District of New Jersey

NEWARK, N.J. – An IRS supervisory revenue agent was arrested today on charges of conspiracy to distribute cocaine, U.S. Attorney Craig Carpenito announced.

Michael Shelli, 41, of Albany, New York, was arrested at his home by agents of the Drug Enforcement Administration (DEA). He is charged by complaint with one count of conspiracy to distribute five kilograms or more of cocaine and appeared by videoconference today before U.S. Magistrate Judge James B. Clark III and was released on $100,000 unsecured bond.

According to the complaint:

Since March 2020, officials of the DEA have been investigating a drug trafficking organization (DTO) operating in New Jersey and elsewhere. In April 2020, law enforcement identified a residence in Saddle Brook, New Jersey, as a location from which members of the DTO were dealing cocaine.  The investigation revealed that Shelli had a courier pick up cocaine from the residence and deliver it to his residence in Albany. Shelli would then repackage the cocaine for sale in the area. 

The conspiracy to distribute cocaine charge is punishable by a maximum penalty of life in prison and a fine of up to $10 million.

U.S. Attorney Carpenito credited special agents of the DEA-New York Division and DEA-Albany District Office, under the direction of Special Agent in Charge Raymond Donovan; the U.S. Attorney’s Office for the Northern District of New York, under the direction of Acting U.S. Attorney Antoinette T. Bacon; the office of the Treasury Inspector General for Tax Administration, under the direction of William Kalb; the New York State Police, under the direction of Superintendent Keith M. Corlett; officers of Troop K, Danbury, Connecticut, Police Department, under the direction of Chief Patrick Ridenhour; officers of the Hasbrouck Heights Police Department, under the direction of Chief Michael J. Colaneri; and officers of the Saddle Brook Police Department, under the direction of Chief Robert Kugler, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Naazneen Khan of the U.S. Attorney’s Office Organized Crimes and Gangs Unit in Newark.

CAMDEN, N.J. – A Gloucester County, New Jersey, man today admitted to stealing gift cards and cash from mail that passed through post offices where he was employed, U.S. Attorney Craig Carpenito announced.

Daniel Talorico, 40, of Sewell, New Jersey, pleaded guilty by videoconference today before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of theft of mail by a postal employee.

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

Talorico was employed by the U.S. Postal Service as a laborer custodian in post offices in Burlington County and Camden County, New Jersey. Between May 2019 and October 2019, Talorico stole gift cards and cash from greeting cards and other mail that passed through the post offices where he worked.

The theft of mail by a postal employee charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for March 1, 2021.

U.S. Attorney Carpenito credited special agents of the U.S. Postal Service Office of Inspector General, Eastern Area Field Office, under the direction of Special Agent in Charge Kenneth Cleevely, 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. – A member of the Newark Municipal Council and Board of Directors of the Newark Community Economic Development Corporation (NCEDC) was charged today with scheming to obtain bribes and kickbacks, U.S. Attorney Craig Carpenito announced.

Joseph A. McCallum Jr., 65, of Newark, is charged by complaint with one count of wire fraud for allegedly devising a scheme, using interstate wire communications, to defraud Newark and the NCEDC of the right to McCallum’s honest services. McCallum is scheduled to appear on a date that will be determined by the court.

Malik Frederick, 60, of Newark, a participant in the scheme, pleaded guilty today by videoconference before U.S. District Judge William J. Martini to Count 1 of a four-count information, charging conspiracy to commit honest services wire fraud, and Count 3, charging him with subscribing to a false personal federal tax return for 2017 for intentionally not reporting over $100,000 in income.

According to documents filed in these cases and statements made in court:

As a member of the Newark city council, representing the West Ward, and of the NCEDC (now known as Invest Newark!), from 2017 through February 2020, McCallum schemed to receive concealed bribes and kickbacks from Frederick, funded by developers, contracting companies, and other businesses seeking contracts and approvals principally related to development, construction, and real estate projects and deals in Newark. These developers and others were solicited by Frederick to hire his consulting company for “access,” and were introduced to McCallum as the councilman behind the particular project or deal of interest to them. McCallum then received and planned to receive concealed bribes and kickbacks derived from the fees that Frederick obtained from those who retained his company.

In exchange, McCallum used his official positions to provide assistance to those who retained Frederick’s company. For those who refused or hesitated to pay, McCallum and Frederick intended to prevent them from obtaining contracts and work from the NCEDC and the City of Newark. McCallum and Frederick used interstate emails and phone calls to further this scheme and took significant steps to conceal these bribes and kickbacks.

The bribes and kickbacks received and sought by McCallum through Frederick included the following:

• A $16,000 bribe funded by a payment from a contracting company;
• a $25,000 bribe and kickback funded by a payment from a developer’s  company;
• $500 in cash to cover travel expenses for an out-of-country trip and an attempt to receive part of a $50,000 payment from a second developer;
• and an attempt to obtain payments from a seller of property in the West Ward and a developer who was seeking to buy and develop the property.

 

Frederick also sought to have a modular home company that was in negotiations with the NCEDC on a development project in Newark retain Frederick’s company and obtain a $40,000 payment from the company. Frederick intended to share the $40,000 payment with an NCEDC official (Co-Conspirator 2) who referred Frederick to the modular home company and expected a portion of whatever Frederick would be paid. After the modular home company refused to retain Frederick’s company, it did not receive a contract from the NCEDC. 

The honest services wire fraud charge alleged in the criminal complaint against McCallum and the wire fraud conspiracy charged in Count 1 of the information to which Frederick pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims, whichever is greater. The false tax return charge to which Frederick pleaded guilty carries a maximum potential penalty of three years in prison and a maximum $250,000 fine, or twice the pecuniary gain to the defendant or loss to the victim, whichever is greater. Sentencing for Frederick is scheduled for March 2, 2021.

U.S. Attorney Carpenito credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge in Newark George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s charges against McCallum and guilty plea by Frederick.

The government is represented by Assistant U.S. Attorneys Jihee G. Suh, Jeffrey Manis, and Elaine K. Lou of the U.S. Attorney’s Office’s Special Prosecutions Division.

The charge and allegations contained in the complaint against McCallum are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Pennsylvania medical assistant today admitted participating in a conspiracy to receive bribes and kickbacks in exchange for ordering genetic tests, U.S. Attorney Craig Carpenito announced.

Shanelyn Kennedy, 25, of Scranton, Pennsylvania, pleaded guilty by videoconference before U.S. District Judge Anne E. Thompson to an information charging her with one count of conspiring to violate the anti-kickback statute. Kennedy is the second 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:

Kennedy worked as a medical assistant for Yitzachok “Barry” Kurtzer, a primary care physician with separate offices in the Scranton area. From at least 2018, Kurtzer and his wife, Robin Kurtzer accepted 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 up to $5,000, and the Kurtzers typically accepted the cash in one of Kurtzer’s offices, at times behind locked doors.

Even as the ongoing COVID-19 pandemic substantially reduced in-patient visits, the Kurtzers continued with their scheme. They went from receiving hand-delivered cash kickbacks and bribes to accepting payments by wire and through a mobile phone money-transfer application.

Kennedy participated in the conspiracy with another employee, Amber Harris, who has previously pleaded guilty for her role in the scheme. They both helped collect the DNA swabs in exchange for also receiving kickbacks and bribes, both in cash and later using the money-transfer application.

As a result of the scheme, Medicare paid $755,241 for genetic tests generated from Kurtzer’s practice.

The count of conspiracy to violate the federal anti-kickback statute 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 Feb. 23, 2021.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and U.S. Department of Health and Human Services, Office of Inspector General, Philadelphia Regional Office, under the direction of Special Agent in Charge Maureen Dixon, with the investigation leading to the charges. He 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 in the Criminal Division, Newark.

The charges against and allegations in the information pertaining to the Kurtzers are merely accusations, and those defendants are presumed innocent unless and until proven guilty.

TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted to being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced.

Rashon Alexander, 42, of Long Branch, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an indictment charging him with one count of being a felon in possession of a firearm.

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

On Jan. 13, 2020, officers from the Eatontown Police Department received information that a man fitting Alexander’s description was staying in a local hotel and was in possession of a firearm. The officers observed Alexander – a convicted felon prohibited from possessing a firearm – and another man approaching the hotel. Officers approached Alexander, who admitted to being in possession of marijuana. Officers searched Alexander and found a quantity of marijuana in his sweatshirt pocket. Officers placed Alexander under arrest and searched him, recovering an RG Industries .22 caliber revolver from his pants pocket.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for February 22, 2021.

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

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, Trenton Field Office, with the investigation leading to today’s guilty plea. He also thanked the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, the Eatontown Police Department, under the direction of Chief William P. Lucia, III, and the New Jersey State Police, under the direction of Col. Patrick J. Callahan for their assistance.

The government is represented by Special Assistant U.S. Attorney Christopher Matthews of the Criminal Division in Trenton.                                                        

Defense counsel: Andrea D. Bergman Esq., Assistant Federal Public Defender, Trenton

NEWARK, N.J. – A Bergen County, New Jersey, man was arrested Oct. 18, 2020, for threatening to injure a federal judge, U.S. Attorney Craig Carpenito announced today.

William Kaetz, 56, of Paramus, New Jersey, was charged by criminal complaint with making an interstate communication containing a threat to injure a person and with threatening to assault and murder a federal judge. Kaetz is scheduled to have his initial appearance this afternoon by videoconference before U.S. Magistrate Judge Cathy L. Waldor.   

According to the criminal complaint filed in this case:

On Sept. 24, 2020, Kaetz sent a communication via U.S. Mail to a federal district judge’s house, claiming to have a pending civil matter before the judge and requesting that the judge expedite the case. Kaetz was interviewed that day by investigators and admitted to being concerned about the status of his pending lawsuit before the judge. Kaetz also asked for the judge to be recused and stated that he had acquired the judge’s home address using a paid internet-based service. Kaetz further stated that the excessive delay on his pending case was unacceptable to him.

On Sept. 30, 2020, Kaetz left a voicemail for the judge, at the judge’s office, stating that he had cases pending before the judge, that the judge should have decided his matters weeks ago, and that he wanted the judge off his cases and off the bench. Kaetz further stated that he would not take “no” for an answer.

On Oct. 18, 2020, Kaetz sent an email to the judge’s personal email account and to others, including general email address for the U.S. Marshals Service. In that email, Kaetz claimed that the judge had been “avoiding and stonewalling” his case, that the judge was a “traitor,” that being a traitor “has a death sentence,” and that “there will come a time to take down those people that fail to do their job.” Kaetz further stated that he had pending motions before the judge and that he would try his best “not to harm the traitor” judge but that the “traitor” judge needed to be dealt with. Kaetz then threatened to publicly reveal the judge’s home address and stated: “God knows who has a grievance and what will happen after that.”

The charge of making an interstate communication containing a threat to injure a person carries a maximum penalty of five years in prison. The charge of threatening to assault and murder a federal judge carries a maximum penalty of 10 years in prison. Both charges also carry a maximum fine of $250,000. 

U.S. Attorney Carpenito credited special agents of the FBI and the Joint Terrorism Task Force, under the direction of Special Agent in Charge George M. Crouch Jr., and deputy U.S. Marshals for the District of New Jersey, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Dean Sovolos of the Office’s National Security 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. – Two alleged ranking members off the Bloods street gang have been charged with conspiring to distribute fentanyl and heroin in Newark, U.S. Attorney Craig Carpenito announced today.

Leonard Wade, a/k/a “Clap,” 49, of New Brunswick, New Jersey, and Ezra A. Strong, a/k/a “Doonka,” 30, of Brick, New Jersey, are charged in separate complaints with conspiracy to distribute more than 400 grams of fentanyl and more than 100 grams of heroin. Wade is also charged with possession of ammunition by a convicted felon. 

Wade appeared for an initial appearance by videoconference today before U.S. Magistrate Judge Michael A. Hammer. Strong appeared for an initial appearance by videoconference on Oct. 14, 2020, before Judge Hammer. Both men are currently detained.

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

Law enforcement officials have seized 831 grams of suspected fentanyl and 612 grams of suspected heroin, as part of an investigation into a drug trafficking organization (DTO) operating in Monmouth and Middlesex counties, Pennsylvania, and elsewhere.

The investigation has revealed that Wade, allegedly a ranking member of the Sex Money Murder (SMM) subset of the Bloods street gang, is a leader of the DTO. Strong, allegedly a ranking member of the Fruit Town Brims, also a subset of the Bloods street gang, distributes fentanyl and heroin on behalf of the DTO. 

On Oct. 1, 2020, law enforcement officers executed a search warrant of Wade’s residence and recovered a 9mm caliber semi-automatic polymer “privately made” handgun, along with 50 rounds of 9mm ammunition and five rounds of .45 caliber ammunition.

The count of conspiracy to distribute and possess with intent to distribute over 400 grams of fentanyl carries a maximum penalty of life imprisonment and a $10 million fine. The ammunition offense carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s Monmouth/Ocean HIDTA Task Force, under the direction of Special Agent in Charge Susan A. Gibson, with the assistance of the Monmouth County Prosecutor’s Office Gang and Criminal Enterprise Unit, with the investigation leading to the arrests.

The government is represented by Assistant U.S. Attorney Lauren E. Repole of the U.S. Attorney’s Office 4OCDETF/Narcotics Unit.

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

NEWARK, N.J. – A Hudson County, New Jersey man was arraigned today after being indicted by a federal grand jury on multiple narcotics and weapons offenses, U.S. Attorney Craig Carpenito announced.

Hector Gonzalez, 68, of Jersey City, New Jersey, was indicted on Oct. 5, 2020, on one count of possessing with intent to distribute heroin and cocaine; one count of being a prior felon in possession of a firearm and ammunition; and one count of possessing a firearm in furtherance of a drug trafficking crime. Gonzalez had been charged by criminal complaint on Oct. 24, 2019. He appeared for his arraignment by videoconference before U.S. Magistrate Judge Michael A. Hammer and pleaded not guilty.

According to documents filed in this case:

On June 22, 2019, members of the Jersey City Police Department executed a search warrant at Gonzalez’s apartment and discovered three firearms, ammunition, 148 glassine folds of heroin, cocaine, and over $1,300. 

The narcotics charge carries a maximum potential penalty of 20 years in prison. The felon-in-possession charge carries a maximum potential penalty of 10 years in prison. The charge of possessing a firearm in furtherance of a drug trafficking crime carries a maximum potential penalty of life in prison.

U.S. Attorney Carpenito credited members of the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, with the investigation leading to the indictment.

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

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

TRENTON, N.J. – A former employee of Tax Pro’s and Tax Solutions & Associates, tax preparation businesses located in Essex and Union counties, was sentenced today to 27 months in prison for conspiring to defraud the United States by filing false income tax returns, U.S. Attorney Craig Carpenito announced.

Angelo Thompson, 39, of Reistertown, Maryland, previously pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count 1 of an indictment charging him with conspiracy to defraud the IRS.

