District of New Jersey

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.

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.

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.

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.

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.

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.

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.

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, 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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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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.”   

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.

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, 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.

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.

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.

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.  

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.

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.

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.

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.

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.

NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 63 months in prison for conspiring to distribute fentanyl and distributing fentanyl, Acting U.S. Attorney Rachael A. Honig announced.

Cequan Wharton, a/k/a “Cee Cee,” 27, of Paterson, New Jersey, previously pleaded guilty before U.S. District Judge Brian R. Martinotti in Newark federal court to an information charging him with conspiracy to distribute and possess with intent to distribute heroin and knowingly and intentionally distributing heroin. Judge Martinotti imposed the sentence by videoconference today.

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

Wharton and his conspirators are members and associates 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 at least September 2018 through Oct. 1, 2019, Wharton and his conspirators conspired to distribute narcotics, including heroin and fentanyl.

In addition to the prison term, Judge Martinotti sentenced Wharton to three years of supervised release.

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. He 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.

NEWARK, N.J. – The owner of a Georgia consulting company and a Texas man were charged today in connection with their roles in a conspiracy to pay kickbacks and bribes in exchange for referrals of patient DNA samples and genetic tests to a laboratory, Acting U.S. Attorney Rachael A. Honig announced.

John Berberian, 46, of Atlanta, Georgia, and Christopher Lytle, 51, of Desoto, Texas, are each charged by complaint with conspiracy to violate the Anti-Kickback Statute. Both defendants are scheduled to have their initial appearances by videoconference on Feb. 11, 2021, before a U.S. Magistrate Judge.

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

Berberian owned and operated a consulting company based in Atlanta. The consulting company entered into agreements with marketing and sales groups, which acquired patients’ DNA samples and physicians’ orders for the purpose of submitting those samples and orders to clinical laboratories for genetic tests and related services. Lytle partnered with Berberian and others to recruit and oversee these patient acquisition groups.

From as early as June 2018 through November 2018, Berberian, Lytle, and others conspired to offer and pay kickbacks and bribes to Ark Laboratory Network LLC, a patient acquisition group. These kickbacks and bribes were paid in exchange for Ark’s referral of patient DNA samples, including from beneficiaries in New Jersey, to Personalized Genetics LLC, d/b/a Personalized Genomics (PGL), a clinical laboratory in Pittsburgh, Pennsylvania, for genetic testing. PGL, in turn, via a billing company associated with Berberian, billed and obtained payment from Medicare for these genetic tests. Berberian’s consulting company paid Ark $957,783 in kickbacks and bribes in exchange for DNA samples and physicians’ orders it delivered to PGL. As a result of the claims PGL submitted to Medicare for the related genetic tests, Medicare paid PGL more than $2.7 million. 

Berberian, Lytle, and others arranged for PGL to enter into a sham contract with Ark in order to make it look like Ark had agreed to provide various marketing, call center, and other services for PGL for $500 per hour. In reality, the consulting company – not PGL – paid Ark in exchange for DNA samples and physicians’ orders. The amount it paid Ark bore no relation to the amount of hours Ark billed for the phony services identified in the sham contract. Instead, the payments were based on the number of samples that Ark delivered to PGL – $1,500 per individual sample for genetic tests related to a patient’s hereditary predisposition for cancer and approximately 50 percent of the net revenue that PGL received from Medicare for pharmacogenomic tests (referred to in the complaint as the “Bribe Formula.”)

To conceal the payment of kickbacks and bribes to Ark, Berberian, Lytle, and others directed Ark to draft and submit, via the consulting company, sham invoices to PGL that purported to bill for hourly services at a rate of $500 per hour. Berberian and Lytle, however, had already determined with Ark the amount of kickbacks and bribes that the consulting company would pay Ark pursuant to the Bribe Formula. Ark’s sham invoices, which typically repeated the same identical description of services, including “conference calls” and “prospective Ark client visits,” simply adjusted the total amount of hours billed so that the amount due under the invoice equaled the same amount due to Ark under the Bribe Formula.

The conspiracy charge against Berberian and Lytle carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest.

Acting U.S. Attorney Honig credited special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott 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 today’s charges.

The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Osmar J. Benvenuto of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.

