District of New Jersey
Press releases recorded for this federal judicial district.
Newark Parking Authority Employee Sentenced to 30 Months in Prison for Narcotics Distribution and Illegally Possessing FirearmsRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 30 months in prison for being a felon in possession of two firearms, and for distributing heroin and cocaine base, Acting U.S. Attorney Rachael A. Honig announced.
Aughkay L. Green, a/k/a “K-Boogie,” 50, of Newark, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a three-count indictment charging him with possession of heroin and cocaine base with intent to distribute and with being a felon in possession of numerous firearms and ammunition.
According to documents filed in this case and statements made in court:
On Jan. 12, 2017, Green sold 25 bricks – later determined to be 38 grams – of heroin to “Individual 1,” for $1,200. On March 22, 2017, Green sold Individual 1 48.9 grams of crack cocaine for $2,250. Green was under law enforcement surveillance and observed to be dressed in his Newark Parking Authority uniform.
On April 1, 2017, Green, accompanied by an unidentified male associate, met Individual 1 in Irvington, New Jersey, where Green’s associate provided Individual 1 with: (1) a Smith and Wesson Model 21 .44 caliber handgun; (2) a Smith and Wesson Model 15 .38 handgun, and (3) 50 rounds of hollow-point .44 caliber ammunition marked “44 REM MAG FC.” Green’s associate received $1,360 from Individual 1, and subsequently provided Green with proceeds from the sale and discussed using these proceeds for the purchase of narcotics.
In addition to the prison term, Judge Hayden sentenced Green to three years of supervised release.
Acting U.S. Attorney Honig credited special agents of the FBI and task force officers of the Joint Terrorism Task Force, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark.
The government is represented by Assistant U.S. Attorney Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit.
Newark Man Sentenced to 110 Months in Prison for Hobbs Act RobberyRead the Press Release
CAMDEN, N.J. – A Newark man was sentenced today to 110 months in prison for his role in robbing a barbershop, Acting U.S. Attorney Rachael Honig announced.
Philip Hedgespeth, 45, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an indictment charging him with one count of Hobbs Act robbery, one count of possessing a firearm in furtherance of a crime of violence and one count of possessing a firearm as a previously convicted felon. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
On May 1, 2018, Hedgespeth entered the Cache Barbershop located in Newark and brandished a firearm at an employee and customer, demanding cash from them. The customer was an off-duty Newark police officer, who attempted to stop Hedgespeth and prevent the robbery. Hedgespeth escaped and jumped into a waiting vehicle. Newark police engaged in a motor vehicle chase with the suspects, which ended when the suspects’ vehicle became disabled on McCarter Highway. Hedgespeth then attempted to flee the scene on foot but was apprehended after a brief chase.
In addition to the prison term, Judge Kugler sentenced Hedgespeth to five years of supervised release.
Acting U.S. Attorney Honig credited law enforcement officers of the Newark Police Department, under the direction of Public Safety Director Brian O’Hara, and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Craig B. Kailimai, Newark Field Division, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Naazneen Khan of the U.S. Attorney’s Office Organized Crimes and Gangs Unit in Newark.
New York and Florida Resident Charged with $3.8 Million Paycheck Protection Program Fraud SchemeRead the Press Release
NEWARK, N.J. – A dual New York and Florida resident was charged for his role in fraudulently obtaining federal Paycheck Protection Program (PPP) loans totaling $3.8 million, Acting U.S. Attorney Rachael A. Honig and Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division announced today.
Gregory J. Blotnick, 34, of New York City and West Palm Beach, Florida, is charged by complaint with eight counts of wire fraud affecting a financial institution and six counts of money laundering. Blotnick is scheduled to have his initial appearance by videoconference on May 20, 2021, before a U.S. Magistrate Judge.
“The funds made available through the Paycheck Protection Program are intended to help businesses and their workers get through the financial hardships caused by the COVID-19 pandemic, not to enrich the unscrupulous few who, like this defendant, lie to obtain those funds for their own personal profit,” Acting U.S. Attorney Honig said. “We will continue to protect the viability of important federal programs like these by working quickly to identify, investigate, and prosecute the individuals who see a time of national crisis as an opportunity to commit fraud.”
“Not only did Blotnick fraudulently obtain almost $4 million in relief funds reserved for those suffering serious financial harm from the tragic COVID-19 pandemic, he also lied about how he would use those funds, placing millions of dollars in losing stock trades,” said Acting Assistant Attorney General McQuaid said. “The Justice Department and its law enforcement partners remain committed to aggressively pursuing and holding accountable fraudsters who treat COVID relief programs like a personal piggy bank.”
“There are many small businesses out there that are suffering who are relying on the CARES Act to keep them and their employees afloat as we continue to feel the financial hardships brough on by this pandemic,” Michael Montanez, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “As alleged in the Complaint, Mr. Blotnick took advantage of the emergency financial assistance by lying and submitting fraudulent applications for loans he did not deserve. IRS Criminal Investigation will work with our law enforcement partners to root out corrupt individuals who try to illegally obtain CARES Act assistance they are not entitled to receive.”
“As the Federal government moves to support small businesses during this critical time, members of the Federal Home Loan Bank system play an integral role in the Paycheck Protection Program,” Special Agent in Charge Robert Manchak of the Northeast Region of the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), said. “The charges announced today serve as a reminder that those who mislead lenders and seek to defraud the CARES Act will be held accountable. We are proud to work with the Department of Justice and our federal law enforcement partners during this unprecedented crisis.”
“These charges demonstrate our commitment to hold accountable those who attempt to defraud pandemic-related assistance programs designed to aid businesses and employees in these challenging times,” said Special Agent in Charge John F. Grasso, Social Security Administration Office of the Inspector General (SSA-OIG). “We will continue to collaborate across agency lines to combat this self-serving type of fraud. I want to thank the Federal Housing Finance Authority OIG, IRS Criminal Investigation, Federal Deposit Insurance Corporation OIG, and the U.S. Attorney’s Office for their efforts to bring this individual to justice.”
“These charges reflect greed and a selfish attempt to increase personal wealth on the backs of Americans suffering from the ongoing pandemic,” Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation OIG (FDIC-OIG) New York Region, said. “As with this case, we will continue to vigorously investigate financial crimes and we appreciate the cooperation of our fellow law enforcement partners.”
According to documents filed in this case and statements made in court:
Blotnick submitted eight fraudulent PPP loan applications to several lenders on behalf of seven purported businesses.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses.
Blotnick submitted eight fraudulent PPP loan applications to several lenders on behalf of seven purported businesses. The applications allegedly contained fraudulent representations to the participating lenders, including documentation of federal tax returns. According to Social Security Administration records, there were no wages or Forms W-2 processed for any of the entities between 2018 and 2020. Blotnick also fabricated the existence of employees listed in purported payroll expense sheets submitted to the various financial institutions.
Based on Blotnick’s alleged misrepresentations, the lenders approved Blotnick’s PPP loan applications and provided Blotnick’s purported business with approximately $3.8 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Blotnick then transferred most of the proceeds into a brokerage account and lost most of it through stock trading.
The eight counts of wire fraud affecting a financial institution each carry a maximum penalty of 20 years in prison and a $250,000 fine; the six counts of money laundering each carry a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater.
Acting U.S. Attorney Rachael Honig credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Manchak; special agents of the IRS – Criminal Investigation, under the direction of Special Agent in Charge Montanez; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Grasso; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Tarasca in New York; and special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Stephen Donnelly, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Fatime Meka Cano of the U.S. Attorney’s Office’s Government Fraud Unit in Newark and Trial Attorney Cory E. Jacobs of the Department of Justice, Criminal Division, Market Integrity and Major Frauds Unit.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
New York City Man Charged with Nearly $4 Million COVID-19 Relief Fraud Scheme and Money LaunderingRead the Press Release
A criminal complaint was filed in the District of New Jersey today charging a dual-resident of New York and Florida with fraudulently obtaining and laundering nearly $4 million in funds from the COVID-19 relief Paycheck Protection Program (PPP).
According to court documents, Gregory J. Blotnick, 34, of New York City and West Palm Beach, used a variety of false representations to fraudulently obtain more than $3.8 million in federal COVID-19 PPP funds. To obtain the loan money, Blotnick submitted eight falsified loan applications to numerous lenders on behalf of five of Blotnick’s businesses, including his New York City-based hedge fund management firm, Brattle Street Capital LLC and related entities. To obtain the PPP loans, Blotnick submitted false information, including the number of his employees, federal tax returns for his businesses, and his payroll documentation, and he certified that he would use the loan money only for business-related purposes. After fraudulently obtaining the loans, Blotnick laundered and misused the loan proceeds by, among other things, transferring those proceeds to brokerage accounts and placing more than $3 million in losing stock trades.
“Not only did Blotnick fraudulently obtain almost $4 million in relief funds reserved for those suffering serious financial harm from the tragic COVID-19 pandemic, he also lied about how he would use those funds, placing millions of dollars in losing stock trades,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The Justice Department and its law enforcement partners remain committed to aggressively pursuing and holding accountable fraudsters who treat COVID-19 relief programs like a personal piggy bank.”
“The funds made available through the Paycheck Protection Program are intended to help businesses and their workers get through the financial hardships caused by the COVID-19 pandemic, not to enrich the unscrupulous few who, like this defendant, lie to obtain those funds for their own personal profit,” said Acting U.S. Attorney Rachael A. Honig for the District of New Jersey. “We will continue to protect the viability of important federal programs like these by working quickly to identify, investigate, and prosecute the individuals who see a time of national crisis as an opportunity to commit fraud.”
“As the federal government moves to support small businesses during this critical time, members of the Federal Home Loan Bank system play an integral role in the Paycheck Protection Program,” said Special Agent in Charge Robert Manchak of the Northeast Region of the Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG). “The charges announced today serve as a reminder that those who mislead lenders and seek to defraud the CARES Act will be held accountable. We are proud to work with the Department of Justice and our federal law enforcement partners during this unprecedented crisis.”
“These charges demonstrate our commitment to hold accountable those who attempt to defraud pandemic-related assistance programs designed to aid businesses and employees in these challenging times,” said Special Agent in Charge John F. Grasso of the Social Security Administration OIG (SSA-OIG) New York Field Division. “We will continue to collaborate across agency lines to combat this self-serving type of fraud. I want to thank the Federal Housing Finance Authority OIG, IRS Criminal Investigation, Federal Deposit Insurance Corporation OIG, and the U.S. Attorney’s Office for their efforts to bring this individual to justice.”
“These charges reflect greed and a selfish attempt to increase personal wealth on the backs of Americans suffering from the ongoing pandemic,” said Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation OIG (FDIC-OIG) New York Region. “As with this case, we will continue to vigorously investigate financial crimes and we appreciate the cooperation of our fellow law enforcement partners.”
Blotnick is charged with eight counts of wire fraud and six counts of money laundering. The defendant is scheduled for his initial court appearance on May 20. If convicted, he faces a maximum penalty of 20 years in prison for each count of wire fraud, and a maximum of 10 years in prison for each count of money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FHFA-OIG, IRS-CI, SSA-OIG and the FDIC-OIG are investigating the case.
Trial Attorney Cory E. Jacobs of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Fatime Meka Cano of the U.S. Attorney’s Office for the District of New Jersey are prosecuting the case.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses.
The Fraud Section leads the Department of Justice’s prosecution of fraud schemes that exploit the CARES Act. In the months since the CARES Act was passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. The Fraud Section has also seized more than $65 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real-estate properties and luxury items purchased with such proceeds. More information can be found at: https://www.justice.gov/criminal-fraud/cares-act-fraud.
Anyone with general information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Monmouth County Business Owner Sentenced to One Year in Prison for Tax Evasion and Failing to Pay Employment Payroll TaxesRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, business owner was sentenced today to 12 months and one day in prison for tax evasion and failure to pay the IRS over $540,000 in employment taxes, Acting U.S. Attorney Rachael A. Honig announced today.
Wilson Salas-Molina, 41, of Howell, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of payroll tax evasion and one count of failure to collect, account for, and pay over payroll taxes. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
Salas-Molina was the owner and operator of US Contractor Inc. (aka Wilson Contractors Inc., aka WC Contractor Inc.), a roofing business located in Monmouth County. From 2012 to 2018, Salas-Molina was required to withhold and pay over to the IRS the employment taxes for US Contractor employees. Salas-Molina cashed checks he received from roofing clients at a check cashing service and paid his 14 employees in cash to conceal his payment of wages and his failure to report, account for, and pay over employment taxes to the IRS. The scheme resulted in a failure to withhold and pay over $540,000 in employment taxes to the IRS.
