District of New Jersey
Press releases recorded for this federal judicial district.
Romanian National Sentenced to Four Years in Prison for Installing Identity Theft Devices on ATMSRead the Press Release
TRENTON, N.J. – A Romanian national was sentenced today to 48 months in prison for his role in a conspiracy to steal bank account information from thousands of customers by installing secret card-reading devices and pinhole cameras on ATMs throughout New Jersey and elsewhere, U.S. Attorney Craig Carpenito announced.
Ionut Paraschiv, 35, previously pleaded guilty to conspiracy to commit bank fraud. U.S. District Judge Peter G. Sheridan imposed the sentence by videoconference this afternoon.
According to documents filed in this case and statements made in court:
Paraschiv admitted he was part of an ATM skimming scheme that stole bank account information by installing hidden card-reading devices on ATMs throughout northern and central New Jersey. Paraschiv previously acknowledged that he and his conspirators created bank cards using the fraudulently obtained account information, which they used to unlawfully withdraw large amounts of cash from various ATMs. The scheme, which involved actual and attempted losses exceeding $1.5 million, impacted over 1,000 bank customers.
In addition to the prison term, Judge Sheridan sentenced Paraschiv to three years of supervised release and ordered him to pay $443,277 in restitution.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski, detectives with the Middlesex County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher Kubriet, and detectives with the Woodbridge Police Department, under the direction of Police Director Robert Hubner, with the investigation leading to today’s sentencing. He also thanked detectives with the New York Police Department Financial Crimes Task Force in Brooklyn, New York, for their assistance with the case.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Organized Crime and Drug Enforcement Task Force/Narcotics Unit in Newark.
Monmouth County Man Charged with Tax Evasion, Corrupt Interference with Administration of Internal Revenue Laws, and Failure to File Tax ReturnsRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, man was charged today with tax evasion, corrupt interference with the administration of the Internal Revenue laws, and failure to file federal tax returns, U.S. Attorney Craig Carpenito announced.
Thomas Bertoli, 62, of Matawan, New Jersey, is charged by indictment with three counts of tax evasion, one count of corrupt interference with the administration of the Internal Revenue laws, and four counts of failure to file tax returns. He will be arraigned at a later date.
According to the indictment:
Bertoli operated the following businesses: The Doormen Inc.; City Street Associates LLC, a/k/a CSA LLC; and Urban Logistics LLC. Individually and through his companies, Bertoli obtained payments from clients for services provided, including payments from developers and construction firms for expediting services on real estate development and construction projects, primarily in Jersey City, New Jersey; and payments from political campaigns for political consulting services in New Jersey. Expediting in the construction industry typically refers to facilitating the acquisition of building permits and other government agency approvals required for the completion of real estate projects.
Bertoli obtained hundreds of thousands of dollars in gross receipts for calendar years 2009 to 2016. Bertoli had not, as of April 18, 2017, filed federal tax returns or paid any of the taxes due, other than a $5,000 nominal payment in September 2014, for those years, despite receiving substantial gross receipts and having a substantial tax due and owing. He concealed and attempted to conceal from the IRS his income and assets through various means; Bertoli cashed at check cashers payments from his clients, made false and fraudulent statements to the IRS, and used the Urban Logistics bank account for personal expenditures.
Bertoli is charged with evasion of payment of taxes for calendar years 2009 to 2013 and evasion of assessment of taxes for calendar years 2014 and 2015. He also is charged with corrupt interference with the administration of the Internal Revenue laws and failing to file tax returns for calendar years 2013 to 2016.
Each charge of tax evasion carries a maximum potential penalty of five years in prison and a maximum $250,000 fine. The charge of corrupt interference with the administration of the Internal Revenue laws carries a maximum potential penalty of three years in prison and a $250,000 fine. Each charge of failing to file a tax return carries a maximum potential penalty of one year in prison and a $100,000 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 Douglas Korneski in Newark with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorneys J Fortier Imbert and Jihee G. Suh of the U.S. Attorney’s Office’s Special Prosecutions Division.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former Transit Union Official Admits EmbezzlementRead the Press Release
NEWARK, N.J. – A former finance officer for a labor union today admitted stealing $117,000 from his union’s operating accounts, U.S. Attorney Craig Carpenito announced.
Angel L. Garcia, 57, of Tampa, Florida, pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to an information charging him with one count of embezzling from the Amalgamated Transit Workers Union Local 1614, in Sussex County, New Jersey.
According to documents filed in this case and statements made in court:
Garcia was a bus driver who held a part-time position at Local 1614. Garcia was elected by the membership, every three years, as the union’s financial secretary, and served in that position from June 2014 through May 2019. As such, Mr. Garcia was a fiduciary who occupied a position of trust and was obligated to act solely in the interests of the membership. As the financial secretary, he alone was responsible for maintaining the check book and other financial documents of the union. However, without executive board approval, Garcia withdrew approximately $117,000 from the union’s three bank accounts to pay for his rent, utilities, telephone and other personal goods and services.
The embezzlement charge carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 17, 2020.
U.S. Attorney Carpenito credited the investigators of the U.S. Department of Labor, Office of Labor Management Standards, under the direction of Adriana Vamvakas, Regional Director; and special agents of the Department of Labor (OIG), New York Region, under the direction of Special Agent in Charge Michael Mikulka, with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Burlington County Couple Charged with Conspiracy to Defraud 33 Victims of over $6 Million in Romance Fraud SchemeRead the Press Release
CAMDEN, N.J. – A husband and wife from Burlington County, New Jersey, were charged today with conspiring to defraud more than 33 victims into mailing and wiring more than $6 million to them and other conspirators after their conspirators met and wooed the victims on online dating sites, U.S. Attorney Craig Carpenito announced.
Martins Friday Inalegwu, 31, and Steincy Mathieu, 24, both of Maple Shade, New Jersey, are charged by complaint with one count of conspiracy to commit wire and mail fraud. Inalegwu was arrested today and made his first appearance by videoconference before U.S. Magistrate Judge Ann Marie Donio. Mathieu remains at large.
According to the documents filed in this case and statements made in court:
Between October 2016 and May 13, 2020, Inalegwu, Mathieu and their conspirators, several of whom reside in Nigeria, allegedly participated in an online romance scheme, defrauding victims throughout the country. The conspirators made initial contact with victims through online dating and social media websites, corresponded with them via email and phone, pretended to strike up a romantic relationship with them. They requested the victims send money to them, or their associates, for fictitious emergency needs. For example, the conspirators duped victims into believing that they needed money for customs fees and taxes, medical expenses, travel expenses or business expenses. The individuals whom the victims believed they were speaking to did not exist, and instead they were speaking to the conspirators.
Inalegwu, Mathieu and their conspirators also engaged in apartment rental scams with at least three of the victims. They advertised a property, not owned or controlled by them, for the purpose of collecting money from the victims in the form of application fees and security deposits. The conspirators listed advertisements online, enticed victims with information about the properties, pretended they were authorized to rent the properties, and then directed that the victims complete applications and send money to either Inalegwu, Mathieu or conspirators, in the form of down payments to reserve the properties. After Inalegwu, Mathieu and conspirators collected the money, the victims never heard from them again.
Conspirators used myriad email accounts and phone numbers to communicate with the victims and instruct them on where to wire the money, including recipient names, addresses, financial institutions and account numbers. Victims wired money to bank accounts held by Inalegwu and Mathieu in the United States, and also mails checks directly to Inalegwu and Mathieu. Some victims transferred money to the conspirators via money transfer services, such as Western Union or MoneyGram, and others wired money to bank accounts held by conspirators overseas.
Federal law enforcement agents have identified more than 33 victims, who sent over $6 million to conspirators, $3.1 million of which was sent directly to Inalegwu and Mathieu. Inalegwu and Mathieu spent the victims’ money on personal expenses, withdrew money in cash, transferred money to other bank accounts they personally controlled, and transferred money to bank accounts held by conspirators in Nigeria and Turkey.
The count of conspiracy to commit wire and mail fraud is punishable by a maximum of 20 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the FBI, Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark; special agents of Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; postal inspectors of the U.S. Postal Inspection Service under the direction of Inspector in Charge James Buthorn; and special agents of the U.S. Attorney’s Office with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Martha K. Nye of the U.S. Attorney’s Office in Trenton.The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Statement by U.S. Attorney Craig CarpenitoRead the Press Release
Earlier today, Attorney General Barr announced that, by operation of law, Audrey Strauss will become the Acting U.S. Attorney for the Southern District of New York and will serve in that capacity until a permanent successor is in place. Audrey Strauss is a talented and tenacious lawyer, and she is someone for whom I have a great deal of respect. She will uphold the reputation and legacy of the Southern District and honor its fine public servants. I commend the Attorney General on his decision to have Audrey Strauss serve in this capacity, and I look forward to continuing to do the job that I love – leading the great men and women of the District of New Jersey.
Leader of Trenton Drug Trafficking Organization IndictedRead the Press Release
TRENTON, N.J. – A federal grand jury today indicted the leader of a Trenton drug-trafficking organization for his role overseeing and managing the distribution of large amounts of heroin in the Trenton area, U.S. Attorney Craig Carpenito announced.
Robert M. Gbanapolor, 33, of Trenton, was charged with conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin with the intent to distribute and distribution. Gbanapolor and 10 others were previously charged by complaint in June 2019. He will be arraigned on a date to be determined.
Eight other members of this drug trafficking conspiracy have previously pleaded guilty in this case. The charges against two other defendants remain pending on complaint.
According to documents filed in the case and statements made in court:
From June 2018 through May 2019, the defendants and others engaged in a heroin trafficking conspiracy in the areas of Stuyvesant Avenue, Hoffman Avenue, and Highland Avenue in Trenton, as well as in the area of Barbary Road in Philadelphia.
Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin, the use of confidential sources of information, and other investigative techniques, law enforcement learned that Gbanapolor obtained regular bulk supplies of heroin from Duane Paulino-Escalera, whom Gbanapolor referred to as “Papi.”
Members of the conspiracy distributed the heroin supplied by Papi to other conspirators, distributors, sub-dealers, and end-users in and around Trenton. Law enforcement officers intercepted numerous discussions among the conspirators regarding issues such as heroin quality and availability, branding, quantity and customer satisfaction.
The charge against Gbanapolor carries a mandatory minimum penalty of five years in prison and a maximum potential penalty of 40 years in prison, and a $5 million fine.
U.S. Attorney Carpenito credited special agents of the U.S. Drug Enforcement Administration, New Jersey Division, Camden Resident Office, under the direction of Special Agent in Charge Susan A. Gibson; and task force officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley, with the investigation leading to the charges. He also thanked detectives and officers of the Gloucester County Prosecutor’s Office, under the direction of Acting Prosecutor Christine A. Hoffman; detectives and officers of the Gloucester Township Police Department, under the direction of Chief Harry Earle; members of the N.J. State Police, under the direction of Col. Patrick J. Callahan; detectives and officers of the Bordentown Township Police Department, under the direction of Chief Brian Pesce; and special agents of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson for their assistance.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorneys Eric A. Boden and Michelle S. Gasparian of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the indictment and the original complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Eighteen People Charged in Connection with Drug Trafficking RingRead the Press Release
CAMDEN, N.J. – Eighteen people have been charged for their alleged roles in a drug trafficking organization that distributed fentanyl, heroin, and cocaine in Camden, U.S. Attorney Craig Carpenito announced today.
Eleven defendants were arrested today and are expected to appear June 19, 2020, by videoconference before U.S. Magistrate Judge Karen M. Williams: Angel Rodriguez, 30; Manuel Bonilla, 35; Anderlis Martinez-Espinal, 19; Miguel Rodriguez, 27, Julio Medina, 29; Janet Lorenzo, 47; Normali Santiago, 36; Ray Santos, 35, all of Camden; Franklin Lorenzo-Gonzalez, 25, of Pennsauken, New Jersey; Bernardo Carambot, 36, and Alberto Perez, 26, both of Philadelphia.
Juan Cabrera, 30; Jabriel Rosa, 38; Hector Lopez, 31; Brian Smith, 33; Hector Mendez, 36; Pedro Yera, 25; Christian Rosario, 25; all of Camden, remain at large.
Each defendant is charged by complaint with one count of conspiracy to distribute and possess with intent to distribute fentanyl, heroin, and cocaine.
According to the documents filed in this case and statements made in court:
From at least 2018, the defendants have all allegedly been members of a drug trafficking organization that dealt fentanyl, heroin, and cocaine in 300-400 blocks of Beckett Street, the 400 block of Royden Street, and the 600 block of Pine Street in Camden, where they distributed drugs to customers on foot and in vehicles. The organization also supplied drugs to customers and other distributors elsewhere, including areas in Philadelphia, Paulsboro, New Jersey, and Martinsburg, West Virginia.
Angel Rodriguez, Manuel Bonilla, Juan Cabrera, and Franklin Lorenzo-Gonzalez are the alleged leaders and managers, who obtained bulk supplies of narcotics, prepared and packaged those narcotics for street level sales, provided fentanyl, heroin, and cocaine for resale to customers, collected drug proceeds, operated multiple stash locations, and oversaw the daily sales and operation of the organization. Other members of the organization assisted in managing the sales on the street. High-level members of the drug trafficking organization laundered drug proceeds through bulk vehicle purchases and real estate.
The conspiracy charge carries a mandatory minimum penalty of 30 years in prison and a maximum potential penalty of life in prison and a $10 million fine.
U.S. Attorney Craig Carpenito credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge of FBI Philadelphia, Michael Driscoll in Philadelphia; special agents of the FBI’s Eastern Panhandle Drug and Violent Crimes Task Force, under the direction of Special Agent in Charge of FBI Pittsburgh, Michael Christman in Pittsburgh; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the Camden County Police Department, under the direction of Chief Joseph D. Wysocki; the Camden County Prosecutor’s Office, under the direction of Acting Prosecutor Jill S. Mayer; the Camden County Sheriff’s Department, under the direction of Sheriff Gilbert L. Wilson; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, Newark Division; special agents of FBI Newark, under the direction of Acting Special Agent in Charge Douglas Korneski; special agents of FBI New York, Criminal Division, under the direction of Special Agent in Charge Jacqueline Maguire; the Gloucester County Prosecutor’s Office, under the direction of Acting Prosecutor Christine Hoffman; the Pennsylvania Attorney General’s Office, under the direction of Attorney General Josh Shapiro; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; and special agents of IRS-Criminal Investigation in Newark, under the direction of Special Agent in Charge Michael Montanez, with the investigation leading to the charges announced today.
The government is represented by Assistant U.S. Attorney Alisa Shver 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.
Bronx, New York, Man Indicted for Drug TraffickingRead the Press Release
TRENTON, N.J. – A federal grand jury today indicted an individual with ties to a drug-trafficking organization for possessing nearly 1 kilogram of heroin with intent to distribute in Ocean County, U.S. Attorney Craig Carpenito announced.
Luis Payano-Perez, 36, of the Bronx, New York, was charged with one count of possession of 100 grams or more of heroin with intent to distribute. Payano-Perez was previously charged by criminal complaint in November 2018. He will be arraigned on a date to be determined.
