District of New Jersey
Press releases recorded for this federal judicial district.
Three Customs and Border Protection Officers Charged with Assaulting Fellow Officers at Newark AirportRead the Press Release
NEWARK, N.J. – Three Customs and Border Protection (CBP) officers were arrested this morning and charged with assaulting two fellow officers at Newark Liberty International Airport, Acting U.S. Attorney William E. Fitzpatrick announced.
Tito Catota, 38, of Lyndhurst, New Jersey, Parmenio I. Perez, 40, of Hawthorne, New Jersey, and Michael A. Papagni, 32, of Staten Island, New York, are charged by complaint with forcibly assaulting, impeding, intimidating, and interfering with two men identified in the complaint as “Victim One” and “Victim Two” while the victims were engaged in their duties as CBP officers. The three defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
“The defendants, who were members of a unit responsible for identifying dangerous contraband and threats to national security, allegedly subjected their own colleagues to senseless physical abuse, all while on duty at Newark Liberty International Airport,” Acting U.S. Attorney Fitzpatrick said. “This behavior would be abhorrent in any environment, especially one serving a critical law enforcement function. The hard working men and women who protect our borders deserve better.”
“DHS employees pledge to maintain the highest standards of conduct and the OIG ensures those employees are held accountable when they violate that obligation,” Special Agent in Charge Mark Tasky of the U.S. Department of Homeland Security, Office of Inspector General, New York Resident Office, said. “DHS OIG takes very seriously allegations such as those in today’s complaint and works tirelessly to conduct a thorough and impartial investigation.”
According to the complaint:
Catota, Perez, and Papagni were employed as CBP officers at Newark Liberty International Airport and were assigned to the Passenger Enforcement Rover Team (PERT). PERT was a CBP specialized unit that was involved in the identification and interception of passengers attempting to bring contraband into the United States or who might be associated with terrorist activities. PERT maintained an office on the second floor of Terminal C at Newark Liberty International Airport.
Victim One was assigned to PERT in October 2016. Within the first two weeks that Victim One worked in PERT, Papagni allegedly advised Victim One that the PERT office table was known as the “rape table” and threatened the victim that he would get him on it.
On Jan. 10, 2017, Victim One was asked to retrieve and forward a document related to a prior drug seizure. While Victim One and an individual identified in the complaint as “CBPO 1” were trying to scan the document, Papagni allegedly warned Victim One that he had five minutes to get out of the office or Papagni would teach him “what this team is about.”
Moments later, an individual identified in the complaint as “CBPO 2” shut off the lights in the PERT office. Papagni, Catota, and another officer identified in the complaint as “CBPO 3” then allegedly grabbed Victim One’s arms and legs and threw him on top of the PERT office table. While Papagni, Catota, and CBPO 3 held him down, Perez got on top of Victim One’s mid-section and grinded his body up and down against Victim One’s genitals through the victim’s clothing in a motion simulating a sex act. Victim One unsuccessfully attempted to push Perez off his body. When Perez eventually got off of Victim One, Papagni, Catota, and CBPO 3 released him.
On Nov. 30, 2016, Victim Two, who was assigned to the Port Director staff, went to the PERT office to speak to CBPO 1. A few minutes later, Victim Two saw an officer identified as “CBPO 4” lock one of the doors to the office. Victim Two started to walk towards the other door to the PERT office but it was closed. Catota, Papagni, and Perez then grabbed Victim Two and threw him on his side on the PERT office table. While two of the defendants held Victim Two down on top of the table, the other defendant got on top of Victim Two and moved his genitals up and down on Victim Two’s leg in simulation of a sex act. Victim Two struggled to get free until Catota, Papagni, and Perez eventually released him.
Both counts in the complaint carry a maximum potential penalty of eight years in prison and a $250,000 fine.Acting U.S. Attorney Fitzpatrick credited special agents with the U.S. Department of Homeland Security, Office of Inspector General, New York Resident Office, under the direction of Special Agent in Charge Mark Tasky and U.S. Customs and Border Protection, Office of Professional Responsibility, New York Resident Office, under the direction of Special Agent in Charge Vance Kuhner, with the investigation leading to today’s arrests.
The government is represented by Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.
The charges and allegations in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defense counsel:
Catota: Alan Zegas Esq., Chatham, New Jersey
Papagni: Chad Seigel Esq., New York
Perez: Lorraine Gauli-Rufo, Verona, New JerseyOhio Man Sentenced to 33 Months in Prison for Defrauding Essex County, New Jersey, Company Out of More Than $950,000Read the Press Release
NEWARK, N.J. – A Milford, Ohio, man was sentenced today to 33 months in prison for using an Essex County, New Jersey, medical company’s credit card without the company’s permission to fraudulently obtain more than $950,000, Acting U.S. Attorney William E. Fitzpatrick announced.
John Tekulve, 44, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with wire fraud. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From January 2011 through October 2012, Tekulve owned a medical supply company that sold products to an Essex County medical company. He obtained the company’s credit card information, which he used to fraudulently bill the company nearly $1 million for products and services that neither Tekulve nor his medical supply company provided. Tekulve then used the proceeds of the scheme for his own purposes, including the purchase of high-end automobiles and jewelry.
In addition to the prison term, Judge Hayden sentenced Tekulve to three years of supervised release and ordered him to pay restitution of $977,418.75.
Acting U.S. Attorney Fitzpatrick credited special agents with the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Veronica Allende of the U.S. Attorney’s Office in Trenton.
Defense counsel: Peter Carter Esq., Newark
Hudson County Woman and Essex County Man Admit Roles in Oxycodone Distribution RingRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, woman and an Essex County, New Jersey, man have admitted their respective roles in a conspiracy to illegally obtain and distribute oxycodone, Acting U.S. Attorney William E. Fitzpatrick announced.
Rhonda Musallam, 41, of Fairview, New Jersey, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court to a superseding information charging her with one count of conspiracy to distribute oxycodone. On Aug. 15, 2017, Robert O’Brien, 60, of Bloomfield, New Jersey, pleaded guilty before Judge Salas to an indictment charging him with one count of conspiracy to distribute oxycodone.
Of the 16 people that were charged in this conspiracy, 15 have been convicted, including the leader, Victoria Horvath, who was sentenced Oct. 20, 2016, to 92 months in prison. Charges against the 16th defendant were dismissed after his death in April 2015.
According to documents filed in this case and statements made in court:
Using confidential sources, surveillance, and recorded text messages and telephone calls, investigators with the Drug Enforcement Administration (DEA) discovered that members and suppliers of a drug-trafficking organization secured prescriptions for oxycodone and other controlled substances from various doctors in New Jersey, filled them at pharmacies in Belleville and elsewhere, and sold the drugs for a profit. The investigation identified O’Brien and Musallam as members of the drug trafficking organization.
Musallam admitted that from June 10, 2014, to July 18, 2014, she supplied members of the conspiracy and others with oxycodone pills. She said that on a day in June 2014 she sold 70 oxycodone-containing pills conspirators in exchange for $1,000.
O’Brien admitted that from Feb. 5, 2014, to Aug. 13, 2014, he obtained and paid for filled prescriptions of oxycodone-containing pills on behalf of members of the conspiracy. He said that on a day in May 2014 he purchased a filled prescription for oxycodone-containing pills from a New Jersey pharmacy on behalf of a conspirator in exchange for 45 oxycodone-containing pills from another conspirator.
Oxycodone is a Schedule II controlled substance – meaning that it has a high potential for
abuse, it is currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.
The charges to which Musallam and O’Brien pleaded guilty carry a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing for Musallam is scheduled for Dec. 19, 2018, and for O’Brien is scheduled for Nov. 27, 2018.
Acting U.S. Attorney Fitzpatrick credited the DEA’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit of the U.S. Attorney’s Office in Newark.
The principal mission of the OCDETF program, under which this investigation was conducted, 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.
Watchung Hills High School District Agrees to Settle Claim It Violated Americans with Disabilities ActRead the Press Release
School Officials Failed to Evacuate Students with Disabilities During School-Wide Evacuation
NEWARK, N.J. – The Watchung Hills Regional High School District Board of Education has agreed to settle allegations that it violated the Americans with Disabilities Act (ADA) when it failed to evacuate at least one student with a mobility disability during a school-wide evacuation and failed to have any policies addressing emergency evacuations of students with disabilities, Acting U.S. Attorney William E. Fitzpatrick announced today.
According to the agreement, on Oct. 7, 2014, the district failed to evacuate at least one student with a mobility disability during an unplanned emergency evacuation. Instead, the student was left on the second floor while students without disabilities were evacuated. The district also did not have a policy or practice that allowed students with mobility impairments to participate fully and equally during emergency evacuation drills.
The ADA prohibits a public entity from, among other things, excluding or denying individuals with disabilities from benefits the public services, programs, or activities. To comply with the ADA, the district must ensure that students with disabilities are afforded “meaningful access” to its services, benefits and activities, including emergency preparedness and emergency evacuations.
“Schools should provide a safe and inclusive environment for all students,” Acting U.S. Attorney Fitzpatrick said. “The ADA mandate is especially pronounced when it comes to programs involving student safety. Through this agreement, the district must enforce an emergency evacuation policy that ensures equal participation and the safety of students with mobility disabilities.”
The district has agreed to ensure that students with disabilities are able to participate meaningfully in emergency evacuations and evacuations drills. It has also agreed to provide ADA training to all of its employees who interact with students with disabilities. The district has adopted policies to ensure that students with disabilities will not be excluded from participation in or be denied the benefits of the district’s safety protocols and practices, including emergency evacuations and drills. The district has agreed to adopt and implement evacuation plans for students with disabilities who have mobility impairments so that all students have the opportunity to participate in evacuations – whether actual evacuations or drills.
The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the Civil Rights Unit, of the U.S. Attorney’s Office Civil Division in Newark.
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
Essex County, New Jersey, Man Sentenced to 173 Months in Prison for Summer 2016 Bank Robbery SpreeRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man was sentenced today to 173 months in prison for robbing four banks in August and September 2016 and for violating his supervised release from a previous offense, Acting U.S. Attorney William E. Fitzpatrick announced.
James Lockwood, 39, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with four counts of bank robbery. He was sentenced to 125 months in prison on the bank robbery counts, as well as an additional 48 months for violating supervised release. He was originally arrested by state authorities on Sept. 23, 2016, and has been in custody since that time. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court, Lockwood robbed the following banks:
Bank
Location
Date
M & T Bank
Lyndhurst, New Jersey
Aug. 16, 2016
Schuyler Bank
Kearney, New Jersey
Aug. 25, 2016
Schuyler Bank
Kearney, New Jersey
Sept. 8, 2016
Capital One Bank
Clifton, New Jersey
Sept. 16, 2016
Lockwood admitted that during each of the above robberies, he threatened to use force while demanding money from the bank employees. He also robbed the same Schuyler Bank on Aug. 25, 2016, and Sept. 8, 2016.
