District of New Jersey
Press releases recorded for this federal judicial district.
Atlantic City Fugitive Arrested for EscapeRead the Press Release
CAMDEN, N.J. – An Atlantic City, New Jersey, man appeared today following his arrest on charges of escaping from federal custody, Acting U.S. Attorney Rachael A. Honig announced.
Patrick Giblin, 56, of Atlantic City, New Jersey, is charged by complaint with escape from the custody of the Attorney General. Giblin made his initial appearance by videoconference today before U.S. Magistrate Judge Ann Marie Donio.
According to the complaint and court documents:
On July 23, 2020, Giblin escaped from the custody of the Attorney General while traveling from a federal prison in Lewisburg, Pennsylvania, to a residential living facility in Newark, where he had been directed to serve the remainder of a federal prison sentence. At the time Giblin was serving a 2017 sentence for traveling interstate and using an interstate facility to promote unlawful activity in connection with a scheme to defraud multiple women. Giblin’s 2017 sentence followed an earlier sentence of 115 months’ imprisonment for a 2007 wire fraud conviction for a similar fraud scheme. Members of the U.S. Marshals Service located and arrested Giblin in Atlantic City on March 10, 2021.
Giblin faces up to five years in prison if convicted of the escape charge.
Acting U.S. Attorney Honig credited members of the U.S. Marshals Service, District of New Jersey, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to the arrest and charges.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Two Charged with Conspiracy to Defraud Bank, Bank Fraud and Aggravated Identity TheftRead the Press Release
CAMDEN, N.J. – A Camden County man and a Bronx, New York, man were charged for their participation in a scheme to steal bank customer identities and then use that information to steal more than $600,000, Acting U.S. Attorney Rachael A. Honig announced today.
Jamere Hill-Birdsong, 32, of Gloucester City, New Jersey, and Lamar Melhado, 31, of the Bronx, New York, are each charged in a 10-count indictment with one count of conspiracy to commit bank fraud, multiple counts of bank fraud and aggravated identity theft. Both Hill-Birdsong and Melhado were arrested and will appear before U.S. Magistrate Judge Ann Marie Donio in Camden federal court via videoconference this afternoon.
According to the indictment:
From August 2016 through August 2017, Hill-Birdsong and Melhado conspired with each other and others to defraud a Mount Laurel, New Jersey, bank. Hill-Birdsong worked inside the call center and recruited other call center employees to participate in the scheme by stealing the identities and account information of customers who called into the bank’s call center. The conspirator bank employees would then take photographs or screenshots of the bank customer’s account information and signatures and would send that information to Hill-Birdsong and Melhado. The conspirators then had phony identification documents made in the names of the bank customers, and used various runners to go into bank branches and make unauthorized cash withdrawals. The conspirators also used the stolen identity information to conduct unauthorized online transfers of moneys from the customer’s accounts.
Hill-Birdsong is charged with bank fraud conspiracy, five counts of bank fraud and one count of aggravated identity theft. Melhado is charged with bank fraud conspiracy, six counts of bank fraud and two counts of aggravated identity theft. Each count of conspiracy to commit bank fraud and bank fraud are punishable by a maximum of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Each count of aggravated identity theft is punishable by an additional consecutive term of imprisonment of up to two years.
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, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S. Attorney’s Office in Camden.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Trenton Man Admits Conspiring to Distribute Fentanyl that Caused the Death of a Monmouth County WomanRead the Press Release
TRENTON, N.J. – A Trenton man admitted conspiring with others to distribute fentanyl that caused the death of a Monmouth county woman, Acting U.S. Attorney Rachael A. Honig announced today.
Quasaan Bethea, 33, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson on March 10, 2021, to Count Two of an indictment charging possession with intent to distribute fentanyl.
According to the documents filed in this case and statements made in court:
On May 15, 2018, Bethea conspired with others to distribute fentanyl to a 39-year-old Monmouth County woman, referred to in the indictment as Victim-1. Victim-1 had sought out Bethea and others to purchase heroin, not fentanyl, a significantly more potent narcotic than heroin. Bethea admitted that the fentanyl he sold to Victim-1 was stamped “CAMEL” and packaged to look like heroin. Shortly after Victim-1’s second purchase of fentanyl from Bethea and others, Englishtown police responded to a report of an overdose death. Upon their arrival, they discovered Victim-1, and in Victim-1’s possession were several wax folds of suspected heroin stamped “CAMEL” and empty wax folds stamped “CAMEL” as well. Laboratory analysis of these wax folds bearing the “CAMEL” stamp determined the substance to be fentanyl. An autopsy of Victim-1 found her cause of death to be acute fentanyl toxicity.
The count of conspiracy to distribute and possess with intent to distribute fentanyl carries a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for July 26, 2021.
Acting U.S. Attorney Honig credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; detectives from the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni; the Englishtown Police Department, under the direction of Peter S. Cooke, Jr., and the Trenton Police Department’s Narcotics Task Force, under the direction of Police Director Sheilah Coley, with the investigation leading to the guilty plea.
The government is represented by Assistant U.S. Attorney Ryan L. O’Neill, of the Office’s Opioids Abuse & Prevention Task Force.
Nebraska Man Sentenced to 21 Months in Prison for Stealing and Selling Employer’s Confidential InformationRead the Press Release
NEWARK, N.J. – A Nebraska man was sentenced today to 21 months in prison for engaging in fraudulent activity that exposed his employer’s confidential information, Acting U.S. Attorney Rachael A. Honig announced.
Timothy Young, 50, of Moorefield, Nebraska, previously pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with wire fraud. Judge Hayden imposed the sentence by videoconference today.
According to documents filed in the case and statements made in court:
Young was employed at a data analytics and risk assessment firm based in New Jersey. The company serves customers worldwide, including entities providing insurance and financial services as well as government entities. The company maintains a network that houses, among other things, significant amounts of personally identifiable information.
Without the firm’s approval, Young obtained confidential, non-public information that belonged to the firm. The information included names, logon names, passwords, email addresses, and telephone numbers for some of the company’s clients. Young then attempted to sell the information.
In addition to the prison term, Judge Hayden sentenced Young to three years of supervised release and ordered him to pay restitution of $296,370.
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 task force officers from the N.J. State Police, Jersey City Police Department, Ocean City Police Department, and Federal Protective Service, with the investigation leading to today’s sentencing. She also thanked the FBI’s Omaha Division, under the direction of Special Agent in Charge Kristi Koons Johnson, for its role in the investigation.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.
Justice Department Settles Claims Against Toms River over Zoning Code that Restricts Houses of WorshipRead the Press Release
NEWARK, N.J. – The Justice Department today announced an agreement with the Township of Toms River, New Jersey, to resolve allegations that the township violated the Religious Land Use and Institutionalized Persons Act (RLUIPA), by severely restricting where houses of worship can locate within its jurisdiction.
The proposed consent decree, which was filed today in the U.S. District Court of the District of New Jersey and must still be approved by the court, would resolve a lawsuit the United States also filed today alleging that the township’s zoning code places unreasonable limits on where religious assemblies and institutions may locate, substantially burdens religious exercise, and treats religious assemblies and institutions on less than equal terms with nonreligious assemblies and institution.
“Federal law protects religious communities against unequal treatment and unwarranted burdens,” Rachael A. Honig, Acting U.S. Attorney for District of New Jersey, said. “Zoning regulations that impose unreasonable restrictions or prevent religious faiths from having a place to worship violate RLUIPA. Through the resolution entered today, this office takes another step to put an end to unlawful zoning practices and vindicate the civil rights of minority religious communities in the District of New Jersey.”
“RLUIPA protects people of all faiths in their right to exercise their religion,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Civil Rights Division. “The Department of Justice has long enforced RLUIPA against zoning regulations that unreasonably burden religious exercise by imposing unwarranted restrictions and conditions on the location of houses of worship.”
The complaint alleges that since 2009, Toms River has enacted a series of revisions to its zoning code – including a 10-acre parcel minimum requirement – which greatly reduced both the number of zoning districts in which houses of worship can locate and the number of sites available for houses of worship. These restrictions have had a particular impact on the township’s Orthodox Jewish population, who, because of their faith and religious traditions, tend to worship at small houses of worship, which they walk to and from on the Sabbath and Holidays. The complaint also alleged that the township’s zoning ordinance treats houses of worship and other religious assemblies and institutions on less favorable terms than nonreligious assemblies and institutions.
As part of the consent decree, the township will revise its zoning code to: reduce the minimum acreage required for a house of worship in many zoning districts from 10 acres to two acres; allow houses of worship as-of-right in certain zoning districts; allow smaller houses of worship to be located on minor collector roads; and treat houses of worship on comparable terms to nonreligious places of assembly. The consent decree also requires the township to train its officials and employees on RLUIPA’s requirements, establish a procedure for receiving and resolving RLUIPA complaints, and other injunctive relief.
RLUIPA is a federal law that protects religious institutions from unduly burdensome or discriminatory land use regulations. In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other religious institutions to worship on their land. More information is available at www.justice.gov/crt/placetoworship.
In July 2018, the Department of Justice announced the formation of the Religious Liberty Task Force. The Task Force brings together department components to coordinate their work on religious liberty litigation and policy, and to implement the Attorney General’s 2017 Religious Liberty Guidance.
Individuals who believe they have been subjected to discrimination in land use or zoning decisions may contact the Civil Rights Division Housing and Civil Enforcement Section at (800) 896-7743, or the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339, or may submit a complaint through the complaint portal on the Place to Worship Initiative website. More information about RLUIPA, including questions and answers about the law and other documents, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.
The United States is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division, Assistant U.S. Attorney Susan Millenky, of the Civil Rights Unit, Civil Division, and Trial Attorneys Ryan G. Lee and Noah D. Sacks, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.
Former Employee of Veterans Affairs Medical Center Charged with Stealing More Than $8.2 Million Worth of HIV MedicationRead the Press Release
NEWARK, N.J. – A former pharmacy technician was arrested today for stealing prescription HIV medications from the pharmacy of the Veterans Affairs Medical Center (VAMC) in East Orange, New Jersey, Acting U.S. Attorney Rachael A. Honig announced.
Lisa M. Hoffman, 48, of Orange, New Jersey, is charged by complaint with theft of medical products, specifically HIV medication. Hoffman is scheduled to make her initial appearance by videoconference before U.S. Magistrate Judge Mark Falk this afternoon.
According to documents filed in this case and statements made in court:
Hoffman’s responsibilities at the VAMC included ordering the necessary drugs and supplies for the outpatient pharmacy, including determining when to place orders and for what products, as well as regularly maintaining inventory levels of needed drugs and supplies. From at least August 2017 through November 2019, Hoffman used her position to steal prescription HIV medication from the VAMC. She placed large orders for HIV medication, purportedly on behalf of VAMC, and then stole the medication after it was delivered. VAMC surveillance footage captured Hoffman regularly taking dozens of bottles of HIV medications from the shelves of the outpatient pharmacy, placing them in a white mail bin, and then transferring the medications from the mail bin to her bag and exiting with the stolen medication. Hoffman stole approximately $8.2 million worth of the VAMC’s HIV medication.
Once Hoffman had the medication, Hoffman met her associate, Wagner Checonolasco, aka “Wanny,” 33, of Lyndhurst, New Jersey, often at her residence, so that she could sell the stolen HIV medication to Checonolasco for cash. After obtaining the stolen HIV medication, Checonolasco resold it to others.
