District of New Jersey
Press releases recorded for this federal judicial district.
Members and Associates of Violent Newark Street Gang Charged for Roles in Drug ConspiracyRead the Press Release
NEWARK, N.J. – Three members and associates of a violent street gang operating in Newark made their initial court appearances today on charges of conspiring to distribute narcotics, U.S. Attorney Craig Carpenito announced.
Zaire Dickerson, a/k/a “Tarzan,” 23, Shaquejah Wilson-Jones, a/k/a “Kiwi,” 23, and Nassir Grimsley, a/k/a “Chop,” 19, all of Newark, are each charged by complaint with one count of conspiracy to distribute and possess with intent to distribute heroin and cocaine base. They all appeared today by videoconference before U.S. Magistrate Judge Edward S. Kiel.
According to documents filed in this case and statements made in court:
Law enforcement has been investigating the 793 set of the Bloods street gang in Newark since at least June 2019. That investigation has revealed that Dickerson and Grimsley are members of the 793 Bloods and distribute narcotics for the gang. Wilson-Jones is associated with the 793 Bloods and distributes narcotics with Dickerson and Grimsley.
Members of this 793 set have been engaging in violent disputes with other gangs, trafficked narcotics, and committed various firearms offenses within and around Newark for years. Several recent violent crimes in Newark and elsewhere, are believed to be related to this gang’s operations.
The narcotics conspiracy charge carries a maximum potential penalty of 20 years in prison and a $1,000,000 fine.
U.S. Attorney Carpenito credited the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, and special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigations leading to the charges.
The government is represented by Assistant U.S. Attorney Desiree Grace Latzer of the U.S. Attorney’s Office Organized Crime and Gangs Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Camden County Businessman Admits Filing False Tax ReturnsRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, businessman today admitted filing false tax returns that failed to report all of his business income, U.S. Attorney Craig Carpenito announced.
Rodney Bush-Rowland, 41, of Camden, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to an information charging him with one count of making and subscribing a false income tax return.
According to documents filed in this case and statements made in court:
Bush-Rowland was the sole owner of To & Fro Transportation Inc., a Camden business that provided medical transportation services. Bush-Rowland admitted that during 2014 and 2015, he used a commercial check casher to negotiate over $2.7 million of To & Fro’s revenue checks. He admitted that he failed to include a large portion of the cashed checks on To & Fro’s corporate income tax returns. Bush-Rowland also admitted that he substantially underreported To & Fro’s income on his own individual income tax returns, causing a tax loss of more than $25,000.
In addition to filing false income tax returns, Bush-Rowland admitted to failing to pay over to the IRS employment taxes for To & Fro’s employees. During 2014, 2015, and 2016, Bush-Rowland filed quarterly employment tax returns that falsely reported that To & Fro paid all of the employment taxes due and owing for its employees. Bush-Rowland admitted that he actually failed to pay over more than $147,000 of To & Fro’s employment taxes during these three years.
The charge to which Bush-Rowland pleaded guilty carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing is scheduled for Dec. 16, 2020.
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 guilty plea.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office Criminal Division in Camden.
The Department of Justice Files Sexual Harassment Lawsuit Against Owner of Rental Properties in Elizabeth, New JerseyRead the Press Release
The Department of Justice announced today that it has filed a lawsuit alleging that the owner of rental properties in Elizabeth, New Jersey violated the Fair Housing Act by subjecting tenants to sexual harassment.
The complaint, filed in the U.S. District Court for the District of New Jersey, alleges that Joseph Centanni, who owns hundreds of rental units in and around Elizabeth, New Jersey, has subjected tenants and housing applicants to sexual harassment on multiple occasions since at least 2005. According to the complaint, Centanni demanded sexual favors like oral sex to get or keep housing, offered housing benefits like reduced rent in exchange for sexual favors, touched tenants and applicants in a way that was sexual and unwelcome, and made unwelcome sexual comments and advances to tenants and applicants. The complaint also alleges that Centanni initiated or threatened to initiate eviction actions against tenants who objected to or refused his sexual advances. According to the complaint, Centanni participates in the federal Housing Choice Voucher Program (also known as Section 8) and receives approximately $102,000 each month in Housing Choice Voucher payments.
“The Fair Housing Act protects the right of all persons in our nation to rent a home without suffering sexual exploitation at the hands of abusive landlords. Demanding sexual favors from tenants, especially those who are financially vulnerable, is illegal,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Fair Housing Act protects tenants from sexual harassment and retaliation by their landlords, and the Justice Department will hold accountable those who engage in such cruel, depraved, and illegal conduct and will work tirelessly to obtain relief for their victims.”
“No one should ever be forced to provide sexual favors, or otherwise endure sexual harassment, as a condition to keep or obtain housing,” said U.S. Attorney Craig Carpenito. “Sexual harassment in housing is illegal under the Fair Housing Act, and we will vigorously enforce this federal law to end this type of depraved behavior.”
Today’s lawsuit seeks monetary damages to compensate the victims, civil penalties to vindicate the public interest, and a court order barring future discrimination. The complaint contains allegations of unlawful conduct; the allegations must be proven in federal court.
Today’s lawsuit is the result of a joint investigative effort with the U.S. Department of Housing and Urban Development’s Fair Housing and Equal Opportunity Office and Office of Inspector General.
The Justice Department's Sexual Harassment in Housing Initiative is an effort to combat sexual harassment in housing led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The Attorney General recently reaffirmed this commitment by directing the Justice Department to deploy all available enforcement tools against anyone who tries to capitalize on the COVID-19 crisis by sexually harassing people in need of housing. U.S. Attorney Craig Carpenito has also reaffirmed the U.S. Attorney’s Office’s commitment to combatting sexual harassment in housing amid the COVID-19 pandemic. The goal of the department’s initiative is to address sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. As part of the initiative, the Justice Department developed a public service announcement and formed a joint task force with HUD to combat sexual harassment in housing. Since launching the Initiative in October 2017, the Department of Justice has filed 17 lawsuits alleging sexual harassment in housing.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.
Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental dwellings owned or managed by Centanni, or who have other information that may be relevant to this case, can contact the Housing Discrimination Tip Line toll free, at 1-833-591-0291, and select option number one to leave a message.
Individuals can also report sexual harassment and other forms of housing discrimination by contacting the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339, by e-mailing the Justice Department at [email protected], or by submitting a report online.
Department of Justice Files Sexual Harassment Lawsuit Against Owner of Rental Properties in Elizabeth, New JerseyRead the Press Release
NEWARK, N.J. – The Department of Justice announced today that it has filed a lawsuit alleging that the owner of rental properties in Elizabeth, New Jersey, violated the Fair Housing Act by subjecting tenants to sexual harassment, U.S. Attorney Craig Carpenito announced.
The complaint alleges that Joseph Centanni, who owns hundreds of rental units in and around Elizabeth, has subjected tenants and applicants to sexual harassment on multiple occasions since at least 2005.
“No one should ever be forced to provide sexual favors, or otherwise endure sexual harassment, as a condition to keep or obtain housing,” U.S. Attorney Craig Carpenito said. “Sexual harassment in housing is illegal under the Fair Housing Act, and we will vigorously enforce this federal law to end this depraved type of behavior.”
“The Fair Housing Act protects the right of all persons in our nation to rent a home without suffering sexual exploitation at the hands of abusive landlords. Demanding sexual favors from tenants, especially those who are financially vulnerable, is illegal,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “The Fair Housing Act protects tenants from sexual harassment and retaliation by their landlords, and the Justice Department will hold accountable those who engage in such cruel, depraved, and illegal conduct and will work tirelessly to obtain relief for their victims.”
According to the complaint:
Centanni demanded sexual favors to get or keep housing, offered housing benefits like reduced rent in exchange for sexual favors, touched tenants and applicants in a way that was sexual and unwelcome, and made unwelcome sexual comments and advances to tenants and applicants. The complaint also alleges that Centanni initiated or threatened to initiate eviction actions against tenants who objected to or refused his sexual advances. According to the complaint, Centanni participates in the federal Housing Choice Voucher Program (also known as “Section 8”) and receives approximately $102,000 each month in Housing Choice Voucher payments.
Today’s lawsuit seeks monetary damages to compensate the victims, civil penalties to vindicate the public interest, and a court order barring future discrimination. The complaint contains allegations of unlawful conduct; the allegations must be proven in federal court.
Today’s lawsuit is the result of a joint investigative effort with the U.S. Department of Housing and Urban Development’s Fair Housing and Equal Opportunity Office and Office of Inspector General.
The Justice Department’s Sexual Harassment in Housing Initiative is an effort to combat sexual harassment in housing led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The Attorney General recently reaffirmed this commitment by directing the Justice Department to deploy all available enforcement tools against anyone who tries to capitalize on the COVID-19 crisis by sexually harassing people in need of housing. U.S. Attorney Carpenito has also reaffirmed the U.S. Attorney’s Office’s commitment to combatting sexual harassment in housing amid the COVID-19 pandemic. The goal of the Department initiative is to address sexual harassment by landlords, property managers, maintenance workers, loan officers, or other people who have control over housing. As part of the initiative, the Justice Department developed a public service announcement and formed a joint task force with HUD to combat sexual harassment in housing. Since launching the Initiative in October 2017, the Department of Justice has filed 17 lawsuits alleging sexual harassment in housing.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the U.S. Attorney’s Civil Rights Unit and its enforcement efforts is available at https://www.justice.gov/usao-nj/civil-rights-enforcement. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.
Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental dwellings owned or managed by Centanni, or who have other information that may be relevant to this case, can contact the Housing Discrimination Tip Line, at 1-800-896-7743, and select option number one to leave a message.
Individuals can also report sexual harassment and other forms of housing discrimination by contacting the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339 or e-mailing the Justice Department at [email protected].
The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Assistant U.S. Attorney Susan Millenky, of the U.S. Attorney’s Office Civil Rights Unit, and Trial Attorneys Erin Meehan Richmond and Kathryn Legomsky, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.
Former Pharmacy Owner Admits Role in Large-Scale Illegal Kickback SchemeRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, pharmacist today admitted participating in a conspiracy to pay bribes and kickbacks for compounded pain creams, U.S. Attorney Craig Carpenito announced.
Robert Fazzini, 53, of Succasunna, New Jersey, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiring to violate the anti-kickback statute.
According to documents filed in this case and statements made in court:
Fazzini was a licensed pharmacist and owner of the now-closed White’s Pharmacy in Morristown, New Jersey. In the summer and fall of 2015, Fazzini participated in a bribe and kickback conspiracy stemming from a scheme to obtain millions of dollars in health benefits from the federal workers’ compensation program by prescribing and dispensing expensive compound pain creams. A Jersey City doctor prescribed compound pain creams for his patients, and a conspirator helped steer those prescriptions to White’s Pharmacy. In exchange for this arrangement, Fazzini routinely paid the conspirator bribes and kickbacks of approximately 50 percent of the reimbursement income White’s Pharmacy received for the pain cream prescriptions. Fazzini and the conspirator attempted to conceal some of these payments by having Fazzini write checks to a relative and different entities associated with the conspirator.
As part of his plea agreement, Fazzini agreed that the improper benefit conferred was between $500,000 and $1.5 million for the charged conspiracy to violate the federal anti-kickback statute.
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 Dec. 8, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark; the U.S. Postal Service, Office of Inspector General, under the direction of Special Agent in Charge of the Northeast Area Field Office Matthew M. Modafferi; the Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Joshua L. Haber and Nicole F. Mastropieri of the Health Care Fraud Unit in the Criminal Division, Newark.
Florida Man Charged with Child Sex Offenses in New JerseyRead the Press Release
CAMDEN, N.J. – A Florida man was arrested today and charged with seeking sex with a minor and inducing her to send him sexual explicit images, U.S. Attorney Craig Carpenito announced today.
Andrew Drechsel, 31, of Saint Cloud, Florida, is charged by complaint with manufacture of child pornography, enticement of a minor to travel for illicit sexual conduct, travel with the intent to engage in illicit sexual conduct with a minor, and use of interstate commerce to entice a minor. He made his initial appearance today in the U.S. District Court for the Middle District of Florida, prior to his transfer to the District of New Jersey.
According to the complaint:
Drechsel sought to have sex with a minor girl and traveled to New Jersey with the intent to engage in illicit sexual conduct with that minor. He also enticed and coerced a minor to travel to Connecticut to engage in illicit sexual conduct and engaged in online sexual communications with a minor and induced her to manufacture sexually explicit images of herself and send them to Drechsel.
The count of use of interstate commerce to entice carries a maximum sentence of life in prison; the count of enticement to travel for illicit sexual conduct carries a maximum sentence of 20 years in prison; the count of travel with the intent to engage in illicit sexual conduct carries a maximum sentence of 30 years in prison; and the count of manufacture of child pornography carries a minimum of 15 years in prison and a maximum of 30 years in prison. All of the counts also carry a maximum fine of $250,000 per count.
This case was investigated by agents with the FBI South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia; with assistance from the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Burlington County Prosecutor’s Office under the direction of Scott A. Coffina; the Cherry Hill Police Department under the direction of Chief William P. Monaghan; the U.S. Attorney’s Office for the District of Connecticut, under the direction of U.S. Attorney John H. Durham; agents of the FBI New Haven Division, under the direction of Special Agent in Charge David Sundberg; the Hartford and New Haven, Connecticut, state’s attorney’s offices; the Windsor, Connecticut, Police Department under the direction of Chief Donald Melanson; and the Hamden, Connecticut, Police Department under the direction of Chief John F. Cappiello; and agents of the FBI Tampa, Orlando Resident Agency, under the direction of Special Agent in Charge Michael F. McPherson.
The government is represented by Assistant U.S. Attorney Alisa Shver of the U.S. Attorney’s Office Criminal Division in Camden.
If you have information regarding the pending prosecution, or you believe you or someone you know may have been victimized by the defendant, the FBI requests that you contact them at 1-800-CALL-FBI or report it at tips.fbi.gov. Identified victims may be eligible for certain services and rights under federal and/or state law.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Union County Man Charged with Fourth Count of Coercing and Enticing Victims for the Purpose of ProstitutionRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted a Union County, New Jersey, man for persuading, inducing and enticing numerous female victims to travel in interstate or foreign commerce to engage in prostitution and other sexual acts, often by use of force, violence and threats, U.S. Attorney Craig Carpenito announced.
Jose Torres, 42, of Elizabeth, New Jersey, was charged today in a superseding indictment with four counts of coercion and enticement. Torres was originally charged in February 2020 with two counts of coercing and enticing and on May 29, 2020, he was indicted on a third count involving another victim. Today’s indictment adds a fourth victim. Torres will be arraigned at a later date.
According to the documents filed in this case and statements made in court:
From May 2015 to October 2019, Torres persuaded, induced and enticed female victims, often commercial sex workers, to travel from various out of state locations, including Canada, New York, and Pennsylvania, in order to engage in prostitution with him. In each instance, Torres lured a female victim to New Jersey with promises of large payments. In three of the charged instances, when the victim asked for payment, Torres became aggressive, often assaulting and raping her. Torres never paid the women for their services.
The two most recently charged counts allege that in December 2015, Torres lured Victim-4 to travel from Pennsylvania to New Jersey on promises of large sums of payment. In May 2018 Torres lured Victim-3 to travel from New York City to New Jersey on promises of large sums of payment. Once Victim-3 arrived, she began to feel uncomfortable. Torres threatened Victim-3, telling her it was in her best interest to remain in the hotel room. Victim-3 remained in the room and Torres then forced her to engage in unwanted sexual activity, including having sexual intercourse without a condom.
The coercion and enticement charges each carry a maximum term of 20 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark; special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI) under the direction of Special Agent in Charge Jason Molina in Newark; and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Yolanda Ciccone, with the investigation leading to today’s superseding indictment.
The government is represented by Assistant U.S. Attorney Emma Spiro of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
The charges and allegations in the superseding indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Owner and Employees of Monmouth County Marine Equipment and Servicing Company Charged with Defrauding U.S. Department of DefenseRead the Press Release
TRENTON, N.J. – Three people have been charged for their alleged roles in a years-long conspiracy to defraud the U.S. Department of Defense (DoD) by providing military equipment parts that were not authorized by contract, U.S. Attorney Craig Carpenito announced today.
Linda Mika, 69, and Paul Mika, 73, both of Jackson, New Jersey, and Kenneth Mika, 49, of Ewing, New Jersey, were arrested today and are scheduled to have their initial appearances this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court.
“As described in the criminal complaint, these defendants sought to make a greater profit by substituting products that were not those they had contractually agreed to provide to the Department of Defense,” U.S. Attorney Carpenito said. “By doing so, they potentially risked the safety of our men and women in uniform. We will continue to work with our law enforcement partners to root out this kind of fraud.”
“Protecting the integrity of the defense procurement system is a top priority for the Defense Criminal Investigative Service (DCIS),” Special Agent in Charge Leigh-Alistair Barzey, DCIS Northeast Field Office, said. “This case, which resulted in today's arrests, confirms the DCIS’ ongoing commitment to work with the USAO-NJ and the FBI, to investigate and prosecute contractors who engage in fraudulent schemes targeting the U.S. Department of Defense.”
“Today's arrest of Linda Mika, Paul Mika and Kenneth Mika reflects the continuing impact federal and state partnerships have on combatting those who defraud the Department of Defense,” Acting FBI Special Agent in Charge Joe Denahan said. “These contractors of Monmouth Marine Engines Inc. knowingly provided substituted parts for military equipment for their own personal gain. We will continue to investigate these types of schemes and hold those who endanger the U.S. military accountable.”
According to documents filed in this case and statements made in court:
From at least March 2017 through February 2020, the Mikas conspired with each other and others to defraud the DoD and its combat logistic support arm, the Defense Logistics Agency (DLA), by engaging in a pattern of unlawful product substitution. Paul Mika was the founder and owner of Monmouth Marine Engines Inc. (Monmouth Marine), a maritime equipment and servicing facility, which, as an approved federal contractor, also entered into contracts with DLA to supply DoD contracting entities with replacement parts for Naval vessels. Paul Mika’s wife and son, Linda Mika and Kenneth Mika, were employees of Monmouth Marine.