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

From at least 2009 to April 2015, Joseph Kenny Batts was co-owner, along with Damien Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, where Thompson, Tony V. Russell, Rudolph Sanders, Batts, and Askew prepared tax returns. In order to boost their business, Thompson and these others conspired to falsify their clients’ federal income tax returns for the purpose of generating refunds from the IRS in amounts that their clients were not entitled to receive. The fraudulent practices that Thompson, Russell, Sanders, Batts, and Askew 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. 

Thompson and other members of the conspiracy also permitted Batts to use their Paid Taxpayer Identification Numbers (PTIN) – the identification number that paid tax preparers are required to place on tax returns that they have prepared – when preparing tax returns to conceal Batts’ identity as the actual tax return preparer, due to, among other things, Batts’ prior federal tax fraud conviction.

After law enforcement executed a search warrant at Tax Pro’s in or about April 2015, Batts discontinued Tax Pro’s and opened Tax Solutions and Associates in Union, where Thompson, Russell, and Batts continued preparing false federal income tax returns.

By fraudulently inflating the amounts of the tax refunds, Thompson and his co-conspirators caused a total tax loss to the IRS in excess of $1.6 million.

Askew, Sanders, and Russell, have pleaded guilty to their roles in the scheme. Batts was convicted at trial in September 2019 of 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. Russell has been sentenced to four years in prison; Askew, Sanders and Batts are awaiting sentencing.

In addition to the prison term, Judge Shipp sentenced Thompson to three years of supervised release and ordered him to pay restitution of $103,320. 

U.S. Attorney Carpenito 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 Suh of the Special Prosecutions Division.

NEWARK, N.J. – An Essex County, New Jersey, man working as a contract custodian at a U.S. Post Office in Maplewood, New Jersey, was arrested today for bank fraud and theft of government property, including stealing nearly $15,000 in checks and cash from the Maplewood Post Office and fraudulently depositing the checks, U.S. Attorney Craig Carpenito announced.

Mark Gregory Jr., 27, of East Orange, New Jersey, is charged by complaint with one count of bank fraud and two counts of theft of government property. He is scheduled to appear this afternoon by videoconference before U.S. Magistrate Judge Michael A. Hammer.

According to documents filed in this case:

Between March 2019 and July 2019, Gregory stole certain checks placed into the stream of mail by customers at the Maplewood Post Office, and cash paid by customers and held at the Maplewood Post Office, and subsequently deposited those checks, in New Jersey and elsewhere, into bank accounts that he controlled.

The bank fraud charge is punishable by a maximum potential penalty of 30 years in prison and a fine of up to $1 million. The theft of government property charges are punishable by a maximum potential penalty of 10 years in prison and a maximum $250,000 fine.

U.S. Attorney Carpenito credited special agents with the U.S. Postal Service – Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, and 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 arrest.

The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the Special Prosecutions Division in Newark.

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

NEWARK, N.J. – A Union County, New Jersey, man today admitted making corrupt payments to a public official of the City of Orange Township, New Jersey, as a reward for that public official’s favorable treatment in connection with an Orange municipal project, U.S. Attorney Craig Carpenito announced.

Jeanmarie Zahore, 56, of Rahway, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to Count 1 of an indictment against him, charging Zahore with making corrupt payments to an agent of a local government receiving federal funds, whom Zahore identified as Willis Edwards III. 

On Sept. 29, 2020, Edwards, the former acting business administrator for Orange, was charged in a superseding indictment in connection with payments allegedly made by Zahore, as well as other charges.

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

Zahore was the sole owner of JZ Nettech, a computer consulting business which he operated out of his residence in Rahway. On Sept. 15, 2015, the Orange City Council passed a resolution awarding JZ Nettech, without competitive bidding, a $350,000 emergency contract to install a computer networking system at a municipal complex that housed the Orange Municipal Court and the Orange Police Department (the “Municipal Complex Project”).

Edwards, as an Orange public official, assisted Zahore in obtaining the contract for the Municipal Complex Project and facilitated the payment of money from Orange to JZ Nettech in connection with the Municipal Complex Project.

Edwards agreed to arrange an advance on the money from Orange for Zahore because Zahore did not have the money to begin working on the Municipal Complex. At Edwards’s instruction, on Sept. 18, 2015, Zahore emailed an Orange employee an invoice for $115,000 in connection with Municipal Complex Project to obtain an advance payment for himself. Typically, vendors are not pre-paid by Orange to purchase supplies for a project.

On Sept. 18, 2015, Zahore received a check from Orange for $115,000 payable to JZ Nettech and deposited that check into JZ Nettech's bank account. Shortly after receiving the $115,000 Orange check, Zahore and Edwards went out together at night to celebrate the award of the $350,000 contract to JZ Nettech.

In October and November 2015, Zahore received two additional payments from Orange in connection with the Municipal Complex Project, one for $140,000 and the other for $95,000.

On more than one occasion Edwards told Zahore, in substance, that Edwards had taken care of Zahore and that Zahore should consider that and do something. Zahore understood those comments by Edwards to be solicitations and demands that Zahore pay Edwards to reward Edwards for Edwards’s assistance in connection with the Municipal Complex Project.

In November 2015, Zahore gave Edwards approximately $10,000 in cash. After accepting the cash payment, Edwards indicated that he was disappointed with the amount and expected more. Zahore made a second cash payment to Edwards for approximately $10,000. Zahore made those two cash payments with the intent to reward Edwards for his assistance.

The charge to which Zahore pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. Sentencing is scheduled for March 3, 2021.

U.S. Attorney Carpenito 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 Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Cari Fais and J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.

The charges and allegations against Edwards are merely accusations, and he is presumed innocent unless and until proven guilty.

TRENTON, N.J. – A Passaic County, New Jersey, man was sentenced today to 60 months in prison for his role in a business email compromise (BEC) scheme in which he and others opened bank accounts to function as conduits for stolen funds, U.S. Attorney Craig Carpenito announced.

Lawrence Espaillat, 42, of Clifton, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiracy to commit wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court.

According to documents filed in this and other cases and statements made in court:

From March 2017 to June 2018, Espaillat, conspirators Corry Pringley and Amanda Suazo, and others, participated in a scheme to steal more than $1 million dollars from individual and corporate victims. The scheme involved recruiting “mules” – including Espaillat, before he rose to the level of recruiter – Suazo and Pringley, to provide their personal identifying information. This information was used to incorporate sham businesses with the N.J. Department of the Treasury under the mules’ names. The mules eventually opened bank accounts in the names of the sham corporations.

A related cyberattack aspect of the scheme involved creating email addresses mimicking – but differing slightly from – legitimate email addresses of supervisory employees at various companies, vendors that did business with those victim companies, mortgage lenders that dealt with individuals in connection with real estate purchases, and brokerage firms and accountants who provided financial services. The conspirators used these deceptive email addresses to send emails that appeared to be requests for payment of legitimate invoices or debts owed by the victims. The victims were deceived into transferring funds by wire into the bogus bank accounts opened by the money mules and controlled by the conspirators. After the victims complied with the fraudulent wiring instructions, Espaillat, Suazo and Pringley, under the direction of other conspirators, quickly debited thousands of dollars from the accounts through in-person and ATM withdrawals and debit card purchases. They also transferred the funds to foreign bank accounts they controlled. Espaillat, Suazo and Pringley kept a fraction of the proceeds as payment.

For example, over a three-day period in April 2018, a corporate victim in Texas deposited $3.8 million dollars in a bank account opened by Pringley and controlled by Espaillat, Pringley and Suazo, who withdrew or transferred more than $1 million from the account.

In addition to the prison term, Judge Sheridan sentenced Espaillat to three years of supervised release, ordered him to pay restitution of $1.7 million and forfeit $12,000.

Suazo and Pringley pleaded guilty on Jan. 17, 2019, and Feb. 14, 2019, respectively, to separate informations charging each with one count of conspiracy to commit wire fraud. Today, Pringley was sentenced by Judge Sheridan to one year and one day in prison, three years of supervised release, restitution of $1.28 million and forfeiture of $8,000. Suazo is awaiting sentencing.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Trenton office.

NEWARK, N.J. – A medical device maker has agreed to pay $18 million to resolve allegations that the company caused the submission of false claims to the Medicare, Medicaid, and TRICARE programs by paying kickbacks to physicians and hospitals to induce the use of its products, the U.S. Attorney’s Office for the District of New Jersey and the Department of Justice announced today. 

The settlement resolves allegations that, for over six years, Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, engaged in a kickback scheme to pay physicians, medical practices, and hospitals to induce their use of MMSI products in medical procedures performed on Medicare, Medicaid, and TRICARE beneficiaries. The federal Anti‑Kickback Statute prohibits offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, TRICARE, and other federal healthcare programs. The statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives.

“Merit Medical provided millions of dollars of advertising and other marketing support to healthcare providers to induce sales of its products,” Attorney for the United States Rachael A. Honig said. “Unlawful kickbacks like these distort the market for medical devices upon which our healthcare system depends. For years, Merit Medical ignored internal warnings and refused to abide by the rules that apply to every other medical device company. With today’s settlement, they are paying the price for that refusal.”

“Paying kickbacks to doctors in exchange for referrals undermines the integrity of federal healthcare programs,” Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division said. “When medical devices are used in surgical procedures, patients deserve to know that their device was selected based on quality of care considerations and not because of improper payments from manufacturers.”

Under the guise of an internal program known as the Local Advertising Program, MMSI allegedly provided remuneration to healthcare providers in the form of millions of dollars in free advertising assistance, practice development, practice support, and purported unrestricted “educational” grants to induce the healthcare providers to purchase and use a wide variety of MMSI products. These products included MMSI’s EmboSphere devices, which generally were used for uterine fibroid embolization procedures, and its QuadraSphere devices, which generally were used for other types of embolization procedures. Despite publicly claiming that its financial assistance was designed to “increase th[e] awareness” of medical treatments, MMSI allegedly provided it only to select healthcare providers to reward past sales, induce future sales, and steer business to MMSI and away from MMSI’s competitors. The government alleged that MMSI disregarded numerous warnings that its conduct may violate the Anti-Kickback Statute, including warnings from MMSI’s own Chief Compliance Officer, during the course of the alleged kickback scheme. Of the $18 million to be paid by MMSI, $15.21 million will be returned to the federal government, and a total of $2.79 million will be returned to individual states, which jointly funded claims involving MMSI devices that were submitted to state Medicaid programs.

Along with the civil settlement, MMSI entered into a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). The CIA requires MMSI to hire a compliance expert and an independent review organization to analyze its systems and transactions.  

“No health care company’s compliance program can be effective without commitment and support from the company’s leaders,” HHS-OIG Chief Counsel Gregory Demske said. “As happened here, ignoring your compliance officer’s concerns about payments to referral sources is a great way to become a defendant in a kickback case.”

The allegations were originally made in a lawsuit filed under the whistleblower provisions of the False Claims Act by Charles J. Wolf M.D., the former chief compliance officer of MMSI. The act permits private parties to sue for false claims on behalf of the United States and to share in any recovery. Wolf will receive $2.65 million from the federal share of the settlement.

The government’s pursuit of this lawsuit illustrates its efforts to combat healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).   

The settlement with Merit Medical was the result of a coordinated effort by the U.S. Attorney’s Office for the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division, with investigative support from the Department of Health and Human Services, Office of Inspector General and the FBI.

The government is represented in the District of New Jersey by Assistant U.S. Attorney Andrew Caffrey of the U.S. Attorney’s Office’s Healthcare Fraud Unit.

The lawsuit is captioned United States ex rel. Wolf v. Merit Medical Systems, Inc. The claims resolved by the settlement are allegations only and there has been no determination of liability.

NEWARK, N.J. – A federal grand jury today indicted an Essex County, New Jersey, man for his role in three armed robberies of pharmacies in West Orange, Belleville and East Orange, New Jersey, U.S. Attorney Craig Carpenito announced. 

Malik Conley, 27, of Newark, is charged with three counts of Hobbs Act robbery, three counts of brandishing firearms in furtherance of the robberies and one count of possession of a firearm by a convicted felon. He will be arraigned on a date to be determined. 

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

On Oct. 21, 2019, Conley and a conspirator entered a pharmacy in West Orange, New Jersey, while wearing face masks. One of the men entered the pharmacy holding a silver handgun pointed at employees. The men demanded cash from the register as well as prescription medication. Conley and his conspirator fled the pharmacy with stolen medication and cash.

On Dec. 3, 2019, Conley entered a pharmacy in Belleville, New Jersey, while wearing a face covering and pointing a silver gun at employees. He demanded cash from the register as well as prescription medication, and ultimately fled the pharmacy with stolen medication and cash. Law enforcement recovered the firearm believed to be used in this robbery later that day in Conley’s girlfriend’s car.

On Jan. 13, 2020, Conley and a conspirator entered a pharmacy in East Orange, New Jersey, while both wearing face masks. One of the men entered the pharmacy holding a gun pointed at employees. Both men demanded cash and prescription medication, and ultimately fled the pharmacy with stolen medication and cash. Conley was arrested later that evening with the car keys to the vehicle believed to be used in the East Orange robbery in his pocket. Law enforcement searched the vehicle and recovered prescription medication traceable to the East Orange Pharmacy.         

Each count of Hobbs Act robbery carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The count of possession of a firearm by a convicted felon 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. Each count of brandishing a firearm in furtherance of a bank robbery carries a mandatory minimum of seven years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.  

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie Patterson in Newark; the West Orange Police Department, under the direction of Chief James P. Abbott; the Belleville Police Department, under the direction of Chief Mark Minichini; and the East Orange Police Department, under the direction Chief William C. Robinson, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Emma Spiro of the U.S. Attorney’s Office in Newark.

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 Department of Justice today announced it charged more than 14,200 defendants with firearms-related crimes during Fiscal Year (FY) 2020, despite the challenges of COVID 19 and its impact on the criminal justice process. Of those cases, 342 have been brought by the District of New Jersey, U.S. Attorney Craig Carpenito announced.

These cases have been a Department priority since November 2019 when Attorney General William P. Barr announced his commitment to investigating, prosecuting, and combatting gun crimes as an important part of the Department’s anti-violent crime strategy. These firearms-related charges are the result of the critical law enforcement partnership between United States Attorneys’ Offices and the Bureau of Alcohol, Tobacco, Firearms and Explosives, led by Acting Director Regina Lombardo, who has made firearms-related investigations a priority.

“The number one priority of government is to keep its citizens safe,” Attorney General Barr said. “By preventing firearms from falling into the hands of individuals who are prohibited from having them, we can stop violent crime before it happens. Violating federal firearms laws is a serious crime and offenders face serious consequences.  The Department of Justice is committed to investigating and prosecuting individuals, who illegally buy, sell, use, or possess firearms. Reducing gun violence requires a coordinated effort, and we could not have charged more than 14,000 individuals with firearms-related crimes without the hard work of the dedicated law enforcement professionals at the ATF, our U.S. Attorneys’ Offices across the country, and especially all of our state and local law enforcement partners.”