The charge and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Hudson County, New Jersey, man previously convicted of multiple felonies was sentenced today to 37 months in prison for illegally possessing a firearm and ammunition, Acting U.S. Attorney Rachael A. Honig announced.

Benorce Duncan, 32, of Jersey City, previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an indictment charging him with one count of possession of a firearm and ammunition 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 May 21, 2019, Duncan knowingly possessed a Röhm .22-caliber RG10 revolver loaded with six rounds of ammunition. At that time, Duncan had previously been convicted in Hudson County Superior Court of aggravated assault and robbery, both of which are felonies.

In addition to the prison term, Judge Hayden sentenced Duncan to three years of supervised release.

This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensures that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.

Acting U.S. Attorney Honig credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the leadership of Special Agent in Charge Charlie J. Patterson in Newark, and the Jersey City Police Department, under the direction of Public Safety Director James Shea, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the U.S. Attorney’s Office Cybercrime Unit in Newark.

CAMDEN, N.J. – An Atlantic County, New Jersey, man who was previously employed by the New Jersey Department of Child Protection and Permanency (NJDCP&P) today admitted producing images of child sexual abuse, Acting U.S. Attorney Rachael A. Honig announced.

Kayan Frazier, 28, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to one count of producing images of child pornography. Frazier has been detained since his arrest on July 12, 2019, and his detention was continued.

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

After receiving a report of images of child sexual abuse distributed via Tumblr, law enforcement officers identified Frazier, who was then employed as a case worker at NJDCP&P as the sender. On April 12, 2019, the Atlantic County Prosecutor’s Office obtained a search warrant for Frazier’s residence and, while executing the warrant, observed Frazier in the company of an underage boy. Law enforcement officers recovered thousands of additional images of child sexual abuse on Frazier’s cellular telephone and other electronic media, which included images of the boy taken in Frazier’s apartment. Frazier admitted that he took the images with a cellular telephone.

The count to which Frazier pleaded guilty carries a mandatory minimum penalty of 15 years in prison, a maximum possible penalty of 30 years in prison and a $250,000 fine. Sentencing is scheduled for June 8, 2021.

Acting U.S. Attorney Honig credited special agents of FBI Atlantic City Resident Agency, Human Trafficking Crimes Against Children Task Force, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Atlantic County Sheriff’s Office, under the direction of Sheriff Eric Scheffler; the New Jersey State Police, under the direction of Col. Patrick J. Callahan, and the New Jersey Human Services Police, with the investigation leading to today’s guilty plea.

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

NEWARK N.J. – A Bergen County, New Jersey, man today admitted concealing assets from a bankruptcy trustee, Acting U.S. Attorney Rachael A. Honig announced. 

Victor Osorio, 53, of Creskill, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an information charging him with one count of bankruptcy fraud.

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

On Feb. 16, 2017, Osorio filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. In his petition and accompanying Schedules of Assets and Liabilities, Osorio declared that he did not have an ownership interest in any incorporated or unincorporated businesses. In so doing, Osorio failed to disclose that he had an ownership interest in both Business-1 and Business-2. Approximately seven months earlier, Osorio had filed a Chapter 11 bankruptcy petition for Business-1, in which he declared that he was Business-1’s sole owner. Osorio also declared that he did not own or have an interest in any checking, savings, or other financial accounts, failing to disclose a bank account in the Dominican Republic in which he had an interest.

In connection with the petition, on Feb. 24, 2017, Osorio filed amended Schedules of Assets and Liabilities, which disclosed a partial ownership interest in Business-1. That declaration was inconsistent with information contained in Business-1’s Chapter 11 bankruptcy proceeding, in which Osorio declared that he was the sole owner of Business-1. The amended schedules also failed to disclose Osorio’s ownership interest in Business-2 and the bank account in the Dominican Republic. 

The bankruptcy fraud charge carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 28, 2021. 

Acting U.S. Attorney Honig credited special agents of Homeland Security Investigations and detectives of the New York City Police Department assigned to HSI’s Border Security Enforcement Task Force, under the direction of HSI Special Agent in Charge Peter C. Fitzhugh in New York, with the investigation leading to today’s guilty plea. 

