District of New Jersey

NEWARK, N.J. – The leader of a multi-million dollar conspiracy that used stolen credit card account information to make fraudulent retail purchases around the country was sentenced today to 110 months in prison, U.S. Attorney Craig Carpenito announced. 

Hamilton Eromosele, 29, previously pleaded guilty before U.S. District Court Judge William J. Martini to an information charging him with one count of conspiracy to commit bank fraud. Judge Martini imposed the sentence by videoconference today.       

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

From at least 2015 through 2018, Eromosele led a network of individuals, based in the New Jersey/New York area, who made short trips around the United States in order to use stolen credit card information to purchase gift cards, flights, hotels, rental cars, and other goods and services. Eromosele obtained stolen credit card information through the “dark web” and other sources, which he then provided to conspirators. Eromosele often recruited women via social media, with promises of easy profits, to fly to various locations to make fraudulent purchases. He collected his conspirators’ fraudulently purchased gift cards or luxury goods, sold them for cash, and dispersed a percentage of the proceeds to the conspirators. 

Conspirators made trips to numerous other states – including Colorado, Pennsylvania, Oklahoma, Montana, Indiana, Ohio, Arizona, and Georgia – and made over $3.5 million in fraudulent purchases using over 4,000 stolen credit card accounts.

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

U.S. Attorney Craig Carpenito credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s sentencing.

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

NEWARK, N.J. – An Essex County, Belleville, New Jersey, was arrested today for allegedly possessing images of child sexual abuse and distributing them on the internet, U.S. Attorney Craig Carpenito announced.

Mauricio Calderon, 49, of Belleville, New Jersey, is charged by complaint with one count of distribution of child pornography and one count of possession of child pornography. He is scheduled to make his initial appearance by videoconference today before U.S. Magistrate Judge Edward S. Kiel.

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

Between March 2020 and April 10, 2020, Calderon used an internet-based application to distribute multiple graphic videos depicting the sexual abuse of minors. During the course of the investigation, Calderon publicly posted in a chatroom multiple videos depicting the sexual abuse of children, and also sent links that redirected to web-pages containing child pornography. Law enforcement discovered numerous videos and images of child sexual abuse on Calderon’s electronic devices when he was arrested at his home this morning.  

The charge of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum penalty of 20 years in prison, and fine of $250,000. The charge of possession of child pornography carries a maximum penalty of 10 years in prison, and fine of $250,000.

U.S. Attorney Carpenito credited special agents with the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, with the investigation leading to these charges.

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

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

TRENTON, N.J. – A Romanian national was sentenced today to 33 months in prison for his role in a conspiracy to steal bank account information from thousands of customers by installing secret card-reading devices and pinhole cameras on ATMs throughout New Jersey and elsewhere, U.S. Attorney Craig Carpenito announced.

Lucian Burulea, 34, previously pleaded guilty to conspiracy to commit bank fraud. U.S. District Judge Peter G. Sheridan imposed the sentence this afternoon in Trenton federal court.

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

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

In addition to the prison term, Judge Sheridan sentenced Burulea to three years of supervised release and ordered him to pay $265,957 in restitution.  

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

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

CAMDEN, N.J. – The owners of several South Jersey restaurants have been charged with harboring illegal aliens, tax offenses, making false statements to investigators and conspiracy, U.S. Attorney Craig Carpenito announced.

Ali Sher Khan, 51, of Haddon Township, New Jersey, and Ali Khan, 48, of Clementon, New Jersey, are charged in an indictment that was unsealed today.

Ali Sher Khan is charged with one count of conspiracy to evade income taxes; 20 counts of failing to collect, account for, and pay over payroll taxes for corporate entities of two Crown Fried Chicken restaurants; three counts of income tax evasions for years 2014 through 2016; one count of harboring illegal aliens; one count of unlawful employment of aliens; and one count of making false statements to the IRS and FBI. He made his initial appearance today before U.S. Magistrate Judge Joel Schneider and was released on $250,000 unsecured bond.

Ali Khan is charged with one count of conspiracy to evade income taxes; 10 counts of failing to collect, account for, and pay over payroll taxes for corporate entities of two Crown Fried Chicken restaurants; three counts of income tax evasion for the years 2014 through 2016; one count of harboring illegal aliens; and one count of unlawful employment of aliens. He will make his initial appearance at a future date.

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

Ali Sher Khan and Ali Khan, along with others, operated two Crown Fried Chicken restaurants in Camden. Ali Sher Khan and other individuals also operated a Crown Fried Chicken restaurant in Burlington Township, New Jersey. 

Ali Sher Khan, Ali Khan and their conspirators allegedly employed illegal aliens at the restaurants. Those employees were paid in cash, and Ali Sher Khan and Ali Khan failed to deduct payroll taxes from the employees’ pay, as required by law. When Ali Sher Khan and Ali Khan caused payroll tax forms to be filed with the IRS, those forms did not accurately reflect the number of employees working the restaurant. Ali Sher Khan and Ali Khan failed to pay over to the IRS the correct amount of payroll taxes. They under-reported $1,055,498 in payroll taxes for the two Camden restaurants and $648,837 in payroll taxes for the Burlington restaurant, causing a tax loss to the government of $308,742. Ali Sher Khan and one of his other business partners allowed the illegal alien employees to live in residences that they owned, and they did not report the rent paid by the employees on their business or personal income tax returns.

From 2013 to 2016, Ali Sher Khan and Ali Khan took substantial amounts of cash out of the businesses and did not report it on their income tax returns. Ali Sher Khan did not disclose to the IRS on his personal tax return $831,517 in income from the Crown Fried Chicken restaurants, causing a tax loss of $252,131. Ali Khan did not report or otherwise disclose to the IRS on his personal tax return $394,894 in income from the Crown Fried Chicken restaurants, causing a tax loss of $113,836. 

When Ali Sher Khan was questioned by special agents of the IRS and the FBI, he falsely denied operating the Crown Fried Chicken businesses, hiring or firing the employees at these businesses, and signing any tax documents related to the businesses. He also falsely stated that he never supplied information to the businesses’ account for the tax returns.

The conspiracy count, tax evasion counts, failing to collect, account for, and pay over payroll taxes count, and false statements count 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. The harboring illegal aliens 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 unlawful employment of aliens count carries a maximum penalty of six months in prison and a $3,000 fine.

U.S. Attorney Carpenito credited special agents of the IRS - Criminal Investigation under the direction of Special Agent in Charge Michael Montanez; special agents of the FBI Cherry Hill Resident Agency under the direction of Special Agent in Charge Michael J. Driscoll                in Philadelphia; and special agents of the Department of Homeland Security, Homeland Security Investigations, Cherry Hill, under the direction of Special Agent in Charge Jason J. Molina in Newark, with the investigation leading to the charges. He also thanked officers of the New York City Police Department, for its assistance with the investigation.

The government is represented by Assistant U.S. Attorneys Jason M. Richardson and Sara Aliabadi of the U.S. Attorney=s Office Criminal Division in Camden.

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

NEWARK, N.J. – A Passaic County, New Jersey, man today admitted conspiring to distribute heroin and to distributing a quantity of fentanyl, U.S. Attorney Craig Carpenito announced.

Cequan Wharton, 26, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an information charging him with conspiracy to distribute and possess with the intent to distribute heroin and knowingly and intentionally distributing fentanyl.

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

Wharton and his conspirators are members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement determined that from at least September 2018 through Oct. 1, 2019, Wharton and his conspirators conspired to distribute narcotics, including heroin and fentanyl.

Each count of the information carries a maximum penalty of 20 years in prison and a fine of $1 million. Sentencing is scheduled for Feb. 4, 2021.

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; detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes; and the Passaic County Sheriff's Office, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges. He also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.

The government is represented by Assistant U.S. Attorney Francesca Liquori, of the Organized Crime and Gangs Unit.

TRENTON, N.J. – The owner of several retail pharmacies, including a pharmacy in Piscataway, New Jersey, was sentenced today to 30 months of prison for conspiring to defraud the IRS, U.S. Attorney Craig Carpenito announced. 

Rao Desu, 53, of Warren, New Jersey, was previously convicted on all counts of the indictment against him: two counts of conspiracy to defraud the IRS and four counts of aiding and assisting in subscribing to false tax returns, following a two-week trial before U.S. District Judge Michael A. Shipp in Trenton federal court. Judge Shipp imposed the sentence today in Trenton federal court.

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

Desu was a 50 percent owner in DVS Pharma Inc., (d/b/a Heights Pharmacy), a retail pharmacy in Piscataway. Darshna Desai was the other 50 percent owner and worked as the lead pharmacist. From April 2004 through November 2013, Desu conspired with Desai to conceal from the IRS the cash income that was earned by the pharmacy as part of a cash-skimming scheme. In particular, Desu’s relative, who assisted at times in the operation of several of Desu’s businesses, instructed Desai to separate the cash earned by Heights Pharmacy from other income received, remove a portion of the cash that was paid to Desai as cash salary, and then split the remainder in two, with one portion given to Desu and the other portion given to Desai. 

Desu was also a 50 percent owner of Manvihar Pharmacy (d/b/a Arthur Avenue Pharmacy) in Bronx, New York. The other 50 percent owner in Arthur Avenue Pharmacy worked at Arthur Avenue Pharmacy as the lead pharmacist. From June 2005 through November 2013, Desu conspired with the co-owner to conceal from the IRS the cash income that was earned by the pharmacy as part of a separate cash-skimming scheme. Specifically, Desu instructed the co-owner to separate the cash earned by Arthur Avenue Pharmacy from other income received, and to split the cash in two, giving half to Desu and giving half to the co-owner.

For tax years 2004 through 2012 Desu and Desai filed false corporate income tax returns, IRS Forms 1120S, for Heights Pharmacy, which failed to disclose the cash that Desai received in salary and that was split between Desu and Desai. From tax year 2005 through 2012, Desu and the co-owner filed false IRS Forms 1120S for Arthur Avenue Pharmacy, which failed to disclose the cash that was split between Desu and co-owner. For tax years 2004 through 2012, Desu filed false personal income tax returns, IRS Forms 1040, which failed to disclose the cash that Desu received from both Heights Pharmacy and Arthur Avenue Pharmacy.

Desai pleaded guilty to conspiracy to defraud the IRS in 2014 and is awaiting sentencing.  

In addition to the prison term, Judge Shipp sentenced Desu to two years of supervised release, fined him $15,000 and ordered restitution of $459,075.

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. He also thanked special agents of the U.S. Department of Justice, Office of Inspector General, under the direction of Special Agent in Charge Guido Modano, New York Field Office, for their role in the investigation. 

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

NEWARK, N.J. – A Nigerian national was sentenced today to 36 months in prison for his role in a computer hacking and identity theft scheme that defrauded vendors of nearly $1 million of office products after “phishing” e-mail login information from government employees, U.S. Attorney Craig Carpenito announced.

Olumide Ogunremi, a/k/a “Tony Williams,” 43, previously pleaded guilty before U.S. District Judge Susan B. Wigenton in Newark federal court to an indictment charging him with one count of conspiracy to commit wire fraud. Judge Wigenton imposed the sentence today by video conference.

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

From at least July 2013 through December 2013, Ogunremi and others perpetrated a computer hacking and theft scheme on U.S. government agencies’ email systems and General Services Administration vendors. The ring employed “phishing” attacks, which used fraudulent e-mails and websites that mimicked the legitimate e-mails and web pages of U.S. government agencies including the U.S. Environmental Protection Agency. Unwitting employees of the agencies visited the fake web pages and provided their e-mail account usernames and passwords.

Ogunremi and his conspirators used these stolen credentials to access the employees’ e-mail accounts in order to place fraudulent orders for office products, typically printer toner cartridges, in the employees’ names from vendors who were authorized to do business with U.S. government agencies. Ogunremi and his conspirators directed the vendors to ship the fraudulent orders to individuals located in New Jersey and elsewhere to be repackaged and ultimately shipped to overseas locations, which were controlled by Ogunremi and his conspirators. Once the orders were received in Nigeria, Ogunremi and his conspirators sold the toner cartridges to another individual on the black market for profit.

Ogunremi had been scheduled to enter a guilty plea to an information charging him with conspiracy to commit wire fraud in March 2018, but fled to Canada. He was extradited from Canada to New Jersey on Sept. 26, 2019. 

On June 10, 2014, Abiodun Adejohn, a/k/a “James Williams,” 36, of Nigeria, pleaded guilty to one count of wire fraud conspiracy and was sentenced in 2015 to three years in prison.

In addition to the prison term, Judge Wigenton sentenced Ogunremi to two years of supervised release and ordered him to pay restitution of $68,618.

 U.S. Attorney Carpenito praised special agents of the Environmental Protection Agency – Office of Inspector General, under the direction of Special Agent in Charge Christopher Gaffney; General Services Administration – Office of Inspector General, under the direction of Special Agent in Charge Jamie Willemin; Department of Commerce – Office of Inspector General, under the direction of Special Agent in Charge Duane Townsend; Department of Defense Cyber Field Office, under the direction of Special Agent in Charge Jeffery Thorpe; and  the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to Ogunremi’s sentencing.

The government is represented by Assistant U.S. Attorney Sophie E. Reiter, of the U.S. Attorney’s Office Violent Crimes Unit in Newark.

TRENTON, N.J. – A New York man was arrested today after travelling from New York to New Jersey to meet an individual, whom he believed was a 13-year old girl, for sex, U.S Attorney Craig Carpenito announced.  

Eduardo Silva, 42, of Bronx, New York, is charged in a three-count complaint with enticing a minor to engage in sexual activity, travelling from New York to New Jersey for the purpose of engaging in unlawful sexual conduct, and sending obscene materials over the Internet. He appeared today by videoconference before U.S. Magistrate Judge Zahid N. Quraishi and was detained.

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

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

The charge of using a facility of interstate commerce to entice a minor to engage in sexual activity carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison; the charge of travel with the intent to engage in illicit sexual conduct with a minor carries a maximum sentence of 30 years in prison; and the charge of using the internet to transfer obscene matters to an individual who had not attained the age of 16 carries a  maximum sentence of 10 years in prison. The charges also each carry a maximum fine of $250,000 per count.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, Cherry Hill, under the direction of Special Agent in Charge Jason J. Molina, with the investigation that led to Silva’s arrest. U.S. Attorney Carpenito also thanked the Burlington County Prosecutor’s Office and the Bordentown Township Police Department for their assistance in the investigation.

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

If you have information regarding the pending prosecution, or you believe you or someone you know may have been victimized by the defendant, the Department of Homeland Security requests that you contact them at 1-866-347-2423. Identified victims may be eligible for certain services and rights under federal and state law.

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 Jersey City man was sentenced today to 120 months in prison for offenses related to the possession of two firearms and fentanyl trafficking, U.S. Attorney Craig Carpenito announced.

Tyreek Martin, a/k/a “Reek,” 35, previously pleaded guilty before U.S. District Judge John M. Vazquez to an information charging him with possession of firearms by a convicted felon, possession with intent to distribute fentanyl, and conspiracy to possess with intent to distribute fentanyl. Judge Vazquez imposed the sentence today by videoconference.

Marcus Haggan, 45, of Jersey City, pleaded guilty on July 22, 2020, before Judge Vazquez to an information charging him with possession with intent to distribute fentanyl and conspiracy to possess with intent to distribute fentanyl and heroin. Sentencing is scheduled for Nov. 23, 2020.

Wyheim Hicks, 26, of Jersey City, pleaded guilty on Sept. 14, 2020, before Judge Vazquez to an information charging him with possession with intent to distribute fentanyl and conspiracy to possess with intent to distribute fentanyl. Sentencing is scheduled for Jan. 26, 2021.