According to documents filed in the case and statements made in court:
In early November 2018, a U.S. Department of Homeland Security, Homeland Security Investigations (HSI), confidential informant provided information that Payano-Perez was prepared to sell the source a large volume of heroin on the evening of November 8, 2018, in the parking lot of the Wawa convenience store in Tuckerton, New Jersey.
In the days before Nov. 8, 2018, Payano-Perez and the confidential informant arranged for the quantity and price of the heroin to be sold, as well as the date, time and location of the planned transaction. On Nov. 8, 2018, Payano-Perez met with two confidential government informants at the Wawa parking lot in order to sell them approximately one kilogram of heroin. Law enforcement officers converged on the Wawa parking lot and arrested Payano-Perez. A subsequent search of Payano-Perez’s vehicle uncovered a bag containing nearly one kilogram of heroin.
The charge against Payano-Perez carries a mandatory minimum penalty of five years in prison and a maximum potential penalty of 40 years in prison, and a $5 million fine.
U.S. Attorney Carpenito credited special agents of HSI Atlantic City, under the direction of Special Agent in Charge Jason Molina in Newark; and the Tuckerton Police Department, under the direction of Chief Brian Olsen, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Eric A. Boden of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charge and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Trenton Man Arrested for Attempting to Ignite Police Vehicle During Trenton ProtestsRead the Press Release
TRENTON, N.J. – A Trenton man was charged today with attempting to ignite a marked police vehicle during the recent violent outburst in Trenton following the death of George Floyd in Minneapolis, Minnesota, U.S. Attorney Craig Carpenito announced.
Earlja J. Dudley, 27, of Trenton, was arrested by special agents of the FBI and is charged by complaint with one count of attempting to damage or destroy by fire a vehicle owned or possessed by an institution receiving federal financial assistance, and one count of attempting to damage or destroy by fire a vehicle used in and affecting interstate commerce. Dudley will make his initial appearance this afternoon by videoconference before U.S. Magistrate Judge Tonianne J. Bongiovanni.
According to documents filed in this case and statements made in court:
On May 31, 2020, large-scale protests were held throughout the United States, including in Trenton, in response to the death of George Floyd, who died on May 25, 2020, while in the custody of the Minneapolis Police Department. Floyd’s death, and the ensuing protests, have drawn national media attention. Although the May 31 protest in Trenton was peaceful earlier in the day, violence erupted later. A group of individuals proceeded down East State Street in downtown Trenton and began to riot, smashing store fronts, looting stores, and attacking multiple marked Trenton Police Department vehicles parked on the 100 Block of East State Street. Dudley is the second defendant to be charged with federal arson offenses from those protests.
A bystander video that was posted publicly to a social media platform captured an individual, later identified as Dudley, wearing a tank top and baseball cap with the Roman numerals “XIV” in red lettering, along with distinctive green, black, and white sneakers. The video recorded Dudley and another individual standing in front of a marked Trenton Police Department vehicle and opening its hood. The video then recorded another individual joining Dudley and lighting an object that Dudley was holding over the exposed engine well of the police vehicle. Dudley placed the burning object into the engine well of the vehicle and moved away from it. Shortly thereafter, flames are visible on the video rising from the engine well of the vehicle. Law enforcement obtained photographs of Dudley posted on social media wearing, on other occasions, a tank top and baseball cap with Roman numerals “XIV” in red lettering, and distinctive green, black, and white sneakers, all of which matched the articles of clothing that Dudley was wearing in the video.
Both counts charged in the criminal complaint carry a statutory mandatory minimum term of imprisonment of five years, a maximum potential penalty of 20 years in prison, and a maximum fine of $250,000.
U.S. Attorney Carpenito credited special agents of the FBI and task force officers of the Joint Terrorism Task Force in Newark, under the direction of Acting Special Agent in Charge Douglas Korneski, with the investigation leading to today’s arrest. He also thanked officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley; and troopers of the New Jersey State Police, under the direction of Col. Patrick J. Callahan, and the New Jersey Office of Homeland Security and Preparedness, under the direction of Jared M. Maples, for their assistance.
The government is represented by Assistant U.S. Attorneys Alexander E. Ramey and Michelle Gasparian of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Newark Parking Authority Employee Admits to Narcotics Distribution and Being a Felon in Possession of FirearmsRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted being a felon in possession of two firearms, and to distributing heroin and cocaine base (crack), U.S. Attorney Craig Carpenito announced.
Aughkay L. Green, a/k/a “K-Boogie,” 49, of Newark, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to a three-count indictment charging him with possession of heroin and cocaine base (crack) with intent to distribute and with being a felon in possession of numerous firearms and ammunition.
According to documents filed in this case and statements made in court:
On Jan. 12, 2017, Green sold 25 bricks – later determined to be 38 grams – of heroin to “Individual 1,” for $1,200. On March 22, 2017, Green sold Individual 1 48.9 grams of crack cocaine for $2,250. Green was under law enforcement surveillance and observed to be dressed in his Newark Parking Authority uniform.
On April 1, 2017, Green, accompanied by an unidentified male associate, met Individual 1 in Irvington, New Jersey, where Green’s associate provided Individual 1 with: (1) a Smith and Wesson Model 21 .44 caliber handgun; (2) a Smith and Wesson Model 15 .38 handgun, and (3) 50 rounds of hollow-point .44 caliber ammunition marked “44 REM MAG FC.” Green’s associate received $1,360 from Individual 1, and subsequently provided Green with proceeds from the sale and discussed using these proceeds for the purchase of narcotics.
The count of possession of cocaine with intent to distribute carries a statutory minimum penalty of five years in prison and a maximum potential penalty of 40 years in prison. The count of possession of cocaine with intent to distribute carries a statutory maximum penalty of 20 years in prison. The count of possession of firearms by a previously convicted felon carries a maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 20, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark; the New Jersey State Police, under the direction of Col. Patrick J. Callahan; the New Jersey Office of Homeland Security and Preparedness, under the direction of Director Jared M. Maples; the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction on Special Agent in Charge Jason Molina; and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction on Special Agent in Charge Charlie J. Patterson, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit.
Founder of Plastics Company Charged in $61 Million Tax Evasion SchemeRead the Press Release
NEWARK, N.J. – A Florida man made his initial court appearance today in connection with charges that he evaded over $61 million in income taxes from 2016 through 2018, U.S. Attorney Craig Carpenito announced.
Alfred Teo, 74, of Boca Raton, Florida, is charged by complaint with one count of tax evasion. He made his initial appearance by videoconference before U.S. Magistrate Judge Edward S. Kiel, who set bond at $20 million.
According to documents filed in this case and statements made in court:
Teo was the majority shareholder of multibillion-dollar plastics manufacturing holding company Alpha Industries Management (Alpha). Teo also traded heavily in the securities markets. Between January 2016 and December 2018, Teo diverted $600 million from Alpha’s line of credit directly into his brokerage accounts to trade and to pay off margin calls.
Teo returned a portion of the $600 million to Alpha, but he did not report the remaining outstanding amount as income on his personal tax returns. Instead, $167 million was recorded as income to AAST Holding Corp. (AAST), another Teo-owned entity that was unrelated to his plastics business, and which Teo used as a vehicle to hide personal income.
Alpha did not provide AAST with the $167 million that AAST claimed as income from Alpha in 2016, 2017, and 2018. The money Alpha recorded as salary to AAST was instead money provided for the benefit of Teo and included money that Alpha sent directly to Teo’s trading accounts.
Instead of reporting the $167 million of income from Alpha on Teo’s personal tax returns in 2016, 2017, and 2018, and paying taxes on that income, the income was reported on AAST’s corporate tax returns. Teo then provided false deduction information to his tax preparer in the form of fictitious “cost of goods sold” to artificially reduce his income and evade the income taxes owed.
AAST was organized for purposes of being a holding company, not for selling goods. The company’s principal place of business and mailing address was a Florida residence that Teo owned. AAST’s bank account records do not show purchases of material, equipment, inventory, or other purchases consistent with the sale of goods or products. AAST’s bank account records do not include deposits that would reflect the millions of dollars in receipts that AAST reported on its tax returns for those three years.
In 2016, 2017, and 2018, Teo’s tax preparer provided draft AAST corporate tax forms for Teo’s review. Teo then returned the corporate tax forms with handwritten notes that indicated AAST had tens of millions of dollars of cost of goods sold. Teo did not provide any support to his tax preparer for these claims.
Teo’s tax preparer used the information that Teo provided to report AAST’s cost of goods sold on AAST’s corporate tax returns in the amounts of approximately $26 million, $51 million, and $87 million for 2016, 2017, and 2018, respectively.
By submitting fraudulent cost of goods sold expenses to his tax preparer for inclusion on AAST’s corporate tax returns, Teo used AAST to avoid paying tens of millions of dollars of income taxes. He reduced AAST’s net business income by approximately $165 million for tax years 2016, 2017, and 2018 combined.
TEO’s personal IRS Forms 1040 for 2016, 2017, and 2018 included AAST’s net business income – as reduced by the approximately $165 million in AAST’s false cost of goods sold – as income to TEO. As a result, Teo understated his personal income for those years by approximately $165 million.
Because Teo’s personal tax returns for 2016, 2017, and 2018 included AAST’s net business income, Teo’s fraudulent reduction of AAST’s net business income with purported cost of goods sold expenses resulted in a tax loss of approximately $10 million, $20 million, and $31 million in 2016, 2017 and 2018, respectively, for a total tax loss of approximately $61 million.
The tax evasion charge carries a maximum potential penalty of five 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 today’s charges.
The government is represented by Assistant U.S. Attorneys Ari B. Fontecchio and Vijay Dewan of the Economic Crimes 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.
Chinese Manufacturer Charged with Exporting Defective and Misbranded Masks Falsely Purporting to be KN95 RespiratorsRead the Press Release
NEWARK, N.J. – A Chinese manufacturer was charged today with producing and exporting to the United States in the midst of the COVID-19 pandemic over 140,000 misbranded and defective masks that falsely purported to be KN95 respirators, U.S. Attorney Craig Carpenito announced.
Crawford Technology Group (HK) Co. LTD. (Crawford) is charged by complaint with violating the Federal Food, Drug and Cosmetic Act (FDCA) for causing misbranded and substandard respirators that falsely purported to meet various filtration efficiency standards to be imported into the United States.
“Defective and misbranded personal protection equipment is a danger to all who unwittingly purchase and use it,” U.S. Attorney Carpenito said. “The Department of Justice and our partners remain committed to finding the unscrupulous companies that sell dangerous gear and stopping them from further endangering health care workers and first responders.”
“It is not enough that this pandemic has upended lives around the world and caused countless suffering and hundreds of thousands of deaths,” Jason Molina, Special Agent in Charge, Homeland Security Investigations (HSI), Newark, said. “In the midst of that, we have companies like this that exploited this tragedy for financial gain and in the process put millions of lives at risk. This case is a good reminder that the combined efforts of the agencies involved in Attorney General Barr’s Task Force have a very long reach to track and charge those who commit such wrongdoing. In addition, for HSI this fulfills the mission of Operation Stolen Promise to rout out COVID related fraud in all its many forms.”
Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by U.S. Attorney Carpenito, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.
“In a time when the United States Postal Service is playing such a critical role in the nation’s supply chain, the United States Postal Inspectors will be ever vigilant in our pursuit of criminals using the mail to commit fraud schemes,” U.S. Postal Inspection Service Inspector in Charge James Buthorn said. “We will not stand by and allow American citizens to be preyed upon and are proud to stand with our partners defending the public as we recover from the COVID-19 pandemic. Congratulation to the inspectors, special agents, and prosecutors.”
“U.S. Customs and Border Protection is proud of the expertise we bring to support and assist investigations that result in the seizure of illicit products,” Troy Miller, Director New York Field Office, said. “It is through interagency partnerships and collaborative efforts, like the one leading to today’s criminal charges, that law enforcement successfully combats today’s criminal organizations.”
“The FDA is actively monitoring the marketplace for fraudulent products related to our battle against COVID-19 that are marketed and distributed to Americans. The agency will continue to collaborate with our fellow law enforcement partners to bring to justice those who place profits above the public health during this pandemic,” Special Agent in Charge Jeffrey J. Ebersole, FDA Office of Criminal Investigations New York Field Office, said. “We will take appropriate action against those who jeopardize the health of Americans and take advantage of a crisis.”
According to documents filed in this case and statements made in court:
In May 2020, Crawford, a digital electronics company based in Shenzhen, China, manufactured and sold 140,400 adulterated and misbranded KN95 filtering face piece respirators to Company-1 for import into the United States.
The packaging for the respirators, as well as the respirators themselves, falsely indicated that they were 95 percent efficient at filtering harmful airborne particles. The respirators and their packaging also claimed that they complied with established standards in the European Union and China, which require at least 94 percent or 95 percent filtering efficiency, respectively. Crawford also advertised the respirators on its website under a tab labeled “epidemic” and claimed that their respirators have “4 layers of protection” and “Passed the national standard 2626-2000 test.” The page also says “KN95 Filtration reaches 95%,” “KN95 Filter Effect 95%,” and states that their respirators protect against “Severe Haze,” “Bacteria,” and “Dust.” These claims were false and misleading because the average filtering efficiency for the Crawford respirators was 22.33 percent, far below the required thresholds.
U.S. Attorney Carpenito thanked the staff of the NIOSH National Personal Protective Technology Laboratory, under the direction of NIOSH Director John Howard M.D., and special agents of the U.S. Secret Service for their work on the investigation.
The charge in the complaint carries a maximum fine of $200,000.
Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: [email protected].
Information on the NIOSH Covid-19 Respirator Assessment program and the results of other NIOSH respirator tests can be found here: https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html
The government is represented by Assistant U.S. Attorney Jonathan Peck of the Asset Recovery and Money Laundering Unit.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Camden County Man Charged with Selling Phony PrescriptionsRead the Press Release
CAMDEN, N.J. – An employee of a Mount Holly, New Jersey, medical practice was arrested today for allegedly selling fraudulent prescriptions for controlled substances, U.S. Attorney Craig Carpenito announced.
Jose Colon, 36, of Sicklerville, New Jersey, is charged by complaint with one count of distributing controlled substances. He is expected to appear by videoconference later this afternoon before U.S. Magistrate Judge Ann Marie Donio.
According to documents filed in this case and statements made in court:
Colon, who is not a medical provider, used the identities of doctors with whom he worked to make and sell fraudulent prescriptions for controlled substances, including Oxycodone, Adderall, Percocet, and Xanax. Colon sometimes met his customers in person with a prescription pad to sell the fraudulent prescriptions for cash. He also submitted fraudulent prescriptions electronically to pharmacies in exchange for electronic payments from his customers. Colon advised his customers on how to fill the fraudulent prescriptions, including instructing them to wait until the medical practice was closed so that Colon would be able to answer any phone calls from the pharmacies questioning the validity of the fraudulent prescriptions.
The count of distributing controlled dangerous substances carries a maximum potential penalty of 20 years in prison and a $1 million fine.
