District of New Jersey
Press releases recorded for this federal judicial district.
Hunterdon County, New Jersey, Man Gets over 10 Years in Prison for Distributing Child PornographyRead the Press Release
NEWARK, N.J. – A High Bridge, New Jersey, man was sentenced today to 121 months in prison for distributing images of child sexual abuse over the internet, U.S. Attorney Craig Carpenito announced.
Darrel Underhill, 74, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of distributing child pornography. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in the case and statements in court:
Underhill used a peer-to-peer file sharing program on his computer to download videos and images of child sexual abuse. In October 2016, law enforcement downloaded over three dozen such videos from Underhill’s computer. After executing a search warrant at Underhill’s home in March 2017, agents located nearly 1000 videos and over 12,000 images of child sexual abuse on Underhill’s computers. Underhill admitted that he was making videos available for others to download.
In addition to the prison term, Judge McNulty sentenced Underhill to five years of supervised release.U.S. Attorney Carpenito credited special agents with the U.S. Department of Homeland Security (DHS), Homeland Security Investigation’s (HSI) Newark Division, under the direction of Acting Special Agent in Charge Brian Michael, with the investigation.
The government is represented by Senior Litigation Counsel Mark J. McCarren of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender
Bergen County, New Jersey, Man Charged with Bribing State Department EmployeeRead the Press Release
NEWARK N.J. – A Bergen County, New Jersey, man was charged today with offering a bribe to an employee of the U.S. Department of State, U.S. Attorney Craig Carpenito, announced.
Luis Santos, 27, of Teaneck, New Jersey, was arrested this morning and charged by complaint with one count of bribery of a public official. Santos is scheduled to appear this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court.
According to the complaint:
Santos offered to pay a United States Consular Adjudicator approximately $2,500 to favorably handle and review non-immigrant visas, which allowed individuals from the Dominican Republic to apply for entry into the United States.
Santos faces a maximum potential penalty of 15 years in prison and a fine of up to $250,000.
U.S. Attorney Carpenito credited special agents of the State Department’s Diplomatic Security Service, under the direction of Aaron Codispoti, Acting Director of the Office of Investigations and Counterintelligence, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Karen D. Stringer of the U.S. Attorney’s Office, Special Prosecutions Division in Newark.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless proven guilty.
Bergen County, New Jersey, Doctor Sentenced to 18 Months in Prison for Role in Test-Referral Bribe Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, doctor was sentenced today to 18 months in prison for his role in a test-referral bribe scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Craig Carpenito announced.
Basel Batarseh, 57, of Franklin Lakes, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes in violation of the Federal Travel Act. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Batarseh, an internal medicine doctor with a practice in West New York, New Jersey, accepted bribes totaling more than $104,000 from BLS employees and associates between November 2007 and August 2010. In exchange, Batarseh generated more than $1.3 million in lab business for BLS.In addition to the prison term, Judge Chesler sentenced Batarseh to one year of supervised release, fined him $7,500 and ordered forfeiture of $104,611.
The investigation has thus far resulted in 53 convictions – 38 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
The investigation has to date recovered more than $13 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.The government is represented by Senior Litigation Counsel Joseph N. Minish, Assistant U.S. Attorney Danielle Alfonzo Walsman and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, of the office’s Asset Forfeiture and Money Laundering Unit.
Defense counsel: Curtis LaForge Esq., Saddle Brook, New Jersey
Bergen County Man Admits Defrauding Two International Companies of $3 Million and Failing to Pay over $880,000 in TaxesRead the Press Release
NEWARK, N.J. – A Park Ridge, New Jersey, man today admitted 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, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court 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.
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 approximately $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. As such, the charges against her were dismissed in June 2017.
The mail fraud conspiracy charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The false tax return counts each carry a maximum potential penalty of three years in prison and a $250,000 fine, or twice gross gain or loss from the offense. Sentencing is scheduled for July 9, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, and IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, with the investigation.
The government is represented by Senior Litigation Counsel Leslie F. Schwartz of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Wanda Akin Esq., Newark
Georgia Man Admits Using Fictitious Businesses for $530,000 Unemployment Insurance, Tax Fraud SchemeRead the Press Release
NEWARK, N.J. – A Georgia man today admitted devising a scheme in which he and others fraudulently collected unemployment benefits and tax refunds by pretending to have worked for several phony companies that he created, U.S. Attorney Craig Carpenito announced.
Lashawn Porcher, 32, of Lawrenceville, Georgia, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with one count of conspiracy to commit mail fraud and one count of aiding and assisting in the filing of a false tax return.
According to documents filed in this case and statements made in court:
Porcher incorporated numerous fictitious businesses in New Jersey, including Computer Tyme Corporation, Cleaning Experience Corporation, Cleaning Time, and The Dream Team, all of which did not conduct any actual business and had no offices, employees, or officers.
From February 2010 through June 2014, Porcher used Computer Tyme Corporation and Cleaning Experience Corporation to seek unemployment insurance benefits for himself and other conspirators based on false claims that they had received compensation as employees of these companies.
To carry out the scheme, Porcher submitted fraudulent wage reports to the N.J. Department of Labor and Workforce Development for himself and others. He also supplied his conspirators with false wage records so that they could submit false claims as well. As a result, Porcher and others were able to fraudulently receive $436,982 in unemployment benefits.
In addition, Porcher used Cleaning Time and The Dream Team to prepare false federal tax returns for himself and other purported employees of these fictitious companies. Porcher admitted falsifying information on W2 forms concerning their wages in order to obtain inflated tax refunds for tax years 2009 through 2012. As a result, he and other conspirators fraudulently collected approximately $103,276 in tax refunds.
The mail fraud conspiracy charge carries a maximum potential penalty of 20 years in prison. The filing of a false tax return charge carries a maximum potential penalty of three years in prison. Both charges carry a potential $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for July 11, 2018.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Labor Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York, special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Jihee G. Suh of the U.S. Attorney’s Office Special Prosecution’s Division in Newark.
Defense counsel: Leticia M. Olivera Esq., Office of the Federal Public Defender, Newark
Pleasantville, New Jersey, Teacher and Sewell, New Jersey, Salesman Admit Health Care Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – Two men today admitted defrauding New Jersey state health benefits programs and other insurers out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito and New Jersey Attorney General Gurbir S. Grewal announced.
William Hunter, 43, a salesman from Sewell, New Jersey, and Richard McAllister, 42, a Pleasantville school teacher from Ocean City, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
From January 2015 through April 2016, Hunter and McAllister recruited individuals to obtain very expensive and unnecessary compounded medications from an out-of-state pharmacy, identified in the informations as the “Compounding Pharmacy.” The conspirators knew that certain compound medications – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.
The conspirators also learned that these medications would be covered by an entity referred to in the informations as the “Pharmacy Benefits Administrator.” The Pharmacy Benefits Administrator provided benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents. The amounts paid for the prescription drug claims were billed to the State of New Jersey.
Hunter, McAllister, and others recruited individuals covered by the Pharmacy Benefits Administrator, including public employees, to fraudulently obtain unnecessary compounded medications from the Compounding Pharmacy. Hunter and McAllister obtained insurance information from those individuals and gave it to another conspirator, who completed the prescriptions and had a doctor sign them without examining the individuals. The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
The pharmacy then paid one of their conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Hunter, McAllister, and other members of the conspiracy. Hunter and McAllister paid individuals with insurance coverage to reward them for obtaining prescriptions. McAllister himself received compounded medications based on a prescription signed by a doctor he did not see.
According to the informations, the Pharmacy Benefits Administrator paid the Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey.
Both defendants face a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Hunter must forfeit $245,020.08 in criminal proceeds and pay restitution of at least $1,323,930.57. McAllister must forfeit $456,806.23 and pay restitution of at least $3,428,222.97. Sentencing for both defendants is scheduled for July 18, 2018.
Sixteen other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, George Gavras, Richard Zappala, Michael Neopolitan, Andrew Gerstel, Timothy Frazier, Michael Pilate, Shawn Sypherd, Nicholas Tedesco, and Michael Sher – pleaded guilty from August through March 2018 and await sentencing.
U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and the U.S. Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York, with the investigation leading to the guilty pleas. He also thanked the Pensions and Financial Transactions Section of the Division of Law, within the 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.
Defense counsel:
Hunter: Jill Cohen Esq., Westmont, New Jersey
McAllister: Edward F. Borden Jr. Esq., Cherry Hill, New JerseyGeneral Foreman at Port Elizabeth Sentenced to Two Years in Prison for Salary FraudRead the Press Release
NEWARK, N.J. – A member of the International Longshoremen’s Association (ILA) and general foreman for a Port Elizabeth terminal operator was sentenced today to 24 months in prison for fraudulently collecting a nearly $500,000 annual salary, much of which was for work he never performed, U.S. Attorney Craig Carpenito announced.
Paul Moe Sr., 66, of Atlantic Highlands, New Jersey, was convicted at trial in October 2017 on all 14 counts of an indictment charging him with one count of wire fraud conspiracy and 13 substantive counts of wire fraud. He was convicted following a 10-day trial before U.S. District Court Judge Katharine S. Hayden, who imposed the sentence today in Newark federal court.
According to statements made in court and the evidence at trial:
From September 2015 through March 2017, Moe fraudulently collected a compensation package that paid him almost $500,000 annually while showing up at his job site for as little as eight hours per week. In order for Moe to collect his $9,300 weekly paycheck, other conspirators submitted false timesheets each day on his behalf and even credited him for up to 16 hours of overtime a day. The 13 substantive wire fraud counts consist of one-week increments in which Moe – having either failed to appear at the job site or while being out of state or out of the country – was paid as if he had been on the job for a minimum of 40 hours a week.
In addition to the prison term, Judge Hayden sentenced Moe to three years of supervised release and ordered him to pay restitution of $749,000.U.S. Attorney Carpenito credited special agents and investigators with the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; the U.S. Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York; the Office of Employee Benefit Security Act (EBSA), under the direction of Regional Director Jonathan Kay; and the Office of Labor Management Standards, under the supervision of District Director Andriana Vamvakas, with the investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel V. Grady O’Malley, Assistant U.S. Attorney Anthony Moscato, Chief of the National Security Unit, and Special Assistant U.S. Attorney Tracey Agnew.
Defense counsel: Gerald McMahon Esq., New York
Doctor Gets Three Years in Prison for Billing Medicare, Other Insurers $3 Million for Therapy Services Performed by Unqualified PersonnelRead the Press Release
NEWARK, N.J. – A doctor with offices in Paterson, Passaic, and Elizabeth was sentenced today to 36 months in prison for defrauding Medicare and private insurance companies out of $3 million by billing them for over 150,000 physical therapy sessions that were performed by unlicensed and unqualified personnel, U.S. Attorney Craig Carpenito announced.
Anthony J. Enrico, 60, of North Haledon, New Jersey, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of health care fraud. Judge McNulty imposed the sentence today in Newark federal court.
According to the documents filed in the case and statements made in court:
From January 2007 through May 2016, Enrico billed Medicare and other health insurance providers for physical therapy services that he supposedly provided to his patients. In order for them to be reimbursable, Medicare and private insurers required that physical therapy services be performed only by individuals like Enrico who met certain criteria based on training and certifications.
Enrico admitted that on more than 150,000 occasions, those services were performed at his direction by individuals who lacked the necessary training and certifications, resulting in him fraudulently obtaining approximately $3 million from Medicare and private insurers.
In addition to the prison term, Judge McNulty sentenced Enrico to three years of supervised release and ordered him to pay restitution of $3 million.U.S. Attorney Carpenito credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, with the investigation.
The government is represented by Senior Litigation Counsel Joseph N. Minish of the U.S. Attorney’s Health Care and Government Fraud Unit and Assistant U.S. Attorney Elaine Lou of the U.S. Attorney’s Office Criminal Division in Newark.
The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.38 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Christopher D. Adams Esq., Holmdel, New Jersey
Passaic County Man Indicted for Conspiracy to Distribute Heroin in Paterson, New Jersey, and Suburbs in New York, New JerseyRead the Press Release
NEWARK, N.J. – A federal grand jury returned an indictment today against an alleged member of a heroin distribution conspiracy that reached from the Bronx, New York, to Paterson and suburban communities in New York and New Jersey, U.S. Attorney Craig Carpenito announced.
Reinaldo Rodriguez, a/k/a “Money,” a/k/a “Mimo,” 29, of Paterson, is charged in a four-count indictment with conspiracy to distribute a kilogram or more of heroin, possession with intent to distribute heroin and marijuana, felony possession a firearm, and possession of a firearm in furtherance of a drug trafficking crime. He was arrested in May 2016 and has been in custody since that time.
Reinaldo Rodriguez was originally charged by complaint with Juan Pablo Goris-Castellano, 27, of the Bronx; Edwin Lopez, 32, of Elmwood Park, New Jersey; Carolina Almonte, 30, of the Bronx; Charlie Rodriguez, 34, of Paterson; Victor Alfonso Alvarez Martinez, 28, of the Bronx; Edward M. Stanel, 27, of Parsippany, New Jersey; and Joseph Trimarco, 30, of Stony Point, New York.
According to documents filed in this case:
From June 2015 through May 2016, the defendants participated in a drug trafficking organization that amassed wholesale quantities of heroin at multiple locations in and around the Bronx and used couriers to deliver large quantities of that heroin to mid-level drug dealers operating in and around Paterson. The heroin was either sold in the Paterson area or re-distributed to street-level drug dealers in suburban areas, including but not limited to, Morris County, New Jersey, and Rockland County, New York.
Goris-Castellano, who was based out of the Bronx, packaged and distributed large quantities of heroin to Lopez, who operated out of Paterson. Goris-Castellano worked with his associates, Almonte and Alvarez Martinez, who brought the heroin to Lopez and returned to Goris-Castellano with Lopez’s payment for the drugs. Lopez then sold portions of that heroin to Charlie Rodriguez, who, working closely with Reinaldo Rodriguez, resold portions of that heroin to street-level drug dealers in Paterson and suburban areas, including Stanel and Trimarco, who operated in Morris County and Rockland County, respectively.
