District of New Jersey

NEWARK, N.J. – A Jersey City police officer was sentenced today to one year and one day in prison for participating in a conspiracy to defraud Jersey City by obtaining compensation for off-duty work that they did not perform, U.S. Attorney Craig Carpenito announced.

James Cardinali, 38, of Jersey City, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit fraud. Judge Vazquez imposed the sentence today in Newark federal court.

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

Cardinali’s duties included serving as the “pick coordinator” for Jersey City’s South District, responsible for assigning police officers to off-duty details. On multiple occasions, Cardinali asked representatives of certain vendors who were performing work in the South District to sign Jersey City off-duty vouchers indicating that a police officer had completed an off-duty assignment for that vendor, even though no officer had in fact completed any assignment. Cardinali then falsely represented on these vouchers that a particular police officer had completed an off-duty assignment. These officers were paid for work they did not perform. Cardinali personally obtained from the officers some of the money that they were paid as a result of the fraudulent conduct.

In addition to the prison term, Judge Vazquez sentenced Cardinali to three years of supervised release and ordered restitution of $166,255 and forfeiture of $39,587.

U.S. Attorney Cardinali credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. The Jersey City Police Department is cooperating with the investigation.

The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel: Matthew E. Beck Esq., West Orange, New Jersey

CAMDEN, N.J. – An Atlantic County, New Jersey, man today admitted his role in robbing the PNC Bank branch in Marlton, New Jersey, on Dec. 8, 2017, as well as two other bank robberies, U.S. Attorney Craig Carpenito announced.

Matthew Burney, 44, of Brigantine, New Jersey, pleaded guilty before U.S. District Judge Joseph Rodriguez in Camden federal court to an information charging him with one count of bank robbery. During the plea hearing, Burney also admitted committing two additional bank robberies.

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

Burney entered the PNC Bank branch in Marlton while wearing a mask that covered the lower part of his face. He threatened to shoot the occupants if the alarm was activated. He pointed what appeared to be semi-automatic handgun at one of the tellers, threatened to shoot her, and demanded all the money from her cash drawer. After she gave him cash, he approached a second teller and demanded money from her. She complied, and Burney then fled the bank.

Burney also admitted robbing the Chase Bank in North Brunswick, New Jersey, on Feb. 28, 2017, and the Bank of America in Fairless Hills, Pennsylvania, on December 9, 2017.

The bank robbery charge carries a maximum potential penalty of 20 years in prison and a fine of either $250,000 or twice the gross gain or loss from the offense, whichever is greater.

U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie; the Evesham Police Department, under the direction of Chief Christopher Chew; the Bristol Township, Pennsylvania, Police Department, under the direction of Robert Coulton, and the Burlington County Prosecutor’s Office, under the direction of Burlington County Prosecutor Scott A. Coffina, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Norman Gross of the U.S. Attorney’s Office Camden Branch.

Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden

TRENTON, N.J. – A Passaic County, New Jersey, man has been convicted of conspiracy to distribute cocaine, money laundering, structuring monetary instruments, and conspiracy to commit money laundering and structuring, U.S. Attorney Craig Carpenito announced today.

Khamraj Lall, 51, of Ringwood, New Jersey, was convicted Oct. 4, 2018, on all eight counts of a superseding indictment following an eight-day trial before U.S. District Judge Anne E. Thompson in Trenton federal court.

According to documents filed in the case and the evidence at trial:

From April 2011 through November 2014, Lall, a private pilot, smuggled hundreds of kilograms of cocaine from Guyana to New Jersey and New York on his privately owned jet aircraft and then laundered the proceeds.

Lall, who owed a private jet charter business called Exec Jet Club in Gainesville, Florida, used the proceeds of his cocaine empire to purchase jet planes, houses, and cars. He also paid more than $2 million in cash stuffed in suitcases to a Florida contractor to build an airplane hangar in Guyana.

Over a 3 ½ year period, Lall also made (or had others make) 1,287 cash deposits totaling approximately $7.5 million into more than 20 different bank accounts in New Jersey and New York, much of it in $20 bills. In order to avoid detection and circumvent bank reporting laws, all 1,287 deposits were for amounts less than $10,000.

In November 2014, Lall was flying one of his jets from the United States to Guyana and stopped in Puerto Rico to refuel. An outbound search of the plane discovered $470,000 in cash stuffed into a suitcase hidden in the tail of the plane, and another $150,000 in cash hidden under a seat.

The conspiracy to distribute cocaine carries a minimum penalty of 10 years in prison, a maximum of life in prison, and a $10 million fine. The counts for money laundering and conspiracy to launder money each carry a potential penalty of 20 years in prison. The counts of structuring and conspiracy to structure cash carry a potential penalty of 10 years in prison.

U.S. Attorney Carpenito credited special agents and task force officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; the Morristown, New Jersey, police department, under the direction of Chief Peter Demnitz; special agents and staff of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) under the direction of Special Agent in Charge Brian Michael; the Drug Enforcement Administration-Rochester, New York, under the direction of Special Agent in Charge James J. Hunt; the Federal Aviation Administration, Law Enforcement Assistance Program; and U.S. Customs and Border Protection Air and Marine Operations Center under the direction of Richard T. Booth, with the investigation leading to the conviction.

The government is represented by Assistant U.S. Attorneys Jonathan M. Peck and Thomas S. Kearney of the Criminal Division in Newark.

Defense Counsel: Michael D’Alessio Jr. Esq. West Orange, New Jersey, and Tama Beth Kudman Esq., West Palm Beach, Florida

Television personality Michael “The Situation” Sorrentino was sentenced to eight months in prison, and his brother, Marc Sorrentino, was sentenced to 24 months in prison for violating federal tax laws. Principal Deputy Assistant Attorney General Richard E. Zuckerman of the U.S. Department of Justice’s Tax Division, U.S. Attorney Craig Carpenito for District of New Jersey, and IRS Special Agent in Charge John R. Tafur made the announcement.

Tax evasion charges were originally brought against Michael Sorrentino, 37, and his brother, Marc Sorrentino, 39, in September 2014, and a superseding indictment returned in April 2017 added additional charges. Michael previously pleaded guilty before U.S. District Judge Susan D. Wigenton to Count 13 of a superseding indictment, which charged him with tax evasion. Marc pleaded guilty to Count 5, which charged him with aiding in the preparation of a false and fraudulent tax return. Judge Wigenton imposed the sentences today in Newark federal court.

“Lying to and defrauding the federal government is a very serious crime, regardless of a defendant’s celebrity status,” said Principal Deputy Assistant Attorney General Zuckerman. “The Sorrentino brothers chose to use Michael’s fame to benefit themselves at the expense of the American taxpayer, and with the help of our federal partners, they were held accountable.”

“The law requires all Americans to pay our fair share of taxes. These defendants deliberately flouted this requirement, acting as though fame and celebrity status placed them above the law. They are not," said U.S. Attorney Carpenito. Tax fraud is as serious as any other form of theft from the government, and the sentences imposed today should make that abundantly clear.”

“Tax crimes, plain and simple, are an outright theft from the hardworking American public,” stated John R. Tafur, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office.  “The courts recognize the severity of these crimes and now Michael and Marc Sorrentino are convicted felons with prison sentences to serve for intentionally disregarding their tax obligations to our country.”

According to documents filed in this case and statements made in court, Michael Sorrentino was a reality television personality who gained fame on “The Jersey Shore,” which first appeared on the MTV network. He and his brother, Marc, created businesses, such as MPS Entertainment LLC and Situation Nation Inc., to take advantage of Michael’s celebrity status.

Michael Sorrentino admitted that in tax year 2011, he earned taxable income, including some that was paid in cash, and that he took certain actions to conceal some of his income to avoid paying the full amount of taxes he owed. He made cash deposits into bank accounts in amounts less than $10,000 each so that these deposits would not come to the attention of the IRS.

Marc Sorrentino admitted that during tax years 2010, 2011 and 2012, he earned taxable income and that he assisted his accountants in preparing his personal tax return for those years, willfully providing them with false information. His personal tax returns under-reported his total income and taxable income.

In addition to the terms of imprisonment, Judge Wigenton ordered Michael Sorrentino to serve two years of supervised release and pay $123,913 in restitution and a criminal fine of $10,000. Marc Sorrentino was ordered to serve one year of supervised release and pay a criminal fine of $7,500.

Principal Deputy Attorney General Zuckerman and U.S. Attorney Carpenito credited special agents of the IRS, under the direction of Special Agent in Charge Tafur, with the investigation leading to today’s sentencings.

The government is represented by  Trial Attorneys Yael T. Epstein and Jeffrey B. Bender of the Tax Division of the U.S. Department of Justice and Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Criminal Division in Newark.

NEWARK, N.J. – Television personality Michael “The Situation” Sorrentino was sentenced today to eight months in prison and his brother, Marc Sorrentino, to 24 months in prison for violating federal tax laws, U.S. Attorney Craig Carpenito, District of New Jersey; Principal Deputy Assistant Attorney General Richard E. Zuckerman of the U.S. Department of Justice’s Tax Division; and IRS Special Agent in Charge John R. Tafur announced.

Michael Sorrentino, 37, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to Count 13 of a superseding indictment, which charged him with tax evasion. Marc Sorrentino, 39, pleaded guilty to Count 5, which charged him with aiding in the preparation of a false and fraudulent tax return. Judge Wigenton imposed the sentences today in Newark federal court.

“The law requires all Americans to pay our fair share of taxes,” U.S. Attorney Carpenito said. “These defendants deliberately flouted this requirement, acting as though fame and celebrity status placed them above the law. They are not. Tax fraud is as serious as any other form of theft from the government, and the sentences imposed today should make that abundantly clear.”

“Lying to and defrauding the federal government is a very serious crime, regardless of a defendant’s celebrity status,” said Principal Deputy Assistant Attorney General Zuckerman. “The Sorrentino brothers chose to use Michael’s fame to benefit themselves at the expense of the American taxpayer, and with the help of our federal partners, they were held accountable.”

“Tax crimes, plain and simple, are an outright theft from the hardworking American public,” Special Agent in Charge Tafur, IRS Criminal Investigation, Newark Field Office, said. “The courts recognize the severity of these crimes and now Michael and Marc Sorrentino are convicted felons with prison sentences to serve for intentionally disregarding their tax obligations to our country.”

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

Michael Sorrentino was a reality television personality who gained fame on “The Jersey Shore,” which first appeared on the MTV network. He and his brother, Marc, created businesses, such as MPS Entertainment LLC and Situation Nation Inc., to take advantage of Michael’s celebrity status.

Michael Sorrentino admitted that in tax year 2011, he earned taxable income, including some that was paid in cash, and that he took certain actions to conceal some of his income to avoid paying the full amount of taxes he owed. He made cash deposits into bank accounts in amounts less than $10,000 each so that these deposits would not come to the attention of the IRS.

Marc Sorrentino admitted that during tax years 2010, 2011 and 2012, he earned taxable income and that he assisted his accountants in preparing his personal tax return for those years, willfully providing them with false information. His personal tax returns under-reported his total income and taxable income.

In addition to the prison terms, Judge Wigenton sentenced Michael Sorrentino to two years of supervised release, 500 hours of community service, $123,000 in restitution (which has already been paid) and fined him $10,000. Marc Sorrentino was sentenced to one year of supervised release, and fined $7,500, with restitution to be determined at a later date.

U.S. Attorney Carpenito and Principal Deputy Attorney General Zuckerman credited special agents of the IRS, under the direction of Special Agent in Charge Tafur, with the investigation leading to today’s sentencings.

The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Criminal Division in Newark; Trial Attorneys Yael T. Epstein and Jeffrey B. Bender of the Tax Division of the U.S. Department of Justice.

Defense counsel: Michael Sorrentino: Henry E. Klingeman Esq. and Kristen Santillo Esq., Newark
Marc Sorrentino: Michael D’Alessio Jr. Esq., West Orange, New Jersey

NEWARK, N.J. – A former senior vice president of a national demolition company today admitted accepting $341,052 from the chief executive officer and from the president of a scrap metal company to steer business to them, U.S. Attorney Craig Carpenito announced.

Frank Aiello, 53, of Wyckoff, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with conspiracy to commit wire fraud.

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

Aiello worked as a senior vice president at Corporate Victim 1, a demolition and remediation services company with offices throughout the United States, including New Jersey.

Cinelli Iron & Metal Co. Inc. purchased scrap metal for resale. Cinelli was headquartered in Secaucus, New Jersey, and operated three scrap metal recycling facilities in New Jersey. Co-Conspirator 1 (CC-1) was a co-owner of Cinelli. Co-Conspirator 2 (CC-2) was the President and co-owner of Cinelli.