U.S. Attorney Carpenito credited special agents with the FBI Newark Division, Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski with the investigation leading to today’s arrest. He also thanked the FBI Newark Health Care Fraud Task Force, whose members include the Galloway Township and Middle Township Police Departments, as well as the Cape May County Prosecutor’s Office, for their assistance on this investigation.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Monmouth County Woman Admits Role in Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, woman today admitted her role in a scheme to defraud a financial institution of hundreds of thousands of dollars, U.S. Attorney Craig Carpenito announced.
Blanca A. Medina, 54, of Manalapan, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to a one-count information charging her with conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
From 2015 to 2018, Medina conspired with others to fraudulently obtain mortgage loans from “Mortgage Lender A” in Monmouth County to finance the purchase of properties by unqualified buyers. Applicants for mortgage loans are required to list their assets and income on their mortgage loan applications, and mortgage lenders rely on those applications when deciding whether to issue mortgage loans.
Medina, a former loan officer for Mortgage Lender A, admitted to participating in a conspiracy in which she knowingly caused completed mortgage loan applications that contained multiple misrepresentations of material facts regarding the buyers’ assets and income to be submitted to Mortgage Lender A. A conspirator provided Medina with false and fraudulent documents for potential borrowers including false and fraudulent lease agreements, bank statements, and a gift check and gift letter. Based on these lies, Mortgage Lender A issued mortgage loans to unqualified buyers, which caused Mortgage Lender A hundreds of thousands of dollars in losses.
The conspiracy charge to which Medina pleaded guilty carries a maximum of 30 years in prison and a $1 million fine. Sentencing is scheduled for Oct. 20, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and Special Agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jonathan Fayer of the Economic Crimes Unit of the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Charlie Divine of the Federal Housing Finance Agency, Office of Inspector General.
Leader of $50 Million Health Care Fraud Conspiracy Targeting State Health Benefits Programs Pleads GuiltyRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted leading a conspiracy that defrauded New Jersey health benefits programs and other insurers out of more than $50 million, U.S. Attorney Craig Carpenito announced.
William Hickman, 44, of Northfield, New Jersey, pleaded guilty by videoconference before U.S. District Judge Robert B. Kugler to one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to commit money laundering.
“Properly prescribed medicines can be a vital part of a patient’s treatment, but they can also be costly,” U.S. Attorney Carpenito said. “This defendant orchestrated an elaborate scheme to submit prescriptions for unnecessary compounded medications on behalf of patients who had never seen a doctor. He did so to steal millions of dollars from medical health benefits systems that were intended to help employees get the treatments they needed and deserved.”
“This defendant made millions of dollars by enlisting patients and exploiting their medical insurance plans at the expense of New Jersey taxpayers,” Acting FBI Special Agent in Charge Douglas Korneski, Newark Division, said. “The FBI is committed to bringing to justice any profiteer who pursues fraud as an occupation with public monies as their paycheck.”
Hickman was charged in March 2019 along with Brian Pugh, Thomas Schallus, John Sher, Thomas Sher, and Christopher Broccoli. Charges remain pending against those defendants, and their trial is scheduled to commence on Sept. 21, 2020.
“When you visit a doctor, you expect him or her to evaluate your symptoms and prescribe medication to best treat your condition,” Michael Montanez, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “Mr. Hickman, who is a salesman not a doctor, recruited patients to have prescriptions filled, not to better the health of the patients, but rather to financially line his own pockets.”
According to documents filed in this case and statements made in court:
William Hickman was a sales representative for a pharmaceutical company. He created a side business called Boardwalk Medical LLC in his wife’s name to sell medical products for other companies, an activity that was prohibited by his employer.
As part of his side business, Hickman started persuading patients to receive compounded medications, which are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Hickman learned that certain insurance plans administered by an entity referred to in the indictment as the “Pharmacy Benefits Administrator” would reimburse thousands of dollars for a one-month supply of certain compounded medications – including pain, scar, antifungal, and libido creams, as well as vitamin combinations. He also learned that many New Jersey state and local government and education employees, including teachers, firefighters, police officers, and state troopers, had this insurance coverage. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.
Hickman marketed compounded medications for several pharmacies, including the Louisiana pharmacy identified in the indictment as “Compounding Pharmacy.” His initial work for Compounding Pharmacy was through an intermediary who paid Hickman a commission if patients he found received compounded medications covered by insurance.
In early 2015, however, Hickman struck his own deal to be a master distributor for Compounding Pharmacy. Under his deal, Compounding Pharmacy agreed to pay Boardwalk Medical 40 percent or more of the insurance payments received for prescriptions obtained by Hickman and the recruiters working for him. Hickman then created a network of conspirators to work under him to find patients, including Michael Sher and Matthew Tedesco (both of whom have pleaded guilty to conspiracy to commit health care fraud) and Pugh. The conspirators working for Hickman found additional patient recruiters and brought them into the conspiracy: Pugh recruited Schallus, Tedesco recruited Broccoli, and Michael Sher recruited John Sher and Thomas Sher. Hickman agreed to pay the conspirators working under him a percentage of the insurance reimbursement that he received from Compounding Pharmacy, and they paid recruiters working under them.
Hickman told his recruiters to find New Jersey public employees and other people with insurance coverage administered by Pharmacy Benefits Administrator. He gave them blank Compounding Pharmacy prescription forms and told them which medicines had the highest insurance reimbursement and to check off 12 months of refills.
Hickman also told his recruiters that he had a doctor who would sign prescriptions without seeing the patients. Dr. John Gaffney, who has pled guilty to conspiracy to commit health care fraud, signed numerous prescriptions at Hickman’s request without seeing the patients or determining that they had a medical necessity for the specially compounded medications.
Based on the instructions he gave them, Hickman’s conspirators recruited New Jersey public employees and others to fraudulently obtain compounded medications from Compounding Pharmacy that the patients did not need, often without a doctor seeing the patients or determining that the medications were medically necessary. Hickman and the conspirators working for him paid individuals for receiving Compounding Pharmacy prescription medications. If the patients did not see their own doctor, recruiters would give Hickman prescriptions that were completed except for the doctor’s signature, and Hickman would have Dr. Gaffney sign the prescription. The completed prescriptions were faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
Compounding Pharmacy paid Boardwalk Medical for each Hickman prescription filled and paid by Pharmacy Benefits Administrator. Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications, and Compounding Pharmacy paid William Hickman over $26 million for prescriptions obtained by Hickman and his conspirators. Hickman paid a portion of that amount to his recruiters, and they paid the recruiters under them. Hickman admitted paying Pugh approximately $435,000 in criminal proceeds over five months. Those payments provided the basis for the money laundering conspiracy charge to which Hickman pleaded guilty.
The health care fraud and wire fraud conspiracy count to which William Hickman pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the value of the property involved in the transaction.
In his plea agreement, William Hickman agreed to pay restitution of $53,037,639 and to the entry of a forfeiture money judgment for $26,241,327. Hickman also agreed to forfeit specific property obtained with criminal proceeds, including five investment accounts and four real estate parcels.
Sentencing for William Hickman 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 today’s guilty plea. He also thanked the Division of Pensions and Financial Transactions in the New Jersey 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 and Assistant U.S. Attorney Barbara Ward, Senior Trial Counsel of the Asset Recovery and Money Laundering Unit.
The charges and allegations contained in the indictment against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Essex County Man Allegedly Involved in Shootout Charged with Distributing HeroinRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man made his initial appearance today after his arrest in North Carolina on drug charges, U.S. Attorney Craig Carpenito announced.
Lester Hicks, a/k/a “Mayhem,” 29, of Newark, is charged by complaint with one count of distributing and possessing with intent to distribute heroin. He made his initial court appearance today by videoconference before U.S. Magistrate Judge Edward S. Kiel.
According to documents filed in this case and statements made in court:
On March 8, 2020, law enforcement officers with the Essex County Sheriff's Office were patrolling around Clinton and Avon avenues in Newark when they observed a vehicle run a red light. The officers stopped the vehicle, in which Hicks was a passenger. They determined there was an active warrant for Hicks’ arrest. A search incident to his arrest recovered 78 glassine envelopes of heroin and $121 in cash. Twenty-eight of the envelopes were stamped “Terminator” in red ink, and 50 of the envelopes were stamped “G” in red ink.
Hicks was charged, processed, and released with a summons to return to court. That same day, he was allegedly involved in a shooting near Martin Luther King Boulevard in Newark. The shooting was recorded on video and Hicks was identified as one of the shooters. After agreeing to self-surrender, he traveled instead to North Carolina, where he was arrested by agents of the Drug Enforcement Administration. Hicks had a sawed-off shotgun in his possession when arrested.
The drug trafficking offense carries a maximum potential penalty of 20 years in prison, and a $1 million fine.
U.S. Attorney Carpenito credited the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, and special agents of the DEA, under the direction of Special Agent in Charge Susan A. Gibson in Newark, with the investigation leading to the charges. He also thanked the Essex County Sheriff’s Office and the Newark Police Department for their assistance with the investigation.
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 ATF, 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, Union County Jail, New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center, New Jersey Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
The government is represented by Assistant U.S. Attorney Mary E. Toscano, Deputy Chief of the Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Previously Convicted Felon Admits Three Felon in Possession of Firearm Charges, One in Connection with a ShootingRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted being a felon in possession of three different firearms on three different days in April and May 2019, and to using one of the firearms in a shooting, U.S. Attorney Craig Carpenito announced.
Samaad Kelly, a/k/a “Spud,” 33, of Newark, New Jersey, pleaded guilty by videoconference before U.S. District Judge Esther Salas to an information charging him with two counts of being a felon in possession of a firearm and one count of being a felon in possession of ammunition.
According to documents filed in this case and statements made in court:
On April 24, 2019, officers from the Essex County Sheriff’s Office received information that Kelly was driving in Newark in a silver BMW with a temporary registration and was in possession of a firearm. The officers observed the BMW, which had a fictitious registration, and conducted a stop. Kelly, who was driving the BMW, could not provide the officers with any identification, registration, or proof of insurance. After conducting a search of the BMW, the officers located a Taurus semi-automatic 9 millimeter handgun in the glove box. The officers arrested Kelly, and Kelly remained in custody until May 2, 2019, when he was released on bail.
On May 7, 2019, officers from the Newark Police Department responded to a report of gun shots near Astor Street in Newark. Upon their arrival, they found one 9 millimeter discharged shell casing and one 9 millimeter round of live ammunition. The officers obtained video footage from surveillance cameras located nearby, which showed Kelly point and fire a black handgun in the direction of another individual.
On May 10, 2019, detectives from the Newark Police Department were patrolling a section of Newark in the vicinity of Astor Street and Brunswick Street. One of the detectives observed Kelly wearing a fanny pack that appeared to be heavily weighed down. When the detectives approached Kelly, he immediately fled on foot. While running away from the detectives, Kelly unclipped the fanny pack and attempted to throw it over a fence. The detectives apprehended Kelly, recovered the fanny pack, and found inside of it a Ruger 9 millimeter semi-automatic pistol, loaded with 10 rounds of ammunition. The detectives arrested Kelly.
Kelly has numerous prior felony convictions, including one for attempted aggravated assault in 2008 and one for possessing a firearm as a convicted felon in 2010. Each felon in possession of a firearm and ammunition charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 20, 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 ensured that federal resources are directed at the criminals posing the greatest threat to our communities. For more information about Project Guardian, please see https://www.justice.gov/projectguardian.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, Newark Field Division with the investigation leading to today’s guilty plea. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, police officers and detectives of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, and the Essex County Sherriff’s Office, under the direction of Sheriff Armando B. Fontoura, for their work on the case.
The government is represented by Assistant U.S. Attorney Christopher D. Amore of the Government Fraud Unit in Newark.
Newark Man Charged with Drug Trafficking in Newark’s Pilgrim Baptist Village Housing ComplexRead the Press Release
NEWARK, N.J. – A Newark man who was indicted in connection with his role in the distribution of heroin – some of which contained fentanyl – and cocaine base (crack) in an affordable housing complex and a nearby senior living community in Newark will make his initial court appearance today, U.S. Attorney Craig Carpenito announced.
Elijah Kane, a/k/a “Bang,” a/k/a “G5,” 28, and his brother Joshua Kane, a/k/a “WildOut,” 24, were indicted by a federal grand jury on May 29, 2020, on charges of conspiring to distribute cocaine base, possession of heroin and cocaine base with intent to distribute, and maintaining a drug-involved premises. Elijah Kane is scheduled to appear by videoconference today before U.S. Magistrate Judge Edward S. Kiel. Joshua Kane was arraigned on the indictment before U.S. District Judge Susan D. Wigenton on June 10, 2020. Elijah and Joshua Kane were both charged previously by criminal complaint.
Four other members and conspirators have been charged by complaint with one count each of conspiring to distribute cocaine base: Ahmad Beyah, a/k/a “Goon,” 18, Sherrod Richardson, a/k/a “Drama,” 19; Yusef Ellis, a/k/a “Tweeze,” 39; and Reuben Howard, a/k/a “Ahmeer,” 38, all of Newark. Richardson is also charged with possession of heroin and cocaine base on Dec. 5, 2019, with intent to distribute. Beyah is also charged with possession of heroin and cocaine base on Mar. 4, 2020, with intent to distribute. Richardson, Ellis, and Howard appeared on April 9, 2020, by telephone conference before U.S. Magistrate Judge James B. Clark III. Beyah appeared on April 16, 2020, by videoconference before U.S. Magistrate Judge Leda Dunn Wettre.
According to the documents filed in this case and statements made in court:
The charges and arrests resulted from an investigation by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the U.S. Attorney’s Office, in conjunction with numerous federal, state, and local law enforcement partners. Pilgrim Baptist Village Housing Complex, Site II (Pilgrim Village), is a privately owned, affordable housing complex in the vicinity of Avon and Jelliff avenues in Newark. It consists of 46 buildings, each with four units, which are accessible via exterior entrances as well as an interior stairwell leading from each apartment to a common hallway that connects multiple buildings and semi-subterranean garages for those buildings. The buildings are clustered around internal courtyards and pedestrian walkways, and the complex is accessible on foot from Avon Avenue or Jelliff Avenue and by car from one of four driveways leading to the semi-subterranean garages. Because its location and layout make it difficult for law enforcement to surveil, Pilgrim Village is the site of an open-air illegal drug market. Since at least November 2018, law enforcement has been investigating the organization that controls this market.
Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical and electronic surveillance, and analysis of telephone call detail records, law enforcement officials determined that the defendants distributed and conspired to distribute heroin and cocaine base in and around Pilgrim Village from at least June 2019 through April 2020.
The counts of conspiracy to distribute at least 28 grams of cocaine base each carry a minimum penalty of five years in prison, a maximum penalty of 40 years in prison, and a fine of at least $5 million. The counts of distribution and possession with intent to distribute heroin and cocaine base each carry a maximum penalty of 20 years in prison and a fine of $1 million. The counts of maintaining a drug-involved premises each carry a maximum penalty of 20 years in prison and a fine of $500,000.
U.S. Attorney Carpenito credited special agents and task force officers of ATF, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; and members of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation leading to the charges.
He also thanked the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson; the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura; and the U.S. Marshals Service, under the direction of Marshal Juan Mattos Jr. He also thanked the Belleville Police Department; the Nutley Police Department; the Bloomfield Police Department; the Verona Police Department; and the Orange Police Department for their assistance with this case.