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

On the morning of Feb. 9, 2019, Jersey City Police Department officers were conducting surveillance of Martin’s residence when they observed Martin exit from the side basement door. He walked to the front of the residence and placed packages of drugs in a garbage can and then walked to the front steps of the residence.

The officers observed Haggan and Hicks walk towards Martin’s residence. Haggan retrieved the drugs from the garbage can and gave some to Hicks. Haggan and Hicks walked off in separate directions while Martin went back into his residence. Based on their observations of the illegal drug transaction, the officers stopped and arrested Haggan and Hicks. Hicks was in possession of approximately 250 glassine bags of suspected heroin with the label “HELL RAISER.” Haggan was in possession of approximately 350 glassine bags of suspected heroin, also with the label “HELL RAISER.”

Later that day, the officers observed Martin exit his residence and placed him under arrest. During a search of Martin’s residence, the officers found eight bricks of suspected heroin wrapped in magazine paper, approximately 400 glassine bags of suspected heroin with the label “HELL RAISER,” and 13 bundles of approximately 130 glassine bags of suspected heroin with the label “G FUNK.” They also found approximately $3,350 in U.S. currency. Subsequent laboratory testing of the seized drugs confirmed that the drugs consisted of substances containing fentanyl and heroin. The officers also recovered two firearms – a Taurus 44 Magnum revolver and a Bersa .380 caliber handgun – and approximately 90 rounds of ammunition. Prior to Feb. 9, 2019, Martin had at least one felony conviction, including a conviction in Superior Court, Hudson County, on Nov. 2, 2018, for distributing controlled dangerous substances, making it illegal for him to possess firearms. 

In addition to the prison term, Martin was sentenced to three years of supervised release.

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, and members of the Jersey City Police Department, under the direction of Public Safety Director James Shea, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Christopher Amore of the Government Fraud Unit in Newark.

NEWARK, N.J. – The former co-owner of a New Jersey marketing company today admitted her role in a scheme to defraud public and private health benefits programs of at least $8.8 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Craig Carpenito announced. 

Lisa Curty, 43, of Staten Island, New York, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging her with conspiracy to commit health care fraud.

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

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

Between February 2015 and February 2017, Curty participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.

Curty exploited this opportunity by creating a New Jersey marketing company (Marketing Company-1) and hiring sales representatives to target individuals who had insurance plans that covered compounded medications. The sales representatives then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. The individuals were then directed to certain telemedicine companies, which Marketing Company-1 or its affiliates paid, to receive the prescriptions.

Once the prescriptions were written, they were filled by certain compounding pharmacies with which Marketing Company-1 conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Marketing Company-1 a percentage of the reimbursement amount. As one of the owners of Marketing Company-1, Curty retained a portion of the payment and provided a “commission” payment to the relevant sales representative.

Curty’s conspirator and co-owner of Marketing Company-1, Christine Myers, pleaded guilty on July 27, 2020, to conspiracy to commit health care fraud and is scheduled to be sentenced on Dec. 1, 2020.

Two sales representatives that worked for Marketing Company-1, Christopher Frusci and Enver Kalaba, were former Metropolitan Transportation Authority (MTA) employees. Since the MTA’s health insurance plan covered compounded medications, Frusci and Kalaba targeted co-workers at the MTA and paid them cash bribes for every compounded prescription they submitted. Frusci and Kalaba have both previously pleaded guilty to conspiracy to commit health care fraud charges based on their respective roles in the scheme. On Feb. 7, 2019, Kalaba was sentenced in Newark federal court to 20 months in prison and one year of supervised release, and must forfeit $138,630 in criminal proceeds he received for his role in the scheme and pay restitution of $2.9 million. Frusci is awaiting sentencing.

The count of conspiracy to commit health care fraud is punishable by a maximum of 10 years in prison and a fine of $250,000 fine, or twice the gross gain or loss from the offense. As part of her plea agreement, Curty must forfeit $1.475 million in criminal proceeds she received for her role in the scheme and pay restitution of at least $8.8 million. Sentencing is scheduled for Jan. 26, 2021.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the Office of the Inspector General, Metropolitan Transportation Authority, under the direction of Inspector General Carolyn Pokorny, with the ongoing investigation leading to today’s guilty plea.

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

TRENTON, N.J. – A Middlesex County, New Jersey, man today admitted that he conspired to distribute more than 100 grams of heroin as part of a conspiracy responsible for distributing significant quantities of heroin and cocaine in the Bayshore area of Monmouth and Middlesex counties, U.S. Attorney Craig Carpenito announced.

Daniel McHugh, 50, of Sayreville, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti via videoconference to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin.  McHugh also admitted to conspiring to distribute and possess with intent to distribute a quantity of cocaine and possessing with intent to distribute a quantity of crack cocaine.

Today’s guilty plea follows a coordinated takedown in November 2018 of 15 defendants charged by complaint with conspiracy to distribute heroin and cocaine. To date, 13 defendants have pleaded guilty, including supplier Gregory Gillens and lead defendant Guy Jackson.  Gillens was sentenced on Sept. 8, 2020, to 10 years in prison. Jackson is awaiting sentencing.

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

From May 2017 to November 2018, McHugh and others engaged in a narcotics conspiracy that operated in the Raritan Bayshore region of Middlesex and northern Monmouth counties. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin and cocaine, the use of confidential sources of information, and other investigative techniques, law enforcement learned that McHugh regularly obtained heroin and cocaine for further distribution from Jackson. Some of the heroin distributed by the conspiracy contained fentanyl, a dangerous synthetic opioid.

On the date of his arrest, McHugh gave consent to search his residence. During that search, law enforcement recovered quantities of heroin, cocaine, and crack cocaine intended for further distribution.

The heroin conspiracy count to which McHugh pleaded guilty carries a statutory mandatory minimum term of five years in prison, a maximum of 40 years in prison, and a fine of up to $5 million. Sentencing is scheduled for Jan. 20, 2021.

U.S. Attorney Carpenito credited Special Agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Organization Task Force (including representatives from the Bradley Beach Police Department, Brick Police Department, Howell Police Department, Marlboro Police Department, Monmouth County Sheriff's Office, Toms River Police Department, and Union Beach Police Department) under the direction of Special Agent in Charge George M. Crouch Jr.; Special Agents of the FBI, Philadelphia Division, Scranton Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the New Jersey State Police, under the direction of Colonel Patrick J. Callahan, Superintendent; the Matawan Police Department, under the direction of Chief Thomas J. Falco, Jr.; the Holmdel Police Department, under the direction of Chief John Mioduszewski; the Highlands Police Department, under the direction of Chief Robert Burton; the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni; the Old Bridge Police Department, under the direction of Chief William A. Volkert; the Keansburg Police Department, under the direction of Chief James K. Pigott; the Hazlet Police Department, under the direction of Chief Philip Meehan; and the Aberdeen Police Department, under the direction of Chief Richard A. Derechailo, with the investigation leading to today’s guilty plea. 

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office’s Criminal Division in Trenton.

The charges and allegations against the two remaining defendants are merely accusations and they are presumed innocent unless and until proven guilty.

CAMDEN, N.J. – An Atlantic County, New Jersey, woman today admitted that she paid a man that she believed to be a hitman $4,000 in October 2018 to assault her ex-boyfriend, U.S. Attorney Craig Carpenito announced.

Diane Sylvia, 60, of Somers Point, New Jersey, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging her with one count of solicitation to commit a crime of violence with the intent to seriously injure another.

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

In September 2018, Sylvia, a licensed clinical social worker with a private mental health counseling practice in Linwood, New Jersey, asked one of her patients, whom she had reason to believe was formerly involved in organized crime, whether the patient could recommend someone to her so that she could have her ex-boyfriend assaulted. Ultimately, an undercover FBI agent, posing as a hitman, met with Sylvia. In recorded meetings in her office and in telephone conversations, Sylvia described how she wanted the purported hitman to punch her ex-boyfriend’s face and break his arm. She told the purported hitman that her ex-boyfriend had stolen money from her and was extorting her.

On Oct. 31, 2018, Sylvia met with the FBI undercover agent in her office and paid him $4,000 in cash to carry out the assault. The agent told Sylvia to get rid of the pre-paid cell phone that she was using to communicate with him. Sylvia asked the purported hitman if she should throw the phone off the Ocean City Bridge. After the meeting, Sylvia was arrested by FBI agents.

The charge of solicitation to commit an act of violence carries a maximum punishment of five years in prison and a fine of $125,000. Sentencing is scheduled for Jan. 27, 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 government is represented by Assistant U.S. Attorney Patrick C. Askin of the Camden Division.

CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted possessing large quantities of heroin, cocaine, and methamphetamine, along with a firearm, U.S. Attorney Craig Carpenito announced.

Joseph Brandenberger, 35, of Absecon, New Jersey, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to an information charging him with possessing with intent to distribute 100 grams or more of heroin, 500 grams or more of cocaine, and 50 grams or more of methamphetamine, and possessing a firearm as a previously convicted felon.

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

Brandenberger was arrested following an investigation that revealed he was using a rented storage unit to conceal a large cache of drugs and a firearm. Upon execution of a search warrant at the location on June 18, 2019, investigators seized 507.6 grams of heroin, 524.3 grams of cocaine, and 107.2 grams of methamphetamine, along with $1,812 in cash and drug packaging material. Investigators also found a loaded Tech-9 9mm handgun. As a previously convicted felon, Brandenberger is prohibited by federal law from possessing a firearm or ammunition. 

The count of possession of heroin, cocaine and methamphetamine with intent to distribute carries a minimum of five years in prison and a maximum of 40 years in prison, and a $5 million fine. The firearm count carries a maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 26, 2020.

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 Molina, Newark Division; and inspectors of the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge Damon Wood, with the investigation leading to today’s guilty plea. He also thanked 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 the Absecon Police Department, under the direction of Chief James R. Laughlin, for their assistance with the case.

The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office Criminal Division in Camden.

CAMDEN, N.J. – Three former executives of a Louisiana compounding pharmacy are charged in a 24-count indictment with using the pharmacy to defraud New Jersey and military health benefits programs, U.S. Attorney Craig Carpenito announced today. 

Christopher Kyle Johnston, 41, of Mandeville, Louisiana; Trent Brockmeier, 58, of Pigeon Forge, Tennessee; and Christopher Casseri, 52, of Baton Rouge, Louisiana, were charged with conspiracy to commit health care fraud and wire fraud and a second conspiracy to commit identity theft by using individuals’ personal identifying information without their consent.  Casseri was also charged with repeatedly lying to federal agents when interviewed. Johnston and Brockmeier face additional charges of conspiring to commit money laundering and substantive counts of money laundering for transactions involving more than $43 million in illicit profits they realized from the scheme.

The defendants are expected to appear today before U.S. Magistrate Judge Ann Marie Donio by videoconference. The case is assigned to U.S. District Judge Robert B. Kugler in Camden. 

According to the indictment:

Central Rexall Drugs was a retail pharmacy in Louisiana that prepared compounded medications, which are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. In 2013, Johnston and Brockmeier entered into an agreement with Central Rexall’s chief executive officer, Hayley Taff – who pleaded guilty on Aug. 12, 2020, to conspiracy to commit health care fraud – to take over the management of the pharmacy and expand the compounding business in exchange for 90 percent of the profits. Brockmeier became chief operating officer of Central Rexall and Johnston became general counsel. They hired Casseri as vice president of sales to manage Central Rexall’s outside sales force.

Johnston, Brockmeier, and Casseri learned that certain insurance plans administered by an entity referred to in the indictment as the “Pharmacy Benefits Administrator” would reimburse thousands of dollars for a one-month supply of certain compounded medications – including pain, scar, and antifungal creams, as well as vitamin combinations. The health plans for New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had this insurance coverage, as did TRICARE, which insures current and former members of the armed forces and their families. 

The three conspirators designed compounded medications and manipulated the ingredients in the medications in order to obtain high insurance reimbursements rather than serve the medical needs of patients. To determine which ingredients and combinations resulted in the highest insurance reimbursements, Johnston, Brockmeier, and Casseri had Central Rexall employees send the Pharmacy Benefits Administrator false prescription claims to test out different combinations of ingredients, but the prescriptions did not exist. By trial and error use of these false claims, Johnston, Brockmeier, and Casseri designed compounded medications with combinations of ingredients that were chosen solely based on the amount of money that insurance would pay rather than on the medications’ ability to serve the medical needs of patients. At their direction, Central Rexall sent compounded medications to patients based solely on financial gain, without any research or testing showing that the combination of ingredients was effective. 

When the Pharmacy Benefits Administrator stopped covering one combination, the conspirators would develop a compounded medication with a different combination of ingredients based solely on the insurance reimbursement and without considering the medical necessity or effectiveness of the new combination. Central Rexall then would send that new compounded medication to patients, even though the new combination of ingredients was not medically equivalent to the combination originally prescribed for the patients and without telling the patients or their doctor about the differences.

The outside sales force retained and directed by Johnston, Brockmeier, and Casseri used various methods to get doctors to prescribe these medications and patients to accept them, including having prescriptions signed without the patient seeing a doctor or knowing about the medications, having medications or refills ordered with the patients’ knowledge, and paying patients to accept the medications and paying doctors to prescribe them.

Johnston, Brockmeier, and Casseri and their conspirators caused over $50 million in fraudulent insurance claims for compounded medications that were not medically necessary.  Johnston received over $34 million and Brockmeier received over $5 million in illicit profits, and Casseri received $200,000 in bonuses. 

The indictment also charges Johnston, Brockmeier, and Casseri with a second scheme to commit identity theft. The conspirators took the patients’ names, dates of birth, and identifying information (including insurance information) without their consent from pre-existing Central Rexall prescriptions and used the information to make the false test claims to the Pharmacy Benefits Administrator.

The health care fraud and wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The false statement count and the conspiracy to commit identity theft count 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. The money laundering charges carry a maximum term of imprisonment of 10 years and a fine of $250,000 or twice the gross gain or loss from the offense or not more than twice the amount of the criminally derived property involved in the transactions.

U.S. Attorney Carpenito credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark: the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka; and the Defense Criminal Investigative Service, under the direction of Special Agent in Charge Cyndy Bruce, Southeast Field Office, with the investigation leading to the indictment. 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.

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

NEWARK, N.J. – A Hudson County, New Jersey, man was indicted today on charges of conspiring to produce and distribute, and producing, distributing, receiving, and possessing, images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Ramon Zelaya, 36, of Union City, is charged by superseding indictment with one count of conspiring to produce and distribute child pornography, two counts of sexual exploitation of a child, one count of distributing child pornography, two counts of receiving child pornography, and two counts of possessing child pornography. Zelaya was initially charged by complaint in March 2019 and by indictment in November 2019.

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

On April 21, 2018, Zelaya used Facebook to conspire with an individual in the Dominican Republic to sexually abuse the individual’s minor child, create images of that abuse, and send the images to Zelaya, who then distributed the images among various Facebook accounts he controlled.

Between Aug. 20, 2018, and Sept. 20, 2018, Zelaya, representing himself as a teenaged boy, used Instagram communications to persuade a child to send him a revealing photograph. He then threatened to reveal that photograph as a means of coercing the child into sending him sexually explicit images. Zelaya subsequently distributed the images via Facebook.

The production charges each carry a mandatory minimum penalty of 15 years in prison, a maximum of 30 years, and a $250,000 fine. The distribution charges each carry a mandatory minimum penalty of five years in prison, a maximum of 20 years, and a $250,000 fine. The possession charges carry maximum penalties of 20 years in prison and 10 years in prison, respectively, as well as a $250,000 fine for each. The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine.