The government is represented by Assistant U.S. Attorney Dara Govan, Chief of the U.S. Attorney’s Office’s Government Fraud Unit in Newark and Assistant U.S. Attorney Samantha C. Fasanello of the U.S. Attorney’s Office’s Criminal Division in Newark.

TRENTON, N.J. - Two men were arrested today for their alleged roles in a scheme to defraud multiple financial institutions of millions of dollars, Acting Attorney Rachael A. Honig announced.

Syed Abbas, 32, of Westerville, Ohio, and Muhammad Naveed, 35, of Jersey City, New Jersey, were arrested by federal law enforcement this morning and are each charged by criminal complaint with conspiracy to commit bank fraud. Naveed is scheduled to appear later today by videoconference before U.S. Magistrate Judge Lois H. Goodman. Abbas is scheduled to appear today in Ohio federal court and have his initial appearance by videoconference before Judge Goodman on Feb. 8, 2021.

The defendants are the eighth and ninth defendants charged in the same criminal complaint in the District of New Jersey in connection with the wide-ranging conspiracy to defraud federally insured banks and merchant processors of millions of dollars. In July 2020, seven other defendants were charged in connection with the scheme.

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

From March 2018 through April 2020, Abbas and Naveed conspired with each other and others to defraud several financial institutions. Abbas and Naveed and their conspirators established bank accounts associated with sham entities that had no legitimate purpose, and thereafter issued checks payable to other shell companies associated with the criminal organization, knowing that the payor accounts had insufficient funds. Abbas and Naveed also conducted numerous fraudulent credit card and debit card transactions between shell companies to fraudulently credit payee accounts and fraudulently overdraw payor accounts. Abbas and Naveed would use these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization. 

Abbas and Naveed withdrew the “existing” funds (through ATMs or bank tellers) that banks had credited to the payee bank accounts at the time of the fraudulent transactions. Because Abbas and Naveed withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks were left with substantial losses.

Law enforcement identified approximately 200 bank accounts used to facilitate the fraudulent schemes. Abbas, Naveed, and other conspirators’ unlawful activities attempted to cause a $10 million loss on financial institutions. The loss attributable to Abbas and Naveed exceeded $1 million.

The bank fraud conspiracy count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million.

Acting U.S. Attorney Honig credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero, Newark Division; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark; special agents of the Social Security Administration, under the direction of John F. Grasso; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; and special agents of the Department of Homeland Security, Homeland Security Investigations – Ohio Division, with the investigation leading to the arrests.

The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney's Office Criminal Division in Trenton.

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

NEWARK, N.J. – A Somerset County, New Jersey, man today admitted defrauding his former employer by using the employer’s account to make unauthorized purchases of high-end electronic devices and selling those items on after-market websites, Acting U.S. Attorney Rachael A. Honig announced.

Ovais Mayet, 33, of Hillsborough, New Jersey, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of wire fraud.

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

Mayet was a biological engineer with a biopharmaceutical company located in Summit, New Jersey. He was permitted to use the employer’s business account to make authorized purchases of materials and equipment for work-related purposes. Instead, Mayet used the employer’s account to purchase substantial quantities of electronic devices, which he did not and would not use in the course of his employment. Between January 2019 and March 2020, Mayet executed online purchase orders and disguised these purchases as business expenses, when, in fact, they were for his own personal gain. Mayet resold the items on after-market websites and used the proceeds to pay for personal expenses. Mayet obtained nearly $1.1 million worth of electronic devices from the fraudulent scheme.

The wire fraud charge to which Mayet pleaded guilty 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. Sentencing is scheduled for June 7, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office Criminal Division in Trenton.

CAMDEN, N.J. – A Burlington County, New Jersey, man today admitted stealing more than $350,000 from a special needs trust, Acting U.S. Attorney Rachael A. Honig announced.

Eugene Young, 69, of Mount Holly, New Jersey, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of wire fraud.

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

A special needs trust was established to provide for the supplemental care, maintenance, support, and education of a disabled individual and, in December 2017, had more than $1 million in assets in two bank accounts. In December 2017, Young caused the trust’s trustee, a senior citizen, to execute a power of attorney appointing him as the trustee’s agent.