In addition to the prison term, Judge Sheridan sentenced Salas-Molina to three years of supervised release and ordered Salas-Molina to pay $541,181 in restitution to the IRS.
Acting U.S. Attorney Honig credited special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Courtney A. Howard of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Four Union County Men Charged with Conspiracy to Distribute NarcoticsRead the Press Release
NEWARK, N.J. – Four Union County, New Jersey, men were charged for their roles in conspiracies to distribute and possess with intent to distribute narcotics, Acting U.S. Attorney Rachael A. Honig and Acting Union County Prosecutor Lyndsay V. Ruotolo announced today.
Tyshawn Jones, 45; Walter Gibbs, 50; Rodney McCrae, 51; and Syhid Ellison, 37; all of Elizabeth, New Jersey, are charged by complaint with conspiracy to distribute and possess with intent to distribute heroin and fentanyl. Each defendant is also charged with additional narcotics offenses. Jones, McCrae, and Ellison were arrested this morning and are scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge Edward S. Kiel. Gibbs remains at large.
According to the documents filed in this case and statements made in court:
From August 2020 through May 2021, the defendants sold heroin and fentanyl in an open-air narcotics market around Third Street between Court Street and Magnolia Avenue in Elizabeth. Through numerous controlled purchases of drugs, surveillance, and the analysis of telephone records, the investigation uncovered evidence that the defendants conspired with each other and others to distribute heroin and fentanyl. The defendants sold heroin that is frequently mixed with fentanyl, a potent, synthetic opioid that is approximately 50 times stronger than heroin.
Each count charged in the complaint carries a maximum penalty of 20 years in prison and a fine of at least $1 million.
Acting U.S. Attorney Honig credited investigators of the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Ruotolo; special agents and task force officers with the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; officers of the Elizabeth Police Department, under the direction of Police Chief Giacomo Sacca; and investigators of the Somerset County Prosecutor’s Office, under the direction of Prosecutor Michael H. Robertson, with the investigation leading to the charges.
The government is represented by Special Assistant U.S. Attorney Stacey E. Zyriek Enriquez of the Violent Crimes Unit and Assistant U.S. Attorney Kimberly Mitchell of the OCDETF/Narcotics 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.
Doctor Sentenced to 57 Months in Prison for Unlawfully Distributing Opioids and Soliciting Sexual Favors from Patients in Exchange for OpioidsRead the Press Release
TRENTON, N.J. – A New York doctor was sentenced today to 57 months in prison for distributing opioids without a legitimate medical reason and soliciting sexual favors from patients in exchange for opioid prescriptions, Acting U.S. Attorney Rachael A. Honig announced.
Joseph Santiamo, 65, of Staten Island, New York, previously pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with conspiracy to distribute oxycodone, a controlled dangerous substance. Judge Shipp imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
From Jan. 1, 2012, through May 3, 2018, Santiamo owned and operated a medical practice in Staten Island focused on internal medicine and geriatric care. He prescribed large quantities of oxycodone outside the ordinary course of professional practice and without a legitimate medical purpose. For some of his patients, there was no medical necessity for Santiamo to treat them with oxycodone, nor to prescribe the large quantities that he did. In addition, Santiamo solicited sexual favors from certain of his younger patients in exchange for unlawful oxycodone prescriptions. These patients were all under the age of 40 at the time Santiamo provided them with prescriptions and thus would not typically be treated by a geriatric care physician like Santiamo. In some instances, Santiamo did this despite evidence that certain patients were abusing opioids.
In addition to the prison term, Judge Shipp sentenced Santiamo to three years of supervised release and fined him $30,000.
Acting U.S. Attorney Honig credited special agents, diversion investigators and task force officers of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Adam Baker of the U.S. Attorney’s Office’s Opioid Abuse Prevention and Enforcement Unit in Newark.
Couple Sentenced to Prison in Gun Trafficking SchemeRead the Press Release
CAMDEN, N.J. – A convicted felon and his girlfriend were sentenced today to prison for their roles in a scheme to buy firearms in Georgia and transport them to New Jersey for resale, Acting U.S. Attorney Rachael A. Honig announced.
Anthony Doyle, 30, was sentenced to 46 months in prison and three years of supervised release; Anastacia Thomas, 28, was sentenced to 12 months and one day in prison and two years of supervised release. Doyle and Thomas, both of Fayetteville, North Carolina, previously pleaded guilty before U.S. District Judge Joseph Rodriguez to conspiring to illegally traffic firearms. Doyle also pleaded guilty to being a felon in possession of a firearm. Judge Rodriguez imposed the sentences today in Camden federal court.
According to documents filed in this case and statements made in court:
On Jan. 25, 2018, law enforcement officers conducted a traffic stop of a car driven by Thomas and occupied by Doyle in Deptford, New Jersey. Law enforcement officers observed in plain view a Glock handgun, which was loaded with 14 hollow tip bullets. A search of the car and a backpack revealed four additional handguns and three firearm boxes.
The investigation revealed that from Nov. 30, 2017, to Jan. 25, 2018, Doyle and Thomas conspired and worked together to deal firearms without a license. Doyle, who was a convicted felon and therefore could not legally purchase firearms, was the driving force behind the conspiracy. He was responsible for selecting the firearms, transporting them up to New Jersey, finding buyers, and selling the firearms at a profit. Doyle used his social media accounts to advertise the firearms for sale, negotiate pricing, and arrange the sales. Doyle’s online discussions regarding illegal firearm trafficking are documented in hundreds of pages of online messages that were analyzed by law enforcement.
Thomas’ role in the scheme was to purchase firearms from federally licensed firearms dealers because Doyle could not do so as a convicted felon. She also purchased firearms from pawn shops, helped Doyle transport the firearms to New Jersey for resale and handled the profits from the resales.
This case is part of Project Guardian, the U.S. Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Craig B. Kailimai, Newark Field Division, with the investigation leading to today’s sentencings.
The government is represented by Assistant U.S. Attorneys Sara A. Aliabadi and Christina O. Hud of the U.S. Attorney’s Office Criminal Division in Camden.
Bergen County Man Sentenced to 51 Months in Prison for Stealing Millions of Dollars from Lenders and Corporations in Wire Fraud SchemeRead the Press Release
NEWARK N.J. – A Bergen County, New Jersey, man was sentenced today to 51 months in prison for defrauding lenders and corporations of $4.9 million by impersonating two bank executives interested in funding syndicated loans for global companies, Acting U.S. Attorney Rachael A. Honig announced.
Matthew O’Callaghan, 43, of Upper Saddle River, New Jersey, previously pleaded guilty before U.S. District Court Judge Susan D. Wigenton via videoconference to count one of an indictment charging him with wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
From 2016 through 2019, O’Callaghan defrauded at least two global financial services groups and four global companies of millions of dollars by deceiving them into believing that “Bank A” was agreeing to commit funds to revolving credit facilities. He contacted the victim-lenders and victim-companies using the aliases “Edward Tierney” and “Michael Nash,” whom he falsely represented were executives at Bank A. O’Callaghan induced the victim-lenders and victim-companies into agreeing to pay Bank A to take on a commitment to fund revolving credit facilities.
O’Callaghan submitted numerous fraudulent documents to the victim-lenders and victim-companies that were designed to deceive them into believing that Nash and Tierney were legitimate representatives of Bank A, when in fact they were not. O’Callaghan created email addresses to resemble legitimate Bank A email addresses, false email signature blocks for Tierney and Nash that bore the Bank A logo and listed the business address for Bank A, fraudulent wiring instructions bearing Bank A’s logo and address, and a tax form bearing a tax identification number for Bank A.
O’Callaghan directed the victim-lenders and victim-companies to wire funds to a bank account at Bank A that O’Callaghan controlled and then converted the money for personal expenses, the purchase of an automobile, gambling, travel, and payments to a private club.
In addition to the prison term, Judge Wigenton sentenced O’Callaghan to three years of supervised release.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Acting Inspector in Charge Rodney M. Hopkins in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit.
Union County Man Charged with Illegal Possession of AmmunitionRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man was indicted today for illegal possession of ammunition, Acting U.S. Attorney Rachael A. Honig announced.
Kevin Cordeiro, 34, of Elizabeth, New Jersey, has been indicted by a federal grand jury for possessing ammunition after having been previously convicted of a felony offense.
According to documents filed in this case and statements made in court:
On Feb. 27, 2021, Cordeiro fired multiple gunshots toward an occupied vehicle that was parked on Westfield Avenue in Elizabeth. Law enforcement recovered eight .45 caliber shell casings from the shooting scene. After the shooting, Cordeiro fled to Florida and was arrested by the U.S. Marshals Service on March 29, 2021. Cordeiro was previously convicted of second-degree robbery in New Jersey Superior Court, for which he was sentenced to six years in prison.
The charged offense carries a maximum sentence of 10 years in prison and a fine of up to $250,000.
Cordeiro was first charged by federal criminal complaint and had an initial appearance in the District of New Jersey before U.S. Magistrate Judge Andre Espinosa via video conference on April 29, 2021. He was detained without bail.
Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Acting Special Agent in Charge Craig B. Kailimai; special agents of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Susan A. Gibson; the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo; and the Elizabeth Police Department, under the direction of Chief Giacomo Sacca, with the investigation leading to this charge. She also thanked the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos, Jr., for their assistance with this investigation.
This case is a part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities.
The government is represented by Assistant U.S. Attorneys Robert Frazer and Samantha C. Fasanello of the U.S. Attorney’s Office in Newark.
The charge and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Two New York Men Charged with Scheme to Steal Checks and Defraud BanksRead the Press Release
NEWARK, N.J. – Two New York men were arrested today for their participation in a scheme to steal and alter checks from the mail and engage in bank fraud, Acting U.S. Attorney Rachael A. Honig announced.
Nigel Lynch, 19, of Yonkers, New York, and Alique Jordan Clarke, 20, of Bronx, New York, are each charged by complaint with one count of conspiracy to commit bank fraud. They are scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge Edward Kiel.
According to documents filed in this case and statements made in court:
From February 2020 to November 2020, Lynch, Clarke, and others conspired to steal checks from mailboxes in Morris, Essex, Somerset, and Passaic counties, alter the stolen checks, and deposit the altered checks into bank accounts controlled by Lynch, Clarke and their conspirators. The investigation has identified over 294 checks with a face value of over $1.3 million that have been stolen, altered, and deposited in accounts controlled by Lynch, Clarke, and their conspirators.
The conspiracy to commit bank fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine.
Acting U.S. Attorney Honig credited special agents of the U.S. Postal Inspection Service Newark Division, under the direction of Acting Inspector in Charge Rodney M. Hopkins, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Vijay Dewan of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Passaic County Man Charged for Role in Fentanyl DistributionRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was arrested and charged with the conspiring to distribute narcotics after he purchased a large quantity of fentanyl, Acting U.S. Attorney Rachael A. Honig announced today.
Ruddy Manuel Santos Corcino, 32, of Passaic, New Jersey, is charged by complaint with one count of conspiracy to distribute fentanyl. He appeared by videoconference before U.S. Magistrate Judge Edward S. Kiel and was released on home confinement.
According to documents filed in this case and statements made in court:
On May 4, 2021, law enforcement officers conducted surveillance in the area of West 183rd Street and University Avenue in Bronx, New York, and observed Corcino arrive in a white Acura SUV and take a wad of currency and approach the front driver side of a black Toyota Camry. Law enforcement officers then observed Corcino hand the driver of the Camry (Individual-3) the wad of currency in exchange for a heavy-weighted reusable Shoprite bag. Law enforcement officers approached the Camry, detained both Corcino and Individual-3, and retrieved the bag from Corcino. The bag contained approximately three kilograms of suspected narcotics. Law enforcement officers also recovered the currency from Individual-3 and determined that Individual-3 was in possession of approximately $4,000. A field-test confirmed that the suspected narcotics in the bag contained a detectable amount of fentanyl.
The count of conspiracy to distribute fentanyl carries a mandatory minimum penalty of 10 years in prison, a maximum penalty of life in prison, and a fine of up to $10 million.
Acting U.S. Attorney Honig credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Cassye Cole of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
California Man Sentenced to Five Years in Prison for Role in Drug ConspiracyRead the Press Release
TRENTON, N.J. – A California man was sentenced today to 60 months in prison for his role in a drug distribution conspiracy connected to the seizure of fentanyl and heroin at a New Jersey rest stop last year, Acting U.S. Attorney Rachael A. Honig announced today.