At the time of his arrest, Reinaldo Rodriguez was in a bedroom in which distribution quantities of heroin and marijuana were found on the floor and a gun was found on top of a box of drug paraphernalia in the closet.
Due to his prior felony drug distribution conviction, the drug distribution conspiracy charge in the indictment carries a mandatory minimum penalty of 20 years in prison, a maximum potential penalty of life in prison, and a $20 million fine. The possession with intent to distribute charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison. The possession of a firearm in furtherance of a drug trafficking crime charge carries a mandatory minimum penalty of five years in prison to run consecutively to any term imposed on the drug possession charge.
Almonte, Alvarez Martinez, Goris-Castellano, Lopez, Charlie Rodriguez, Stanel, and Trimarco have all pleaded guilty to their roles in the conspiracy. Almonte was sentenced to 46 months in prison in May 2017. Lopez was sentenced to 162 months in prison in July 2017.
U.S. Attorney Carpenito credited special agents of the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie Nickerson in Newark, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge John B. Devito, with the investigation.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies dedicated to identifying and dismantling the most serious drug trafficking, weapons trafficking and money laundering organizations.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit of the U.S. Attorney’s Office in Newark.
The charges and allegations against Reinaldo Rodriguez are merely accusations, and he is considered innocent unless and until proven guilty.
Defense counsel: Elizabeth Smith Esq., Mendham, New Jersey
Monmouth County, New Jersey, Couple Charged with Conspiring to Evade Personal and Employment TaxesRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, couple was arrested this morning by federal agents on charges of conspiracy to defraud the United States by evading the payment of personal and employment taxes, U.S. Attorney Craig Carpenito announced.
Tito Viteri, 39, and, Maria Yepez, 38, of Cream Ridge, New Jersey, are charged by complaint with one count of conspiracy to defraud the IRS of taxes from 2008 through 2016. Viteri and Yepez made their initial appearances today before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court and were released on $300,000 each unsecured bonds.
According to documents filed in this case and statements made in court:
Since 2002, Viteri was the owner and operator of numerous commercial trucking companies that performed delivery services, all of but one of which operated in New Jersey. Yepez was the nominal owner of three of the companies.
Viteri and Yepez allegedly conspired to evade paying personal and business-related taxes by engaging in the following acts: (1) “pyramiding” companies and using nominees as the purported owners of several of the companies in order to shield business assets while incurring employment tax liabilities; (2) failing to file timely and accurate quarterly federal tax returns by falsely categorizing employees as independent contractors, for whom employment taxes did not have to be paid; (3) receiving unreported kickback income from an employee; and (4) concealing personal income and assets by using nominees and depositing money into their child’s bank account.
In 2008, an IRS audit determined that Viteri owed approximately $785,000 in unpaid taxes for one of his companies, and he himself owed approximately $315,000 in unpaid personal taxes. Although Viteri began making payments to the IRS in August 2011, he stopped making those payments in December 2013, claiming he was not “bringing enough money home.” Despite his claims, at around the same time (February 2013 to February 2016) Viteri and Yepez made approximately $111,000 in rental payments (approximately $3,000 per month) for a property in Chesterfield where they lived.
Although Viteri and Yepez still had substantial outstanding tax liabilities, in 2016, Viteri and Yepez purchased a home in Cream Ridge for $929,653. To conceal the purchase of the home from the IRS, Viteri and Yepez purchased the home in the name of Viteri’s mother.
As of March 2018, Viteri owed approximately $1.3 million in personal income taxes, and Viteri and Yepez owed an additional approximately $1.3 million in unpaid business-related taxes.
The conspiracy charge carries a maximum potential penalty of five years in prison and a statutory maximum fine equal to the greatest of: (1) $250,000; (2) twice the gross amount of any pecuniary gain that any persons derived from the offense; or (3) twice the gross amount of any pecuniary loss sustained by any victims.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the FBI, Newark Division, under the direction of Acting Special Agent in Charge Bradley W. Cohen; and the U.S. Department of Labor, Office of the Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York, with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis, Attorney-in-Charge of the U.S. Attorney’s Office Trenton Branch.
The charges and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defense counsel:
Tito Viteri: Darren Gelber Esq., Woodbridge, New Jersey
Maria Yepez: Jerome A. Ballarotto Esq., Hamilton, New JerseyFBI Fugitive Makes Initial Court Appearance for 2003 Indictment for Wire and Bank FraudRead the Press Release
NEWARK, N.J. – A fugitive wanted by the FBI for nearly 15 years was arrested this morning and appeared in court for his role in orchestrating a wire fraud and bank fraud scheme, U.S. Attorney Craig Carpenito announced.
In July 2003, Steven Nacim, 49, a/k/a “Fouad,” a Moroccan national, was indicted by a federal grand jury sitting in Newark for conspiring to commit wire fraud and bank fraud, and for substantive counts of wire fraud and bank fraud. Nacim returned to the United States from Morocco earlier this week and was taken into custody today in Newark. He appeared before U.S. Magistrate Judge Cathy L. Waldor and was placed under house arrest with GPS location monitoring.
According to the indictment and statements made in court:
In March and April of 2002, Nacim and others owned and operated a business known as Computer 3000, based in East Rutherford, New Jersey, and Casablanca, Morocco. Nacim and his conspirators executed a fraudulent check scheme involving the negotiation of a fraudulent check drawn on insufficient funds, and the wire transfer of the proceeds through multiple accounts controlled by the conspirators. Through Computer 3000, they purchased computers and related merchandise using company checks drawn on insufficient funds, and then shipped the merchandise to Morocco. Nacim’s two co-defendants remain fugitives.
The conspiracy charge carries a maximum sentence of five years in prison. The wire fraud charges each carry a maximum sentence of 20 years in prison and the bank fraud charge carries a maximum sentence of 30 years in prison and a $1 million fine. The defendant also faces a maximum fine of $250,000 or twice his gain, or twice the loss sustained by the victims of the offense, for the conspiracy and wire fraud charges.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu, Chief of the Asset Recovery Money Laundering Unit, in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Joseph B. Shumofsky Esq., Newark
Former Business Manager of Assisted Living Facility Indicted for Stealing Hundreds of Thousands of Dollars from Elderly VictimRead the Press Release
NEWARK, N.J. – The business manager of a Morristown, New Jersey, assisted living facility has been charged with exploiting her position to steal approximately $237,000 from an elderly victim under her care, U.S. Attorney Craig Carpenito announced today.
Marcella Drakeford, 45, of Jensen Beach, Florida, is charged with six counts of mail fraud. Drakeford was arrested today and appeared before U.S. Magistrate Judge Shaniek M. Maynard in federal court in Fort Pierce, Florida. She was indicted March 16, 2018, by a federal grand jury sitting in New Jersey and is scheduled to be arraigned April 4, 2018, before U.S. District Judge Katharine S. Hayden in Newark federal court.
According to the indictment:
Beginning in December 2016, Drakeford allegedly agreed to help manage her victim’s financial affairs and pay for her care. She was granted limited access to the victim’s checking account. Unbeknownst to victim or the victim’s guardian, Drakeford already had fraudulently gained access to the victim’s credit card account and had several cards issued in her name. Drakeford then used the credit cards for personal expenditures, including clothing, jewelry, and automobiles, dental work, rent, and utilities. Drakeford paid off the credit card bills with checks drawn on the victim’s checking account, all without permission. Drakeford allegedly defrauded the victim of approximately $237,000.
Each count of mail fraud with which Drakeford is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss caused by the scheme.
U.S. Attorney Carpenito credited inspectors of the U.S. Postal Inspection Service under the direction of Acting Inspector in Charge Ruth M. Mendonca, for the investigation leading to the arrests. He also thanked the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp, and the Morristown Police Department, under the direction of Chief Peter Demnitz, for their respective roles in the investigation.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office’s Cyber Unit.
The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Union County, New Jersey, Man Admits Interstate Theft SchemeRead the Press Release
NEWARK, N.J. – An Elizabeth, New Jersey, man today admitted operating a scheme to fraudulently obtain hundreds of thousands of dollars in commercial and residential merchandise from various companies, U.S. Attorney Craig Carpenito announced.
Roy Depack, a/k/a “Ray Depack,” a/k/a “Roy Soriano,” a/k/a “John Soriano,” 43, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with one count of conspiracy to commit mail and wire fraud.
According to documents filed in this case and statements made in court:
Beginning in 2014, Depack and others conspired to fraudulently obtain merchandise – including Apple computers, digital scales, a walk-in freezer, a snow blower, a gas backpack blower, Samsung televisions, and Milwaukie tools kits – from at least six different victim companies. In total, Depack fraudulently obtained and attempted to obtain over $900,000 in merchandise.
As part of the scheme, Depack called the victim companies and falsely claimed to be a representative of companies that had preexisting business relationships, lines of credit, or accounts with the victim companies. Depack would then direct the victim companies to ship the products to various addresses in New York, Newark, Elizabeth, and Union, New Jersey, while the victims billed the companies that Depack was pretending to represent. Depack and others sold the goods to pawn stores and other individuals.
For example, on April 10, 2017, Depack, using the name "Mike Clarke" and falsely claiming to be a representative of a food distribution company, ordered one digital scale, valued at approximately $3,614, from a victim identified in the information as “Company Six” and directed that it be delivered to Elizabeth. After the scale was delivered on April 11, 2017, Depack and another individual sold it at a pawn store in Newark for approximately $700.
The charge of conspiracy to commit mail and wire fraud is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 26, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, and postal inspectors from the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Ruth M. Mendonca, with the investigation.
The government is represented by Assistant U.S. Attorney Anthony Moscato, Chief of the U.S. Attorney’s Office National Security Unit in Newark.
Defense Counsel: Dennis S. Cleary Esq., West Orange, New Jersey
Union County, New Jersey, Auto Dealer Admits Laundering Proceeds of Fraud on Russian CitizensRead the Press Release
NEWARK, N.J. – A New Jersey auto dealer today admitted laundering hundreds of thousands of dollars generated by a scheme to defraud Russian citizen of monies, paid in advance, for the purchase of luxury automobiles shipped from the United States, U.S. Attorney Craig Carpenito announced.
Sergey Kapustin, 49, of Warminster, Pennsylvania, pleaded guilty before U.S. District Court Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of money laundering.
According to documents filed in this case and statements made in court:
Kapustin was the owner and president of Global Auto Group, Effect Auto Sales and G Auto Sales, located in Elizabeth, New Jersey. Global bought and sold used cars, typically high-end vehicles that were routinely classified as “salvaged.”
From January 2008 through December 2014, Kapustin defrauded customers, who usually lived in Russia, Ukraine or members of the former Soviet Union. He had at least one Russian language website that offered for sale luxury vehicles that were normally priced below market value and that could be shipped to Finland for easy delivery to Russian citizens, but only if they agreed to pay full price in advance for the vehicle. He admitted that his customers routinely either did not receive the vehicles for which they had wired payment or, alternatively, were shipped vehicles that were either not operable or in poor condition
Once the funds were deposited into one the several bank accounts Kapustin controlled, he would move those funds to other accounts from which he withdrew funds to continue the scheme, as well as for his own personal use. Kapustin admitted laundering as much as $550,000 of customer down payments.
The count to which Kapustin pleaded guilty carries a maximum penalty of 10 years and $250,000 fine. Sentencing is scheduled for July 10, 2018.
U.S. Attorney Carpenito credited the special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime/Gangs Unit.
Defense: Carol Gillen Esq., Assistant Federal Public Defender, Newark
Monmouth Beach, New Jersey, Man Admits Robbing Investors BankRead the Press Release
TRENTON, N.J. – A Monmouth Beach, New Jersey, man today admitted robbing an Investors Bank branch in Navesink, New Jersey, U.S. Attorney Craig Carpenito announced.
Martin Racioppi, 52, pleaded guilty before U.S. District Court Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of bank robbery.
According to documents filed in this case and statements made in court:
On July 20, 2017, Racioppi entered an Investors Bank in Navesink and approached a bank teller. He told the teller, “Give me all of your money.” When the teller said, “Excuse me?” Racioppi again demanded all the teller’s money and told the teller to “make it quick.” The bank teller handed Racioppi cash, and Racioppi left the bank. The FBI arrested Racioppi in Middletown one day later.
The bank robbery charge carries a maximum potential penalty of 20 years in prison and a fine of either $250,000 or twice gross gain or loss from the offense, whichever is greater. Sentencing is scheduled for July 10, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Enterprise Task Force (which includes representatives from Bradley Beach Police Department, Brick Police Department, Marlboro Police Department, Monmouth County Sheriff’s Office, and Toms River Police Department), under the direction of Acting Special Agent in Charge Bradley W. Cohen; the Middletown Township Police Department, under the direction of Chief Craig Weber; the Monmouth County Prosecutor’s Office, under the direction of Monmouth County Prosecutor Christopher J. Gramiccioni; the Monmouth Beach Police Department, under the direction of Chief Thomas C. Walsh; the Atlantic Highlands Police Department, under the direction of Chief Jerry Vasto; and the Eatontown Police Department, under the direction of Chief Michael D. Goldfarb with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis, Attorney-in-Charge of the U.S. Attorney’s Office Trenton Branch.
Five Individuals Charged in Phony Debt Elimination SchemeRead the Press Release
NEWARK, N.J. - Five individuals were arrested this morning and charged with using phony money orders, cashier’s checks, receipts and other fabricated documents to fraudulently discharge mortgages, student loans, and other financial obligations, U.S. Attorney Craig Carpenito announced.
Melissa Reynolds, 42, of Elizabeth, New Jersey, is charged by complaint with three counts of conspiracy to commit bank and mail fraud, two counts of bank fraud, one count of mail fraud, one count of conspiracy to commit mail fraud, and one count of making false statements to the United States. Germaine King, 40, also of Elizabeth, is charged with one count of conspiracy to commit mail fraud, one count of mail fraud and one count of making false statements to the United States.