Young used the power of attorney to gain access to the trust’s bank accounts and, between December 2017 and June 2019, used a variety of means to divert funds from the trust.  Young used a debit card associated with the bank accounts to make more than 650 purchases and approximately 200 ATM withdrawals. He also wrote checks from the accounts to himself, made other withdrawals from the accounts, and cashed portions of annuity checks that were the property of the trust. The funds were not used for the benefit of the trust’s beneficiary, as required by the terms of the trust, but rather for Young’s personal use. Young misappropriated more than $350,000 from the trust before his scheme was discovered.

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross pecuniary gain to the defendant or twice the gross pecuniary loss to others, whichever is greater.  Sentencing is scheduled for June 7, 2021.

Acting U.S. Attorney Honig credited special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, special agents of the Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty, and special agents of U.S. Immigrations and Customs Enforcement (ICE), Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – The owner of several Fairlawn, New Jersey, businesses was sentenced today to 12 months and one day in prison for failing to pay more than $500,000 in payroll taxes, Acting U.S. Attorney Rachael A. Honig announced. 

Dennis Saccurato, 68, previously pleaded guilty to tax evasion before U.S. District Court Judge Susan D. Wigenton, who imposed the sentence by videoconference today.       

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

Saccurato owned and operated cleaning product businesses in Fairlawn, including Sparta Chem Inc., Horizon Products LLC, Compu-Kleen, and Start West Labs, and was required to pay over payroll taxes to the IRS. From 2014 to 2016, Saccurato withheld payroll taxes from the wages paid to his employees, purportedly for remittance to the IRS, but failed to pay over the taxes, which amounted to $549,715.   

In addition to the prison term, Judge Wigenton sentenced Saccurato to three years of supervised release.

Acting U.S. Attorney Honig credited 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 sentencing.

The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

NEWARK, N.J. – A Union County, New Jersey, man convicted of being a felon in possession of a semi-automatic submachine gun with a high capacity magazine was sentenced today to 120 months in prison, Acting U.S. Attorney Rachael A. Honig announced.

Jarrell L. Daniels, 29, of Elizabeth, New Jersey, was convicted on Feb. 21, 2020, after a two and a half-day trial before U.S. District Judge Kevin McNulty in Newark of one count of being a felon in possession of a semi-automatic submachine gun with a high capacity magazine and multiple rounds of ammunition.  

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

On the morning of April 9, 2018, Daniels was walking down Irvington Avenue in Elizabeth carrying a loaded .45 caliber Masterpiece Arms ACP submachine gun with 30 additional rounds of ammunition in an extended magazine. Daniels was wearing a disguise, as well as latex gloves. He came upon his victim and opened fire, shooting at his victim 16 times, but none of the shots struck the victim. As he fled, Daniels dropped his head covering and later stashed the gun and other items of clothing in a nearby trashcan. DNA on these items, as well as surveillance footage and ballistics evidence, ultimately enabled the authorities to identify Daniels as the shooter.

In addition to the prison term, Judge McNulty sentenced Daniels to three years of supervised release.

Acting U.S. Attorney Honig credited law enforcement officers of the Elizabeth Police Department, under the direction of Police Chief Giacomo Sacca.; the Union County Sheriff’s Office, under the direction of Sheriff Peter Corvelli; special agents of the FBI, 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; and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo, with the investigation leading to today’s sentencing.

The government was represented by Assistant U.S. Attorneys Vera Varshavsky and Sammi Malek of the Criminal Division of the U.S. Attorney’s Office in Newark.

TRENTON, N.J. – Three New Jersey residents were arrested today for allegedly participating in a long-running scheme to defraud the New Jersey Traumatic Brain Injury Fund (TBI Fund), a publicly funded health care benefit program, of more than $4.5 million, Acting U.S. Attorney Rachael A. Honig announced.

Harry Pizutelli, 62, of Edison, New Jersey, and C.R. Kraus, 55, and Maritza Flores, 43, both of Toms River, New Jersey were arrested by special agents of the FBI and IRS this morning and are charged by criminal complaint with conspiracy to commit health care fraud. They are scheduled to appear later today by videoconference before U.S. Magistrate Judge Tonianne J. Bongiovanni.

