, N.J. – The leader of an international money laundering organization in the Dominican Republic today admitted his role in a conspiracy to commit money laundering, U.S. Attorney Philip R. Sellinger announced. 

Luis Velazquez-Cordero, aka El Pequeño, 37, a citizen of the Dominican Republic, pleaded guilty before U.S. District Judge Brian R. Martinotti to Count One of an indictment charging him with conspiring to commit money laundering. Velazquez-Cordero was extradited to the United States after his arrest the Dominican Republic on July 28, 2020.

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

Velazquez-Cordero was the leader of a money laundering organization that used the United States banking system to convert over $80 million in cash from illegal drug sales into cashier’s checks and then deposit the checks into United States bank accounts so that the money could be transferred back to international drug trafficking organizations in the Dominican Republic and other countries. Velazquez-Cordero directed conspirators in New Jersey, New York, and Florida to pick up cash drug proceeds and exchange the cash for cashier’s checks at United States banks. Velazquez-Cordero provided the amount of each check, the payee, and the bank accounts into which the checks should be deposited.  The checks were then deposited into the payee accounts, many of which were controlled by shell corporations and used as a means to facilitate laundering illegal drug proceeds. The cashier’s check scheme was designed to conceal the nature, source, ownership, and control of the illegal drug proceeds in order to avoid scrutiny by law enforcement and banking institutions.

As part of his plea, Velazquez-Cordero also agreed to forfeit $1.4 million in United States currency seized during the investigation, as well as five properties in the Dominican Republic and 10 vehicles, including a Ferrari. 

The money laundering count to which Velazquez-Cordero pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $500,000 or twice the amount involved in the offense, whichever is greater. Sentencing is scheduled for Sept. 14, 2022.

U.S. Attorney Sellinger credited special agents of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson; the DEA Special Operations Division and the Santo Domingo Country Office, under the supervision of Special Agent in Charge Renita D. Foster; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins; officers of U.S. Customs and Border Protection, New York Field Office, under the direction of Director of Field Operations Frank Russo; the Morristown, New Jersey, Police Department, under the direction of Chief Darnell Richardson; the Clifton, New Jersey, Police Department, under the direction of Chief Tom Rinaldi; the Passaic, New Jersey, Police Department, under the direction of Chief Luis A. Guzman; the New York City Police Department, under the direction of Commissioner Keechant L. Sewell; the New York City Office of the Special Narcotics Prosecutor, under the direction of Special Narcotics Prosecutor Bridget G. Brennan; the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes; the Bergen County Prosecutor’s Office under the direction of Bergen County Prosecutor Mark Musella; the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; the New Jersey Office of the Attorney General, under the direction of Acting Attorney General Matthew J. Platkin, with the investigation leading to today’s guilty plea. The Justice Department’s Office of International Affairs provided valuable assistance in securing Velazquez-Cordero arrest and extradition. U.S. Attorney Sellinger thanked officials in the Dominican Republic for their assistance in the investigation. 

The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the National Security Unit in Newark. 

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

NEWARK, N.J. – A Newark man was sentenced today to 120 months in prison for his role in a drug trafficking conspiracy, U.S. Philip R. Sellinger announced.

Rahim Jackson previously pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an indictment charging him with conspiracy to distribute heroin. Judge Martinotti imposed the sentence today in Newark federal court.

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

From 2018 through July 31, 2019, Jackson and others conspired to distribute and possess with intent to distribute at least one kilogram of heroin. Jackson admitted using the Rotunda Recreation and Wellness Center on Clifton Avenue, where he was employed, in furtherance of the conspiracy.

In addition to the prison term, Judge Martinotti sentenced Jackson to five years of supervised release.

U.S. Attorney Sellinger credited special agents of Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Susan A. Gibson in Newark; members of the Newark Department of Public Safety, under the direction of Director Brian O’Hara; and the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s sentencing.

He also thanked the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, the Essex County Prosecutor’s Office, under the direction of Prosecutor Theodore N. Stephens II, the Rockaway Township Police Department, under the direction of Chief Martin McParland, and special agents from the ATF, under the direction of Special Agent in Charge Jeffrey L. Matthews in Newark.

The Broadway Townhomes investigation was part of the Newark Violent Crime Initiative (VCI).  The Newark VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the sole purpose of combatting violent crime in and around 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, New Jersey State Parole, Union County Jail, New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center, New Jersey Department of Corrections, the East Orange Police Department, and the Irvington Police Department. 

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorney Kendall Randolph of the U.S. Attorney’s Office’s OCDETF Unit in Newark and Assistant U.S. Attorney Heather Suchorsky of the Economic Crimes Unit.

CAMDEN, N.J. – A Cumberland County, New Jersey, man was sentenced today to 168 months in prison for conspiring to commit wire and money laundering, and tax evasion, in connection with a romance fraud scheme, U.S. Attorney Philip R. Sellinger announced.

Rubbin Sarpong, 38, of Millville, New Jersey, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with conspiring to commit wire fraud, conspiring to commit money laundering and tax evasion. Judge Bumb imposed the sentence today in Camden federal court.

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

From January 2016 to Sept. 3, 2019, Sarpong and his conspirators, several of whom reside in Ghana, allegedly participated in an online romance scheme, defrauding victims in New Jersey and elsewhere. Sarpong and the conspirators set up dating profiles on various dating websites, using fictitious or stolen identities and posing as United States military personnel who were stationed overseas. They contacted victims through the dating websites and then pretended to strike up a romantic relationship with them. After establishing virtual romantic relationships with victims on the online dating platforms and via email, the conspirators asked them for money, often for the purported purpose of paying to ship gold bars to the United States. Although the stories varied, most often Sarpong and the conspirators claimed to be military personnel stationed in Syria who received, recovered, or were awarded gold bars. The conspirators told many victims that their money would be returned once the gold bars were received in the United States. 

Sarpong and the conspirators used several email accounts and Voice Over Internet Protocol phone numbers to communicate with victims and instruct them on where to wire money, including recipient names, addresses, financial institutions, and account numbers. At least 40 identified victims wired money to Sarpong and others in the United States, including to 13 bank accounts controlled by Sarpong, some of which were in the names of his friends, relatives, and a fictitious business entity, Rubbin Sarpong Autosales. Occasionally, victims also mailed personal checks or cashier’s checks to the conspirators and also transferred money to the conspirators via money transfer services, such as Western Union and MoneyGram. The funds were not used for the purposes claimed by the conspirators – that is, to transport non-existent gold bars to the United States – but were instead withdrawn in cash, wired to other domestic bank accounts, and wired to other conspirators in Ghana.

While engaged in this fraud, Sarpong purchased property in Ghana and posted photographs of himself on social media showing him with large amounts of cash, high-end cars, designer clothing and expensive jewelry. Despite having received approximately $1.14 million in taxable income from the scheme during tax years 2016 through 2018, Sarpong filed no income tax returns and paid no income tax, resulting in a tax loss of $387,923.

In addition to the prison term, Judge Bumb sentenced Sarpong to three years of supervised release and ordered him to pay restitution of $3.08 million to 36 victims, $387,923 to IRS, $4,096 to the New Jersey Department of Health and Human Services and $6,903 to the U.S. Department of Agriculture.

U.S. Attorney Sellinger credited special agents of the FBI, Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Michael Messenger in Newark; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark; special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins in Newark; and special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S Attorney’s Office in Camden.

CAMDEN, N.J. – A Camden man was sentenced to 140 months in prison for conspiring to distribute large amounts of heroin, cocaine, and crack in Camden, U.S. Attorney Philip R. Sellinger announced today.

Jose Diaz, 30, of Camden, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with conspiracy to distribute one hundred grams or more of heroin as well as quantities of cocaine and crack cocaine. Judge Bumb imposed the sentence on April 28, 2022, in Camden federal court.