In addition to the prison term, Judge Salas sentenced Lockwood to three years of supervised release.
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 sentencing. He also thanked the Hudson County Prosecutor’s Office, the Passaic County Prosecutor’s Office, and the Kearny and Clifton Police Departments for their assistance.
The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Keith Hirschorn Esq., Hoboken, New Jersey
Two Defendants Charged in Takedown of Trenton Drug Trafficking Organization Plead GuiltyRead the Press Release
TRENTON, N.J. – Two individuals from Trenton, New Jersey, who were arrested in connection with a Trenton-area drug trafficking organization today pleaded guilty to separate charges of unlawful firearms possession and conspiracy to distribute heroin, Acting U.S. Attorney William E. Fitzpatrick announced.
Prince Sarnoe, 30, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with unlawful possession of a firearm by a convicted felon. India Daniels, 24, pleaded guilty before Judge Wolfson to a separate information charging her with conspiracy to distribute and possess with intent to distribute heroin.
In December 2016, Sarnoe, Daniels, and eight other members of a drug trafficking organization operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. The complaint referred to the drug trafficking organization as the “Abdullah DTO,” after its leader, Ishmael Abdullah. Since then, eight of the 10 defendants, including Abdullah, Sarnoe and Daniels, have pleaded guilty.
According to documents filed in this case and statements made in court:
From May 2015 through December 2016, Abdullah and others participated in a drug trafficking organization that operated in the area of Spring and Passaic Streets in the City of Trenton. Abdullah was responsible for obtaining significant quantities of heroin from multiple suppliers, including Jose Joaquin Torres-Mezquita and Ileana Sanchez. Ishmael Abdullah and Keith Hunter coordinated the organization’s distribution of heroin through themselves and others.
Members of the Abdullah DTO used temporary prepaid phones, stash houses and cars, and spoke in code to avoid detection by law enforcement. Additionally, multiple members of the organization, including Sarnoe – a previously convicted felon – possessed and maintained access to firearms.
While Abdullah was detained at the Mercer County Correction Center on outstanding warrants, Daniels coordinated and obtained, on Abdullah’s behalf, additional supplies of heroin from Torres-Mezquita. In furtherance of the conspiracy, Daniels then provided that heroin to Hunter for distribution to other members of the conspiracy and their customers.
The firearms charge to which Sarnoe pleaded guilty carries a maximum potential sentence of 10 years in prison and a $250,000 fine. The conspiracy charge to which Daniels pleaded guilty carries a maximum potential sentence of 20 years in prison and a $1 million fine. Sentencing for both defendants is set for Jan. 5, 2018.
Acting U.S. Attorney Fitzpatrick credited agents and officers with the Greater Trenton Safe Streets Task Force, including special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, Newark Division, Trenton Field Office, under the direction of Special Agent in Charge John B. Devito; officers of the Trenton Police Department, under the direction of Director Ernest Parrey Jr.; officers of the Princeton Police Department, under the direction of Chief Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief John P. Stemler III; and detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo J. Onofri, with the investigation.
He also thanked special agents of the FBI’s Philadelphia Field Office, under the direction of Special Agent in Charge Michael Harpster; special agents of Homeland Security Investigations, under the direction of Acting Special Agent in Charge Debra Parker; officers of the N.J. State Police, under the direction of Superintendent Col. Joseph R. Fuentes; and officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler, for their assistance in the case.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations against the remaining defendants are merely accusations, and those defendants are presumed innocent unless and until proven guilty.
Defense counsel:
Sarnoe: John S. Furlong Esq., Trenton
Daniels: Robert Rambadadt Esq., New York
Passaic County, New Jersey, Pilot Charged for His Role in International Cocaine Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – A Ringwood, New Jersey, man appeared in federal court today to face cocaine distribution, money laundering, and other conspiracy charges associated with his role in a scheme to import large quantities of cocaine from Guyana to New Jersey and New York, Acting U.S. Attorney William E. Fitzpatrick announced.
Khamraj Lall, 50, is charged by indictment with one count each of conspiracy to launder money, conspiracy to structure funds, conspiracy to import cocaine, and conspiracy to distribute cocaine. He was arraigned today before U.S. District Judge Michael A. Shipp in Trenton federal court and was detained. Lall was arrested July 22, 2015 and has been in custody since that time.
According to documents filed in this and related cases and statements made in court:
From April 2011 through November 2014, Lall, a private pilot, allegedly imported large quantities of cocaine from Guyana to New Jersey and elsewhere on his privately-owned jet aircraft and then laundered the proceeds into banks in New Jersey and New York. Afterwards, he allegedly smuggled hundreds of thousands of dollars in cash back to Guyana.
Lall performed, or had others perform, over 1,287 cash deposits totaling approximately $7,549,775 into more than 20 different bank accounts. All deposits were for amounts less than $10,000 in order to circumvent certain banking reporting laws.
The indictment seeks forfeiture of multiple properties as well as two private jets that Lall purchased with structured funds or were otherwise involved in the criminal conspiracies.
The conspiracy to import and distribute cocaine charges carry a minimum penalty of 10 years in prison, a maximum of life in prison, and a $10 million fine. The conspiracy to launder money charge carries a potential penalty of 20 years in prison and a $500,000 fine. The conspiracy to structure funds charge carries a potential penalty of five years in prison and a $500,000 fine.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents and task force officers of the Drug Enforcement Administration, New York Division, under the direction of Special Agent in Charge James. J. Hunt, IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and the Morristown, New Jersey, police department, under the direction of Chief Peter Demnitz, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorneys Jonathan M. Peck, Barry A. Kamar, and Melissa M. Wangenheim of the U.S. Attorney’s Office Organized Crime/Drug Enforcement Task Force Unit, Assistant U.S. Attorneys Peter Gaeta and Sarah Devlin of the Asset Forfeiture-Money Laundering Unit, and Assistant U.S. Attorney Robert A. Marangola of the U.S. Attorney’s Office, Western District of New York.
Defense Counsel: Michael D’Alessio Jr. Esq.
Hudson County, New Jersey, Man Sentenced to 40 Years in Prison for Producing and Possessing Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Hudson County, New Jersey, man was sentenced today to 480 months in prison for coercing a minor to engage in sexually explicit conduct while he photographed the abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
Felix Restitullo, 42, of Jersey City, New Jersey, was convicted in May 2017 of one count of production of child pornography and one count of possession of child pornography following a two-week trial before U.S. District Judge William H. Walls. The jury deliberated less than three hours before returning the guilty verdicts. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
Restitullo resided with his mother, who acted as caregiver to children, including the victim, an underage girl. On March 13, 2014, as a result of an ongoing investigation into the sexual abuse of minor children, law enforcement officers interviewed the victim, who told the officers that Restitullo had sexually abused her and photographed it.
Restitullo was arrested and charged by the Hudson County Prosecutor’s Office with aggravated sexual assault and endangering the welfare of the girl. In connection with his arrest, officers searched Restitullo’s bedroom and recovered a camera and multiple electronic media devices belonging to Restitullo.
A forensic examination of the devices was performed, and law enforcement agents identified photographs that depicted the victim’s sexual abuse saved on a thumb drive found in Restitullo’s closet. Agents identified more than 3,000 images and more than 350 videos of child sexual abuse.
In addition to the prison term, Judge Walls sentenced Restitullo to lifetime supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Debra Parker, Newark field office, and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Melissa M. Wangenheim and Justin Herring of the Criminal Division in Newark.
Defense counsel: Mario Blanch Esq., West New York, New Jersey
Gloucester County, New Jersey, Man Sentenced to 78 Months in Prison for Enticing Children to Engage in Sexual ConductRead the Press Release
CAMDEN, N.J. – A Deptford, New Jersey, man was sentenced today to 78 months in prison for using a fake Facebook profile to entice children to produce sexually explicit images, Acting U.S. Attorney William E. Fitzpatrick announced.
Michael J. Mostovlyan, 33, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to an information charging him with one count of online enticement of a minor to engage in criminal sexual conduct. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in the case and statements made in court:
Mostovlyan admitted that between Jan. 1, 2016 and June 2, 2016, he communicated with children online in order to obtain sexually explicit images of those children. Using a fake female persona on Facebook in the name of “Amber Zee,” which he created using actual images of a girl, Mostovlyan was able to persuade the victims to send him sexually explicit photographs or videos.
In addition to the prison term, Judge Bumb sentenced Mostovlyan to 15 years of supervised release.
U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction Special Agent in Charge Michael Harpster in Philadelphia; the Monroe Township Police Department under the direction of Chief John McKeown; the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Dalton; and the Deptford Township Police Department, under the direction of Chief William Hanstein, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office in Camden.
Galena Biopharma Inc. to Pay More Than $7.55 Million to Resolve Alleged False Claims Related to Opioid DrugRead the Press Release
Galena Biopharma Inc. (Galena) will pay more than $7.55 million to resolve allegations under the civil False Claims Act that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, the Department of Justice announced today.
“Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient’s medical need rather than a doctor’s financial interests,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “The Department of Justice intends to vigorously pursue those who offer and receive illegal inducements that undermine the integrity of government health care programs.”
“The conduct alleged by the government and resolved by today’s settlement was egregious because it incentivized doctors to over-prescribe highly addictive opioids,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “This settlement constitutes another example of the Department of Justice’s ongoing efforts to battle the opioid epidemic on every front.”
The United States contends that Galena paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors $5,000, and speakers $6,000, plus expenses, to attend an “advisory board” that was partly planned, and attended, by Galena sales team members and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral. The United States also contends that Galena paid doctors to refer patients to the company’s RELIEF patient registry study, which was nominally designed to collect data on patient experiences with Abstral, but acted as a means to induce the doctors to prescribe Abstral. Galena has not marketed any pharmaceutical drug since the end of 2015.
Two of the doctors who received remuneration from Galena were tried, convicted and later sentenced to prison in the U.S. District Court for the Southern District of Alabama following a jury trial of, among other counts, offenses relating to their prescriptions of Abstral. Galena cooperated in that prosecution.
The settlement resolves a lawsuit filed by relator Lynne Dougherty under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. As part of today’s resolution, Ms. Dougherty will receive more than $1.2 million. The matter remains under seal as to allegations against entities other than Galena.
The settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey, with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General, and the Food and Drug Administration Office of Criminal Investigations’ Metro Washington Field Office.
The claims settled by this agreement are allegations only; there have been no admissions of liability by Galena.
Galena Biopharma Inc. to Pay More Than $7.55 Million to Resolve Alleged False Claims Related to Opioid DrugRead the Press Release
NEWARK, N.J. – Galena Biopharma Inc. will pay more than $7.55 million to resolve allegations that it paid kickbacks to doctors to induce them to prescribe its fentanyl-based drug Abstral, Acting U.S. Attorney William E. Fitzpatrick and Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division announced today. The allegations arose from a whistleblower suit filed under the False Claims Act.
“The conduct alleged by the government and resolved by today’s settlement was egregious because it incentivized doctors to over-prescribe highly addictive opioids,” Acting U.S. Attorney Fitzpatrick said. “This settlement constitutes another example of the Department of Justice’s ongoing efforts to battle the opioid epidemic on every front.”
“Given the dangers associated with opioids such as Abstral, it is imperative that prescriptions be based on a patient’s medical need rather than a doctor’s financial interests,” Acting Assistant Attorney General Readler said. “The Department of Justice intends to vigorously pursue those who offer and receive illegal inducements that undermine the integrity of government health care programs.”
The settlement follows an investigation by the U.S. Attorney’s Office for the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division.
The United States contends that Galena Biopharma paid multiple types of kickbacks to induce doctors to prescribe Abstral, including providing more than 85 free meals to doctors and staff from a single, high-prescribing practice; paying doctors $5,000 honoraria, and speakers $6,000, plus expenses, to attend an “advisory board” that was partly planned, and was attended by, Galena sales team members; and paying approximately $92,000 to a physician-owned pharmacy under a performance-based rebate agreement to induce the owners to prescribe Abstral. The United States also contends that Galena paid doctors to refer patients to the company’s RELIEF patient registry study, which was nominally designed to collect data on patient experiences with Abstral, but acted as a means to induce the doctors to prescribe Abstral.
Galena Biopharma sold Abstral in November 2015 after booking net losses on Abstral in each year that it owned the drug, beginning in June 2013. During that period, Medicare, TRICARE, and the Federal Employees Health Benefits program paid $13.6 million for Abstral prescriptions; the settlement resolves Galena’s civil liability for causing false claims to be submitted to these programs. Galena Biopharma has not marketed any pharmaceutical drug since the end of 2015. It currently has a market capitalization of roughly $21 million. The company cooperated with the government’s investigation of certain individuals in connection with the conduct that is the subject of today’s settlement agreement; it also cooperated with the U.S. Attorney’s Office for the Southern District of Alabama’s investigation that led to the February 2017 conviction of two doctors, in the U.S. District Court for the Southern District of Alabama following a jury trial, of, among other counts, offenses relating to their prescriptions of Abstral.
The settlement resolves a lawsuit filed by relator Lynne Dougherty under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. As part of today’s resolution, Ms. Dougherty will receive more than $1.2 million. The matter remains under seal as to allegations against entities other than Galena.
Acting U.S. Attorney Fitzpatrick credited special agents from FDA-OIG, under the direction of Special Agent in Charge Jeffrey J. Ebersole, FDA Office of Criminal Investigations’ New York Field Office, as well as investigators from the U.S. Attorney’s Office for the District of New Jersey, for the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorneys Charles Graybow and Brian Urbano of the Health Care and Government Fraud Unit, and David Dauenheimer, Deputy Chief, Civil Division, of the U.S. Attorney’s Office for the District of New Jersey, and by Trial Attorney Natalie Priddy of the Department of Justice’s Civil Division.
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 $1.36 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.
The claims settled by this agreement are allegations only; there have been no admissions of liability.
California Man Gets 63 Months in Prison for Possessing with Intent to Distribute 29 Kilograms of MethamphetamineRead the Press Release
TRENTON, N.J. – A South Gate, California, man who was arrested with 29 kilograms of methamphetamine hidden in a tractor trailer was sentenced today to 63 months in prison, Acting U.S. Attorney William E. Fitzpatrick announced.
Tomas Lopez Beltran, 46, previously pleaded guilty before U.S. District Judge Brian R. Martinotti to an information charging him with one count of possession with intent to distribute more than 500 grams or more of methamphetamine. Judge Martinotti imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements in the court:
On Oct. 28, 2016, law enforcement lawfully searched a tractor trailer driven by Beltran and recovered approximately 29 kilograms of methamphetamine and $73,500 in cash from a concealed compartment located inside the cab of the trailer. Beltran admitted that he intended to distribute the methamphetamine and cash to an individual in Georgia.
In addition to the prison term, Judge Martinotti sentenced Beltran to three years of supervised release
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Karen D. Stringer of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Eric J. Marcy Esq., Woodbridge, New Jersey
Monmouth County, New Jersey, Man Sentenced to 97 Months in Prison for Receiving Images of Child Sexual Abuse over InternetRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 97 months in prison for using his e-mail and instant messaging accounts to receive images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
Matthew Kaminsky, 51, of Matawan, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of receiving child pornography. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Kaminsky allegedly met various underage girls through online chat applications and sent them naked pictures of himself. In late January of 2015, over the course of several days, he began corresponding with a 13-year-old girl over an online chat application and induced her to take nude pictures of herself and to send them to him. In March 2015 law enforcement officers recovered computer equipment belonging to Kaminsky containing images and videos appearing to be of child sexual abuse. Law enforcement officers located and interviewed the 13-year-old girl Kaminsky had chatted with online in January of 2015, and she confirmed that she had chatted online with Kaminsky and had sent him nude pictures of herself at his request.
In addition to the prison term, Judge Cooper sentenced Kaminsky to five years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Debra Parker, Newark, and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge John Walker, Philadelphia Division, 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: Brian Reilly Esq., Assistant Federal Public Defender, Trenton
Executive Director of Ocean City, New Jersey, Housing Authority Gets Three Years of Probation for Embezzling Federal FundsRead the Press Release
CAMDEN, N.J. – The former executive director of the Ocean City, New Jersey, Housing Authority (OCHA) was sentenced today to three years of probation for embezzling federal funds received by authority from the U.S. Department of Housing and Urban Development (HUD), Acting U.S. Attorney William E. Fitzpatrick announced.
Alesia Watson, 54, of Galloway Township, New Jersey, previously pleaded guilty before U.S. Magistrate Judge Karen M. Williams to an information charging her with one count of embezzling federal funds received from HUD and administered by OCHA to which she was not entitled. Judge Williams imposed the sentence today in Camden federal court.
According to documents filed in the case and statements made in court:
As executive director, Watson had access to two credit cards maintained by OCHA. From December 2013 through March 2015, Watson purchased 69 MasterCard gift cards using these two OCHA credit cards. She used the gift cards for personal expenses not associated with OCHA or provided them to friends and family members. Watson then used federal funds received from HUD and administered by OCHA to pay the credit card bills associated with the purchase of the gift cards. According to the plea agreement, the loss associated with the embezzlement was more than $6,500 but less than $15,000.
Watson was also ordered to pay restitution of $8,050.
Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi, and special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, with the investigation.
The government is represented by Deputy Attorney-in-Charge Matthew J. Skahill of the U.S. Attorney’s Office in Camden.
Defense counsel: John J. Zarych Esq., Northfield, New Jersey
Essex County, New Jersey, Man Pleads Guilty to Armed Robbery of Passaic, New Jersey, ClubRead the Press Release
NEWARK, N.J. – A South Orange, New Jersey, man today admitted his participation in the September 2015 armed robbery of a club in Passaic, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Keontrae Lawrence, a/k/a “Taz,” 29, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an indictment charging him with one count of conspiracy to commit Hobbs Act robbery and one count of brandishing a firearm during a crime of violence.
According to the indictment and other documents filed in this case:
On Sept. 6, 2015, Lawrence and others agreed to rob a club in Passaic at gunpoint. During his plea hearing, Lawrence admitted that he knowingly and willfully participated in the robbery and that he and another conspirator brandished a firearm and threatened to use violence against a club employee. He also admitted that he and the other conspirator took $26,084 in cash from the club before fleeing in a getaway car.
The Hobbs Act conspiracy charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The count of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of seven years in prison and that sentence must be consecutive to any other sentence imposed. Lawrence’s sentencing is set for Jan. 5, 2018.
Lawrence was originally charged with Jimmy Cooper, a/k/a “Flip,” 32, of Irvington, New Jersey, and Shaheed Blamahsah, a/k/a “Aboo,” 30, of East Orange, New Jersey, in November 2016. Cooper and Lawrence were later indicted by a federal grand jury on March 24, 2017, for their roles in the robbery.
Blamahsah pleaded guilty to his role in the robbery and awaits sentencing. The charges against Cooper are still pending, and he is presumed 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, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Sheriff’s Office, the Passaic Police Department, and the Newark Police Division for their assistance.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the U.S. Attorney’s Office’s Criminal Division in Newark.
Defense counsel: John A. Azzarello Esq., Morristown, New Jersey
California Man Admits Role in Heroin Distribution SchemeRead the Press Release
NEWARK, N.J. – A California man who swallowed plastic bags containing approximately 600 grams of heroin admitted today that he possessed the drug with intent to distribute it, Acting U.S. Attorney William E. Fitzpatrick announced.
Omar Vazques, 24, of Bakersfield, California, pleaded guilty before U.S. District Court Judge John Michael Vazquez in Newark federal court to an information charging him with one count of possession of heroin with intent to distribute and distribution of heroin.
According to documents filed in this case and statements made in court:
On Sept. 15, 2016, Vazques landed at Newark Liberty International Airport on a commercial flight after having swallowed approximately 81 “pellets” of heroin wrapped in plastic baggies. Vazques intended to distribute the heroin after his arrival but was apprehended by law enforcement authorities, who escorted Vazques to a hospital. Vazques underwent emergency surgery after hospital staff discovered that one of the baggies had ruptured. A co-defendant, Arturo Gonzales, who arrived on the same flight and had also swallowed heroin with the intent to distribute it, pleaded guilty before Judge Vazquez on June 26, 2017.
The drug distribution charge to which Vazques pleaded guilty carries a maximum prison sentence of 20 years and a maximum fine of $1 million. Sentencing is scheduled for Dec. 11, 2017.
U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, in Newark for the investigation that led to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office Organized Crime/Drug Enforcement Task Force Unit.
California Man Admits Laundering Proceeds from Heroin Trafficking OrganizationRead the Press Release
TRENTON, N.J. – An Anaheim, California, man today admitted laundering money on behalf of an international drug trafficking organization, Acting U.S. Attorney William E. Fitzpatrick announced.
