District of New Jersey
Press releases recorded for this federal judicial district.
Newark Non-Profit Director and Political Fundraiser Pleads Guilty to Wire Fraud and Tax EvasionRead the Press Release
NEWARK, N.J. – The former executive director of a Newark-based childcare and community program and a partner in a political fundraising and consulting company today admitted committing wire fraud and tax evasion, Acting U.S. Attorney William E. Fitzpatrick announced.
Kiburi D. Tucker, 42, of Newark, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of wire fraud and four counts of tax evasion.
According to documents filed in this case and statements made in court:
As the executive director of The Centre Inc., Tucker embezzled Centre Inc. funds, through ATM, debit card and bank withdrawal transactions to fund his personal expenditures such as gambling, travel, and furnishing his home. Tucker defrauded The Centre Inc. of $332,116 from 2012 through 2015.
Tucker also intentionally under-reported the proceeds that he took from The Centre Inc. to the IRS. He intentionally under-reported the income that he received for tax year 2015 from his partnership in Elite Strategies, a political fundraising and consulting company, by filing false federal personal income tax returns. Tucker admitted that he was responsible for underreporting $177,040 in income from the above sources for the 2015 tax year, resulting in a tax loss of $56,509.
The count of wire fraud is punishable by a maximum penalty of 20 years in prison and a $250,000 fine. The count of tax evasion is punishable by a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 27, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, 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; and the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jacques S. Pierre and Jihee G. Suh of the Special Prosecutions Division.
Defense counsel: Timothy M. Donohue Esq., West Orange, New Jersey
Former New York Law Firm Partner Admits Conspiring to Defraud Two New York Law Firms Out of More Than $7 MillionRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, woman today admitted using bogus litigation support companies to obtain millions of dollars from two law firms where she was a partner, Acting U.S. Attorney William E. Fitzpatrick announced.
Keila Ravelo, 52, of Englewood Cliffs, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to two counts of an indictment charging her with conspiracy to commit wire fraud (Count One) and tax evasion (Count Nine).
According to documents filed in the case and statements made in court:
Ravelo worked as a partner for a company identified in the indictment as “Law Firm 1” from July 1, 2005, through October 2010. She then became partner in another law firm, identified in the indictment as “Law Firm 2,” and worked there from October 2010 through November 2014.
From 2008 through July 2014, Ravelo and her husband, Melvin Feliz, 51, conspired to defraud Law Firm 1 and Law Firm 2, forming two limited liability companies, “Vendor 1” and “Vendor 2,” which purported to provide litigation support to the firms, but in fact provided no actual services to the firms. Ravelo and Feliz controlled Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1 and Law Firm 2 for work that was never performed for the law firms or their clients. Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2, which Ravelo and Feliz later used for personal expenses. The law firms paid Vendor 1 and Vendor 2 approximately $7.8 million. Ravelo and Feliz willfully failed to report the fraudulent earnings on their tax returns.
On Aug. 25, 2015, Feliz pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of tax evasion. Feliz admitted that from 2008 through July 2014, he and Ravelo controlled the Vendor 1 and Vendor 2 bank accounts and submitted invoices to Law Firm 1and Law Firm 2 for work that was never performed for the law firms or their clients. He admitted that Ravelo, in her capacity as a partner at the law firms, approved payments to Vendor 1 and Vendor 2 that Ravelo and Feliz later used for personal expenses. Before pleading guilty for the role he played in this wire fraud and tax evasion conspiracy, Feliz pleaded guilty to an indictment which charged him and two other men with conspiring to distribute approximately 20 kilograms of cocaine.
The charge of conspiracy to commit wire fraud is punishable by a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The tax evasion charge is punishable by a maximum potential penalty of five years in prison and $250,000 fine. Sentencing for Ravelo is scheduled for March 5, 2018. Feliz is awaiting sentencing.
Acting U.S. Attorney Fitzpatrick credited law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and law enforcement officers of the Drug Enforcement Administration, Newark Division, under the direction of Special Agent in Charge Valerie A. Nickerson, with the investigation leading to today’s plea.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
The government is represented by Assistant U.S. Attorneys Andrew Kogan, Brian Urbano and Ronnell Wilson of the U.S. Attorney’s Office Criminal Division and Assistant U.S. Attorneys Jafer Aftab and Barbara Ward, Acting Chief of the Asset Forfeiture and Money Laundering Unit.
Defense counsel: Lawrence S. Lustberg Esq., Newark, New Jersey, and Steven H. Sadow Esq., Atlanta, Georgia
Two New Jersey Men Arrested for $30 Million Mortgage Fraud SchemeRead the Press Release
NEWARK, N.J. – A New Jersey attorney and another man were charged with running a large-scale mortgage fraud scheme that involved dozens of properties in Jersey City, Clifton, Union, and elsewhere in New Jersey and caused losses of more than $30 million, Acting U.S. Attorney William E. Fitzpatrick announced.
Christopher Goodson, 44, of Newark, and Anthony Garvin, 47, of Jersey City, New Jersey, are charged by complaint with one count of conspiracy to commit bank fraud. Both defendants were arrested this morning and are expected to appear this afternoon before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
According to the Complaint:
From January 2011 through August 2017, Goodson, Garvin, and others engaged in a short sale mortgage fraud conspiracy targeting various New Jersey properties with mortgages that were in default.
As part of the scheme, the conspirators arranged simultaneous fraudulent transactions on the same target property. In the first transaction, which involved the sale by the current owner, the conspirators convinced the financial institution holding the mortgage to accept the sale of the target property at a loss, usually to a buyer who was secretly a conspirator or an entity controlled by the conspiracy.
In the second transaction, the conspirators flipped the same target property from the first buyer to a second buyer, who typically obtained a mortgage from another financial institution using false loan applications, pay stubs, bank account statements and title reports provided by members of the conspiracy. As a result, the second transaction frequently closed for significantly more or even double the price of the first transaction.
Goodson, Garvin, and others allegedly rigged the short sale process at each step in order to maximize the difference in price between the two transactions and keep the victim financial institutions from detecting the fraud.
For instance, Goodson, an attorney, concealed the fact that he played multiple-roles in the short sale transactions, including allegedly generating false preapproval letters from a New Jersey corporation he owned that purported to be a short-term lending company operating out of California. These letters were used to deceive banks into believing that the purchaser – typically a conspirator or entity controlled by Goodson – had the credit necessary for the transaction. Goodson also negotiated the fraudulent short sales with the banks, generated phony deeds that backdated the closing date of the first transactions, and even served as the closing attorney during some of the short sales.
Garvin was a real estate agent and investor who allegedly coordinated fraudulent transactions as part of the scheme.
The conspirators disbursed the funds into various accounts they controlled to conceal their illegal activities and split the profits. In total, the conspiracy defrauded financial institutions out of more than approximately $30 million.
The conspiracy to commit bank fraud count is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, and special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, with the investigation
The government is represented by Assistant U.S. Attorneys David Feder and Zach Intrater of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Jamaican Resident Sentenced to over Five Years in Prison for Role in Fake Lottery ScamRead the Press Release
NEWARK, N.J. – A resident of Jamaica, West Indies, was sentenced today to 63 months in prison for swindling elderly residents of the United States by falsely telling them they had won millions of dollars in Jamaican lotteries, Acting U.S. Attorney William E. Fitzpatrick announced.
Ricardo Reid, 32, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an indictment charging him with one count of conspiracy to commit mail and wire fraud. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From 2011 to 2016, Reid purchased mailing lists that contained addresses and other information of elderly individuals and then solicited these individuals by tricking them into believing they had won millions in lotteries and sweepstakes. He also told the elderly individuals that in order to redeem these fictitious winnings, they had to pay registration fees and other fees and taxes. Reid told the victims that the calls were from officials of the United States, such as the IRS, and from lottery or bank officials.
Reid admitted that he used aliases like “Robert Gates,” “Mr. Bogohazian,” and “Damien Boswel,” and used call forwarding and Voice Over Internet Protocol services to make and receive calls, all while masking his phone number and location.
In addition to the prison term, Judge Wigenton sentenced Reid to three years of supervised release and ordered him to pay restitution of $577,703.78.
Anyone with information regarding possible victims of this activity is urged to contact the U.S. Postal Inspectors in Newark at 973-693-5400.
Acting U.S. Attorney Fitzpatrick credited inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, and special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Acting Special Agent in Charge Michael McCarthy, with the investigation.
The government is represented by Assistant U.S. Attorney Lorraine S. Gerson of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: K. Anthony Thomas Esq., Assistant Federal Public Defender, Newark
Member of Drug Trafficking Organization Gets over 17 Years in Prison for Conspiring to Sell Heroin in Hudson CountyRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man was sentenced today to 210 months in prison for distributing heroin in Hoboken, New Jersey, on multiple occasions, Acting U.S. Attorney William E. Fitzpatrick announced.
Travis Thomas, a/k/a “Mush,” 27, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an indictment charging him with one count of conspiracy to distribute heroin and seven substantive counts of heroin distribution. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Between July 2015 and December 2015, Thomas conspired with others to distribute heroin in Hudson County, including Hoboken. Thomas admitted that he distributed over 100 grams of heroin and worked with others, including Sterling McCoy, a/k/a “Boogs,” 34, of Pleasantville, New Jersey, and Jason Henderson Wheeler, a/k/a “J,” 29, of Hoboken, in furtherance of the conspiracy.
In addition to the prison term, Judge Wigenton sentenced Thomas to eight years of supervised release. McCoy and Wheeler have also been convicted and sentenced for their roles in the conspiracy.
Acting U.S. Attorney Fitzpatrick credited special agents of 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. Attorneys Brian Urbano and Erica Liu of the U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: Jason N. Orlando Esq., Jersey City
Doctor and Wife from Wayne, New Jersey, Plead Guilty in Test-Referral Bribe Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A cardiologist with a practice in Paterson, New Jersey, and his wife pleaded guilty today to their involvement in a test-referral bribe scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.
Aiman Hamdan, 50, pleaded guilty before U.S. District Judge Stanley R. Chesler to a superseding information charging him with accepting bribes in violation of the Federal Travel Act. His wife, Kristina Hamdan, 39, pleaded guilty before Judge Chesler to Counts One and Thirteen of an indictment charging her with conspiracy to violate the Anti-Kickback Statute, the Federal Travel Act and the honest services wire fraud statute, and conspiracy to commit money laundering.
According to documents filed in this case and statements made in court:
In September 2008, Aiman Hamdan was given a $500,000 loan by BLS in exchange for his agreement to refer patient blood samples to BLS. From October 2008 through November 2008, Aiman Hamdan caused approximately $53,000 of blood samples to be referred to BLS, resulting in the lab being paid that amount by Medicare and private insurance companies.
From November 2009 through April 2013, Kristina Hamdan, a former sales employee of the lab, agreed with others to pay doctors illegal bribes in exchange for the doctors’ agreement to refer patient blood specimens to BLS. For example, Kristina Hamdan bribed Yousef Zibdie, 53, of Wayne, an internal medicine doctor with a practice in Woodland Park, in exchange for generating more than $900,000 in lab business for BLS. The bribes were funded by BLS and, in an effort to obscure the source and nature of the payments, paid to the doctors by Kristina Hamdan through a sham entity that also paid the Hamdans’ household and personal expenses.
Aiman Hamdan faces a maximum potential penalty of five years in prison on the Federal Travel Act charge. Kristina Hamdan faces a maximum potential penalty of five years in prison on Count One of the indictment and a maximum potential penalty of 20 years in prison on Count Thirteen of the indictment. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
As part of their guilty pleas, Aiman and Kristina Hamdan agreed to forfeit and pay back $15,000 and $1.2 million in criminal proceeds, respectively. Sentencing for both defendants is scheduled for Feb. 14, 2018.
Zibdie previously pleaded guilty on June 21, 2017 and awaits sentencing.
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.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; 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. Attorneys Danielle Alfonzo Walsman, Charles Graybow, 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, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
The New Jersey U.S. Attorney’s Office reorganized its health care fraud 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 $1.37 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:
Aiman Hamdan: Lee Vartan Esq., West Orange, New Jersey, and Joseph A. Hayden, Jr., Esq., Hackensack, New Jersey
Kristina Hamdan: Edward J. Bilinkas Esq., Randolph, New JerseyTwo Insurance Companies Agree to Pay More Than $2 Million to Resolve False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – Two insurance companies that are part of one of the largest providers of automobile insurance in the United States have agreed to pay more than $2 million to resolve allegations that they violated the False Claims Act by causing Medicare and Medicaid to pay for claims for which the companies were responsible, Acting U.S. Attorney William E. Fitzpatrick announced today.
Progressive Casualty Insurance Co., of Cleveland, Ohio, and Progressive Garden State Insurance Co., of West Trenton, New Jersey, are part of the Progressive Group of Insurance Companies, one of the nation’s largest auto insurance providers.