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

Nineteen defendants were arrested in late 2018 on drug-trafficking charges based on the FBI’s investigation of a drug-trafficking organization that ran the open-air narcotics trade on the 400-500 block of Pine Street in Camden for several months in 2018. The organization included street-level sellers who were supervised by shift managers, who in turn were supervised by higher-level “runners.” Diaz admitted that he had a supervisory role as a shift manager, in the drug trafficking organization. The shift managers and runners supplied the sellers pre-packaged heroin, some of which was mixed with fentanyl, as well as cocaine and crack cocaine. The runners also collected drug proceeds from the shift managers and provided those proceeds to higher-level members of the conspiracy.

Seventeen of these defendants pleaded guilty before Judge Bumb to drug conspiracy charges. Two defendants are awaiting trial, which is scheduled for July 18, 2022. The charges and allegations against those two defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

In addition to the prison term, Judge Bumb sentenced Diaz to five years of supervised release.

U.S. Attorney Philip R. Sellinger credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire; the Camden County Police Department, under the direction of Chief Gabriel Rodriguez; the Camden County Prosecutor’s Office, under the direction of Acting Camden County Prosecutor Grace C. MacAulay; the Camden County Sherriff’s Department, under the direction of Sheriff Gilbert L. Wilson; the Cherry Hill Police Department, under the direction of  Acting Chief of Police Larry Robb; and the N.J. State Police, under the direction of Colonel Patrick J. Callahan, with the investigation leading to today’s sentencing. He also thanked the Drug Enforcement Administration, the U.S. Marshals Service, and the Department of Homeland Security for their assistance.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorneys Sara Aliabadi and Patrick C. Askin of the U. S. Attorney’s Office Criminal Division in Camden.

NEWARK, N.J. – A Middlesex County, New Jersey man today admitted to filing a false tax return on behalf of his company, U.S. Attorney Philip R. Sellinger, Acting Assistant Attorney General David A. Hubbert, and Acting Deputy Assistant Attorney General Stuart M. Goldberg announced.

Gabriel M. Ferrari, 64, of Edison, New Jersey, pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to Count Four of an indictment that charged him with subscribing to a false tax return.

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

Ferrari was the sole owner of Buses and Trucks Inc., an automotive repair business in Linden, New Jersey. In January 2015, Ferrari subscribed to and caused to be filed a corporate tax return for Buses and Trucks for tax year 2011. As Ferrari knew at the time, that return was false in that it understated Buses and Trucks’ gross receipts for tax year 2011. In fact, Ferrari had diverted Buses and Trucks’ gross receipts to pay personal expenses, including gambling on horse races, and did not report those diverted receipts on the Buses and Trucks 2011 corporate tax return.

The charge of subscribing to a false tax return carries a maximum potential penalty of three years in prison and a maximum fine of $250,000. Sentencing is set for Sept. 14, 2022.

U.S. Attorney Sellinger, Acting Assistant Attorney General Hubbert, and Acting Deputy Assistant Attorney General Goldberg credited special agents of IRS Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Andrew M. Trombly of the Cybercrime Unit in Newark and by Trial Attorney Ann M. Cherry of the Tax Division in Washington, D.C.

NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced today to 264 months in prison for his role in trafficking heroin and fentanyl into a New Jersey state prison, resulting in the overdose of one of the inmates, U.S. Attorney Philip R. Sellinger announced.

Noel Salgado, aka “Kuko,” 41, was previously convicted of one count of conspiracy to distribute and possess with intent to distribute heroin and fentanyl and one count of distribution and possession with intent to distribute heroin and fentanyl, which resulted in serious bodily injury, following a four-day trial before U.S. District Judge William J. Martini, who imposed the sentence today in Newark federal court.

According to the documents filed in this case and the evidence at trial:

While incarcerated at Bayside State Prison, Salgado directed associates to provide narcotics proceeds to him and his associates and to smuggle narcotics into prison to distribute to other inmates.

On Oct. 17, 2015, Salgado called an associate from prison to arrange for the purchase and smuggling into the prison of heroin and fentanyl. Another conspirator picked up the narcotics and smuggled them to Salgado on Oct. 18, 2015. The following day, an inmate to whom Salgado had distributed the narcotics was found unresponsive in his cell suffering from a drug overdose. The inmate stopped breathing on his own and remained unconscious for approximately 20 minutes before medical personnel administered Narcan to revive him. The inmate was hospitalized for two days.

In addition to the prison term, Judge Martini sentenced Salgado to three years of supervised release.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Michael Messenger, and investigators with the N.J. Department of Corrections, under the direction of Acting Commissioner Victoria L. Kuhn, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Christopher D. Amore and Elaine K. Lou of the U.S. Attorney’s Office in Newark.

CAMDEN, N.J. – A California man was convicted on six counts related to the theft of over $23 million dollars from the U.S. Department of Defense (DoD), money destined for one of its jet fuel suppliers, U.S. Attorney Philip R. Sellinger announced today.

Sercan Oyuntur, 40, of Northridge, California, was convicted on April 28, 2022, of one count of conspiracy to commit wire, mail and bank fraud; two counts of bank fraud; one count of using an unauthorized access device to commit fraud; one count of aggravated identity theft; and one count of making false statements to federal law enforcement officers, following an eight-day trial before U.S. District Judge Joseph H. Rodriguez in Camden federal court.

According to documents filed in this case and the evidence presented at trial:

A corporation that had a contract with the DoD to supply jet fuel to troops operating in southeast Asia employed an individual in New Jersey, who was responsible for communicating with the federal government on behalf of the corporation through a government computer system. Through a complex phishing scheme, Oyuntur and criminal conspirators in Germany, Turkey, and New Jersey targeted the corporation and the individual so that the conspirators could steal money that DoD intended to pay to the corporation for providing jet fuel.

Oyuntur’s conspirators created fake email accounts in other people’s names and designed fake webpages that resembled the General Services Administration’s (GSA) public-facing website. From June to September 2018, the conspirators caused phishing emails to be sent to various DoD vendors, including the individual from New Jersey who represented the corporation, to trick these vendors into visiting the phishing pages. These emails appeared to be legitimate communications from the United States government, but were actually sent by the conspirators, and contained electronic links that automatically took individuals to the phishing pages. There, they saw what appeared to be a GSA website and were prompted to enter their confidential login credentials, which were then used by the conspirators to make changes in the government systems and ultimately divert money to the conspirators.

As part of his participation in the scheme, Oyuntur worked closely with another conspirator, Hurriyet Arslan, who owned a used car dealership, Deal Automotive Sales, in Florence, New Jersey. Arslan opened a separate shell company based in New Jersey for use in the criminal scheme, obtained a cell phone number for the shell company, hired another person to pose as the shell company’s owner, and opened a bank account in the name of the shell company. 

On Oct. 10, 2018, based on the fraudulent activities of Oyuntur and his conspirators, DoD transferred $23.5 million that had been earned by the victim corporation into Arslan’s Deal Automotive bank account. Arslan went to the bank and was able to access some of this money, but the bank would not release all of the funds to Arslan. That same day, a conspirator in Turkey sent Arslan an email with an altered government contract that falsely indicated Deal Automotive had been awarded a DoD contract valued at approximately $23 million dollars. Oyuntur instructed Arslan to take this fake contract into the bank to explain why he had received the money, so that Arslan could convince the bank to release the remaining funds.

The conspiracy and bank fraud counts of which Oyuntur was convicted each carry a maximum potential penalty of 30 years in prison. The count of using an unauthorized access device to commit fraud carries a maximum potential penalty of 10 years in prison. The false statement count carries a maximum potential penalty of five years in prison. The aggravated identity theft count carries a statutory mandatory consecutive term of two years in prison. The conspiracy and bank fraud counts each carry a maximum fine of equal to the greatest of $1 million or twice the gross profits or loss resulting from the offense, whichever is greatest; the remaining counts carry a $250,000 fine, or twice the gain or loss from the offense, whichever is greatest. Oyuntur will be sentenced on a date to be determined.

Arslan pleaded guilty in January 2020 to conspiracy, bank fraud, and money laundering and is scheduled to be sentenced on June 21, 2022. 

U.S. Attorney Sellinger credited criminal investigators of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the General Services Administration, Office of Inspector General, under the direction of Special Agent in Charge Eric D. Radwick; special agents of the U.S. Department of Defense, Defense Criminal Investigative Service, Northeast Field Office and the Cyber Field Office, under the direction of Special Agent in Charge Patrick Hegarty and Special Agent in Charge Kenneth A. DeChellis; 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 conviction.