Checonolasco was previously charged with conspiracy to steal government property. Those charges remain pending.
The charge of theft of medical products is punishable by a potential penalty of 20 years in prison, and a fine of $1 million, or three times the economic loss attributable to the offense.
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 the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Nicole F. Mastropieri of the Health Care Fraud Unit.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Convicted Felon Sentenced to Four Years in Prison for Selling Semi-Automatic Rifle in TrentonRead the Press Release
TRENTON, N.J. – A Trenton man was sentenced today to 48 months in prison for unlawfully possessing a semi-automatic rifle while attempting to sell it to another individual, Acting U.S. Attorney Rachael A. Honig announced.
Edwin Gaines, 59, previously pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count of possession of a firearm by a convicted felon. Judge Sheridan imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
On Feb. 15, 2019, Gaines, who previously had been convicted of murder in New Jersey Superior Court and who has other felony convictions, arranged to sell to another individual a Ruger .22 semi-automatic rifle as well as an extended magazine. The purchaser, however, was acting at the direction and supervision of law enforcement. In a video- and audio-recorded transaction in the basement of a Trenton residence, the individual purchased the rifle and magazine from Gaines using money that law enforcement had provided.
In addition to the prison term, Judge Sheridan sentenced Gaines to three years of supervised release.
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 Special Agent in Charge Charlie J. Patterson; detectives from the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; and officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley, with the investigation leading to today’s sentencing.
The government is represented by Special Assistant U.S. Attorney Katie Lee of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Two Newark Men Charged with Attempted Carjacking and Discharging a FirearmRead the Press Release
NEWARK, N.J. – Two Newark men made their initial appearances today on charges stemming from a Feb. 22, 2021, attempted carjacking in Newark during which a firearm was discharged, Acting U.S. Attorney Rachael A. Honig announced.
Antwan Malone, 34, and Dawan Walker, 24, both of Newark, are charged by complaint with one count of attempted carjacking and one count of discharging of a firearm during a crime of violence. They appeared by videoconference today before U.S. Magistrate Judge Mark Falk and were detained.
According to documents filed in this case and statements made in court:
On Feb. 22, 2021, law enforcement officers responded to the area of the I-78 West entrance ramp and Irvine Turner Boulevard in Newark on a report of an attempted carjacking with a weapon. They learned that Malone and Walker had pulled up beside a blue BMW M5 SUV that was stopped at a stop light and blocked the BMW’s ability to enter I-78. Malone approached the vehicle brandishing a handgun, and then pointed the gun at the driver’s face while repeatedly telling the driver to either exit the vehicle or Malone would shoot them. At that point, the driver was able to escape by ramming the BMW into Malone and Walker’s vehicle and entering the I-78 entrance ramp. Malone fired two shots at the BMW.
The count of attempted carjacking carries a maximum potential sentence of 15 years in prison. The count of discharging of a firearm during a crime of violence is punishable by a mandatory minimum of 10 years in prison and a maximum sentence of life in prison, which must run consecutively to any term of imprisonment imposed on any other charges.
Acting U.S. Attorney Honig credited the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the charges and arrests.
This case is part of the Violent Crime Initiative (VCI), which was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the purpose of combatting violent crime in and around Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
The government is represented by Assistant U.S. Attorney George L. Brandley of the OCEDTF 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.
South Carolina Investment Fund Manager Admits $20 Million Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – A South Carolina investment fund manager today admitted his role in a scheme to fraudulently obtain over $20 million from investors through misrepresentations about trading strategy and fund performance, Acting U.S. Attorney Rachael A. Honig announced.
George Heckler, 64, of Charleston, South Carolina, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of securities fraud.
According to documents filed in this case and statements made in court:
Heckler managed, controlled or was involved with multiple investment funds, including Conestoga Partner Holdings (Conestoga), Cassatt Short Term Trading Fund LP (Cassatt), CV Special Opportunity Fund LP (CVSO), and TA1 LLC (TA1).
From 2014 to 2018, Heckler misrepresented to investors that he would invest their funds in particular trading strategies. Instead, he diverted their funds out of Cassatt and TA1 for purposes inconsistent with the trading strategies, including to pay out millions of dollars to other investors. Heckler also used investors’ funds to cover investment losses suffered by other funds under his management and/or control.
Heckler solicited investments from Victim-1, claiming the investments would be invested in Cassatt, which employed a “first loss” trading strategy intended to protect investors from losses. However, as of December 2013, Cassatt no longer had a brokerage account that was necessary to employ the represented trading strategy. Despite Cassatt no longer having a brokerage account, in 2014, Heckler represented to Victim-1 that Cassatt was still engaged in a first loss trading strategy and solicited Victim-1’s investment in Cassatt. In September 2014, Victim-1 invested approximately $9.1 million in Cassatt, relying on Heckler’s representation that Victim-1’s money would be invested consistent with Cassatt’s first loss trading strategy. Heckler used $4.6 million of Victim-1’s investment to repay existing investors and the remainder to satisfy other obligations Heckler owed that were unrelated to Cassatt.
Heckler also approached Victim-2 about the possibility of creating a hedge fund that would deploy capital to first-loss traders, who would serve as the “first loss” protection for investors’ capital. In late 2015, Victim-2 formed a hedge fund, utilizing the concept proposed by Heckler (Entity-1). In 2015 and 2016, Entity-1 invested $10.1 million in TA1 via a participation agreement that provided that Entity-1’s investment would be used for an “options arbitrage dividend recapture trade,” otherwise known as the “skate trade.” In fact, none of Entity-1’s investment was used for the “skate trade.” Entity-1’s investment was used for other purposes, including repaying others who had previously invested with Heckler.
Over the course of the scheme, Heckler sent out statements to investors that misled them into believing the value of their investments was increasing, when, in fact, the value was declining. Heckler took approximately $1 million in fees and distributions from the fraudulently obtained investments for his personal use.
The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for July 15, 2021.
The U.S. Securities and Exchange Commission has filed a civil complaint against Heckler based on the allegations underlying the securities fraud charge.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge Michael J. Driscoll, Philadelphia Field Office, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorneys Catherine R. Murphy and Andrew Macurdy of the U.S. Attorney’s Office Criminal Division.
Paterson Man Admits to Coercion and Enticement of MinorRead the Press Release
NEWARK, N.J. – A Passaic County man today admitted to coercion and enticement of a minor and to illegally reentering the United States, Acting U.S. Attorney Rachael A. Honig announced.
Juan Carlos Morales-Pedraza, 34, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to a superseding information charging him with coercion and enticement of a minor and of illegally re-entering the United States after having previously been deported.
According to documents filed in this case and statements made in court:
On April 13, 2019, Morales-Pedraza approached a 15-year-old victim in Passaic County. Two days later, after engaging in sexual intercourse with the victim, Morales-Pedraza and the victim left the New Jersey, with plans to travel to Illinois. Morales-Pedraza admitted that he planned to engage in sexual conduct with the victim in Illinois. Law enforcement arrested Morales-Pedraza in Ohio.
Morales-Pedraza admitted that he is a citizen of Mexico and that he illegally entered the United States after having previously been deported.
The count of coercion and enticement carries a maximum penalty of 20 years in prison, a $250,000 fine, and mandatory restitution. The count of illegal re-entry carries a maximum prison sentence of two years and a $250,000 fine. Sentencing is scheduled for July 14, 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; the Passaic County Prosecutor’s Office’s Sexual Investigations Unit, under the direction of Prosecutor Camelia M. Valdes, and investigators with the Ohio State Highway Patrol and the Lake Township Police Department in Lake Township, Ohio, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Francesca Liquori of the Organized Crime and Gangs Unit.
Passaic County Man Admits Distributing FentanylRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man today admitted distributing fentanyl, Acting U.S. Attorney Rachael A. Honig announced.
Tawan Grier, a/k/a “TJ,” 22, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with knowingly and intentionally distributing fentanyl.
According to documents filed in this case and statements made in court:
Grier is an associate of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. 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 officers determined that from September 2018 through Oct. 1, 2019, Grier and other members and associates of the 230 Boys distributed narcotics, including heroin, fentanyl, and cocaine base.
The count of distributing fentanyl carries a maximum penalty of 20 years in prison and a fine of at least $1 million. Sentencing is scheduled for July 14.
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.
Acting U.S. Attorney Honig credited special agents and task force officers with the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff's Office, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. She also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.
The government is represented by Assistant U.S. Attorney Francesca Liquori, of the Organized Crime and Gangs Unit.
Amtrak Employee Charged with Stealing and Selling over $50,000 Worth of Chainsaws and Chainsaw PartsRead the Press Release
NEWARK, N.J. – An Amtrak employee was arrested last night for stealing chainsaws and chainsaw parts valued at over $50,000 from Amtrak and reselling them, primarily through an online auction service, Acting U.S. Attorney Rachael A. Honig announced today.
Jose Rodriguez, 48, of Brick, New Jersey, is charged by complaint with one count of theft from an agency receiving federal funds and one count of theft of government property. Rodriguez is scheduled to appear via videoconference this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the documents filed in this case and statements made in court:
Rodriguez has been an Amtrak employee since October 2007, most recently as a senior engineer and repairman, based out of an Amtrak facility in North Brunswick, New Jersey. Between August 2016 and July 2020, Rodriguez obtained 77 chainsaws, 103 bars, and 163 chains from Amtrak, the total value of which was over $50,000. Rodriguez used an online auction service to sell most of the Amtrak chainsaws and parts to purchasers throughout the United States. Rodriguez also directly contacted one purchaser on multiple occasions offering to sell chainsaws and parts the day before or the same day that Rodriguez picked up chainsaws and parts from Amtrak. Agents recovered several chainsaws that Rodriguez sold, which had serial numbers matching Amtrak’s chainsaws. One of those chainsaws had previously been reported stolen by Amtrak.
The offenses charged in the complaint each carry a maximum penalty of 10 years in prison and maximum fine of $250,000.
Acting U.S. Attorney Honig credited detectives from Amtrak Police New York Division and Mid-Atlantic Division, under the direction of Chief Sam Dotson, and special agents from Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters, Eastern Field Office, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Cari Fais and Jeffrey Manis of the Office’s Special Prosecutions Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
New Jersey Physician and Medical Practice Agree to Pay $106,255 to Resolve False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – A New Jersey physician and his medical practice will pay $106,255 to resolve allegations that they violated the False Claims Act by making false representations in connection with submissions to the Centers for Medicare & Medicaid Services, Acting U.S. Attorney Rachael A. Honig announced today.
According to the contentions of the United States contained in the settlement agreement:
From Jan. 1, 2016, through March 31, 2020, Vedat Obuz and his medical practice, Lotus Clinics P.C./Lotus Family Medicine, falsely billed certain medical procedures to Medicaid and Medicare by representing that the procedures had been performed by Obuz when, in fact, those procedures were performed by nurse practitioners.
The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Kathleen Menold. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Ms. Menold will receive 20 percent from the federal share of the settlement.
The government’s pursuit of this lawsuit illustrates its efforts to combat healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Supervisory Special Agent Thomas Mahoney, with the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorney Daniel Meyler of the Health Care Fraud Unit in Newark.
The lawsuit is captioned United States ex rel. Menold v. Lotus Family Medicine, Vedat Obuz, and Ozlem Obuz, 17-cv-1728 (D.N.J.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Former Police Officer Admits Role in Multimillion-Dollar Compounded Prescription Drug SchemeRead the Press Release
NEWARK, N.J. – A former police officer with the North Brunswick police department today admitted his role in a multimillion-dollar scheme that defrauded state health benefits programs through the submission of medically unnecessary prescriptions for compounded medications, Acting U.S. Attorney Rachael A. Honig announced.