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

The TBI Fund is a publicly funded program run by the New Jersey Division of Disability Services, a component of the New Jersey Department of Human Services. The TBI Fund’s purpose is to provide New Jersey residents who have suffered a traumatic brain injury with services and support in order to maximize their quality of life when funding from insurance, personal resources, or other programs is unavailable to meet their needs. Services funded by the TBI Fund include physical, occupational, and speech therapy; service coordination; assistive technology; cognitive therapy; neuropsychological services; pharmaceuticals; wheelchair ramp installation and other home modifications; and general home management and maintenance.

After a prospective patient applies for services, TBI Fund personnel review the application and, if approved, the patient is authorized to secure designated services from a third-party vendor. Once a patient receives services approved by the TBI Fund, the vendor or service provider submits an invoice to the TBI Fund for payment. When an invoice is received, TBI Fund personnel review the invoice to ensure that the patient had been approved to receive the services. If the invoice is approved, an internal payment voucher is generated, authorized by TBI Fund personnel, and then submitted to the New Jersey Department of the Treasury for payment, which issues a check directly to the vendor.

Pizutelli was the manager of the TBI Fund and was responsible for the its day-to-day operation. He supervised, managed, and oversaw the process by which third-party vendors were paid for services rendered to eligible TBI Fund patients. From 2009 through June 2019, Pizutelli, Kraus, Flores, and others conspired to defraud the TBI Fund by misappropriating more than $4.5 million in fraudulent vendor payments for purported services that were never actually provided. Pizutelli orchestrated the distribution of fraudulent vendor payments to Kraus, Flores, and others by generating and processing false invoices and internal payment vouchers. Pizutelli generated these invoices and vouchers to give the appearance that Kraus, Flores, and other conspirators had provided approved services to eligible patients when, in fact, they had not provided any services. Pizutelli then approved and transmitted the internal payment vouchers so that his conspirators received vendor payments even though they had performed no services to eligible patients. Pizutelli orchestrated these fraudulent payments to maintain and further romantic and/or sexual relationships with Flores and other conspirators.

Pizutelli orchestrated the fraudulent payment of more than $4.5 million from the TBI Fund to members of the conspiracy, including more than $4 million in fraudulent distributions to Kraus and Flores, which they used for their own personal benefit and enrichment. To obscure their fraudulent conduct, Kraus and Flores also made material misstatements on their federal income tax returns, by significantly underreporting the income they had derived from the fraudulent scheme.

The health care fraud conspiracy charge carries a maximum penalty of 20 years in prison and of $250,000 or twice the gross receipts to the defendants or gross loss sustained by any victims, whichever is greater.

Acting U.S. Attorney Honig credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr., and special agents of the IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the charges. She also thanked the New Jersey Attorney General’s Office, Division of Law, and the New Jersey Department of Human Services, for their assistance.

The government is represented by J. Brendan Day, Attorney-in-Charge of the Trenton Branch Office of the U.S. Attorney’s Office.

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

NEWARK, N.J. – A Middlesex County, New Jersey, man today admitted participating in a fraudulent scheme that involved soliciting investments from victims for a ticket resale business, when in fact he diverted their investments for his own personal use and benefit, Acting U.S. Attorney Rachael A. Honig announced.

Jeffrey Burd, 61, of Edison, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of wire fraud.

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

From January 2014 to June 2018, Burd represented to his victims that he was involved in buying tickets to high-profile concerts, sporting events, and Broadway shows and then reselling those tickets for a profit. Burd induced the victims to provide him with money that would purportedly be invested in his ticket purchase and resale activities, and he represented that the profits from the sales of those tickets would be shared among him and the victims. Burd further assured the victims that investing with him carried no risk, and he promised returns on their investments of 30 percent to 40 percent. Burd made payments to certain victims that were purportedly their profits, and made representations to certain victims that portions of their profits were being reinvested in additional ticket deals, which in turn purportedly would generate more profits for those victim.  In fact, Burd did not purchase or sell any material amount of tickets with the victims’ money, and he instead used their investments for his personal expenditures. In total, Burd obtained approximately $447,000 from the victims over the course of the fraudulent scheme. 

The 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. Sentencing is scheduled for June 8, 2021.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jennifer S. Kozar of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

CAMDEN, N.J. – A California man who had fled to Mexico has been arrested for his role in a conspiracy to steal credit and debit cards from customers at approximately 80 Michaels’ Stores in 19 states and to then use that information to make fraudulent withdrawals from the bank accounts of those customers, Acting U.S. Attorney Rachael A. Honig announced today.