Harry Madrid, 26, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to Count Two of an indictment charging him with conspiracy to launder money. Madrid was previously arrested in November 2014 in Illinois.
According to documents filed in this case and statements made in court:
From June 2014 through November 2014, Madrid conspired with other members of a international drug trafficking organization, which included cells operating in New Jersey, to launder more than $150,000 in United States currency related to the distribution of heroin.
One of Madrid’s co-defendants, 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 his vehicle.
The money laundering charge to which Madrid pleaded guilty carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Sentencing is set for Dec. 14, 2017.
Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration (DEA)’s 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 plea.
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.
South Jersey Man Gets 70 Months in Prison for Role in Crack Distribution ConspiracyRead the Press Release
CAMDEN, N.J. - A Camden man was sentenced today to 70 months in prison for his role in a crack cocaine distribution conspiracy operating in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.
Joseph Boyd, a/k/a “Breet,” 32, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Joseph Boyd admitted that he sold crack cocaine in and around the 1100 block of Lansdowne Avenue in Camden and supplied crack cocaine to other members of the conspiracy to sell in the area.
Joseph Boyd – along with Jason Boyd, Tony Wilson, Preston Thomas, Derek Stallworth, Jeffrey Whitaker, Nafeez Griffin, and Julian Dickerson – were originally charged by complaint on Sept. 9, 2016, following an investigation by the FBI’s South Jersey Violent Offender and Gang Task Force. Law enforcement officers seized drugs and recovered two handguns that were kept by members of the conspiracy in connection with the organization’s drug trafficking activities.
In addition to the prison term, Judge Simandle sentenced Joseph Boyd to three years of supervised release.
Jason Boyd, Stallworth, and Wilson, who each previously pleaded guilty to drug distribution conspiracy and firearms possession, were all sentenced to 96 months in prison. Dickerson and Griffin both pleaded guilty to their roles in the scheme and await sentencing.
Thomas and Whitaker remain charged by superseding indictment with one count of conspiracy to distribute and to possess with intent to distribute cocaine base. Thomas is also charged with one count of possession of a firearm in furtherance of a drug trafficking crime. The charges and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s South Jersey Violent Offender and Gang Task Force, South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster; the Camden County Police Department, under the direction of Chief J. Scott Thomson; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; and the N.J. State Police, under the direction of Col. Rick Fuentes, with the investigation.
He also thanked the Camden County Sheriff’s Department, the Cherry Hill Police Department, and the U.S. Department of Homeland Security Investigations (HSI) for their assistance.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: David Rudenstein Esq.
Monmouth County, New Jersey, Man Sentenced to Three Years in Prison for Multimillion-Dollar Investment Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Monmouth County, New Jersey, man was sentenced today to 36 months in prison for conspiring to defraud 76 victims of more than $4 million and evaded paying more than $273,000 in taxes, Acting U.S. Attorney William E. Fitzpatrick announced.
Peter Zuck, 67, of Middletown, New Jersey, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with one count of conspiracy to commit wire fraud and four counts of tax evasion. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Zuck was a co-founder of Osiris Partners LLC and Osiris Partners Fund Limited. Starting in 2009, Zuck was employed in a management role with Osiris Partners LLC and Osiris Partners Fund Limited, including as a managing member and portfolio manager of the fund. Between June 2009 and November 2011, Osiris Fund Limited Partnership solicited 76 investors to invest $12 million in the Fund. Zuck, Michael Spak, who previously pleaded guilty to one count of conspiracy to commit wire fraud for his role in the scheme, and other conspirators defrauded investors by concealing investments losses in the fund, misappropriating assets from the fund for their own personal use, and obtaining management fees based on a fraudulently inflated net asset value.
Zuck admitted that members of the Osiris Fund Limited Partnership diverted $4 million in investors’ funds from the fund and fraudulently drew $3.9 million in management fees to which they were not entitled.
Zuck also admitted that he was issued $1.3 million in checks in connection with his employment at Osiris Partners LLC and Osiris Fund Limited Partnership, which he used to pay for personal expenditures but which he did not report as income to the IRS. Instead, Zuck concealed his income by causing the checks to be deposited in an account that he controlled but that was in his son’s name and falsely assigning the income to his son on IRS forms. He admitted that he attempted to evade $273,417 in income tax.
In addition to the prison term, Judge Rodriguez sentenced Zuck to three years of supervised release. Restitution will be determined at a later date.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou, David M. Eskew, and Shirley Emehelu of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Tim Anderson Esq., Red Bank
Monmouth County Investment Adviser and Tax Preparer Charged in $1.8 Million Investment Fraud SchemeRead the Press Release
TRENTON, N.J. – A Farmingdale, New Jersey, man was arrested and charged today with defrauding investment clients out of more than $1.8 million, Acting U.S. Attorney William E. Fitzpatrick announced.
Scott Newsholme, 42, is charged by criminal complaint with one count each of mail fraud, wire fraud, and securities fraud. He was arrested by FBI and IRS special agents this morning and will appear later this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.
According to the complaint:
Since 2002, Newsholme owned and operated at least three different financial advisory and tax return preparation businesses. Between 2007 and 2016, Newsholme recommended to multiple clients that they invest their money with him, which he would use on their behalf to purchase various securities, including bond instruments issued by a private New Jersey country club, a bond investment in a video-game production company, and investments in the production of a movie. Newsholme also represented to clients that he would invest their money in more traditional securities, including mutual funds, annuities, life insurance policies, college education accounts, and money market funds.
Newsholme directed his investment clients to write checks to him or one of his companies so that he could execute the investments on their behalf.
However, rather than invest them as promised, Newsome used the funds for personal expenses, including multiple vehicles, bedroom furniture, debits at casinos, bank transfers to Newsholme’s personal bank accounts, and ATM withdrawals. In many cases, the investments that Newsholme recommended did not even exist.
In addition, Newsholme concealed his scheme by diverting incoming investment funds to pay other clients who had requested to withdraw funds from their investment portfolios. Newsholme also provided his clients phony account statements, security instruments, and other documentation showing the purported investments made on his clients’ behalf. Overall, Newsholme’s alleged scheme caused investment losses of over $1.8 million.
The mail and wire fraud counts each carry a maximum potential penalty of 30 years in prison and a $1 million fine. The securities fraud count carries a maximum potential penalty of 20 years in prison and $5 million fine.
In a separate civil action, the U.S. Securities and Exchange Commission (SEC) today filed a complaint against Newsholme in Trenton federal court.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, Newark Division, Red Bank Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation. He also thanked the SEC’s New York Regional Office, under the direction of Andrew Calamari, and the N.J. Bureau of Securities, under the direction of Bureau Chief Christopher Gerold, for their assistance.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
Defense Counsel: Gregory E. Tomczak Esq., Scottsdale, Arizona
Passaic County Man Gets 54 Months in Prison for Bank RobberyRead the Press Release
NEWARK, N.J. – A Little Falls, New Jersey, man was sentenced today to 54 months in prison for robbing a TD Bank in Hawthorne, New Jersey, in February 2016, Acting U.S. Attorney William E. Fitzpatrick announced.
Robert Somers, 45, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of bank robbery. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Feb.17, 2016, Somers robbed the TD Bank in Hawthorne by handing a teller a note that read: “this is a hold up,” and demanding cash. The teller handed Somers cash. Somers demanded more money, and a second teller handed him additional cash. Somers then fled the bank in a car driven by another individual.
In addition to the prison term, Judge Wigenton sentenced Somers to three years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Hawthorne Police Department, under the direction of Chief Richard McAuliffe; the Pennsylvania State Police, under the direction of Col. Tyree C. Blocker; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation.
The government is represented by Assistant U.S. Attorneys Jihee G. Suh and Karen D. Stringer of the U.S. Attorney’s Office Criminal Division in Newark.One Man Arrested, Three Others Convicted for Securities Fraud Conspiracy Involving Mercer County Pharmaceutical CompanyRead the Press Release
NEWARK, N.J. - One man was arrested and three others pleaded guilty today for their roles in an insider trading scheme that profited from yet-to-be public information concerning a pharmaceutical company that developed a drug to treat cancer, Acting U.S. Attorney William E. Fitzpatrick announced.
Daniel Perez, 28, of Yardley, Pennsylvania, was arrested this morning and charged by complaint with one count of conspiracy to commit securities fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
Evan Kita, 27, of Yardley, pleaded guilty today before U.S. District Judge Michael A. Shipp to an information charging him with one count of conspiracy to commit securities fraud and one count of securities fraud. Richard Yu, 27, and his father, Chiang Yu, 55, both of Pennington, New Jersey, also pleaded guilty today before Judge Shipp to separate informations charging them each with one count of securities fraud. All three were released on $150,000 unsecured bond.
According to documents filed in the case and statements made in court:
Celator Pharmaceuticals Inc. (Celator) was a biopharmaceutical company headquartered in Ewing Township, New Jersey, that developed the drug Vyxeos to treat acute myeloid leukemia. In December 2012, Celator began Phase 3 clinical trials for Vyxeos, the results of which were highly confidential within the company. On March 14, 2016, Celator issued a press release announcing that the clinical trial results were positive.
Prior to the March 2016 announcement, Kita, who was a Celator employee from June 2013 through April 2016, learned that the Vyxeos clinical trials had produced positive results. Kita then shared that information with Perez and Richard Yu, who both traded on the information.
On May 31, 2016, Celator and Jazz Pharmaceuticals PLC (Jazz) – a publicly-traded company headquartered in Dublin, Ireland – announced that they had entered an agreement for Jazz to purchase Celator in a transaction valued at approximately $1.5 billion. Jazz completed the acquisition of Celator in 2016, and now operates Celator as a wholly-owned subsidiary.
Kita learned of the potential acquisition prior to the public announcement from two close friends who still worked at Celator. Again, Kita shared the information with Perez and Richard Yu, who both traded on the information. Richard Yu, in turn, shared the information with Chiang Yu, who also traded on the information and agreed to share the profits with Kita.
Kita admitted that the gain resulting from his insider trading scheme was more than $250,000, but not more than $550,000. Chiang Yu admitted that the gains associated with his offense were more than $95,000, but not more than $150,000. Richard Yu admitted that the gains associated with his offense were $200,070.29.
The conspiracy to commit securities fraud counts carry a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. The securities fraud counts carry a potential penalty of 20 years in prison and a $5 million fine. Sentencing for Kita, Richard Yu, and Chiang Yu is set for Dec. 5, 2017.
The charge and allegations against Perez are merely accusations, and he is presumed innocent unless and until proven guilty.