The government is represented by Senior Trial Counsel Jason M. Richardson of the Civil Rights Division in Camden and Assistant U.S. Attorney Sara A. Aliabadi of the Special Prosecutions Division in Camden.

CAMDEN, N.J. – A New York man was sentenced today to 24 years in prison for attempting to entice a minor and traveling from New York to New Jersey to meet an individual, whom he believed was a 13-year-old girl, to engage in sexual activity, U.S Attorney Philip R. Sellinger announced.  

Eduardo Silva, 44, of Bronx, New York, previously pleaded guilty via videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with one count of coercion and enticement of a minor and one count traveling with the intent to engage in illicit sexual conduct with a minor. Judge Bumb imposed the sentence today in Camden federal court.

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

On Sept. 5, 2020, Silva, while using an online social media application, sent a message to an individual he believed was an underage girl, but who was in fact an undercover federal agent. Silva asked whether the minor was “into older guys” and over the next several days sent a series of explicit online communications and text messages, discussing his intent to travel to meet the minor and engage in sexual activity with her. On Sept. 23, 2020, Silva was arrested when he traveled from the Bronx to a motel in Bordentown, New Jersey, intending to meet a 13-year-old girl for sex.  

In addition to the prison term, Judge Bumb sentenced Silva to lifetime supervised release.

U.S. Attorney Sellinger credited special agents of the Department of Homeland Security, Homeland Security Investigations, Cherry Hill Office, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to today’s sentencing. He also thanked the Burlington County Prosecutor’s Office, under the direction of Prosecutor Scott A. Coffina, and the Bordentown Township Police Department, under the direction of Chief of Police Brian Pesce, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.

NEWARK, N.J. – A Somerset County, New Jersey, man today admitted his role in a drug trafficking network that was responsible for the importation of large quantities of heroin into New Jersey, U.S. Attorney Philip R. Sellinger announced.  

William T. Bouza, 45, of Watchung, New Jersey, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with conspiracy to distribute heroin and possession of heroin with intent to distribute.

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

In February 2019, Bouza arranged for a vehicle that was equipped with a secret compartment, or “trap,” containing 15 kilograms of heroin, to be shipped from California to a location in Union County. Law enforcement intercepted the vehicle, seized the narcotics, and identified Bouza as the intended recipient. In the following months, law enforcement determined that Bouza was storing and processing narcotics for street-level distribution at multiple locations in Essex County. In October 2019, Bouza was apprehended. Law enforcement subsequently discovered more than 1,000 packages, or “bricks” of heroin, each containing approximately 50 individual doses, in one of Bouza’s stash-houses. In total, law enforcement seized over 18 kilograms of heroin belonging to Bouza.

The controlled substances offenses carry a maximum penalty of life in prison, a mandatory minimum term of 10 years in prison and a $10 million fine. Sentencing is scheduled for Sept. 13, 2022.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

U.S. Attorney Sellinger credited law enforcement officers with the United States Department of Homeland Security – Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, the New Jersey State Police, and other law enforcement agencies within the Opioids Task Force with the investigation.

The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.

TRENTON, N.J. – An Ocean County, New Jersey, man today admitted unlawfully possessing a privately manufactured short barrel rifle, a silencer, and five imitation badges of various federal agencies, U.S. Attorney Philip R. Sellinger announced.

Jeffrey Backlund, 57, of Waretown, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with unlawfully possessing firearms that were not registered in the National Firearms Register and Transfer Record, and unlawful possession of an official badge or identification card.

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

On Sept. 6, 2020, after investigating a domestic disturbance, law enforcement executed a search warrant at Backlund’s residence and located a number of firearms and imitation federal identification badges. They found one short-barreled, AR-style, .223 caliber rifle bearing no serial number and no branding. Attached to the rifle, they found a tan metal cylindrical device that law enforcement determined to be a silencer. Given the physical characteristics of the rifle and silencer, Backlund was required to, but did not, registered these items in the National Firearms Register and Transfer Record pursuant to the National Firearms Act.

Law enforcement officers also located two bi-fold wallets containing FBI Special Agent identification credentials bearing Backlund’s picture and personal information, a United States Marshals Service badge, a Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent badge, and a Drug Enforcement Administration Special Agent badge. All badges and identifications were imitation and Backlund did not have the authority to possess any of them.

The charge of possessing firearms not registered in the National Firearms Registration and Transfer Record carries a maximum prison sentence of 10 years and a maximum fine of $10,000; the charge of unlawful possession of an official badge or identification card carries a maximum prison sentence of six months and a maximum fine of $5,000. Sentencing is scheduled for Sept. 13, 2022.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Michael Messenger in Newark; special agents of the ATF Newark Field Division, under the direction of Special Agent in Charge Jeffrey L. Matthews; special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; members of the U.S. Marshals Service, under the direction of Marshal Juan Mattos Jr.; detectives with the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley D. Billhimer, and officers of the Ocean Township Police Department, under the direction of Chief Michal J. Rogalski, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Martha K. Nye of the Criminal Division in Trenton.

CAMDEN, N.J. – A Gloucester City, New Jersey, man was sentenced today to 37 months in prison for conspiring to distribute oxycodone pills and selling Xanax pills, making him the eighth person to be sentenced for his role in a drug trafficking ring operating in and around Gloucester City and Camden, U.S. Attorney Philip R. Sellinger announced.

Marcus Rushworth, 48, of Gloucester City, previously pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with conspiring to distribute and possess with intent to distribute oxycodone and distributing a quantity of Xanax. 

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

Rushworth admitted that on multiple occasions from January 2020 to March 2020, he worked with Rocco DePoder to sell oxycodone and Xanax to customers in and around Gloucester City. Rushworth also obtained a quantity of Xanax from DePoder on Feb. 17, 2020, in order to sell to a drug customer. Rushworth was charged along with 17 others in March 2020 in connection with an investigation by the FBI into the illegal distribution of prescription drugs, including high dosage oxycodone pills, to customers in Gloucester City and Camden. DePoder was sentenced by Judge Bumb on Oct. 8, 2021, to 70 months in prison for his role in the scheme.   

In addition to the prison term, Judge Bumb sentenced Rushworth to three years of supervised release.

U.S. Attorney Sellinger credited special agents of FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire; the U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Laurie R. Doran; the Camden County Police Department, under the direction of Chief Gabriel Rodriguez; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to today’s sentencing.

He also thanked the FBI Newark Division, New Jersey State Police, Camden County Prosecutor’s Office, and U.S. Drug Enforcement Administration (DEA) for their assistance.

The government is represented by Assistant U.S. Attorney Sara F. Merin of the Newark office.

NEWARK, N.J. – A Bergen County, New Jersey, company was fined $67,668 today and sentenced to one year of probation for 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.

TSC Agency LLC (TSC), a logistics and freight forwarding company based in Mahwah, New Jersey, previously pleaded guilty by videoconference before U.S. Magistrate Judge Jessica S. Allen 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, TSC and two partners purchased 250,000 KN95 filtering facepiece respirators from a foreign manufacturer. TSC and one of those partners then sold 100,000 masks to a chain of New Jersey grocery stores at prices in excess of prevailing market prices. TSC 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, TSC had no history of selling personal protective equipment. 

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.

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.

NEWARK, N.J. – A Bergen County, New Jersey, woman was sentenced today to 27 months in prison for participating in a multi-year embezzlement scheme and subscribing to a false personal income tax return, U.S. Attorney Philip R. Sellinger announced.

Estela Laluf, 76, previously pleaded guilty by videoconference before U.S. District Judge Julien Xavier Neals to an information charging her with one count of wire fraud and one count of subscribing to a false tax return. Judge Neals imposed the sentence today in Newark federal court.