Jose Salazar, 44, aka “Tito,” 44, of Riverside, California, was indicted in 2015 and has been a fugitive. He was apprehended in Mexico City in September 2020 and returned last week via Philadelphia International Airport to face an indictment charging him with one count of conspiracy to commit bank fraud and one count of aggravated identity theft. Salazar made his initial appearance and arraignment today by videoconference before U.S. Magistrate Judge Karen M. Williams. He pleaded not guilty and was remanded without bail.

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

The conspirators installed devices that acquired customers’ bank account and personal identification number (PIN) information on point of sale (POS) terminals at stores operated by Michaels. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.

The conspirators allegedly replaced POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.

In 2011, Salazar recruited individuals to participate in the conspiracy. From April 2011 to May 2011, Salazar, Angel Angulo, Crystal Banuelos, and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money using automated teller machines (ATMs) from hundreds of bank accounts. Banuelos pleaded guilty on Nov. 17, 2015, and was sentenced to time served and five years of probation. Angulo pleaded guilty on June 20, 2017 and was sentenced to three years in prison. 

The charge of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of aggravated identity theft carries a mandatory penalty of two years in prison, to be served consecutively to any other sentence.

Acting U.S. Attorney Honig credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge James Henry, with the investigation leading to the charges. She also thanked special agents with the U.S. Marshal Service, under the direction of Juan Mattos, and INTERPOL for their assistance. The Justice Department’s Office of International Affairs provided significant assistance in securing the defendant’s extradition from Mexico.

The government is represented by Assistant U.S. Attorney Jonathan Fayer 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.

NEWARK, N.J. –The former president of a New Jersey local union and administrator of two union affiliated benefit funds made her initial appearance today on charges that she embezzled from the union and two union-affiliated employee benefit funds, Acting U.S. Attorney Rachael A. Honig announced.

Dorothy McBride, 74, of Montville, New Jersey, was charged by complaint with one count each of embezzlement of labor union assets and embezzlement from employee benefit plans. She allegedly embezzled approximately $100,000 from a local union affiliated with the Communications Workers of America (CWA), of which she was president, and approximately $534,470 from the Welfare Fund and the Pension Fund, of which she was administrator. McBride made her initial appearances today by videoconference before U.S. Magistrate Judge Leda Dunn Wettre and was released on $250,000 unsecured bond.

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

McBride had control over the union’s and the funds’ bank accounts. From at least 2015 through June 2018, she made routine payments to her personal credit card accounts from the bank accounts of the union and employee benefit funds for expenditures that were not authorized or for legitimate union or fund purposes. McBride caused the pension fund to direct monthly payments for pension benefits to a personal account of hers for a benefit that she was ineligible to receive and that the pension fund was not obligated to pay out.

The charges of embezzlement of labor union assets and embezzlement from employee benefit plans each carry a statutory maximum sentence of five years in prison and a maximum $250,000 fine, or twice the gain or loss from the offense.

Acting U.S. Attorney Honig credited the investigators of the U.S. Department of Labor, Employee Benefits Security Administration, under the direction of Regional Director Thomas Licetti of the New York Regional Office; investigators of the U.S. Department of Labor, Office of Labor Management Standards, under the direction of Adriana Vamvakas, Regional Director; and special agents of the Department of Labor – Office of the Inspector General, New York Region, under the direction of Special Agent in Charge Michael Mikulka, 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.

CAMDEN, N.J. – The former mayor of Atlantic City was sentenced today to 30 days in prison and 11 months of home confinement for defrauding contributors to a youth basketball team out of more than $86,000, Acting U.S. Attorney Rachael Honig announced. 

Frank Gilliam, 49, of Atlantic City, New Jersey, previously pleaded guilty to an information charging him with wire fraud. U.S. District Judge Joseph H. Rodriguez imposed the sentence today by videoconference.      