If an individual has Medicare or Medicaid and other private health insurance coverage, each type of coverage constitutes a “payer.” The insurance coverage that pays first, referred to as the “primary payer,” typically pays to the limits of its coverage for an individual’s health care claims. Generally, if there are health care costs that the primary payer does not cover, these costs may then be paid by the individual’s other insurance coverage, referred to as the “secondary payer.”
Under federal and New Jersey state law, if an individual has both private insurance and Medicare or Medicaid, neither Medicare nor Medicaid may serve as the primary payer for certain claims and the private insurer must remain as the primary payer.
According to the allegations in this case, under “health first” automobile insurance policies that it offered, Progressive designated the policyholder’s health insurance carrier as the primary payer for medical claims that arose in connection with an automobile accident. Even though, under the law, Progressive could not decline to make primary payment to Medicare or Medicaid beneficiaries, the company permitted Medicare and Medicaid beneficiaries to elect a “health first” policy. Many of these policyholders in New Jersey who were Medicare or Medicaid beneficiaries incurred medical claims in connection with an automobile accident. Because Progressive’s “health first” policies designated the company as the secondary payer, Medicare and Medicaid improperly paid for claims that Progressive should have paid. The United States and New Jersey alleged that this conduct violated the Medicare Secondary Payer Act and Medicaid regulations and, as a result, Progressive caused false claims to be submitted to Medicare and Medicaid.
The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act. The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower will receive more than $600,000 of the more than $2 million that the United States and New Jersey recovered.
The settlement is the culmination of an investigation conducted by 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.
The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the U.S. Attorney’s Office in Newark.
The U.S. Attorney’s Office reorganized its health care fraud practice in 2010, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.37 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.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned United States ex rel. Nergon v. Progressive Casualty Insurance Company, et al. (D.N.J.).
Defense counsel:
Michael K. Loucks Esq., BostonRelator’s counsel:
Jeremy Abay Esq. and John Weston Esq., PhiladelphiaNew York Probation Officer Charged for Role in Conspiracy to Smuggle Heroin from NigeriaRead the Press Release
NEWARK, N.J. – A Brooklyn, New York, man was arrested this morning for allegedly collecting drug distribution proceeds and laundering money on behalf of a heroin distribution conspiracy operating out of Nigeria, Acting U.S. Attorney William E. Fitzpatrick announced.
Anderson Ajimavo, 62, is charged by complaint with one count of conspiracy to distribute and possess with intent to distribute one kilogram or more of heroin and one count of conspiracy to commit money laundering. He is scheduled to appear this afternoon before U.S. Magistrate Leda Dunn Wettre in Newark federal court.
According to the complaint:
The FBI and Homeland Security Investigations (HSI) have been investigating a drug trafficking organization operating in Nigeria, New York, New Jersey, and elsewhere. During that investigation, law enforcement learned that the drug trafficking organization employed individuals to ingest heroin pellets and fly to the United States to deliver the drugs to other members of the organization.
Ajimavo was allegedly employed by the drug trafficking organization to collect, transmit, and launder the narcotics proceeds. A confidential source (CS-1) who received the heroin from the couriers after they arrived in the United States was instructed by the leader of the drug trafficking organization to pay for the heroin through Ajimavo.
On a least four occasions from November 2016 through March 2017, CS-1 met with Ajimavo and paid him a total of over $75,000 in narcotics proceeds, which Ajimavo was to transmit to the drug trafficking organization in Nigeria.
The heroin distribution conspiracy charge carries a mandatory minimum penalty of 10 years in prison, a maximum of life imprisonment, and a $10 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the gross gain or loss from the offense.
The charges and allegations against Ajimavo are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Acting Special Agent in Charge Michael McCarthy; and U.S. Customs and Border Protection (CBP), under the direction of Acting Director of Field Operations Leon Hayward, New York Field Office, with the investigation.
The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Mercer County Man Admits Cocaine Distribution ConspiracyRead the Press Release
TRENTON, N.J. – A Trenton man today admitted his role in a conspiracy to distribute over a kilogram of cocaine and crack cocaine in the Trenton area, Acting U.S. Attorney William E. Fitzpatrick announced.
Bobby Williams, 37, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to Count One of a superseding indictment charging him with conspiracy to distribute and possess with intent to distribute 500 grams or more of cocaine and to manufacture, distribute, and possess with intent to distribute 28 grams or more of cocaine base.
According to the documents filed in this case and statements made in court:
From September 2013 through his arrest on Jan. 13, 2016, Williams conspired with co-defendants Khalfini Richardson, William Enmond and Capitol T. Wellons to distribute cocaine and manufacture and distribute crack cocaine primarily from two adjacent residences in Trenton.
At his plea hearing, Williams admitted conspiring to distribute a total of 1.72 kilograms of cocaine and 82.9 grams of crack cocaine.
The count to which Williams pleaded guilty carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for March 6, 2018.
Enmond entered a guilty plea and was sentenced on July 20, 2017 to 60 months in prison. Richardson and Wellons have also pleaded guilty and await sentencing.
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s guilty plea.The government is represented by Assistant U.S. Attorneys Molly Lorber and Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: John S. Furlong Esq.Former Atlantic County Prosecutor’s Office Detective Admits Mortgage Fraud ConspiracyRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, woman today admitted her role in a more than $200,000 mortgage fraud conspiracy involving a property she purchased in Mays Landing, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Betsy Borges, 38, of Mays Landing, pleaded guilty before Senior U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of conspiracy to commit bank fraud.
Borges was originally charged by complaint in May 2017 with Iraida Fuentes, 35, of Pleasantville, New Jersey.
According to documents filed in this case and statements made in court:
In December 2002, Borges purchased 4957 Cardigan Court in Mays Landing. Despite failing to make mortgage payments to Wachovia and its successor, Wells Fargo, Borges collected rental income from tenants living in the property and concealed that income from the banks. Borges also falsely represented to Wells Fargo, on multiple occasions, that she could not make the mortgage payments for the property.
Borges subsequently arranged with Wells Fargo for Fuentez to purchase the property through a short sale. Not only did Borges and Fuentez conceal their familial relationship from Wells Fargo, they also concealed the fact that Borges and another conspirator provided Fuentez the funds to purchase the property.
On Sept. 20, 2012, Fuentez purchased the property at a price well below its actual value. On Nov. 22, 2016, B&B Properties – a company owned in part by Borges – purchased the property from Fuentez for $25,000. On Feb. 3, 2017, Borges then individually purchased the property from B&B Properties for a dollar.
The bank fraud conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine. As part of her plea agreement, Borges must forfeit $206,450 in criminal proceeds from the scheme. Sentencing is scheduled for Feb. 23, 2018.
Fuentes previously pleaded guilty on Nov. 6, 2017 to making a false declaration in the grand jury in relation to this matter and awaits sentencing.
Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s guilty plea. He also thanked the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner, and the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, for their assistance.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.Defense counsel: Louis M. Barbone Esq., Atlantic City, New Jersey.
Pharmaceutical Employee Admits Health Care Fraud Conspiracy Targeting State Health Benefits ProgramsRead the Press Release
CAMDEN, N.J. – A Galloway, New Jersey, man today admitted defrauding New Jersey state health benefits programs and other insurers out of nearly $500,000 by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino announced.
Andrew Gerstel, 39, a pharmaceutical sales representative, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
From January 2015 through April 2016, Gerstel 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 learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.
The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the information as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.
Gerstel recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications that were reimbursed for the highest amounts, without regard to their medical necessity. The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
The pharmacy paid one of Gerstel’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Gerstel and other members of the conspiracy. Gerstel paid recruiters under him and individuals with insurance coverage to reward them for obtaining the prescriptions.
According to the information, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey.
As part of his plea agreement, Gerstel must forfeit $184,389.05 in criminal proceeds he received for his role in the scheme and pay restitution of at least $483,946.72.
Gerstel faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 26, 2018.
Ten other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, George Gavras, Richard Zappala, and Michael Neopolitan – have pleaded guilty to their roles in the scheme and await sentencing.
Acting U.S. Attorney Fitzpatrick 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 Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to the guilty plea. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Porrino 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: Ralph A. Paolone Esq., GallowayOwner of Hudson County, New Jersey, Scrap Metal Company Admits Role in 17-Year Conspiracy to Defraud CustomersRead the Press Release
Former Chief Financial Officer Has Pleaded Guilty to Related Charge
NEWARK, N.J. – The minority owner of Cinelli Iron & Metal Co. (CIMCO) today admitting operating a 17-year conspiracy that defrauded customers out of millions of dollars, Acting U.S. Attorney William E. Fitzpatrick announced.
Craig Cinelli, 47, of Allendale, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to Count One of an indictment that charged him with conspiracy to commit wire fraud.
David Barteck, 53, of Wood Ridge, New Jersey, the former chief financial officer of CIMCO, and Michael A. Valenti III, 43, of Hasbrouck Heights, New Jersey, the former senior vice president of sales at CIMCO, each previously pleaded guilty before Judge Wigenton to participating in the conspiracy.According to documents filed in this case and statements made in court:
CIMCO, which was headquartered in Secaucus, New Jersey, purchased scrap metal for resale and operated three scrap metal recycling facilities in New Jersey. CIMCO trucks would deliver scrap metal containers to customer jobsites and remove them after they were filled. CIMCO then purportedly paid customers based on the type and net weight of the scrap material.
From 1999 through March of 2016, Craig Cinelli, his brother, Joseph Cinelli Sr., Barteck, Valenti, and others allegedly used a variety of fraudulent business practices to buy scrap metal from CIMCO’s customers for less than CIMCO should have paid. The company then resold the scrap metal at a profit.
Instead of paying the proper, agreed-upon amounts for the actual weight, members of the conspiracy used a variety of techniques to misrepresent the true weight and type of the scrap metal, including altering documents to reflect a lower weight, removing scrap metal from a haul before it was weighed and misrepresenting the types of scrap metal contained in a haul. Cinelli admitted that the loss caused by the conspiracy that was reasonably foreseeable to him was more than $9.5 million, but less than $25 million.
The wire fraud conspiracy and substantive wire fraud counts each carry a maximum potential penalty of up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 15, 2018.
Charges against Joseph Cinelli Sr., remain pending, and he is presumed innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents with the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael Mikulka in New York; special agents with the U.S. Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker in New York; and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case is part of efforts underway by the Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
Defense counsel: Ray Flood Esq., Hackensack, New Jersey
Man Admits Assaulting Sleeping Girl on AirplaneRead the Press Release
NEWARK, N.J. – An Indian national admitted that he assaulted a girl on a flight from Seattle, Washington, to Newark Liberty International Airport, Acting U.S. Attorney William E. Fitzpatrick announced today.
Vijaykumar Krishnappa, 29, pleaded guilty Nov. 8, 2017 before U.S. Magistrate Judge James B. Clark in Newark federal court to a superseding information charging him with assault in the special aircraft jurisdiction of the United States.
According to documents filed in this case and statements made in court, while on a United Airlines flight from Seattle to Newark on July 23, 2017, Krishnappa intentionally assaulted a girl who was unknown to him and seated next to him on the flight. Krishnappa admitted that while the victim was asleep, he intentionally touched her near her groin over her leggings without her consent.
Under the terms of the plea agreement, Krishnappa will be sentenced to between 30 and 90 days in prison. Sentencing is scheduled for Jan. 17, 2018.Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the Port Authority of New York-New Jersey, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the U.S. Attorney’s Criminal Division in Newark.
Defense counsel: John H. Yauch Esq., Newark
Counsel to U.S. Attorney Receives Hollenbeck AwardRead the Press Release
NEWARK, N.J. – John M. Fietkiewicz, Counsel to the U.S. Attorney for the District of New Jersey, was honored today with the Charles J. Hollenbeck Award at the N.J. Commission on Professionalism in the Law awards luncheon in Somerset.
“John has served our office with distinction and professionalism for more than three decades,” Acting U.S. Attorney William E. Fitzpatrick said. “His role in overseeing the preparation of cases for trial has been invaluable in ensuring that when our Assistant U.S. Attorneys walk into court, they are completely prepared. He embodies the highest principles of what public service is all about.”
Fietkiewicz has held a variety of positions in the U.S. Attorney’s Office since starting in October 1985. Prior to becoming a member of the U.S. Attorney’s Front Office as Counsel to the U.S. Attorney in March 2013, he was the Chief Litigation Counsel for three years, a Senior Litigation Counsel in the Special Prosecutions Division for seven years, the Deputy Chief of the Fraud Division for 11 years, and an AUSA in the Fraud Division, Criminal Division, and Appeals Division for six years. Since 2005, he has been the Office’s Professional Responsibility Officer. He created the office’s Trial Supervision Program in 2010 and has run it ever since
Fietkiewicz received his J.D., cum laude, from the Fordham University School of Law, where he was Editor-in-Chief of the Fordham Law Review. He received his B.A., magna cum laude, from Montclair State College. Prior to coming to the U.S. Attorney’s Office, he clerked for the Honorable Gerard L. Goettel, United States District Judge, Southern District of New York, and he was associated with the New York law firm of Cahill Gordon & Reindel.