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

Between October 2010 and August 2016, Laluf held a management position at a New Jersey guided-tour company. During that time, Laluf and another employee, who held an accounting position at the company and had authority to write checks against the company’s bank accounts, devised a scheme to embezzle funds from the company. Laluf would direct the employee to write company checks to actual company employees and contractors, which did not reflect any actual work or services done by those individuals. The employee would then cash these checks, and Laluf and the employee would convert the resulting funds to their personal use.  Laluf and the employee embezzled hundreds of thousands of dollars from the company. Laluf then fraudulently omitted the proceeds of the embezzlement scheme from her tax year 2016 tax return.

In addition to the prison term, Judge Neals sentenced Laluf to two years of supervised release and ordered her to pay $295,297 in restitution.

U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Damon Wood, Philadelphia Division, and special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Andrew M. Trombly of the Cybercrime Unit in Newark.

NEWARK, N.J. – A New York man was charged today with conspiring to kidnap and hold for ransom a Fort Lee, New Jersey, resident, U.S. Attorney Philip R. Sellinger announced.

Gabriel Anthony, 34, of Queens, New York, is charged by complaint with conspiring to commit kidnapping. He appeared today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and was detained.

Three conspirators – Fa Deng, 42, of Staten Island, New York, and Albert Ferrelli, 50, and Chiahao Lee, 30, both of Queens, New York – were charged by complaint on April 7, 2022 with conspiring to commit kidnapping.  

According to documents filed in the cases, and statements made in court:

On April 5, 2022, the four conspirators drove to the victim’s home in Fort Lee. Ferrelli and Anthony 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 a 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.

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.

NEWARK, N.J. – An Essex County, New Jersey, man was convicted today for his role in scheming with at least one U.S. Postal Service (USPS) employee and others to steal credit cards from the mail and then steal victims’ identities in order to use the stolen cards to make hundreds of thousands of dollars of retail and online purchases, Attorney for the United States Vikas Khanna announced.

Dashaun Brown, 28, of Newark, was convicted on four counts of the superseding indictment against him: conspiracy to commit bank fraud, bank fraud, receipt and possession of stolen mail, and aggravated identity theft in connection with bank fraud, following a week-long trial before U.S. District Judge Kevin McNulty in Newark federal court. Brown was acquitted on one count of bank fraud and one count of aggravated identity theft.

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

Dashaun Brown, Jahad Salter, 29, and Hakir Brown,­ 28, engaged USPS employees, including Khadijah Banks-Oneal, 31, to steal credit cards from the mail in exchange for compensation. Once they obtained the stolen cards, Dashaun Brown and his conspirators posed as the accountholders of the stolen credit cards when calling the banks that issued the cards and used personal identifying information belonging to the accountholders to activate the cards and to obtain or change information about the stolen credit cards. They then used the stolen credit cards to make purchases at retail stores in New Jersey and elsewhere, resulting in attempted losses of over $1 million.

Salter, Hakir Brown, and Banks-Oneal previously pleaded guilty for their respective roles in this scheme and are awaiting sentencing. Salter pleaded guilty on April 12, 2022, to conspiracy to commit bank fraud and being a felon in possession of a firearm, and his sentencing is scheduled for Aug. 30, 2022. Hakir Brown pleaded guilty on Feb. 25, 2022, to conspiracy to commit bank fraud, and his sentencing is scheduled for July 7, 2022. Banks-Oneal pleaded guilty on March 30, 2022, to receiving bribes as a federal employee, and he is scheduled to be sentenced on Aug. 10, 2022.

The charges of conspiracy to commit bank fraud and bank fraud are each punishable by a statutory maximum sentence of 30 years in prison and a maximum fine of $1 million. The charge of receipt and possession of stolen mail is punishable by a statutory maximum sentence of five years in prison and a maximum fine of $250,000. The aggravated identity theft charge carries a mandatory penalty of two years in prison, which must run consecutively to any other prison sentence imposed. Sentencing is scheduled for Sept. 6, 2022. 

Attorney for the United States Khanna credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector of Charge Damon Wood, Philadelphia Division; and special agents of the U.S. Postal Service, Office of Inspector General, Northeast Area Field Office, under the direction of Special Agent in Charge Matthew Modafferi, with the investigation leading to today’s guilty verdict. He also thanked the U.S. Marshals Service, District of New Jersey, under the direction of Marshal Juan Mattos Jr.; the U.S. Secret Service, New York Field Office, under the direction of Special Agent in Charge Patrick J. Freaney; the Treasury Inspector General for Tax Administration, Mid-Atlantic Field Division, under the direction of Special Agent in Charge Andrew S. McKay; the Department of Homeland Security, Homeland Security Investigations, Newark Field Office, under the direction of Special Agent in Charge Jason J. Molina; the Livingston, New Jersey Police Department, under the direction of Chief Gary Marshuetz; the Newark Police Department, under the direction of Department of Public Safety Director Brian O’Hara; the Essex County, New Jersey Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; the New Providence, New Jersey, Police Department, under the direction of Chief of Police Theresa A. Gazaway; and the Berkeley Heights, New Jersey, Police Department, under the direction of Chief of Police Jason Massimino, for their assistance.

The government is represented by Assistant U.S. Attorneys Sara F. Merin and Elaine K. Lou of the Special Prosecutions Division in Newark.

CAMDEN, N.J. – A New York man was sentenced today to 235 months in prison for enticing and transporting a minor across state lines to engage in sexual activity, and for receiving images of child sexual abuse from another minor, U.S. Attorney Philip R. Sellinger announced.

Richard Gabriel Piedra Ordonez, 37, of Queens, New York, previously pleaded guilty by videoconference before U.S. District Judge Noel L. Hillman to a three-count information charging him with one count of coercion and enticement of a minor; one count of transporting a minor to engage in criminal sexual activity; and one count of receiving child pornography.  Judge Hillman imposed the sentence today in Camden federal court.

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

In April 2019, Piedra began communicating with a New Jersey resident who was under the age of 16 using Snapchat and other social media and messaging platforms. Piedra was aware of the minor’s age and misrepresented his own age as 19 when he was actually 35 years old.  Over the course of the subsequent months, Piedra and the victim met in person and engaged sexual activity.  On multiple occasions, Piedra traveled to New Jersey to have sex with the victim and drove the victim to his home in New York City, where they engaged in sexual activity.

Federal law enforcement agents executing a search warrant on Piedra’s residence in December 2019 found sexually explicit images and videos of minors on a hard drive located in Piedra’s bedroom. Further investigation revealed that, in 2017, Piedra had communicated with an Indiana resident who was under the age of 15 using various social media and messaging platforms. Piedra was aware of the minor’s age and misrepresented his own age as 19 years old.  Piedra requested and received sexually explicit images and videos from the Indiana victim.

In addition to the prison term, Judge Hillman sentenced Piedra to 10 years of supervised release and ordered him to register as a sex offender.

U.S. Attorney Sellinger credited special agents with FBI’s Atlantic City Child Exploitation & Human Trafficking Task Force, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Atlantic County Prosecutor’s Office, under the direction of Acting Prosecutor Cary Shill; and the N.J State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s sentencing. He also thanked the Cape May County Prosecutor’s Office, under the direction of Prosecutor Jeffrey H. Sutherland, for its assistance with the investigation.

The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.

NOTE: Criminal complaint against Nisim Davydov has been dismissed. Link to dismissal order is at end of press release.

NEWARK, N.J. –The Department of Justice announced criminal charges against 21 defendants in nine federal districts across the United States for their alleged participation in various health care related fraud schemes that exploited the COVID-19 pandemic. These cases allegedly resulted in over $149 million in COVID-19-related false billings to federal programs and theft from federally-funded pandemic assistance programs. In connection with the enforcement action, the department seized over $8 million in cash and other fraud proceeds.

“The Department of Justice’s Health Care Fraud Unit and our partners are dedicated to rooting out schemes that have exploited the pandemic,” Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division said.

“Billions of dollars have been spent by the federal government to help individuals and their companies with the economic impact of the COVID-19 epidemic,” U.S. Attorney Philip R. Sellinger, District of New Jersey, said. “Unfortunately, unscrupulous people have stolen millions of dollars through a variety of schemes. We will continue to bring cases to fight this kind of fraud.”

