District of New Jersey
Press releases recorded for this federal judicial district.
CEO of Limited Liability Company Pleads Guilty to Wire FraudRead the Press Release
CAMDEN, N.J. – The chief executive officer of a private equity investment firm today admitted he defrauded an investor of $1.35 million dollars, U.S. Attorney Craig Carpenito announced.
Karl James, 48, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information that charged him with one count of wire fraud.
According to documents filed in this case and statements made in court:
James was the CEO of Gore Capital LLC, which he told others was a private equity investment firm. In February 2016, James and the victim agreed to each invest approximately $1.5 million into a company that specialized in extracting and converting cannabinoids from marijuana. They further agreed to form an LCC as a conduit for their joint investment. In April 2016, James incorporated the LLC in Delaware.
On April 20, 2016, James instructed the victim to wire his investment funds into a bank account. James falsely told the victim that the victim also had access to the account. On April 22, 2016, the victim wired $500,000 into the account. On July 12, 2016, James instructed the victim to wire the remaining $1 million of his investment, which the victim did. To induce the victim’s payment, James told the victim that he would deposit his own money into the account. In reality, James never wired or deposited any of his own funds.
James later spent $1.35 million of the victim’s funds on personal and entertainment expenses for himself.
The wire fraud charge carries a maximum penalty of 20 years in prison and a fine of $250,000. Sentencing is scheduled for Jan. 6, 2020.
U.S. Attorney Craig 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.
The government is represented by Assistant U.S. Attorney Matthew Feldman Nikic and Assistant U.S. Attorney Dara Govan, Chief of the Office’s Public Protection Unit, in Newark.
Ohio Man Arrested for Orchestrating $10 Million Dollar Scheme to Defraud Health Care Benefit ProgramsRead the Press Release
NEWARK, N.J. – An Ohio man was arrested today for his role in a large-scale, multi-level marketing scheme to defraud private and federally funded health care benefit programs of at least $10 million through the submission of claims for medically unnecessary prescriptions for compounded medications, U.S. Attorney Craig Carpenito announced.
Kent Courtheyn, 35, of Kent, Ohio, owner and operator of two companies involved in the sales and marketing of compounded medications, IntegriMed Solutions LLC (IntegriMed) and KA Compounding LLC (KA Compounding), was charged by a federal grand jury in a two-count indictment with conspiring to commit health care fraud and conspiring to violate the Anti-Kickback Statute. He is scheduled to have his initial court appearance today in federal court in Ohio.
According to documents filed in this case and statements made in court:
From as early as July 2014 through July 2016, Courtheyn, a former medical device sales representative, ran a scheme to defraud federally funded health care benefit programs, such as TRICARE, as well as privately funded health care benefit programs. TRICARE is a health care entitlement program of the U.S. Department of Defense (DoD) Military Health System that provides coverage for DoD beneficiaries worldwide, including active duty service members, National Guard and Reserve members, retirees, their families, and survivors.
Courtheyn recruited individuals to submit false and fraudulent claims for medically unnecessary compounded medications, such as pain creams, scar creams, wound creams, and metabolic vitamins, without regard to medical necessity. Compounding is a practice in which a licensed pharmacist or physician combines, mixes or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. Pharmacies engaging in the practice are referred to as “compounding pharmacies.” Generally, compounded medications are not approved by the Food and Drug Administration (FDA), but can be prescribed by a physician when an FDA-approved drug does not meet the health needs of a particular patient. Compounded medications are supposed to be tailored to a patient’s particular medical need.
Courtheyn and others targeted individuals with health insurance plans that paid for compounded medications and had high reimbursements, and convinced these individuals to obtain compounded medications through their health insurance plan regardless of medical necessity.
Courtheyn was partners with Steven M. Butcher, a New York resident who was the owner and operator of another marketing company, MedMax LLC, involved in the marketing of medically unnecessary compounded medications. Courtheyn and Butcher had relationships with various compounding pharmacies, either directly or indirectly, through billing and distribution companies, which had their own network of compounding pharmacies. Courtheyn and Butcher sent prescriptions directly to a compounding pharmacy or to a billing and distribution company, which referred prescriptions to a particular compounding pharmacy and submitted claims to the appropriate health insurance plan on behalf of that pharmacy. In return for steering prescriptions to certain compounded pharmacies, Courtheyn and Butcher received a percentage of the reimbursement received by the pharmacy for each paid claim. Health insurance plans were reimbursing compounding pharmacies from $3,000 and $43,000 for each compounded prescription.
To maximize profit, Courtheyn operated IntegriMed and KA Compounding as a multi-level marketing company. He recruited several individuals as “sales representatives” who were paid a certain percentage of the reimbursement amount for each medically unnecessary compounded medication the sales rep caused to be filled and billed to a paying health insurance plan. If a sales representative was a beneficiary of a paying health insurance plan, Courtheyn also paid these individuals for obtaining their own or their family members’ medically unnecessary compounded medications.
The compounded medications Courtheyn and Butcher marketed and sold were not individualized to address the specific therapeutic needs of a specific patient. Instead, he chose drugs to be included in a compounded medication in order to maximize reimbursement and profit and not based on medical necessity. To get the medically unnecessary medications prescribed, Courtheyn and Butcher contracted and paid telemedicine companies with the expectation that their telemedicine physicians would prescribe compounded medications regardless of medical need. In total, Courtheyn defrauded health care benefit programs of at least $10 million, including TRICARE, which was defrauded at least $3.5 million.
The count of conspiracy to commit health care fraud carries a maximum potential punishment of 10 years in prison; conspiracy to violate the Anti-Kickback Statute carries a maximum potential penalty of five years. Both offenses are also punishable by a fine of $250,000, or twice the gross gain or loss from the offense.
Butcher pleaded guilty on Feb. 14, 2018, before U.S. District Judge John Michael Vazquez in Newark federal court to conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute. He admitted to defrauding health care benefit programs of $45 million. Butcher is awaiting sentencing.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the ongoing investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Erica Liu, Deputy Chief of the Criminal Division in Newark.
Defense counsel: Michael Elliot Esq. and Mindy Sauter Esq, Dallas, Texas
Mercer County Man Convicted of Being Felon in Possession of FirearmRead the Press Release
TRENTON, N.J. – A Mercer County, New Jersey, man was convicted today of being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced.
Rasheed McNair, 40, of Ewing, New Jersey, was convicted following a two-day trial before U.S. District Judge Peter G. Sheridan in Trenton federal court. The jury deliberated for less than one hour before returning the guilty verdict.
According to documents filed in this case and the evidence at trial:
On Feb. 18, 2018, two Trenton Police detectives in the Street Crimes Unit were driving through the area of Oakland Street and Hoffman Avenue in Trenton when one of them observed McNair standing in an open doorway in a public housing complex and holding what was later identified as a Smith & Wesson .40 caliber semiautomatic handgun.
McNair tucked the handgun into his jacket and ran up the stairwell of the building. After giving chase, one of the detectives observed McNair remove the handgun from inside his jacket and attempt to hide it under a doormat in front of an apartment. The other detective retrieved the firearm from under the doormat and rendered it safe. The weapon was later found to be loaded with 11 rounds of ammunition in the magazine and one round in the chamber, and its serial number had been obliterated.
The charge of being a felon in possession of a firearm carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 9, 2020.
U.S. Attorney Carpenito credited the Trenton Police Department, under the direction of Police Director Sheilah A. Coley; and special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson, with the investigation leading to today’s guilty verdict.
The government is represented by Assistant U.S. Attorneys Elisa T. Wiygul and Michelle S. Gasparian of the U.S. Attorney’s Office’s Criminal Division in Trenton.
Defense counsel: Mark A. Fury Esq., Mt. Holly, New Jersey
Tax Preparer Convicted of Conspiracy to Defraud IRS and Preparing False Tax ReturnsRead the Press Release
TRENTON, N.J. – A Maryland man working as a tax preparer in New Jersey was convicted today on charges of conspiracy to defraud the IRS by preparing false income tax returns for clients in order to boost business at tax preparation companies that he and others ran, U.S. Attorney Craig Carpenito announced.
Joseph Kenny Batts, 50, of Elkridge, Maryland, was convicted following a one-week trial before U.S. District Judge Michael A. Shipp in Trenton federal court on one count of conspiracy to defraud the United States and five counts of aiding and assisting in the preparation of false federal income tax returns.
According to documents in this case and the evidence at trial:
Since at least 2009 to April 2015, Batts was co-owner, along with conspirator Damien Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, New Jersey, where Batts and others prepared tax returns. In order to boost their business, Batts, Askew, codefendants Tony Russell, Angelo K. Thompson and Rudolph Sanders conspired to falsify their clients’ income tax returns for the purpose of generating refunds in amounts that their clients were not entitled to receive. The fraudulent practices used to inflate tax refunds included fabricating and inflating credits for education and child care; deductions, such as charitable contributions and unreimbursed employee expenses; and Schedule C business losses.
As part of their scheme, Batts, Thompson, Askew, Russell and Sanders also used fraudulent IRS Forms 1098-T to support false education credits that they had claimed on their clients’ false federal income tax returns prepared at Tax Pro’s and Tax Solutions and Associates.
Batts also used the Paid Taxpayer Identification Number (PTIN) – the identification number that paid tax preparers are required to place on tax returns that they have prepared – of his conspirator tax preparers when preparing tax returns to conceal his identity as the actual tax return preparer, due to, among other things, his prior tax fraud conviction.
By inflating the tax refunds through fraudulent means, Batts and his conspirators caused a total tax loss to the United States in excess of $900,000.
Thompson, Askew, Sanders and Russell have previously pleaded guilty to their roles in the scheme and await sentencing.
The conspiracy charge carries a maximum potential penalty of five years in prison. The maximum sentence for aiding or assisting in the filing of false returns is three years in prison. Both are also punishable by a statutory maximum fine equal to the greatest of $250,000 or twice the gross amount of any pecuniary gain that any persons derived from the offense or twice the gross amount of any pecuniary loss sustained by any victims. Sentencing for Batts is scheduled for Jan. 16, 2020.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Cari Fais and Jihee G. Suh and of the U.S. Attorney’s Office in Newark.
Owner of Defense Contracting Firm Sentenced to 42 Months in Prison for Defrauding U.S. Department of Defense and Conspiring to Violate Arms Export Control ActRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, man was sentenced today to 42 months in prison for defrauding the U.S. Department of Defense (DoD) by providing military equipment parts that were not what he had contracted to provide and illegally accessing technical information as a non-United States citizen, U.S. Attorney Craig Carpenito announced.
Oben Cabalceta, 53, of Atco, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of wire fraud and one count of conspiracy to violate the Arms Export Control Act. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Cabalceta was the owner of two companies: Owen’s Fasteners Inc. (Owen’s) and United Manufacturer LLC (United), two manufacturing companies in West Berlin, New Jersey.
Cabalceta admitted that between August 2004 and March 2016, Owen’s and United obtained contracts with the DoD by falsely claiming that the military parts it contracted to provide would be the exact product provided by authorized manufacturers. The DoD contracts specified that the military parts were critical application items for military equipment, including aircraft. Contrary to the contract, Cabalceta either used his companies to contract with local manufacturers to supply non-conforming parts or made the parts himself at a significantly reduced cost. The non-conforming parts were shipped from New Jersey to various DoD locations around the country. DoD paid Owen’s and United $1,890,939 for those parts.
Cabalceta also admitted that he was a native and citizen of the Republic of Costa Rica who overstayed his tourist visa in 2000 and was not a United States citizen or lawfully in the United States. To further his fraud on the DoD, in August 2005 and November 2010, Cabalceta caused his brother-in-law, Roger Sobrado, to submit to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of Owen’s. In 2015, Cabalceta caused an accomplice to submit to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of Owen’s.
Cabalceta acknowledged that access to the controlled drawings and technical data was limited to citizens of the United States and those lawfully in the United States. He admitted that on July 28, 2011, and at various times between January 2013 and November 2015, while unlawfully in the United States, he accessed or downloaded drawings that were sensitive in nature that required special access.
In addition to the prison term, Judge Hillman sentenced Cabalceta to two years of supervised release and ordered to pay $1.8 million in restitution. He will also be deported to Costa Rica upon completion of his sentence.
On Oct. 11, 2018, Sobrado pleaded guilty before Judge Hillman to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to violate the Arms Export Control Act, and income tax evasion. He was sentenced Sept. 4, 2019, to three years in prison.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the direction of Special Agent in Charge Leigh-Alistair Barzey; special agents of the U.S. Attorney’s Office; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; and special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge John F. Grasso for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.
New Jersey Tax Return Preparer Sentenced to Six Years in Prison for False Tax FilingRead the Press Release
NEWARK, N.J. – A tax preparer from Bergen County, New Jersey, was sentenced today to 72 months in prison for filing false federal income tax returns, stealing client refunds, and committing identity theft in connection with refunds stolen from a deceased taxpayer, U.S. Attorney Craig Carpenito announced.
Wayne Dunich-Kolb, 54, previously pleaded guilty before U.S. District Judge Kevin McNulty to four counts of a second superseding indictment: aiding and assisting preparation of false tax returns; subscribing to false tax returns; mail fraud while on pretrial release; and aggravated identity theft. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Dunich-Kolb operated a tax preparation business through which he prepared and filed tax returns through various tax preparation entities, including Dunich-Kolb LLC, Jadran Services Corp., Adriatica Payroll Corp., Adriatica Tax Planning LLC, and Adriatic Tax Planning LLC (collectively, the “tax preparation entities”), which he ran from his former residences in Saddle River and Montvale, New Jersey. Dunich-Kolb also maintained a U.S. Post Office box in Las Vegas, Nevada, that he used in connection with his tax preparation business.
Dunich-Kolb caused many of his clients to form fictitious partnerships or corporations that existed in name only and had no business purpose other than to falsely reduce the clients’ tax liability. He prepared fraudulent business returns for clients’ fictitious businesses by fabricating and inflating business expenses, such as advertising, travel and other miscellaneous expenses, in order to generate fraudulent business and partnership losses, which he then used to substantially reduce taxpayers’ taxable income on their individual federal income tax returns.
Dunich-Kolb falsified clients’ individual federal income tax returns, partnership returns, and corporation returns by fabricating and inflating: (1) business and partnership Schedule K-1 losses; (2) deductions for unreimbursed employee business expenses, including home office, vehicle mileage and fuel expenses; and (3) expenses and cost basis of rental properties, including vehicle mileage and travel expenses for rentals located within or a short distance from the primary residence.
Dunich-Kolb also falsified his own personal federal income tax returns by substantially underreporting income from his tax preparation and accounting business. For tax year 2008, Dunich-Kolb received gross income totaling approximately $638,000 while claiming income of only $489.