The Hollenbeck award is given annually to someone who is “licensed to practice law in the state of New Jersey; employed by a governmental agency at the federal, state, county or municipal level, or by a nonprofit organization that serves the needs of the legal community; and has served with diligence, competence and dedication to the profession.” The award is named for Charles Hollenbeck who dedicated a majority of his nearly four-decade career as an attorney to improving the quality of legal services throughout the state.
Two New Jersey Men Admit Conspiracy to Distribute More Than 140 Kilograms of Heroin and CocaineRead the Press Release
One Defendant Also Pleads Guilty to Assaulting Federal Officers
TRENTON, N.J. – Two New Jersey men today admitted their roles in a conspiracy to distribute 140 kilograms of narcotics in New Jersey, Acting U.S. Attorney William Fitzpatrick announced.
Gemal Singleton, 27, of Edison, New Jersey, and Siddeeq Q. Williams, 39, of Cranford, New Jersey, pleaded guilty before U.S. District Judge Brian R. Martinotti in Trenton federal court to separate informations charging them each with one count of conspiracy to possess with intent to distribute more than one kilogram of heroin and five kilograms of cocaine. Williams also pleaded guilty to one count of assaulting federal officers.
According to the documents filed in this case and statements made in court:
Singleton, Williams, and others arranged for cocaine and heroin to be shipped to New Jersey via tractor trailer. On Aug. 27, 2017, the tractor trailer arrived in New Jersey and law enforcement conducted a vehicle stop after the driver committed several traffic violations. A subsequent search of the tractor-trailer recovered five large duffle bags containing a total of 56 kilograms of heroin and 85 kilograms of cocaine. Singleton and Williams admitted that they were supposed to meet the tractor-trailer to collect the narcotics for eventual distribution.
On Aug. 30, 2017, law enforcement went to speak with Singleton and Williams. Williams admitted that when two law enforcement officers operating an undercover vehicle attempted to pull him over, he sped away in a Honda Pilot. Williams also admitted that during the ensuing pursuit, he rammed the Pilot into the officers’ vehicle and drove away.
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. The charge of assaulting a federal officer carries a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing for both defendants is scheduled for Feb. 20, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s guilty pleas.
The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.
Defense counsel:
Singleton: Robert DeGroot Esq., Newark
Williams: Jon Kearney Esq., Kearny, New Jersey
New York Doctor Sentenced to 33 Months in Prison for Role in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – An internal medicine doctor practicing in Staten Island, New York, was sentenced today to 33 months in prison for taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.
Ahmed El Soury, 45, of Monmouth Junction, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging him with conspiracy to violate the Anti-Kickback Statute, the Federal Travel Act, and the honest services wire fraud statute. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
El Soury admitted accepting cash bribes in return for referring patient blood specimens to BLS. From March 2011 through April 2013, El Soury received bribes totaling more than $66,000 from BLS employees and associates. El Soury’s referrals generated approximately $650,000 in lab business for BLS.
The investigation has thus far resulted in 51 convictions – 37 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.
In addition to the prison term, Judge Chesler sentenced El Soury to three years of supervised release and fined him $7,500.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; 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 Assistant U.S. Attorneys Joseph N. Minish, 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, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
The New Jersey U.S. Attorney’s Office reorganized its health care fraud 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 $1.37 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: Albert Dayan Esq., Kew Gardens, New York
Cumberland County, New Jersey, Man Admits Bank RobberyRead the Press Release
CAMDEN, N.J. – A Cumberland, County, New Jersey, man today admitted robbing two banks with an accomplice, Acting U.S. Attorney William E. Fitzpatrick announced.
Quintin L. Jones, 35, pleaded guilty before U.S. District Court Judge Renée Marie Bumb to an information charging him with two counts of bank robbery.
According to documents filed in this case and statements made in court:
On Oct. 11, 2016, Jones and an accomplice robbed a Cape Bank in Upper Deerfield Township, New Jersey. According to bank employees and video surveillance, two men wearing black hooded sweatshirts entered the bank. While one man crouched near the entrance and pointed what appeared to be a black revolver at employees, the other man approached bank tellers and directed them to place cash into a bag.
Afterwards, both robbers fled with $24,926 in stolen money from the bank. Employees observed a tan or gold vehicle with a black soft-top rapidly exit the parking lot and turn in the direction of Vineland. Security cameras at the bank and an employee also captured pictures of the car. Investigators determined that the car matched the description of a Chrysler Sebring that was stolen on Sept. 22, 2016, during a carjacking in the parking lot of a Walmart in Mays Landing, New Jersey.
The following Saturday, on Oct. 15, 2016, troopers with the N.J. State Police responded to a vehicle fire at a parking lot in Parvin State Park in Pittsgrove Township, New Jersey. After fire personnel extinguished the flames, troopers determined that the vehicle was the same car that had been stolen in the carjacking on Sept. 22, 2016.
Subsequent investigation revealed that Jones and the accomplice had purchased a gas can at a Walmart in Vineland and then took a cab to a Wawa gas station near Parvin State Park, where they purchased gas shortly before police responded to the vehicle fire. Investigators also learned that Jones, who had been staying at a local hotel on Oct. 15, 2016, had been observed by an employee placing a large amount of cash in a bag. Acting on this and other information, the State Police later obtained state arrest warrants for Jones and the accomplice along with search warrants for their residences. Law enforcement personnel who searched the accomplice’s residence also found clothing consistent with the outfits worn by the two men during the Cape Bank robbery as well as a toy revolver, cash, gloves, and a car key that appeared to be for the Chrysler Sebring.
Jones also admitted robbing Newfield National Bank in Newfield, New Jersey, on Oct. 7, 2016, with the accomplice. During that robbery, Jones and the accomplice stole $5,557 before fleeing in the same stolen Chrysler Sebring.
The counts with to which Jones pleaded guilty each carry a maximum punishment of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 16, 2018.
The charges against Jones’ accomplice, Nathan L. Wallace of Vineland, remain pending, and he is considered innocent unless and until proven guilty.
Acting U.S. Attorney William E. Fitzpatrick credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; the FBI’s Philadelphia Division, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster; the N.J. State Police, under the direction of Col. Rick Fuentes. He also thanked the Vineland Police Department; the Hamilton Township Police Department; the Newfield Police Department; the Cumberland County Prosecutor’s Office; and the Salem County Prosecutor’s Office for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Megan J. Davies Esq., Cherry Hill, New Jersey
Florida Man Admits Role in Conspiracy to Distribute More Than 45 Kilograms of Narcotics in New JerseyRead the Press Release
TRENTON, N.J. – A Miami man today admitted his role in a conspiracy to distribute over 45 kilograms of narcotics, including heroin, fentanyl, cocaine, and morphine, Acting U.S. Attorney William E. Fitzpatrick announced.
Sauro D. Estevez Figueredo, 49, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to Count One of an indictment charging him with conspiracy to possess with intent to distribute more than one kilogram of heroin, five kilograms or more of cocaine, 400 grams or more of fentanyl, and morphine.
Figueredo was originally arrested with Edwin Alamo Jr., 22, Emmanuel Gonzalez, 33, both of Bronx, New York, Alberto Mora, 53, of Morriston, Florida, and Porfirio Peralta-Nunez, 38, of Jersey City, New Jersey, in February 2016. All five defendants have since pleaded guilty to their roles in the drug distribution conspiracy.
According to the documents filed in this case and statements made in court:
On Feb. 5, 2016, law enforcement observed a tractor trailer, driven by Figueredo and Mora, parked at an intersection near a store in Clifton, New Jersey. That afternoon, Gonzalez and Alamo drove to the tractor trailer and left with a suitcase given to them by Mora. Later, Peralta-Nunez arrived at the tractor trailer with two empty bags and left shortly afterwards with the bags filled.
Figueredo admitted that he collected narcotics and transported them via tractor trailer to New Jersey. He also admitted that Mora handed out a suitcase with 22 kilograms of heroin and afterwards, another conspirator took two bags containing fentanyl, morphine and heroin from the tractor trailer. He further admitted that there were two additional bags on the tractor trailer – one that contained 10 kilograms of fentanyl and one that contained 10 kilograms of cocaine – that would have been provided to other conspirators if not for law enforcement’s intervention.
The drug distribution 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. Figueredo’s sentencing is scheduled for Feb. 15, 2017.
The government is represented by Assistant U.S. Attorneys Meredith Williams and Elaine Lou of the Criminal Division in Newark.
Acting U.S. Attorney Fitzpatrick credited special agents with the Drug Enforcement Administration, under the direction of Special Agent in Charge Valerie A. Nickerson in Newark, with the investigation leading to today’s guilty plea.
Defense Counsel: Michael D’Alessio Esq., West Orange, New Jersey
Owner of Newark, New Jersey, Political Fundraising and Consulting Company Pleads Guilty to Tax EvasionRead the Press Release
NEWARK, N.J. – A Newark woman today admitted evading taxes while operating her political fundraising and consulting business in 2015, Acting U.S. Attorney William E. Fitzpatrick announced.
Linda O. Jumah, 35, pleaded guilty before Chief U.S. District Judge Jose L. Linares in Newark federal court to an information charging her with one count of tax evasion. She was released on $75,000 unsecured bond.
According to documents filed in this case and statements made in court:
As owner of Elite Strategies LLC, Jumah intentionally under-reported income that she received from the business for tax year 2015 by filing a false federal personal income tax return. Jumah admitted that after sharing proceeds with a business partner, she under-reported $121,941 in income for the 2015 tax year, resulting in a tax loss of $39,633.
The tax evasion charge carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 14, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jacques S. Pierre and Jihee G. Suh of the Special Prosecutions Division in Newark.
Defense counsel: Robert G. Stahl Esq., Westfield, New Jersey.
New York Man Admits Role in Stolen Identity Refund Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bronx, New York, man today admitted his role in an extensive scheme to obtain money through fraudulently obtained refund checks issued by the U.S. Treasury, Acting U.S. Attorney William E. Fitzpatrick announced.
Hector Urena pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court 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).
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.
The counts of conspiracy to steal government funds is punishable by up to five years in prison. The count of theft of government funds is punishable by a maximum potential penalty of 10 years in prison. Both counts are also punishable by a fine of up to $250,000, or twice the gain or loss caused by the offense. The count of aggravated identity theft is punishable a statutory mandatory prison sentence of two years that must be served consecutively to any term of imprisonment imposed for the violation of any other count. Sentencing is scheduled for Jan. 25, 2018.
Acting U.S. Attorney Fitzpatrick 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 guilty plea.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Criminal Division in Newark.
Defense counsel: James Kousouros Esq., New York
Man Charged with Conspiracy to Smuggle Heroin from NigeriaRead the Press Release
NEWARK, N.J. – A Nigerian national was arrested for his role in a conspiracy to use ingested pellets to smuggle heroin from Nigeria into the United States, Acting U.S. Attorney William Fitzpatrick announced today.
Michael Awotunde, 52, of Lagos, Nigeria, is charged by complaint with one count of conspiracy to import 100 grams or more of heroin.
Awotunde was arrested at John F. Kennedy International Airport on Nov. 3, 2017. He appeared this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court and was detained.
According to the complaint:
The FBI and Homeland Security Investigations (HSI) have been investigating a drug trafficking organization operating in Nigeria, New York, New Jersey, and elsewhere. During that investigation, law enforcement learned that the drug trafficking organization employed individuals to ingest heroin pellets and fly to the United States to deliver the drugs to other members of the organization.
On Jan. 26, 2017, one such courier, Ramota Okuleye, 64, also of Lagos, traveled from Nigeria to the United States after ingesting heroin for delivery to a confidential source (CS-1). On Jan. 27, 2017, Okuleye arrived in Newark and provided CS-1 with approximately 68 heroin pellets totaling 979 grams of heroin.
During their conversations, Okuleye explained that she primarily worked for Awotunde, but was transporting drugs for a different person. She told CS-1 to reach out to Awotunde for future transactions and provided CS-1 with a telephone number for Awotunde.
On Feb. 8, 2017, CS-1 spoke with Awotunde and the two agreed to work together in the future. On Sept. 8, 2017, Awotunde agreed to sell CS-1 heroin.
On Oct. 19, 2017, Okuleye returned to the United States after ingesting approximately 51 pellets that tested positive for heroin. She was arrested in October 2017 and charged by federal criminal complaint. Afterwards, Awotunde reached out to CS-1 and expressed concern over her arrest.
Awotunde faces a mandatory minimum penalty of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine.
The charges and allegations against Awotunde and Okuleye are merely accusations, and both defendants are considered innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Acting Special Agent in Charge Debra Parker; and U.S. Customs and Border Protection (CBP), under the direction of Acting Director of Field Operations Leon Hayward, New York Field Office, with the investigation.
The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office OCDETF/Narcotics Unit in Newark.
Defense counsel: Thomas F.X. Dunn Esq., Glen Rock, New Jersey.