The Mikas, on behalf of Monmouth Marine, obtained contracts with the DoD by falsely claiming that the military parts they contracted to provide would be exact products furnished by authorized manufacturers. Once awarded the contracts, however, the Mikas sourced non-conforming substitute parts at a significantly reduced cost to fill the contracts. They did this to maximize their profit margin while also suppressing fair competition in the bidding of federal contracts. Upon receipt by Monmouth Marine, the non-conforming parts were then shipped to DLA in packaging disguising the parts’ identity in an effort by the Mikas to deceive DLA and its unwitting downstream purchasers.
The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the direction of Special Agent in Charge Barzey; and special agents of the FBI, under the direction of Acting Special Agent in Charge Denahan with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney=s Office Criminal Division in Trenton.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
New Jersey Public University Employee Admits Role in $5.3 Million Compounded Prescription Drug SchemeRead the Press Release
NEWARK, N.J. – An employee of a public university in New Jersey today admitted his role in a scheme to defraud public and private health benefits programs of at least $5.3 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Craig Carpenito announced.
John Cuffari, 58, of Cedar Grove, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him 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 November 2014 and July 2016, Cuffari 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.
Cuffari exploited this opportunity through working as a sales representative for several compounding pharmacies. In order to profit as a sales representative, Cuffari targeted individuals who had insurance plans that covered compounded medications and then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. In order to obtain prescriptions for compounded medications for some of the recruited individuals, Cuffari caused payments to be made to a New Jersey-based physician.
Once the prescriptions were written, they were filled by the compounding pharmacies with which Cuffari worked. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Cuffari a percentage of the reimbursement amount.
As part of his plea agreement, Cuffari must forfeit $539,580 in criminal proceeds he received for his role in the scheme and pay restitution of at least $5,392,214. He faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 9, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sean M. Sherman of the United States Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.
Hudson County Felon Admits Possession of Firearm and AmmunitionRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man previously convicted of multiple felonies admitted today to possessing a firearm and ammunition, U.S. Attorney Craig Carpenito announced.
Benorce Duncan, 31, of Jersey City, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to an 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 May 21, 2019, Duncan knowingly possessed a Röhm .22-caliber RG10 revolver loaded with six rounds of ammunition. At that time, Duncan had previously been convicted in Hudson County Superior Court of aggravated assault and robbery, both of which are felonies.
The charge to which Duncan pleaded guilty carries a maximum penalty of 10 years in prison and a fine of up to $250,000. Sentencing is scheduled for Dec. 8, 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 the Newark Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the leadership of Special Agent in Charge Charlie J. Patterson, and the Jersey City Police Department, under the direction of Public Safety Director James Shea, 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.
Securities Trader Admits Market Manipulation Scheme that Netted More Than $17 Million in Illicit ProfitsRead the Press Release
NEWARK, N.J. – A New Jersey-based securities trader today admitted orchestrating a massive, long-running market manipulation scheme and tax fraud that netted more than $17 million in illegal profits between 2014 and 2016, U.S. Attorney Craig Carpenito announced.
Joseph Taub, 41, of Clifton, New Jersey, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to counts four and five of a superseding indictment charging him with securities fraud and conspiracy to defraud the United States.
According to documents filed in this case and statements made in court:
From 2014 to 2016, Taub and others conspired to manipulate the securities prices of numerous public companies by coordinating trading in dozens of brokerage accounts he secretly controlled. Taub used “straw accounts” that were held in the names of others to conduct much of his trading. Taub funded many of these straw accounts and used the straw account holders to conceal the scheme from regulators and law enforcement.
To manipulate securities prices, Taub engaged repeatedly in a series of contemporaneous transactions designed to artificially influence the market price of the securities of various publicly traded companies, and induce other market participants to trade in those securities based on the false impression that there was real market interest in the securities, using Run Based Manipulation and Order Based Manipulation.
Run Based Manipulation is a type of securities manipulation in which a manipulator takes either a long or a short position in a security, enters orders or trades in a manner designed to inflate or deflate the price of the security while attracting others to trade the security and finally reverse their position at the inflated or deflated price. A common feature of Run Based Manipulation is that the manipulator profits directly from the manipulated market by exploiting investors who bought at inflated prices or sold at depressed prices. Order Based Manipulation is a type of securities manipulation involving orders, sometimes but not always accompanied by trades, that are intended to give other market participants a false signal about the security’s demand or supply.
Taub also admitted defrauding the United States by hiding from the brokerage firms and the IRS the identities of those who actually controlled the straw accounts and who reaped the majority of the profits from the scheme. As a result, the profits from the straw accounts were taxed at the lower tax rates applicable to the straw account holders instead of the higher tax rates applicable to Taub, which allowed Taub to avoid $394,424 in taxes.
The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine. The conspiracy to defraud the United States count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Under the terms of the plea agreement, if accepted by the court, Taub will receive a sentence of 18 months in prison, will forfeit $17.1 million, and will be ordered to pay restitution in the amount of $394,424 to the IRS. Sentencing is scheduled for Dec. 1, 2020.
Sean Greenwald pleaded guilty to his role in the scheme on Feb. 21, 2018 and awaits sentencing.
The Department of Justice has also reached a settlement of its civil forfeiture case against assets acquired by Taub and his family using proceeds of the market manipulation scheme. Under the terms of the settlement, Taub and his family members agreed to forfeit all assets subject to the pending forfeiture complaint in which they have a potential interest. Taub is also required to cooperate with and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, and special agents of the U.S. Attorney’s Office, District of New Jersey, with the investigation. He also thanked the Securities and Exchange Commission’s New York Regional Office, under the direction of Marc P. Berger, for its assistance in this investigation.
The government is represented by Criminal Division Deputy Chief Daniel V. Shapiro; Senior Trial Counsel Catherine R. Murphy and Assistant U.S. Attorney Jennifer S. Kozar of the U.S. Attorney’s Office Economic Crimes Unit in Newark; and Unit Chief Sarah Devlin, of the U.S. Attorney’s Office Asset Recovery and Money Laundering Unit.
Pharmaceutical Company Agrees to Pay $3.5 Million to Resolve Allegations of Violating False Claims ActRead the Press Release
NEWARK, N.J. – Pacira Pharmaceuticals Inc. will pay $3.5 million to resolve allegations that it paid kickbacks to doctors in the form of bogus research grants to induce them to prescribe its analgesic EXPAREL, Attorney for the United States Rachael A. Honig announced today. The allegations arose from a whistleblower suit filed under the False Claims Act.
“Pacira tried to accelerate sales of its EXPAREL product through an illegal kickback scheme,” Attorney for the United States Honig said. “Pharmaceutical companies may not entice doctors to use their products by offering research grants in return for sales. Illegal inducements can distort medical decision-making, lead to the use of overpriced drugs, and drive up health care costs for everyone.”
“The payment of kickbacks or bribes in exchange for phony research and other grants, robs the government and every American,” FBI-Newark Acting Special Agent in Charge Joe Denahan said. “Today’s agreement by Pacira Pharmaceuticals Inc., to pay $3.5 million, should send a strong message to anyone thinking about participating in this type of illegal activity. The FBI remains committed to combating these types of schemes and bringing these perpetrators to justice.”
“Offering phony research grants in order to increase sales and fatten the bottom line is illegal and can be detrimental to the medical decision-making process,” Scott J. Lampert, Special Agent in Charge of the Office of Inspector General for the U.S. Department of Health and Human Services, said. “We will continue to work with our law enforcement partners to safeguard our government health care programs and the taxpayers picking up the bill.”
According to documents filed in this case and the contentions of the United States contained in the settlement agreement:
From Dec. 1, 2012, through April 30, 2015, Pacira paid disguised kickbacks in the form of research and other grants to healthcare providers and institutions. Pacira intended these payments to induce sales of its newly-launched local analgesic, EXPAREL, to the targeted physicians and their respective hospitals. The research grants in question were typically initiated by Pacira sales representatives or marketing executives, who discussed internally their sales goals in connection with the grant. Pacira also required that EXPAREL be placed on formulary at the physician’s institution before awarding any research grant.
After awarding the grant money, Pacira expressed little interest in the proposed research. Pacira did not contractually require that the grant recipient adhere to the proposed research topic or achieve certain milestones before payment. In many cases, Pacira did not follow up with the grant recipient to ensure that the work was being performed, and in some cases, the grant recipient did no work at all. Pacira did not document why it needed the research or the fair market value of the proposal. Finally, Pacira executives coached grant recipients and other employees on how to avoid internal scrutiny of the grant payments.
Medicare and Medicaid do not pay for claims that include products tainted by illegal kickbacks. Pacira caused the submission of false claims by using these research grants to induce sales of EXPAREL, which it knew would be used in procedures reimbursed by Medicare and Medicaid.
The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring civil actions on behalf of the Government and to share in any recovery. As part of today’s resolution, the whistleblower—a pharmacist who brought the misconduct to the government’s attention—will receive approximately $520,000 of the recovery from the federal share of the settlement, plus approximately $118,000 from the state share of the settlement.
Attorney for the United States Honig credited special agents of the FBI, under the direction of Acting Special Agent in Charge Denahan in Newark; special agents of the HHS-OIG, under the direction of Special Agent in Charge Lampert, as well as special agents with the U.S. Attorney’s Office in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Andrew A. Caffrey, III, of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.
The case is captioned United States ex rel. Schneider v. Pacira Pharmaceuticals, Inc. (D.N.J.). The claims settled by this agreement are allegations only, and there have been no admissions of liability.
Former Employee at Middlesex County Warehouse Leased by Federal Government Admits Theft of Hundreds of iPhonesRead the Press Release
TRENTON, N.J. – A Somerset County, New Jersey, man admitted today that he stole almost 300 iPhones that had been seized by Customs and Border Protection (CBP) and were temporarily stored at a warehouse in Dayton, New Jersey, U.S. Attorney Craig Carpenito announced.
Joel Cruz, 27, of Franklin Park, New Jersey, pleaded guilty today by videoconference before U.S. District Court Judge Michael Shipp to an information charging him with theft from an interstate or foreign shipment.
According to documents filed in this case and statements made in court:
In November 2014, CBP seized approximately 14 boxes, containing 628 iPhones, from Boston Logan International Airport. All of the boxes were shipped from the United States, and were en route to Dubai, United Arab Emirates. After their seizure, the boxes were consolidated into six containers, each containing a unique shipping code, and were shipped and delivered to the Dayton warehouse.
Cruz was an employee of Company 1, which had contracted with the Treasury Executive Office for Asset Forfeiture (TEOAF), a federal agency, to provide services regarding the management of property seized by CBP and stored at the warehouse. Company 1 contracted with third parties, including Company 2, to provide temporary contractors to work at the warehouse.
Between Jan. 9, 2015, and Feb. 2, 2015, Cruz scanned the location of the seized boxes inside the warehouse and stole 292 iPhones worth $218,372. He removed the iPhones from the warehouse on separate occasions by concealing them in his pants, boots, and jacket. Luis Ramos, a Company 2 employee, assisted Cruz in removing a small number of the iPhones in exchange for one or two of the phones. Ramos was previously charged in connection with his role in the scheme, and those charges remain pending.
Cruz provided 175 to 200 of the stolen iPhones to a former employee of the warehouse to sell on Cruz’s behalf. Cruz sold the remaining stolen iPhones on his own.
The theft from interstate or foreign shipment carries a maximum potential penalty of 10 years in prison and is punishable by a fine of $250,000 or twice the amount of the pecuniary gain or loss from the offense.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Office of Inspector General, Newark Field Office, under the direction of Assistant Special Agent in Charge Brian C. McCarthy; U.S. Department of Homeland Security, Federal Protective Service, Region 2, under the direction of Regional Director Robert Sooter; Customs and Border Protection, Office of Professional Responsibility, SAC/NYC, under the direction of Special Agent in Charge Vance Kuhner; and the U.S. Department of Treasury, Office of Inspector General, Washington, D.C., under the direction of Assistant Inspector General for Investigations Sally D. Luttrell with the investigation leading to today’s guilty plea.
The government is represented by Senior Trial Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Former Co-Owner of New Jersey Marketing Company Admits Role in $8.8 Million Compounded Prescription Drug SchemeRead the Press Release
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.
Christine Myers, 38, of Phillipsburg, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging her with conspiracy to commit health care fraud.
“In an era when many Americans worry about securing health insurance for their families, we’ve seen far too many instances where both private and publicly funded insurance providers are being raided for millions in phony reimbursements on compounded medications,” U.S. Attorney Carpenito said. “Myers admitted that she and others sought to defraud insurers by recruiting the very people who enjoy that coverage, offering them cash bribes to get medications they didn’t need. Her conviction should serve as a warning to those who would exploit their health coverage for financial gain.”
FBI Newark Acting Special Agent in Charge Joe Denahan said, “Christine Myers treated health insurance plans as a vehicle to line her own pockets when she engaged in an elaborate scheme that resulted in defrauding insurers out of at least $8.8 million. The FBI, in conjunction with our law enforcement partners, will continue to investigate and bring to justice criminals who defraud the system and cheat the American taxpayer.”
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, Myers 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.
Myers exploited this opportunity through creating a New Jersey marketing company (Marketing Company-1) and hiring sales representatives to work on the company’s behalf. At Myers’ direction, the sales representatives targeted 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, Myers retained a portion of the payment and provided a “commission” payment to the relevant sales representative.
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 global pandemic brings into stark relief how critical it is to have access to affordable healthcare,” MTA Inspector General Carolyn Pokorny said. “That this individual recruited former MTA employees to help steal millions of dollars from taxpayers, riders and other transportation stakeholders is especially despicable. We will continue to work with our law enforcement partners in this ongoing investigation to ensure that anyone else involved with the scheme is brought to justice.”
“Protecting TRICARE, the healthcare system for U.S. military members and their dependents, is a top priority for the Defense Criminal Investigative Service (DCIS),” Special Agent in Charge Leigh-Alistair Barzey, DCIS Northeast Field Office, said. “Schemes to defraud TRICARE, such as those alleged in the information announced today, waste precious resources and ultimately threaten the quality of health care that our Service members and their families deserve. Myers' guilty plea is the result of a joint effort by the U.S. Attorney’s Office, the DCIS, the FBI and MTA-OIG, and it demonstrates the ongoing commitment of the DCIS to work with its law enforcement partners to investigate and prosecute those who engage in health care fraud.”
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, Myers 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 Dec. 1, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Denahan; 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 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.
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Defense counsel: Marc A. Agnifilo Esq., New York
U.S. Attorney’s Office Notes 30th Anniversary of Americans with Disabilities ActRead the Press Release
NEWARK, N.J. – The Americans with Disabilities Act (ADA) was passed on July 26, 1990, and is the nation’s preeminent law for providing access and equal opportunity for people with disabilities. The U.S. Attorney’s Office has played a vital role in enforcing the ADA in order to help eliminate discrimination against people with disabilities. U.S. Attorney Craig Carpenito today reinforces the Office’s commitment to vigorously enforce the ADA in the years to come.
“The ADA is a landmark civil rights statute that guarantees people with disabilities equal opportunity to fully participate in mainstream life without discriminatory barriers,” U.S. Attorney Carpenito said. “Despite the tremendous progress that has been made in the 30 years since this historic legislation was signed, we still see unlawful barriers that prevent individuals with disabilities from fully participating in many aspects of society. The U.S. Attorney’s Office will continue to work tirelessly to shatter those discriminatory barriers.”
Over the past 30 years, our country has worked to change attitudes about disability, remove obstacles to equality, and dismantle the systems that have historically excluded people with disabilities. We commemorate the many ways that the ADA has transformed our society – by replacing exclusion with access, segregation with integration, and limitations with self-determination. The ADA has advanced the promise of the American dream, ensuring that people with disabilities can write their own stories. We are better and stronger because of the contributions that people with disabilities make.
The U.S. Attorney’s Office has prioritized enforcing the ADA to vindicate the rights of people with disabilities in several recent matters. These efforts include:
- Ensuring Equal Access to Polling Places. On Aug. 15, 2019, in connection with the Justice Department’s ADA Voting Initiative, the U.S. Attorney entered into comprehensive settlement agreements with the Ocean County Board of Elections and the Union County Board of Elections to ensure that people with mobility disabilities can physically access polling locations so as to not be denied their fundamental right to vote. https://www.justice.gov/usao-nj/pr/united-states-reaches-agreements-ocean-county-and-union-county-boards-elections-ensure
- Combatting Discrimination in Childcare Settings. On Nov. 13, 2019, the U.S. Attorney’s Office settled a lawsuit, resolving allegations that a national daycare provider, Spring Education Inc., discriminated against a 3-year-old girl and her parents when it expelled the child on the basis of her disability and refused to make reasonable modifications to its policies and practices. Under the terms of the settlement, the defendant was required to agree to injunctive remedies, including adopting policies to provide reasonable modifications for children, as well as paying damages to the child and a civil penalty to the United States. https://www.justice.gov/usao-nj/pr/us-attorney-s-office-reaches-agreement-nationwide-daycare-provider-ensure-equal-rights
- Providing Equal Access for Children with Disabilities in Youth Activities. On Oct. 11, 2019, the U.S. Attorney’s Office reached an agreement with a gymnastics facility in Bergen County to implement polices to ensure equal access for children with disabilities, as well as damages to the child and her parents and a civil penalty to the United States. https://www.justice.gov/usao-nj/pr/us-attorney-s-office-reaches-ada-settlement-gymnastics-facility-ensure-children On April 5, 2018, the U.S. Attorney’s office entered into an agreement with a gymnastics center that excluded a child on the basis of her disability. The agreement required the center to adopt policies and practices to comply with the ADA and pay damages to the child. https://www.justice.gov/usao-nj/pr/us-attorney-s-office-reaches-settlement-gymnastics-center-ensure-equal-access-children
- Protecting the Rights of Students with Disabilities. On Feb. 21, 2019, the U.S. Attorney’s Office entered into an agreement with Rider University that required the university to make reasonable modifications to its policies, practices, and procedures for students with food allergy-related disabilities. https://www.justice.gov/usao-nj/pr/us-attorney-s-office-reaches-agreement-rider-university-resolve-allegations-under On Sept. 11, 2019, the U.S. Attorney’s Office executed a settlement agreement to resolve allegations that the Watchung Hills Regional High School failed to evacuate at least one student with a mobility disability during a school-wide evacuation and failed to implement any policies addressing emergency evacuations of students with disabilities. https://www.justice.gov/usao-nj/pr/watchung-hills-high-school-district-agrees-settle-claim-it-violated-americans
- Protecting the Rights of Combat Veterans with Disabilities. On Feb. 6, 2020, the U.S. Attorney’s Office reached a settlement with a charter bus company, Academy Express, LLC, to resolve allegations that the bus company discriminated against a 74-year-old combat veteran with multiple disabilities by denying him accessible transportation on a multi-day tour of historic sites with his fellow combat veterans. The settlement agreement requires the bus company to implement policies to ensure persons with disabilities receive accessible – and timely – transportation, as well as to pay damages to the veteran and a civil penalty to the United States. https://www.justice.gov/usao-nj/pr/us-attorney-s-office-reaches-ada-settlement-charter-bus-company-protect-rights-americans
- Ensuring Physical Access to Places of Public Accommodation. The U.S. Attorney’s Office has successfully resolved multiple matters to ensure physical access to places of public accommodate to those with mobility disabilities. On Nov. 19, 2019, the U.S. Attorney’s Office reached a settlement with the owner of the historic Paramount Theater in Asbury Park to ensure physical accessibility for people with disabilities. https://www.justice.gov/usao-nj/pr/us-atorney-s-office-reaches-ada-settlement-owner-historic-paramount-theater-ensure
- Combatting HIV Discrimination. On Dec. 17, 2019, the U.S. Attorney entered into a settlement with a Middlesex County day care facility to resolve allegations that the facility denied a child admission based on the parent’s disclosure that the child may have a disability – either HIV or Hepatitis. The settlement required the day care to implement policies and procedures to ensure that children with disabilities are afforded full and equal opportunities to participate in its services, as well as to provide damages to the child and his parent. https://www.justice.gov/usao-nj/pr/us-attorney-s-office-reaches-ada-settlement-middlesex-county-day-care-facility-over
The Justice Department’s ADA Voting Initiative focuses on protecting the right of individuals with disabilities. A hallmark of the ADA Voting Initiative is its collaboration with jurisdictions to increase accessibility at polling places. The Department of Justice has surveyed more than 2,200 polling places and increased polling place accessibility in more than 35 jurisdictions, including in Ocean County and Union County, New Jersey.