The case was investigated as part of the Violent Crime Initiative (VCI). The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the purpose of combatting violent crime in and around Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
The government is represented by Assistant U.S. Attorney Angelica M. Sinopole of the Organized Crime & Gangs Unit of the U.S. Attorney’s Office in Newark.
The charges and allegations against the defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Statement of the Department of Justice before the Senate Judiciary CommitteeRead the Press Release
William Hughes
Associate Deputy Attorney General
Craig Carpenito
United States Attorney for the District Of New Jersey
U.S. Department of Justice Joint Statement before the
United States Senate Committee on the Judiciary Washington, D.C.
For a Hearing Entitled
“Covid-19 Fraud: Law Enforcement’s Response to those Exploiting the Pandemic.”
June 9, 2020
Six Members of Atlantic City Drug Trafficking Organization IndictedRead the Press Release
CAMDEN, N.J. – A federal grand jury has indicted six members of an Atlantic City drug-trafficking organization for their roles in the distribution of large amounts of heroin in the Atlantic City area, U.S. Attorney Craig Carpenito announced today.
Terryn Kelsey, 30, Jamaal Marshall, 33, Tyjuan Demarest, 40, Tieyesha Tucker, 26, Blaine Dorsey, 55, and Valarie Lamar, 60, all of Atlantic City, were each charged in a one-count indictment returned June 10, 2020, with conspiracy to distribute or possess with the intent to distribute more than 1 kilogram of heroin. These six individuals, along with 16 others, were previously charged by criminal complaint in June of 2019. They will face arraignment in federal court on a date to be determined.
Thirteen other members of this drug trafficking conspiracy have previously pleaded guilty in this case. The charges against three other defendants remain pending on complaint.
According to documents filed in the case and statements made in court:
Kelsey, Marshall, Demarest, Tucker, Dorsey, Lamar and other members of the drug conspiracy trafficked heroin from Patterson, New Jersey, into Atlantic City throughout the course of the investigation. An investigation led by the FBI used physical and video surveillance, confidential informants, consensual recordings, and two court authorized wiretaps to uncover the operations of this drug trafficking organization. The investigation tracked multiple stamps of heroin being distributed by the defendants, including “AK-47,” “Apple,” “Fortnite,” “Rolex,” “Frank Lucas,” “Bentley,” “Pandora,” and “9 ½.” Between January 1, 2017 and June 21, 2019, these stamps were associated with 48 deaths and 84 non-fatal overdoses in New Jersey.
The charge in the indictment against Kelsey, Marshall, Demarest, Tucker, Dorsey and Lamar carries a mandatory penalty of 10 years in prison, a maximum potential penalty of life in prison, and up to a $10 million fine.
U.S. Attorney Carpenito credited special agents of the FBI’s Safe Streets South Jersey Violent Incident and Gang Task Force, Atlantic City Resident Agency, and FBI, Newark Division, under the direction of Acting Special Agent in Charge Douglas Korneski; officers of the Atlantic City Police Department, under the direction of Chief White; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Atlantic County Sheriff’s Department, under the direction of Sheriff Eric Scheffler; and the Pleasantville Police Department, under the direction of Chief Sean Riggin, with the investigation leading to the charges. He also thanked the U.S. Department of Homeland Security, Homeland Security Investigations; the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; and the N.J. State Police for their assistance.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorney Martha K. Nye of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the indictment and the original complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Owner of Business Consulting Firm Admits Orchestrating Multimillion-Dollar Bank Fraud and Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man who founded and owned a business consulting firm admitted today to orchestrating a multimillion-dollar bank fraud and securities fraud scheme operated through that firm, U.S. Attorney Craig Carpenito announced.
Edward Espinal, 44, of Wayne, New Jersey, the chief executive officer of Cash Flow Partners LLC (Cash Flow) pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud and one count of securities fraud.
“Edward Espinal coordinated a vast fraud scheme that lured people into taking out fraudulent loans that his company helped obtain and, in many cases, put that borrowed money into sham investments he also controlled,” U.S. Attorney Carpenito said. “His complex scam tricked numerous investors out of a substantial amount of money, and now he will have to pay for his crimes.”
“This defendant is the quintessential con artist,” Acting FBI Special Agent in Charge Douglas Korneski said. “He played a shell game with other people’s hard-earned money, making promises he never intended to keep, and walking away with ill-gotten gains while leaving them high and dry. Fraudsters like Edward Espinal keep the FBI in business, and we work diligently to bring his type to justice.”
According to documents filed in this case and statements made in court:
The Bank Fraud Conspiracy
Espinal was the founder and chief executive officer of Cash Flow and controlled the company’s operations. From March 2016 through December 2019, Espinal led and directed a bank fraud conspiracy designed to obtain millions of dollars in loans from banks on the basis of false representations. To attract customers, Cash Flow released internet advertisements and held seminars offering to assist customers with low-paying salaries in obtaining loans. These advertisements included promotional videos featuring Espinal and a former telenovela actor. Customers contacted Cash Flow and were routed to the company’s sales department.
Employees in the sales department then encouraged customers to sign up for various loan programs that Cash Flow provided and to enter into contracts with Cash Flow. Under those contracts, employees would help customers obtain loans from banks. The Cash Flow contracts permitted customers to keep a portion of the loan proceeds and customers agreed to provide the remaining percentage of the proceeds to Cash Flow. Cash Flow agreed to pay off the loans on behalf of its customers.
Cash Flow then used false information and fraudulent documents to obtain loans for its customers for which they otherwise would not have qualified, and posed as the customers in communications with the banks.
The Securities Fraud
From July 2016 through September 2019, Espinal obtained more than $5 million in investments from victim investors on the basis of false and fraudulent pretenses and representations.
Espinal solicited investments from prospective customers using a marketing campaign on Spanish language television channels and the internet, the “Cash Flow TV” YouTube page, and live presentations in Cash Flow’s offices and elsewhere. Espinal also solicited investments from individuals who obtained loans through Cash Flow’s bank fraud conspiracy, encouraging loan customers to invest loan proceeds in Cash Flow’s investment program. Once investors agreed to invest in Cash Flow, Espinal issued “promissory notes” to investors that guaranteed monthly investment returns between 1.25 percent and 4 percent. The promissory notes stated that Cash Flow would return investors’ principal either one year from the date of the promissory note, or 60 days after investors demanded payment. Espinal and other Cash Flow employees signed the promissory notes on behalf of Cash Flow.
Espinal made a number of misrepresentations to investors. He told investors that he would pool their funds with the funds of other investors in investments related to real estate, real estate companies, a gold mine in Ecuador, and construction projects in countries outside of the United States. In reality, Espinal used investor funds to pay returns to earlier investors, to pay for personal expenses for himself, his family, and another Cash Flow employee, to perpetuate the bank fraud scheme, and to market the bank fraud and investment scheme to future victims. Espinal falsely claimed that Cash Flow’s purported real estate fund, Cash Flow Capital, was “licensed” by the Securities and Exchange Commission. He guaranteed monthly returns on investment based on the purported proceeds from the sale of properties in Cash Flow’s investment portfolio. In reality, Espinal did not sell Cash Flow properties, so no profits were derived from the sale of Cash Flow properties.
Two other individuals, Raymundo Torres and Jennie Frias, have previously pleaded guilty to their roles in the Cash Flow bank fraud conspiracy and are awaiting sentencing.
The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The securities fraud counts carry a maximum penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for Oct. 13, 2020.
Individuals who believe they may have information about this case may contact the FBI at 1-800-CALL-FBI (225-5324).
The U.S. Securities and Exchange Commission (SEC) has filed a civil complaint against Espinal based on the allegations underlying the securities fraud charge.
U.S. Attorney Carpenito credited special agents of the FDIC-Office of the Inspector General (FDIC-OIG), under the direction of Special Agent in Charge Patricia Tarasca in New York, and special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, with the investigation leading to today’s guilty plea. He also thanked the SEC for the assistance provided by its Enforcement Division.
The government is represented by Assistant U.S. Attorneys Ari B. Fontecchio and J. Stephen Ferketic of the U.S. Attorney’s Criminal Division in Newark.
North Carolina Man Admits Heroin Distribution and Firearms OffensesRead the Press Release
TRENTON, N.J. – A Raleigh, North Carolina, man with ties to Trenton admitted today to distributing heroin and unlawfully possessing a firearm as a convicted felon, U.S. Attorney Craig Carpenito announced.
Dennis Cheston Jr., a/k/a “Beans,” 39, pleaded guilty by videoconference before Chief U.S. District Judge Freda L. Wolfson to a third superseding indictment that charged him with distribution and possession with intent to distribute heroin (Count Five) and unlawful possession of a firearm by a convicted felon (Count Nine).
In October 2018, Cheston and 26 other members identified as having participated in a large drug trafficking conspiracy operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. Cheston and others also were charged with additional firearms offenses. On Feb. 27, 2020, a grand jury returned a 10-count third superseding indictment charging Cheston and eight other defendants with conspiracy to distribute one kilogram or more of heroin and various other drug and firearm offenses. Of the 26 defendants charged in the original criminal complaint, Cheston is the 23rd defendant to plead guilty. The charges in the third superseding indictment and the criminal complaint are currently pending against the three remaining defendants, and they are presumed innocent unless and until proven guilty.
According to documents filed in this case and statements made in court:
From October 2017 to October 2018, law enforcement officers conducted an investigation of a large narcotics conspiracy that operated in Trenton and which sought to profit from the distribution of heroin and numerous other controlled substances. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, controlled purchases of heroin, the use of confidential sources of information, and other investigative techniques, law enforcement learned that Jakir Taylor and Jerome Roberts obtained regular supplies of hundreds of “bricks” of heroin from defendant David Antonio, whom they referred to as “Papi.”
Telephone and text message communications intercepted pursuant to the wiretap orders also revealed that, on multiple occasions during the investigation, Cheston – a convicted felon who has ties to Trenton – traveled from North Carolina to Trenton and obtained quantities of heroin from Taylor, which Taylor had obtained from Antonio. During one intercepted telephone call between Taylor and Cheston, Cheston advised Taylor that the heroin bearing an ink stamp that read “Top Secret,” was high quality, and that his customers liked it. During the course of these drug transactions and additional intercepted communications between Taylor and Cheston, Cheston also agreed to travel from North Carolina to Trenton and supply Taylor with multiple firearms in exchange for future supplies of heroin. On Sept. 8, 2018, based on the intercepted communications and other evidence obtained during the investigation, law enforcement tracked Cheston’s travel from North Carolina to Trenton, where he was arrested upon his arrival as he exited the Trenton Transit Center. During a subsequent search of Cheston’s backpack, law enforcement recovered a nine-millimeter Smith & Wesson handgun, which Cheston had agreed to provide to Taylor.
The drug distribution count to which Cheston pleaded guilty carries a statutory maximum term of imprisonment of 20 years and a maximum fine of $1 million. The felon-in-possession count to which Cheston pleaded guilty carries a statutory maximum term of imprisonment of 10 years and a maximum fine of $250,000. Cheston’s sentencing is scheduled for Oct. 21, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Satellite Office, under the direction of Special Agent in Charge Charlie J. Patterson; officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley; officers of the Princeton Police Department, under the direction of Chief of Police Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief of Police John P. Stemler III; officers of the Burlington Township Police Department, under the direction of Police Director Bruce Painter; and detectives of the Burlington County Prosecutor’s Office, under the direction of Prosecutor Scott A. Coffina, with the investigation leading to today’s guilty plea. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan; detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the New Jersey State Board of Parole for their assistance in the case.
The government is represented by Attorney-in-Charge J. Brendan Day and Assistant U.S. Attorney Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Greater Trenton Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies to enhance the identification, apprehension, and prosecution of individuals involved in gang-related activities, violent crime, and drug distribution in and around the greater Trenton area. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
Former Owner of Construction Company Admits EmbezzlementRead the Press Release
CAMDEN, N.J. – The former owner of a construction company today admitted his role in defrauding a retirement plan set up by the company, U.S. Attorney Craig Carpenito announced.
Joshua Ferrell, 34, of Chatsworth, New Jersey, the former owner of Indian Mills Contracting Services Inc. (Indian Mills), pleaded guilty plea by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of embezzlement and theft from an employee pension or welfare benefit plan or a fund connected with such plan established for the company’s employees.
According to documents filed in this case and statements made in court:
Ferrell admitted that, between 2011 and February 2017, he was the president and owner of Indian Mills, which was a construction company in Chatsworth. Indian Mills was a family owned construction company that worked on federal, municipal, state, commercial and industrial projects throughout New Jersey. Indian Mills employed machine operators, carpenters, cement masons and labors.
In 2015, Ferrell established the Indian Mills Contracting Inc. 401K Plan which was established as a single employer profit sharing and 401K plan. The plan was covered by the Employee Retirement Income Security Act (ERISA) of 1974. Ferrell was the plan administrator.
Under the ERISA regulations, employers are permitted to establish and maintain employer sponsored retirement plans for the benefit of their employees. Once these plans are established, both employers and employees have the option of making regular contributions of funds to them. The accumulated plan assets are generally invested for the benefit of the plan and the plan participants, and any capital gains or income earned through such investment are added to the accumulated plan assets. Upon retirement, or when otherwise eligible, a plan participant may request and receive disbursements from the retirement plan assets. These disbursements correspond to contributions made to the plan by the participant, plus any associated gains made during the term of employment.
Ferrell admitted that the 401K plan allowed employees to defer portions of their salary before taxes from their bi-weekly paychecks and have that money earmarked for contribution into the plan’s trust.
Ferrell admitted that between Jan. 1, 2015, and February 2017, money which was deducted bi-weekly from Indian Mills employees’ paychecks and which was supposed to be contributed to the plan was instead kept by Ferrell and spent by him.
The charges to which Ferrell pleaded guilty carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled Oct. 19, 2020.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York; and investigators of the U.S. Department of Labor, Employee Benefits Security Administration (EBSA), under the direction of Philadelphia Regional Director Michael Schloss, with the investigation leading to today’s guilty plea.
The government is represented by Senior Trial Counsel Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Somerset County Man Charged with Online Enticement of Minor and Traveling Overseas to Engage in Criminal Sexual ConductRead the Press Release
NEWARK, N.J. – A Somerset County, New Jersey, man made his initial court appearance by videoconference today on charges that he enticed a minor over the internet to engage in sexual activity and traveled to the Philippines to engage in sex with the minor, U.S. Attorney Craig Carpenito announced.
James A. Diggs, 44, of Somerville, New Jersey, is charged by complaint with one count of online enticement of a minor to engage in sexual activity and one count of foreign travel to engage in criminal sexual activity. He made his initial appearance by videoconference before U.S. Magistrate Judge Leda Dunn Wettre and was detained.
According to documents filed in this case and statements made in court:
Between September 2018 and February 2019, Diggs used an online messaging application to persuade, induce, entice, and coerce “Minor Victim-1,” who was located in the Philippines, to engage in sexual activity. During the communications, Diggs solicited Minor Victim-1 to engage in sexual acts with him in return for money or material objects. Diggs encouraged Minor Victim-1 to keep their relationship secret because Minor Victim-1 was underage. In October 2018, Diggs traveled from New Jersey to the Philippines to meet and engage in sexual activity with Minor Victim-1.