Hudson County Man Admits Robbing Jersey City BankRead the Press Release
NEWARK, N.J. – A Bayonne, New Jersey, man today admitted robbing Bayonne Community Bank in Jersey City, New Jersey, on May 25, 2016, Acting U.S. Attorney William E. Fitzpatrick announced.
Patrick O’Boyle, 60, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an indictment charging him with one count of bank robbery.
According to documents filed in this case and statements made in court:
On May 25, 2016, O’Boyle robbed the Bayonne Community Bank by approaching the teller and demanding all “your 100s, 50s, and 20s and make it quick because my car is double parked outside.” O’Boyle had his left arm clutched at his side as if he had something under his hooded sweatshirt, which the teller thought might have been a gun. The teller handed him cash, and O’Boyle fled the bank.
The bank robbery charge carries a maximum 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 Feb. 20, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and officers of the Jersey City Police Department, under the direction of Director James Shea, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Ari B. Fontecchio of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Carol Gillen Esq., Assistant Federal Public Defender, Newark
Two Real Estate Brokers Plead Guilty to Defrauding Banks in $3.5 Million ‘Shotgun’ Loan SchemeRead the Press Release
NEWARK, N.J. – Two New York men today admitted their roles in a $3.5 million scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” Acting U.S. Attorney William E. Fitzpatrick announced.
Simon Curanaj, 62, of Yonkers, New York, and Michael Arroyo, 59, of Bronx, New York, each pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to separate informations charging them with conspiracy to commit bank fraud.
According to documents filed in the case and statements made in court:
From 2012 through January 2014, Curanaj, Arroyo, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on residential properties in New Jersey and New York, including a residential property on Havermeyer Avenue in the Bronx. In 2013, Curanaj, Arroyo, and others transferred ownership of the property to an individual living at the property and his family friend.
Curanaj, Arroyo, and others then applied, in the family friend’s name, for two HELOCs from two banks using the Havermeyer Avenue property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated the family friend’s income without his knowledge. In addition, the equity in the property was far less than the amount of the HELOC loans Curanaj, Arroyo, and others applied for.
The victim banks eventually issued loans to the family friend in excess of $500,000. After the victim banks deposited money into the family friend’s bank accounts, portions of the funds were disbursed to Curanaj, Arroyo, and others. Eventually, the family friend defaulted on the two HELOC loans.
The overall scheme resulted in $3.5 million in losses to the victim banks.
The conspiracy to commit bank fraud count carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing for Curanaj and Arroyo is scheduled for Feb. 27, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of the Federal Housing Finance Agency (FHFA) – Office of Inspector General, under the direction of Special Agent in Charge Steven Perez in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.Defense counsel:
Curanaj: Anthony Iacullo Esq.
Arroyo: Telesforo Del Valle Esq.Two Mercer County, New Jersey, Men Admit Armed Robbery Spree of Electronics Stores in New Jersey and PennsylvaniaRead the Press Release
CAMDEN, N.J. – Two Trenton, New Jersey, men admitted robbing Metro PCS stores in Willingboro, New Jersey, Lumberton, New Jersey, and Levittown, Pennsylvania, in September and October 2016, Acting U.S. Attorney William E. Fitzpatrick announced today.
Rodney Day, 26, pleaded guilty today before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of conspiracy to commit Hobbs Act robberies. Zeldrick Nance, 30, pleaded guilty before Judge Rodriguez to a separate information with the same charge on Oct. 30, 2017. Both defendants have been in custody since their arrest on Jan. 3, 2017.
According to documents filed in this case and statements made in court:
On Sept. 29, 2016, Day, Nance and Lisa Anderson, 34, of Griffithville, Arkansas, drove to the Willingboro Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped the store occupants and placed them into a store bathroom. Meanwhile, Anderson stole cellular telephones and money from the cash registers. During the robbery, Day demanded the keys to a car owned by one of the victims. Day, Nance, and Anderson fled with the stolen cellular telephones and money in that stolen car.
On Oct. 7, 2016, Day, Nance, and Anderson drove to the Lumberton Metro PCS Store. Day brandished what appeared to be a firearm while Nance duct taped a store occupant, put that victim in a storage room, and took the victim’s wallet and keys. Meanwhile, Anderson stole cellular telephones and money from the cash registers.
On Oct. 12, 2016, Day, Nance, and Anderson drove to the Levittown Metro PCS Store. Day once again brandished what appeared to be a firearm while Nance duct taped the victims inside the store and put them in a store bathroom. Anderson subsequently entered the store and stole cellular telephones and money from the cash registers.
The charge of conspiracy to commit Hobbs Act robberies carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing for Day and Nance is set for Feb. 14, 2018 and Feb. 7, 2018, respectively.
Anderson has been in custody since her arrest on Jan. 3, 2017. She has pleaded guilty to her role in the robberies and is currently scheduled for sentencing on Dec. 5, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to this week’s guilty pleas. He also thanked the Willingboro, Lumberton, and Levittown police departments, as well as the Burlington and Mercer County Prosecutor’s Offices for their assistance in this case.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Day: Peter A. Levin Esq., Philadelphia
Nance: Robert Wolf Esq., Westmont, New Jersey
Former Bordentown Township Police Chief Charged with Hate Crime and Use of Excessive Force During ArrestRead the Press Release
CAMDEN, N.J. – The retired chief of the Bordentown Township Police Department was arrested and charged today with committing a hate crime and violating a man’s civil rights by using excessive force during an arrest, Acting U.S. Attorney William E. Fitzpatrick and FBI Special Agent in Charge Timothy Gallagher announced.
Frank M. Nucera Jr., 60, of Bordentown, New Jersey, was arrested by FBI agents this morning and charged with a hate crime assault and the deprivation of civil rights under color of law. Nucera, who was the township administrator as well as its police chief before he retired earlier this year, will make his initial appearance before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.
“The nobility of police officers is rooted in their selfless commitment to protect our communities and their pledge to honor our constitutional values. As Chief of the Bordentown Township Police Department, the defendant dishonored the profession by doing neither,” Acting U.S. Attorney Fitzpatrick said. “The complaint alleges that the defendant harbored an intense racial animosity towards African Americans, and on September 1, 2016, that senseless hatred led to the unlawful assault of a handcuffed and defenseless prisoner. The conduct alleged is a shocking breach of the duty of every police officer to provide equal justice under the law and never to mistreat a person in custody. As a result, the former chief of police is now a charged federal criminal defendant.”
“Police officers take an oath to uphold the law. The FBI works to ensure that they are held accountable when they violate that oath and break the law,” SAC in Charge of the Newark FBI Field Office said. “We rely on the police to protect the public. The few who take advantage of that public trust, at any level, will be investigated and prosecuted to the full extent of the law."
According to documents filed in this case and statements made in court:
On Sept. 1, 2016, two Bordentown Township police officers responded to a phone call from the Bordentown Ramada, complaining that two teenagers had stayed in a room at the hotel without paying. The teens were listed in the complaint as “Civilian 1,” an 18-year-old African American man, and “Civilian 2,” a 16-year-old African American girl. After the officers arrived and questioned the teenagers, the situation escalated into a physical confrontation, with both teens attempting to resist arrest. The officers called for backup, and numerous officers, including then-Chief Nucera, arrived on the scene.
After Civilian 1 was handcuffed and was being escorted out of the hotel by police, Nucera allegedly approached him from behind and slammed the man’s head into a metal doorjamb. A subordinate police officer later surreptitiously recorded Nucera making racist and hostile remarks about Civilian 1, Civilian 2, and African Americans more generally. He repeatedly used racial slurs to refer to Civilian 1 and Civilian 2, and said: “[t]hese fucking people” should “[s]tay the fuck out of Bordentown.” He also said it “would have been nice” if officers could have used a police dog during the arrest.
The use of excessive force and hate crime counts with which Nucera is charged each carry a maximum penalty of 10 years in prison and a $250,000 fine.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorneys Molly S. Lorber and Sarah M. Wolfe of the Criminal Division in Trenton.
Defense counsel: Tracy Riley Esq., Mount Holly, New Jersey
Federal Inmate Admits Possessing Images of Child Sexual Abuse While He Was in PrisonRead the Press Release
CAMDEN, N.J. – A federal inmate already serving a lengthy sentence for a child pornography conviction today admitted possessing images of child pornography while in prison, Acting U.S. Attorney William E. Fitzpatrick announced.
Erik M. Smith, 36, of Iron Mountain, Michigan, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with possession of child pornography through the use of a contraband micro SD card. Smith was already serving a 235-month sentence at Federal Correctional Institution Fort Dix (FCI Fort Dix) for his conviction in the Western District of Michigan for receipt of child pornography. Smith had a scheduled release date of March 26, 2027, prior to today’s guilty plea.
According to documents filed in this case and statements made in court:
Smith possessed a 16-gigabyte micro SD card containing 263 images of child pornography, including 213 sexually explicit images of prepubescent children. He told another inmate the SD card included “mostly boy stuff,” referring to images of boys. Smith admitted that he downloaded these and other images of child pornography from a cloud account on behalf of other inmates. Smith was one of five federal inmates arrested on April 26, 2017, on the East Compound of FCI Fort Dix and charged with new counts of distributing images and videos of child sexual abuse within the prison through the use of contraband cellphones and micro SD cards, as well as selling and possessing with intent to sell such images and videos on federal property, and conspiracy to commit these offenses.
The count of possession of child pornography to which Smith pleaded guilty carries a mandatory minimum sentence of 10 years in prison, due to Smith’s prior conviction, a maximum potential penalty of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for Feb. 13, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s guilty plea. He also thanked officials of the Bureau of Prisons at FCI Fort Dix for their assistance with the investigation.
The government is represented by Assistant U.S. Attorneys Gabriel Vidoni and Alyson M. Oswald of the U.S. Attorney’s Office’s Criminal Division in Camden.
The charges and allegations in the complaints against the remaining four federal inmates –Anthony Jeffries, 32, of Orange, Virginia; Brian J. McKay, 46, of Brookhaven, Pennsylvania; Jordan T. Allen, 30, of Plain City, Ohio; and Christopher Roffler, 30, of Virginia Beach, Virginia – are merely accusations, and those defendants are considered innocent unless and until proven guilty.
Defense counsel: Mark W. Catanzaro Esq., Mount Holly, New Jersey
Virginia Man Sentenced to 87 Months in PrisonRead the Press Release
CAMDEN, N.J. – A Virginia man was sentenced today to 87 months in prison for robbing four banks – two in New Jersey and two in Baltimore, Maryland – during a spree in December 2016, Acting U.S. Attorney William E. Fitzpatrick announced.
Bruce Wayne Higgins, 43, of Herndon, Virginia, previously pleaded guilty before U.S. District Court Judge Renée Marie Bumb to a four-count information charging him with robbing: (1) Dec. 10, 2016 – Howard Bank in Baltimore; (2) Dec. 13, 2016 -- Northwest Bank in Baltimore; (3) Dec.15, 2016 – TD Bank N.A. in Ocean City, New Jersey; and (4) Dec. 16, 2016 – Wells Fargo Bank in Atlantic City, New Jersey. Judge Bumb imposed the sentence today in Camden federal court
According to documents filed in this case and statements made in court:
On Dec. 15, 2016, a man entered a TD Bank in Ocean City and presented a teller with a note that read: “GUN IN Pocket, MONEY NOW or –BANG-.” He then took cash from the teller and fled on foot. Law enforcement officers issued a bulletin with a bank surveillance photograph. The robber was later identified as Higgins.
Through coordination with the FBI in Baltimore, Maryland, New Jersey agents learned that a robber with a similar physical description had robbed two banks and a business earlier that week in Baltimore.
On Dec. 16, 2017, a man fitting Higgins’ description walked into a TD Bank in Atlantic City. After recognizing Higgins from the police bulletin, a bank employee triggered the bank’s “hold-up” alarm, and Higgins left the bank and got into a taxicab. Officers from the Atlantic City Police Department (ACPD) arrived at the TD Bank and, following up on information provided by witnesses, issued a bulletin describing the taxicab’s number and direction of travel.
Having received the bulletin describing the taxicab, another ACPD officer located the taxicab near a Wells Fargo Bank in Atlantic City while Higgins was allegedly in the process of robbing that bank. Higgins entered the Wells Fargo Bank and presented a teller with a note that read, “Gun in Pocket, Money Now or Bang now.” After Higgins took the money and fled the bank, ACPD officers arrested him.
Higgins admitted to robbing two banks and a business in Baltimore, Maryland, as well as the two New Jersey banks. During each of the bank robberies, Higgins threatened the bank’s employees and fled.
In addition to the prison term, Judge Bumb sentenced Higgins to three years of supervised release and ordered him to pay restitution of $23,390.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark and Special Agent in Charge Gordon Johnson in Baltimore; the Ocean City Police Department, under the direction of Chief Chad Callahan; the Atlantic City Police Department, under the direction of Chief Henry White; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Baltimore County Police, under the direction of Chief Terrance Gordon; and the Fairfax County Police, under the direction of Chief of Police Col., Edwin C. Roessler Jr., with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S. Attorney’s Office in Camden.