Dunich-Kolb also stole certain clients’ federal tax refunds, including the refunds of a deceased client, by causing the IRS to mail the refund checks to Dunich-Kolb’s Las Vegas Post Office box, from where they were forwarded to Dunich-Kolb’s residence in Montvale. Dunich-Kolb, without authorization, used the Social Security numbers of the deceased client and another client on IRS forms claiming that the latter client was entitled to the deceased client’s refunds for tax years 2013 and 2014 and causing the IRS to mail the deceased client’s refunds to his Las Vegas Post Office box. Once in receipt of the clients’ tax refund checks, Dunich-Kolb deposited the checks into accounts that he controlled and converted the funds to his own personal use.
In addition to the prison term, Judge McNulty sentenced Dunich-Kolb to three years of supervised release and ordered him to pay restitution of $2.2 million to the IRS.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan R. Tafur, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sarah Devlin, Chief of the Asset Recovery and Money Laundering Unit.
Defense counsel: Jeffrey G. Garrigan Esq., Summit, New Jersey
Passaic County, New Jersey, Man Sentenced to 24 Years in Prison for Heroin Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 288 months in prison for conspiring to distribute at least one kilogram of heroin, U.S. Attorney Craig Carpenito announced.
Yasmil Minaya, a/k/a “Animal,” 33, was previously convicted on both counts of the indictment against him: one count of conspiracy to distribute one kilogram or more of heroin and one count of distribution and possession with intent to distribute one kilogram or more of heroin. Minaya was convicted following a two-week trial before U.S. District Judge Kevin McNulty, who imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:Law enforcement officials learned that Minaya and his co-defendants were serving as New Jersey and New York area distributors for a drug trafficking organization operating in the Dominican Republic, Mexico and elsewhere. The organization’s narcotics were usually transported to this area via truck and were paid for by the defendants before being sold on the street. The drug organization has been linked to several multiple-kilogram seizures of heroin, including a seizure of approximately two kilograms of heroin in March 2015, four kilograms in November 2015, and 10 kilograms in January 2017.
In addition to the prison term, Judge McNulty sentenced Minaya to five years of supervised release.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
U.S. Attorney Carpenito credited special agents with the DEA, under the direction of Special Agent in Charge Susan A. Gibson, and officers with the N.J. State Police, Trafficking North Unit, 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 Melissa Wangenheim, Chief of the Opioid Abuse Prevention and Enforcement Unit in Newark, and U.S. Attorney Carpenito.
Defense Counsel: Howard B. Brownstein Esq., Union City, New Jersey
New York Man Sentenced to Nine Years in Prison for Kidnapping, Interstate Domestic ViolenceRead the Press Release
NEWARK, N.J. – A New York man was sentenced today to 108 months in prison for assaulting and kidnapping an individual with whom he had a romantic relationship, U.S. Attorney Craig Carpenito announced.
Rudolf Szoradi, 51, previously pleaded guilty before U.S. District Judge Jose J. Linares in Newark federal court to an information charging him with one count of kidnapping and interstate domestic violence. U.S. District Judge Esther Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Szoradi and the victim previously had a romantic relationship. On Dec. 15, 2017, Szoradi assaulted the victim with a knife in the basement of a Newark residence. The victim suffered serious injuries. Szoradi then confined her in a vehicle against her will and drove her across state lines, eventually reaching North Carolina, where the victim was able to receive medical attention for her injuries.
In addition to the prison term, Judge Salas sentenced Szoradi to five years of supervised release.
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 sentencing. He also thanked the Newark Police Division and Clayton, North Carolina, police department for their assistance.
The government is represented by Assistant U.S. Attorney Matthew Feldman Nikic of the U.S. Attorney’s Office’s Criminal Division in Newark.
Four People Charged in $99 Million Scheme to Commit Health Care Fraud and Wire Fraud and Pay Kickbacks to Doctors and Their EmployeesRead the Press Release
TRENTON, N.J. – Four people have been charged for their roles in conspiracies to commit health care fraud and wire fraud and to pay kickbacks to doctors and doctors’ employees, U.S. Attorney Craig Carpenito announced today.
Alex Fleyshmakher, 33, of Morganville, New Jersey, was arrested this morning and will have his initial appearance this afternoon before U.S. Magistrate Judge Douglas Arpert in Trenton federal court. Also charged in the superseding indictment are: Ruben Sevumyants, 36, of Marlboro, New Jersey; and Samuel “Sam” Khaimov, 47, and Yana Shtindler, 44, both of Glen Head, New York. Sevumyants was previously charged by indictment, and Khaimov and Shtindler were each previously charged by complaint.
According to documents filed in this case:
Prime Aid Pharmacies – now closed – operated as “specialty pharmacies” out of locations in Union City, New Jersey, and Bronx, New York. They processed expensive medications used to treat various conditions, including Hepatitis C, Crohn’s disease, and rheumatoid arthritis. Fleyshmakher worked at Prime Aid Union City and was an owner of Prime Aid Bronx. Khaimov was an owner of Prime Aid Union City and the lead pharmacist of Prime Aid Bronx. Shtindler was Prime Aid Union City’s administrator, and Sevumyants was its operations manager.
Initially, Prime Aid Pharmacies obtained retail network agreements with several pharmacy benefit managers (PBMs), which allowed them to receive reimbursement payments for prescription medications, including specialty medications. PBMs acted as intermediaries on behalf of Medicare, Medicaid, and private healthcare insurance providers, so that when a pharmacy received a prescription, the pharmacy then submitted a claim for reimbursement to the PBM that represented the beneficiary’s drug plan.
Starting in 2009, in order to obtain a higher volume of prescriptions, Khaimov, Sevumyants, Fleyshmakher, and other Prime Aid employees paid bribes and kickbacks to doctors and doctors’ employees to induce them to steer prescriptions to Prime Aid Pharmacies. The kickbacks included expensive meals and payments by cash, check, and wire transfers. Another method of bribery also involved paying an employee to work inside a doctor’s office for the doctor’s benefit.
Prime Aid Union City – at the direction of Shtindler, Khaimov, and Sevumyants – also engaged in the pervasive fraudulent practice of billing health insurance providers for medications that were never provided to patients. While Prime Aid generally provided medications for initial prescriptions it received, it systematically billed for refills for those same medications without ever dispensing them to patients. From 2013 through 2017, Prime Aid Union City received over $65 million in reimbursement payments from Medicare, Medicaid, and private insurers for medications the pharmacy not only failed to give patients, but never even ordered or had in stock.
PBMs conducted routine audits of Prime Aid Union City and discovered its practice of billing but not dispensing medications. In response to these audits, Shtindler instructed Prime Aid employees to falsify records submitted to the PBMs. Sevumyants forged shipping records of a private commercial shipping company to make it appear as if medications were shipped to the patients when, in fact, they were not.
Despite these concealment efforts, some PBMs terminated the Prime Aid Pharmacies from their PBM networks. In order to continue profiting from these same PBMs, Khaimov and Shtindler opened new pharmacies, including Your Care Pharmacy in Bronx, New York, and transferred patients from the terminated Prime Aid Pharmacies to Your Care. To facilitate this scheme, Shtindler and Khaimov lied to the PBMs about the true ownership of those pharmacies, including Your Care, in order to ensure that in approving such pharmacies, the PBMs did not know the affiliation between the terminated pharmacies and the new pharmacies. This scheme resulted in one PBM being defrauded into paying Your Care over $34 million in reimbursement payments.
The superseding indictment charges each defendant as follows:
Counts
Defendants
Charge
One
Khaimov
Shtindler
Sevumyants
Health Care Fraud Conspiracy
Two – Five
Khaimov
Shtindler
Sevumyants
Health Care Fraud
Six
Khaimov
Shtindler
Wire Fraud Conspiracy
Seven – Nine
Khaimov
Shtindler
Wire Fraud
Ten
Khaimov
Sevumyants
Fleyshmakher
Kickback Conspiracy
The healthcare fraud counts charged in Counts One through Five are each punishable by a maximum of 10 years in prison. The wire fraud counts charged in Count Six through Nine are each punishable by a maximum of 20 years in prison. The conspiracy to pay illegal kickbacks charged in Count 10 in punishable by a maximum of five years in prison. All 10 counts are also punishable by a $250,000 fine, or twice the gross gain or loss from the offense.U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, in Newark; special agents of the Department of Health and Human Services-Office of Inspector General, under the direction of Scott J. Lampert; and the N.J. Office of the State Comptroller, Medicaid Fraud Division, under the direction of Director Josh Lichtblau, with the ongoing investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care & Government Fraud Unit, and Senior Trial Counsel Jason S. Gould of Criminal Division of the U.S. Attorney’s Office in Newark.
The charges and allegations contained in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense counsel:
Fleyshmakher: TBD
Khaimov: Anthony Iacullo Esq., Nutley, New Jersey
Shtindler: Lawrence S. Lustberg Esq., Newark
Sevumyants: Amy Luria Esq. & Michael Critchley Sr. Esq., RoselandEmployee at U.S. Military Base Admits to Accepting Bribes and KickbacksRead the Press Release
NEWARK, N.J. – A civilian employee of Picatinny Arsenal (PICA) and an employee of a defense contractor today admitted their roles in conspiring with others to receive bribes and other gratuities in return for assistance with the awarding of government contracts, U.S. Attorney Craig Carpenito announced.
Robert Dombroski, 64, of Branchville, New Jersey, a high ranking civilian employee at PICA, pleaded guilty before U.S. District Judge John Vazquez in Newark federal court to an information charging him with conspiring to commit wire fraud in order to accept or receive things of value in return for favorable assistance with government contracts and with making false claims against the United States.
Indra Nayee, 53, of Metuchen, New Jersey, pleaded guilty before Judge Vazquez to an information charging him with conspiring to give, offer or promise anything of value to a public official and to make false claims against the United States.
According to documents filed in this case and statements made in court:
Dombroksi worked at PICA, a U.S. Army installation in Morris County, New Jersey, for more than 30 years. PICA conducts research, development, acquisition and lifecycle management of advanced conventional weapons systems and advanced ammunitions and provides products and services to all branches of the U.S. military. Dombroski admitted that from at least January 2010 through December 2017, he conspired with other employees at PICA, with Subsystems Technology (STI) – a defense contracting firm that works with PICA and specializes in advanced engineering, advanced analytics, management consulting and IT services, including cyber-security – and employees of STI. He conspired to seek and accept gifts and other items of value, such as Apple products, luxury handbags, Beats headphones, and tickets to a luxury sky box at professional sporting events, valued at least $150,000 to $250,000, from STI in exchange for assistance in obtaining and retaining government contracts and other favorable assistance at PICA. He also admitted that in order to cover up his crimes, he filed false statements to the Department of Defense by failing to list the items of value he received from STI on his annual confidential financial disclosure form known as an OGE Form 450.
Nayee, an employee of STI, admitted that from January 2012 through December 2016, he conspired with STI and other employees of STI to offer gifts and other items of value to numerous individuals employed at PICA in order to obtain and retain contracts and other favorable assistance at PICA. He also admitted that he and other employees at STI, and the company, submitted false bills to the United States writing off the cost of the bribes as “materials” needed on United States government contracts, when in fact the gifts and other items of value were for the personal use and enjoyment of the employees at PICA and not for any legitimate government purpose.
The conspiracy charge to which Dombroski and Nayee pleaded guilty carries a maximum potential penalty of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Sentencing for Dombroski is scheduled for Nov. 19, 2019, and sentencing for Nayee is scheduled for Dec. 16, 2019.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Leigh-Alistair Barzey, Special Agent in Charge, DCIS Northeast Field Office; and the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge L. Scott Moreland, with the investigation leading to today’s guilty pleas.
The government is represented by Senior Trial Counsel Margaret Ann Mahoney of the U.S. Attorney’s Office’s National Security Unit in Newark.
Pennsylvania Man Admits Role in Armed Bank RobberyRead the Press Release
CAMDEN, N.J. – A Pennsylvania man today admitted robbing a bank in Carneys Point, New Jersey, in July 2018 while brandishing a firearm, U.S. Attorney Craig Carpenito announced.
Kareem Moore, 29, of North Wales, Pennsylvania, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an indictment charging him with armed bank robbery and brandishing a firearm during a bank robbery.
According to documents filed in this case and statements made in court:
Moore admitted that on July 30, 2018, he and a conspirator walked into the Fulton Bank in Carneys Point and that he demanded cash while displaying a loaded handgun. Moore and the conspirator took the cash and fled. Responding officers arrived at the bank within minutes of the robbery, and, after a brief foot pursuit, tackled and arrested Moore.
The armed bank robbery charge carries a maximum potential penalty of 25 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The count of brandishing a firearm carries a mandatory minimum sentence of seven years, which must be served consecutively to any other sentence imposed. Sentencing is scheduled for Dec. 16, 2019.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the Salem County Prosecutor’s Office, under the direction of Prosecutor John T. Lenahan; officers of the Carneys Point Police Department, under the direction of Chief of Police Gerald A. Krivda; and officers of the Penns Grove Police Department, under the direction of Chief John T. Stranahan Sr., with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Kristen M. Harberg of the United States Attorney’s Office in Camden.
Defense counsel: Richard Coughlin Esq., Federal Public Defender, Camden
New Jersey Doctor Pleads Guilty to $13 Million Conspiracy to Defraud Medicare with Telemedicine Orders of Orthotic BracesRead the Press Release
A Toms River, New Jersey physician pleaded guilty today for his role in a $13 million health care fraud scheme, which previously resulted in charges in April 2019 against 23 other defendants in one of the largest health care fraud cases investigated by the FBI and the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and prosecuted by the Department of Justice.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Craig Carpenito of the District of New Jersey, Assistant Director Robert Johnson of the FBI’s Criminal Investigative Division, Deputy Inspector General for Investigations Gary Cantrell of HHS-OIG and Deputy Administrator and Director Alec Alexander of the Centers for Medicare & Medicaid Services, Center for Program Integrity (CMS/CPI) made the announcement.
Joseph DeCorso, 62, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Peter G. Sheridan of the District of New Jersey. DeCorso’s sentencing is set for Jan. 8, 2020, before Judge Sheridan.
In pleading guilty, DeCorso admitted that he worked for two purported telemedicine companies for which he wrote medically unnecessary orders for orthotic braces for Medicare beneficiaries between July 2017 and March 2019. He admitted that his conduct resulted in a $13 million intended loss to Medicare. In connection with his plea agreement, DeCorso agreed to pay over $7 million in restitution to the United States, as well as forfeit assets and property traceable to proceeds of the conspiracy.
DeCorso admitted that in the course of the scheme, an international telemarketing network lured hundreds of thousands of elderly or disabled Medicare beneficiaries into the scheme, which involved call centers throughout the world, which then sent the beneficiaries’ information to several telemedicine companies. DeCorso further admitted that he wrote brace orders for the telemedicine companies without speaking to the beneficiaries and that he concealed the fraud with falsified orders that stated, among other things, that he had “discussions” or “conversations” with beneficiaries or had conducted diagnostic testing for benficiaries, when, in fact, DeCorso had not spoken to beneficiaries and had not conducted diagnostic testing on beneficiaries in connection with the ordering of orthotic braces.
