District of New Jersey
Press releases recorded for this federal judicial district.
Essex County, New Jersey, Men Sentenced to Prison for Roles in $2 Million Fraudulent Check Scheme Targeting Home-Improvement StoresRead the Press Release
NEWARK, N.J. – Two Essex County, New Jersey, men have been sentenced to prison for their respective roles in a phony check scheme that stole more than $2 million in merchandise from multiple home-improvement stores throughout the country, U.S. Attorney Craig Carpenito announced today.
Shadeed Phillips, 33, of Irvington, New Jersey, was sentenced to 12 months and one day in prison and Koreen Higgs, 45, also of Irvington, was sentenced to 33 months in prison. Both defendants previously pleaded guilty before U.S. District Judge Katharine S. Hayden to informations charging them each with one count of conspiracy to commit wire fraud. Judge Hayden imposed Phillips’ sentence today and Higgs’ sentence on Feb. 25, 2019, in Newark federal court.According to documents filed in this case and statements made in court:
Starting in December 2013 and continuing through February 2017, several individuals, including Phillips and Higgs, conspired to obtain merchandise or store credit from home-improvement stores in locations along the eastern United States, including New Jersey, by purchasing items with fraudulent checks.
Phillips, Higgs and others entered home-improvement and other retail stores and gathered several high-value items like air conditioners or hardwood flooring. Phillips, Higgs and others then typically “purchased” the items either by handing a cashier a fraudulent check with a phony name but authentic account and routing numbers, or by pretending to be an authorized signatory on a store credit account that they had previously opened with a phony check.
During some of the transactions, Phillips, Higgs and others displayed fake driver’s licenses that had been created by one of the other conspirators, which either duplicated the phony name imprinted on the fraudulent check they presented for payment or matched the name of an authorized signatory on a store credit account that they had previously opened.
In total, Phillips, Higgs and others stole over $2 million in merchandise from various retailers in New Jersey, New York, Pennsylvania, Delaware, North Carolina, Georgia, Virginia, Connecticut, Massachusetts, and South Carolina.
In addition to the prison term, Judge Hayden sentenced Phillips and Higgs each to three years of supervised release.
U.S. Attorney Carpenito credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James Buthorn, and special agents of the U.S. Attorney’s Office, District of New Jersey, with the investigation. He also thanked the Union Township Police Department, the Holmdel Police Department, the Passaic County Prosecutor's Office, the Totowa Police Department, and the Monroe Township Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark.Defense counsel:
Phillips: Thomas Ambrosio Esq.. Lyndhurst, New Jersey
Higgs: Alexander Booth Esq., Jersey City, New JerseyActive-Duty Member of the U.S. Navy Admits Role in Interstate Gun Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – An active-duty member of the U.S. Navy today admitted her role in a conspiracy to illegally purchase five semi-automatic handguns bound for New Jersey, U.S. Attorney Craig Carpenito announced.
Tesora Amanda Cortes Trejorojas, 24, of Norfolk, Virginia, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an indictment charging her with one count of conspiring with others to transport and receive in New Jersey firearms purchased and obtained outside the state.
According to documents filed in this case and statements made in court:
Trejorojas admitted that in November 2017, she engaged in text messages with Azia Sinclair in which Trejorojas agreed to purchase firearms for Sinclair and her boyfriend, Shyheim Tyson, a/k/a “Shy,” who were both residents of New Jersey.
On Nov. 11, 2017, Sinclair and Tyson drove from New Jersey to Trejorojas’ residence in Norfolk. All three went to a gun store in Norfolk, where Trejorojas purchased five semiautomatic handguns, as well as 200 rounds of ammunition, with cash provided by Sinclair and Tyson. The next day, Sinclair and Tyson drove back to New Jersey with the five handguns and ammunition.
Approximately five hours after Sinclair and Tyson arrived back in New Jersey, an individual was arrested in Orange, New Jersey, after police officers responded to the sound of gunshots. During the arrest, police officers recovered one of the five handguns that Sinclair and Tyson had transported from Virginia to New Jersey.
In March 2018, law enforcement executed a search warrant on Sinclair’s residence in Newark, and found another of the guns that Sinclair and Tyson had transported from Virginia to New Jersey in November 2017.
Tyson pleaded guilty to conspiracy to transport and receive in New Jersey firearms purchased and obtained outside the State of New Jersey, and he was sentenced on Jan. 7, 2019, to 37 months in prison. Sinclair is awaiting trial.
The conspiracy to traffic in firearms carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 25, 2019.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge John B. Devito, Newark Field Division, and Special Agent in Charge Thomas L. Chittum III, Washington Field Division, with the investigation leading to today’s guilty plea. He also thanked the N.J. State Police; the Newark Department of Public Safety; and Naval Criminal Investigative Service (NCIS) in Norfolk for their assistance.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the Violent Crimes Unit in Newark.
The charges and allegations against Sinclair are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel:
Trejorojas: Jonathan F. Marshall Esq., Red Bank, New Jersey
Sinclair: Linda Foster Esq., Assistant Federal Public Defender, Newark
Tyson: Vincent J. LaPaglia Esq., Hoboken, New JerseyMan Allegedly Tried to Smuggle Cocaine Sewn into His VestRead the Press Release
NEWARK, N.J. – A resident of the Dominican Republic is scheduled to appear in federal court today for allegedly trying to smuggle into the United States approximately three kilograms of cocaine, U.S. Attorney Craig Carpenito announced.
Jose Manuel Jimenez Jimenez, 46, is charged by complaint with one count of illegal importation of more than 500 grams of cocaine. He was arrested Feb. 22, 2019, and is scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to documents filed in this case and statements made in court;
Jimenez arrived at Newark Liberty International Airport on a flight from Santo Domingo, Dominican Republic. During a screening, law enforcement officers discovered the cocaine sewn into the vest Jimenez was wearing.
The count with which Jimenez is charged carries a mandatory minimum penalty of five years in prison, a potential maximum penalty of 40 years in prison, and a $5 million fine.
U.S. Attorney Carpenito credited the U.S. Department of Homeland Security, Homeland Security Investigations, New Jersey Division, under the direction of Special Agent in Charge Brian Michael; and officers of Customs and Border Protection, under the direction of Troy Miller, director of Field Operations, New York Field Office, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Candace Hom Esq., Assistant Federal Public Defender, Newark
Essex County, New Jersey, Man Admits Social Security FraudRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man today admitted defrauding the Social Security Administration (SSA) of more than $200,000, U.S. Attorney Craig Carpenito announced.
Fernando Solaris, 63, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to a superseding information charging him with Social Security disability fraud and theft of government property.
According to documents filed in this case and statements made in court:
After immigrating to the United States in 1970, Solaris applied for, and received, three Social Security numbers (SSNs). He did so by slightly altering the personal information he provided on the application for each new SSN. In March 2002, using one of his SSNs, Solaris began receiving Supplemental Social Security Income and Disability benefits by claiming that he had constant pain in his back and left leg, which precluded him from working. He did not disclose to authorities that he had two additional Social Security numbers.
From 2002 through 2012, Solaris used two other Social Security cards to sporadically maintain employment in New Jersey while continuing to receive supplemental income and disability benefits. Solaris defrauded the SSA of $221,364 in Disability Insurance Benefits (DIB).
The count of Social Security fraud is punishable by a maximum of five years in prison, the count of theft of government property is punishable by a maximum of 10 years in prison; each count is punishable by a fine of $250,000, or twice the gross amount of any pecuniary gain by the defendant or loss to any victims, whichever is greatest. Sentencing is scheduled for June 4, 2019.
U.S. Attorney Carpenito credited special agents of the Social Security Administration Office of the Inspector General, under the direction of Special Agent in Charge John F. Grasso in New York, with the investigation leading to the guilty plea.
The government is represented by Special Assistant U.S. Attorney Perry Farhat of the U.S. Attorney’s Office Public Protection Unit in Newark.
Defense counsel: Kevin Carlucci Esq., Assistant Federal Public Defender, Newark
Pennsylvania Man Sentenced to 147 Months in Prison for Three Robberies, Possessing Firearm in Furtherance of Crime of ViolenceRead the Press Release
CAMDEN, N.J. – A Pennsylvania man was sentenced today to 147 months in prison for committing three armed robberies in Salem, Ocean, and Cumberland counties in November 2017, U.S. Attorney Craig Carpenito announced.
Terrance Robinson, 32, of Havertown, Pennsylvania, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of Hobbs Act robbery, two counts of bank robbery, and one count of possession of a firearm in furtherance of a crime of violence. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
On Nov. 1, 2017, Robinson and Jeffery Edmonds, 45, of Ridley Park, Pennsylvania, drove together to a convenience store in Upper Pittsgrove Township, New Jersey, stopping along the way to pick up a handgun and remove the license plates from the car that Edmonds was driving. After arriving at the convenience store, Edmonds remained in the getaway car while Robinson entered the store with the handgun and stole some money.
Edmonds and Robinson robbed an Ocean First Bank in Upper Deerfield Township, New Jersey, on Nov. 6, 2017, and a Fulton Savings Bank in Alloway Township, New Jersey, on Nov. 14, 2017. Prior to robbing the banks, Edmonds and Robinson removed the license plates from the getaway car. Robinson stayed in the getaway car while Edmonds entered the banks and robbed them with a handgun.
In addition to the prison term, Judge Simandle sentenced Robinson to five years of supervised release and ordered him to pay restitution of $13,527.
Edmonds previously pleaded guilty for his alleged roles in the robberies, and his sentencing is scheduled for March 1, 2019.
U.S. Attorney Carpenito credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Gregory W. Ehrie, and officers of the N.J. State Police, under the direction of Superintendent Col. Patrick J. Callahan, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.
Four Additional People Charged in Conspiracy to Distribute over Five Kilograms of CocaineRead the Press Release
NEWARK, N.J. – Four additional people have been charged for their respective roles in a conspiracy to distribute more than five kilograms of cocaine, U.S. Attorney Craig Carpenito announced today.
Victoria Irizarry, 30, of Fort Lee, New Jersey; Marisol Vargas, 34, of Rowland Heights, California; Daniel Estrella, 28, of Lyndhurst, New Jersey; and Cohen Easton, 46, a/k/a “Power,” of Paterson, New Jersey, are charged by complaint with one count of conspiracy to possess with intent to distribute approximately five kilograms or more of suspected cocaine.
Vargas and Irizarry appeared this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court and were released on bail. Easton appeared Feb. 21, 2019, before Judge Mannion and was detained. Estrella remains at large. Previously, Derik Sanchez, 32, of Fort Lee, New Jersey, and James Ferrer, 34, of Belleville, New Jersey were charged in related federal conspiracy complaints.
According to documents filed in this case and statements made in court:
In September and October 2018, Vargas, who allegedly maintained a narcotics stash house in California, brokered the shipment of boxes of cocaine to Sanchez, Irizarry, and others in New Jersey using the U.S. Postal Service. The cocaine, which was intercepted by law enforcement, was to be sold in New Jersey and New York by Sanchez and other members of the conspiracy, including Ferrer, Easton, and Estrella.
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.
U.S. Attorney Craig Carpenito credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, New Jersey Division, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Ari Fontecchio of the Economic Crimes Unit and Senior Trial Counsel Jamie Hoxie of the OCDETF/Narcotics Unit in Newark.
Atlantic County, New Jersey, Man Admits Distributing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted his role in distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Carlos Santiago-Gomez, 29, of Absecon, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to one count of distributing images of child pornography and was detained without bail.
According to documents filed in this case and statements made in court:
On March 27, 2018, law enforcement officers from the FBI’s Atlantic City Child Exploitation Task Force executed a search warrant at Santiago-Gomez’s residence in Absecon, New Jersey, and seized multiple items of digital evidence, including cell phones, CD discs, thumb drives, hard drives and computers, which contained thousands of images of child sexual abuse. Agents also located evidence showing that in July and August 2017, Santiago-Gomez posted videos of child sexual abuse on at least two KIK instant message groups, while also acting as the administrator of one of those groups.
The count of distribution of child pornography is punishable by a minimum of five years in prison and a maximum of 20 years in prison, and a fine of $250,000. Sentencing is scheduled for June 6, 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 N.J. State Police, under the direction of Col. Patrick J. Callahan; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon G. Tyner; the Atlantic County Sheriff’s Office, under the direction of Sheriff Eric Scheffler; and N.J. Human Services Police, under the direction of Director Timothy J. Gallagher, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
Defense counsel: Brenden T. Shur Esq., Northfield, New Jersey
U.S. Attorney’s Office Reaches Agreement with Rider University to Resolve Allegations Under the American with Disabilities ActRead the Press Release
NEWARK, N.J. – The United States has reached an agreement with Rider University to settle allegations that the school violated the Americans with Disabilities Act (ADA) by failing to make reasonable modifications to its policies, practices, and procedures for students with food allergy-related disabilities, U.S. Attorney Craig Carpenito announced today.
The matter originated from a complaint by a former Rider student with celiac disease, which is triggered by consumption of gluten. Celiac disease can cause permanent damage to the surface of the small intestines and an inability to absorb certain nutrients, leading to vitamin deficiencies that affect the brain, nervous system, bones, liver and other organs. According to the complaint, Rider University did not provide reasonable modifications to its policies, practices, and procedures regarding its dining program.