From 2013 through 2016 Aiello participated in a conspiracy with CC-1 and CC-2 to defraud Corporate Victim 1 of its right to his honest services in the performance of his duties. The principal goal of the conspiracy was for Aiello to use his position to enrich himself by soliciting and accepting gifts, payments, and other things of value from the two Cinelli conspirators in exchange for actions favorable to their business, and for the Cinelli officials to enrich themselves by secretly obtaining favorable action through corrupt means.

The wire fraud conspiracy count carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 15, 2019.

U.S. Attorney Carpenito credited special agents with the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael Mikulka in New York; special agents with the U.S. Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker in New York; and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation.

The government is represented by Senior Litigation Counsel Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

Defense counsel: John Azzarello Esq., Morristown, New Jersey

TRENTON, N.J. – Three New Jersey men – a real estate investor, a builder, and a real estate settlement attorney – were arraigned today on multiple charges in connection with their alleged roles in a mortgage fraud scheme, U.S. Attorney Craig Carpenito announced. 

Victor Santos, a/k/a “Vitor Santos,” 58, of Watchung, New Jersey; Arsenio Santos, a/k/a “Gaspar Santos,” 51, of Warren, New Jersey; and Fausto Simoes, 65, of Millington, New Jersey, were charged on Sept. 24, 2018, in a 19-count indictment. They were each charged with one count of conspiring to commit bank fraud. Victor Santos was charged with nine counts of bank fraud and nine counts of making false statements in an application for credit. Arsenio Santos was charged with four counts of bank fraud and four counts of making false statements in an application for credit. Simoes was charged with seven counts of bank fraud and seven counts of making false statements in an application for credit.

All three were arraigned today before U.S. District Judge Michael Shipp in Trenton federal court. 

According to documents filed in this case:

From September 2007 through November 2008, Victor Santos, a real estate investor; Arsenio Santos, a builder; and Simoes, a real estate settlement attorney, and others allegedly conspired to fraudulently obtain mortgage loans with a total value of more than $4 million.

Victor Santos, Arsenio Santos, and their conspirators allegedly recruited “straw buyers” –individuals who purchase a property for another in order to conceal the identity of the actual purchaser, usually in exchange for a fee – to purchase properties in Newark. 

In exchange for the use of the straw buyers’ identity and credit history, Victor Santos, Arsenio Santos, and others allegedly agreed to pay each of the straw buyers a fee of at least $5,000, provide the straw buyer’s down payment and cash required for closing, secure tenants to lease the purchased property, and make the mortgage payments on each of the fraudulently obtained mortgages. These secret agreements were not disclosed to the bank. Shortly after the properties were acquired the mortgages went into default. 

For the three representative schemes highlighted in the indictment, Victor Santos, Arsenio Santos, and their conspirators prepared and submitted mortgage applications containing false information to the bank and obtained loans totaling more than $1.3 million. The conspirators allegedly arranged transactions for the Newark properties whereby the straw buyers would nominally purchase the properties for far more than the sellers had agreed to sell them, and the conspirators diverted excess loan proceeds for their own benefit and to further the conspiracy. 

Simoes was the closing attorney on approximately 10 of the fraudulent transactions and signed and certified the final settlement statements. These statements falsely stated that the cash required for closing for each transaction came from the straw buyer. In fact, Victor Santos and his conspirators provided those funds to Simoes and the funds were deposited into Simoes’ attorney trust account. For certain transactions, a shell company – whose bank account was controlled by Victor Santos and a conspirator – and to which funds from fraudulently obtained mortgage loans were disbursed – was the source of the cashier’s checks given to Simoes to fund the straw buyer’s cash required at closing. For other transactions, down payments came from an account owned and controlled by Arsenio Santos or from the proceeds of a previously obtained fraudulent loan.

The conspiracy to commit bank fraud count, the bank fraud counts, and the false statement counts, each carry a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or twice the gross loss to others whichever is greater.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Acting Special Agent in Charge Robert Manchak, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie of the Newark office, with the investigation leading to the charges.

The government is represented by Special Assistant U.S. Attorneys Charlie Divine and Kevin DiGregory of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark and the Federal Housing Finance Agency, Office of Inspector General.
 

NEWARK, N.J. – A Newark man who was arrested following a domestic disturbance in which he discharged his weapon was sentenced today to 94 months in prison for possessing a firearm as a previously convicted felon, U.S. Attorney Craig Carpenito announced.

Dequan Farlow, 38, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an indictment charging him with one count of possession of a firearm as a previously convicted felon. Judge Chesler imposed the sentence today in Newark federal court.

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

Farlow was arrested by Newark police officers on June 30, 2017 after he allegedly shot a speaker next to his ex-girlfriend’s mother and struck the mother with the gun at her residence in Newark.

Farlow admitted that he knowingly possessed a loaded Hi-Point JCP semi-automatic handgun, despite having at least one prior felony conviction in Essex County Superior Court. As part of his plea agreement, Farlow also acknowledged that he knowingly fired the gun on June 30, 2017.

In addition to the prison term, Judge Chesler sentenced Farlow to three years of supervised release.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing. He also thanked officers of the Newark Police Division, under the direction of Department of Public Safety Director Anthony F. Ambrose, 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: Patrick McMahon Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A music teacher and singer/songwriter who performed for children at synagogues, Jewish community centers, camps and conventions nationwide was sentenced today to 82 months in prison for receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Eric S. Komar, 47, of Hillsborough, New Jersey, previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of receiving child pornography. Judge Martini imposed the sentence today in Newark federal court.

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

Between April 2017 and September 2017, Komar used an Internet based peer-to-peer file-sharing program to obtain images and videos that included images of prepubescent children being sexually abused as well as sadistic and masochistic images. Komar also admitted to law enforcement that he had become sexually aroused by a child in his presence on more than one occasion.

In addition to the prison term, Judge Martini sentenced Komar to 10 years of supervised release and ordered that he register as a sex offender.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie; members of the Somerset County Prosecutor’s Office, under the direction of Somerset County Prosecutor Michael H. Robertson and County Chief of Detectives John W. Fodor; the Hillsborough Township Police Department, under the direction of Chief Darren Powell, and the N.J. Regional Computer Forensics Laboratory, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Leticia Vandehaar of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: John H. Yauch Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – One year ago, the U.S. Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), which Attorney General Jeff Sessions has made the centerpiece of the Department’s violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and re-entry programs for lasting reductions in crime.

In line with the Justice Department’s priority to combat violent crime, the District of New Jersey designated three cities – Newark, Camden and Jersey City – as its Project Safe Neighborhoods target areas. In the one year since the Department announced its relaunching of the PSN program it has already shown measurable progress in the prosecution and deterrence of violent criminals in these communities.

“Project Safe Neighborhoods is a proven program with demonstrated results,” Attorney General Sessions said. “We know that the most effective strategy to reduce violent crime is based on sound policing policies that have proven effective over many years, which includes being targeted and responsive to community needs. I have empowered our United States Attorneys to focus enforcement efforts against the most violent criminals in their districts, and directed that they work together with federal, state, local, and tribal law enforcement and community partners to develop tailored solutions to the unique violent crime problems they face. Each United States Attorney has prioritized the PSN program, and I am confident that it will continue to reduce crime, save lives, and restore safety to our communities.”

To implement the goals of PSN and combat violent crime in Newark, the Violent Crime Initiative (VCI) was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the City of Newark’s Department of Public Safety and the Essex County Prosecutor’s Office. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to investigate and prosecute violent offenders who endanger the safety of the community. The VCI includes the U.S. Attorney’s Office, the FBI, the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Marshal’s Office, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the N.J. State Parole Board, the Union County Jail, the N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, the N.J. Department of Corrections, the East Orange Police Department and the Irvington Police Department.

“The cases described below illustrate just how effective law enforcement can be when federal, state, and local partners all work together and focus their resources on the most serious violent offenders,” U.S. Attorney Craig Carpenito said. “Our joint efforts are reducing violent crime in the communities most affected by it. Street by street, neighborhood by neighborhood, we are making those areas safer.”

“Our valued partnership with each member of the Violent Crime Initiative strengthens our unwavering commitment to rid our streets of illegal weapons and narcotics throughout the City of Newark,” Newark Department of Public Safety Director Anthony Ambrose said. “We are pleased that the U.S. Attorney Jeff Sessions has spearheaded the Project Safe Neighborhoods initiative, along with U.S. Attorney for the District of New Jersey Craig Carpenito, to ensure that the people of Newark, Jersey City and Camden enjoy safety and the improved quality of life they deserve through this ongoing, targeted reduction of violent crime on our streets.”

According to documents filed in court over the past year, the investigations implemented as part of Newark’s VCI have yielded the following results:

Between March and September 2018, 28 alleged members of a drug trafficking organization that dealt kilogram-quantities of heroin in and around Newark, specifically the area near Hayes Street and 14th Avenue, were charged federally with narcotics and firearms offenses. The organization is composed of members of the Brick City Brims set of the Bloods street gang, many of whom have perpetrated violence against, and been the targets of violence by, rivals in connection with their narcotics trafficking and gang activities. As part of this ongoing investigation, at least six firearms have been seized.

In September 2018, six alleged members of a drug trafficking organization led by Andre Mims were prosecuted federally for distributing heroin throughout Newark, including to customers who traveled from all over New Jersey and even as far as Florida. Two defendants are also charged with firearms offenses. At least an additional 15 defendants tied to the organization are being prosecuted by the Essex County Prosecutor’s Office. As part of the collaborative efforts by federal, state and local law enforcement agencies, two firearms were seized in connection with the investigation.

During the past year, at least 15 additional violent offenders and gang members have been prosecuted as part of Newark’s Violent Crime Initiative, and additional arrests are anticipated. Overall, crime is down 12 percent in Newark since last year, but there has been a far greater decrease in violent crime, with 74 fewer shooting victims and 45 fewer shooting incidents during that time.

Meanwhile, PSN efforts to combat violent crime in Camden have been underway for years through the Camden Collaborative Crime Commission (C4), a federal, state, and local partnership of law enforcement officers, analysts, and prosecutors. C4 partners meet every morning to share intelligence and collaborate to effectively target and reduce violence by focusing prosecutorial efforts on violent and/or substantial drug trafficking organizations. As part of these efforts, there has been a continued emphasis on firearms prosecutions and enforcement actions targeting open-air drug markets in the city. In March 2018, six defendants were charged federally with drug charges and one defendant with firearms charges for their role in the distribution of furanyl fentanyl, heroin, and crack cocaine in the City of Camden. In addition to the six charged defendants, five additional defendants have pled guilty to their roles in this drug trafficking organization. The dismantling of this drug distribution network is just one example of how the partnerships forged at C4 are yielding tangible results combatting violent crime and drug trafficking in Camden. These efforts have resulted in a significant decrease in violent crime in Camden, with 21 fewer shooting victims and 25 fewer shooting incidents than last year.

Although a Violent Crime Initiative is in its infancy in Jersey City, over the course of the past year, the USAO has prosecuted 19 firearms cases and numerous narcotics trafficking cases in an effort to thwart violence and gang activity in Jersey City. During that time, Jersey City has experienced a 30 percent reduction in shooting victims and 24 percent reduction in shooting incidents over the past year.

Federal efforts to combat violent crime are not just limited to the three designated PSN target areas. Throughout the District of New Jersey, the prosecution of firearms offenses has increased by over 130 percent this year alone. Over the past year, the State of New Jersey has experienced a 23 percent reduction in shooting victims and a 27 percent reduction in shooting incidents.

CAMDEN, N.J. – The president of a staffing company today admitted defrauding a commercial finance lending company out of more than $400,000, U.S. Attorney Craig Carpenito announced.

Jeremy Hare, 47, of Philadelphia, pleaded guilty today before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with wire fraud.

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

Hare was the president and managing member of Apollo Search Partners LLC, a staffing agency with an office in New Jersey. On June 16, 2017, Hare had Apollo enter into a financing agreement with a commercial finance lender that offered funding to companies so that they could meet payroll and other obligations. The lender agreed to provide funding to Apollo. In order to get funding, Apollo would provide the Victim Company invoices and supporting time cards for each person Apollo staffed with a client.

Between June 20, 2017 and Aug. 15, 2017, Hare submitted more than 15 invoices to the lender even though Apollo never staffed most of the individuals listed on the invoices and the time sheets submitted with the invoices included hours that were never worked. Based on those invoices, the lender provided more than $400,000 to Apollo between June and August 2017. To date, the lending company has not received reimbursement for that funding.
The charge carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 4, 2019.

U.S. Attorney Carpenito credited 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 guilty plea.

The government is represented by Assistant U.S. Attorneys Andrew Kogan of the U.S. Attorney’s Office Cybercrime Prevention and Enforcement Unit and Sarah Devlin of the Asset Recovery and Money Laundering Unit in Newark.

Defense counsel: Ronald L. Greenblatt Esq., Philadelphia

NEWARK, N.J. – A New Jersey attorney today admitted running a large-scale mortgage fraud scheme that involved properties in Jersey City, Clifton, Union, and elsewhere in New Jersey and caused losses of millions of dollars, U.S. Attorney Craig Carpenito announced.