Daniel Passafiume, 45, of Monroe, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with conspiring to commit health care fraud.
According to documents filed in this case and statements made in court:
Between January 2014 and November 2016, Passafiume and a conspirator, identified as CC-1 in the information, marketed certain prescription “compounded medications,” including vitamins and pain creams, to beneficiaries of New Jersey state insurance plans, including the State Health Benefits Program (SHBP). These insurance plans paid thousands of dollars for compounded medications, which 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 because, for example, the patient is allergic to a dye or other ingredient or requires the medication in a different form.
Passafiume and his conspirator had agreements with pharmacies to collect large commission payments for each prescription they obtained for the pharmacy. Passafiume and CC-1 found individuals with these insurance plans and connected them with doctors who were willing to sign prescriptions without an examination or a determination that the individuals needed the compounded medications. Those recruited to obtain prescriptions included employees of a New Jersey police department, family members of these employees, and Passafiume’s own family members. At times, Passafiume provided beneficiaries with cash, checks, and gift cards for agreeing to obtain these prescriptions.
The conspiracy charge carries a maximum potential penalty of 10 years in prison and a fine of $250,000 fine, or twice the gain or loss from the offense, whichever is greater. As part of his plea agreement, Passafiume must forfeit $284,659 in criminal proceeds and pay restitution of $3.27 million. Sentencing is scheduled for July 12, 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 Senior Trial Counsel Leslie Faye Schwartz of the Special Prosecutions Division and Assistant U.S. Attorney Osmar J. Benvenuto of the Health Care Fraud Unit in Newark.
Cardiologist Admits Unlawfully Distributing Thousands of Oxycodone PillsRead the Press Release
NEWARK, N.J. – A New Jersey cardiologist today admitted unlawfully prescribing thousands of Oxycodone pills, Acting U.S. Attorney Rachael A. Honig announced.
Raymond Catania, 59, of Warren, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with dispensing Oxycodone outside of the usual course of professional practice and not for a legitimate medical purpose.
According to documents filed in this case and statements made in court:
Catania was a New Jersey physician specializing in cardiology and practicing in Watchung, New Jersey. From January 2016 through March 2017, Catania issued prescriptions for thousands of Oxycodone pills to one of his patients, and Catania did so without a legitimate medical purpose and outside of the usual course of professional practice. Catania also issued prescriptions for thousands of Oxycodone pills to that patient’s wife even though the wife was not Catania’s patient. Oxycodone – a Schedule II controlled substance – has a high potential for abuse that can lead to severe psychological and physical dependence and can result in fatal overdoses. Catania prescribed more than 8,600 Oxycodone 30 mg pills.
Catania faces a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for July 14, 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 Osmar J. Benvenuto of the Health Care Fraud Unit, and Leslie F. Schwartz, Senior Litigation Counsel, of the Special Prosecutions Division, in Newark.
Three Correctional Officers and a Sergeant Charged with Assaulting Federal Pretrial DetaineeRead the Press Release
NEWARK, N.J. – Three Essex County correctional officers and one sergeant have been charged with conspiring to violate a pretrial detainee’s civil rights, Acting U.S. Attorney Rachael A. Honig announced today.
Officers Angel Chaparro, 38, Damion James, 40, and Luis Ortiz, 29, and Sgt. Herman Pride, 51, are each charged by complaint with one count of conspiracy to violate civil rights. Pride and Ortiz were arrested on March 4, 2021, and had their initial appearances before U.S. Magistrate Judge James B. Clark III. Both were released on bail. Chaparro and James were arrested this morning and will have their initial appearances by videoconference Judge Clark this afternoon.
According to the criminal complaint:
On the evening of Aug. 17, 2020, a federal pretrial detainee at Essex County Correctional Facility (ECCF) squirted a mixture of urine, yogurt, and milk onto a correctional officer. The detainee subsequently was transported to a disciplinary cell, where Chaparro, James, and Ortiz assaulted the detainee, striking him multiple times. Pride did not intervene to stop the assault. At the end of the assault, Pride said, “okay, that’s enough.” During the assault, James’ watch fell off. He and other officers returned to the detainee’s cell to retrieve his watch.
The detainee asked for, and was initially denied, medical assistance. The victim later told Pride that if Pride would provide the victim with medical attention, the victim would lie and say that he had fallen off his bed. Pride refused to provide any medical attention. Two days later, the detainee was finally taken to the emergency room at University Hospital in Newark. He was diagnosed with large swelling and tenderness in the right side of his face and discoloration and bruising around his right eye.
The defendants all were required to submit documentation regarding their use of force. None of them submitted any such reports. Instead, Chaparro signed a false report indicating that no force had been used.
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 the Essex County Correctional Facility Internal Affairs Bureau, under the direction of Director Alfaro Ortiz and the Office of the Warden, with the investigation leading to the charges.
The government is represented by Acting Principal Assistant U.S. Attorney Rahul Agarwal.
The charges and allegations in the criminal complaint are merely accusations, and the defendants are all presumed innocent unless and until proven guilty.
Portfolio Manager of Real Estate Investment Fund Charged with Using Sham Loan Document to Obtain Money from InvestorRead the Press Release
NEWARK, N.J. – A portfolio manager and senior independent executive advisor at a Secaucus-based real estate fund was charged with using a sham loan document to defraud an investor of hundreds of thousands of dollars, Acting U.S. Attorney Rachael A. Honig announced today.
Thomas Nicholas Salzano, aka “Nick Salzano,” of Secaucus, New Jersey, was charged by complaint with one count of wire fraud and one count of aggravated identity theft. Salzano appeared by videoconference on March 4, 2021, before U.S. Magistrate Judge Leda Dunn Wettre and was released on a $100,000 unsecured bond.
According to documents filed in this case and statements made in court:
Salzano was employed at National Realty Investment Advisors (NRIA), a private real estate management fund with a purported $1.25 billion in assets under management as of 2021. In May 2018, Victim 1 purchased three purported units in NRIA’s real estate investment fund for $150,000, after hearing an advertisement for the fund on the radio. Individual 1, a vice president and senior independent project manager at NRIA, offered Victim 1 a guaranteed 6 percent return for each unit purchased, paid monthly, for the first two to two-and-a-half years of the five-year term, and the potential of greater guaranteed returns after the initial period.
Near the end of 2018, Individual 1 approached Victim 1 about a supposed new opportunity to become a joint venture partner with NRIA in a property in North Bergen, New Jersey, allegedly owned by NRIA. According to Individual 1, the minimum investment was $300,000, and Victim 1 could use her original $150,000 investment in the NRIA fund toward the required $300,000 investment in the North Bergen property.
Victim 1 asked Individual 1 for more information on the North Bergen property. Individual 1 sent Victim 1 materials purporting to show that NRIA intended to obtain a $25 million bank loan on the property. Victim 1 asked for information on the loan. Individual 1 then referred Victim 1 to Salzano.
On Jan. 17, 2019, Salzano emailed Victim 1 a purported letter of intent (LOI) from Lender 1, a loan provider for estate investors and developers, purportedly signed by Victim 2, the chief executive officer of Lender 1. The LOI sent by Salzano was fraudulent. A representative later confirmed that the letter was fraudulent and Victim 2’s signature was forged.
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a fine of $250,000. The aggravated identity theft charge is punishable by a mandatory sentence of two years in prison to be served consecutively to any other term of imprisonment imposed.
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 the charges.
The government is represented by Assistant U.S. Attorneys Andrew Macurdy and Jonathan Fayer of the of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Four Members of Interstate Home Burglary Crew Admit to Conspiring to Transport Stolen PropertyRead the Press Release
NEWARK, N.J. – Four individuals admitted to their roles in conspiring to transport stolen property derived from home burglaries across state lines and related crimes, Acting U.S. Attorney Rachael A. Honig announced today.
Julian Zorilla, 53, Erica Rincon, 39, Jhonatan Lozada Serna, 32, all Colombian nationals, and Pablo Neira, 26, of New York, pleaded guilty by videoconference this week before U.S. District Judge Stanley R. Chesler to informations charging each of them with one count of conspiracy to transport stolen property across state lines. In addition, Zorilla, Rincon, and Neira also pleaded guilty to conspiracy to commit bank fraud, and Lozada Serna pleaded guilty to illegally re-entering the United States of America after being previously deported for an aggravated felony.
According to documents filed in this case and statements made in court:
From Dec. 14, 2019, through Jan. 14, 2020, Zorilla, Rincon, Neira, and Lozada Serna conspired with each other to burglarize homes in New Jersey, Pennsylvania, and Delaware. The defendants stole money, jewelry, and designer clothing. They were arrested while breaking into a home in Wilmington, Delaware.
Zorilla, Rincon, and Neira obtained fraudulent foreign travel documents under fictitious names to gain access to United States banks. They used fraudulently obtained financial devices to rent vehicles and hotel rooms used in furtherance of the commission of these home burglaries. Lozada Serna illegally re-entered the United States after his removal in 2019 after he was previously convicted of an aggravated felony in Texas.
The charge of conspiracy to transport stolen property carries a maximum penalty of five years in prison, and a maximum fine of $250,000. The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a maximum fine of $1 million. The charge for illegally re-entering the United States carries a maximum penalty of 20 years in prison and a maximum fine of $250,000. Sentencing for all four defendants is scheduled for July 13, 2021.
Acting U.S. Attorney Honig credited the FBI, under the direction of George M. Crouch Jr. in Newark, with the investigation leading to the guilty pleas. She also thanked special agents of the FBI Baltimore Division, Wilmington Resident Agency and Delaware Violent Crimes Task Force; the FBI New York Office, Joint Terrorism Task Force, John F. Kennedy Airport Resident Agency; Immigration and Customs Enforcement – Enforcement and Removal Operations, Newark; the New Castle County Delaware Police Department, and the Beachwood New Jersey Police Department, for their work on the case.
The government is represented by Special Assistant U.S. Attorney Keith Travers of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.
Doctor Admits Role in Genetic Testing Kickback and Bribery SchemesRead the Press Release
NEWARK, N.J. – A Pennsylvania doctor today admitted participating in two conspiracies to receive bribes and kickbacks in exchange for ordering genetic tests, Acting U.S. Attorney Rachael A. Honig announced.
Lee Besen, 65, of Waverly, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Anne E. Thompson to an information charging him with two counts of conspiring to violate the Anti-Kickback Statute.
Besen is the fourth defendant to plead guilty in bribery and kickback schemes involving doctors and medical employees in the Scranton, Pennsylvania, area.
According to documents filed in this case and statements made in court:
Besen was a primary care physician with an office in the Scranton area. In 2018, he began accepting monthly cash kickbacks and bribes in exchange for collecting DNA samples from Medicare patients and sending them for genetic tests to clinical laboratories in New Jersey and Pennsylvania. The cash kickbacks ranged from $500 to over $8,000. Besen typically accepted the cash inside his office, at times behind locked doors.
When Besen did not receive his kickback and bribe payments, the volume of genetic tests he ordered dipped. When he accepted those payments, that volume typically increased because, as Besen said in a recorded conversation, “Greenbacks speak.” Besen was also recorded discussing the kickback and bribe payments as “vigs” – slang for fees collected by bookies.