General Foreman at Port Elizabeth Convicted of 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 convicted at trial today for fraudulently collecting a nearly $500,000 annual salary, much of which was for work he never performed, Acting U.S. Attorney William E. Fitzpatrick announced.
Paul Moe Sr., 66, of Atlantic Highlands, New Jersey, was convicted 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 in Newark federal court. The jury deliberated for two hours before returning its verdict.
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.
Each count is punishable by up to twenty years in prison and a $250,000 fine. Sentencing will be scheduled at a later date.Acting U.S. Attorney Fitzpatrick 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 Special Agent in Charge Michael C. Mikulka in New York; the Office of Employee Benefits Security Administration (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.
The government was 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
Leader of Drug Trafficking Organization Operating in New Jersey Extradited from the Dominican RepublicRead the Press Release
NEWARK, N.J. – A Dominican national was extradited to the United States over the weekend for his alleged role in a drug trafficking organization responsible for over 16 kilograms of heroin that were seized in New Jersey and New York, Acting U.S. Attorney William E. Fitzpatrick announced.
Wellington Luna De La Cruz, a/k/a “Orlando Luna Cruz,” a/k/a “Luis Echevarria,” a/k/a “El Mofle,” 40, is charged by indictment with one count of conspiracy to distribute more than one kilogram of heroin and one count of distribution and possession with intent to distribute more than one kilogram of heroin. De La Cruz appeared this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court and was detained.
According to documents filed in this and related cases:
Since January 2015, the Drug Enforcement Administration (DEA) has been investigating a drug trafficking organization (DTO) operating in New Jersey, the Dominican Republic, Mexico, and elsewhere. The investigation revealed that De La Cruz is an alleged narcotics trafficker and high-ranking member of the DTO.
The narcotics were generally imported from Mexico and transported via truck to the New Jersey and New York areas. De La Cruz allegedly instructed certain DTO members to receive the shipments, deliver payment to the truck drivers or other suppliers, and then distribute specified amounts of narcotics to other members of the DTO.
The DTO has been linked to several multiple-kilogram seizures of heroin, including two kilograms of heroin seized in New York in March 2015; four kilograms of heroin seized on Route 80 near Saddle Brook, New Jersey, in November 2015; and 10 kilograms of heroin seized in Elizabeth, New Jersey, in January 2017.
If convicted, De La Cruz faces a mandatory minimum sentence of 10 years imprisonment, a maximum sentence of life imprisonment, and a fine of $10 million per count.
This case is being conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF). The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.
Acting U.S. Attorney Fitzpatrick credited special agents with the DEA, under the direction of Special Agent in Charge Valerie A. Nickerson, and officers with the N.J. State Police, Trafficking North Unit, under the direction of Col. Rick Fuentes, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the OCDETF/Narcotics Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Two Men Admit Roles in Drug Trafficking ConspiracyRead the Press Release
TRENTON, N.J. – Two men today admitted their respective roles in an international drug trafficking organization, Acting U.S. Attorney William E. Fitzpatrick announced.
Wilson Madrid, 31, of Norcross, Georgia, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with conspiracy to launder money. Dany Francisco-Valerio, 44, of Bronx, New York, pleaded guilty before Judge Sheridan to an information charging him with conspiracy to distribute heroin.
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, Francisco-Valerio 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.
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.
The money laundering charge to which Madrid pleaded guilty carries a maximum penalty of 20 years in prison and a $500,000 fine. Sentencing is scheduled for Jan. 30, 2018.
The narcotics charge to which Francisco-Valerio pleaded guilty carries a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for Jan. 31, 2018.
Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration’s (DEA) New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, officers of the N.J. State Police, under the direction of Superintendent Col. Joseph R. Fuentes, and officers from the DeKalb (Illinois) Police Department, under the direction of Chief Gene Lowrey, with the investigation leading to today’s guilty pleas.
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:
Madrid: Mark Davis Esq., Hamilton, New Jersey
Francisco-Valerio John D. Lynch Esq., Jersey City, New Jersey
Middlesex County, New Jersey, Man Arrested for Using Phony Payments, False Identity Theft Claims to Obtain FundsRead the Press Release
NEWARK, N.J. – An Old Bridge, New Jersey, man was arrested today for allegedly using phony payments and false identity theft claims to deceive credit card companies and banks into giving him funds and credit, Acting U.S. Attorney William E. Fitzpatrick announced.
Sandy John Masselli, 55, is charged by complaint with two counts of bank fraud and two counts of wire fraud. FBI agents arrested Masselli at his residence this morning. Masselli is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint:
From June 2014 through July 2017, Masselli engaged in three separate but related schemes to fraudulently obtain credit and funds from various credit card companies and two brokerage firms.
In one scheme, Masselli opened accounts with certain credit card companies, made purchases with these accounts until he had almost reached or exceeded the credit limit, and then sent payments from bank accounts that he knew did not have sufficient funds to cover the purchases. Before the fraudulent payments were rejected for insufficient funds, the credit card companies temporarily credited Masselli’s accounts based on those payments, providing him access to additional credit and allowing him to continue to make purchases. Masselli failed to pay these balances and the credit card companies sustained substantial losses.
In another scheme, Masselli opened credit accounts with two credit card companies, made thousands of dollars in purchases, and then falsely represented to these credit card companies that the accounts had been opened fraudulently and used without his authorization, causing these companies to close the accounts and sustain losses.
As part of a third scheme, Masselli attempted to deposit more than $600,000 in checks from a closed account into a new brokerage account, which he then tried to use for various personal expenses. Those transfers were unsuccessful because the checks he deposited were ultimately returned as unpaid.
The bank fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The wire fraud counts each carry a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
Acting U.S. Attorney Fitzpatrick credited special agents of 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 Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Man Admits Smuggling Chocolate-Covered Heroin into Newark Liberty International AirportRead the Press Release
TRENTON, N.J. – A Guatemalan citizen today admitted transporting three kilograms of heroin that had been coated in chocolate in a failed attempt to bring the drugs undetected through Newark Liberty International Airport, Acting U.S. Attorney William E. Fitzpatrick announced.
Jacobo Leonel Orellana-Estrada, 21, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of possession with intent to distribute more than one kilogram of heroin.
According to the documents filed in this case and statements made in court:
On June 11, 2017, Orellana-Estrada arrived at Newark Liberty International Airport as a passenger aboard a commercial airline flight from Guatemala City, Guatemala. U.S. Customs and Border Protection (CBP) officers stopped Orellana-Estrada at customs inspection and searched his luggage. In one of his bags, they discovered what appeared to be six small single-layer cakes that were actually packages of heroin coated in a thin layer of chocolate and wrapped in paper.
The count of possession with intent to distribute more than one kilogram of heroin carries a maximum potential penalty of life in prison. Sentencing is scheduled for Jan. 29, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of CBP, under the direction of Acting Director of Field Operations Leon Hayward, New York Field Office, and U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Newark Field Office, under the direction of Acting Special Agent in Charge Debra Parker, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the Narcotics/OCDETF unit of the U.S. Attorney’s Office in Newark.
Defense counsel: .Kevin Carlucci, Esq., Assistant Federal Public Defender
New York Doctor Convicted of Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor practicing in Staten Island, New York, was convicted at trial today for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.
Thomas V. Savino, 58, of Staten Island, was found guilty on all 10 counts of an indictment charging him with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud.
Savino was convicted following a six-day trial before U.S. District Judge Stanley R. Chesler in Newark federal court. The jury deliberated for two and a half hours before returning its verdict.
According to documents filed in this case and the evidence at trial:From July 2012 through April 2013, Savino received cash bribes totaling at least $25,000 from BLS employees and associates in return for referring his patients’ blood specimens to BLS. Savino’s referrals generated approximately $375,000 in lab business for BLS.
The investigation has thus far resulted in 51 convictions – 37 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.
The Anti-Kickback and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud counts are each punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is set for Feb. 14, 2018.
Acting U.S. Attorney William E. Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin; 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 and Assistant U.S. Attorney Erica Liu of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
The New Jersey U.S. Attorney’s Office reorganized its health care fraud 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 $1.37 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: Eric R. Breslin Esq., Newark and Melissa S. Geller, New YorkFormer Investment Advisor Who Stole Client’s Retirement Savings Sentenced to 37 Months for Wire Fraud and Investment Advisor FraudRead the Press Release
TRENTON, N.J. – A former financial advisor entrusted with advising clients on investments was sentenced today to 37 months in prison for defrauding his client, a former factory worker, out of his retirement savings and using the funds for his own benefit, Acting U.S. Attorney William E. Fitzpatrick announced.
Jesse Holovacko, 39, of Sayreville, New Jersey, was previously convicted on all counts of an indictment charging him with six counts of wire fraud and one count of investment advisor fraud following a five-day trial before U.S. District Judge Michael A. Shipp, who imposed the sentence today in Trenton federal court.
According to documents filed in this case and the evidence at trial:
Holovacko was an investment advisor at a financial institution located in New Jersey. In 2012, Holovacko went to the factory where the victim worked, met with the victim and some of his co-workers, and signed the victim on as a client, transferring the victim’s pension savings into an Individual Retirement Account (IRA). The victim entrusted Holovacko with managing the victim’s retirement savings.
From December 2013 through August 2014, Holovacko falsely told the victim that he would use retirement account funds to purchase bonds for him and advised the victim to transfer the retirement money to the victim’s bank account and then provide cashier’s checks made out directly to the financial advisor, telling the victim it would make it easier to purchase the bonds. Based on these false representations, Holovacko obtained 18 cashier’s checks totaling approximately $255,000.
Holovacko deposited all of the cashier’s checks into his own personal bank account and spent it for his car loan and mortgage payments, dining out, concerts and clubs, baseball game tickets, as well as taking out approximately $150,000 in cash. In order to continue deceiving the victim, Holovacko promised the victim documentation of the purported investments in bonds.
In addition to the prison term, Judge Shipp sentenced Holovacko to three years of supervised release. Forfeiture and restitution will be determined at a hearing scheduled for Nov. 15, 2017.
Acting U.S. Attorney Fitzpatrick credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph V. Cronin in Newark, and agents with the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s verdict. He also thanked the Financial Industry Regulatory Authority (FINRA) and the N.J. Bureau of Securities of the New Jersey Attorney General’s Office for their assistance.
The government is represented by Assistant U.S. Attorneys Jihee G. Suh and Zach Intrater of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Paul Condon Esq., Jersey City, New Jersey
Essex County, New Jersey, Man Pleads Guilty to Armed Robbery and CarjackingRead the Press Release
NEWARK, N.J. –A Newark man today admitted robbing a Newark jewelry store and then stealing a car at gunpoint immediately afterwards, Acting U.S. Attorney William E. Fitzpatrick announced.
Orlando Nieves-Velez, 29, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an indictment charging him with one count of Hobbs Act robbery, one count of carjacking, and one count of using a firearm in furtherance of a crime of violence.
According to the documents filed in this case and statements made in court:
On Dec. 1, 2016, Nieves-Velez robbed a jewelry store in Newark while brandishing a firearm. During the robbery, Nieves-Velez pressed a gun to the back of an employee’s neck and threatened to shoot him if the other employees didn’t give him jewelry.
After leaving the store with more than $20,000 in jewelry, Nieves-Velez stepped in front of a 2006 Nissan Altima. Nieves-Velez pointed his gun at the driver and ordered the driver out of the car. Nieves-Velez fired his gun into the air before fleeing in the Altima.
The charge of Hobbs Act robbery carries a maximum penalty of 20 years in prison. The carjacking charge carries a maximum potential penalty of 15 years in prison. Nieves-Velez also faces a mandatory minimum prison term of 10 years in prison for discharging his weapon in connection with the carjacking, which must be served consecutively to any other sentence imposed. Each of these counts also carries a maximum fine of $250,000. Sentencing is scheduled for Feb. 20, 2018.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos in Newark, and the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: Kevin Carlucci Esq., Assistant Federal Public Defender, Newark
South Jersey Brother and Sister Admit Kickback Conspiracy Involving Military Parts for the U.S. NavyRead the Press Release
NEWARK, N.J. – The president and secretary of a Cherry Hill, New Jersey, machine shop today admitted paying kickbacks in return for subcontract work from a Philadelphia company that manufactured military parts for the U.S. Navy, Acting U.S. Attorney William E. Fitzpatrick announced.
John Schallenhammer, 57, of Atco, New Jersey, and his sister, Theresa Schallenhammer, 53, of Cherry Hill, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to separate informations charging them with conspiracy to violate the federal anti-kickback act. They were both released on $50,000 unsecured bond.
According to documents filed in this case and statements made in court:
Christopher Sanchirico, 55, of King of Prussia, Pennsylvania, was the assistant purchasing manager for an entity identified in the information as “Subcontractor 1,” which was located in Philadelphia and manufactured shock-hardened circuit breakers and switchgears for installation on U.S. Navy surface ships, submarines, and aircraft carriers. Subcontractor 1 performed work on multiple U.S. Navy and Defense Logistics Agency maritime contracts as a first-tier subcontractor to a prime contractor working for the United States.