This case was investigated by the FBI’s Newark Field Office and HHS-OIG. Acting Assistant Chief Jacob Foster and Trial Attorney Darren Halverson of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Any doctors or medical professionals who have been involved with alleged fraudulent telemedicine and DME marketing schemes should call to report this conduct to the FBI hotline at 1-800-CALL-FBI.
Additional documents related to the investigation and prior indictments are available here: https://www.justice.gov/opa/documents-and-resources-april-9-2019-press-release-health-care-fraud
Five Paterson, New Jersey, Men Admit Stealing over $300,000 in Checks from Dozens of Mail Collection BoxesRead the Press Release
NEWARK, N.J. – Five Paterson, New Jersey, men have admitted their roles in a scheme to steal checks worth more than $300,000 from U.S. Postal Service (USPS) mail collection boxes throughout New Jersey, U.S. Attorney Craig Carpenito announced.
Jerry Lake-Rodriguez, 26, pleaded guilty today before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with conspiracy to commit bank fraud and aggravated identity theft. Co-defendants Ismael Alicea Jr., 26, Yerrisson Garcia-Rodriguez, 24, Brayan Ulloa-Ulloa, 24, and Johan Lake-Rodriguez, 27, previously pleaded guilty to separate informations charging each with conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
Jerry Lake-Rodriguez and his conspirators stole checks from USPS mail collection boxes in Passaic, Bergen, Morris, Essex, and Middlesex counties, and elsewhere, and fraudulently deposited them into various bank accounts, often within a day of being stolen. The stolen checks had a total value of over $300,000.
The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The aggravated identity theft charge carries a penalty of a mandatory two-year term of imprisonment, to be served consecutively to any other sentence imposed. Sentencing for Jerry Lake-Rodriguez is scheduled for Feb. 6, 2020.
U.S. Attorney Craig Carpenito credited postal inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Inspector in Charge James Buthorn, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel:
Jerry Lake-Rodriguez: Curtis LaForge Esq., Saddle Brook, New Jersey
Johan Lake-Rodriguez: Tim Donohue Esq., West Orange, New Jersey
Garcia-Rodriguez: Kevin Buchan Esq., Roseland, New Jersey
Ulloa-Ulloa: Frank Galluccio Esq., Paterson
Alicea: Bruce Rosen Esq., Florham Park, New JerseyTrenton Man Admits to Participating in Heroin Trafficking ConspiracyRead the Press Release
TRENTON, N.J. – A Trenton man today admitted his role in a drug trafficking conspiracy that allegedly distributed more than one kilogram of heroin in Trenton and the surrounding area, U.S. Attorney Craig Carpenito announced.
Omar Council, a/k/a “Stacks,” a/k/a “O,” a/k/a “Y-O,” a/k/a “Snow,” 40, pleaded guilty today before Chief U.S. District Judge Freda L. Wolfson in Trenton federal court to a superseding information charging him with one count of conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin.
According to documents filed in this and other cases and statements made in court:
In October 2018, Council and 25 other members of a drug trafficking conspiracy operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. Council is the 18th defendant to plead guilty. On Aug. 8, 2019, a grand jury returned a 15-count second superseding indictment charging Council and eight other defendants – Jerome Roberts, a/k/a “Righteous,” a/k/a “Lee”; David Antonio, a/k/a “Papi,” a/k/a “Pop,” a/k/a “Victor Arias,” a/k/a “Santiago Ramirez”; Brian Phelps, a/k/a “B-Money,” a/k/a “B”; Timothy Wimbush, a/k/a “Young Money”; Taquan Williams, a/k/a “Trip”; Jubri West; Dennis Cheston, Jr., a/k/a “Beans”; and Wayne K. Bush – with various crimes relating to the drug-trafficking conspiracy, including firearms charges against Phelps, Wimbush, Williams, West, and Cheston.
From as early as October 2017 to October 2018, the defendants and others engaged in a narcotics distribution conspiracy that operated in the areas of Martin Luther King Boulevard, Sanford Street, Middle Rose Street, Southard Street, Hoffman Avenue, and Coolidge Avenue in Trenton. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders – including over a cellular telephone used by Council – controlled purchases of heroin from Council and others, the use of confidential sources of information, and other investigative techniques, law enforcement learned that Council was a significant drug distributor in and around Trenton and the surrounding area. The investigation also revealed that Council maintained close relationships with other conspirators, including Jakir Taylor, who obtained regular supplies of hundreds of “bricks” of heroin from David Antonio, whom they referred to as “Papi.” Council obtained supplies of heroin directly from Taylor and others (including supplies of heroin originating from Antonio), and regularly redistributed that heroin to others in and around Trenton.
The drug conspiracy count to which Council pleaded guilty carries a statutory mandatory minimum term of imprisonment of five years, a maximum potential penalty of 40 years in prison, and a maximum fine of $5 million. Sentencing is scheduled for Jan. 10, 2020.
U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge Charlie J. Patterson; officers of the Trenton Police Department, under the direction of Police Director Sheila A. 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 N.J. 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 J. Onofri; officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler; and members of the N.J. State Board of Parole for their assistance in the case..
The government is represented by Assistant U.S. Attorneys J. Brendan Day and Alexander Ramey of the U.S. Attorney’s Office’s Criminal Division in Trenton.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Greater Trenton Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies to enhance the identification, apprehension, and prosecution of individuals involved in gang-related activities, violent crime, and drug distribution in and around the greater Trenton area. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
The charges and allegations against the remaining defendants are merely accusations and those defendants are presumed innocent unless and until proven guilty.
Defense Counsel: Mark W. Catanzaro Esq., Mount Holly, New Jersey
Six Individuals Admit Roles in Nationwide Credit Card Fraud Affecting Thousands of Account HoldersRead the Press Release
NEWARK, N.J. – Six individuals have pleaded guilty to participation in a multimillion-dollar conspiracy that used stolen credit card account information to make fraudulent retail purchases, U.S. Attorney Craig Carpenito announced.
Hamilton Eromosele, 29, of the Bronx, New York, the leader of the scheme, pleaded guilty today before U.S. District Judge William Martini in Newark federal court to an information charging him with one count of conspiracy to commit bank fraud. George Edandison, 27, and Youssouf Traore, 21, both of the Bronx; Deja Handsford, 25, of New York City; Quincy Wielingen, 28, of Queens Village, New York; and Kaishce English, 32, of Allentown, Pennsylvania, all pleaded guilty before Judge Martini on previous dates to the same charge.A seventh conspirator, Edward Dorsey, 28, of Mount Vernon, New York, appeared before U.S. Magistrate Judge Steven C. Mannion in Newark federal court on July 8, 2019, for an initial appearance on a criminal complaint charging him with participating in the same offense.
According to the documents filed in this case and statements made in court:
From at least 2015 through 2018, Eromosele led a network of individuals, based in the New Jersey/New York area, who made trips around the United States in order to use stolen credit card information to purchase gift cards, flights, hotels, rental cars, and other goods and services. Eromosele obtained stolen credit card information through the “dark web” and other sources, which he then provided to conspirators. Eromosele often recruited women via social media, with promises of easy profits, to fly to various locations to make fraudulent purchases. Eromosele collected his conspirators’ fraudulently purchased gift cards or luxury goods, sold them for cash, and dispersed a percentage of the proceeds to the conspirators. The conspirators made over $3.5 million in fraudulent purchases using over 4,000 stolen credit card accounts.
The conspiracy to commit bank fraud charge carries a maximum sentence of 30 years in prison and a maximum fine of $1 million. Sentencing for Eromosele is scheduled for Jan 16, 2020.
U.S. Attorney Craig Carpenito credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, Newark Field Office, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations against Dorsey are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel:
Eromosele: Pasquale Giannetta Esq., Newark
Edandison: Daniel Welch Esq., Jersey City, New Jersey
Handsford: Linwood Allen Jones Esq., East Orange, New Jersey
Traore: Angelo Servidio Esq., Nutley, New Jersey
English: Frank Arleo Esq., West Orange, New Jersey
Wielingen: Jason Orlando Esq., Jersey City
Dorsey: Elizabeth Smith Esq., Mendham, New JerseyPaterson Police Officer Admits Conspiring to Violate Civil Rights, Using Excessive Force, and Filing A False Police ReportRead the Press Release
NEWARK, N.J. – A City of Paterson police officer today admitted conspiring with other officers to violate the civil rights of individuals in Paterson, using unreasonable and excessive force against individuals in Paterson, and filing a false police report to conceal his criminal activity, U.S. Attorney Craig Carpenito announced.
Eudy Ramos, 32, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to Counts 1 and 7 of an indictment against him, charging him with conspiracy to violate individuals’ civil rights and filing a false police report. Ramos also pleaded guilty to an information charging him with using unreasonable and excessive force in violation of individuals’ civil rights.
According to documents filed in this and other cases and statements made in court:
Ramos, along with other Paterson police officers, including Jonathan Bustios, Daniel Pent, Matthew Torres, Frank Toledo, and others, stopped and searched motor vehicles, without justification, and stole cash and other items from the occupants. Ramos and the other officers also stopped and searched individuals on the streets of Paterson, and illegally took their money. He and other officers also arrested individuals in Paterson, seized cash from them during the arrests, and split the cash proceeds among themselves. To cover up their criminal activity, Ramos and his fellow officers then filed false police reports. Ramos admitted to the following instances of illegal conduct:
• On Feb. 1, 2017, Ramos and Pent stopped and searched a vehicle in Paterson. They stole approximately $10,000 from the passenger of the vehicle and split it between themselves. Ramos and Pent then submitted an incident report to the Paterson Police Department in which they intentionally omitted any mention of the $10,000 theft.
• On Dec. 1, 2017, Ramos and Bustios stopped and searched an individual on a street corner in Paterson and stole approximately $1,000 from the individual. After the theft, a video of a portion of the encounter was posted to Twitter by a third party.
• On Dec. 2, 2017, Ramos and Toledo arrested an individual. During the arrest, they stole $1,000 from the individual and split the proceeds.
• On Dec. 7, 2017, Torres and Ramos conducted a vehicle stop in Paterson. They searched the vehicle, the driver, and the passenger, who had approximately $3,100 and marijuana. Ramos told the passenger that instead of charging the passenger with distribution of marijuana they could take $500 from the passenger and have the passenger sign a piece of paper. Ramos then purportedly placed a call to his superior and told the passenger that the superior officer said it had to be $800. Ramos took out a piece of white paper, wrote something on it, and told the passenger to sign it. Ramos and Torres released the driver and passenger and shared the stolen cash proceeds. They did not report the stop and search of the vehicle and its occupants, or the cash seizure, to the Paterson Police Department.
• On Feb. 20, 2018, Ramos and Bustios stopped and searched a vehicle and detained the driver and passenger of the vehicle. They stole a bag containing approximately $1,800 from the car. They then agreed to meet at Peach and Plum streets in Paterson, a location with no camera, where Bustios passed a portion of the illegally seized cash to Ramos through the window of Bustios’ police car. Bustios and Ramos did not report to the Paterson Police Department the fact that they had stopped and searched the vehicle, detained and searched its occupants, and taken cash, all without legal justification.
• On March 5, 2018, Ramos and Torres stopped and searched a vehicle, without legal basis. The occupants of the encounter filmed the encounter and posted the video to Instagram. They asked Ramos his basis for conducting the vehicle stop, and Ramos responded, “Random stop.” Ramos did not locate any cash inside the vehicle and departed the scene without taking anything.
While on official duty, Ramos also routinely used unreasonable and excessive force in his encounters with individuals in Paterson, causing them bodily harm:
• Ramos and other officers routinely delivered a “running tax” to individuals they arrested. If an individual ran from them, Ramos and others would “tax” the individual by striking the individual multiple times, causing bodily injury.
• On Jan. 20, 2015, Ramos and Pent received a call regarding loud music coming from a vehicle on Doremus Avenue in Paterson. They approached an individual in the vehicle, removed him, and began punching and kicking him. The individual suffered bodily injury, including eye injuries, as a result of Ramos’ and Pent’s excessive force.
• On Sept. 7, 2016, Ramos placed a handcuffed individual in the backseat of his police car, without a seatbelt, to transport the individual to Paterson Police Department headquarters. Ramos then depressed the brakes on his police car and forced the individual to slam his head against the divider in the backseat of the police car, a tactic known as “brake-checking.” After the individual slammed his head on divider, Ramos jokingly said, “What happened, man? You gotta put your seatbelt on.” Ramos recorded a video of this incident.
• On March 2, 2017, Ramos and Bustios were dispatched to a call regarding stolen property located in a vehicle in a parking garage. The individual who had stolen the property (Individual 1) was sitting in the vehicle. The individual whose property had been stolen (Individual 2) was angry and told Ramos and Bustios that he wanted to take a swing at Individual 1. Ramos and Bustios allowed him to do so. While Ramos and Bustios watched, Individual 2 punched Individual 1, who fell to the ground and hit his head, causing bodily injury. Bustios filmed the encounter.
The conspiracy to violate civil rights and the deprivation of civil rights charges each carry a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each count is $250,000. Sentencing is scheduled for Jan. 8, 2020.
Bustios pleaded guilty in December 2018 to conspiring to deprive individuals of their civil rights and to extortion under color of official right. Torres pleaded guilty in May 2019 to conspiring to deprive individuals of their civil rights and to filing a false police report. His sentencing is scheduled for Nov. 18, 2019. Toledo pleaded guilty in July 2019 to conspiring to deprive individuals of their civil rights, to using unreasonable and excessive force against individuals in Paterson, and to filing a false police report. His sentencing is scheduled for Oct. 22, 2019. On March 26, 2019, Pent was charged by complaint with conspiring to deprive individuals of their civil rights. The charge and allegations against him are merely accusations and he is presumed innocent unless and until proven guilty.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory Ehrie in Newark, with the investigation leading to today’s arrest. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.
The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office.
Defense counsel: Miles Feinstein Esq., Clifton, New Jersey
Man Admits Role in Conspiracy to Distribute Heroin and Fentanyl from A Drug Mill in the Bronx to Customers in New JerseyRead the Press Release
NEWARK, N.J. – A Bronx, New York, man today admitted participating in a conspiracy to distribute heroin and fentanyl to customers in New Jersey, U.S. Attorney Craig Carpenito announced today.
Dilson Vasquez Genao, 23, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of conspiracy to distribute 400 grams or more of a mixture and substance containing fentanyl. Francisco Mercedes Gil, 31, also of the Bronx, New York, pleaded guilty before Judge Salas to the same charges last week.
Four other individuals – Jhan Carlos Capellan Maldonado, 30, Jose Antonio Vasquez Pena a/k/a “Tono,” 46, Daury Contreras Ulerio, 34, and Reimon Genao Rosario, 22 – were indicted on the same charge in August 2019 and were arraigned on Sep. 4, 2019, before Judge Salas. One individual – Eddy Urena Rodriguez, 34 – remains charged by complaint.
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 the Bronx to store, mix, and package heroin and fentanyl in distribution quantities. Maldonado employed Genao, Gil, Rodriguez, Ulerio, and Rosario, to assist in preparing the heroin and fentanyl for distribution to customers in New Jersey. Pena lived at the apartment in order to safeguard the narcotics and narcotics supplies.