For more information about the 30th Anniversary of the ADA, please visit www.ada.gov. More information about the U.S. Attorney’s Civil Rights Unit and its enforcement efforts is available at https://www.justice.gov/usao-nj/civil-rights-enforcement
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at https://www.justice.gov/usao-nj/civil-rights-enforcement/complaint.
Newark Man Charged with Attempted Carjacking in Jersey City During Which Victim was ShotRead the Press Release
NEWARK, N.J. – A Newark man made his initial appearance today on charges stemming from a July 9, 2020, attempted carjacking in Jersey City during which a victim was shot in the abdomen, U.S. Attorney Craig Carpenito announced.
Tevin Browning, 29, of Newark, is charged by complaint with one count of conspiracy to commit carjacking, one count of attempted carjacking, one count of discharge of a firearm during a crime of violence, and one count of possession of a firearm and ammunition by a convicted felon. He is appeared by video conference this afternoon before U.S. Magistrate Judge James B. Clark III and was detained.
According to documents filed in this case and statements made in court:
At approximately 5:00 p.m. on July 9, 2020, a carjacking occurred in the area of Tonnelle and Broadway avenues in Jersey City, which was recorded on several video cameras in the area. Browning and an armed conspirator attempted to forcibly enter an Acura MDX which had pulled over to the side of Tonnelle Avenue to pick up a passenger. As the passenger entered the Acura, Browning and his conspirator forcibly attempted to enter the vehicle. Browning attempted to enter the rear right passenger side of the Acura, and punched the passenger in the head. At that point, the driver quickly attempted to drive away from the area. As the driver drove away, the gunman attempted to enter the front passenger side of the Acura and held onto the Acura. After a short distance, the gunman shot the driver in the abdomen, and then fell off the Acura as its driver was able to escape.
Moments later, a Dodge Challenger arrived at the scene and picked up the gunman before fleeing the area. Police officers found a spent .45 caliber shell casing stamped “Blazer .45 Auto” in the area where the gunman had fallen to the ground.
At approximately 8:00 p.m., Jersey City Police officers observed the Challenger parked and unoccupied on a residential street in Jersey City. The officers then observed Browning place an unknown item in the trunk of the car before walking into a nearby residence. Moments later, the officers observed Browning re-enter the trunk of Challenger before he was taken into custody. A lawful search warrant of the Challenger produced a .45 caliber Hi-Point Model JHP semiautomatic handgun, bearing serial number 406099, which was loaded with four rounds of ammunition. Two of the rounds were stamped “Blazer .45 Auto” on the shell casing.
The counts of conspiracy to commit carjacking and attempted carjacking carry a maximum potential sentence of 25 years in prison. The count of discharge of a firearm during a crime of violence is punishable by a mandatory minimum of 10 years in prison and a maximum sentence of life in prison, which must run consecutively to any term of imprisonment imposed on any other charges. On the count of possession of a firearm and ammunition by a convicted felon, Browning faces a maximum of 10 years in prison.
U.S. Attorney Carpenito credited the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to the charges and arrest.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the 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.
Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ’s Largest Opioid ResolutionRead the Press Release
NEWARK, N.J. – Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone, New Jersey U.S. Attorney Craig Carpenito, other Department of Justice officials, and officials from other state and federal agencies announced. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion — the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today in U.S. District Court for the Western District of Virginia to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information, also in the Western District of Virginia, related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data and a chart that was misleading in light of the false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” First Assistant United States Attorney Daniel P. Bubar of the Western District of Virginia said today. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the Court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
United States District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the United States Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” U.S. Attorney Craig Carpenito for the District of New Jersey said. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the United States District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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Indivior Solutions Pleads Guilty to Felony Charge and Indivior Entities Agree to Pay $600 Million to Resolve Criminal and Civil Investigations as Part of DOJ’s Largest Opioid ResolutionRead the Press Release
Indivior Solutions today pleaded guilty to a one-count felony information and, together with its parent companies Indivior Inc. and Indivior plc, agreed to pay a total of $600 million to resolve criminal and civil liability associated with the marketing of the opioid-addiction-treatment drug Suboxone. Together with a $1.4 billion resolution with Indivior’s former parent, Reckitt Benckiser Group PLC (RB Group), announced in 2019, and a plea agreement with Indivior plc’s former CEO, Shaun Thaxter, announced last month, the total resolution relating to the marketing of Suboxone is more than $2 billion — the largest-ever resolution in a case brought by the Department of Justice involving an opioid drug.
Suboxone is a drug product approved for use by recovering opioid addicts to avoid or reduce withdrawal symptoms while they undergo treatment for opioid-use disorder. Suboxone contains buprenorphine, a powerful opioid.
“Combatting the opioid crisis is a Department of Justice priority,” said Principal Deputy Associate Attorney General Claire M. Murray. “Today’s announced resolution and related actions hold accountable entities and individuals that unlawfully marketed opioid-addiction products.”
“The opioid crisis is a public health emergency. Prevention and access to effective treatments for opioid addiction are critical to fighting this epidemic,” said Deputy Assistant Attorney General Michael D. Granston for the Justice Department's Civil Division. “When a drug manufacturer claims to be part of a solution for opioid addicts, we expect honesty and candor to government officials, as well as to the physicians and patients making important treatment decisions based on those representations.”
Resolution of the Criminal Investigation
Indivior Solutions pleaded guilty today to a one-count felony criminal information charging false statements relating to health care matters. In connection with its guilty plea, Indivior Solutions admitted to making false statements to promote the film version of Suboxone (Suboxone Film) to the Massachusetts Medicaid program (MassHealth) relating to the safety of Suboxone Film around children. The resolution includes a criminal fine, forfeiture, and restitution totaling $289 million. On June 30, 2020, Indivior plc’s former CEO Shaun Thaxter pleaded guilty to a one-count misdemeanor information related to Indivior’s false and misleading representations to MassHealth.
In 2002, Indivior Inc. received approval to market Suboxone tablets for use in the treatment of opioid addiction and dependence. At that time, Indivior Inc. was an RB Group subsidiary known as Reckitt Benckiser Pharmaceuticals Inc. In December 2014, RB Group spun off Indivior Inc., and the two companies are no longer affiliated. Thereafter, Indivior Inc. became a subsidiary of Indivior plc. On April 9, 2019, a federal grand jury sitting in Abingdon, Virginia, indicted Indivior Inc. and Indivior plc for allegedly engaging in an illicit nationwide scheme to increase prescriptions of Suboxone.
In its guilty plea today, Indivior Solutions, which employed marketing and sales personnel for the Indivior group of companies, admitted to an aspect of the scheme alleged in the indictment. Specifically, Indivior Solutions admitted that, in October 2012, it sought to convince MassHealth to expand Medicaid coverage of Suboxone Film in Massachusetts and sent MassHealth false data indicating that Suboxone Film had the lowest rate of accidental pediatric exposure (i.e., children taking medication by accident) of all buprenorphine drugs in Massachusetts, when in fact, it did not. Indivior Solutions further admitted that sending the false and misleading information occurred in the context of marketing and promotional efforts directed at MassHealth, which were overseen by top executives. MassHealth announced it would provide access to Suboxone Film for patients with children under the age of six shortly after Indivior provided the false and misleading information to agency officials.
“During the nationwide opioid epidemic, Indivior Solutions made false statements about Suboxone’s safety to increase its sales. In doing so, Indivior Solutions misled government health care officials and is being held accountable today for its felonious conduct,” said First Assistant U.S. Attorney Daniel P. Bubar of the Western District of Virginia. “This resolution is the culmination of years of work by prosecutors and agents and demonstrates that we will continue to work tirelessly to hold pharmaceutical manufacturers responsible for illegal conduct.”
In addition to its financial aspects, the agreement with Indivior Inc. includes novel provisions that:
- Require Indivior Inc. to disband its Suboxone sales force and not reinstate it;
- Require Indivior Inc.’s CEO to personally certify, under penalty of perjury, on an annual basis that during the prior year (a) Indivior was in compliance with the Food Drug and Cosmetic Act and did not commit health care fraud or (b) list all non-compliant activity and the steps taken by Indivior to remedy these acts;
- Prohibit Indivior Inc. from using data obtained from surveys of health care providers for marketing, sales, and promotional purposes;
- Require Indivior Inc. to remove health care providers from their promotional programs who are at a high risk of inappropriate prescribing; and
- Make Indivior subject to contempt sanctions by the court and reinstatement of the dismissed charges if it violates the agreement.
“The opioid crisis has devastated families and communities across the Commonwealth and drug manufacturers must be held accountable for their role in creating and prolonging this crisis,” said Virginia Attorney General Mark R. Herring. “I want to thank my Medicaid Fraud Control Unit for their work on this important case, as well as our local, state and federal partners for their continued collaboration. My team and I will continue to do everything in our power to hold pharmaceutical companies accountable for their role in the opioid crisis and help to ensure justice for those families who have been effected by the opioid crisis.”
“Parties that contract with the government will be held to the letter of the contract,” said Kenneth Cleevely, Special Agent in Charge of the Eastern Field Office for the U.S. Postal Service Office of Inspector General. “The U.S. Postal Service spends billions of dollars per year in workers compensation-related costs, most of which are legitimate. However, when medical providers or companies choose to flout the rules and profit illegally, special agents with the USPS OIG will work with our law enforcement partners to hold them responsible. To report fraud or other criminal activity involving the Postal Service, contact USPS OIG special agents at www.uspsoig.gov or 888-USPS-OIG.”
U.S. District Judge James P. Jones accepted the guilty plea but deferred acceptance of the plea agreement until after the preparation of a presentence report. He scheduled sentencing for Oct. 20, 2020 at the U.S. Courthouse in Abingdon, Virginia.
The Civil Settlement
Under the civil settlement, Indivior Inc. and Indivior plc have agreed to pay a total of $300 million to resolve claims that the marketing of Suboxone caused false claims to be submitted to government health care programs. The $300 million settlement amount includes approximately $209.3 million to the federal government and $90.7 million to states that opt to participate in the agreement.
The civil settlement resolves allegations by the United States that, from 2010 through 2015, Indivior companies knowingly (a) promoted the sale and use of Suboxone to physicians who were writing prescriptions that were not for a medically accepted indication and that lacked a legitimate medical purpose, were issued without any counseling or psychosocial support, were for uses that were unsafe, ineffective, and medically unnecessary, and were often diverted; (b) promoted the sale or use of Suboxone Film to physicians and state Medicaid agencies using false and misleading claims that Suboxone Film was less susceptible to diversion and abuse than other buprenorphine products and that Suboxone Film was less susceptible to accidental pediatric exposure than tablets; and (c) submitted a petition to the Food and Drug Administration on Sept. 25, 2012, claiming that Suboxone Tablet had been discontinued “due to safety concerns” about the tablet formulation of the drug and took other steps to delay the entry of generic competition for Suboxone to improperly control pricing of Suboxone, including pricing to federal healthcare programs.
“Prescription opioids are both addictive and dangerous when diverted for improper use or prescribed without accurate information about the risks that they pose,” said U.S. Attorney Craig Carpenito for the District of New Jersey. “This resolution holds Indivior to account for placing profit above patient and community safety.”
The civil settlement resolves claims against Indivior in six lawsuits pending in federal court in the Western District of Virginia and the District of New Jersey under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. The False Claims Act also permits the government to intervene in such actions, as the government previously did in the three lawsuits pending in the Western District of Virginia. The whistleblower share to be awarded in this case has not yet been determined.
“Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies encourage the use of powerful drugs where not medically necessary and provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
Non-monetary Provisions of the Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Indivior executed a five-year Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General (HHS-OIG). The CIA requires that Indivior implement numerous accountability and auditing provisions. On an annual basis, top executives and the Board of Directors must certify about compliance, Indivior must conduct annual risk assessments and other monitoring, and an independent review organization will conduct multi-faceted audits.
“Addressing the opioid crisis is a top priority for OIG, and we will continue to work closely with the Department of Justice to hold corporations and individuals accountable when they use illegal tactics to promote and sell opioids,” said Gregory E. Demske, Chief Counsel to the Inspector General, HHS-OIG. “Among other things, our CIA with Indivior imposes accountability on the Board and top executives, subjects the company to internal and external auditing, and ensures that the company will separate itself from its prior top leadership.”
“The opioid epidemic has ravaged this nation,” said Elton Malone, Assistant Inspector General for Investigations with the Office of Inspector General of the U.S. Department of Health and Human Services. “This resolution, along with our law enforcement partners’ work, should serve as a warning that large companies will face prosecution if they break the law.”
FTC Resolution
Under a separate agreement with the Federal Trade Commission (FTC), Indivior has agreed to pay $10 million to resolve claims that it engaged in unfair methods of competition in violation of the Federal Trade Commission Act, 15 U.S.C. § 53(b). The FTC filed a complaint in the U.S. District Court for the Western District of Virginia alleging anticompetitive activities by Indivior designed to impede competition from generic equivalents of Suboxone. As part of a consent decree, Indivior agreed that it would notify the FTC if it filed a Citizen Petition with the FDA in connection with a drug product, it would simultaneously disclose to both the FDA and the FTC all studies and data relevant to that Citizen Petition. Indivior further agreed not to withdraw a drug from the market or otherwise disadvantage a drug after obtaining approval to market another drug containing the same active ingredient.
“As alleged in the FTC’s complaint, in the midst of the nation’s opioid crisis, a critical opioid-addiction treatment was about to become more affordable,” said Gail Levine, a Deputy Director of the FTC’s Bureau of Competition. “But Indivior prevented that. It kept its drug prices high by unlawfully impeding generic manufacturers from competing effectively.”
A Multilateral Effort
The criminal case against Indivior was prosecuted by Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia, Albert P. Mayer and Carol Wallack of the Department of Justice Civil Division’s Commercial Litigation Branch, Charles J. Biro and Matthew J. Lash of the Department of Justice Civil Division’s Consumer Protection Branch, Kristin L. Gray, Joseph S. Hall and Janine M. Myatt of the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General, and Garth W. Huston of the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA - Office of Criminal Investigation; United States Postal Service – Office of Inspector General; and Department of Health and Human Services - Office of Inspector General.
The civil settlement was handled by Edward Crooke of the Civil Division’s Commercial Litigation Branch, Sara Bugbee Winn of the U.S. Attorney’s Office for the Western District of Virginia, and Andrew A. Caffrey III of the U.S. Attorney’s Office for the District of New Jersey. Assistance was provided by representatives of the HHS Office of Counsel to the Inspector General; the HHS Office of the General Counsel, CMS Division; FDA’s Office of Chief Counsel; the U.S. Attorney’s Office for the Eastern District of Virginia; the U.S. Department of Agriculture Office of the General Counsel; the National Association of Medicaid Fraud Control Units; the Defense Criminal Investigative Service; the Office of Personnel Management - Office of Inspector General; the Department of Veterans’ Affairs Office of Inspector General; the Department of Labor - Office of Inspector General; and TRICARE Program Integrity.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
Except to the extent admitted as part of the criminal resolution, the claims resolved by the civil settlement are allegations only. There has been no determination of liability in the civil case.
For more information about the U.S. Attorney’s Office for the Western District of Virginia, visit its website at https://www.justice.gov/usao-wdva. Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch and http://www. justice.gov/civil/fraud-section. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Hudson County Man Charged with Being Felon in Possession of WeaponRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man made his initial appearance today on a charge stemming from his arrest for illegally possessing a handgun with a large capacity magazine, U.S. Attorney Craig Carpenito announced.
Malik Holloway, 28, of Jersey City, New Jersey, is charged by complaint with one count of possession of a firearm and ammunition by a convicted felon. He appeared by videoconference before U.S. Magistrate Judge James B. Clark III and was detained.