Besen frequently sought ways to make more money. At one point, he proposed adding to the scheme by collecting “CGx” cancer screening tests from Medicare patients, sending the tests to a new lab, and then splitting lucrative sales commissions that the lab paid out – ranging up to $2,500 per test. Although Besen had not previously ordered CGx tests for any of his patients, once he realized there was money to be made, he said in a recording that his office was “totally open now for CGx.” He was also recorded saying that he hoped the money he made from CGx tests would help him “retire early.”
Even as the ongoing COVID-19 pandemic substantially reduced in-patient visits, Besen worked with his staff to generate more genetic tests from Medicare patients. Before one illicit payoff that Besen accepted in the parking lot of a fast-food restaurant, he was recorded making veiled threats and expressing concern about being caught on camera accepting kickbacks and bribes. Despite such concerns, he followed through with the meeting because, as he was recorded saying, he wanted to collect “greenbacks” for his “pool house.”
Besen enlisted his employee, Kimberly Schmidt, who, in exchange for cash kickbacks and bribes, helped prepare paperwork for the genetic tests. Schmidt has previously pleaded guilty for her role in the scheme and is awaiting sentencing.
As a result of the scheme, Medicare paid $350,374 for genetic tests generated from Besen’s medical practice.
Separately, Besen and Terri Haines, of Kennett Square, Pennsylvania, entered into a different kickback and bribery scheme involving “health fairs.” Haines was not a health care provider, but made a living soliciting and collecting CGx genetic screening tests from Medicare patients at health fairs, and then sending those tests to a lab in exchange for commissions. She was not authorized to order those CGx tests without a doctor’s sign-off. Haines paid Besen a kickback and bribe to use his name and medical credentials to order CGx tests for the Medicare patients she met at fairs, even though Besen never actually attended any of the health fairs and never met the patients for whom the genetic tests were ordered. Medicare paid $713,882 for CGx genetic tests that resulted from this scheme.
Each conspiracy charge is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived from the offense, whichever is greater. Sentencing is scheduled for July 6, 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; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and special agents of the U.S. Department of Health and Human Services, Office of Inspector General, Philadelphia Regional Office, under the direction of Special Agent in Charge Maureen R. Dixon, with the investigation leading to the charges. She also thanked the FBI Scranton Field Office, FBI Philadelphia Division, and the Pennsylvania Attorney General’s Office for their assistance.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit and Acting Principal Assistant U.S. Attorney Rahul Agarwal.
The charges and allegations against Haines are merely accusations, and she is presumed innocent unless and until proven guilty.
Three Essex County Men Admit Conspiring to Defraud Banks of over $250,000 Using Credit Cards and Blank Checks Stolen from MailRead the Press Release
NEWARK, N.J. – Three Essex County, New Jersey, men admitted conspiring to defraud two banks of $250,000 using stolen credit cards and blank checks, Acting U.S. Attorney Rachael A. Honig announced today.
Alexander Varice, 22, and Dashawn Duncan, 27, both of South Orange, New Jersey, and Nasheed Jackson, 24, of Newark; of South Orange, New Jersey, pleaded guilty this week by videoconference before U.S. District Judge Susan D. Wigenton to informations charging each of them with one count of conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
From August 2018 through January 2020, Varice, Jackson, and Duncan engaged in a scheme to use stolen credit cards or checks to fraudulently make purchases and withdraw money from two banks. The credit cards were stolen from facilities used by the U.S. Postal Service in Pine Brook and Warren, New Jersey, and never reached the intended cardholders. After obtaining the stolen cards, Varice, Jackson, and Duncan used them to make unauthorized purchases at various retail stores and to withdraw cash from automated teller machines (ATMs) in New Jersey and elsewhere. The blank checks were also stolen from various New Jersey-based post office facilities, and never reached their intended recipients. Varice and Jackson altered the date, payee, and amount of the stolen checks prior to deposit into a third-party account so that they could manually enter the amounts that they wanted to fraudulently withdraw from a victim bank ATM.
The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a maximum fine of $1 million. Sentencing is scheduled as follows: Varice, July 13, 2021; Jackson, July 14, 2021; and Duncan, July 19, 2021.
Acting U.S. Attorney Honig credited inspectors of the U.S. States Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero in Newark, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Blake Coppotelli of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Bergen County Man Charged with Tax EvasionRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was charged today with tax evasion for calendar years 2014 to 2016, Acting U.S. Attorney Rachael A. Honig announced.
David Kushner, 55, of Cresskill, New Jersey, was indicted by a federal grand jury on three counts of tax evasion. He will be arraigned at a later date.
According to the indictment:
Kushner served as a partner of a real estate investment business and as a partner and president of a property management business. Based on his roles, Kushner received management fee income and additional payments from the businesses.
Kushner controlled four bank accounts. Kushner deposited payments and income from the businesses and elsewhere into the accounts and then used most of the funds for personal expenses. Kushner failed to file any income tax returns, failed to make any estimated payments for the accounts, and failed to declare most of the funds in the accounts as income on his individual income tax returns. As a result, Kushner evaded hundreds of thousands of dollars in personal income taxes.
Each count of tax evasion carries a maximum potential penalty of five years in prison and a maximum fine of $250,000.
Acting U.S. Attorney Honig 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 today’s indictment.
The government is represented by Assistant U.S. Attorney Alexandra Saker of the U.S. Attorney’s Office’s Narcotics/OCDETF Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Jeweler Admits Lying to Federal Agents During InvestigationRead the Press Release
NEWARK, N.J. – The manager of a Jersey City jewelry store today admitted lying to federal agents during an investigation into a fraud conspiracy, Acting U.S. Attorney Rachael A. Honig announced today.
Khaled Hamade, 60, of Clifton, New Jersey, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an information charging him with one count of making false statements to federal agents.
According to documents filed in this case and statements made in court:
Hamade was the manager of a jewelry store at the Newport Mall in Jersey City. In March 2019, he provided false information to federal agents who were investigating a fraud conspiracy against a financial institution. Hamade denied knowledge of the identities, and personal information, of numerous customers of his jewelry store who were believed to have engaged in the fraud.
The count of providing false statements to which Hamade pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for July 14, 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, and inspectors of the U.S. Postal Inspection Service, under the supervision of Acting Inspector in Charge Raimundo Marrero in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Bergen County Man Admits Filing 18 Phony Tax Returns to Obtain Tax RefundsRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man today admitted filing 18 fraudulent tax returns in victims’ names to obtain tax refunds to which he was not entitled, Acting U.S. Attorney Rachael A. Honig announced.
Emmanuel A. Barrientos-Fermin, 33, of Tenafly, New Jersey, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an indictment charging him with one count each of conspiracy to commit wire fraud, access device fraud, and aggravated identity theft.
According to documents filed in this case and statements made in court:
Barrientos-Fermin admitted that from January 2020 through February 2020, he and others conspired to use stolen personal identifying information (PII) to submit fraudulent tax returns in victims’ names to obtain tax refunds without the victims’ knowledge or consent. A conspirator (CC-1) obtained falsified Social Security cards, driver’s licenses, birth certificates and W-2 forms bearing the victims’ stolen PII. The conspirator provided the documents to Barrientos-Fermin and others, who would use fraudulently obtained PII to file tax returns at various tax preparation company branches, posing as the victims.
Barrientos-Fermin admitted that he entered into an agreement in which CC-1 would pay him $200 to enter tax preparation companies posing as the victims to file tax returns in their names. Barrientos-Fermin provided CC-1 a photo of himself and CC-1, in turn, provided Barrientos-Fermin with driver’s licenses bearing Barrientos-Fermin’s photos and the victims’ PII. CC-1 also provided Barrientos-Fermin with matching Social Security cards, W-2s, and sometimes birth certificates. Barrientos-Fermin admitted going into tax preparation locations pretending to be the victims and providing the false documents to the tax preparers to prepare and file the fraudulent tax returns. After submitting each fraudulent tax return and collecting advance refund debit cards, Barrientos-Fermin provided CC-1 the debit cards in exchange for cash payments of about $200 per return.
The count of conspiracy to commit wire fraud carries a maximum sentence of 20 years in prison, and the count of access device fraud carries a maximum sentence of 10 years in prison. The count of aggravated identity theft carries a statutory minimum term of imprisonment of two years in prison, which must run consecutively to any other term of imprisonment imposed. All the counts also carry a maximum fine of $250,000, or twice the gross gain or loss caused by the offenses, whichever is greater. Sentencing is scheduled for Sept. 15, 2021.
Acting U.S. Attorney Honig credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Raimundo Marrero in Newark; and special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s guilty plea. She also thanked the Totowa, New Jersey, Police Department, under the direction of Chief of Police Carmen Veneziano, for its 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.
Two Men Charged with Conspiring to Distribute Heroin after Seizure of 20 Kilograms of Heroin from Mill in PatersonRead the Press Release
NEWARK, N.J. – Two men will make their initial court appearances today after being arrested and charged in connection with a drug distribution conspiracy, Acting U.S. Attorney Rachael A. Honig announced.
Luis Cepeda-Capellan, 25 of Paterson, New Jersey, and Isidro Fernandez, 32, of New York, are each charged by complaint with one count of conspiracy to distribute heroin. They are scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge James B. Clark III.
According to documents filed in this case and statements made in court:
During an investigation by the Drug Enforcement Administration (DEA), New York Drug Enforcement Task Force (NYDETF), law enforcement officers learned that Fernandez purchased significant quantities of items associated with the illegal manufacture and distribution of narcotics, including thousands of glassine bags, strainers, sifters, and scales. On Feb. 25, 2021, law enforcement officers observed Fernandez receive boxes of items consistent with those used to transport drug paraphernalia, such as large quantities of glassine bags, in New York. After obtaining the boxes, Fernandez traveled into New Jersey and delivered these boxes to an individual who brought them to Cepeda-Capellan’s residence.
The charge of conspiracy to distribute one kilogram or more of heroin carries a mandatory minimum of 10 years in prison, a maximum of life in prison, and a fine of $10 million, or twice the amount of money involved in the offense, whichever is greater.
Acting U.S. Attorney Honig credited the NYDETF, which comprises special agents and task force officers of the DEA, New York City Police Department, and New York State Police,with the investigation leading to the charges.
The government is represented by Special Assistant U.S. Attorney Keith Travers of the U.S. Attorney’s Office Organized Crime and Drug Enforcement Task Force/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.
Canadian Fugitive Charged with Distribution and Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A Bronx, New York, man appeared in court today on charges of possessing and distributing images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.
Perth De, aka “Parthasarthie Kapoor,” 47, is charged by complaint with one count of distribution of child pornography and one count of possession of child pornography. He appeared by videoconference today before U.S. Magistrate Judge James B. Clark III and was ordered detained.
According to documents filed in this case and statements made in court:
On Jan. 21, 2020, De was arrested at Newark Liberty International Airport pursuant to a provisional arrest warrant obtained at the request of the Government of Canada, which previously charged De with sexually assaulting minors. Law enforcement officials found several cellular phones in De’s luggage. A subsequent forensic examination of one of the cellular phones revealed numerous videos of children being sexually abused. Some of the videos had been distributed from the cellular phone.
The charge of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison and a fine of $250,000. The charge of possession of child pornography carries a maximum penalty of 10 years in prison and a fine of $250,000.
Acting U.S. Attorney Honig credited special agents with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, and the U.S. Department of State Diplomatic Security Service, with the investigation leading to the charges.