“When I became U.S. Attorney more than two years ago, I emphasized that our most important job is protecting the public,” U.S. Attorney Carpenito said. “Project Guardian is one of the best strategies we have to accomplish that mission. By coordinating with our federal, state and local law enforcement partners, we have pursued and prosecuted those who violate our firearms laws, and helped to reduce gun violence in our state.”

“Protecting the public from violent crime involving firearms is at the core of ATF’s mission,” ATF Acting Director Regina Lombardo said. “Every day the men and women of ATF pursue and investigate those who use firearms to commit violent crimes in our communities, many of whom are prohibited from possessing firearms from previous convictions.  ATF, in collaboration with the U.S. Attorneys’ Offices across the nation, is committed to bringing these offenders to justice for their egregious and violent criminal acts.”

The Department of Justice announced its commitment to decreasing gun violence and enforcing federal firearms laws in an effort to make the communities in America safer through Project Guardian. As part of this strategy, Project Guardian focuses on close coordination with all law enforcement partners to investigate, prosecute and prevent gun crimes, including the illegal acquisition or attempted acquisition, possession, use, and trafficking of firearms.

Under federal law, it is illegal to possess a firearm if you fall into one of nine prohibited categories including being a felon, illegal alien, or unlawful user of a controlled substance. Further, it is unlawful to possess a firearm in furtherance of a drug trafficking offense or violent crime.  It is also illegal to purchase – or even to attempt to illegally purchase - firearms if the buyer is a prohibited person or illegally purchasing a firearm on behalf of others. Lying on ATF Form 4473, which is used to lawfully purchase a firearm, is also a federal offense.  The Department is committed to prosecuting these firearms offenses as well as using all modern technologies available to law enforcement such as the National Integrated Ballistic Information Network, known as NIBIN, to promote gun crime intelligence.

The U.S. Attorney’s Office for the District of New Jersey has continued its long-standing partnerships with federal, state, county and local law enforcement agencies to implement Project Guardian and has renewed its commitment to prosecute firearms offenses. For example:

On May 6, 2020, Jonathan Brown, 26, of Covington, Georgia, was arrested for trafficking multiple firearms from Georgia to Jersey City, New Jersey, which were subsequently used in acts of violence. Brown was charged by complaint with one count of conspiracy to commit the unlicensed sale of firearms. Brown led a scheme to purchase firearms in or around Georgia and traffic those firearms to individuals in Jersey City. Brown, who is barred from purchasing firearms himself due to multiple prior felony convictions, used straw purchasers in Georgia to obtain the firearms so that Brown could sell those firearms to others. On multiple occasions, Brown brought firearms from Georgia to New Jersey for sale. Within months of Brown’s trips to Jersey City, law enforcement arrested numerous individuals in Jersey City in possession of firearms purchased by Brown’s straw purchasers. At least one of the weapons trafficked by Brown was later used in the shooting of another person in Jersey City. At least one of the individuals in possession of one of Brown’s guns had a prior felony conviction, and was therefore barred from possessing a firearm. To date, law enforcement has recovered seven firearms allegedly trafficked by Brown in Jersey City.

On May 29, 2020, a New Jersey man with a prior felony conviction was charged with unlawfully possessing dozens of firearms, including handguns, rifles, a silencer, ammunition, and high-capacity magazines. Darick Nollett, 30, of Heislerville, New Jersey, was charged by criminal complaint with one count of unlawfully possessing a firearm as a convicted felon, and one count of knowingly receiving and possessing a firearm that was not registered to him in the National Firearms Registration and Transfer Record. Law enforcement officers executing a court-authorized search warrant of Nollett’s residence recovered the following, in addition to a firearm silencer:

• A Remington 710 .270 caliber rifle;

• A Savage 93R17 .17 caliber rifle;

• An Aero Precision DTOM 15 rifle;

• A CMMG Inc. MK4 rifle;

• A Del-Ton DTI-15 rifle;

• An Aero Precision DTOM 15 rifle;

• A Keltec rifle;

• A Smith & Wesson .38 caliber revolver;

• A Ruger LCP .380 caliber semi-automatic pistol;

• A Colt Python .357 caliber revolver;

• A Taurus PT738 .380 caliber handgun;

• A Sig Sauer P226 .22 caliber handgun;

• A Glock 20 10mm handgun;

• A Heckler & Koch VP9 tactical pistol;

• A Smith & Wesson M&P40 .40 caliber handgun;

• A Springfield XD-40 .40 caliber handgun;

• A Springfield XD-45 .45 caliber handgun;

• A Taurus PT111 G2 9mm handgun;

• A Browning BPS 12 gauge shotgun;

• A Winchester Model 120 12 gauge shotgun;

• A Hatsan Arms Escort PS Magnum 12 gauge semi-automatic shotgun;

• A Remington 870 20 gauge shotgun;

• A Mossberg 500E .410 gauge shotgun;

• A Rossi 520 20 gauge shotgun;

• A New England Firearms Pardner SBI 12 gauge shotgun;

• A Fabrica Aguirre y Aranzabal JC Higgins Model 100 12 gauge shotgun;

• A Savage Model 720 12 gauge shotgun;

• A Springfield Armory Model 1896 rifle;

• A Ruger Model 10-22 .22 caliber rifle;

• A Remington 7615 Police .223 caliber rifle;

• A Winchester Model 1864 30 30 rifle; and

• A Mossberg 500 12 gauge shotgun;

Law enforcement officers also recovered an assembled AR-15 style rifle with scope that did not bear a serial number, along with unassembled parts for another AR-15 style rifle.

On June 1, 2020, Ibraaheem Islam, a/k/a “Ish,” 32, was charged by superseding complaint with three counts of possession with intent to distribute cocaine base (Counts One through Three), one count of possession of a firearm by a convicted felon (Count Four), and one count of possession of a firearm in furtherance of a drug trafficking crime (Count Five).  Those charges stemmed from Islam’s involvement in narcotics trafficking activity on a regular basis in the vicinity of Chadwick Avenue, Newark. Law enforcement obtained warrants to search two vehicles and one residence associated with Islam. On May 30, 2020, law enforcement recovered a 5.7x28 millimeter caliber FN Herstal model “FN Five-Seven” pistol, loaded with 17 rounds of ammunition, 194 vials containing suspected cocaine base, and 64 glassine envelopes containing suspected heroin.

On July 20, 2020, Tevin Browning, 29, of Newark, was charged by complaint with one count of conspiracy to commit carjacking, one count of attempted carjacking, one count of discharge of a firearm during a crime of violence, and one count of possession of a firearm and ammunition by a convicted felon following his alleged involvement in a July 9, 2020 attempted carjacking in Jersey City during which a victim was shot in the abdomen. Specifically, at approximately 5:00 p.m. on July 9, 2020, a carjacking occurred in the area of Tonnelle and Broadway avenues in Jersey City. Browning and an armed conspirator attempted to forcibly enter an Acura MDX.  As the passenger entered the Acura, Browning and his conspirator forcibly attempted to enter the vehicle. Browning attempted to enter the rear right passenger side of the Acura, and punched the passenger in the head. At that point, the driver quickly attempted to drive away from the area. As the driver drove away, the gunman attempted to enter the front passenger side of the Acura and held onto the Acura. After a short distance, the gunman shot the driver in the abdomen, and then fell off the Acura as its driver was able to escape. Moments later, a Dodge Challenger arrived at the scene and picked up the gunman before fleeing the area. Police officers found a spent .45 caliber shell casing stamped “Blazer .45 Auto” in the area where the gunman had fallen to the ground.  A lawful search warrant of the Challenger produced a .45 caliber Hi-Point Model JHP semiautomatic handgun, bearing serial number 406099, which was loaded with four rounds of ammunition. Two of the rounds were stamped “Blazer .45 Auto” on the shell casing.

On Oct. 7, 2020, Benjamin Daye, 34, admitted to robbing a Camden barbershop at gunpoint on November 23, 2019.  Upon entering the barbershop, Daye grabbed a juvenile customer, pointed a loaded gun at the customer’s head, and demanded cash and belongings from employees and customers. Daye fled and was apprehended shortly thereafter next to a bag containing the handgun and the stolen items.

These are just a few examples of the cases brought in the District of New Jersey under Project Guardian. Between October 1, 2019 and September 30, 2020, this office charged 342 individuals with gun offenses. Of those individuals, 252 were prior convicted felons who were prohibited from possessing firearms and almost 90 possessed firearms in furtherance of, or in relation to, drug trafficking offenses or crimes of violence, such as carjackings and shootings.

The charges and allegations pending against all defendants are merely accusations, and they are presumed innocent unless and until proven guilty.

For more information on the lawful purchasing of firearms, please see: https://www.atf.gov/qa-category/atf-form-4473.

NEWARK, N.J. – A federal grand jury today indicted two men for their roles in two armed bank robberies in Passaic and Little Falls, New Jersey, respectively, U.S. Attorney Craig Carpenito announced today. 

Nicholas Ortiz, 37, of Paterson, New Jersey, and Jose Soto, 49, of Passaic, New Jersey, are each charged with two counts of bank robbery, conspiracy to commit bank robbery, and brandishing firearms in furtherance of the bank robberies. They will be arraigned at a date to be determined. 

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

On Feb. 6, 2020, Ortiz and Soto, while wearing ski masks and holding umbrellas, entered the PNC Bank in Passaic and ordered everyone to get down on the floor. One of the men entered the bank brandishing a silver and black handgun. The other man entered the bank and jumped over the teller counter, demanding that the teller turn over all cash in the drawers.

On Feb. 27, 2020, Ortiz and Soto entered the Valley National Bank in Little Falls, New Jersey. One of the men entered brandishing a silver and black gun. The other man jumped over a teller counter, and began rifling through various drawers. Ortiz and Soto forced the bank employees, at gunpoint, to open the vault, and began retrieving cash from the bank vault. They forced all employees into the bank vault and then fled through the rear door of the National Valley Bank. 

Each bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy 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. Each count of brandishing a firearm in furtherance of a bank robbery carries a mandatory minimum of seven years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.  

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; the Passaic Police Department, under the direction of Chief Luis A. Guzman; and the Little Falls Police Department, under the direction of Chief Ronald Petrie, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Emma Spiro 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.

TRENTON, N.J. – A Hudson County, New Jersey, man was arrested for conspiring to use drones to smuggle contraband, including tobacco and cell phone chargers, into the federal correctional facility at Fort Dix, and for possessing with the intent to distribute narcotics, U.S. Attorney Craig Carpenito announced today.

Jason Arteaga Loayza, a/k/a “Juice,” 29, of Jersey City, New Jersey, was charged by complaint in November 2019 with one count of conspiring to smuggle contraband and to defraud the United States and one count of possessing with the intent to distribute a substance containing heroin and fentanyl. Arteaga was arrested on Oct. 12, 2020, in Vermont by federal marshals, and is scheduled to have his initial appearance on Oct. 14, 2020, before U.S. Magistrate John M. Conroy in Burlington, Vermont, federal court.   

According to the documents filed in this case:

The U.S. Department of Justice, Office of Inspector General (DOJ-OIG), obtained evidence that Arteaga, an inmate at Fort Dix from June 2017 to September 2018, participated in multiple drone deliveries of contraband meant for inmates between October 2018 and April 2019. 

On Oct. 30, 2018, Fort Dix officers observed a drone with a fishing line hovering above the rooftop of a housing unit. Underneath the hatch to the rooftop, which had the bolts removed, responding officers recovered a bag that contained tobacco, cell phone chargers, and USB charging cables. In the same area officers found a cell phone that was likely used to coordinate the drone drop, which was in frequent communication with Arteaga leading up to the drop. An inmate found near the rooftop hatch had wet knees, consistent with being on the wet rooftop to retrieve the contraband package. Arteaga’s iCloud account contained screenshots of google search results for “fort dix weather” in October 2018 and screenshots of live chats with CC-1 taken days before the drop in which the inmate appeared to be inside of Fort Dix and wearing a prison uniform. 

A few days earlier, Jersey City police officers had encountered a man in the common area of Arteaga’s residence with multiple plastic bags containing numerous cell phones. The man told police that he came to the address to meet Juice. 

During a search of Arteaga’s residence in June 2019, agents discovered a kitchen closet with packages of empty cell phone boxes, cell phone chargers, empty boxes of SIM cards, and several phones, including a box that had been shipped to Arteaga the day before the drop. The kitchen closet also contained a tobacco box consistent with the tobacco that had been recovered in drone drops.  Each of the drone drops that followed the Oct. 30, 2018, drop contained cell phones or cell phone equipment, and one additional drone drop contained tobacco. Arteaga also had a suitcase in his bedroom that contained his driver’s license, 20 packets of Suboxone Sublingual Film, a prescription opiate, and a plastic bag containing over 21 grams of a substance containing heroin and fentanyl.

One of the cell phones obtained during the search of Arteaga’s residence contained communications with a contact saved as “Adogfy,” in which Arteaga and Adogfy likely coordinated drone drops on Fort Dix. For example, the phone showed communications and a call between Arteaga and Adogfy on April 15, 2019; the next morning, a package of contraband with a cord attached to it was found in Fort Dix. The package contained packets of Hydroxycut drink mix, vacuum-sealed bags of tobacco, cellphone batteries, reading glasses, and a cell phone. On April 22, 2019, Adogfy sent Arteaga a photo that appeared to be an aerial shot of Fort Dix.  Approximately two minutes later, Arteaga sent back the same photo marked with two yellow lines, and a message: “Behind the buildind [sic] where the yellow is the long yellow line is a fence.” Approximately one minute later, Adogfy sent Arteaga another aerial photo that appeared to be Fort Dix, with orange target marks over several housing units. Arteaga responded with the same photo, marked with a black dot behind a particular housing unit, and a message stating, “Black dot.” Later that week, Arteaga sent Adogfy a message asking, “U think that u cud do something 2m.” Adogfy responded, “2m too windy 20 mph.” 

Two other men, Adrian Goolcharran, a/k/a “Adrian Ahoda” and “Adrian Ajoda,” and Nicolo Denichilo, have also been charged with participating in the scheme to use drones to smuggle contraband into Fort Dix.  They have been released on bail pending further proceedings. 

The offenses charged in the complaint carry a maximum penalty of five years in prison and maximum fine of $250,000 for the conspiracy count and 20 years in prison and a $1 million fine for the narcotics count. 

U.S. Attorney Carpenito credited agents of DOJ-OIG, New Jersey area office, under the direction of Special Agent in Charge Guido Modano; the U.S. Air Force Office of Special Investigations, Detachment 307, under the direction of Superintendent Jonathan Jackson; and the U.S. Department of Transportation – Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Douglas Shoemaker, with the investigation leading to the charges.

He also thanked Federal Bureau of Prisons personnel at Fort Dix, under the direction of Warden David Ortiz; agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; investigating agents of the U.S. Attorney’s Office, under the direction of Supervisory Special Agent Thomas J. Mahoney; and officers with the Pemberton Borough Police Department, under the direction of Chief Edward Hunter; the Pemberton Township Police Department, under the direction of Chief David Jantas; and Chesterfield Township Police Department, under the direction of Chief Kyle Wilson, for their assistance.