“This COVID-19 health care fraud enforcement action involves extraordinary efforts to prosecute some of the largest and most wide-ranging pandemic frauds detected to date,” Director for COVID-19 Fraud Enforcement Kevin Chambers said.

The April 20, 2022, announcement builds on the success of the May 2021 COVID-19 Enforcement Action and involves the prosecution of various COVID-19 health care fraud schemes.

In the District of New Jersey:

• Abid Syed, Taquir Din, Tamer Mohamed, Abdul Rauf, Tauquir Khan, and Nisim Davydov, all of New Jersey, are charged by criminal complaint with conspiracy to violate the Federal Anti-Kickback Statute for their roles in an alleged scheme to defraud Medicare by paying illegal kickbacks and bribes of over $250,000 for laboratory tests for COVID-19 pathogen tests. Syed and Din owned and controlled Metpath, a clinical laboratory in Parsippany, New Jersey, which performed and billed Medicare for COVID-19 diagnostic testing. Khan, Mohamed, and Davydov were marketers who supplied thousands of COVID-19 diagnostic tests to Metpath and who received kickbacks and bribes from Syed and Din for doing so. The complaint alleges that Metpath tried to conceal its kickback payments to the marketers through shell companies set up and controlled by Rauf. The case is being prosecuted by Assistant U.S. Attorney DeNae Thomas of the Health Care Fraud Unit of the U.S. Attorney’s Office for the District of New Jersey.

 

• Lisa Hammell, 39, of Turnersville, New Jersey, an employee of the U.S. Postal Service, was charged by indictment with an alleged conspiracy to defraud the United States and fraud in connection with identification documents for her role in creating and distributing to others fraudulent COVID-19 vaccination record cards. Beginning in or around March 2021, Hammell allegedly began selling fraudulent COVID-19 vaccination record cards that she created by designing a COVID-19 vaccination record card and printing dozens of fraudulent cards while working at a post office. Hammell allegedly sold at least 400 fraudulent COVID-19 vaccination cards to unvaccinated people. As alleged in the indictment, the goal of the conspiracy was to undermine the Centers for Disease Control and Prevention (CDC)’s function of administering the COVID-19 vaccination program and ensuring that genuine COVID-19 vaccination cards containing accurate information are distributed to vaccine recipients only by authorized providers. The case is being prosecuted by Trial Attorneys Kelly M. Lyons and Darren C. Halverson of the Newark Strike Force.

 

The enforcement actions were led and coordinated by Assistant Chief Jacob Foster and Trial Attorney D. Keith Clouser of the National Rapid Response Strike Force, and Assistant Chief Justin Woodard of the Health Care Fraud Unit’s Gulf Coast Strike Force in the Criminal Division’s Fraud Section. The Fraud Section’s National Rapid Response Strike Force and the Health Care Fraud Unit’s Strike Forces (SF) in Brooklyn, the Gulf Coast, Miami, Los Angeles, and Newark, as well as the U.S. Attorneys’ Offices for the District of Maryland, District of New Jersey, District of Utah, Northern District of California, and Western District of Tennessee are prosecuting these cases. Descriptions of each case involved in this enforcement action are available on the department’s website at: https://www.justice.gov/criminal-fraud/health-care-fraud-unit/case-summaries.

In addition to the FBI, HHS-OIG, and CPI/CMS, the U.S. Postal Inspection Service; Department of Defense Office of Inspector General; Department of the Interior Office of the Inspector General; Department of Labor Office of the Inspector General; Food and Drug Administration Office of the Inspector General; Homeland Security Investigations; U.S. Department of Veterans Affairs Office of the Inspector General; and other federal and local law enforcement agencies participated in the law enforcement action.

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the CMS, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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.

The Department of Justice needs the public’s assistance in remaining vigilant and reporting suspected fraudulent activity. To report suspected fraud, contact the National Center for Disaster Fraud (NCDF) at (866) 720-5721 or file an online complaint at: https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form. Complaints filed will be reviewed at the NCDF and referred to federal, state, local, or international law enforcement or regulatory agencies for investigation.

An indictment, complaint, or information is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

 

davydovdismissal.pdf

NEWARK, N.J. – U.S. Attorney Philip R. Sellinger announced today his office’s participation in a first of its kind, anti-hate crime outreach program entitled United Against Hate, which seeks to directly connect federal, state, and local law enforcement with traditionally marginalized communities in order to build trust and encourage the reporting of hate crimes and hate incidents.

Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division joined U.S. Attorney Sellinger, Acting New Jersey Attorney General Matthew J. Platkin, and FBI Acting Special Agent in Charge Terence Reilly to announce their federal and state partnership on this new initiative. After they spoke to an audience of community leaders, civil rights advocates, and community members, subject matter experts from their offices engaged in a presentation and direct discussions with community leaders and advocates about taking steps to identify, report, and prevent hate crimes and incidents.

“Hate crimes and discrimination are antithetical to the core principles underlying our democracy,” U.S. Attorney Sellinger said. “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. In response to a dramatic increase in hate crimes and hate incidents, we are launching the United Against Hate Initiative in New Jersey. Combatting hate crimes, hate incidents, and discrimination is core to our mission, and through dynamic outreach and prevention efforts, we are eager to take steps to combat hate beyond prosecution.”

“The U.S. Department of Justice continues to marshal all resources at its disposal to hold people who engage in unlawful, bias-motivated acts of hate accountable,” Assistant Attorney General Clarke of the Justice Department’s Civil Rights Division said. “Through United Against Hate, we are bringing together the Justice Department, local law enforcement, and community leaders to strengthen our overall efforts to combat hate crimes and prevent hate incidents. Our communities, schools, workplaces and homes are all safer when we stand unified in the fight against hate.”

“The ripple effect of hate crimes is felt hundreds, even thousands of miles away,” FBI Acting Special Agent in Charge Reilly said. “People who identify with those victims see themselves and wonder ‘will it happen here?’ and ‘Will I be next?’ The Constitution of the United States grants us many freedoms. When any one of those freedoms – or any other constitutional right – is threatened or violated, we have to respond. And when I say ‘we,’ I’m not speaking just as a member of the FBI. I’m speaking as a member of the community. Because if we don’t respond, we risk the erosion of our very identity as a nation. That's why the FBI embarked on a hate crimes awareness campaign last year. We want people to call us if they have witnessed or been subjected to a hate crime.”

“The numbers are clear. Hate and bias are at an all-time high across our nation and in New Jersey,” Acting Attorney General Platkin said. “One of the strongest tools we have at our disposal is the collaboration between government and community stakeholders. That is why I am proud to stand shoulder to shoulder with federal and state partners who share the same commitment and urgency to stem the tide of hate.”

The U.S. Attorney’s Office for the District of New Jersey was chosen as one of three districts, out of 94 districts in the nation, to advance the United Against Hate outreach initiative. The U.S. Attorney’s Office plans to engage with communities across New Jersey to deepen connections with those communities, further hate crimes prevention efforts, and encourage more people to report hate crimes and hate incidents.

Last month, U.S. Attorney Sellinger announced the creation of a Civil Rights Division within the U.S. Attorney’s Office. This new division, which enforces both civil and criminal civil rights laws, will engage with local community members, advocacy groups, and other federal and state agencies to protect civil rights. The division will lead the U.S. Attorney’s Office’s efforts in implementing the United Against Hate initiative.

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.

TRENTON, N.J. – An Ocean County, New Jersey, man was charged with federal hate crimes for a series of violent assaults on members of the Orthodox Jewish community in and around Lakewood, New Jersey, U.S. Attorney Philip R. Sellinger for the District of New Jersey and Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division announced today.

Dion Marsh, 27, of Manchester, New Jersey, is charged with four counts of violating the federal Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act and one count of carjacking. With respect to the hate crimes violations, Marsh is charged with willfully causing bodily injury to four victims, and attempting to kill and cause injuries with dangerous weapons to three of them, all because they were Jewish. Marsh is in custody on related state charges and will make his initial appearance on the federal charges on a date to be determined.