The ADA prohibits discrimination against individuals with disabilities by public accommodations, including colleges and universities. Under the ADA, a disability is any mental or physical impairment that substantially limits a major life activity, and the ADA includes a wide range of major life activities – including eating – and the operation of major bodily functions, like the immune system. The ADA requires colleges and universities to reasonably modify their policies, practices or procedures when necessary to avoid disability discrimination, unless such entities can demonstrate that the modifications being sought would fundamentally alter the nature of the goods and services of the university.
The U.S. Attorney’s Office determined that Rider University failed to provide reasonable modifications to its policies, practices, and procedures for students with food allergy-related disabilities and failed to adequately train its staff on appropriate policies for accommodating individuals with food allergies. Since the beginning of the investigation, Rider University has worked cooperatively to develop and amend its policies and practices to comply with the ADA.
The settlement agreement requires Rider University to adopt policies for accommodating students with food allergy-related disabilities instead of relying on the limited policies of a food service vendor, make certain structural changes to food service areas to provide allergen-free food preparation areas in its dining facilities, employ a full-time dietician to advise the University and its students on ways to address food allergy-related disability issues, and create a “pre-order” option for students with food allergies.
“We commend Rider University on working to ensure that its students with severe food allergies have options that meet their needs,” US Attorney Craig Carpenito said. “This agreement will improve the experience of students with food allergy-related disabilities and help them to focus on getting an education.”
The government is represented by Assistant U.S. Attorney Daniel Meyler and Michael E. Campion, chief of the Civil Rights Unit, of the U.S. Attorney’s Civil Division in Newark.
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).
Three Men Charged with Armed Robbery Spree Spanning Multiple Counties in New JerseyRead the Press Release
NEWARK, N.J. – Three Union County, New Jersey, men have been charged with robbing liquor stores at gunpoint in November 2018, U.S. Attorney Craig Carpenito announced today.
Paul Jimenez, 29, Jaime Fontanez, 41, and Vincent Chan-Guillen, 28, of Elizabeth, New Jersey, are all charged by complaint with one count of conspiring to commit Hobbs Act robbery and one count of using and carrying a firearm during a crime of violence. Jimenez is also charged with five substantive counts of Hobbs Act robbery and Fontanez and Chan-Guillen are charged with four substantive counts of Hobbs Act robbery. Jimenez and Fontanez appeared before U.S. Magistrate Judge Steven C. Mannion in Newark federal court on Feb. 20, 2019, and were detained. Chan-Guillen is expected to make his initial appearance at a later date.
According to the documents filed in this case and statements made in court:
The FBI investigated a string of armed robberies of liquor stores that took place in Middlesex, Union and Essex counties beginning in November 2018. During each of the robberies, one of the defendants allegedly brandished a handgun at the store clerk while another defendant went behind the counter and stole money from the cash register.
During one of the robberies in Essex County, one of the robbers fired a shot as they ran from the store. No one was injured in that incident. That firearm was later found in Chan-Guillen’s possession on Nov. 30, 2018.
The Hobbs Act charges each carry a maximum potential penalty of 20 years in prison. The brandishing of a firearm during a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of seven years in prison, which must run consecutively to any other prison term. The discharging of a firearm during a crime of violence carries a maximum potential penalty of life in prison and a mandatory minimum sentence of 10 years in prison, which must run consecutively to any other prison term. Each count also carries a potential $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, with the investigation leading to the arrests. He also thanked the Elizabeth Police Department, under the direction of Chief John Brennan; the Rahway Police Department, under the direction of Chief John Rodger; the Woodbridge Police Department, under the direction of Director Robert Hubner; the Bloomfield Police Department, under the direction of Public Safety Director Samuel A. DeMaio; the Linden Police Department, under the direction of Chief David Hart; the Kenilworth Police Department, under the direction of Chief John Zimmerman; the Union Police Department Police Department, under the direction of Director Dan Zieser; and the N.J. State Police, under the direction of Col. Patrick J. Callahan for their work on this case.
The government is represented by Assistant U.S. Attorney Tracey Agnew and Special Assistant U.S. Attorney Shawn Barnes of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Member of ATM Skimming Conspiracy Targeting Multiple New Jersey Bank Locations Pleads GuiltyRead the Press Release
NEWARK, N.J. – A New York man today admitted participating in a scheme that used secret card-reading devices and pinhole cameras on various New Jersey bank locations to steal at least $428,581, U.S. Attorney Craig Carpenito announced.
Bogdan Rusu, 39, of Queens, New York, pleaded guilty before U.S. District Judge Esther Salas to an information charging him with one count of conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
Rusu and others sought to defraud financial institutions and their customers by illegally obtaining customer account information, including account numbers and personal identification numbers. Rusu admitted installing equipment on ATMs at banks in New Jersey. Eleven other defendants charged in this scheme have pleaded guilty.
The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for July 1, 2019.
U.S. Attorney Carpentio credited special agents of the U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael in Newark; special agents of the U.S. Secret Service, Boston Field Office; Longmeadow, Massachusetts, Police Department; Cambridge, Massachusetts, Police Department; and Medford, Massachusetts, Police Department, with assistance from the victim banks, with the investigation leading to today’s guilty plea. The Middlesex County, Massachusetts, District Attorney’s Office; U.S. Attorney’s Office of the Eastern District of New York and U.S. Attorney’s Office of the District of Massachusetts, Springfield Division assisted in the investigation and prosecution.
The government is represented by Assistant U.S. Attorney Kelly Graves of the U.S. Attorney’s Office Criminal Division in Newark and Trial Attorney Marianne Shelvey of the Justice Department’s Criminal Division Organized Crime and Gang Section.
Former Mail Carrier Admits Accepting Bribes for Stealing Credit Cards from MailRead the Press Release
NEWARK, N.J. – A former U.S. Postal Service (USPS) mail carrier today admitted that she accepted cash bribes in return for removing envelopes containing credit cards from the mail and providing these stolen credit cards to the individual who gave her the cash bribes, U.S. Attorney Craig Carpenito announced.
Kyanne Costley, 24, of Newark, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging her with one count of accepting bribes.
According to documents filed in this case and statements made in court:
Costley was a mail carrier in Elizabeth, New Jersey. From September 2017 through February 2018, Costley accepted cash bribes from Moussa Dagno, whom she knew by his alias only, for stealing credit cards from the mail and giving the stolen credit cards to Dagno. Dagno was arrested in February 2018 and was charged by complaint with bribery and theft of mail.
While on duty, Costley stole credit cards from the mail that were sent by financial institutions to accountholders and then gave those stolen credit cards to Dagno. Costley met with Dagno on more than one occasion to give him the stolen credit cards and received approximately $100 in cash for each stolen credit card that Dagno found acceptable. Costley received a total of $1,750 in cash payments in exchange for the stolen credit cards.
The bribery charge is punishable by a maximum potential penalty of 15 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for May 29, 2019.
U.S. Attorney Carpenito credited special agents with the USPS Office of Inspector General, under the direction of Special Agent in Charge Matthew Modafferi, Northeast Area Field Office, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jihee G. Suh of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Hudson County Man Sentenced to 10 Years in Prison for Role in Conspiracy to Distribute CocaineRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man was sentenced today to 120 months in prison for his role in a cocaine distribution conspiracy operating in Jersey City, U.S. Attorney Craig Carpenito announced.
Rayfael Roman, 34, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Roman admitted that from September 2017 through Feb. 7, 2018, he conspired with others to distribute cocaine. Roman also admitted that in February 2018 he spoke on the telephone with a conspirator and agreed to sell that person one kilogram of cocaine for $29,500. Law enforcement officials intercepted these conversations using a court order to intercept wire and electronic communications on Roman’s cellular phone.
Before Roman and the conspirator could complete the cocaine sale, law enforcement officers obtained and executed a search warrant for Roman’s apartment in Jersey City. They found approximately 2.5 kilograms of cocaine, approximately $30,000 in cash, and various other materials commonly associated with drug distribution, such as an electronic money-counting machine, a digital scale, and drug-packaging materials.
In addition to the prison term, Judge McNulty sentenced Roman to five years of supervised release.
U.S. Attorney Carpenito credited the Hudson County Prosecutor’s Office under the leadership of Prosecutor Esther Suarez, and special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Susan A. Gibson, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
Florida Man Charged with Money Laundering in $8.5 Million Account Takeover SchemeRead the Press Release
NEWARK, N.J. – A Florida man was arrested today on charges that he laundered funds related to an $8.5 million business account takeover scheme with ties to Eastern Europe, U.S. Attorney Craig Carpenito announced.
Igor Buzyukov, 51, is charged by criminal complaint with one count of money laundering. He is scheduled to appear tomorrow in Miami federal court.
According to the complaint:
Between February 2018 and July 2018, Buzyukov and others were allegedly part of an account takeover scheme aimed at several clients of Company-1, a financial technology company headquartered in San Jose, California. The scheme resulted in total losses exceeding $8.5 million.
The scheme generally involved an unidentified individual or individuals calling Company-1 and impersonating a representative of one of the victim companies. The individual would then request that an unauthorized bank account be added to the victims’ Company-1 accounts and be designated to receive payments from e-commerce customers.
The unauthorized bank accounts added to the victims’ Company-1 accounts were each controlled by Buzyukov under the name of a corporation registered to him in Florida. After monies were deposited to the unauthorized accounts, Buzyukov would transfer the funds to other accounts controlled by him. Buzyukov then wired the majority of the funds to several bank accounts held by various individuals in Russia, Turkey and Ukraine.
The money laundering charge carries a maximum penalty of 20 years in prison and a fine of $500,000, or twice the value of the property involved, whichever is greater.
U.S. Attorney Carpenito credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Anthony Torntore of the U.S. Attorney’s Cybercrimes Unit in Newark.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Essex County, New Jersey Woman Sentenced to Two Years in Prison for Illegal Food Stamps SchemeRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, woman was sentenced today to 24 months in prison for her role in a food stamps fraud scheme, U.S. Attorney Craig Carpenito announced.
Maria Teresa Venegas of Newark previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging her with one count of Supplemental Nutrition Assistance Program (SNAP) benefit fraud. Judge Vazquez imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Venegas was the listed owner of Jenny’s Deli, a small grocery store in Newark. From March 2015 to March 2018, her father, Manuel Venegas, was an employee of Jenny’s Deli.
Jenny’s Deli was authorized to accept benefits provided by SNAP, formerly known as the Food Stamp Program. The program is administered by the U.S. Department of Agriculture. Retail food stores approved for participation in SNAP may sell food in exchange for SNAP benefits but may not exchange SNAP benefits for cash. According to the charges against them, Maria Teresa Venegas and Manuel Venegas exchanged more than $885,000 in SNAP benefits for cash between 2011 and 2018.
Every SNAP recipient receives an Electronic Benefit Transfer (EBT) card, similar to a debit card, to use to make purchases. Every retailer authorized to accept SNAP benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters 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.
In addition to the high volume of SNAP benefits redemptions for Jenny’s Deli, indicating fraud, law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of an undercover law enforcement agent who engaged in approximately 20 “purchases” at Jenny’s Deli where Manuel Venegas, Maria Teresa Venegas, or another Jenny’s Deli employee acting at their direction exchanged money for SNAP benefits.
In addition to the prison term, Judge Vazquez sentenced Maria Teresa Venegas to two years of supervised release and ordered restitution of $888,487.
Manuel Venegas pleaded guilty on Oct. 30, 2018, to the same charge and is scheduled to be sentenced March 6, 2019.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Agriculture – Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark.
Newark Man Convicted of Armed Jewelry Heist in Elizabeth, New JerseyRead the Press Release
NEWARK, N.J. – A Newark man was convicted in federal court today for his role in the September 2017 armed robbery of a jewelry exchange located in Elizabeth, New Jersey, U.S. Attorney Craig Carpenito announced.
William Valentin, 43, was found guilty of one count of conspiring to commit Hobbs Act robbery, one count of Hobbs Act robbery, one count of brandishing a firearm during a crime of violence, and one count of conspiring to use a firearm during a crime of violence. Valentin was convicted following a six-day trial before U.S. District Judge Madeline Cox Arleo in Newark federal court.
According to documents filed in this case and the evidence at trial:
On the morning of Sept. 5, 2017, four masked individuals, including Valentin, entered a jewelry exchange located in Elizabeth. Valentin then brandished a firearm at an employee while the other conspirators unloaded the contents of the store’s safes into large bags. Video surveillance showed Valentin and other conspirators entering the mall, approaching the jewelry exchange, and running out with the bags of jewelry. Afterwards, Valentin and his conspirators jumped into a black Audi and drove away.
In January 2018, Valentin was arrested in Holyoke, Massachusetts, with a backpack containing jewelry stolen from the Elizabeth exchange in his possession.
The count of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of seven years in prison, which must be imposed consecutive to any other sentence imposed. The Hobbs Act, Hobbs Act conspiracy, and conspiracy to use a firearm in the commission of a crime of violence charges each carry a statutory maximum of 20 years in prison and a $250,000 fine, or twice the 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, the Elizabeth Police Department, under the direction of Chief Ronald Simon, and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Michael A. Monahan, with the investigation leading to today’s guilty verdicts. He also thanked the Holyoke Police Department, under the direction of Chief James Neiswanger, for its assistance.