Luis Aponte, 50, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiracy to distribute fentanyl and heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
According to the documents filed in the case and statements made in court:
On March 1, 2019, Aponte drove a tractor-trailer truck to a rest stop in Bloomsbury, New Jersey. The next day, he met his co-defendant, Denny Diaz, 31, of Philadelphia, Pennsylvania, in a car and gave Diaz approximately six kilograms of fentanyl. Both men were arrested shortly thereafter. Law enforcement officers searched Aponte’s truck at the rest stop and found an additional two kilograms of fentanyl and 11 kilograms of heroin inside. Diaz pleaded guilty in September 2019 and was sentenced on May 26, 2020, to 33 months in prison.
In addition to the prison term, Judge Sheridan sentenced Aponte to three years of supervised release.
Acting U.S. Attorney Honig credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Raymond P. Donovan, New York Division; New York City Police Commissioner Dermot F. Shea; and New York State Police Superintendent Keith M. Corlett with the investigation leading to today’s sentencing. This case is being investigated by the DEA’s New York Drug Enforcement Task Force, comprising agents and officers of the DEA, New York City Police Department and New York State Police.
The government is represented by Assistant U.S. Attorney Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit.
Arizona Man Sentenced to 46 Months in Prison for Conspiring to Distribute Five Kilograms of FentanylRead the Press Release
NEWARK, N.J. – An Arizona man was sentenced today to 46 months in prison for conspiring to distribute fentanyl and for possessing with intent to distribute fentanyl, Acting U.S. Attorney Rachael Honig announced.
Jose Manuel Ramos Lemus, 51, a citizen of Mexico residing in Arizona, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an indictment charging him with conspiracy to distribute and possess with the intent to distribute 400 grams or more of fentanyl and possession with intent to distribute 400 grams or more of fentanyl. Judge Cecchi imposed the sentence today by videoconference.
According to documents filed in this case and statements made in court:
On July 6, 2019, Ramos Lemus arrived at the Jersey Gardens Mall to meet with a confidential source (CS). In the parking lot of the mall, Lemus assured the CS that he had five kilograms of China White heroin for distribution. After leaving the vehicle, Ramos Lemus returned with a duffle bag containing five kilograms of fentanyl and was arrested.
In addition to the prison term, Judge Cecchi sentenced Ramos Lemus to three years of supervised release.
Acting U.S. Attorney Rachael A. Honig credited special agents of the Drug Enforcement Administration, under the direction of Special Agent Susan A. Gibson, with the investigation leading to today’s sentencing.
The government is represented by Assistant United States Attorney Lauren E. Repole of the Economic Crimes Unit.
Union County Man Admits Receipt of Child PornographyRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man today admitted receiving images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.
Joseph Hinksmon, 41, of Cranford, New Jersey, pleaded by videoconference before U.S. District Judge Claire C. Cecchi to one count of an indictment charging him with receipt of child pornography.
According to documents filed in this case and statements made in court:
From July 10, 2019, through July 24, 2019, Hinksmon accessed the internet to download and receive videos and images of child sexual abuse to his personal hard drive. Hinksmon’s computer devices contained more than 600 images of child sexual abuse that Hinksmon had downloaded from the internet, including images of prepubescent children.
The charge of receiving child pornography carries a mandatory minimum sentence of five years in prison, a maximum of 20 years in prison, and a $250,000 fine. Hinksmon will be required to register as a sex offender. Sentencing is scheduled for Sept. 23, 2021.
Acting U.S. Attorney Rachael A. Honig 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 John Wilson Jr. of the Criminal Division in Newark.
Pennsylvania Man Charged with Conspiring to Distribute 430 Kilograms of KhatRead the Press Release
NEWARK, N.J. – A Pennsylvania man was charged with conspiring to distribute 430 kilograms of khat imported into Newark International Airport, Acting U.S. Attorney Rachael A. Honig announced today.
Azeez Adebari, 46, of Harrisburg, Pennsylvania, is charged by complaint with one count of conspiring to distribute and to possess with intent to distribute a quantity of a mixture containing cathinone and cathine. He made his initial appearance by videoconference before U.S. Magistrate Judge Edward S. Kiel on May 3, 2021, and was detained.
According to documents filed in this case and statements made in court:
On April 21, 2021, U.S. Customs and Border Protection (CBP) officers identified a freight container suspected of containing khat that had arrived by air at Newark International Airport. Khat is a flowering shrub that is abused for its stimulant-like effects and has no accepted medical use in the United States. Khat contains two active ingredients that are controlled substances: cathinone, a Schedule I controlled substance, and cathine, a Schedule II controlled substance.
CBP officers determined that the shipment contained approximately 430 kilograms of khat. The shipping manifest and other customs documentation identified the contents of the shipment as clothing, and ground melon and pepper, among other things. On May 3, 2021, Adebari, who was listed as the consignee on the shipment, arrived at Newark Airport to pick up the khat shipment and was arrested.
The count with which the defendant is charged carries a maximum potential penalty of 20 years in prison and a maximum fine of $1 million.
Acting U.S. Attorney Honig credited special agents of Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, and officers of CBP, under the direction of Marty Raybon, Acting Director of Field Operations, New York Field Office, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Angelica M. Sinopole of the Organized Crime & Gangs Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Passaic County Man Sentenced to 21 Months in Prison for Assault with a Dangerous Weapon at Delaware Water GapRead the Press Release
TRENTON, N.J. – A Passaic County, New Jersey, man was sentenced today to 21 months in prison for assaulting with a dangerous weapon two people who were swimming in the Delaware River, Acting U.S. Attorney Rachael A. Honig announced.
Jeffrey A. Mulcahy, 59, of Wayne previously pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with one count of assault with a dangerous weapon with intent to do bodily harm. Judge Shipp imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
On Sept. 2, 2019, two individuals (Victim 1 and Victim 2) were swimming in the Delaware River in the Kittatinny Point area of the Delaware Water Gap in Warren County, New Jersey. Mulcahy approached them and began speaking to them about fishing. After a few minutes, Mulcahy departed the area, returning approximately 15 minutes later, holding a can of beer. He continued to talk to Victim 1 and Victim 2 about fishing, however, Mulcahy appeared agitated. Victim 1 and Victim 2 had gotten out of the river and were standing near the riverbed. Mulcahy removed what appeared to be a handgun from his waistband and pointed it at Victim 2’s head. While pointing the gun at Victim 2, Mulcahy ordered Victims 1 and 2 to the ground. Mulcahy then pointed the gun at Victim 1 and stated that he was going to kill Victim 1 if Victim 1 did not listen to him. Mulcahy struck Victim 1 in the head and neck area with the handgun. Mulcahy then began pulling rope out of his pocket and attempted to get Victim 1’s hands behind Victim 1’s back. Victim 1 resisted and was able to take Mulcahy to the ground, where the two began a physical struggle. Mulcahy’s handgun fell to the ground and Victim 2 recovered it and left to contact law enforcement. After the brief physical altercation, Victim 1 ran off to a nearby picnic area to locate Victim 2. Mulcahy departed the area and was later apprehended by law enforcement officers in Hackettstown, New Jersey. Subsequent investigation of the handgun that Victim 2 recovered from Mulcahy revealed that it was a pellet gun.
In addition to the prison term, Judge Shipp sentenced Mulcahy to three years of supervised release and fined him $2,000.
Acting U.S. Attorney Honig credited park rangers of the U.S. National Park Service, under the direction of Chief Ranger Eric Lisnik, the Hackettstown Police Department, under the direction of Chief James A. Macaulay, and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo, Deputy Chief of the Criminal Division in Newark.
Passaic County Couple Sentenced for Roles in $4.5 Million Food Stamps Fraud SchemeRead the Press Release
NEWARK N.J. – A Passaic County, New Jersey, couple were sentenced to prison today for engaging in a food stamps fraud scheme, Acting U.S. Attorney Rachael A. Honig announced.
Ibrahim Zughbi, 67, of Wayne, New Jersey, was sentenced to 41 months in prison and his wife, Miriam Zughbi, 63, also of Wayne, was sentenced to 24 months in prison. Ibrahim Zughbi previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with Supplemental Nutrition Assistance Program (SNAP) benefit fraud and money laundering. Miriam Zughbi previously pleaded guilty to an information charging her with conspiracy to defraud the United States through SNAP benefit fraud. U.S. District Judge Anne E. Thompson imposed the sentences today in Trenton federal court.
According to documents filed in these cases and statements made in court:
From January 2014 to January 2018, the defendants owned and worked at Jamaica Meat Market, a medium-size grocery store in Paterson, New Jersey, that was authorized to accept benefits provided by SNAP, formerly known as the Food Stamp Program. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for SNAP benefits. They may not exchange SNAP benefits for cash. While the Zughbis ran the store, another individual owned the store and was the person registered with SNAP. From between 2014 and 2018, through unlawfully exchanging SNAP benefits for cash, Ibrahim and Miriam Zughbi defrauded SNAP more than $4.5 million.
Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the amount is credited to the retailer’s designated bank account. In addition to the high volume of SNAP benefits redemptions for Jamaica Meat Market indicating fraud, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of a confidential source who, at the direction of law enforcement, engaged in 16 “purchases” at Jamaica Meat Market where both defendants exchanged money for SNAP benefits.
Ibrahim Zughbi had previously participated in SNAP when he was the owner of Neighborhood Supermarket, a grocery store that operated out of the same location as the Jamaica Meat Market. In March 2011, the USDA had permanently disqualified Ibrahim Zughbi from SNAP when Zughbi and the Neighborhood Supermarket were administratively charged with SNAP violations. Another individual took over the business, changed its name to Jamaica Meat Market, and certified in writing to the USDA that Ibrahim Zughbi would have nothing to do with the business or its participation in the program. Ibrahim Zughbi continued to run Jamaica Meat Market, and he and his wife continued to exchange cash for SNAP benefits.
To conceal the proceeds of the SNAP benefit fraud, from January 2014 to January 2018, Ibrahim Zughbi wrote inflated checks from the Jamaica Meat Market account containing the SNAP fraud proceeds to a supplier, and then received funds back in cash from the supplier. Zughbi also issued checks to family members with no apparent connection to Jamaica Meat Market.
In addition to the prison term, Judge Thompson sentenced Ibrahim Zughbi and Miriam Zughbi to three years of supervised release and ordered them to pay restitution of $4.66 million.
Acting U.S. Attorney Honig credited special agents of the U.S. Department of Agriculture –Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, and Homeland Security Investigations (HSI), Newark, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to today’s sentencings. She also thanked the Passaic County Prosecutor’s Office, the Wayne Township Police Department and the Paterson Police Department for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Sean M. Sherman of the Opioid Abuse Prevention & Enforcement in Newark.
Essex County Man Sentenced to Five Years in Prison for Possessing Firearm in Furtherance of Drug Trafficking CrimeRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 60 months in prison for possessing a handgun in furtherance of a drug trafficking crime, Acting U.S. Attorney Rachael A. Honig announced today.
Ricky Terrell, 24, of Newark, previously pleaded guilty before U.S. District Court Judge John Michael Vazquez via videoconference to a one-count Information charging him with possession of a firearm in furtherance of a drug trafficking crime, specifically the possession with intent to distribute heroin and cocaine. Judge Vazquez imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Stephen Crane Village is a public housing complex in Newark, on the border with Belleville. From February 2019 through February 2020, law enforcement officers investigated individuals that controlled an open-air drug market that operated within Stephen Crane Village.
Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement determined that numerous individuals conspired to distribute and did actually distribute narcotics, including heroin, fentanyl, cocaine and cocaine base, in and around Stephen Crane Village.
On Feb. 25, 2020, law enforcement lawfully searched Terrell’s residence and found heroin and cocaine, a Smith & Wesson .40 caliber handgun, and numerous rounds of ammunition.
In addition to the prison term, Judge Vazquez sentenced Terrell to three years of supervised release.
Acting U.S. Attorney Honig credited special agents and task force officers with the ATF, Newark Division, under the direction of Acting Special Agent in Craig B. Kailimai; the Belleville Police Department, under the direction of Chief Mark Minichini; special agents and task force officers of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; the Newark Police Department, under the direction of Public Safety Director Brian O’Hara; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; and the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, with the investigation leading to today’s sentencing. She also thanked the U.S. Marshals Service, the Nutley Police Department, the Bloomfield Police Department, the West Orange Police Department, the Verona Police Department, the Orange Police Department, and the Bergen County Sheriff’s Office for their assistance with this case.