Henry Grady James IV, 43, of Hillside, New Jersey, and Arthur N. Martin III of West Orange, New Jersey, are both charged with one count of conspiracy to commit bank and mail fraud. Daniel K. Dxrams, 39, of Maplewood, New Jersey, is charged with one count of conspiracy to commit mail fraud. All five defendants are expected to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint:Reynolds, King, James, Martin, Dxrams, and others used fraudulent money orders, cashier’s checks, and other fictitious documents to fraudulently discharge their debts or other obligations. In total, Reynolds and other conspirators caused and attempted to cause over $3 million in losses.
For example, in March 2013, Reynolds obtained a $417,276 mortgage from an entity referred to in the complaint as “Financial Institution One,” for the purchase of her Elizabeth residence. In May 2014, Reynolds mailed a fraudulent money order in the amount of $432,000 to Financial Institution One as a payoff on the mortgage. The money order falsely claimed to have been issued or processed by the IRS.
Financial Institution One’s mortgage business erroneously accepted the fraudulent payment and credited it as a payoff for her mortgage. Financial Institution One also mailed Reynolds an overpayment refund of $9,789. When Financial Institution One’s mortgage business filed a suit seeking to reinstate the fraudulently discharged mortgage, Reynolds and King continued to allege in court that the mortgage had been paid and even submitted a phony receipt for the bogus money order.
Reynolds and others unsuccessfully used the same scheme to seek the discharge of other mortgages, including Reynolds’ second residence in Newark, the residence of an individual in Bowie, Maryland, James’ residence in Hillside, New Jersey, and Martin’s residence in West Orange, New Jersey.
Reynolds also sought to fraudulently discharge over $52,000 in student loans with fraudulent money orders and cashier’s checks. For example, on March 20, 2017, Reynolds sent a fraudulent cashier’s check in the amount $67,000 to the Department of Education’s processing company. The payment was rejected.
Reynolds, King, and Dxrams conspired to fraudulently obtain luxury cars in a similar fashion. For instance, Reynolds sent a bogus $101,000 cashier’s check to a finance company that enabled Dxrams to obtain a 2012 Bentley. Dxrams sold the car to a third party for approximately $85,000 and then issued a bank check to King for approximately $25,000. The defendants also used this scheme in an effort to fraudulently obtain two Mercedes-Benz cars.
The bank fraud and bank fraud conspiracy charges are punishable by a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. The mail fraud and mail fraud conspiracy charges are punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The false statement charge is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Carpenito credited special agents of the FBI and the Joint Terrorism Task Force, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark; the N.J. Office of Homeland Security and Preparedness, under the direction of Director Jared Maples; the U.S. Department of Education, Office of Inspector General Eastern Regional Office, under the direction of Assistant Special Agent in Charge Debbi Mayer; and the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi.
The charges and allegations in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Anthony Moscato, Chief of the U.S. Attorney’s National Security Unit in Newark.
Defense Contractor and Civilian Employee at U.S. Military Base Admit Bribery Scheme Involving Government ContractsRead the Press Release
NEWARK, N.J. – Two Sussex County, New Jersey, women, one a defense contractor employee and the other a civilian employee at Picatinny Arsenal, today admitted their roles in a scheme that traded bribes and other gratuities for favorable treatment on government contracts, U.S. Attorney Craig Carpenito announced.
Irene Pombo, 68, of Hamburg, New Jersey, and her daughter, Nicole Pier, 38, of Byram Township, New Jersey, pleaded guilty before U.S. District Judge John Vazquez in Newark federal court to separate informations charging them with conspiracy to give or accept anything of value in return for favorable assistance with government contracts and with making false claims against the United States.
According to documents filed in this case and statements made in court:
Pombo was an employee of an entity referred to in the information as “Company A,” a defense contracting firm that works with the Department of Defense at Picatinny Arsenal, a U.S. Army installation in Morris County, New Jersey. Pier was a civilian employee at Picatinny Arsenal.
From January 2006 through December 2017, Company A, Pombo, and other Company A employees conspired to offer a variety of valuable gifts, including Apple products, luxury handbags, Beats headphones, and tickets to a luxury sky box at professional sporting events, valued at least $150,000 to $250,000, to numerous individuals employed at Picatinny Arsenal, including Pier, in order to obtain and retain contracts and other favorable assistance.
Pombo admitted that she and other Company A employees filed false bills to the United States writing off the cost of the bribes as “materials” needed on government contracts.
The conspiracy charge to which Pombo and Pier pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for June 19, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, and the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge L. Scott Moreland, with the ongoing investigation.
The government is represented by Senior Litigation Counsel Margaret Ann Mahoney of the U.S. Attorney’s Office’s National Security Unit in Newark.
Defense counsel:
Pier: Robert Galantucci Esq., Hackensack
Pombo: Edward Cillick Esq., HackensackUnion County Man Admits Armed Crime Spree of Bank Robberies; Carjackings, and Hostage TakingRead the Press Release
NEWARK, N.J. – A Union County, New Jersey, man today admitted robbing seven banks – and attempting to rob an eighth bank while brandishing a firearm – committing one carjacking and attempting to commit three additional carjackings, and taking a hostage at gunpoint while fleeing, U.S. Attorney Craig Carpenito announced.
Marlon Peek, 41, of Plainfield, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to Counts One through 11, 13, 15, and 17 of an indictment. The counts include: seven counts of bank robbery, one count of carjacking, one count of attempted bank robbery with a dangerous weapon, one count of use and brandishing of a firearm during a crime of violence, three counts of attempted carjacking, and one count of forced accompaniment in attempting to avoid apprehension for the attempted armed bank robbery.
“This defendant cut a swath of violent crime through central New Jersey for two months, brandishing guns to terrify innocent victims as he robbed banks and carjacked vehicles,” U.S. Attorney Carpenito said. “The excellent work of local and federal law enforcement officers have taken a violent criminal with no regard for the lives and safety of others off the streets. The crimes to which the defendant pleaded guilty justifiably expose him to significant prison time.”
Peek robbed or attempted to rob the following New Jersey banks:
Bank
Location
Date
TD Bank
Edison, New Jersey
March 17, 2015
Magyar Bank
Edison, New Jersey
March 31, 2015
Investors Bank
Dunellen, New Jersey
April 9, 2015
Wells Fargo Bank (aiding and abetting)
South Plainfield, New Jersey
April 14, 2015
Unity Bank
Middlesex Borough, New Jersey
April 15, 2015
PNC Bank
South Plainfield, New Jersey
April 21, 2015
TD Bank
Springfield, New Jersey
April 21, 2015
Bank of America (armed attempt)
Linden, New Jersey
May 6, 2015
According to documents filed in this case and statements made in court:From March 2015 to May 2015, Peek and others committed a string of crimes. At each bank, Peek presented a note demanding cash from bank tellers, including, on at least six occasions, statements that he had a gun and would shoot. During the robbery of the TD Bank in Edison, New Jersey, on March 17, 2015, Peek handed a teller a note that read, in part, “I have gun will shoot to kill you have 3 seconds.” In the course of the attempted robbery of the Bank of America, Peek pointed a loaded firearm directly at a bank teller.
Peek admitted that he committed a carjacking in Plainfield, New Jersey, on April 21, 2015, between robbing the PNC Bank and the TD Bank that day, and that he committed three attempted carjackings using a loaded firearm directly after attempting to rob the Bank of America in Linden on May 6, 2015. He also admitted that in attempting to flee from the attempted robbery of the Bank of America, he entered a warehouse, took a hostage, held a loaded gun to the hostage’s head, and forced the hostage to accompany him. Law enforcement officers arrived on the scene and ordered Peek to drop his gun. Peek then surrendered his weapon and was arrested.
The seven bank robbery charges to which Peek pleaded guilty each carry a maximum penalty of 20 years in prison and a maximum fine of $250,000. The four carjacking or attempted carjacking charges to which Peek pleaded guilty each carry a maximum penalty of 15 years in prison and a maximum fine of $250,000. The charge of armed attempted bank robbery to which Peek pleaded guilty carries a maximum penalty of 25 years in prison and a maximum fine of $250,000.
The charge of using and carrying a firearm during and in relation to a crime of violence, while brandishing the firearm, carries a mandatory minimum sentence of seven years in prison and a maximum penalty of life imprisonment. The sentence imposed for this charge must be consecutive to the sentence for any other count. This charge also carries a maximum fine of $250,000.
The charge of forced accompaniment in attempting to avoid apprehension for the attempted robbery of the Bank of America carries a mandatory minimum sentence of 10 years in prison and a maximum penalty of life imprisonment. Sentencing is scheduled for June 11.
Peek’s co-defendant, Nathaniel Brown, pleaded guilty to Count Four of the indictment and is scheduled to be sentenced May 30, 2018.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley Cohen in Newark; and officers of the Linden Police Department, under the direction of Chief David Hart; the Edison Police Department, under the direction of Chief Thomas Bryan; the Dunellen Police Department, under the direction of Chief Jeffrey E. Nelson; the South Plainfield Police Department, under the direction of Chief James Parker; the Middlesex Police Department, under the direction of Chief Matthew P. Geist; the Plainfield Police Department, under the direction of Director Carl Riley; and the Springfield Police Department, under the direction of Chief John Cook with the investigation leading to today’s guilty plea. U.S. Attorney Carpenito also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Michael A. Monahan, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew C. Carey, for their assistance.
The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Alyssa A. Cimino Esq., Fairfield, New Jersey
Four Defendants Sentenced to Federal Prison Terms in Multi-State Dog Fighting ProsecutionRead the Press Release
TRENTON, N.J. – Four men have been sentenced to federal prison terms for their respective roles in an interstate dog fighting network that extended from New Jersey to New Mexico and Indiana, U.S. Attorney Craig Carpenito, District of New Jersey, and Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division, announced today.
The four defendants, arrested and charged as part of a coordinated effort across numerous federal judicial districts to combat organized dog fighting, previously pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court:
- Anthony “Monte” Gaines, 37, of Vineland, New Jersey, was sentenced March 5, 2018, to serve 42 months in prison. He previously pleaded guilty to two felony counts of conspiracy to buy, sell, receive, transport, deliver, and possess dogs intended for use in an animal fighting venture, and one felony count of possessing a dog intended for use in an animal fighting venture.
- Frank Nichols, 40, of Millville, New Jersey, was sentenced March 9, 2018, to serve 57 months in prison. He previously pleaded guilty to one felony count of conspiracy to transport, deliver and receive dogs intended for use in an animal fighting venture, and one felony count of possessing a stolen firearm subsequent to a felony conviction.
- Lydell Harris, 32, of Vineland, New Jersey, a/k/a “Sinn,” was sentenced today to serve 17 months in prison. He previously pleaded guilty to one felony count of conspiracy to sponsor or exhibit a dog in an animal fighting venture, and one felony count of possessing a dog intended for use in an animal fighting venture.
- Pedro Cuellar, 47, of Willow Springs, Illinois, was sentenced today to serve 12 months in prison. He had pleaded guilty to one felony count of conspiracy to transport, deliver, and receive dogs intended for use in an animal fighting venture.
A fifth co-defendant, Mario Atkinson, 42, of Asbury Park, New Jersey, has also pleaded guilty and is scheduled to be sentenced April 18, 2018. The court is expected to set a trial date for four additional defendants for some time this summer. Judge Anne E. Thompson sentenced Gaines and Judge Peter G. Sheridan sentenced Harris, Nichols and Cuellar.
“Dog fighting is vicious and cruel. And beyond the needless suffering it inflicts on animals, it exacts a toll on local animal shelters, charitable humane organizations, and the taxpayers of New Jersey,” U.S. Attorney Carpenito said. “We applaud our local and federal partners who investigated this case and brought the offenders to justice. The message from these sentencing hearing is simple: if you fight dogs in New Jersey, you will face prosecution and imprisonment.”
“Ending animal fighting ventures is important to our Division, and is often tied to other forms of crime. We dispatch prosecutors who focus in this area to districts across the country to join with our partners in the U.S. Attorneys’ Offices in aggressively pursuing illegal animal fighting,” said Acting Assistant Attorney General Wood. “This week’s sentencing proceeding demonstrates that our justice system will not tolerate the torment and death of animals in the fighting ring, all for the sake of illegal gambling.”
“The provisions of the Animal Welfare Act were designed to protect animals from being used in illegal fighting ventures, which often entail other forms of criminal activity involving drugs, firearms and gambling,” Special Agent in Charge Bethanne M. Dinkins for U.S. Department of Agriculture’s Office of Inspector General said. “Together with the Department of Justice, animal fighting is an investigative priority for USDA OIG, and we will work with our law enforcement partners to investigate and assist in the criminal prosecution of those who participate in animal fighting ventures.”
According to court documents filed in connection with the cases and statements made in court:
From October 2015 through June 1, 2016, the defendants and their associates fought dogs – including to the death – and trafficked in dogs with other dog fighters in Indiana, Illinois, New Mexico, and elsewhere so that those dogs could be used in dog fights. They also maintained fighting dogs and dog fighting equipment such as dog treadmills, intravenous drug bags and lines, “breeding stands” used to immobilize female dogs, and chains weighing up to several pounds per linear foot. Agents found canine blood on the floor, walls, and ceiling of the basement of one defendant’s residence, indicating that the area was likely used as a dog fighting pit. One of the pleading defendants admitted that his dog died in his car on the way home after losing a dogfight.
This case is part of Operation Grand Champion, a coordinated effort across numerous federal judicial districts to combat organized dog fighting. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog fighting “victories.” To date, 98 dogs have been rescued as part of Operation Grand Champion, and either surrendered or forfeited to the government. The Humane Society of the United States assisted with the care of the dogs seized by federal law enforcement. The investigation is ongoing.
The government is represented by Assistant U.S. Attorney Kathleen O’Leary of the U.S. Attorney’s Office, District of New Jersey, and Trial Attorney Ethan Eddy of the Justice Department’s Environmental Crimes Section.
The case is being investigated by the U.S. Department of Agriculture – Office of Inspector General, the U.S. Department of Homeland Security – Homeland Security Investigations, and the FBI.