The government is represented by Assistant U.S. Attorneys Lauren E. Repole and Cari Fais of the U.S. Attorney’s Office in Newark.
Former President and Former Chief Legal Officer of Publicly Traded Fortune 200 Technology Services Company Indicted on 12 Counts Related to Multimillion-Dollar Foreign Bribery SchemeRead the Press Release
NEWARK, N.J. – A federal grand jury has indicted the former president and the former chief legal officer of Cognizant Technology Solutions Corp., a publicly traded Fortune 200 technology services company based in Teaneck, New Jersey, in connection with a foreign bribery scheme.
U.S. Attorney Craig Carpenito of the District of New Jersey, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, and Special Agent in Charge Gregory W. Ehrie of the FBI Newark Field Office made the announcement today.“Corruption, bribery, and kickbacks have no rightful place in American business, and corporate officials who bribe foreign officials to gain a competitive advantage are breaking U.S. law,” U.S. Attorney Carpenito said. “As this indictment shows, we will investigate and prosecute those who would misuse their privileged positions as senior corporate executives to offer and pay bribes, and then conceal their misconduct from investors, so that we can help to restore public trust in a market that is fair and open for all.”
“The allegations in the indictment filed yesterday describe a sophisticated international bribery scheme authorized and concealed by C-suite executives of a publicly-traded multinational company,” Assistant Attorney General Benczkowski said. “The indictment of Gordon Coburn and Steven Schwartz demonstrates the Department’s commitment to relentlessly pursuing corporate fraud and corruption wherever it is found.”
“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” Special Agent in Charge Gregory W. Ehrie said. “In this time of international commerce, whether at home or overseas, the FBI is committed to fighting both corruption and fraud. Companies should have the opportunity to prosper through honest business practices, not the practice of bribery and backroom deals.”
Gordon Coburn, 55, of Beaver Creek, Colorado, and Steven Schwartz, 51, of Greenwich, Connecticut, were charged in a 12-count indictment with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), three counts of violating the FCPA, seven counts of falsifying books and records, and one count of circumventing and failing to implement internal accounting controls. The charges stem from an alleged scheme to bribe one or more government officials in India to ensure the issuance of a construction permit necessary to complete the development of an office campus that would support thousands of employees and become one of Cognizant’s largest facilities in India.
The case is assigned to U.S. District Judge Kevin McNulty of the District of New Jersey. The defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the indictment:
In April 2014, Coburn and Schwartz authorized an unlawful payment of $2 million to one or more government officials in India to secure and obtain the necessary permits to open a new office campus. To conceal Cognizant’s involvement in the scheme, Coburn, Schwartz and others allegedly agreed that a third-party construction company would obtain the permit by making the illegal bribe payment and that Cognizant would reimburse the construction company through phony construction invoices at the end of the project. The indictment alleges that in late June 2014, after the conspirators had agreed that the construction company would make the bribe payment on behalf of Cognizant, the construction company secured the necessary government order for Cognizant to obtain the permit, allowing Cognizant to complete the development of the office campus and avoid millions of dollars in costs. Months later, the conspirators are alleged to have knowingly caused Cognizant to funnel over $2 million to the construction company disguised as payment for cost overruns on the office campus when they knew that the actual purpose of the payment was to reimburse the construction company for the bribe payment.
According to the indictment, as Coburn, Schwartz and others had previously agreed, they hid the bribe reimbursement payment within a series of line items in a construction change order request to be paid to the construction company, thereby concealing the true nature and purpose of the reimbursement, falsifying Cognizant’s books and records, and circumventing and failing to implement its internal controls.
The Department of Justice and the U.S. Attorney’s Office for the District of New Jersey also announced today that they have declined prosecution of Cognizant after considering the factors set forth in the Department of Justice’s Principles of Prosecution of Business Organizations and the Corporate Enforcement Policy, including Cognizant’s prompt voluntary self-disclosure, cooperation and remediation, as well as Cognizant’s disgorgement to the Department and the U.S. Securities and Exchange Commission (SEC) of the cost savings that resulted from the bribery scheme.
In the related case with the SEC, Cognizant entered into a cease-and-desist order and agreed to pay the SEC a civil penalty, disgorgement and prejudgment interest totaling $25 million.
The Department appreciates the significant cooperation provided by the SEC in this case.
The case is being investigated by the FBI’s Newark Field Office.
The government is represented by Assistant U.S. Attorneys Courtney A. Howard and Nicholas P. Grippo, Attorney in Charge of the Trenton Office of the District of New Jersey, and Assistant Chief David A. Last of the DOJ Criminal Division’s Fraud Section.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Two California Men Charged in Plot to Distribute over 30 Pounds of Crystal Methamphetamine and Five Kilos of Fentanyl into New JerseyRead the Press Release
TRENTON, N.J. – Two men have been arrested in Riverside, California, for their alleged roles in shipping over 30 pounds of crystal methamphetamine and conspiring to send an additional five kilos of fentanyl into New Jersey, U.S. Attorney Craig Carpenito announced today.
Isabel Otanez-Sanchez, 25, and Jesus Zavala-Torres, 33, both of San Jacinto, California, are charged by complaint with one count of conspiracy to possess with intent to distribute 500 grams or more of methamphetamine and 400 grams or more of fentanyl. Torres appeared Feb. 13, 2019, before a federal magistrate judge in Riverside, and Sanchez is scheduled to appear in federal court in Riverside today.
According to the complaint:
In September 2018, law enforcement officers received information that an individual known as “Pancho,” later identified as Sanchez, was shipping large quantities of narcotics from California to New Jersey. On Jan. 28, 2019, Sanchez agreed to send 30 pounds of methamphetamine to a law enforcement confidential source (the “CS”) in Atlantic City, New Jersey. Torres and Sanchez hid 28 packages of methamphetamine inside a salvaged vehicle that was shipped to New Jersey from California via a car carrier service. Agents recovered the methamphetamine from the car’s gas tank.
On Feb. 12, 2019, the CS met with Sanchez and Torres in Riverside to pay for the methamphetamine. At this meeting, Sanchez and Torres also agreed to sell an additional five kilos of fentanyl to the CS, which would be shipped to the CS in New Jersey in the same manner as the methamphetamine. After agreeing to the sale of the fentanyl, Torres left the meeting to retrieve two kilos of fentanyl to show to the CS prior to shipment. As Torres was driving back to the meeting, he was stopped by local law enforcement officers and two kilos of fentanyl were recovered from his automobile.
Both defendants face a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine.
U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations (HSI), Cherry Hill, under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to the arrests. He also thanked HSI in Riverside; the N.J. State Police; the Hemet, California, Police Department; and the Atlantic City Task Force for their assistance.
The government is represented by Special Assistant U.S. Attorney Meriah Russell of the U.S. Attorney's Office Criminal Division in Trenton.
The charge and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Owner of Home Construction Company Charged with PerjuryRead the Press Release
NEWARK, N.J. – A Somerset County, New Jersey, man was charged today with lying during proceedings before the U.S. Department of Labor, Occupational Safety and Health Administration (OSHA), U.S. Attorney Craig Carpenito announced
Robert Riley, 42, of Far Hills, New Jersey, is charged with one count of perjury. Riley was scheduled to make his initial appearance this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to documents filed in this case and statements made in court:
Riley owns RSR Home Construction in Bernardsville, New Jersey. Riley became the subject of an OSHA safety investigation after two separate incidents in which workers fell from a roof and were seriously injured. The workers had purportedly been tasked by Riley to perform roof repairs on a barn structure without proper training or safety equipment. As part of its investigation, OSHA took Riley’s deposition, at which he testified under oath that he never authorized anyone to perform roof repairs. Text messages from Riley to construction workers reveal that he instructed the very roof work that precipitated the fall incidents.
The perjury charge carries a maximum potential penalty of five years in prison and a $250,000 fine.
U.S. Attorney Craig 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; Occupational Safety and Health Administration, under the direction of Acting Regional Administrator Richard Mendelson; and Office of the Solicitor, Region II, under the direction of Regional Solicitor Jeffrey S. Rogoff.
The government is represented by Assistant U.S. Attorney Ryan L. O’Neill of the U.S. Attorney’s Office’s Public Protection Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: John A. Azzarello Esq., Morristown, New Jersey
Mexican National Admits to Trafficking Fentanyl into the United StatesRead the Press Release
NEWARK, N.J. – A Mexican man today admitted his role in conspiring to traffic approximately 300 grams of fentanyl into New Jersey, U.S. Attorney Craig Carpenito announced.
Angel Santo Jerez Matos, 60, a/k/a “El Colonel,” pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with conspiracy to possess with intent to distribute more than 40 grams of fentanyl.
According to the documents filed in this case and statements made in court:
Matos was a supplier of fentanyl, heroin, and cocaine to a drug trafficking organization operating in and around New Jersey.
Matos and a member of a New Jersey drug trafficking organization were heard, on intercepted communications, discussing the pricing of “cars,” meaning kilograms of narcotics to be shipped from Mexico into the United States through California. The drugs would then be shipped to New Jersey. Additional communications among members of the New Jersey drug trafficking organization revealed that 300 grams of fentanyl that had originated with Matos in Mexico made its way to users in Newark in May 2017.
The conspiracy charge to which Matos pleaded guilty carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine. Sentencing is scheduled for June 19, 2019.
The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the U.S. Attorney’s Office Economic Crimes Unit.
U.S. Attorney Carpenito credited the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s guilty plea.
This case is being conducted under the auspices of the 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.
Defense counsel: Robert Galuccio Esq., Paterson, New Jersey
Former Federal Employee and Former Director of Defense Contractor Charged in Fraud SchemeRead the Press Release
NEWARK, N.J. – A former civilian employee at Picatinny Arsenal and a former official of a defense contractor with a branch office in Lake Hopatcong, New Jersey, have been charged with conspiracy to commit wire fraud, U.S. Attorney Craig Carpenito announced today.
Robert Dombroski, 63, of Branchville, New Jersey, is charged by complaint with one count of conspiracy to commit wire fraud and four counts of making false statements. Indra Nayee, 51, of Metuchen, New Jersey, is also charged by complaint with one count of conspiracy to commit wire fraud. Both men are scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to documents filed in this case and statements made in court:
Dombroski worked at Picatinny Arsenal for over 30 years, retiring as a federal employee in 2015. He was then hired as a civilian, serving as a Senior Products Manager for advanced weapons. Prior to retiring, Dombroski held the position of senior associate for advanced weapons and worked on and supervised contract projects with a defense contractor, identified in court papers as “Company A,” which is headquartered in Arlington, Virginia, and has a branch office in Lake Hopatcong, New Jersey. In that capacity, Dombroski had influence over the awarding of government contracts to this company and influenced how the money was allocated.
Nayee was the former Picatinny Arsenal division director of Company A, and had direct oversight and control over how his company executed the government contracts it had with Picatinny Arsenal. He supervised and directly managed all branch employees. Nayee was the primary point of contact at Company A for Picatinny Arsenal employees, including Dombrowski.
From 2010 through 2018, Dombroski and Nayee conspired with other federal employees at Picatinny Arsenal and employees of Company A 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 $150,000 to $250,000, in exchange for government contracts and other favorable assistance for Company A at Picatinny Arsenal.
The count of conspiracy to commit wire fraud carries a maximum penalty of 20 years in prison. The false statement charges each carry a maximum penalty of five years in prison.
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 Special Agent in Charge Leigh-Alistair Barzey; 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 ongoing investigation.
The government is represented by Senior Trial Counsel Margaret Ann Mahoney and Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office’s National Security Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense counsel:
Dombrowski: John Reilly Esq.,
Nayee: Mauro Wolf Esq., New YorkFormer Director of Corporate Law at Global Technology Company Charged with Insider TradingRead the Press Release
NEWARK, N.J. – The former corporate secretary and director of corporate law at a global technology company headquartered in Cupertino, California, was charged today with insider trading, U.S. Attorney Craig Carpenito announced.
Gene Levoff, 45, of San Carlos, California, was charged by criminal complaint with one count of securities fraud. He is scheduled to make his initial appearance in Newark federal court on Feb. 20, 2019.
According to documents filed in this case and statements made in court:
Between February 2011 and April 2016, Levoff – the top corporate attorney at “Company-1,” who also served the company’s assistant secretary and corporate secretary – engaged in a scheme to defraud the company and its shareholders. He allegedly misappropriated material, nonpublic information about Company-1’s financial results and then executed trades involving the company’s stock. The scheme allowed Levoff to realize profits of approximately $227,000 and to avoid losses of approximately $377,000.
Levoff used his position as a member/co-chairman of Company-1’s Disclosure Committee – which reviewed and discussed the company’s draft quarterly and yearly earnings materials and periodic U.S. Securities and Exchange Commission (SEC) filings before they were disclosed to the public – to obtain material, nonpublic financial information. Levoff used this confidential information by buying and selling stock in Company-1 ahead of its quarterly earnings announcements, which were issued to the public via press releases. When Levoff discovered that Company-1 had posted strong revenue and net profit for a given financial quarter, he purchased large quantities of stock, which he later sold for a profit once the market reacted to the news. When Levoff learned that Company-1 had posted lower-than-anticipated revenue and net profit, he sold large quantities of Company-1 stock, avoiding significant losses.