This investigation was part of the Newark Violent Crime Initiative (VCI), where the U.S. Attorney’s Office has partnered with state, federal, county, and local law enforcement to investigate crime in Newark and the surrounding cities. This case is also conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorney Tracey Agnew of the Organized Crime and Gangs Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.
Bergen County Man Admits Engaging in Conspiracy to Defraud Former EmployersRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man today admitted engaging in a conspiracy to divert to his personal use over $516,000 in customer payments owed to his former employers, Acting U.S. Attorney Rachael A. Honig announced.
Joseph Spaccavento, 41, of Ramsey, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with one count of conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
From February 2013 through September 2018, Spaccavento conspired with a former co-worker, Melissa Corso, to divert customer payments owed to their former employers for their own use and benefit. Corso instructed certain customers of the victim companies to submit their payments to a PayPal account (the “Scheme Account”) registered in Spaccavento’s name and associated with Corso’s work email address. The account was not authorized by the victim companies.
Spaccavento and Corso caused withdrawals to be made from the Scheme Account and diverted the funds to the personal PayPal accounts of Spaccavento, Corso, and others. Spaccavento and Corso also caused transfers of funds from the Scheme Account to various commercial retailers to pay for personal expenses. Purchases from these commercial retailers were shipped to the home and work addresses of Spaccavento, Corso, and others. The victim companies lost $516,857.
Corso was arrested on Feb. 5, 2021, and charged by complaint with two counts of wire fraud for diverting customer payments owed to the victim companies to the Scheme Account for personal use. Those charges and allegations against Corso contained in the complaint, which is still pending, are merely accusations, and Corso is presumed innocent unless and until proven guilty.
The conspiracy to commit wire fraud count is punishable by a maximum of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. Sentencing is scheduled for Sept. 9, 2021.
Acting U.S. Attorney Honig 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 Jennifer S. Kozar of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Former Financial Advisor Sentenced to 78 Months in Prison for Role in $2 Million Ponzi Scheme Targeting Elderly InvestorsRead the Press Release
TRENTON, N.J. – A Somerset County, New Jersey man, was sentenced today to 78 months in prison for engaging in a $2 million Ponzi scheme targeting elderly investors and for subscribing to a false tax return, Acting U.S. Attorney Rachael A. Honig announced.
Daniel Rivera, 51, of Hillsborough, New Jersey, a former financial advisor, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging him with one count of wire fraud and one count of subscribing to a false tax return. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From 2008 through 2017, Rivera solicited primarily elderly investors to invest their money in a company called Robbins Lane Properties Inc. Rivera represented to investors that Robbins Lane was a company staffed by experienced real estate professionals that invested in real estate ventures. Rivera told investors that by investing in Robbins Lane, senior investors would share in the company’s investment portfolio by lending it money to invest in real estate. Rivera further promised investors that they would receive a guaranteed monthly income, and that the company’s rate of return was based on secure real estate investments in the company’s portfolio. In reality, Robbins Lane had no employees, no real estate portfolio, and the monies used to pay investors as a purported return on their investments was from funds he received from other investors. Rivera also used funds sourced from investors to pay his personal and unrelated business expenses, including paying his child’s college tuition and sorority fees.
During the course of the fraudulent scheme, on March 5, 2014, Rivera filed with the IRS a federal income tax return that underreported his taxable income by $33,276.
In addition to the prison term, Judge Thompson sentenced Rivera to three years of supervised release and ordered him to pay restitution of $1.47 million to his victims and $284,863 to the IRS.
Acting U.S. Attorney Honig 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 IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Fraud Unit in Newark.
Two Men Sentenced for Roles in Narcotics Distribution OffenseRead the Press Release
NEWARK, N.J. – Two men were sentenced to federal prison terms for possessing a large quantity of cocaine, Acting U.S. Attorney Rachael A. Honig announced today.
Jose Reyes, 60, of the Dominican Republic, was sentenced by videoconference before Chief U.S. District Judge Freda L. Wolfson to 57 months in prison. Ramon Fabian-Pena, aka “Rafael,” 60, of Passaic County, New Jersey, was sentenced by Judge Wolfson on April 21, 2021, to 30 months in prison.
Reyes and Fabian-Pena each previously pleaded guilty to an information charging them with one count of conspiracy to distribute cocaine and one count of possession to distribute cocaine.
According to the documents filed in this case and statements made in court:
On Jan. 7, 2020, Reyes traveled from New York to Passaic, New Jersey, to oversee the delivery of approximately six kilograms of cocaine. At the direction of Reyes, Fabian-Pena took possession of the narcotics from another individual. Law enforcement officers were conducting surveillance of the narcotics transaction and recovered a bag containing approximately six kilograms of cocaine. A lawful search of messages contained on Reyes’ cell phone revealed that Reyes coordinated the narcotics transaction.
In addition to the prison terms, Judge Wolfson sentenced each defendant to three years of supervised release.
Acting U.S. Attorney Honig credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s sentencing. She also thanked members of the Mercer County Prosecutor’s Office and the Hamilton Township Police Department for their assistance.
This investigation was conducted by a DEA New Jersey Task Force, led by the New Jersey State Police, and composed of DEA special agents and officers from various county and local police departments.
The government is represented by Assistant U.S. Attorney Cassye Cole of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.
Three Additional Individuals Admit Participating in $10 Million Multi-State Bank Fraud ConspiracyRead the Press Release
TRENTON, N.J. – A New York woman, an Ohio man, and a New Jersey man admitted their roles in a large-scale conspiracy to commit bank fraud in states including New Jersey, New York, Pennsylvania, Maryland, Virginia, and Michigan, Acting Attorney Rachael A. Honig announced today.
Erm Ayaz, 36, of Bayside, Brooklyn, pleaded guilty today by videoconference before Chief Judge Freda L. Wolfson to an information charging her with one count of conspiracy to commit bank fraud. Syed Abbas, 32, of Westerville, Ohio, and Habib Majid, 35, of North Brunswick, New Jersey, pleaded guilty before Chief Judge Wolfson on April 27, 2021, and April 21, 2021, respectively, to informations that charged them each with one count of conspiracy to commit bank fraud.
Ayaz, Abbas, and Majid are among seven individuals that have pleaded guilty as part of the scheme.
According to documents filed in this case and statements made in court:
From 2018 through April 2020, Ayaz, Majid, Abbas, and others conspired to defraud several major banks and electronic merchant processors. They established bank accounts associated with sham entities that had no legitimate purpose and issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. The conspirators also conducted numerous fraudulent credit card and debit card transactions between shell companies to credit payee accounts and fraudulently overdraw payor accounts. Members of the conspiracy also used these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization, where no prior legitimate transaction had occurred.
Members of the criminal organization withdrew the “existing” funds (through ATMs or bank tellers) that banks and/or merchant processors had credited to the payee bank accounts at the time of the fraudulent transaction. Because the conspirators withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks and merchant processors were left with substantial losses.
The investigation revealed that Ayaz, Majid, Abbas, and other conspirators attempted to defraud financial institutions and merchant processors of approximately $10 million dollars and did in fact cause a loss of approximately $3.5 million.
The conspiracy charges which Ayaz, Abbas, and Majid pleaded guilty carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or loss to others, whichever is greater. Ayaz’s sentencing is scheduled for Sept. 14, 2021. Abbas’ and Majid’s sentencings are scheduled for Sept. 9, 2021.
Four co-defendants – Awaise Dar, Rana Sharif, Naveed Arif, Ali Abbas – have previously pleaded guilty to informations charging them with conspiracy to commit bank fraud in connection with the scheme.
Acting U.S. Attorney Honig credited inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins 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; the Social Security Administration Office of Inspector General, under the direction of John F. Grasso; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the guilty pleas.
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.
Ten Members and Associates of ‘Uptop’ Street Gang Charged in Drug Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – Ten people have been charged for their roles as members and associates of “UpTop,” a Paterson, New Jersey-based street gang involved in the distribution of drugs, including heroin, fentanyl, and cocaine base, Acting U.S. Attorney Rachael A. Honig announced today.
Corey Boyd, 23; Leo Edwards, 27; Kwame Ellis, 30; Sean Morgan, 21; and Brent Staton, 20; and Kassan Drakeford, 31; all of Paterson; and Stefan Cameron, 25, of Hackensack, New Jersey, are charged by complaint with one count of conspiracy to distribute heroin, fentanyl and cocaine base. Six of the defendants were arrested this morning and are scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge Mark Falk. Ellis remains at large.
Also charged in the same complaint, and already in state custody on other charges, are Devin Kyle, 21; Edwin Diaz, 19; and Anthony Herring, 38, all of Paterson. They will have their initial appearances on a date to be determined.
According to the documents filed in this case and statements made in court:
The defendants are all members and associates of the UpTop street gang, which operates primarily in the Fourth Ward of Paterson. Through numerous controlled purchases of drugs, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone records, the investigation uncovered evidence that from January 2020 through April 29, 2021, the defendants conspired to distribute heroin, fentanyl and cocaine base.
UpTop derived its name from its location; its turf is colloquially described as being "up the hill" in the Fourth Ward of Paterson. Members of UpTop sell heroin that is frequently mixed with fentanyl, a potent, synthetic opioid that is approximately 50 times stronger than heroin.
Members and associates of UpTop sometimes compete with each other for narcotics customers within the gang's turf. However, the investigation has shown that UpTop members work together to ensure that outsiders are unable to distribute narcotics within the turf. Members and associates of UpTop work together to preserve and protect the power, territory, and reputation of the gang, and to hinder, obstruct, and prevent law enforcement officers from identifying their criminal activities, from apprehending offenders of the crimes, and from successfully prosecuting and punishing the offenders.
The count of conspiracy charged in the complaint carries a maximum penalty of 40 years in prison and a fine of at least $5 million, with a mandatory minimum prison sentence of five years.
Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Craig B. Kailimai; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; officers of the Paterson Police Department, under the direction of Police Director Jerry Speziale and Police Chief Ibrahim M. Baycora; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff’s Department, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. She also thanked the U.S. Marshals Service for their assistance with the case.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Senior Trial Counsel Francesca Liquori and Special Assistant U.S. Attorney Kendall Randolph of the Organized Crime/Gangs 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.
Georgia Man Charged with Sending Anonymized Emails Threatening Violence Against Executive Officer of New Jersey CompanyRead the Press Release
NEWARK, N.J. – A Georgia man was arrested today on charges that he made interstate threats to an executive officer of a New Jersey based company, Acting U.S. Attorney Rachael A. Honig announced.
Alan Wallace, 58, of Cumming, Georgia, is charged by criminal complaint with two counts of making interstate threats. He is scheduled to appear today before U.S. Magistrate Judge Russell G. Vineyard in Atlanta federal court.
According to the complaint:
From January 2021 to March 2021, Wallace, a former employee of Company-1, sent threatening email communications to Victim-1, an executive officer of Company-1, a publicly traded company with headquarters in New Jersey. Victim-1’s Company-1 email account received the emails every few days beginning on Jan. 11, 2021, and continuing through early March 2021, with more sporadic emails arriving thereafter. The emails were sent to Victim-1 from an anonymous email service.
The emails threatened violence to Victim-1 and to Victim-1’s family if Company-1’s stock did not exceed a certain share value within 30 days. The threats contained ominous subject lines such as, “Gun or Knife,” “Blood Bath,” and “You about sealed your family’s fate,” and content consistent with those subject lines. For example, an email received on Jan. 31, 2021, read: “[Victim-1] - you are about to lose family due to your actions hurting others and inaction to elevate the stock price. Weep and remember.”
The counts of making interstate threats each carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greater.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark and Special Agent in Charge Chris Hacker in Atlanta, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys David W. Feder and Anthony P. Torntore of the U.S. Attorney’s Cybercrime Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is are considered innocent unless and until proven guilty.
Convicted Camden County Felon Admits Illegally Possessing Eight FirearmsRead the Press Release
CAMDEN, N.J. – A Camden County man today admitted illegally possessing eight firearms, Acting U.S. Attorney Rachael Honig announced.
Kareem McCargo, 38, of Camden, pleaded guilty to a superseding information charging him with one count of being a felon in possession of a firearm before U.S. District Judge Robert B. Kugler in Camden federal court.