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

Gilliam was the co-founder of AC Starz Basketball Club (AC Starz), a non-profit that he incorporated to operate a youth basketball team. While serving as a member of the Atlantic City Council and later, as mayor of Atlantic City, Gilliam solicited donations for AC Starz from various individuals and entities under the false pretense that the contributions were for a youth basketball team and/or school supplies for underprivileged children. Gilliam instead used most of the money for personal expenses – including luxury clothing, expensive meals, and trips – that were completely unrelated to the operation of a youth basketball team. In total, Gilliam defrauded the contributors out of $86,790.    

In addition to the prison term, Judge Rodriguez sentenced Gilliam to three years of supervised release, ordered him to pay restitution to his victims in the amount of $86,790 and ordered him to perform 200 hours of community service. 

Acting U.S. Attorney Rachael Honig credited special agents of the FBI Atlantic City Resident Agency and FBI Atlantic City Public Corruption Task Force, which includes the Atlantic County and Cape May County Prosecutor’s Offices and the Atlantic City Police Department, under the direction of FBI Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division.

NEWARK, N.J. – A United Kingdom national is charged with wire fraud and conspiracy to commit bribery for his role in a scheme involving the award of millions of dollars of U.S. Army Corps of Engineers (USACE) reconstruction contracts in Iraq, Acting U.S. Attorney Rachael A. Honig announced today.

The indictment unsealed today charges Shwan Al-Mulla, 60, the former owner of Iraqi Consultants & Construction Bureau (ICCB), with seven counts of honest services wire fraud and one count of conspiracy to commit bribery and defraud the U.S. government. Al-Mulla remains at large.

According to the indictment unsealed today:

In 2003, Al-Mulla founded ICCB. Between 2007 and 2009, Al-Mulla and his conspirators, including Ahmed Nouri and another ICCB employee, paid over $1 million in bribes to John Alfy Salama Markus, a USACE employee, in exchange for the awarding of millions of dollars in Iraqi reconstruction contracts to ICCB. Salama Markus was a USACE employee deployed to Contingency Operating Base Speicher in Tikrit, Iraq. Salama Markus was involved in the review and award process for lucrative Iraqi reconstruction contracts and the administration, oversight, and modification of those contracts after they were awarded. In exchange for over $1 million in bribes, Salama Markus provided Al-Mulla and his conspirators with confidential USACE information concerning bids, independent government estimates, and the selection process. Al-Mulla and Nouri used this information to submit winning bids for millions of dollars in contracts. They also submitted bids on behalf of multiple companies, with Salama Markus’ knowledge, for the same contracts.

For example, in March 2007, Salama Markus solicited a $350,000 bribe in exchange for helping ICCB obtain a $6.2 million contract to make certain infrastructure improvements at the Bayji Oil Refinery. On April 24, 2007, Salama Markus sent an email to Nouri telling Nouri the price to bid, on behalf of ICCB, for the contract, and on May 9, 2007, ICCB received the contract. On June 20, 2007, Al-Mulla received an email from Nouri asking to make a $200,000 partial bribe payment to Salama Markus and Salama Markus agreed. Al-Mulla subsequently instructed another ICCB employee to arrange for a $200,000 payment to be made to Salama Markus in Egypt. On July 17, 2007, Al-Mulla received an email from Nouri detailing the bribes owed to Salama Markus and the expected official actions promised by Salama Markus. The outstanding bribe payments listed in the email included the remaining $150,000 bribe payment in connection with the Bayji Oil Contract, a $100,000 bribe payment for USACE contracts concerning the building of schools; and a $550,000 payment to ensure that ICCB obtained four additional contracts. 

In July 2007, ICCB received the additional four contracts, worth approximately $7 million dollars, in exchange for the promised $550,000 bribe payment to Salama Markus. In August 2007, Al-Mulla met Nouri, Salama Markus, and another ICCB employee in Amman, Jordan. Al-Mulla authorized the payment of $750,000 cash to Salama Markus. And, at ICCB’s office in Amman, an ICCB employee gave a bag containing $750,000 in cash to Salama Markus.

Salama Markus previously pleaded guilty to honest services wire fraud, money laundering and tax offenses and, on March 12, 2013, he was sentenced to 156 months in prison. On Oct. 1, 2018, Ahmed Nouri pleaded guilty to conspiracy to commit bribery and is awaiting sentencing.