According to documents filed in this case:
At 8:20 p.m. on July 13, 2020, a Jersey City Police Department (JCPD) officer observed via surveillance camera what he believed to be the transfer of a firearm between two individuals on Neptune Avenue. Approximately 30 minutes later, members of JCPD observed a large group of people. Malik Holloway began to walk away from the group. An officer observed what appeared to be a bulge protruding from the center of Holloway’s waistband and Holloway smelled of marijuana. Holloway was stopped and the officer conducted a pat down for weapons. The officer recovered a Glock Model 17 9mm with a large capacity magazine containing 18 rounds of ammunition
The charge of possession of a weapon by a convicted felon carries a maximum penalty of 10 years in prison and a fine of up to $250,000.
U.S. Attorney Carpenito credited the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; and special agents and task force officers of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division, with the investigation leading to the charge and arrest.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the 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 U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The government is represented by Assistant U.S. Attorney Tracey Agnew of the Organized Crime and Gangs Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
German Citizen Charged with Orchestrating Mail Fraud Scheme Defrauding Elderly and Vulnerable Victims of over $10 MillionRead the Press Release
NEWARK, N.J.– A federal grand jury today indicted a German man with orchestrating a massive mail fraud scheme targeting elderly and otherwise vulnerable victims with false and fraudulent psychic solicitations, U.S. Attorney Craig Carpenito announced.
Georg Ingenbleek, 54, a citizen of Germany, is charged with two counts of mail fraud, four counts of money laundering, and one count of obstruction of justice. Ingenbleek was associated with and used a company, Regency Direct Marketing AG, located in Switzerland, for his mass mailing campaigns.
According to the Indictment:
From at least 2011 through 2016, Ingenbleek created numerous direct mail solicitations supposedly from world-renowned psychics, falsely and fraudulently claiming that the recipients were being contacted because they had been the subject of specific visions by the psychics, including visions that the recipients were going to receive large sums of money and good fortune. Many of the letters falsely promised that the psychic services or objects being offered were free of charge. In fact, the letters were mass-produced using software and information provided by Ingenbleek to a direct mail marketing services company, Company-1, located in Piscataway, New Jersey, that Ingenbleek retained to print and mail the solicitations.
Ingenbleek directed a second company, Company-2, to send fraudulent billing notices to the same victims which stated that the victims owed money for psychic services, which in many cases had been offered free of charge. The fraudulent billing notices were labeled “collection notices” and “invoices,” falsely representing that the victims owed late payment fees, and falsely stating that a psychic or astrology organization would refer the victim to a “collection agency” and take legal action if the recipient did not send a check, usually for $20 to $50. Through his fraudulent psychic mailing campaign, Ingenbleek obtained more than $10 million dollars from the victims.
In September 2016, Ingenbleek directed representatives of Company-1 and Company-2 to destroy all materials related to his fraudulent psychic mailings in response to federal criminal investigations into his conduct and the conduct of other participants in the scheme. In one email, dated Sept. 23, 2016, Ingenbleek told a representative of Company-2, “You cannot wait! I advise you urgently to get rid of the material! Use your own car, rent a truck, start today, work all weekend.”
The mail fraud and obstruction counts each carry a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The money laundering counts each carry a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the value of the money instrument or funds involved in the transportation, transmission, or transfer of funds.
U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn in Newark; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and special agents of HSI New York, under the direction of Special Agent in Charge Peter C. Fitzhugh, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Jonathan Fayer of the U.S. Attorney’s Office Economic Crimes Unit and Special Assistant U.S. Attorney Benjamin Teich.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Convicted Felon Admits Selling Semi-Automatic Rifle in TrentonRead the Press Release
TRENTON, N.J. – A Trenton man today admitted unlawfully possessing a semi-automatic rifle during the course of an attempted sale to another individual, U.S. Attorney Craig Carpenito announced.
Edwin Gaines, 59, pleaded guilty today by videoconference before U.S. District Judge Peter G. Sheridan to an information charging him with one count of possession of a firearm by a convicted felon.
According to documents filed in this case and statements made in court:
On Feb. 15, 2019, Gaines, who previously had been convicted of murder in New Jersey Superior Court and who has other felony convictions, arranged to sell to another individual a Ruger .22 semi-automatic rifle as well as an extended magazine. The purchaser, however, was acting at the direction and supervision of law enforcement. In a video- and audio-recorded transaction in the basement of a Trenton residence, the individual purchased the rifle and magazine from Gaines using money that law enforcement had provided.
The firearm charge to which Gaines pleaded guilty carries a statutory maximum term of 10 years in prison and a fine of $250,000. Gaines’s sentencing is scheduled for Nov. 24, 2020.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson, and detectives from the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan, with the investigation leading to today’s guilty plea.
The government is represented by Special Assistant U.S. Attorney Marita Navarro of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Passaic County Man Admits Participating in Heroin ConspiracyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man today admitted conspiring to distribute 100 grams or more of heroin, and to distributing a quantity of heroin, U.S. Attorney Craig Carpenito announced.
Tyson Jacobs, 21, of Paterson, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to one count of conspiracy to distribute and possess with the intent to distribute 100 grams or more of heroin and one count of knowingly and intentionally distributing heroin. Jacobs was previously charged by complaint.
According to documents filed in this case and statements made in court:
The defendant and his conspirators are all members and associates of the 230 Boys street gang, which operates primarily around Rosa Parks Boulevard and Godwin Avenue in Paterson. Through investigative techniques, including 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, the defendant and his conspirators conspired to distribute narcotics, including heroin and fentanyl.
The count of conspiracy to distribute at least 100 grams of heroin carries a mandatory minimum penalty of five years in prison and a maximum penalty of 40 years in prison and a fine of $5 million. The count of distribution of heroin carries a maximum of 20 years in prison and a fine of $1 million. Sentencing is scheduled for Nov. 23, 2020.
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 ATF, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark; officers of the N.J. State Police, under the direction of Col. Patrick J. Callahan; officers of the Paterson Police Department, under the direction of Director Jerry Speziale and Police Chief Ibrahim Baycora; and detectives of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia Valdes, with the investigation leading to the charges. He also thanked the U.S. Marshals Service, the Bergen County Sheriff's Office and the Belleville and Livingston police departments for their assistance with the case.
The government is represented by Assistant U.S. Attorney Francesca Liquori, of the OCDETF/Narcotics unit.
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Statement from U.S. Attorney’s OfficeRead the Press Release
NEWARK, N.J. – The FBI has identified Roy Den Hollander as the primary subject in the attack that occurred at the home of the Honorable Esther Salas on July 19, 2020. Den Hollander is now deceased. The investigation remains ongoing. Individuals who believe they have information relevant to the investigation should contact FBI-Newark at 973-792-3000, press option 2.
Somerset County Man Indicted on Child Pornography ChargesRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted a Somerset County, New Jersey, man for allegedly distributing and possessing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
John Schulenburg, 65, of Basking Ridge, New Jersey, is charged with one count of distribution of child pornography and one count of possession of child pornography. He will be arraigned at a date to be determined. Schulenberg was arrested on a criminal complaint on this conduct on Nov. 6, 2019, and was released on $100,000 unsecured bond.
According to documents filed in this case and statements made in court:
In July 2019, an undercover law enforcement officer conducted an online session using a publicly available peer-to-peer (P2P) program, which allows internet users to trade digital files. During this session, a user shared multiple files of featuring images of child sexual abuse from an internet address traced to Schulenburg’s residence.
On Nov. 6, 2019, law enforcement lawfully obtained a computer from Schulenburg’s residence that contained hundreds of images and videos of child pornography, including images of prepubescent children being sexually abused.
The count of distribution of child pornography carries a mandatory minimum penalty of 15 years in prison, a maximum penalty of 40 years in prison, and fine of $250,000. The count of possession of child pornography carries a mandatory minimum penalty of 10 years in prison, a maximum penalty of 20 years in prison, and fine of $250,000.
U.S. Attorney Carpenito credited the FBI Newark's Child Exploitation Human Trafficking Task Force, under the direction of FBI Special Agent in Charge Joe Denahan; the Somerset County Prosecutor's Office, under the direction of Prosecutor Michael H. Robertson, and the Bernards Township Police Department, under the direction of Chief Michael Shimsky, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Vijay Dewan of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Members of Jersey City Gangs Charged in Connection with Shooting of ChildRead the Press Release
NEWARK, N.J. – Three members of allied Jersey City gangs were charged with the July 7, 2020, shooting of a 12-year old child, U.S. Attorney Craig Carpenito announced today.
Marc Taylor, a/k/a “Bando,” 18, Jashawn Tate, a/k/a “Trilly,” 18, and Damari Blackwell, a/k/a “Juggy,” 18, all of Jersey City, are each charged by complaint with one count of assault with a dangerous weapon in aid of racketeering activity and one count of discharging a firearm during a crime of violence. They are scheduled to make their initial appearances July 16, 2020, by videoconference before U.S. Magistrate Judge James B. Clark III.
According to the documents filed in this case and statements made in court:
Taylor, Tate, and Blackwell are associated with three violent street gangs, which have operated pursuant to an alliance since at least September 2019. These gangs historically were associated with specific neighborhoods in Jersey City: the Marion Gardens Housing Complex, Rutgers Avenue, and the Curries Woods Housing Projects. Since the inception of this alliance, members and associates of Marion, Rutgers, and Curries Woods have operated as a cohesive unit, particularly with respect to their retaliatory acts of violence against rival gangs.
On July 7, 2020, Taylor, Tate, and Blackwell drove to rival gang territory and approached a group of individuals. Taylor fired numerous rounds with a .45 caliber handgun through the front passenger seat window of a vehicle while Blackwell simultaneously attempted to fire a Tec-9 assault pistol through the sunroof. A 12-year-old was shot in the leg. Following this assault, Tate attempted to evade law enforcement by fleeing Jersey City in a stolen car and crashed, which resulted in the apprehension of the three defendants. This targeted assault in rival gang territory appears to be a retaliation for a previous shooting.
On the count of assault with a dangerous weapon in aid of racketeering activity, Taylor, Tate, and Blackwell each face up to 20 years in prison. For their respective charges for discharging a firearm during a crime of violence, Taylor, Tate, and Blackwell each face a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, which must run consecutively to any term of imprisonment imposed on any other charges.
U.S. Attorney Carpenito credited the Jersey City Police Department, under the direction of Public Safety Director James Shea; the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division; and special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to the charges and arrests.
This investigation was conducted as part of the Jersey City Violent Crime Initiative (VCI). The VCI was formed in 2018 by the U.S. Attorney’s Office for the District of New Jersey, the Hudson County Prosecutor’s Office, and the Jersey City Police Department, for the sole purpose of combatting violent crime in and around Jersey City. As part of this partnership, federal, state, county, and city agencies collaborate to strategize and prioritize the prosecution of violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Jersey City Police Department, the Hudson County Prosecutor’s Office, the Hudson County Sheriff’s Office, New Jersey State Parole, the Hudson County Jail, and the New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center.
The case is being prosecuted by Assistant U.S. Attorney Desiree Grace Latzer of the Organized Crime and Gangs Unit in Newark.
Two Pennsylvania-Based Doctors and Five Others Charged in Genetic Testing Kickback and Bribery SchemesRead the Press Release
NEWARK, N.J. – Seven people have been charged for their roles in conspiracies to pay and receive kickbacks in exchange for ordering genetic tests, U.S. Attorney Craig Carpenito announced today.
Three complaints were unsealed today charging the following individuals with conspiring to violate the Federal Anti-Kickback Statute: Lee Besen, 64, of Waverly, Pennsylvania, is charged in two separate complaints, one with Kimberly Schmidt, 45, of Moscow, Pennsylvania, and the other with Terri Haines, of Kennett Square, Pennsylvania. The third complaint charges Yitzachok “Barry” Kurtzer, 60, and Robin Kurtzer, 59, both of Monsey, New York; Amber Harris, 28, of Scranton, Pennsylvania; and Shanelyn Kennedy, 25, of Scranton, Pennsylvania. All of the defendants except Robin Kurtzer made their initial appearances by videoconference before U.S. Magistrate Judge Leda D. Wettre. Robin Kurtzer will surrender at a later date.
“As alleged in the criminal complaints, these defendants engaged in a long-running and complex scheme to rip off Medicare to the tune of millions of dollars,” U.S. Attorney Carpenito said. “They turned patients into human ATMs, generating cash payments for medical testing and other procedures. Those who offer or receive bribes and kickbacks for patient care will be prosecuted by this Office and swiftly brought to justice.”
“Health Care fraud costs our country billions each year, which is not just absorbed, it is passed down to the consumer,” Acting Special Agent in Charge Joe Denahan of the Newark FBI Field Office said. “Today’s arrest is a direct result of the commitment by our federal and state partners to aggressively pursue and charge those who willingly defraud our citizens of valuable resources that are in high demand. We will remain vigilant to assure that unscrupulous individuals are brought to justice.”
“Our medical system is built on trust,” Michael Montanez, Special Agent in Charge, IRS - Criminal Investigation, Newark Field Office, said. “When doctors take bribes and kickbacks that trust is broken. The allegations in the criminal complaints portray doctors who ordered genetic tests for the sole purpose of cheating Medicare and putting cash in their own pockets.”
“Scams, such as the alleged, are hardly victimless,” Maureen R. Dixon, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, Philadelphia Regional Office, said. “These types of fraudulent activities come at a significant cost to the taxpayer and patients who were the target of these procedures. We will continue working with our law enforcement partners to stop kickbacks that threaten the integrity of government health programs.”
According to documents filed in this case and statements made in court:
Besen and Kurtzer were both primary care physicians with separate offices in the Scranton area. From at least 2018, Besen and Kurtzer each began accepting monthly cash kickbacks and bribes in exchange for collecting DNA samples from Medicare patients and sending them for genetic tests to clinical laboratories in New Jersey and Pennsylvania. The cash kickbacks ranged from $500 to $5,000 and Besen and Kurtzer typically accepted the cash in their respective offices, at times behind locked doors. At one point, Kurtzer and his wife, Robin, complained that they were not getting paid enough and renegotiated a higher kickback and bribery fee.
When Besen and Kurtzer did not receive their kickback and bribe payments, the volume of genetic tests they ordered dipped. But, when they accepted those payments, that volume typically increased because, as Besen said in a recorded conversation, “Greenbacks speak.”
Besen and Kurtzer were also recorded receiving and discussing many of their kickback and bribe payments. After Kurtzer accepted a $5,000 cash kickback, he counted the money and said, “Perfect. Didn’t short me.” Besen discussed the kickback and bribe payments as “vigs” – slang for fees collected by bookies.
Besen frequently sought ways to make more money. At one point, he proposed adding to the scheme by collecting “CGx” cancer screening tests from Medicare patients, sending the tests to a new lab, and then splitting lucrative sales commissions that the lab paid out – ranging up to $2,500 per test. Although Besen had not previously ordered CGx tests for any of his patients, once he realized there was money to be made, he said in a recording that his office was “totally open now for CGx.” He was also recorded saying that he hoped the money he made from CGx tests would help him “retire early.” Kurtzer and his staff similarly started ordering CGx tests in order to make more money off of kickbacks and bribes.
Even as the ongoing COVID-19 pandemic substantially reduced their in-patient visits, Besen and Kurtzer continued with their schemes. They worked with their staffs to generate more genetic tests from Medicare patients. Kurtzer went from receiving hand-delivered cash kickbacks and bribes to accepting his payments by wire and through a cell phone money-transfer app. Besen was recorded opining that it was “nuts” for Kurtzer to create that kind of paper trail. Instead, Besen accepted his kickback and bribe payment in cash, in a fast food parking lot. Leading up to that payoff, Besen was recorded making veiled threats and referencing the mafia, while also expressing concern about being caught on camera accepting kickbacks and bribes. Despite such concerns, he followed through with the meeting because, as he was recorded saying, he wanted to collect “greenbacks” for his “pool house.”
Neither doctor acted alone while perpetrating their bribery and kickback schemes. Besen enlisted Schmidt, his employee, who helped him with the scheme by preparing paperwork for the genetic tests. Schmidt also accepted kickbacks and bribes that were calculated based on the volume of genetic tests that Besen generated.
Kurtzer included his wife and his employees Harris and Kennedy, in the scheme. Robin Kurtzer helped negotiate the terms of the kickback and bribery payments, while Harris and Kennedy helped collect the DNA swabs in exchange for also receiving kickbacks and bribes.
As a result of these schemes, Medicare was billed over $1 million for genetic tests generated from Besen’s medical practice, and over $1.3 million for tests generated from Kurtzer’s practice.
Separately, Besen and Haines entered into a different kickback and bribery scheme involving “health fairs.” Haines was not a health care provider, but made a living soliciting and collecting CGx genetic screening tests from Medicare patients at health fairs, and then sending those tests to a lab in exchange for commissions. She was not authorized to order those CGx tests without a doctor’s sign-off. As a result, Haines paid Besen a kickback and bribe to use his name and medical credentials to order CGx tests for the Medicare patients she met at fairs, even though Besen never actually attended any of the health fairs and never met the patients for whom the genetic tests were ordered. Medicare was billed $1,936,795 for genetic tests that resulted from this scheme.
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.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Denahan in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge 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 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 and allegations in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Romanian Programmer Admits that He Helped Create Bitclub Network, a Fraud Scheme Worth at Least $722 MillionRead the Press Release
NEWARK, N.J. – A Romanian man arrested in Germany admitted today to conspiring to engage in wire fraud and offering and selling unregistered securities in connection with his role in the BitClub Network, a cryptocurrency mining scheme worth at least $722 million, U.S. Attorney Craig Carpenito announced.
Silviu Catalin Balaci, 35, a Romanian citizen who was living in Germany, pleaded guilty by videoconference before U.S. District Judge Claire C. Cecchi to a superseding information charging him with one count of a dual-object conspiracy to commit wire fraud and to offer and sell unregistered securities. Balaci and four co-defendants – Matthew Brent Goettsche, Russ Albert Medlin, Jobadiah Sinclair Weeks, and Joseph Frank Abel – were charged previously by indictment in December 2019 in connection with the scheme.
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. Balaci assisted Goettsche and Medlin in creating and operating the BitClub Network and served as a programmer for the BitClub Network.