According to documents filed in this case and statements made in court:
On Oct. 31, 2018, Camden County Police officers encountered McCargo as he exited his vehicle. Upon seeing the officers, McCargo fled, but was ultimately apprehended. A search of McCargo’s vehicle revealed eight firearms and over 400 rounds of ammunition. McCargo admitted to knowingly possessing all eight firearms and ammunition. He further admitted that at the time he possessed these firearms, he knew that he was a convicted felon.
The charge of possession of a weapon by a convicted felon carries a maximum penalty of 10 years in prison and a fine of up to $250,000. Sentencing is scheduled for Sept. 8, 2021.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local, and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
Acting U.S. Attorney Honig credited special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms & Explosives, under the direction of Acting Special Agent in Charge Craig B. Kailimai; and the Camden County Police Department, under the direction of Police Chief Gabriel Rodriguez, with the investigation leading to today’s guilty plea. She also thanked the Camden County Prosecutor’s Office and the Drug Enforcement Administration for their assistance with the investigation.
The government is represented by Assistant U.S. Attorney Martha K. Nye of the of the U.S. Attorney’s Office’s Criminal Division in Trenton.
12 Members and Associates of ‘Harlem World/12th Avenue’ Street Gang Charged in Drug Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – Twelve people have been charged for their roles as members and associates of “Harlem World/12th Avenue,” a Paterson, New Jersey-based street gang involved in the distribution of drugs, including cocaine base, heroin, and fentanyl, Acting U.S. Attorney Rachael A. Honig announced today.
Michael Booker, 38; Kenron Boyd, 28; Ronald Hammond, 53; Damir Horne-Casper, 28; Marcell Jackson, 26; Roger Jacobs, 25; Damond King, 31; Naquis Martin, 24; Korri Muckle, 40; Troy Taylor, 35; and Shamir Thompson, 26, all of Paterson, New Jersey; and Tahj Smith, 20, of Haledon, New Jersey, are each charged by complaint with one count of conspiracy to distribute heroin, fentanyl and cocaine base.
King, who is already in custody on state charges, is additionally charged by complaint with one count of possession of a firearm by a convicted felon. Booker, Jackson, and Taylor are at large. The remaining eight defendants who were arrested today will appear by videoconference this afternoon before U.S. Magistrate Judge Mark Falk.
According to the documents filed in this case and statements made in court:
The defendants are members and associates of the Harlem World/12th Avenue street gang, which operates primarily around 12th Avenue and East 23rd Street in Paterson. Through numerous controlled purchases of drugs, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone records, the investigation uncovered evidence that from February 2020 through April 26, 2021, the defendants conspired to distribute heroin, fentanyl, and cocaine base.
Harlem World/12th Ave derives its name from a reference to an area in Paterson on
and around 12th Avenue. An individual is eligible to join Harlem World/ 12th Avenue if he resides within the gang's turf and is willing to participate in street level narcotics sales. Members of the gang distribute decks of heroin that are almost always stamped or labeled with various “brand names” in colored ink to allow dealers and purchasers alike to differentiate and market batches of heroin. For example, on various occasions, glassine envelopes were stamped “Coca Cola,” “Larry Bird,” “Kobe Bryant,” “Paid in Full,” “Best Buy,” and “K.O.,” and have since October 2020 been linked to over 10 fatal overdoses.
The count of conspiracy to distribute at least 28 grams of cocaine base and a quantity of heroin and fentanyl carries a maximum penalty of 40 years in prison and a fine of at least $5 million. The count of possession of a firearm by a convicted felon carries a maximum of 10 years in prison and a fine of $250,000.
Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Craig B. Kailimai; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; officers of the Paterson Police Department, under the direction of Police Director Jerry Speziale and Police Chief Ibrahim M. Baycora; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff’s Department, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. She also thanked the U.S. Marshals Service for their assistance with the case.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Special Assistant U.S. Attorney Kendall Randolph of the Organized Crime/Gangs 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.
Salem County Man Charged with Possession of Ammunition by Convicted FelonRead the Press Release
CAMDEN, N.J. – A Salem County man made his initial appearance today on charges of illegally possessing ammunition, Acting U.S. Attorney Rachael A. Honig announced.
Sharif Hallman, 38, of Carneys Point, New Jersey, is charged by complaint with one count of possession of ammunition by a convicted felon. He appeared by videoconference before U.S. Magistrate Judge Karen M. Williams and was detained.
According to documents filed in this case and statements made in court:
On March 7, 2021, Penns Grove and Carneys Point police officers responded to an apartment complex in Carneys Point in response to a 911 call reporting a shooting. Officers encountered Hallman, a 13-time convicted felon, with a bicycle. Additional information from dispatchers reported that the suspected shooter was on a bike. Officers attempted to detain Hallman. A pistol became dislodged from Hallman and landed on the ground. The pistol had one round in the chamber, and an extended magazine containing another 22 rounds of ammunition.
The felon in possession of ammunition charge carries a maximum penalty of 10 years in prison and a fine of up to $250,000.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Camden Field Office, under the direction of Acting Special Agent in Charge Craig B. Kailimai in Newark; officers of the Penns Grove Police Department, under the direction of Officer in Charge Lt. Jason G. Spera; officers of the Carneys Point Police Department, under the direction of Chief of Police Dale VanNamee; and the Salem County Prosecutor’s Office, under the direction of Prosecutor John T. Lenahan, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
The charge and allegation contained in the complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
Owner of Diving School Admits Wire FraudRead the Press Release
CAMDEN, N.J. – The president and CEO of a commercial diving school today admitted fraudulently obtaining funding from the U.S. Department of Education (DOE) and the U.S. Department of Veterans Affairs (VA) for the school and its students, Acting U.S. Attorney Rachael A. Honig announced.
Tamara Brown, 57, of Haddon Heights, New Jersey, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging her with one count of wire fraud.
According to documents filed in this case and statements made in court:
From January 2012 through July 2018, Brown owned a private, for-profit commercial diving school, which offered educational programs in commercial diving and underwater welding and salvage. As a for-profit institution, the diving school was required to be accredited through an approved accreditation body to be eligible to receive tuition funds from the DOE’s Higher Education Act’s programs. The VA also relies upon the accreditation in evaluating the eligibility of veteran students to receive student aid funding. Given that more than 80 percent of the diving school’s students received financial assistance from the Department of Education, the school stood to lose its largest source of tuition funding for its students if it lost its accreditation.
Prior to 2012, the diving school had been properly accredited. However, when renewing the diving school’s accreditation that year, Brown submitted fraudulent information to the accrediting authority. For example, Brown reported rates of employment of the school’s graduates of between 81 to 84 percent, when the employment rates were closer to 50 to 60 percent, significantly lower than the rate required to maintain accreditation. Brown also provided fraudulent information pertaining to the school’s holding of “advisory board” meetings required for accreditation to ensure that the school’s curriculum would educate students to meet the current demands of the industry and prospective employers. In the school’s accreditation application, Brown reported holding advisory board meetings on various dates and also submitted what purported to be minutes of nine such board meetings. The diving school did not have a formal advisory board and did not regularly conduct meetings as required. Brown submitted wholly fabricated meeting minutes for at least six of the nine dates listed in the school’s accreditation application and, therefore, did not satisfy the minimum accreditation requirements. The diving school nonetheless continued to regularly receive DOE funds via wire transfers, including a wire transfer which occurred on Jan. 18, 2017.
The wire fraud charge to which Brown pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss resulting from the offense. Under the terms of the plea agreement, Brown must pay restitution of $1.1 million. Sentencing is scheduled for Aug. 30, 2021.
Acting U.S. Attorney Honig credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia, the Philadelphia Resident Agency of the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Terry V. Harris, and the Northeast Field Office of the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S Attorney’s Office in Camden.
Iowa Man Sentenced to 25 Years in Prison for Producing and Possessing Child PornographyRead the Press Release
CAMDEN, N.J. – An Iowa man today was sentenced to 300 months in prison for producing and possessing images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.
Donavon Oliphant, 38, of Independence, Iowa, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of sexual exploitation of a minor and one count of possession of 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 August 2019, Oliphant produced 11 images and four videos of child sexual abuse. The videos depicted sexual acts involving a pre-pubescent child and an adult male. Oliphant then used a peer-to-peer file-sharing program to share these images and videos with an individual located in Gloucester County, New Jersey. When law enforcement accessed Oliphant’s file-sharing account, they found more than 1,700 videos and 200 images of child sexual abuse.
In addition to the prison term, Judge Hillman sentenced Oliphant to a lifetime term of supervised release, ordered him to pay restitution of $3,000, and ordered him to register as a sex offender.
Acting U.S. Attorney Honig credited special agents of 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 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.
Two Paterson Police Officers Charged with Assaulting Victim and Filing False Police ReportRead the Press Release
NEWARK, N.J. – Two Paterson Police Officers are facing civil rights and obstruction of justice charges for allegedly assaulting a victim in Paterson and then lying about it, Acting U.S. Attorney Rachael A. Honig announced.
Paterson Police Officers Kevin Patino, 29, of Paterson New Jersey, and Kendry Tineo-Restituyo, 28, also of Paterson, New Jersey are both charged by complaint with depriving a victim of his Constitutional right to be free from the use of unreasonable force by law enforcement officers and with filing a false police report. Patino surrendered this morning and Tineo-Restituyo is expected to surrender later this morning. The defendants are scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge André M. Espinosa.
“Police officers who abuse their positions to exert power over and injure the citizens they are supposed to protect violate our Constitution and erode trust in our public institutions,” Acting U.S. Attorney Honig said. “The U.S. Attorney’s Office is committed to working closely with the FBI and our state partners to investigate and prosecute these civil rights violations and restore the public trust.”
“Civil rights violations are one of the FBI’s highest priorities, particularly when the allegations involve members of law enforcement,” George M. Crouch Jr., Special Agent in Charge of the FBI, Newark Division, said. “We rely on the police to protect the public. The few who take advantage of this public trust, at any level, will be investigated by the FBI and prosecuted to the full extent of the law.”
According to documents filed in this case and statements made in court:
At approximately 12:30 a.m. on December 14, 2020, in Paterson, Patino and Tineo-Restituyo approached the victim, who was walking with his hands in his pockets. Patino grabbed hold of the victim. When the victim attempted to separate himself, Patino struck the victim in the face and body numerous times. While Patino was striking the victim, Tineo-Restituyo picked the victim up and threw him to the ground. Patino and Tineo-Restituyo then repeatedly struck the victim while he was on the ground.
Patino and Tineo-Restituyo then filed a police report regarding the arrest of the victim, which contained numerous false statements and omissions. For instance, the police report falsely stated that the victim had walked towards the officers “screaming profanities” and “acting belligerent” and that the victim had struck Patino with a closed fist in the chest. None of this was true. The report also omitted the fact that Patino and Tineo-Restituyo continued to strike the victim after the victim was on the ground.
The violation of civil rights count carries a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each of the charges is $250,000.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent In Charge George M. Crouch Jr. in Newark; the New Jersey Attorney General’s Office, under the direction of Attorney General Gurbir Grewal; the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes; and the North Jersey Public Corruption Task Force, composed of members of FBI and New Jersey State Police, with the investigation leading to the charges.
The government is represented by Senior Civil Rights Counsel Joseph Gribko of the U.S. Attorney’s Office’s Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Tennessee Man Admits Committing Wire FraudRead the Press Release
NEWARK, N.J. – A Tennessee man today admitted using a company’s bank information to pay off personal debts, Acting U.S. Attorney Rachael A. Honig announced.
Ketan Ghutadaria, 50, of Johnson City, Tennessee, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
From March 2018 through September 2018, Ghutadaria engaged in a fraudulent scheme to enrich himself by using Company-1’s bank account information to pay off his personal debts, including an automobile loan for the purchase of a 2017 Audi Q7. Ghutadaria contacted companies to whom he owed money and provided those companies with Company-1’s bank account number and routing number. For example, on June 29, 2018, Ghutadaria contacted Bank of America and authorized it to submit an Automated Clearing House (ACH) debit transaction for $53,505 to Company-1’s bank account in New York. The release of those fraudulently obtained funds resulted in Ghutadaria paying off his automobile loan. Ghutadaria fraudulently caused Company-1 to pay off $164,109 of his personal debts.
The count of wire fraud is punishable by a statutory maximum sentence of 20 years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense, whichever is greater. Sentencing is scheduled for Sept. 14, 2021.