In July 2013, John Schallenhammer, the president of a machine shop identified in the information as “Subcontractor 2,” made an agreement with Sanchirico. In return for Sanchirico’s assistance in securing a manufacturing contract between Subcontractor 1 and Subcontractor 2, John Schallenhammer paid Sanchirico between five and 10 percent of the gross revenue from circuit breaker and switchgear components that Subcontractor 2 provided to Subcontractor 1. Theresa Schallenhammer, Subcontractor 2’s secretary, maintained records of the payments and sometimes made bank withdrawals for the kickbacks when John Schallenhammer was unable to do so.
From 2013 to 2016, the Schallenhammers paid Sanchirico approximately $150,000 in cash kickbacks.
John and Theresa Schallenhammer both face a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for both defendants is scheduled for Feb. 6, 2018.
Sanchirico pleaded guilty to a related charge on Oct. 10, 2017 and awaits sentencing.
Acting U.S. Attorney Fitzpatrick credited agents of the Naval Criminal Investigative Service, Northeast Field Office, under the direction of Special Agent in Charge Leo S. Lamont in Newport, Rhode Island, and agents of 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 investigation leading to the guilty pleas. He also thanked the U.S. Attorney’s Office for the Eastern District of Pennsylvania, under the direction of Acting U.S. Attorney Louis D. Lappen, for its assistance.
The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the U.S. Attorney’s Office’s National Security Unit in Newark.
Defense counsel:
John Schallenhammer: Blair R. Zwillman Esq., Millburn, New Jersey
Theresa Schallenhammer: Henry E. Klingeman Esq., and Ernesto Cerimele Esq., Newark
Former Philadelphia District Attorney Rufus Seth Williams Sentenced to Five Years in Prison for Federal Bribery ChargeRead the Press Release
PHILADELPHIA – Former Philadelphia District Attorney Rufus Seth Williams, who previously admitted that he accepted tens of thousands of dollars’ worth of concealed bribes in exchange for his agreement to perform official acts, defrauded a nursing home and family friends of money earmarked for a family member’s care, and used political action committee funds and official government vehicles for his personal benefit, was sentenced today to 60 months in prison, Acting New Jersey U.S. Attorney William E. Fitzpatrick announced.
Williams, 50, of Philadelphia, previously pleaded guilty before U.S. District Judge Paul S. Diamond to Count One of a superseding indictment charging him with travel and use of interstate facilities to promote and facilitate bribery contrary to Pennsylvania law. Judge Diamond imposed the sentence today in Philadelphia federal court.
“Mr. Williams swore an oath that he would act according to the highest legal and ethical standards,” Acting U.S. Attorney Fitzpatrick said. “Yet, as Philadelphia’s chief law enforcement officer, he accepted lavish gifts and other bribes in return for official favors, and even defrauded his own political action committee and his mother’s nursing home to pay for his personal expenses. Today’s sentence is a fitting punishment for an elected official who put his financial interests above his constituents and the dedicated public servants of the District Attorney’s Office.”
"With today’s sentencing, Seth Williams has officially been brought to justice. But the damage he's done to the public trust is much harder to resolve," said Michael Harpster, Special Agent in Charge of the FBI's Philadelphia Division. "Williams traded on his elected office to live larger than its six-figure salary would allow – and as a result, lost both. His corruption now claims several years of his freedom, as well."
According to documents filed in this case and statements made in court:
From July 2010 through May 2015, Williams had an arrangement with Mohammad N. Ali (identified in the indictment as “Business Owner #1”) in which Williams, while serving as the Philadelphia District Attorney, accepted trips, money, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Ali, including contacting a Philadelphia police official in order to pressure and advise the official to assist Ali with security screenings at the airport. Williams also agreed to assist with criminal charges brought by the Philadelphia District Attorney’s Office against Ali’s associate.
From March 2012 through July 2015, Williams had an arrangement with Michael Weiss (identified in the superseding indictment as “Business Owner #2”) in which Williams accepted airline tickets, money, an automobile, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Weiss, including appointing him as Special Advisor to the Philadelphia District Attorney’s office in November 2012 and providing an official letter to the California Department of Alcoholic Beverage Control in order to influence a then-pending hearing to revoke or suspend Weiss’ California liquor license. In July 2015, Williams also obtained a police accident report at Weiss’ request.
In addition, from February 2012 through November 2013, Williams diverted his mother’s pension and Social Security payments to pay for his own personal expenses instead of applying them to his mother’s nursing home costs, as was his obligation under agreements with the nursing home. After accepting $10,000 from his mother’s friends intended to cover expenses for her nursing home care, Williams spent that money on his personal expenses as well.
From August 2010 through August 2016, Williams also defrauded the “The Committee to Elect Seth Williams” by using its funds for personal expenditures, including parties, birthday dinners, massages, and fitness classes. He concealed this fraud by providing false or incomplete reports to the Commonwealth of Pennsylvania and to the City of Philadelphia.
Lastly, Williams engaged in a scheme to use official vehicles – which were provided by the City of Philadelphia and a federal narcotics law enforcement program – for his personal benefit. Williams used the vehicles to transport himself, family members, friends and other non-employees on non-district attorney business, including personal trips outside of Philadelphia.
“In his position as Philadelphia’s District Attorney, Williams abused the trust placed in him by the public and today’s sentencing sends a clear message that such action will not be tolerated,” said Acting IRS-Criminal Investigation Special Agent in Charge Edward Wirth. "Today's sentencing is a direct result of the excellent partnership IRS-CI, our fellow law enforcement partners, and the U.S. Attorney’s Office have in combating violations of federal law.”
“Homeland Security Investigations is pleased to have teamed with our law enforcement partners to hold accountable public officials who betray the trust of the community they are sworn to serve by engaging in criminal behavior,” said Marlon V. Miller, Special Agent in Charge of HSI Philadelphia. “Let Mr. Williams’ sentencing serve as a proof that HSI will continue to work with our law enforcement partners to investigate and bring to justice public officials who feel they are above the law.”
In addition to the prison term, Judge Diamond sentenced Williams to three years of supervised release. Judge Diamond also ordered Williams to pay forfeiture of $33,009 and restitution of $58,422.83.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Michael Harpster in Philadelphia; special agents of IRS-Criminal Investigation, Philadelphia Office, under the direction of Acting Special Agent in Charge Edward Wirth, and special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) Philadelphia, under the direction of Special Agent in Charge Marlon V. Miller, with the investigation. He also thanked the U.S. Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Nick DiGiulio, for its participation in the investigation.
The U.S. Attorney in the Eastern District of Pennsylvania recused his office from the investigation involving the Philadelphia District Attorney’s Office, and the matter was assigned to the U.S. Attorney’s Office for the District of New Jersey. Two prosecutors from the Eastern District of Pennsylvania office were assigned to the case, subject to the supervision of prosecutors in the New Jersey office.The government is represented by Deputy Chief Eric W. Moran of the U.S. Attorney’s Office Criminal Division and Chief of Appeals Robert A. Zauzmer and Assistant U.S. Attorney Vineet Gauri of the U.S. Attorney’s Office in Philadelphia.
Defense counsel: Thomas F. Burke Esq., Philadelphia.
Former Deportation Officer Sentenced to Seven Years in Prison for Accepting Bribes, Harboring an Undocumented Immigrant and Lying to U.S. Immigration AuthoritiesRead the Press Release
NEWARK, N.J. – A Somerset, New Jersey, man was sentenced today to 84 months in prison for accepting cash bribes and sex in exchange for providing employment authorization documents and concealing his employment of an undocumented immigrant at a hair salon he owned, Acting U.S. Attorney William E. Fitzpatrick announced.
Arnaldo Echevarria, 40, a former deportation officer with Immigration and Customs Enforcement (ICE), was previously convicted of Counts 1-6 and Counts 8 and 9 of an indictment charging him with seven counts of accepting bribes, one count of harboring an undocumented immigrant and one count of making false statements to immigration authorities. He was acquitted on Count 7, one of the bribery counts. Echevarria was convicted following a one-week trial before U.S. District Judge Esther Salas, who imposed the sentence today in Newark federal court.
According to statements made in court and evidence presented at trial:
As a deportation officer, Echevarria enforced immigration and customs laws by identifying, locating, arresting and removing undocumented immigrants from the United States and by supervising certain undocumented immigrants who had not yet been deported. Undocumented immigrants subject to a deportation order often were able to obtain employment authorization documents which allowed them to legally work in the United States for a one-year period and which could be renewed annually.
Between 2012 and 2014, Echevarria agreed to obtain employment authorization documents for undocumented immigrants who were not lawfully present in the country. In return, Echevarria demanded and received approximately $75,000 in cash bribes, and demanded and received sex from one individual. In order to conceal them from immigration authorities, Echevarria falsely stated that they had been granted temporary protected status, which allows nationals from certain countries experiencing environmental disaster, ongoing armed conflict, or other extraordinary conditions to lawfully remain in the United States. None of the individuals who bribed Echevarria had actually applied for, or received, temporary protected status.
In December 2012, Echevarria received permission from his superiors at ICE to open a hair salon in West Orange, New Jersey. Echevarria certified to ICE that the hair salon would not conflict with ICE matters and would not involve undocumented workers. However, Echevarria employed his girlfriend at the time, an undocumented immigrant, to manage the salon. Echevarria’s girlfriend had entered the United States illegally, using the name and identification of an individual in Puerto Rico to obtain a Pennsylvania identification card.
Echevarria knew his girlfriend resided in the United States illegally. Prior to opening the hair salon, Echevarria queried the name and date of birth of his girlfriend’s alias in various law enforcement databases. After opening the salon, Echevarria ensured that his girlfriend’s illegal status remained a secret by signing the lease for her apartment and by placing her cable and electric bills in his name. In addition to driving his girlfriend and other employees to and from the salon each day, Echevarria also paid the employees in cash and never asked them to fill out employment eligibility paperwork.
In addition to the prison term, Judge Salas sentenced Echevarria to three years of supervised release and ordered to pay forfeiture of $75,000.
Acting U.S. Attorney Fitzpatrick credited special agents of ICE, Office of Professional Responsibility, under the direction of Special Agent in Charge Keith Barwick, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark, and Barbara Llanes, Deputy Chief of the General Crimes Unit.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey
Owner of Computer School Sentenced to Two Years in Prison for $2.8 Million Veterans’ Retraining Assistance Program Education FraudRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, woman who owned a computer training center was sentenced today to 24 months in prison for stealing $2.8 million from a program designed to help veterans find employment, Acting U.S. Attorney William E. Fitzpatrick announced.
Elizabeth Honig, 52, of Morganville, New Jersey, previously pleaded guilty before U.S. District Judge Peter Sheridan to an information charging her with one count of theft of government funds. Judge Sheridan imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Honig owns Computer Insight Learning Center (CILC), a computer training school based in Eatontown, New Jersey. She helped 182 veterans enroll to receive federal funding under a program – funded by the Department of Veterans Affairs (VA) and the Department of Labor – designed to help older, unemployed veterans receive training and find employment in high demand occupations. The vast majority of these veterans were either not eligible or not actually attending the training.
Honig’s program was approved by the VA to provide education and training to military veterans, including veterans who received tuition assistance under the Veteran’s Retraining Assistance Program (VRAP), which offered up to 12 months of benefits for older, unemployed veterans between the ages of 35 and 60. This program provided training assistance to unemployed veterans for programs designed to lead to a high-demand occupation.
Honig admitted she logged on to the applications system more than 100 times and certified that she was the actual veteran who was applying for benefits. She supplied false information about employment status to qualify to attend her school and receive funding from the VA. Honig then certified to the VA that the veterans enrolled in her Business Software Applications Program – approved by the VA as a 14-week course costing approximately $4,000 – were attending for up to one year. Honig also certified that the veterans were attending full-time, in-class, knowing that 62 of those veterans lived out of the state. CILC is not eligible to be approved to provide online education.
Honig allowed veterans to attend less than the required hours, to stop attending prior to completion, or, in many cases, never attend at all. Honig failed to report the non-attendance to VA, which is required by law after 30 days of non-attendance, as long as the veterans continued to pay her a monthly fee. This caused the VA to continue payments to veterans who were not entitled to the funds. Honig’s monthly fee of approximately $750 also resulted in overpayments by veterans far in excess of the VA approved $4,000 course tuition.
In addition to the prison term, Judge Sheridan sentenced Honig to three years of supervised release. Under terms of the plea agreement, Honig consented to a forfeiture judgment of $1,274,154 and agreed to pay restitution of $2,831,455.
Acting U.S. Attorney Fitzpatrick credited the Northeast Field Office, U.S. Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Donna L. Neves; and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Deborah J. Gannett and Jacob T. Elberg, Chief of the Healthcare and Government Fraud Unit in Newark.