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 Molina, with the investigation leading to the charges. He also thanked the Union City, New Jersey, Police Department, under the direction of Chief Nichelle Luster, the Bayonne Police Department, under the direction of Chief of Police Robert Geisler, and the Public Prosecutor’s Office of San Cristóbal, Dominican Republic, for assistance in the investigation.

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

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

NEWARK, N.J. – Four people were arrested today for their roles in a conspiracy to commit bank fraud, including soliciting U.S. Postal Service (USPS) employees to steal check books and credit cards from the mail, depositing fraudulent checks, including pandemic relief checks, and using credit cards without authorization, U.S. Attorney Craig Carpenito announced.

Jeffrey Bennett, 26, of Irvington, New Jersey; Tashon Ragan, 21, of Hillside, New Jersey; Jahaad Flip, 21, and Janel Blackman, 41, both of Newark, are each charged by complaint with one count of conspiracy to commit bank fraud. Ragan and Flip are also charged with one count of passing fictitious obligations, namely counterfeit Economic Impact Payment (EIP) checks.  Bennett and Ragan are also charged with one count each of aggravated identity theft.  All four defendants are scheduled to appear this afternoon via videoconference before U.S. Magistrate Judge Mark Falk.

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

From February 2019 to May 2020, a group that referred to themselves as the “Members,” and their associates, including Bennett, Flip, and Ragan, conspired to solicit and did solicit USPS employees, including Blackman, to steal U.S. mail containing checks, checkbooks, debit cards, and credit cards in exchange for cash. Once they received stolen checks, Bennett, Flip, Ragan, and others, fraudulently forged the signatures of the accountholders and negotiated the checks by making them payable to individuals, some of whom were New Jersey high school students, who had given the Members and their associates access to their accounts, also in exchange for cash. Bennett, Flip, and Ragan then attempted to and did deposit the fraudulent checks online and at various bank ATMs throughout New Jersey and later withdrew funds from the bank accounts before the victim banks could discover the fraud and decline the checks. Bennett also used the stolen credit cards to purchase gift cards or Apple products, which he then resold to generate additional proceeds from the scheme. Bennett, Flip, Ragan, and Blackman split the proceeds of the fraud among themselves.

Ragan and Flip are also charged with depositing thousands of dollars of counterfeit EIP checks purportedly issued pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized EIP payments structured as one-time refundable tax credits to certain eligible taxpayers of $1,200 for individuals, $2,400 for married couples filing jointly, and up to $500 for each qualifying child.   

The conspiracy charge is punishable by a maximum potential penalty of 30 years in prison. The passing fictitious obligations charge is punishable by a maximum penalty of 25 years in prison. The aggravated identity theft charge is punishable by a mandatory sentence of two years in prison to be served consecutively to any other term of imprisonment imposed. The bank fraud conspiracy also carries a fine of up to $1 million. All other charges are punishable by a maximum $250,000 fine. 

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; special agents with IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; 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 Summit Police Department, the New Providence Police Department, the Piscataway Police Department, the Newark Police Department, the South Orange Police Department, and the Little Falls Police Department for their assistance.

The government is represented by Assistant U.S. Attorneys Jonathan Fayer of the Criminal Division and Elaine K. Lou of the Special Prosecutions Division in Newark.

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

NEWARK, N.J. – Five Essex County men have been arrested today and charged with distribution of heroin, fentanyl and cocaine in and around the Reservoir Site Townhouses in Newark, U.S. Attorney Craig Carpenito announced.

Arrested today and charged by complaint are:

• Dayvon Rogers, 29, of Newark, two counts of distribution of cocaine in August and September 2020;
• Rasheed Gilbert, 27, of East Orange, one count of distribution of cocaine in January 2020, and one count of distribution of heroin and cocaine in January 2020;
• Naim Frazier, 32, of Newark, one count of distribution of heroin and fentanyl in January 2020;
• Rahjohn Montgomery, 27, of East Orange, one count of distribution of heroin in January 2020, and one count of distribution of heroin, fentanyl, and cocaine in June 2020; and
• Rasheen Thomas, 25, of Newark, one count of distribution of heroin and cocaine in June 2020, three counts of distribution of heroin and cocaine in July 2020, and two counts of distribution of heroin and cocaine in August 2020.

The defendants are scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Mark Falk.

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

The defendants sold narcotics in and around the Reservoir Site Townhouses in Newark, selling to individuals who were confidential informants working with law enforcement. The narcotics sales were documented through audio and video recordings, text messages, and physical surveillance.

Each count in the complaints carries a maximum penalty of 20 years in prison and a fine of $1 million.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, under the direction of Special Agent in Charge George M. Crouch Jr.; the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose; Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; the East Orange Police Department, under the direction of Chief Phyllis Bindi: and Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, with the investigation leading to the charges.

This investigation is part of the Violent Crime Initiative (VCI) in Newark. The Newark VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the sole purpose of combatting violent crime in and around the Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI includes the U.S. Attorney’s Office, the DEA, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Federal Bureau of Investigation, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, New Jersey State Parole Board, New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center, and New Jersey Department of Corrections.

The government is represented by Assistant U.S. Attorneys Emma Spiro and Jonathan W. Romankow of the U.S. Attorney’s Office Violent Crimes 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.

NEWARK, N.J. – An Essex County, New Jersey, man made his initial appearance today on charges of illegally possessing a handgun and possessing heroin with the intent to distribute, U.S. Attorney Craig Carpenito announced.

Antoine Hawkins, 31, of Newark, is charged by complaint with one count of possession of a firearm and ammunition by a convicted felon and one count of possession with intent to distribute heroin. He made his initial appearance today by videoconference before U.S. Magistrate Judge Mark Falk and was detained.

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

On Sept. 16, 2020, law enforcement officers conducted a surveillance operation in connection with a shooting on Aug. 18, 2020. An officer approached Hawkins, who appeared to be the person of interest in the shooting incident. During a conversation between the law enforcement officer and Hawkins, the law enforcement officer observed what appeared to be the imprint of a firearm on Hawkins’s jacket. The law enforcement officer frisked Hawkins and seized a 9mm Springfield Armory XDM pistol, which was loaded with 19 rounds of ammunition.

After Hawkins was arrested for possessing the pistol and the ammunition, law enforcement executed a search warrant inside of Hawkins’s residence, which revealed 626 glassine envelopes containing suspected heroin and three 9mm magazines.

The firearm offense carries a maximum potential penalty of 10 years in prison, and a fine of $250,000. The narcotics offense carries a maximum potential penalty of 30 years in prison, and a fine of $2 million.

U.S. Attorney Carpenito credited the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; members of the Newark Department of Public Safety, under the direction of Public Safety Director Anthony F. Ambrose; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson in Newark; and special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Jason Molina, with the investigation leading to the charges.

This investigation is part of the Violent Crime Initiative (VCI) in Newark. The Newark VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the sole purpose of combatting violent crime in and around the Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI includes the U.S. Attorney’s Office, the DEA, the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Federal Bureau of Investigation, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, New Jersey State Parole Board, New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center, and New Jersey Department of Corrections.

The government is represented by Assistant U.S. Attorney Benjamin Levin of the U.S. Attorney’s Office Violent Crimes Unit in Newark.

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

NEWARK, N.J. – Two Iranian nationals have been charged in connection with a coordinated cyber intrusion campaign – sometimes at the behest of the government of Iran – targeting computers in New Jersey and around the world, U.S. Attorney Craig Carpenito announced today.

Hooman Heidarian, a/k/a “neo,” 30, and Mehdi Farhadi, a/k/a “Mehdi Mahdavi” and “Mohammad Mehdi Farhadi Ramin,” 34, both of Hamedan, Iran, are each charged in a 10-count indictment returned Sept. 15, 2020, with: one count each of conspiracy to commit fraud and related activity in connection with computers and access devices; computer fraud - unauthorized access to protected computers: computer fraud, unauthorized damage to protected computers; conspiracy to commit wire fraud; and access device fraud; and five counts of aggravated identity theft.

“These Iranian nationals allegedly conducted a wide-ranging campaign on computers here in New Jersey and around the world,” U.S. Attorney Carpenito said. “They brazenly infiltrated computer systems and targeted intellectual property and often sought to intimidate perceived enemies of Iran, including dissidents fighting for human rights in Iran and around the world. This conduct threatens our national security, and as a result, these defendants are wanted by the FBI and are considered fugitives from justice.”

“We will not bring the rule of law to cyberspace until governments refuse to provide safe harbor for criminal hacking within their borders,” Assistant Attorney General for National Security John C. Demers said. “Unfortunately, our cases demonstrate that at least four nations—Iran, China, Russia and North Korea—will allow criminal hackers to victimize individuals and companies from around the world, as long as these hackers will also work for that country’s government—gathering information on human rights activists, dissidents and others of intelligence interest.  Today’s defendants will now learn that such service to the Iranian regime is not an asset, but a criminal yoke that they will now carry until the day they are brought to justice.”

“The indictment of two Iranian nationals charged with computer hacking, fraud, and aggravated identity theft demonstrates how the FBI continues to work relentlessly with our law enforcement partners to identify cybercriminals who seek to do harm to American citizens, businesses, and universities, regardless of where those criminals may reside and hold them accountable,” George M. Crouch Jr., Special Agent in Charge of the FBI Newark Division, said. “Mehdi Farhadi and Hooman Heidarian are now fugitives and have been added to the FBI website for charges in connection with a massive, coordinated cyber intrusion campaign. These actions demonstrate how imposing risks and consequences on our cyber adversaries will continue to be a top priority for the FBI.” 

According to the indictment:

Beginning in at least 2013, the defendants were responsible for a coordinated campaign of cyber intrusions into computer systems in New Jersey and around the world. The victims included several American and foreign universities, a Washington, D.C.-based think tank, a defense contractor, an aerospace company, a foreign policy organization, non-governmental organizations (NGOs), non-profits, and foreign government and other entities identified as rivals or adversaries to Iran around the world.

Heidarian and Farhadi conducted many of these intrusions on behalf of the Iranian government. The stolen data was typically highly protected and extremely sensitive, and included confidential communications pertaining to national security, foreign policy intelligence, non-military nuclear information, aerospace data, human rights activist information, victim financial information and personally identifiable information, and intellectual property, including unpublished scientific research. The defendants also often vandalized websites using the pseudonym “Sejeal” and posted messages that appeared to signal the demise of Iran’s internal opposition, foreign adversaries, and countries identified as rivals to Iran, including Israel and Saudi Arabia.

Tactics and Techniques

The defendants conducted online reconnaissance to carefully select their victims, gathering data and intelligence to determine their areas of expertise, and assessing computer networks in preparation for launching cyber-attacks. They often used information obtained at this stage in latter phases of their hacking activities to complete a picture of processes, organizational structure, and potential soft spots of victim networks. The defendants used vulnerability-scanning tools to test the victim networks and to reveal security holes.

The defendants gained and maintained unauthorized access to victim networks using various tools, including: session hijacking, where a valid computer session was exploited to gain unauthorized access to information or services in a computer system; SQL injection, in which they used malicious code to access information that was not intended to be displayed, such as sensitive government data, user details, and personal identifiers; and malicious programs installations, which allowed the defendants to maintain unauthorized access to computers.

The defendants then used key-loggers and “remote access Trojans” to maintain access and monitor the actions of users of the victim networks. They also developed a botnet tool, which facilitated the spread of malware, denial of service attacks, and spamming to victim networks. In some instances, the defendants used their unauthorized access to victim networks or accounts to establish automated forwarding rules for compromised victim accounts, whereby new outgoing and incoming emails were automatically forwarded from the compromised accounts to accounts controlled by defendants

Using these methods, the defendants stole hundreds of terabytes of data, including confidential victim work product and intellectual property, and personal identifying information, such as access credentials, names, addresses, phone numbers, Social Security numbers, and birthdates. The defendants marketed stolen data on the black market.

In addition to stealing intellectual property and other data, the defendants, using the pseudonym “Sejeal,” replaced the publicly available contents of websites with political and other ideological content, thereby defacing websites, for the apparent purpose of projecting Iranian influence and threatening perceived enemies of Iran. The defacements featured, among other things, images of burning Israeli flags and threats forecasting the death or demise of citizens in the United States, Israel, and elsewhere.

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

The counts of conspiracy to commit computer fraud and related activity in connection with computers and access devices, unauthorized access to protected computers, and computer fraud – unauthorized damage to protected computers, each carry a maximum sentence of five years in prison. The count of conspiracy to commit wire fraud carries a maximum sentence of 20 years in prison. The counts of aggravated identity theft each carry a mandatory sentence of two years in prison. The count of access device fraud carries a maximum sentence of 10 years in prison.

The government is represented by Assistant U.S. Attorney Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit, Daniel V. Shapiro, Deputy Chief of the U.S. Attorney’s Office Criminal Division, and Trial Attorney Scott McCulloch of the National Security Division. 

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

Two Iranian nationals have been charged in connection with a coordinated cyber intrusion campaign – sometimes at the behest of the government of the Islamic Republic of Iran (Iran) – targeting computers in New Jersey, elsewhere in the United States, Europe and the Middle East, the Department of Justice announced today.

According to a 10-count indictment returned on Sept. 15, 2020, Hooman Heidarian, a/k/a “neo,” 30, and Mehdi Farhadi, a/k/a “Mehdi Mahdavi” and “Mohammad Mehdi Farhadi Ramin,” 34, both of Hamedan, Iran, stole hundreds of terabytes of data, which typically included confidential communications pertaining to national security, foreign policy intelligence, non-military nuclear information, aerospace data, human rights activist information, victim financial information and personally identifiable information, and intellectual property, including unpublished scientific research.  In some instances, the defendants’ hacks were politically motivated or at the behest of Iran, including instances where they obtained information regarding dissidents, human rights activists, and opposition leaders.  In other instances, the defendants sold the hacked data and information on the black market for private financial gain.

“We will not bring the rule of law to cyberspace until governments refuse to provide safe harbor for criminal hacking within their borders,” said Assistant Attorney General for National Security John C. Demers.  “Unfortunately, our cases demonstrate that at least four nations — Iran, China, Russia and North Korea — will allow criminal hackers to victimize individuals and companies from around the world, as long as these hackers will also work for that country’s government — gathering information on human rights activists, dissidents and others of intelligence interest.  Today’s defendants will now learn that such service to the Iranian regime is not an asset, but a criminal yoke that they will now carry until the day they are brought to justice.”

“These Iranian nationals allegedly conducted a wide-ranging campaign on computers here in New Jersey and around the world,” said U.S. Attorney Carpenito for the District of New Jersey. “They brazenly infiltrated computer systems and targeted intellectual property and often sought to intimidate perceived enemies of Iran, including dissidents fighting for human rights in Iran and around the world. This conduct threatens our national security, and as a result, these defendants are wanted by the FBI and are considered fugitives from justice.”

“The indictment of two Iranian nationals charged with computer hacking, fraud, and aggravated identity theft demonstrates how the FBI continues to work relentlessly with our law enforcement partners to identify cybercriminals who seek to do harm to American citizens, businesses, and universities, regardless of where those criminals may reside and hold them accountable,” said George M. Crouch Jr., Special Agent in Charge of the FBI Newark Division. “Mehdi Farhadi and Hooman Heidarian are now fugitives and have been added to the FBI website for charges in connection with a massive, coordinated cyber intrusion campaign. These actions demonstrate how imposing risks and consequences on our cyber adversaries will continue to be a top priority for the FBI.” 