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

At 1:18 p.m. on April 8, 2022, Marsh forced a visibly identifiable Orthodox Jewish man out of his car in Lakewood, assaulting and injuring him in the process. Marsh took control of the man’s car and drove away. A surveillance video in the area captured Marsh arriving in the area prior to the carjacking and assault.

At 6:06 p.m., Marsh was in Lakewood driving a different car when he deliberately struck another visibly identifiable Orthodox Jewish man with the vehicle, attempting to kill the victim and causing him to suffer several broken bones.

At 6:55 p.m., Marsh, once again driving the vehicle that he had stolen from the first victim, attempted to kill another visibly identifiable Orthodox Jewish man. Marsh used the stolen vehicle to deliberately strike the man, who was walking in Lakewood. Marsh got out of the vehicle and stabbed the man in the chest with a knife, causing the victim to suffer a stab wound and other injuries.

At 8:23 p.m., Marsh, still driving the vehicle that he had stolen from the first victim, used it to deliberately strike another visibly identifiable Orthodox Jewish man who was walking in nearby Jackson Township, New Jersey, attempting to kill the man and causing him to suffer several broken bones and internal injuries.

At 12:00 a.m. on April 9, 2022, law enforcement officers arrested Marsh at his residence.

The three hate crimes violations charging Marsh with attempting to kill those victims each carry a statutory maximum term of life in prison and a $250,000 fine. The hate crime violation charging Marsh with assaulting the other victim carries a statutory maximum term of 10 years in prison and a $250,000 fine. The carjacking charge carries a statutory maximum term of 15 years in prison and a $250,000 fine.

U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr.; officers of the Lakewood Police Department, under the direction of Chief of Police Gregory H. Meyer; officers of the Jackson Township Police Department, under the direction of Chief of Police Matthew Kunz; officers of the Ocean County Sheriff’s Office, under the direction of Sheriff Michael G. Mastronardy; prosecutors and detectives of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley D. Billhimer, and officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office’s Civil Rights Division.

The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Union County, New Jersey, man today admitted committing wire fraud and making false reports and statements to and for the U.S. Department of Housing and Urban Development (HUD), U.S. Attorney Philip R. Sellinger announced.

Shenandoah Adams Sr., aka “Shane Adams Sr.,” 56, of New Providence, New Jersey, pleaded guilty before U.S. District Judge Esther Salas to one count of an indictment charging him with wire fraud and an information charging him with one count of making false reports and statements to and for HUD.

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

Adams was a principal of Adams Property Management and Investment Group LLC (Adams Property Management), which purchased property on Hilton Street in East Orange, New Jersey in 2014. The following year, Adams arranged for a close associate to obtain a $153,562 loan from a mortgage lender to purchase the Hilton Street property from Adams Property Management. After the associate’s mortgage payments on the Hilton Street property became substantially in arrears, Adams arranged for the associate to sell the property to another associate for $255,000. The closing on that sale commenced on May 31, 2016; as of that date, the total amount to pay off the first associate’s mortgage was $210,565, including interest and fees. On June 1, 2016, Adams and the first associate had a telephone conversation with the mortgage servicer for the associate’s lender, during which Adams made false and fraudulent statements to induce the lender to reduce the payoff amount. The lender agreed to reduce the associate’s payoff amount to $190,000. At Adams’s direction, the associate cashed the check for the amount of the reduction – $20,665 – and delivered the cash proceeds to Adams.

Adams also was a principal of VH Electrical and Plumbing LLC.  On March 11, 2015, Adams, on behalf of VH, entered into a contract with the Orange Public Library to replace the Library’s HVAC/chiller unit for $49,000. The project was funded by a HUD Community Development Block Grant to the library and Orange. Adams sent a library representative documentation to give the false impression that Adams was taking steps to order a replacement chiller. Adams received $40,000 from the library, but did not replace the library’s chiller. 

The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a maximum $250,000 fine. The charge of making false reports and statements to HUD carries a maximum potential penalty of one year in prison and a maximum potential fine of $100,000. Sentencing is scheduled for Sept. 29, 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 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.

The government is represented by Assistant U.S. Attorney Cari Fais, Chief of the Opioid Abuse Prevention and Enforcement Unit, and Assistant U.S. Attorneys J Fortier Imbert and Sara F. Merin of the U.S. Attorney’s Office’s Special Prosecutions Division.

CAMDEN, N.J. – A medical sales representative from Gloucester County, New Jersey, was convicted today on 18 counts related to defrauding public health insurance plans out of more than $4.6 million, Attorney for the United States Vikas Khanna announced.

Steven Monaco, 40, of Sewell, New Jersey, was convicted on April 19, 2022, of one count of conspiracy to commit health care fraud and wire fraud, eight counts of health care fraud, eight counts of wire fraud, and one count of conspiracy to violate the Anti-Kickback Statute and the Travel Act, following a nine-day trial before U.S. District Judge Robert B. Kugler. 

According to documents filed in this case and the evidence at trial:

Monaco was a leader of two related fraud schemes that resulted in millions of dollars of loss to public health insurance plans. In the first scheme, Monaco, as a sales representative for a medical diagnostic laboratory, orchestrated a kickback scheme with a doctor, Daniel Oswari.  Monaco arranged for Oswari’s medical assistant to be placed on the payroll of the laboratory while continuing to work as a medical assistant for Oswari’s practice. In exchange, Oswari referred all his lab work to the laboratory for testing between late 2013 and 2016, and Monaco received $36,000 in commissions from the laboratory.

In the second fraud scheme, Monaco and his conspirator, pharmaceutical sales representative Richard Zappala, discovered that certain insurance plans – including New Jersey state and local government plans – paid for very expensive compounded prescription medications between 2014 and 2016. Monaco and Zappala organized a scheme in which they received a percentage of the insurance reimbursement for compounded medication prescriptions that they arranged. Monaco and Zappala approached medical professionals and paid them to sign medically unnecessary prescriptions for the compounded medications. Monaco paid Oswari and his staff to identify and prescribe the compound medications to patients of Oswari’s practice with the requisite insurance plans, as well as other people that Oswari did not medically evaluate.  Monaco also arranged for other medical professionals – including Dr. Michael Goldis and his cousin, physician’s assistant Jason Chacker – to sign medically unnecessary prescriptions for members of Monaco’s family and others whom these medical professionals did not examine.  Monaco directly compensated Chacker with money and tickets to sporting events, and Zappala paid Goldis cash to sign the medically unnecessary prescriptions for members of Monaco’s family and others. Monaco also directly paid individuals who had coverage under the public insurance plans and agreed to receive prescriptions for the compounded medications. As a result of this scheme, Monaco received approximately $350,000 and caused a loss of over $4.6 million to the insurance plans.

Monaco was initially charged in an indictment in 2019 with Oswari, Goldis, and medical assistant Aaron Jones. 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. Jones pleaded guilty in March 2022 to health care fraud conspiracy. Zappala also pleaded guilty in September 2017 to conspiracy to commit health care fraud. Chacker pleaded guilty in October 2019 to conspiracy to commit health care fraud. Oswari, Goldis, Chacker, and Zappala all await sentencing.

The health care fraud and wire fraud conspiracy count on which Monaco was convicted carries a maximum potential penalty of 20 years in prison. The Anti-Kickback Statute and Travel Act conspiracy carries a maximum penalty of five years in prison. The health care fraud counts each carry a maximum of 10 years in prison, and the wire fraud counts each carry a maximum of 20 years in prison. All the counts also carry a $250,000 fine, or twice the gain or loss from the offense. Sentencing for Monaco is scheduled for Aug. 24, 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; IRS Office of Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins in Newark; and the U.S. Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to today’s conviction.

The government is represented by R. David Walk Jr., Chief of the Government Fraud Unit, and Assistant U.S. Attorney Christina O. Hud of the Criminal Division.

CAMDEN, N.J. – A Cumberland County, New Jersey man pleaded guilty today to possessing with intent to distribute methamphetamine, U.S. Attorney Philip R. Sellinger announced.

Charles Sistrunk Jr., 39, of Millville, New Jersey, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to an information charging him with possession with intent to distribute 500 mg or more of a substance containing methamphetamine.