As a part of the scheme, Balaci and Goettsche discussed that the target audience for the BitClub Network would be “dumb” investors, referred to them as “sheep,” and plotted that they would be “building this whole model on the backs of idiots.” The BitClub Network told investors that they could invest in three different bitcoin mining pools; however, Balaci admitted that, at no point during the conspiracy was he aware of the BitClub Network operating three separate bitcoin mining pools. Balaci admitted that he, at Goettsche’s behest, changed the figures displayed as bitcoin mining earnings to make it appear that the BitClub Network was earning more than what was actually being mined. For example, in February 2015, Goettsche directed Balaci to “bump up the daily mining earnings starting today by 60%,” to which Balaci warned “that is not sustainable, that is ponzi teritori [sic] and fast cash-out ponzi . . . but sure.” In connection with his plea, Balaci confirmed that during the course of the scheme, the BitClub Network took at least $722 million worth of bitcoin from investors.
The charge to which Balaci 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. A sentencing date has not been set.
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 Assistant Director in Charge Paul D. Delacourt; 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; and 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, with the investigation leading to today’s guilty plea. He also thanked the Department of Justice’s Office of International Affairs and German authorities for their assistance.
Anyone who believes they may be a victim may visit www.justice.gov/usao-nj/bitclub or the Department of Justice’s large case website www.justice.gov/largecases. There, victims can find more information about the case, including a questionnaire for victims to fill out and submit.
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.
Four Men Indicted for Their Roles in $35 Million Pharmacy Compounded Medication SchemeRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted four men for their roles in a massive compounded medication fraud and kickback scheme they ran out of a pharmacy in Clifton, New Jersey, U.S. Attorney Craig Carpenito announced.
Jeffrey Andrews, 68, of Bryn Mawr, Pennsylvania; Chad Beene, 47, of Philadelphia; and Adam Brosius, 55, and Robert Schneiderman, 77, both of Langhorne, Pennsylvania, are charged with conspiracy to commit health care fraud, health care fraud, conspiracy to violate the Anti-Kickback Statute, and violations of the Anti-Kickback Statute. They will be arraigned at a date to be determined.
According to documents filed in this case and statements made in court:
In early 2014, Brosius, Beene, Andrews, and Schneiderman started using Main Avenue Pharmacy, a mail-order pharmacy with a storefront in Clifton, to run a large fraud and kickback scheme involving compounded drugs like scar creams, pain creams, migraine mediation, and vitamins.
The scheme revolved around identifying compounded drugs that would yield exorbitant reimbursements from health insurers, including both federal and commercial payers. The defendants figured out which compounds were paying the highest reimbursements by having its pharmacists engage in a practice known as “test billing:” the pharmacist would submit a phony claim to insurance to see which compound would generate the highest reimbursements. Main Avenue also received tips from other pharmacies and marketing companies about which compounds were generating the highest reimbursements.
Once Main Avenue identified lucrative formulas for compounds, it would create large prescription pads with precisely those formulas on it. The prescription pad was extremely easy to use – it included check boxes for doctors to select a particular compounded formula. This increased the likelihood that the doctor would not alter the high-paying formula. There was also a place to select up to a dozen refills and a box authorizing the pharmacy to alter the ingredients itself in case an insurer wasn’t covering a particular compounded medication.
Once the prescription pad was set, Main Avenue would disseminate it to marketers across the country with whom it had contractual relationships. The marketing companies would in turn distribute the prescription pad to telemedicine companies and doctors with whom they had a financial arrangement.
By and large, the doctors who signed prescriptions for compounded medications that were filled at Main Avenue had never even spoken to or examined the patient. Once the prescriptions were signed by a doctor, they would be returned to the marketing company, which would transmit the prescription to Main Avenue Pharmacy. Main Avenue would then fill the prescription and submit claims to health care benefit programs for reimbursement. They did so with federal payers like Medicare and Tricare and with commercial payers in New Jersey and elsewhere.
After Main Avenue obtained reimbursement from the health insurers, they would pay kickbacks to the marketers who had generated the prescriptions based on the overall adjudication amount. Main Avenue signed contracts with many of the marketers, and the contracts themselves spelled out the kickback arrangement, which called for Main Avenue to pay each marketer money based on the volume of referrals of compounded prescriptions and the reimbursement amount that Main Avenue received.
Main Avenue would routinely waive copayments of the patients to whom they were sending multiple prescriptions. They did this to ensure that the patients would keep the medications that Main Avenue had sent regardless of whether the patient wanted them. On some occasions, Brosius paid the copayments on behalf of the patients, and falsified money orders from the patients to Main Avenue to make it appear as if the patients had paid their copayments when they had not.
On compounded medications alone, Main Avenue received over $34 million in reimbursements from health care benefit programs. Approximately $8 million of that total was paid by federal payers.
For the conspiracy to commit health care fraud and health care fraud charges, the defendants face a statutory maximum of 10 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.
For the charge of conspiracy to violate the Anti-Kickback Statute, the defendants face a statutory maximum of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Each individual violation of the Anti-Kickback Statute carries a statutory maximum of 10 years in prison. That offense is also punishable by a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark; the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, and the Department of Health and Human Services – Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.
The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
DeCavalcante Associate Sentenced to 76 Months in Prison for Cocaine Distribution and Gun PossessionRead the Press Release
NEWARK, N.J. – An associate of the DeCavalcante crime family was sentenced today to 76 months in prison for possessing cocaine with the intent to distribute and possession of a firearm during the course of a drug crime, U.S. Attorney Craig Carpenito announced.
Mario Galli III, 28, of Toms River, New Jersey, previously pleaded guilty before Judge Anne E. Thompson in Trenton federal court to an information charging one count of possession with intent to distribute cocaine and one count of possession of a FEG 9mm Model PGK-9HP gun, loaded with 12 rounds of ammunition, by a convicted felon in furtherance of a drug trafficking crime. Judge Thompson imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
Galli was previously convicted in 2016 for conspiracy to distribute in excess of 500 grams of cocaine and served 30 months in federal prison on that charge. He was placed on supervised release in 2019 and then arrested in Ocean County in September 2019. Investigators from the Ocean County Prosecutor’s Office executed search warrants on Galli’s residence and the residence of a conspirator, finding collectively 400 to 500 grams of cocaine, the weapon and ammunition.
In addition to the prison term, Judge Thompson sentenced Galli to three years of supervised release.
U.S. Attorney Carpenito credited special agents of the FBI’s Organized Crime Task Force under the direction of Acting Special Agent in Charge Joe Denahan in Newark; and investigators from the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley D. Billhimer, with the investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney=s Office’s Organized Crime/Gangs Unit in Newark.
Gang Leader Charged with Possession of Semi-Automatic WeaponRead the Press Release
NEWARK, N.J. – A high-ranking member of a set of the Bloods street gang will make his initial court appearance today on charges he possessed a weapon as a convicted felon, U.S. Attorney Craig Carpenito announced today.
Farod Baldwin, 37, of Newark, was arrested July 7, 2020, at the Betty Shabazz Village Housing Complex. He is charged by complaint with one count of unlawful possession of a firearm and ammunition by a convicted felon and is scheduled to appear by videoconference later today before U.S. Magistrate Judge Leda Dunn Wettre.
According to documents filed in this case and statements made in court:
Law enforcement officers were conducting surveillance in Newark when they observed Baldwin park a Jeep Grand Cherokee near an apartment. He removed a 9 mm semi-automatic pistol from the Jeep. Officers observed Baldwin tuck the firearm into his pants before entering the front door of an apartment. Law enforcement officers lawfully searched the apartment and recovered the firearm. Baldwin attempted to flee from the apartment but was apprehended. A further search of the apartment resulted in the seizure of approximately 20 jugs of suspected cocaine base, a bullet-proof vest, two high-capacity magazines, and various ammunition, including rifle ammunition.
Baldwin is allegedly a high-ranking member of a set of the national Bloods street gang known as Sex Money Murder (SMM). Members of SMM have been engaging in violent disputes with other gangs, have trafficked narcotics, and have committed various firearms offenses. Several recent violent crimes, including shootings and homicides, in Newark and elsewhere, are believed to be related to a dispute between SMM and rival gangs.
The firearms offense carries a maximum potential penalty of 10 years in prison, and a $250,000 fine.
U.S. Attorney Carpenito credited the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose; the Essex County Prosecutor’s Office, under the direction Acting Prosecutor Theodore N. Stephens II; and special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to the charge.
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 Mary E. Toscano, Deputy Chief of the Criminal Division in Newark, and Assistant U.S. Attorney Lauren Repole of the OCDETF Unit of the Criminal Division.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former Orange Acting Business Administrator Indicted on Corruption, Fraud, and Tax ChargesRead the Press Release
NEWARK, N.J. – The former acting business administrator for the Township of Orange, New Jersey, has been charged in a 28-count indictment with conspiracy, bribe-taking, money and property fraud, federal tax fraud, and making false statements in connection with a mortgage, U.S. Attorney Craig Carpenito announced today.
Willis Edwards III, 49, formerly of East Orange, New Jersey, and currently of Lithonia, Georgia, was charged with 14 counts of wire fraud, two counts of bribery in connection with the business of a federally funded local government, two counts of theft from a federally funded local government, two counts of mail fraud, two counts of false statements concerning a mortgage, one count of bribery in connection with the business of a federally funded local government and organization, one count of theft from a federally funded local government and organization, one count of conspiracy to commit wire fraud, one count of conspiracy to commit wire fraud and mail fraud, one count of conspiracy to defraud the United States and the IRS, and one count of filing a false tax return. A date for Edwards’ arraignment has not yet been scheduled.
According to documents filed in this case:
In January 2015, Edwards had his friend, Franklyn Ore, form Urban Partners LLC (Urban Partners), using cash provided by Edwards. During 2015, Edwards used Urban Partners to funnel to himself a stream of concealed kickbacks in exchange for Edwards’ official action as an Orange public official and assistance in the affairs of Orange and in violation of his duties in connection with:
- A Saturday literacy program for which Orange and the Orange Public Library were awarded a $50,000 Community Development Block Grant, funded by the U.S. Department of Housing and Urban Development (HUD) and administered by Essex County, to provide tutoring services for low and moderate-income families (the Saturday Literacy Program);
- A project for which an urban planning company located in Montclair, New Jersey, had received a one-year, $150,000 contract from Orange to provide professional economic planning services to analyze the conditions within the Central Orange Redevelopment Area (the “redevelopment project”); and
- A project to acquire the Orange YWCA building and develop it into a community recreation center.
The Saturday Literacy Program Fraud and Kickbacks
Despite knowing that Urban Partners did not provide any services to the library in connection with the Saturday Literacy Program, Edwards caused false and fraudulent vouchers to be submitted in March 2015 and in May 2015 to Essex County seeking Saturday literacy grant funds for expenses purportedly paid to Urban Partners. In support of the fraudulent vouchers, Edwards had phony documents submitted to Essex County, including: (1) a sham contract between Urban Partners and the library, backdated to over six months before Urban Partners had been formed, (2) false statistical data about the children who supposedly attended the literacy sessions, (3) fake Urban Partners invoices, and (4) backdated library checks payable to Urban Partners that had not been negotiated when submitted to Essex County to give the false impression that the Library had paid Urban Partners, when it had not done so.
Between April 2015 and June 2015, Essex County provided the Library with $50,000 in HUD funds for the Saturday Literacy Program. Between May 2015 and August 2015, Edwards caused the library to pay Urban Partners approximately $36,000, despite knowing that Urban Partners had not provided the library with any services in connection with the Saturday Literacy Program. Edwards received kickbacks from Ore from the money paid to Urban Partners by the library. At Edwards’s direction, Ore also provided a portion of the proceeds from the library to an associate of Edwards. Ore spent the remaining proceeds for his own personal benefit.
The Redevelopment Project Fraud and Kickbacks
Edwards used his influence as an Orange public official to arrange for the planning company to hire Urban Partners after the planning company had received its contract with Orange. Ore provided services to the Planning Committee and, between August 2015 and February 2016, the planning company, which was receiving payments from Orange, paid Urban Partners $33,220. Edwards received kickbacks from Ore from the money that the planning company paid to Urban Partners.
The YWCA Project Fraud and Kickback
In December 2015, aware that his resignation as an Orange public official would become effective on Dec. 31, 2015, Edwards took further steps to use his position for corrupt and fraudulent purposes. Edwards advised Ore that Edwards had access to Orange discretionary funds and wanted to use them by the end of the year. At Edwards’s instruction, Ore generated and submitted a fraudulent invoice from Urban Partners to Orange, billing Orange $16,800 for services purportedly related to the YWCA Project. Edwards, knowing that no services has been rendered, approved the issuance of a purchase order and Orange paid Urban Partners $16,800. On Dec. 30, 2015, Edwards received a substantial amount of the $16,800 in a kickback from Ore.
The Plagiarism Scheme
From June 2015 to June 2016, Edwards duped Orange into making payments to a consultant, which were, at least in part, for academic papers that the consultant arranged to have written for Edwards. Edwards, who was enrolled in a graduate program at a university in New Jersey, plagiarized the papers that Orange paid for and passed them off as his own work. Between December 2015 and March 2016, with Edwards’s approval, the consultant submitted three fraudulent invoices to Orange calling for payments of $12,000, $16,000, and $10,000 for purported professional services. Orange paid the money to the consultant and Edwards received from the consultant academic papers that had been written for him. On June 20, 2016, Edwards submitted several papers which were virtually identical to the papers that he had received from the consultant. In emails to the professors, to which the papers were attached, Edwards asked the professors to grade the attached outstanding assignments so that he did “not receive a failing grade for all of the hard work that [he had] done.”
The Graduate School Payments Scheme
The indictment also charges Edwards with fraud in connection with funding his graduate studies. Between December 2015 and July 2016, Edwards engaged in a scheme to defraud Orange of $25,142 in payments to himself and University 1 related to Edwards’s graduate courses there and at another university in New Jersey through the use of a fraudulent approval memorandum. In February 2016, when Edwards was no longer an Orange public official, he dictated the following language to an employee in Orange’s Finance Department (Orange Employee 1) for use in a fraudulent approval memorandum addressed to Edwards: “As per the employee handbook, this memorandum serves as consent for you [Edwards] to enroll in the courses as discussed. Please forward the invoices to process for payment.” Edwards instructed Orange Employee 1 to backdate the memorandum to Aug. 17, 2015, to give the false impression that Edwards had received approval for Orange to pay for academic courses in which he had enrolled.
On Feb. 10, 2016, at Edwards’s direction, Orange Employee 1 sent an email to a senior public official in the office of the Mayor of Orange (Orange Employee 2) containing a draft of the fraudulent approval memorandum. Orange Employee 2 later provided Orange Employee 1 with a final copy of the fraudulent approval memorandum on Orange letterhead, purportedly from the Mayor of Orange, addressed to Edwards, and backdated to Aug. 17, 2015. It included the language that Edwards dictated to Orange Employee 1 and bore the stamp of the initials of the Mayor of Orange to give the false impression that the Mayor of Orange had approved Edwards’s reimbursement for the courses, when the Mayor of Orange had not done so.
Federal Tax Fraud
Edwards also caused a false 2015 federal tax return to be filed with the IRS. From January 2016 to April 15, 2016, Edwards conspired with his tax return preparer, Zenobia Williams, to defraud the United States and the IRS by claiming bogus labor expenses of $27,055 for his business, Natural Care Municipal Cleaning Services LLC (Natural Care), on that tax return. In addition to falsifying business expenses, Edwards also underreported Natural Care’s income. He reported $40,000 in gross receipts, when Natural Care actually received approximately $52,000 in payments from a New Jersey law firm and approximately $32,500 in payments from a local Board of Education. Edwards also did not report the ill-gotten gains that he obtained in 2015 in connection with the Saturday Literacy Program, the Redevelopment Project, and the YWCA Project.
Making False Statements in Connection with a Mortgage
In 2014, Edwards also made false statements to obtain mortgage relief on a $248,000 30-year mortgage loan that he obtained in 2005 to purchase a residence in East Orange, New Jersey. As of Feb. 11, 2014, Edwards had fallen substantially in arrears on his mortgage payments. On April 7, 2014, Edwards submitted a completed Request for Mortgage Assistance form to the mortgage servicer. Edwards disclosed that he was employed by Orange and falsely indicated that he did not have a second employer, when, at the time, he also was employed by a New Jersey County College at an annual salary of approximately $45,000. On Oct. 8, 2014, Edwards and the mortgage servicer entered into a Home Affordable Modification Agreement. In reliance upon false representations made by Edwards, the mortgage servicer provided the following benefits, among others, to Edwards: (1) $95,590 of Edwards’s debt was forgiven between July 2015 and July 2017, and (2) the real estate property was taken out of foreclosure.
The charges carry the following maximum potential penalties:
Offenses Charged
Maximum Term of Imprisonment
Maximum Fine
Conspiracy to commit wire fraud or wire fraud and mail fraud
20 years
$250,000
Wire fraud
20 years
$250,000
Mail fraud
20 years
$250,000
Theft from a federally-funded local government
10 years
$250,000
Bribery in connection with the business of a federally funded local government
10 years
$250,000
Conspiracy to defraud the United States and the IRS
Five years
$250,000
Subscribing to a false tax return
Three years
$250,000
False statement concerning a mortgage
30 years
$1,000,000
On Jan. 13, 2020, Ore entered a guilty plea to an information charging offenses related to the Saturday Literacy Program, the Redevelopment Project, and the YWCA Project. On Feb. 13, 2020, Timur Davis, the former Executive Director of the Orange Library, entered a guilty plea to an information charging an offense related to the Saturday Literacy Program and another HUD-funded program to replace an HVAC/Chiller unit at the Library. On Dec. 30, 2019, Williams entered a guilty plea to conspiring to defraud the United States and the IRS.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Cari Fais and J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Essex County Man Charged in Large-Scale Car Theft SchemeRead the Press Release
NEWARK, N.J. –An Essex County, New Jersey, man has been arrested and charged with running a large, multi-state car theft and fraud ring, U.S. Attorney Craig Carpenito announced today.
Warren Guerrier, 43, of Newark, was arrested by special agents of the FBI and is charged by complaint with one count of conspiracy to commit wire fraud and one count of aggravated identity theft. He is scheduled to appear by teleconference this afternoon before U.S. Magistrate Judge Leda Dunn Wettre.