Diggs used an online messaging application to entice and coerce three other minor victims in the Philippines to engage in unlawful sex acts. Between February 2015 and February 2019, Diggs traveled to the Philippines on at least seven occasions.
The online enticement of a minor charge carries a maximum potential penalty of life in prison, a mandatory minimum prison sentence of 10 years, and a $250,000 fine. The foreign travel to engage in criminal sexual activity charge carries a maximum potential penalty of 30 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, Cherry Hill Office, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to the charges. He also thanked agents of the U.S. Customs and Border Protection, John F. Kennedy International Airport, for their assistance.
The government is represented by Assistant U.S. Attorney Patricia Astorga of the Opioid Abuse Prevention and Enforcement Unit of the U.S. Attorney’s Office in Newark.
The charges and allegations contained in the criminal complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Man Charged with Mail Fraud Committed While Serving Federal Sentence for Previous FraudRead the Press Release
CAMDEN, N.J. – The president of a company providing goods to government agencies was charged today by a federal grand jury with allegedly attempting to defraud businesses in connection with government contracting, U.S. Attorney Craig Carpenito announced.
Keith Fisher Sr., 62, of Philadelphia, Pennsylvania, and Burlington, New Jersey, is charged by indictment with one count of mail fraud. He was previously charged with this conduct in a criminal complaint and also with violating the conditions of his supervised release from a prior conviction. Fisher will be arraigned at a later date.
According to documents filed in this and other cases and statements made in court:
On July 18, 2017, Fisher was sentenced by U.S. District Judge Renée Marie Bumb to 60 months in prison for conspiring to commit mail fraud using various companies he owned and controlled. In that case, Fisher and his companies won bids for U.S. government contracts; subcontracted with victim-businesses to provide goods to the government pursuant to the contracts; collected payments from the government for fulfilling the contracts; and then failed to pay the subcontractor victim-businesses that actually provided the goods.
The fraud scheme charged today involved another company, Atlantic Safety Corp., controlled by Fisher, and began when Fisher was nearing the end of his previous prison sentence. Fisher used Atlantic Safety to bid on federal contracts through Unison Marketplace, a reverse auction online marketplace that enabled government agencies to post requirements for goods. Upon submitting a winning bid, Atlantic Safety was awarded a contract to provide goods to a government agency.
Fisher orchestrated his fraud by using an alias to subcontract with a third-party vendor to provide goods directly to the government agency. Fisher induced the third-party vendor to ship the goods to the government agency on credit by falsely promising to pay the vendor for the goods. Fisher also made false and fraudulent representations to other potential subcontractor vendors about the credit-worthiness and financial status of Atlantic Safety.
The mail fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents with the U.S. Naval Criminal Investigative Service, Northeast Field Office, under the direction of Acting Special Agent in Charge Timothy Westfall; special agents with the General Services Administration Office of Inspector General, Office of Investigations Mid-Atlantic Division, under the direction of Special Agent in Charge Eric D. Radwick; and special agents with the U.S. Department of State Office of Inspector General, Office of Investigations, Americas, Pacific, and Asia Division, under the direction of Special Agent in Charge Robert J. Smolich, with the investigation leading to today’s indictment.
The government is represented by Assistant U.S. Attorney Jeffrey Bender of the U.S. Attorney’s Office in Camden.
The charge and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Selection Committee Named for Project Safe Neighborhoods Grant ProgramRead the Press Release
NEWARK, N.J. – Three people will begin their service as part of the selection committee for the Department of Justice’s Project Safe Neighborhoods grants program, U.S. Attorney Craig Carpenito announced today.
“I’m pleased that these three distinguished public servants have agreed to serve as members of an external panel that will review applications for grants under the Project Safe Neighborhoods program,” U.S. Attorney Carpenito said. “They each come from a background of extensive public service and each bring a unique perspective to this process.”
The three members of the selection committee are:
John Hoffman, currently General Counsel for Rutgers University, where he oversees a group of 21 attorneys responsible for several hundred litigation matters and general university affairs. Mr. Hoffman served as the state’s Acting Attorney General from June 2013 through March 2016. Before that, he served in the senior leadership team of Attorney General Jeffrey Chiesa, as executive assistant Attorney General, and before that he served as director of the Division of Investigations for the State Comptroller’s Office.
Hoffman also has extensive experience in federal government: seven years as a trial attorney for the Civil Division of the U.S. Department of Justice, and from 2004 to 2010 as an Assistant U.S. Attorney for the District of New Jersey, where he focused primarily on economic and white-collar criminal prosecutions.
Among his achievements as Acting Attorney General, Mr. Hoffman led an initiative to equip police with body-worn cameras and established a new policy directive on police-involved shooting incidents, improving the relationship between law enforcement and diverse communities. He spearheaded several initiatives to address the heroin and opiates epidemic in the state, including the enhancement of the Prescription Monitoring Program to suppress the misuse of prescription medications, and launched the opiate antidote Narcan program to law enforcement agencies statewide resulting in nearly 3,000 overdose reversals.
J. Scott Thomson is Executive Director of Global Security at Holtec International, a diversified energy technology company. Before joining the company, Mr. Thomson was the Chief of the Camden County Police Department, where he pioneered an innovative strategy that significantly transformed the public safety profile of the city of Camden, a city that was once labeled as the “Nation’s Most Dangerous City.” He created a new police department that was responsible for achieving unprecedented reductions in crime, culminating in a 50-year low in 2018. To achieve this, Mr. Thomson developed unique strategies, harnessed technologies, and bolstered an organizational culture that led to President of the United States in 2015 recognizing his department as a model for 21st Century policing.
Mr. Thomson has served on numerous boards and committees of leading institutions including the White House Office of National Drug Control Policy, the United States Attorney General Global Advisory Committee, the International Association of Chiefs of Police, and was a founding member of the Harvard University Law Enforcement Summit Executive Leadership Group. He has also served as an adjunct professor at Fairleigh Dickinson University, School of Administrative Science.
From 2015 to 2019, Mr. Thomson was the elected President of the Police Executive Research Forum, a Washington, D.C., policing think-tank which represents more than 3,000 international law enforcement executives.
Andrea P. McCoy Johnson most recently served as the Re-Entry and Outreach Coordinator for the U.S. Attorney’s Office in the District of New Jersey. A 20-year veteran of the Essex County Prosecutor’s Office, Ms. McCoy Johnson’s lifelong commitment to public safety, community engagement and criminal justice reform is exhibited in her career in public service. She has combined her interests in youth, criminal justice and community engagement, while working with community groups, law enforcement, and young people.
At the U.S. Attorney’s Office, she implemented Project L.E.A.D. (Legal Enrichment and Decision-Making), where she and other colleagues worked with fifth-graders at schools in Newark, Trenton and Camden. She considered this position the perfect “retirement” position as it allowed her to serve as a liaison between the community and law enforcement, create programs that focus on youth prevention, community awareness and education and allowed her to continue to serve as a public servant who gives back to her community. She also taught criminal justice classes at Rutgers University in the School of Criminal Justice, where she shared her love of juvenile justice reform, criminal justice and community collaboration with the next generation of criminal justice leaders.
After 17 years as an Assistant Prosecutor and Unit Supervisor with the Essex County Prosecutor’s Office, in 2013, Andrea was elevated to the position of Executive Assistant Prosecutor, where she was responsible for all aspects of human resources, labor and contract negotiations in an Office of over 400 employees, as well as management of the support staff. Prior to that, she supervised the Juvenile Trial, Community Justice and Victim Witness Advocacy Units and served as an Assistant Prosecutor in the Juvenile Trial and Official Corruption and Economic Crime Units.
Project Safe Neighborhoods (PSN) is designed to create and foster safer neighborhoods through a sustained reduction in violent crime, including, but not limited to, addressing criminal gangs and the felonious possession and use of firearms. The program's effectiveness depends upon the ongoing coordination, cooperation, and partnerships of local, state, tribal, and federal law enforcement agencies – and the communities they serve – engaged in a unified approach led by the U.S. Attorney in all 94 districts.
Essex County Man Admits Participation in Heroin ConspiracyRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted his role as a member of a heroin trafficking conspiracy, U.S. Attorney Craig Carpenito announced.
Raheem Tarry, 34, of Newark, pleaded guilty by video conference before U.S. District Judge Susan D. Wigenton to two counts of a third superseding indictment charging him with one count of conspiracy to distribute and possess with intent to distribute one kilogram of more of heroin and distribution of heroin and possession of heroin with intent to distribute.
According to documents filed in this case and statements made in court:
Tarry and others were members of a drug trafficking organization that dealt heroin and crack cocaine in and around Newark, specifically Hayes Street and 14th Avenue in the area of the New Community Corporation housing development (NCC). The organization is comprised of members of the Brick City Brim set of the Bloods street gang.
The investigation revealed that in addition to selling narcotics, members of the organization alerted each other to police and rival gang member or drug dealer presence within NCC; shared narcotics supply, narcotics proceeds, and customers; and raised bail money for each other following arrests. Members of the organization have also engaged in violence and been the subject of violence in connection with their narcotics trafficking activities.
Between March and August 2018, Tarry and 27 other individuals were charged by criminal complaint with conspiracy to distribute heroin and cocaine base; one individual also was charged with firearms offenses relating to his drug trafficking. On Aug. 20, 2019, a grand jury returned a 22-count third superseding indictment charging Tarry and four other defendants with conspiracy to distribute one kilogram or more of heroin and various other drug and firearms offenses; the alleged leader of the organization also was charged with participating in a continuing criminal enterprise. The charges in the complaint and third superseding indictment remain pending as to several of the defendants and one is charged in a separate indictment. They are presumed innocent unless and until proven guilty.
The heroin trafficking conspiracy count to which Tarry pleaded guilty carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. The drug distribution and possession with intent to distribute count to which Tarry pleaded guilty carries a maximum potential penalty of 20 years in prison, and a $1 million fine. Sentencing is scheduled for Oct. 14, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and members of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation leading to today’s guilty plea. He also thanked the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the New Jersey Department of Corrections, the New Jersey State Parole Commission, and the U.S. Marshals for their assistance.
The case was investigated as part of the Violent Crime Initiative (VCI). The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the purpose of combatting violent crime in and around Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Christopher D. Amore of the U.S. Attorney’s Office in Newark.
Illinois Man Admits Role in $4.6 Million Health Care Fraud Related to Genetic TestingRead the Press Release
NEWARK, N.J. – An Illinois man today admitted his role in a scheme to defraud the Medicare Program in connection with fraudulent orders for genetic tests, U.S. Attorney Craig Carpenito announced.
Kyle D. McLean, 36, of Arlington Heights, Illinois, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to a superseding information charging him with one count of conspiracy to defraud the United States in connection with a scheme to commit health care fraud. McLean and five co-defendants were previously charged by indictment in September 2019 in connection with the conspiracy and a related scheme.
According to documents filed in this case and statements made in court:
McLean and certain of his conspirators operated Privy Health Inc., a company that acquired DNA samples and Medicare information from hundreds of patients through various methods, including offering $75 gift cards to patients, all without the involvement of a treating health care professional. Privy partnered with another company, Ark Laboratory Network LLC, which purported to operate a network of laboratories that facilitated genetic testing. Matthew S. Ellis, a physician based in Gainesville, Florida, and a co-defendant charged in the indictment, served as the ordering physician who authorized genetic testing for hundreds of patients across the country that he never saw, examined, or treated. These included patients from New Jersey and various other states where Ellis was not licensed to practice medicine. Through this process, Ellis, McLean, and others submitted and caused to be submitted fraudulent orders for genetic tests to numerous clinical laboratories. These orders falsely certified that Ellis was the patients’ treating physician and, in some cases, falsely indicated that a patient had a personal or family history of cancer. In 2018 alone, Medicare paid clinical laboratories at least approximately $4.6 million for genetic tests that Ellis ordered as part of this scheme.
The charge to which McLean pleadedguilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense. Sentencing is scheduled for Oct. 9, 2020.
A co-defendant, Kacey C. Plaisance, of Altamonte Springs, Florida, previously pleaded guilty and is scheduled to be sentenced on September 17, 2020.
U.S. Attorney Carpenito credited the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey with the investigation leading to today’s guilty plea.
The government is represented by Senior Trial Counsel Bernard J. Cooney of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.
The charge and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Chinese Manufacturer Charged with Exporting Misbranded and Defective Masks Falsely Purporting to be N95 RespiratorsRead the Press Release
NEWARK, N.J. – A Chinese manufacturer was charged today with producing and exporting to the United States in the midst of the COVID-19 pandemic nearly half a million misbranded and defective masks that falsely purported to be N95 respirators, U.S. Attorneys Craig Carpenito, District of New Jersey, and Richard P. Donoghue, Eastern District of New York, announced.
King Year Packaging and Printing Co. Ltd. (King Year) is charged by complaint with three counts of violating the Federal Food, Drug and Cosmetic Act (FDCA) for causing misbranded and substandard respirators that falsely purported to meet the N95 standard to be imported into the United States. The complaint also charges the defendant with one felony count of making a false statement by filing misleading registration documents with the U.S. Food and Drug Administration (FDA). The criminal complaint was filed in Brooklyn federal court.
“These charges demonstrate the continued commitment of the Department of Justice and our partners to aggressively pursue those who sell misbranded and defective personal protective equipment, whether they are located here or abroad,” Carpenito said. “We will aggressively investigate and charge manufacturers that put our medical professionals and first responders at risk in fighting this crisis.”
“The charges alleged in this complaint show a blatant disregard for the safety of American citizens,” Acting FBI-Newark Special Agent in Charge Douglas Korneski said. “Had it not been for the actions of the investigative team, this defendant would have put first responders, hospital employees, and other front line workers directly in harm’s way with faulty equipment just to make a buck. The defendant tried to bypass the government's regulations by misbranding the quality of the equipment being peddled. The FBI remains vigilant in the pursuit of criminals trying to exploit the current crisis.”
Attorney General William P. Barr created the COVID-19 Hoarding and Price Gouging Task Force, led by U.S. Attorney Carpenito, who is coordinating efforts with the Antitrust Division and U.S. Attorneys across the country wherever illegal activity involving protective personal equipment occurs. The Secretary of Health and Human Services has issued a notice designating categories of health and medical supplies that must not be hoarded or sold for exorbitant prices.
“U.S. Customs and Border Protection is proud of the expertise we bring to support and assist investigations by our law enforcement partners,” Troy Miller, Director, CBP New York Field Office, said. “It is through interagency partnerships and collaborative efforts, like the one leading to today’s charges that we send a message to foreign manufacturers on the importance of understanding and complying with US health, safety, and import laws.”
“The FDA is actively monitoring the marketplace for fraudulent products related to our battle against COVID-19. The agency will continue to collaborate with our fellow law enforcement partners to bring to justice those who place profits above the public health during this pandemic,” Jeffrey J. Ebersole, Special Agent in Charge, FDA Office of Criminal Investigations’ New York Field Office, said. “Today’s announcement should serve as a reminder that we will take appropriate action against those who jeopardize the health of Americans while taking advantage of a crisis.”