Acting U.S. Attorney Honig credited inspectors from the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney Hopkins in Newark, and Inspector in Charge Tommy Coke of the Knoxville Domicile, Atlanta Division; deputy U.S. marshals of the U.S. Marshal Service, under the direction of U.S. Marshal David Jolley, Eastern District of Tennessee; and members of the Hudson County Prosecutor’s Office, Special Investigations Unit, under the direction of the Hudson County Prosecutor Esther Suarez, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Cassye Cole of the U.S. Attorney’s Office’s Criminal Division in Newark.
Mercer County Man Sentenced to 125 Months in Prison for Armed Robbery Spree of Businesses in TrentonRead the Press Release
TRENTON, N.J. – A Mercer County, New Jersey, man was sentenced today to 125 months in prison for nine robberies and two attempted robberies of businesses in Trenton, Acting U.S. Attorney Rachael A. Honig announced.
Derrick T. Beckett, Jr., 23, of Trenton, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of conspiracy to commit Hobbs Act robbery, two counts of Hobbs Act robbery, and one count of attempted Hobbs Act robbery. Judge Thompson imposed sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From July 20, 2017, to Feb. 28, 2018, Beckett committed nine robberies and two attempted robberies of businesses in Trenton. Beckett approached employees of the businesses, brandishing what appeared to be a firearm, but was later determined to be a BB-gun, and demanded money. On multiple occasions Beckett threatened and engaged in violence, both threatening to shoot some victims, and pistol-whipping others when they failed to comply. Beckett stole cash and fled the victim businesses on foot, where he was sometimes met and assisted by a getaway driver.
In addition to the prison term, Judge Thompson sentenced Beckett to three years of supervised release and ordered restitution of $9,100.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s conviction and sentence. She also thanked officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley, and detectives and prosecutors of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri, for their assistance.
The government is represented by Assistant U.S. Attorney Alexander E. Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Four People Admit Roles in Bank Fraud ConspiracyRead the Press Release
NEWARK, N.J. – Four individuals have pleaded guilty to conspiracy to commit bank fraud and related crimes, Acting U.S. Attorney Rachael A. Honig announced today.
Miguel Ortiz, 22, Victor Emilio Mejia Adames, 21, and Tiffany Diaz Fermin, 24, all of Paterson, pleaded guilty by videoconference before U.S. district Judge Kevin McNulty, to conspiracy to commit bank fraud. Brando Mancebo, 21, formerly of Paterson, pleaded guilty by videoconference before Judge McNulty to possession of stolen mail and conspiracy to commit bank fraud. Ortiz and Adames pleaded guilty today; Fermin and Mancebo pleaded guilty last week.
According to documents filed in this case and statements made in court:
Ortiz, Adames, Fermin, Mancebo and others conspired to break into U.S. Postal Service collection boxes in Bergen, Hudson, and Morris counties and steal mail. They agreed to fraudulently deposit stolen checks into bank accounts associated with members of the conspiracy, even though they were not payees on the checks. Members of the conspiracy then withdrew funds from those accounts.
The conspiracy to commit bank fraud charges to which Ortiz, Adames, and Fermin pleaded guilty carries a maximum term of five years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or loss to the victim, whichever is greater. The possession of stolen mail charge to which Mancebo pleaded guilty carries a maximum term of five years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or loss to the victim, whichever is greater. The conspiracy to commit bank fraud charge to which Mancebo pleaded guilty carries a maximum term of 30 years in prison and a maximum fine of $1 million, or twice the gross profit to the defendant or loss the victim, whichever is greater.
Acting U.S. Attorney Honig credited inspectors of U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Rodney M. Hopkins in Newark, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Katherine Calle of the Organized Crime and Drug Enforcement Task Force/Narcotics Unit in Newark.
Essex County Man Admits Gun Possession and Drug Distribution ChargesRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted illegally possessing a firearm and distributing methamphetamine, Acting U.S. Attorney Rachael A. Honig announced.
Kevon Anderson, 25, of Newark, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to a superseding information charging him with one count of gun possession by a convicted felon and one count of narcotics trafficking.
According to documents filed in this case and statements made in court:
On Sept. 10, 2019, Anderson was arrested by Newark Police Department officers and found to be in possession of a .38 caliber Smith and Wesson Bodyguard handgun and seven rounds of .38 caliber ammunition. Anderson was also carrying 19 rounds of 9-millimeter ammunition, and he had several ecstasy (methamphetamine) pills intended for distribution. Anderson had been convicted of a felony in 2018 for resisting arrest.
The charge of being a felon in possession of a firearm carries a maximum penalty of 10 years in prison and a fine of up to $250,000. The narcotics trafficking charge carries a maximum penalty of 20 years in prison and a fine of up to $1 million. Sentencing is scheduled for Sept. 15, 2021.
Acting U.S. Attorney Honig credited the officers of the Newark Police Department, under the direction of Public Safety Director Brian O’Hara, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sammi Malek of the Criminal Division in Newark.
Essex County Man Admits Drug Conspiracy and Distribution of Crack in Stephen Crane VillageRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted distributing and conspiring with others to distribute more than 28 grams of cocaine base, Acting U.S. Attorney Rachael A. Honig announced.
Nasir Williams, 24, of Newark, pleaded guilty by videoconference before U.S. District Court Judge John Michael Vazquez to an information charging him with one count each of conspiracy to distribute and possess with intent to distribute 28 grams or more of cocaine case and distribution of 28 grams or more of cocaine base.
According to documents filed in this case and statements made in court:
Stephen Crane Village is a public housing complex in Newark, on the border with Belleville, New Jersey. From at least February 2019 through February 2020, law enforcement officers investigated individuals that controlled an open-air drug market that operated there.
Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone records, law enforcement officers determined that numerous individuals, including Williams, conspired to distribute and did actually distribute narcotics, including heroin, fentanyl, cocaine and cocaine base, in and around Stephen Crane Village. On Jan. 15, 2020, in Stephen Crane Village, Nasir Williams sold approximately 31 grams of cocaine base to an individual while under surveillance by law enforcement.
The conspiracy and distribution charges to which Williams pleaded guilty both carry a statutory mandatory minimum term of five years in prison, a maximum of 40 years in prison, and a maximum fine of $5 million. Sentencing is scheduled for Sept. 21, 2021.
Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Acting Special Agent in Charge Craig B. Kailimai; the Belleville Police Department, under the direction of Chief Mark Minichini; special agents and task force officers of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; the Newark Police Department, under the direction of Public Safety Director Brian O’Hara; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; and the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, with the investigation leading to today’s guilty plea. He also thanked the U.S. Marshals Service, the Nutley Police Department, the Bloomfield Police Department, the West Orange Police Department, the Verona Police Department, the Orange Police Department and the Bergen County Sheriff’s Office for their assistance with this case.
This investigation was part of the Newark Violent Crime Initiative (VCI), where the U.S. Attorney’s Office has partnered with state, federal, county, and local law enforcement to investigate crime in Newark and the surrounding cities. This case is also conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorneys Tracey Agnew and Cassye Cole of the Organized Crime and Gangs Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.
Union County Man Indicted for Tax Evasion and Failing to File Tax ReturnsRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man made his initial court appearance today on charges of tax evasion and failing to file tax returns, Acting U.S. Attorney Rachael A. Honig and Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division announced.
Jonathan Dean Michael, 52, of Springfield, New Jersey, was indicted by a federal grand jury on March 29, 2021, on one count of tax evasion, from 2014 through 2018, and five counts of failing to file tax returns during the same period. He appeared by videoconference before U.S. Magistrate Judge Andre M. Espinosa. He will be arraigned before U.S. District Judge John Michael Vazquez at a date to be determined.
According to documents filed in this case and statements made in court:
Michael was employed as a mechanic by a port-operating company in New Jersey. From 2014 through 2018, Michael’s gross income from all sources was over $1.6 million, including over $1.4 million that was paid to him by the port-operating company. In February 2014, Michael submitted a Form W-4, “Employee’s Withholding Allowance Certificate,” to his employer in which he falsely claimed to be completely exempt from federal income tax withholding. In November 2016, after the IRS instructed the port-operating company to begin withholding income taxes from Michael, Michael wrote the company and claimed that his false W-4 was correct. Despite earning gross income in each year in excess of the threshold that would require him to file individual income tax returns, Michael failed to file such tax returns with the IRS for the years 2014 through 2018.
The maximum penalty for the count of tax evasion is five years of imprisonment; the maximum penalty for failure to file tax returns is one year per count.
Acting U.S. Attorney Honig and Acting Assistant Attorney General Hubbert credited special agents of IRS-Criminal Investigation Division, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Matthew Feldman Nikic of the Cybercrime Unit in Newark and by Trial Attorney Michael C. Vasiliadis of the Tax Division in Washington, D.C.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Monmouth County Man Sentenced to 57 Months in Prison for Unlawfully Possessing MachinegunRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 57 months in prison for being a felon in possession of a firearm and unlawfully possessing a machinegun, Acting U.S. Attorney Rachael A. Honig announced.
Davon Harley, 30, of Neptune City, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an indictment charging him with one count of being a felon in possession of a firearm and one count of unlawful possession of a machinegun. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed today and statements made in court:
In February 2020, a Neptune City Police officer confronted Harley, a previously convicted felon, who was arguing with others in the yard of an apartment complex. Harley fled through the apartment complex into neighboring properties and discarded a handgun that, upon inspection, had been altered to fire exclusively in fully automatic mode. The weapon had a magazine capable of holding 31 rounds of ammunition. Law enforcement officers, assisted by the Neptune Township and Asbury Park police departments, located Harley and the machinegun and magazine that Harley had discarded. The magazine contained 22 rounds of ammunition.
In addition to the prison term, Judge Sheridan sentenced Harley to three years of supervised release.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Acting Special Agent in Charge Craig B. Kailimai; officers of the Neptune City Police Department, under the direction of Police Director Matthew Quagliato; officers of the Neptune Township Police Department, under the direction of Chief of Police James M. Hunt, Jr.; officers of the Asbury Park Police Department, under the direction of Chief of Police David Kelso; officers of the Monmouth County Sheriff’s Office, under the direction of Sheriff Shaun Golden; and detectives of the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, with the investigation leading to today’s sentencing.
The government is represented by Special Assistant U.S. Attorney Christopher Matthews of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Atlantic County Man Sentenced to 80 Months in Prison for Drug and Firearm OffensesRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man was sentenced today to 80 months in prison for possessing large quantities of heroin, cocaine, and methamphetamine, along with a firearm, Acting U.S. Attorney Rachael A. Honig announced.
Joseph Brandenberger, 36, of Absecon, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to an information charging him with possessing with intent to distribute 100 grams or more of heroin, 500 grams or more of cocaine, and 50 grams or more of methamphetamine, and possessing a firearm as a previously convicted felon. Judge Kugler imposed the sentence today by videoconference.
According to documents filed in this case and statements made in court:
Brandenberger was arrested following an investigation that revealed he was using a rented storage unit to conceal a large cache of drugs and a firearm. Upon execution of a search warrant at the location on June 18, 2019, investigators seized 507.6 grams of heroin, 524.3 grams of cocaine, and 107.2 grams of methamphetamine, along with $1,812 in cash and drug packaging material. Investigators also found a loaded Tech-9 9mm handgun. As a previously convicted felon, Brandenberger is prohibited by federal law from possessing a firearm or ammunition.
In addition to the prison term, Judge Kugler sentenced Brandenberger to five years of supervised release.
Acting U.S. Attorney Honig credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, Atlantic City Division; and inspectors of the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge Damon Wood, with the investigation leading to today’s sentencing. She also thanked special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Field Division, under the direction of Acting Special Agent in Charge Craig B. Kailimai; and the Absecon Police Department, under the direction of Chief James R. Laughlin, for their assistance with the case.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office Criminal Division in Camden.
Illinois Man Sentenced to Three Years in Prison for Role in $1.4 Million Bank Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Illinois man was sentenced today to 36 months in prison for his role in a bank fraud scheme resulting in $1.4 million in losses, Acting U.S. Attorney Rachael Honig announced.
Dwayne Modeliste, 41, previously pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an indictment charging him with conspiracy to commit bank fraud. Judge Hillman imposed the sentence today by videoconference.
According to documents filed in this case and statements made in court:
From 2016 to 2018, Modeliste conspired with Larry McGee and Adam D. Arena to defraud Synchrony Bank. Modeliste and his conspirators used the personally identifiable information of others, most of whom were incarcerated, to obtain credit cards from Synchrony Bank. Modeliste and his conspirators submitted to Synchrony Bank merchant applications so those enrolled merchants could accept Synchrony credit cards as a form of payment. After the merchants were enrolled with Synchrony Bank, the conspirators used the fraudulently obtained credit cards to conduct transactions at the merchants. The proceeds from the fraudulent transactions were deposited into bank accounts controlled by Modeliste and his conspirators.