The government is represented by Assistant U.S. Attorneys Cari Fais and Jeffrey Manis of the Office’s Special Prosecutions Division in Newark.

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

NEWARK, N.J. – The Justice Department today sued a Monmouth County, New Jersey, company for allegedly defrauding the United States by falsely claiming to be eligible for more than $16.5 million in government contracts set aside for service-disabled, veteran-owned small businesses, U.S. Attorney Craig Carpenito announced.

VE Source LLC, based in Shrewsbury, New Jersey, and its owners, Sherman Barton and Chris Neary, along with a related company, Vertical Source Inc., allegedly defrauded the government by falsely claiming that VE Source was eligible for government contracts set aside for companies owned and controlled by service-disabled veterans.

To promote contracting opportunities for United States veterans, Congress has authorized federal agencies to make contracts available exclusively to service-disabled, veteran-owned small businesses, known as “SDVOSBs.” Small businesses must be both majority-owned by and controlled on a long-term and day-to-day basis by service-disabled veterans.

According to the complaint:

VE Source obtained contracts from the U.S. Department of Agriculture (USDA) and the Defense Logistics Agency (DLA), a component of the U.S. Department of Defense. Under the DLA contract, VE Source was paid to deliver fire-retardant coveralls for the U.S. Navy; under the USDA contract, VE Source was paid to deliver aprons and apron strings to the USDA. Both contracts were set-aside for SDVOSBs. VE Source’s owners falsely certified that the company was controlled by Sherman Barton, a service-disabled veteran, when the company was in fact controlled by Christopher Neary, who is not a service-disabled veteran. By diverting contracts and benefits intended for businesses owned and controlled by service-disabled veterans towards an ineligible company, the defendants undercut the express congressional purpose in enacting laws intended to encourage the awards of federal contracts to SDVOSBs.

U.S. Attorney Carpenito credited special agents of the General Services Administration, Office of Inspector General, acting under the direction of Inspector General Carol F. Ochoa; The U.S. Department of Agriculture, Office of Inspector General, under the direction of Inspector General Phyllis K. Fong; and the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the investigation leading to the filing of this civil fraud complaint.

The government is represented by Assistant U.S. Attorneys David V. Simunovich and Mark C. Orlowski of the U.S. Attorney’s Government Fraud Unit in Newark.

CAMDEN, N.J. – A New Jersey man today admitted robbing a Camden barbershop at gunpoint, U.S. Attorney Craig Carpenito announced.

Benjamin Daye, 34, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to an information charging him with one count of Hobbs Act robbery and one count of brandishing a firearm during a crime of violence.

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

On Nov. 23, 2019, Daye entered a barbershop in Camden armed with a loaded handgun.  He grabbed a juvenile customer, pointed the gun at the customer’s head, and demanded cash and belongings from employees and customers. Daye fled and was apprehended shortly thereafter next to a bag containing the handgun and the stolen items.

The Hobbs Act charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The brandishing a firearm charge carries a mandatory minimum sentence of seven years which must be served consecutively to any other sentence imposed. Sentencing is scheduled for Feb. 9, 2021.

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

U.S. Attorney Carpenito credited 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 Camden County Police Department, under the direction of Chief Joseph Wysocki; and the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer, with the investigation leading to today’s charges. This investigation was a joint effort of the ATF Camden Field Office and the Camden County Police Department (CCPD) Shooting Response Team (SRT). ATF and CCPD have formulated a partnership composed of special agents, detectives, and intelligence analysts that investigate shooting incidents in real time.

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. – An Illinois man was sentenced today to 57 months in prison for conspiring to distribute one kilogram or more of heroin and 500 grams or more of cocaine, U.S. Attorney Craig Carpenito announced.

Jesus Henoc Castaneda Soberanis, 26, of Chicago, Illinois, previously pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiracy to distribute and possess with the intent to distribute one kilogram or more of heroin and 500 grams or more of cocaine. Judge Wigenton imposed the sentence today in Newark federal court.

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

On June 6, 2019, Soberanis conspired with others to distribute narcotics, agreeing to pay a conspirator approximately $1,000 to drive Soberanis, together with approximately one kilogram of cocaine and approximately two kilograms of heroin, from Illinois to the East Coast. The investigation revealed that Soberanis would have distributed at least one of these kilograms of narcotics in New Jersey, were the narcotics not interdicted by law enforcement.

In addition to the prison term, Judge Wigenton sentenced Soberanis to two years of supervised release.

U.S. Attorney Craig Carpenito credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Ray Donovan in New York, with the investigation leading to today’s sentencing.

The arrest was the result of an investigation by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.

The Strike Force is housed at the DEA’s New York Division and includes agents and officers of the DEA; the New York City Police Department; the New York State Police; Immigration and Customs Enforcement – Homeland Security Investigations; the U. S. Internal Revenue Service Criminal Investigation Division; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; U.S. Secret Service; the U.S. Marshals Service; New York National Guard; the Clarkstown Police Department; U.S. Coast Guard; Port Washington Police Department; and New York State Department of Corrections and Community Supervision.

The government is represented by Assistant U.S. Attorney Francesca Liquori of the U.S. Attorney’s Office’s Organized Crime /Gangs Unit in Newark.

NEWARK, N.J. – An Ecuadorian man today admitted his role in a conspiracy to import several kilograms of cocaine from Ecuador into the United States, U.S. Attorney Craig Carpenito announced. 

Jorge Giklin Arauz Velasquez, 45, of Ecuador, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to one count of an indictment charging him with conspiracy to import five kilograms or more of cocaine into the United States. 

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

From March 2018 through January 2019, Velasquez worked with members of a drug trafficking organization operating out of Ecuador to import cocaine from Ecuador throughout the United States. For several months, Velasquez discussed the possibility of importing kilogram quantities of cocaine into the United States into the New Jersey area. In November 2018, Velasquez told another individual that he could smuggle cocaine onto a flight leaving Ecuador and arriving in Florida.    

In December 2018, Velasquez and another associate discussed that several kilograms of cocaine could be shipped on a plane leaving Guayaquil, Ecuador, and arriving in Fort Lauderdale, Florida. The cocaine would be contained in luggage on the flight. Later, Velasquez sent a message containing the flight number where the cocaine shipment would be located, along with a description of the luggage tag for the luggage that would contain the cocaine. Law enforcement in Florida located the luggage from the identified flight, which contained approximately 10 kilograms of cocaine.

The count to which Velasquez pleaded guilty carries a mandatory minimum penalty of 10 years in prison, a maximum penalty of life in prison, and a $10 million fine. Sentencing is scheduled for Feb. 10, 2021.

U.S. Attorney Carpenito credited specials agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; Colombian National Police DIJIN-GESIN; the Ecuadorian National Police; Immigration and Customs Enforcement – Enforcement and Removal Operations, under the direction of Field Office Director John Tsoukaris; officers of the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose; and the New Jersey National Guard Counter Drug Task Force, under the direction of Col. Paul Rumberger, with the investigation. U.S. Attorney Carpenito also thanked the U.S. Department of Justice’s Office of International Affairs for their assistance with the case. 

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies dedicated to identifying and dismantling the most serious drug trafficking, weapons trafficking and money laundering organizations.

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

NEWARK, N.J. – A U.S. Postal Service (USPS) mail carrier from Hudson County was arrested today for discarding mail, including 99 general election ballots sent from the County Board of Elections and intended to be delivered to West Orange residents, from his assigned routes in Orange and West Orange, U.S. Attorney Craig Carpenito announced.

Nicholas Beauchene, 26, of Kearny, New Jersey, is charged by complaint with one count of delay, secretion, or detention of mail and one count of obstruction of mail. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

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

Approximately 1,875 pieces of mail – including 627 pieces of first class, 873 pieces of standard class, two pieces of certified mail, 99 general election ballots destined for residents in West Orange, and 276 campaign flyers from local candidates for West Orange Town Council and Board of Education – were recovered from dumpsters in North Arlington and West Orange on Oct. 2, 2020, and Oct. 5, 2020. The mail had been scheduled to be delivered on Sept. 28, Oct. 1, and Oct. 2, 2020, to addresses on certain postal routes in Orange and West Orange. On the delivery dates for which mail was recovered, Beauchene was the only mail carrier assigned to deliver mail to the addresses on the recovered mail. 

The recovered mail was placed back into the mail stream for delivery to its intended recipients. Copies of the recovered mail were made and retained as evidence.

The delay of mail charge is punishable by a maximum penalty of five years in prison and a $250,000 fine. The obstruction of mail charge is punishable by a maximum penalty of six months in prison and a $5,000 fine.

U.S. Attorney Carpenito credited special agents of the USPS-Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to today’s arrest. He also thanked the North Arlington Police Department, under the direction of Scott Hedenberg, for their assistance.

The government is represented by Assistant U.S. Attorney Sara F. Merin of the Special Prosecutions Division in Newark.

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

NEWARK, N.J. – A Henderson, Nevada, man today admitted his role in a scheme to use bogus information and simultaneous loan applications at multiple banks – known as “shot-gunning” – to attempt to obtain home equity lines of credit (HELOCs), U.S. Attorney Craig Carpenito announced.

Joseph A. Gonzalez, 46, pleaded guilty before U.S. District Judge John Michael Vazquez to Count One of an indictment charging him with one count of conspiracy to commit bank fraud. Gonzalez is the sixth person to plead guilty as part of the scheme.

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

From 2010 through 2018, Jorge Flores and Simon Curanaj, a real estate broker in the Bronx who has previously pleaded guilty and is awaiting sentencing, ran a mortgage fraud scheme in which they applied for more than $9 million in HELOCs from banks on residential properties in New Jersey and New York.

Gonzalez and Flores used a property in Jersey City, New Jersey, as part of the scheme. Gonzalez had been allowed by the owner of the property to live there in exchange for management services, but neither he nor Flores owned the property. Gonzalez also recruited an individual with good credit to act as a straw buyer (Individual 1). Unbeknownst to the owner of the property, a “quitclaim” deed – which contains no warranties of title – was prepared transferring the property to Individual 1. The signatures on the deed were forged.

Gonzalez and Flores then applied for two HELOCs from multiple banks using the Jersey City property as collateral in Individual 1’s name. They concealed the fact that the property offered as collateral was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Individual 1’s income, which was stated to be higher than his actual income. At the time the applications were made, the value of the property was less than the amount of the HELOC loans for which Gonzalez and Flores applied.

The victim banks eventually issued loans to Individual 1 in excess of $500,000. After the victim banks funded the HELOCs and deposited money into Individual 1’s bank account, Individual 1 disbursed almost all of it to Gonzalez, Flores, and others. Gonzalez used $43,000 of the illicit proceeds to buy a luxury car. Individual 1 eventually defaulted on both HELOC loans.

The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross pecuniary gain to the defendants or twice the gross pecuniary loss to others, whichever is greater. Sentencing is scheduled for Feb. 10, 2021.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; and special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the guilty plea.

The government is represented by Senior Trial Counsel Jason S. Gould of the U.S. Attorney’s Health Care Fraud Unit in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.

NEWARK, N.J. – A Monmouth County, New Jersey, man today admitted illegally possessing a firearm, U.S. Attorney Craig Carpenito announced.

Ahmed A-Hady, 36, of Keyport, pleaded guilty by videoconference before U.S. District Court Judge Katharine S. Hayden to an information charging him with possession of a firearm by a convicted felon.       

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 two individuals, David Nathaniel Anderson and Francine Graham, killed three civilians after earlier killing a law enforcement officer. After the shooting, law enforcement recovered from Anderson’s right rear pants pocket a handwritten note that contained a telephone number ending in 4115, and a Keyport, New Jersey, address. Law enforcement also recovered several weapons carried by Anderson and Graham, 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 lawfully searched both the pawnshop and A-Hady’s private residence. During the search of the pawnshop, law enforcement recovered multiple rifles, handguns, and one shotgun. In addition, during the searches of the pawnshop and A-Hady’s private residence, law enforcement 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, a time when he, as a convicted felon, was prohibited from possessing firearms. The purchase of this rifle came 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. 

As part of the guilty plea, A-Hady also agreed to forfeit his interest, if any, in the firearms recovered during the search of the pawnshop.

The charge of being a felon in possession of a firearm carries a maximum potential penalty of up to 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Feb. 9, 2021.

U.S. Attorney Craig Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; 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 the plea. U.S. Attorney Carpenito 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 Assistant U.S. Attorney 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, also of the National Security Unit.

NEWARK, N.J. – A U.S. Postal Service (USPS) employee was arrested today for stealing mail and committing bank fraud, including stealing checks sent through the mail and fraudulently depositing those checks without authorization, U.S. Attorney Craig Carpenito announced.

Juan Torres, 27, of Hackensack, New Jersey, is charged by complaint with one count of bank fraud and one count of mail theft. He is scheduled to appear/appeared this afternoon via videoconference before U.S. Magistrate Judge Cathy L. Waldor.

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

From November 2019 to Jan. 11, 2020, certain checks addressed to third-party victims and mailed to addresses on postal routes in Hackensack, Leonia, and Maywood, New Jersey, were stolen on or about the same dates that Torres was delivering mail on those routes and subsequently were fraudulently deposited by Torres, in New Jersey and elsewhere, into a bank account that he controlled.

The bank fraud charge is punishable by a maximum potential penalty of 30 years in prison and a fine of up to $1 million. The mail theft charge is punishable by a maximum potential penalty of five years in prison and a maximum $250,000 fine.

U.S. Attorney Carpenito credited special agents with the U.S. Postal Service – Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, with the investigation leading to today’s arrest. He also thanked special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, and the Office of the Treasury Inspector General for Tax Administration (TIGTA), under the direction of Special Agent in Charge Andrew McKay, for their assistance.

The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Special Prosecutions Division in Newark.

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

NEWARK, N.J. – A Bergen County, New Jersey, man was charged for his role in stealing prescription HIV medication from the pharmacy of the East Orange VA Medical Center, U.S. Attorney Craig Carpenito announced today.

Wagner Checonolasco, a/k/a “Wanny,” 33, of Lyndhurst, New Jersey was charged by criminal complaint with conspiracy to steal government property, specifically HIV medication. Checonolasco had his initial appearance by videoconference before U.S. Magistrate Judge Cathy L. Waldor and was released on $250,000 unsecured appearance bond.

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

From January 2018 through November 2019, Checonolasco conspired with another person to steal prescription HIV medication from the Veterans Affairs Medical Center (VAMC) in East Orange, New Jersey. The conspirator, who was employed as a pharmacy procurement technician at the VAMC pharmacy, placed large orders for HIV medication, purportedly on behalf of VAMC. After the medication was delivered, the conspirator stole it. Checonolasco and the conspirator met, frequently at the conspirator’s residence, so that Checonolasco could purchase the stolen HIV medication, which he then sold. Checonolasco and the conspirator conspired to steal $7.85 million worth of HIV medications.     

The charge of conspiracy to steal government property is punishable by a potential penalty of five years in prison and fine of a $250,000, or twice the gross gain or loss from the offense, whichever is greater.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office, under the direction of Special Agent in Charge Christopher F. Algieri, with the ongoing investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Nicole F. Mastropieri of the Health Care Fraud Unit in Newark.