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

On Oct. 13, 2020, agents of the FBI executed a court-authorized search warrant at Sistrunk’s residence and found over 3.7 kilograms of crystal methamphetamine, or “ice.” In his guilty plea today, Sistrunk admitted to possessing the methamphetamine with intent to distribute it to others.

The charge carries a mandatory minimum term of 10 years in prison, a maximum term of life in prison and a maximum $10 million fine. Sentencing is scheduled for Aug. 23, 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 the Drug Enforcement Administration; the Department of Homeland Security, Homeland Security Investigations; the New Jersey State Police; the Atlantic County Prosecutor’s Office; the Atlantic County Sheriff’s Office; the Atlantic City Police Department; the Pleasantville Police Department; and the Millville Police Department for their assistance in the investigation.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorney Andrew B. Johns of the Criminal Division in Camden.

TRENTON, N.J. – An Ocean County, New Jersey, man was sentenced today to 18 months in prison for fraudulently obtaining chainsaws and chainsaw parts from his employer Amtrak and then selling this equipment for personal profit, U.S. Attorney Philip R. Sellinger announced.

Jose Rodriguez, 49, of Brick, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Zahid N. Quraishi to an information charging him with one count of mail fraud. Judge Quraishi imposed the sentence today

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

Rodriguez had been an Amtrak employee since October 2007, most recently as a senior engineer and repairman, based out of an Amtrak facility in North Brunswick, New Jersey. Between March 2012 and July 2020, Rodriguez obtained approximately 114 chainsaws, 122 chainsaw replacement bars, and 222 replacement chains from Amtrak, the total value of which was over $76,000, under the false pretense that this equipment would be used for Amtrak projects, but then sold the equipment either on an online auction service or directly to purchasers. Rodriguez used the U.S. Postal Service to mail the stolen chainsaw and chainsaw parts to purchasers throughout the United States, including purchasers in Ohio, Pennsylvania, and West Virginia.

In addition to the prison term, Judge Quraishi sentenced Rodriguez to three years of supervised release and ordered restitution of $76,379 and forfeiture of $53,381.

U.S. Attorney Sellinger credited detectives from Amtrak Police New York Division and Mid-Atlantic Division, under the direction of Chief Sam Dotson, and special agents from Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters, Eastern Field Office, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Leslie Faye Schwartz in the Special Prosecutions Division and Cari Fais, Chief of the Criminal Division’s Opioids Unit.

TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 60 months in prison for distributing cocaine in Monmouth County and conspiring to illegally sell firearms, including multiple handguns and a semi-automatic rifle, in and around Monmouth and Ocean counties, U.S. Attorney Philip R. Sellinger announced.

Enrique Quijada, 25, of Freehold, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Anne E. Thompson to a superseding information charging him with one count of conspiracy to engage in firearms trafficking, one count of possession of a firearm by an alien unlawfully present in the United States, and one count of distribution of cocaine. Judge Thompson imposed the sentence today in Trenton federal court.

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

From May 2020 through September 2020, Manuel Espinosa-Ozoria, Waldin Espinosa-Ozoria, Enrique Quijada, Javier Rodriguez-Valpais, and Jacquelyn DeJesus were members of a gun trafficking conspiracy that spanned from Florida to New Jersey. DeJesus allegedly assisted Manuel Espinosa-Ozoria – the alleged leader of the conspiracy – by acting as a “straw purchaser” of firearms in Florida. Manuel Espinosa-Ozoria and DeJesus then transported the firearms from Florida to Monmouth County, where members of the conspiracy, including Quijada, sold the firearms to individuals working at the direction and supervision of the FBI. Rodriguez-Valpais sold a .223 caliber semi-automatic rifle to Quijada, who in turn sold the rifle to an individual working at the direction and supervision of the FBI. In addition to gun trafficking, Quijada admitted selling cocaine to an individual working at the direction and supervision of the FBI.

Three other members of the gun trafficking conspiracy – Javier Rodriguez-Valpais, Waldin Espinosa-Ozoria, and Jacquelyn DeJesus – previously have pleaded guilty in connection with this case. The charges against Manuel Espinosa-Ozoria remain pending.   

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

U.S. Attorney Sellinger credited special agents of the FBI, Newark Division, under the direction of Special Agent in Charge George M. Crouch Jr., with the investigation leading to today’s sentencing. He also thanked the FBI Tampa Division, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark and Tampa Field Divisions, and the Freehold Borough, New Jersey, police department for their assistance in the investigation.

In July 2021 the U.S. Department of Justice launched five cross-jurisdictional strike forces to help reduce gun violence by disrupting illegal firearms trafficking in key regions across the country. Leveraging existing resources, the regional strike forces will better ensure sustained and focused coordination across jurisdictions and help stem the supply of illegally trafficked firearms from source cities, through other communities, and into five key market regions: New York, Chicago, Los Angeles, the San Francisco Bay Area/Sacramento Region and Washington, D.C. According to gun trace data, a significant number of firearms recovered in the New York/northern New Jersey area originate from outside the area. The new strike force will help ensure sustained and focused coordination between law enforcement and prosecutors in the New York/northern New Jersey area with their counterparts in those other locations.

The government is represented by Assistant U.S. Attorney Ian D. Brater of the U.S. Attorney’s Office’s Criminal Division in Trenton.

For the defendant whose charges remain pending, the charges and allegations are merely accusations, and he is presumed innocent unless and until proven guilty.

NEWARK, N.J. – A former U.S. Postal Service USPS employee today admitted that he conspired to fraudulently obtain unemployment insurance benefits, U.S. Attorney Philip R. Sellinger announced. 

Ross Clayton, 31, of Irvington, New Jersey, pleaded guilty by videoconference before U.S. District Judge Julien X. Neals 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 (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 $600 weekly benefit to those eligible for PUA and regular unemployment insurance benefits.

Clayton was a USPS employee. Clayton took unemployment insurance benefits-related mail, including debit cards, from a USPS location in New Jersey and used that mail to obtain unemployment insurance benefits to which he was not entitled.

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. Sentencing is scheduled for Sept. 7, 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 Manhattan; and postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal 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 Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.

NEWARK, N.J. – A former hotel employee of a nationwide hotel chain today admitted his role in a scheme to embezzle over $300,000 from the company, U.S. Attorney Philip R. Sellinger announced.

Marco Alvarez, 46, of Bloomfield, New Jersey, pleaded guilty by videoconference before U.S. District Judge Esther Salas to an information charging him with one count of wire fraud. 

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

As senior analyst for strategic sourcing for a national hotel chain, Alvarez was responsible for administering the company’s corporate credit card program. He was authorized to approve applications for credit cards and to access account information for such credit cards. From April 2014 through January 2020, Alvarez embezzled funds from the hotel through the unauthorized use of the hotel’s corporate credit cards to purchase goods and services. Alvarez admitted that he knowingly opened and used corporate credit cards to make $317,582 in unauthorized personal purchases and attempted to conceal them by transferring credits owed to the hotel to these credit cards to offset the unauthorized charges made.

The charge of wire fraud carries a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, or twice the gross profits or loss, whichever is greatest. Sentencing is scheduled for Sept. 21, 2022.

U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Damon Wood, Philadelphia Division; and special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, 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 Government Fraud Unit in Newark.

NEWARK, N.J. – Four individuals were charged with conspiring to launder money taken from victims across the United States, many of whom were elderly, as a part of a series of romance scams, U.S. Attorney Philip R. Sellinger announced today.

William Kwabena Goeh, 47, of Somerset, New Jersey; Nana Yaw Marfo, 37, of Virginia; and Shannon Braxton, 45, and Chevon Braxton, 42, both of Maryland, are each charged by complaint with one count of money laundering conspiracy. Goeh was arrested this morning in New Jersey, had his initial appearance by videoconference before U.S. Magistrate Judge James B. Clark III, and was released on $100,000 unsecured bond.

Marfo was arrested this morning in Virginia and is scheduled to have his initial appearance this afternoon before the U.S. Magistrate Judge Ivan Davis in the Eastern District of Virginia. The Braxtons were both arrested this morning in Maryland and are scheduled to have their initial appearances before U.S. Magistrate Judge Gina L. Simms in the District of Maryland. Marfo and the Braxtons are scheduled to have their initial appearances in the District of New Jersey on.