The government is represented by Special Assistant U.S. Attorney Kendall Randolph of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
National Leader of Outlaw Motorcycle Gang Charged with Illegally Possessing a FirearmRead the Press Release
NEWARK, N.J. – A Suffolk County, New York, man was arrested today for illegally possessing a firearm, Acting U.S. Attorney Rachael A. Honig announced.
Keith Richter, aka “Conan,” 62, of Bay Shore, New York, is charged by criminal complaint with one count of possession of a firearm by a convicted felon. He is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Michael A. Hammer.
According to documents filed in this case and statements made in court:
Richter is the national president of the Pagan’s Motorcycle Club, an outlaw motorcycle gang known by law enforcement to engage in illegal activity, including narcotics trafficking, weapons trafficking, and violent crimes.
On Feb. 20, 2021, the Pagans hosted a party in Lancaster, Pennsylvania. While Richter was traveling home from the party late at night, he was stopped by law enforcement officers in Mercer County, New Jersey. Officers recovered a loaded Ruger P345 .45 caliber handgun from the vehicle.
Richter was previously convicted of felony offenses, including conspiracy to commit murder in aid of racketeering and attempted assault with a dangerous weapon in aid of racketeering, for which he served 16 years in prison.
The count of being a felon in possession of a weapon carries a maximum sentence of 10 years in prison and a fine of $250,000.
Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; special agents of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Susan A. Gibson; the Suffolk County District Attorney’s Office, under the direction of District Attorney Timothy D. Sini; the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo; and the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to these charges.
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.
The government is represented by Assistant U.S. Attorneys Robert Frazer, R. Joseph Gribko, and Samantha C. Fasanello, of the U.S. Attorney’s Office in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Camden County Man Admits Conspiring with White Supremacists to Vandalize Synagogues Across the CountryRead the Press Release
CAMDEN, N.J. – A Camden County man today admitted his role in conspiring with members of a white supremacist hate group to threaten and intimidate African Americans and Jewish Americans by vandalizing minority-owned properties throughout the country in September 2019, Acting U.S. Attorney Rachael A. Honig announced.
Richard Tobin, 19, of Brooklawn, New Jersey, pleaded guilty to an information charging him with conspiracy against rights before U.S. District Judge Robert B. Kugler in Camden federal court.
“Americans should never have to fear racist, antisemitic or any other form of bias-motivated violence,” Acting U.S. Attorney Rachael A. Honig said. “This defendant encouraged hateful acts of violence against individuals and their houses of worship, based solely on their religion or the color of their skin. Together with our colleagues in the Civil Rights Division and the Joint Terrorism Task Force, this Office will continue to work every day to identify individuals like him and bring them swiftly to justice.”
“The FBI and our partners simply won’t tolerate crimes spurred by hate, which are meant to intimidate and isolate the groups targeted,” Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division, said. “People of all races and faiths deserve to feel safe in their communities. Richard Tobin encouraged others to victimize innocent people, in furtherance of his abhorrent white supremacist beliefs. While we all have the right to believe whatever we want, when those views lead to violence, that’s a different and dangerous story.”
“Conspiring with others to vandalize and destroy property owned by African-Americans and Jewish Americans will not be tolerated by the Department of Justice,” said Principal Deputy Assistant Attorney General Pam Karlan of the Civil Rights Division. “Every person should feel secure knowing they have the right to own and use their property free from being targeted because of their race or religion. We will continue to protect the civil rights of all individuals and vigorously prosecute bias motivated crimes.”
According to documents filed in this case and statements made in court:
Tobin admitted that from Sept. 15 to Sept. 23, 2019, he was a member of a white supremacist group, “The Base,” and during that time, he communicated online with other members and directed them to destroy and vandalize properties affiliated with African Americans and Jewish Americans. Tobin dubbed this coordinated attack “Kristallnacht,” or “Night of Broken Glass,” after an attack in Germany on Nov. 9 and 10, 1938, in which Nazis murdered Jewish people and burned and destroyed Jewish homes, synagogues, stores and schools. Tobin implored members of The Base to post propaganda flyers and to break windows and slash tires belonging to African Americans and Jewish Americans. On Sept. 21, 2019, members of The Base vandalized synagogues in Racine, Wisconsin, and Hancock, Michigan, by spray painting them with hate symbols.
A conspirator, Yousef Omar Barasneh, previously pleaded guilty to conspiracy against rights in federal court in the Eastern District of Wisconsin, for his role in vandalizing the synagogue in Racine, Wisconsin.
The conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater. Sentencing is scheduled for June 28, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI Philadelphia Division’s South Jersey Resident Agency, under the direction of Special Agent in Charge Driscoll, and the Joint Terrorism Task Force and its member agencies, including the Department of Homeland Security – Homeland Security Investigations, the New Jersey Office of Homeland Security and Preparedness, the New Jersey State Police and the Camden County Police Department, with the investigation leading to today’s guilty plea. She also thanked the Brooklawn and Cherry Hill police departments for their assistance.
The government is represented by Assistant U.S. Attorney Kristen M. Harberg of the U.S. Attorney’s Office in Camden and Trial Attorney Eric Peffley of the Civil Rights Division, Criminal Section.
Morris County Pharmacy Employee Charged with $1.9 Million Kickback and Bribery SchemeRead the Press Release
NEWARK, N.J. – A pharmacy employee was charged for conspiring to offer and pay bribes and kickbacks in exchange for having prescriptions steered to the Morris County, New Jersey, pharmacy where he worked, Acting U.S. Attorney Rachael A. Honig announced today.
Srinivasa Raju, 49, of Haskell, New Jersey, was arrested today and charged by complaint with conspiring to violate the Anti-Kickback Statute. He had his initial appearance by videoconference before U.S. Magistrate Judge Michael A. Hammer and was released on $250,000 unsecured bond.
Magdalena Jimenez, 56, of Newark, New Jersey, was previously charged with a parallel bribery and kickback scheme involving the same pharmacy. Those charges remain pending.
According to documents filed in this case and statements made in court:
Raju had various responsibilities at the Morris County pharmacy, including coordinating prescription deliveries and soliciting business. From at least January 2019, Raju worked with other pharmacy personnel to pay kickbacks and bribes to a doctor’s employee in exchange for receiving numerous prescriptions from that doctor’s Jersey City office.
Raju first paid the kickbacks and bribes using gift cards, but soon switched to cash and checks. He typically handed the kickbacks and bribes to coworkers inside the pharmacy and directed them to deliver the payments to the doctor’s employee. To conceal the true nature of some of the illicit payments, Raju had approximately $8,000 worth of checks made out to the employee’s relative, under the guise of paying for IT services. In truth, Raju never met or communicated with the relative, and no actual services were performed.
In November 2020, Raju was recorded inside the pharmacy directing an employee to deliver a kickback and bribe of “200 bucks for Thanksgiving.” Raju asked, “What do you think, I should give $300? What do you think?” Raju then counted out more cash, which he put in a sealed envelope to have hand delivered. In December 2020, he had a $250 cash kickback and bribe, which was stashed inside a Christmas card, hand delivered to the doctor’s employee, inside the doctor’s office.
The conspiracy charge is punishable by a maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss derived 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 Agents with the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas Mahoney, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit.
The charges and allegations in the complaints against Raju and Jimenez are merely accusations, and they are both presumed innocent unless and until proven guilty.
New Jersey Nurse Admits Role in Multimillion-Dollar Compounding Fraud SchemeRead the Press Release
NEWARK, N.J. – A New Jersey nurse today admitted her role in a multimillion-dollar compounding fraud scheme, Acting U.S. Attorney Rachael A. Honig announced.
Jennifer Nash, 51, of River Vale, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging her with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Beginning in 2015, Nash was recruited by two individuals who owned a pharmaceutical marketing company to write prescriptions for customized drugs known as “compounded medications” in exchange for payment. Not only did Nash write these prescriptions regardless of whether a health insurance plan beneficiary needed such a medication, she also wrote them even though her Advance Practice Nurse license was inactive or suspended. On other occasions, Nash wrote prescriptions for compounded medications, in exchange for cash payments, without meeting with or examining patients.
In addition to authorizing these medically unnecessary prescriptions, Nash served as a sales representative. She collected large commission payments in exchange for marketing these compounded medications without regard to whether a beneficiary needed such a medication or whether an FDA-approved medication would have been appropriate and sufficient.
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 medical professional determines that an FDA-approved medication does not meet the health needs of a particular patient. For example, compounded drugs may be appropriate for a patient who is allergic to a dye or other ingredient or a patient who cannot consume a medication by traditional means, such as an elderly patient or child who needs the medication in a liquid form instead of an FDA-approved pill.
The conspiracy count to which Nash pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000 fine, or twice the gain or loss from the offense, whichever is greater. Sentencing is scheduled for July 6, 2021.
Acting U.S. Attorney Honig credited special agents and of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and José R. Almonte of the Health Care Fraud Unit in Newark.
Former Sales Representative Indicted in Compounded Prescription Drug SchemeRead the Press Release
NEWARK, N.J. – A former sales representative was arrested today for his role in a scheme to defraud public health benefits programs by billing for medically unnecessary compounded prescriptions, Acting U.S. Attorney Rachael A. Honig announced.
Matthew Puccio, 38, of Randolph, New Jersey, was indicted by a federal grand jury on Feb. 17, 2021, for conspiracy to commit health care fraud. He will be arraigned at a date to be determined.
According to the indictment returned yesterday:
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 ingredients in the prescription.
Between November 2014 and March 2016, Puccio participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public health benefits programs. The scheme centered on marketing companies recruiting and paying sales representatives, such as Puccio, to obtain compounded medications for themselves and others regardless of medical necessity, and by specifically targeting health plans that reimbursed for compounded medications at high rates.
Puccio exploited this opportunity through working as a sales representative for several compounding pharmacies. He targeted individuals who had health plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity. Puccio and others induced two New Jersey based physicians to sign medically unnecessary prescriptions for beneficiaries that he and others had recruited.
Once the prescriptions were written, they were filled by the compounding pharmacies with which Puccio worked. The compounding pharmacies would then receive reimbursement from the health plans and would pay Puccio a percentage of the reimbursement amount.
The charge of conspiracy to commit health care fraud carries a maximum sentence of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Acting Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorneys Emma Spiro and Sean M. Sherman of the U.S. Attorney’s Office’s Opioid Abuse Prevention and Enforcement Unit in Newark.
The charge and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Somerset County Man Admits Traveling Outside of United States to Engage in Criminal Sexual ConductRead the Press Release
TRENTON, N.J. – A Somerset County, New Jersey, man today admitted traveling to the Philippines to engage in sex with a minor, Acting U.S. Attorney Rachael A. Honig announced.
James A. Diggs, 45, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to an information that charged him with traveling outside of the United States to engage in criminal sexual activity.
According to documents filed in this case and statements made in court:
In October 2018, Diggs traveled to the Philippines to meet and engage in sexual activity with Minor Victim-1 in exchange for money and gifts, knowing the victim was a minor.
Foreign travel to engage in criminal sexual activity carries a maximum potential penalty of 30 years in prison and a $250,000 fine.
Acting U.S. Attorney Honig credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to today’s guilty plea. She also thanked agents of the U.S. Customs and Border Protection, John F. Kennedy International Airport, for their assistance.
The government is represented by Assistant U.S. Attorney Patricia Astorga of the Opioid Abuse Prevention and Enforcement Unit of the U.S. Attorney’s Office in Newark.