According to the indictment:

Beginning in at least 2013, the defendants were responsible for a coordinated campaign of cyber intrusions into computer systems in New Jersey and around the world. The victims included several American and foreign universities, a Washington, D.C.-based think tank, a defense contractor, an aerospace company, a foreign policy organization, non-governmental organizations (NGOs), non-profits, and foreign government and other entities the defendants identified as rivals or adversaries to Iran.  In addition to the theft of highly protected and sensitive data, the defendants also vandalized websites, often under the pseudonym “Sejeal” and posted messages that appeared to signal the demise of Iran’s internal opposition, foreign adversaries, and countries identified as rivals to Iran, including Israel and Saudi Arabia.

To select their victims, the defendants conducted online reconnaissance, including gathering public data and intelligence to determine a victim’s areas of expertise, and using vulnerability scanning tools and other means to assess computer networks.  The defendants gained and maintained unauthorized access to victim networks using various tools, including: session hijacking, where a valid computer session was exploited to gain unauthorized access to information or services in a computer system; SQL injection, in which they used malicious code to access information that was not intended to be displayed, such as sensitive government data, user details, and personal identifiers; and malicious programs installations, which allowed the defendants to maintain unauthorized access to computers.

The defendants then used key-loggers and “remote access Trojans” to maintain access and monitor the actions of users of the victim networks. They also developed a botnet tool, which facilitated the spread of malware, denial of service attacks, and spamming to victim networks. In some instances, the defendants used their unauthorized access to victim networks or accounts to establish automated forwarding rules for compromised victim accounts, whereby new outgoing and incoming emails were automatically forwarded from the compromised accounts to accounts controlled by defendants.

Assistant Attorney General Demers and U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Crouch in Newark, with the investigation leading to the charges.

Each defendant is charged with: one count of conspiracy to commit fraud and related activity in connection with computers and access devices; unauthorized access to protected computers; unauthorized damage to protected computers; conspiracy to commit wire fraud; and access device fraud; and five counts of aggravated identity theft.

The counts of conspiracy to commit computer fraud and related activity in connection with computers and access devices, and unauthorized access to protected computers, each carry a maximum sentence of five years in prison. The counts of unauthorized damage to protected computers and access device fraud each carry a maximum sentence of ten years in prison.  The count of conspiracy to commit wire fraud carries a maximum sentence of 20 years in prison. The counts of aggravated identity theft each carry a mandatory sentence of two years in prison.

The government is represented by Assistant U.S. Attorney Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit, Daniel V. Shapiro, Deputy Chief of the U.S. Attorney’s Office Criminal Division, and Trial Attorney Scott McCulloch of the National Security Division’s Counterintelligence and Export Control Section. 

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

TRENTON, N.J. – A Trenton man was sentenced today to 204 months in prison for his role as a supplier to a significant drug trafficking conspiracy that distributed more than one kilogram of heroin in Trenton and the surrounding area, U.S. Attorney Craig Carpenito announced.

David Antonio, a/k/a “Pop,” a/k/a “Papi,” a/k/a “Santiago Ramirez,” 32, previously pleaded guilty before Chief U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of a third superseding indictment charging him with conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin. Judge Wolfson imposed the sentence today by videoconference.

In October 2018, Antonio, and 25 other individuals were charged by criminal complaint with conspiracy to distribute heroin. On Feb. 27, 2020, a grand jury returned a 10-count third superseding indictment charging Antonio and six other defendants with conspiracy to distribute one kilogram or more of heroin and various other drug and firearm offenses. Twenty-three of the 26 defendants charged in the complaint have pleaded guilty.

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

From October 2017 to October 2018, the defendant and others engaged in a large drug trafficking conspiracy that operated in the areas of Martin Luther King Boulevard, Sanford Street, Middle Rose Street, Southard Street, Hoffman Avenue, Chambers Street, and Coolidge Avenue in Trenton, and which sought to profit from the distribution of heroin and numerous other controlled substances. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin, the use of confidential sources of information, and other investigative techniques, law enforcement learned that conspirators Jakir Taylor and Jerome Roberts obtained regular supplies of hundreds of “bricks” of heroin from Antonio. Intercepted communications among Taylor, Roberts, Antonio, and other conspirators revealed that Taylor and Roberts agreed to obtain from Antonio, and that Antonio agreed to supply, a “motherlode” of as many as 1,400 bricks of heroin in a single delivery – equating to approximately 1.5 kilograms of heroin. Taylor told Antonio that he intended to “flood the streets” of Trenton with this large supply, and Antonio agreed to supply a sufficient amount of heroin to Taylor that would allow him to do so. In communications with Taylor, Antonio indicated that he was “filling the bags” up with heroin and fentanyl. During coordinated arrests on Oct. 25, 2018, law enforcement arrested Antonio at a residence in Trenton, and recovered more than 1.4 kilograms of heroin, in addition to a significant amount of paraphernalia used to package heroin for distribution.

In addition to the prison term, Judge Wolfson sentenced Antonio to five years of supervised release.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr.; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson; officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley; officers of the Princeton Police Department, under the direction of Chief of Police Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief of Police John P. Stemler III; officers of the Burlington Township Police Department, under the direction of Police Director Bruce Painter; and detectives of the Burlington County Prosecutor’s Office, under the  direction of Prosecutor Scott A. Coffina, with the investigation leading to today’s sentencing. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the New Jersey State Board of Parole for their assistance in the investigation and prosecution of the case.

The government is represented by Attorney-in-Charge J. Brendan Day and Assistant U.S. Attorney Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Greater Trenton Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies to enhance the identification, apprehension, and prosecution of individuals involved in gang-related activities, violent crime, and drug distribution in and around the greater Trenton area. 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 three remaining defendants charged in this case are presumed innocent until proven guilty.

NEWARK, N.J. – A Morris County, New Jersey, couple who owned and operated construction businesses in Morris County admitted their roles in filing false tax returns that failed to report all their personal income, U.S. Attorney Craig Carpenito announced.

Roger Magill, 50, of Wharton, the owner and operator of Reliable Construction, a/k/a Reliable Paving and Hackensack Pavers, a/k/a Hackensack Paving – collectively, the Magill entities – pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with three counts of tax evasion. His wife, Ruby Magill, 50, of Wharton, pleaded guilty before Judge Wigenton to an information charging her with one count of misprision of felony.

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

Roger Magill admitted that, between 2014 and 2016, he owned the Magill entities that operated in Morris County, New Jersey. Roger Magill admitted to obtaining hundreds of thousands of dollars in personal income from the Magill entities and attempted to hide his personal income from the IRS by using a fictitious identity to cash business checks at several check cashing businesses. Roger Magill admitted that he evaded paying $261,758 in personal income taxes. Ruby Magill admitted that she purposefully facilitated Roger Magill’s tax evasion scheme by allowing him to deposit his hidden income into business bank accounts that she operated and controlled.

The charges to which Roger Magill pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. The charge to which Ruby Magill pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencings are scheduled for Jan. 20, 2021.

U.S. Attorney Carpenito credited agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Jamel Semper, Chief of the Organized Crime and Gangs Unit in Newark.

TRENTON, N.J. – A former member of Paraguay’s Congress and her husband have admitted their roles in an international money laundering conspiracy, U.S. Attorney Craig Carpenito announced today.

Raimundo Va, 45, pleaded guilty today before Chief Judge Freda L. Wolfson to an information charging him with one count of conspiracy to commit money laundering. His wife, Cynthia Elizabeth Tarrago Diaz, 41, pleaded guilty on Sept. 15, 2020, before Judge Wolfson to an information charging her with conspiracy to commit money laundering.

On Nov. 21, 2019, Tarrago and Va were arrested by the FBI after they arrived in Newark as part of their unlawful money laundering activities, and were charged in a criminal complaint along with a third individual, Rodrigo Alvarenga Paredes, who remains at large in Paraguay.

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

Until January 2019, Tarrago was a member of Paraguay’s Congress, and in late 2019 had publicly announced her intention to run for mayor of the capital district of Asunción. While in office, Tarrago and her husband, Va, agreed to accept at least $2 million in United States currency from two individuals who represented themselves to be narcotics traffickers, believing the money to be proceeds of unlawful narcotics trafficking, and to launder the funds through an international network of accounts in order to disguise the unlawful source of the proceeds. Tarrago and Va traveled to New Jersey and Florida on multiple occasions and accepted approximately $800,000 in United States currency from the purported drug traffickers, and caused those funds to be laundered through the conspiracy’s network of accounts, and ultimately transferred back to an account maintained by the purported drug traffickers. To disguise the illicit source of the funds, members of the conspiracy generated fraudulent invoices that stated legitimate business reasons for the transfers of laundered funds to the purported drug traffickers’ account. Moreover, on multiple occasions during the purported drug dealers’ meetings with Tarrago and Va, Tarrago indicated that she would be able to assist the purported drug dealers with procuring large quantities of cocaine from Paraguay at an inexpensive price.

Unbeknownst to Tarrago and Va, the currency that they accepted from the purported drug traffickers and caused to be laundered was not actually illicit drug proceeds. Rather, those funds were provided to Tarrago and Va by two undercover FBI agents as part of an extensive investigation of the money laundering network. During the investigation, the undercover agents met with Tarrago and Va in the United States on numerous occasions, and obtained substantial video and audio recordings of their interactions with Tarrago and Va, during which details of the money laundering network were discussed. The evidence obtained during the investigation revealed that Alvarenga Paredes, operating through the auspices of a money-exchange company in Paraguay, coordinated the laundering of the funds that the undercover agents provided to Tarrago and Va.

The money laundering conspiracy counts against Tarrago and Va carry a statutory maximum potential penalty of 20 years in prison, and a maximum fine of the greater of $500,000 or twice the value of the funds involved in the conspiracy. Sentencing for both defendants is scheduled for Jan. 21, 2021. The investigation is continuing.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr., with the investigation leading to today’s guilty pleas. He also thanked the Department of Justice’s Office of International Affairs and the FBI’s Legal Attaché in Buenos Aires for their assistance in the case.

The government is represented by Assistant U.S. Attorneys R. Joseph Gribko of the Criminal Division in Trenton and J. Brendan Day, Attorney in Charge of the Trenton Office of the U.S. Attorney’s Office.

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

TRENTON, N.J. – A Dominican Republic national was sentenced today to 32 months in prison for illegally using the identity of another person to fraudulently obtain a U.S. passport, U.S. Attorney Craig Carpenito announced.

Arnaldo Antonio Medrano Bonilla, 56, of the Dominican Republic, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of passport fraud and one count of aggravated identity theft. Judge Sheridan imposed the sentence by videoconference today.

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

In August 2015, Medrano submitted a fraudulent renewal application for a U.S. passport, listing the name, birth date, and Social Security number of a U.S. citizen, but providing his own photograph. Medrano presented that U.S. citizen’s birth certificate in further support of his fraudulent application. In this way, Medrano unlawfully obtained a U.S. passport bearing his own photograph and the identity of another person.

In addition to the prison term, Judge Sheridan sentenced Medrano to three years of supervised release.

U.S. Attorney Carpenito credited special agents of the U.S. Department of State, Diplomatic Security Service, New York Field Office, under the direction of Special Agent in Charge Keith Byrne, with the investigation leading to today’s sentencing.

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

NEWARK, N.J. – A Bergen County, New Jersey, attorney who allegedly fraudulently obtained nearly $9 million in federal Paycheck Protection Program (PPP) loans has been indicted, U.S. Attorney Craig Carpenito and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division announced

Jae H. Choi, 48, of Cliffside Park, New Jersey, previously charged by complaint, was charged by indictment on Sept. 15, 2020, with four counts of bank fraud, four counts of false statements on a loan application, one count of aggravated identity theft, and one count of money laundering. The indictment seeks to forfeit 11 bank accounts and one investment account for the proceeds of the fraud, as well as a million-dollar home Choi purchased in Cresskill, New Jersey.  An arraignment date has not yet been set.

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

Choi submitted four fraudulent PPP loan applications to four lenders on behalf of four businesses that purportedly provided educational services. Choi fabricated the existence of hundreds of employees, manipulated bank and tax records, and falsified a driver’s license on the applications.

Choi falsely represented to the lenders that the companies controlled by him had hundreds of employees and paid over $3 million in monthly wages. In one instance, Choi emailed a lender falsely claiming that he just told 150 of his employees that they were losing their jobs because the PPP loan had not yet come through, and that he had “watched grown men and women crying.” Choi wrote in that same email that he “sincerely hope[d]” that the lender’s employee “would never find [himself] in this kind of situation.”

Based on Choi’s alleged misrepresentations, three of the four lenders funded three businesses with an approximately $3 million PPP loan each. Choi received a total of nearly $9 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

Choi used the fraudulently obtained PPP loan proceeds to pay for numerous personal expenses, including to buy a nearly $1 million home in Cresskill, New Jersey, fund approximately $30,000 in remodeling and other improvements, and invest millions more in the stock market through an account held in the name of his spouse.  

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

This case was investigated by IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn; the Small Business Administration Office of the Inspector General; and the Social Security Administration – Office of the Inspector General.

The government is represented by Assistant U.S. Attorney Andrew Macurdy of the District of New Jersey and Trial Attorney Andrew Tyler of the Fraud Section of the Department of Justice, Criminal Division.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

The charges and allegations in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty in a court of law.

NEWARK, N.J. – The U.S. Attorney’s Office for the District of New Jersey today announced an agreement with the Borough of Woodcliff Lake, New Jersey, to resolve allegations that the Borough violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by denying zoning approval for an Orthodox Jewish congregation to construct a  worship center on its property. 

The proposed consent decree, which was filed today in the U.S. District Court of the District of New Jersey and must still be approved by the Court, would resolve a lawsuit filed by the United States against the borough, which alleged that the borough had prevented Valley Chabad, an Orthodox Jewish congregation that has worshipped in the borough for over 20 years, from constructing a new house of worship. A separate settlement agreement and proposed consent decree have resolved a related lawsuit filed by Valley Chabad against the borough.  

“RLUIPA protects the rights of every religious community to worship free of unlawful burdens,” U.S. Attorney Craig Carpenito, District of New Jersey, said. “As our office continues to vigorously protect the civil rights of the Jewish community and all religious communities in our District, we will use every tool at our disposal, including pursuing court-enforceable injunctive remedies. Through our actions today, we have taken steps to ensure that Valley Chabad and its members will no longer face unlawful barriers in their practice of religion.”

“For more than four centuries, religious people from all over the world have sought refuge here,” Assistant Attorney General Eric Dreiband of the Civil Rights Division said. “Often, these people did so to escape persecution by monarchs, dictators, and other despots. Then, when our ancestors established the United States of America, the Founders adopted the First Amendment to the United States Constitution and thereby enacted into law the right of all people to exercise religion. Two decades ago, the Congress extended these protections when it passed the Religious Land Use and Institutionalized Persons Act. That law protects religious people and their institutions from unduly burdensome or discriminatory land use regulations. The United States is, and must always remain, committed to the right of all people to practice their faith and worship together. The United States Department of Justice will continue to fight against any unlawful deprivation of the right of all people to practice their faith. As our ancestors did four centuries ago, today, religious people often gather and worship with those who share their faith. Through this agreement, the Valley Chabad and its members will be able to build a house of worship and to exercise their right to practice their religion freely.”