According to the complaint:
From April 6, 2020, to April 21, 2020, King Year manufactured 495,200 defective and misbranded masks that claimed to be N95 respirators, and caused those defective products to be imported into the United States. King Year stamped the NIOSH and FDA logos on the packaging for its respirators, appealing directly to healthcare personnel, when in fact, its respirators were not NIOSH-approved, nor were they approved, cleared, or otherwise authorized by the FDA. King Year’s respirators also were embroidered with “N95,” even though they fell well below the minimum 95 percent filtration standard.
King Year’s misbranded and defective products had the potential to deceive U.S. consumers, including healthcare workers and first responders, into believing they were purchasing authentic N95 respirators, and put them at risk. To cover up the poor quality of its respirators, King Year disseminated false documents attesting to their authenticity and filed a fraudulent registration statement with the FDA.
Each charge carries a maximum fine of $500,000 or the greater of twice the gross gain or twice the gross loss from the offense.
Please report COVID-19 fraud, hoarding or price-gouging to the National Center for Disaster Fraud’s National Hotline at (866) 720-5721, or e-mail: [email protected].
The government is represented by Assistant United States Attorney Jonathan Fayer of the Economic Crimes Unit for the U.S. Attorney’s Office for the District of New Jersey.
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Camden County Felon Admits Unlawfully Possessing Fraudulent Law Enforcement Credentials and FirearmRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, man previously convicted of multiple felony offenses including robbery, burglary, and aggravated assault today admitted possessing fraudulent law enforcement credentials and unlawfully possessing a handgun, U.S. Attorney Craig Carpenito announced.
Warren E. Shelton, 54, of Chesilhurst, New Jersey, pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to an indictment charging him with one count of unlawful possession of imitation badges, identification cards, and other insignia prescribed for use by officers of a department or agency of the United States and one count of possession of a firearm by a previously convicted felon.
According to documents filed in this case and statements made in court:
In 2018, Shelton designed, ordered, and acquired counterfeit Department of Homeland Security, Federal Protective Service (FPS) credentials, business identification cards, and a badge falsely representing that he was employed as a special agent with FPS and authorized to carry a weapon and enforce federal laws. During a court-authorized search of Shelton’s home in May 2019, investigators located and seized these counterfeit items and also located and seized a Colt .45 caliber handgun and ammunition along with two blank guns that resembled real firearms. As a previously convicted felon, Shelton is prohibited from possessing a firearm.
Shelton faces a maximum potential penalty of 10 years in prison and a fine of up to $250,000 for the firearm offense. He also faces up to six months in prison and a fine of up to $5,000 for possession of the counterfeit FPS credentials, business cards, and badge. Sentencing is scheduled for Oct. 7, 2020.
U.S. Attorney Carpenito credited special agents of the Department of Homeland Security (DHS), Office of Inspector General (OIG), under the direction of Assistant Special Agent in Charge Julio Santana; special agents of the Department of Homeland Security, Federal Protective Services (FPS), under the direction of Supervisory Special Agent Anthony Fuscellaro; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina; special agents of the U.S. Secret Service, Philadelphia Field Office, under the direction of Special Agent in Charge James Henry; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge Charlie J. Patterson with the investigation leading to today’s guilty plea. He also thanked officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan, the Camden County Police Department, under the direction of Chief Joseph Wysocki, and the Chesilhurst Police Department, under the direction of Chief Wendell Smith for their assistance.
The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni and Daniel A. Friedman of the U.S. Attorney’s Office Criminal Division in Camden.
Atlantic City Man Charged with RiotingRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man has been arrested on charges that he participated in a riot in Atlantic City on May 31, 2020, following a day of otherwise peaceful protests, U.S. Attorney Craig Carpenito announced today.
Carlos A. Matchett, 30, of Atlantic City, New Jersey, was arrested June 3, 2020, by special agents of the FBI and is charged by complaint with use of a facility of interstate and foreign commerce, namely, a cellular telephone, and the social media platform Facebook, with intent to participate in and carry on a riot. Matchett will make his initial appearance today by videoconference before U.S. Magistrate Judge Karen M. Williams.
According to the complaint:
During the evening of May 31, 2020, following protests in Atlantic City, a group of people engaged in a spree of rioting, destruction, and looting in and around the Tanger Outlets, an area known locally as “the Walk.” Police responded to the area and observed Matchett standing in the middle of a roadway shouting obscenities at law enforcement and enticing persons around him to join in looting. After Matchett refused orders to disperse, police arrested him. During a search, they found a knife, a hatchet, and a jar filled with gasoline inside a backpack that he was wearing.
Further investigation revealed that shortly before his arrest, Matchett made public postings on his Facebook page linking to a news article about looting in Philadelphia and remarking to others, “LET’S START A RIOT.” Matchett also posted a video on Facebook on May 31, 2020, that showed him encouraging and assisting others in the vicinity of the Tanger Outlets in Atlantic City to loot goods from smashed store fronts.
The charge in the complaint carry a maximum prison term of five years and a maximum fine of $250,000.
U.S. Attorney Carpenito credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark and the FBI’s Atlantic City Resident Agency’s Joint Terrorism Task Force, whose members include the Atlantic City Police Department and New Jersey State Police, with the investigation leading to today’s arrest. He also thanked officers of the Atlantic City Police Department, under the direction of Police Chief Henry White, for their assistance.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Monmouth County Man Charged with Tax Evasion, Corrupt Interference with Administration of Internal Revenue Laws, and Failure to File Tax ReturnRead the Press Release
NEWARK, N.J. – A Monmouth County, New Jersey, man was charged today with tax evasion, corrupt interference with the administration of the Internal Revenue laws, and failure to file a federal tax return, U.S. Attorney Craig Carpenito announced.
Thomas Bertoli, 62, of Matawan, New Jersey, has been charged by complaint with two counts of tax evasion, one count of corrupt interference with the administration of the Internal Revenue laws, and one count of failure to file a tax return. A summons was issued for Bertoli to appear before a United States Magistrate Judge at a time to be scheduled.
According to the complaint:
Defendant Bertoli operated the following businesses: The Doormen Inc.; City Street Associates LLC, a/k/a CSA LLC; and Urban Logistics LLC. Individually and through his companies, Bertoli obtained payments from clients for services provided, including payments from developers and construction firms for expediting services on real estate development and construction projects, primarily in Jersey City, New Jersey; and payments from political campaigns for political consulting services in New Jersey. Expediting in the construction industry typically refers to facilitating the acquisition of building permits and other government agency approvals required for the completion of real estate projects.
Bertoli obtained hundreds of thousands of dollars in gross receipts for calendar years 2009 to 2016. Bertoli had not, as of April 18, 2017, filed federal tax returns or paid any of the taxes due, other than a $5,000 nominal payment in September 2014, for those years. He concealed and attempted to conceal from the IRS his income and assets through various means; Bertoli cashed at check cashers payments from his clients, made false and fraudulent statements to the IRS, and used the Urban Logistics bank account for personal expenditures.
Bertoli is charged with tax evasion for calendar years 2009 to 2013 and evasion of assessment of taxes for calendar year 2014. He also is charged with corrupt interference with the administration of the Internal Revenue laws and failing to file a tax return for calendar year 2013.
Each charge of tax evasion carries a maximum potential penalty of five years in prison and a $250,000 fine. The charge of corrupt interference with the administration of the Internal Revenue laws carries a maximum potential penalty of three years in prison and a $250,000 fine. The charge of failing to file a tax return carries a maximum potential penalty of one year in prison and a $100,000 fine.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Laura J. Perry and special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys J Fortier Imbert and Jihee G. Suh of the U.S. Attorney’s Office’s Special Prosecutions Division.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Statement of U.S. Attorney Craig CarpenitoRead the Press Release
As I said in the wake of the despicable hate crimes committed in Jersey City last December, we are confronting problems in this state and this country that I cannot believe we are still facing at this point in our history. I emphatically reject the idea that violence is the solution to those problems. I am proud of the people of Newark, Camden and elsewhere who have raised their voices in peaceful protest to seek justice for George Floyd and the many other victims like him, and to call for change.
A few individuals are using these protests as cover to commit violent acts and damage our communities. They are not honoring the memory of George Floyd. They do not work to ensure justice for his memory, his family or his loved ones. They hide behind his name to further their own agendas. They may think that they can worsen the divide that responsible community, civic and governmental leaders have engaged with one another to try to close for years. They are wrong.
I know this engagement works because I see the impact of productive community and law enforcement partnerships every day in Newark, Camden, and elsewhere. As I watch the police and the community grow together, I see crime go down. I know that members of the community intervened during the past several days to prevent a few individuals from turning a peaceful protest violent. I commend their brave stand, and I say to them: we will not allow the actions of the lawless few to silence the voice of the many.
The U.S. Attorney’s Office will continue to protect the right of all people to assemble and protest peacefully, without interruption from those bent on violence or destruction. We will continue to investigate and prosecute those police officers who abuse their power through the unlawful use of force and other violations of our citizens’ civil rights. We will also intervene wherever individuals try to distract from these valid causes by engaging in riots, arson and looting. We will bring all of these wrongdoers to justice.
Our work sends a strong message: New Jersey will not tolerate the victimization of our people, our cities, our businesses, our law enforcement and our government. Justice will prevail.
Philadelphia Woman Indicted in $68 Million Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – An investment fund manager was indicted today in connection with an alleged $68 million securities fraud scheme, U.S. Attorney Craig Carpenito announced.
Brenda Smith, 59, of Philadelphia, Pennsylvania, was indicted on six counts of wire fraud and one count of securities fraud. Smith was initially charged by complaint in August 2019.
According to documents filed in this case and statements made in court:
Smith managed and controlled Broad Reach Capital LP, a purported investment fund. Broad Reach Capital was a pooled investment fund/hedge fund that was established in February 2016 and was open to accredited investors with a minimum investment of $1 million.
From February 2016 through August 2019, Smith allegedly orchestrated a scheme in which she made misrepresentations to investors and promised that she would invest their funds in particular trading strategies that Broad Reach Capital was optimally situated to execute. Smith referred to these strategies as dividend capture, VIX Convergence, and opportunistic trading. Instead of investing the money as she advertised, Smith diverted tens of millions of dollars of investor funds out of Broad Reach Capital for purposes inconsistent with the trading strategies, including for personal use and to pay out millions of dollars to other investors.
Smith misrepresented the success and performance of Broad Reach Capital to investors and prospective investors. She touted Broad Reach Capital as a trade-focused investment fund that was highly liquid and employed a robust risk management program. Smith distributed written materials about Broad Reach Capital to investors and prospective investors that included purported historical performance information, such as claimed annual returns of over 33 percent in 2017 and positive monthly returns in 2018. In fact, the total cash and securities in the Broad Reach Capital bank and brokerage accounts decreased from December 2016 through June 2019. For example, the written materials claimed that Broad Reach Capital had a 1.76 percent return in February 2018 when in reality, Broad Reach Capital’s brokerage accounts lost over 50 percent of their value.
To lull investors and induce them to continue investing, Smith provided monthly account statements that falsely showed that their investments were safe and earning significant returns. Smith also falsely represented that she was personally invested in Broad Reach Capital and provided a fictitious account statement to at least one investor.
As part of the fraudulent scheme, Smith collected more than $68 million of cash into Broad Reach Capital from approximately 40 investors. At its peak, however, the value of cash and securities in the Broad Reach Capital bank and brokerage accounts did not exceed $32 million. Instead of investing the money as she promised, Smith transferred tens of millions of dollars out of Broad Reach Capital to entities she controlled for purposes inconsistent with its trading strategies, including more than $10 million for mineral mining operations and $2 million for American Express credit card bills. When investors requested redemption of their investments, Smith diverted other investors’ funds to pay the requested redemption amounts.
The wire fraud counts carry a maximum penalty of 20 years and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greater. The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine.
The U.S. Securities and Exchange Commission (SEC) Philadelphia Regional Office previously filed a civil complaint against Smith based on the same conduct.
U.S. Attorney Carpenito credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Michael Driscoll, and special agents of the U.S. Attorney’s Office with the investigation leading to today’s charges. He also thanked the U.S. Securities and Exchange Commission’s Philadelphia Regional Office, under the direction of Director Kelly L. Gibson, for its assistance.
The government is represented by Assistant U.S. Attorneys Catherine R. Murphy and Andrew Macurdy of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Owners of Texas and Mississippi Laboratories Admit Roles in Kickback Scheme Related to Genetic TestingRead the Press Release
NEWARK, N.J. – The owners of two clinical laboratories in Texas and Mississippi today admitted their roles in a scheme to pay kickbacks in exchange for referrals of patient DNA samples and genetic tests to the laboratories, U.S. Attorney Craig Carpenito announced.
Sherman Kennerson, 55, of Plano, Texas, and Jeffrey Madison, 54, of DeSoto, Texas, each pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to one count of conspiracy to defraud the United States in connection with a scheme to violate the Anti-Kickback Statute.
According to documents filed in this case and a related matter and statements made in court:
Kennerson and Madison co-owned and operated with other individuals Spectrum Diagnostic Labs LLC (Spectrum Lab) and Metric Lab Services LLC (Metric Lab), two clinical laboratories, located in Texas and Mississippi, respectively, that performed genetic tests and submitted claims to Medicare. Kennerson and Madison oversaw the laboratories’ marketing and sales operations through which outside marketing groups recruited physicians to refer patients’ DNA samples to the laboratories for genetic tests and related services.
Kennerson and Madison paid bribes to Ark Laboratory Network LLC (Ark), one the marketing groups for Spectrum Lab and Metric Lab, and Jeffrey Tamulski, to induce Ark to refer patients’ DNA samples to the laboratories. Tamulski and the owners of Ark, Edward B. Kostishion, Jeremy M. Richey, and Kacey C. Plaisance, were previously charged by indictment in September 2019 in connection with a related kickback conspiracy involving referrals to laboratories for genetic testing. Plaisance pleaded guilty to his role in the conspiracy on May 6, 2020.
As part of the scheme, the laboratories entered into sham agreements with Ark and Tamulski under which Ark purported to provide various consulting, marketing, and other services at an hourly rate. Kennerson and Madison, however, paid Ark and Tamulski in exchange for referrals and DNA samples based on a percentage of the revenue the laboratories received from federal health care programs, including Medicare. Once the amount of the bribe was calculated, Ark and Tamulski drafted and submitted sham invoices to the laboratories that backed into the agreed upon bribe amount and attempted to conceal the scheme through describing various services provided at hourly rates. Metric Lab paid Ark over $136,000 in bribes and the laboratories received over $517,000 in payments from Medicare for claims connected to the kickback scheme with Ark and Tamulski.
The conspiracy charge to which Kennerson and Madison each pleaded guilty carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest. Sentencing for both defendants is scheduled for Oct. 5, 2020.
U.S. Attorney Carpenito credited the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, with the investigation leading to today’s guilty pleas.
The government is represented by Senior Trial Counsel Bernard J. Cooney of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.