Convicted Felon and His Sister Charged in Indictment Stemming from Violent Encounter with Law Enforcement OfficersRead the Press Release
NEWARK, N.J. – A brother and sister from Plainfield, New Jersey, were indicted today on drug distribution, felony possession of a firearm, obstruction of justice, and other charges resulting from a violent encounter with law enforcement officers in October 2017, U.S. Attorney Craig Carpenito announced.
Arthur Forman, 35, is charged with possession of cocaine, marijuana, and oxycodone with intent to distribute, possession of a firearm in the course of committing a drug crime, and being a previously convicted felon in possession of a handgun. Courtney Jessica Forman, 30, is charged with misprision of a felony for taking acts to conceal Arthur Forman’s alleged crimes. Both defendants are charged with obstruction of justice. They are scheduled to be arraigned in Newark federal court at a later date.
According to the documents filed in this case:
During an encounter with law enforcement on Oct. 13, 2017, Forman allegedly resisted arrest by choking a Plainfield detective. During the encounter, Forman transferred a bag containing contraband to Courtney Jessica Forman, who attempted to dispose of the contraband by throwing it out a window. The bag was recovered by law enforcement officers from a nearby rooftop landing. Law enforcement officers recovered cocaine, marijuana, and a .38 caliber semi-automatic handgun loaded with eight rounds from the bag and multiple oxycodone pills from Arthur Forman’s apartment.
Based on the combined charges, Arthur Forman faces a maximum sentence of 30 years to life in prison. Courtney Jessica Forman faces a maximum sentence of three years in prison for the misprision charge and five years in prison for the obstruction of justice charge.
The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Carpenito credited special agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge John Devito, the Plainfield Police Division, under the leadership of Director Carl Riley, and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Michael Monahan, with the investigation.
The government is represented by Assistant U.S. Attorneys Joshua L. Haber of the U.S. Attorney’s Office Healthcare Fraud Unit and Desiree Grace Latzer of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
Defense counsel:
Arthur Forman: Wanda M Akin Esq.
Courtney Jessica Forman: David Holman Esq.Camden, New Jersey, Woman Admits Defrauding FEMA after Natural DisastersRead the Press Release
CAMDEN, N.J. – A Camden woman today admitted defrauding the Federal Emergency Management Administration (FEMA) in 2014 after Hurricane Sandy struck New Jersey in 2012, U.S. Attorney Craig Carpenito announced.
Shanyra Bennett 40, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of Disaster Benefits Fraud.
According to documents filed in this case and statements made in court:
When a natural disaster or federal emergency occurs in the United States, federal agencies, such as FEMA, provide relief and assistance to effected individuals and entities. FEMA provides financial assistance by, among other things, helping effected individuals repair their property.
Due to FEMA's vast size and the typically large number of victims resulting from a disaster, FEMA is frequently targeted in disaster fraud schemes by individuals or groups seeking benefits to which they are not entitled. They do this by submitting fraudulent applications to FEMA for among other things, repairs and rental assistance.
In October 2012, various counties of southern New Jersey, including Camden County, sustained significant damage due to wind, rain, and flooding from Hurricane Sandy.
On Oct. 30, 2012, then-President Obama signed a Presidential Disaster Declaration for the State of New Jersey, enabling eligible individuals to seek financial assistance from FEMA when displaced by the storms.
Bennett admitted today that she applied for FEMA benefits in November 2012, requesting rental assistance, assistance to replace personal property that was damaged and assistance for transportation, as her car was damaged and not drivable.
Bennett faxed FEMA documents claiming that she worked as a senior health aide, which required her to travel for work. She sent FEMA a fraudulent letter indicating that she had insurance through Mercury Indemnity Co. of America. At the time of the hurricane, Bennett did not have insurance with Mercury Indemnity. Bennett also submitted fraudulent invoices from a mechanic in Camden.
Based on these false representations and fraudulent documents, on Dec. 10, 2012, FEMA electronically transferred $5,162 into Bennett’s bank account to replace her 2004 Dodge Durango, which she falsely reported destroyed by the hurricane.
To support her claim for personal property assistance, Bennett faxed FEMA a letter purported to be on the letterhead of her employer, which indicated that she was a Certified Home Health Aid and that her position required a laptop to perform her job. She also faxed FEMA earning statements from a company in Camden for July 2013, August 2013, September 2013 and October 2013. At the time of the hurricane, Bennett was unemployed.
As part of the application process for rental assistance, Bennett provided a fraudulent copy of a lease agreement for a house on South 41st Street, Camden, and fraudulent copies of rental receipt payments for June 2013 through November 2013. Bennett neither rented the property nor paid rent for use of the property.
Based on Bennett’s false statements and representations, between December 2012 and September 2013, FEMA transferred $22,190 in disaster related funds through electronic fund transfers into Bennett’s bank account.
Bennett admitted that she also defrauded FEMA in 2011, when Hurricane Irene struck the area. She admitted that between September 2011 and November 2012, based on her fraudulent claims and representations, she received approximately $30,200 in FEMA disaster related funds.
The charge to which Bennett pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of $250,000. Bennett=s sentencing is scheduled for June 27, 2018.
U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Mark Tasky, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden in the criminal case.
Somerset County Man Indicted for Role in $1 Million Medicare Fraud that Deceived Seniors into Unnecessary DNA TestsRead the Press Release
Defendant Used Purported Non-Profit to Convince Seniors to Submit to Unnecessary Testing; Paid Healthcare Providers to Falsely Claim Tests Were Necessary
NEWARK, N.J. –A Somerset County, New Jersey, man was indicted by a federal grand jury today for using the purported non-profit The Good Samaritans of America to defraud the Medicare Program of more than $1 million by convincing hundreds of senior citizens to submit to unnecessary genetic testing, U.S. Attorney Craig Carpenito announced.
Seth Rehfuss, 43, of Somerset, New Jersey, is charged by indictment with conspiracy to commit health care fraud and conspiracy to wrongfully access individually identifiable health information and to pay illegal remunerations to health care professionals.
According to documents filed in the case and statements made in court:
From July 2014 through December 2015, Rehfuss, conspirator Sheila Kahl of Point Pleasant, New Jersey, and others allegedly used The Good Samaritans of America and offers of “free ice cream” to gain access to low-income senior housing complexes. Rehfuss and other members of the scheme claimed that The Good Samaritans of America was a “trusted non-profit” that assisted senior citizens in navigating federal benefit programs. In reality, The Good Samaritans of America was a front to present information about genetic testing.
In order to convince senior citizens to submit to genetic testing, Rehfuss used fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. In addition, Rehfuss claimed that the genetic testing allowed for “personalized medicine.”
As part of the scheme, Seth Rehfuss and others frequently took DNA swabs in the community rooms where the presentations took place or made arrangements to visit the senior citizen’s apartment on another day to take the DNA swab. Regardless of the timing or location of the swabbing, the DNA swab was collected without the involvement of any healthcare provider and without any determination by a healthcare provider that such testing was medically necessary or appropriate.
To get the tests authorized, Rehfuss used advertisements on Craigslist to recruit healthcare providers for the scheme. After entering into contractual relationships with The Good Samaritans of America, the healthcare providers received requisition forms that often included a patient’s personal information, Medicare information, medication lists and diagnosis codes.
The healthcare providers were paid thousands of dollars per month by Rehfuss and Kahl to sign their names to requisition forms authorizing testing for patients they never examined and were in no way involved in the patients’ care or treatment. Rehfuss and Kahl used fraudulent email accounts to access the individually identifiable health information of the senior citizens, specifically the results of the DNA analysis.
Rehfuss, Kahl and others caused the Medicare program to pay more than $1 million to two clinical laboratories. Rehfuss obtained more than $100,000 and distributed commissions to Kahl of tens of thousands of dollars.
Rehfuss and others were actively working towards expanding the scheme outside of New Jersey into other states, including: Georgia, Delaware, Virginia, Maryland, Pennsylvania, South Carolina, Michigan, Mississippi, Florida, Tennessee and Arizona.
The healthcare fraud conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sheila Kahl previously pleaded guilty and is awaiting sentencing.
U.S. Attorney Carpenito credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, along with special agents of the U.S. Attorney’s Office for the District of New Jersey, with the investigation leading to today’s indictment.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The government is represented by Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office’s Public Protection Unit in Newark.
Former Jersey City Police Officer Sentenced to 18 Months in Prison for Bribery Conspiracy Involving Off-Duty Work AssignmentsRead the Press Release
NEWARK, N.J. – A former Jersey City, New Jersey, police officer was sentenced today to 18 months in prison for paying bribes in order to obtain compensation for off-duty work he did not perform, U.S. Attorney Craig Carpenito announced.
Michael O’Leary, 35, 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 bribery. Vazquez imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Private contractors and utility companies sometimes needed the services of off-duty Jersey City police officers for certain projects, including work in Jersey City that could obstruct the flow of traffic. O’Leary was an officer who was eligible to perform off-duty work.
From November 2013 through April 2016, O’Leary engaged in a conspiracy in which he paid bribes to another Jersey City officer who was authorized to assign off-duty work, in exchange for that officer’s official assistance in submitting phony vouchers to Jersey City indicating that O’Leary had completed certain off-duty assignments. As a result, O’Leary was compensated for work he never performed.
In addition to the prison term, Judge Vazquez sentenced O’Leary to two years of supervised release and ordered him to pay restitution of $113,145 and forfeiture of $39,587.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy A. Gallagher in Newark, with the investigation.
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 Criminal Division in Newark.
Defense counsel: John Lynch Esq., Union City, New Jersey
Convicted Felon Indicted for Possession of Firearm and HeroinRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man who was previously convicted of federal heroin distribution charges was indicted today with drug distribution and firearms crimes, U.S. Attorney Craig Carpenito announced.
Jihad Garrett, 34, is charged with possession of heroin with intent to distribute, possession of a firearm in the course of committing that drug crime, and being a previously convicted felon in possession of a handgun. He is scheduled to make his initial appearance next week before U.S. Magistrate Judge Cathy Waldor in Newark federal court.
According to the indictment:
Garrett was charged in connection with the Feb. 23, 2018, seizure of a vehicle he was driving. Newark police subsequently recovered from the vehicle 500 packets of heroin that were prepared for distribution and a .40 caliber handgun loaded with seven rounds of ammunition.
Garrett was convicted in 2012 in Newark federal court on heroin distribution charges and was sentenced to 74 months in prison.
The current heroin distribution charge carries a maximum of 20 years in prison; the count of possession of a firearm during the drug offense carries a mandatory minimum sentence of five years in prison and a maximum term of life in prison that must be served upon completion of the drug offense. The charge of being a felon in possession of a firearm carries a maximum term of 10 years in prison.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Carpenito credited the FBI, under the leadership of Special Agent in Charge Timothy Gallagher; the U.S. Marshal’s Service, under the leadership of U.S. Marshal Juan Mattos Jr., and the Newark Department of Public Safety, under the direction of Anthony F. Ambrose, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorneys Robert Frazer and Desiree Latzer of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
California Man Sentenced to Three Years in Prison for Scheme to Steal 94,000 Debit and Credit Cards from Michaels’ Stores in 19 StatesRead the Press Release
CAMDEN, N.J. – A Riverside, California, man was sentenced today to 36 months in prison for his role in a conspiracy to steal 94,000 credit and debit cards from customers at approximately 80 Michaels’ Stores and use that information to make fraudulent withdrawals from the customers’ bank accounts, U.S. Attorney Craig Carpenito announced.
Angel Angulo, 28, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to Count One and Count Two of an indictment charging him with conspiracy to commit bank fraud and aggravated identity theft. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
The conspirators installed devices that acquired customers’ bank account and personal identification number (PIN) information on point of sale (POS) terminals at stores operated by Michaels. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.
The conspirators allegedly replaced 88 POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.
From April 2011 to May 2011, Angulo, Crystal Banuelos, and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money using ATMs from hundreds of bank accounts. On May 14, 2011, Angulo and Banuelos possessed 179 counterfeit cards in New Jersey.
In addition to the prison term, Judge Rodriguez sentenced Angulo to five years of supervised release and ordered him to pay restitution of $480,300.
Banuelos previously pleaded guilty to her role in the scheme and is scheduled to be sentenced Sept. 5, 2018.
U.S. Attorney Carpenito credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
Defense counsel: Lisa Lewis Esq., Assistant Federal Public Defender, Camden
Ocean County, New Jersey, Man Pleads Guilty to Attempting to Provide Material Support to ISISRead the Press Release
TRENTON, N.J. – A Point Pleasant, New Jersey, man today admitted that he planned to construct and use a pressure cooker bomb in New York on behalf of the Islamic State of Iraq and al-Sham (ISIS), U.S. Attorney Craig Carpenito and Assistant Attorney General for National Security John C. Demers announced.
Gregory Lepsky, 20, pleaded guilty before U.S. District Court Judge Michael Shipp in Trenton federal court to an information charging him with one count of attempting to provide material support to a designated foreign terrorist organization, specifically ISIS.
According to documents filed in this case and statements made in court:
On Feb. 21, 2017, Lepsky was arrested by the Point Pleasant Police Department in connection with an incident that occurred that day in his family’s home. Following the arrest, law enforcement officers searched the residence and found a new pressure cooker stored behind a roll of bubble wrap in Lepsky’s bedroom closet.
During searches of computers and other digital evidence linked to Lepsky, law enforcement officers found evidence of Lepsky’s plan to build and detonate a bomb as part of his support for ISIS. During several social media communications, Lepsky told others that he intended to fight on behalf of ISIS and that he would, if necessary, become a martyr by driving a “bunch of explosives” to where the “enemies” could be found and blowing himself up.
Law enforcement officers also located a series of instructions that had been published online by another terrorist group that gave specific, step-by-step instructions on how to build a pressure cooker bomb, which coincided with the delivery of the pressure cooker to Lepsky a short time before his arrest. In addition, law enforcement officers recovered a message forwarded by Lepsky from another ISIS supporter stating that if a westerner could not travel to Syria to fight for ISIS, he could conduct a terrorist attack in his home country using improvised explosive devices.
During today’s plea hearing, Lepsky admitted that beginning in January 2017, he began to formulate a plan to detonate the pressure cooker bomb in New York City on behalf of ISIS. Lepsky admitted that he used the internet to access ISIS directives, obtain bomb-making instructions, and purchase the pressure cooker and other items to be used in the attack.