Levoff was subject to Company-1’s regular quarterly “blackout periods,” which prohibited individuals who had access to material nonpublic information from engaging in trades until a certain period after the company disclosed its financial results to the public. Levoff ignored this restriction, as well as the company’s broader Insider Trading Policy – which Levoff participated in revising – and instead repeatedly executed trades based on material, nonpublic information without the company’s knowledge or authorization. On several occasions, he executed trades within a blackout period after notifying other individuals subject to the restriction that they were prohibited from buying or selling Company-1 stock until the blackout period terminated.
For example, in July 2015, Levoff sold more than 77,000 shares of Company-1 stock in multiple accounts he controlled after he received Company-1’s draft earnings materials and draft SEC filing for the third quarter of financial year 2015 (Q3 2015) and after he participated in a Disclosure Committee meeting. By selling off his shares, Levoff avoided a loss of approximately $345,000 when Company-1 later publicly disclosed revenue and profit below what many analysts had predicted.
Levoff’s trades on other occasions resulted in profits of approximately $227,000; he also avoided additional losses of approximately $32,000.
The securities fraud count carries a potential penalty of 20 years in prison and a $5 million fine.
The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Levoff today based on the same conduct.
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. He also thanked the SEC for the assistance provided by its Enforcement Division and Company-1, which cooperated with law enforcement over the course of the investigation.
The government is represented by Senior Trial Counsel Jamari Buxton and Chief Daniel Shapiro of the U.S. Attorney’s Office’s Economic Crimes Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Kevin H. Marino Esq., Chatham, New Jersey
Dental Assistant Admits Unlawful Prescription Opioid Pain Pills DistributionRead the Press Release
CAMDEN, N.J. – A Pennsylvania woman today admitted unlawfully distributing prescription opioid pain medication in the Philadelphia and South Jersey areas, U.S. Attorney Craig Carpenito announced.
Nancy Ayres, 45, a/k/a “Nancy Esslinger,” of Upper Chichester, Pennsylvania, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging her with one count of distributing and possessing with intent to distribute oxycodone. Ayres was previously arrested and charged by criminal complaint on Aug. 27, 2018.
According to the documents filed in the case and statements made in court:
Ayres is a dental assistant and has worked in several dental offices in the Philadelphia area and neighboring states. Beginning in at least December 2017, Ayres obtained prescriptions in close proximity to each other for large quantities of oxycodone pills from at least three different medical professionals.
Between April 2018 and June 2018, Ayres allegedly sold 1,044 15- and 20-milligram oxycodone tablets. Ayres made representations that she could obtain other prescription medications for sale, including muscle relaxers and medications for pain management, erectile dysfunction, and anxiety.
The charge of unlawful oxycodone distribution carries a maximum penalty of 20 years of in prison and a fine of up to $1 million. Sentencing is scheduled for May 20, 2019.U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark; and the N.J. Attorney General’s Atlantic City Task Force, under the direction of Attorney General Gurbir S. Grewal, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Christina O. Hud of the Criminal Division.
Defense counsel: David Jay Glassman Esq., Marlton, New Jersey
Training Agent Admits Selling False OSHA Training CardsRead the Press Release
TRENTON, N.J. – A certified Occupation Safety and Health Administration training agent today admitted submitting false reports and selling fraudulent training cards to carpenters to improperly establish that they were certified in safety standards, U.S. Attorney Craig Carpenito announced.
Mark Dropala, 42, of Middle Village, New York, pleaded guilty before U.S. District Judge Brian Martinotti in Trenton federal court to an information charging him with one count of making and using false OSHA documents.
According to documents filed in this case and statements made in court:
“OSHA 10” training is a program for construction workers, including carpenters and laborers, to provide knowledge and skills in occupational safety standards. One of the focuses of the course is safety regulations for electrical equipment and scaffolding construction to help prevent injuries and deaths to construction workers.
Dropala was certified by OSHA’s Outreach Training Program (OTP), authorized through OSHA’s Training Organization at Rutgers University in New Brunswick, New Jersey. He was authorized to issue OSHA 10 cards that proved to employers that the holder of the card had taken and passed a 10-hour OTP training course. Instead, Dropala sold in excess of 100 false OSHA 10 cards for approximately $200 per card.
The count to which Dropala pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for July 2, 2019.
U.S. Attorney Carpenito credited special agents of the Port Authority of New York and New Jersey, under the direction of Inspector General Michael Nestor, and U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael Mikulka, 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.
Owner of Janitorial Supply Company Admits Defrauding Customer, Failing to Pay TaxesRead the Press Release
CAMDEN, N.J. – A Camden County, New Jersey, man who owned a janitorial supply company admitted today to submitting fraudulent bills to a customer and failing to pay taxes on the illicit proceeds of his scheme, U.S. Attorney Craig Carpenito announced.
Mitchell Bleicher, 52, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count each of wire fraud, money laundering, and income tax evasion.
According to documents filed in this case and statements made in court:
Bleicher was the owner and operator of Allied Materials Inc. (Allied), a janitorial supply company in Berlin, New Jersey. Allied sold janitorial and cleaning supplies, office and break room supplies, food service items, safety equipment, and business printing and imprinted items.
Bleicher admitted that between 2009 and April 2018, he submitted invoices to Company 1, headquartered in Cherry Hill, New Jersey, that falsely listed products that Allied purportedly delivered to Company 1, when, in fact, Allied had not delivered those products. Allied’s fraudulent invoices also inflated the number of products that were actually delivered. As part of his scheme, and to ensure that his fraudulent invoices were accepted, Bleicher admitted that he paid a contractor working in the facilities department of Company 1 who was responsible for the janitorial supplies. Once that contractor left, Bleicher continued his fraudulent activity with the contractor’s replacement and rewarded him by buying him expensive dinners, taking him to professional sports games like the Philadelphia 76ers, and providing him with expensive wines. Later, Bleicher recruited an employee of Company 1 and gave her the fraudulent invoices to submit for payment.
Bleicher admitted that he used the money he got from the scheme – $1,917,381 – on numerous personal expenditures, such as Rolex watches, two Rolls Royce automobiles, two Subaru automobiles, motorcycles, home renovations and college tuition for his children.
Bleicher acknowledged that he failed to pay taxes on the money he received through fraud. Although he filed income tax returns with the IRS for 2011 through 2017, Bleicher did not report the money that he fraudulently obtained from Company 1. By not reporting that additional taxable income, Bleicher admitted that he defrauded the IRS of $578,902 in income tax revenue.
The count of wire fraud to which Bleicher pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The count of money laundering carries a maximum penalty of 10 years in prison and a fine of $250,000. The count of income tax evasion carries a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for May 17, 2019.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Michael T. Harpster in Philadelphia; 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 Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: Robert E. Welsh Esq., Philadelphia
Biodiesel Fuel Company Sentenced for Releasing over 45,000 Gallons of Wastewater into the "Arthur Kill" WaterwayRead the Press Release
Yesterday, an Elizabeth, New Jersey, biodiesel fuel company was sentenced for discharging more than 45,000 gallons of wastewater from its commercial biodiesel fuel production facility into the Arthur Kill, a waterway separating New Jersey from Staten Island, New York, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA). The company had pleaded guilty in June 2018 to one count of violating the Clean Water Act.
Fuel Bio One LLC was sentenced by U.S. District Judge William J. Martini to pay a criminal fine of $100,000. The company was also sentenced to probation for a period of five years, during which the company must (1) provide biannual reports to the court and the government documenting its waste generation, handling, and disposal practices; (2) develop, implement, and fund an employee training program to ensure that all employees are aware of proper waste handling and disposal practices and to ensure that all storage, treatment, and disposal of wastewater complies with the Clean Water Act; and (3) allow the EPA full access to all offices, warehouses, and facilities owned or operated by the company.
“Staten Island Sound (also known as the Arthur Kill) is a vital waterway running between New Jersey and Staten Island. Once heavily polluted and nearly devoid of marine life, this waterbody is making a comeback and again provides habitat to many species of fish and wildlife,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “Illegal dumping of pollution into the Sound not only violates federal law, but also threatens the environmental recovery of this historic marine channel, which is important to New Yorkers and New Jerseyans alike. The Justice Department will continue to work closely with EPA Criminal Investigation Division to prosecute illegal actions like those in this case.”
“Protecting the environment and our natural resources is one of the many ways this office works to keep New Jersey safe for everyone,” said U.S. Attorney Carpenito for the District of New Jersey. “The sentence imposed yesterday as a result of Fuel Bio One’s previous guilty plea ensures that the company will be punished for its past crimes, and the plea agreement puts in place a plan to ensure they don’t pollute our waterways in the future.”
“Fuel Bio One undercut a level playing field when they illegally discharged polluted wastewater into the Arthur Kill,” Special Agent in Charge Tyler Amon of EPA’s Criminal Investigation Division in New Jersey said. “This judicial action demonstrates EPA’s commitment to protecting New Jersey’s environment and ensuring that all companies play by the rules to keep pollutants out of the state’s natural resources.”
According to court documents filed in this case and statements made in court, Fuel Bio One generated wastewater that included methanol, biodiesel, and other contaminants as a byproduct of biodiesel fuel production at its Elizabeth, New Jersey, plant. On Sept. 6, 2013, and Nov. 9, 2013, employees of Fuel Bio One released approximately 45,000 gallons of wastewater into a storm water pit at the Elizabeth plant, causing the pump to operate and, as a result, wastewater to be discharged into the Arthur Kill. A representative of Fuel Bio One admitted to this conduct in court yesterday.
Assistant Attorney General Clark and U.S. Attorney Carpenito credited special agents of the EPA, under the direction of Special Agent in Charge Amon, with the investigation leading to yesterday’s sentence.
The Government is represented by Trial Attorney Adam Cullman of the Environmental Crimes Section and Assistant U.S. Attorney Kathleen P. O’Leary of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
Ohio Man Admits Armed Robbery of Mobile Communications Company Retail StoreRead the Press Release
NEWARK, N.J. – An Ohio man admitted today he robbed a mobile communications company retail store in Orange, New Jersey, at gunpoint in June 2016, U.S. Attorney Craig Carpenito announced.
Frederick A. White, 46, pleaded guilty to one count of Hobbs Act robbery and one count of brandishing a firearm during a crime of violence before U.S. District Judge Claire C. Cecchi in Newark federal court after opening statements in his trial had concluded.
According to documents filed in this case and statements made in court:
On the afternoon of June 11, 2016, White entered a mobile communications company retail store in Orange wearing a wig and brandishing a handgun. White stole cash from an employee of the store and fled. He was arrested a short while later after a foot pursuit by the Orange Police Department.
White previously was convicted of multiple counts of armed and attempted carjacking and discharging a firearm during a crime of violence in federal court in Newark in 1993.
Pursuant to the terms of the parties’ agreement, White will be sentenced to a term of imprisonment of 25 years and one day, followed by a term of supervised release of five years.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and the Orange Police Department, under the direction of Director Todd Warren and Chief Law Enforcement Officer Vincent Vitiello, for their assistance with the investigation leading to today’s guilty plea. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens 2nd, for its assistance.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Desiree Grace Latzer of the U.S. Attorney’s Office Criminal Division in Newark.
New York Man and Passaic County, New Jersey, Woman Charged with Fraud in Connection with Moving CompanyRead the Press Release
NEWARK, N.J. – A Hewlett, New York, man and a Haledon, New Jersey, woman appeared in federal court today on fraud charges for allegedly extorting customers of their moving company, U.S. Attorney Craig Carpenito announced.
Lior Atiyas, 42, a/k/a “David Cohen,” and Lola Larios 36, a/k/a “Michelle Jacobs,” are each charged by complaint with one count of conspiracy to commit wire fraud. They both made their initial appearance today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to documents filed in this case and statements made in court:
From as early as January 2016 through January 2019, Atiyas and Larios conspired to extort customers of their moving company to pay drastically increased fees for moving services once the customers were in a vulnerable state and unable to refuse their demands. Atiyas and Larios carried out the conspiracy by using their moving company, Premier Relocations LLC, and other fraudulently created moving companies, to quote customers “low-ball” price estimates for moving household goods. Once the customers’ goods were loaded onto the moving trucks, Premier employees, at the direction of Atiyas and Larios, would drastically raise the price of the move (often two or three times that of the quoted estimate), and then refuse to deliver the goods until the customers paid the increased price. The aggregate difference between the initial estimates and the revised amounts charged to victims is estimated at more than $400,000.
The charge of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison, and a fine of $250,000, or twice the gross gain to the defendants or loss to the victims.U.S. Attorney Carpenito credited special agents with the Department of Transportation, Office of the Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, Northeast Region, with the investigation leading to these charges.
The government is represented by Assistant U.S. Attorney Christopher Amore of the U.S. Attorney’s Office Public Protection Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense counsel:
Atiyas: Lance Lazzaro Esq., Brooklyn, New York
Larios: Peter Carter Esq., Assistant Federal Public Defender, NewarkMetropolitan Transit Authority Employee Sentenced to 20 Months in Prison for Role in Compounding Pharmacy SchemeRead the Press Release
NEWARK, N.J. – An Old Bridge, New Jersey, man was sentenced today to 20 months in prison for his role in a large scheme to defraud the Metropolitan Transit Authority’s health benefits plan of more than $2.8 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Craig Carpenito announced.