The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against all four defendants today.
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. He also thanked the SEC for the assistance provided by its Market Abuse Unit, under the direction of Joseph Sansone and Robert Cohen, and its Philadelphia Regional Office, under the direction of G. Jeffrey Boujoukos.
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:
Perez: Louis R. Busico Esq., Newton, Pennsylvania
Kita: Robert Heim Esq., New York
Richard Yu: Rubin Sinins Esq., Springfield, New Jersey
Chiang Yu: Kristen Santillo Esq., Newark, New Jersey
Illinois Man Admits Transporting Multiple Kilograms of Heroin as Part of Cross-Country Drug Distribution ConspiracyRead the Press Release
TRENTON, N.J. – A DeKalb, Illinois, man who was arrested transporting four kilograms of heroin to Indiana pleaded guilty today in Trenton federal court, Acting U.S. Attorney William E. Fitzpatrick announced.
Henry Zamora, 38, pleaded guilty before U.S. District Judge Peter G. Sheridan to Count One of an indictment charging him with conspiracy to distribute heroin.
According to documents filed in this case and statements made in court:
From June 2014 through November 2014, Zamora conspired with other members of a cross-country drug trafficking organization, which included cells operating in New Jersey, to transport and distribute bulk quantities of heroin. On Nov. 21, 2014, Zamora was arrested while transporting four kilograms of heroin contained in a hidden compartment in his vehicle. Following the arrest, officers recovered an additional two kilograms of heroin from his residence in DeKalb.
The charge to which Zamora pleaded guilty carries a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for Dec. 13, 2017.
Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration (DEA)’s 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 Police Department with the investigation leading to today’s guilty plea.The government is represented by Assistant U.S. Attorneys Thomas S. Kearney and Jamari Buxton of the U.S. Attorney’s Office OC/Gangs Unit in Newark.
Defense counsel: Andrea Bergman Esq., Trenton, New Jersey
Two Individuals Charged in Synthetic Opioid Drug Conspiracy Following Overdose DeathRead the Press Release
NEWARK, N.J. – A man from New York and a woman from New Jersey were arrested this morning for their roles in a conspiracy to distribute dangerous designer drugs, including a synthetic opioid that is several times more potent than morphine, Acting U.S. Attorney William E. Fitzpatrick announced.
Brian Parker, 34, of Long Island City, New York, and Victoria Koleski, 29, of Farmingdale, New Jersey, are charged by criminal complaint with conspiring to distribute controlled substance analogues, and distributing and possessing with intent to distribute the controlled substance analogues U-47700, A-PHP, and 3-MEO-PCP. The defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the complaint:
Controlled substance analogues are designer drugs that have chemical structures and hallucinogenic effects similar to Schedule I controlled substances. Parker, who has two prior convictions for federal narcotics-related crimes, allegedly manufactured and distributed controlled substance analogues and other illegal chemicals through two internet-based companies he controlled. The substances sold by Parker were linked to an overdose death which occurred in May 2016.
On May 22, 2016, law enforcement officers were dispatched to a residence in Madison, Wisconsin, in response to a report of a 37-year-old man who had stopped breathing. The victim was dead by the time officers arrived at his residence. An autopsy later confirmed that the victim’s death was caused by acute intoxication due to the combined effects of a substance called U-47700 and Benzodiazepine Analogue (Etizolam).
U-47700 is a synthetic opioid that is several times more potent than morphine. Law enforcement officers recovered several mail parcels that were addressed to the victim, one or more of which contained full glass vials labeled “U-47700,” as well as multiple invoices indicating the victim had been ordering U-47700 and other substances from a website run by Parker.
After learning of the victim's overdose, law enforcement agents began investigating one of Parker’s websites. The investigation revealed that Parker used other conspirators, including Koleski, to send and receive packages for his narcotics distribution business. Those conspirators received raw materials from China or elsewhere through the mail, repackaged and sent them to Parker, who then manufactured those materials into the chemicals that he sold online. Afterwards, Parker transported the finished products back to his conspirators, who then shipped them to Parker's customers.
For example, from June 30, 2017 through July 5, 2017, Koleski shipped approximately 218 parcels from a post office located in Farmingdale, many of which contained controlled substance analogues that Parker sold online. A court-authorized search and seizure of approximately 75 of those packages revealed that Parker and Koleski were also distributing the controlled substance analogues A-PHP and 3-MEO-PCP, which have chemical structures and hallucinogenic properties similar to the Schedule I controlled substances A-PVP and PCP, respectively.
Each charge in the complaint carries a maximum potential penalty of 20 years in prison and a $1 million fine.
Acting U.S. Attorney Fitzpatrick credited special agents with the Drug Enforcement Administration (DEA)’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to today’s arrests.
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 complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Farmingdale, New Jersey, Man Charged with Robbing Two Monmouth County BanksRead the Press Release
TRENTON, N.J. – A Farmingdale, New Jersey, man appeared in federal court today to face charges that he recently robbed TD Banks in Tinton Falls, New Jersey, and Wall, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Michael R. Volek, 53, was arrested yesterday and charged by complaint with one count of bank robbery. He appeared this afternoon before U.S. Magistrate Judge Douglas Arpert in Trenton federal court and was detained.
According to the complaint:
On Aug 25, 2017, Volek allegedly entered a TD Bank in Tinton Falls and handed a teller a note that read “put the money in bag now and nobody get hurt.” Volek then told the bank teller “put the money in the bag. Come on, I’m desperate.” The teller handed Volek some cash and he left the bank.
On Aug. 28, 2017, Volek allegedly entered another TD Bank in Wall and handed a teller a note that read “Put the money in bag now. This is no joke. I will shoot you. $100. $50.” Volek then told the teller “Give me money. If you don’t, I’m going to cut you.” The teller handed Volek some cash and he left the bank. Volek was arrested later that day at a motel in Neptune, New Jersey.
The charge in the complaint 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.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, Newark Division, Red Bank Resident Agency, Jersey Shore Gang and Criminal Enterprise Task Force (to include representatives from Bradley Beach Police Department, Brick Police Department, Marlboro Police Department, Monmouth County Sheriff’s Office, and Toms River Police Department), under the direction of Special Agent in Charge Timothy Gallagher; the Monmouth County Prosecutor’s Office, under the direction of Monmouth County Prosecutor Christopher J. Gramiccioni; the Tinton Falls Police Department, under the direction of Chief John A. Scrivanic; the Wall Township Police Department, under the direction of Chief Ken Brown; and the Neptune Township Police Department, under the direction of Chief James M. Hunt Jr., with the investigation leading to Volek’s arrest.
The government is represented by Assistant U.S. Attorney R. Joseph Gribko of the U.S. Attorney’s Office Criminal Division in Trenton.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty
Defense counsel: Andrea Bergman Esq., Assistant Federal Public Defender, Trenton
Cape May County, New Jersey, Man Gets 66 Months in Prison for Operating Payroll Tax Fraud SchemeRead the Press Release
TRENTON, N.J. – A Sea Isle City, New Jersey, man was sentenced today to 66 months in prison for operating a multimillion-dollar fraud scheme through his former payroll company, Innovative Payroll Services LLC (IPS), Acting U.S. Attorney William E. Fitzpatrick announced.
John Scholtz, 68, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of wire fraud and one count of transacting in criminal proceeds. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Scholtz owned and operated IPS, a company that provided payroll services to clients – including municipalities, educational institutions, and various small to medium-sized privately held companies – in New Jersey and elsewhere. Each payroll period, IPS provided its clients with a summary setting forth the payroll taxes owed for that period. IPS clients then deposited the specified payroll taxes into an IPS bank account, where IPS held the funds until they were remitted to the taxing authorities.
Scholtz admitted that from February 2012 to January 2016, he withdrew or directed others at IPS to withdraw client tax funds from IPS’ Tax Impound Accounts, knowing that these funds constituted client tax funds, and used these funds instead for IPS operating expenses and his own personal expenses, including payments for homes, cars, boats, airplanes and credit cards.
This ongoing misappropriation of funds caused many IPS clients to be in delinquent status with the IRS and state and local taxing authorities. As clients’ tax deposit funds came in, IPS used such funds to pay other clients’ taxes owed for prior pay periods, as well as penalties and interest. As a result, at least 103 IPS clients lost more than $8.4 million worth of federal, state and local tax deposits that IPS failed to make, as well as more than $578,000 in associated penalties and interest. The City of Trenton was an IPS client from July 2009 to January 2016, and is one of is the IPS clients whose tax deposit funds were misappropriated by Scholtz.
In addition to the prison term, Judge Wolfson sentenced Scholtz to two years of supervised release and ordered him to pay restitution of $9,566,460.79.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, Newark Division; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, Newark Division; and the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo J. Onofri, with the investigation.
The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Brian Reilly Esq., Assistant Federal Public Defender, Trenton
Two Men Charged in Conspiracy to Distribute over 140 Kilograms of Heroin and CocaineRead the Press Release
NEWARK, N.J. – Two California men who were arrested in Essex County, New Jersey, with over 140 kilograms of narcotics in their possession made their initial appearances today in Newark federal court, Acting U.S. Attorney William E. Fitzpatrick announced.
Abraham Castro, 33, of San Diego, California, and Hector Leonel Lucas-Ramos, 42, of National City, California, are charged by complaint with one count of conspiracy to possess with intent to distribute approximately 141 kilograms of suspected cocaine and heroin. They appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson and were detained.
According to the complaint:
On Aug. 27, 2017, Castro and Lucas-Ramos were arrested in Essex County while they were driving a tractor trailer. After the tractor trailer was seen committing several traffic violations, law enforcement conducted a motor vehicle stop. As law enforcement approached the driver, Castro, they observed Lucas-Ramos run to the cabin-area of the tractor trailer, where he was allegedly trying to close a large bag containing packages of a white powdery substance.
During a subsequent search of the tractor trailer, law enforcement recovered approximately five large duffle bags containing a total of 141 packages. Lab testing later confirmed the presence of heroin and cocaine in the packages.
Each defendant faces a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison, and a $10 million fine.
Acting U.S. Attorney Fitzpatrick credited the Drug Enforcement Administration (DEA)’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Meredith Williams of the U.S. Attorney’s Office General OCDETF/Narcotics Unit in Newark.
Defense counsel:
Castro: John Yauch Esq., Assistant Federal Public Defender, Newark
Lucas-Ramos: Alyssa Cimino Esq., Fairfield, New Jersey
Member of Trenton Drug Trafficking Organization Sentenced to Seven Years in PrisonRead the Press Release
TRENTON, N.J. – A Trenton man was sentenced today to 84 months in prison for his role in a drug trafficking organization that allegedly distributed hundreds of grams of heroin in Trenton and the surrounding areas, Acting U.S. Attorney William E. Fitzpatrick announced.