Under the terms of the plea agreement, if accepted by the Court, Lepsky will be given a sentence between 16 and 19 years in prison and a lifetime term of supervised release. Sentencing is scheduled for June 19, 2018.
U.S. Attorney Carpenito and Assistant Attorney General Demers credited the FBI and the Joint Terrorism Task Force, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the N.J. State Attorney General’s Office under the direction of Attorney General Gurbir Grewal; the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph Coronato; the Point Pleasant Police Department under the direction of Chief Richard P. Larsen; and the N.J. Office of Homeland Security and Preparedness under the direction of Director Jared Maples, with the investigation.
The government is represented by Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office Criminal Division in Newark and Trial Attorney Justin Sher of the National Security Division’s Counterterrorism Section.Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark
New Jersey Man Pleads Guilty to Attempting to Provide Material Support to ISISRead the Press Release
Gregory Lepsky, 20, of Point Pleasant, New Jersey, pleaded guilty today to an information charging him with one count of attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. Lepsky admitted that he planned to construct and use a pressure cooker bomb in New York on behalf of ISIS.
Assistant Attorney General for National Security John C. Demers and U.S. Attorney Craig Carpenito announced the plea which was accepted by U.S. District Court Judge Michael Shipp.
According to documents filed in this case and statements made in court:
On Feb. 21, 2017, Lepsky was arrested by the Point Pleasant Police Department in connection with an incident that occurred that day in his family’s home. Following the arrest, law enforcement officers searched the residence and found a new pressure cooker stored behind a roll of bubble wrap in Lepsky’s bedroom closet.
During searches of computers and other digital evidence linked to Lepsky, law enforcement officers found evidence of Lepsky’s plan to build and detonate a bomb as part of his support for ISIS. During several social media communications, Lepsky told others that he intended to fight on behalf of ISIS and that he would, if necessary, become a martyr by driving a “bunch of explosives” to where the “enemies” could be found and blowing himself up.
Law enforcement officers also located a series of instructions that had been published online by another terrorist group that gave specific, step-by-step instructions on how to build a pressure cooker bomb, which coincided with the delivery of the pressure cooker to Lepsky a short time before his arrest. In addition, law enforcement officers recovered a message forwarded by Lepsky from another ISIS supporter stating that if a westerner could not travel to Syria to fight for ISIS, he could conduct a terrorist attack in his home country using improvised explosive devices.
During today’s plea hearing, Lepsky admitted that beginning in January 2017, he began to formulate a plan to detonate the pressure cooker bomb in New York City on behalf of ISIS. Lepsky admitted that he used the internet to access ISIS directives, obtain bomb-making instructions, and purchase the pressure cooker and other items to be used in the attack.
Under the terms of the plea agreement, if accepted by the Court, Lepsky will be given a sentence between 16 and 19 years in prison and a lifetime term of supervised release.
Assistant Attorney General Demers and U.S. Attorney Carpenito credited the FBI and the Joint Terrorism Task Force, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the N.J. State Attorney General’s Office under the direction of Attorney General Gurbir Grewal; the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph Coronato; the Point Pleasant Police Department under the direction of Chief Richard P. Larsen; and the N.J. Office of Homeland Security and Preparedness under the direction of Director Jared Maples, with the investigation.
The government is represented by Assistant U.S. Attorney James Donnelly for the District of New Jersey and Trial Attorney Justin Sher of the National Security Division’s Counterterrorism Section.
Passaic County Man Charged with Trying to Bring Loaded Gun on Plane at Newark Liberty International AirportRead the Press Release
NEWARK, N.J. – A Totowa, New Jersey, man will appear in federal court today to face weapons charges after allegedly trying to get a firearm through security at Newark Liberty International Airport, U.S. Attorney Craig Carpenito announced.
Laron L. James, a/k/a “Juelz Santana,” 36, is charged by complaint with one count of possession of a firearm by a convicted felon and one count of carrying a weapon on an aircraft. He surrendered to law enforcement early this morning and will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the complaint:
On March 9, 2018, James submitted a carry-on bag for inspection at Newark Liberty International Airport. While he waited for his bag to be screened, James allegedly requested that the bag be examined quickly because he was going to miss his flight to San Francisco.
During the X-Ray screening of James’s luggage, a Transportation Security Administration (TSA) agent identified a suspected firearm and contacted the Port Authority Police. Upon seeing that his bag had attracted additional attention, James left the security checkpoint area without his belongings, including his driver’s license and boarding pass, and departed the airport in a taxi.
Further investigation of James’s bag revealed that it contained a Derringer .38 caliber handgun, which was loaded with two rounds. James was prohibited from possessing a firearm due to a 2013 conviction for manufacturing and distributing a controlled dangerous substance.
Both charges in the complaint carry a maximum potential penalty of 10 years in prison.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and officers of the Port Authority Police Department, under the direction of Superintendent Michael A. Fedorko, with the investigation.
The government is represented by Assistant U.S. Attorney Desiree Grace Latzer of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Middlesex County Man Admits Conspiracy to Distribute Two Kilograms of Heroin in New JerseyRead the Press Release
NEWARK, N.J. – A Parlin, New Jersey, man who delivered two kilograms of heroin to another individual in Harrison, New Jersey, today pleaded guilty in Newark federal court, U.S. Attorney Craig Carpenito announced.
Pedro Rodriguez, 44, pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with conspiracy to possess with intent to distribute over a kilogram of heroin.
According to the documents filed in this case and statements made in court:
On Oct 19, 2017, law enforcement officers observed Pedro Rodriguez outside of a restaurant in Newark, where he met with another individual and retrieved a bag that was suspected of containing narcotics. Afterwards, Pedro Rodriguez drove to Harrison, met with Rafaelito Rodriguez, 43, of East Stroudsburg, Pennsylvania, and provided him a bag containing approximately two kilograms of heroin. Rafaelito Rodriguez was arrested in Harrison shortly afterwards. Pedro Rodriguez was later arrested at his home in Parlin.
The drug conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. Sentencing is scheduled for July 19, 2018. Rafaelito Rodriguez pleaded guilty on March 6, 2018 and awaits sentencing.
The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.
U.S. Attorney Carpenito credited the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie A. Nickerson, with the investigation.
Defense counsel: Pedro Rodriguez is represented by Michael Pedicini Esq.
Former Settlement Agent Gets 12 Years in Prison for Mortgage Fraud and Tax EvasionRead the Press Release
NEWARK, N.J. – A former settlement agent from Wyckoff, New Jersey, was sentenced today to 144 months in prison for defrauding banks out of $1.1 million using phony loan applications for properties in Bergen and Morris Counties, New Jersey, and for failing to pay over $450,000 in personal income taxes, U.S. Attorney Craig Carpenito announced.
Mark Andreotti, 47, was previously convicted on all six counts of an indictment charging him with bank fraud, conspiracy to commit bank fraud, tax evasion, and failure to file tax returns. He was convicted following a two-week trial before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
In January 2010, Andreotti submitted a loan application to a bank requesting $625,000 to refinance the mortgage on his house in Wyckoff. Andreotti, who owned and operated Metropolitan Title and Abstract (Metropolitan), used Metropolitan as the settlement agent on the transaction. After the bank transferred the $625,000 for the refinance to Metropolitan’s escrow account, Andreotti spent the money on personal expenses instead of paying off the first mortgage on the house.
In April 2011, Andreotti conspired with another individual who worked as a real estate attorney to obtain $480,000 by claiming that the money would be used to refinance the mortgage on the attorney’s house in Montville, New Jersey. After the bank transferred the money for the refinance to Metropolitan’s escrow account, Andreotti kept $110,000 for himself before transferring the remaining funds to the other conspirator.
In 2010, the IRS initiated collection actions against Andreotti for unpaid personal income taxes. Despite numerous liens and levies and having five rental income properties in addition to his primary residence, Andreotti continued to evade his taxes. He also failed to file tax returns for the tax years 2010 and 2011.
In addition to the prison term, Judge Wigenton sentenced Andreotti to five years of supervised release and ordered him to pay restitution of over $2.1 million.
U.S. Attorney Carpenito credited special agents of the Federal Housing Finance Agency – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark; special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark; and special agents with the U.S. Attorney’s Office, with the investigation.
The government is represented by Assistant U.S. Attorney Shana Chen in of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Charlie Divine of the Federal Housing and Finance Agency – Office of Inspector General.Defense counsel: Marc Neff, Esq., of Marlton
Essex County, New Jersey, Father and Daughter Charged in Food Stamps SchemeRead the Press Release
NEWARK, N.J. – Two individuals who operate a Newark grocery store were charged today with fraudulently exchanging over $885,000 in Supplemental Nutrition Assistance Program (SNAP) benefits for cash, U.S. Attorney Craig Carpenito announced.
Maria Teresa Venegas, 25, and her father, Manuel Venegas, 53, both of Newark, are charged by complaint with SNAP benefits fraud. Both were arrested this morning and appeared in the afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court. They were released on $200,000 unsecured bond.
According to the complaint:
Since November 2011, the defendants managed Jenny’s Deli, a small grocery store in Newark that was authorized to accept SNAP benefits, 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.
Manuel and Maria Teresa Venegas allegedly exchanged more than $885,000 in SNAP benefits for cash between 2011 and 2018. In addition to the high volume of SNAP redemptions for Jenny’s Deli indicating fraud, law enforcement officers used an undercover agent who engaged in approximately 20 “purchases” at Jenny’s Deli where one or both defendants allegedly exchanged cash for SNAP benefits.
The SNAP benefits fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
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 charges.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defense counsel:
Maria Teresa Venegas: Linda Foster, Esq., Assistant Federal Public Defender, Newark
Manuel Venegas: Laurie Fierro Esq., Kinnelon, New JerseyBeam Bros. Trucking Inc. and Its Principals Agree to Settle Civil False Claims Act AllegationsRead the Press Release
Beam Bros. Trucking Inc. (BBT), and its principals Gerald Beam and Garland Beam, have agreed to pay $1,025,000 to resolve allegations under the False Claims Act that BBT overcharged the U.S. Postal Service (USPS) on contracts to transport mail. BBT is a trucking company located in Mt. Crawford, Virginia.
“The Department of Justice takes seriously its role in protecting the federal procurement process from false claims,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “This settlement demonstrates that we will hold accountable federal contractors engaging in fraud, and will ensure that federal funds are protected from overcharges and abuse.”
“We are gratified to have contributed to this investigation and applaud the exceptional work by the investigative team for both protecting the contracting process and overall program costs,” said Special Agent in Charge Scott Pierce of the U.S. Postal Service Office of Inspector General. “Along with our law enforcement partners, the USPS OIG will continue to aggressively investigate those who engage in activities designed to defraud the Postal Service.”
“Contractors working for the federal government are held to the same high ethical standards as full-time employees,” U.S. Attorney for the District of New Jersey Craig Carpenito said. “This settlement will return more than $1 million to the USPS.”
USPS contracts with trucking companies, including BBT, to transport mail throughout the United States. On some contracts, USPS had provided trucking contractors with credit cards, known as Voyager Cards, to pay for fuel. This settlement resolves allegations that BBT misused Voyager Cards to purchase fuel on contracts that did not allow for their use, resulting in inflated charges in violation of the False Claims Act.
The settlement resolves allegations made in lawsuit filed under the whistleblower provision of the False Claims Act by Bobby Blizzard, a former BBT employee. The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. Mr. Blizzard’s share of the recovery has yet to be determined.
The settlement was the result of a coordinated effort between the United States Attorney’s Office for the District of New Jersey, the Civil Division of the Department of Justice, and the USPS, Office of the Inspector General.
The lawsuit, which was filed in the District of New Jersey, is captioned United States ex rel. Doe v. Beam Bros. Trucking, Inc., Civil Action No. 10-657 (D.N.J.). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Beam Bros. Trucking Inc. and Its Principals Agree to Settle Civil False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – Beam Bros. Trucking Inc. (BBT), and its principals Gerald Beam and Garland Beam, have agreed to pay $1,025,000 to resolve allegations under the False Claims Act that BBT overcharged the U.S. Postal Service (USPS) on contracts to transport mail. BBT is a trucking company located in Mt. Crawford, Virginia.
“Contractors working for the federal government are held to the same high ethical standards as full-time employees,” U.S. Attorney for the District of New Jersey Craig Carpenito said. “This settlement will return more than $1 million to the USPS.”
“The Department of Justice takes seriously its role in protecting the federal procurement process from false claims,” Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division said. “This settlement demonstrates that we will hold accountable federal contractors engaging in fraud, and will ensure that federal funds are protected from overcharges and abuse.”
“We are gratified to have contributed to this investigation and applaud the exceptional work by the investigative team for both protecting the contracting process and overall program costs,” Special Agent in Charge Scott Pierce of the U.S. Postal Service Office of Inspector General, said. “Along with our law enforcement partners, the USPS OIG will continue to aggressively investigate those who engage in activities designed to defraud the Postal Service.”
USPS contracts with trucking companies, including BBT, to transport mail throughout the United States. On some contracts, USPS had provided trucking contractors with credit cards, known as Voyager Cards, to pay for fuel. This settlement resolves allegations that BBT misused Voyager Cards to purchase fuel on contracts that did not allow for their use, resulting in inflated charges in violation of the False Claims Act.
The settlement resolves allegations made in lawsuit filed under the whistleblower provision of the False Claims Act by Bobby Blizzard, a former BBT employee. The False Claims Act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. Mr. Blizzard’s share of the recovery has yet to be determined.The settlement was the result of a coordinated effort between the United States Attorney’s Office for the District of New Jersey, the Civil Division of the Department of Justice, and the USPS, Office of the Inspector General. The government is represented by Assistant U.S. Attorney Frances Bajada, District of New Jersey, and Trial Attorney Gregory Pearson, Commercial Litigation Branch, Civil Division, U.S. Department of Justice.