The complaint alleged that Woodcliff Lake violated RLUIPA by imposing a substantial burden on Valley Chabad’s religious exercise when, on three occasions between 2006 and 2013, Valley Chabad attempted to purchase parcels of property in the borough in order to construct a house of worship and meeting center, called a Chabad house, large enough to meet its needs. In each instance, the borough purchased or re-zoned the parcels, preventing development of a Chabad house. The complaint also alleges that this conduct and the borough’s eventual denial of Valley Chabad’s application for zoning relief to expand on its current property burdened Valley Chabad’s ability to worship freely without furthering a compelling government interest. 

As part of the consent decree, the borough will permit Valley Chabad to construct a new Chabad house on its property. The resolution would also enjoin the borough from acting in a manner that violates RLUIPA and require the borough to establish a procedure for receiving and resolving RLUIPA complaints, train its employees on RLUIPA’s requirements, and submit regular reports to the United States and the court on its compliance. In the separate agreement that resolves the related private action, the borough agreed to pay Valley Chabad $1.5 million to resolve its claims for damages and attorney’s fees that arose from the borough’s conduct.  

RLUIPA is a federal law that protects religious institutions from unduly burdensome or discriminatory land use regulations. In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other religious institutions to worship on their land. More information is available at www.justice.gov/crt/placetoworship.

People who believe they have been subjected to discrimination in land use or zoning decisions may contact the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339 or the Civil Rights Division Housing and Civil Enforcement Section at (800) 896-7743, or through the complaint portal on the Place to Worship Initiative website.  More information about RLUIPA, including questions and answers about the law and other documents, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.

The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division and Assistant U.S. Attorney Susan Millenky, of the Civil Rights Unit, Civil Division.

TRENTON, N.J. – Two California men today admitted to participating in a conspiracy to broker patients as part of a multi-state patient scheme in which one of them directed recruiters to bribe drug-addicted individuals to enroll in drug rehabilitation and the other paid referral fees from his rehabilitation center in exchange for those patient referrals, U.S. Attorney Craig Carpenito announced.

Kevin M. Dickau, 32, of Tustin, California, and Dr. Akikur Mohammad, 57, of West Hills, California, each pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan. Dickau pleaded guilty to an information charging him with one count of conspiracy to commit health care fraud. Mohammad pleaded guilty to an information charging him with one count of conspiracy to violate the Eliminating Kickbacks in Recovery Act (EKRA).

EKRA, enacted by Congress in October 2018 as part of a broader package of legislation aimed at combatting the opioid crisis, bars the payment of kickbacks in exchange for the referral of patients to drug treatment facilities. Mohammad’s EKRA conviction is among the first such convictions in the country using the new charge.

Three other individuals have previously pleaded guilty for their roles in the scheme: Peter Costas, of Red Bank, New Jersey, pleaded guilty to conspiracy to commit health care fraud in May 2020; Seth Logan Welsh, of Forest Hill, Maryland, and John C. Devlin, of Baltimore, Maryland, pleaded guilty to the same charge on Sept. 8, 2020.

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

Dickau, Welsh, Devlin, and their conspirators owned and operated a marketing company in California. Dickau, Welsh, and Devlin used the marketing company to help orchestrate a scheme in New Jersey, Maryland, California, and other states that involved bribing individuals addicted to heroin and other drugs to enter into drug rehabilitation centers so Welsh, Devlin, and their conspirators could generate referral fees from those facilities. One facility in California that paid such referral fees was owned and operated by Mohammad.

The marketing company run by Dickau, Welsh, and Devlin maintained contractual relationships with drug treatment facilities around the country, including the one run by Mohammad. The marketing company also engaged a nationwide network of recruiters – including Costas in New Jersey – to identify and recruit potential patients, from New Jersey and other states, who were addicted to heroin or other drugs and who had robust private health insurance.

To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas and other recruiters offered to bribe them – often as much as several thousand dollars – with the approval of Dickau, Welsh, and Devlin. Once the patients agreed to enroll in drug rehabilitation in exchange for the offered bribe, Dickau, Welsh, Devlin, and Costas would arrange and pay for cross-country travel to the drug treatment centers in California and other states, in concert with the owners of the facilities themselves, including Mohammad. Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments, and he would pass along information to Dickau, Welsh, and Devlin about the patients’ status at the facilities. Dickau, Welsh, and Devlin would monitor the other patients they brokered by speaking to other recruiters or to the owners and employees of the drug treatment facilities themselves.

Mohammad’s drug treatment facility had a contract with the marketing company.  Mohammad’s facility and other facilities typically paid the marketing company a fee of $5,000 to $10,000 per patient referral. Dickau, Welsh, Devlin, and their conspirators divvied that money among themselves. Costas and other recruiters received approximately half that amount for each patient they brokered. Dickau, Welsh, Devlin, and their conspirators brokered scores of patients to drug treatment facilities around the country, including the one run by Mohammad, and the conspiracy caused millions of dollars of losses for health insurers.

For example, on Jan. 24, 2019, Mohammad, Welsh, and Dickau had a text message conversation in which Dickau sent a patient’s biographical and health insurance information to Mohammad to see if Mohammad would accept the patient at his drug treatment facility. After confirming that the patient had adequate health insurance benefits, Mohammad accepted the patient for admission to his drug treatment facility. The patient enrolled at Mohammad’s drug treatment facility soon after, and Mohammad billed a commercial insurance company over $70,000 for purported services rendered to the patient. The following month. Mohammad paid the marketing company a referral payment of $5,000 for referring the patient.

In a telephone conversation on March 14, 2019, Mohammad and Welsh discussed kickbacks for referrals for two patients sent to Mohammad’s drug treatment facility. During the call, Mohammad and Welsh discussed how long each patient stayed at Mohammad’s drug treatment facility, and they agreed that Mohammad would pay Dickau and Welsh a kickback for the two patient referrals. On the same day, Mohammad wrote a check to the marketing company for $10,000.

Dickau faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Mohammad 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. Sentencing for both defendants is scheduled for Jan. 20, 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 pleas. He also thanked the FBI, under the direction of Acting Assistant Director in Charge John F. Bennett in Los Angeles, California and the District Attorney’s Office in Orange County, California.

The government is represented by Senior Trial Counsel Jason S. Gould of the Health Care Fraud Unit in Newark.

TRENTON, N.J. – A Somerset County, New Jersey, man admitted today that he concealed his attempts to provide material support to Hamas, U.S. Attorney Craig Carpenito, Assistant Attorney General John C. Demers of the U.S. Department of Justice’s National Security Division, FBI-Newark Special Agent in Charge George M. Crouch Jr., and FBI Assistant Director for Counterterrorism Jill Sanborn announced.

Jonathan Xie, 21, of Basking Ridge, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with one count of concealing attempts to provide material support to a designated foreign terrorist organization. 

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

Xie admitted that he knowingly concealed and disguised the nature, location, source, ownership and control of the attempt to provide material support and resources to Harakat al-Muqawamah al-Islamiyya and the Islamic Resistance Movement, an organization that is commonly referred to as Hamas. Xie admitted that he knew Hamas was a designated foreign terrorist organization and has engaged in terrorist activities. He said he attempted to conceal the attempted support believing it would be used to commit or assist in the commission of a violent act.

In December 2018, Xie sent $100 via Moneygram to an individual in Gaza who Xie believed to be a member of the Al-Qassam Brigades – a faction of Hamas that has conducted attacks, to include suicide bombings against civilian targets inside Israel. At approximately the same time that Xie sent the money, he posted on his Instagram account “Just donated $100 to Hamas. Pretty sure it was illegal but I don’t give a damn.”

In April 2019, Xie appeared in an Instagram Live video wearing a black ski mask and stated that he was against Zionism and the neo-liberal establishment. When asked by another participant in the video if he would go to Gaza and join Hamas, Xie stated “yes, If I could find a way.” Later in the video, Xie displayed a Hamas flag and retrieved a handgun. He then stated “I’m gonna go to the [expletive] pro-Israel march and I’m going to shoot everybody.” In subsequent Instagram posts, Xie stated, “I want to shoot the pro-israel demonstrators . . .  you can get a gun and shoot your way through or use a vehicle and ram people . . . all you need is a gun or vehicle to go on a rampage . . . I do not care if security forces come after me, they will have to put a bullet in my head to stop me.”

In April 2019, Xie sent a link to a website for the Al-Qassam Brigades to an FBI employee who was acting online in an undercover capacity. Xie described the website as a “Hamas” website and stated he had previously sent a donation to the group. Xie then sent screenshots of the website to the undercover employee and demonstrated how to use a new feature on the website that allows donations to be sent via Bitcoin.  On April 18, 2019, when the undercover employee asked whether Bitcoin was anonymous, Xie responded:  “yah… i think that's why hamas is using it now because money transfer is not that anonymous.” 

The count of concealing attempted material support 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. Sentencing for Xie is scheduled for Jan. 27, 2021. 

U.S. Attorney Carpenito and Assistant Attorney General Demers credited special agents of the FBI and task force officers of the Joint Terrorism Task Force, under the direction of Special Agent in Charge Crouch, Jr.; and the U.S. Department of Defense, Army Counterintelligence, 902d Military Intelligence Group, with the investigation leading to today’s guilty plea. He also thanks the U.S. Secret Service for its assistance with the case.

The government is represented by Senior Trial Counsel Joyce M. Malliet of the U.S. Attorney’s Office’s National Security Unit and Trial Attorney Taryn Meeks of the U.S. Department of Justice’s Counterterrorism Section of the National Security Division.

A Somerset County, New Jersey, man admitted today that he concealed his attempts to provide material support to Hamas, Assistant Attorney General John C. Demers of the U.S. Department of Justice’s National Security Division, U.S. Attorney Craig Carpenito, FBI-Newark Special Agent in Charge George M. Crouch Jr., and FBI Assistant Director for Counterterrorism Jill Sanborn announced.

Jonathan Xie, 21, of Basking Ridge, New Jersey, pleaded guilty by videoconference before U.S. District Judge Michael A. Shipp to an information charging him with one count of concealing attempts to provide material support to a designated foreign terrorist organization. 

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

Xie admitted that he knowingly concealed and disguised the nature, location, source, ownership and control of the attempt to provide material support and resources to Harakat al-Muqawamah al-Islamiyya and the Islamic Resistance Movement, an organization that is commonly referred to as Hamas. Xie admitted that he knew Hamas was a designated foreign terrorist organization and has engaged in terrorist activities. He said he attempted to conceal the attempted support believing it would be used to commit or assist in the commission of a violent act.

In December 2018, Xie sent $100 via Moneygram to an individual in Gaza who Xie believed to be a member of the Al-Qassam Brigades – a faction of Hamas that has conducted attacks, to include suicide bombings against civilian targets inside Israel. At approximately the same time that Xie sent the money, he posted on his Instagram account “Just donated $100 to Hamas. Pretty sure it was illegal but I don’t give a damn.”

In April 2019, Xie appeared in an Instagram Live video wearing a black ski mask and stated that he was against Zionism and the neo-liberal establishment. When asked by another participant in the video if he would go to Gaza and join Hamas, Xie stated “yes, If I could find a way.” Later in the video, Xie displayed a Hamas flag and retrieved a handgun. He then stated “I’m gonna go to the [expletive] pro-Israel march and I’m going to shoot everybody.” In subsequent Instagram posts, Xie stated, “I want to shoot the pro-israel demonstrators . . .  you can get a gun and shoot your way through or use a vehicle and ram people . . . all you need is a gun or vehicle to go on a rampage . . . I do not care if security forces come after me, they will have to put a bullet in my head to stop me.”

In April 2019, Xie sent a link to a website for the Al-Qassam Brigades to an FBI employee who was acting online in an undercover capacity. Xie described the website as a “Hamas” website and stated he had previously sent a donation to the group. Xie then sent screenshots of the website to the undercover employee and demonstrated how to use a new feature on the website that allows donations to be sent via Bitcoin.  On April 18, 2019, when the undercover employee asked whether Bitcoin was anonymous, Xie responded:  “yah… i think that's why hamas is using it now because money transfer is not that anonymous.” 

The investigation revealed additional social media accounts for Xie, including a YouTube account which contained, among other things, a playlist containing videos, many of which advocated or propagandized Soldiers for Allah, the war in Syria, Hezbollah (a foreign terrorist organization), and the Houthi movement in Yemen, as well as support for Bashar al Assad, Saddam Hussein, and North Korea.

The count of concealing attempted material support 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. Sentencing for Xie is scheduled for Jan. 27, 2021. 

Assistant Attorney General Demers and U.S. Attorney Carpenito credited special agents of the FBI and task force officers of the Joint Terrorism Task Force, under the direction of Special Agent in Charge Crouch, Jr.; and the U.S. Department of Defense, Army Counterintelligence, 902d Military Intelligence Group, with the investigation leading to today’s guilty plea. He also thanks the U.S. Secret Service for its assistance with the case.

The government is represented by Senior Trial Counsel Joyce M. Malliet of the U.S. Attorney’s Office’s National Security Unit and Trial Attorney Taryn Meeks of the U.S. Department of Justice’s Counterterrorism Section of the National Security Division.

NEWARK, N.J. – The president of a now-defunct New Jersey-based marble and granite wholesaler today admitted his role in orchestrating and carrying out a scheme to defraud a bank in connection with a $17 million secured line of credit, U.S. Attorney Craig Carpenito announced.

Rajendra Kankariya, 61, of Tenafly, New Jersey, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit wire fraud affecting a financial institution.

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

From March 2016 through March 2018, Kankariya, the president and part owner of Lotus Exim International Inc. (LEI), conspired with other LEI employees to obtain from the victim bank a $17 million line of credit by fraudulent means. The victim bank extended LEI the line of credit, believing it to have been secured in part by LEI’s accounts receivable. In reality, Kankariya and his conspirators had fabricated or inflated many of the accounts receivable, ultimately leading to LEI defaulting on the line of credit.

In order to conceal the lack of sufficient collateral, LEI employees, with the knowledge and approval of Kankariya, created fake email addresses on behalf of LEI’s customers so they could pose as those customers and answer the victim bank’s and outside auditor’s inquiries about the accounts receivable. The scheme involved numerous fraudulent accounts receivable where the outstanding balances were either inflated or entirely fabricated. The scheme caused the victim bank losses of approximately $17 million.

The count of conspiracy to commit wire fraud affecting a financial institution to which Kankariya pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of $1 million. Kankariya is scheduled to be sentenced on Jan. 18, 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 Sammi Malek of the U.S. Attorney’s Office National Security Unit in Newark.

NEWARK, N.J. – A Newark man and associate of the street gang known as the “Famous Boyz” was sentenced today to 98 months in prison for conspiring to distribute crack cocaine and possessing with the intent to distribute crack cocaine and cocaine, U.S. Attorney Craig Carpenito announced.  

Jonathan Garcia, a/k/a “Bebo,” 36, previously pleaded guilty via videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with conspiring to distribute 28 grams or more of crack cocaine, and distributing and possessing with intent to distribute cocaine and crack cocaine. Judge Arleo imposed the sentence today by videoconference.     

Saeed Dawes, a/k/a “Nasty,” 22, of Newark, was sentenced on Aug. 12, 2020, via videoconference by Judge Arleo to 57 months in prison and three years of supervised release.  Dawes previously pleaded guilty before Judge Arleo to an information charging him with one count of conspiring to distribute crack cocaine and heroin.

Jonathan Hernandez, 25, of Newark, pleaded guilty on Aug. 26, 2020, before Judge Arleo in Newark federal court to a superseding information charging him with one count of conspiring to distribute crack cocaine and one count of possessing with the intent to distribute crack cocaine.   