Christopher Goodson, 45, of Newark, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of conspiracy to commit bank fraud.

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

From January 2011 through August 2017, Goodson, his co-defendant, Anthony Garvin, and others engaged in a short sale mortgage fraud conspiracy targeting various New Jersey properties with mortgages that were in default.

The conspirators arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.

In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction.

Goodson admitted that he, Garvin, and others rigged the short sale process at each step in order to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud.

For instance, Goodson concealed the fact that he played multiple roles in the short sale transactions, including allegedly generating false pre-approval letters from a New Jersey corporation he owned that purported to be a short-term lending company operating out of California. These letters were used to deceive banks into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. Goodson also negotiated the fraudulent short sales with the banks, generated phony deeds that backdated the closing date of the first transactions, and even served as the closing attorney during some of the short sales.

Garvin was a real estate agent and investor who allegedly coordinated fraudulent transactions as part of the scheme. The charge against him remains pending; he is considered innocent unless and until proven guilty.

The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits. In total, the conspiracy defrauded financial institutions out of millions of dollars.

The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Jan. 29, 2019.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory Ehrie in Newark, postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, and special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, with the investigation

The government is represented by Assistant U.S. Attorneys David Feder and Zach Intrater, Executive Assistant to the U.S. Attorney, in Newark.

Defense counsel: John C. Whipple Esq., Morristown, New Jersey

NEWARK, N.J. – The Justice Department today announced that United Communities, LLC, a private company that manages military housing at Joint Base McGuire-Dix-Lakehurst (JB-MDL), has agreed to pay $62,501.78 to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by imposing early termination charges on 13 servicemembers who had exercised their right to terminate their residential leases upon receipt of qualifying military orders. The early termination charges ranged from $138 to $3,100. This case and the settlement with another company in United States v. Twin Creek, announced on Sept. 11, 2018, are the first two SCRA cases the Department has brought involving lease incentives.

The Department launched an investigation into United Communities’ leasing practices after receiving a referral from Air Force Community Legal Services. U.S. Army Capt. Gregory Funk had sought to terminate his lease with United Communities after he received military orders to deploy to Qatar for up to 365 days as a part of Operation Inherent Resolve. United Communities agreed to release Captain Funk from the remainder of his lease term, but required him to pay back the $899.20 lease incentive that he had received when he signed the lease because he had not completed the 24-month term of the lease. The investigation revealed 12 other instances where SCRA-protected servicemembers were required to pay back their lease incentives.

Under the terms of the settlement, United Communities must pay a total of $45,001.78 in damages to 13 servicemembers. United Communities will also pay a civil penalty of $17,500 to the United States. In addition, United Communities must develop policies to ensure it complies with the SCRA, train its employees on the protections afforded by the SCRA, and report future SCRA-related complaints to the government.

“Members of the Army, Navy, and Air Force at Joint Base McGuire-Dix-Lakehurst, and servicemembers nationwide, have the right to terminate their leases without penalty when their military orders send them elsewhere,” Acting Assistant Attorney General John Gore said. “We appreciate United Communities’ cooperation with the Department to compensate affected servicemembers. We are resolute in our commitment to vigorously enforce the SCRA on behalf of our men and women in uniform.”

“When the brave men and women of our armed services answer the call of duty, they should be confident that they and their families will receive every protection the SCRA offers,” U.S. Attorney Craig Carpenito said. “With this settlement agreement, I am proud to continue our robust enforcement of the SCRA in New Jersey.”

The SCRA extends various protections to servicemembers to allow them to devote their entire energy to the national defense. The SCRA provides protections for servicemembers in areas such as evictions, 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. The SCRA also allows servicemembers to terminate their residential leases after entering military service or receiving military orders for a permanent change of station, deployment, or retirement. Landlords are prohibited from imposing an early termination charge on servicemembers who terminate their leases under the SCRA.

The agreement resolves a suit filed by the United States in the United States District Court for the District of New Jersey.

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. 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 David V. Simunovich, Civil Division; and Trial Attorney Alan Martinson, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.

NEWARK, N.J. – A California ceramic materials company will pay $175,000 to resolve allegations that it committed multiple False Claims Act violations relating to awards by the National Science Foundation and the U.S. Army under the Small Business Innovation Research (SBIR) Program, U.S. Attorney Craig Carpenito announced today. 

The settlement resolves allegations uncovered by the Office of Inspector General of the National Science Foundation that LoTEC Inc. (d/b/a Vesta Sciences) transferred proceeds of the awards to an undisclosed related company, loaned award funds to other related companies and to LoTEC’s principal, certified that the principal investigator for the awards was primarily employed by LoTEC when she was not, and failed to properly account for hours worked under the awards. 

“Companies that contract with the federal government need to clearly and accurately disclose how they are planning to spend public money,” U.S. Attorney Carpenito said. “The government relies on small businesses to research and innovate. But the government also relies on SBIR Program recipients to engage in open communications, to make clear disclosures, and to keep accurate records so that awarding agencies can oversee these important research projects.”

“The SBIR Program is a valuable tool in advancing NSF’s mission to promote the progress of science by increasing opportunities for innovative research by small businesses,” Allison Lerner, National Science Foundation Inspector General, said. “The NSF Office of Inspector General is committed to vigorously pursuing fraud, waste and abuse in the SBIR program. I commend the U.S. Attorney’s Office and our investigative partners for their strong support in this effort.”

“This settlement further demonstrates the resolve of the U.S. Army Criminal Investigation Command’s (USACIDC) Major Procurement Fraud Unit and our law enforcement partners to protect and defend the assets of the United States Army,” Special Agent in Charge L. Scott Moreland, of the USACIDC’s Mid-Atlantic Fraud Field Office, said.

The civil settlement is not an admission of liability or improper conduct by LoTEC.

The government is represented by Assistant U.S. Attorney Daniel Meyler of the U.S. Attorney’s Office Civil Division. 

NEWARK, N.J. – A Newark man appeared in federal court today on charges that he allegedly attempted to rob a city barbershop in May 2018, U.S. Attorney Craig Carpenito announced.

Philip K. Hedgespeth, 43, is charged by complaint with one count of Hobbs Act robbery, one count of brandishing a firearm during a crime of violence, and one count of possession of a firearm by a convicted felon. Hedgespeth made his initial appearance today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained without bail.

According to the complaint:

On the evening of May 1, 2018, Hedgespeth entered a barbershop in Newark and attempted to rob it, brandishing a firearm at an employee. He tried to shoot the gun in the employee’s direction, but the weapon malfunctioned. The employee and an off-duty Newark police officer then attempted disarm Hedgespeth, but Hedgespeth was able to exit the barbershop. While standing in front of the barbershop, Hedgespeth pointed his weapon at the officer, who shot Hedgespeth in the face. Hedgespeth fled the scene in a Dodge Challenger. He was apprehended by Newark police officers after exiting the vehicle and leading them on a brief chase on foot. At the time of his arrest, Hedgespeth was in possession of a handgun. Video surveillance recorded Hedgespeth entering the barbershop and attempting to conduct the robbery.

The count of Hobbs Act robbery carries a maximum potential sentence of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. 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 charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge John B. Devito, Newark Field Division; the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, with the investigation leading to today’s charges. 

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

NEWARK, N.J. – Three men were charged today in connection with their respective roles in a drug trafficking conspiracy, U.S Attorney Craig Carpenito announced.

Ahmad Johnson, a/k/a “OC,” 38, Cory Canzater, a/k/a “Big C,” 45, and Maurice McPhatter a/k/a “Ree,” 45, all of Newark, were charged today in a five-count indictment. All three defendants are charged with one count of conspiracy to distribute and possess with intent to distribute controlled substances, including heroin, cocaine and fentanyl (Count One). Additionally, Johnson is charged with one count of conspiracy to distribute and possess with intent to distribute heroin (Count Two); two counts of distribution and possession with intent to distribute heroin (Counts Three and Four); and one count of possession of a weapon by a convicted felon (Count Five). The indictment follows the arrests of seven members of Johnson’s drug trafficking organization in September 2017.

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

From September 2016 through June 2017, Johnson and others took part in a heroin distribution conspiracy that operated in and around Newark.

Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that Johnson was allegedly a leader of the conspiracy and was responsible for obtaining wholesale amounts of narcotics, including heroin and cocaine, and processing and packaging the narcotics for sale. Johnson sometimes found users to “test” the narcotics to evaluate their quality, potency, and danger for broader distribution. Distributors then sold the narcotics to other distributors and to users.

Count One of the indictment, the conspiracy charge against Johnson, Canzater and McPhatter, carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. Counts Two and Four are punishable by up to 40 years in prison and a $5 million fine, Count Three is punishable by up to 20 years in prison and a $1 million fine and Count Five is punishable by up to 10 years in prison and a $250,000 fine.

Attorney Carpenito credited special agents and officers with DEA’s High-Intensity Drug Trafficking Area (HIDTA) Group 1, under the direction of Special Agent in Charge Valerie A. Nickerson, with the investigation leading to todays’ indictment.

The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the U.S. Attorney’s Office Organized Crime and Drug Enforcement Task Force / Narcotics Unit in Newark.

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

CAMDEN, N.J. – A Brookhaven, Pennsylvania, man was sentenced today to an additional 160 months in prison for possessing hundreds of images and videos of child sexual abuse while imprisoned at Federal Correctional Institution Fort Dix for previous offenses involving the distribution and possession of child pornography, U.S. Attorney Craig Carpenito announced.

Brian J. McKay, 47, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of possession of child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.

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

McKay admitted that he possessed two micro SD Cards which together contained a total of approximately 593 images and 645 videos of child pornography, some of which depicted children being sexually abused and sadistic and masochistic sexual conduct involving infants and toddlers. In connection with his plea, McKay also admitted that he distributed child pornography to another inmate.

McKay and seven other inmates were arrested in April 2017 and February 2018 following an FBI investigation involving multiple covert recordings and several cooperating inmates. The investigation revealed that McKay and other inmates utilized contraband cellphones, micro SD cards, and access to the internet to obtain, view, and distribute child pornography within the prison. A co-defendant organized and helped facilitate this criminal activity by maintaining cloud accounts that were used as repositories for child pornography.

In addition to the prison term, Judge Rodriguez sentenced McKay to 10 years of supervised release. Restitution will be determined at a later date.

Six other inmates – all of whom were serving sentences for prior child pornography offenses while committing the alleged crimes in this case – have pleaded guilty: Erik M. Smith, 36, of Iron Mountain, Michigan; Anthony C. Jeffries, 32, of Orange, Virginia; Jordan T. Allen, 31, of Plain City, Ohio; Christopher D. Roffler, 30, of Virginia Beach, Virginia; Jacob S. Good, 26, of Fredericksburg, Virginia; and Charles Wesley Bush, 38, of Knoxville, Tennessee. Smith was sentenced to 151 months in prison and Good was sentenced to 10 years in prison; the other four defendants are awaiting sentencing.

William H. Noble, 52, of Lowell, Massachusetts, was indicted on May 23, 2018, and is scheduled for trial next year. The charges and allegations against Noble are merely accusations, and he is presumed innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation. He also thanked officials of the Bureau of Prisons at Federal Correctional Institution Fort Dix for their assistance.

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

Defense counsel: John B. Brennan Esq., Camden

NEWARK, N.J. – Six Paterson, New Jersey, men have been charged with taking part in a scheme to break into U.S. Postal Service (USPS) mail collection boxes throughout northern New Jersey and steal the mail—particularly, checks—inside, U.S. Attorney Craig Carpenito announced.

Ismael Alicea, Jr., 25, Yerrisson Garcia-Rodriguez, 23, Jerry Lake-Rodriguez, 25, Johan Lake-Rodriguez, 26, Brayan Ulloa-Ulloa, 24, and Jefersson Quezada, 21, are each charged by complaint with one count of conspiracy to commit bank fraud. Each defendant, except Alicea, is also charged with one count of bank fraud. Garcia-Rodriguez, Jerry Lake-Rodriguez, Johan Lake-Rodriguez, and Quezada are additionally charged with one count of aggravated identity theft, and Alicea and Johan Lake-Rodriguez are charged with possession of stolen mail.    

According to the complaint:

The defendants stole checks from USPS mail collection boxes in Passaic, Bergen, Morris, Essex, and Middlesex counties, and elsewhere, and fraudulently deposited them into various bank accounts, often within a day of being stolen. Some defendants broke into mail collection boxes using pry bars, usually late at night. Law enforcement officers have identified at least $300,000 worth of stolen checks that were deposited into the bank accounts.

Four of the defendants were arrested this morning and made their initial appearance today before U.S. Magistrate Court Judge Joseph Dickson in Newark federal court. Johan Lake-Rodriguez is in state custody and will make his initial appearance later this week. Jefersson Quezada remains at large.      