The lawsuit, which was filed in the District of New Jersey, is captioned United States ex rel. Doe v. Beam Bros. Trucking, Inc., Civil Action No. 10-657 (D.N.J.). The claims resolved by this settlement are allegations only, and there has been no determination of liability.Previously Convicted Felon Admits Second Felon in Possession of Firearm Charge; Agrees to 12-Year Prison SentenceRead the Press Release
CAMDEN, N.J. – A Essex County, New Jersey, man today admitted being a felon in possession of a weapon – for the second time – as well as a violation of supervised release from his first felon in possession conviction, and agreed to a 144-month sentence, U.S. Attorney Craig Carpenito announced.
John Cottle, 47, pleaded guilty to an information charging him with one count of being a felon in possession of a firearm and one count of violation of supervised release from his first felon in possession of a firearm conviction from 2010. Cottle entered his plea before U.S. District Judge Noel L. Hillman in Camden federal court.
According to documents filed in this case and statements made in court:
In December 2016, investigators from the Newark and Hillside police departments responded to reports of a robbery in the area of South 13th Street, near Avon Avenue, in Newark. Officers encountered Cottle in the area and upon investigation found him to be in possession of a loaded .40 caliber Glock semi-automatic handgun. Cottle has numerous prior felony convictions, including a 2010 felon in possession of a firearm conviction in the District of New Jersey – from which he was still on supervised release at the time of the 2016 arrest – and is prohibited from possessing a firearm under federal law.
The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine; the violation of supervised release carries a maximum potential penalty of 24 months in prison. As part of his plea agreement, Cottle agreed to the maximum penalty for each of the crimes charged.
U.S. Attorney Carpenito credited FBI special agents, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to the guilty plea. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Robert D. Laurino; the Newark Police Department, under the direction of Public Safety Director Anthony F. Ambrose; the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Michael A. Monahan; and the Hillside Police Department, under the direction of Chief of Police Vincent Ricciardi, for their assistance.The government is represented by Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office in Newark.
Head of Stock Trading Operation Admits Role in $3 Million Cross-Country Insider Trading RingRead the Press Release
TRENTON, N.J. -The owner and operator of a stock trading operation today admitted participating in a multi-year insider trading scheme that made over $3 million in illicit profits by exploiting material information in violation of confidentiality agreements, U.S. Attorney Craig Carpenito announced.
Steven Fishoff, 60, of Westlake Village, California, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count Four of an indictment charging him with securities fraud.
According to documents filed in this case and statements made in court:
On numerous occasions between May 2010 and August 2013, Fishoff, Ronald Chernin, 69, of Oak Park, California, Steven Costantin, 57, of Farmingdale, New Jersey, Paul Petrello, 56, of Boca Raton, Florida, and Joseph Spera, 56, of Boca Raton, short-sold the securities of numerous public companies using inside information obtained by Fishoff and others.
For each of these offerings, Fishoff or one or more of the day traders that he employed – including his friend, Chernin, and his brother-in-law, Costantin – entered into confidentiality or “wall-crossing” agreements as representatives of Fishoff’s trading entities, whereby they agreed not to disclose or trade on inside information concerning the offerings, such as the name of the issuers and the timing and pricing of the transactions, and were “brought over the wall” for the narrow purpose of determining whether to purchase the offered securities.
In breach of these confidentiality and trading restrictions, Fishoff tipped Petrello and Spera – identified as “CC-1” in the indictment – with the inside information about the confidentially marketed offerings, including the stock trading symbols of the companies and the timing or pricing of the upcoming offerings.
In furtherance of the scheme, Fishoff short sold the stock of the public companies, including Synergy Pharmaceuticals Inc., based on the inside information, in anticipation of a drop in the stocks’ price when the stock offerings were disclosed to the public. Fishoff and his co-defendants traded through the accounts of their respective trading entities or through related accounts that they controlled.
Fishoff and his co-defendants used the inside information to gain more than $3 million in illegal profits over the course of the three-year scheme. Chernin and Costantin, who executed trades using Fishoff’s capital, along with Petrello and Spera, generally split their profits with Fishoff on a 50-50 basis as compensation for the inside information.
Fishoff faces a maximum potential penalty of 20 years in prison and a $5 million fine on the securities fraud charge. Fishoff also agreed to settle the parallel civil forfeiture action, United States of America v. The Contents of Wedbush Securities Account Number 8313 et al., and to forfeit the over $1.6 million in assets sought by the government in that complaint. His sentencing is scheduled for June 20, 2018.
Chernin, Costantin, Petrello, and Spera have all pleaded guilty for their involvement in the scheme and await sentencing.
U.S. Attorney Craig Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher 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 and Senior Associate Regional Director Sanjay Wadhwa, for its assistance.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu, Chief of the Asset Recovery and Money Laundering Unit, Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit, and Assistant U.S. Attorney Sarah Devlin of the Asset Recovery and Money Laundering Unit.
Defense counsel: Daniel Brown Esq. and Lionel André Esq.
Union County, New Jersey, Man Gets over Eight Years in Prison for Distributing Sexually Explicit Images and Videos of ChildrenRead the Press Release
TRENTON, N.J. – An Elizabeth, New Jersey, man was sentenced today to 97 months in prison for using his home computer to distribute sexually explicit videos and images of children, U.S. Attorney Craig Carpenito announced.
Thomas J. Leonard, 36, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to an information charging him with one count of distributing child pornography. Judge Martinotti imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court, Leonard admitted that he used the online peer-to-peer file sharing program BitTorrent to obtain and distribute images and videos of children engaged in sexual acts.
In addition to the prison term, Judge Martinotti sentenced Leonard to five years of supervised release and fined him $30,000.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the Union County Prosecutor’s Office, the N.J. State Police, and the N.J. Regional Computer Forensics Laboratory, for their assistance.
The government is represented by Assistant U.S. Attorney Veronica Allende of the U.S. Attorney’s Office Criminal Division in Trenton.
Anyone with information regarding possible victims of this activity is urged to contact the FBI in Newark at 973-792-3000.
Defense counsel: Rubin M. Sinins Esq., Springfield, New JerseySix People Charged in Takedown of Newark Drug Trafficking OrganizationRead the Press Release
NEWARK, N.J. – Federal and local law enforcement authorities arrested six people today for their alleged roles in a drug trafficking organization that distributed heroin in Newark, U.S. Attorney Craig Carpenito announced.
Tyrone Brown, 34, Lamarr Burwell, 22, and Miles McCloud, 37, all of Newark, and Martin Pettiford, 23, of Irvington, New Jersey, are each charged by complaint with one count of conspiracy to distribute heroin and one or more counts of possession with intent to distribute heroin. Tyrone Brown is also charged with one count of possession with intent to distribute a fentanyl analogue. Omar Wyche, 29, of Newark, and Keyeen Scott, 37, of Myrtle Beach, South Carolina, were each charged with one or more counts of possession with intent to distribute heroin.
Five of the defendants are scheduled to appear before U.S. Magistrate Judge Mark Falk in Newark federal court today; Keyeen Scott is scheduled to appear before U.S. Magistrate Judge Kaymani D. West in Florence, South Carolina.
“The activities described in the criminal complaints unsealed today describe an active marketplace where heroin and crack cocaine are sold openly on the streets of Newark and surrounding areas,” U.S. Attorney Carpenito said. “The wiretaps and surveillance provide a glimpse into the violent and dangerous world these defendants have created in one neighborhood. Our office, working together with our federal and local law enforcement partners, is focusing on ridding neighborhoods of just this type of activity, one gang at a time. Today’s arrests signal an important new beginning in our fight to retake our streets from dangerous gangs and drug dealers.”
“Gangs are the mechanism by which drugs are transmitted to the ‘bad seeds’ in our cities, and are at the root of the violent crime problem,” FBI Special Agent in Charge Timothy Gallagher said. “The FBI Newark Field Office is committed to making Newark, and its surrounding communities, a safe place to be. The most effective way to combat this epidemic of violence is through cooperation; the efforts of all law enforcement agencies with the support and understanding of the citizens whom we protect and serve.”
“We appreciate our partnership with U.S. Attorney Craig Carpentino and Special Agent in Charge, Timothy Gallagher of the F.B.I. in Newark for lending their invaluable law enforcement expertise and resources in the apprehension of these suspects,” Newark Department of Public Safety Director Anthony Ambrose said. “These arrests represent our commitment to ensuring that the neighborhood in and around New Community Corporation complex is free from individuals who blatantly commit crimes and jeopardize the safety and quality of life of our residents. We will continue working tirelessly with our federal and local law enforcement partners to keep Newark safe.”
According to documents filed in this case and statements made in court:
The defendants are allegedly members of a drug trafficking organization that dealt heroin in and around Newark, specifically the area of Hayes Street and 14th Avenue near the New Community Corp. community development (NCC). The organization also supplied drugs to customers and other distributors elsewhere.
The organization is composed of members of the Brick City Brims set of the Bloods street gang. The investigation revealed that in addition to selling narcotics in and around NCC – primarily in a courtyard area they refer to as “the desert” – the members of the drug trafficking organization alerted each other to the presence of police, rival gang members or drug dealers within NCC; pooled narcotics; shared narcotics proceeds and customers; and raised bail money for each other following an arrest. Members of the organization have also engaged in violence and been the subject of violence in connection with their narcotics trafficking activities.
An investigation led by the FBI used physical and video surveillance, confidential informants, cooperating witnesses, dozens of controlled narcotics purchases, record checks, narcotics seizures, including of heroin, and multiple telephone wiretaps to uncover the operations of the drug trafficking organization.
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 counts carry a maximum potential penalty of 20 years in prison and a $1 million fine.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gallagher in Newark, and members of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation leading to the charges.
He also thanked the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, the New Jersey Department of Corrections, New Jersey State Parole, the East Orange Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the U.S. Marshals for their assistance.
The drug trafficking organization operating out of the NCC was an original focus of the Violent Crime Initiative (VCI). The VCI was formed in August 2017 by the U.S. Attorney’s Office for the District of New Jersey, the Essex County Prosecutor’s Office, and the City of Newark’s Department of Public Safety for the 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 FBI, the ATF, the Drug Enforcement Administration’s (DEA) New Jersey Division, the U.S. Marshals, the Newark Department of Public Safety, the Essex County Prosecutor’s Office, the Essex County Sheriff’s Office, New Jersey State Parole Board, Union County Jail, New Jersey State Police Regional Operations and Intelligence Center/Real Time Crime Center, New Jersey Department of Corrections, the East Orange Police Department, and the Irvington Police Department.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit Division in Newark.
The charges and allegations contained in the complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Previously Convicted Felon from Hudson County, New Jersey, Charged with Illegally Possessing Firearm Found During Witness Tampering InvestigationRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, woman was charged today with possessing a weapon as a previously convicted felon, U.S. Attorney Craig Carpenito announced.
Shahouna Dutton, 24, is charged by complaint with one count of being a felon in possession of a firearm. Dutton was arrested at her home by special agents of the FBI. She made her initial appearance before U.S. Magistrate Judge Mark Falk in Newark federal court and was detained.
According to documents filed in this case and statements made in court:
On Feb. 22, 2018, investigators from the Hudson County Prosecutor’s Office executed a search warrant at Dutton’s home to look for further evidence of Dutton’s witness tampering related to a homicide case pending in Hudson County, which was scheduled to begin on Feb. 27, 2018. Investigators found a loaded .22 caliber handgun in Dutton’s bedroom. Dutton has two prior felony convictions in the State of New Jersey and is prohibited from possessing a firearm under federal law.
The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Carpenito credited FBI special agents, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to the arrest. He also thanked the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, and the Jersey City Police Department, under the direction of Department of Public Safety Director James Shea, for their assistance.
The government is represented by Senior Litigation Counsel Robert Frazer of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
Hudson County Man Charged with Cocaine Trafficking Conspiracy Operating in Jersey CityRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man was charged today with conspiracy to distribute cocaine after law enforcement conducted a wiretap of his phone and found 2.5 kilograms of cocaine in his apartment, U.S. Attorney Craig Carpenito announced.
Rayfeal Roman, 34, is charged by complaint with one count of conspiracy to distribute 500 grams or more of cocaine. He was arrested on state charges last month and remains in custody; he will have his initial appearance on the federal charges later this week before U.S. Magistrate Judge Mark Falk in Newark federal court.
According documents filed in this case and statements made in court:
Since September 2017, law enforcement officers in New Jersey have been investigating a large drug distribution network involving Roman and others. The investigation included lawfully intercepted communications, as well as physical surveillance, a comprehensive review of records, and other investigative methods.
Law enforcement officers obtained a court order to intercept wire and electronic communications occurring over the cellular telephone used by Roman. Law enforcement officers intercepted numerous telephone conversations in which Roman others discussed the distribution of cocaine.
On Feb. 6-7, 2018, law enforcement officers intercepted communications between Roman and a conspirator regarding the sale of one kilogram of cocaine. The conspirator wanted to obtain the cocaine from Roman for $29,500, and that the conspirator would, in turn, be providing the cocaine to another unnamed individual. Roman directed the conspirator to go to Roman’s apartment in Jersey City in order to obtain the cocaine.
Law enforcement officers obtained and executed a search warrant for Roman’s apartment in Jersey City. They found approximately 2.5 kilograms of cocaine, approximately $30,000 in cash, and various other materials commonly used in connection with drug distribution, such as an electronic money-counting machine, a digital scale, and drug-packaging materials.
The cocaine distribution conspiracy charge carries a mandatory minimum penalty of five years in prison, a maximum of 40 years in prison, and a $2 million fine.
U.S. Attorney Carpenito credited the Hudson County Prosecutor’s Office under the leadership of Prosecutor Esther Suarez, and special agents of the Drug Enforcement Administration, under the direction of Valerie A. Nickerson, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Violent Crimes Unit in Newark.
The charge and allegations in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Georgia Man Sentenced to Seven Years in Prison for Role in Drug Trafficking ConspiracyRead the Press Release
TRENTON, N.J. – A Norcross, Georgia, man was sentenced today to 84 months in prison for his role in an international drug trafficking organization, U.S. Attorney Craig Carpenito announced.