The honest services wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The conspiracy to commit bribery and defraud the U.S. government count carries a maximum potential penalty of five 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, under the direction of Special Agent in Charge Jason J. Molina; the IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; the Defense Criminal Investigative Service, under the direction of Special Agent in Charge Patrick J. Hegarty; and 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 Acting Principal Assistant U.S. Attorney Rahul Agarwal and Assistant U.S. Attorney Elaine Lou of the Special Prosecutions Division in Newark.

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

TRENTON, N.J. – A Romanian national was sentenced today to 60 months in prison for his role in a conspiracy to steal bank account information from thousands of customers by installing secret card-reading devices and pinhole cameras on ATMs throughout New Jersey and elsewhere, Acting U.S. Attorney Rachael A. Honig announced.

Adrian Fichidiu, 37, previously pleaded guilty to conspiracy to commit bank fraud and aggravated identity theft. U.S. District Judge Peter G. Sheridan imposed the sentence by videoconference today.

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

Fichidiu admitted he was part of an “ATM skimming” scheme that stole bank account information by installing hidden card-reading devices on ATMs throughout northern and central New Jersey. Fichidiu previously acknowledged that he and his conspirators created bank cards using the fraudulently obtained account information, which they used to unlawfully withdraw large amounts of cash from various ATMs. The scheme, which involved actual and attempted losses exceeding $1.5 million dollars, impacted over 1,000 bank customers.

In addition to the prison term, Judge Sheridan sentenced Fichidiu to five years of supervised release and ordered him to pay restitution that will be finalized at a later date.  

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., detectives with the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Yolanda Ciccone, and detectives with the Woodbridge Police Department, under the direction of Police Director Robert Hubner, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.

NEWARK, N.J. – The former chief financial officer (CFO) of a Sussex County retail construction company was indicted today on five additional tax charges stemming from his failure to collect, account for, and pay over hundreds of thousands in federal payroll taxes, Acting U.S. Attorney Rachael A. Honig announced.

Jonathan Baker, 39, of Green Township, New Jersey, was originally charged by indictment in December 2019 with five counts of wire fraud and three counts of money laundering for orchestrating a scheme to defraud his former employer and several lenders, including by embezzling millions of dollars for his own personal benefit.

Baker is currently out on bail and will be arraigned at a later date before U.S. District Judge William J. Martini.

According to the superseding indictment:

Baker held the title of CFO of Victim-Company 1, a small, privately held retail construction company located in Sparta, New Jersey. The company acted as a construction manager and a general contractor for construction projects, such as new business offices, retail spaces, and restaurants. Baker also held the title of manager of Victim-Company 2, which held 100 percent of the voting and equitable interest in Victim-Company 1.

From 2015 through 2018, Baker defrauded both companies and several commercial lenders, embezzling millions of dollars from the companies and fraudulently inducing commercial lenders into providing funds to Baker and his associated entities through fraudulent use of Victim-Company 1’s name, bank statements, balance sheet, and bank accounts.

Baker misappropriated millions of dollars from the Victim-Companies’ bank accounts and used the funds for his personal expenses, including mortgage payments on Baker’s residence, the purchase of a BMW, and the purchase of six donkeys.

Baker concealed the fraud by making false statements to members of the Victim-Companies after they confronted him with evidence of the fraud. He falsely claimed that a commercial lender had made a mistake in filing a lien against Victim-Company 1 and repeatedly misrepresented that the commercial lender would be issuing a retraction and apology. Baker then refused to meet or join conference calls with the members of the companies to discuss the liens against Victim-Company 1, refused to produce the Companies’ bank statements, changed the locks on the Companies’ offices, and attempted to disable the Companies’ email and phone system.

From Jan. 31, 2017, to Jan. 31, 2018, Baker withheld tax payments from the pay checks of the employees of Victim-Company 1 but failed to pay over hundreds of thousands of dollars in payroll taxes that were withheld and due to the IRS. Baker also failed to prepare and file quarterly federal tax returns on behalf of Victim-Company 1. 

The wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The money laundering counts each carry a maximum potential penalty of 10 years in prison and a $250,000 fine. The tax counts each carry a maximum potential penalty of five years in prison and a $250,000 fine.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr., and special agents of the IRS, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the superseding indictment.

The government is represented by Assistant U.S. Attorney Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit.

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