Enver Kalaba, 37, a bus driver with the MTA, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with conspiracy to commit health care fraud. Judge Vazquez imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Kalaba admitted that as early as April 2016 through August 2017 he participated in a scheme to defraud the MTA’s health benefits plan, a privately funded health plan, by knowingly causing the billing of fraudulent claims for medically unnecessary prescription compounded medications, such as scar creams, pain creams, and metabolic supplements. Kalaba was recruited into the scheme by another former MTA bus driver, Christopher Frusci, 34, of Staten Island, New York. Both Frusci and Kalaba were “sales representatives” of Company A, a New Jersey marketing company of compounded prescriptions.Kalaba and Frusci targeted MTA employees because the MTA’s health benefits’ plan covered compounded medications. To convince MTA beneficiaries to obtain medically unnecessary compounded prescriptions, Kalaba paid them monthly cash bribes of approximately $100 per prescription. To ensure physicians prescribed compounded medications regardless of medical necessity, Kalaba referred MTA beneficiaries to telemedicine physicians who were paid by Company A and its affiliates.
Kalaba was also sentenced to one year of supervised release, and must forfeit $138,630 in criminal proceeds he received for his role in the scheme and pay restitution of $2.9 million.
On March 2, 2018, Frusci pleaded guilty before Judge Vazquez for his role in the scheme and is scheduled for sentencing on March 27, 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 Special Agent in Charge Leigh-Alistair Barzey; and the Office of the Inspector General, Metropolitan Transportation Authority, under the direction of Inspector General Barry Kluger, with the ongoing investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Erica Liu of the United States Attorney’s Office.
Defense counsel: Robert G. Stahl Esq., Westfield, New Jersey
Bronx Couple Admit Sex Trafficking of MinorRead the Press Release
TRENTON, N.J. – A Bronx, New York, man and woman today admitted their roles in a month-long scheme to advertise and provide a minor for sexual acts for money, U.S. Attorney Craig Carpenito announced.
Richard Ortiz, 23, a/k/a “Ace,” and Gabriella Colon, 19, both of Bronx, New York, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to informations charging them with conspiracy to commit sex trafficking of a child.
According to documents filed in this case and statements made in court:
From January 2018 through February 2018, Ortiz and Colon recruited, enticed, and advertised Victim-1, knowing that Victim-1 was less than 18 years old and would be caused to engage in one or more commercial sex acts. Colon and Ortiz acknowledged having transported Victim-1 from New York into New Jersey and Colon admitted to photographing Victim-1 in various states of undress and posting the photographs on a website advertising Victim-1 for sexual services. Colon and Ortiz admitted collecting money from numerous individuals who paid to have sexual relations with Victim-1.
The count to which Ortiz and Colon pleaded guilty carries a maximum term of life imprisonment. Sentencing for Colon is scheduled for May 13, 2019, and for Ortiz, May 14, 2019.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and detectives with the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew Carey, with the investigation leading to today’s guilty pleas. He also thanked the East Brunswick and Fort Lee, New Jersey, 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.
Defense counsel:
Ortiz: Olubukola Adetula Esq., Irvington, New Jersey
Colon: Candace Hom Esq., Assistant Federal Public Defender, NewarkBiodiesel Fuel Company Sentenced for Releasing More Than 45,000 Gallons of Wastewater into Arthur KillRead the Press Release
NEWARK, N.J. – An Elizabeth, New Jersey, biodiesel fuel company was sentenced today for discharging more than 45,000 gallons of wastewater from its commercial biodiesel fuel production facility into the Arthur Kill, a narrow waterway that separates New Jersey from Staten Island, New York, U.S Attorney Craig Carpenito announced.
Fuel Bio One LLC was sentenced by U.S. District Judge William J. Martini to pay a criminal fine of $100,000. The company was also sentenced to probation for a period of five years, during which the company must: provide biannual reports to the Court and the Government documenting its waste generation, handling and disposal practices; develop, implement, and fund an employee training program to ensure that all employees are aware of proper waste handling and disposal practices and to ensure that all storage, treatment and disposal of wastewater complies with the Clean Water Act; and allow U.S. Environmental Protection Agency full access to all offices, warehouses and facilities owned or operated by the company.
Fuel Bio One LLC previously pleaded guilty before U.S. Magistrate Judge James B. Clark 3rd to an information charging it with one count of violating the Clean Water Act, a statute that was enacted to prevent, reduce, and eliminate water pollution in the United States.
“Protecting the environment and our natural resources is one of the many ways this office works to keep New Jersey safe for everyone,” U.S. Attorney Carpenito said. “The sentence imposed today as a result of Fuel Bio One’s previous guilty plea ensures that the company will be punished for its past crimes, and the plea agreement puts in place a plan to ensure they don’t pollute our waterways in the future.”
According to court documents filed in this case and statements made in court:
Fuel Bio One generated wastewater that included methanol, biodiesel and other contaminants, as a byproduct of its biodiesel fuel production at its Elizabeth, New Jersey, plant. On Sept. 6, 2013, and Nov. 9, 2013, employees of Fuel Bio One released approximately 45,000 gallons of wastewater into a storm water pit at the Elizabeth plant, causing the pump to operate and, as a result, wastewater to be discharged into the Arthur Kill. A representative of Fuel Bio One admitted to this conduct in court.
U.S. Attorney Carpenito credited special agents of the U.S. Environmental Protection Agency, under the direction Special Agent in Charge Tyler Amon, with the investigation leading to today’s sentencing.
The Government is represented by Assistant U.S. Attorney Kathleen P. O’Leary of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark and Adam Cullman of the Environmental Crimes Section of the U.S. Department of Justice.
Union County, New Jersey, Man Charged with Receiving Child PornographyRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man appeared in federal court today on charges of receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Andrew Chu, 28, of Garwood, New Jersey, is charged by complaint with one count of receipt of child pornography. He made his initial appearance today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and was released on $100,000 unsecured bond with home detention and electronic monitoring.
According to documents filed in this case and statements made in court:
In February 2018, Chu downloaded three videos depicting the sexual abuse of children from a child pornography website located on the darknet.
The charge of receipt of child pornography carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.
U.S. Attorney Carpenito credited special agents with the Department of Homeland Security, Homeland Security Investigations (HSI), Newark Field Office, under the direction of Special Agent in Charge Brian A. Michael, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sarah A. Sulkowski of the U.S. Attorney’s Office Public Protection Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
New Jersey Residential Loan Company Agrees to Settle Claim It Unlawfully Foreclosed Upon Servicemembers' Homes Without Obtaining Required Court OrdersRead the Press Release
WASHINGTON –The Justice Department today announced that PHH Mortgage Corporation (PHH) has agreed to pay $750,000 to six servicemembers to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by unlawfully foreclosing on their homes without obtaining the required court orders.
“The brave men and women who serve in our nation’s armed forces frequently are required to deploy and serve overseas with little notice,” said U.S. Attorney Craig Carpenito. “This Office remains resolute in its commitment to honor their personal sacrifices when they do so by ensuring that servicemembers’ rights will be protected, as the law requires, whenever duty calls. This agreement ensures that servicemembers will be compensated for the damages they suffered when their homes were improperly foreclosed upon while they were serving our country.”
“Our men and women in uniform deserve to be able to focus on their job of keeping our country safe without worrying about losing their home to an unlawful foreclosure,” said Assistant Attorney General Eric Dreiband. “The Civil Rights Division is committed to protecting the rights of our servicemembers from unlawful conduct.”
The SCRA prohibits foreclosing on the home of a servicemember during active military service and one year thereafter without a court order if the mortgage originated prior to the servicemember’s period of military service.
PHH is one of the United States’ largest mortgage loan servicers, operating nationwide. The New Jersey-based company also originates, sells and subservices residential mortgage loans.
The Department launched an investigation, which was handled jointly by the U.S. Attorney’s Office for the District of New Jersey and the Department’s Civil Rights Division, after it received a complaint in May 2016 through the Department’s Servicemembers and Veterans Initiative. The Department’s investigation revealed that PHH foreclosed on six homes of SCRA-protected servicemembers in violation of the SCRA between 2010 and 2012.The agreement resolves a suit filed today by the United States in the U.S. District Court for the District of New Jersey.
The agreement requires PHH to pay $125,000 to each servicemember whose home was unlawfully foreclosed upon. The agreement also requires PHH to provide training to its staff to ensure that servicemembers do not face unlawful foreclosures in the future, and to notify the Department of future complaints regarding servicemembers’ rights.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. Since 2011, the Department has obtained over $468 million in monetary relief for servicemembers through its enforcement of the SCRA. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Individuals who believe their civil rights have been violated in the District of New Jersey may also file a complaint with the U.S. Attorney’s Office for the District of New Jersey at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division; Assistant U.S. Attorney Christopher Amore, Criminal Division; and Trial Attorney Alan Martinson, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.
New Jersey Man and Ex-Girlfriend Charged with Murder-For-HireRead the Press Release
NEWARK, N.J. – A New Jersey man appeared in federal court today on charges that he promised to pay a purported hitman to kill his estranged wife, U.S. Attorney Craig Carpenito announced. The defendant’s ex-girlfriend, who appeared in federal court Feb. 5, 2019, is also charged with participating in the plot.
Narsan Lingala, 55, of Middlesex County, New Jersey, is charged by criminal complaint with one count of murder-for-hire. He appeared today before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and was held without bail. Lingala’s ex-girlfriend, Sandya Reddy, 52, appeared before Judge Hammer on the same charge and was also detained.
According to the complaint:
In May 2018, Lingala was in a holding cell at the Middlesex County Superior Courthouse as he awaited a court hearing. While there, he asked another inmate if he knew anyone who could kill his estranged wife. The inmate responded that he knew such a person. In June 2018, at the direction of law enforcement, the inmate introduced Lingala to an undercover agent posing as a hitman. Over subsequent weeks, Lingala and the undercover hitman spoke by phone and planned to meet in person the next time that Lingala traveled from Indiana to New Jersey.
On Aug. 18, 2018, Lingala and the undercover hitman agreed to meet in person outside a New Jersey shopping mall. Later that day, Lingala and his then-girlfriend, Reddy, arrived outside the mall and approached the undercover hitman. Lingala introduced Reddy and stated that she understood what was going on. Lingala, Reddy, and the undercover hitman entered the undercover hitman’s car. They proceeded to have a conversation that was video recorded.
The undercover hitman asked Lingala to confirm what he wanted the undercover hitman to do. Lingala said, “I want that woman to be out of my life . . . totally. Never again. She never comes back.” During the conversation, the undercover hitman asked, “You want me to take care of her?” Lingala responded, “Yeah.” The undercover hitman stated, “She’s done, I’m going to kill her. End of story.” Lingala responded, “Yeah. End of story.”
During the conversation, Lingala gave the undercover hitman information about the intended victim. Lingala provided his ex-wife’s full name, home address, age, and home phone number. He also described the entrances to and layout of her home; the name of the company where she worked; and the timing and details of her work commute. Lingala showed the undercover hitman photos of the exterior and interior of his ex-wife’s home. Reddy also provided the undercover hitman information about the intended victim.
The undercover hitman, Lingala, and Reddy also discussed the price that the undercover hitman would be paid. The undercover hitman said the job would cost between $5,000 and $10,000, depending on the job’s complexity. Lingala agreed and asked if he could pay after the job was done. The undercover hitman said he would need a down payment. Lingala and Reddy discussed the issue, and then Lingala asked the undercover hitman, “Can I give you a thousand down payment?” The undercover hitman agreed. Lingala later stated, “I want that money to go into your pocket.” Lingala informed the undercover hitman that making the down payment would take about two weeks. After the meeting, authorities arrested Lingala and Reddy
The murder-for-hire charge is punishable by a maximum of 10 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, as well as the Middlesex County Prosecutor’s Office and detectives, under the direction of Prosecutor Andrew Carey, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Matthew Feldman Nikic of the U.S. Attorney’s Cybercrimes Unit in Newark.
The charges and allegations in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defense counsel:
Lingala: Candace Hom Esq., Assistant Federal Public Defender, Newark
Reddy: Patrick McMahon Esq., Assistant Federal Public Defender, NewarkJustice Department Obtains $750,000 from PHH Mortgage Corp. for Unlawfully Foreclosing on Servicemembers’ HomesRead the Press Release
WASHINGTON –The Justice Department today announced that PHH Mortgage Corporation (PHH) has agreed to pay $750,000 to six servicemembers to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by unlawfully foreclosing on their homes without obtaining the required court orders.
“Our men and women in uniform deserve to be able to focus on their job of keeping our country safe without worrying about losing their homes to an unlawful foreclosure,” said Assistant Attorney General Eric Dreiband. “The Civil Rights Division is committed to protecting the rights of our servicemembers from unlawful conduct.”
“The brave men and women who serve in our nation’s armed forces frequently are required to deploy and serve overseas with little notice,” U.S. Attorney Craig Carpenito said. “This Office remains resolute in its commitment to honor their personal sacrifices when they do so by ensuring that servicemembers’ rights will be protected, as the law requires, whenever duty calls. This agreement ensures that servicemembers will be compensated for the damages they suffered when their homes were improperly foreclosed upon while they were serving our country.”
The SCRA prohibits foreclosing on the home of a servicemember during active military service and one year thereafter without a court order if the mortgage originated prior to the servicemember’s period of military service.
PHH is one of the United States’ largest mortgage loan servicers, operating nationwide. The New Jersey-based company also originates, sells and subservices residential mortgage loans.