In October 2018, Garcia, Hernandez, and Dawes, along with 13 other members of a violent drug trafficking conspiracy operating in Newark, were charged by criminal complaint after a lengthy wiretap investigation with conspiracy to distribute crack cocaine and heroin.  Shaka McKinney and Jahid Vauters, a/k/a “K,” a/k/a “KO,” also were charged with firearms possession offenses. To date, 14 of the defendants have pleaded guilty to drug and/or firearm charges and seven await sentencing. 

On Feb. 25, 2019, a grand jury returned a one-count indictment charging three of the defendants, Patricio Hernandez, Jonathan Hernandez, and Garcia, with conspiracy to distribute and to possess with intent to distribute 280 grams or more of crack cocaine for their alleged participation in supplying the “Famous Boyz” with cocaine.  On Sept. 30, 2019, a grand jury returned a 21-count superseding indictment against defendants Patricio Hernandez, Jonathan Hernandez, Garcia, Javon Holmes, a/k/a “J-Dot”, and John Mosley, a/k/a “Breezy,” a/k/a “Brazy.” The charges in the superseding indictment remain pending against the remaining defendants. 

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

The defendants are members and associates of the Famous Boyz – a subset of the Brick City Brim set of the Bloods street gang – which dealt significant quantities of heroin and crack-cocaine, primarily around the area of South 18th Street and 15th Avenue, in Newark.  The gang often referred to this area as the “8 Block,” “18th,” or simply by reference to the number “8”. 

Mosley was a primary source of narcotics for the Famous Boyz and often directed the gang’s drug operations. Mosley and other members of the Famous Boyz shared narcotics, customers, and firearms with one another in furtherance of their narcotics-trafficking activities, and they used juveniles to distribute narcotics and stash firearms. Patricio Hernandez and Jonathan Hernandez were among the main suppliers of crack cocaine to Mosley, while Vauters supplied Mosley with heroin. Heroin sold by Famous Boyz members, including Dawes, Karen Armstrong and Eugene Williams, contained a fentanyl analogue, which is an extremely dangerous and highly-addictive substance. 

Members of the Famous Boyz also used social media to promote the gang’s criminal activities, including by advertising their narcotics-trafficking activities and proceeds and by threatening both rival gang members and any individuals who consider cooperating with law enforcement. Those members who sold narcotics also enriched themselves by committing other crimes, including robberies. Law enforcement, acting on information obtained from a wiretap, arrested West while he was attempting to commit a robbery. After law enforcement seized a .40 caliber firearm from the scene, Mosley was overheard complaining to Holmes, “so all the ratchets gone” and “damn we just lost all the straps,” referring to the Famous Boyz losing their firearms.

In addition to the prison term, Garcia was sentenced to four years of supervised release.

U.S. Attorney Carpenito credited special agents of ATF, under the direction of Special Agent in Charge Charlie J. Patterson in Newark, and members of the Newark Department of Public Safety, under the direction of Public Safety Director Anthony Ambrose, with the investigation leading to the charges and convictions.

He also thanked the DEA, under the direction of Special Agent in Charge Susan A. Gibson, the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, the N.J. State Police, under the direction of Col. Patrick J. Callahan, the Belleville Police Department, under the direction of Chief Mark Minichini, and the Livingston Police Department, under the direction of Chief Gary Marshuetz for their assistance.

This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and is part of the Violent Crime Initiative (VCI) in Newark. 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 VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety to combat violent crime in and around Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA New Jersey Division, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Board of Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department. 

The government is represented by Deputy Chief of the Criminal Division Mary E. Toscano and Assistant U.S. Attorney Angelica M. Sinopole of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.

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

The Justice Department today announced an agreement with the Borough of Woodcliff Lake, New Jersey, to resolve allegations that the Borough violated the Religious Land Use and Institutionalized Persons Act (RLUIPA) by denying zoning approval for an Orthodox Jewish congregation to construct a worship center on its property. 

The proposed consent decree, which was filed today in the U.S. District Court of the District of New Jersey and must still be approved by the court, would resolve a lawsuit filed by the United States against the Borough, which alleged that the Borough had prevented Valley Chabad, an Orthodox Jewish congregation that has worshiped in the borough for over 20 years, from constructing a new house of worship. A separate settlement agreement and proposed consent decree have resolved a related lawsuit filed by Valley Chabad against the borough.  

“For more than four centuries, religious people from all over the world have sought refuge here,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Often, these people did so to escape persecution by monarchs, dictators, and other despots. Then, when our ancestors established the United States of America, the Founders adopted the First Amendment to the U.S. Constitution and thereby enacted into law the right of all people to exercise religion. Two decades ago, the Congress extended these protections when it passed the Religious Land Use and Institutionalized Persons Act. That law protects religious people and their institutions from unduly burdensome or discriminatory land use regulations. The United States is, and must always remain, committed to the right of all people to practice their faith and worship together. The U.S. Department of Justice will continue to fight against any unlawful deprivation of the right of all people to practice their faith. As our ancestors did four centuries ago, today, religious people often gather and worship with those who share their faith. Through this agreement, the Valley Chabad and its members will be able to build a house of worship and to exercise their right to practice their religion freely.”

“RLUIPA protects the rights of every religious community to worship free of unlawful burdens,” said U.S. Attorney Craig Carpenito, District of New Jersey. “As our office continues to vigorously protect the civil rights of the Jewish community and all religious communities in our district, we will use every tool at our disposal, including pursuing court-enforceable injunctive remedies. Through our actions today, we have taken steps to ensure that Valley Chabad and its members will no longer face unlawful barriers in their practice of religion.”

The complaint alleged that Woodcliff Lake violated RLUIPA by imposing a substantial burden on Valley Chabad’s religious exercise when, on three occasions between 2006 and 2013, Valley Chabad attempted to purchase parcels of property in the borough in order to construct a house of worship and meeting center, called a Chabad house, large enough to meet its needs. In each instance, the borough purchased or re-zoned the parcels, preventing development of a Chabad house. The complaint also alleges that this conduct and the borough’s eventual denial of Valley Chabad’s application for zoning relief to expand on its current property burdened Valley Chabad’s ability to worship freely without furthering a compelling government interest. 

As part of the consent decree, the borough will permit Valley Chabad to construct a new Chabad house on its property. The resolution would also enjoin the borough from acting in a manner that violates RLUIPA and require the borough to establish a procedure for receiving and resolving RLUIPA complaints, train its employees on RLUIPA’s requirements, and submit regular reports to the United States and the court on its compliance. In the separate agreement that resolves the related private action, the borough agreed to pay Valley Chabad $1.5 million to resolve its claims for damages and attorney’s fees that arose from the borough’s conduct.  

RLUIPA is a federal law that protects religious institutions from unduly burdensome or discriminatory land use regulations. In June 2018, the Justice Department announced its Place to Worship Initiative, which focuses on RLUIPA’s provisions that protect the rights of houses of worship and other religious institutions to worship on their land. More information is available at www.justice.gov/crt/placetoworship.

People who believe they have been subjected to discrimination in land use or zoning decisions may contact the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339 or the Civil Rights Division Housing and Civil Enforcement Section at (800) 896-7743, or through the complaint portal on the Place to Worship Initiative website. More information about RLUIPA, including questions and answers about the law and other documents, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.

The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division and Assistant U.S. Attorney Susan Millenky of the Civil Rights Unit, Civil Division.

NEWARK, N.J. – Seven members of the U.S. Attorney’s Office, District of New Jersey, are among those who were honored by the Department of Justice’s 36th Annual Director’s Awards this year, U.S. Attorney Craig Carpenito announced today.

Executive Assistant U.S. Attorney Rahul Agarwal received a Director’s Award for Superior Performance in the Criminal Division. AUSA Agarwal led the investigation and prosecution of seven Paterson, New Jersey, police officers for crimes including the brutal assault of a suicidal hospital patient; the distribution and sale of narcotics; unlawful vehicle stops, searches, and seizures; unlawful use of force; and the theft and extortion of money and property from Paterson residents. His work, which was described in the local press as “a story of the justice system working,” is an example of the important role that the Department of Justice continues to play in maintaining public trust in our local police departments and in ensuring that every community receives the commitment to public safety to which it is entitled.  

Assistant U.S. Attorneys Michael Campion, Chief of the office’s Civil Rights Unit, and Kelly Horan Florio, a member of that unit, each received a Director’s Award for Superior Performance in the Civil Division, for their productive and successful affirmative civil enforcement practice. Collaborating with DOJ’s Civil Rights Division and other Department of Justice colleagues, they zealously pursue and obtain justice on behalf of those who have been deprived of their civil rights. Among other causes, they have fought for the rights of military personnel under the Servicemembers Civil Relief Act, the disabled and mobility-impaired under the Americans with Disabilities Act, the imprisoned under the Civil Rights of Institutionalized Persons Act, victims of discrimination under the Civil Rights Act and the Fair Housing Act, and persons of faith under the Religious Land Use Institutionalized Persons Act. As recognized experts in civil rights, they are frequent speakers at events across New Jersey, educating the public about civil rights and the Department's notable civil rights initiatives, including the Department's Initiative to Combat Sexual Harassment in Housing, Place of Worship Initiative and the Servicemembers and Veterans Initiative.  

A team comprised of nine attorneys and eLitigation professionals from the U.S. Attorney’s Office and the Executive Office for U.S. Attorneys (EOUSA) were honored for their cooperative effort in overhauling the eLitigation practices and protocols for the District of New Jersey. The award recipients from the U.S. Attorney’s Office, Jason DeJesus, Sergey Gluzberg, Richard Jones, and AUSA Daniel Shapiro, formulated the Office’s standalone eLitigation Unit; improved the eLitigation competencies of paralegals; developed and automated a common folder structure for civil and criminal cases; instituted an electronic system for the generation and tracking of grand jury subpoenas; and adopted workflows for the intake, processing, review, and production of data. They were honored together with Susan Cooke, John Haried, Tonia Jones, Tammy Reno, and Virginia Vance from EOUSA, who provided exemplary support throughout the restructuring.

“Every day, the men and women who work in our office do their jobs with an extraordinary level of skill and professionalism,” U.S. Attorney Craig Carpenito, District of New Jersey, said. “That our work was recognized in three separate areas this year – criminal, civil and administrative – speaks to that dedication throughout every aspect of our work. I am particularly pleased that the Department this year recognized our office’s enduring commitment to protecting Americans’ civil rights through both affirmative civil enforcement and criminal investigation and prosecution. I congratulate all of the recipients on their achievements and am proud to call myself their colleague.”

The traditional ceremony held in the Great Hall at the Robert F. Kennedy Department of Justice Building had to be cancelled this year in response to the COVID-19 pandemic.

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.

NEWARK, N.J. – A Middlesex County, New Jersey, corporation involved in consulting, technology and staffing and using primarily foreign nationals in the United States pursuant to H1-B visas has agreed to resolve allegations that it violated immigration and employment regulations concerning continuous employment and wage requirements, U.S. Attorney Craig Carpenito announced today.

The United States contended that from January 2014 through June 2018 many of Savantis Solutions LLC’s H-1B workers were not paid the required wage in regular intervals at the required wage rate throughout their period of employment. Savantis, based in Edison, New Jersey and formerly known as Vedicsoft Solutions LLC and Vedicsoft Holdings LLC, failed to properly pay many of its H-1B workers in conformance with their applications to the federal government and federal regulations. The United States also contended that Savantis improperly recruited H-1B workers by requesting that they provide security deposits to Savantis prior to Savantis submitting their H-1B Cap lottery applications.

The resolution requires the company to pay $345,365 in restitution, which will be used to pay back wages plus interest to employees and former employees of the company. Savantis cooperated in the investigation of the matter and undertook compliance efforts in response. Pursuant to the agreement, the company is also required to hire an outside law firm to serve as a monitor to ensure ongoing and continued compliance with the relevant rules and regulations for the next three years.

U.S. Attorney Carpenito credited special agents of the Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka; the U.S. Department of Homeland Security, Homeland Security Investigations, Newark Field Office, under the direction of Special Agent in Charge Jason Molina; the Department of Labor, Wage and Hour Division’s Southern New Jersey District Office under the direction of District Director, Charlene Rachor; and U.S. Citizenship and Immigration Services, Office of Fraud Detection and National Security, Vermont Service Center and Newark Field Office, leading to today’s resolution.

The government is represented by Assistant U.S. Attorney David E. Dauenheimer, Deputy Chief of the U.S. Attorney's Office’s Government Fraud Unit in Newark.

CAMDEN, N.J. – A Texas woman today admitted her role in a conspiracy to distribute heroin, U.S. Attorney Craig Carpenito announced.

Cristina Godinez, 36, of San Antonio, Texas, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging her with one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.

Alba Lilia Diaz, 43, of Chicago, Illinois, a co-defendant, pleaded guilty July 28, 2020, to an information charging her with one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin.

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

On July 22, 2019, Diaz travelled to New Jersey to conduct a heroin sale. She provided a sample of heroin and agreed to deliver 15 kilograms of heroin several days later. On July 25, 2019, Diaz and Godinez drove to New Jersey from Chicago with the heroin in their vehicle. When they arrived in New Jersey, Godinez negotiated the sale while Diaz waited with the drugs in a hotel room. Once a price was agreed to, Diaz brought the heroin to the buyer’s car. Special agents from the Department of Homeland Security, Homeland Security Investigations (HSI) arrested the defendants and seized the drugs.

The conspiracy counts to which the defendants pleaded guilty carry a mandatory minimum term of 10 years in prison, a maximum of life in prison and a fine of $10 million, or twice the gross gain or loss caused by the offense. Sentencing for Godinez is scheduled for Jan. 19, 2021. Diaz is scheduled to be sentenced on Nov. 20, 2020.

U.S. Attorney Carpenito credited special agents of HSI, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to the guilty pleas. He also thanked the Drug Enforcement Administration, the New Jersey State Police, the Camden County Prosecutor’s Office, and the Gloucester County HIDTA Task Force for their assistance with the case.

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

NEWARK, N.J. – An Essex County, New Jersey, man previously convicted of multiple felonies admitted today to possessing a firearm and ammunition, U.S. Attorney Craig Carpenito announced.

Sharif Clarke, 38, of Irvington, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding indictment charging him with one count of possession of a firearm and ammunition by a convicted felon.

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

On Dec. 3, 2018, Clarke knowingly possessed a Glock .40-caliber handgun loaded with nine rounds of Remington ammunition. At that time, Clarke had previously been convicted in Essex County Superior Court of resisting and eluding arrest and of possession of a controlled substance on school property, both of which are felonies.

The charge to which Clarke pleaded guilty carries a maximum penalty of 10 years in prison and a fine of up to $250,000. Sentencing is scheduled for Jan. 21, 2020.

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

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the leadership of Special Agent in Charge Charlie J. Patterson, and the Newark Department of Public Safety, under the leadership of Public Safety Director Anthony F. Ambrose, with the investigation leading to today’s guilty plea.

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

NEWARK, N.J. – A Pittsburgh, Pennsylvania, man was indicted today on charges of possessing with intent to distribute fentanyl and cocaine, U.S. Attorney Craig Carpenito announced.

Kenswick Austin, 45, is charged with one count of possession with intent to distribute more than 400 grams of fentanyl and one count of possession with intent to distribute at least 500 grams of cocaine. Austin was previously charged by complaint on March 31, 2020.

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

Between March 13, 2020, and March 28, 2020, Austin participated in multiple meetings and telephone calls to arrange the shipment to New Jersey of a package containing controlled substances. On March 30, 2020, the package arrived at an agreed-upon location, and Austin accompanied several other individuals to take possession of it. After a trained narcotics detection canine alerted to the presence of narcotics, law enforcement searched the package pursuant to a federal search warrant and found it to contain approximately one kilogram each of substances confirmed by laboratory testing to be fentanyl and cocaine.