The conspiracy and bank fraud charges each carry a maximum penalty of 30 years in prison and a $1 million fine. The aggravated identity theft charge carries a penalty of a mandatory term of two years in prison, to be served consecutively to any other sentence imposed.    

U.S. Attorney Craig Carpenito credited postal inspectors of the U.S. Postal Inspection Service, Newark Division, under the direction of Inspector-in-Charge James Buthorn, with the investigation leading to today’s arrests and charges. He also thanked the U.S. Secret Service and U.S. Marshals Service for their assistance with the investigation. 

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

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

TRENTON, N.J. - A New York stock trader today admitted making bribe payments to a broker at an investment banking firm in exchange for stock allocations, U.S. Attorney Craig Carpenito announced.

Adam Rentzer, 52, of Roslyn, New York, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of violating the Travel Act by engaging in a commercial bribery scheme.

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

Rentzer was a trader who purchased and sold securities in initial and secondary public stock offerings, including offerings marketed by two investment banking firms in New York (“Firm A” and “Firm B”). Brian M. Hirsch was an employee of Firm A and later Firm B, and was responsible for allocating initial and secondary public stock offerings to clients.

Between mid-2013 and January 2017, Rentzer and others paid cash kickbacks to Hirsch in exchange for Hirsch providing favorable allocations from public stock offerings marketed by Firms A and B. The kickback payments were based on an agreed-upon percentage of the profits that Rentzer realized from his subsequent sales of stocks that he purchased in the stock offerings. Hirsch did not disclose any of these payments to Firms A and B and took steps to conceal his corrupt arrangement with Rentzer and others. In accepting the payments, Hirsch knowingly violated various policies and procedures of Firms A and B, including policies governing stock allocations and conflicts of interest. Rentzer paid Hirsch a total of $150,000 to $250,000.

Rentzer faces a maximum potential penalty of five years in prison and a fine of $250,000. Sentencing is scheduled for Jan. 11, 2019.

On Dec. 19, 2017, Hirsch pleaded guilty to one count of violating the Travel Act in connection with the scheme. He is scheduled to be sentenced on Nov. 18, 2018.

In a separate civil action, the U.S. Securities and Exchange Commission (SEC) today filed a complaint against Rentzer in Trenton federal court.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, for the investigation leading to today’s guilty plea. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Regional Director Marc P. Berger for its assistance in the investigation.

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.

Defense counsel: John F. Carman Esq., Garden City, New York

NEWARK, N.J. – A U.S. Postal Service (USPS) mail carrier was indicted today on charges that he accepted cash bribes in return for intercepting and delivering parcels containing illegal narcotics and conspiring to defraud the United States, U.S. Attorney Craig Carpenito announced.

Fred Rivers, 46, of Newark, was charged by indictment with receiving bribes as a public official and conspiracy to defraud the United States by interfering with and obstructing the lawful function of the USPS. Rivers will be arraigned at a later date.

According to documents filed in this case:

Rivers was a mail carrier at the USPS Springfield Station in Newark. From October 2016 through September 2017, Rivers accepted cash bribes from Glenn Blackstone, who received parcels containing illegal narcotics through the mail. While on duty, Rivers intercepted these parcels and personally delivered them to Blackstone at locations in Newark, not to the recipient address noted on the parcels. Rivers received cash payments of approximately $100 from Blackstone for each delivery.

Rivers began delivering the intercepted parcels to Blackstone in exchange for cash after another mail carrier, Leonard Gresham, asked Rivers to make the deliveries when Gresham was unavailable to do so.

Gresham pleaded guilty to his role in the scheme on Feb. 13, 2018. Blackstone pleaded guilty to his role in the scheme on April 17, 2018. They are both awaiting sentencing.

The bribery charge is punishable by a maximum potential penalty of 15 years in prison. The conspiracy charge carries a maximum potential penalty of five years in prison. Both charges carry a maximum fine of $250,000 or twice the gross gain from the offense.

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 indictment.

The government is represented by Assistant U.S. Attorney Jihee G. Suh of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

Defense counsel: Paulette Pitt Esq., Woodbridge, New Jersey

NEWARK, N.J. – A federal grand jury indicted a City of Paterson police officer for multiple offenses arising from the assault of an attempted suicide victim at St. Joseph’s Medical Center in Paterson, U.S. Attorney Craig Carpenito announced. 

Police Officer Roger Then, 29, of Paterson, was charged in a five-count indictment with one count of conspiring to violate an individual’s civil rights; two substantive counts of violating an individual’s civil rights; misprision of felony for concealing the civil rights violation; and falsifying a record for submitting a false police report about the assault. Then was previously charged by criminal complaint in May 2018. He will be arraigned in federal court on a date to be determined.

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

Then and Ruben McAusland were police officers with the Paterson Police Department.  On March 5, 2018, they responded to a call from an attempted suicide victim. The victim called 911 and was taken by the Paterson Fire Department to St. Joseph’s Medical Center. Then and McAusland responded to the victim’s residence and subsequently followed the Fire Department to the hospital to monitor the victim.

Two videos captured some of the events that took place in the hospital that night. A hospital surveillance video shows the victim sitting in a wheelchair and McAusland standing at the hospital admissions desk. The victim appeared to throw an object down the hallway.  McAusland, looking angry, pushed the victim’s wheelchair with his hands and punched the victim in the face. As the victim fell towards the ground, still in the wheelchair, Then grabbed the victim by the back of the neck and pushed the victim to the ground.

In the second video, taken by Then using his cellular telephone, the victim was on his back in a hospital bed. The victim said, “right here?  See my cheek?”  Then turned the camera toward himself and smiled. Then next turned the camera back towards the victim and McAusland. The victim said, “ha, ha, bitch.” McAusland responded, “I’m a what?” The victim said, “do it.” McAusland put on a pair of hospital gloves and proceeded to violently strike the victim twice across the face. McAusland then stood over the victim and said, “I ain’t fucking playing with you.” The victim covered his face with his hands and was silent. McAusland continued, “calm your ass down.” Rather than intervening to stop McAusland’s assault of the victim, Then recorded it.

Then and McAusland submitted a police report in connection with the events of March 5, 2018. The police report did not mention that McAusland punched the victim and that Then grabbed the victim by the neck and pushed the victim towards the ground, as captured in the first video. The police report also did not mention that McAusland violently struck the victim, twice, in a hospital room, as depicted in the second video. Nor did the police report mention that Then had recorded the second assault on his cell phone and failed to intervene to stop it from happening.

The victim suffered multiple injuries to his face, including an eye injury that required surgery, as a result of these assaults. 

The conspiracy to violate civil rights count and the two substantive violation of civil rights counts each carries a maximum penalty of 10 years in prison. The misprision of felony count carries a maximum penalty of three years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each of the charges is $250,000.

On June 27, 2018, McAusland pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with possessing with intent to distribute narcotics and deprivation of civil rights under color of law. He is awaiting sentencing.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s indictment. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal, Deputy Chief of the Criminal Division, and Lee M. Cortes Jr., Deputy Chief of the Special Prosecutions Division.

NEWARK, N.J. – Federal and local law enforcement authorities have charged six people for their alleged roles in a drug trafficking organization that distributed heroin in Newark, U.S. Attorney Craig Carpenito announced today.

Andre Mims, 42, Herbert Cheeks, 52, and Anthony Woods, 54, all of Newark; Gregory Mims, 43, of East Orange, New Jersey; and James Thomas, 51, of Bronx, New York; are each charged by complaint with one count of conspiracy to distribute heroin. Andre Mims and Cheeks are also charged with one count of possession of a firearm by a convicted felon. Freddie Mims, 35, of Irvington, is charged with one count of possession with intent to distribute heroin.

Gregory and Freddie Mims are scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court. Andre Mims is in state custody and will appear in Newark federal court on Sept. 25, 2018. The other defendants – Cheeks, Woods and Thomas – remain at large.

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

Andre Mims and Cheeks are allegedly the leaders of a drug trafficking organization that sold heroin in and around Newark, including to customers from all over New Jersey. The organization also supplied drugs to customers and other distributors elsewhere. Law enforcement officials used physical and video surveillance, undercover officers, dozens of controlled narcotics purchases, record checks, narcotics and weapons seizures, and telephone wiretaps in their investigation.

The drug trafficking organization – known for its particular “stamps” of heroin, including “mastercard,” “ciroc” and “E.T.” – controlled several stash locations in Newark, Irvington and East Orange.

The count of drug trafficking conspiracy carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine. The drug possession count carries a maximum potential penalty of 20 years in prison and a $1 million fine. The felony gun possession counts carry a maximum potential penalty of 10 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited the Essex County Prosecutor’s Office under the direction Acting Prosecutor Theodore N. Stephens II, and special agents of the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson, New Jersey Division, with the investigation leading to the charges. He also thanked the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Essex County Sheriff’s Office, the Newark Police Department, and the Union County Prosecutor’s Office for their assistance with the investigation.

This drug trafficking organization was the focus of the Violent Crime Initiative (VCI) in Newark. The Newark VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the sole purpose of combatting violent crime in and around the Newark. As part of this partnership, federal, state, county, and city agencies collaborate and pool resources to prosecute violent offenders who endanger the safety of the community. The VCI includes the U.S. Attorney’s Office, the DEA, the ATF, the FBI, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, N.J. State Parole Board, the Union County Jail, N.J. State Police Regional Operations and Intelligence Center/Real Time Crime Center, N.J. Department of Corrections, the East Orange Police Department, and the Irvington Police Department.

The government is represented by Special Assistant U.S. Attorney Naazneen Khan of the U.S. Attorney’s Office’s Violent Crimes Unit and Assistant U.S. Attorney Mary E. Toscano, Deputy Chief of the Criminal Division in Newark.

NEWARK, N.J. – A Hudson County, New Jersey woman was arrested and charged today for promoting a voter bribery scheme by use of the U.S. mail, U.S. Attorney Craig Carpenito announced.

Lizaida Camis, 55, of Hoboken, is charged by complaint with a violation of the Travel Act for causing the mails to be used to aid voter bribery contrary to New Jersey state law. She is scheduled to have her initial appearance today before U.S. Magistrate Judge Mark Falk 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, voters receive a mail-in ballot.

From October 2013 through November 2013, Camis agreed to pay certain Hoboken voters $50 each if those voters applied for and cast mail-in ballots for the November 2013 Hoboken municipal election. Camis provided these voters with VBM Applications and then delivered the completed applications to the Hudson County Clerk’s office. After the mail-in ballots were delivered to the voters, Camis went to their apartments and, in some cases, instructed the voters to vote for the candidates for whom Camis was working. Camis promised the voters that they would be paid $50 for casting their mail-in ballots and told them that they could pick up their checks after the election at an office on Jefferson Street in Hoboken. Bank records show that voters living in Hoboken received $50 checks from entities associated with the campaigns that employed Camis.

Camis 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 today’s arrest.

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 considered innocent unless and until proven guilty.

NEWARK, N.J. – A Dubai man was indicted today for his alleged participation in a long-running credit card fraud and aggravated identity theft conspiracy, U.S. Attorney Craig Carpenito announced.

Olusegun Akinlade, a/k/a “Shadow Walker,” 29, of Dubai, United Arab Emirates, is charged by indictment with one count of bank fraud conspiracy and one count of aggravated identity theft.    

According to the indictment:

From October 2015 to January 2018, Akinlade, Henry Abdul, a conspirator who pleaded guilty in August 2018 to his role in the scheme, and others participated in a conspiracy to obtain control of and use credit card accounts of others through a fraudulent scheme commonly referred to as a “credit card takeover.” As part of the scheme, a person who is not the account owner or authorized user of a credit card account contacts the financial institution and poses as the account owner in order to change the personal information associated with the account to information familiar to the unauthorized user. This may include the residence, email address, or telephone number associated with the account. These changes to the account are designed to give the unauthorized user control of the account without the actual account owners’ knowledge or authorization, and may permit the unauthorized user to receive new credit cards associated with the compromised accounts. Once in control of the account, the unauthorized users make purchases, transfer funds to other accounts under their control, or sell the account information to third parties.

Akinlade and his conspirators allegedly purchased the victim account holders’ personal identifying information from hackers located outside of the United States. They then used the stolen information when contacting victim banks to carry out the account takeovers, or to open new accounts. Akinlade, who was in Dubai during the scheme, received from Abdul and other conspirators merchandise that they had purchased with the compromised credit card accounts, and a percentage of any profits the conspirators made selling such merchandise.

The bank fraud conspiracy charge carries a maximum potential penalty of up to 30 years in prison and a fine of up to $1 million. The aggravated identity theft charge carries a mandatory sentence of two years in prison, which must run consecutive to any other term of imprisonment imposed by the Court.