The Department launched an investigation, which was handled jointly by the Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey, after it received a complaint in May 2016 through the Department’s Servicemembers and Veterans Initiative. The Department’s investigation revealed that PHH foreclosed on six homes of SCRA-protected servicemembers in violation of the SCRA between 2010 and 2012.
The agreement resolves a suit filed today by the United States in the United States District Court for the District of New Jersey.
The agreement requires PHH to pay $125,000 to each servicemember whose home was unlawfully foreclosed upon. The agreement also requires PHH to provide training to its staff to ensure that servicemembers do not face unlawful foreclosures in the future, and to notify the Department of future complaints regarding servicemembers’ rights.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. Since 2011, the Department has obtained over $468 million in monetary relief for servicemembers through its enforcement of the SCRA. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Individuals who believe their civil rights have been violated in the District of New Jersey may also file a complaint with the U.S. Attorney’s Office for the District of New Jersey at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
Owner of Information Technology Staffing Company Charged with Visa and Naturalization FraudRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man was arrested this morning for allegedly submitting 11 fraudulent H-1B visa applications as well as fraudulently procuring his own citizenship, U.S. Attorney Craig Carpenito announced.
Neeraj Sharma, 43, of Piscataway, New Jersey, is charged by complaint with one count of visa fraud and one count of naturalization fraud. Sharma is scheduled to make his initial appearance this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to documents filed in this case and statements made in court:
Sharma recruited foreign workers with purported IT expertise who sought work in the United States. When submitting the potential staffers’ H-1B visa paperwork to U.S. Citizenship and Immigrations Services, Sharma falsely represented that the foreign workers had full-time positions awaiting them at a national bank, a prerequisite to securing their visas. In fact, Sharma had never secured work for the applicants and submitted phony letters to USCIS on the bank’s letterhead with forged signatures of bank executives. The H-1B program applies to employers seeking to hire nonimmigrant aliens as workers in specialty occupations or as fashion models of distinguished merit and ability.
The visa and naturalization fraud charges carry a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited special agents of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Special Agent in Charge Brian A. Michael, the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, and the U.S. CIS Office of Fraud Detection and National Security, Vermont and Newark Field Offices, with the investigation.
The government is represented by Assistant U.S. Attorney Ryan L. O’Neill of the U.S. Attorney’s Office’s Public Protection Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
New York Man Sentenced to 77 Months in Prison for Possessing Firearm as a Previously Convicted FelonRead the Press Release
NEWARK, N.J. – A Yonkers, New York, man who was convicted by a federal jury of possessing a firearm as a previously convicted felon was sentenced today to 77 months in prison, U.S. Attorney Craig Carpenito announced.
Francisco Vallejo, 29, was previously convicted of possessing a firearm despite his three prior felony convictions in Passaic County Superior Court. Vallejo was convicted on July 26, 2018, following a four-day trial before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
On June 7, 2015, Vallejo was arrested in Passaic, New Jersey, after reports of a disturbance and gunshots were made to the Passaic Police Department. Responding officers detained Vallejo on the street, and thereafter located a loaded .25 caliber firearm in a nearby garbage can. A nearby security camera captured Vallejo stashing the firearm in the garbage can, and he was later found to have gunpowder residue on his hands.
In addition to the prison term, Judge Wigenton sentenced Vallejo to three years of supervised release.
U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of Special Agent in Charge John B. Devito, officers of the Passaic Police Department, under the direction of Chief of Police Luis A. Guzman, and officers of the Passaic County Sheriff’s Office, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney J. Brendan Day and Senior Trial Counsel R. Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
Middlesex County, New Jersey, CPA Admits Filing False Tax ReturnRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, certified public accountant today admitted that he underreported his income on his personal tax return, avoiding paying more than $672,000 in taxes, U.S. Attorney Craig Carpenito announced.
Amit Govil, 58, of New Brunswick, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to Count 1 of an indictment charging him with making and subscribing a false tax return.According to documents filed in the case and statements made in court:
Govil, licensed as a CPA in New York and New Jersey, operated P&G Associates, a business headquartered in East Brunswick, New Jersey, providing risk management and audit services to community banks. Govil admitted that for the tax year 2010, he underreported and failed to report the gross receipts or sales of P&G Associates on Schedule C of his personal tax return, avoiding more than $672,000 in taxes.
The count of making and subscribing a false tax return carries a maximum potential penalty of three years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for May 13, 2019.
U.S. Attorney Carpenito credited special agents of the IRS, 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. Attorneys Courtney A. Howard and Catherine R. Murphy of the U.S. Attorney’s Office Economic Crimes Unit.
Defense counsel: Jeffrey Alberts Esq., New York
Camden County, New Jersey, Man Admits Supplying Crack Cocaine to Drug Trafficking OrganizationRead the Press Release
CAMDEN, N.J. - A Camden County, New Jersey, man today admitted his role in a Camden drug trafficking organization that distributed large amounts of crack cocaine, furanyl fentanyl and heroin, U.S. Attorney Craig Carpenito announced.
Mark Campbell, 39, a/k/a “D” and Diz,” of Sicklerville, New Jersey, pleaded guilty before U.S. District Judge Renée Marie Bumb in Camden federal court to a superseding information charging him with one count of conspiracy to distribute and possess with intent to distribute 280 grams or more of cocaine base.
According to documents filed in this case and statements made in court:
Campbell admitted that he supplied large quantities of cocaine base (crack cocaine) to members of a drug trafficking organization operating around the 1700 block of Filmore Street in Camden. The organization also distributed heroin and furanyl fentanyl, which it obtained from other suppliers. Ten members of the drug ring were arrested in June 2017 following a long-term investigation by the FBI, which utilized multiple telephone wiretaps, surveillance, confidential informants, cooperating witnesses, more than 20 controlled drug purchases, a GPS vehicle tracker and four court-authorized search warrants, among other investigative techniques. Members of the drug trafficking organization distributed crack cocaine, furanyl fentanyl, and heroin to users and resellers in and around Camden and to people cooperating with the FBI. The investigation ultimately led to the seizure of more than 300 grams of crack cocaine, quantities of furanyl fentanyl and heroin, a firearm, and drug paraphernalia. An eleventh defendant was later charged in March 2018.
The count to which Campbell pleaded guilty carries a mandatory minimum term of 10 years in prison and a maximum of life. Sentencing is scheduled for May 13, 2019.
Six other defendants – Daron Suiter, 24; Davon Leak 20; George Williams, 44; Karim Johnson, 39, a/k/a “Chicky;” Latoya Whealton, 34, a/k/a “Toya;” and Rajai Gaines, a/k/a “Jigga,” – previously pleaded guilty.
Drug, firearm, and witness tampering charges remain pending in a third superseding indictment against four other defendants, including alleged leaders John Gunther, 35, a/k/a “Critty,” and Taleaf Gunther, 32, a/k/a “Leafy” and “L,” as well as alleged members William Roland, 37, a/k/a “Chill,” and Malcolm McCoy, 28. Trial is scheduled to begin in March 2019.
U.S. Attorney 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; and the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation. He also thanked the Camden County Sheriff’s Department, the Cherry Hill Police Department, and the U.S. Department of Homeland Security Investigations (HSI) for their assistance.
The government is represented by Assistant U.S. Attorneys Gabriel J. Vidoni and Alisa Shver of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations against the four defendants awaiting trial are merely accusations, and they are presumed innocent unless and until proven guilty.
Defense counsel: Troy A. Archie Esq., Cinnaminson, New Jersey
Newark, New Jersey, Man Convicted of Firearms Offense in Connection with Shooting of 5-Year-Old GirlRead the Press Release
NEWARK, N.J. – A Newark man, previously convicted in state court of six felonies, was found guilty in federal court today of being a felon in possession of a handgun, U.S. Attorney Craig Carpenito announced.
Jamar Battle, 31, was convicted after a three-day trial before U.S. District Judge William J. Martini in Newark of one count of being a felon in possession of a firearm and ammunition. The jury deliberated two hours before delivering the guilty verdict.
According to documents filed in this case and the evidence at trial:
On the evening of July 4, 2018, Battle was involved in an argument with his girlfriend and was waiting for her outside of her home. After she arrived near her home, Battle fired six shots at the car she had been riding in as it pulled away. He did not hit his intended target, but did hit a 5-year old girl who had been walking with her father after watching a neighborhood fireworks display. The child survived the shooting but suffered a major injury that required immediate medical attention.
Prior to this shooting, Battle had been convicted of six felonies. In 2015, Battle was sentenced to New Jersey State Prison on two firearms offenses and had just been released from prison in May 2018.
The count on which Battle was convicted is punishable by a maximum of 10 years in prison and a fine of up to $250,000. Sentencing is scheduled for June 21, 2019.
U.S. Attorney Carpenito credited law enforcement officers of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose; special agents of the Department of Alcohol Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge John B. Devito; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens 2nd, with the investigation leading to today’s guilty verdict.
The government was represented by Senior Trial Counsel Robert Frazer and Special Assistant U.S. Attorney Naazneen Khan of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
Two Men Indicted for Operating Large-Scale Heroin Mill in Penthouse of Fort Lee, New Jersey, Luxury High-RiseRead the Press Release
NEWARK, N.J. – Two men were indicted today for operating a heroin mill out of a penthouse apartment unit in luxury, residential high-rise tower in Fort Lee, New Jersey, U.S. Attorney Craig Carpenito announced.
Richard Fernandez, 36, and Carlos Mosquea-Diaz, 36, are charged with conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin and fentanyl. Fernandez is also charged with possession of a firearm in relation to a drug trafficking crime.
According to documents filed in this case and statements made in court:
On Oct. 3, 2018, Mosquea-Diaz was arrested in the parking lot of the apartment building by a vehicle that contained in its trunk a wine box containing approximately $130,000. In a trash room on the 42nd floor of the apartment building, agents recovered more than 10 kilograms of heroin and fentanyl. On the same floor, a penthouse apartment sublet by Fernandez contained a loaded firearm and several thousand dollars, as well as numerous ledgers, money counters, cutting agents, and other drug distribution and packaging paraphernalia.
The conspiracy count with which the defendants are charged carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison, and a fine of up to $10 million. The weapons count with which Fernandez is charged carries a mandatory minimum sentence of five years in prison, and a maximum of life in prison, that must be served upon completion of any sentence for the drug offense.
U.S. Attorney Craig Carpenito credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Valerie A. Nickerson, with the investigation leading to today’s indictment.
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 indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Bergen County, New Jersey, Man Charged with Receiving Child PornographyRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today for receipt of child pornography, U.S. Attorney Craig Carpenito announced.
Justin Madia, 60, of Hillsdale, New Jersey, is charged by complaint with one count of receipt of child pornography. He is scheduled to appear 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:
As early as June 9, 2018, Madia used an Internet based peer-to-peer network to request video files containing images of child pornography. On Jan. 31, 2019, law enforcement searched Madia’s residence and seized a computer and multiple electronic storage devices belonging to him. The electronic storage devices contained the peer-to-peer network software and multiple images of child pornography, including images of prepubescent children being sexually abused.
The charge of receipt of child pornography carries a mandatory minimum potential penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.
U.S. Attorney Craig Carpenito credited special agents with the FBI, under the direction of Special Agents in Charge Gregory W. Ehrie in Newark and Michael T. Harpster in Philadelphia; the Hillsdale Police Department, under the direction of Chief Robert Francaviglia; the Bergen County Prosecutor’s Office Cyber Crimes Unit, under the direction Acting Prosecutor Dennis Calo; and the N.J. Regional Computer Forensic Lab, under the direction of Director Steven Newman, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Sophie Reiter of the U.S. Attorney’s Office Public Protection Unit in Newark.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Jersey City Man Sentenced to 37 Months in Prison for Scamming Investors of $3.4 MillionRead the Press Release
NEWARK, N.J. – A Jersey City man was sentenced today to 37 months in prison for swindling two investors of $3.4 million by falsely representing that his businesses had secured lucrative contracts to sell olive oil to major retailers, U.S. Attorney Craig Carpenito announced.
Antonio Fasolino, 62, previously pleaded guilty before U.S. District Judge Michael Vazquez to all four counts of indictment charging him with three counts of wire fraud and one count of transacting in criminal proceeds. Judge Vazquez imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
Fasolino owned several companies that were purportedly involved in the manufacture, sale and distribution of pasta, tomato sauce, olive oil and other food products. In 2012, Fasolino obtained approximately $3.4 million from two victims by falsely representing that Fasolino’s companies had been awarded lucrative contracts to sell olive oil.
In fact, there were never any such contracts. Fasolino supplied the victims with altered bank statements and spent the money on himself, including car and mortgage payments, apartment rentals, a wedding, college tuition and credit card payments.
In addition to the prison term, Judge Vazquez sentenced Fasolino to three years of supervised release and ordered restitution of $3.4 million.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s sentencing.
The government is represented by Executive Assistant U.S. Attorney Zach Intrater and Assistant U.S. Attorney Sarah Devlin of the Assert Forfeiture and Money Laundering Unit.
Middlesex County, New Jersey, Man and Woman Charged with Conspiring to Distribute Misbranded DrugsRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man and woman appeared in court today after being arrested for their roles in a scheme to market and distribute misbranded and unapproved new drugs, U.S. Attorney Craig Carpenito announced.