Thomas Rogers, a/k/a “Herb,” a/k/a “T-Rod,” 23, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin. As part of his guilty plea, Rogers admitted possessing at least one firearm during the conspiracy. Judge Wolfson imposed the sentence today in Trenton federal court.
In December 2016, Rogers and nine other members of a drug trafficking organization operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. The complaint referred to the drug trafficking organization as the “Abdullah DTO,” after its leader, Ishmael Abdullah. Since then, six of the 10 defendants, including Abdullah, have pleaded guilty.
According to documents filed in this case and statements made in court:
From June 2015 through December 2016, Rogers and others engaged in a drug trafficking organization that operated in the area of Spring and Passaic Streets in Trenton. Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that defendant Ishmael Abdullah was a leader of the Abdullah DTO and was responsible for obtaining significant quantities of heroin from multiple suppliers, including from defendants Jose Joaquin Torres-Mezquita and Ileana Sanchez. Abdullah and Keith Hunter coordinated the organization’s distribution of heroin through themselves and other conspirators, including Rogers.
Members of the Abdullah DTO used temporary prepaid phones, stash houses and cars, and spoke in code to avoid detection by law enforcement. In connection with their narcotics conspiracy, Rogers and other members of the Abdullah DTO maintained joint access to multiple firearms.
In addition to the prison term, Judge Wolfson sentenced Rogers to five years of supervised release.
Acting U.S. Attorney Fitzpatrick credited agents and officers with the Greater Trenton Safe Streets Task Force, including special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Newark Division, Trenton Field Office, under the direction of Special Agent in Charge John B. Devito; officers of the Trenton Police Department, under the direction of Director Ernest Parrey Jr.; officers of the Princeton Police Department, under the direction of Chief Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief John P. Stemler III; and detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo J. Onofri, with the investigation.
He also thanked special agents of the FBI’s Philadelphia Field Office, under the direction of Special Agent in Charge Michael Harpster; special agents of Homeland Security Investigations, under the direction of Acting Special Agent in Charge Debra Parker; officers of the N.J. State Police, under the direction of Superintendent Col. Joseph R. Fuentes; and officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler, for their assistance in the case.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations against the remaining defendants are merely accusations and those defendants are presumed innocent unless and until proven guilty.
Defense counsel: David R. Oakley Esq., Princeton
New York Man Sentenced to 39 Months in Prison for Role in Robbery of New Jersey BarRead the Press Release
NEWARK, N.J. – A New York man was sentenced today to 39 months in prison for his role in the robbery of a North Jersey bar, Acting U.S. Attorney William E. Fitzpatrick announced.
Balmore Carrillo-Iraheta, 20, of Suffern, New York, previously pleaded guilty before Judge Linares for his role in the Hobbs Act Robbery of a Hawthorne, New Jersey, bar. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Balmore Carrillo-Iraheta admitted that on Dec. 25, 2016, he and others forcibly robbed the bar and fled with approximately $200 in cash.
In addition to the prison term, Judge Linares sentenced Carrillo-Iraheta to three years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, the Bergen County Prosecutor’s Office, under the direction of Prosecutor Gurbir S. Grewal, and the Ridgewood and Hawthorne Police Departments, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Karen D. Stringer of the U.S. Attorney’s Office’s Criminal Division in Newark.
Defense counsel: Ruth M. Liebesman Esq., Paramus, New Jersey
Monmouth County, New Jersey, Man Charged with Identity Theft and Check KitingRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man appeared in federal court today to face charges that he operated a $530,000 check-kiting scheme using stolen Social Security numbers, Acting U.S. Attorney William E. Fitzpatrick announced.
Daniel White, 51, of Manalapan, New Jersey, was charged by complaint with one count of bank fraud and one count of aggravated identity theft. He made his initial appearance before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court.
According to documents filed in this case and statements made in court:
From February 2015 to June 2016, White opened or directed others to open 413 accounts at TD Bank, using 133 different Social Security numbers, 84 of which belonged to other individuals. White then wrote or caused others to write 472 checks totaling more than $530,000 addressed to himself or the owners of the newly opened accounts, knowing that the accounts against which the checks were written did not contain sufficient funds. White and others deposited those checks into the newly opened accounts and withdrew money before the checks bounced.
The count of bank fraud with which White is charged carries a maximum potential penalty of 30 years in prison and a $1 million fine. The count of aggravated identity theft carries a mandatory minimum of two years in prison, consecutive to any other sentence imposed.
Acting U.S. Attorney Fitzpatrick credited the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt; the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato; and the Manchester Police Department, under the direction of Chief Lisa D. Parker, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations in the complaint are merely accusations, and the defendant is innocent unless and until proven guilty.
FBI Most-Wanted Fugitive Makes Initial Court Appearance for MS-13 MurderRead the Press Release
NEWARK, N.J. – One of the FBI’s Ten Most Wanted Fugitives, who was arrested earlier this month in Virginia, made his initial appearance in federal court in Newark for a gang-related murder, Acting U.S. Attorney William E. Fitzpatrick announced.
In September 2013, Walter Yovany-Gomez, 33, a/k/a “Cholo,” was indicted by a Newark grand jury for murder in aid of racketeering and conspiracy to commit murder in an indictment that named 14 alleged members of Plainfield Locos Salvatrucha (PLS), a New Jersey branch of the Mara Salvatrucha (MS-13) transnational gang. At the time of the federal indictment, Yovany-Gomez was a fugitive.
In April 2017, the FBI placed Yovany-Gomez on its Ten Most Wanted Fugitive List. On August 12, 2017, he was arrested without incident in Woodbridge, Virginia, based on tips received from the public. He made his initial appearance before U.S. Magistrate Judge Michael A. Hammer this afternoon and was remanded without bail.
Between 2014 and 2016, all 13 of the other co-defendants charged in the September 2013 federal indictment were convicted, including eight MS-13 members who were convicted following a 16-week trial that ended in June 2016.
Yovany-Gomez is charged in connection with the murder of Julio Matute. According to the indictment and statements made in court:
On the morning of May 8, 2011, Matute was allegedly murdered by Yovany-Gomez and a conspirator, Cruz Flores, a/k/a “Bruja.” Gomez and Flores allegedly struck Matute in the head with a baseball bat, sliced his throat, and stabbed him in the back 17 times with a screwdriver, allegedly because Matute was suspected of socializing with a rival gang. Flores was found guilty of the murder during the trial described above.
Yovany-Gomez is charged with murder in aid of racketeering, which is punishable by a mandatory sentence of life in prison. The charge is a death penalty-eligible offense subject to a decision by the U.S. Attorney General.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; and special agents of U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations, under the direction Newark Field Office Director John Tsoukaris. He also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace Park, for long, close collaboration on the case. The FBI Washington Field Office’s Violent Crimes Task Force, the Fairfax County Police Department’s Gang Unit, and the Northern Virginia Gang Task Force coordinated the local search and arrest of Yovany-Gomez. He also acknowledged the U.S. Attorney’s Offices for the Eastern District of Virginia and the District of Maryland for their assistance in the ongoing investigation.
The government is represented by Assistant U.S. Attorneys James Donnelly and Jamari Buxton of the U.S Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Burlington County, New Jersey, Pharmacist Convicted of Illegally Distributing Opioids from ‘Pill Mills’Read the Press Release
CAMDEN, N.J. – A Medford, New Jersey, pharmacist was convicted today for his role in illegally distributing and dispensing oxycodone from two pharmacies located in Medford, Acting U.S. Attorney William E. Fitzpatrick announced.
Michael Ludwikowski, 45, the owner of Olde Medford Pharmacy and Medford Family Pharmacy, was convicted of six counts in an indictment charging him with illegally distributing and dispensing oxycodone, a Schedule II controlled substance, and maintaining a drug-involved premises. He was convicted following a five-week trial before U.S. District Judge Jerome B. Simandle in Camden federal court. The jury deliberated for three days before returning the guilty verdict.
The trial follows the guilty plea of co-defendant David M. Goldfield, also a pharmacist (who Ludwikowski had hired to work at Olde Medford Pharmacy), to engaging in a conspiracy to dispense controlled substances with Ludwikowski, and the pleas of Dontees Jones, Matthew Lawson, and Patrick Clark, all long-term customers of Ludwikowski, and Krystal Wood, a former employee of Olde Medford Pharmacy.
“For the people of New Jersey and across the United States, the suffering, loss of life, and enormous financial losses attributed to the opioid epidemic are all too real,” Acting U.S. Attorney Fitzpatrick said. “In the midst of this crisis, Ludwikowski – a pharmacist who had a duty to ensure that prescription opiates were dispensed only for legitimate medical purposes – knowingly sold them to customers with fake prescriptions or to individuals whom he knew to be addicts. He didn’t just fail in his professional responsibilities: he actively contributed to the opioid crisis, and as the jury decided today, broke federal laws in the process.”
“Opioid and prescription drug abuse have been spreading throughout our country. We are determined to investigate and prosecute those who unlawfully distribute oxycodone within our community,” Special Agent in Charge Timothy Gallagher of the FBI’s Newark office said. “Today’s conviction highlights the commitment of the FBI and our partners to combat the growth of this epidemic that continues to impact our society.”
Carl J. Kotowski, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division said, “The current opioid epidemic is widespread and is tearing families apart. A pharmacist has a responsibility to play a role in curtailing this problem. In this case, the defendant chose to ignore that responsibility and instead was more interested in profiting on people’s addictions.”
According to documents filed in this case and statements made in court:
From March 2008 through August 2013, Ludwikowski, the pharmacist-in-charge of Olde Medford Pharmacy, and his employee, Goldfield, knowingly distributed and dispensed oxycodone and other controlled substances to individuals, including addicts, who presented phony prescriptions.
Ludwikowski ordered large quantities of oxycodone from a national distributor. The distributor established thresholds for the quantity of controlled substances that it supplied to certain pharmacies. Ludwikowski and his pharmacies received large quantities of 30mg oxycodone pills, even though he knew the painkiller was not going to be used for legitimate medical reasons.
In some instances, the customers presented fraudulent prescriptions for a non-narcotic substance that had been “washed,” or “bleached,” through a chemical process that removed the original writing. The customers then rewrote the prescriptions for their drug of choice, oxycodone. Ludwikowski and Goldfield also ignored concerns raised by an employee who pointed out an obviously altered prescription.