U.S. Attorney Carpenito credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn, special agents with U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John Tafur, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorneys Nicholas P. Grippo and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.

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

NEWARK, N.J. – The longtime leader of one of Newark’s largest and most violent street gangs was sentenced today to two concurrent terms of life in prison for his role in six murders, an attempted murder, drug trafficking, and firearms offenses as part of a racketeering conspiracy involving the New Jersey Grape Street Crips, U.S. Attorney Craig Carpenito announced.

Corey Hamlet, a/k/a “C-Blaze,” a/k/a “Blaze,” a/k/a “Blizzie,” a/k/a “Castor Troy,” 41, of Belleville, New Jersey, the gang’s leader, was convicted in July 2018 following a two-month trial before U.S. District Judge Madeline Cox Arleo. Judge Arleo imposed the sentence today in Newark federal court.

Hamlet was charged in November 2016 in a 22-count indictment charging 14 members and associates with, among other things, seven murders, numerous attempted murders, and numerous other violent and drug trafficking crimes committed as part of the racketeering conspiracy. Twelve of the 14 defendants charged in the indictment have now been convicted. The two remaining defendants, Hanee Cureton and Khalil Stafford, are pending trial.

An additional 68 members and associates of the Grape Street Crips who were arrested in a coordinated takedown in May 2015 were separately charged with drug-trafficking, physical assaults, and witness intimidation. Sixty-six individuals also have been convicted, and charges remain pending against two.

“Today’s sentencing marks the end of Corey Hamlet’s reign of terror on the streets of Newark,” U.S. Attorney Carpenito said. “At this point, close to 70 members of the Newark set of the Grape Street Crips, a violent criminal organization that committed murders and other acts of violence in order to maintain control of a large portion of the illegal drug trade in Newark, have been removed from the streets. In the case of the gang’s leader, Hamlet, it’s for the rest of his life. Our office and our law enforcement partners will continue to go after dangerous criminals like this to protect the public.”

“Corey Hamlet, the leader of the Grape Street Crips, chose to order others to kill and now he can serve time for the gang,” Newark FBI Special Agent in Charge Gregory W. Ehrie said. “This conduct will not be tolerated and today’s sentence should send a message that the FBI, together with our law enforcement partners, will pursue and prosecute members of violent street gangs who seek to inflict violence and fear in our communities. The gang was responsible for four murders, an attempted murder, racketeering conspiracy and drug trafficking. The FBI and our partners will aggressively pursue gangs wherever they surface and are steadfast to making Newark and the surrounding communities, a safe place for our citizens.”

“The sentencing of Corey Hamlet closes the chapter on one of Newark’s most violent offenders,” Special Agent in Charge Valerie A. Nickerson of the Drug Enforcement Administration’s New Jersey Division said. “The residents of Newark can be confident that the men and women of DEA and our law enforcement partners will continue to pursue those who choose to violate the rule of law. Every citizen has the right to live without fear, and the conviction and sentencing of Corey Hamlet helps to make that possible.”

According to the documents filed in this case and other cases and the evidence presented at trial:

The Grape Street Crips engaged for years in numerous acts of murder, robbery, extortion, and drug trafficking throughout Newark. As the leader of the New Jersey set of the Grape Street Crips, Hamlet’s orders resulted in six murders committed by members of the gang.

The trial highlighted numerous violent acts committed by Grape Street Crips members as part of the racketeering conspiracy, some of which targeted members of rival gangs and others that targeted Grape Street Crips members whom Hamlet perceived to be a threat to his position as the leader of the gang:

• June 14, 2010: The murder of Leroy Simmons;

• Dec. 23, 2010: The murder of Rodney Kearney;

• Oct. 10, 2011: The attempted murders of eight individuals who were caught in the cross-fire when Hamlet’s second-in-command Kwasi Mack, a/k/a “Welchs,” and another Grape Street Crips member attempted to murder a gang member who they suspected had cooperated with law enforcement;

• May 3, 2013: The murder of Tariq Johnson;

• Oct. 27, 2013: The attempted murders of Almalik Anderson and Saidah Goines.

• Nov. 12, 2013: The murder of Anwar West;

• March 3, 2014: The murders of Wesley Child and Velma Cuttino—an innocent bystander—as well as the attempted murder of Maurice Green;

The trial revealed that Hamlet ordered many of the murders as revenge against Almalik Anderson, a rival with whom he had a long-running dispute. One of Hamlet’s fellow gang-members attempted to broker a truce with Anderson at the Short Hills Mall. After the meeting at Short Hills, Hamlet used his Instagram account to assert that Anderson had cooperated with law enforcement. On Hamlet’s orders, four gang members then hunted Anderson down and sprayed his car with bullets, nearly killing him and passenger Saidah Goines, a relative.

Within two weeks, Hamlet successfully ordered two other gang-members to murder Anwar West, the fellow gang-member who had attempted to broker peace between Hamlet and Anderson. On Hamlet’s orders, co-defendant Rashan Washington left West alone inside a Jeep Cherokee knowing that another gang member intended to walk up and shoot West in the head.

Hamlet then ordered the murder of Maurice Green, Anderson’s brother. On March 3, 2014, Manley and Hamlet, the long-time leader of the New Jersey Grape Street Crips, were riding in Manley’s Jeep Cherokee when they pulled alongside a car being driven by Green. Although Hamlet aimed a firearm at Green and the car’s other occupants, Green pulled off before any shots were fired. A short time later, Ahmad Manley found Green, and a car chase ensued. The chase concluded when Green’s car crashed into other vehicles at the intersection of Irvine Turner Boulevard and Spruce Street in Newark. Numerous shots fired from Manley’s Jeep Cherokee at Green’s vehicle struck Green and killed Wesley Childs, a passenger in Green’s car. In addition, Velma Cuttino – an innocent bystander who was a passenger in one of the vehicles that had crashed at the intersection – was shot through the head and killed.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Ehrie in Newark, and special agents of the DEA, under the direction of Special Agent in Charge Nickerson, with the investigation. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Robert D. Laurino, and the Essex County Sherriff’s Office, under the direction of Armando B. Fontura, for their long and close collaboration on the case

The government is represented by Osmar J. Benvenuto, Chief of the Organized Crime and Gangs Unit, Assistant U.S. Attorney Barry A. Kamar of the Criminal Division, and Assistant U.S. Attorney Richard J. Ramsay of the Appeals Division in Newark.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.

Defense counsel: Anthony J. Iacullo, Clifton, New Jersey

CAMDEN, N.J. – A Pennsylvania man today admitted committing three armed robberies in Salem, Ocean, and Cumberland counties in November 2017, U.S. Attorney Craig Carpenito announced.

Terrance Robinson, 31, of Havertown, Pennsylvania, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court 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.

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.

Each of the three robbery counts carry a maximum potential penalty of 20 years in prison. The possession of a firearm in furtherance of a crime of violence charge carries a consecutive minimum term of five years in prison and a maximum potential penalty of life imprisonment. Each offense also carries a potential $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 9, 2019.

Edmonds previously pleaded guilty for his alleged roles in the robberies, and his sentencing is scheduled for Nov. 16, 2018.

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 guilty plea.

The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.

NEWARK, N.J. – A Passaic County, New Jersey, woman today admitted conspiring to distribute thousands of pills containing heroin in New Jersey, U.S. Attorney Craig Carpenito announced.

Karen Rojas, 28, of Paterson, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging her with conspiring to distribute and possess with intent to distribute more than 100 grams of substances containing heroin.

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

At their residence in Paterson, Rojas’ boyfriend, Juan Vidal, manufactured pills that were made with heroin and that were made to resemble Percocet pills. Vidal used a press to make the pills and Rojas then sold the pills for approximately $5 dollars per pill. Between February 2018 and April 2018, Rojas sold thousands of pills that were manufactured by Vidal.

On April 18, 2018, for example, in a recorded transaction, Rojas was asked by a cooperating witness for 100-150 heroin pills. Rojas sold the cooperating witness 40 heroin pills, for approximately $200, and Rojas indicated that Vidal needed to “get supplies,” meaning to purchase more heroin, in order to make additional pills.

Rojas and Vidal were previously charged by criminal complaint in April 2018 with conspiracy to distribute these drugs. Vidal entered a guilty plea on Sept. 12, 2018, and he is scheduled to be sentenced on Dec. 18, 2018.

The distribution of narcotics offense carries a mandatory minimum penalty of five years imprisonment, a maximum penalty of 40 years’ imprisonment, and a maximum fine of $5 million. Rojas’ sentencing is scheduled for Dec. 19, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

Defense counsel: Paul Uhlik Esq., Clifton, New Jersey

NEWARK, N.J. – An Old Bridge, New Jersey, man was indicted today for allegedly using phony payments and false identity theft claims to deceive credit card companies and banks into giving him funds and extending credit, First Assistant U.S. Attorney Rachael A. Honig announced.

Sandy John Masselli, 56, was initially arrested in October 2017 and charged by complaint with bank and wire fraud. Today’s indictment similarly charges Masselli with three counts of bank fraud and three counts of wire fraud.    

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

From June 2014 through July 2017, Masselli engaged in three separate but related schemes to fraudulently obtain credit and funds from various credit card companies and two brokerage firms. 

In one, Masselli opened accounts with certain credit card companies, made purchases with these accounts until he had almost reached or exceeded the credit limit, and then purported to send payments from bank accounts that he knew did not have sufficient funds to cover the purchases. Before the fraudulent payments were rejected for insufficient funds, the credit card companies temporarily credited Masselli’s accounts based on those payments, providing him access to additional credit and allowing him to continue to make purchases. Masselli failed to pay these balances and the credit card companies sustained substantial losses.     

In another scheme, Masselli opened credit accounts with two credit card companies, made thousands of dollars in purchases, and then falsely represented to these credit card companies that the accounts had been opened fraudulently and used without his authorization, causing these companies to close the accounts and sustain losses.

As part of a third scheme, Masselli attempted to deposit more than $600,000 in checks from a closed account into a new brokerage account, which he then tried to use for various personal expenses. Those transfers were unsuccessful because the checks he deposited were ultimately returned as unpaid.     

The bank fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.

First Assistant U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Gregory W. Ehrie, with the investigation leading to today’s indictment. 

The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.

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

TRENTON, N.J. – A former chiropractor with offices in Lakewood, New Jersey, today admitted evading income taxes totaling more than half a million dollars from 2012 through 2015 and failing to report a Russian bank account, to which he wired more than $1.5 million, U.S. Attorney Craig Carpenito announced.

Carlo Amato, 57, of Beachwood, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to one count of tax evasion and one count of failure to file a report of foreign financial account (FBAR) while violating another law of the United States and as part of a pattern of illegal activity involving more than $100,000 in a 12-month period.

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

From 2012 through 2015, Amato operated a chiropractic office in Lakewood through two entities: Chiropractic Care Consultants Inc. and Accident Recovery Physical Therapy. He deposited, or caused to be deposited, checks for chiropractic services into accounts held in the names of his minor children. Amato knew that these checks were taxable as income, but he did not disclose the payments to his accountant, nor did he report them on his tax returns. Amato also failed to report as taxable income certain additional funds that were deposited into Chiropractic Care’s and Accident Recovery’s business bank accounts. For example, Amato reported $0 in taxable income and $0 in tax due on his 2014 income tax return. His taxable income for 2014 was, in fact, $561,258, and Amato admitted that the tax due and owing to the IRS for 2014 was $197,036. Amato admitted that he also evaded more than $300,000 in taxes for the tax years 2012, 2013, and 2015.

Amato, a U.S. citizen, admitted that in 2014, he had an account at UniCredit Bank in Russia. He admitted that he wired more than $1.5 million to Russian bank accounts, including the UniCredit Bank account, and that he knew that he was obligated to report any foreign bank account with an aggregate value of more than $10,000. Amato admitted that he nonetheless failed to file a report of foreign account, commonly known as an FBAR, for the year 2014.  Amato also admitted that the funds he failed to report were the product of a fraudulent scheme in which Amato overbilled at least six insurance companies by more than $1 million by billing for services that were never rendered. Amato previously pleaded guilty in Ocean County Superior Court to first degree financial facilitation of criminal activity for money laundering of funds from the overbilling scheme.

The tax evasion charge to which Amato pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gain to any person or loss to any victims of the offense. The failure to file a report of foreign account charge to which Amato pleaded guilty carries a maximum potential penalty of 10 years in prison and a fine of $500,000 or twice the gain to any person or loss to any victims of the offense. Sentencing is scheduled for Jan. 9, 2019.

Under the terms of his plea agreement, Amato will file amended tax returns and make full restitution for the years 2012 through 2015 and file accurate FBARs for the years 2012 through 2017.

U.S. Attorney Carpenito credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge John Tafur, with the investigation leading to today’s guilty plea. U.S. Attorney Carpenito thanked the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, and the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, for their roles in the investigation.