Keith Kovaleski, 54, of South Amboy, New Jersey, and Ines Maltez, 33, of Sayreville, New Jersey, were both charged by complaint with conspiring to distribute and cause the receipt and delivery of misbranded drugs and unapproved new drugs, and to impede the functions of the U.S. Food and Drug Administration (FDA). They were arrested today and appeared before U.S. Magistrate Judge Michael A. Hammer in Newark federal court. Both defendants were released on $100,000 unsecured bond.
According to documents filed in this case and statements made in court:
The FDA is responsible for protecting the health and safety of the American public by enforcing the Federal Food, Drug, and Cosmetic Act (FDCA), a law intended to assure that drugs are safe, effective, and bear accurate labeling containing all required information. The FDA regulates the manufacture, labeling, and distribution of all drugs shipped or received in interstate commerce.
From 2014 to January 2019, Kovaleski was the principal of AA Peptide LLC, a/k/a All American Peptide (AAP). AAP used its website to market and distribute substances used by bodybuilders and others engaged in weight training to enhance performance and mitigate the side effects of performance-enhancing substances.
The AAP website included a bogus legal disclaimer that its products were intended for laboratory research use only, and not as drugs or food. Kovaleski employed the bogus “research chemicals” disclaimer to conceal that he and others were distributing misbranded drugs and unapproved new drugs for use by their customers.
Between April 2018 and December 2018, an undercover law enforcement agent made five purchases of misbranded drugs and unapproved new drugs from the AAP website. Each undercover purchase was made through the website without a prescription, and none of the substances purchased contained an “Rx-only” designation on their labels. None of the substances purchased from AAP contained adequate directions for use or warnings regarding known side-effects. Two of the purchases included pills containing tadalafil, the active ingredient in Cialis, in dosages significantly higher than the highest recommended dosage.
Maltez participated in the scheme by packaging and mailing misbranded and unapproved drugs, and by receiving payments from customers.
The conspiracy charge carries a maximum potential penalty of up to five years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss.
U.S. Attorney Craig Carpenito credited special agents of the FDA, under the direction of Special Agent in Charge Jeffrey J. Ebersole, FDA Office of Criminal Investigations’ New York Field Office; postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, Newark Division, and special agents of AMTRAK Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters, Eastern Field Office, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Karen Stringer and Cari Fais of the Special Prosecutions Division.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty
Pennsylvania Woman Admits Participating in Credit Card ‘Bust Out’ Scheme to Defraud BanksRead the Press Release
NEWARK, N.J. – A Philadelphia, Pennsylvania, woman admitted today that she participated in a scheme to defraud banks by using stolen and altered identities to fraudulently obtain credit cards and then using those cards to make more than $2.5 million in charges that were never repaid, U.S. Attorney Craig Carpenito announced.
Fatou Djambo, 37, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging her with one count of conspiring to defraud financial institutions and one count of aggravated identity theft.
Djambo was originally charged with this conduct in a criminal complaint filed May 22, 2018, along with Talat Ali Maan, 44, of Germantown, Maryland; Syed Rehman, 51, of Jersey City, New Jersey; Kashif Idrees, 36, of Germantown, Maryland; and Jaheed Wahed Ahmed, 54, of Jersey City, New Jersey. Ahmed pleaded guilty to bank fraud conspiracy and aggravated identity theft before Judge Arleo on Jan. 9, 2019. The charges against Maan, Rehman, and Idrees remain pending. Idrees is not in custody, and is a fugitive.
According to documents filed in this case and statements made in court:
The defendants engaged in a scheme to use stolen and fraudulently altered identities to obtain credit cards from banks and then use those credit cards to make purchases that they had no intention to repay, leaving the banks to bear the losses. The defendants stole the identities of actual people and then, in many cases, created “synthetic identities” by pairing the name and Social Security number for an actual person with a fictitious birth date. When creating the synthetic identities, the defendants often used the name and Social Security number of an actual minor and combined them with a fictitious birth date that made the identity appear to be that of an adult.
The defendants used the stolen and synthetic identities to obtain lines of credit, primarily through opening credit card accounts at banks. The fraudulently obtained credit cards were maintained in good standing with the banks long enough to establish creditworthiness. The defendants then “busted out” the cards by making large purchases and never repaying the debts associated with those purchases.
The defendants also incorporated and registered in various states numerous purported companies that did little or no legitimate business. They obtained credit card processing equipment by opening merchant processing accounts in the names of the sham companies, and then used that equipment to make fraudulent charges on the fraudulent credit cards.
Djambo’s role included arranging for individuals to obtain genuine, but fraudulently obtained, Pennsylvania driver’s licenses, a service for which Maan and Rehman paid her. Djambo also secured addresses in the Philadelphia area to which Maan and Rehman could direct mail containing fraudulently obtained credit cards and other items relating to the scheme. Djambo collected and delivered that mail to conspirators in Jersey City, among other locations.
The charge of conspiring to defraud financial institutions carries a maximum penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. The aggravated identity theft charges carries a mandatory penalty of two years in prison, which must run consecutively to any other term of imprisonment imposed, and an up to $250,000 fine.
U.S. Attorney Carpenito credited special agents of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to today’s guilty plea.
The charges in the complaint are merely allegations, and Maan, Rehman, and Idrees are presumed to be innocent unless and until convicted.
The government is represented by First Assistant U.S. Attorney Rachael A. Honig.
Two Ukrainian Nationals Indicted in Computer Hacking and Securities Fraud Scheme Targeting U.S. Securities and Exchange CommissionRead the Press Release
Two Ukrainian men have been charged for their roles in a large-scale, international conspiracy to hack into the Securities and Exchange Commission’s (SEC) computer systems and profit by trading on critical information they stole.
In a 16-count indictment unsealed today in the District of New Jersey, Artem Radchenko, 27, and Oleksandr Ieremenko, 26, both of Kiev, Ukraine, are charged with securities fraud conspiracy, wire fraud conspiracy, computer fraud conspiracy, wire fraud, and computer fraud. The SEC also filed a civil complaint today charging Ieremenko along with several other individuals and entities.
The indictment alleges that Radchenko and Ieremenko hacked into the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and stole thousands of files, including annual and quarterly earnings reports containing confidential, non-public, financial information, which publicly traded companies are required to disclose to the SEC. The defendants and others then profited by selling access to the confidential information in these reports and trading on this stolen information prior to its distribution to the investing public.
“The defendants allegedly orchestrated sophisticated computer intrusions to steal non-public information from the SEC, compromising the integrity of the market and depriving honest investors of a level playing field,” said Assistant Attorney General Benczkowski. “The Department of Justice will aggressively pursue and prosecute those who attack our financial markets and seek to profit unfairly, no matter where such offenders reside.”
“The defendants charged in the indictment announced today engaged in a sophisticated hacking and insider trading scheme to cheat the securities markets and the investing public,” U.S. Attorney Craig Carpenito said. “They targeted the Securities and Exchange Commission with a series of sophisticated and relentless cyber-attacks, stealing thousands of confidential EDGAR filings from the Commission’s servers and then trading on the inside information in those filings before it was known to the market, all at the expense of the average investor.”
“Today’s indictment sends a strong message to those criminals who choose to use the cyber-world to profit from network intrusion,” Mark McKevitt, Special Agent in Charge of the Secret Service Newark Field Office, said. “The Secret Service will continue to aggressively investigate cyber-enabled financial crimes and develop innovative ways to combat emerging cyber threats.”
“This indictment is a testament to the countless hours of hard work and dedication by law enforcement in the fight against cyber criminals,” FBI Special Agent in Charge Gregory W. Ehrie said. “Cybercrime knows no boundaries. Dismantling these operations are possible only by working closely with our partners.”
According to the indictments unsealed today:
From February 2016 to March 2017, Radchenko, Ieremenko, and others conspired to gain unauthorized access to the computer networks of the SEC’s EDGAR system, which is used by publicly traded companies to file required disclosures, such as annual and quarterly earnings reports. These filings contained detailed information about the financial condition and operations of the companies, including their earnings. Such information can, and often does, affect the stock price of the companies when it is made public, and is therefore highly confidential prior to its disclosure to the general public.
The EDGAR system allows companies to make test filings in advance of a public filing. These test filings often contain information that is the same as, or similar to the information in the final filing. The defendants stole thousands of test filings before they were released to the public, and sought to profit from their theft by using the information in the test filings to trade before the investing public learned the information.
To gain access to the SEC’s computer networks, the defendants used a series of targeted cyber-attacks, including directory traversal attacks, phishing attacks, and infecting computers with malware. Once the defendants had access to the test filings on the EDGAR system, they stole them by copying the test filings to servers they controlled. For example, between May 2016 and October 2016, the defendants extracted thousands of test filings from the EDGAR servers to a server they controlled in Lithuania.
Ieremenko was previously charged in a hacking and securities fraud scheme in an indictment in the District of New Jersey. That indictment charged Ieremenko with being part of a large-scale, international conspiracy to hack the computer systems of three newswire organizations and steal press releases containing confidential non-public financial information relating to hundreds of companies traded on the NASDAQ and NYSE from three newswires. The members of the conspiracy profited from the theft by trading on the news ahead of its distribution to the investing public. The indictment unsealed today alleges Ieremenko employed some of the same methods to hack the SEC.
Radchenko recruited to the scheme traders who were provided with the stolen test filings so they could profit by trading on the information before the investing public. Armed with the stolen information, the traders profited by executing various trades in brokerage accounts they controlled. In one instance, a test filing for “Public Company 1” was uploaded to the EDGAR servers at 3:32 p.m. (EDT) on May 19, 2016. Six minutes later, the defendants stole the test filing and uploaded a copy to the Lithuania server. Between 3:42 p.m. and 3:59 p.m., a conspirator purchased approximately $2.4 million worth of shares of Public Company 1. At 4:02 p.m., Public Company 1 released its second quarter earnings report and announced that it expected to deliver record earnings in 2016. Over the next day, the conspirator sold all the acquired shares in Public Company 1 for a profit of more than $270,000.
The wire fraud conspiracy and substantive wire fraud counts with which the defendants are charged 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 conspiracy, computer fraud conspiracy, and substantive computer fraud counts with which the defendants are charged carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.
This case was investigated by the U.S. States Secret Service and special agents of the FBI, with assistance from the SEC’s Market Abuse and Cyber Units and the Justice Department’s Office of International Affairs.
The prosecution is being handled by Trial Attorney Aarash Haghighat of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), and by Assistant U.S. Attorney Daniel Shapiro; Chief of the Cybercrimes Unit Justin S. Herring; Attorney-in-Charge, of the U.S. Attorney’s Office in Trenton Nicholas Grippo; and Special Assistant U.S. Attorney Lynn O’Connor.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two Ukrainian Nationals Indicted in Computer Hacking and Securities Fraud Scheme Targeting U.S. Securities and Exchange CommissionRead the Press Release
NEWARK, N.J. – Two Ukrainian men have been charged for their roles in a large-scale, international conspiracy to hack into the Securities and Exchange Commission’s (SEC) computer systems and profit by trading on critical information they stole, U.S. Attorney Craig Carpenito announced today.
In a 16-count indictment unsealed today Artem Radchenko, 27, and Oleksandr Ieremenko, 26, both of Kiev, Ukraine, are charged with securities fraud conspiracy, wire fraud conspiracy, computer fraud conspiracy, wire fraud, and computer fraud. The SEC also filed a civil complaint today charging Ieremenko along with several other individuals and entities.
The indictment alleges that Radchenko and Ieremenko hacked the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system and stole thousands of files, including annual and quarterly earnings reports containing confidential, non-public, financial information, which publicly traded companies are required to disclose to the SEC. The defendants and others then profited by selling access to the confidential info in these reports and trading on this stolen information prior to its distribution to the investing public.
“The defendants charged in the indictment announced today engaged in a sophisticated hacking and insider trading scheme to cheat the securities markets and the investing public,” U.S. Attorney Craig Carpenito said. “They targeted the Securities and Exchange Commission with a series of sophisticated and relentless cyber-attacks, stealing thousands of confidential EDGAR filings from the Commission’s servers and then trading on the inside information in those filings before it was known to the market, all at the expense of the average investor.”
“The defendants allegedly orchestrated sophisticated computer intrusions to steal non-public information from the SEC, compromising the integrity of the market and depriving honest investors of a level playing field,” said Assistant Attorney General Brian Benczkowski. “The Department of Justice will aggressively pursue and prosecute those who attack our financial markets and seek to profit unfairly, no matter where such offenders reside.”
“Today’s indictment sends a strong message to those criminals who choose to use the cyber-world to profit from network intrusion,” Mark McKevitt, Special Agent in Charge of the Secret Service Newark Field Office, said. “The Secret Service will continue to aggressively investigate cyber-enabled financial crimes and develop innovative ways to combat emerging cyber threats.”
“This indictment is a testament to the countless hours of hard work and dedication by law enforcement in the fight against cyber criminals,” FBI Special Agent in Charge Gregory W. Ehrie said. “Cybercrime knows no boundaries. Dismantling these operations are possible only by working closely with our partners.”
According to the indictments unsealed today:
From February 2016 to March 2017, Radchenko, Ieremenko, and others conspired to gain unauthorized access to the computer networks of the SEC’s EDGAR system, which is used by publicly traded companies to file required disclosures, such as annual and quarterly earnings reports. These filings contained detailed information about the financial condition and operations of the companies, including their earnings. Such information can, and often does, affect the stock price of the companies when it is made public, and is therefore highly confidential prior to its disclosure to the general public.