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 Genao, Gil, Rodriguez, Ulerio, Rosario, Maldonado, and Pena. All seven defendants attempted to escape out a window in the bedroom. All but one—Rosario—were apprehended and arrested by law enforcement officers waiting outside. Rosario was arrested at a later date.
Each defendant faces a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. Sentencing for Genao is scheduled for Jan. 7, 2020, and sentencing for Gil is scheduled for Jan. 6, 2020.
U.S. Attorney Craig Carpenito credited the Homeland Security Investigations (HSI)’s New Jersey Division, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s guilty plea.
The government is represented by Senior Trial Counsel Jason S. Gould of the U.S. Attorney’s Office’s Opioid Abuse Prevention and Enforcement Unit in Newark.
The charge and allegations contained in the indictment against Maldonado, Pena, Ulerio and Rosario and complaint against Rodriguez are merely accusations, and those defendants are presumed innocent unless and until proven guilty.
Defense counsel:
Genao: Edward Kratt Esq., New York
Gil: Keith Oliver Esq., Middletown, New Jersey
Maldonado: Blair Zwillman Esq., Millburn, New Jersey
Ulerio: Perry Primavera Esq., Hackensack, New Jersey
Rosario: James Moriarty Esq., New York
Pena: Peter Carter Esq., Assistant Public Defender, New Jersey
Rodriguez: Ramon Pagan Esq., New YorkInvestment Adviser Sentenced to 70 Months in Prison for Stealing Millions of Dollars from ClientsRead the Press Release
NEWARK, N.J. – A former broker and investment adviser was sentenced today to 70 months in prison for stealing millions of dollars from his clients in order to pay for personal expenses, U.S. Attorney Craig Carpenito announced.
Gary Basralian, 72, of Springfield, New Jersey, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of wire fraud and one count of investment adviser fraud. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Basralian was a registered broker who provided investment advisory services to clients and received compensation for advising them about investing in, purchasing, or selling securities. From 1989 until December 2017, he was registered with the Financial Industry Regulatory Authority (FINRA), or its predecessors, as working at “Securities Firm A,” a registered investment adviser and broker-dealer with its principal place of business in Jersey City, New Jersey. Securities Firm A provided a broker-dealer platform for more than 2,000 independent financial advisers across the United States.
From July 2007 through November 2017, Basralian defrauded his clients by falsely telling them that he would invest their money in securities and other investments when, in fact, he misappropriated those funds and used them for his own personal expenditures – including payments on a BMW automobile and tens of thousands of dollars in credit card bills.
In one instance Basralian wired money from at least one victim client’s investment account at Securities Firm A to various accounts that he controlled and used the proceeds for his own benefit. When the victim asked why the account had diminished in value, Basralian sent the victim a phony spreadsheet showing that the money was being invested as loans to various companies and would be paid back with interest. Basralian admitted stealing at least $2 million.
In addition to the prison term, Judge Arleo sentenced Basralian to three years of supervised release.
On May 22, 2018, the N.J. Bureau of Securities in the Office of the N.J. Attorney General issued a summary revocation order against Basralian that revoked his agent and investment adviser representative registrations.
U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked the N.J. Bureau of Securities, under the direction of Bureau Chief Christopher Gerold, for its assistance.
The government is represented by Assistant U.S. Attorney Courtney A. Howard of the U.S. Attorney’s Office’s Economic Crimes Unit.
Italian Shipping Company Sentenced to Pay $4 Million for Concealment of Pollution from VesselRead the Press Release
NEWARK, N.J. – A shipping company based in Italy was sentenced today to pay $4 million for discharging oily waste and other pollutants into the sea and then lying about it, U.S. Attorney Craig Carpenito and Deputy Assistant Attorney General Jean E. Williams announced.
The company, d’Amico Shipping Italia S.p.A., previously pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging it with violating the Act to Prevent Pollution from Ships. In addition to the $4 million penalty, the terms of the plea agreement place d’Amico on probation for four years. During probation, the company will be subject to the terms of an environmental compliance program that requires outside audits by an independent company and oversight by a court-appointed monitor
According to documents filed in this case and statements made in court:
The charge to which d’Amico pleaded guilty related to the deliberate concealment of vessel pollution from an oil tanker – the M/T Cielo di Milano – owned by that company, which visited ports in New Jersey multiple times, as well as ports in Maryland and Florida. The company admitted that the ship’s crew intentionally bypassed required pollution prevention equipment by discharging machinery space bilge water and oily waste from the vessel’s engine room through its sewage system into the sea. The company also admitted that crew members falsified the vessel’s Oil Record Book, a required log regularly inspected by the Coast Guard; made false statements to the Coast Guard during its inspection of the M/T Cielo di Milano in January 2015; and destroyed the vessel’s sounding log after the Coast Guard had boarded the vessel.
The company admitted the following in a detailed joint factual statement filed in Court:
- From August 2014 through January 2015, the M/T Cielo di Milano used two different methods to illegally dispose of oily waste, both of which involved discharging it from the vessel’s sewage holding tank into the sea.
- Some of the discharges took place within the exclusive economic zone, that is, within 200 nautical miles of the United States.
- Two different chief engineers were involved in the illegal discharges and the intentional falsification of the Oil Record Book to cover up those discharges.
- One chief engineer falsified the Oil Record Book to state that bilge water had been processed through the vessel’s pollution control equipment when, in fact, it had not.
- The crew routinely hid equipment used to conduct the discharges when the vessel entered port.
- During a Coast Guard inspection of the vessel in Bayonne, New Jersey, in January 2015, the chief engineer and second engineer lied to inspectors and told lower-level crew members to lie as well.
- After the Coast Guard departed the vessel, the chief engineer destroyed a notebook containing tank soundings by burning the pages in the vessel’s boiler flame in order to conceal the notebook from the Coast Guard.
The $4 million penalty includes $1 million in organizational community service payments to restore the coastal environment of New Jersey. The funds will be directed to environmental projects that to be selected by the National Fish and Wildlife Foundation to support the cleanup of marine pollution, preservation of aquatic life, and restoration of the shorelines around Newark Bay.
U.S. Attorney Carpenito and Deputy Assistant Attorney General Williams credited special agents of the U.S. Coast Guard Investigative Service, under the direction of Special Agent in Charge Richard D. Cox, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Kathleen P. O’Leary of the Health Care and Government Fraud Unit in Newark and attorneys from the Environmental Crimes Section of the U.S. Department of Justice.
Defense Contractor Sentenced to Three Years in Prison for Conspiracy to Defraud U.S. Department of Defense, Conspiracy to Violate Arms Export Control Act, and Income Tax EvasionRead the Press Release
The owner of two defense contracting firms was sentenced to 36 months in prison for providing non-conforming parts for military equipment, illegally sharing sensitive technical information and evading income taxes Assistant Attorney General John Demers and U.S. Attorney Craig Carpenito announced today.
Roger Sobrado, 49, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count each of conspiracy to commit wire fraud, conspiracy to violate the Arms Export Control Act, and income tax evasion. Judge Hillman imposed the sentence on Sept. 4, 2019, in Camden federal court.
According to documents filed in this case and statements made in court:
Sobrado was the owner of two companies: Tico Manufacturing Inc. (TICO), a purported manufacturing company, and Military and Commercial Spares Inc. (MCS), a defense contracting company, both in Berlin Township, New Jersey.
Sobrado admitted that between January 2011 and December 2015, MCS obtained contracts with the U.S. Department of Defense (DoD) by falsely claiming that the military parts it contracted to provide would be exactly as described and provided by authorized manufacturers. The DoD contracts specified that the parts were critical application items for military equipment, including fighter jets and helicopters. Sobrado recruited various family members to participate in the scheme by establishing companies that contracted with the DoD. Those companies also obtained contracts with the DoD by falsely claiming that the military parts they contracted to provide would be the exact product described and would be provided by authorized manufacturers. In fact, Sobrado used TICO to contract with local manufacturers to supply non-conforming parts to MCS and his family members’ companies at a significantly reduced cost. The non-conforming parts supplied by Sobrado were shipped from New Jersey to various DoD locations around the country.
DoD paid Sobrado and his family members’ companies for the non-conforming parts. The family members then paid Sobrado for the non-conforming parts. Sobrado admitted that he deposited some of his business receipts into his personal bank account and that he paid for personal items from his business account without telling his accountant. For tax years 2011 through 2014, Sobrado reported a total taxable income of $1,608,372. He failed to report additional income of $1,182,405, which caused a loss to the United States of $509,962.
Sobrado also admitted that in August 2005 and in November 2010 he submitted to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of a family member’s company. Sobrado acknowledged that access to the controlled drawings and technical data was limited to citizens of the United States and to those lawfully in the United States. Sobrado said he submitted the application because his family member told him that he needed access to drawings and that he could not get them because he was not a U.S. citizen.
Sobrado agreed that on July 28, 2011, and at various times between January 2013 and November 2015, the family member, who is illegally in the United States, accessed or downloaded hundreds of drawings that were sensitive in nature and that required special access.
In addition to the prison term, Judge Hillman sentenced Sobrado to three years of supervised release and ordered him to pay $8,043,977 in restitution.
Assistant Attorney General Demers and U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the direction of Special Agent in Charge Leigh-Alistair Barzey; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge John S. Grasso; and special agents of the U.S. Attorney’s Office with the investigation leading to today’s sentencing.
The government is represented by Senior Trial Counsel Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden and Trial Attorney David Recker of the Justice Department’s National Security Division.
Defense Contractor Sentenced to Three Years in Prison for Conspiracy to Defraud U.S. Department of Defense, Conspiracy to Violate Arms Export Control Act, and Income Tax EvasionRead the Press Release
CAMDEN, N.J. – The owner of two defense contracting firms was sentenced to 36 months in prison for providing non-conforming parts for military equipment, illegally sharing sensitive technical information and evading income taxes, U.S. Attorney Craig Carpenito announced today.
Roger Sobrado, 49, of Marlton, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count each of conspiracy to commit wire fraud, conspiracy to violate the Arms Export Control Act, and income tax evasion. Judge Hillman imposed the sentence on Sept. 4, 2019, in Camden federal court.
According to documents filed in this case and statements made in court:
Sobrado was the owner of two companies: Tico Manufacturing Inc. (TICO), a purported manufacturing company, and Military and Commercial Spares Inc. (MCS), a defense contracting company, both in Berlin Township, New Jersey.
Sobrado admitted that between January 2011 and December 2015, MCS obtained contracts with the U.S. Department of Defense (DoD) by falsely claiming that the military parts it contracted to provide would be exactly as described and provided by authorized manufacturers. The DoD contracts specified that the parts were critical application items for military equipment, including fighter jets and helicopters. Sobrado recruited various family members to participate in the scheme by establishing companies that contracted with the DoD. Those companies also obtained contracts with the DoD by falsely claiming that the military parts they contracted to provide would be the exact product described and would be provided by authorized manufacturers. In fact, Sobrado used TICO to contract with local manufacturers to supply non-conforming parts to MCS and his family members’ companies at a significantly reduced cost. The non-conforming parts supplied by Sobrado were shipped from New Jersey to various DoD locations around the country.
DoD paid Sobrado and his family members’ companies for the non-conforming parts. The family members then paid Sobrado for the non-conforming parts. Sobrado admitted that he deposited some of his business receipts into his personal bank account and that he paid for personal items from his business account without telling his accountant. For tax years 2011 through 2014, Sobrado reported a total taxable income of $1,608,372. He failed to report additional income of $1,182,405, which caused a loss to the United States of $509,962.
Sobrado also admitted that in August 2005 and in November 2010 he submitted to the DoD a fraudulent application for access to export controlled drawings and technical data on behalf of a family member’s company. Sobrado acknowledged that access to the controlled drawings and technical data was limited to citizens of the United States and to those lawfully in the United States. Sobrado said he submitted the application because his family member told him that he needed access to drawings and that he could not get them because he was not a U.S. citizen.
Sobrado agreed that on July 28, 2011, and at various times between January 2013 and November 2015, the family member, who is illegally in the United States, accessed or downloaded hundreds of drawings that were sensitive in nature and that required special access.
In addition to the prison term, Judge Hillman sentenced Sobrado to three years of supervised release and ordered him to pay $8,043,977 in restitution.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the direction of Special Agent in Charge Leigh-Alistair Barzey; special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael; special agents of IRS - Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge John S. Grasso; and special agents of the U.S. Attorney’s Office with the investigation leading to today’s sentencing.
The government is represented by Senior Trial Counsel Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden and Trial Attorney David Recker of the Justice Department’s National Security Division.
Somerset County Man Sentenced to Five Years in Prison for Receipt of Child PornographyRead the Press Release
TRENTON, N.J. – A Somerset County, New Jersey, man was sentenced today to 60 months in prison for receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Lomere T. Walls, 27, of Franklin Park, New Jersey, previously pleaded before U.S. District Judge Brian R. Martinotti to an indictment charging him with one count of receipt of child pornography. Judge Martinotti imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Walls used a peer-to-peer file sharing program, which he installed on his computer several years ago, to download videos and images of child sexual abuse. Between July and November of 2016, law enforcement downloaded dozens videos of child pornography from Walls’ computer. After executing a search warrant at Walls’ home in November of 2016, agents located 149 videos and 92 images of child sexual abuse on Walls’ computer and phone. Walls admitted that he had been actively searching for videos and images of child pornography, which he had previously saved on his computer.
In addition to the prison term, Judge Martinotti sentenced Walls to five years of supervised release.
U.S. Attorney Carpenito credited special agents with the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to today’s sentencing. The investigation was also assisted by the Somerset County Prosecutor’s Office under the direction of Prosecutor Michael H. Robertson.
The government is represented by Assistant U.S. Attorney Mark J. McCarren of the U.S. Attorney’s Special Prosecutions Division in Newark.
Defense counsel: Eric Mark Esq., Newark
Cumberland County Man Charged with Conspiracy to Defraud 30 Victims in Romance Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Cumberland County, New Jersey, man was arrested today on charges that he allegedly defrauded more than 30 victims into wiring money to him and his conspirators after he and his conspirators met and wooed the victims on online dating sites, U.S. Attorney Craig Carpenito announced.
Rubbin Sarpong, 35, of Millville, New Jersey, is charged by complaint with one count of conspiracy to commit wire fraud. He is scheduled to make his initial court appearance today before U.S. Magistrate Judge Joel Schneider in Camden federal court.
According to documents filed in this case and statements made in court:
Between January 2016 and Sept. 3, 2019, Sarpong and his conspirators, several of whom reside in Ghana, allegedly participated in an online romance scheme, defrauding victims in New Jersey and elsewhere. Sarpong and the conspirators set up dating profiles on various dating websites, using fictitious or stolen identities and posing as United States military personnel who were stationed overseas. They contacted victims through the dating websites and then pretended to strike up a romantic relationship with them. After establishing virtual romantic relationships with victims on the online dating platforms and via email, the conspirators asked them for money, often for the purported purpose of paying to ship gold bars to the United States. Although the stories varied, most often Sarpong and the conspirators claimed to be military personnel stationed in Syria who received, recovered, or were awarded gold bars. The conspirators told many victims that their money would be returned once the gold bars were received in the United States.