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the Criminal Division in Trenton.

NEWARK, N.J. – A former Jersey City police officer was sentenced today to 23 months in prison for accepting approximately $55,000 in corrupt payments in exchange for helping employers operate at worksites without the required presence of an off-duty police officer and for helping a police officer obtain compensation for off-duty work he did not perform, U.S. Attorney Craig Carpenito announced.

Anthony Iannicco, 49, of Jersey City, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit fraud and accept corrupt payments. Judge Vazquez imposed the sentence today in Newark federal court.

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

Iannicco was a police officer with the Jersey City Police Department (JCPD) from 1995 to 2016. From 2008 through 2016, his duties included serving as the “assistant pick coordinator” for Jersey City’s West District. As the assistant pick coordinator, Iannicco assigned police officers to off-duty details.

Under Jersey City’s municipal code, off-duty police officers were not permitted to receive cash payments directly from off-duty employers. Rather, the employers were supposed to pay Jersey City, which would then pay the off-duty police officers, minus certain fees, taxes and deductions, including an administrative fee payable to Jersey City per hour that the off-duty police officers worked.

Iannicco conspired with numerous employers to cut Jersey City out of the process of hiring and compensating off-duty police officers. Generally, Iannicco permitted these employers to operate at worksites without the presence of a police officer when such a presence was required. In exchange, Iannicco accepted cash payments directly from these employers in violation of Jersey City rules and regulations.

Altogether, from 2011 to 2016, Iannicco collected payments of approximately $55,000 directly from off-duty employers and a conspirator.

In addition to the prison term, Judge Vazquez sentenced Iannicco to three years of supervised release and ordered forfeiture of $55,000 and restitution of $219,196.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s sentencing.

JCPD is cooperating with the investigation.

The government is represented by Assistant U.S. Attorney Vikas Khanna, Deputy Chief of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: John A. Azzarello Esq., Morristown, New Jersey

NEWARK, N.J. – An employee of the Essex County Sheriff’s Office was charged with soliciting payments from a man posing as a land developer for information regarding properties under foreclosure, U.S. Attorney Craig Carpenito announced today.

Abdush Shahid Ahmad, 51, of Newark, was charged by complaint with attempted extortion under color of official right affecting interstate commerce. He made his initial appearance today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.

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

An employee in the civil process division of the Essex County Sheriff’s Office, Ahmad had access to writs of execution on homes to be sold at public auction by the Sherriff’s Office as a result of foreclosure actions. Ahmad allegedly indicated to a cooperating witness that he had access to that information before the information was made public on the Essex County Sheriff’s Office website or announced in local newspapers. Ahmad attempted to sell approximately 20 writs of execution to the cooperating witness who posed as a land developer, and who was operating at the direction of law enforcement agents. Ahmad received $100 for each writ and made clear that he expected an additional $4,900 for each property that the cooperating witness was able to acquire using the non-public information. Ahmad allegedly recorded the terms of the arrangement in a contract that he signed and presented to the cooperating witness in person, to avoid using his e-mail to send the contract to the cooperating witness.

The count of attempted extortion under color of official right affecting interstate commerce carries a maximum penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division.

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

Defense counsel: Carol Gillen Esq., Assistant Federal Public Defender

NEWARK, N.J. – A Newark man admitted today that he possessed a firearm as a previously convicted felon, U.S. Attorney Craig Carpenito announced.

Richard D. Williams, 40, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an indictment charging him with one count of possession of a firearm as a previously convicted felon.

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

On Feb. 18, 2017, law enforcement officers spotted a white Infiniti car that matched the make, model, color and year of a car that had previously been reported stolen. When police ran the license plate on the vehicle, they determined it belonged to a different car, suggesting that the license plate on the Infiniti had been switched. Police officers attempted to stop the vehicle, but it took off at a high rate of speed. The police pursued the car in a high-speed chase through Newark and into East Orange, New Jersey. Several other police cars and a Newark police department helicopter joined the pursuit.

The police chased the car for 10 minutes until it was traveling east on South Orange Avenue near Bergen Street in East Orange, New Jersey. The car crossed into oncoming traffic and collided head on with an unmarked Newark police department vehicle. The crash caused both the Infiniti and Newark police vehicle to catch fire. The three Newark police officers inside the police vehicle all suffered injuries but exited their vehicle safely.

Williams got out of the Infiniti and tried to flee, but was quickly caught and detained by a Newark police officer until a N.J. State Police trooper joined him. Williams was found to have a black .38-caliber revolver, loaded with four bullets, in his waistband. Williams had at least one prior felony conviction in federal court.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 29, 2019.

U.S. Attorney Carpenito credited task force officers of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction Special Agent in Charge John B. Devito, with the investigation. He also thanked officers of the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose, for their assistance.

The government is represented by Assistant U.S. Attorneys Jason S. Gould and Catherine R. Murphy of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Michael Pedicini Esq., Chatham, New Jersey

NEWARK, N.J. – A federal grand jury indicted a former Fort Dix correctional officer today for accepting cash bribes in exchange for delivering contraband to federal inmates at Fort Dix, U.S. Attorney Craig Carpenito and Special Agent in Charge Guido Modano of the U.S. Department of Justice Office of the Inspector General, New York Field Division, announced.

Paul Anton Wright, 32, of Berlin, New Jersey, was charged by indictment with two counts of agreeing to accept and accepting bribes, two counts of violating the Travel Act, and one count of providing contraband to an inmate inside a correctional facility. Wright was charged by criminal complaint in April 2018. He will be arraigned in federal court on a date to be determined.

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

Wright was a correctional officer at Federal Correctional Institution Fort Dix (FCI Fort Dix), a Bureau of Prisons facility for male inmates in Burlington County. In 2015, Wright agreed to accept cash bribes in exchange for smuggling contraband, including tobacco, K2 (synthetic marijuana) and suboxone (a narcotic used treat opioid addiction), to inmates.

Wright received the cash bribes from two individuals outside of the facility. From February 2015 to September 2015, Wright traveled to Philadelphia to receive cash payments from the relative of an inmate and subsequently delivered contraband, including K2, to the inmate. For example, on April 21, 2015, Wright accepted a cash payment from the relative, deposited a portion of it into his bank account and used some of the cash to gamble at a casino in Atlantic City. In exchange for that payment, Wright subsequently delivered contraband to an inmate.

From October 2015 to December 2015, Wright traveled to Bronx, New York, to receive cash payments from the relative of another inmate’s girlfriend. He met with this relative multiple times and accepted contraband and cash. For example, on Dec. 13, 2015, Wright accepted a cash payment of several thousand dollars from this relative in exchange delivering contraband to the inmate.

The bribery counts with which Wright is charged carry a maximum penalty of 15 years in prison. The maximum fine is the greatest of three times the value of the bribe payments or $250,000. The Travel Act counts and the contraband smuggling count all carry a maximum penalty of five years in prison and a maximum fine of $250,000 per count.

U.S. Attorney Carpenito credited special agents of the Department of Justice, Office of the Inspector General, under the direction of Special Agent in Charge Modano, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division, and Tazneen Shahabuddin, Assistant U.S. Attorney in the Special Prosecutions Division.

Defense counsel: Angelo Bianchi Esq. and Peter LaGreca Esq., West Caldwell, New Jersey

NEWARK, N.J. – A political consultant from Essex County, New Jersey, was sentenced today to 48 months in prison for her role in a fraud scheme related to contracts with the Newark Watershed Development Corp. (NWCDC) and kickbacks to officials there, U.S. Attorney Craig Carpenito announced.

Dianthe Martinez-Brooks, 48, of West Orange, New Jersey, previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging her with one count of wire fraud. Judge Linares imposed the sentence today in Newark federal court.

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

Martinez-Brooks was the owner and proprietor of a consulting company called DMart127 LLC, which provided political consulting services to local candidates and elected officials, among others, in the Essex County area. Between May 2011 and March 2013, she participated in a scheme with Linda Watkins Brashear, the former NWCDC Executive Director, and Donald Bernard, the former Director of Special Projects, to defraud the NWCDC of the honest services of Brashear and Bernard, and of money and property.

Martinez-Brooks submitted fraudulent invoices to the NWCDC in the name of DMart127 detailing services that were purportedly performed, but which sought payments that overstated the value of any services she or her company performed. Martinez-Brooks also assisted in obtaining contracts between companies owned by Kevin Gleaton and the NWCDC and contracts between a company owned by her relative and the NWCDC through Bernard and Brashear. Fraudulent invoices were submitted in the name of those companies to the NWCDC detailing services that were purportedly performed, but were never rendered by Gleaton, his companies, or Martinez-Brooks’ relative. Based on the fraudulent invoices, the NWCDC issued checks to DMart127, Gleaton’s companies and company belonging to Martinez-Brooks’ relative totaling $225,666. Martinez-Brooks kicked back a substantial amount of those proceeds to Brashear and Bernard.

In addition to the prison term, Judge Linares also sentenced Martinez-Brooks to three years of supervised release and ordered her to pay restitution of $225,666.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan Tafur; and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Jacques S. Pierre and Jihee G. Suh of the Special Prosecutions Division.

Defense counsel: Paulette Pitt Esq., Woodbridge, New Jersey

CAMDEN, N.J. – A Fredericksburg, Virginia, man was sentenced today to an additional 120 months in prison for possessing images of child sexual abuse while imprisoned at Federal Correctional Institution Fort Dix for a previous offense involving the distribution of child pornography, U.S. Attorney Craig Carpenito announced.

Jacob S. Good, 26, previously pleaded guilty before Senior U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of possession of child pornography. Judge Rodriguez imposed the sentence today in Camden federal court.

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

Good admitted that he possessed a micro SD Card which contained numerous images of child sexual abuse, some of which depicted prepubescent children. In connection with his plea, Good also admitted that he used a smart phone and access to the dark web to view and possess child pornography.

Good and seven other inmates were arrested in April 2017 and February 2018 following an FBI investigation involving multiple covert recordings and several cooperating inmates. The investigation revealed that Good and other inmates utilized contraband cellphones, micro SD cards, and access to the internet to obtain, view, and distribute child pornography within the prison. A co-defendant organized and helped facilitate this criminal activity by maintaining cloud accounts that were used as repositories for child pornography.

In addition to the prison term, Judge Rodriguez sentenced Good to lifetime supervised release.

Six other inmates – all of whom were serving sentences for prior child pornography offenses while committing the alleged crimes in this case – have pleaded guilty: Erik M. Smith, 36, of Iron Mountain, Michigan: Anthony C. Jeffries, 32, of Orange, Virginia; Jordan T. Allen, 31, of Plain City, Ohio; Brian J. McKay, 47, of Brookhaven, Pennsylvania; Christopher D. Roffler, 30, of Virginia Beach, Virginia; and Charles Wesley Bush, 38, of Knoxville, Tennessee. Smith was sentenced to 151 months in prison; the other five defendants are awaiting sentencing.

William H. Noble, 52, of Lowell, Massachusetts, was indicted on May 23, 2018, and is scheduled for trial next year. The charges and allegations against Noble are merely accusations, and he is presumed innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation. He also thanked officials of the Bureau of Prisons at Federal Correctional Institution Fort Dix for their assistance.

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

Defense counsel: David M. Simon Esq., Camden

NEWARK, N.J. – An Essex County, New Jersey, woman admitted today that she took part in a food stamps fraud scheme, U.S. Attorney Craig Carpenito announced.

Maria Teresa Venegas, 25, of Newark, 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.

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

From November 2011 to March 2018, Venegas was the owner of Jenny’s Deli, a small grocery store in Newark, which 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. Venegas allegedly 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 she exchanged money for SNAP benefits.

The SNAP fraud charge carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the gross pecuniary gain/loss. Sentencing is scheduled for Jan. 25, 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 guilty plea.

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: Linda Foster Esq., Assistant Federal Public Defender (Newark)

CAMDEN, N.J. – A Salem County, New Jersey, man with a previous felony record today admitted illegally possessing guns and selling guns without a license, U.S. Attorney Craig Carpenito announced.

Corey Moore, 32, of Salem, pleaded guilty before U.S. district Judge Noel L. Hillman in Camden federal court to two counts of an indictment charging him with dealing in firearms without a license and unlawfully possessing firearms after having been convicted of a felony offense.

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

From July 20, 2016, through Dec. 20, 2016, Moore sold firearms. On Oct. 24, 2016, Moore sold two loaded firearms – an Intratec, Model AB10, 9 millimeter Luger pistol, and a Smith & Wesson, Model 642 (marked LadySmith), .38 caliber revolver – to a man who was a confidential informant working with federal law enforcement officers. Moore, who did not have a license, sold the firearms to the informant at a convenience store in Logan Township, New Jersey. He also unlawfully possessed two additional loaded firearms: an Iberia Firearms Inc. (Hi-Point), Model JCP, .40 caliber pistol, and a Ruger, Model Security-Six, .357 magnum caliber revolver. Both of those firearms were fully operable and had been transported in interstate commerce prior to Moore’s possession of them.