Wilson Madrid, 32, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to launder money. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in these and other cases and statements made in court:
From June 2014 through November 2014, Madrid conspired with other members of an international drug trafficking organization, with cells operating in New Jersey, to launder more than $150,000 related to the distribution of heroin. In December 2014, a co-defendant, Dany Francisco-Valerio, 44, of Bronx, New York, conspired with members of the drug trafficking organization to transport and distribute kilogram quantities of heroin; on Dec. 24, 2014, he was arrested while transporting 15 kilograms of heroin contained in a hidden compartment in his vehicle. Francisco-Valerio pleaded guilty before Judge Sheridan to an information charging him with conspiracy to distribute heroin and has been sentenced to 51 months in prison.
One of their conspirators, Henry Zamora, pleaded guilty before Judge Sheridan on Aug. 31, 2017, to conspiring to distribute four kilograms of heroin that were recovered from a hidden compartment in Zamora’s vehicle. Another conspirator, Harry Madrid, pleaded guilty before Judge Sheridan on Sept. 7, 2017, to conspiring to launder more than $150,000 on behalf of the drug trafficking organization.
In addition to the prison term, Judge Sheridan sentenced Madrid to five years of supervised release.
U.S. Attorney Carpenito credited the Drug Enforcement Administration’s (DEA) New Jersey Division, under the direction of Special Agent in Charge Valerie A. Nickerson, officers of the N.J. State Police, under the direction of Superintendent Col. Patrick Callahan, and officers from the DeKalb (Illinois) Police Department, under the direction of Chief Gene Lowrey, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Thomas S. Kearney and Assistant U.S. Attorney Jamari Buxton of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
Defense counsel: Mark Davis Esq., Hamilton, New Jersey
Former Newark Police Officer Indicted for Conspiracy to Defraud Newark Conservation and Development CorporationRead the Press Release
NEWARK, N.J. – A former Newark police officer was indicted by a federal grand jury today for allegedly conspiring to defraud the Newark Watershed Conservation and Development Corporation (NWCDC) and giving kickbacks to its former executive director, U.S. Attorney Craig Carpenito announced.
Janell Robinson, 42, of Newark, is charged with one count of conspiracy to defraud the NWCDC facilitated by use of mails and wire transmissions, two counts of mail fraud, and one count of conspiracy to commit extortion under color of official right affecting interstate commerce.
According to documents filed in this case:
Between March 2010 and May 2013, while Robinson was a Newark police officer, she controlled Protected and Secured Services LLC (P&S), a company that purported to provide security-consulting services to its only client, the NWCDC.
Between March 2010 and May 2013, Robinson allegedly conspired with Brashear to pay Brashear a stream of concealed and undisclosed kickbacks from the proceeds that P&S received from the NWCDC. In exchange for Brashear’s assistance with securing P&S a contract with the NWCDC and approving fraudulent and inflated invoices that Robinson submitted, Robinson paid Brashear approximately $3,000 each time P&S received payment from the NWCDC.
In total, the NWCDC paid P&S approximately $289,000 during the scheme, some of which Robinson used to pay Brashear as kickbacks.
The wire and mail fraud conspiracy, mail fraud, and conspiracy to commit extortion under color of official right charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The indictment also seeks forfeiture of the approximately $289,000 in ill-gotten gains obtained from the scheme.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.
The government is represented by Assistant U.S. Attorneys Leslie F. Schwartz and Jacques S. Pierre of the U.S. Attorney’s Office Special Prosecutions Division.
The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Cynthia H. Hardaway Esq.
Morris County, New Jersey, Man Admits Conspiring to Commit Strong-Arm ExtortionRead the Press Release
NEWARK, N.J. – A Kenvil, New Jersey, man today admitted conspiring with a former Middlesex Borough fire inspector to use threats of violence to extort cash payments from the owner of a real estate development company, U.S. Attorney Craig Carpenito announced.
Joseph P. Martinelli, 64, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with conspiring to commit extortion using threats of force, violence, and fear.
According to the documents filed in this case and statements made in court:
From December 2016 through June 2017, Martinelli conspired with Billy A. Donnerstag, 49, of Hackettstown, New Jersey, then a fire inspector for Middlesex Borough and other New Jersey municipalities, to extort the owner and operator of a real estate development and construction company, referred to in the information as “Individual 1,” using threats of physical harm if Individual 1 did not pay Martinelli and Donnerstag thousands of dollars.
Martinelli and Donnerstag agreed that the pretext for demanding money would be that Individual 1 supposedly didn’t pay enough for a property he bought from Martinelli in 2007. In a series of telephone and in-person conversations with Individual 1, Martinelli and Donnerstag demanded money from Individual 1 by suggesting that Individual 1 would be physically harmed by Donnerstag if Individual 1 refused.
Martinelli and Donnerstag obtained $15,000 in cash from Individual 1 over two separate meetings. The cash had been provided by the FBI.
The count of conspiracy to commit extortion carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 12, 2018.
U.S. Attorney Carpenito credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr., Deputy Chief of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Donnerstag remains charged by indictment. The charge and allegations against him are merely accusations, and he is presumed innocent unless and until proven guilty.
Defense counsel: Brian N. DiGiacomo Esq., Madison, New Jersey
Metropolitan Transportation Authority Employee Admits $5 Million Compounded Medication Prescription SchemeRead the Press Release
NEWARK, N.J. – A Staten Island, New York, man today admitted his role in a scheme to use phony prescriptions for medically unnecessary compounded medications to defraud the Metropolitan Transportation Authority (MTA)’s health insurance plan and other insurers out of $5 million, U.S. Attorney Craig Carpenito announced.
Christopher Frusci, 33, an MTA bus driver, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Frusci admitted that from May 2015 through May 2017, he conspired to defraud health insurance plans, including the MTA’s privately-funded health plan, using fraudulent claims for compounded medications, such as scar creams, pain creams, and metabolic supplements marketed by a company referred to as “Company A” in the information.
In order to secure prescriptions for the compounded medications, Company A and its “sales representatives,” referred beneficiaries to telemedicine physicians who were paid by Company A or its affiliates.
Company A recruited Frusci as a sales representative and instructed him to target individuals with certain health plans, including the MTA’s health plan, that covered compounded medications. Frusci then convinced multiple MTA employees to obtain medically unnecessary medications by paying them monthly cash bribes of approximately $100 to $1,500. In order to increase his profits, Frusci also recruited other individuals to work as sales representatives under him.
As part of his plea agreement, Frusci must forfeit $724,448.73 in criminal proceeds he received for his role in the scheme and pay restitution of at least $5 million. He faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for June 4, 2018.
“In an era when many Americans worry about securing health insurance for their families, we’ve seen far too many instances where both private and publicly-funded insurance providers are being raided for millions in phony reimbursements on compounded medications,” U.S. Attorney Carpenito said. “Frusci admitted that he and others sought to defraud the MTA health plan and other insurers by recruiting the very people who enjoy that coverage, offering them cash bribes to get medications they didn’t need. His conviction should serve as a warning to those who would exploit their health coverage for financial gain.”
FBI Special Agent in Charge Timothy Gallagher said, "Christopher Frusci treated his own employer's health insurance plan of Metropolitan Transportation Authority as a vehicle to line his own pockets when he engaged in an elaborate scheme that resulted in defrauding insurers out of $5 million. The FBI, in conjunction with our law enforcement partners will continue to investigate and bring to justice criminals who defraud the system and cheat the American taxpayer."
“Our investigation is ongoing to determine the extent to which additional MTA employees may have participated in this fraudulent scheme,” said Inspector General Barry Kluger of the MTA Office of the Inspector General. “I applaud and am pleased to support the efforts of the U.S. Attorney, along with the FBI and the Department of Defense Office of Inspector General, to combat this nationwide epidemic of health care fraud that unfortunately, and at great cost, has infected the MTA as well.”
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the MTA Office of the Inspector General, under the direction of Inspector General Barry Kluger; and the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the ongoing investigation.
The government is represented by Assistant U.S. Attorney Erica Liu, Chief of the U.S. Attorney's Office Opioid Abuse Prevention and Enforcement Unit in Newark.
To date, the New Jersey U.S. Attorney’s Office has prosecuted over 20 individuals involved in various compounding pharmacy schemes across New Jersey to defraud health care benefit programs, and has recovered more than $4 million through forfeiture and restitution. These schemes have caused a total loss of more than $70 million to the health care industry, which has affected state, federal and private health care benefit programs.
The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.38 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Patrick V. Parrotta, Staten Island, New York
Essex County, New Jersey, Man Sentenced to 135 Months in Prison for Armed Robbery of Passaic, New Jersey, ClubRead the Press Release
NEWARK, N.J. – A South Orange, New Jersey, man was sentenced today to 135 months in prison for his participation in the September 2015 armed robbery of a club in Passaic, New Jersey, U.S. Attorney Craig Carpenito announced.
Keontrae Lawrence, a/k/a “Taz,” 29, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an indictment charging him with one count of conspiracy to commit Hobbs Act robbery and one count of brandishing a firearm during a crime of violence. Judge Arleo imposed the sentence today in Newark federal court.
According to the indictment and other documents filed in this case:
On Sept. 6, 2015, Lawrence and others agreed to rob a club in Passaic at gunpoint. During his plea hearing, Lawrence admitted that he knowingly and willfully participated in the robbery and that he and another conspirator brandished a firearm and threatened to use violence against a club employee. He also admitted that he and the other conspirator took $26,084 in cash from the club before fleeing in a getaway car.
In addition to the prison term, Judge Arleo sentenced Lawrence to five years of supervised release.
Lawrence was originally charged with Jimmy Cooper, a/k/a “Flip,” 32, of Irvington, New Jersey, and Shaheed Blamahsah, a/k/a “Aboo,” 30, of East Orange, New Jersey, in November 2016. Cooper and Lawrence were later indicted by a federal grand jury on March 24, 2017, for their roles in the robbery.
Blamahsah pleaded guilty to his role in the robbery and was sentenced Oct. 6, 2017, to 150 months in prison. The charges against Cooper are still pending, 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 Timothy Gallagher in Newark, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s sentencing. He also thanked the Passaic County Sheriff’s Office, the Passaic Police Department, and the Newark Police Division for their assistance.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the U.S. Attorney’s Office’s Criminal Division in Newark.
Defense counsel: John A. Azzarello Esq., Morristown, New Jersey
Salem County, New Jersey, Woman Admits Filing False Corporate Tax ReturnsRead the Press Release
NEWARK, N.J. – A Salem County, New Jersey, woman today admitted signing false tax returns for shell companies resulting in $286,742 in fraudulent refunds, U.S. Attorney Craig Carpenito announced.
Marilyn Crespo, 50, of Carney’s Point, New Jersey, pleaded guilty before U.S. Chief District Judge Jose L. Linares in Newark federal court to an information charging her one count of filing a false corporate tax return for tax year 2009.
According to the documents filed in this case and statements made in court:
Crespo previously resided in Guttenberg, New Jersey. At the direction of her husband, Jose Crespo, she signed under penalty of perjury numerous false corporate tax returns, Forms 1120, for fake businesses, knowing that the businesses were not real and that the credits claimed on the tax returns were false.
In signing these false tax returns, Marilyn Crespo took advantage of fuel excise tax credits offered under federal tax law. The federal government taxes gasoline, diesel fuel, and certain other types of fuel, but certain commercial uses of these fuels are nontaxable. Businesses that purchase fuel for a nontaxable use can claim a tax credit by filing Form 4136 entitled “Credit for Federal Tax Paid on Fuels.”
Marilyn Crespo signed a federal corporate tax return for 2009 for Magnum Cleaning Service Corp. that claimed gross receipts of $115,027, a fuel excise tax credit of $20,859 and a resulting refund of $15,750. In fact, Magnum was a shell company and the gross receipts and fuel excise tax credit numbers were false. Marilyn Crespo received and cashed the $15,750 refund check at a check-cashing facility in Guttenberg. She cashed many other refund checks for similar false tax returns at this same check-cashing facility.
Jose Crespo pleaded guilty on Sept. 11, 2017, before Judge Linares, to engaging in the fuel excise tax credit scheme and another tax fraud scheme and causing an anticipated loss to the IRS of nearly $1.5 million. He was sentenced Dec. 20, 2017, to three years in prison.
The count of filing a false tax return carries a maximum potential penalty of three years in prison, and a potential $250,000 fine or twice the gross gain or loss from the offense. Sentencing is set for June 20, 2018.
U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Kenneth W. Kayser Esq., East Hanover, New Jersey
Margate, New Jersey, Firefighter Admits $7 Million Health Care Fraud Conspiracy Targeting State Health Benefits ProgramsRead the Press Release
CAMDEN, N.J. – A Northfield, New Jersey, man today admitted defrauding New Jersey state health benefits programs and other insurers out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito and New Jersey Attorney Gurbir S. Grewal announced.
Michael Sher, 40, 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.
“Michael Sher paid kickbacks to patients, gave an envelope of cash to a medical doctor who caused thousands of fraudulent compounded medication prescriptions to be filled, and actively recruited others below him as part of the conspiracy to defraud New Jersey state health benefits programs,” U.S. Attorney Carpenito said. “It is unconscionable for a public servant to defraud the very public he swore to protect, yet that is exactly what Michael Sher did. The defendants convicted in this case include two firefighters, a guidance counselor, a teacher, a medical doctor, and several pharmaceutical employees, which speaks to the extensive network employed by this conspiracy and the efforts of federal and state law enforcement partners to bring this wasteful and brazen scheme to an end.”
“Firemen take an oath to uphold the law. The FBI works to ensure that they are held accountable when they violate that pledge and break the law,” Special Agent in Charge Timothy Gallagher of the Newark FBI Field Office said. “The guilty plea by Michael Sher sends a clear message that the FBI and our law enforcement partners will relentlessly pursue those who defraud the State Health Benefits Program, which ultimately affects the hardworking citizens of New Jersey.”