Sarpong and the conspirators used myriad email accounts and Voice Over Internet Protocol phone numbers to communicate with victims and instruct them on where to wire money, including recipient names, addresses, financial institutions, and account numbers. Victims wired money to bank accounts held by Sarpong and others at financial institutions in the United States. Occasionally, victims also mailed personal checks and/or cashier’s checks to the conspirators and also transferred money to the conspirators via money transfer services, such as Western Union and MoneyGram. The funds were not used for the purposes claimed by the conspirators – that is, to transport non-existent gold bars to the United States – but were instead withdrawn in cash, wired to other domestic bank accounts, and wired to other conspirators in Ghana.
Federal law enforcement agents have identified more than 30 victims, with a total loss amount exceeding $2.1 million. Sarpong allegedly personally received $823,386 in victim funds into bank accounts that he owned or controlled. Sarpong posted photographs of himself on social media posing with large amounts of cash, high-end cars and expensive jewelry.The count of conspiracy to commit wire 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 Special Agent in Charge Gregory W. Ehrie in Newark; special agents of Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael in Newark; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig 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.
Defense counsel: Lori M. Koch Esq., Assistant Federal Public Defender, Camden
Bergen County Man Admits to Fraudulent Short Sale Scheme to Defraud Mortgage Lenders and Tax EvasionRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man today admitted his role in a scheme with his son to use straw buyers and short sales on properties to defraud mortgage lenders out of hundreds of thousands of dollars and to avoid paying taxes on the proceeds of the scheme, U.S. Attorney Craig Carpenito announced.
George Bussanich Sr., 60, of Park Ridge, New Jersey, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to a superseding information charging him with one count of bank fraud conspiracy and one count of tax evasion. His son, George Bussanich Jr., 39, of Upper Saddle River, New Jersey, pleaded guilty to tax evasion before Judge Cecchi in October 2017 and is scheduled to be sentenced Sept. 25, 2019.
According to documents filed in this case and statements made in court:
Between 2009 and 2012, Bussanich Sr. and Bussanich Jr. conspired to defraud mortgage lenders through the sham short sales of two properties located on Jefferson Avenue in Emerson, New Jersey, and Lillian Street in Park Ridge.
Bussanich Sr. controlled various purported medical clinics and surgical centers in New Jersey. He recruited his business partner and an employee from a sleep clinic in Cliffside Park, New Jersey, to pose as legitimate, unrelated buyers of the properties. In order to conceal his involvement, Bussanich Sr. used a business entity he controlled to fund each short sale transaction and the subsequent repurchase of those properties. Bussanich Jr., the owner of record of both properties, negotiated the short sales with the lenders using materially false information that misrepresented the circumstances of the short sales, the relationships of the parties, and the source of funding for the transactions.
Approximately two years after the fraudulent short sales, Bussanich Sr. bought the properties back from the straw purchasers using money that he owed his business partner from an earlier venture.
Bussanich Sr. also failed to disclose on his tax returns hundreds of thousands of dollars in income that he received from his purported medical clinics and surgical centers. He used those funds to purchase high-end luxury vehicles worth a total of over $300,000, including two Land Rover sport utility vehicles and a Ferrari Spyder. He also used those funds to purchase official bank checks to fund the fraudulent short sales.
The bank fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a maximum potential fine of $1 million. The tax evasion charge carries a maximum potential penalty of five years in prison and a maximum potential $250,000 fine. Sentencing is scheduled for Jan. 23, 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 special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the Office’s Economic Crimes Unit, and Nicholas P. Grippo, Attorney in Charge of the Trenton Office.
Atlantic County Man Admits Personal Income Tax EvasionRead the Press Release
CAMDEN, N.J. - An Atlantic County, New Jersey, man today admitted evading payment of income taxes on money he embezzled from his business, U.S. Attorney Craig Carpentino announced.
Barry Markman, 62, of Margate, New Jersey, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with one count of evasion of income tax.
According to documents filed in this case and statements made in court:
Markman was one of the owners of a company that sold and installed shutters, shades and blinds to retail customers. The company also sold shutters, shades and blinds to wholesale customers using various other trade names. Markman admitted that between 2012 and 2016, he took checks written by the company’s customers and deposited those funds into his personal bank account. He later used those funds to gamble.
For 2012 through 2016, Markman substantially underreported his income by initially failing to include on his income tax returns $618,002 he received directly from the company’s customers. Markman admitted that he owed to the United States on this income he embezzled from the company an additional tax of $170,704.
The charge to which Markman pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Dec. 6, 2019.
U.S. Attorney Carpenito credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, 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.
Defense counsel: Robert Williams Esq., Haddonfield, New Jersey
Pharmacy Owner Charged in Multimillion-Dollar Scheme to Commit Health Care Fraud and Pay Illegal Bribes to DoctorRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today for his role in conspiracies to commit health care fraud and to bribe a doctor, U.S. Attorney Craig Carpenito announced.
Eduard Shtindler, a/k/a “Eddy,” 36, of Paramus, New Jersey, is charged by complaint with one count of conspiracy to commit health care fraud and one count of conspiracy to pay illegal kickbacks to a doctor. He is scheduled to make his initial court appearance today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
According to documents filed in this case and statements made in court:
From 2012 through at least 2017, Shtindler owned and operated Empire Pharmacy – now closed – in West New York, New Jersey. Starting in 2015, Empire began filling prescriptions for expensive specialty medication that required “prior authorization” before being approved for reimbursement by Medicare, Medicaid, and some private insurance providers. Shtindler intended to entice doctors to use Empire for specialty medication prescriptions by showing that, among other things, Empire received prior authorization approval more successfully than any other pharmacies. To do that, he directed Empire employees, including two pharmacists, to repeatedly falsify prior authorization forms for medications for various conditions, including psoriasis and Hepatitis C. In recorded conversations, Shtindler admitted to his and Empire’s practice of falsifying prior authorization forms in order to receive approval for medication that would not have otherwise been approved. Shtindler and Empire received approximately $2 million in reimbursement payments from Medicare, Medicaid, and other insurance carriers that they otherwise would not have received.
From 2012 through early 2017, Shtindler also participated in a conspiracy to pay bribes to a psychiatrist in Hudson County, New Jersey, to induce the doctor to send prescriptions to Empire. Shtindler sent Empire employees to deliver some of the bribe payments to the doctor. On occasion, Shtindler secreted cash bribes, in $100 denominations, in pill bottles that were delivered to the doctor. In exchange for these bribes, the doctor steered patients to Empire pharmacy, even though the patients used other pharmacies closer to their homes for all of their other prescriptions. In one recorded conversation between Shtindler and a former Empire employee who had delivered a bribe to the doctor on Shtindler’s behalf, Shtindler stated: “You think [the doctor]’s going to go to the FBI and rat himself out?” In another conversation with the same former employee, Shtindler said: “First off, I didn’t make you do it. I didn’t put a gun to your head. We all made money together.” Empire dispensed approximately $3 million in medications prescribed by the psychiatrist.
The count of conspiracy to commit health care fraud carries a maximum penalty of 10 years in prison. The count of conspiracy to pay illegal kickbacks carries a maximum penalty of five years in prison. Both counts are also punishable by a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and the N.J. Office of the State Comptroller, under the direction of Comptroller Philip James Degnan, with the ongoing investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care and Government Fraud Unit of the U.S. Attorney’s Office in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Camden Man Admits Role in Stolen Identity Refund Fraud Scheme and Obstruction of JusticeRead the Press Release
CAMDEN, N.J. – A Camden man today admitted cashing fraudulently obtained tax refund checks issued by the U.S. Treasury, unlawfully utilizing the stolen identities of residents of Puerto Rico to effectuate the scheme, and tampering with a witness, U.S. Attorney Craig Carpenito announced.
Alberto Sanchez, 34, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to five counts of an indictment: two counts of theft of government funds, two counts of aggravated identity theft and one count of tampering with a witness or victim.
According to documents filed in this case and statements made in court:
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks. Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. They then complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund. They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access. With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control or cashing the checks at check cashing businesses.
For the 2013 tax year, more than 3,300 SIRF tax returns were filed using the names and Social Security numbers of residents of Puerto Rico, and where the refunds were directed to be mailed to a small section of Pennsauken, New Jersey. Of the 3,300 returns filed, several of the refunds checks were issued and ultimately cashed at check cashing agencies in New Jersey, Philadelphia, and New York using false and fraudulent identifications, including fake New Jersey driver's licenses, fake Social Security cards, and fake Department of Homeland Security Permanent Resident Identification cards.
On March 28, 2018, Sanchez and others were indicted by a federal grand jury. According to the indictment, the defendants and their conspirators obtained stolen identities of residents of Puerto Rico to falsely and fraudulently generate income tax refund checks. The conspirators recruited mail carriers from the U.S. Postal Service as part of the scheme to steal the tax refund checks from the mail. The mail carriers were paid for every U.S Treasury check that was stolen. The conspirators paid “check couriers” to cash the tax refund checks in a variety of ways, including at check cashing businesses in and around Camden. The check couriers presented false and fraudulent identifications at the check cashing businesses matching the names on the tax refund checks in order to cash the checks. The scheme caused $565,091 in losses to the U.S. Treasury.
Sanchez admitted that during 2014, he cashed Treasury income tax refund checks that were issued to other people. He used an Alien Permanent Resident Identification Card, which had his photograph, but the name, address and identifying information of another individual, and a Social Security card, which had a name and Social Security number that matched the information on the income tax refund check. Sanchez also admitted that, upon finding out that another person was arrested for participating in the scheme, he told that person to lie to investigators.
The counts of theft of government funds are each punishable by a maximum of 10 years in prison; the count of witness tampering is punishable by a maximum of 20 years in prison; and the counts of aggravated identity theft are each punishable by a mandatory minimum of two years in prison. All the counts are also punishable by a fine of up to $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 10, 2019.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, Newark Field Office, and Special Agent in Charge Guy Ficco, Philadelphia Field Office; and special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, with the investigation leading to today’s guilty plea. He also thanked the U.S. Postal Inspection Service for its assistance with the investigation.
The government is represented by Assistant U.S. Attorney Jason M. Richardson and Assistant U.S. Attorney Christina O. Hud of the Criminal Division.
The charges and allegations against the remaining codefendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Bronx, New York, Man and Middlesex County Man Sentenced for Their Roles in Prostitution Ring Involving a MinorRead the Press Release
TRENTON, N.J. – A Middlesex County, New Jersey, man and a Bronx, New York, man have been sentenced for their respective roles in a 2018 scheme in which a minor was advertised and provided for commercial sex acts, U.S. Attorney Craig Carpenito announced today.
Aryeh Goodman, 37, of East Brunswick, New Jersey, was sentenced today to 18 months in prison. He previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with interstate travel in aid of a racketeering enterprise. Richard Ortiz, 24, a/k/a “Ace,” of Bronx, New York, was sentenced Aug. 27, 2019, to 96 months in prison. He previously pleaded guilty before Judge Wolfson to an information charging him with conspiracy to commit the sex trafficking of a child. Judge Wolfson imposed both sentences in Trenton federal court.
According to documents filed in this case and statements made in court:
From January 2018 through February 2018, Ortiz and his codefendant, Gabriella Colon, recruited, enticed, and advertised Minor Victim-1, knowing that Minor Victim-1 was less than 18 years old and would be caused to engage in one or more commercial sex acts. Ortiz previously acknowledged having transported Minor Victim-1 from New York into New Jersey and collecting money from numerous individuals who paid to have sexual relations with Minor Victim-1. Aryeh Goodman previously admitted answering an online advertisement that depicted Minor Victim-1 and presented Minor Victim-1 for various sexual acts. Goodman, a previously convicted sex-offender, acknowledged travelling to the East Brunswick motel where Minor Victim-1 was located and paying Ortiz and Colon so he could engage in sexual activities with Minor Victim-1.
In addition to the prison terms, Judge Wolfson sentenced Goodman to one year of supervised release and Ortiz to five years of supervised release. She ordered Ortiz to register as a sex-offender upon being released from prison. Colon previously pleaded guilty to an information charging her with one count of conspiracy to commit sex trafficking of a child and is scheduled to be sentenced Sept. 26, 2019.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, and detectives with the Middlesex County Prosecutor’s Office with the investigation. He also thanked the East Brunswick and Fort Lee Police Departments for their assistance.
The government is represented by Special Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Organized Crime Drug Enforcement Task Force/Narcotics Unit in Newark.
South Carolina Man Indicted for Running $1.1 Million Foreign Currency Ponzi SchemeRead the Press Release
NEWARK, N.J. – A South Carolina man was indicted today on charges that he defrauded at least 20 people by soliciting investments in a phony foreign currency trading scheme, Attorney for the United States Rachael Honig announced.
Thomas Lanzana, 51, of Pawleys Island, South Carolina, and formerly of New Jersey, was charged by indictment with two counts of wire fraud and one count of commodities fraud. He was previously charged with the same offenses by criminal complaint on Aug. 10, 2018.
According to documents filed in this case and statements made in court:
From at least 2013, Lanzana solicited approximately $1.1 million from at least 45 customers to invest in what he claimed were highly successful, algorithm-based trading pools in foreign currency derivatives (forex) and other financial instruments. He misrepresented to prospective customers that he was a successful forex trader when he was not. To keep his customers’ trust, Lanzana sent them false account statements, posted false monthly account statements to his companies’ websites showing balances – some in excess of $800,000 – for forex trading accounts that did not exist, and sent false tax documents to customers reporting earnings that did not exist.
Lanzana misappropriated at least $350,000 in customer funds, using some to repay earlier investors in the manner of a Ponzi scheme, and to pay for his personal expenses, including purchases on Amazon.com, payments to a luxury car dealer and a jewelry retailer, and golf expenses.
The counts of wire fraud with which Lanzana is charged carry a maximum potential penalty of 30 years in prison and a fine of $1 million. The count of commodities fraud carries a maximum potential penalty of 10 years in prison and a fine of $1 million, or twice the gross gain or loss.
Attorney for the United States Honig credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s indictment. She also thanked the U.S. Commodity Futures Trading Commission’s Division of Enforcement for its role in the investigation.
The government is represented by Assistant U.S. Attorney Anthony P. Torntore of the U.S. Attorney’s Office’s Cyber Crime Unit.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Philadelphia Woman Arrested in $100 Million Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – An investment fund manager was arrested today in connection with an alleged $100 million securities fraud scheme, U.S. Attorney Craig Carpenito announced.
Brenda Smith, 59, of Philadelphia, Pennsylvania, is charged by complaint with four counts of wire fraud and one count of securities fraud. Smith was arrested in Philadelphia and is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this case and statements made in court:
From February 2016 to August 2019, Smith allegedly orchestrated a scheme using her investment fund, Broad Reach Capital, in which she lied to investors about the assets and performance of the fund and falsely stated that she would invest their funds in particular trading strategies. Smith collected more than $100 million in investments. Instead of investing the money as she promised, she diverted millions of dollars of investor funds out of Broad Reach Capital for other purposes, including paying other investors. When confronted with redemption requests by several large investors in Broad Reach Capital, Smith failed to honor the redemption requests and lied about the status of their investment and the fund.