Morris County Man Sentenced to 18 Months in Prison for Filing False Tax ReturnsRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, man who owned and operated construction businesses in Morris County was sentenced today to 18 months in prison for filing false tax returns that failed to report all his personal income, acting U.S. Attorney Rachael A. Honig announced.
Roger Magill, 51, of Wharton, the owner and operator of Reliable Construction, aka Reliable Paving, and Hackensack Pavers, aka Hackensack Paving, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to one count of an information charging him with tax evasion. Judge Wigenton imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
Between 2014 and 2016, obtained hundreds of thousands of dollars in personal income from his construction businesses, which he attempted to hide from the IRS by using a fictitious identity to cash business checks at several check cashing businesses. Magill attempted to hide his personal income by depositing money into bank accounts that he did not report to the IRS. He evaded paying $261,758 in personal income taxes.
In addition to the prison term, Judge Wigenton sentenced Magill to two years of supervised release.
Acting U.S. Attorney Honig credited 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 Jamel Semper, Chief of the Organized Crime and Gangs Unit in Newark.
Senior Care Company Agrees to Pay $714,996 to Resolve False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – A New Jersey senior care company will pay $714,996 to resolve allegations that it violated the False Claims Act by making false representations in connection with submissions to the Centers for Medicare & Medicaid Services, Acting U.S. Attorney Rachael A. Honig announced today.
According to the contentions of the United States contained in the settlement agreement:
CareOne Management LLC, now known as ABC1857 LLC (CareOne), submitted claims for payment to Medicare for reimbursement of Medicare bad debt from Jan. 1, 2012, to July 2, 2018. Medicare reimburses health care providers for uncollectable deductible and coinsurance amounts from Medicare beneficiaries – known as “bad debts.” The company made false representations of compliance with applicable statutory and regulatory criteria, including “criteria for allowable bad debt,” which require a provider to “be able to establish that reasonable collection efforts were made” of amounts owed by beneficiaries before a provider submits the claim as bad debt to Medicare.
The allegations were originally made in a lawsuit filed by Margaret Gathman under the whistleblower provisions of the False Claims Act. The Act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Ms. Gathman will receive $143,000 from the federal share of the settlement.
Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).
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; special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Supervisory Special Agent Thomas Mahoney, with the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorney Daniel Meyler of the Health Care Fraud Unit in Newark.
The lawsuit is captioned United States ex rel. Gathman v. CareOne LLC, 17-cv-6180 (D.N.J.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Essex County Man Admits Role in $23 Million Identity Fraud and Money Laundering SchemeRead the Press Release
NEWARK, N.J. – A Newark today man admitted his role in a large international money laundering conspiracy and to using a stolen identity in furtherance of the scheme, Acting U.S. Attorney Rachael A. Honig announced.
Edwin Deleon-Batista, 37, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiracy to commit money laundering and one count of identity fraud.
According to documents filed in this case and statements made in court:
From March 2018 through October 2019, Deleon-Batista laundered over $23 million in cash drug proceeds on behalf of a money laundering organization with close ties to drug trafficking organizations in the Dominican Republic and elsewhere. Deleon picked up large amounts of cash drug proceeds in New Jersey, New York, and Florida and laundered it by purchasing cashier’s checks at local bank branches. The checks were made payable to individuals and companies specified by the leaders of the money laundering organization. By converting the drug proceeds to cashier’s checks, Deleon tried to hide the source of the illegal cash and avoid scrutiny by law enforcement and banks.
Deleon-Batista was previously arrested on federal money laundering charges in New York in April 2019. Soon after his arrest, Deleon-Batista began using a stolen identity and obtained a fraudulent Florida driver’s license to continue the money laundering scheme. He used the fraudulent license to open several bank accounts, which he then used to convert millions of dollars more in cash drug proceeds into cashier’s checks at bank branches in New Jersey, New York, and Florida over a five-month period.
The charge of money laundering conspiracy carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the amount involved in the offense, whichever is greater. The charge of identity fraud carries a maximum prison sentence of five years and a maximum $250,000 fine. Sentencing is scheduled for June 22, 2021.
Acting U.S. Attorney Honig credited special agents and task force officers of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson, and the New York Division, under the direction of Special Agent in Charge Raymond Donovan; special agents and task force officers of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and the Morristown, New Jersey, police department, under the direction of Acting Police Chief Darnell Richardson with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the Criminal Division in Newark.
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.
Warren County Man Admits Role in Scheme to Deceive Bank and Bank RegulatorsRead the Press Release
NEWARK, N.J. – A Warren County, New Jersey, man today admitted his role in a scheme to defraud a bank and bank regulators, Acting U.S. Attorney Rachael A. Honig announced.
Gary Ketchum, 73, of Hackettstown, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to a superseding information charging him with one count of conspiring to make false entries to deceive First State Bank and to deceive the Federal Deposit Insurance Corporation, FSB’s regulators.
According to documents filed in this case and statements made in court:
A three-phase scheme took place from 2009 to 2010. The first phase was to fraudulently infuse $7 million of capital into First State Bank (FSB). In the second phase of the scheme, conspirators caused FSB to make millions of dollars in loans based on material misrepresentations to cover up the fraudulent nature of the capital infusion and to end inquiries from FSB’s auditors. The final phase involved lying to the FDIC and FSB, among others, about the fraudulent capital infusion and loans.
In May 2017, a conspirator, Donna Conroy, pleaded guilty to her role and is awaiting sentencing. In October 2018, Ketchum, along with conspirators Joseph Natale, former CEO of FSB, formerly of Cranford, New Jersey, and Albert Gasparro were charged by indictment with conspiracy to deceive the FDIC and FSB, deceiving those two entities, conspiracy to commit bank fraud, and bank fraud. Natale is scheduled stand trial before Judge McNulty beginning on Nov. 1, 2021. The charges against Gasparro remain pending.
The conspiracy count to which Ketchum pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross loss sustained by any victim. Sentencing is scheduled for June 28, 2021.
Acting U.S. Attorney Honig credited special agents of the FDIC – Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca; special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr.; and inspectors of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Goldsmith Romero, with the investigation leading to today’s guilty plea.
The government is represented by Ari B. Fontecchio of the Economic Crimes Unit of the U.S. Attorney’s Office, District of New Jersey.
The charges and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Newark Woman Admits Possessing Stolen MailRead the Press Release
TRENTON, N.J. – An Essex County, New Jersey woman admitted to unlawfully possessing stolen mail in Hunterdon and Monmouth Counties, Acting U.S. Attorney Rachael A. Honig announced.
Michele Dearaujo, 37, of Newark, pleaded guilty by videoconference before U.S. District Judge Anne E. Thompson to two counts of unlawfully possessing stolen mail.
According to documents filed in this case and statements made in court:
On Oct. 14, 2020, a mailbox in Hunterdon County was tampered with in the early morning; the victim had been expecting replacement credit cards to be delivered by mail. The victim later learned the victim’s credit card had been fraudulently used to purchase merchandise worth hundreds of dollars. The merchandise was to be shipped to Dearaujo at her address.
The investigation revealed that Dearaujo had stolen mail from several residences in New Jersey. Dearaujo admitted that on Nov. 20, 2020, in Hunterdon County, and on January 25 2019, in Monmouth County, she unlawfully possessed mail which had been stolen, knowing that it had been stolen.
The counts of unlawful possession of stolen mail each carry a maximum penalty of five years of imprisonment and a $250,000 fine. Sentencing is scheduled for June 14, 2021.
Acting U.S. Attorney Honig credited postal inspectors of the U.S Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, with the investigation leading to today’s guilty plea. She also thanked the Tewksbury Township Police Department, Rumson Police Department, Saddle River Police Department, Woodcliff Lake Police Department, Warren Township Police Department, Readington Township Police Department, and Clinton Township Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Katherine Calle of the U.S. Attorney’s Office OCDETF/Narcotics Unit.
Three Men Charged in Conspiracy to Distribute Fentanyl, Methamphetamine and Cocaine into New JerseyRead the Press Release
NEWARK, N.J. – Three New York men have been charged in connection with a conspiracy to distribute fentanyl, methamphetamine and cocaine in New Jersey from locations in Manhattan, Acting U.S. Attorney Rachael A. Honig announced today.
Juan Carlos Merced Moreno, aka “Samuel,” 43; Antonio Hidalgo, aka “Cacona,” 43, and Jose Miguel Abreu, aka “Pelu,” 26, all from Manhattan, are charged by complaint with one count of conspiracy to distribute 400 grams or more of suspected fentanyl, 500 grams or more of suspected methamphetamine, and 500 grams or more of suspected cocaine. Merced Moreno appeared by videoconference today before U.S. Magistrate Judge Cathy L. Waldor and was detained. Hidalgo is in custody on other charges and Abreu is at large.
According to documents filed in this case and statements made in court:
In February 2019, law enforcement officials began investigating a drug trafficking organization based in Hudson County, New Jersey, and intercepted telephone calls made by its members. Officials learned of a fentanyl pill press based being operated by Moreno, Hidalgo and Abreu in the Washington Heights neighborhood of Manhattan. Based on intercepted telephone calls and surveillance between November 2020 and January 2021, law enforcement officials learned the defendants supplied fentanyl pills to the New Jersey drug trafficking organization, which subsequently distributed them throughout New Jersey. Law enforcement believes that the three defendants supplied approximately at least 25,000 fentanyl pills to the New Jersey organization.
Law enforcement officials began to intercept telephone calls made and received by Moreno and Hidalgo, as well as telephone calls between the two men and Abreu, and identified various residences and stash locations in Manhattan associated with the DTO-NY. On Jan. 29, 2021, law enforcement officials executed search warrants on Moreno’s residence, Hidalgo’s residence, Abreu’s residence and other stash and manufacturing locations. They recovered: 5.4 kilograms of a suspected combination of methamphetamine and fentanyl; 1.7 kilograms of suspected methamphetamine in a crystalized rock form; 1.6 kilograms of suspected methamphetamine pills; 1.5 kilograms of suspected fentanyl pills; 1.3 kilograms of suspected cocaine; 788 grams of suspected fentanyl in brick form; two pill presses; four scales; and $11,180. The seized narcotics have an estimated street value of $700,000.
The drug distribution conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a maximum $10 million fine.
Acting U.S. Attorney Honig credited special agents of the U.S. Department of Homeland Security Investigations, New York City Airport Border Enforcement Security Taskforce, under the direction of Peter C. Fitzhugh; special agents from U.S. Department of Homeland Security, Homeland Security Investigations – Newark, under the direction of Special Agent in Charge Jason J. Molina; members of the New York Police Department, under the direction of Commissioner Dermot F. Shea; and investigators and assistant prosecutors from the Hudson County Prosecutor’s Office, under the direction of Hudson County Prosecutor Esther Suarez, with the investigation leading to the charges and arrests.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
The charges and allegations against the defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Morris County Man Charged with Producing, Possessing and Mailing Child PornographyRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey man who is employed by a New Jersey elementary school and helps run a youth soccer club has been charged in connection with production, possession and mailing child pornography, Acting U.S. Attorney Rachael A. Honig announced today.
Steven Brooks, 34, of Morristown, New Jersey, is charged by complaint with one count of production of child pornography, one count of possession of child pornography and one count of mailing child pornography. He is scheduled to appear by videoconference today before U.S. Magistrate Judge Cathy L. Waldor.