In addition to the prison term, Judge Hillman sentenced Modeliste to three years of supervised release. He also ordered Modeliste to make restitution to Synchrony Bank in the amount of $1.43 million and ordered forfeiture in the amount of $133,330.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Catherine R. Murphy of the
U.S. Attorney’s Office’s National Security Unit in Newark.
Paterson Man Admits Distributing Heroin that Caused Death of New York ResidentRead the Press Release
NEWARK, N.J. – A Paterson, New Jersey, man today admitted possessing and distributing heroin that caused the death of a Warwick, New York, resident, Acting U.S. Attorney Rachael A. Honig announced.
Shameik Byrd, 31, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of distribution and possession with intent to distribute heroin relating to the overdose death of a 25-year-old man, identified in court documents as Victim-1.
According to the documents filed in this case and statements made in court:
On April 1, 2016, Byrd sold Individual-1 and Individual-2 five glassine envelopes of heroin stamped “Trap Queen.” The next day, Byrd sold Individual-1 and Inidividual-2 approximately 13 additional glassine envelopes of heroin stamped “Trap Queen.” Immediately following each purchase, Individual-1 and Individual-2 sold the same heroin they had obtained from Byrd to Victim-1. On April 3, 2016, officers from the Warwick Police Department responded to a residence on a report of an unresponsive male, Victim-1, who was later pronounced dead at the scene. Law enforcement agents observed nine empty glassine envelopes stamped “Trap Queen” and eight glassine envelopes of heroin stamped “Trap Queen.” An autopsy was later conducted on Victim-1, whose cause of death was determined to be “acute heroin intoxication.”
The count of possession and distribution of heroin carries a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Sept. 14, 2021.
Acting U.S. Attorney Rachael A. Honig credited special agents of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; detectives from the New Jersey Division of Criminal Justice, Gangs and Organized Crime Bureau, under the direction of Director Veronica Allende; detectives from the Passaic County Sheriff’s Office, under the direction of Sheriff Richard H. Berdnik; and detectives from the Warwick Police Department, under the direction of Chief Thomas McGovern Jr., with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Ryan L. O’Neill, of the Office’s Health Care Fraud Unit.
Nevada Man Sentenced to 18 Months in Prison for Defrauding Banks in $9 Million Shotgun Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – A Henderson, Nevada, man was sentenced today to 18 months in prison for his role in a scheme to use bogus information and simultaneous loan applications at multiple banks – known as “shot-gunning” – to attempt to obtain home equity lines of credit (HELOCs), Acting U.S. Attorney Rachael A. Honig announced.
Joseph A. Gonzalez, 46, previously pleaded guilty before U.S. District Judge John Michael Vazquez to Count One of an indictment charging him with one count of conspiracy to commit bank fraud. Judge Vazquez imposed the sentence today by videoconference. Gonzalez is the sixth person to plead guilty as part of the scheme.
According to documents filed in the case and statements made in court:
From 2010 through 2018, Jorge Flores and Simon Curanaj, a real estate broker in the Bronx who has previously pleaded guilty and is awaiting sentencing, ran a mortgage fraud scheme in which they applied for more than $9 million in HELOCs from banks on residential properties in New Jersey and New York.
Gonzalez and Flores used a property in Jersey City, New Jersey, as part of the scheme. Gonzalez had been allowed by the owner of the property to live there in exchange for management services, but neither he nor Flores owned the property. Gonzalez also recruited an individual with good credit to act as a straw buyer (Individual 1). Unbeknownst to the owner of the property, a “quitclaim” deed – which contains no warranties of title – was prepared transferring the property to Individual 1. The signatures on the deed were forged.
Gonzalez and Flores then applied for two HELOCs from multiple banks using the Jersey City property as collateral in Individual 1’s name. They concealed the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Individual 1’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the property was less than the amount of the HELOC loans for which Gonzalez and Flores applied.
The victim banks eventually issued loans to Individual 1 in excess of $500,000. After the victim banks funded the HELOCs and deposited money into Individual 1’s bank account, Individual 1 disbursed almost all of it to Gonzalez, Flores, and others. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. Individual 1 eventually defaulted on both HELOC loans.
In addition to the prison term, Judge Vazquez sentenced Gonzalez to three years of supervised release and ordered him to pay restitution of $512,500.
Acting U.S. Attorney Honig credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.
The government is represented by Jason S. Gould, Acting Chief of the Violent Crimes Unit, and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.
Hudson County Man Admits Role in Bank RobberyRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted his role in a bank robbery, Acting U.S. Attorney Rachael A. Honig announced.
Juan Rojas Hernandez, 21, of Jersey City, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to Count Two of an indictment charging him with one count of bank robbery. His co-defendants were charged in the same indictment for their roles in a Union City bank robbery.
According to documents filed in this case and statements made in court:
On Nov. 5, 2019, Rojas Hernandez and his co-defendants robbed a bank in Union City, New Jersey. Rojas Hernandez served as the lookout during the robbery while co-defendant William Tedeschi entered the bank and handed a note to a bank teller demanding money. Rojas Hernandez and his co-defendants then fled with approximately $10,200 and split the proceeds of the robbery.
The bank robbery charge to which Rojas Hernandez pleaded guilty carries a maximum potential penalty of 20 years in prison and $250,000 fine. Sentencing is scheduled for Aug. 26, 2021.
Acting U.S. Attorney Honig 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 Union City Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Vijay Dewan of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Gloucester Man Admits Trafficking Prescription Pills and Engaging in SNAP FraudRead the Press Release
CAMDEN, N.J. – A Gloucester City, New Jersey, man today admitted conspiring to distribute Adderall, selling oxycodone, and defrauding the federal Supplemental Nutrition Assistance Program (SNAP) in connection with his role in a drug trafficking ring operating in and around Gloucester City, Acting U.S. Attorney Rachael A. Honig announced.
Michael DePoder, 41, of Gloucester City, pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with one count each of conspiring to distribute and possess with intent to distribute Adderall, distributing oxycodone, and unlawfully acquiring and using SNAP benefits.
According to documents filed in this case and statements made in court:
DePoder admitted that on multiple occasions from December 2019 to March 2020, he distributed Adderall, a Schedule II controlled substance containing amphetamine, to his father, Rocco DePoder, as part of a drug distribution conspiracy. Michael DePoder also sold oxycodone pills to an associate on March 8, 2020. He also admitted unlawfully acquiring SNAP benefits in exchange for controlled substances and unlawfully using and possessing those and other SNAP benefits totaling $2,676. SNAP, formerly known as the Food Stamp program, is administered by the U.S. Department of Agriculture.
Michael DePoder 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.
The drug conspiracy and distribution counts are punishable by up to 20 years in prison and the SNAP fraud counts are punishable by up to five years in prison. Michael DePoder also faces a fine of up to $1,000,000 on each of the drug distribution offense and a fine of up to $250,000 for the SNAP fraud offense. As part of his plea agreement, he must pay $2,676 in restitution. Sentencing is scheduled for Aug. 24, 2021.
Eleven other defendants – Rocco DePoder, 68, Marcus Rushworth, 47, and Kenneth Rushworth, 60, all of Gloucester City; Alfred Kee, Jr., 52, of Blackwood, New Jersey; Robert Pratt, 57, of Myrtle Beach, South Carolina, formerly of Blackwood; Wayne Muse, 74, of Lindenwold, New Jersey; Eric Bell, 50, Steven Walker, 50, Alexander Siaca, 55, all of Camden; Antwan Tucker, 51, of Woodbury, New Jersey; and Anwar Abdullah, 32, of Pennsauken, New Jersey – previously pleaded guilty before Judge Bumb to informations charging them with drug trafficking offenses involving the distribution of prescription drugs. They are all awaiting sentencing.
Acting U.S. Attorney Honig credited special agents of the FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; 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; New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; 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 guilty plea.
She also thanked the FBI Newark Division, New Jersey State Police, Camden County Prosecutor’s Office, and U.S. Drug Enforcement Administration for their assistance.
The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the Office’s Camden branch and Sara F. Merin of the Newark Office.
The charges and allegations contained in the complaints and indictments against the remaining defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Five People Charged, Two Others Admit Guilt, in $93 Million Health Care Fraud SchemeRead the Press Release
NEWARK, N.J. – Five individuals have been charged and two others have pleaded guilty in New Jersey for their roles in massive durable medical equipment and genetic cancer screening kickback fraud schemes, Acting U.S. Attorney Rachael A. Honig announced today.
Thomas Farese, 78, of Delray Beach, Florida; Pat Truglia, 53, of Parkland, Florida; Domenic J. Gatto Jr., 46, of Palm Beach Gardens, Florida; and Nicholas Defonte, 72, and Christopher Cirri, 63, both of Toms River, New Jersey, are each charged by complaint with conspiracy to commit health care fraud.
Two additional individuals pleaded guilty today by videoconference before U.S. District Judge Kevin McNulty: Brian Herbstman, 46, of Jackson, New Jersey, pleaded guilty to an information charging him with conspiracy to commit health care fraud and to violate the Anti-Kickback Statute; and Sean Hogan, 48, Old Bridge, New Jersey, pleaded guilty to an information charging him with conspiracy to engage in money laundering. Sentencing for both is scheduled for Aug. 31, 2021.
According to documents filed in these cases and statements made in court:
Each of the defendants played a role in defrauding health care benefit programs by offering, paying, soliciting, and receiving kickbacks and bribes in exchange for completed doctors’ orders for durable medical equipment (DME), namely orthotic braces:
- Farese, Truglia, Gatto, and their conspirators had financial interests in multiple DME companies, which paid kickbacks to suppliers of DME orders, including Cirri, Defonte, and Truglia. In exchange for DME orders, the DME companies fraudulently billed Medicare, TRICARE, CHAMPVA, and other health care benefit programs. The defendants concealed their ownership of the DME companies by using straw owners, who were falsely reported to Medicare as the owners of the companies.
- Truglia, Cirri, Defonte, and their conspirators owned and operated multiple call centers through which they obtained DME orders for beneficiaries of Medicare and other federal health care programs. The call centers paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these beneficiaries. The telemedicine companies then paid physicians to write medically unnecessary DME orders. The orders were provided to DME supply companies owned by Farese, Truglia, Gatto, and others in exchange for bribes. The DME supply companies provided the braces to beneficiaries and fraudulently billed the health care programs.
- Herbstman and his conspirators had financial interests in multiple DME companies. The DME companies paid kickbacks to suppliers in exchange for DME orders, which the DME companies fraudulently billed to Medicare, TRICARE, CHAMPVA, and other health care benefit programs.
- Hogan and his conspirators agreed to launder the proceeds of the health care fraud conspiracy. From March 2018 to October 2019, Hogan and others withdrew approximately $1.16 million in ill-gotten gains.
Herbstman and his conspirators had business relationships with call centers through which they obtained patient referrals for genetic cancer screening tests. Herbstman provided these patient referrals to others in exchange for kickbacks and bribes from companies that performed the tests and fraudulently billed them to health care programs.
The defendants caused losses to Medicare, TRICARE, and CHAMPVA of approximately $93 million.
The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charges of conspiracy to violate the federal Anti-Kickback Statute and conspiracy to commit health care fraud, to which Herbstman pleaded guilty, are punishable by a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charge of conspiracy to transact in criminal proceeds, to which Hogan pleaded guilty, is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000 or twice the gross profit or loss caused by the offense, whichever is greater.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Scott J. Lampert; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigations leading to the charges and guilty pleas.
The government is represented by Assistant U.S. Attorneys Sean M. Sherman and Ryan L. O’Neill of the Opioid Abuse Prevention & Enforcement and Health Care Fraud Units in Newark, Senior Trial Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit in Newark, and Trial Attorney Darren C. Halverson of the Criminal Division’s Fraud Section.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Five Individuals Charged for Roles in $65 Million Nationwide Conspiracy to Defraud Federal Health Care ProgramsRead the Press Release
The owners of four orthotic brace suppliers and several marketing companies were charged in a complaint unsealed yesterday for allegedly orchestrating a nationwide kickback and bribery scheme to order medically unnecessary orthotic braces for Medicare beneficiaries.