In one instance, Smith allegedly induced Victim 1 to invest in Broad Reach Capital, telling Victim 1 that it was a trade-focused investment fund that employed particular trading strategies. Smith provided a one-page summary “tear sheet” about Broad Reach Capital that contained purported historical performance information, including a claim that the fund had a 1.76 percent return in February 2018. In reality, Broad Reach Capital’s brokerage accounts lost approximately 50 percent of their value in February 2018. Smith also told Victim 1 that the assets of Broad Reach Capital were tens of millions of dollars higher than they actually were. Victim 1 invested millions of dollars. Smith did not invest Victim 1’s money in the trading strategies as promised, but instead transferred Victim 1’s money to non-Broad Reach Capital bank accounts that Smith controlled and paid other investors with Victim 1’s money. Victim 1 eventually made a redemption request for more than $46 million. Smith failed to pay any portion of the redemption request, providing a series of shifting false excuses and explanations for the lack of redemption.
The wire fraud counts are each punishable by a maximum of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. The securities fraud count is punishable by a maximum of 20 years in prison and a fine of $5 million.
U.S. Attorney Carpenito credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Michael Harpster, and special agents of the U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, 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 G. Jeffrey Boujoukos, for its assistance.
The government is represented by Senior Trial Counsel Courtney A. Howard of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Twenty People Charged in Connection with Monmouth County Drug Trafficking ConspiracyRead the Press Release
TRENTON, N.J. – Twenty people have been charged for their roles as members, associates, and suppliers of a drug-trafficking conspiracy that distributed cocaine and crack cocaine in the Monmouth County, New Jersey, area, U.S. Attorney Craig Carpenito announced today.
Nineteen defendants were arrested today and one remains at large. They are charged with conspiracy to distribute 500 grams or more of cocaine or 280 grams or more of crack cocaine (See chart below). The defendants arrested today are scheduled to have their initial appearances this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court.
“As alleged in complaint, the defendants in this organization distributed significant amounts of cocaine and crack cocaine throughout Monmouth County and surrounding municipalities,” U.S. Attorney Carpenito said. “By coordinating closely with our federal, state and local law enforcement partners, we continue to work hard to substantially reduce on the drug trade in in our communities in these areas, and across the state.”
“Today's operation is another example of the FBI's dedication to keeping the public safe,” FBI Special Agent-in-Charge Gregory W. Ehrie, Newark, said. “We know it is a way of life for drug dealers to pollute their neighborhoods with toxic substances so they can profit. It is the FBI's way of life to use dogged determination to find those who are doing the most damage, get them off the streets, and help our local and federal prosecutors put them out of business so the neighborhoods might recover. Our job is made easier when community members take a stand and report any illegal activity they witness.”
According to the documents filed in this case and statements made in court:
Between April 2019 and August 2019, the defendants and others engaged in a narcotics conspiracy that operated primarily in municipalities throughout Monmouth County – including Cliffwood, Keansburg, Matawan, Keyport, Red Bank, Long Branch, Neptune, and Asbury Park, as well as Brick Township in Ocean County – and which sought to profit from the distribution of cocaine and crack cocaine. Through the interception of telephone calls and text messages pursuant to court-authorized wiretap orders, and other investigative techniques, law enforcement officials learned that defendant Damion Helmes obtained regular supplies of cocaine from defendants Derrick Hayes and Dequan Copeland. Helmes then distributed that cocaine, portions of which he converted into crack cocaine, for profit, to other distributors, sub-dealers, and end users throughout Monmouth County. During the wiretap portion of the investigation, law enforcement intercepted numerous communications by and between the conspirators regarding such issues as cocaine quality and availability, pricing, packaging, quantity, and customer satisfaction.
U.S. Attorney Carpenito credited Special Agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Organization Task Force (including representatives from the Bradley Beach, Brick, Howell, Toms River, Union Beach and Marlboro police departments, and the Monmouth County Sheriff's Office) under the direction of Special Agent in Charge Gregory W. Ehrie; the Red Bank Police Department, under the direction of Chief Darren McConnell; the Keansburg Police Department, under the direction of Chief James Pigott; the Middletown Police Department, under the direction of Chief Craig Weber; the Monmouth County Prosecutor’s Office, under the direction of Monmouth County Prosecutor Christopher J. Gramiccioni; the Highlands Police Department, under the direction of Chief Robert Burton; the Holmdel Police Department, under the direction of Chief John Mioduszewski; and the Long Branch Police Department, under the direction of Chief Jason Roebuck, with the investigation leading to today’s charges. U.S. Attorney Carpenito also thanked the Monmouth County Sheriff’s Office, under the direction of Sheriff Shaun Golden; the Monmouth County Police Academy, under the direction of Director Thomas Mahon; and the Monmouth County Correctional Institution, under the direction of Warden Donald Sutton; for their assistance.
The government is represented by Special Assistant U.S. Attorney Ian D. Brater of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.
NAME
RESIDENCE
AGE
CHARGE
SENTENCE EXPOSURE
Damion Helmes
Cliffwood, NJ
39
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40 years
Minimum of 10 years, maximum of Life
Derrick Hayes
Neptune, NJ
37
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Minimum of 5 years, maximum of 40 years
Dequan Copeland
Red Bank, NJ
40
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Minimum of 5 years, maximum of 40 years
Dawn Stephens
Keansburg, NJ
38
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40 years
Minimum of 10 years, maximum of life
Shantay Walker
Howell, NJ
42
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40 years
Minimum of 10 years, maximum of life
*Keith Logan
Long Branch, NJ
38
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40 years
Minimum of 10 years, maximum of life
Shamar Dudley
Long Branch, NJ
42
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40 years
Minimum of 10 years, maximum of life
Cassius Williams
Keyport, NJ
26
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Minimum of 5 years, maximum of 40
Tonya Underwood
Matawan, NJ
46
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Michelle Torrez
Matawan, NJ
44
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Elizabeth Conover
Laurence Harbor, NJ
28
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Curtis Jenkins
Keyport, NJ
36
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Ralph Lee
Keyport, NJ
40
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Jermaine Hicks
Wall, NJ
39
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Minimum of 5 years, maximum of 40
Skyler Rogers
Cliffwood, NJ
35
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Terry Haupt
Neptune, NJ
35
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Minimum of 5 years, maximum of 40
Amad Jones
Long Branch, NJ
37
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Minimum of 5 years, maximum of 40
Eric Yarbrough
Keansburg, NJ
28
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Rondell Hill
Lakewood, NJ
35
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Conspiracy to Distribute or Possess with Intent to Distribute more than 280 grams of crack cocaine
Minimum of 5 years, maximum of 40
Minimum of 10 years, maximum of life
Malcolm Gatson
Cliffwood, NJ
43
Conspiracy to Distribute or Possess with Intent to Distribute more than 500 grams of cocaine
Minimum of 5 years, maximum of 40
*denotes at large
Leader of Violent East Orange Street Gang Charged with Drug and Gun OffensesRead the Press Release
NEWARK, N.J. – An East Orange, New Jersey, man appeared in court today on charges of distribution of phencyclidine and marijuana, possession of firearms in furtherance of a drug distribution crime, and the use of a minor to distribute drugs, U.S. Attorney Craig Carpenito announced.
Tyree Thomas, a/k/a “Hellboy,” 26, is charged by complaint with seven counts of distribution of phencyclidine, commonly known as PCP; one count of conspiracy to distribute marijuana and phencyclidine; one count of possession with intent to distribute phencyclidine; one count of using a minor to distribute drugs; and one count of possession of a firearm in furtherance of a drug trafficking crime. He appeared today before U.S. Magistrate Judge James B. Clark III in Newark federal court and was detained without bail.
According to documents filed in this case:
Thomas is allegedly the leader of the East Orange set of the Bloods street gang known as the “Sheedside Pirus,” and a high-ranking member of a separate East Orange Bloods set known as the MOB Pirus, both of which primarily operate out of East Orange, Orange and Newark.An investigation conducted over the course of several months by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) included multiple purchases of PCP and marijuana from Thomas by an undercover ATF agent between April and July of 2019.
The counts of conspiracy to distribute marijuana and PCP are punishable by a maximum of 40 years in prison. The count of employing a juvenile in a drug distribution scheme is punishable by a maximum of 80 years in prison. The count of distribution of PCP is punishable by a maximum of 20 years in prison. The count of possession of a firearm in furtherance of a drug trafficking crime is punishable by five years in prison, to be served consecutively to any other sentence.
U.S. Attorney Carpenito credited special agents of the ATF, under the direction of Special Agent in Charge Charles J. Patterson; officers of the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose; officers of the East Orange Police Department, under the direction of Chief Phyllis Bindi; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt; the N.J. State Police, under the direction of Col. Patrick J. Callahan; the N.J. Department of Corrections, under the direction of Acting Commissioner Marcus O. Hicks Esq.; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; and the Orange Police Department under the direction of Director Todd Warren, with the investigation leading to the charges.
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.
The government is represented by Special Assistant U.S. Attorney Naazneen Khan and Senior Trial Counsel Robert Frazer of the Criminal Division’s Violent Crimes Unit, and Assistant U.S. Attorney Vera Varshavsky of the Criminal Division’s Organized Crime/Gangs Unit.The charges and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Charles Alvarez Esq., Bloomfield, New Jersey
Morris County Man Admits Possessing Bombs and Being Felon in Possession of GunsRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, man admitted today possessing bombs, precursor materials, and being a felon in possession of guns, U.S. Attorney Craig Carpenito announced.
Christopher Faschan, 31, of Landing, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Newark federal court to an information charging him with one count of unlawful possession of destructive devices and one count of being a felon in possession of firearms and ammunition.
According to documents filed in this case and statements made in court:
On Feb. 1, 2019, Faschan drove to the home of a person identified in court documents as “Individual 1” in Stanhope, New Jersey, and displayed what he claimed to be a bomb. Shortly thereafter, Faschan detonated the bomb in the area of Lake Lackawanna in Stanhope.
On Feb. 4, 2019, law enforcement agents interviewed Faschan, who said that he had ignited the bomb. He described it as two pounds in weight and explained how he used and mixed Potassium Perchlorate, Aluminum Powder, and Tannerite to make several bombs that were in his home.
Law enforcement agents executed a court-authorized search of Faschan’s home and recovered a cache of weapons, ammunition, and firearms, including:
Firearms, Ammunition, and Large Capacity Magazines
-
9mm Smith and Wesson semi-automatic, Model 5, high-capacity handgun;
-
9mm Fabrique Nationale Herstal semi-automatic handgun, Model FNX-9;
-
Mossberg 12-Gauge shotgun, Model 500;
-
Savage .22 Caliber long rifle, Model 64;
-
Sturm Ruger .22 Caliber handgun, Model Mark 1;
-
.556 Caliber ammunition magazine with a 100-round capacity;
-
Numerous pistol magazines loaded with 9mm hollow-point rounds.
Explosive Devices and Precursor Materials
-
Device One, which contained explosive material inside a black container with BB fragmentation, and a green fuse protruding from the device in order to initiate the destructive device;
-
Device Two, which contained several containers of lighter fluid affixed around explosive material in the center with a fuse protruding from the device.
-
Four plastic containers labeled “exploding targets” containing a substance that appears to be Ammonium Nitrate;
-
One package labeled “Thermite” containing separated chemicals;
-
One container containing dark-colored powder labeled “Indian Dark;”
-
One unlabeled plastic bag containing fine, dark-colored powder;
-
One clear plastic container labeled “German Ecartk aluminum powder,”
-
One plastic container labeled “Potassium Perchlorate;”
-
Three mason jars containing a white substance labelled “KC104;”
-
One package of Hobby Fuse;
-
Two plastic containers containing sphere-shaped, gray energetic pellets;
-
One red and white can labeled “FFg super fine black rifle powder;”
-
Thirteen homemade MSeries pyrotechnic devices;
-
Four improvised pyrotechnic shot shells;
-
One Box labelled “10 flash banger rounds 37MM” containing 17 pyrotechnic shot shells;
-
One plastic container containing suspected black powder;
-
One plastic container containing dark colored fine powder;
-
One bag containing electrical initiators.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; officers of the Byram Police Department, under the direction of Chief Peter J. Zabita; the Roxbury Police Department, under the direction of Chief Marc Palanchi; the Sussex County Prosecutor’s Office, under the direction of Prosecutor Francis A. Koch; officers of the Morris County Sheriff’s Office, under the direction of Sheriff James M. Gannon; and officers of the Morris County Prosecutor’s Office, under the direction of Prosecutor Frederic M. Knapp, with the investigation leading to the charges.
The counts of possession of a destructive device and possession of firearms by a previously convicted felon each carry a maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 25, 2019.
The government is represented by Assistant U.S. Attorney Dean C. Sovolos of the U.S. Attorney’s Office National Security Unit.
-
Four Paterson, New Jersey, Men Charged with Stealing $450,000 in Checks from Dozens of Mail Collection BoxesRead the Press Release
NEWARK, N.J. – Four Paterson, New Jersey, men are charged for their roles in a scheme to break into U.S. Postal Service (USPS) mail collection boxes throughout northern New Jersey and steal the mail – particularly, checks – inside, U.S. Attorney Craig Carpenito announced today.
Aneuris Henriquez-Lopez, 24, Eleazer Peralta, 19, Fernando Santiago, 26, and Rikinson Rodriguez-Sanchez, 25, are each charged by complaint with one count of conspiracy to commit bank fraud. Henriquez-Lopez, Peralta and Santiago were arrested today and are scheduled to make their initial appearances this afternoon before U.S. Magistrate Court Judge James B. Clark III in Newark federal court. Rodriguez-Sanchez remains at large.
According to documents filed in this case and statements made in court:
The defendants allegedly stole checks from USPS mail collection boxes in Passaic, Bergen, Morris, Essex, and Middlesex counties, and elsewhere, and fraudulently deposited those checks into various bank accounts, often within a day of being stolen. Some of the mail collection boxes were broken into with the use of pry bars, usually late at night.
The conspiracy to commit bank fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine.
U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Inspector-in-Charge James Buthorn, with the investigation leading to today’s charges. He also thanked the U.S. Secret Service and U.S. Marshals Service for their assistance with the investigation.
The government is represented by Assistant U.S. Attorney Andrew Macurdy of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Sussex County Man Charged with Unlawfully Possessing ArsenalRead the Press Release
NEWARK, N.J. – A Sussex County, New Jersey, has been charged with possessing an arsenal of weapons and ammunition, along with white supremacist and racist propaganda, U.S. Attorney Craig Carpenito announced today.