According to documents filed in this case and statements made in court:
In January 2021, law enforcement officers were notified about possible child pornography on an external hard drive belonging to Brooks. Law enforcement officers conducted a legally authorized search of Brooks’ external hard drive. The investigation revealed that Brooks used a fake online persona on a social media account to solicit nude photos and videos from teenage victims. A video file on Brooks’s external hard drive showed the fake online persona that Brooks created using a social media platform to communicate with a minor and to solicit the minor to send a video that depicted the minor masturbating. There were dozens of other images of child sexual abuse.
The production of child pornography charge carries a mandatory minimum sentence of 15 years and a maximum of 30 years in prison. The possession of child pornography charge carries a maximum sentence of 10 years in prison. The mailing of child pornography charge carries a mandatory minimum sentence of five years and a maximum of 20 years in prison. Each charge also includes a maximum fine of $250,000.
Acting U.S. Attorney Honig credited special agents and members of the Child Exploitation Human Trafficking Task Force of the Newark field office of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., as well as special agents from the FBI’s San Francisco field office, under the direction of Special Agent in Charge Craig D. Fair, with the investigation leading to the charges and arrest.
The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
The charges and allegations against the defendants are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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Acting U.S. Attorney Rachael A. Honig Welcomes Acting Newark Public Safety Director; Thanks Retiring Director for His ServiceRead the Press Release
NEWARK, N.J. – Acting U.S. Attorney Rachael A. Honig today congratulated Brian O’Hara on being named as the new Acting Public Safety Director for the City of Newark, replacing Public Safety Director Anthony F. Ambrose when he retires on March 31, 2021.
“Our office has worked well with Deputy Chief O’Hara in his previous role overseeing the Newark Police Division’s Accountability, Engagement and Oversight Bureau, a role of key importance to our ongoing consent decree with the City of Newark,” Acting U.S. Attorney Honig said. “We look forward to working with him and continuing the productive relationship we’ve developed in Newark under the direction of Public Safety Director Ambrose. We wish Director Ambrose a well-earned and enjoyable retirement.”
Queens Man Charged with Referral-Fee Fraud on Ride Sharing BusinessRead the Press Release
NEWARK, N.J. – A Queens man has been charged with using hundreds of stolen and false identities to defraud a ride sharing business of over $500,000 in delivery driver referral benefits, Acting U.S. Attorney Rachael A. Honig announced today.
Hatem Ghouneim, 32, of Astoria, New York, was charged Feb. 11, 2021, by indictment with three counts of wire fraud and one count of aggravated identity theft.
According to documents filed in this case:
Corporate Victim 1 was a technology company headquartered in San Francisco, California, that allowed users to order food from restaurants and have it delivered by eligible delivery carriers. To grow its platform, Corporate Victim 1 employed referral promotions. Individuals participating in the referral program could earn money by inviting new delivery carriers who met Corporate Victim 1’s criteria and who completed the actions required by the specific referral program.
Throughout 2019, Ghouneim engaged in a scheme to fraudulently obtain delivery carrier referral fees from Corporate Victim 1. He created fraudulent delivery carrier accounts with Corporate Victim 1, using hundreds of stolen and false identities, to induce Corporate Victim 1 to pay referral fees for each new fake account. Ghouneim defrauded Corporate Victim 1 of over $500,000 in referral fees.
The wire fraud counts carry a maximum penalty of 20 years in prison and a $250,000 fine. The aggravated identity theft count carries a mandatory minimum penalty of two years in prison.
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 the charge.
The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Union County Man Admits $1.6 Million Tax Evasion SchemeRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man who owned and operated contracting businesses in Essex County, New Jersey, today admitted filing false tax returns that failed to report all his personal and corporate income, Acting U.S. Attorney Rachael A. Honig announced.
Olger Fallas, 49, of Union, the owner and operator of Olger Fallas Painting (OFP) and Olger Fallas Properties (OFPROP) pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to an information charging him with two counts of tax evasion.
According to documents filed in this case and statements made in court:
Fallas admitted that between 2013 and 2017 he owned OFP and OFPROP. He admitted that he attempted to hide personal and corporate income from the IRS by using a check cashing business to cash customer payments, which he did not report to the IRS. Fallas also admitted that he deposited hundreds of thousands of dollars in customer payments into bank accounts that were not associated with his companies. Fallas admitted that he evaded paying approximately $1.7 million in personal and corporate income taxes during the scheme.
The counts of tax evasion each carry a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for June 22, 2021.
Acting U.S. Attorney Honig credited agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jamel Semper, Chief of the Organized Crime and Gangs Unit in Newark.
Trenton Man Charged with Spree of Armed Carjackings and Robberies, Brandishing Firearms During Crimes of Violence, and Possession of Firearm as Convicted FelonRead the Press Release
TRENTON, N.J. –A Trenton man has been charged with committing a string of armed carjackings and armed robberies, including the armed robbery of a commercial establishment in Trenton, Acting U.S. Attorney Rachael Honig announced today.
Joshua Perez, 22, of Trenton, is charged by complaint with one count of Hobbs Act robbery, two counts of carjacking, three counts of possession of and brandishing a firearm during and in relation to a crime of violence, and one count of possession of a firearm after previously being convicted of a felony offense. Perez is currently in custody on unrelated charges. He will make his initial appearance before U.S. Magistrate Judge Lois H. Goodman at a date to be determined.
According to the criminal complaint filed today:
Law enforcement officers investigated a series of armed robberies and carjackings in and around Trenton in late 2020. The investigation revealed that Perez, a previously convicted felon, and other individuals committed at least three of those armed carjackings and robberies.
On Oct. 10, 2020, law enforcement responded to a report of an armed robbery and carjacking of a vehicle in Trenton. The victims reported that they were exiting their car when three men got out of a white sedan, pointed handguns at them, and demanded their money and cell phones. Two of the subjects fled in the white sedan and one drove away in the victim’s car. The armed carjacking was captured by security cameras in the area. After the white sedan was found abandoned, a search of it revealed, among other things, a victim’s cellular telephone, and a latent fingerprint belonging to Perez.
On Dec. 5, 2020, law enforcement responded to a report of another armed robbery and carjacking in Trenton. The victim reported sitting in a car when two men ran up and pointed handguns at the victim. The men ordered the victim out of the car at gunpoint, stole money and a cell phone, and the victim’s car.
Approximately one hour later, that victim’s carjacked vehicle was used in connection with an armed robbery of a nearby Trenton gas station. Law enforcement officers responded to a report of an armed robbery in progress at the gas station. The victims reported that three males pulled up, one subject ordered them to the ground at gunpoint and pistol-whipped them. Another subject, later identified as Perez, entered the gas station, and robbed the attendant at gunpoint. Security camera footage recorded the armed robbery in progress. During a court-ordered search of Perez’s residence, Perez pointed a firearm at law enforcement officers. Officers arrested Perez and recovered the firearm, and seized other evidence linking Perez to the Dec. 5, 2021, carjacking and armed robbery of the gas station.
The Hobbs Act robbery count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The two carjacking counts each carry a maximum potential penalty of 15 years in prison and a $250,000 fine. The three counts of brandishing a firearm during and in relation to a crime of violence each carry a statutory mandatory minimum penalty of seven years in prison, which must run consecutive to each other and to any other sentence imposed, and a maximum term of life in prison. The felon-in-possession count carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, Trenton Satellite Office, under the direction of Special Agent in Charge Charlie J. Patterson; officers of the Trenton Police Department (TPD), under the direction of Police Director Sheilah Coley; and detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri, with the investigation leading to the charges.
The case was investigated as part of the Violent Crime Initiative (VCI) in Mercer County, New Jersey. The VCI was formed in August 2020 by the U.S. Attorney’s Office for the District of New Jersey, the Mercer County Prosecutor’s Office, and the Trenton Police Department for the purpose of combatting violent crime in and around Trenton. As part of this partnership, federal, state, and local agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA, the Trenton Police Department, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Special Assistant U.S. Attorney Katie Magee Lee of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations against the defendant are merely accusations and he is presumed innocent unless and until proven guilty.
Bronx, New York, Woman Arrested for Fraudulently Obtaining over $200,000 Worth of iPhonesRead the Press Release
NEWARK, N.J. – A Bronx, New York, woman was arrested today and charged with fraudulently obtaining over $200,000 worth of iPhones, Acting U.S. Attorney Rachael A. Honig announced.
Rosanna Lucrecia Cruel Blanco, 39, is charged by criminal complaint with one count of conspiracy to commit mail fraud and one count of aggravated identity theft. She is expected to make her initial appearance by videoconference today before U.S. Magistrate Judge Mark Falk.
According to documents filed in this case and statements made in court:
From Dec. 17, 2017, to December 2020, Blanco and her conspirators devised a scheme to fraudulently obtain replacement cellular phones from an insurance company – Company 1 – by assuming the identities of wireless customers and filing false claims under Company 1’s handset insurance program. The handsets were predominantly iPhones with a value of approximately $700 to $1,000 per handset.
Blanco and her conspirators contacted Company 1, posed as legitimate customers and submitted false claims to Company 1 for damage, theft, or loss on hundreds of handsets owned by the legitimate customers. Blanco and her conspirators provided Company 1 with false identification, typically in the form of a New York or New Jersey driver’s license falsified to reflect the name of the legitimate customer. They also provided Company 1 with new shipping contact names and addresses that were different from the actual customers. The new shipping addresses included locations in the Bronx, Yonkers, White Plains, Manhattan, and various locations in New Jersey.
Based on the false claims and the fake identification, Company 1 shipped the replacement iPhones telephones via UPS or FedEx to the new contact names and addresses provided by Blanco and her conspirators. The iPhones were then picked up by Blanco and her conspirators. More than 100 replacement cellular telephones were shipped to Blanco and her conspirators. Total losses from the scheme exceed $200,000.
The charge of conspiracy to commit mail fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The aggravated identity theft charge carries a mandatory sentence of two years in prison, which must be served consecutively to any other sentence imposed.
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 arrest.
The government is represented by Assistant U.S. Attorney Blake Coppotelli of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
New Jersey Woman Sentenced to 63 Months in Prison for $2 Million Bank Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, woman was sentenced today to 63 months in prison for an elaborate bank frank scheme resulting in losses of more than $2 million, Acting U.S. Attorney Rachael Honig announced.
Alexis Taylor, 32, of Hackensack, New Jersey, previously pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to one count of an indictment charging her with conspiracy to commit bank fraud. Judge Vazquez imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
From March 2017 to June 2018, Taylor agreed with others to execute a scheme to defraud various financial institutions located in New Jersey, New York, and elsewhere. She purchased a significant amount of stolen personal identifying information via the dark web, including bank account information and online security question answers. Taylor then used the information to access victim accounts at various banks and other financial institutions.
Taylor, and others acting at her direction, would travel to banks and impersonate victim account holders to withdraw funds from accounts held by the victims at those institutions. Taylor would also communicate with the banks by phone and request that wire transfers be made from victim accounts and into accounts held by Taylor. Finally, it was part of the scheme that Taylor would travel to victims’ homes and intercept debit cards and other financial documents from the mail to facilitate the fraud.
In addition to the prison term, Judge Vazquez sentenced Taylor to four years of supervised release. A hearing on restitution is scheduled for May 10, 2021.
Acting U.S. Attorney Honig credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s sentencing. She also thanked members of the Bergen County Prosecutor’s Office and the Closter Police Department for their assistance in the investigation.
The government is represented by Assistant U.S. Attorney Anthony P. Torntore of the U.S. Attorney’s Cybercrimes Unit in Newark.