The charge and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Nebraska Man Admits Stealing and Selling His Employer’s Confidential InformationRead the Press Release
NEWARK, N.J. – A Nebraska man today admitted engaging in fraudulent activity that exposed his employer’s confidential information, U.S. Attorney Craig Carpenito announced.
Timothy Young, 50, of Moorefield, Nebraska, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with wire fraud.
According to documents filed in the case and statements made in court:
Young was employed at a data analytics and risk assessment firm based in New Jersey. The company serves customers worldwide, including entities providing insurance and financial services as well as government entities. The company maintains a network that houses, among other things, significant amounts of personally identifiable information.
Without the firm’s approval, Young obtained confidential, non-public information that belonged to the firm. The information included names, logon names, passwords, email addresses, and telephone numbers for some of the company’s clients. Young then attempted to sell the information.
The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of the greater of $250,000, twice the gross profits to Young or twice the gross loss suffered by the victim.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and task force officers from the N.J. State Police, Jersey City Police Department, Ocean City Police Department, and Federal Protective Service, with the investigation leading to today’s guilty plea. He also thanked the FBI’s Omaha Division, under the direction of Special Agent in Charge Kristi Koons Johnson, for its role in the investigation.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.
Middlesex County Man Arrested for Attempting to Set Fire to Trenton Police VehicleRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, man was arrested today for attempting to set fire to a marked police vehicle in Trenton after a demonstration over the death of George Floyd in Minneapolis, Minnesota, U.S. Attorney Craig Carpenito announced.
Justin Spry, 21, of South Plainfield, New Jersey, was arrested by special agents of the FBI and is charged by complaint with one count of attempting to damage or destroy by fire a vehicle owned or possessed by an institution receiving federal financial assistance, and one count of attempting to damage or destroy by fire a vehicle used in and affecting interstate commerce. Spry will make his initial appearance June 3, 2020, by videoconference before U.S. Magistrate Judge Tonianne J. Bongiovanni.
“The conduct described in the criminal complaint demonstrates a deliberate effort to destroy a police vehicle during a demonstration,” U.S. Attorney Carpenito said. “Our office will not hesitate to bring to justice anyone who engages in this kind of destruction. We will work with our law enforcement partners to find these violent perpetrators and charge them appropriately.”
According to the complaint:
On May 31, 2020, large-scale protests were held throughout the United States, including in Trenton, in response to the death of Floyd on May 25, 2020, while in the custody of the Minneapolis Police Department. Although the May 31 protest in Trenton began peacefully, violence erupted later in the day. A group of individuals proceeded along East State Street in downtown Trenton and began to smash store fronts, loot businesses, and attack marked Trenton Police Department vehicles parked along East State Street.
A street camera recorded Spry and another individual attempt to stuff a piece of cloth into the gas tank of a marked police vehicle and ignite it. Law enforcement officers on scene observed Spry as he attempted to ignite the vehicle. Spry noticed the officers and attempted to flee, but was arrested.
Both counts charged in the criminal complaint carry a statutory mandatory minimum term of imprisonment of five years, a maximum potential penalty of 20 years in prison, and a maximum fine of $250,000.
U.S. Attorney Carpenito credited special agents of the FBI and task force officers of the Joint Terrorism Task Force in Newark, as well as special agents of the FBI’s Trenton Resident Agency, under the direction of Acting Special Agent in Charge Douglas Korneski, with the investigation leading to today’s arrest. He also thanked officers of the Trenton Police Department, under the direction of Police Director Sheilah Coley; troopers of the New Jersey State Police, under the direction of Colonel Patrick J. Callahan; and officers of the New Jersey Department of Corrections, under the direction of Commissioner Marcus O. Hicks, for their assistance.
The government is represented by Assistant U.S. Attorneys Alexander E. Ramey and Michelle Gasparian of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Camden County Man Admits Role in Theft of Government Funds Scheme and Defrauding Supplemental Nutrition Assistance ProgramRead the Press Release
CAMDEN, N.J. – A Camden County man today admitted his role in a scheme to steal hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.
Octavio Rodriguez, 51, of Pennsauken, New Jersey, pleaded guilty by videoconference before U.S. District Judge Renee Marie Bumb to an information charging him with one count of conspiracy to defraud the United States and one count of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP).
Rodriguez and his co-defendants – Luciano Estevez, 50, and Jose Garcia, 52, both of Camden, and Juan Melo, 56, of Woodlynne, New Jersey – were previously charged by separate complaints in August 2019 with participating in the conspiracy and defrauding SNAP. Melo and Estevez previously pleaded guilty to their roles in the scheme.
Formerly known as the Food Stamps program, SNAP is administered by the USDA to assist low-income individuals and families with the purchase of groceries and food items. SNAP recipients receive EBT cards, similar to commercial debit cards, to make food purchases. Retailers authorized to accept SNAP benefits have EBT terminals to process the food purchases. Food purchases are made by swiping the EBT card at the terminal, and having customers enter a Personal Identification Number (PIN). The EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction, and informs the retailer whether the transaction should be authorized or denied. The amount of the purchase is deducted electronically from the SNAP benefits reserved for the customer and the purchase amount is credited to the retailer’s designated bank account.
According to documents filed in this case and statements made in court:
Rodriguez, Estevez, Garcia, Melo, and others allegedly targeted low-income individuals who possessed or had access to EBT cards, and unlawfully purchased the cards from these individuals in exchange for cash and controlled substances. Two confidential sources working with law enforcement engaged in 43 controlled transactions involving EBT cards totaling more than $40,500, which they exchanged for cash and controlled substances, including prescription opioids.
The defendants used the unlawfully procured EBT cards to purchase bulk goods and food items from large national superstores. These goods and food items were then resold in small convenience and grocery stores owned or affiliated with the defendants or their associates, resulting in a profit for the defendants. Hundreds of EBT cards fraudulently procured by the defendants were used at these superstores, resulting in the misappropriation of approximately $150,000 in government funds.
Rodriguez also unlawfully procured an EBT terminal registered to a superstore in Philadelphia, Pennsylvania to use at his small grocery store in Camden, which was not registered as a lawful SNAP merchant in the USDA program. Through this terminal, the scheme netted approximately $110,000 in SNAP funds.
The conspiracy count to which Rodriguez pleaded guilty carries a maximum penalty of five years in prison, and the SNAP fraud offense to which Rodriguez pleaded guilty carries a maximum penalty of 20 years in prison. Each offense also carries a fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Oct. 5, 2020.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture-Office of Inspector General, Northeast Region, under the direction of Special Agent in Charge Bethanne M. Dinkins; the U.S. Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; the FBI Philadelphia Field Office, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael J. Driscoll in Philadelphia; and the Camden County Police Department, under the direction of Chief of Police Joseph D. Wysocki.
The government is represented by Assistant U.S. Attorney Christina O. Hud of the U.S. Attorney’s Office’s Criminal Division in Camden.
U.S. Attorney Carpenito Announces $16.6 Million in Awards to Address COVID-19 Pandemic in New JerseyRead the Press Release
NEWARK, N.J. – U.S. Attorney Craig Carpenito today announced that the state of New Jersey has received $16.6 million in Department of Justice grants to respond to the challenges posed by the outbreak of COVID-19.
The grants, awarded to the New Jersey Department of Law and Public Safety and more than 40 county and local entities, are available under the Coronavirus Emergency Supplemental Funding program, authorized by the recent stimulus legislation signed by President Trump.
“The coronavirus pandemic has put tremendous stress on all of our normal government functions,” U.S. Attorney Carpenito said. “The additional funding made available by this program will provide much-needed resources to the men and women in New Jersey who place themselves at risk to protect all of us.”
“The outbreak of COVID-19 and the public health emergency it created are sobering reminders that even the most routine duties performed by our nation’s public safety officials carry potentially grave risks,” Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs, said. “These funds will provide hard-hit communities with critical resources to help mitigate the impact of this crisis and give added protection to the brave professionals charged with keeping citizens safe.”
The New Jersey Department of Law and Public Safety was awarded $11.8 million. The cities of Newark ($922,000), Camden ($527,000) and Jersey City ($465,000) were among the other recipients. In all, New Jersey received 42 grants totaling more than $16.6 million.
The law gives jurisdictions considerable latitude in the use of these funds for dealing with COVID-19. Potential uses include hiring personnel, paying overtime, purchasing protective equipment and distributing resources to hard-hit areas. Funds may also be used to help correctional facilities cover costs related to COVID-19, including, but not limited to, sanitation, contagion prevention and measures designed to address the related medical needs of inmates, detainees and correctional personnel.
Agencies that were eligible for the fiscal year 2019 State and Local Edward Byrne Memorial Justice Assistance Grant Program are candidates for the emergency funding. Local units of government and tribes will receive direct awards separately according to their jurisdictions’ allocations. For a list of all awards thus far, visit the Coronavirus Emergency Supplemental Funding program webpage.
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
Leader of Chadwick Avenue Drug Trafficking Organization Charged with Narcotics and Firearm OffensesRead the Press Release
NEWARK, N.J. – A Newark man had his initial appearance today on charges stemming from his arrest for narcotics trafficking and illegally possessing a firearm, U.S. Attorney Craig Carpenito announced.
Ibraaheem Islam, a/k/a “Ish,” 32, appeared by video conference before U.S. Magistrate Judge Leda Dunn Wettre and was detained without bail. He is charged by complaint with three counts of possession with intent to distribute cocaine base (Counts One through Three), one count of possession of a firearm by a convicted felon (Count Four), and one count of possession of a firearm in furtherance of a drug trafficking crime (Count Five).
According to documents filed in this case and statements made in court:
From at least April 17, 2020 to May 27, 2020, Islam engaged in conduct consistent with hand-to-hand narcotics transactions on a regular basis in the vicinity of Chadwick Avenue, Newark, New Jersey. Law enforcement obtained a warrant for Islam’s arrest, as well as warrants to search two vehicles and one residence associated with Islam. On May 30, 2020, law enforcement recovered a 5.7x28 millimeter caliber FN Herstal model “FN Five-SeveN” pistol, loaded with 17 rounds of ammunition, 194 vials containing suspected cocaine base, and 64 glassine envelopes containing suspected heroin. Islam was placed under arrest and taken into custody.
Counts One and Two each carry a maximum penalty of 20 years in prison and a fine of up to $1 million. Count Three carries a mandatory minimum sentence of five years in prison, a maximum sentence of 40 years in prison, and a fine of up to $5 million. Count Four carries a maximum sentence of 10 years in prison, and a fine of up to $250,000. Count Five carries a mandatory minimum sentence of five years in prison, a maximum sentence of life in prison, and a fine of up to $250,000.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, under the direction of Special Agent in Charge Charlie J. Patterson; the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, with the investigation leading to the charges.
The case was investigated as part of the Violent Crime Initiative (VCI). The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the purpose of combatting violent crime in and around Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI is composed of the U.S. Attorney’s Office, the FBI, the ATF, the DEA, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Parole, Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
This case is also 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.
The government is represented by Assistant U.S. Attorneys Samantha C. Fasanello, Cassye Cole, and Desiree Grace Latzer of the U.S. Attorney’s Office in Newark.
The charges and allegations contained in the Complaint are merely accusations, and the Defendant is considered innocent unless and until proven guilty.
Two Men Charged in $8 Million Credit Card FraudRead the Press Release
NEWARK, N.J. – A grand jury today indicted two men, one from Ocean County, New Jersey, and the other from Utah, with carrying out a fraudulent scheme to obtain credit cards in the names of third parties, make purchases on the cards to generate rewards points, monetize the points, and cancel the purchases.
Aharon Lev, a/k/a “Aaron Lev,” a/k/a “Aron Lev,” a/k/a “David Gold,” a/k/a “David Monroe,” 33, of Lakewood, New Jersey, and Timothy Gibson, 43, of Lehi, Utah, are charged by indictment with one count each of conspiracy to commit wire fraud. Lev is also charged by indictment with two counts of wire fraud and two counts of aggravated identity theft. Lev was previously charged by complaint and released on bond to Israel; he is required to return to New Jersey by June 9, 2020, to be arraigned on the indictment. Gibson will make his initial appearance at a date to be determined.
According to documents filed in this case and statements made in court:
From August 2014 through May 2016, Lev recruited individuals to give him their personally identifiable information, such as names and Social Security numbers, which Lev used to open numerous small-business accounts in their names with the victim credit card company. With Gibson’s assistance, Lev then used those accounts to make purchases that generated rewards points, which could be redeemed for frequent-flyer miles with various airlines. Once the points were issued, Lev cancelled the purchases and sold the points to Gibson, who resold them to third parties for use as miles to purchase airfare. Over two years, the scheme cost the credit card company more than $8 million in fees paid to the airlines for acceptance of points for miles.
Each charge of wire fraud and conspiracy to commit wire fraud carries a maximum penalty of 20 years in prison, a $250,000 fine, restitution, and forfeiture. Each charge of aggravated identity theft carries a mandatory sentence of two years in prison, to be served consecutive to any sentence on the wire-fraud and conspiracy charges.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the U.S. Attorney’s Office’s Cybercrime Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Passaic County Man Admits Unauthorized use of the Seal of the United States House of RepresentativesRead the Press Release
NEWARK, N.J. – A former staffer for a member of the United States House of Representatives today admitted using, without authorization, the seal of the House of Representatives in connection with falsified letters written on the member’s congressional letterhead, U.S. Attorney Craig Carpenito announced.
Patrick Sheehan, 29, of West Milford, New Jersey, pleaded guilty during a videoconference before U.S. Magistrate Judge Michael A. Hammer to an information charging him with the unauthorized use of the seal of the United States House of Representatives.
According to documents filed in this case and statements made in court:
Sheehan was employed in the Newton, New Jersey, office of a member of the United States House of Representatives from February 2018 to August 2019. As a staff member, he had access to the member’s official letterhead, which contained the likeness of the seal of the United States House of Representatives.
In July 2019, Sheehan falsified and mailed to various recipients a series of letters. The first letters purported to be from another employee of the member and contained false information regarding the member and that employee. The employee did not create, approve, or sign those letters. Sheehan then falsified multiple copies of a letter on the member’s official letterhead purporting to be from the member. That letter, which the member did not create, approve, or sign, responded to the false information in the employee letters, and also contained false information. The phony letters that Sheehan created and distributed contained the likeness of the seal of the House of Representatives.
Sheehan faces a maximum potential penalty of six months in prison, five years of probation, and a fine of $5,000. Sentencing is scheduled for Sept. 29, 2020.
U.S. Attorney Carpenito credited special agents with the U.S. Capitol Police, under the direction of Chief of Police Steven A. Sund, inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, and special agents with the U.S. Attorney’s Office for the District of New Jersey with the investigation.
The government is represented by Assistant U.S. Attorney Cari Fais of the Special Prosecutions Division in Newark.
Justice Department Sues Gloucester County Company for Fraud in Connection with New Jersey Turnpike Extension ProjectRead the Press Release
NEWARK, N.J. – The Justice Department today sued a Gloucesster County construction company for allegedly defrauding the United States by falsely claiming credit for using disadvantaged business entities, U.S. Attorney Craig Carpenito announced.