Joseph Rubino, 57, of Lafayette Township, New Jersey, is charged by complaint with one count each of possession with intent to distribute methamphetamine, possession of firearms in furtherance of a drug-trafficking crime, and possession of firearms by a convicted felon. Rubino will appear in Newark federal court at a date to be determined.
According to documents filed in this case and statements made in court:
On July 24, 2019, following a motor vehicle accident, officers with the N.J. State Police observed numerous weapons and ammunition inside Rubino’s crashed vehicle. After executing court-authorized warrants to search Rubino’s vehicle and residence, law enforcement recovered from Rubino’s car and house the following:
- Intratec Arms Model TEC-DC9 semi-automatic assault handgun;
- Cobray Arms Mac-11 9mm semi-automatic assault pistol with a high-capacity magazine;
- Keltec CMR30 .22 caliber semi-automatic rifle loaded with 16 .22 caliber hollow-point cartridges;
- High Standard Derringer .22 caliber double-barrel handgun;
- Polymer 80 9mm semi-automatic handgun;
- Ithaca M-66 20-gauge single shotgun;
- Remington Model 700 .223 caliber bold action rifle with scope;
- Thompson Center .50 caliber muzzle-loading rifle with scope;
- Remington Model 870 Wingmaster 12-gauge pump shotgun;
- New England Firearms 20-gauge single shot shotgun;
- Remington Model 760 .300 Savage pump rifle;
- Glenfield Mod 60 .22 LR caliber semi-automatic rifle;
- Two sawed-off double-barrel shotgun barrels;
- Several high-capacity magazines;
- Numerous silencers;
- An assault rifle scope;
- A grenade launcher;
- A ballistics vest; and
- Numerous additional ammunition of various calibers.
In addition to the firearms and ammunition, law enforcement recovered approximately 70 grams of methamphetamine, seven kilograms of marijuana, and 200 marijuana vape cartridges from Rubino’s house.
Rubino was also in possession of a box containing clothing and bumper stickers with “SS Bolts,” which are common white supremacist and neo-Nazi symbols, as well as a document entitled “N****r Owner’s Manual,” containing racist material and purporting to be an instruction manual for owning a slave.
U.S. Attorney Carpenito credited members of the N.J. State Police, under the direction of Col. Patrick J. Callahan; and special agents of the ATF, under the direction of Special Agent in Charge Charlie J. Patterson in Newark with the investigation leading to the charges. He also thanked the Warren County Prosecutor’s Office, under the direction of Prosecutor Richard T. Burke, and the Sussex County Prosecutor’s Office, under the direction of Prosecutor Francis A. Koch for their assistance.
The count of possession of methamphetamine with intent to distribute is punishable by a maximum of 40 years in prison; the count of possession of a firearm by a convicted felon is punishable by a maximum of 10 years in prison; and the count of possession of a firearm in furtherance of a drug-trafficking crime is punishable by a maximum of life in prison.
The case is being prosecuted by Assistant U.S. Attorney Vera Varshavsky of the Organized Crime and Gangs Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until convicted.
South Jersey Woman Sentenced to Two Years in Prison for Health Care Fraud Conspiracy Targeting State Health Benefits ProgramsRead the Press Release
CAMDEN, N.J. – An Ocean County, New Jersey, woman was sentenced today to 24 months in prison for defrauding New Jersey state health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito announced.
Kristie Masucci, 37, of Cedar Run, New Jersey, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging her with conspiracy to commit health care fraud. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
From January 2015 through February 2016, Masucci served as a recruiter in the conspiracy and persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the information as the “Compounding Pharmacy.” The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.
The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the information as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.
Masucci and conspirators working under her recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid one of Masucci’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Masucci and other members of the conspiracy.
Masucci’s conspirators would then cause the prescriptions to be signed by a doctor who never evaluated whether the patients had a medical necessity for the compounded medication. The prescriptions were then faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
According to the information, the Pharmacy Benefits Administrator paid the Compounding Pharmacy more than $50 million for compounded medications mailed to individuals in New Jersey, including $1.8 million for prescriptions submitted by Masucci and her cohorts. Masucci received $388,608 for her role in the scheme.
In addition to the prison term, Judge Kugler sentenced Masucci to three years of supervised release and ordered her to pay $1.8 million in restitution.
U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur 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 sentencing. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Gurbir S. Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys R. David Walk Jr. and Christina Hud of the U.S. Attorney’s Office in Camden.
Defense counsel: Amy Luria Esq., Roseland, New Jersey
Egg Harbor Township Man Sentenced to Eight Years in Prison for Receiving Child PornographyRead the Press Release
TRENTON, N.J. – An Atlantic County, New Jersey, man was sentenced today to 96 months in prison for receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Matthew Wolny, 41, of Egg Harbor Township, New Jersey, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to an information charging him with one count of receipt of child pornography. Judge Martinotti imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:In September 2013, Wolny, who was then living in Jackson, New Jersey, used a peer-to-peer file sharing software, which he had installed on his computer, to download video files containing images of child sexual abuse from the internet to his computer hard drive.
In addition to the prison term, Judge Martinotti sentenced Wolny to 10 years of supervised release.
U.S. Attorney Carpenito credited special agents of Homeland Security Investigations (HSI), under the direction of Brian Michael, and the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley D. Billhimer, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office’s Camden Office.
Defense counsel: Jack Wenik Esq., Newark
Two Essex County Men Sentenced to Federal Prison Terms on Drug and Weapons ChargesRead the Press Release
NEWARK N.J. – Two Essex County, New Jersey, men were sentenced today to federal prison terms following their convictions on multiple drug and weapons offenses, U.S. Attorney Craig Carpenito announced.
Jesse Tullies, 54, of Hillside, New Jersey, was sentenced to 235 months in prison and Eugene Williams, 34, of Newark, was sentenced to 190 months in prison. Both were convicted on one count each of conspiracy to distribute heroin, distribution of heroin, distribution of cocaine base, being a felon in possession of a weapon, and use and carrying of a firearm in furtherance of a drug trafficking crime. The defendants were convicted following a three-day trial in June 2018 before U.S. District Judge Kevin McNulty, who imposed the sentences today in Newark federal court.
According to documents filed in this case and the evidence at trial:
On Oct. 4, 2017, Essex County Sheriff’s Officers witnessed Tullies and Williams involved in what they believed were a number of illegal drug sales in the area of Clinton Place and Weequahic Avenue in Newark. Tullies and Williams were subsequently arrested, and during a search, officers recovered $1,275 in cash from Tullies and $360 from Williams.
During a search of the area where officers had seen Tullies and Williams retrieve suspected narcotics from under the rear bumper of a car, officers also recovered the following items:
• One plastic bag containing 198 glassine envelopes containing suspected heroin, including four glassine envelopes stamped “Black Jack”;
• One plastic bag containing 22 smaller plastic bags and ten plastic jugs containing cocaine base and cocaine;
• A 9mm Beretta semiautomatic handgun loaded with two rounds of 9mm ammunition;
• A 9mm Taurus Millennium PT111 G2 semiautomatic handgun loaded with eight rounds of Sig Sauer 9mm ammunition and four rounds of Winchester 9mm ammunition; and
• A 9mm FEG PA-63 Makarov semiautomatic handgun loaded with two rounds of JSC Barnaul Machine Tool Plant 9mm hollow point ammunition.
In addition to the prison terms, Judge McNulty sentenced Tullies and Williams each to three years of years of supervised release.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson in Newark; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and officers of the Essex County Sheriff’s Office, under the direction of Sheriff Armando B. Fontoura, with the investigation leading to today’s sentencings.
The government is represented by Assistant U.S. Attorney Elaine Lou of the U.S. Attorney’s Office in Newark and Assistant U.S. Attorney Francisco Navarro of the U.S. Attorney’s Office, Eastern District of New York.
Defense counsel:
Tullies: James R. Murphy Esq., Princeton, New Jersey
Williams: Pasquale F. Giannetta Esq., NewarkUnited States Reaches Agreements with Ocean County and Union County Boards of Elections to Ensure Compliance with Americans with Disabilities ActRead the Press Release
NEWARK – The United States has reached agreements with the election boards for Ocean and Union counties to ensure people with disabilities can physically access polling locations, U.S. Attorney Craig Carpenito announced today.
From 2015 to 2019, the federal government surveyed more than 100 polling places through four elections in Ocean and Union counties. The surveys found many of those polling places had physical barriers to access, potentially impeding voters who have mobility or vision impairments. The Boards of Elections in those two counties expressed their commitment to making all polling locations accessible to voters with disabilities, as required under Title II of the Americans with Disabilities Act (ADA).
Under the memoranda of agreement, the county election boards will employ temporary measures, such as portable ramps and signage, where appropriate to make polling places accessible. They will also train their poll workers on the requirements of the ADA and how to use temporary measures to ensure each polling place is accessible. The county boards will also survey polling locations for accessibility and maintain the accessibility of each polling place it uses on Election Day. When selecting future polling places, the agreements also require the county boards to select locations that will be accessible during elections. The Department of Justice will monitor the county boards’ compliance with the agreements and provide the counties with technical assistance.
The Ocean and Union county election boards fully cooperated with the U.S. Attorney’s Office to voluntarily reach the agreements, and agreed to take remedial steps soon after learning of these findings to improve physical accessibility at polling places.
“The right of every voter with a disability to vote in person at his or her local polling place is an integral part of our democratic system of government that must be not be diminished or restricted by barriers to access,” U.S. Attorney Carpenito said. “These agreements protect this fundamental right by ensuring voting access to polling places to individuals with mobility disabilities.”
These agreements are part of the Justice Department’s ADA Voting Initiative, which focuses on protecting the voting rights of individuals with disabilities. A hallmark of the ADA Voting Initiative is its collaboration with jurisdictions to increase accessibility at polling places. The Department of Justice has surveyed more than 1,600 polling places and increased polling place accessibility in more than 35 jurisdictions.
The United States is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Civil Rights Unit, Assistant U.S. Attorney Kelly Horan Florio, of the U.S. Attorney’s Civil Rights Unit, and Assistant U.S. Attorneys Elizabeth A. Pascal and Kristin Vassallo, Deputy Chiefs of the U.S. Attorney’s Civil Division.
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
Middlesex County Man Charged with Securities Fraud and Aggravated Identity TheftRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man was indicted today by a federal grand jury for running a multi-year investment fraud scheme that caused millions of dollars of losses, Attorney for the United States Rachael A. Honig announced.
Sandy John Masselli, 57, of Old Bridge, New Jersey, is charged in a superseding indictment with one count of bank fraud, two counts of wire fraud, two counts of securities fraud and one count of aggravated identity theft. Masselli was originally indicted on two counts of bank fraud and three counts of wire fraud on September 19, 2018.
According to the documents filed in this case:
From September 2011 through October 2017, Masselli solicited millions of dollars in investments from retail investors by fraudulently touting the prospect of his online gaming company, Carlyle Entertainment Ltd., formerly Carlyle Gaming & Entertainment Ltd. (Carlyle), to conduct a lucrative initial public offering (IPO) of its stock on either the NASDAQ or the New York Stock Exchange (NYSE). Masselli induced investors to purchase shares of Carlyle stock by promising them steeply discounted prices in advance of the purported IPO and assuring them that the stock price would increase significantly after the IPO. Masselli further represented that the IPO would occur within weeks of the investors’ stock purchases.
However, as Masselli knew, Carlyle was not prepared to conduct an IPO, given that neither Masselli nor anyone else on behalf of Carlyle ever filed an application with the NASDAQ or the NYSE to list Carlyle stock on either exchange, or filed with the Securities and Exchange Commission (SEC) a registration statement to list Carlyle shares on a national exchange. Masselli further misrepresented to the investors how he would use their investments, for example telling them that he would allocate investment funds toward improving Carlyle’s online platform and paying legal fees in connection with preparing Carlyle for a looming IPO. Contrary to these claims, however, Masselli misappropriated these funds to pay for his and his family’s own personal expenses.
Within days or weeks of receiving investor funds, Masselli deposited the monies into bank accounts he controlled, many of which were opened under names of fictitious corporate entities in an effort to conceal the source of the funds. Masselli typically used the funds to pay for personal expenses, including paying credit card balances and financing or leasing luxury automobiles.
Masselli also opened a credit card account under the assumed identity of another person, without that person’s authorization, made purchases with the account until he had almost reached or exceeded the credit limit, and then purported to send payments from a bank account that he knew did not have sufficient funds to cover the purchases. Before the fraudulent payments were rejected for insufficient funds, the credit card company temporarily credited the fraudulently opened account based on those payments, providing Masselli access to additional credit and allowing him to continue to make purchases. Masselli ultimately failed to pay the balance and the credit card company sustained a loss.
The bank fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities fraud counts each carry a maximum potential penalty of 20 years in prison and a $5 million fine. The aggravated identity theft count carries a mandatory sentence of two years in prison that must run consecutively to the sentence imposed for any other count.
Attorney for the United States Honig credited special agents of the FBI, under the direction of Special Agent in Gregory W. Ehrie in Newark, with the investigation leading to today’s superseding indictment.
The government is represented by Assistant U.S. Attorney Eric A. Boden of U.S. Attorney’s Office in Trenton.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Two Top-Level Managers Admit Roles in Camden Drug Trafficking OrganizationRead the Press Release
CAMDEN, N.J. – Two top-level managers in a drug-trafficking organization today admitted their roles in distributing significant amounts of illegal drugs in Camden, U.S. Attorney Craig Carpenito announced.
Ronnie Lopez, 45, of Pennsauken, New Jersey, and Nelson Salcedo, 41, of Camden, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to their roles in managing a drug trafficking conspiracy that was based on the 500 block of Pine Street in Camden. Lopez pleaded guilty to an information charging him with one count of conspiracy to distribute heroin, crack cocaine, cocaine and fentanyl. Salcedo pleaded guilty to an information charging him with one count of conspiracy to distribute heroin, crack cocaine and cocaine. Lopez and Salcedo are the first of 19 defendants who were charged in this case in November 2018 to plead guilty. Charges against the other defendants remain pending.
According to documents filed in this case and statements made in court:
An investigation led by the FBI used surveillance tactics, confidential informants, consensual recordings, over 40 controlled drug purchases, record checks, a GPS vehicle tracker, and several court-authorized wiretaps to uncover the operations of the Camden drug-trafficking organization.
Lopez occupied the highest position in the conspiracy, and obtained bulk quantities of illegal drugs for ultimate sale to customers. The organization also had other top-level managers and distributors, such as Salcedo, who obtained drugs from Lopez and other suppliers and prepared and packaged the drugs for distribution downstream. At their plea hearings, both Lopez and Salcedo admitted to distributing thousands of kilograms of illegal drugs in Camden.
The counts to which Lopez and Salcedo pleaded guilty carry a mandatory penalty of 10 years in prison, 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 Michael Harpster; the Camden County Police Department, under the direction of Chief J. Scott Thomson; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; the Camden County Sherriff’s Department, under the direction of Sheriff Gilbert L. Wilson; the Cherry Hill Police Department, under the direction of Chief William P. Monaghan; and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s guilty pleas. He also thanked the Drug Enforcement Administration, the U.S. Marshals Service, and the Department of Homeland Security for their assistance.