According to the documents filed in this case and statements made in court:
From November 2016 to March 2019, Guerrier and several conspirators participated in a scheme to sell stolen vehicles through internet-based marketplaces, such as Craigslist and OfferUp. For each fraudulent transaction, Guerrier and his conspirators scouted out vehicles at apartment complexes, hotels, or shopping centers in New Jersey, New York, Pennsylvania, Virginia, and Maryland that they intended to steal and sell. Once a desirable vehicle was selected, Guerrier and his conspirators photographed the target vehicle and attached a GPS tracker to the vehicle in order to acquire a pattern-of-life of the original owner. Guerrier and his conspirators then listed the target vehicles for sale on an internet-based marketplace. They communicated with potential purchasers and, upon identifying a purchaser, scheduled a meeting time and location to meet in person. Shortly before the scheduled meeting times, the conspirators returned to the target vehicles with unlawfully obtained valet keys and stole the vehicles. The scheme targeted mostly older model vehicles made by Honda or Acura because valet keys for such vehicles were easier to access. At Guerrier’s direction, one of the conspirators personally met the purchasers, while posing as the original owner of the vehicle, and provided the purchasers the unlawfully obtained valet key, at least one fraudulent motor vehicle registration document, and the stolen vehicle in exchange for cash.
Overall, the scheme to defraud involves more than 30 stolen vehicles, of which 29 were sold to unwitting buyers. Guerrier and his conspirators collected $217,650 from unwitting buyers over the course of the conspiracy.
The charge of conspiracy to commit wire fraud carries a statutory maximum sentence of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense, and the aggravated identity theft charge carries a mandatory minimum sentence of two years in prison, which must be served consecutively to any other term of imprisonment imposed.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Joe Denahan in Newark, with the investigation leading to the charges and arrest.
The government is represented by Special Assistant U.S. Attorney Kendall Randolph of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Middlesex County Man Charged with Stealing and Altering U.S. Treasury CheckRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man has been charged with bank fraud, theft, and identity theft U.S. Attorney Craig Carpenito announced today.
Bernard Lopez, 40, of Sayreville, New Jersey, is charged by complaint with one count of bank fraud, one count of theft of government funds, and one count of aggravated identity theft. He was arrested on July 6, 2020, appeared today by teleconference before U.S. Magistrate Judge Lauren F. Louis in the Southern District of Florida, and is expected to appear by videoconference before U.S. Magistrate Judge Leda Dunn Wettre later this week.
According to the documents filed in this case and statements made in court:
On Oct. 5, 2019, Lopez used a victim’s Social Security number and business documents pertaining to a sham business that he had created to open a fraudulent bank account in that business’ name. Lopez then fraudulently obtained a U.S. Treasury check, which was fraudulently altered to be made payable to the sham business in the amount of $211,887 and deposited it into the account. Lopez then either withdraw or transfer the stolen proceeds from the fraudulent business bank account before anyone could detect the fraud.
The bank fraud charge carries a maximum penalty of 30 years in prison and a fine of the greatest of $1 million or twice the gain derived from, or loss caused by, the offense. The theft of government funds charge carries a maximum penalty of 10 years in prison and a fine of the greatest of $250,000 or twice the gain derived from, or loss caused by, the offense. The aggravated identity theft charge carries a mandatory term of imprisonment of two years, which must run consecutively to any other term of imprisonment imposed.
U.S. Attorney Carpenito credited special agents and task force officers of the U.S. Department of the Treasury-Office of Inspector General, under the direction of Assistant Inspector General for Investigations Sally D. Luttrell, with the investigation leading to the charges. He also thanked the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina, for assistance in the investigation.
The government is represented by Assistant U.S. Attorney Perry Farhat of the Government Fraud Unit of the U.S. Attorney’s Office’s Criminal Division in Newark.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Department of Justice Awards $2.2 Million for Innovative Community Policing ProjectsRead the Press Release
NEWARK, N.J. – The Department of Justice today announced $2.2 million in grant funding to law enforcement agencies and stakeholders through the Department’s Office of Community Oriented Policing Services (COPS Office) Community Policing Development (CPD) Microgrants Program. COPS Office Director Phil Keith announced 29 awards with award amounts ranging from $15,090 to $100,000.
In the District of New Jersey, the state Department of Law and Public Safety is receiving a $34,350 grant for its Officer Safety and Wellness Program and Howell Township is receiving a $93,357 grant for its Youth Engagement Program.
“These funds will provide additional resources for the development of policing strategies that will improve the way law enforcement interacts with the people they are sworn to protect,” U.S. Attorney Carpenito said. “This comes at a crucial time, as we work to refine and enhance community policing strategies.”
“The CPD Microgrants Program is a critical resource to advance innovative community policing projects across the country,” Director Keith said. “These strategic investments from the COPS Office pay huge dividends to state and local law enforcement agencies and the communities that they serve.”
CPD Microgrants Program funds are used to develop the capacity of local, state, and tribal law enforcement agencies to implement community policing strategies. Applicants were invited to propose demonstration or pilot projects to be implemented in their agency that offer creative ideas to advance crime fighting, community engagement, problem solving, or organizational changes to support community policing in one of the following areas:
- Human Trafficking
- Meeting Rural Law Enforcement Challenges
- Officer Safety and Wellness
- Recruitment, Hiring, and Retention
- School Safety
- Staffing and Allocation Studies
- Victim-Centered Approaches
- Violent Crime
- Youth Engagement
Funding through this program is available for the first time since 2018, following the successful removal of a nationwide injunction. These awards are being announced at a critical time for our country, when community policing strategies are very much needed to improve police and community relations.
The complete list of awards can be found here: https://cops.usdoj.gov/pdf/2020AwardDocs/cpdmicrogrants/Award_List.pdf. To learn more about CPD Microgrants, please visit https://cops.usdoj.gov/cpdmicrogrants. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
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.
Camden County Man Admits Trafficking High-Dosage Oxycodone Pills as Part of Camden and Gloucester City Drug RingsRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, man today admitted buying and reselling 80 milligram oxycodone pills as part of his role in drug trafficking operations based in Gloucester City and Camden, U.S. Attorney Craig Carpenito announced.
Wayne Muse, 73, of Lindenwold, New Jersey, pleaded guilty by videoconference before U.S. District Judge Renée Marie Bumb to an information charging him with one count of conspiracy to distribute and possess with intent to distribute a quantity of oxycodone and one count of distributing and possessing with intent to distribute a quantity of oxycodone.
According to documents filed in this case and statements made in court:
Muse and others, including Rocco DePoder and Erick Bell, allegedly agreed to distribute oxycodone in South Jersey between January and March 2020. On Feb. 13 and 14, 2020, Muse communicated with DePoder using the telephone – in communications that were intercepted during a wiretap investigation led by the FBI – and arranged to sell DePoder 60 80 mg. oxycodone pills, which Muse planned to purchase from an individual identified as “Seller-1.” On Feb. 14, 2020, DePoder paid Muse $600, and Muse used $300 of that money to buy the 60 oxycodone pills from Seller-1. Muse then provided the 60 oxycodone pills to DePoder, keeping the remaining $300. Between January and March 2020, Muse also sold oxycodone pills to Bell.
Each count of the information carries a maximum prison term of 20 years and a maximum fine of $1 million.
Others, including DePoder and Bell, were charged in criminal complaints in March 2020. Their cases are pending, and they are presumed innocent unless and until proven guilty.
U.S. Attorney Carpenito credited special agents of FBI Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll; the U.S. Department of Health and Human Services-Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the Camden County Sheriff's Office, under the direction of Sheriff Gilbert L. Wilson; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the Camden County Police Department, under the direction of Chief Joseph Wysocki; and the U.S. Department of Agriculture-Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to today’s guilty plea. He also thanked the FBI Newark Division, New Jersey State Police, Camden County Prosecutor’s Office, and U.S. Drug Enforcement Administration (DEA) for their assistance.
The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni of the Office’s Camden branch and Sara F. Merin of the Newark Office.
Seven Individuals Arrested in Connection with $3.5 Million Multi-State Bank Fraud ConspiracyRead the Press Release
TRENTON, N.J. – Seven people have been charged for their alleged roles in a large-scale conspiracy to commit bank fraud in New Jersey, New York, Pennsylvania, Maryland, Virginia, and Michigan over the course of two years, U.S. Attorney Craig Carpenito announced today.
The criminal complaint unsealed today in Trenton federal court charges the defendants with conspiracy to commit bank fraud, in connection with a fraudulent scheme that used hundreds of fraudulent accounts to defraud several major banks causing losses of over $3.5 million. Today’s arrests of five of the defendants were made in coordination with two other federal investigations conducted by the U.S. Attorney’s Offices for the Eastern District of Virginia and the District of Maryland, which led to the filing of separate criminal complaints, also unsealed today, that charged five defendants in the Eastern District of Virginia and two defendants in the District of Maryland.
According to documents filed in the District of New Jersey and statements made in court:
From 2018 through April 2020, the defendants conspired with each other and others to defraud several major banks and electronic merchant processors. To accomplish the conspiracy’s unlawful objective, the defendants established bank accounts associated with sham entities that had no legitimate purpose, and thereafter would issue checks payable to other sham entities associated with the criminal organization, knowing that the accounts on which the checks were drawn contained insufficient funds. The defendants would also conduct numerous fraudulent credit card and debit card transactions between shell companies to fraudulently credit payee accounts and fraudulently overdraw payor accounts. Alternatively, the defendants would use these shell companies to execute temporary refund credits, commonly referred to as “charge-backs,” to checking accounts associated with the criminal organization, where no prior legitimate transaction had occurred.
In each one of these instances, members of the criminal organization withdrew the funds (through ATMs or bank tellers) that banks and/or merchant processors had credited to the payee bank accounts at the time of the fraudulent transaction. Because the defendants withdrew the credited funds from the payee accounts before the banks could recognize the fraudulent transactions, the banks and merchant processors were left with substantial losses.
The investigation has identified approximately 200 bank accounts and 75 merchant credit card processing accounts used to facilitate the schemes. The defendants’ unlawful activities have caused an aggregate loss to banks and merchant processing companies of at least $3.5 million.
The bank fraud conspiracy count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million.
U.S. Attorney Craig Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, Newark Division, and Acting Inspector in Charge Felicia George, Michigan Division; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina in Newark; the Social Security Administration Office of the Inspector General, under the direction of Special Agent in Charge John F. Grasso; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to today’s charges. He also thanked the Department of Homeland Security, Homeland Security Investigations, Michigan Division, and the U.S. Attorneys for the Eastern District of Virginia and the District of Maryland for coordinating the investigation.
The government is represented by Assistant U.S. Attorney Ray Mateo of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The defendants charged in the New Jersey complaint unsealed today are listed below:
Name
Age
Residence
*Rana Sharif
36
Dearborn Heights, Michigan
Awaise Dar
32
Dearborn, Michigan
*Shamsher Farooq
26
Dearborn, Michigan
Habib Majid
34
North Brunswick, New Jersey
Naveed Arif
42
Port Reading, New Jersey
Ali Abbas
38
Carteret, New Jersey
Erm Ayaz
36
Bayside, New York
*denotes at large
Monmouth County Man Charged with Filing False Tax ReturnRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, man was charged today for subscribing to a false tax return, U.S. Attorney Craig Carpenito announced.
Steven Bryce, 50, of Monmouth County, New Jersey, is charged by complaint with subscribing to a false tax return for tax year 2013. A summons was issued for Bryce to appear before a U.S. Magistrate Judge in Newark federal court at a time to be scheduled.
According to the complaint:
In 2013, Bryce operated a gambling business. On July 14, 2014, Bryce filed with the IRS U.S. Individual Income Tax Return, Form 1040, for the calendar year 2013 on behalf of himself and his spouse, which falsely stated that they had total income of $112,899. The 2013 Tax Return was not true and correct: Bryce received tens of thousands of dollars from his gambling business, and, as a result, had income substantially in excess of the amount he reported.
The charge of subscribing to a false tax return carries a maximum potential penalty of three years in prison and a maximum $250,000 fine.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez and special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Jersey City Police Officer Charged with Fraud Involving Off-Duty Work AssignmentsRead the Press Release
NEWARK, N.J. – A Jersey City police officer was charged today with conspiring to defraud Jersey City by obtaining compensation for off-duty work that she did not perform, U.S. Attorney Craig Carpenito announced.
Gicella Sanchez, 36, of Jersey City, is charged by complaint with one count of conspiracy to defraud a local government. She is expected to appear today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.
According to documents filed in this case and statements made in court:
Private contractors and businesses sometimes require the services of off-duty Jersey City police officers for certain projects, including work that could obstruct the flow of traffic. The off-duty assignments were made by a Jersey City Police Department-designated coordinator for the district in which the assignment was to be carried out. Officers receiving these off-duty assignments were required to complete and provide to the coordinator a voucher that indicated, among other things, the hours worked on particular off-duty assignments.
From November 2014 through June 2016, Sanchez conspired with another Jersey City police officer who was authorized to assign off-duty work and sign vouchers. That officer – with Sanchez’s knowledge and consent – submitted phony vouchers to Jersey City indicating that Sanchez had completed certain off-duty assignments that she never actually performed. As a result, Sanchez was compensated well over $5,000 for off-duty work she never performed.
Sanchez faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to today’s charge.
The Jersey City Police Department is cooperating with the investigation.
The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Bergen County Man Arrested in $1.5 Million Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today for his alleged role in an investment scheme that fraudulently obtained $1.525 million from at least three families from 2017 through 2019, U.S. Attorney Craig Carpenito announced.
Matthew Benjamin, 53, of Englewood, New Jersey, is charged by complaint with two counts of wire fraud and one count of securities fraud. He is scheduled to make his initial appearance today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.
According to documents filed in this case and statements made in court:
From May 2017 through August 2019, Benjamin falsely represented to at least three families that his company, Clear Solutions Group LLC, had lucrative contracts to purchase closeout or excess cosmetic inventory from Company A, which he would then resell at a mark-up to Company B. Benjamin told the victims that he had access to these closeout goods through his contacts in the cosmetics and fragrance industry, which he purportedly made through his work at his family’s cosmetic wholesale and distribution business prior to starting Clear Solutions Group. Benjamin induced the victims to provide him with money to purchase the inventory from Company A and promised significant profits in return. Instead of investing the money as he promised, Benjamin misappropriated the investor’s money for his own use and benefit.
Benjamin provided the victims with falsified documents, including fake purchase orders, invoices, promissory notes and bank records showing inflated assets of Clear Solutions Group. To lull victims and induce them to continue investing, Benjamin provided them with documents that purported to detail the investors’ profits.
Benjamin misrepresented to certain investors that portions of their profits on the investment contracts were being reinvested in additional deals to purchase and sell cosmetics, which in turn would generate more profits. From time to time, Benjamin made payments to the investors that were purportedly their profits on certain cosmetics contracts.
In reality, Benjamin did not purchase or sell cosmetics with the money invested by the victims. Instead, Benjamin misappropriated the investors’ money by making payments to other investors in Clear Solutions Group, which were characterized as those investors’ profits from the nonexistent cosmetic contracts, thereby enabling Benjamin to continue to perpetuate his fraudulent scheme; and by funding Benjamin’s and his family’s lifestyle, including paying for car and house rental payments, food, international travel, legal fees, technology equipment, and summer camp tuition for his family members. The victims’ losses from the fraud perpetrated by Benjamin collectively totaled approximately $1 million.
The wire fraud counts are each punishable by a maximum of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. The securities fraud count is punishable by a maximum of 20 years in prison and a fine of $5 million.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to today’s charges. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Director Marc Berger, for its assistance. The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Benjamin today based on the same conduct.
The government is represented by Assistant U.S. Attorney Jennifer Kozar of the Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Ex-Husband of ‘Real Housewives of New Jersey’ Star and Lucchese Crime Family Soldier Indicted for Assault and Other CrimesRead the Press Release
NEWARK, N.J. – The ex-husband of one of the stars of the Bravo television show “The Real Housewives of New Jersey,” and an organized crime soldier were arrested today on charges of planning and carrying out an assault of the Bravo star’s current husband in exchange for a lavish wedding reception, U.S. Attorney Craig Carpenito announced.
Thomas Manzo, 55, of Franklin Lakes, New Jersey, and John Perna, 43, of Cedar Grove, New Jersey, are each charged by indictment with committing a violent crime in aid of racketeering activity and conspiracy to commit a violent crime in aid of racketeering activity. The indictment also charges Perna – identified in the indictment as a soldier in the Lucchese Crime Family – with conspiracy to commit wire and mail fraud related to the submission of a false car insurance claim, and Manzo with falsifying and concealing records related to the federal investigation of the violent crime. Both defendants will make their initial appearances today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.
According to the documents filed in this case and statements made in court:
In the spring of 2015, Manzo, one of the owners of the Brownstone Restaurant in Paterson, New Jersey, allegedly hired Perna to assault his ex-wife’s then-boyfriend in exchange for a deeply discounted wedding reception for Perna held at the upscale venue. Perna, who is a “made man” in the Lucchese Crime Family with his own crew, worked with his associates to plan and carry out the assault, which took place in July of 2015. In exchange for committing the assault, Perna held a lavish wedding reception at Manzo’s restaurant for a fraction of the price, which was paid by another Lucchese associate and close friend of Manzo’s. The wedding and reception, held in August 2015, were attended by approximately 330 people, and included many members of the Lucchese Crime Family.
Separately, prior to the date that Perna was scheduled to begin serving a state prison sentence in January 2016, he falsely reported that his Mercedes Benz was stolen and destroyed. Perna filed an insurance claim for the destruction of the Mercedes Benz in order for the balance due on the Mercedes Benz. However, Perna had staged the vehicle theft and arson with other members of the Lucchese Crime Family.
The charge against Manzo for allegedly falsifying and concealing records related to the federal investigation of the July 2015 assault relates to federal grand jury subpoenas that were sent to the Brownstone Restaurant seeking documents related to the August 2015 Perna wedding reception. Manzo failed to turn over relevant documents in response to those subpoenas and deliberately submitted a false document regarding the reception to the government, along with a false certification. In November 2019, agents with the FBI executed a search warrant at the Brownstone Restaurant and seized invoices for the August 2015 Perna wedding reception and other relevant documents that were not previously turned over.