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

CAMDEN, N.J. – Two former New Jersey state public education system employees were sentenced today to prison terms for defrauding New Jersey state health benefits programs by submitting fraudulent claims for medically unnecessary compounded prescriptions, U.S. Attorney Craig Carpenito announced.

Richard McAllister, 45, a former schoolteacher, and James Wildman, 46, a former maintenance worker for the public school system, both of Marmora, New Jersey, were sentenced to 37 months and 46 months in prison, respectively. Both McAllister and Wildman previously pleaded guilty before U.S. District Judge Robert B. Kugler to separate criminal informations charging them with conspiring to commit health care fraud. Judge Kugler imposed the sentences today in Camden federal court.

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

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

In 2015 and 2016, McAllister and Wildman served as recruiters in the conspiracy and persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from a Louisiana pharmacy, Central Rexall Drugs Inc. (Central Rexall). The chief executive officer of Central Rexall, Hayley Taff, pleaded guilty on Aug. 12, 2020, to health care fraud conspiracy, and Central Rexall executives Christopher Kyle Johnston, Trent Brockmeier, and Christopher Casseri were indicted on Sept. 16, 2020 for conspiracy to commit health care and wire fraud, conspiracy to commit identity theft, and money laundering charges.

The members of the conspiracy, including McAllister and Wildman, learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for up to thousands of dollars for a one-month supply. The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the information as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents.

McAllister, Wildman, and their conspirators recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from Central Rexall without regard as to their medical necessity. Given that McAllister and Wildman were employees of the State’s public education system, they had access to and recruited others in the public education system to participate in the scheme. The prescriptions were faxed to Central Rexall, which filled the prescriptions and billed the Pharmacy Benefits Administrator. In return for the obtaining the prescriptions, the pharmacy paid certain conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to McAllister, Wildman, and other members of the conspiracy. 

The conspiracy resulted in over $50 million in fraudulent insurance claims for compounded medications that were not medically necessary, including over $3.4 million for prescriptions submitted by McAllister and his cohorts and over $4.8 million for prescriptions submitted by Wildman and his cohorts. McAllister received over $450,000 and Wildman received over $650,000 in illicit profits from the scheme. 

In addition to the prison terms, Judge Kugler sentenced McAllister to three years of supervised release and ordered him to pay $3.4 million in restitution and to forfeit $456,806. Judge Kugler also sentenced Wildman to three years of supervised release and ordered him to pay $4.86 million in restitution and to forfeit $657,040.

U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Gurbir S. Grewal and Division Chief Aimee Nason, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys R. David Walk Jr. and Christina O. Hud of the U.S. Attorney’s Office in Camden.

NEWARK, N.J. – A Morris County, New Jersey, woman was sentenced today to 18 months in prison for her role in a scheme to illegally smuggle millions of dollars’ worth of aircraft parts from the United States to Iran, U.S. Attorney Craig Carpenito announced.

Joyce Eliabachus, a/k/a “Joyce Marie Gundran Manangan,” 53, of Morristown, New Jersey, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging her with one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA) in connection with her role in an international procurement network that smuggled over $2 million worth of aircraft components to Iran. Judge Arleo imposed the sentence today in Newark federal court.

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

Eliabachus, Peyman Amiri Larijani, 34 – a citizen and resident of Iran – and others were part of an international procurement network that surreptitiously acquired large quantities of aircraft components from United States-based manufacturers and vendors and unlawfully exported them to entities in Iran using freight-forwarding companies in the United Arab Emirates (UAE) and Turkey. Larijani is charged by complaint with one count each of conspiracy to violate Iranian Transactions and Sanctions Regulations (ITSR), conspiracy to commit money laundering, and conspiracy to smuggle goods from the United States. Larijani was also charged in U.S. District Court for the District of Columbia in two separate indictments unsealed June 4, 2019.

Eliabachus was the principal officer and operator of Edsun Equipments LLC, a purported New Jersey-based aviation parts trading company run out of her Morristown residence. Larijani was the owner of an Iran-based procurement firm and served as operations and sales manager of a network of supply and engineering companies in Tehran, Iran, and Istanbul, Turkey. 

From May 2015 through October 2017, Eliabachus, Larijani, and their conspirators facilitated at least 49 shipments containing 23,554 license-controlled aircraft parts from the United States to Iran, all of which were exported without the required licenses.

Eliabachus conspired with Larijani, whose international network helped initiate the purchase of United States-origin aircraft components on behalf of Larijani’s clients in Iran. The network’s client list included Iranian airline companies, several of which have been officially designated by the United States as a threat to national security, foreign policy, or economic interests. One company, Mahan Air Co., has been subject to sanctions by the United States for providing financial, material and technological support to the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF), and allegedly ferrying arms and reinforcements to designated terrorist groups such as Hezbollah and Hamas.

Eliabachus used her company to finalize the purchase and acquisition of the requested components from the various United States-based distributors. She repackaged and shipped the components to shipping companies in the UAE and Turkey, where Larijani and other Iranian conspirators directed the components to locations in Iran. 

In order to obscure the extent of the network’s procurement activities, Eliabachus routinely falsified the true destination and end-user of the aircraft components she acquired. She also falsified the true value of the components being exported in order to avoid filing export control forms, which further obscured the network’s illegal activities from law enforcement. 

The funds for the illicit transactions were obtained from the Iranian purchasers, funneled through Turkish bank accounts held in the names of shell companies controlled by the Iranian conspirators. The money was ultimately transferred into one of Edsun Equipments’ accounts in the United States. The network’s creation and use of multiple bank accounts and shell companies abroad was intended to conceal the true sources of funds in Iran, as well as the identities of the Iranian entities who were receiving U.S. aircraft components.

In addition to the prison term, Judge Arleo sentenced Eliabachus to one year of supervised release.

U.S. Attorney Carpenito credited special agents of Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina in Newark, and the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, under the direction of Special Agent in Charge Jonathan Carson in New York, with the investigation.

The government is represented by Assistant U.S. Attorneys Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit, and Sarah Devlin, Chief of the office’s Asset Recovery and Money Laundering Unit, with assistance from Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.

The charges still pending against Larijani are only allegations, and he is presumed innocent unless and until proven guilty.

NEWARK, N.J. – Four Union County, New Jersey, men were arrested today for their roles in a conspiracy to steal mail and possess stolen mail, including credit cards and pandemic relief credit cards, fraudulently use the stolen credit cards without authorization, and defraud the U.S. Postal Service and the U.S. Department of the Treasury, U.S. Attorney Craig Carpenito announced.

Jarid Brooks, 27, Justin Brooks, 21, Kyjuan Hutchins, 21, and Kyle Williams, 35, all of Vauxhall, New Jersey, are charged by complaint with conspiracy. They are scheduled to appear by this afternoon by videoconference before U.S. Magistrate Judge Cathy L. Waldor.

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

From July 2019 to August 2020, Williams allegedly stole credit cards from the U.S. mail in the course of his employment for the U.S. Postal Service, provided those credit cards to Jarid Brooks, Justin Brooks, and Hutchins, and the defendants thereafter fraudulently activated those credit cards and then used those credit cards to make and attempt to make purchases without the cardholders’ authorization, including buying gift cards and electronics. The investigation to date has revealed that the victims have incurred over approximately $80,000 in intended and actual loss from fraudulent purchases made using their stolen credit cards. The defendants also schemed to fraudulently use over $11,000 of funds pre-loaded onto Economic Impact Payment (EIP) cards issued by the U.S. Department of Treasury and sent in the U.S. mail pursuant to the Coronavirus Aid, Relief, and Economic Security Act that were stolen from the mail.

The conspiracy charge is punishable by a maximum penalty of five years in prison and a maximum fine of $250,000.

U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn; special agents with the U.S. Postal Service – Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office; and special agents with the Office of the Treasury Inspector General for Tax Administration (TIGTA), under the direction of Special Agent in Charge Andrew McKay, with the investigation leading to today’s arrests. He also thanked the Union County Prosecutor’s Office, the Caldwell Police Department, the Fairfield Police Department, the Boonton Police Department, and the Millburn Police Department.

The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Special Prosecutions Division in Newark.

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

NEWARK, N.J. – Two members of the Neighborhood Bloods street gang, which operated in Jersey City, New Jersey, have been indicted for the Jan. 16, 2017, murder of three Jersey City residents, including a pregnant 25-year-old woman, Attorney Craig Carpenito announced today. 

Markell Brown, a/k/a “Sayboy,” 32, and Terence Shaw, a/k/a “Sweet Meat,” 32, both of Jersey City, are each charged with conspiracy to commit murder in aid of racketeering, three counts of murder in aid of racketeering, three counts of discharging a firearm in furtherance of a crime of violence, and three counts of causing death through use of a firearm.

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

On Jan. 16, 2017, Brown and Shaw allegedly murdered a rival gang member with whom they had been feuding, as well as the gang member’s pregnant girlfriend and their own associate, who had accompanied them to commit the murders. Brown and Shaw used a stolen U-Haul truck and two-way walkie-talkie radios during the murders. They used their associate to obtain access to the rival gang member’s apartment. After entering that residence on Fulton Avenue in Jersey City shortly after 10:00 p.m., Brown and Shaw executed the rival gang member, shooting him in the back of the head, the left arm, and the right shoulder. They also shot the woman in the back of the head and the chest. As Brown and Shaw left, they shot their associate in the chest in order to eliminate the possibility that he would provide information to law enforcement.

Brown and Shaw each face a potential mandatory life sentences for each of the counts charging murder in aid of racketeering. For each count of discharging a firearm during a crime of violence, they face a potential mandatory consecutive sentences of 10 years in prison. The count of conspiracy to commit murder in aid of racketeering carries a maximum sentence of 10 years in prison. The counts of causing death through use of a firearm each carry a maximum sentence of life in prison.

U.S. Attorney Craig Carpenito credited the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, and the Jersey City Police Department, under the direction of Public Safety Director James Shea, as well as special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to the charges. 

This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole Board, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.

The government is represented by Assistant U.S. Attorney Desiree Grace Latzer, Acting Chief of the U.S. Attorney’s Violent Crime Unit in Newark.

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

CAMDEN, N.J. – A Gloucester City, New Jersey, man today admitted conspiring to distribute and selling oxycodone, Adderall, and Xanax and defrauding the federal Supplemental Nutrition Assistance Program (SNAP) in connection with his role in a drug trafficking ring, U.S. Attorney Craig Carpenito announced.

Rocco DePoder, 67, of Gloucester City, pleaded guilty today by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with conspiring to distribute and possess with intent to distribute oxycodone, distributing a quantity of oxycodone, and unlawfully acquiring SNAP benefits in exchange for controlled substances and unlawfully using and possessing those and other SNAP benefits.

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

DePoder admitted that on multiple occasions from June 2019 to March 2020, he worked with Erick Bell and others to sell oxycodone in New Jersey. DePoder obtained 60 80 mg. oxycodone pills for $25 per pill from Bell on February 3, 2020, with the intention of distributing the pills to other people. DePoder also admitted to purchasing resale quantities of oxycodone, Adderall, and Xanax from conspirators and reselling the pills to others, serving as a leader of criminal activity in that conspiracy. DePoder admitted to selling oxycodone, Adderall, and Xanax pills to another person in exchange for a total of $8,374 in SNAP benefits, which were on Electronic Benefit Transfer (EBT) cards, and then personally using some of those SNAP benefits and selling and giving EBT cards to others so they could unlawfully use the SNAP benefits.  SNAP, formerly known as the Food Stamp program, is administered by the U.S. Department of Agriculture. EBT cards are similar to debit cards and are used to make food purchases with SNAP benefits – when an EBT card is swiped at a food store authorized for participation in the SNAP program, the amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the purchase amount is credited to the retailer’s designated bank account.  

The drug conspiracy count carries a maximum potential punishment of 20 years in prison; the count of drug distribution carries a maximum potential penalty of five years in prison; both counts are also punishable by a fine of $1 million, or twice the gross loss or gain caused by the offenses. The count of SNAP benefits fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of his guilty plea, DePoder will forfeit multiple items, including $6,598 in currency, and pay $8,374.42 in restitution. Sentencing is scheduled for Feb. 8, 2021.

Five other defendants – Marcus Rushworth, 47, of Gloucester City, New Jersey; Kenneth Rushworth, 59, of Gloucester City, New Jersey; Wayne Muse, 74, of Lindenwold, New Jersey; Robert Pratt, 57, of Myrtle Beach, South Carolina, formerly of Blackwood, New Jersey; and Steven Walker, 47, of Camden, New Jersey, previously pleaded guilty before Judge Bumb to informations charging them with drug trafficking offenses involving the distribution of prescription drugs. They are awaiting sentencing. 

U.S. Attorney Carpenito credited special agents of FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the Camden County Police Department, under the direction of Chief Joseph Wysocki; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to today’s guilty plea.

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

The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the U.S. Attorney’s Office’s Camden Office and Sara F. Merin of the Special Prosecution Division in Newark.

NEWARK, N.J. – A Illinois man was sentenced today to 37 months in prison for conspiring to transport heroin and cocaine to New Jersey, U.S. Attorney Craig Carpenito announced.

Daniel Gonzalez Maldonado, 25, of Carpentersville, Illinois, previously pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiracy to distribute and possess with the intent to distribute one kilogram or more of heroin and 500 grams or more of cocaine. Judge Wigenton imposed the sentence today by videoconference.

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

On June 6, 2019, a conspirator paid Maldonado approximately $1,000 to drive the conspirator and a quantity of narcotics from Illinois to the East Coast. Maldonado allowed the conspirator to store approximately one kilogram of cocaine and approximately two kilograms of heroin in a Norristown, Pennsylvania, hotel room that was reserved in Maldonado’s name. The investigation revealed that at least one of these kilograms of narcotics would have been distributed in New Jersey.

In addition to the prison term, Judge Wigenton sentenced Maldonado to two years of supervised release.

U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Ray Donovan in New York, with the investigation leading to today’s sentencing.

The arrest was the result of an investigation by the New York Strike Force, a crime-fighting unit comprising federal, state and local law enforcement agencies supported by the Organized Crime Drug Enforcement Task Force and the New York/New Jersey High Intensity Drug Trafficking Area.

The Strike Force is housed at the DEA’s New York Division and includes agents and officers of the DEA; the New York City Police Department; the New York State Police; Immigration and Customs Enforcement – Homeland Security Investigations; the U. S. Internal Revenue Service Criminal Investigation Division; the Bureau of Alcohol, Tobacco, Firearms and Explosives; U.S. Customs and Border Protection; U.S. Secret Service; the U.S. Marshals Service; New York National Guard; the Clarkstown Police Department; U.S. Coast Guard; Port Washington Police Department; and New York State Department of Corrections and Community Supervision.

The government is represented by Assistant U.S. Attorney Francesca Liquori of the U.S. Attorney’s Office’s Organized Crime Drug Enforcement Task Force/Narcotics Unit in Newark.