The government is represented by Assistant U.S. Attorneys Sara A. Aliabadi and Patrick C. Askin of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations against the other defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Defense counsel:
Lopez: Stanley O. King Esq., Woodbury, New Jersey
Salcedo: Rocco C. Cipparone Jr. Esq., Haddon Heights, New JerseyThree Men Arrested in ‘SNAP’ Food Stamp Benefits Theft SchemeRead the Press Release
CAMDEN, N.J. – Three men were arrested today in connection with a scheme in which they allegedly stole hundreds of thousands of dollars in government funds using fraudulently procured electronic benefits transfer (EBT) cards, U.S. Attorney Craig Carpenito announced.
Luciano Estevez, 50, and Jose Garcia, 52, both of Camden; and Juan Melo, 56, of Woodlynne, New Jersey, are charged by separate complaints with one count each of conspiracy to defraud the United States and one count each of defrauding the U.S. Department of Agriculture’s (USDA) Supplemental Nutrition Assistance Program (SNAP). They appeared this afternoon before U.S. Magistrate Judge Ann Marie Donio in Camden federal court. A fourth defendant, Octavio Rodriguez, 50, of Pennsauken, New Jersey, is charged with the same crimes and remains at large.
SNAP, formerly known as the food stamp program, is a program 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:
Estevez, Rodriguez, 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 and narcotics.
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.
Estevez 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. Estevez was able to unlawfully receive through this terminal approximately $110,000 in SNAP funds.
The conspiracy count with which all four defendants are charged carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Estevez, Rodriguez, and Garcia each are each charged with a SNAP fraud offense in which the value of the trafficked benefits exceeded $5,000, which carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss from the offense. Melo is charged with a SNAP fraud offense in which the value of the trafficked benefits is less than $5,000, but greater than $100, which carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross gain or loss from the offense.
U.S. Attorney Carpenito credited special agents of the FBI Philadelphia Field Office, South Jersey Resident Agency, both under the direction of Special Agent in Charge Michael Harpster in Philadelphia; the U.S. Department of Agriculture-Office of Inspector General, Philadelphia, under the direction of Special Agent in Charge Bethanne M. Dinkins; the Camden County Police Department, under the direction of Chief J. Scott Thomson; 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 Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; the Camden County Sheriff’s Department, the N.J. State Police; the N.J. Department of Treasury and the National Guard, with the investigation leading to the arrests.
The government is represented by Assistant U.S. Attorney Christina O. Hud of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charges and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until convicted.
Morris County Man Admits Role in Compounding Pharmacy ConspiracyRead the Press Release
NEWARK, N.J. – A Morris County, New Jersey, man today admitted participating in a conspiracy to bill health insurance companies for medically unnecessary compounded prescriptions, U.S. Attorney Craig Carpenito announced.
Peter Frazzano, 46, of Randoph, New Jersey, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Frazzano admitted that from November 2014 through March 2016 he participated in a conspiracy to defraud health insurance plans, including the N.J. State Health Benefits plan, by knowingly causing the billing of fraudulent claims for medically unnecessary prescription compounded medications, such as scar creams, pain creams, and metabolic supplements. To ensure that a physician prescribed compounded medications regardless of medical necessity, Frazzano and a conspirator recruited a doctor to sign prescriptions ordering compounded medications without ever examining or interacting with any of the individuals who were to receive the medications.The count to which Frazzano pleaded guilty is punishable by a maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of his plea agreement, Frazzano must forfeit $270,751 in criminal proceeds and pay restitution of $2,727,292. Sentencing is scheduled for Nov. 19, 2019.
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.
The government is represented by Vikas Khanna, Deputy Chief of the Criminal Division of the U.S.Attorney’s Office in Newark.
Defense counsel: Joseph Shumofsky Esq., Newark
Gang Member Charged in Connection with Two Attempted Murders as Part of RICO ConspiracyRead the Press Release
NEWARK, N.J. – A member of the New Jersey Grape Street Crips appeared in court today on charges that include two attempted murders charged as part of a RICO conspiracy, as well as narcotics trafficking, U.S. Attorney Craig Carpenito announced.
Sean Hills, a/k/a “Half A Brain,” a/k/a “Half,” a/k/a “Rydaman,” 28, of Newark, was charged in a two-count indictment with Racketeer Influenced and Corrupt Organizations (RICO) conspiracy and distribution of cocaine. Hills made his initial court appearance and was arraigned today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
Since 2015, more than 80 members of the New Jersey Grape Street Crips have been convicted federally in connection with multiple murders, attempted murders, shootings, drug trafficking, firearms charges, and witness intimidation as part of a coordinated investigation by the FBI, the Drug Enforcement Administration (DEA), and local law enforcement partners.
According documents filed in this case and statements made in court:
Hills is allegedly a long-time member of the New Jersey Grape Street Crips who has the gang’s senior hierarchy tattooed on his face. On Dec. 15, 2012, Hills repeatedly shot Victim-1 near the area of South 14th Street and 14th Avenue, an area that Hills and other gang-members were trying to take over as part of their drug-trafficking territory. On Feb. 1, 2013, Hills shot Victim-2 numerous times. Both victims survived the attacks. Hills is additionally charged with separate instances of possession with intent to distribute of cocaine.
Hills faces a maximum sentence of up to 20 years on each count for the RICO conspiracy and the narcotics charges, and a fine of $250,000 on the RICO conspiracy charge and $1 million on the drug charge.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark. 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 Armando B. Fontoura, for their long and close collaboration on the case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto, Chief of the Organized Crime and Gangs Unit, and Assistant U.S. Attorney Jamel Semper of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense Counsel: Olubukola Adetula Esq., East Orange, New Jersey
Defense Contractor to Pay $4.02 Million for Alleged Improper BillingRead the Press Release
NEWARK, N.J. – A Virginia-based military contractor doing business in New Jersey will pay $4.02 million to resolve allegations that it improperly billed the United States for extra payments to employees, U.S. Attorney Craig Carpenito, District of New Jersey, announced.
Mission1st Group Inc. (Mission First), a Virginia Corporation which provided program management, systems engineering, and information technology and communications, improperly billed the United States for extra payments to employees, known as uplifts, that were not actually paid to its employees.
Employees of civilian contractors in support of U.S. military forces stationed in Iraq and Afghanistan are entitled to uplifts to their salaries in the form of danger pay and hazardous duty pay. The settlement resolves allegations that Mission First billed uplifts that it was supposed to pay to its employees, but did not actually pay the employees. The United States alleged that Mission First also billed the United States for Federal Insurance Contributions Act (FICA) taxes on the uplift billings, which were in most instances in excess of the statutory cap for the affected employees, and then improperly retained those excess tax payments.
U.S. Attorney Carpenito credited Special Agent Peter DeRado of the Defense Criminal Investigative Service; Special Agents William Schelpf and Kim Canady of the Major Procurement Fraud Unit of the U.S. Army’s Criminal Investigation Division; David Gotlib, an auditor with the Department of Defense Contract Audit Agency; and Steven G. Foster, a contracting officer with the Army Contracting Command, Aberdeen Proving Ground, led by Kenyata L. Wesley Sr., Executive Director, Senior Executive Service, with the investigation.
The government is represented by Senior Trial Counsel Anthony J. Labruna and Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Civil Division in Newark, and Trial Attorney Art J. Coulter of the Civil Frauds Section of the Justice Department in Washington, D.C.
Defense counsel: Justin A. Chiarodo Esq., Washington, D.C.
Bergen County Man Admits Distribution and Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man today admitted distributing and possessing videos and images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Malcolm Salamanca, 29, of Ridgefield, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count of distribution of child pornography and one count of possession of child pornography.
According to documents filed in this case and statements made in court:Salamanca used a peer-to-peer file-sharing program to download and share videos and images of child sexual abuse. In November 2016, undercover law enforcement agents downloaded some of those images and videos from Salamanca’s computer. After executing a search warrant at Salamanca’s home in November 2017, agents located more videos of child sexual abuse on Salamanca’s computers.
The distribution of child pornography charge to which Salamanca pleaded guilty carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. The possession of child pornography charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Salamanca will be required to register as a sex offender. Sentencing is scheduled for Dec. 2, 2019.
U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to today’s guilty plea. He also thanked the Bergen County Prosecutor’s Office, the Ridgefield Police Department and the U.S. Postal Inspection Service for their assistance with the investigation.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the Cyber Crimes Unit in Newark.
Defense counsel: Paul Brickfield Esq., River Edge, New Jersey
Three New Jersey Residents Charged with Sex Trafficking ConspiracyRead the Press Release
Jean Noriega, 48, Enna Gonzalez, 53, and John Oyola, 32, of Paterson, New Jersey, were charged in a criminal complaint with one count of conspiracy to commit sex trafficking. The charges were announced by Assistant Attorney General Eric Dreiband for the Justice Department’s Civil Rights Division and U.S. Attorney Craig Carpenito for the District of New Jersey.
According to the allegations in the complaint, the defendants conspired to coerce multiple women to engage in commercial sex in New Jersey and New York. Specially, Noriega used violence, threats of violence, threats of drug withdrawal, and other means, to compel the victims to engage in commercial sex for his profit, including after his incarceration in New York in 2017. Oyola and Gonzalez helped Noriega control the victims through various means, collect the proceeds, and otherwise carry out his sex trafficking activities while Noriega was incarcerated.
Noriega, who is incarcerated in New York on a previous conviction, made his initial appearance today before U.S. Magistrate Judge Thérèse Wiley Dancks in Syracuse federal court in the Northern District of New York. Oyola made his initial appearance Aug. 7, 2019, before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Gonzalez appeared before Judge Mannion on Aug. 5.
The charges in the complaint are merely allegations, and the defendants are presumed to be innocent unless and until convicted. If convicted of conspiracy to commit sex trafficking, the defendants face a maximum sentence of life imprisonment, a $250,000 fine, and mandatory restitution.
This case is being investigated by the FBI and the Passaic County Prosecutor’s Office’s Human Trafficking Unit. It is being prosecuted by Assistant U.S. Attorney Sophie Reiter for the District of New Jersey and Trial Attorney Kate Hill for the Civil Rights Division’s Human Trafficking Prosecution Unit.
Three New Jersey Residents Charged with Sex Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – Three New Jersey residents have been charged by complaint for their roles in a sex trafficking conspiracy, U.S. Attorney Craig Carpenito for the District of New Jersey and Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division announced today.
Jean Noriega, 48, Enna Gonzalez, 53, and John Oyola, 32, all of Paterson, New Jersey, were each charged in a criminal complaint with one count of conspiracy to commit sex trafficking.
According to documents filed in this case and statements made in court:
The three defendants conspired to coerce multiple women to engage in commercial sex in New Jersey and New York. Noriega used violence, threats of violence, threats of drug withdrawal, and other means, to compel the victims to engage in commercial sex for his profit, including after his incarceration in New York in 2017. Oyola and Gonzalez helped Noriega control the victims through various means, collect the proceeds, and otherwise carry out his sex trafficking activities while Noriega was incarcerated.
Noriega, who is incarcerated in New York on a previous conviction, made his initial appearance today before U.S. Magistrate Judge Thérèse Wiley Dancks in Syracuse federal court in the Northern District of New York. Oyola made his initial appearance Aug. 7, 2019, before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Gonzalez appeared before Judge Mannion on Aug. 5, 2019.
The count of conspiracy to commit sex trafficking carries a maximum penalty of life in prison, a $250,000 fine, and mandatory restitution.
U.S. Attorney Carpenito credited special agents of the FBI’s Newark Child Exploitation Human Trafficking Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, the Passaic County Prosecutor’s Office’s Human Trafficking Unit, under the direction of Prosecutor Camelia M. Valdes, and the New York State Department of Corrections and Community Supervision Office of Special Investigations, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sophie Reiter of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorney Kate Hill for the Civil Rights Division’s Human Trafficking Prosecution Unit.
The charge and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until convicted.
Former Postal Workers Union Officer Admits EmbezzlementRead the Press Release
CAMDEN, N.J. – A former secretary-treasurer of a U.S. Postal Workers Union today admitted embezzling $34,500 of union funds, U.S. Attorney Craig Carpenito announced.
Robert Peter, 58, of Sicklerville, New Jersey, pleaded guilty before U.S. District Judge Noel Hillman in Camden federal court to an information charging him with one count of embezzling funds from the operating account of the Local 526 Postal Workers Union. Local 526 represents approximately 900 members who work in the clerk, maintenance, and motor vehicle crafts for the U.S. Postal Service in southern New Jersey.
Between May 1, 2018, and June 13, 2018, Peter issued eight checks to himself, totaling $22,500, by fraudulently utilizing the union president’s “signature stamp” to authorize the disbursement of members’ money. He also withdrew, without proper authorization, $12,000 in cash from the union’s account through ATM machines in Atlantic City.
The count of embezzlement carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross amount of gain to the defendant or loss to the victim, whichever is greater. Sentencing is scheduled for Nov. 26, 2019.
U.S. Attorney Craig Carpenito credited the special agents of the Office of Labor Management Standards from the Philadelphia-Pittsburgh District Office, under the direction of District Director Kevin Kennedy, with the investigation leading to today’s guilty plea.
The government is represented by V. Grady O'Malley, Senior Litigation Counsel, of the U.S. Attorney's Office Organized Crime/Gangs Unit in Newark.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden
Bergen County Man Admits Embezzlement from Employee Benefit PlanRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man today admitted that he embezzled funds from an employee benefit plan, U.S. Attorney Craig Carpenito announced.
Howard Preschel, 63, of Teaneck, New Jersey, pleaded guilty before U.S. District Court Judge Susan D. Wigenton in Newark federal court to one count of an indictment charging him with embezzling funds from the CMG Vending Inc. Pension Trust Fund.
According to documents filed in this case and statements made in court:
Preschel served as a trustee for the CMG Vending Inc. Pension Trust Fund. CMG Vending operated, leased, and rented vending machines throughout New Jersey and New York. Preschel was, by law, a fiduciary, and therefore required to act solely in the interest of the participants and beneficiaries.
Between November 2010 and April 2018, Preschel embezzled $368,783 from the trust fund by engaging in 52 separate illegal withdrawals or transfers from various accounts. As a result of these illegal withdrawals and transfers, the trust fund lost an additional $93,267 in interest. As part of the plea agreement, Preschel agreed to make restitution to the trust fund in the amount of $462,050. Preschel also agreed to a debarment which prohibits him from acting as a fiduciary on behalf of any employee benefit plan for a period of 13 years.
The embezzlement count to which Preschel pleaded guilty carries a maximum potential sentence of five years in prison and a fine of $250,000 or twice the gross amount of gain to the defendant or loss to the victim, whichever is greater. Sentencing is scheduled for Nov. 13, 2019.
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 Mikulka in Mountainside, and the U.S. Department of Labor, Employee Benefits Security Administration, under the direction of Acting Regional Director Thomas Licetti of the New York Regional Office, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office Criminal Division in Newark.