“Michael Sher acted as a recruiter in this conspiracy by persuading individuals in New Jersey to obtain medically unnecessary and very expensive compounded medications from an out-of-state pharmacy. Sher’s co-conspirators paid him $1.7 million to engage in this criminal conduct. We will continue to work with our law enforcement partners to aggressively investigate illegal prescription drug schemes, particularly when they impact patients of programs administered by the Department of Labor," said Peter Nozka, Acting Special Agent in Charge, New York Region, U.S. Department of Labor Office of Inspector General.
According to documents filed in this case and statements made in court:
From January 2015 through April 2016, Sher and others recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the information as the “Compounding Pharmacy.”
The conspirators knew that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply. They also knew that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular medications.
An entity referred to in the information as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.
Sher and conspirators working under him recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications. Sher and others often used pre-printed prescription forms in which they selected medications with the highest possible reimbursement, without any consideration for medical necessity. The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
The pharmacy paid one of Sher’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Sher and other members of the conspiracy. Sher admitted paying one of the doctors to reward the doctor for signing prescriptions. Sher also paid individuals covered by the Pharmacy Benefits Administrator, as well as the other recruiters who worked under him during the conspiracy.
According to the information, the Pharmacy Benefits Administrator paid Compounding Pharmacy more than $50 million for compounded medications mailed to individuals in New Jersey, including $7,065,303.00 for prescriptions submitted by Sher and his cohorts. Sher received approximately $1,728,372.29 for his role in the scheme.
Sher faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of his plea agreement, Sher must forfeit his criminal proceeds and pay restitution in an amount to be determined at sentencing. Sentencing is scheduled for June 8, 2018.
Fifteen other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, George Gavras, Richard Zappala, Michael Neopolitan, Andrew Gerstel, Timothy Frazier, Michael Pilate, Shawn Sypherd, and Nicholas Tedesco – pleaded guilty from August through February 2018 and await sentencing.
U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, and the U.S. Department of Labor, Office of Inspector General, under the direction of Acting Special Agent in Charge Peter Nozka in New York, with the investigation leading to the guilty plea. He also thanked the Pensions and Financial Transactions Section of the Division of Law, within the Attorney General’s Office, under the direction of Attorney General Gurbir Grewal and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Jacqueline M. Carle and R. David Walk Jr. of the U.S. Attorney’s Office in Camden.
Defense counsel: William J. Hughes, Jr., Esquire, Morristown, New Jersey
Warren County, New Jersey, Man Convicted of Production of Child Pornography, Online Enticement, Sending Interstate Extortionate Threats, and StalkingRead the Press Release
NEWARK, N.J. – A Washington, New Jersey, man was convicted today of sex crimes, extortion and stalking – including asking a minor girl to produce explicit images of herself and threatening a second girl if she didn’t agree to meet and date him, U.S. Attorney Craig Carpenito announced.
Brandon McIntyre, 25, was convicted of two counts of the production of child pornography, one count of the online enticement of a minor to engage in criminal sexual conduct, two counts of sending interstate extortionate threats, and one count of stalking. The jury deliberated approximately four hours following a one-week trial before U.S. District Judge Kevin McNulty in Newark federal court.
According to the documents filed in this case and the evidence at trial:
McIntyre met various minor girls through Facebook, sometimes as himself, other times pretending to be a teenage girl. Over the course of the correspondence with one female, McIntyre threatened to hurt her boyfriend and kill her family when she refused to go out with him. In his interaction with another girl, McIntyre sent her images of his genitals and demanded that she send nude images of herself. McIntyre threatened the girl, claiming he was a state trooper who could arrest and imprison her family members if she did not send him nude images of herself. When one victim threatened to report McIntyre to her school guidance counselor, McIntyre responded, “Do it and see what happens” and “I can have ur family killed too and make u watch.”
McIntyre admitted to law enforcement that he, at times, pretended to be a teenage girl using the alias “Katie Thompson” in online chats with minors. He said he solicited minors to take and send nude images of themselves to him and threatened to harm minors and their loved ones on multiple occasions if they did not comply with his demands.
The charges of sexual exploitation of a child each carry a mandatory minimum penalty of 15 years in prison, and a maximum potential penalty of 30 years in prison. The charge of online enticement carries a mandatory minimum penalty of 10 years in prison, and a maximum potential penalty of life in prison. The charges of interstate extortionate threats each carry a maximum potential penalty of five years in prison. The charge of stalking carries a maximum penalty of five years in prison. All of the counts are also punishable by a $250,000 fine. Sentencing will be scheduled at a later date.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Middlebury, Vermont, Police Department, and the Clinton Police Department with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorneys Erica Liu and Danielle Alfonzo Walsman of the U.S. Attorney’s Office’s Criminal Division in Newark.
New York Man Sentenced to 54 Months in Prison for Role in Stolen Identity Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bronx, New York, man was sentenced today to 54 months in prison for his role in an extensive scheme to obtain money through fraudulently obtained refund checks issued by the U.S. Treasury, U.S. Attorney Craig Carpenito announced.
Hector Urena previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count each of conspiracy to steal government funds, theft of government funds, and aggravated identity theft (Count Three). Judge Vazquez imposed the sentence today 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.
The investigation revealed that Urena and others participated in a classic SIRF scheme. Urena’s conspirators obtained stolen identities to file fraudulent Form 1040s. He and his conspirators then used false and fraudulent documents to convert treasury checks into cash or other proceeds for their own profit at a check cashing business Urena owned. From August 2013 through May 2015, the scheme caused more than $2.7 million in losses to the U.S. Treasury.
In addition to the prison term, Judge Vazquez sentenced Urena to three years of supervised release and ordered him to pay $2.78 million in restitution.
U.S. Attorney Carpenito credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica Weyler; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt; with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Criminal Division in Newark.
U.S. Attorney Carpenito Restructures Office to Add Additional Resources to Quality of Life Issues Facing New Jersey CitizensRead the Press Release
NEWARK, N.J. – U.S. Attorney Craig Carpenito announced today that he is reorganizing the District of New Jersey office to add additional resources to areas that are vital to the health and safety of the people of New Jersey.
U.S. Attorney Carpenito said this new structure will take best advantage of the depth and breadth of experience of the 130 Assistant U.S. Attorneys that staff the Newark, Trenton and Camden offices and focus their work on areas of criminal and civil enforcement that will pay the biggest dividends in protecting the public.
“After spending the past six weeks conducting an in-depth review of our operations, meeting with federal and state law enforcement leaders from across the state, and working closely with the Department of Justice, I have identified several areas of criminal activity where we need to intensify our efforts,” U.S. Attorney Carpenito said. “This sharpened focus will help us get the most dangerous criminals off our streets, address the ongoing opioid epidemic in our state, and stop the hackers and identity thieves who prey on our residents.”
U.S. Attorney Carpenito announced the following strategic changes in how the office will be organized:
• Three new units in the Criminal Division:
o Opioid Abuse Prevention and Enforcement – Among the first stand-alone units of its kind in the country, this unit will work with the existing Health Care and Government Fraud Unit and the Organized Crime and Drug Enforcement Task Force (OCDETF) Unit to target everyone who is making a living on these dangerous and addictive drugs, from the people who are running street-level distribution networks, to the doctors and pharmacists who turn a blind eye to over-prescribing and phony prescriptions, to the manufacturers and distributors who abdicate their responsibility to ensure these medications are being used lawfully. The Centers for Disease Control and Prevention reports that drug overdose deaths and opioid-involved deaths continue to increase in the United States. The majority of drug overdose deaths (66 percent) involve an opioid. In 2016, the number of overdose deaths involving opioids (including prescription opioids and heroin) was five times higher than in 1999. From 2000 to 2016, more than 600,000 people died from drug overdoses. On average, 115 Americans die every day from an opioid overdose. This unit will be enhanced by two Special U.S. Attorneys from the N.J. Office of the Attorney General, part of a joint state/federal effort to combat the growing problem of opioid abuse.
“U.S. Attorney Carpenito and I have forged a partnership dedicated to preventing illegal narcotics and prescription painkillers from flowing unchecked into our communities,” N.J. Attorney General Grewal said. “This collaboration of state and federal law enforcement allows us to share resources and strategies to identify, apprehend, and prosecute drug traffickers, unscrupulous doctors, and others who profit from the suffering and death caused by opioid addiction.”
o Violent Crimes Enforcement Unit – According to national crime data from the FBI, New Jersey’s homicide rate per 100,000 people rose from 3.9 to 4.2 and the rape rate rose from 10.7 to 16.2 between 2014 and 2016. The new Violent Crimes Enforcement Unit will work together with the Organized Crime/Gangs Unit to address these trends by targeting seven strategic areas:
- Federal Interest Murder/Major Violent Crimes
- Gang prosecution
- Carjacking
- Gun Trafficking
- Armed Bank Robberies
- Hobbs Act Robberies
- Human trafficking
o Cyber Crime Prevention and Enforcement – The attorneys in this unit are responsible for some of the most complex investigations the office handles, dealing with the unique and ever-changing issues presented by computer and communications technologies. Computer hacking, mass identity theft, ATM hacking – this unit will partner with the National Security and Economic Crimes units to focus on those cases and other emerging illegal uses of technology. In addition to litigating their own cases, they will provide their support and special expertise to federal and state partners as needed. The most recent report from the FBI Internet Crime Complaint Center found that, nationally, there were an average of 280,000 complaints per year from 2010 through 2016, and in 2016, the number of complaints reached 298,728, resulting in victim losses of $1.33 billion in that year alone. That same year, New Jersey received 6,690 complaints (13th in the nation), resulting in losses to victims of $24.5 million (11th in the nation.)
• A fourth unit, the current General Crimes Unit, will be recast as the Public Protection Unit. This unit will lead the office’s realignment with the Department of Justice’s renewed focus on the Project Safe Neighborhoods program, a nationwide strategy for using existing resources to most effectively combat violent crime in partnership with state and local law enforcement and the communities we serve. The unit handles any and all types of crime, but in this restructuring, the focus will be on criminals who prey on the public, including those who commit violent crimes and white collar scams, human trafficking and child exploitation.
“The changes I am announcing today will enhance our ability to do our most important job – protecting the public – more efficiently and with greater impact,” U.S. Attorney Carpenito said. “They will align our office with the priorities outlined and implemented by Attorney General Sessions and the Department of Justice. Of course, the office will continue to focus on all areas of federal interest, including national security, economic crimes, federal taxes, political corruption, civil rights, health care and government frauds.”
“The FBI dedicates significant resources in combating violent crime, cybercrime and the alarming rise in opioid abuse,” Special Agent In Charge of the FBI Newark Division Timothy Gallagher said. “We strongly support U.S. Attorney Carpenito’s focus to get the most dangerous drugs and criminals off our streets, particularly those who intend on defrauding our citizens and praying on the young and old. We look forward to continuing to work closely with the U.S. Attorney’s Office, so together we can make our state a safer place for our citizens.”
Valerie A. Nickerson, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division said, “The men and women of the Drug Enforcement Administration work tirelessly to combat the current opioid epidemic in New Jersey. We look forward to the opportunity to continue our work with the U.S. Attorney’s Office and the New Jersey Attorney General’s Office to investigate and prosecute those who continue to profit off of the misery that this epidemic has caused.”
“We look forward to expanding upon our great working relationship with the U.S. Attorney’s Office,” Bureau of Alcohol, Tobacco and Firearms Special Agent in Charge John Devito said. “With this reorganization, both ATF and the USAO will be better situated to protect the citizens of New Jersey and mitigate the risk that violent crime poses to the public.”
U.S. Attorney Carpenito also announced new leadership of the office:
The First Assistant U.S. Attorney will be Rachael Honig, who is rejoining the office from the private sector. She worked for the U.S. Attorney’s Office for 14 years, most recently as Counsel to the U.S. Attorney. The Executive Assistant to the U.S. Attorney is Zach Intrater, who has been with the office for eight years in the Criminal Division, most recently as Deputy Chief of the Economic Crimes Unit. The Acting Counsel to the U.S. Attorney is Caroline Sadlowski, who has been with the office for 15 years, including nine years in the Appeals Division and six years in the Civil Division. Most recently, she was chief of the Civil Division. The Deputy U.S. Attorney, overseeing the Trenton and Camden Vicinages, is Thomas J. Eicher, who has been with the office more than 14 years, most recently as Chief of the Criminal Division.
“Let me be clear: The U.S. Attorneys’ Office for the District of New Jersey has a long and proud history,” U.S. Attorney Carpenito said. “Every U.S. Attorney who has sat in this seat has inherited a great office, and then worked to make it even better before handing it off to his or her successor. I intend to be no different. The changes I am announcing today are my first steps in making this office stronger and more successful.”
California Man Admits Cross-Country Conspiracy to Distribute over 141 Kilograms of Heroin and CocaineRead the Press Release
TRENTON, N.J. – A National City, California, man today pleaded guilty to his role in a conspiracy to transport 141 kilograms of narcotics from California to New Jersey, U.S. Attorney Craig Carpenito announced.
Hector Lucas-Ramos, 42, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to an information charging him with conspiracy to possess with intent to distribute more than one kilogram of heroin and five kilograms of cocaine.
According to the documents filed in this case and statements made in court:
On Aug. 27, 2017, Lucas-Ramos was arrested in Essex County while he and Abraham Castro, 33, of San Diego, California, were driving a tractor trailer. After the tractor trailer was seen committing several traffic violations, law enforcement officers conducted a motor vehicle stop. During a subsequent search of the tractor trailer, law enforcement officers recovered five large duffle bags containing a total of 56 kilograms of heroin and 85 kilograms of cocaine.
Lucas-Ramos admitted today that he and Castro drove the tractor trailer from California to deliver the narcotics to other conspirators in New Jersey.
The conspiracy charge to which Lucas-Ramos pleaded guilty carries a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine. His sentencing is scheduled for June 27, 2018. Castro pleaded guilty to his role in the conspiracy on Nov. 14, 2017, and awaits sentencing.The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office Organized Crime Drug Enforcement Task Force (OCDETF)/Narcotics Unit.
U.S. Attorney Carpenito credited the Drug Enforcement Administration’s New Jersey Division, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation.
This case is being conducted under the auspices of the OCDETF. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Defense counsel: Paula Notari Esq. New York