NEWARK, N.J. – A grand jury indicted a Bronx, New York, man today for his role in a drug trafficking conspiracy, U.S. Attorney Craig Carpenito announced.

Raul A. Figueroa Santana, 48, was indicted on one count of conspiracy to distribute five kilograms or more of cocaine and one count of possession with intent to distribute five kilograms or more of cocaine. He and two co-defendants, Yohan E. De Jesus Osornio, 30, of Phelan, California, and Ronal Luiyi Hernandez Sepulveda, 30, of the Bronx, were charged by complaint on Nov. 16, 2019.

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

Figueroa Santana was arrested on Nov. 15, 2019, in Newark after conducting a transaction involving 10 kilograms of cocaine. Law enforcement officers observed De Jesus Osornio, who had parked his tractor trailer on Passaic Street in Newark, enter a white Mazda before returning to the tractor trailer with a weighted-down bag. Law enforcement officers observed Hernandez Sepulveda and Figueroa Santana arrive in a black Mitsubishi. Law enforcement officers observed Hernandez Sepulveda approach the tractor trailer and walk back to the Mitsubishi with a bag, which Hernandez Sepulveda placed in the back of the Mitsubishi, where Figueroa Santana was waiting. After approaching and apprehending the defendants, law enforcement officers searched the bag and found 10 kilograms of cocaine, and found an additional 20 kilograms of cocaine and a large sum of cash in the tractor trailer.

De Jesus Osornio and Hernandez Sepulveda previously pleaded guilty. De Jesus Osornio was sentenced Sept. 30, 2020, to three years in prison. Hernandez Sepulveda pleaded guilty and is scheduled to be sentenced Dec. 2, 2020.

Both counts of the indictment carry maximum penalties of life imprisonment and a $10 million fine.

U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s Newark Division, under the direction of Special Agent in Charge Susan A. Gibson, with investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Lauren E. Repole 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.

NEWARK, N.J. – The former program manager of an international freight forwarding company has been arrested on charges that he embezzled over $550,000 from the company, United States Attorney Craig Carpenito announced today.

Morten Nielsen, 36, a Danish national residing in Jersey City, New Jersey, is charged by complaint with two counts of wire fraud. He appeared before U.S. Magistrate Judge Joseph A. Dickson by videoconference yesterday.

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

As program manager for the international freight forwarding company, Nielsen was responsible for the company’s contract relating to the Egyptian Foreign Military Sales program (EFMP), a program between the government of Egypt and the U.S. Department of Defense (DoD) that facilitates the sale and repair of military equipment from the DoD to Egypt. Nielsen was responsible for ensuring all safeguards and logistics for the transportation of certain classified material between the United States and Egypt and for submitting all paperwork and billing invoices on behalf of the company to the Egyptian government. Once approved, those invoices were forwarded to the DoD for payment to the company. 

Nielsen allegedly sent fraudulent invoices on behalf of his employer to the Egyptian government that included charges for services performed by a sham company he created. The sham company did not perform any services for his employer. Once the fraudulent invoices were approved by Egypt and paid by the DoD, Nielsen caused his employer to pay the sham company he created over $550,000 over a two-year period.   

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

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; special agents of the DoD – Office of Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Margaret Mahoney, of the Government Frauds 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.

CAMDEN, N.J. – A Camden County man has been charged with possessing fentanyl with the intent to distribute and possessing a firearm in furtherance of a drug trafficking crime, U.S. Attorney Craig Carpenito announced today.

Tyquan Burrell, 28, is charged by criminal complaint with one count of possession with intent to distribute more than 40 grams of fentanyl and one count of possession of a firearm in furtherance of a drug trafficking crime. Burrell is expected to appear this afternoon before U.S. Magistrate Judge Joel Schneider by videoconference.

According to documents filed in this case:

On Oct. 1, 2020, law enforcement executing a search warrant at Burrell’s residence located approximately 2,521 wax baggies and three sandwich-sized clear plastic bags containing a total of more than 300 grams of a substance that tested positive for fentanyl, approximately $34,000 in U.S. currency, and a loaded handgun in a bedroom used by Burrell. Burrell was arrested in Cooper River Park in Camden and was in possession of approximately 418 wax baggies containing a substance also believed to be fentanyl.

The possession with intent to distribute charge carries a mandatory minimum prison sentence of five years, a maximum potential penalty of 20 years in prison, and a $5 million fine.  The charge of possessing a firearm in furtherance of a drug trafficking crime carries a mandatory minimum penalty of five years in prison, a maximum of life imprisonment, and a $250,000 fine.

This investigation and prosecution is part of the Violent Crime Initiative (VCI) in Camden. The Camden VCI was formed in January of 2020 by the U.S. Attorney’s Office for the District of New Jersey, the Camden County Prosecutor’s Office, and the Camden County Police Department for purpose of combatting violent crime in and around the Camden area. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to investigate and prosecute violent offenders who endanger the safety of the community. The VCI includes the U.S. Attorney’s Office, the Camden County Prosecutor’s Office, the Camden County Police Department, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), the Federal Bureau of Investigation (FBI), the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), the Drug Enforcement Administration (DEA), the U.S. Marshals, The U.S. Probation Office, the Camden County Sheriff’s Office, the New Jersey State Parole Board, the New Jersey State Police, the Rutgers University Police Department, and the Liberty Mid-Atlantic High Intensity Drug Trafficking Area (HIDTA) program.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina; the Camden County Police Department, under the direction of Chief Joseph Wysocki; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Gloucester Township Police Department, under the direction of Chief David J. Harkins; and the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, and the Winslow Township Police Department under the direction of Chief George M. Smith, with the investigation leading to today’s charges. He also thanked the Camden County Sheriff’s Office, under the direction of Sheriff Gilbert L. “Whip” Wilson, special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Field Division, under the direction of Special Agent in Charge Charlie J. Patterson, and officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan, for their assistance with the case.

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

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 Philadelphia man today admitted possessing and transporting more than three kilograms of cocaine he intended to distribute, U.S. Attorney Craig Carpenito announced.

Suris Vasquez-Javier, 40, pleaded guilty by videoconference before U.S. District Court Judge Claire C. Cecchi to an information charging him with one count of possession with the intent to distribute 500 grams or more of cocaine.

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

On Jan. 27, 2020, law enforcement officers conducted a lawful motor vehicle stop during which Vasquez-Javier provided consent to search the vehicle. During the search, they uncovered a secret compartment, known as a “trap” and commonly used by criminals to hide contraband, such as narcotics, in an effort to evade detection. Law enforcement officers recovered a black plastic bag containing more than three kilograms of cocaine. A search incident to his arrest uncovered more than $2,600 in U.S. currency. 

The charge of possession with the intent to distribute cocaine carries a mandatory minimum penalty of five years in prison and a maximum potential penalty of 40 years in prison. Sentencing is scheduled for Feb. 10, 2021. 

U.S. Attorney Carpenito credited special agents of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, and members of the New Jersey State Police, under direction of Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Angelica M. Sinopole of the Organized Crime and Gangs Unit in Newark.

NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced today to 12 months and one day in prison for his role in an automobile accident scheme in which health care practitioners fabricated or exaggerated accident victims’ injuries to support fraudulent insurance claims to Personal Injury Protection (PIP) insurance plans for medically unnecessary services, U.S. Attorney Craig Carpenito announced.

Luis G. Aguirre, 57, previously pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with one count of conspiracy to commit health care fraud. Judge Chesler imposed the sentence today by videoconference.

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

Aguirre helped to orchestrate an automobile accident scheme in Bergen County, New Jersey, by acting as a “runner” who identified and recruited accident victims to the scheme.  Aguirre subsequently introduced the victims to various chiropractors, medical imaging centers, and others, who billed PIP insurance plans for medically unnecessary services.

Aguirre and an employee from an auto body shop in West New York, New Jersey, (Individual-1) identified and recruited individuals who had been in car accidents, finding them through word of mouth in the community and through relationships with health care providers in northern New Jersey. Aguirre paid Individual-1 for each accident victim that Individual-1 helped identify and recruit to the scheme. Individual-1, in turn, paid accident victims for participating in the scheme. Aguirre also ensured that the victims had filed police reports to support subsequent insurance claims.

Aguirre then directed the accident victims to visit specific health care providers to obtain medically unnecessary medical exams and services, such as X-rays and MRIs, for fake or exaggerated injuries that they supposedly suffered during the automobile accidents.

Aguirre was paid approximately $500 in cash by the health care providers for each individual accident victim that he delivered. Aguirre thereby caused health care providers to submit insurance claims to PIP insurance plans on behalf of the accident victims.

For example, on Sept. 25, 2018, an individual from North Bergen, New Jersey, (Individual-3) was involved in an automobile accident in Elizabeth, New Jersey. Based on a police report of the incident, the accident was minor: Individual-3 was rear-ended by another car when both were stopped at a red light. According to the police report, Individual-3 refused medical treatment at the scene, stating that Individual-3 would seek separate medical attention.  At the time of the accident, Individual-3 had an automobile insurance policy through Auto Insurer-1, which included PIP coverage.

Aguirre learned from Individual-1 that Individual-3 was willing to participate in the scheme in exchange for cash payment. On Oct. 12, 2018, Aguirre directed Individual-3 to visit the proprietor (Individual-2) of an MRI Center in Rochelle Park, New Jersey, where Individual-3 underwent a series of medically unnecessary X-rays. On Oct. 16, 2018, the MRI Center billed Individual-3’s PIP insurance policy.

Aguirre’s participation in the conspiracy caused an estimated loss to PIP insurance plans of over $250,000, while the total loss caused by the conspiracy exceeded $3.5 million.

In addition to the prison term, Judge Chesler sentenced Aguirre to three years of supervised release and ordered him to pay restitution of $53, 710.

U.S. Attorney Carpenito credited special agents of the Department of Labor – Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka; and special agents of the FBI, under the direction Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the Health Care Fraud Unit at the U.S. Attorney’s Office in Newark.

NEWARK, N.J. – Two men will appear in federal court to face charges that they were involved in the unauthorized takeover of social media and other personal online accounts belonging to professional and semi-professional athletes, U.S. Attorney Craig Carpenito announced today.

Trevontae Washington, 21, of Thibodaux, Louisiana, and Ronnie Magrehbi, 20, of Orlando, Florida, are each charged in separate criminal complaints with one count of conspiracy to commit wire fraud and one count of conspiracy to commit computer fraud and abuse. Washington is scheduled to appear today before U.S. Magistrate Judge Janis van Meerveld in the Eastern District of Louisiana. Magrehbi is scheduled to appear today before U.S. Magistrate Judge Gregory Kelly in the Middle District of Florida.

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

At various times between December 2017 and April 2019, Washington and Magrehbi took part in illegal schemes to gain access to social media and other personal online accounts belonging to professional and semi-professional athletes, including athletes employed by the National Football League (NFL) and the National Basketball Association (NBA).

Washington is alleged to have compromised accounts belonging to multiple NFL and NBA athletes. Washington phished for the athletes credentials, messaging them on platforms like Instagram with embedded links to what appeared to be legitimate social media log-in sites, but which, in fact, were used to steal the athletes’ user names and passwords. Once the athletes entered their credentials, Washington and others locked the athletes out of their accounts and used them to gain access to other accounts. Washington then sold access to the compromised accounts to others for amounts ranging from $500 to $1,000.

Magrehbi is alleged to have obtained access to accounts belonging to a professional football player, including an Instagram account and personal email account. Magrehbi extorted the player, demanding payment in return for restoring access to the accounts. The player sent funds on at least one occasion, portions of which were transferred to a personal bank account controlled by Magrehbi, but never regained access to his online accounts.

The wire fraud conspiracy charges carry a statutory maximum of 20 years in prison and a fine of up to $250,000. The computer fraud conspiracy charges carry a statutory maximum of five years in prison and a fine of up to $250,000.

U.S. Attorney Carpenito credited special agents of the U.S. Secret Service, under the direction of Special Agents in Charge Mark McKevitt in Newark, Caroline O’Brien-Buster in Orlando, and Leslie Pichon in New Orleans; members of the New Jersey Division of Criminal Justice Financial and Computer Crimes Bureau, under the direction of New Jersey Attorney General Gurbir S. Grewal, and members of the Thibodaux, Louisiana, Police Department.

The government is represented by Assistant U.S. Attorney Anthony Torntore of the U.S. Attorney’s Cybercrimes Unit in Newark.

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

NEWARK, N.J. – A Newark man was sentenced today to 120 months in prison for his role in a conspiracy to distribute heroin and crack cocaine, U.S. Attorney Craig Carpenito announced.

Cory Canzater, a/k/a, “Big C,” 47, of Newark, was previously found guilty of one count of conspiracy to distribute and possess with intent to distribute more than one kilogram of heroin and more than 28 grams of cocaine base, distribution of heroin and distribution of cocaine base. Canzater was convicted following a one-week trial before U.S. District Judge Kevin McNulty in Newark federal court, who imposed the sentence today by videoconference.

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

Canzater engaged in a heroin and crack cocaine distribution conspiracy, led by Ahmad Johnson, a/k/a “OC,” 40, of Newark. Other members of the conspiracy included Maurice McPhatter, a/k/a “Ree,” Willie McPhatter, a/k/a “Roc,” Keith Henderson, and Sacha Negron, all of Newark.  Canzater was a runner, who distributed narcotics for the Johnson drug trafficking organization.

Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that Canzater was a member of a conspiracy led by Johnson, who was responsible for obtaining wholesale amounts of drugs, including heroin and cocaine, and processing and packaging the drugs for sale in and around Newark. During the September 2017 takedown of the organization, law enforcement conducted a series of search warrants and found over a kilogram of heroin, over 200 grams of crack cocaine, and over 150 grams of fentanyl.

Johnson pleaded guilty to a drug conspiracy and was sentenced on April 15, 2019, to 180 months in prison. Maurice McPhatter pleaded guilty to a drug conspiracy and was sentenced on May 15, 2020, to 120 months in prison. Willie McPhatter, Henderson, and Negron have all pleaded guilty to drug conspiracy charges and are awaiting sentencing.

This case was 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.

In addition to the prison term, Judge McNulty sentenced Canzater to five years of supervised release.

U.S. Attorney Carpenito credited special agents and officers with DEA’s High-Intensity Drug Trafficking Area (HIDTA) Group 1, under the direction of Special Agent in Charge Susan Gibson, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Patricia Astorga and Ari B. Fontecchio of the U.S. Attorney’s Office in Newark.

TRENTON, N.J. – Three New Jersey men and a man and woman from Florida have been charged with conspiring to illegally sell firearms, including handguns and a semi-automatic rifle, in and around Monmouth County, U.S. Attorney Craig Carpenito announced today.