Defense counsel: Evan Nappen Esq., Eatontown, New Jersey
Mercer County, New Jersey, School Bus Driver Sentenced to 121 Months in Prison for Distributing Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Yardville, New Jersey, man was sentenced today to 121 months in prison for using his e-mail account to distribute images of child sexual abuse, Acting U.S. Attorney William. E Fitzpatrick announced.
Christopher Walsh, 32, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of receiving and distributing child pornography. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From June 15, 2014 through Jan. 10, 2016, Walsh’s email account either sent or received a total of 1,590 files that contained content constituting child pornography. Walsh, who was a school bus driver, admitted that on Aug. 2, 2015, he knowingly emailed a video depicting child sexual abuse to another individual.
In addition to the prison term, Judge Cooper sentenced Walsh to 10 years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), New Jersey Field Office under the direction of Acting Special Agent in Charge Debra Parker, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Molly S. Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Assistant Federal Public Defender Lisa Van Hoeck Esq., Trenton
Head of Camden Nonprofit Sentenced to 70 Months in Prison for Defrauding Medicaid and Embezzling over $1.5 MillionRead the Press Release
CAMDEN, N.J. – The executive director of a nonprofit provider of mental health services to Camden’s poorest residents was sentenced today to 70 months in prison for defrauding New Jersey Medicaid by using unqualified people to treat Medicaid recipients and taking money from the nonprofit, Acting U.S. Attorney William E. Fitzpatrick announced.
Cesar Tavera, 53, of Cherry Hill, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with conspiracy to commit health care fraud and embezzling from a health care benefit program. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Cesar Tavera was the Executive Director of Nueva Vida Behavioral Health Center of New Jersey, a nonprofit provider of mental health services to the Camden Hispanic community.
Most of Nueva Vida’s patients are on Medicaid, and Tavera controlled Nueva Vida’s billings to New Jersey Medicaid. He also supervised the people at Nueva Vida who treated Medicaid patients. New Jersey Medicaid rules require that people giving mental health therapy to Medicaid recipients must either be licensed or have a master’s degree in mental health. Tavera had several unlicensed, unqualified individuals treat Medicaid recipients and then billed Medicaid as if qualified therapists had treated the patients. Tavera himself treated Medicaid patients even though he was not qualified.
Under Tavera’s direction, Nueva Vida used several other fraudulent practices to obtain money from Medicaid. Nueva Vida billed Medicaid for therapy that never happened and billed group therapy as if each participant received individual therapy. If a mother received therapy without her child, Nueva Vida would bill Medicaid for a session with the mother and a separate session with the child. Nueva Vida billed Medicaid for short sessions as if they lasted for 45 minutes. To cover up his crimes, Tavera created false records to pass Medicaid audits.
He regularly embezzled money from the Nueva Vida bank account in addition to his salary and spent the money on himself and his family. He used the Nueva Vida bank account to pay for dental care, meals, travel in the United States and abroad, and the expenses of his daughter’s music career. Tavera paid no-show employees with cash and payroll checks from Nueva Vida’s bank account. He repeatedly withdrew cash at the Sugar House Casino in Philadelphia and used the money to gamble at the casino. Tavera embezzled more than $1.5 million from Nueva Vida.
In addition to the prison term, Judge Hillman sentenced Tavera to three years of supervised release and ordered to pay $2.5 million in restitution.
Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, and special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, for the investigation leading to the guilty pleas. He also thanked the Medicaid Fraud Division of the N.J. Office of the State Comptroller.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.
The 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 $1.34 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.
California Man Admits Role in Cross-Country Cocaine and Heroin Trafficking ConspiracyRead the Press Release
TRENTON, N.J. – A Los Angeles man today admitted his role in a conspiracy to traffic five kilograms of cocaine and four kilograms of heroin that were smuggled inside large pieces of hydraulic machinery, Acting U.S. Attorney William E. Fitzpatrick announced.
Eduardo Barragan Zuninga, 30, pleaded guilty before U.S. District Court Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of conspiring to distribute heroin and cocaine.
According to documents filed in this case and statements made in court:
From March of 2015 through March of 2016, Zuninga, Fermin Nunez, 45, also of Los Angeles, and others engaged in a conspiracy to ship cocaine and heroin, and the proceeds from narcotics transactions, across the country hidden inside large pieces of hydraulic machinery.
Nunez arranged for the drugs to be shipped from California to the east coast for distribution by Zuninga and others in the New York metropolitan area. Nunez, with Zuninga’s assistance, similarly arranged for the shipment of the distribution proceeds back to California.
Execution of two search warrants at the conclusion of an investigation conducted by the FBI, in cooperation with local law enforcement partners in Los Angeles, resulted in the seizure of approximately five kilograms of cocaine and four kilograms of heroin from a warehouse in Pennsylvania, and over $260,000 in suspected narcotics proceeds from a piece of hydraulic machinery in a California storage facility.
The conspiracy charge to which Zuninga pleaded guilty today 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 Jan. 29, 2018.
Nunez previously pleaded guilty to his role in the conspiracy and awaits sentencing.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the Los Angeles Interagency Metropolitan Police Apprehension Crime Task Force (L.A. IMPACT) and the Los Angeles Police Department, under the direction of Police Chief Charlie Beck, with the investigation.
The government is represented by Assistant U.S. Attorney Molly S. Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Lisa Van Hoeck Esq., Assistant Federal Public Defender, Trenton
Hudson County Man Convicted of Production and Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A Bayonne, New Jersey, man was convicted at trial today on charges of producing and possessing images and videos of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
Gregory John Schaffer, 38, was found guilty on all three counts of an indictment charging him with two counts of production of child pornography and one count of possession of child pornography. He was convicted following a three-day trial before U.S. District Judge Jose L. Linares in Newark federal court. The jury deliberated one and a half hours before returning its verdict.
According to documents filed in the case and the evidence at trial:
In 2010, Schaffer sexually abused a 12-year-old girl in a tow-truck office in Union City, New Jersey, and video recorded the abuse without her knowledge. He later stored the video recording on a laptop computer found by law enforcement in his office in Jersey City, New Jersey. Schaffer also backed-up the video recording to another electronic storage device found in his office.
Around the same time, Schaffer also sexually abused a 14-year-old girl in a hotel room and video recorded the abuse without her knowledge. Schaffer again stored the video recording on the same laptop computer and electronic storage device that law enforcement found in his office.
Law enforcement also found additional sexually explicit videos and images of minors on Schaffer’s laptop computer and electronic storage device.
The production of child pornography charge carries a mandatory minimum penalty of 15 years in prison and a $250,000 fine. The possession of child pornography charge carries a maximum penalty of 10 years in prison and a $250,000 fine.
Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), New York Field Office under the direction of Special Agent in Charge Angel M. Melendez; special agents of the U.S. Secret Service, under the direction of Special Agent in Charge David E. Beach, New York Field Office; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s guilty verdict.
The government is represented by Assistant U.S. Attorneys Jason S. Gould and Meredith Williams of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Thomas Ambrosio Esq., of Lyndhurst, New Jersey
Former Bergen County, New Jersey, Coin Dealer Sentenced to 15 Months in Prison for Income Tax EvasionRead the Press Release
TRENTON, N.J. – A former resident of Old Tappan, New Jersey, was sentenced today to 15 months in prison for evading personal income taxes on more than $400,000 in income in 2013, Acting U.S. Attorney William E. Fitzpatrick announced.
William Dominick, 69, of Collier County, Florida, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of tax evasion and one count of identity theft. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Dominick owned and operated Westwood Rare Coin out of his home in Old Tappan. He was required to include income earned by Westwood Rare Coin on his individual IRS 1040 form. During calendar year 2013, Dominick failed to report $400,000 in income earned by Westwood Rare Coin. He did this by using other people’s identities to open credit cards to purchase bulk quantities coins from the U.S. Mint in order to corner the market. Dominick then sold those coins through his business, retained the proceeds for his personal use, and failed to include the proceeds on the tax return that he signed and filed with the IRS.
In addition to the prison term, Judge Thompson sentenced Dominick to three years of supervised release and fined him $10,000.
Under terms of his plea agreement, Dominick will file amended returns and make full restitution for years 2010 through 2014.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of special agent in charge Timothy Gallagher; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Joseph W. Cronin, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Shana Chen of the Economic Crimes Unit in Newark.
New Jersey Corrections Officer Charged with Receipt of Child PornographyRead the Press Release
NEWARK, N.J. – A corrections officer with the N.J. Department of Corrections was arrested and charged today with receiving images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
Stephen Salamak, 37, of Lodi, New Jersey, was arrested at his home by special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and charged by complaint with one count of receiving child pornography. Salamak made his initial appearance before U.S. Magistrate Judge Joseph A. Dickson. He was released on $125,000 unsecured bond, with home confinement and electronic location monitoring.
According to documents filed in this case and statements made in court:
Salamak used email to seek and obtain images of child sexual abuse, including images of prepubescent children.
The charge of receiving child pornography carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.
Acting U.S. Attorney Fitzpatrick credited special agents of ICE HSI, under the direction of Acting Special Agent in Charge Debra Parker; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor Gurbir S. Grewal, with the investigation leading to today’s charge and arrest.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Former President of Linens Supply Company Admits Using Corporate Credit Card to Steal $245,000Read the Press Release
NEWARK, N.J. – A Sewell, New Jersey, man and the former president of a linens supply company today admitted defrauding his employer of $245,000 that he disguised as legitimate business expenses, Acting U.S. Attorney William E. Fitzpatrick announced.
Michael A. Vicchairelli, 62, pleaded guilty before U.S. District Judge Renee Marie Bumb in Camden federal court to an information charging him with one count of wire fraud.
According to documents filed in this case and statements made in court:
Between January 2012 and August 2014, while he was the president of the victim company, Vicchairelli used his corporate American Express Card for personal unauthorized expenditures, including costs related to gentleman’s lounges, escorts, auto repairs and restaurants. Vicchairelli then submitted reimbursement claims to the company for these expenses.
To conceal the fraud, Vicchairelli instructed company employees to hide these personal charges by coding them within the company’s ledger system as legitimate business expenses, such as maintenance, tolls, and delivery charges. Overall, Vicchairelli received at least $245,000 in reimbursements and other unauthorized payments from the company.
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of his plea agreement, Vicchairelli has agreed to pay restitution to the victim company. Sentencing is scheduled for Jan. 22, 2018.Acting U.S. Attorney Fitzpatrick credited special agents of 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 Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.
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Defense counsel: Michael J. Engle Esq., PhiladelphiaPennsylvania Man Arrested for Defrauding Fema of over $250,000 in Hurricane Sandy Disaster ReliefRead the Press Release
CAMDEN, N.J. – An Ambler, Pennsylvania, man was charged today with using phony documents to collect $252,734 in FEMA-backed disaster benefits and insurance payments that were supposed to be used to cover storm damages to his mother’s property in Ocean City, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Nicholas Ochs, 54, is charged by indictment with one count of disaster benefits fraud, five counts of mail fraud and one count of theft of government funds. He appeared today before U.S. Magistrate Judge Karen M. Williams and was released on $100,000 unsecured bond.
According to the indictment:
In October 2012, the various counties of southern New Jersey, including Cape May County, suffered significant damage due to wind, rain, and flooding as a result of Hurricane Sandy. During that time, Ochs’s mother lived in a house in Ocean City. In January 2013, Ochs, on behalf of his mother, filed an application with the Federal Emergency Management Agency (FEMA) seeking federal rental assistance and assistance for personal property damage, claiming that the property was unfit for occupancy as a result of the storm.
An inspector working on behalf of FEMA inspected the property and determined that the property was uninhabitable and that repairs were required. During the inspection, Ochs, acting as power of attorney, signed the application on behalf of his mother attesting that all the information on the application was true and correct. By signing the application, Ochs also acknowledged that any disaster relief money awarded would be returned if his mother received insurance benefits for the same loss. FEMA initially denied Ochs’s claim citing the fact that the property was covered by flood insurance.
However, Ochs submitted fraudulent documents to FEMA indicating that the insurance provider denied his mother’s claim. In addition, when applying for the federal assistance, Ochs allegedly submitted false documents claiming that, as a result of being displaced, his mother was renting another property on the same block in Ocean City. From January 2013 through December 2013, Ochs faxed fraudulent lease agreements and rental receipts and failed to disclose that the property his mother was renting was owned by his mother and that no rent was ever paid. In addition, in February 2013, Ochs contacted FEMA and made a claim for transportation assistance based on his false claim that his mother’s 1985 Mercedes Benz was damaged by Hurricane Sandy.
As a result of the false documents, between February 2013 and December 2013, FEMA paid Ochs’s mother $17,229 for rental assistance and $4,345 for home repairs. Ochs then used the money for his own personal expenses. The total amount of FEMA benefits for rental assistance and home repair that Ochs collected to which he was not entitled was $21,574.In addition, after Ochs made an insurance claim for damages related to the storm, his mother’s insurance provider ultimately paid her $231,160, $169,518 of which was held in escrow by the mortgage-holder, Wells Fargo. To entice Wells Fargo to release the funds, Ochs presented fraudulent invoices and forms that over-inflated the value of the work that was actually performed.