The violent crime in aid of racketeering activity count against both defendants carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The conspiracy to commit the violent crime in aid of racketeering activity count against both defendants carries a maximum potential penalty of three years in prison and a $250,000 fine. The conspiracy to commit mail and wire fraud count against Perna carries a maximum potential penalty of 20 years of in prison and a $250,000 fine. The falsifying and concealing records related to a federal investigation count against Manzo carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to the charges and arrest.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Special Assistant U.S. Attorney Kendall Randolph of the U.S. Attorney’s Office’s Organized Crime and Gangs Unit in Newark.
The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Atlantic County Tax Preparer Charged with Filing False Tax ReturnsRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, tax preparer was arrested today for allegedly using false information to increase her clients’ tax refunds and filing her own false tax returns, U.S. Attorney Craig Carpenito announced.
Michele Griffin, 40, of Galloway, New Jersey, is charged by indictment with 19 counts of aiding and assisting in the preparation and filing of false tax returns. Griffin is also charged with three counts of filing her own false tax returns. Griffin will be arraigned today by video conference before U.S. Magistrate Judge Joel Schneider.
According to the indictment:
Griffin allegedly prepared multiple fraudulent tax returns on behalf of her clients by falsifying their education expenses, dependent care expenses, business income, dependent information, and unemployment income. As a result, her clients’ returns requested higher tax credits and higher refunds than the clients were entitled to receive. Griffin received substantial income by preparing tax returns for others that she failed to report on her own tax returns. Griffin also included false education expenses on her own tax returns, which led her to request higher education credits and a higher refund than she was entitled to receive.
Griffin allegedly prepared 19 false tax returns on behalf of six clients for tax years 2013 through 2016 and filed three false tax returns for herself for tax years 2013 through 2015.
Each count carries a maximum penalty of three years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Three Individuals Charged, Fourth Admits Guilt in $6 Million Health Care Fraud Conspiracy Targeting State Health Benefits ProgramsRead the Press Release
CAMDEN, N.J. – A federal grand jury has returned a 33-count indictment charging three individuals, including a doctor and an advanced practice nurse, with defrauding New Jersey state health benefits programs and other insurers out of more than $6 million by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito announced today. A fourth individual, a Mt. Laurel, New Jersey, doctor, pleaded guilty to signing four false prescriptions for patients he never met.
Brian Sokalsky, D.O., 42, of Margate, New Jersey, and Vincent Tornari, 46, of Linwood, New Jersey, were charged with conspiracy to commit health care fraud and wire fraud. Sokalsky was charged with a second conspiracy to commit health care fraud and wire fraud. Ashley Lyons-Valenti, 63, of Swedesboro, New Jersey, and Tornari were charged with a third conspiracy to bribe Lyons-Valenti and deprive her patients and employer of her honest services. Sokalsky and Tornari also were each charged with individual acts of health care fraud and wire fraud, and Lyons-Valenti was charged with individual acts of wire fraud and five false statement counts. Lyons-Valenti was also charged with obstruction of justice for tampering with a grand jury witness.
The cases are assigned to U.S. District Judge Robert B. Kugler in Camden. The indicted defendants are expected to appear today by videoconference before U.S. Magistrate Judge Joel Schneider.
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 in New Jersey to obtain very expensive and medically unnecessary compounded medications from a Louisiana pharmacy, identified in the indictment as “Compounding Pharmacy 1,” and a Pennsylvania pharmacy, identified in the indictment as “Compounding Pharmacy 2.” The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.
The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal 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, Matthew Tedesco, who previously pleaded guilty to conspiracy to commit health care fraud, had an arrangement with Sokalsky – if Tedesco sent new patients to Sokalsky’s medical practice, Sokalsky would prescribe Compounding Pharmacy 1 medications for the patients. Tedesco received a percentage of the amount that Compounding Pharmacy 1 received for prescriptions obtained by Tedesco and his associates. Tedesco and his conspirators recruited public employees and others covered by the Pharmacy Benefits Administrator to agree, in exchange for money, to obtain compounded medications from Compounding Pharmacy 1. Tedesco sent the recruited individuals to Sokalsky and often tipped him off that they were coming. Sokalsky prescribed Compounding Pharmacy 1 medications for the patients, including medications that patients did not need or discuss with him. Sokalsky profited by billing insurance for over 30 new patients.
The completed prescriptions were faxed to Compounding Pharmacy 1, which filled the prescriptions and billed the Pharmacy Benefits Administrator. The Pharmacy Benefits Administrator paid Compounding Pharmacy 1 over $5 million for compounded medications prescribed by Sokalsky.
The indictment charges Sokalsky and Tornari with a similar scheme to write fraudulent prescriptions for Compounding Pharmacy 2. Tornari’s company had an agreement with Compounding Pharmacy 2 to receive 50 percent of the insurance payment for prescriptions they arranged. Tornari then hired Mark Bruno to find patients who would agree to receive Compounding Pharmacy 2 medications in exchange for cash payments. Bruno pleaded guilty in 2019 to conspiracy to commit health care fraud for his participation in the scheme. Tornari had Sokalsky agree to write Compounding Pharmacy 2 prescriptions for new patients sent to him. Bruno found patients and sent them to Sokalsky, often after letting Sokalsky know that they were coming. Sokalsky wrote Compounding Pharmacy 2 prescriptions that the patients did not need or discuss with Sokalsky, sometimes without even seeing the patients. These prescriptions cost insurers over $500,000.
In a third charged scheme, Tornari hired Lyons-Valenti’s boyfriend and agreed to pay him commissions on each Compounding Pharmacy 2 prescription that Lyons-Valenti wrote. Lyons-Valenti then started writing Compounding Pharmacy 2 prescriptions and Tornari paid commissions to the boyfriend, who gave Lyons-Valenti half of the commission payments. Lyons-Valenti persuaded her workers and subordinates at her medical office to receive Compounding Pharmacy 2 prescription medications that they did not need, often without giving them a medical examination or recording the prescriptions in their medical records. Lyons-Valenti wrote Compounding Pharmacy 2 prescriptions for which insurance paid over $1.25 million and received over $90,000 in kickbacks in return.
In a fourth scheme, Lyons-Valenti signed five Compounding Pharmacy 1 prescriptions for Judd Holt, who previously pleaded guilty to conspiracy to commit health care fraud for his role in the scheme. On each of the five prescriptions, Lyons-Valenti falsely stated that she had examined the patient’s medical records, conducted a face-to-face examination of the patient, and determined that the prescribed medications were medically necessary, when in fact she had never met or examined any of the five patients.
Lyons-Valenti also was charged with witness tampering for making false and misleading statements to a co-worker who was a federal grand jury witness. Lyons-Valenti called and texted the witness before and after the witness talked to the FBI and before the witness was scheduled to testify in the grand jury. Lyons-Valenti told the witness to tell the FBI that Lyons-Valenti had examined the witness before prescribing medications for the witness, which was false. Lyons-Valenti also falsely told the witness that Lyons-Valenti had never received any money for writing the prescriptions.
The health care fraud and wire fraud conspiracy count with which defendants Sokalsky and Tornari are charged carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Each wire fraud 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. Each health care fraud 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 honest services conspiracy count and the false statement counts each carry a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The witness tampering charge carries a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense
Also today, Michael Goldis, D.O., 64, who had a medical practice in Stratford, New Jersey, pleaded guilty by videoconference before Judge Kugler to four counts of making false statements relating to health care matters. According to admissions made in court, Goldis signed four prescriptions for individuals who were not his patients at the request of Richard Zappala, who previously pleaded guilty to conspiracy to commit health care fraud. On each of the four prescriptions, Goldis falsely certified that he had examined the patient’s medical records, conducted a face-to-face examination of the patient, and determined that the prescribed medications were medically necessary, when in fact Goldis had never met or examined any of the four patients. Goldis admitted that he received $1,000 checks on the same days he signed two of the prescriptions and received a total of $4,700 from Zappala. The Pharmacy Benefits Administrator paid approximately $1 million for prescriptions Goldis signed at Zappala’s request.
Goldis was previously charged in an indictment with conspiracy to commit health care fraud and other offenses with Steven Monaco, Daniel Oswari, and Aaron Jones. Oswari pleaded guilty in December 2019 to fraud and kickback charges. The indictment remains pending against Monaco and Jones.
Goldis faces a maximum penalty on each count of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Nov. 6, 2020.
U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski 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 and guilty plea. 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 and the indictment against Monaco and Jones are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Registered Sex Offender Sentenced to One-Year Jail Term for Violating Terms of Supervised ReleaseRead the Press Release
NEWARK, N.J. – A Monsey, New York, man who was previously convicted of assaulting a woman on a flight from Israel to Newark Liberty International Airport was sentenced today to additional prison time for violating the terms of his supervised release by sexually abusing a minor, U.S. Attorney Craig Carpenito announced.
Yoel Oberlander, 39, appeared by videoconference for a hearing before U.S. District Judge Esther Salas and pleaded guilty to violating the terms of his supervised release by committing another crime. He was sentenced today to 12 months in prison, representing time served, and an additional term of supervised release of two years, which includes a 12-month term of home detention with a GPS bracelet. He will be required to quarantine on house arrest for a period of 14 days once released from Essex County Jail.
On July 20, 2017, Oberlander was sentenced to 12 months in prison and three years of supervised release after pleading guilty to committing the offense of assault with the intent to stalk. On June 24, 2019, while serving his probationary term, Oberlander was arrested by the Ramapo Police Department in New York for picking up a minor victim in his car and assaulting the victim. Oberlander was charged by the Rockland County District Attorney with three misdemeanor offenses: sexual abuse in the third degree, forcible touching, and endangering the welfare of a child.
Oberlander is a registered sex offender; he was convicted in 2002 in New York for sexual abuse in the second degree, arising from his sexual assault of a minor. In his prior federal prosecution by this office, Oberlander was convicted of assaulting a 22-year old woman who was seated next to him on a May 2016 El Al flight from Tel Aviv to Newark by touching her in the area of her chest, upper thigh, and hand without her consent.
The government is represented by Assistant U.S. Attorneys Melissa M. Wangenheim and Adam Baker of the U.S. Attorney’s Criminal Division in Newark.
Novartis Hellas S.A.C.I. and Alcon Pte Ltd Agree to Pay over $233 Million Combined to Resolve Criminal FCPA CasesRead the Press Release
Novartis Hellas S.A.C.I. (Novartis Greece), a subsidiary of Novartis AG, a Switzerland-based global pharmaceutical company, and Alcon Pte Ltd, a former subsidiary of Novartis AG and current subsidiary of Alcon Inc., a multinational eye care company, have agreed to pay a combined total of more than $233 million in criminal monetary penalties to resolve the department’s investigation into violations of the Foreign Corrupt Practices Act (FCPA).
The resolutions arise out of a Novartis Greece scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece and to falsely record improper payments relating to the corrupt scheme and similar conduct, and an Alcon Pte Ltd scheme to make and falsely record improper payments in Vietnam. Novartis AG has also agreed to pay over $112 million to the U.S. Securities and Exchange Commission (SEC) in a related matter.
Novartis Greece entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of New Jersey in connection with a criminal information filed today in the District of New Jersey charging Novartis Greece with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the books and records provision of the FCPA. Pursuant to the deferred prosecution agreement, Novartis Greece has committed to pay a total criminal monetary penalty of $225 million.
Alcon Pte Ltd, a subsidiary of Novartis AG at the time of the misconduct, separately entered into a deferred prosecution agreement in connection with a criminal information filed today in the District of New Jersey charging Alcon Pte Ltd with conspiracy to violate the books and records provision of the FCPA. Pursuant to the deferred prosecution agreement, Alcon Pte Ltd has committed to pay a total criminal monetary penalty of approximately $8.9 million.
“Novartis AG’s subsidiaries profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The resolutions announced today reflect the paramount importance of effective compliance programs and the department’s commitment to holding companies accountable when they fall short.”
“The agreement we’re announcing today shows that there will be a heavy price paid by companies that violate our laws, whether at home or overseas,” said U.S. Attorney Craig Carpenito for the District of New Jersey. “Just as importantly, it includes a framework for compliance reforms that should ensure that these companies conduct their business legally moving forward.”
“The FBI is committed to fighting any corrupt acts that adversely impact our economy, our citizenry, or our way of life,” said Acting Special Agent in Charge Douglas Korneski of the FBI’s Newark Field Office. “I say this to every company doing business on the stock exchange – if you think you can ignore the rules or make up your own, if your business model includes bribery or a quid pro quo, you can count the days until we show up on your company's doorstep. We will protect our citizens, our economy, our way of life, and bring to justice anyone who breaks the law.”
According to its admissions, between 2012 and 2015, Novartis Greece conspired with others to violate the FCPA by engaging in a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece in order to increase the sale of Novartis-branded pharmaceutical products. Specifically, Novartis Greece paid for employees of state-owned and state-controlled hospitals and clinics to travel to international medical congresses, including events held in the United States, as a means to bribe these officials in exchange for increasing the number of prescriptions they wrote for Lucentis, a prescription drug that Novartis Greece sold. In furtherance of the scheme, Novartis Greece employees traveled to the United States, and, while located in the United States, facilitated the provision of the improper benefits to publicly-employed Greek health care providers.
In connection with the resolution, Novartis Greece also admitted that between 2009 and 2010, Novartis Greece made improper payments to health care providers in connection with an epidemiological study that was intended to increase sales of certain Novartis-branded prescription drugs. The epidemiological study was used as a vehicle to make improper payments to the health care providers in order to increase sales of certain Novartis-branded prescription drugs, and Novartis Greece employees recognized that many participating health care providers believed that they were being paid in exchange for writing prescriptions of Novartis products and not for providing data as part of a clinical study.
In furtherance of both schemes, Novartis Greece, through its employees and agents, knowingly and willfully conspired with others to cause Novartis AG to mischaracterize and falsely record improper payments related to the international medical congresses and the epidemiological study in Novartis AG’s books, records, and accounts.
According to its admissions, from 2011 through 2014, Alcon Pte Ltd knowingly and willfully conspired with others to cause Novartis AG to maintain false books, records and accounts, as a result of a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Vietnam. Specifically, the false books and records resulted from a scheme in which Alcon employees in Vietnam made corrupt payments through a third-party distributor to employees of state-owned and state-controlled hospitals and clinics in Vietnam in order to increase sales of intraocular lenses. Intraocular lenses are artificial replacement lenses that are implanted in the eye as part of a treatment for a variety of ailments such as cataracts. Alcon employees in Vietnam, reimbursed the distributor for up to 50 percent of the cost of the corrupt payments, and these reimbursements were falsely recorded as, among other things, consulting expenses, marketing expenses, and human resource expenses.
As part of the agreement with Novartis Greece, Novartis Greece agreed to continue to cooperate with the U.S. government in any ongoing or future criminal investigations concerning Novartis Greece, its executives, employees, or agents. In addition, under the agreement, Novartis Greece and its parent company, Novartis AG, agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.
As part of the agreement with Alcon Pte Ltd, Alcon Pte Ltd agreed to continue to cooperate with the government in any ongoing or future criminal investigations concerning Alcon Pte Ltd, its executives, employees, or agents. In addition, under the agreement, Alcon Pte Ltd and its parent company, Alcon Inc., agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.
The government reached these resolutions with Novartis Greece and Alcon Pte Ltd based on a number of factors, including the failure to timely disclose the conduct that triggered the investigations; the nature and seriousness of the offenses, which spanned multiple years and involved high level employees; the lack of an effective compliance and ethics program at the time of the misconduct; and credit for each company’s respective cooperation. The companies also engaged in remedial measures, including terminating and disciplining individuals who orchestrated the misconduct, adopting heightened controls and anti-corruption protocols, and significantly increasing the resources devoted to compliance.
The criminal monetary penalty for Novartis Greece reflects a 25 percent reduction off a point near the midpoint of the U.S. Sentencing Guidelines range because, although Novartis Greece fully cooperated and remediated, its parent company Novartis AG was involved in similar conduct for which it previously reached a resolution with the SEC in March 2016.
The criminal monetary penalty for Alcon Pte Ltd reflects a 25 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because of Alcon Pte Ltd’s full cooperation with the government’s investigation.
In a related matter with the SEC, Novartis AG agreed to pay the SEC disgorgement and prejudgment interest totaling approximately $112 million for the conduct in Greece and Vietnam, as well as additional conduct.
The FBI’s Garrett Mountain, New Jersey Field Office is investigating the case. Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section and Senior Trial Counsel Bernard J. Cooney and Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Health Care Fraud Unit are prosecuting the case.
The department appreciates the assistance of the Criminal Division’s Office of International Affairs and the significant cooperation provided by the SEC in this case.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
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.
Novartis AG and Subsidiaries to Pay $345 Million to Resolve Foreign Corrupt Practices Act CasesRead the Press Release
NEWARK, N.J. – Switzerland-based global pharmaceutical company Novartis AG and a current and former subsidiary will pay $345 million in criminal and regulatory penalties to resolve violations of the Foreign Corrupt Practices Act (FCPA), U.S. Attorney Craig Carpenito, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and FBI Acting Special Agent in Charge Douglas Korneski, Newark Field Office, announced today.
Novartis Hellas S.A.C.I. (Novartis Greece), a subsidiary of Novartis AG, and Alcon Pte Ltd, a former subsidiary of Novartis AG and current subsidiary of Alcon Inc., a multinational eye care company, have agreed to pay $233 million in criminal penalties to resolve the Department’s investigation into FCPA violations. The resolutions arise out of a Novartis Greece scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece and to falsely record improper payments relating to the corrupt scheme and similar conduct, and an Alcon Pte Ltd scheme to make and falsely record improper payments in Vietnam. Novartis AG has also agreed to pay $112 million to the U.S. Securities and Exchange Commission (SEC) in a related matter.
Novartis Greece entered into a deferred prosecution agreement with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of New Jersey in connection with a criminal information filed today in the District of New Jersey charging Novartis Greece with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of conspiracy to violate the books and records provision of the FCPA. Pursuant to the deferred prosecution agreement, Novartis Greece has committed to pay a criminal penalty of $225 million.