The charge of possession with intent to distribute more than 400 grams of fentanyl carries a minimum punishment of 10 years in prison, a maximum of life in prison, and a $10 million fine. The charge of possession with intent to distribute 500 grams or more of cocaine carries a minimum punishment of five years in prison, a maximum of 40 years in prison, and a $5 million fine.

U.S. Attorney Carpenito credited special agents and task force officers of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to the charge. He also thanked the Bound Brook, New Jersey, Police Department, under the direction of Chief of Police Vito Bet, and the Somerset County Prosecutor’s Office’s Crime Suppression Unit, under the direction of Prosecutor Michael H. Robertson, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the Cybercrime 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.

CAMDEN, N.J. – A federal grand jury has returned a 16-count indictment charging a physician and pharmaceutical sales representative with defrauding New Jersey state health benefits programs and other insurers out of more than $2.5 million by submitting fraudulent claims for medically unnecessary prescriptions, as well as unlawfully obtaining and disclosing individually identifiable patient health information protected by HIPAA, U.S. Attorney Craig Carpenito announced. 

Keith Ritson, 40, of Bayville, New Jersey, and Frank Alario, M.D., 63, of Delray Beach, Florida, are charged with conspiracy to commit health care fraud and wire fraud, as well as individual acts of health care fraud and wire fraud. Both men are charged with a second conspiracy to wrongfully obtain and disclose patients’ individually identifiable health information. Alario is additionally charged with making false statements in a health care matter, and Ritson faces additional charges of conspiring to commit money laundering and substantive counts of money laundering.

The cases are assigned to U.S. District Judge Robert B. Kugler in Camden. The indicted defendants are expected to make their initial appearances before U.S. Magistrate Judge Ann Marie Donio in Camden federal court via videoconference on Sept. 10, 2020.

According to the indictment:

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.

The conspirators recruited individuals to obtain very expensive and medically unnecessary compounded medications from a Louisiana pharmacy, Central Rexall Drugs Inc. (Central Rexall). The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, and vitamin combinations – would be reimbursed by insurance providers in amounts in the 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, police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the indictment 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, the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, and other insurance plans.  The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey or the other insurance plans for the amounts paid.

In the first charged conspiracy, Ritson recruited individuals with prescription drug benefits administered by the Pharmacy Benefits Administrator to receive unnecessary compound medication prescriptions, which Alario signed without examining, speaking with, or establishing a physician-patient relationship with the patient. Alario sent a form to Central Rexall’s compliance program in which he falsely attested that he saw and spoke with patients in person and established a physician-patient relationship prior to prescribing Central Rexall medications. Ritson and Alario earmarked established patients of Alario’s medical practices who had insurance that covered the expensive compound medications. Alario prescribed the medications not for the patient’s need or request, but for the benefits he and Ritson stood to gain. The scheme caused the Pharmacy Benefits Administrator to pay over $2.5 million for the fraudulent prescriptions. For his role in the scheme, Ritson received a percentage of the amount that Central Rexall received from the Pharmacy Benefits Administrator for the medications, and Alario benefitted by receiving free meals, entertainment, travel, and other remuneration from Ritson. 

The indictment also charges Ritson and Alario with a separate scheme to wrongfully obtain and disclose individually identifiable patient health information for their own personal gain and commercial advantage. As a sales representative not affiliated with Alario’s medical practices, Ritson should not have had access to patients’ confidential information. However, since only certain insurances covered the compound medications promoted by Ritson, the defendants accessed patient files and other identifying information to ascertain patients’ insurance coverage. On at least one occasion, Ritson and Alario jointly accessed patient information on an office computer for the purpose of determining insurance coverage for the medications. Ritson also had access to parts of Alario’s office where patient information was stored or could be heard and observed, including employee-restricted areas with medical files, fax machines, and computers. Ritson was also frequently present in exam rooms during patient appointments with Alario for the purpose of promoting the compound medications, at which time Alario commonly introduced Ritson to his patients as his “nephew” or gave the impression that Ritson was affiliated with the medical practice.  By being present during the patient exams, Ritson had access to patients’ medical files and protected health information.

The health care fraud and wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison; each wire fraud count carries a maximum potential penalty of 20 years in prison; each health care fraud count carries a maximum penalty of 10 years in prison; the false statement count and the conspiracy to wrongfully obtain or disclose individually identifiable patient health information count each carry a maximum penalty of five years in prison; and the money laundering charges carry a maximum penalty of 10 years in prison. All of the offenses are also each punishable by a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater.

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, with the investigation leading to the indictment. 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 Christina O. Hud and R. David Walk Jr. of the U.S. Attorney’s Office in Camden.

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

NEWARK, N.J. – Two Essex County, New Jersey, men – a compliance safety and health officer (CSHO) with the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA) and his brother – are scheduled to appear today on charges that they conspired to extort $6,000 in cash from a general contractor, U.S. Attorney Craig Carpenito announced.

Alvaro Idrovo, 44, of Bloomfield, New Jersey, and Paul Idrovo, a/k/a “Jose Diaz,” 46, of Nutley, New Jersey, are charged by complaint with knowingly and intentionally conspiring to commit an offense against the United States, specifically to commit an act of extortion under color of Alvaro Idrovo’s office or employment with OSHA. The defendants are scheduled to appear later today by videoconference before U.S. Magistrate Judge Leda Dunn Wettre. 

According to the complaint:

Alvaro Idrovo was assigned to investigate an anonymous complaint concerning the misuse of an extension ladder at a North Bergen work site of Company 1. He told Individual 1, the owner of Company 1, that Individual 1 was in violation of OSHA regulations for not having the necessary safety training certificates for Company 1’s workers to be on ladders at the work site. Alvaro Idrovo falsely advised Individual 1 that he needed to obtain training certificates with a specific vendor named “Jose Diaz” or Individual 1 would be subject to exorbitant fines and possible arrest for the violation.

Individual 1 contacted the phone number supplied by Alvaro Idrovo, which actually belonged to Paul Idrovo, posing as “Jose Diaz,” who told Individual 1 that the required OSHA training certificates would cost $13,000 in cash and repeated Alvaro Idrovo’s false assertions that if Individual 1 did not get the training certificates that Individual 1 would be in big trouble with OSHA, including big fines and possible jail. In follow-up telephone conversations with Paul Idrovo, Individual 1 was able to negotiate the fee down to $6,000 in cash.

When OSHA officials learned of Idrovo’s attempt to extort Individual 1 while questioning Individual 1 on an unrelated matter, the OSHA officials referred the matter to federal law enforcement officials, who arranged for Individual 1 to make consensual recordings with both Alvaro and Paul Idrovo. During an April meeting surveilled by law enforcement, Individual 1 paid Paul Idrovo $6,000 in cash in exchange for ladder and safety awareness training certificates and a safety and health plan. Alvaro Idrovo thereafter attached copies of the training certificates and the plan to his OSHA reports regarding Company 1’s violation despite knowing that the training certificates falsely claimed that training had been provided to the noted individuals in March 2020, “Jose Diaz” had provided training, and the alleged training was OSHA certified.  

The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine.

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

The government is represented by Senior Trial Counsel Leslie Faye Schwartz, of the United States Attorney’s Office’s Special Prosecutions Division.

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

TRENTON, N.J. – A Duluth City, Georgia, man was sentenced today to 61 months in prison for his role in a conspiracy to hijack the credit card accounts of multiple victims in order to fraudulently purchase hundreds of thousands of dollars in gift cards and high-end products, U.S. Attorney Craig Carpenito announced.

Akintunde Adeyemi, 35, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an indictment charging him with one count of conspiring to commit bank fraud and one count of aggravated identity theft. Judge Sheridan imposed the sentence by videoconference today.

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

From July 2016 through May 2017, Adeyemi and others participated in a “credit card takeover” conspiracy to obtain control of credit card accounts by using stolen personal information to apply for compromised credit cards. Upon credit approval, Adeyemi provided his conspirators with fake government identifications and the account information to retrieve the credit cards associated with the compromised accounts. Adeyemi directed conspirators to use the compromised credit card accounts to purchase gift cards and high-value items, such computer tablets, cell phones, and other electronic devices, throughout New Jersey and Georgia. The scheme caused over $600,000 in losses to financial institutions who issued the credit cards. Two of Adeyemi’s co-conspirators, Oluwaseun Jato and Funmilola Adekanmi, have also pleaded guilty to participating in the scheme and are scheduled to be sentenced on Oct. 7, 2020.

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

U.S. Attorney Carpenito credited inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, and special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorneys Ray Mateo of the Criminal Division in Trenton, and Nicholas Grippo, Deputy Chief of the Criminal Division in Newark.

TRENTON, N.J. – Two Maryland men today admitted participating in a conspiracy to defraud health insurance companies through a multi-state patient brokering scheme in which they directed recruiters to bribe drug-addicted individuals to enroll in drug rehabilitation in exchange for referral fees from the rehabilitation centers, U.S. Attorney Craig Carpenito announced.

Seth Logan Welsh, 26, of Forest Hill, Maryland, and John C. Devlin, 33, of Baltimore, Maryland, each pleaded guilty by teleconference before U.S. District Judge Peter G. Sheridan to separate informations charging them with one count of conspiracy to commit health care fraud.

Peter Costas, of Red Bank, New Jersey, pleaded guilty to the same charge in May 2020.

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

Welsh, Devlin, and their conspirators owned and operated a marketing company in California. Welsh and Devlin used the marketing company to help orchestrate a scheme in New Jersey, Maryland, California, and other states that involved bribing individuals addicted to heroin and other drugs to enter into drug rehabilitation centers so Welsh, Devlin, and their conspirators could generate referral fees from those facilities.

The marketing company maintained contractual relationships with drug treatment facilities around the country and engaged a nationwide network of recruiters – including Costas in New Jersey – to identify and recruit potential patients, from New Jersey and other states, who were addicted to heroin or other drugs and who had robust private health insurance.

To convince drug-addicted individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas and other recruiters offered to bribe them – often as much as several thousand dollars – with Welsh’s and Devlin’s approval. Once the patients agreed to enroll in drug rehabilitation in exchange for the offered bribe, Welsh, Devlin, and Costas would arrange and pay for cross-country travel to the drug treatment centers in California and other states. Costas would stay in touch with the New Jersey patients at the facilities and specifically instruct them to stay at the facilities long enough to generate referral payments, and he would pass along information to Welsh and Devlin about the patients’ status at the facilities. Welsh and Devlin would monitor the other patients they brokered by speaking to other recruiters or to the owners and employees of the drug treatment facilities themselves.

Welsh, Devlin, Costas, and their conspirators often directed patients to different rehabilitation facilities month after month to generate multiple referral payments without regard to whether the substance abuse treatment was medically necessary or effective.

Welsh, Devlin, Costas, and their conspirators also sent patients to facilities in California and other states that they knew provided ineffective drug treatment or actually fostered drug use on their premises. After sending one patient to a drug treatment facility in Los Angeles, California, the patient reported to Costas that “everyone’s high” that “it’s a flop,” meaning that it was not a legitimate substance abuse treatment facility providing bona fide drug treatment services. When that information was relayed to Devlin in a text message, he responded “Lol.” A few days later, Welsh texted Devlin and Costas to report that the patient was “smoking meth” at the drug treatment facility. Costas replied, “Yes. [The patient is] freaking out at me. [He] said out of the 10 ppl. [people] in [the drug treatment facility] only 4 are sober. The rest are smoking meth and dope . . . .  [The patient] said everyone’s high and it’s a complete flop and [he] tried to stay sober around it without ‘ratting’ as long as he could.” Costas’s text message meant that the patient was trying to stay in drug rehabilitation long enough to trigger referral payments to Welsh’s and Devlin’s marketing company without relapsing.

The facilities typically paid Welsh’s and Devlin’s marketing company a fee of $5,000 to $10,000 per patient referral. Welsh, Devlin, and their conspirators shared that money among themselves. Costas and other recruiters received approximately half that amount for each patient they brokered. During the scheme, Welsh, Devlin, and their conspirators brokered scores of patients to drug treatment facilities around the country, and the conspiracy caused millions of dollars of losses for health insurers.

Welsh and Devlin face a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 11, 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 pleas.

The government is represented by Senior Trial Counsel Jason S. Gould of the Health Care Fraud Unit in Newark.

TRENTON, N.J. – A Union County, New Jersey, man today was sentenced to 120 months in prison for his role as the supplier of large quantities of heroin and cocaine in a narcotics trafficking conspiracy in the Bayshore area of Monmouth and Middlesex counties, U.S. Attorney Craig Carpenito announced today.

Gregory Gillens, 47, of Hillside, New Jersey, previously pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute more than one kilogram of heroin. Gillens also admitted to conspiring to distribute and possess with intent to distribute a quantity of cocaine. Judge Martinotti imposed the sentence today via videoconference.

Today’s sentence follows a coordinated takedown in November 2018 of 15 defendants charged in a federal criminal complaint with conspiracy to distribute heroin and cocaine. To date, 12 defendants have pleaded guilty, including lead defendant Guy Jackson. Defendant Deberal Rogers has been indicted.

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

From May 2017 to November 2018, Gillens and others engaged in a narcotics conspiracy that operated in the Raritan Bayshore region of Middlesex and northern Monmouth counties.

Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin and cocaine, the use of confidential sources of information, and other investigative techniques, law enforcement officers learned that Gillens regularly supplied large quantities of heroin and cocaine for further distribution, including to co-defendant Jackson. Some of the heroin distributed by the conspiracy contained fentanyl, a dangerous synthetic opioid.

Pursuant to search warrants executed on the day of Gillens’ arrest or soon thereafter, law enforcement recovered more than $96,000 in cash and more than 600 grams of cocaine from Gillens’ former residence and from inside a vehicle he had previously used to deal narcotics.  The vehicle and the cash have been administratively forfeited to the United States.

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

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Organization Task Force (including representatives from the Bradley Beach Police Department, Brick Police Department, Howell Police Department, Marlboro Police Department, Monmouth County Sheriff's Office, Toms River Police Department, and Union Beach Police Department) under the direction of Special Agent in Charge George M. Crouch Jr.; special agents of the FBI, Philadelphia Division, Scranton Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the New Jersey State Police, under the direction of Col. Patrick J. Callahan, Superintendent; the Matawan Police Department, under the direction of Chief Thomas J. Falco, Jr.; the Holmdel Police Department, under the direction of Chief John Mioduszewski; the Highlands Police Department, under the direction of Chief Robert Burton; the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni; the Old Bridge Police Department, under the direction of Chief William A. Volkert; the Keansburg Police Department, under the direction of Chief James K. Pigott; the Hazlet Police Department, under the direction of Chief Philip Meehan; and the Aberdeen Police Department, under the direction of Chief Richard A. Derechailo, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office’s Criminal Division in Trenton.

The charges and allegations against the remaining three defendants are merely accusations and they are presumed innocent unless and until proven guilty.

NEWARK, N.J. – A Paterson, New Jersey, woman was arrested today in connection with her alleged role in a conspiracy to distribute heroin and fentanyl in New Jersey and Vermont, U.S. Attorney Craig Carpenito announced. 

Nysifah Deaveareaux, 27, is charged by criminal complaint with conspiracy to distribute 40 grams or more of fentanyl and 100 grams or more of heroin. She is scheduled to make her initial court appearance today by videoconference before U.S. Magistrate Judge James B. Clark III.

Caron J. Abrams, 26, of Paterson, was charged by criminal complaint on Aug.14, 2020, with possession with intent to distribute 40 grams or more of fentanyl. He appeared by videoconference before the U.S. Magistrate Judge Joseph A. Dickson and was detained without bail.