Based on the false invoices, Wells Fargo mailed numerous checks totaling $169,518 to the house in Ocean City, which Ochs deposited into bank accounts that he controlled and spent on personal expenses. These funds were ultimately paid for by FEMA pursuant to its National Flood Insurance Program, which backed insurance payments for disaster-related expenses. Altogether, Ochs allegedly defrauded FEMA of $252,734.
The count of disaster benefits fraud carries a potential penalty of 30 years in prison and a $250,000 fine. The mail fraud counts each carry a potential penalty of 30 years in prison and $1 million fine. The count of theft of government funds carries a potential penalty of 10 years in prison and a $250,000 fine.
The charges and allegations in the indictment are merely accusations, and Ochs is presumed innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Mark Tasky, with investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Thomas Young Esq., Camden
Four People Charged in Mortgage Fraud ConspiracyRead the Press Release
NEWARK, N.J. – A real estate investor, a builder, a mortgage loan officer, and a real estate settlement attorney were arrested today and charged with using “straw buyers” to fraudulently obtain mortgage loans from a bank, Acting U.S. Attorney William E. Fitzpatrick announced.
Victor Santos, a/k/a “Vitor Santos,” 57, of Wachtung, New Jersey; Arsenio Santos, a/k/a “Gaspar Santos,” 50, of Warren, New Jersey; Fausto Simoes, 64, of Millington, New Jersey; and, Raquel Casalinho, 37, of Union, New Jersey, are charged by complaint with one count each of conspiracy to commit bank fraud. They are expected to appear at 2 p.m. today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the complaint:
From September 2007 through November 2008, Victor Santos, a real estate investor; Arsenio Santos, a builder and Victor’s cousin; Casalinho, a junior home mortgage consultant at the victim bank and Victor’s niece; and Simoes, a real estate settlement attorney, and others allegedly conspired to fraudulently obtain mortgage loans with a total value of more than $5 million.
Victor Santos, Arsenio Santos, and their conspirators allegedly recruited straw buyers to purchase properties in Newark and obtained their identifying information, including Social Security cards and drivers’ licenses. A “straw buyer” was an individual who purchased a property for another in order to conceal the identity of the actual purchaser, usually in exchange for a fee.
In exchange for the use of the straw buyers’ identity and credit history, Victor Santos, Arsenio Santos, and others allegedly agreed to pay each of the straw buyers a fee of approximately $5,000, provide the straw buyer’s down payment and cash required for closing, secure tenants to lease the purchased property and make the mortgage payments on each of the fraudulently obtained mortgages. These secret agreements were not disclosed to the bank.
In accordance with Victor Santos’ instructions, the straw buyers’ information was provided to Casalinho and was used to prepare fraudulent mortgage loan applications that contained a variety of false statements, including the identity of the actual buyer. For the two representative schemes highlighted in the complaint, Casalinho, Victor Santos, Arsenio Santos, and their conspirators prepared and submitted mortgage applications containing false information to the bank and obtained loans totaling more than $900,000. The conspirators allegedly arranged transactions for the Newark properties whereby the straw buyers would nominally purchase the properties for far more than the sellers had agreed to sell them, and the conspirators kept the difference between the contract price and the amounts the sellers received.
Simoes was the closing attorney on approximately 10 of the fraudulent transactions and signed and certified as true the final settlement statements. These statements falsely stated that the cash required for closing for each transaction came from the straw buyer. In fact, Victor Santos and his conspirators provided those funds to Simoes and the funds were deposited into Simoes’ attorney trust account. For certain transactions, a shell company – whose bank account was controlled by Victor Santos and a conspirator and to which funds from fraudulently obtained mortgage loans were disbursed – was the source of the cashier’s checks given to Simoes to fund the buyer’s cash required at closing. For other transactions, down payments came from an account owned and controlled by Arsenio Santos and Victor Santos, the proceeds of the mortgage loan itself after funding or closing, or from the proceeds of a previously obtained fraudulent loan.
The conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or twice the gross loss to others whichever is greater.
Acting U.S. Attorney Fitzpatrick credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher of the Newark office, with the investigation leading to today’s charges.
The government is represented by Special Assistant U.S. Attorneys Kevin DiGregory and Charlie Divine and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office’s Economic Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Eleven Men Charged in $1 Million Cross-Country Scheme to Defraud National Cellular ProviderRead the Press Release
NEWARK, N.J. – Eleven men in New York, Connecticut, North Carolina and Florida were charged today for their roles in a scheme that used stolen identities to order smartphones and other electronic goods and then paid drivers with a parcel delivery company to divert those goods to members of the conspiracy, Acting U.S. Attorney William E. Fitzpatrick announced.
Eight defendants were arrested this morning. Arrantes Garrincha Green, a/k/a “Don Gucci,” a/k/a “Gucci,” 39, of Margate, Florida, and Helton Arando Mallette, 27, of Miami, Florida, will appear this afternoon before U.S. Magistrate Judge Edwin G. Torres in Miami federal court. Omar Kimani Forsythe, a/k/a “Biggs,” 26, and Elvis Anthony Prehay, 43, both of Tamarac, Florida, will appear before Judge Torres tomorrow.
Sheldon Andre Wellington, a/k/a “Shellinz,” 35, of Rockville Center, New York, and Kindley Michel, 36, of Spring Valley, New York, will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
Troy Linton Cooper, 35, of East Hartford, Connecticut, will appear this afternoon before U.S. Magistrate Judge Robert Richardson in Hartford federal court. Dashawn Brown, 25, of Raleigh, North Carolina, will appear this afternoon before U.S. Magistrate Judge James E. Gates in Raleigh federal court.
Andre Donovan Duffas, 27, of Plantation, Florida, Jermaine Wilson, a/k/a “Budds,” 32, of Nanuet, New York, and Oneil Gentles, a/k/a “Daffy,” 40, of Bronx, New York, remain at large.
All 11 defendants are charged by indictment with one count of wire fraud conspiracy and one count of conspiracy to transport stolen goods in interstate commerce. Green is also charged with one count of aggravated identity theft.
According to the indictment:
From June 2015 through June 2017, the defendants and others, led by Green, allegedly conspired to steal electronic equipment, including new smartphones, from a national cellular service provider.
Members of the conspiracy used stolen personal identifiers and debit and credit card information to place orders with the victim company. Many of the orders were allegedly made using two cellular phones associated with Green.
Afterwards, members of the conspiracy, including Green, Duffas, Mallette, Prehay, Wellington, and Wilson, transmitted anticipated delivery dates and locations of the fraudulently-ordered products to other conspirators who were employed as drivers with a major parcel delivery company. These drivers, including Brown, Cooper and Michel, were paid to divert the products mid-delivery to other members of the conspiracy, including Duffas, Forsythe, Gentles, Mallette, Prehay, Wellington, and Wilson.
Proceeds generated through the scheme were shared by wire transfer or depositing the funds in designated bank accounts.
The scheme compromised the identities of hundreds of residents in multiple municipalities across multiple states, including Upper Saddle River, New Jersey, and caused losses in excess of $1 million to the victim company.
The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison. The count of conspiracy to commit interstate transportation of stolen property carries a maximum potential penalty of five years in prison. Both counts carry a potential fine of $250,000, or twice the gross gain or loss from the offense. The aggravated identity theft count carries a mandatory sentence of two years in prison, which must be served in addition to any sentence imposed.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charges. He also thanked the Upper Saddle River Police Department, the Bergen County Prosecutor’s Office, the NYPD, the Westchester County District Attorney’s Office, the West Hartford Police Department and the Connecticut State’s Attorney’s Office, Hartford Judicial District, for their assistance.
The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office General Crimes Unit in Newark.
Two Women, Including Former Associate Dean of Caldwell University, Admit Defrauding Veterans’ GI BillRead the Press Release
NEWARK, N.J. – Two women today admitted their roles in a conspiracy that fraudulently obtained over $24 million from the Post-9/11 GI Bill, a federal education benefits program designed to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, Acting U.S. Attorney William E. Fitzpatrick announced.
Lisa DiBisceglie, 56, of Lavallette, New Jersey, the former Associate Dean of the Office of External Partnerships at Caldwell University, and Helen Sechrist, 61, of Sandy Level, Virginia, a former employee of the Pennsylvania-based company Ed4Mil LLC, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to separate informations charging them each with one count of conspiracy to commit wire fraud.“DiBisceglie and Sechrist were part of an elaborate bait-and-switch scheme that stole millions of dollars in Post-9/11 GI Bill tuition assistance,” Acting U.S. Attorney Fitzpatrick said. “Instead of receiving a quality education under the Caldwell brand, the veterans that were recruited by Ed4Mil were enrolled in unapproved online courses without their knowledge, all while members of the conspiracy profited from their hard-earned benefits. Prosecuting fraud against the government is always a top concern of our office, especially when the conduct shamelessly exploits our servicemen and women for financial gain.”
“The VA’s Post-9/11 GI Bill is a comprehensive educational program meant to help our nation’s veterans advance their education and careers as they move from military service to civilian life. Defrauding this important VA program costs our nation’s taxpayers and VA and does a tremendous disservice to our veterans,” said Donna L. Neves, Special Agent in Charge, Northeast Field Office, U.S. Department of Veterans, Office of Inspector General. “VA OIG is committed to working closely with our fellow law enforcement partners and thanks the U.S. Attorney’s Office, District of New Jersey for their dedication to this time-intensive, complex case.”
According to documents filed in this case and statements made in court:
The Post-9/11 GI Bill provides educational assistance to eligible veterans of the U.S. Armed Forces by paying for veterans’ tuition, housing costs, and other educational expenses as long as their courses meet certain criteria. Due to the fact that these tuition benefits are paid by the United States directly to the school, all entities involved in developing and administering the courses must be fully disclosed to the United States in order to assess the courses for approval.
From 2009 through August 2013, Ed4Mil founder and president David Alvey, 50, of Harrisburg, Pennsylvania, along with DiBisceglie, Sechrist, and others, conspired to fraudulently obtain millions of dollars in tuition assistance and other education-related benefits under the Post-9/11 GI Bill.
As part of the conspiracy, DiBisceglie helped Ed4Mil get approval from Caldwell’s administration to develop and administer a series of non-credit online courses for veterans in Caldwell’s name. In order for the courses to be eligible for education benefits under the Post-9/11 GI Bill, DiBisceglie, Alvey, and others prepared and submitted an application with the Veterans Administration stating that the courses were developed, taught, and administered by Caldwell faculty and met Caldwell’s stringent educational standards. As a result, the courses were subsequently approved, and Sechrist, Alvey, and others aggressively marketed the courses to veterans who were eligible to receive the benefits.
However, Caldwell did not participate in developing or teaching the online courses. Instead, the veterans were ultimately enrolled in online correspondence courses developed and administered by a sub-contractor of Ed4Mil. Neither Ed4Mil nor its sub-contractor were disclosed to the government, and neither were eligible to receive Post-9/11 GI Bill benefits.
At all times during the conspiracy, DiBisceglie, Sechrist, Alvey, and others concealed the true nature of the courses from the government and the veterans who enrolled in the courses. Thousands of veterans enrolled in the online courses believing they were taking courses from Caldwell. Altogether, the scheme caused the United States to pay over $24 million in tuition benefits under the Post-9/11 GI Bill.
“Scams like this steal money from hardworking taxpayers and legitimate students – and in this case, our veterans – and that is completely unacceptable,” said Debbi Mayer, Assistant Special Agent in Charge of the U.S. Department of Education Office of Inspector General’s Northeastern Regional Office. “I’m proud of the work of the OIG special agents and our law enforcement partners for holding Ms. DiBisceglie and Ms. Sechrist accountable for their criminal actions.”
“The guilty pleas by DiBisceglie and Sechrist send a clear and unequivocal message that the FBI and our law enforcement partners will relentlessly pursue fraud against the government. These crimes are especially egregious since they target our veterans and the educational system,” stated Timothy Gallagher, Special Agent in Charge of the Newark FBI Field Office.
The wire 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. Sentencing for both defendants is scheduled for Jan. 24, 2018.The charge and allegations against Alvey are still pending, and he is presumed innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office, under the direction of Special Agent in Charge Neves in Newark; the FBI, under the direction of Special Agent in Charge Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General, under the direction of Assistant Special Agent in Charge Mayer of the Northeastern Region, with the ongoing investigation.
The government is represented by Assistant U.S. Attorneys David M. Eskew, David Malagold, and Nicole Mastropieri of the U.S. Attorney’s Office Criminal Division in Newark and Assistant U.S. Attorney Jafer Aftab of the Asset Forfeiture and Money Laundering Unit.
Defense Counsel:
DiBisceglie: Gray Broughton Esq., Richmond, Virginia and John Morgenstern, Esq., Philadelphia
Sechrist: Richard Verde, Esq., North Caldwell, New Jersey