Customers who used the fraudulent prescriptions generally paid in cash and provided gifts to Ludwikowski and Goldfield. In some instances, these customers filled fraudulent prescriptions for oxycodone multiple times a week.
In furtherance of the scheme, Ludwikowski and another pharmacist he employed – referred to in the indictment as “Pharmacist 3” – reached an agreement with a physician –referred to in the indictment as “Doctor 1” – to “steer” Doctor 1’s patients to Ludwikowski’s pharmacies. In a text message from Pharmacist 3 to Ludwikowski on Jan. 11, 2013, Pharmacist 3 wrote: “I talked to [Doctor 1] and he is going to direct all of his patients to us he is the pain doc in Cherry Hill.”
Each of the five substantive counts of illegal distribution of oxycodone carries a maximum potential penalty of 20 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. The count of maintaining a drug-involved premises carries a maximum penalty of 20 years in prison and a $500,000 fine, or twice the gross gain or loss from the offense.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Gallagher; the DEA New Jersey Division, under the direction of Special Agent in Charge Kotowski; the Medford Police Department under the direction of Chief Richard J. Meder; the Moorestown Police Department under the direction of Chief Lee R. Lieber; the Florence Police Department under the direction of Chief John Bunce; and the Lumberton Police Department under the direction of Chief Tony Diloreto, with the investigation leading to today’s conviction.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz and Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney’s Office in Camden, as well as Assistant U.S. Attorney Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Firefighter, Two Pharmaceutical Employees Admit Health Care Fraud Conspiracy Targeting State Health Benefits ProgramsRead the Press Release
CAMDEN, N.J. – Three men today admitted defrauding New Jersey state health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino announced.
Michael Pepper, 45, an Atlantic City, New Jersey, firefighter from Northfield, New Jersey; Thomas Hodnett, 41, a pharmaceutical sales representative from Voorhees, New Jersey; and Steven Urbanski, 37, a pharmaceutical sales representative from Marlton, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
From January 2015 through April 2016, Pepper, Hodnett, and Urbanski served as recruiters in the conspiracy and persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the informations 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 informations 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.
The conspirators recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid one of Pepper, Hodnett, and Urbanski’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to other members of the conspiracy.
Once they had recruited an employee covered by the Pharmacy Benefits Administrator, Pepper, Hodnett, and Urbanski would obtain the employee’s insurance information and fill out a Compounding Pharmacy prescription form. They would select the compounded medications that paid the most without regard to their medical necessity.
Other conspirators would then get the prescriptions signed by doctors who never saw the patients and never evaluated whether the patients had a medical necessity for the compounded medication. The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
According to the informations, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey. Pepper received approximately $113,627.54 for his role in the scheme. Hodnett received approximately $269,966.08 for his role in the scheme. Urbanski received approximately $113,668.12 for his role in the scheme.
Each defendant 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 for Pepper, Hodnett, and Urbanski is scheduled for Dec. 5, 2017.
As part of their plea agreements, Pepper must forfeit $113,627.54 in criminal proceeds and pay restitution of at least $719,481.65. Hodnett agreed to forfeit $269,966.08 and pay restitution of at least $1,497,541.44. Urbanski must forfeit $113,668.12 in criminal proceeds and pay restitution of at least $752,291.94.
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, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to the guilty pleas. 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:
Pepper: Joseph A. Levin Esq., Atlantic City, New Jersey
Hodnett: James J. Leonard Jr. Esq., Atlantic City, New Jersey
Urbanski: Richard Sparaco Esq., Cherry Hill, New Jersey
Two Men Plead Guilty in $25 Million Healthcare Fraud Conspiracy Targeting New Jersey Health Benefits ProgramsRead the Press Release
CAMDEN, N.J. – Two men today admitted defrauding New Jersey state health benefits programs and other insurers out of $25 million by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick and New Jersey Attorney General Christopher S. Porrino announced.
Matthew Tedesco, 42, a pharmaceutical sales representative from Linwood, New Jersey, and Robert Bessey, 43, of Philadelphia, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them with conspiracy to commit health care fraud.
“Using a network of recruiters, doctors, and state and local government employees, the defendants defrauded the state of New Jersey and other health insurers out of millions of dollars by getting reimbursed for phony prescriptions on expensive and medically unnecessary compounded medications,” Acting U.S. Attorney Fitzpatrick said. “This conduct, which fraudulently exploited state health benefits programs and left New Jersey taxpayers on the hook for millions in losses, is especially brazen in an era when health insurance is a constant concern for many Americans.”
“While many New Jersey residents were hard at work trying to pay for adequate healthcare insurance coverage for their families, these two individuals were illegally bilking our system for millions,” said Attorney General Porrino. “Law enforcement partners across the state are attacking fraud on all fronts, prosecuting those who steal while honest citizens struggle. I want to thank the United States Attorney's Office for the District of New Jersey, Acting U.S. Attorney Fitzpatrick and all of our federal partners for unraveling and successfully prosecuting this complicated scheme.”
“These types of schemes and kickback arrangements cripple the healthcare industry and steal money from hardworking taxpayers by driving up the price of insurance,” Special Agent in Charge Timothy Gallagher of the FBI Newark Division said. “The FBI in conjunction with our federal and local law enforcement partners will continue to investigate allegations of fraud that undermine the integrity of our health care system.”
According to documents filed in this case and statements made in court:
Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
From January 2015 through April 2016, Tedesco, a leader in the conspiracy, Bessey, a recruiter in the conspiracy, and others persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the informations as the “Compounding Pharmacy.” The conspirators learned that an entity referred to in the informations as the “Pharmacy Benefits Administrator” would reimburse pharmacies thousands of dollars for a one-month supply of certain prescription compounded medications, including pain, scar, antifungal, and libido creams, as well as over $10,000 per month for certain vitamin combinations.
The conspirators also learned that the Pharmacy Benefits Administrator managed the prescription drug benefit for some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers. 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.
The conspirators recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid one of Tedesco and Bessey’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to other members of the conspiracy.
Once they had recruited an employee covered by the Pharmacy Benefits Administrator, Tedesco, Bessey, and others would obtain the employee’s insurance information and fill out a Compounding Pharmacy prescription form. They would select the compounded medications that paid the most and order 12 months of refills without regard to their medical necessity.
Tedesco and others had prescriptions signed by doctors who never saw the patients and never evaluated whether the patients had a medical necessity for the compounded medication. The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator. Tedesco and others gave money and other benefits to doctors who signed the prescriptions and individuals who agreed to receive the medication.
According to the informations, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to individuals in New Jersey. Over $25 million of that was for prescriptions arranged by Tedesco and the conspirators working for him. Tedesco admitted receiving approximately $11,166,844.20 for submitting those fraudulent claims. He paid some of that money to the conspirators who worked for him. Bessey received approximately $485,540.09 for his role in the scheme.
“The U.S. Department of Labor Office of Inspector General is committed to combating illegal prescription drug schemes, like compounded medication fraud, particularly when they victimize programs administered by the Department of Labor. We will continue to work with our colleagues in other federal and state law enforcement agencies to aggressively investigate allegations of this nature,” said Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor, Office of Inspector General.
“Healthcare programs are in place to provide the American taxpayer with valuable benefits, not for individuals like Mr. Tedesco and Mr. Bessey to exploit and pilfer in order to line their own pockets,” stated Jonathan D. Larsen, Special Agent in Charge, IRS-Criminal Investigation, Newark Field Office.
As part of his plea agreement, Tedesco must forfeit $11,166,844.20 in criminal proceeds and pay restitution of at least $28,773,906.97. Bessey agreed to forfeit $485,540.09 and pay restitution of at least $2,693,192.63.
Each defendant faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss caused by the offense. Sentencing for both defendants is set for Dec. 4, 2017.
Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Gallagher in Newark, IRS – Criminal Investigation, under the direction of Special Agent in Charge Larsen in Newark, and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Mikulka, with the investigation leading to the guilty pleas. 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:
Matthew Tedesco: Michael Elliott Esq., Dallas, Texas
Robert Bessey: Brian J. McMonagle Esq., Philadelphia
Former Senior VP of Sales of Hudson County, New Jersey, Scrap Metal Company Admits 17-Year Conspiracy to Defraud CustomersRead the Press Release
NEWARK, N.J. – The former senior vice president of sales at Cinelli Iron & Metal Co. (CIMCO) today admitted participating in a 17-year conspiracy that defrauded customers out of millions of dollars, Acting U.S. Attorney William E. Fitzpatrick announced.
Michael A. Valenti III, 43, of Hasbrouck Heights, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
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, Valenti, Craig Cinelli, Joseph Cinelli Sr., David Barteck 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.
The wire fraud conspiracy count carries a maximum potential penalty of up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
During his plea hearing, Valenti 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. His sentencing is scheduled for Nov. 21, 2017.
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: Linda George Esq. Hackensack, New Jersey
South Jersey Postal Service Employee and Three Others Charged with Fraud Involving Stolen Blank Postal Money OrdersRead the Press Release
CAMDEN, N.J. – A U.S. Postal Service (USPS) employee and three others were charged in connection with a $100,000 fraud involving numerous stolen blank money orders, Acting U.S. Attorney William E. Fitzpatrick announced today.
Marc Saunders, 39, of Sicklerville, New Jersey, is charged by complaint with stealing a money order imprinting machine and over 180 blank USPS money orders and defrauding the USPS by presenting them and providing them to others, knowing that they were issued unlawfully.
Anthony J. Bell, 38, Andre M. Sutton, 39, both of Philadelphia, and Eugene J. Bowen, 35, of Knoxville, Tennessee, are charged by complaint with defrauding the USPS by presenting the stolen money orders and providing them to others, knowing that they were issued unlawfully.
Saunders, Bell, and Sutton were arrested today and will appear this afternoon before U.S. Magistrate Judge Joel Schneider in Camden federal court. Bowen is still at large.
According to the complaints:
In 2014, Saunders worked at the New Lisbon, New Jersey, USPS branch. In late 2016, law enforcement learned that a money order imprinting machine and more than 180 blank money orders previously issued to that branch were missing. Beginning in 2015, some of the stolen blank money orders surfaced after having been imprinted with dollar amounts and cashed at different USPS branches in the Philadelphia area. About 130 of those stolen money orders were cashed through the end of 2016.
The investigation uncovered alleged links between people who cashed some of those money orders and middlemen Bell, Bowen, and Sutton, and links between the middlemen and Saunders. Saunders was linked to the middlemen through Facebook posts, telephone records, and other evidence. A number of the stolen money orders were cashed in the Knoxville area right after Bowen visited Saunders in New Jersey and returned to Tennessee.