Monmouth County Man Sentenced to 18 Months Prison for Unlawfully Possessing a FirearmRead the Press Release
NEWARK, N.J. – A Keyport man was sentenced today to 18 months in prison for illegally possessing an assault rifle, Acting U.S. Attorney Rachael A. Honig announced.
Ahmed A-Hady, 36, previously pleaded guilty before U.S. District Court Katharine S. Hayden to an information charging him with one count of possession of a firearm by a convicted felon. Judge Hayden imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
On Dec. 10, 2019, there was a mass shooting in Jersey City in which a Jersey City Police Officer and three civilians were shot and killed by a male (Individual 1) and a female (Individual 2). After the shooting, law enforcement recovered a handwritten note from Individual 1’s right rear pants pocket that contained a telephone number ending in 4115 and a Keyport, New Jersey, address. Law enforcement also recovered several weapons possessed by Individuals 1 and 2, including an AR-15 rifle.
FBI agents determined that the phone number ending in 4115 contained on the note belonged to A-Hady. Law enforcement also determined that the Keyport address listed on the note was a storefront for a pawn shop. On the evening of Dec. 13, 2019, law enforcement officers traveled to the pawnshop and interviewed A-Hady and two of his relatives.
Law enforcement officers lawfully searched both the pawnshop and A-Hady’s private residence and recovered multiple rifles, handguns, and one shotgun. During the searches of the pawnshop and A-Hady’s private residence, law enforcement also recovered over 400 rounds of ammunition, including a large number of hollow point bullets.
One of the weapons recovered from the pawnshop was a Sig Sauer .22 caliber rifle capable of accepting a large capacity magazine. Records showed that A-Hady purchased this rifle in Florida on Oct. 23, 2012, approximately five months after A-Hady was convicted in New Jersey Superior Court of a crime that was punishable by a term of imprisonment of more than one year.
In addition to the prison term, Judge Hayden sentenced A-Hady to three years of supervised release. A-Hady forfeited his interest, if any, in the firearms recovered during the search of the pawnshop.
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; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; the Office of the New Jersey Attorney General, under the direction of Attorney General Gurbir S. Grewal; and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s sentencing. Acting U.S. Attorney Honig also thanked the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, and the Jersey City Police Department, under the direction of Director James Shea, for their assistance.
The government is represented by Ronnell Wilson, Chief of the National Security Unit of the U.S. Attorney’s Office for the District of New Jersey, and Assistant U.S. Attorneys Dean C. Sovolos and Thomas S. Kearney, of the National Security Unit.
Essex County Man Indicted for Operating Heroin Mill in His ApartmentRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted an Essex County, New Jersey, man for narcotics offenses for operating a large-scale heroin mill out of his apartment, Acting U.S. Attorney Rachael A. Honig announced.
Alexis Garcia Cabrera, 51, of Newark, is charged with possessing over 400 grams of fentanyl with intent to distribute. Garcia Cabrera was previously charged by complaint in May 2019. He will be arraigned on a date to be determined.
According to documents filed in this case and statements made in court:
On May 9, 2019, law enforcement officers executed a search warrant at Garcia Cabrera’s residence and found multiple freezer-type bags containing suspected heroin as well as a large quantity of loose narcotics that were in the processing stage. Law enforcement officers also found equipment used to process and “cut” heroin, including grinders, sifters, and chemical cutting agents, and large quantities of materials designed to package heroin for street-level distribution, including 1,000 glassine envelopes. Agents located multiple “bricks,” or packages of 50 individual doses, of suspected heroin, which are intended for street-level distribution. Subsequent lab tests revealed that the suspected heroin also contained fentanyl.
The possession of over 400 grams of fentanyl with intent to distribute count carries a maximum penalty of life imprisonment, a mandatory minimum term of 10 years in prison and a $10 million fine.
Acting U.S. Attorney Honig credited special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office OCDETF/Narcotics Unit.
The charge and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Cumberland County Man Sentenced to Eight Years in Prison for Distributing Child PornographyRead the Press Release
CAMDEN, N.J. – A Cumberland County, New Jersey, man was sentenced today to 96 months in prison for distributing images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.
Bruce Jackson, 32, of Bridgeton, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an indictment charging him with one count of distributing child pornography. Judge Hillman imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
Jackson used a peer-to-peer file-sharing program to download and share videos and images of child sexual abuse. Between November 2017 and June 2018, law enforcement downloaded 61 videos of child sexual abuse from Jackson’s computer. After executing a search warrant at Jackson’s home in August 2018, agents located more than 300 videos of child sexual abuse on one of Jackson’s thumb drives. Jackson admitted that he used the peer-to-peer file-sharing program to make images and videos of child sexual abuse available for others to download from his computer.
In addition to the prison term, Judge Hillman sentenced Jackson to five years of supervised release and ordered him to register as a sex offender.
Acting U.S. Attorney Honig credited special agents with the U.S. Department of Homeland Security, Homeland Security Investigations – Cherry Hill, 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 Martha K. Nye of the U.S. Attorney’s Office’s Criminal Division in Trenton and Assistant U.S. Attorney Kristen Harberg of the U.S. Attorney’s Office’s Criminal Division in Camden.
Connecticut Woman Charged with Defrauding Former Employers in New JerseyRead the Press Release
NEWARK, N.J. – A Connecticut woman was arrested today and charged with engaging in a scheme to divert more than approximately $540,000 in payments owed to her former employers by using an unauthorized PayPal account to misappropriate the funds for personal use, Acting U.S. Attorney Rachael A. Honig announced today.
Melissa Corso, 50, of Groton, Connecticut, is charged by complaint with two counts of wire fraud. She made her initial appearance today in the U.S. District Court for the District of Connecticut, prior to her transfer to the District of New Jersey.
According to the complaint:
From February 2013 through July 2019, Corso misappropriated approximately $540,000 in customer payments owed to her former employers by directing their customers to submit their payments to a PayPal account linked to Corso’s work email address, which Corso had access to and control over. Corso sent one-time payment links to certain customers via her work email account with instructions to submit payment to her PayPal account, which was not authorized to receive these payments.
In total, Corso caused the victim companies’ customers to pay over approximately $3.1 million of funds due to the companies into her PayPal account through approximately 1,150 transactions. Using her work email address, Corso made multiple withdrawals from the PayPal account and diverted the funds to other PayPal accounts linked to personal email accounts of Corso and two other individuals, as well as to various commercial retailers, including eBay; Bloomingdale’s; Best Buy; Dick’s Sporting Goods; GrubHub; Forever 21; Louis Vuitton; MAC Cosmetics; and Target. A number of purchases from these commercial retailers were shipped to the home or work addresses of Corso and the two individuals.
To hide the fact that significant portions of customer payments were being fraudulently diverted for personal use, Corso doctored the victim companies’ internal records, including customer statements prepared by Corso that falsely showed that customer payments were applied correctly (i.e., in their entirety), when portions of those payments had actually been misapplied by Corso. She was able to perpetuate the fraud in this manner for years based on her role and responsibilities for coordinating the collection of customer payments and applying payments to customer invoices.
Each charge of wire fraud carries a maximum potential penalty 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.
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 arrest.
The government is represented by Assistant U.S. Attorney Jennifer S. Kozar of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Tax Preparer Sentenced to Five Years in Prison for Conspiracy to Defraud IRS and Preparing False Tax ReturnsRead the Press Release
TRENTON, N.J. – A Maryland man working as a tax preparer in New Jersey was sentenced today to 60 months in prison for his role in a conspiracy to defraud the IRS by preparing false income tax returns for clients in order to boost business at tax preparation companies that he and others ran, Acting U.S. Attorney Rachael A. Honig announced.
Joseph Kenny Batts, 52, of Elkridge, Maryland, was convicted following a one-week trial before U.S. District Judge Michael A. Shipp in Trenton federal court on one count of conspiracy to defraud the United States and five counts of aiding and assisting in the preparation of false federal income tax returns. Judge Shipp imposed the sentence today by videoconference.
According to documents in this case and the evidence at trial:
From at least 2009 to April 2015, Batts was co-owner, along with conspirator Damien Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, New Jersey, where Batts and others prepared tax returns. In order to boost their business, Batts, Askew, and codefendants Tony Russell, Angelo K. Thompson and Rudolph Sanders conspired to falsify their clients’ income tax returns for the purpose of generating refunds in amounts that their clients were not entitled to receive. The fraudulent practices used to inflate tax refunds included fabricating and inflating credits for education and child care; deductions, such as charitable contributions and unreimbursed employee expenses; and Schedule C business losses.
As part of their scheme, Batts, Thompson, Askew, Russell and Sanders also used fraudulent IRS Forms 1098-T to support false education credits that they had claimed on their clients’ false federal income tax returns prepared at Tax Pro’s and Tax Solutions and Associates.
Batts also used the Paid Taxpayer Identification Number (PTIN) – the identification number that paid tax preparers are required to place on tax returns that they have prepared – of his conspirator tax preparers when preparing tax returns to conceal his identity as the actual tax return preparer, due to, among other things, his prior tax fraud conviction.
By inflating the tax refunds through fraudulent means, Batts and his conspirators caused a total tax loss to the United States in excess of $1.6 million.
Thompson, Askew, Sanders and Russell have previously pleaded guilty to their roles. Thompson was sentenced to 27 months in prison and three years of supervised release; Russell was sentenced to 48 months in prison and three years of supervised release. Askew and Sanders are awaiting sentencing.
In addition to the prison term, Judge Shipp sentenced Batts to three years of supervised release and ordered him to pay $1.2 million 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. Attorneys Cari Fais and Jihee G. Suh and of the U.S. Attorney’s Office in Newark.
Philadelphia Man Admits Role in Fentanyl Distribution ConspiracyRead the Press Release
CAMDEN, N.J. – A Philadelphia man today admitted his role in a fentanyl distribution conspiracy, Acting U.S. Attorney Rachael A. Honig announced.
Ronal Alberto Hernandez Pinales, 26, pleaded guilty by videoconference before U.S. District Judge Noel L. Hillman to an information charging him with conspiring to distribute and possess with intent to distribute 400 grams or more of fentanyl.
According to documents filed in this case and statements made in court:
In early 2020, Hernandez Pinales and his conspirator, Jonathan Rivera Pagan, met and communicated about fentanyl trafficking and firearms. On March 2, 2020, Rivera Pagan and Hernandez Pinales arranged to deliver fentanyl to another individual. Hernandez Pinales and Rivera Pagan drove separately to a parking lot of a building in Gloucester County to conduct the planned fentanyl transaction. Shortly thereafter, both Hernandez Pinales and Rivera Pagan fled from the parking lot, after seeing what they believed to be law enforcement presence in the area. Rivera Pagan was later arrested in the parking lot of a nearby bar, and Hernandez Pinales was later arrested near a highway. Law enforcement officers recovered approximately 900 grams of fentanyl from Hernandez Pinales’ car, as well as cellphones from Rivera Pagan and Hernandez Pinales that contained drug-related communications.
The charge to which Hernandez Pinales pleaded guilty 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. Sentencing is scheduled for June 9, 2021.
Rivera Pagan previously pleaded guilty to his role in the fentanyl conspiracy and his sentencing is scheduled for April 1, 2021.
Acting U.S. Attorney Honig credited special agents and task force officers with the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to today’s guilty plea. He also thanked the New Jersey State Police, the Gloucester County Prosecutor’s Office and the East Greenwich Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.