Moore faces a maximum potential term of imprisonment of up to five years in prison for on the count of dealing in firearms without a license, and up to 10 years in prison on the count of being a felon in possession of a weapon. He also faces a fine of up to $250,000. Sentencing is scheduled for Jan. 4, 2019.

U.S. Attorney Carpenito credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, under the direction of John B. Devito, with the investigation.

The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the Criminal Division in Camden.

Defense counsel: Anne C. Singer Esq., Haddonfield, New Jersey

NEWARK, N.J. – A comic book artist from Essex County, New Jersey, today admitted distributing thousands of images and videos of child sexual abuse, U.S. Attorney Craig Carpenito announced.

 Timothy Yates, 31, of West Orange, New Jersey, pleaded guilty today before Senior U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of distribution of child pornography. Yates was previously arrested and charged by complaint on April 4, 2018. 

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

Yates is a comic book artist and the author of a comic book series which features a young female heroine on various adventures. Yates traveled to locations across the country to promote his work and attend comic book conventions, which were frequently attended by children. 

On several instances in 2016 and 2017, undercover law enforcement officers accessed a publicly available peer-to-peer network and observed a computer with a certain Internet Protocol address logged into the network that was sharing child pornography images and videos. The computer and IP address were associated with Yates. Law enforcement officers executed a search warrant at the defendant’s residence and discovered electronic devices belonging to Yates, which contained thousands of images and videos of child sexual abuse. 
        
The charge of distribution 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. Sentencing is scheduled for Jan. 14, 2019. 

U.S. Attorney Carpenito credited special agents with U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael; inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James Buthorn; the West Orange Police Department, under the direction of Chief James P. Abbott; and the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Christina O. Hud of the Criminal Division.
 

 

NEWARK, N.J. – A Union County, New Jersey, man was sentenced to 24 months in prison for his role in a scheme to steal money through fraudulently obtained refund checks issued by the U.S. Treasury, U.S. Attorney Craig Carpenito announced today.

Armand Joseph, 46, of Linden, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an indictment charging him with conspiring to defraud the United States and theft of government funds. Judge Wigenton imposed the sentence on Sept. 13, 2018, in Newark federal court.

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

Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks. Perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico. They then complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund. They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access. With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control or cashing the checks at check cashing businesses.

Beginning in January 2012, members of the conspiracy obtained stolen identities of residents of Puerto Rico and used them to file fraudulent income tax returns seeking refunds to which they were not entitled. They directed the checks to addresses in New Jersey that they controlled so they could receive them. Joseph used his position as a teller at a check-cashing business to cash checks for the conspirators.

In addition to the prison term, Judge Wigenton sentenced Joseph to three years of supervised release and ordered him to pay restitution of $247,344, and to forfeit the same amount.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John Tafur in Newark;, inspectors with the U.S. Postal Service Office of Inspector General, under the direction of Inspector in Charge James Buthorn; and Carl Riley, Public Safety Director, Plainfield Police Division, Criminal Investigation Bureau, with the investigation leading to today’s charges and arrests.

The government is represented by Assistant U.S. Attorney Sammi Malek of the Criminal Division, Newark.

Defense counsel: Paul Condon Esq., Jersey City, New Jersey

NEWARK, N.J. – A resident of Puerto Rico was charged today with attempting to smuggle more than 10 kilograms of cocaine into the United States through Newark Liberty International Airport, U.S. Attorney Craig Carpenito announced.

Raynee Emrico Gilbert Contreras Crespo, 21, is charged by complaint with conspiracy to possess with intent to distribute more than five kilograms of cocaine. He had his initial appearance on the charges today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court and was detained.

According to documents filed in this case:

On Sept. 13, 2018, the Drug Enforcement Administration (DEA) was conducting an operation at Newark Liberty International Airport in which they were observing passengers and bags that could potentially be transporting narcotics. Agents identified two bags that potentially contained narcotics that were checked on a flight from Puerto Rico, observing that the bags were heavily weighted for their size. DEA agents in Newark established surveillance at the assigned luggage carousel for the flight and saw Crespo retrieve the bags and leave the airport.

The agents approached Crespo and asked him if his bags contained narcotics. After initially denying that the bags contained narcotics, Crespo subsequently admitted that they did, and signed a written consent to allow the agents to search the bags. Approximately 12 kilograms of a mixture and substance that field-tested positive for cocaine was found.

The drug conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life, and a $10 million fine.

U.S. Attorney Carpenito credited the special agents of the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson, with the arrest.

The government is represented by Assistant U.S. Attorney Stephen Ferketic 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.

Defense counsel: John Yauch Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – An Essex County, New Jersey, man today admitted negotiating the sale of 17 firearms over a five-month period while he was a previously convicted felon, U.S. Attorney Craig Carpenito announced.

Reginald Moultrie, 49, of Newark, pleaded guilty before U.S. District Claire C. Cecchi to an information charging him with one count of possessing a firearm as a previously convicted felon.

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

On July 20, 2017, Moultrie, who had at least one prior felony conviction in Essex County Superior Court, possessed an assault rifle capable of accepting a large capacity magazine. Moultrie also acknowledged that between May 1, 2017, and Sept. 30, 2017, he negotiated the sale of 17 firearms.

The felon in possession charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Jan. 16, 2019.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation, leading to today’s guilty plea. He also thanked officers from the Newark Police Department, under the direction of Department of Public Safety Director Anthony F. Ambrose, for their assistance.

The government is represented by Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office National Security Unit in Newark.

Defense counsel: Patrick McMahon Esq., Newark

TRENTON, N.J. – A Bergen County, New Jersey, man today admitted giving a bribe to an employee of the U.S. Department of State, U.S. Attorney Craig Carpenito announced.

Luis Santos, 37, of Teaneck, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of bribery of a public official.

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

Santos paid $2,381 to a U.S. Consular Adjudicator in Santo Domingo, Dominican Republic, to favorably handle and review non-immigrant visas, which allowed individuals from the Dominican Republic to apply for entry into the United States.

The bribery charge carries a maximum potential penalty of 15 years in prison and a fine of up to $250,000. Sentencing is scheduled for Dec. 18, 2018.

U.S. Attorney Carpenito credited special agents of the U.S Department of State Diplomatic Security Service with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Karen D. Stringer of the U.S. Attorney’s Office, Special Prosecutions Division in Newark.

Defense counsel: Thomas Ambrosio Esq., Lyndhurst, New Jersey

NEWARK, N.J. – A New York real estate broker and a Bergen County, New Jersey, homeowner were sentenced today for their respective roles in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” U.S. Attorney Craig Carpenito announced.

Michael Arroyo, 60, of Bronx, New York, was sentenced to 21 months in prison. He previously pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit bank fraud.

Rafael Popoteur, 67, of Ridgefield Park, New Jersey, was sentenced to three years of supervised release, including one year of house arrest. He previously pleaded guilty before Judge Vazquez to an information charging him with conspiracy to commit bank fraud.

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

From 2012 through January 2014, Arroyo and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue in the Bronx. In 2013, Arroyo and others transferred ownership of the property to an individual living at the property and his family friend.

Arroyo and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans that Arroyo and others applied for.

The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Arroyo and others. Eventually, the family friend defaulted on the two HELOC loans.

Popoteur was a client of Arroyo and another broker. From 2012 through January 2014, Popoteur and the two real estate brokers, and others, conspired to fraudulently obtain multiple HELOCs from banks on a residential property in New Jersey. To get the banks to extend lines of credit they would not have otherwise approved, Popoteur and the real estate brokers executed a quitclaim deed to transfer ownership of a Ridgefield Park, New Jersey property to Popoteur, who also lived at the property.

Popoteur and the real estate brokers then applied for three HELOCs from multiple banks using the Ridgefield Park, New Jersey property as collateral. As the conspirators had done previously, they hid from the lenders the fact that the properties offered as collateral were either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also contained false information concerning Popoteur’s income, which was stated to be higher than his actual income.  At the time the applications were made, the value of the Ridgefield Park, New Jersey property that was unencumbered by a mortgage was far less than the amount of the HELOC loans Popoteur and the others applied for.

The victim banks eventually issued loans to Popoteur in excess of $495,000.  After the victim banks funded the HELOCs and deposited money into Popoteur’s bank accounts, Popoteur disbursed portions of it to the real estate brokers and others. In 2014, Popoteur defaulted on all three HELOC loans.

The overall scheme resulted in $3.5 million in losses to the victim banks.

In addition to the prison term, Judge Vazquez sentenced Arroyo five years of supervised release.

U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, 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 sentencings.

The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.

CAMDEN, N.J. – A former Atlantic County resident now living in Florida admitted defrauding New Jersey state health benefits programs out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito and N.J. Attorney General Gurbir S. Grewal announced.

Robert Madonna, 36, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.

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

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

Madonna was one of the owners of a company formed to market prescription compounded medications, referred to as Company 1. From May 2015 through February 2016, Madonna and others associated with the company persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications. 

 The conspirators learned that certain compound medication prescriptions – including pain, scar, and antifungal creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply. The conspirators also learned that the N.J. State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, would cover compound medication prescriptions.  

Madonna and his conspirators entered into an agreement under which Company 1 would receive a percentage of the amounts paid to compounding pharmacies for prescriptions secured by Madonna and his conspirators. Madonna and his conspirators then recruited public employees, offered them hundreds of dollars per month, and persuaded them to agree to obtain prescription compounded medications without any examination by a medical professional that the medications were medically necessary. Madonna would obtain insurance and personal information from the public employees and give that information to conspirators. A doctor then would call the public employees and complete the prescription without personally examining the employees or having a prior doctor/patient relationship with them. Company 1 would receive a percentage of the amounts paid on these fraudulent prescriptions, which Madonna and others would divide.

According to the information, Madonna and his conspirators caused New Jersey to pay more than $2 million in fraudulent claims for compounded medications for public employees.

Madonna received $179,370 in gross proceeds for his role in the scheme.  As part of his plea agreement, Madonna must forfeit these criminal proceeds and pay restitution of at least $2,092,791.

Madonna faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.  Sentencing is scheduled for Feb. 5, 2019.

U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge John Tafur in Newark: and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys R. David Walk, Jr. and Jacqueline M. Carle of the U.S. Attorney’s Office in Camden.

                                      

                                                                                                                                                                                                                                                                                                                                                                                                                                                               

                                 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

NEWARK, N.J. – An Essex County, New Jersey, man admitted robbing 14 hotels in New Jersey and New York, U.S. Attorney Craig Carpenito announced today. 

Tremone Burnett, 46, of Orange, New Jersey, pleaded guilty before U.S. District Court Judge Katharine S. Hayden in Newark federal court on Sept. 12, 2018, to two counts of an indictment charging him with one count of conspiracy to commit robbery and threaten physical violence, and one count of using a firearm during a crime of violence.

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

From April 24, 2014, through June 19, 2014, Burnett robbed 12 New Jersey hotels and two New York hotels at gunpoint. The New Jersey hotels were located in Carteret, Lebanon, Newark, Rockaway, Secaucus, Avenel, Parsippany, Paramus, Weehawken, and Edison; the New York hotels were located in Airmont and Nanuet. In each robbery, Burnett wielded a handgun and, in some instances, tied the victim’s hands and feet. During one of the robberies, Burnett discharged his firearm.

The count of conspiracy to commit robbery and threaten violence carries a maximum penalty of 20 years in prison. The count of discharging a firearm during a crime of violence carries a maximum 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 maximum fine of $250,000, or twice the gross gain or loss from the offense. Sentencing is scheduled for Dec. 18, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Theodore N. Stephens II; and the Newark Department of Public Safety, under the direction of Public Safety Director Anthony F. Ambrose, with the investigation leading to today’s guilty plea. He also thanked the Carteret, Edison, Lebanon, Rockaway, Parsippany, Weehawken and Woodbridge Township police departments in New Jersey; the Clarkstown and Ramapo police departments in New York; the N.J. State Police; and the Bergen County, Hunterdon County, Middlesex County, and Morris County prosecutors’ offices for their work on this case.

The government is represented by Assistant U.S. Attorney Stephen Ferketic of the U.S. Attorney’s Office Public Protection Unit in Newark.

NEWARK, N.J. – A Passaic County, New Jersey, man today admitted distributing thousands of pills containing heroin in New Jersey, U.S. Attorney Craig Carpenito announced. 

Juan Vidal, 33, of Paterson, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with one count of conspiring to distribute, and possess with intent to distribute, more than 100 grams of substances containing heroin. 

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

At his residence, Vidal manufactured pills containing heroin that were made to resemble Percocet pills. He used a press to make the pills, and he another individual, Karen Rojas, sold the pills for approximately $5 per pill. Between February 2018 and April 2018, Vidal manufactured, and Rojas sold, thousands of pills. 