Thomas Farese, 78, of Delray Beach, Florida and Pat Truglia, 53, of Parkland, Florida, the owners of orthotic brace suppliers, were each charged with one count of conspiracy to commit health care fraud and three counts of health care fraud, all in connection with paying and receiving health care kickbacks and bribes for orders of orthotic braces.
Christopher Cirri, 63, and Nicholas DeFonte, 72, both of Toms River, New Jersey, the owners and operators of a fraudulent marketing company were charged with one count of conspiracy to commit health care fraud in connection with paying and receiving health care kickbacks and bribes for orthotic brace orders. Cirri and DeFonte were arrested and appeared this afternoon before U.S. Magistrate Judge Jessica S. Allen of the District of New Jersey
Domenic Gatto, 46, of Palm Beach Gardens, Florida, an owner and operator of an orthotic brace supplier, was charged with one count of conspiracy to commit health care, in connection with soliciting and receiving health care kickbacks. Gatto surrendered and appeared this afternoon before U.S. Magistrate Judge Jessica S. Allen of the District of New Jersey
The complaint alleges that between October 2017 and April 2019, Farese, Truglia, Cirri, DeFonte, and Gatto participated in a nationwide conspiracy to defraud Medicare, TRICARE, Civilian Health and Medical Program of the Department of
Veterans Affairs (CHAMPVA), and other federal and private health care benefit programs through the payment and receipt of illegal health care fraud kickbacks in exchange for orthotic brace orders that lacked medical necessity with a total loss of approximately $65 million.
The complaint further alleges that Truglia, Cirri, and DeFonte operated or controlled marketing call centers to solicit beneficiaries of federal and private health care benefit programs and to entice them to accept orthotic braces regardless of need. Truglia, Cirri, and DeFonte paid telemedicine companies illegal kickbacks and bribes in exchange for doctors and other medical professions signing brace orders and falsely swearing to their medical necessity. Truglia, Cirri, and DeFonte concealed the kickbacks and bribes by entering into sham contracts with the fraudulent telemedicine companies and issuing invoices describing the payments as “marketing” or “business process outsourcing” expenses.
Farese and Truglia purchased these brace orders through orthotic brace suppliers in Georgia and Florida through which they billed the federal and private health care benefit programs for the orders. To conceal their ownership interests in the brace suppliers, Farese and Truglia used nominee owners and provided those names to Medicare in lieu of their own.
The complaint further alleges that Gatto connected Cirri and DeFonte to other co-conspirators and arranged for Cirri and DeFonte to sell orthotic brace orders to orthotic brace suppliers in New Jersey and Florida in exchange for illegal health care kickbacks and bribes. Gatto and others paid Cirri and DeFonte kickbacks and bribes for each federal health care beneficiary for whom orthotic brace orders were sold to orthotic brace suppliers to be billed to Medicare, TRICARE, CHAMPVA, and other federal and private health care benefit programs. To conceal the kickbacks and bribes, Cirri and DeFonte created sham invoices labeling the payments as “marketing” and “business processing outsourcing” expenses. To conceal his ownership interest in the brace supplier, Gatto used a nominee owner on forms submitted to Medicare and used shell corporations to transfer the funds he paid in connection with the purchase of the supplier.
The charges here—health care fraud and conspiracy to commit health care fraud—are punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross profit or loss caused by the offense, whichever is greater. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Rachael A. Honig of the District of New Jersey; Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Special Agent in Charge Christopher F. Algieri of Department of Veterans Affairs Office of Inspector General (VA-OIG); Special Agent in Charge Patrick J. Hegarty of the Defense Criminal Investigative Service (DCIS); and Special Agent in Charge George M. Crouch Jr. of the FBI’s Newark Field Office made the announcement.
This case was investigated by HHS-OIG, DCIS, the FBI, and VA-OIG.
Trial Attorney Darren C. Halverson of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Sean Sherman and Ryan O’Neill of the District of New Jersey are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine and durable medical equipment (DME) marketing schemes should call to report this conduct to the FBI hotline at 1-800-CALL-FBI.
A complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Bergen County Man Charged with Mortgage Fraud, Fraudulently Obtaining SBA Loan and Aggravated Identity TheftRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today on charges of engaging in mortgage fraud, fraudulently obtaining an SBA loan, and stealing another person’s identity information, Acting U.S. Attorney Rachael A. Honig announced.
Nathanael Zimmerman, 40, of Wyckoff, New Jersey, is charged by complaint with one count each of wire fraud, bank fraud and aggravated identity theft. He is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Jessica S. Allen.
According to the complaint:
From August 2013 through January 2014, Zimmerman orchestrated a scheme to engage in mortgage fraud concerning Federal Housing Administration (FHA)-insured loans. Zimmerman aided individuals in applying for FHA-insured loans and caused fraudulent representations to be made to the lenders, including submitting false bank statements. Zimmerman received a portion of the loan proceeds. Later, these unqualified individuals defaulted on their loans, causing losses to the U.S. Department of Housing and Urban Development of more than $300,000.
In 2020 Zimmerman used his deceased brother’s identity to obtain a U.S. Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL). Zimmerman received more than $150,00 by applying for EIDL funds in his brother’s name and using his brother’s personal identification information.
The charges of wire fraud affecting a financial institution and bank fraud are each punishable by a maximum potential penalty of 30 years in prison and a fine of $1 million, or twice the gross profits or twice the gross loss suffered by the victims, whichever is greater. The charge of aggravated identity theft is punishable by a mandatory consecutive term of imprisonment of two years in prison and a fine of $250,000, twice the gross profits or twice the gross loss suffered by the victims, whichever is greater.
Acting U.S. Attorney Honig 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 arrest.
The government is represented by Assistant U.S. Attorneys Sammi Malek and Andrew Kogan of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
Somerset County Man Indicted for Narcotics Offenses and Money LaunderingRead the Press Release
NEWARK, N.J. – A Somerset County, New Jersey, man was indicted today for his role in a large-scale heroin trafficking operation that involved the movement of large sums of money, Acting U.S. Attorney Rachael A. Honig announced.
William T. Bouza, 46, of Watchung, New Jersey, is charged by indictment with one count of conspiracy to distribute heroin and fentanyl, two counts of possession with intent to distribute controlled substances, and one count of conspiracy to commit money laundering. Bouza was previously charged by complaint. He will be arraigned on a date to be determined.
According to documents filed in this case and statements made in court:
In February 2019, Bouza arranged for a vehicle equipped with a secret compartment, or “trap,” containing 15 kilograms of heroin, to be shipped from California to a location in Union County, New Jersey. Law enforcement officers intercepted the vehicle, seized the narcotics, and arranged for a controlled delivery. They observed Bouza enter the area, but he departed prior to taking possession of the vehicle. In October 2019, law enforcement officers determined that Bouza was storing and processing narcotics for street-level distribution at multiple locations in Essex County. They approached Bouza, who fled in a motor vehicle. He was apprehended approximately one week later. Law enforcement officers subsequently discovered approximately 1,000 packages, or “bricks” of heroin, each containing approximately 50 individual doses, in one of Bouza’s stash houses. Lab testing confirmed the presence of fentanyl in a portion of these items. The investigation also revealed that Bouza was in possession of approximately $400,000 in cash and was responsible for the illicit transfer of well over $800,000 in narcotics proceeds.
The controlled substances offenses carry a maximum penalty of life imprisonment, a mandatory minimum term of 10 years in prison and a $10 million fine. The money laundering offense carries a maximum penalty of 20 years in prison.
Acting U.S. Attorney Honig credited law enforcement officers with the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark; and the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to the indictment.
The government is represented by Assistant United States Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Morris County Man Admits Role in Health Care Fraud Conspiracy, Conspiring to Obstruct JusticeRead the Press Release
CAMDEN, N.J. – A Morris County man today admitted defrauding New Jersey county health benefits programs and obstructing justice by seeking to provide false information to federal agents and the grand jury investigating the scheme, Acting U.S. Attorney Rachael A. Honig announced.
Rocco Cammalleri, 49, of Budd Lake, New Jersey, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to commit health care fraud and one count of conspiracy to obstruct justice.
According to documents filed in this case and statements made in court:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
In 2015, the conspirators learned that certain New Jersey local government employees, including county prison guards, had insurance coverage for these compounded medications. An entity referred to as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the Bergen County Prescription Benefits Program (BCPBP), which covered certain local government employees, including county prison guards. The Pharmacy Benefits Administrator paid prescription drug claims and then billed the BCPBP for the amounts paid.
The conspirators learned that certain compounded medication prescriptions – including vitamins and pain, scar, antifungal, migraine, and libido creams – reimbursed thousands of dollars for a one-month supply. From September 2015 through April 2017, the conspirators – a including Cammalleri and an individual referred as Individual 2 – recruited local government employees and others to obtain medically unnecessary compounded medications. Cammalleri, who had no medical or sales background or training, recruited several individuals to receive medically unnecessary compound medications. Cammalleri and Individual 2 directed the recruits to an unnamed doctor – referred to as Individual 1 – to obtain his authorization for the compounded prescription medications. The recruits agreed to receive the very expensive compounded medications not because they needed them, but rather because they were paid to do so. Cammalleri received $175,467 in payments for the prescriptions he arranged and agreed to receive, and caused $2.98 million in fraudulent claims for compounded medications.
In 2017, Individual 2 informed Cammalleri that a federal grand jury was investigating the health care fraud conspiracy. Individual 2 and Cammalleri conspired to obstruct the federal investigation by providing and seeking to provide false information to federal agents and the grand jury.
The health care fraud conspiracy count to which Cammalleri pleaded guilty carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense, whichever is greater. The obstruction of justice conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater. Sentencing is scheduled for Nov. 18, 2021.
Acting U.S. Attorney Rachael A. Honig credited special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; and special agents of the U.S. Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Christina O. Hud and R. David Walk Jr. of the U.S. Attorney’s Office in Camden.
Middlesex Man Admits Paycheck Protection Program Fraud Scheme and Obtaining Funds from a Deposited Stolen and Altered U.S. Treasury CheckRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, man today admitted fraudulently receiving Payment Protection Program (PPP) funds and depositing a stolen and altered U.S. Treasury check, Acting U.S. Attorney Rachael A. Honig announced today.
Bernard Lopez, 40, pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count each of bank fraud and theft of government funds.
According to the documents filed in this case and statements made in court:
Lopez devised a scheme to commit bank fraud through which a stolen and altered U.S. Treasury check was deposited into a corporate bank account Lopez created in the name of Pezlo Management LLC. The check was altered to be made payable to Pezlo in the amount of $211,886 and was then deposited into Pezlo’s corporate bank account. Lopez later withdrew or transferred the stolen proceeds from Pezlo’s bank account before the bank could detect the fraud.
On June 24, 2020, Lopez caused to be submitted a fraudulent PPP loan application to a lender on behalf of Company-1, a purported business that Lopez controlled. The Small Business Administration oversees the PPP, which is designed to provide forgivable loans to small businesses affected by the coronavirus pandemic. Applicants for PPP loans apply directly to banks or financial institutions participating in the program; in those applications, applicants make affirmative certifications about their average monthly payroll expenses and number of employees. Applicants also certify their intent to spend PPP proceeds on permissible business expenses, such as payroll costs, rent, utilities, and interest on mortgages. PPP loans may be entirely forgiven if the recipient spends the loan proceeds on these permissible expenses within a designated period after receiving the proceeds.
Lopez’s PPP application falsely represented that Company-1 employed 25 employees, had a monthly payroll expense of approximately $192,000, and had mortgage/lease and utilities expenses. Company-1 did not, in fact, employ any employees, nor did it incur payroll or utility expenses. Based on Lopez’s misrepresentations, the lender approved Lopez’s PPP loan application and provided Lopez’s purported business with $481,502 in federal COVID-19 emergency relief funds meant for distressed small businesses. Lopez then converted a portion of the proceeds for his own use.
The count of bank fraud is punishable by a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain to the defendant or gross loss to the victim, whichever is greater. The count of theft of government funds is punishable by a maximum of 10 years in prison and a fine of up to $250,000, or twice the gross gain or loss from the offense, whichever is greater. Sentencing is scheduled for Oct. 6, 2021.
Acting U.S. Attorney Honig credited special agents and task force officers of the U.S. Department of the Treasury-OIG, under the direction of Assistant Inspector General for Investigations Sally D. Luttrell, with the investigation leading to the charges. She also thanked special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, and special agents of the Federal Deposit Insurance Corporation Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca for assistance.
The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Fraud Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.