Shamir Williams, 25, of Paterson, was charged by complaint on Aug. 14, 2020, along with Deaveareaux, with conspiracy to distribute 40 grams or more of fentanyl and 100 grams or more of heroin. On Aug. 20, 2020, Williams appeared by videoconference before U.S. Magistrate Judge Cathy L. Waldor and was detained without bail.

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

From May 2020 through Aug. 13, 2020, Williams negotiated sales of heroin to another individual. On June 11, 2020, pursuant to these negotiations, Deaveareaux transported approximately 250 “bricks,” or over 12,000 individual doses of heroin, from Paterson and distributed the heroin in Vermont. On Aug. 13, 2020, Abrams attempted to deliver 200 “bricks,” or over 9,000 individual doses of heroin and fentanyl, to an individual at a Passaic County Home Depot parking lot, where he was taken into custody. 

Each of the crimes charged carries a minimum penalty of five years in prison, a maximum penalty of 40 years in prison, and a fine of at least $5 million.

U.S. Attorney Carpenito credited special agents and task force officers with the DEA in New Jersey and New England, under the direction of Special Agents in Charge Susan Gibson and Brian D. Boyle, respectively, with the investigation leading to the charges.

This investigation was conducted as part of the Paterson Violent Crime Initiative (VCI). The VCI was formed in 2020 by the U.S. Attorney’s Office for the District of New Jersey and the Passaic County Prosecutor’s Office, for the sole purpose of combatting violent crime in and around Paterson. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration’s (DEA) New Jersey Division, the Department of Homeland Security – Homeland Security Investigations, the Paterson Police Department, the Passaic County Prosecutor’s Office, the Passaic County Sheriff’s Office, New Jersey State Parole, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.

The government is represented by Assistant U.S. Attorney Francesca Liquori of the Organized Crime and Gangs Unit.

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

CAMDEN, N.J. – A Camden County, New Jersey, man was charged today for detonating an explosive device at a local business and unlawfully possessing unregistered destructive devices and a short-barreled rifle, U.S. Attorney Craig Carpenito announced.

Dwayne A. Vandergrift Jr., 35, of Gloucester City, New Jersey, is charged by complaint with malicious use of explosives, unlawful possession of two destructive devices, and unlawful possession of a short-barreled rifle. Vandergrift will make his initial appearance before U.S. Magistrate Judge Karen M. Williams at a later date.

According to the complaint:

During the early morning hours of Aug. 26, 2020, Vandergrift placed an explosive device on the front door of a local gym near his home in Gloucester City. Security camera footage recorded Vandergrift fleeing the area moments before the device exploded, badly damaging the front door and shattering its glass. On Aug. 28, 2020, federal and local law enforcement officers executed a search warrant at Vandergrift’s home and found substantial quantities of bomb making materials, numerous weapons, including an unregistered short barreled rifle, several tactical vests outfitted with body armor and loaded 30-round ammunition magazines, and a marijuana grow operation containing approximately 85 marijuana plants. Upon examining Vandergrift’s personal computer devices, investigators discovered that he had recently researched how to construct and utilize various explosive devices, including pipe and pressure cooker bombs. Vandergrift was arrested by local authorities on Aug. 28, 2020, and charged by the Camden County Prosecutor’s Office. He is presently in custody on those charges. 

The malicious use of explosive charge carries a maximum prison term of 20 years and a maximum fine of $250,000. The charges for possession of the unregistered destructive devices and short-barreled rifle carry maximum prison terms of 10 years each and maximum fines of $250,000.

U.S. Attorney Carpenito credited special agents and task force officers of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll and the FBI’s Philadelphia Joint Terrorism Task Force, with the investigation leading to today’s arrest.  He also thanked officers of the Gloucester City Police Department, under the direction of Police Chief Brian Morrell; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Camden County Sheriff’s Office, under the direction of Sheriff Gilbert L. Wilson; the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Charlie J. Patterson; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared Maples; Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina; and the New Jersey State Police, under the direction of Col. Patrick J. Callahan.

The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office’s Criminal Division in Camden.

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

TRENTON, N.J. – A Trenton man was sentenced today to 160 months in prison for his role in a large drug trafficking conspiracy that distributed more than one kilogram of heroin in Trenton and the surrounding area, U.S. Attorney Craig Carpenito announced. 

Omar Council, a/k/a “Stacks,” a/k/a “O,” a/k/a “Y-O,” a/k/a “Snow,” 41, previously pleaded guilty before Chief U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin. Judge Wolfson imposed the sentence today.

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

In October 2018, Council and 25 other members of a drug trafficking conspiracy operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. On Aug. 8, 2019, a grand jury returned a 15-count second superseding indictment charging Council and eight other defendants, Jerome Roberts, a/k/a “Righteous,” a/k/a “Lee”; David Antonio, a/k/a “Papi,” a/k/a “Pop,” a/k/a “Victor Arias,” a/k/a “Santiago Ramirez”; Brian Phelps, a/k/a “B-Money,” a/k/a “B”; Timothy Wimbush, a/k/a “Young Money”; Taquan Williams, a/k/a “Trip”; Jubri West; Dennis Cheston, Jr., a/k/a “Beans”; and Wayne K. Bush with various crimes relating to the drug-trafficking conspiracy, including firearms charges against Phelps, Wimbush, Williams, West, and Cheston. To date, 23 defendants have pleaded guilty in connection with their participation in the conspiracy.

From as early as October 2017 to October 2018, the defendants and others engaged in a narcotics conspiracy that operated in the areas of Martin Luther King Boulevard, Sanford Street, Middle Rose Street, Southard Street, Hoffman Avenue, and Coolidge Avenue in Trenton, and which sought to profit from the distribution of heroin and numerous other controlled substances. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders – including over a cellular telephone used by Council – controlled purchases of heroin from Council and others, the use of confidential sources of information, and other investigative techniques, law enforcement learned that Council was a significant drug distributor in and around Trenton. Council maintained close relationships with other conspirators, including Jakir Taylor, who obtained regular supplies of hundreds of “bricks” of heroin from defendant David Antonio, whom they referred to as “Papi.” Council obtained supplies of heroin directly from Taylor and others (including supplies of heroin originating from Antonio), and regularly re-distributed that heroin to others in and around Trenton.

In addition to the prison term, Judge Wolfson sentenced Council to five years of supervised release.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge George M. Crouch, Jr.; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson; officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley; officers of the Princeton Police Department, under the direction of Chief of Police Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief of Police John P. Stemler III; officers of the Burlington Township Police Department, under the direction of Police Director Bruce Painter; and detectives of the Burlington County Prosecutor’s Office, under the  direction of Prosecutor Scott A. Coffina, with the investigation leading to today’s conviction and sentence. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the New Jersey State Board of Parole for their assistance in the case.

The government is represented by J. Brendan Day, Attorney-in-Charge of the U.S. Attorney’s Office’s Trenton Branch Office, and Assistant U.S. Attorney Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Greater Trenton Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies to enhance the identification, apprehension, and prosecution of individuals involved in gang-related activities, violent crime, and drug distribution in and around the greater Trenton area. 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 charges and allegations against the remaining defendants are merely accusations and those defendants are presumed innocent unless and until proven guilty.

A New Jersey attorney was arrested today and charged with fraudulently obtaining approximately $9 million in Paycheck Protection Program (PPP) loans, announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Craig Carpenito of the District of New Jersey.

Jae H. Choi, 48, a licensed attorney of Cliffside Park, New Jersey, was charged by criminal complaint, unsealed today upon his arrest, in the District of New Jersey with three counts of bank fraud and one count of money laundering.

The complaint alleges that Choi submitted three fraudulent PPP loan applications to three different lenders on behalf of three different businesses that purportedly provided educational services.  The complaint also alleges that Choi fabricated the existence of hundreds of employees, manipulated bank and tax records, and falsified a driver’s license on the applications.  

Choi allegedly falsely represented to the lenders that the companies controlled by him had hundreds of employees and paid over $3 million in monthly wages.  Based on Choi’s alleged misrepresentations, each lender funded each of the three businesses with an approximately $3 million PPP loan.  As a result, the complaint alleges that Choi received a total of nearly $9 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

Choi allegedly used the fraudulently-obtained PPP loan proceeds to pay for numerous personal expenses, including to buy, among other things, a nearly one million-dollar residential home in Cresskill, New Jersey, to fund approximately $30,000 in remodeling and other improvements, and to invest millions more in the stock market through an account held in the name of his spouse.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29.  It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.  One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent.  Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.  The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

This case was investigated by IRS – Criminal Investigation, the U.S. Postal Inspection Service, the Small Business Administration Office of the Inspector General, and the Social Security Administration – Office of the Inspector General.  Trial Attorney Andrew Tyler and Assistant U.S. Attorney Andrew Macurdy of the District of New Jersey are prosecuting the case.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

NEWARK, N.J. – A Middlesex County, New Jersey, man and two Brooklyn, New York, men were charged today with bank fraud and identity theft, U.S. Attorney Craig Carpenito announced.

Benjamin Rich, 40, of Edison, New Jersey, and Frank Ambrosio, 35, and Felix Alamo, 59, both of Brooklyn, are each charged by complaint with conspiracy to commit bank fraud and aggravated identity theft. Rich and Alamo are scheduled to appear today by videoconference before U.S. Magistrate Judge James B. Clark III. Ambrosio remains at large.

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

Rich, Ambrosio, and Alamo, and others, allegedly conspired to defraud banks across New Jersey, and elsewhere, by using the personal identification information (PII) of victims to open fraudulent bank accounts in order to deposit fraudulently obtained checks. Rich would obtain checks that were either stolen or counterfeited. He would then create sham businesses with names closely resembling those of the payees appearing on the stolen or counterfeited checks. For example, if defendant Rich obtained a check made payable to “ABC Corp.,” he would create a sham business called “ABC LLC.” Rich would later provide Ambrosio, Alamo, and other conspirators, with fraudulent identification documents bearing their photographs and the victims’ PII and business opening documents in order to open the fraudulent bank accounts for the sham businesses.  The conspirators would deposit the fraudulently obtained or counterfeited checks into those fraudulent bank accounts and then withdraw the funds before anyone could detect the fraud.   

The charge of bank fraud carries a maximum of 30 years in prison and a maximum fine of $1 million, or twice the gain derived or loss caused by the offense, whichever is greater. The charge of aggravated identity theft carries a statutory minimum term of imprisonment of two years in prison, which must run consecutively to any other term of imprisonment imposed, and a fine of $250,000, or twice the gain derived or loss caused by the offense.

U.S. Attorney Carpenito credited 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 charges.

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 complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

TRENTON, 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.

Amber Harris, 28, of Lake Ariel, 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.

Harris is the first of several defendants to plead guilty in long-running 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:

Harris worked as a medical assistant for Yitzachok “Barry” Kurtzer, a primary care physician with 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.

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 cell phone money transfer app.

Harris and another employee, Shanelyn Kennedy, also participated 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 app.

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 Jan. 5, 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; 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 R. 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 against the remaining defendants are merely accusations, and those defendants are presumed innocent unless and until proven guilty.

NEWARK, N.J. – A California man today admitted to conspiring to offer and sell unregistered securities and to subscribing to a false tax return in connection with his role in the BitClub Network, a cryptocurrency mining scheme worth at least $722 million, U.S. Attorney Craig Carpenito announced. 

Joseph Frank Abel, 50, of Camarillo, California, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to count two of the indictment, charging him with conspiracy to offer and sell unregistered securities. He also pleaded guilty to a separate information charging him with subscribing to a false tax return for the tax year 2017.

Abel and four codefendants – Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks, and Joseph Frank Abel – were charged by indictment in December 2019.

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

From April 2014 through December 2019, the BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme. Abel operated as a large-scale promoter of the BitClub Network. He promoted and sold shares of BitClub Network despite knowing that the network and its operators did not file a registration statement to register shares with the U.S. Securities and Exchange Commission.

Abel admitted taking money from investors in exchange for shares of the BitClub Network’s purported mining pools. In order to promote shares in the BitClub Network’s mining pools, he created and posted videos to the internet and gave presentations and speeches about the BitClub Network throughout the United States and numerous other countries, including in Asia, Africa, and Europe. As part of the conspiracy, Abel instructed investors in the United States to use a virtual private network, or “VPN,” to hide their U.S.-based IP addresses and evade detection and regulation by U.S. law enforcement.

Abel admitted failing to report on a Form 1040 United States Individual Income Tax Return for the tax year 2017 approximately $1 million in cryptocurrency as income he earned from his promotion of the BitClub Network.

The conspiracy charge to which Abel pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims. The tax charge to which Abel pleaded guilty carries a maximum penalty of three years in prison and a fine of $100,000. Sentencing is scheduled for Jan. 27, 2021.

U.S. Attorney Carpenito credited special agents and task force officers of the FBI Los Angeles Division’s West Covina Resident Agency, under the direction of Acting Assistant Director in Charge John F. Bennett; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; special agents of the IRS Los Angeles Field Office, under the direction of Special Agent in Charge Ryan L. Korner; the FBI Criminal Investigative Division, under the supervision of Assistant Director Calvin A. Shivers and the Financial Crimes Section, under the leadership of Section Chief Steven Merrill, and members of the Ventura Police Department with the investigation leading to today’s guilty plea.

Anyone who believes they may be a victim can find more information about the case, including a questionnaire for victims to fill out and submit, at: www.justice.gov/usao-nj/bitclub or the Department of Justice’s large case website www.justice.gov/largecases.

The government is represented by Unit Chief David W. Feder, Assistant U.S. Attorneys Jamie L. Hoxie and Anthony P. Torntore of the Cybercrime Unit, and Unit Chief Sarah Devlin and Assistant U.S. Attorney Joseph Minish of the Asset Recovery and Money Laundering Unit, of the U.S. Attorney’s Office in Newark.

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

NEWARK, N.J. – A Bergen County, New Jersey, attorney was arrested today and charged with fraudulently obtaining approximately $9 million in Paycheck Protection Program (PPP) loans, U.S. Attorney Craig Carpenito and Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, announced.

Jae H. Choi, 48, of Cliffside Park, New Jersey, is charged by complaint with three counts of bank fraud and one count of money laundering. He is expected to make his initial appearance by videoconference today before U.S. Magistrate Judge James B. Clark III.

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

Choi allegedly submitted three fraudulent PPP loan applications to three different lenders on behalf of three different businesses that purportedly provided educational services. The complaint also alleges that Choi fabricated the existence of hundreds of employees, manipulated bank and tax records, and falsified a driver’s license on the applications.

Choi allegedly falsely represented to the lenders that the companies controlled by him had hundreds of employees and paid over $3 million in monthly wages. Based on Choi’s alleged misrepresentations, each lender funded each of the three businesses with an approximately $3 million PPP loan. As a result, the complaint alleges that Choi received a total of nearly $9 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

Choi allegedly used the fraudulently obtained PPP loan proceeds to pay for numerous personal expenses, including to buy, among other things, a nearly $1 million home in Cresskill, New Jersey, to fund approximately $30,000 in remodeling and other improvements, and to invest millions more in the stock market through an account held in the name of his spouse.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted March 29. It is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.  In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.

The charges and allegations in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty in a court of law.

This case was investigated by IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn; the Small Business Administration Office of the Inspector General; and the Social Security Administration – Office of the Inspector General.

The government is represented by Assistant U.S. Attorney Andrew Macurdy of the District of New Jersey and Trial Attorney Andrew Tyler.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.