C. Abbonizio Contractors Inc., a company based in Sewell, New Jersey, allegedly defrauded the government by claiming to use disadvantaged entities when those entities were not actually used to perform work.
Companies performing federally funded work on New Jersey transportation projects sponsored by the New Jersey Department of Transportation (NJDOT) are required to utilize disadvantaged business entities (DBE) for a specified percentage of the work, and are required to certify their use of these entities.
According to the complaint filed today in U.S. District Court:
Abbonizio Contractors obtained a $39 million subcontract from PKF Mark III, the prime contractor on the Direct Connection Project, a federally funded reconfiguration of the interchanges of Routes I-295, I-76, and Route 42 in Camden County. PKF Mark III was required to perform 15 percent of the work with DBE contractors, and Abbonizio Contractors assumed that requirement as part of its subcontract. Abbonizio Contractors and its president, Peter Abbonizio, improperly claimed credit for using DBE to perform work on the project by reporting to PKF Mark III the use of DBE that did not actually perform work. The scheme involved hiring DBE not to perform work, but merely to fraudulently invoice work as their own that was actually performed by other companies, in violation of the contract and federal regulations.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Transportation, Office of Inspector General under the direction of Acting Inspector General Howard R. Elliot, and agents of the Port Authority of New York and New Jersey, Office of the Inspector General under Acting Inspector General Michael Farbiarz, with the investigation leading to the filing of this civil fraud complaint.
The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Government Fraud Unit in Newark.
Cumberland County Man Charged with Illegal Possession of More Than Three Dozen FirearmsRead the Press Release
CAMDEN, N.J. – A New Jersey man with a prior felony conviction was charged today with unlawfully possessing dozens of firearms, including handguns, rifles, a silencer, ammunition, and high-capacity magazines, U.S. Attorney Craig Carpenito announced.
Darick Nollett, 30, of Heislerville, New Jersey, is charged by criminal complaint with one count of unlawfully possessing a firearm as a convicted felon, and one count of knowingly receiving and possessing a firearm that was not registered to him in the National Firearms Registration and Transfer Record. Nollett is expected to make his initial appearance by videoconference this afternoon before U.S. Magistrate Judge Joel Schneider in Camden federal court.
According to documents filed in this case:
Nollett used the Internet to purchase a device that, while marketed as a “fuel filter,” is known to law enforcement to be frequently purchased by individuals for use as a firearm silencer. Law enforcement officers executing a court-authorized search warrant of Nollett’s residence recovered the following, in addition to the silencer:
- A Remington 710 .270 caliber rifle;
- A Savage 93R17 .17 caliber rifle;
- An Aero Precision DTOM 15 rifle;
- A CMMG Inc. MK4 rifle;
- A Del-Ton DTI-15 rifle;
- An Aero Precision DTOM 15 rifle;
- A Keltec rifle;
- A Smith & Wesson .38 caliber revolver;
- A Ruger LCP .380 caliber semi-automatic pistol;
- A Colt Python .357 caliber revolver;
- A Taurus PT738 .380 caliber handgun;
- A Sig Sauer P226 .22 caliber handgun;
- A Glock 20 10mm handgun;
- A Heckler & Koch VP9 tactical pistol;
- A Smith & Wesson M&P40 .40 caliber handgun;
- A Springfield XD-40 .40 caliber handgun;
- A Springfield XD-45 .45 caliber handgun;
- A Taurus PT111 G2 9mm handgun;
- A Browning BPS 12 gauge shotgun;
- A Winchester Model 120 12 gauge shotgun;
- A Hatsan Arms Escort PS Magnum 12 gauge semi-automatic shotgun;
- A Remington 870 20 gauge shotgun;
- A Mossberg 500E .410 gauge shotgun;
- A Rossi 520 20 gauge shotgun;
- A New England Firearms Pardner SBI 12 gauge shotgun;
- A Fabrica Aguirre y Aranzabal JC Higgins Model 100 12 gauge shotgun;
- A Savage Model 720 12 gauge shotgun;
- A Springfield Armory Model 1896 rifle;
- A Ruger Model 10-22 .22 caliber rifle;
- A Remington 7615 Police .223 caliber rifle;
- A Winchester Model 1864 30 30 rifle; and
- A Mossberg 500 12 gauge shotgun;
In addition, law enforcement officers recovered an assembled AR-15 style rifle with scope that did not bear a serial number. Law enforcement officers also recovered unassembled parts for another AR-15 style rifle.
Each charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
This case is part of Project Guardian, the Department of Justice’s signature initiative to reduce gun violence and enforce federal firearms laws. Initiated by the Attorney General in the fall of 2019, Project Guardian draws upon the Department’s past successful programs to reduce gun violence; enhances coordination of federal, state, local and tribal authorities in investigating and prosecuting gun crimes; improves information sharing by the Bureau of Alcohol, Tobacco, Firearms and Explosives when a prohibited individual attempts to purchase a firearm and is denied by the National Instant Criminal Background Check System (NICS), to include taking appropriate actions when a prospective purchaser is denied by the NICS for mental health reasons; and ensured that federal resources are directed at the criminals posing the greatest threat to our communities.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), Cherry Hill office, under the direction of Newark Special Agent in Charge Jason Molina, special agents of the ATF Newark Field Division, under the direction of Special Agent in Charge Charlie J. Patterson, postal inspectors of the U.S. Postal Inspection Service, Philadelphia Division, under the direction of Inspector in Charge Damon E. Wood, officers of the New Jersey State Police, under the direction of Superintendent Col. Patrick J. Callahan, and the Cumberland County Prosecutor’s Office, under the direction of Prosecutor Jennifer Webb-McRae, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charges and allegations in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Union County Man Admits Distributing over One Kilogram of FentanylRead the Press Release
TRENTON, N.J. – A Union County, New Jersey, man today admitted distributing and conspiring to distribute 400 grams or more of fentanyl, U.S. Attorney Craig Carpenito announced.
Jhon Rodriguez-Acosta, 34, of Elizabeth, New Jersey, pleaded guilty by videoconference before U.S. District Judge Peter G. Sheridan to one count of conspiracy to distribute and possess with the intent to distribute 400 grams or more of fentanyl and one count of knowingly and intentionally distributing of 400 grams or more of fentanyl.
According to documents filed in this case and statements made in court:
From April 2018 through Feb. 13, 2019, Rodriguez-Acosta conspired with others to distribute narcotics. On Feb. 12, 2019, Rodriguez-Acosta provided a conspirator with over one kilogram of fentanyl. On or about Feb. 13, 2019, Rodriguez-Acosta and a second conspirator traveled to the parking lot of a 7-Eleven in Elizabeth to collect payment for the fentanyl he distributed.
The counts to which Rodriguez-Acosta pleaded guilty each carry a mandatory minimum sentence of 10 years in prison, a maximum sentence of life imprisonment and a fine of up to $10 million. Sentencing is scheduled for Sept. 28, 2020.
U.S. Attorney Craig Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Francesca Liquori of the U.S. Attorney’s Office’s Organized Crime Drug Enforcement Task Force/Narcotics Unit in Newark.
Bronx, New York, Man Sentenced to 46 Months in Prison for Role in Conspiracy to Distribute Heroin and Fentanyl from Drug Mill in the BronxRead the Press Release
NEWARK, N.J. – A Bronx, New York, man was sentenced today to 46 months in prison for his role in a conspiracy to distribute heroin and fentanyl from a drug mill in the Bronx to locations in New Jersey, U.S. Attorney Craig Carpenito announced.
Daury Contreras Ulerio, 35, a/k/a “Majimbou,” previously pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an indictment charging him with one count of conspiracy to distribute 400 grams or more of a mixture and substance containing fentanyl. Dilson Vazquez Genao, 23, Eddie Urena Rodriguez, 35, Francisco Mercedes Gil, 31, and Jose Antonio Vazquez Pena, a/k/a “Tono,” 47, also of the Bronx, New York, all have pleaded guilty before Judge Salas to the same charges previously and are awaiting sentencing.
Two other individuals – Jhan Carlos Capellan Maldonado, 31, and Reimon Genao Rosario, 23 – were indicted on the same charge as Ulerio in August 2019. Their cases are pending; the charges against them are merely accusations, and they are presumed innocent unless and until proven guilty.
According to documents filed in this case and statements made in court:
In early February 2019, law enforcement officers learned that Maldonado used an apartment in Bronx to store, mix, and package heroin and fentanyl in distribution quantities. Pena stayed at the apartment in order to safeguard the narcotics and narcotics supplies. Maldonado employed approximately five workers at a time – including Rodriguez, Ulerio, Rosario, Gil, and Genao – to assist in preparing the heroin and fentanyl for distribution, which Maldonado then distributed to customers in New Jersey.
On Feb. 25, 2019, law enforcement officers saw Maldonado drive to a retail store and emerge with several full shopping bags and then drive to the apartment. Genoa came out of the building and met with Maldonado, who got out of his vehicle and gave Genoa the plastic shopping bags. Through its investigation, law enforcement later learned that the plastic shopping bags contained materials to package heroin and fentanyl.
Genoa went back inside the building and was followed by law enforcement officers, who watched as Genoa entered Maldonado’s apartment with a key, still carrying the shopping bags. On Feb. 27, 2019, law enforcement searched Maldonado’s apartment and found seven individuals inside, including Rodriguez, Ulerio, Rosario, Gil, Maldonado, Pena, and Genao. All seven defendants attempted to escape out a window, but all but one – Rosario – were apprehended and arrested by law enforcement officers waiting outside. Rosario was arrested at a later date. Law enforcement recovered nearly a kilogram of fentanyl from the apartment, along with materials to grind and package fentanyl for distribution.
U.S. Attorney Craig Carpenito credited the U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New Jersey Division, under the direction of Special Agent in Charge Jason Molina, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the Health Care Fraud Unit in Newark.
Philadelphia Man Sentenced to 33 Months in Prison for Role in Drug ConspiracyRead the Press Release
TRENTON, N.J. – A Philadelphia man was sentenced today to 33 months in prison for his role in a drug distribution conspiracy connected to the seizure of fentanyl and heroin at a New Jersey rest stop last year, U.S. Attorney Craig Carpenito announced.
Denny Diaz, 30, previously pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiracy to distribute fentanyl and heroin. Judge Sheridan imposed the sentence today.
According to the documents filed in the case and statements made in court:
Diaz’s co-defendant, Luis Aponte, 49, of Riverside, California, drove a tractor-trailer truck to a rest stop in Bloomsbury, New Jersey, on March 1, 2019. The next day, he met Diaz in a car and gave Diaz approximately six kilograms of fentanyl. Both men were arrested shortly thereafter. Law enforcement officers searched Aponte’s truck at the rest stop and found an additional two kilograms of fentanyl and 11 kilograms of heroin inside.
In addition to the prison term, Judge Sheridan sentenced Diaz to three years of supervised release. Aponte previously pleaded guilty to his role in the conspiracy. He is scheduled to be sentenced July 6, 2020.
U.S. Attorney Craig Carpenito credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Ray Donovan, New York Division; New York City Police Commissioner Dermot F. Shea; and New York State Police Superintendent Keith M. Corlett with the investigation leading to today’s sentencing. This case is being investigated by the DEA’s New York Drug Enforcement Task Force, comprising agents and officers of the DEA, New York City Police Department and New York State Police.
The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Criminal Division in Newark.
Morris County Man Admits Making Bomb Threat to Religious InstitutionRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, man today admitted maliciously calling in a bomb threat to a religious institution, U.S. Attorney Craig Carpenito announced.
James Triano, 38, of Pompton Plains, New Jersey, pleaded guilty by videoconference before U.S. District Judge Kevin McNulty to an indictment charging him with maliciously conveying false information about an explosive.
According to documents filed in this case and statements made in court:
On March 21, 2017, Triano called a religious institution in Livingston, New Jersey. He told a representative of that institution there was a bomb located in the religious institution’s building that would explode in 30 minutes. Triano conveyed this information about the bomb knowing that it was false. The bomb threat resulted in a substantial disruption to the religious institution, as well as to the public.
The count with which Triano has pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 30, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and officers from the Livingston Police Department, under the direction of Police Chief Gary Marshuetz, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Catherine R. Murphy of the U.S. Attorney’s Office Criminal Division in Newark.
Hudson County Man Admits Role in Bank Robberies and Impersonating Federal AgentRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man today admitted his role in two bank robberies and one attempted bank robbery and to impersonating a federal agent, U.S. Attorney Craig Carpenito announced.
William Tedeschi, 48, of Jersey City, New Jersey, pleaded guilty by videoconference before U.S. District Judge Brian R. Martinotti to an indictment charging him with one count of bank robbery, one count of attempted bank robbery, and one count of impersonating a federal agent. Tedeschi was previously charged by indictment in December 2019, and his co-defendants were charged in the same indictment for their roles in a Union City bank robbery.
According to documents filed in this case and statements made in court:
On Sept. 8, 2019, Tedeschi entered a Jersey City business purporting to be an FBI agent soliciting donations for a fictitious charity benefitting law enforcement. On Nov. 5, 2019, Tedeschi and his co-defendants robbed a bank in Union City, New Jersey, and split the robbery proceeds. On Nov. 16, 2019, Tedeschi attempted to rob a bank in Newark, and on Nov. 26, 2019, Tedeschi robbed a bank in Elizabeth, New Jersey. During the two completed robberies and the attempted robbery, Tedeschi handed the bank tellers notes demanding cash.
The bank robbery charges to which Tedeschi pleaded guilty carry a maximum potential penalty of 20 years in prison and $250,000 fine; the impersonation of a federal officer charge carries a maximum penalty of three years and a $250,000 fine. Tedeschi’s sentencing is scheduled for Oct. 1, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea. He also thanked the Jersey City Police Department, Elizabeth Police Department, Newark Police Department, and Union City Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Cymetra M. Williams of the U.S. Attorney’s Office Health Care Fraud Unit in Newark.
The charge and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Paterson Man Sentenced to 37 Months in Prison for Role in Drug Trafficking and Money Laundering OperationRead the Press Release
NEWARK, N.J. – A Paterson, New Jersey, man was sentenced to 37 months in prison for his role in a drug trafficking/money laundering organization that operated throughout northern New Jersey, U.S. Attorney Craig Carpenito announced.
Jhensel Jimenez-Taveras, 27, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit money laundering. Judge Wigenton imposed the sentence today.
According to documents filed in this case and statements made in court:
In April 2019, law enforcement officers observed Jimenez-Taveras engage in a suspected narcotics transaction in Berkeley Heights, New Jersey. Law enforcement officers stopped the vehicle that Jimenez-Taveras was operating and located $123,255 in cash. Further investigation revealed that Jimenez-Taveras was responsible for transferring large sums of U.S. currency on behalf of the drug trafficking/money laundering organization. Jimenez-Taveras acknowledged that these funds were the product of narcotics sales and that his intent in transporting the money was to fund additional narcotics activities.
In addition to the prison term, Judge Wigenton sentenced Jimenez-Taveras to three years of supervised release. As part of his plea agreement, Jimenez-Taveras must also forfeit the $123,255 that was seized by law enforcement.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason Molina, and troopers with the New Jersey State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.