The EDGAR system allows companies to make test filings in advance of a public filing. These test filings often contain information that is the same or similar to the information in the final filing. The defendants stole thousands of test filings before they were released to the public, and sought to profit from their theft by using the information in the test filings to trade before the investing public learned the information.
To gain access to the SEC’s computer networks, the defendants used a series of targeted cyber-attacks, including directory traversal attacks, phishing attacks, and infecting computers with malware. Once the defendants had access to the test filings on the EDGAR system, they stole them by copying the test filings to servers they controlled. For example, between May 2016 and October 2016, the defendants extracted thousands of test filings from the EDGAR servers to a server they controlled in Lithuania.
Ieremenko was previously charged in a hacking and securities fraud scheme in an indictment in the District of New Jersey. That indictment charged Ieremenko with being part of a large-scale, international conspiracy to hack the computer systems of three newswire organizations and steal press releases containing confidential non-public financial information relating to hundreds of companies traded on the NASDAQ and NYSE from three newswires. The members of the conspiracy profited from the theft by trading on the news ahead of its distribution to the investing public. The indictment unsealed today alleges Ieremenko employed some of the same methods to hack the SEC.
Radchenko recruited to the scheme traders who were provided with the stolen test filings so they could profit by trading on the information before the investing public. Armed with the stolen information, the traders profited by executing various trades in brokerage accounts they controlled. In one instance, a test filing for “Public Company 1” was uploaded to the EDGAR servers at 3:32 p.m. (EDT) on May 19, 2016. Six minutes later, the defendants stole the test filing and uploaded a copy to the Lithuania server. Between 3:42 p.m. and 3:59 p.m., a conspirator purchased approximately $2.4 million worth of shares of Public Company 1. At 4:02 p.m., Public Company 1 released its second quarter earnings report and announced that it expected to deliver record earnings in 2016. Over the next day, the conspirator sold all the acquired shares in Public Company 1 for a profit of more than $270,000.
The wire fraud conspiracy and substantive wire fraud counts with which the defendants are charged 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 conspiracy, computer fraud conspiracy, and substantive computer fraud counts with which the defendants are charged carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.
U.S. Attorney Craig Carpenito credited special agents of the U.S. States Secret Service, under the direction of Special Agent in Charge Mark McKevitt, Newark Field Office; 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 indictment. He also thanked the SEC’s Market Abuse and Cyber Units under the direction of Robert Cohen, Joseph Sansone, and Carolyn Welshhans, and the Justice Department’s Office of International Affairs.
The government is represented by Assistant U.S. Attorney Daniel Shapiro; Chief of the Cybercrimes Unit Justin S. Herring; Attorney-in-Charge of the U.S. Attorney’s Office in Trenton Nicholas Grippo; Special Assistant U.S. Attorney Lynn O’Connor; and DOJ Trial Attorney Aarash Haghighat of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS).
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Hoboken, New Jersey, Man Charged with Using U.S. Mails to Promote Voter Bribery SchemeRead the Press Release
NEWARK, N.J. – A Hoboken, New Jersey, man has been charged with promoting a voter bribery scheme by use of the U.S. mail, U.S. Attorney Craig Carpenito announced today.
William Rojas, 68, is charged by complaint with a violation of the federal Travel Act for causing the mails to be used in aid of voter bribery contrary to New Jersey state law. He is scheduled to have his initial appearance 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:
Under New Jersey law, registered voters are permitted to cast a ballot by mail rather than in person. To receive a mail-in ballot, voters must complete and submit to their county clerk’s office an Application for Vote by Mail Ballot (VBM Application). After the application is processed by the county clerk’s office, voters receive a mail-in ballot.
From September 2015 through November 2015, Rojas agreed to pay certain Hoboken voters $50 if those voters applied for and cast mail-in ballots for the November 2015 Hoboken municipal election. Rojas provided these voters with VBM Applications, told the voters that they would get paid $50 for casting mail-in ballots, and then delivered the completed VBM applications to the Hudson County Clerk’s office. After the mail-in ballots were delivered to the voters, Rojas went to the voters’ residences to collect the mail-in ballots and mailed the completed mail-in ballots to the Hudson County Clerk’s Office. After the election, Rojas delivered checks to these voters. Bank records show that voters living in Hoboken received $50 checks from an entity associated with the campaign that employed Rojas.
Rojas faces a maximum penalty of five years in prison and a $250,000 fine.
U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, and special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Sean Farrell of the U.S. Attorney’s Office’s Special Prosecutions Division and Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Ocean County Attorney Charged with Tax Evasion, Filing False Tax Returns, Failing to Pay over Payroll Taxes, and Making False Statements on Loan ApplicationRead the Press Release
TRENTON, N.J. – A federal grand jury today indicted a partner at an Ocean County law firm for evasion of taxes totaling more than $1 million; filing false income tax returns; failing to pay over payroll taxes to the IRS; and making false statements on a bank loan application, First Assistant U.S. Attorney Rachael A. Honig announced.
George Gilmore, 69, of Toms River, New Jersey, was charged in a six-count indictment with one count of income tax evasion for calendar years 2013, 2014, and 2015; two counts of filing false tax returns for calendar years 2013 and 2014; failing to collect, account for, and pay over payroll taxes for two quarters in 2016, and making false statements on a 2015 loan application submitted to Ocean First Bank N.A.
According to documents filed in this case:
Gilmore worked as an equity partner and shareholder at Gilmore & Monahan P.A., a law firm in Toms River, where he exercised primary control over the firm’s financial affairs. Gilmore filed on behalf of himself and his spouse federal income tax returns declaring that he owed $493,526 for calendar year 2013, $321,470 for 2014, and $311,287 for 2015. Despite admitting that he owed taxes for each of these years, Gilmore made no estimated tax payments and failed to pay the federal individual income taxes that he owed. Rather, between January 2014 and December 2016, Gilmore spent more than $2.5 million on personal expenses, including substantial home remodeling costs, vacations, and the acquisition of antiques, artwork, and collectibles. By Dec. 31, 2016, based on the tax due and owing that Gilmore reported on the returns, he owed the IRS $1,520,329 in taxes, penalties, and interest.
To evade and defeat the payment of his taxes Gilmore concealed information from the IRS and falsely classified income, made false and misleading statements to IRS personnel, and filed false tax returns that materially understated the true amount of income that he received from the law firm:
- From January 2014 to December 2016, Gilmore used the law firm’s bank accounts to pay more than $2 million worth of personal expenses, including obtaining checks to cash and cash advances on a corporate credit card. Gilmore falsely classified payments as “shareholder loans” instead of income to him.
- On Oct. 16, 2014, Gilmore sent the IRS a $493,526 check as payment for his 2013 taxes despite having no more than $2,500 in his personal bank account at the time. Gilmore’s check bounced and he never resubmitted payment in lieu of the bounced check. From November 2014, when he was notified by the IRS concerning the bounced check, to the end of December 2014, Gilmore spent more than $80,000 toward the construction of his home and to purchase artwork, antiques, and collectibles and more than $25,000 in mortgages and related expenses for five real estate properties that he owed.
- From November 2014 to October 2015, Gilmore falsely represented to the IRS collections officer that he would make partial payments to the IRS for his outstanding tax liability, but made none.
- Gilmore filed false tax returns for 2013 and 2014, which under reported his actual income from the law firm.
Because he exercised significant control over the law firm’s financial affairs, Gilmore was a person responsible for withholding payroll taxes from the gross salary and wages of the law firm’s employees to cover individual income, Social Security and Medicare tax obligations. For the tax quarters ending March 31, 2016, and June 30, 2016, the law firm withheld tax payments from its employees’ checks, but Gilmore failed to pay over in full the payroll taxes due to the IRS.
Gilmore also submitted a loan application to Ocean First Bank containing false statements. On Nov. 21, 2014, Gilmore reviewed, signed, and submitted to Ocean First Bank a Uniform Residential Loan Application (URLA) to obtain refinancing of a mortgage loan for $1.5 million with a “cash out” provision that provided Gilmore would obtain cash from the loan. On Jan. 22, 2015, Gilmore submitted another URLA updating the initial application. Gilmore failed to disclose his outstanding 2013 tax liabilities and personal loans that he had obtained from others on the URLAs. Gilmore received $572,000 from the cash out portion of the loan, the proceeds of which he did not apply to his unpaid taxes.
The tax evasion count and the two counts of failing to collect, account for, and pay over payroll taxes each carry a maximum penalty of five years in prison, and a $250,000 fine, or twice the gross gain or loss from the offense. The two counts of filing a false tax return each carry a maximum penalty of three years in prison, and a $250,000 fine, or twice the gross gain or loss from the offense. The count alleging loan application fraud carries a maximum penalty of 30 years in prison and a $1 million fine. Gilmore will be arraigned at a date to be determined.
First Assistant U.S. Attorney Honig credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, special agents with U.S. Attorney’s Office under the direction of Supervisory Special Agent Thomas Mahoney, and special agents of the FBI Red Bank Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, for the investigation leading to today’s indictment.
The government is represented by Deputy U.S. Attorney Matthew J. Skahill; Assistant U.S. Attorney Jihee G. Suh of the U.S. Attorney’s Office Special Prosecutions Division; and Trial Attorney Thomas F. Koelbl of the U.S. Department of Justice - Tax Division.
The charges and allegations in the indictment are merely accusations, and Gilmore is considered innocent unless and until proven guilty.
New York CPA Admits False Tax FilingRead the Press Release
NEWARK, N.J. – A certified public accountant from New York today admitted filing a tax return in his own name that contained materially false information, U.S. Attorney Craig Carpenito announced.
Christopher Miu, 58, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of subscribing to a tax return that he knew substantially understated his gross income.
According to documents filed in this case and statements made in court:
Between 2008 and 2014, Miu failed to file income tax returns own his own behalf. When he ultimately filed returns for those years, Miu substantially under-reported his gross income, leading to a tax loss to the United States of more than $550,000.
The count to which Miu pleaded guilty carries a maximum potential statutory penalty of three years in prison, and a fine of up to $100,000. Miu has also agreed to resolve his tax due and owing with the IRS. Sentencing is scheduled for April 25, 2019.
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 guilty plea.
The government is represented by Senior Trial Counsel Andrew Leven of the Healthcare & Government Fraud Unit of the U.S. Attorney’s Office, District of New Jersey.
Microcap Company CEO Sentenced to 52 Months in Prison for Securities FraudRead the Press Release
TRENTON, N.J. – The chief executive officer of a publicly traded microcap company was sentenced today to 52 months in prison for orchestrating a multimillion-dollar securities fraud scheme using false reports with the U.S. Securities and Exchange Commission, U.S. Attorney Craig Carpenito announced.
Cary Lee Peterson, 38, of Phoenix, Arizona, was previously found guilty of all three counts of an indictment charging him with two counts of false certification in SEC filings and one count of securities fraud. He was convicted following a two-week trial before U.S. District Judge Anne E. Thompson, who imposed the sentence today in Trenton federal court.
According to documents filed in this case and evidence presented at trial:
Peterson, as CEO of RVPlus Inc., filed numerous false reports with the SEC, including:
- On Aug. 21, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $1.8 billion with the Ministry of Environment for Katsina State within the Federal Republic of Nigeria to provide unspecified green energy products and services.
- On Nov. 16, 2013, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $90 million with the Commission of the Foreign Affairs to the Senate for the Republic of Haiti.
- On Dec. 21, 2012, Peterson falsely certified on Form 10-Q that RVPlus held $8,653,846 in short-term accounts receivable for services rendered under the Nigeria agreement, despite prior warnings from RVPlus’ auditors that reporting these receivables as revenue was improper.
- On Dec. 27, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $10.5 million with the Federal Ministry of Planning & Economic Affairs for the Republic of Liberia.
- On March 28, 2013, Peterson falsely certified on SEC Form 10-Q that RVPlus held $17,590,837 in short-term accounts receivable from, among other sources, the Haiti and Liberia agreements.
The SEC suspended trading in RVPlus on July 19, 2013, due to questions concerning the accuracy of RVPlus’ periodic financial filings, including reported accounts receivable, assets, and operations.
Peterson also claimed that ECCO2 Corp., a not-for-profit owned by Peterson was an “affiliate organization” of the U.N. Convention on Climate Change. Peterson claimed that “[t]his status held with the sectors of the United Nations opens many windows of opportunity to over $100 billion in financial aid to fund ECCO2 projects.” ECCO2 was never an affiliate of the U.N. Convention on Climate Change. In fact, the U.N. wrote to Peterson on two separate occasions demanding that ECCO2 stop claiming that it was.
In addition to the prison term, Judge Thompson sentenced Peterson to three years of supervised release and ordered him to pay restitution of $250,167.
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. He also thanked FBI special agents under the direction of Special Agent in Charge John F. Bennett in San Francisco for their assistance with Peterson’s arrest, and the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Regional Director Marc P. Berger and Senior Associate Regional Director Sanjay Wadhwa, for its assistance.
The government is represented by Assistant U.S. Attorney Ari Fontecchio of the U.S. Attorney’s Office Criminal Division and Executive Assistant U.S. Attorney Zach Intrater.