Enrique Quijada, 23, a/k/a “El Enano 13,” a/k/a “Kike,” of Freehold, New Jersey; Manuel Espinosa-Ozoria, 30, a/k/a “Chino,” of Bartow, Florida; his brother, Waldin Espinosa-Ozoria, 31, a/k/a “Manin,” of Freehold, New Jersey; Javier Rodriguez-Valpais, 31, a/k/a “Broly,” of Morganville, New Jersey; and Jacquelyn Dejesus, 41, of Bartow, Florida, are each charged by criminal complaint with one count of conspiracy to engage in the business of unlicensed firearms dealing. Manuel Espinosa-Ozoria and Rodriguez-Valpais are each additionally charged with one count of possession of a firearm by a convicted felon. Manuel Espinosa-Ozoria and Dejesus are also charged with one count of unlawfully selling a firearm to an individual that they knew did not reside in their state of residence, namely Florida.

Quijada, Rodriguez-Valpais and Dejesus were arrested today are scheduled to appear by videoconference before U.S. Magistrate Judge Zahid N. Quraishi. Manuel Espinosa-Ozoria and Waldin Espinosa-Ozoria remain at large,

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

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

The counts of conspiracy to engage in the business of unlicensed firearms dealing and unlawfully selling a firearm to an unlicensed resident of another state each carry a maximum potential penalty of five years in prison and a $250,000 fine. The counts of possession of a firearm by a convicted felon carry a maximum penalty of 10 years in prison and a $250,000 fine.   

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, under the direction of Special Agent in Charge George M. Crouch Jr., with the investigation leading to the charges and arrest. He also thanked the FBI Tampa Division, the ATF Newark and Tampa Field Divisions, and the Freehold Borough, New Jersey, Police Department for their assistance in the investigation.

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

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

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

NEWARK, N.J. – Six individuals have been charged in New Jersey for their roles in a massive nationwide prescription medication and durable medical equipment telemedicine scheme, and three others admitted their roles in three other health care fraud cases. The announcements are part of a federal law enforcement effort to crack down on health care fraud nationwide.

U.S. Attorney Craig Carpenito, District of New Jersey, announced charges against six people: Mark Belter, 46, of North Ridgeville, Ohio; David C. Laughlin, Jr., 46, of Buckeye, Arizona; Stephen Luke, 52, of Phoenix, Arizona, were charged by complaint with conspiracy to violate the Anti-Kickback Statute. In a separate complaint, Ethan Welwart, 32, of North Brunswick, New Jersey; William “Ben” Welwart, 66, of Staten Island, New York; and Elan Yaish, 51, of Tel Aviv, Israel, also were charged with conspiracy to violate the Anti-Kickback Statute for their roles in the same scheme. Ethan Welwart, William Welwart, and Yaish had their initial appearances before U.S. Magistrate Judge James B. Clark III on Sept. 3, 2020, and Belter, Laughlin, and Luke had their initial appearances before U.S. Magistrate Judge Leda Dunn Wettre on Sept. 10, 2020.

Attorney for the United States Rachael A. Honig, District of New Jersey, announced guilty pleas from three defendants in three cases:

Andrew McCubbins, 39, of Draper, Utah, the owner of a telemedicine company, pleaded guilty by videoconference on Sept. 24, 2020, before U.S. District Judge Kevin McNulty to an information charging him with one count each of conspiring to commit wire fraud, conspiracy to commit health care fraud, and conspiring to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.

Christian Mohases, 38, of Santa Ana, California, pleaded guilty by videoconference on Sept. 24, 2020, before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiring to commit health care fraud and one count of conspiring to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.

Luis Roa, 51, of Santiago, Chile, pleaded guilty by videoconference on Sept. 24, 2020, before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiring to commit health care fraud and one count of conspiring to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.

 The announcements are part of a nationwide federal law enforcement effort to combat telemedicine fraud, prescription fraud and durable medical equipment fraud. As part of this effort, the Department of Justice is announcing today the largest amount of alleged fraud loss ever charged – $4.5 billion in allegedly false and fraudulent claims submitted by more than 86 criminal defendants in 19 judicial districts around the country – related to nationwide schemes involving telemedicine: the use of telecommunications technology to provide health care services remotely. 

        

Belter et al.

Beginning in January 2016 and continuing for more than three years, the six defendants exchanged kickbacks and bribes with each other and others. Belter, who owned and operated a marketing company in Ohio called Health Pain Solutions, identified Medicare beneficiaries and targeted them for specific prescription medications or durable medical equipment (DME) like braces.  He then sent the beneficiaries’ information to Laughlin and Luke, who owned RediDoc. Belter paid Laughlin and Luke kickbacks for each signed prescription and doctor’s order for those beneficiaries that Laughlin and Luke collected from doctors under contract with RediDoc. Laughlin and Luke in turn paid those doctors kickbacks for each prescription and doctor’s order they signed. Laughlin and Luke transmitted the prescriptions to Apogee, a pharmacy owned and run by Ethan Welwart, William Welwart, and Yaish, and doctor’s orders to DME providers, who submitted claims for reimbursement to Medicare and other insurers.  Ethan Welwart, William Welwart, and Yaish at Apogee subsequently paid Belter kickbacks from the reimbursements they received, in exchange for Belter’s actions in originating the beneficiaries’ claims.

After identifying target beneficiaries, Belter or his employees telephoned them, purportedly to obtain their medical history and consent to receive medications or DME. The purpose of these calls was so that Belter could record the conversations with the beneficiaries and convince them to try certain medications or DME. Belter had no medical licenses or training.

Belter purposely did not tell the beneficiaries what doctor would prescribe the medication or DME. The conspirators believed that the beneficiaries may not consent to receive medication or DME from an unknown doctor. In an email to William Welwart and another Apogee employee on Jan. 15, 2018, Belter wrote that, when he called beneficiaries, he did not provide specifics: “I think you might lose some people [beneficiaries] when you mention a Doctor name they have never heard of.”

After obtaining the beneficiary’s medical history and purported consent, Belter transmitted a beneficiary intake form, the recorded call, and a pre-filled prescription for medication or DME order to Laughlin and Luke at RediDoc.  Under a contract, Belter paid Laughlin and Luke a fee of approximately $95 for each prescription that RediDoc obtained from one of its contracted doctors; $100 for each DME order; and $115 for a prescription and a DME order.

RediDoc recruited and contracted with doctors around the country to sign prescriptions and DME orders.  RediDoc paid its contracted doctors anywhere from $7 to $30 per “consultation,” depending on whether they prescribed medication, DME, or both. For example, according to one RediDoc contract, RediDoc agreed to pay a doctor $15 per “consultation” by telephone with no prescription; $20 per “consultation” resulting in a medication prescription or DME order; and $30 per “consultation” resulting in a medication prescription and DME order.  RediDoc had similar contracts with doctors across the country and paid them over $5.5 million during the scheme.

The defendants and other conspirators caused the submission of false and fraudulent claims to health care benefit programs, including Medicare, in excess of $100 million for prescription medication and DME.

The charge of conspiracy to violate the Anti-Kickback Statute is punishable by a potential penalty of five years in prison and a fine of $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater.

The government is represented in this case by Senior Trial Counsel Jason S. Gould and Assistant U.S. Attorneys Nicole Mastropieri and Hayden Brockett of the Health Care Fraud Unit in Newark, as well as Senior Trial Counsel Barbara Ward of the Asset Recovery and Money Laundering Unit in Newark.

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

 

McCubbins

McCubbins owned and operated a telemedicine company based in Utah that purported to provide health care services through health care professionals to Medicare beneficiaries. McCubbins and others paid kickbacks and bribes to various parties in exchange for referrals and orders for medically unnecessary genetic cancer screening tests (CGX Tests) for Medicare beneficiaries, ultimately leading to approximately $89 million in Medicare payments.

In order to generate referrals of Medicare beneficiaries to the telemedicine company, McCubbins and others paid kickbacks and bribes to individuals operating call centers targeting Medicare beneficiaries for CGX Tests. Once the telemedicine company received the referrals, health care professionals acting on its behalf wrote medically unnecessary orders for CGX Tests for the Medicare beneficiaries. McCubbins bribed medical doctors, nurse practitioners, and physician assistants to prescribe the CGX Tests for Medicare beneficiaries. These health care professionals wrote medically unnecessary orders for CGX Tests without performing legitimate medical consultations and after only cursory telephonic interactions with the Medicare beneficiaries. In addition, the Telemedicine Company also bribed doctors to purportedly “supervise” nurses and other health care professionals in order to legitimize the their prescriptions for CGX Tests. In reality, however, the supervising physicians had no legitimate clinical or collaborative relationship with the health care professionals they claimed to supervise.

 

Mohases

Mohases and his conspirators owned and operated multiple call centers through which they obtained doctors’ orders for DME, namely orthotic braces, and patient referrals for genetic CGX tests for Medicare beneficiaries. Mohases and his conspirators provided these orders and referrals in exchange for bribes from certain companies that provided the braces and performed the CGX Tests, ultimately leading to approximately $8.5 million in Medicare payments for medically unnecessary DME and CGX Tests.

Mohases and his conspirators obtained the DME orders and CGX Test referrals through the use of marketing call centers and telemedicine companies. Mohases used telemedicine companies to generate DME orders that were medically unnecessary because they were generated without any legitimate physician-patient relationship and without complying Medicare’s telemedicine requirements. In order to conceal the kickback arrangements, Mohases and his conspirators entered into sham contracts that made it appear that they were providing legitimate services. Mohases generated false invoices to match the sham contracts and to conceal the kickback scheme.

 

Roa

Roa and his conspirators owned and operated multiple call centers through which they obtained doctors’ orders for DME, namely braces, and patient referrals for CGX tests for Medicare beneficiaries. Roa and his conspirators provided these orders and referrals in exchange for bribes from certain companies that provided the braces and performed the CGX tests, ultimately leading to approximately $6.9 million in Medicare payments for medically unnecessary DME and CGX tests.

Roa and his conspirators obtained the DME orders and CGX test referrals through the use of marketing call centers and telemedicine companies. Roa used telemedicine companies to generate DME orders that were medically unnecessary because they were generated without any legitimate physician-patient relationship and without complying with Medicare’s telemedicine requirements. In order to conceal the kickback arrangements, Roa and his conspirators entered into sham contracts that made it appear that they were providing legitimate services. Roa generated false invoices to match the sham contracts and to conceal the kickback scheme.

The charge of conspiracy to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charge of conspiracy to commit health care fraud is punishable by a maximum potential penalty of 10 years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. The charge of conspiracy to violate the federal Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. 

The government in the cases against McCubbins, Mohases and Roa is represented by Assistant U.S. Attorneys Sean M. Sherman, J. Stephen Ferketic, and Ryan O’Neill of the Opioid Abuse Prevention & Enforcement Unit, and Senior Trial Counsel Ward.

U.S. Attorney Carpenito and Attorney for the United States Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch. Jr. in Newark; the Department of Health and Human Services-Office of Inspector General, under the direction of Scott J. Lampert; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri with the ongoing investigations.

NEWARK, N.J. – A Thailand national was indicted today for defrauding a New Jersey company in its purchase of COVID-19 personal protective equipment (PPE) intended for combating the COVID-19 virus, U.S. Attorney Craig Carpenito announced. 

The defendant, known only by the alias “Dang Chanchai,” is charged with nine counts of wire fraud for defrauding the victim company of approximately $1.5 million.  

According to the indictment:

From at least March 2020 through May 2020, Chanchai knowingly and intentionally devised a scheme to defraud the victim company by means of materially false and fraudulent pretenses, making false representations about his ability to provide 3M Company (3M) N95 respirator and surgical masks through an entity Chanchai identified as UTE Group Company Limited (UTE).

Chanchai falsely represented himself and UTE as a distributor of 3M N95 masks. On March 17, 2020, Chanchai sent the victim company a contract that falsely represented that UTE could and would supply 10 million N95 masks. The victim company agreed to purchase from Chanchai and UTE approximately 1 million 3M N95 masks for ultimate delivery to health care providers in Europe.

From April 20, 2020, through April 30, 2020, Chanchai sent the victim company fake documents purporting to be from 3M, including a fake purchase order from 3M showing the order by UTE of the masks purchased by victim company. The fake documents also included false representations about the status of the production of the masks, as well as requests for payments to satisfy the order. Based on the fake 3M documents, the company ordered 300,000 additional masks. Chanchai provided the company with two more fake 3M documents, confirming the new order and falsely representing that the new order would be ready for pick-up on May 13, 2020.

Based on Chanchai’s misrepresentations, the victim company wired payments totaling $1,494,306 to UTE. Chanchai and UTE did not provide a single 3M N95 mask to the company and ceased communicating with the company after receiving the final payment under the agreement.

The wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross pecuniary gain or loss from the offense, whichever is greater. 

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

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

Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by U.S. Attorney Carpenito, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a Notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices. 

Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: [email protected]

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 leader of an international money laundering organization in the Dominican Republic was arraigned in New Jersey today after being extradited to the United States, U.S. Attorney Craig Carpenito announced. 

Luis Velazquez-Cordero (a/k/a “El Pequeño”), 35, of the Dominican Republic, is charged by indictment with five counts of money laundering and conspiracy to commit money laundering for his role in laundering millions in illegal cash drug proceeds. The indictment includes a forfeiture money judgment for $80 million, representing a portion of the property involved in the money laundering scheme. Velazquez-Cordero was arrested in the Dominican Republic on July 28, 2020, and extradited to the United States. He was arraigned today by videoconference before U.S. District Judge Katherine Hayden.

Eight other defendants have been charged in New Jersey federal court with money laundering and other charges related to the same international conspiracy. 

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

From August 2016 through July 2020, Velazquez-Cordero directed conspirators operating in New Jersey, New York, and Florida to pick up millions in cash drug proceeds from drug trafficking organizations operating in the U.S. and exchange the cash for cashier’s checks at U.S. banks. Velazquez-Cordero provided the amount of each check, the payee, and the bank accounts into which the checks should be deposited. The checks were then deposited into the payee accounts, many of which were controlled by shell corporations and used exclusively as a means to facilitate laundering illegal drug proceeds. The scheme was designed to conceal the nature, source, ownership, and control of the illegal drug proceeds in order to avoid scrutiny by law enforcement and banking institutions, and allegedly resulted in $80 million in cash from illegal drug sales being transferred back to drug trafficking organizations in other countries.

Each count of money laundering carries a maximum penalty of 20 years in prison and a fine of $500,000 or twice the amount involved in the offense, whichever is greater. 

U.S. Attorney Carpenito credited special agents of the U.S. Drug Enforcement Administration, New Jersey Division, under the direction of Special Agent in Charge Susan A. Gibson, as well as the DEA Special Operations Division; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; officers of U.S. Customs and Border Protection, under the direction of Troy Miller, New York Field Office; the Morristown, New  Jersey, Police Department, under the direction of Acting Chief Darnell Richardson; the Clifton, New Jersey, Police Department, under the direction of Acting Chief Tom Rinaldi; the Passaic, New Jersey, Police Department, under the direction of Chief Luis A. Guzman; the New York City Police Department, under the direction of Commissioner Dermot Shea; the New York City Office of the Special Narcotics Prosecutor, under the direction of Special Narcotics Prosecutor Bridget G. Brennan; the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor Mark Musella, with the investigation leading to today’s charges. He also thanked the Dirección Nacional de Control de Drogas of the Dominican Republic (the National Directorate of Drug Control) and its President, Admiral José Manuel Cabrera Ulloa; the U.S. State Department and DOJ Office of International Affairs, for their assistance in the investigation. 