Alcon Pte Ltd, a subsidiary of Novartis AG at the time of the misconduct, separately entered into a deferred prosecution agreement in connection with a criminal information filed today in the District of New Jersey charging Alcon Pte Ltd with conspiracy to violate the books and records provision of the FCPA. Pursuant to the deferred prosecution agreement, Alcon Pte Ltd has committed to pay a criminal penalty of approximately $8.9 million.
“The agreement we’re announcing today shows that there will be a heavy price paid by companies that violate our laws, whether at home or overseas,” U.S. Attorney Carpenito said. “Just as importantly, it includes a framework for compliance reforms that should ensure that these companies conduct their business legally moving forward.”
“Novartis AG’s subsidiaries profited from bribes that induced medical professionals, hospitals, and clinics to prescribe Novartis-branded pharmaceuticals and use Alcon surgical products, and they falsified their books and records to conceal those bribes,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division said. “The resolutions announced today reflect the paramount importance of effective compliance programs and the department’s commitment to holding companies accountable when they fall short.”
“The FBI is committed to fighting any corrupt acts that adversely impact our economy, our citizenry, or our way of life,” Acting Special Agent in Charge Douglas Korneski said. “I say this to every company doing business on the stock exchange – if you think you can ignore the rules or make up your own, if your business model includes bribery or a quid pro quo, you can count the days until we show up on your company's doorstep. We will protect our citizens, our economy, our way of life, and bring to justice anyone who breaks the law.”
According to its admissions:
Between 2012 and 2015, Novartis Greece conspired with others to violate the FCPA by engaging in a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Greece in order to increase the sale of Novartis-branded pharmaceutical products. Novartis Greece paid for those employees to travel to international medical congresses, including events held in the United States, as a means to bribe these officials in exchange for increasing the number of prescriptions they wrote for Lucentis, a prescription drug that Novartis Greece sold. Novartis Greece employees traveled to the United States facilitated the provision of the improper benefits to publicly employed Greek health care providers.
Novartis Greece also admitted that between 2009 and 2010, Novartis Greece made improper payments to health care providers in connection with an epidemiological study that was intended to increase sales of certain Novartis-branded prescription drugs. The epidemiological study was used as a vehicle to make improper payments to the health care providers in order to increase sales of certain Novartis-branded prescription drugs, and Novartis Greece employees recognized that many participating health care providers believed that they were being paid in exchange for writing prescriptions of Novartis products and not for providing data as part of a clinical study.
Novartis Greece, through its employees and agents, knowingly and willfully conspired with others to cause Novartis AG to mischaracterize and falsely record improper payments related to the international medical congresses and the epidemiological study in Novartis AG’s books, records, and accounts.
From 2011 through 2014, Alcon Pte Ltd knowingly and willfully conspired with others to cause Novartis AG to maintain false books, records and accounts, as a result of a scheme to bribe employees of state-owned and state-controlled hospitals and clinics in Vietnam. The false books and records resulted from a scheme in which Alcon Pte Ltd made corrupt payments through a third-party distributor to employees of state-owned and state-controlled hospitals and clinics in Vietnam in order to increase sales of intraocular lenses. Intraocular lenses are artificial replacement lenses that are implanted in the eye as part of a treatment for a variety of ailments, such as cataracts. Alcon employees in Vietnam, with the approval of executives and employees of Alcon Pte Ltd, reimbursed the distributor for up to 50 percent of the cost of the corrupt payments, and these reimbursements were falsely recorded as, among other things, consulting expenses, marketing expenses, and human resource expenses.
As part of the agreement, Novartis Greece agreed to continue to cooperate with the government in any ongoing or future criminal investigations concerning Novartis Greece, its executives, employees, or agents. Novartis Greece and its parent company, Novartis AG, agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.
Alcon Pte Ltd agreed to continue to cooperate with the government in any ongoing or future criminal investigations concerning Alcon Pte Ltd, its executives, employees, or agents. Alcon Pte Ltd and its parent company, Alcon Inc., agreed to enhance their compliance programs and to report to the government on the implementation of their enhanced compliance programs.
The government reached these resolutions with Novartis Greece and Alcon Pte Ltd based on a number of factors, including: the failure to timely disclose the conduct that triggered the investigations; the nature and seriousness of the offenses, which spanned multiple years and involved high level employees; the lack of an effective compliance and ethics program at the time of the misconduct; and credit for each company’s respective cooperation. The companies also engaged in remedial measures, including terminating and disciplining individuals who orchestrated the misconduct, adopting heightened controls and anti-corruption protocols, and significantly increasing the resources devoted to compliance.
The criminal penalty for Novartis Greece reflects a 25 percent reduction off a point near the midpoint of the U.S. Sentencing Guidelines range because, although Novartis Greece fully cooperated and remediated, its parent company Novartis AG was involved in similar conduct for which it previously reached a resolution with the SEC in March 2016.
The criminal penalty for Alcon Pte Ltd reflects a 25 percent reduction off the bottom of the U.S. Sentencing Guidelines fine range because of Alcon Pte Ltd’s full cooperation with the government’s investigation.
In a related matter with the SEC, Novartis AG agreed to pay the SEC disgorgement and prejudgment interest of $112 million for the conduct in Greece and Vietnam, as well as additional conduct.
The government is represented by Senior Trial Counsel Bernard J. Cooney and Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Health Care Fraud Unit, District of New Jersey, and Trial Attorney Della Sentilles of the Criminal Division’s Fraud Section.
The FBI’s Garrett Mountain, New Jersey Field Office is investigating the case. The Department appreciates the assistance of the FBI Legal Attaché in Athens, Greece, the Office of International Affairs and the significant cooperation provided by the SEC in this case.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.
New Jersey Man Arrested for Receiving Child Pornography and Concealing Objects to Impede FBI InvestigationRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man was charged today with allegedly receiving files depicting child sexual abuse and concealing objects to impede the FBI’s investigation, U.S. Attorney Craig Carpenito announced.
Charles F. Browne, 52, of South River, New Jersey, is charged by complaint with one count of receiving child pornography and one count of concealing an object to impede a federal investigation. He is scheduled to appear today by videoconference before U.S. Magistrate Judge Joseph A. Dickson.
According to documents filed in this case and statements made in court:
In September 2017, Dropbox Inc. noticed that child pornography had been uploaded to a Dropbox account with the screen name “Charles Browne” and an email address containing the term “cbrowne.” The FBI obtained the files that were uploaded to the Dropbox account, which included prepubescent child sexual abuse and a resume for Browne.
On April 8, 2019, law enforcement approached Browne, as he left his then-residence in Tom’s River, New Jersey, to interview him about an ongoing investigation. Subsequent to the interview, he disposed of items in the Kettle Creek, a coastal waterway.
On April 12, 2019, the Ocean County Sherriff’s Office deployed a drone at the end of the Pier and located an object of interest. FBI divers were deployed and recovered an iPad and iPhone, both of which had been previously registered with Browne’s Apple iCloud account.
Further review of the recovered devices indicated they had been at Brown’s residence and near a body of water north of Bay Terrace Road. One had been at the location where his care was pulled over. The recovered iPad contained videos depicting prepubescent child sexual abuse and emails to and from accounts linked to Browne.
The count of receipt 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 count of concealing objects to impede a federal investigation count carries a maximum penalty of 20 years in prison and a fine of $250,000.
U.S. Attorney Carpenito credited special agents with the FBI Newark Child Exploitation Human Trafficking Task Force, under the direction of Acting Special Agent in Charge Douglas Korneski, with the investigation leading to today’s charges. He also thanked the FBI New York Underwater Search & Evidence Response Team, under the direction of Assistant Director in Charge William Sweeney, the FBI Laboratory Division, under the direction of Assistant Director G. Clayton Grigg, the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Kuberiet, the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni, the Monmouth County Sheriff’s Office, under the direction of Sheriff Shaun Golden, the Ocean County Sheriff’s Office, under the direction of Sheriff Michael G. Mastronardy, the Toms River Police Department, under the direction of Chief Mitchell Little, and the South River Police Department, under the direction of Chief Mark Tinitigan, for their assistance in this investigation.
The government is represented by Assistant U.S. Attorney Jamie L. Hoxie of the U.S. Attorney’s Office’s Cybercrime Unit in Newark, New Jersey.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Eleven People Charged with $6 Million Bank Fraud Conspiracy that Operated in South Jersey and Southeastern PennsylvaniaRead the Press Release
CAMDEN, N.J. – Eleven people have been charged for their alleged roles in a large-scale conspiracy to commit bank fraud over in southern New Jersey and southeastern Pennsylvania over the course of four years, U.S. Attorney Craig Carpenito announced today.
The complaints unsealed today charge each of the defendants with bank fraud conspiracy in connection with a scheme that used hundreds of fraudulent accounts to defraud several major banks of $6 million and then launder that money and send it overseas to other conspirators.
According to documents filed in this case and statements made in court:
The defendants are allegedly members of a Nigeria-based, multi-layered organization that engaged in a massive bank fraud conspiracy in several states, including New Jersey, Pennsylvania, Maryland and Rhode Island, between June 2016 and March 2020. Members of the group stole numerous business checks from the United States mail, altered the payee on the checks to a fraudulent name and deposited the checks in bank accounts that had been opened with forged foreign passport documents and fraudulent U.S. visas that matched the names on the stolen checks. Once the banks credited all or a portion of the funds to the accounts – but before the checks had cleared – the defendants withdrew the funds from ATMs or purchased money orders, using debit cards associated with the fraudulent accounts. Members of the organization have used over 400 fraudulent accounts with fake identity documents to defraud the banks.
The organization also laundered the proceeds of the fraud by several means, including using debit cards to purchase money orders from third party stores and using those money orders to purchase used automobiles from different automobile auction companies in Pennsylvania. The vehicles were then exported to Nigeria and other countries in Africa to launder the stolen funds and to increase profits by selling the vehicles at the higher market values obtained for vehicles in these foreign countries.
The bank fraud conspiracy count carries a maximum potential penalty of 30 years in prison and a maximum fine of $1 million.
U.S. Attorney Craig Carpenito credited special agents of the U.S. Postal Inspection Service, under the direction of Damon E. Wood, Inspector in Charge, Philadelphia Division, and Peter R. Rendina, Inspector in Charge, Washington Division; the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina in Newark, Special Agent in Charge Brian A. Michael in Philadelphia, Special Agent in Charge John Ernst in Baltimore, and Special Agent in Charge Michael S. Shea in Boston Division; and the U.S. Department of State Diplomatic Security Service (DSS), New York Field Office and Philadelphia Resident Office, under the direction of Special Agent in Charge Timothy W. Dumas, with the investigation leading to the charges. He also thanked the U.S. Marshals Service and the Pennsylvania State Police for their assistance.
The government is represented by Assistant U.S. Attorney Patrick C. Askin of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The defendants charged today are listed below:
Name
Age
Residence
Sulaiman Fola Dosunmu
39
Darby, Pennsylvania
Tunde Adeowo
40
Lansdowne, Pennsylvania
Muritala Adeowo
55
Lansdowne
Ayanniyi K Alayande
47
Darby
Ahmmed Bamidele Ponle
41
Darby
Margiettu M. Kamu
34
Philadelphia
Rafiat Adesubomi Sarumi
36
Yeadon, Pennsylvania
Babatunde Omotayo Oke
40
Hyattsville, Maryland
Adekunle Kehinde Owolabi
49
Laurel, Maryland
Olayinka Peter Olaseinde
42
Providence, Rhode Island
Olugbenga Oyedele
47
Collingdale, Pennsylvania
Three New Jersey Men Charged in Connection with Interstate Luxury Car Theft RingRead the Press Release
NEWARK, N.J. – Three New Jersey men have been charged for their alleged roles in a conspiracy to steal luxury cars in New Jersey, New York, and Connecticut and transport them across state lines, U.S. Attorney Craig Carpenito announced today.
Malik Baker, a/k/a “Smack,” a/k/a “Mu,” of Vauxhall, New Jersey, 26, and Hakeem Smith, a/k/a “B.A.,” a/k/a “Hak,” 29, and Nafique Goodwyn, 26, both of Newark, were charged by complaint with conspiring to transport stolen vehicles in interstate commerce. Baker and Smith were also charged with one count of conspiring to receive stolen vehicles and one count of receiving a stolen vehicle that had crossed state lines after being stolen, and Smith was also charged with one count of transporting a stolen vehicle across state lines. Goodwyn was arrested today and made his initial appearance via video conference before U.S. Magistrate Judge Joseph A. Dickson. He will be released on $100,000 bond with home detention. Baker and Smith are currently detained on unrelated charges and will make their initial appearances in federal court at a later date.
According to documents filed in this case and statements made in court:
Beginning in July 2019, the defendants and others stole and conspired to steal at least 10 luxury cars in New Jersey, New York, and Connecticut, and hid those cars at a location in Irvington, New Jersey. The cars included a 2019 BMW X4 M40i, stolen from Greenwich, Connecticut, on July 19, 2019; a 2016 Mercedes-Maybach S600, stolen from Clifton, New Jersey, on Aug. 1, 2019; a 2019 Porsche Cayenne, stolen from New City, New York, on Aug. 6, 2019; a 2017 Mercedes S550 and a 2019 Rolls Royce, stolen from Hewlett Bay Park, New York, on Aug. 13, 2019; a 2019 Land Rover, stolen from Kensington, New York, on Aug. 22, 2019; a 2019 Mercede-Maybach, stolen from Quogue, New York, on Aug. 29, 2019; a 2014 Lexus GS, stolen from West Long Branch, New Jersey, on Aug. 29, 2019; a 2017 BMW M4, stolen from Marlton, New Jersey, on Sept. 7, 2019; and a 2017 Mercedes AMG S63, stolen from Orangeburg, New York, in September 2019.
The defendants often used the stolen cars to steal additional cars, and, in one instance, they used a Maserati GranTurisimo they stole from Manalapan, New Jersey, to steal a Range Rover and a Porsche Cayenne in the early morning hours of Aug. 6, 2019 in New City, New York. When law enforcement attempted to conduct a stop of the Maserati, the Maserati accelerated and crashed head-on into a police vehicle before the suspects fled the scene in another stolen vehicle. Law enforcement recovered one of the stolen cars in a shipping container at the port in Newark en route to Ghana.
The cars stolen by the defendants have an estimated value of at least $1.5 million.
The charges of interstate transportation of stolen vehicles and receipt of stolen vehicles are both punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offenses.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark;, as well as the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose; the Irvington Township Police Department, under the direction of Director Tracy Bowers; the Clarkstown, New York, Police Department, under the direction of Chief Raymond McCullagh; the Wall Township Police Department, under the direction of Chief Kenneth Brown Jr.; the Marlboro Township Police Department, under the direction of Chief Peter Pezzullo; the Tewksbury Township Police Department, under the direction of Chief Tim Barlow; the New Jersey State Police, under the direction of Colonel Patrick J. Callahan; and the Hunterdon County Prosecutor’s Office, under the direction of Acting Prosecutor Michael J. Williams, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Christopher Amore and Olajide Araromi of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Owner of Construction Company Sentenced to 18 Months in Prison for Tax Evasion and Bankruptcy FraudRead the Press Release
NEWARK, N.J. – A Bayonne, New Jersey, man was sentenced today to 18 months in prison for tax evasion and bankruptcy fraud, U.S. Attorney Craig Carpenito announced.
Patrick Franconeri, 57, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to an information charging him with one count of tax evasion and one count of concealment of assets in bankruptcy. Judge Martinotti imposed the sentence by videoconference today.
According to documents filed in this case and statements made in court:
Franconeri was the owner and operator of several construction businesses that performed work for a major insurance company in New Jersey. During tax year 2014, as a result of the operation of the construction companies, Franconeri earned taxable income of $1,362,950, on which there was an income tax owing to the United States of $558,439. However, Franconeri failed to file a tax return or request an extension for that year.
Franconeri took actions to conceal and attempt to conceal his income so that he would not have to pay taxes on it, including cashing checks at check-cashing facilities so that the money would not come to the attention of the IRS.
Franconeri also filed a Chapter 7 bankruptcy petition in U.S. District Court in Newark on March 11, 2010, but knowingly and fraudulently concealed property belonging to his bankruptcy estate from the United States Trustee. Franconeri concealed and failed to disclose his ownership and operation of his construction companies, as well as $965,575 in income he had received in the prior two years as the owner and operator of his construction companies.
In addition to the prison term, Judge Martinotti sentenced Franconeri to three years of supervised release and ordered him to pay restitution of $716,569 to the victims of his bankruptcy offense and $558,349 in restitution to the IRS.
U.S. Attorney Carpenito credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the Violent Crimes Unit in Newark.
Ocean County Man Charged with Receipt and Possession of Child PornographyRead the Press Release
TRENTON, N.J. – An Ocean County, New Jersey, man was arrested today on charges that he received and possessed images and videos of child sexual abuse downloaded from the internet, U.S. Attorney Craig Carpenito announced.
Joseph J. Punderson, 31, of Island Heights, New Jersey, is charged in a criminal complaint with one count of receipt of child pornography and one count of possession of child pornography. Punderson appeared this afternoon by videoconference before U.S. Magistrate Judge Tonianne J. Bongiovanni and detained without bail.
According to documents filed in this case:
In investigating leads provided by the National Center for Missing and Exploited Children (NCMEC) and others, law enforcement uncovered evidence that e-mail and social media accounts associated with Punderson were used and were linked to accounts that were used in the commission of suspected child pornography offenses between May 2019 and November 2019.
The charge of knowingly receiving child pornography carries a mandatory minimum sentence of five years and a maximum of 20 years in prison, and a statutory maximum fine equal to $250,000 or twice the gross pecuniary gain or loss, whichever is greater. The charge of knowingly possessing child pornography carries a maximum of 10 years in prison, and a statutory maximum fine equal to $250,000 or twice the gross pecuniary gain or loss, whichever is greater.
U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), Atlantic City, under the direction of Special Agent in Charge Jason Molina in Newark, the Ocean County Prosecutors Office, under the direction of Prosecutor Bradley D. Billhimer, and the Island Heights Police Department, under the direction of Acting Chief Paul Rutledge, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Alexander E. Ramey of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.