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

The defendants used bank accounts and accounts at credit unions to launder the proceeds of money obtained by victims of romance scams. Several victims throughout the United States fell victim to romance scams after meeting individuals online who they thought were interested in a romantic relationship. The victims, many of whom were elderly, sent thousands of dollars to accounts controlled by Goeh, Marfo, the Braxtons, and others, believing the money was being sent for the benefit of their online romantic interest. Goeh and Marfo opened up business bank accounts in the names of various entities to conceal the romance scam fraud proceeds. Goeh received at least $530,000; Marfo received at least $4.7 million; Shannon Braxton received at least $500,000; and Chevon Braxton received at least $1.3 million. The Braxtons withdrew a large portion of the fraud proceeds as cash, while Goeh and Marfo wired thousands of dollars overseas, including to accounts in China, the United Arab Emirates, Italy, Singapore, and Mauritius.      

The money laundering conspiracy charge has a maximum term of 20 years in prison and a maximum fine of $500,000 or twice the value of the funds involved in the transfer, whichever is greater.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agents in Charge George M. Crouch Jr. in Newark and Eric B. Smith in Cleveland, Ohio; special agents of the U.S. Department of Labor’s Office of Inspector General, under the direction of Special Agent in Charge Irene Lindow in Chicago, Illinois, and the U.S. Secret Service, under the direction of Special Agent in Charge Paul Duran in San Antonio, Texas, with the investigation leading to the charges.  U.S. Attorney Sellinger also thanks the U.S. Attorney’s Office for the Northern District of Ohio for its assistance. 

The government is represented by Assistant U.S. Attorney Jamie L. Hoxie of the U.S. Attorney’s Office’s Cybercrime Unit in Newark.

The charges and allegations contained in the complaints are merely accusations and the defendants are considered innocent unless and until proven guilty. 

NEWARK, N.J. – A Colorado man was arrested today for conspiring to unlawfully transport firearms via the internet, U.S. Attorney Philip R. Sellinger announced today.

Hunter Weeks, 22, of Colorado Springs, Colorado, was arrested in Colorado and is charged by complaint with conspiracy to unlawfully transport firearms, and possession and transportation of an unregistered firearm. He is scheduled make his initial appearance today in the District of Colorado.

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

From February 2021 through July 2021, undercover law enforcement agents communicated with several individuals, including Weeks, via a social media platform where individuals advertised for sale various narcotics and firearms. During this time period, Weeks’ fingerprints were found on the parcels used to mail three firearms from addresses in Colorado to New Jersey that were sold to the undercover agents, including: a Glock firearm with an auto sear switch, making it a fully-automatic firearm; an Uzi assembled to function as machine gun; and an AR-15 firearm.

The count of conspiracy to unlawfully transport firearms charge carries a statutory maximum of five years in prison and a fine of $250,000. The possession of unregistered firearms charge 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 arrest. 

The government is represented by Assistant U.S. Attorney Vera Varshavsky of the U.S. Attorney’s Cybercrime 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.

NEWARK, N.J. – A Bergen County, New Jersey, man was sentenced today to 24 months and two days in prison for his role in a scheme to file fraudulent tax returns in victims’ names in order to obtain tax refunds to which he was not entitled, U.S. Attorney Philip R. Sellinger announced.

Emmanuel A. Barrientos-Fermin, 39, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an indictment charging him with one count of conspiracy to commit wire fraud, one count of access device fraud, and one count of aggravated identity theft. Judge Cecchi imposed the sentence today via videoconference.

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

From January 2020, through February 2020, Barrientos and others conspired to utilize stolen personal identifying information (PII) to submit fraudulent tax returns in victims’ names, in order to obtain tax refunds without the victims’ knowledge or consent. A conspirator would obtain falsified Social Security cards, driver’s licenses, birth certificates and W-2s bearing the victims’ stolen PII and provide them to Barrientos-Fermin and other, who would use them to file tax returns at various tax preparation company branches posing as the victims.

In addition to the prison term, Judge Cecchi sentenced Barrientos-Fermin three years of supervised release and ordered him to pay $17,373 in restitution.

U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Damon Wood, Philadelphia Division; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins, with the investigation leading to today’s sentencing. He also thanked the Totowa, New Jersey, Police Department, for its assistance.

The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the U.S. Attorney’s Office Government Fraud Unit in Newark.

CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted his role in drug distribution scheme, U.S. Attorney Philip R. Sellinger announced.

Ricardo Clavijo, 40, of Egg Harbor Township, New Jersey, pleaded guilty today before the U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiring to distribute over one kilogram of heroin, one count of possession with intent to distribute over one kilogram of heroin, and one count of maintaining a drug-related premises.

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

On July 12, 2021, a search warrant was executed at Clavijo’s residence, where law enforcement authorities encountered Clavijo and his brother, Christopher Gonzalez. Authorities found a drug packaging facility in the basement, as well as 4.3 kilograms of heroin, 5.5 kilograms of fentanyl, 10.8 kilograms of cocaine, drug packaging materials and equipment, and a money counting machine. Some of the heroin was already packaged in tens of thousands of individual doses, ready for street-level distribution. Agents also seized a .45 caliber handgun, a loaded magazine for the handgun, a 9mm 50-round drum magazine, and $8,457 in cash, all of which will be forfeited by Clavijo as part of his guilty plea.

The conspiracy count and possession with intent to distribute count to which Clavijo pleaded guilty both carry a mandatory minimum term of 10 years in prison, a maximum term of life in prison and a fine of $10 million, or twice the gross gain or loss caused by the offense, whichever is greatest. The count of maintaining a drug-related premises carries a maximum penalty of 20 years in prison and a $500,000 fine, or twice the gross gain or loss caused by the offense, whichever is greatest. Sentencing is scheduled for Sept. 7, 2022.

Gonzalez is charged by complaint with conspiracy to distribute and possess with intent to distribute over one kilogram of heroin.

U.S. Attorney Sellinger credited special agents of the Drug Enforcement Administration’s Newark Division, DEA Atlantic County HIDTA Task Force, under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to today’s guilty plea. He also thanked the Atlantic County Prosecutor’s Office, under the direction of Acting County Prosecutor Cary Shill, and the Egg Harbor Township Police Department, under the direction of Chief Michael T. Hughes, for their assistance.

The government is represented by Assistant U.S. Attorney Andrew B. Johns of the Criminal Division in Camden.

The charges and allegations contained in Gonzalez’s complaint are merely accusations, and he is presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Middlesex County, New Jersey, man was charged with embezzling over $2.3 million from a New York-based company where he had been the controller since 2001, U.S. Attorney Philip R. Sellinger announced today.

Gerard Beauzile, 61, of South Plainfield, New Jersey, is charged by indictment with 10 counts of wire fraud. He appeared by videoconference today before U.S. Magistrate Judge James B. Clark, III, and was released on $200,000 unsecured bond.

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

From 2001 through February 2021, Beauzile worked as controller, heading a New York-based company’s accounting department. On a monthly basis, from 2014 through December 2020, Beauzile issued company checks to himself, and deposited those checks into his personal bank account at bank branches in New York, near his employer’s headquarters. 

Over the course of the scheme, Beauzile issued approximately 140 checks to himself totaling in excess of $2.3 million, which he used for his own benefit. Beauzile hid his scheme by failing to enter some of the checks into the victim company’s accounting system; causing checks to appear as though they were made payable to vendors when, in fact, Beauzile issued them to himself; changing the vendors invoices to correspond with the accounting of those checks; and falsifying the victim company’s bank account statements.

Each count of wire fraud is punishable by a maximum penalty of 20 years in prison and a maximum $250,000 fine.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George Crouch in Newark, with the investigation leading to the indictment.

The government is represented by Assistant U.S. Attorney Blake Coppotelli of the Economic Crimes Unit in Newark.

The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed to be innocent unless and until proven guilty.

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.

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.

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.

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. 

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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

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

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