This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF).  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

The government is represented by Assistant U.S. Attorney Jonathan M. Peck of Asset Recovery & Money Laundering Unit of the Criminal Division in Newark.

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

NEWARK, N.J. – A Jersey City police officer today admitted to conspiring to defraud Jersey City by obtaining compensation for off-duty work that she did not perform, U.S. Attorney Craig Carpenito announced.

Gicella Sanchez, 36, of Jersey City, pleaded guilty by videoconference before U.S. District Judge John M. Vazquez to an information charging her with one count of conspiracy to defraud a local government receiving federal funds.

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

Private contractors and businesses sometimes needed to use the services of off-duty Jersey City police officers for certain projects, including work within Jersey City that could obstruct the flow of traffic. The off-duty assignments were made by a Jersey City Police Department-designated coordinator for the district in which the assignment was to be carried out. Officers receiving these off-duty assignments were required to complete and provide to the coordinator a voucher that indicated, among other things, the hours worked on particular off-duty assignments.

From November 2014 through June 2016, Sanchez conspired with another Jersey City police officer who was authorized to assign off-duty work and sign vouchers. That officer – with Sanchez’s knowledge and consent – submitted phony vouchers to Jersey City indicating that Sanchez had completed certain off-duty assignments that she never actually performed. In other instances, Sanchez showed up to off-duty job sites, but left before her shift ended. As a result, Sanchez accepted thousands of dollars for off-duty work that she never performed.

Sanchez faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of her plea agreement, Sanchez must forfeit $9,095 in criminal proceeds she received from her role in the scheme and pay restitution of $2,490. Sentencing is scheduled for Feb. 2, 2021.

U.S. Attorney Craig Carpenito 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 Jersey City Police Department is cooperating with the investigation.

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

Defense counsel: Daniel J. Welsh Esq., Jersey City

CAMDEN, N.J. – A Gloucester City, New Jersey, man today admitted conspiring to distribute oxycodone pills and selling Xanax pills, making him the fifth person to plead guilty for his role in a drug trafficking ring operating in and around Gloucester City and Camden, U.S. Attorney Craig Carpenito announced today.

Marcus Rushworth, 47, of Gloucester City, pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with conspiring to distribute and possess with intent to distribute oxycodone and distributing a quantity of Xanax. 

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

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

The drug conspiracy charge carries a potential penalty of 20 years in prison and the distribution charge carries a potential penalty of five years in prison. Sentencing is scheduled for Feb. 5, 2021.

Four other defendants – Kenneth Rushworth, 59, of Gloucester City, a relative of Marcus Rushworth, Wayne Muse, 74, of Lindenwold, New Jersey, Robert Pratt, 57, of Myrtle Beach, South Carolina, formerly of Blackwood, New Jersey, and Steven Walker, 47, of Camden – previously pleaded guilty before Judge Bumb to informations charging them with drug trafficking offenses involving the distribution of prescription drugs. 

U.S. Attorney Carpenito credited special agents of FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the Camden County Police Department, under the direction of Chief Joseph Wysocki; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to the charges.

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

The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the Office’s Camden office and Sara F. Merin of the Newark office.

NEWARK, N.J. – A Bergen County, New Jersey, was charged today for his role in a conspiracy to file phony tax returns in order to illegally obtain tax refunds, U.S. Attorney Craig Carpenito announced.

Emmanuel A. Barrientos-Fermin, 38, of Tenafly, New Jersey, is charged in a three-count indictment with conspiracy to commit wire fraud, access device fraud, and aggravated identity theft.

According to the indictment:

From January 2020 through February 2020, Barrientos-Fermin, and others conspired to utilize stolen personal identifying information (PII) to submit fraudulent tax returns to obtain tax refunds without the victims’ knowledge or consent. Co-Conspirator-1 (CC-1) would obtain falsified Social Security cards, driver’s licenses, birth certificates and W-2 forms bearing the victims’ stolen PII and provide them to Barrientos-Fermin and other conspirators. Barrientos-Fermin and others would use the fraudulently obtained PII to file tax returns at various tax preparation company branches, posing as the victims.

Barrientos-Fermin and CC-1 entered into an agreement in which CC-1 would pay $200 to Barrientos-Fermin 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; CC-1 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, W2s, and birth certificates. Barrientos-Fermin went to tax preparation locations pretending to be the victims and provided the false documents to the tax preparers to prepare and file fraudulent tax returns. At Barrientos-Fermin’s request, the tax preparers submitted the fraudulent returns via wire transmission from their branch offices in New Jersey to their data processing center in Columbus, Ohio. 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 $200 per return.

 The count of conspiracy to commit wire fraud carries a maximum sentence of 20 years in prison. The counts of aggravated identity theft carry a mandatory sentence of two years in prison. The count of access device fraud carries a maximum sentence of 10 years in prison. All three counts are also punishable by a fine of $250,000, or twice the gain or loss caused by the offense, whichever is greater.

U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, and special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez with the investigation leading to the charges. He also thanked the Totowa, New Jersey, Police Department for assistance in the arrest and investigation.

The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Frauds Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.

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 acting business administrator for the Township of Orange, New Jersey, who had previously been indicted for multiple acts of corruption and fraud, was indicted today on additional conspiracy, wire fraud, and kickback-taking charges in a superseding indictment, U.S. Attorney Craig Carpenito announced.

Willis Edwards III, 49, formerly of East Orange, New Jersey, and currently of Lithonia, Georgia, was charged in a superseding indictment with additional counts of conspiracy to commit wire fraud, wire fraud, and taking kickbacks in connection with the business of Orange, a federally funded local government.

According to the superseding indictment:

An associate of Edwards, Jeanmarie Zahore, was the sole owner of JZ Nettech, a computer consulting business. On Sept. 15, 2015, the City Council of Orange Township, New Jersey, passed a resolution awarding JZ Nettech, without competitive bidding, a $350,000 emergency contract to install a computer networking system at a municipal complex that housed the Orange Municipal Court and the Orange Police Department (the “Municipal Complex Project”).

Between August 2015 and November 2015, Edwards solicited and accepted cash payments totaling approximately $20,000 from Zahore as a reward for Edwards’ favorable treatment of Zahore and JZ Nettech in connection with the Municipal Complex Project.

On Sept. 14, 2015, after communications between Edwards and Zahore in August 2015, Edwards advised a senior official of the Orange Municipal Court and a senior official of the Orange Police Department that there was an urgent need to address a potential security vulnerability in the Municipal Complex’s computer network, and that JZ Nettech had been selected as the vendor to fix the problem. Edwards caused Orange to issue a Certification of Funds, certifying that $350,000 was available for the Municipal Complex Project and identifying the vendor as JZ Nettech.

On Sept. 15, 2015, Edwards spoke before the Orange City Council in support of allocating emergency funds for the Municipal Complex Project and awarding the Municipal Complex Project to JZ Nettech. At the meeting, during which Orange City Council members raised questions about the selection of JZ Nettech as the vendor for the Municipal Complex Project, Edwards did not disclose that he had engaged in communications with Zahore since at least August 2015.

On Sept. 16, 2015, the day after the Orange City Council approved the $350,000 contract, Edwards approved the issuance of a blanket purchase order authorizing Orange to pay JZ Nettech $350,000 in connection with the Municipal Complex Project.

From Sept. 18, 2015, to Nov. 10, 2015, Zahore received and deposited three Orange checks totaling $350,000 in connection with the Municipal Complex Project into his JZ Nettech bank account.

Beginning shortly after Orange made its first payment to Zahore, Edwards told Zahore on more than one occasion, in substance, that Edwards had taken care of Zahore and that Zahore should consider that and do something.

In November 2015, following Edwards’ multiple solicitations and demands for payment from Zahore, Edwards received approximately $10,000 in cash from Zahore as a reward for Edwards’ favorable treatment of Zahore and JZ Nettech in connection with the Municipal Complex Project. Upon receipt of that $10,000 cash payment, which was funded in substantial part by money paid by Orange to JZ Nettech, Edwards expressed his dissatisfaction to Zahore with the amount of the payment. Edwards received a second payment of approximately $10,000 in cash from Zahore, who characterized those two cash payments in a spreadsheet that Zahore maintained of expenses related to the project:

11/20/2015                                          Gift: WE         $10,000.00

11/23/2015                                          Gift: WE         $10,000.00

The superseding indictment further charges that Edwards willfully signed a 2015 federal tax return under penalty of perjury that did not report, among other items of income, the approximately $20,000 in kickbacks.

The charges of conspiracy to commit wire fraud (Count 14) and wire fraud (Count 15) each carry a potential penalty of 20 years in prison; the count of accepting kickbacks in connection with the business of a federally funded local government (Count 16), carries a potential penalty of 10 years in prison. All three counts are also punishable by a fine of $250,000.

These charges were added to a 28-count indictment returned on July 7, 2020. Zahore was indicted on Aug. 18, 2020.

U.S. Attorney Carpenito 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 Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Cari Fais and J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.

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

NEWARK, N.J. – A federal grand jury has indicted six members of a Paterson street gang on charges of selling heroin and fentanyl, including a charge against one defendant for distributing heroin and fentanyl with death resulting, U.S. Attorney Craig Carpenito announced today.

Charged in a 29-count second superseding indictment are: Wyzier Peterson, 23, a/k/a “Trap;” Carl Brown, 26, a/k/a “C Dub,” a/k/a “Dub;” Aaryn Abrams, 24, a/k/a “AI;” Najier Boone, 24, a/k/a “Bebe;” Zikeme Brooks, 27, a/k/a “Zeek,” a/k/a “Ace;” and Jimir Ricks, 26, a/k/a “40,” a/k/a “Red.” 26.

The defendants are charged as follows:

  Count

Charge

Defendant(s)

1

Conspiracy to distribute and to possess with intent to distribute 100 grams or more of heroin and 40 grams or more of fentanyl

Peterson, Brown, Abrams, Boone, Brooks, and Ricks

2

Distribution of heroin and fentanyl

Peterson and Ricks

3

Distribution of heroin

Brown and Boone

4

Distribution of heroin and fentanyl (with death resulting from the substance)

Peterson

5

Distribution of heroin

Peterson

6-13

Distribution of controlled substances (heroin and fentanyl)

Ricks

15

Distribution of heroin and fentanyl

Ricks and Abrams

16-18

Distribution of controlled substances (heroin and fentanyl)

Abrams

19-24

Distribution of controlled substances (heroin and fentanyl)

Boone

25

Distribution of heroin and fentanyl

Brooks

26

Distribution of 28 grams or more of cocaine base

Boone

27

Possession with intent to distribute heroin, fentanyl, and cocaine base

Abrams

28

Use of a firearm in furtherance of a drug trafficking crime

Abrams

29

Possession of a firearm by a convicted felon

Abrams

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

The defendants and their conspirators are members and associates of the 230 Boys street gang, which operates primarily in and around Rosa Parks Boulevard and Godwin Avenue within the City of 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 determined that from at least September 2018 through July 3, 2019, the defendants and their conspirators conspired to distribute narcotics, including heroin and fentanyl.  In October 2019, the defendants and 10 other members and associates of the 230 Boys were charged by complaint. 

Six co-defendants have since pleaded guilty before U.S. District Judge Brian R. Martinotti: Keith Brinkley, 30; Isaiah Hargrove, 21; Tyson Jacobs, 21; Amir Jones, 21; Dwayne Northern, 35; and Cequan Wharton, 30, all of Paterson.

Count 4 carries a mandatory minimum sentence of 20 years in prison, a maximum penalty of life in prison, and a mandatory fine of $1 million. Counts 1 and 26 carry a mandatory minimum sentence of five years in prison, and a maximum penalty of 40 years in prison, and a maximum fine of $5 million. Counts 2-3 and 5-27 carry a maximum penalty of 20 years in prison and a maximum fine of $1 million. Count 28 carries a mandatory minimum penalty of five years in prison and a maximum penalty of life in prison, which must run consecutively to any other term of imprisonment imposed, as well as a maximum fine of $250,000. Count 29 carries a maximum penalty of 10 years in prison and a maximum fine of $250,000.

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.

U.S. Attorney Carpenito 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; and detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes, 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 U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.

The charges and allegations in the second superseding indictment and previous criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

TRENTON, N.J. – A Middlesex County, New Jersey, man was arrested today for his role in a scheme to defraud the IRS by making false claims for income tax refunds and conspiracy, U.S. Attorney Craig Carpenito announced.

Luis Crespo, 42, of Sayreville, New Jersey is scheduled to appear by this afternoon by video conference before U.S. Magistrate Judge Zahid N. Quraishi in connection with an indictment, unsealed today, that charges Crespo with conspiracy to defraud the United States with respect to claims and with filing false, fictitious and fraudulent claims.

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

Crespo was allegedly part of a conspiracy led by Michael Watsey, who orchestrated a scheme to file false claims or cause the filing of false claims, namely the filing of 16 false tax returns in the years 2014 through 2017. Watsey created false Forms W2-G, which showed significant gambling winnings and Federal tax withheld. Participants in this scheme were Watsey, his family members, Crespo and other associates. Watsey filed or caused the filing of 16 false tax returns with false Forms W2-G, requesting a total of $3.9 million in false federal tax refunds with a total of $1.29 million actually being received. Crespo used false Forms W2-G created by Watsey in the filing of his 2016 and 2017 false tax returns. Those returns requested a total of $508,787 in false federal tax refunds with a total of $510,668 actually being paid by the IRS.

Watsey pleaded guilty before U.S. District Judge Anne E. Thompson on Jan. 3, 2020, and is scheduled to be sentenced Dec. 15, 2020.

The conspiracy count carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The false, fictitious or fraudulent claims counts each carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. 

U.S. Attorney Carpenito credited special agents of the IRS, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the charges and arrest.

The government is represented by Senior Trial Counsel Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.

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. – A Louisiana man today admitted that he illegally accessed a healthcare company’s online portal and downloaded more than 60,000 laboratory reports belonging to more than 30,000 patients, U.S. Attorney Craig Carpenito announced. 

David Manno, 35, of Marrero, Louisiana, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with exceeding authorized access to a protected computer.

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

The victim was a publicly traded healthcare company with its headquarters in New Jersey. The company offered a web-based portal through which patients could access their medical and health information, schedule laboratory testing, track their healthcare provider information, maintain medical records, and pay for services. Patients were able to log in to the portal by using a unique username and password. In November 2016, Manno accessed the portal and sent requests that caused the portal to send him lab reports belonging to other patients. Manno sent more than 150,000 modified requests, causing the portal to send him more than 60,000 laboratory reports for more than 30,000 patients.

The charge of exceeding access to a protected computer is punishable by a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross profit or loss caused by the offense, whichever is greater. Sentencing is scheduled for Feb. 3, 2021.

U.S. Attorney Carpenito 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 Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.