On April 18, 2018, for example, in a recorded transaction, Rojas was asked by a cooperating witness for 100-150 heroin pills. Rojas sold the cooperating witness 40 heroin pills for approximately $200, and Rojas indicated that Vidal needed to “get supplies,” meaning purchase more heroin, in order to make additional pills. Vidal and Rojas were previously charged by criminal complaint in April 2018 with conspiracy to distribute these drugs.

The distribution of narcotics offense carries a mandatory minimum penalty of five years in prison, a maximum penalty of 40 years in prison, and a maximum fine of $5 million.  Sentencing is scheduled for Dec. 18, 2018.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory Ehrie in Newark, with the investigation leading to today’s guilty plea. 

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

Rojas’ case is pending. The charge and allegations against her are merely accusations, and she remains innocent unless and until proven guilty.

NEWARK, N.J. – A Passaic County, New Jersey, woman, was sentenced today to 37 months in prison for her role in a month-long crime spree that included attempting to rob a Citizens Bank, in Tannersville, Pennsylvania, at gunpoint, conspiring to rob a Keystone Bank in Scotrun, Pennsylvania, and robbing a Spencer Savings Bank in Garfield, New Jersey, at gunpoint, U.S. Attorney Craig Carpenito announced.

Melisa Aquino Arias, 24, of Passaic, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging her with one count of attempted bank robbery, one count of attempted conspiracy to steal from a bank, and one count of bank robbery. Judge Chesler imposed the sentence today in Newark federal court.

Her co-defendant, Swahilys Pedraza-Rodriguez, 20, of New Haven, Connecticut, pleaded guilty before Judge Chesler on April 5, 2018, to an information charging her with the same offenses. She is scheduled to be sentenced Sept. 13, 2018.

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

On Aug. 28, 2017, Arias and Pedraza-Rodriguez, both disguised in nuns’ habits, entered a Citizens Bank in Tannersville, Pennsylvania. While inside, Arias acted as a lookout as Pedraza-Rodriguez took out what appeared to be gun and demanded money from a bank teller. Arias signaled to Pedraza-Rodriguez that they should leave the bank and the women fled empty-handed.

On Sept. 20, 2017, Arias and Pedraza-Rodriguez agreed to steal money from the drive-through ATM machine at a Keystone Bank in Scotrun, Pennsylvania. Arias drove them, both wearing hijabs, to the ATM machine and again acted as a lookout while Pedraza-Rodriguez attempted to pry open the ATM machine with a screwdriver. Those attempts were unsuccessful, and the women again fled the scene.

On Sept. 27, 2017, Pedraza-Rodriguez and Arias entered a Spencer Savings Bank in Garfield, New Jersey, and asked a bank teller for information about opening a bank account. Arias, who was wearing a blue hijab, took out what appeared to be a black handgun and demanded money, while Pedraza-Rodriguez stood guard by the bank manager. After a bank teller handed them some cash, the defendants left the bank and employees immediately alerted the police. Law enforcement officers responded to the scene, but did not immediately locate the robbers. 

On Oct. 15, 2017, Pedraza-Rodriguez and Arias entered an NVE Bank in Teaneck, New Jersey. Arias wore an orange hijab and Pedraza-Rodriguez wore a black head covering. They approached a bank employee and requested information about opening a bank account. The employee recognized the women as the alleged perpetrators of the Garfield bank robbery. As the employee went to alert the police, the women left the bank. Pedraza-Rodriguez and Arias were apprehended soon after by law enforcement officers. 

In addition to the prison term, Judge Chesler sentenced Aria to three years of supervised release and ordered her to pay $2,900 in restitution to Spencer Savings Bank.

U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the Garfield Police Department, under the direction of Chief Raymond Kovach; the Teaneck Police Department, under the direction of Chief Glenn M. O'Reilly; the Leonia police department, under the direction of Chief Thomas P. Rowe; and the Pocono Township Police Department, under the direction of Chief Kent Werkheiser with the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the U.S. Attorney’s Office Criminal Division in Newark.

 

CAMDEN, N.J. – A Cumberland, County, New Jersey, man was sentenced today to 100 months in prison for robbing two banks with an accomplice, U.S. Attorney Craig Carpenito announced.

Quintin L. Jones, 36, of Vineland, New Jersey, previously pleaded guilty before U.S. District Court Judge Renée Marie Bumb to an information charging him with two counts of bank robbery. Judge Bumb imposed the sentence today in Camden federal court.

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

On Oct. 11, 2016, Jones and an accomplice robbed a Cape Bank in Upper Deerfield Township, New Jersey. According to bank employees and video surveillance, two men wearing black hooded sweatshirts entered the bank. While one man crouched near the entrance and pointed what appeared to be a black revolver at employees, the other man approached bank tellers and directed them to place cash into a bag.

Both robbers fled the bank. Employees observed a tan or gold vehicle with a black soft-top rapidly exit the parking lot and turn in the direction of Vineland. Security cameras at the bank and an employee also captured pictures of the car. Investigators determined that the car matched the description of a Chrysler Sebring that was stolen on Sept. 22, 2016, during a carjacking in the parking lot of a Walmart in Mays Landing, New Jersey.

On Oct. 15, 2016, troopers with the N.J. State Police responded to a vehicle fire at a parking lot in Parvin State Park in Pittsgrove Township, New Jersey. After fire personnel extinguished the flames, troopers determined that the vehicle was the same car that had been stolen in the carjacking on Sept. 22, 2016.

Subsequent investigation revealed that Jones and the accomplice had purchased a gas can at a Walmart in Vineland and then took a cab to a Wawa gas station near Parvin State Park, where they purchased gas shortly before police responded to the vehicle fire. Investigators also learned that Jones, who had been staying at a local hotel on Oct. 15, 2016, had been observed by an employee placing a large amount of cash in a bag. Acting on this and other information, the State Police later obtained state arrest warrants for Jones and the accomplice along with search warrants for their residences. Law enforcement personnel who searched the accomplice’s residence also found clothing consistent with the outfits worn by the two men during the Cape Bank robbery as well as a toy revolver, cash, gloves, and a car key that appeared to be for the Chrysler Sebring. 

Jones also admitted robbing Newfield National Bank in Newfield, New Jersey, on Oct. 7, 2016, with the accomplice. During that robbery, Jones and the accomplice stole cash before fleeing in the same stolen Chrysler Sebring.

In addition to the prison term, Judge Bumb sentenced Jones to three years of supervised release and ordered him to pay restitution of $30,856.

Jones’ accomplice, Nathan L. Wallace of Vineland, pleaded guilty on Jan. 24, 2018, and is scheduled to be sentenced Oct. 9, 2018.

U.S. Attorney Carpenito credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; the FBI’s Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster; the N.J. State Police, under the direction of Col. Patrick J. Callahan, with the investigation leading to today’s sentencing. He also thanked the Vineland Police Department; the Hamilton Township Police Department; the Newfield Police Department; the Cumberland County Prosecutor’s Office; and the Salem County Prosecutor’s Office for their roles in the investigation.

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

TRENTON, N.J. – A brother and sister from New Jersey were sentenced today to federal prison terms for their respective roles in running a multi-million dollar fraudulent invoice scheme, U.S. Attorney Craig Carpenito announced.

Shevandra Verasawmi, 38, of Matawan, New Jersey, was sentenced to 87 months in prison and Vishallie Verasawmi, 37, of Green Brook, New Jersey, was sentenced to 48 months in prison. Both were found guilty of all four counts of an indictment charging them with one count of conspiracy to commit mail fraud and three counts of mail fraud. The defendants were convicted following a one-week trial before U.S. District Judge Freda L. Wolfson in Trenton federal court. The jury deliberated for one hour before returning its verdict.

According to documents filed in this case and the evidence at trial:

From April 2016 through August 2016, Shevandra and Vishallie Verasawmi defrauded an entity identified in the indictment as “Victim Company 1” into paying shell companies that were incorporated by Shevandra Verasawmi. Despite the fact that the shell companies never had contracts for goods or services with Victim Company 1, Vishallie Verasawmi used her position as an employee of Victim Company 1 to cause the shell companies to be added to Victim Company 1’s accounts payable system.

Shevandra and Vishallie Verasawmi then submitted dozens of fraudulent invoices to Victim Company 1 and ultimately deposited the fraud proceeds into bank accounts they controlled. In total, Shevandra and Vishallie Verasawmi attempted to divert millions of dollars belonging to Victim Company 1 and spent the proceeds on personal expenses, including a luxury car and credit card payments.

The indictment seeks forfeiture of Shevandra and Vishallie Verasawmi’s proceeds from the scheme, including $1,066,830 and a 2016 BMW 750Li xDrive sedan.

In addition to the prison terms, Judge Wolfson sentenced the both of the defendants to three years of supervised release and ordered them both to pay restitution of $1,066,830. Vishallie Verasawmi was also ordered to forfeit the BMW.

The investigation was led by special agents with the U.S. Attorney’s Office, District of New Jersey.

The government is represented by Senior Litigation Counsel Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Dara Aquila Govan of the U.S. Attorney’s Office Cybercrime Unit. Senior Litigation Counsel Barbara A. Ward and Special Assistant U.S. Attorney Kathleen Robeson of the U.S. Attorney’s Office Asset Recovery and Money Laundering Unit are handling the forfeiture aspects of the case.

NEWARK, N.J. – A Park Ridge, New Jersey, man was sentenced today to 61 months in prison for using shell companies and phony invoices to scam both his and his wife’s employers out of millions of dollars, U.S. Attorney Craig Carpenito announced.

Philip Charles de Gruchy, 64, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to Count One and Counts 10 through 15 of a superseding indictment charging him with conspiracy to commit mail fraud and subscribing to false individual and corporate tax returns. Judge Wigenton imposed the sentence today in Newark federal court.

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

From August 2007 through April 2, 2010, de Gruchy’s then-wife Barbara Brown was employed by “Company A,” a toy and juvenile products retailer headquartered in Wayne, New Jersey, first as director of customer relationship management and then as director of global customer relations management. She had authority to hire and pay contractors. Brown caused Company A to enter into a business relationship with CEM Inc., an entity that she and de Gruchy secretly controlled. From Nov. 5, 2007, through March 4, 2010, CEM submitted approximately 170 invoices to Company A totalling more than $3 million for alleged marketing consulting work that was ultimately unnecessary, worthless, or never completed.

Although the checks that Company A issued to CEM were mailed to various Canadian addresses, the checks were ultimately deposited by de Gruchy into a CEM account at bank branches located in Park Ridge. De Gruchy wrote checks out of the CEM account payable directly to either de Gruchy, Brown or two companies affiliated with de Gruchy: Silk Farm Inc. and Ontario LLC. De Gruchy and Brown then used the money for personal purposes, including home renovations, mortgage payments on the Park Ridge residence that Brown and de Gruchy shared, and credit card expenses.  

From July 2010 through Nov. 11, 2011, de Gruchy was employed as the director of global relations management by “Company B,” an international manufacturer and retailer of luxury suitcases and accessories, headquartered in South Plainfield, New Jersey. He was responsible for a data migration project designed to assist Company B with identifying customer purchasing patterns. De Gruchy obtained verbal approval from Company B to hire Brown to assist him on the migration project. At no time did de Gruchy reveal his personal and financial relationship with Brown.

From November 2010 until November 2011, Brown submitted invoices in her own name or the name of her company, BI Insights, totaling more than $300,000 for purported work related to the data migration project. De Gruchy approved all of the invoices submitted by Brown and BI Insights. The work was ultimately unnecessary, worthless, or never completed. Checks from Company B totaling $216,825 were sent to one of the Canadian addresses used to receive checks from Company A and deposited into a Canadian bank account. Certain funds from the Canadian bank account were thereafter transferred to de Gruchy and Brown’s joint personal bank accounts in the United States.

De Gruchy also admitted that he filed false federal tax returns, Forms 1040, for the calendar years 2009 and 2010, in which he knowingly overstated expenses and understated gross receipts, including receipts from the fraudulent conduct involving Company A and Company B.  De Gruchy further admitted that he filed false federal corporate income tax returns, Forms 1120, for the calendar years 2009 and 2010 for CEM Inc. and Silk Farm Inc., in which he falsely claimed certain payments as business expenses. De Gruchy acknowledged at the plea hearing that he owes the IRS $882,844 in additional taxes for 2009 and 2010.  

Brown, who was charged with de Gruchy in the superseding indictment, passed away in May 2017, and the charges against her were dismissed. 

In addition to the prison term, Judge Wigenton sentenced de Gruchy to three years of supervised release. Restitution will be determined at a later date.

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 Tafur in Newark, with the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Special Prosecutions Division, and Assistant U.S. Attorney Sarah Devlin of Asset Recovery and Money Laundering Unit, in Newark.