The count of stealing a money order imprinting machine and blank postal money orders carries a maximum penalty of 10 years in prison and a $250,000 fine. The count of defrauding the USPS carries a maximum penalty of five years in prison and a $250,000 fine.
Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Postal Service, Office of the Inspector General, under the direction of Special Agent in Charge Monica Weyler, with the investigation.
The government is represented by Assistant U.S. Attorney Howard Wiener of the U.S. Attorney’s Office Criminal Division in Camden.
Pennsylvania Man Gets 90 Months in Prison for Trafficking Guns into South JerseyRead the Press Release
CAMDEN, N.J. – A Carbon County, Pennsylvania, man was sentenced today to 90 months in prison for conspiring to illegally traffic over 20 firearms – including assault rifles and other high-capacity weapons – into the Camden area, Acting U.S. Attorney William E. Fitzpatrick announced.
Darnel Johns, 49, of Albrightsville, Pennsylvania, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of conspiracy to deal in firearms without a federal firearms license and one count of possession of firearms by a convicted felon. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this and related cases and statements made in court:
Johns admitted that in the Fall and Winter of 2014, he conspired with co-defendant David Potts, 45, of Camden, to illegally sell at least 22 guns. The firearms included a sawed-off shotgun, multiple high-capacity assault-style rifles, and a high-capacity assault-style pistol with a 30-round magazine. Several of the firearms were stolen and had obliterated serial numbers.
In addition to the prison term, Judge Kugler sentenced Johns to three years of supervised release.
Potts previously pleaded guilty to his role in the conspiracy and was sentenced on April 10, 2017 to 121 months in prison.
Acting U.S. Attorney Fitzpatrick credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge John B. Devito, Newark Field Division, and Essam Rabadi, Special Agent in Charge of ATF’s Philadelphia Field Division, with the investigation. He additionally credited special agents of the Drug Enforcement Administration, Camden Resident Office, under the direction of Special Agent in Charge Carl J. Kotowski; the ATF Charlotte Field Division under the direction of Special Agent in Charge C. J. Hyman; investigators with the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; detectives of the Camden County Police Department, under the direction of Chief Scott J. Thomson; the Newark Division of Public Safety’s Ballistics Laboratory; and the Bergen County Sheriff’s Office Ballistics Laboratory, with the investigation.
He additionally credited the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos, Jr.; investigators under the Camden High Intensity Drug Trafficking Area; the New Jersey State Police’s Metro South Unit, under the direction of Superintendent Col. Rick Fuentes; the New Jersey State Parole Board, under the direction of Chairman James T. Plousis; the Camden County Sheriff’s Office, under the direction of Sheriff Gilbert L. Wilson; and the Cherry Hill, Pennsauken and Maple Shade Police Departments.
The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office Criminal Division in Camden.
This investigation was coordinated through the Camden County Crime Collaboration (“C-4”). Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. Such intense coordination greatly enhances the law enforcement community’s ability to correctly identify and successfully prosecute Camden’s most dangerous criminals.
Defense counsel: Thomas Young Esq., Assistant Federal Defender, Philadelphia
Member of Newark’s ‘South Side Cartel’ Gang Gets 315 Months in Prison for Racketeering, Carjacking, Robbery and Drug ChargesRead the Press Release
NEWARK, N.J. – A Newark man was sentenced today to 315 months in prison for his role in a violent and long-running racketeering conspiracy perpetuated by the “South Side Cartel,” a set of the Bloods Street gang based in Newark, Acting U.S. Attorney William E. Fitzpatrick announced.
Malik Lowery, a/k/a “Leek,” 36, previously pleaded guilty before U.S. District Judge Esther Salas to multiple counts of a second superseding indictment charging him with racketeering, racketeering conspiracy, carjacking, Hobbs Act Robbery and conspiracy to distribute, and to possess with intent to distribute, one kilogram or more of heroin and 280 grams or more of crack cocaine. Judge Salas imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
As part of the racketeering charges, Lowery admitted his role in the Oct. 20, 2007 murder of a member of the South Side Cartel that took place on Bragaw Avenue in Newark. Lowery also admitted to committing an armed carjacking with fellow South Side Cartel members on Jan. 3, 2008 and to the robbery of a drug dealer on Feb. 3, 2008, among other acts.
Originally a neighborhood-based gang whose main activities were selling drugs and committing violent acts to aid the drug trafficking business, many of the gang's members were officially brought into the Bloods gang in 2002 and 2003. The gang’s center of activities were apartments located inside buildings dubbed the “Twin Towers,” located at 496-500 Hawthorne Avenue, the location of repeated narcotics and gun arrests by local law enforcement between 2002 and 2010. Many of the South Side Cartel members had tattoos showing these buildings and the logo of “SSC” representing the gang’s initials.
At its peak, the South Side Cartel had about 20 members or associates, many of whom have since been killed in gang-related murders or who are serving prison sentences in state and federal prisons for gang-related crimes. The South Side Cartel was generally known among law enforcement and the FBI as the most violent street gang operating in Newark, committing numerous murders, shootings, robberies and other violent acts in furtherance of the enterprise.
In addition to the prison term, Judge Salas sentenced Lowery to 10 years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; police officers and detectives of the Newark Department of Public Safety, under the direction of Director Anthony A. Ambrose; and prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Robert D. Laurino, with the investigation.
The government is represented by Assistant U.S. Attorneys Robert Frazer and Courtney Howard of the Organized Crime/Gangs Unit in Newark.
Defense counsel: John Azzarello Esq., Morristown, New Jersey, Anthony Ricco, New York,
Leader of Trenton Drug Trafficking Organization Pleads Guilty to Heroin Distribution Conspiracy, Unlawful Firearms PossessionRead the Press Release
Co-Defendant Sentenced to 42 Months in Prison
TRENTON, N.J. – One Trenton man was convicted and another sentenced to prison today for their roles in a drug trafficking organization that distributed hundreds of grams of heroin in the Trenton area, Acting U.S. Attorney William E. Fitzpatrick announced.
Ishmael Abdullah, a/k/a “Ish,” a/k/a “Gangsta,” a/k/a “Papi,” 27, pleaded guilty today before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with one count of conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin and one count of unlawful possession of a firearm by a convicted felon.
Bernadino Guervil, 29, a/k/a “BG,” was sentenced today to 42 months in prison and three years of supervised release. Guervil previously pleaded guilty before Judge Wolfson to an information charging him with conspiracy to distribute and possess with intent to distribute heroin.
In December 2016, Abdullah and nine other members of a drug trafficking organization operating in Trenton were charged by criminal complaint with conspiracy to distribute heroin. The complaint referred to the drug trafficking organization as the “Abdullah DTO” after the organization’s leader. Abdullah is the sixth of the 10 defendants to plead guilty.
According to documents filed in this case and statements made in court:
From May 2015 through December 2016, Abdullah and others participated in a drug trafficking organization that operated in the area of Spring and Passaic Streets in the Trenton.
Through the authorized interception of telephone calls and text messages, controlled purchases of heroin, the use of confidential sources of information, and other investigative means, law enforcement learned that Ishmael Abdullah was a leader of the Abdullah DTO, and was responsible for obtaining significant quantities of heroin from multiple suppliers, including Jose Joaquin Torres-Mezquita and Ileana Sanchez. Ishmael Abdullah and Keith Hunter coordinated the organization’s distribution of heroin through themselves and other conspirators, including Guervil. Members of the Abdullah DTO used temporary prepaid phones, stash houses and cars, and spoke in code to avoid detection by law enforcement.
During his plea hearing, Abdullah admitted that he conspired with others to distribute at least 400 grams of heroin. Abdullah, who is a previously convicted felon, also admitted knowingly possessing a SCCY Industries CPX-2 firearm.
The conspiracy charge to which Abdullah pleaded guilty carries a mandatory minimum sentence of five years in prison, a maximum potential sentence of 40 years in prison, and a $5 million fine. The firearms charge carries a maximum potential sentence of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 27, 2017.
Acting U.S. Attorney Fitzpatrick credited agents and officers with the Greater Trenton Safe Streets Task Force, including special agents of the FBI, Newark Division, Trenton Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), Newark Division, Trenton Field Office, under the direction of Special Agent in Charge John B. Devito; officers of the Trenton Police Department, under the direction of Director Ernest Parrey Jr.; officers of the Princeton Police Department, under the direction of Chief Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief John P. Stemler III; and detectives of the Mercer County Prosecutor’s Office, under the direction of Prosecutor Angelo J. Onofri, with the investigation.
He also thanked special agents of the FBI’s Philadelphia Field Office, under the direction of Special Agent in Charge Michael Harpster; special agents of Homeland Security Investigations, under the direction of Acting Special Agent in Charge Debra Parker; officers of the N.J. State Police, under the direction of Superintendent Col. Joseph R. Fuentes; and officers of the Mercer County Sheriff’s Office, under the direction of Sheriff John A. Kemler, for their assistance in the case.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office’s Criminal Division in Trenton.
The charges and allegations against the remaining defendants are merely accusations, and those defendants are presumed innocent unless and until proven guilty.
Cardiologist Admits Billing Veterans Affairs for Hundreds of Bogus Medical ProceduresRead the Press Release
NEWARK, N.J. – A Somerset, New Jersey, man today admitted defrauding the Veterans Affairs program by billing for services he had not actually performed, Acting U.S. Attorney William E. Fitzpatrick announced.
Apostolos Voudouris, 44, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging him with health care fraud. Voudouris also entered into a civil settlement agreement with the government, under which he will pay $476,460 to resolve the government’s claims under the False Claims Act.
According to the documents filed in the case and statements made in court:
Voudouris is a physician specializing in cardiology and electrophysiology. Beginning in 2006, Voudouris provided services to eligible veterans at the Veterans Affairs Medical Center in East Orange, New Jersey, pursuant to his contract with the Department of Veterans Affairs (VA).
Voudouris admitted that on more than 350 occasions between 2011 and 2015, he submitted documentation to the VA claiming to have performed procedures he had not actually performed. By doing so, Apostolos Voudouris fraudulently received $238,230 from the VA.
Voudouris 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 currently scheduled for Dec. 12, 2017. As part of his plea agreement, Voudouris must pay restitution of $238,230 to the VA in addition to the $476,460 civil settlement, for a total of $714,690.
Acting U.S. Attorney Fitzpatrick credited special agents of 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; the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation.
The government is represented by Assistant U.S. Attorney Jacob T. Elberg, Chief of the U.S. Attorney’s Health Care and Government Fraud Unit, and by Assistant U.S. Attorney Susan Pappy of the U.S. Attorney’s Health Care and Government Fraud Unit.
The U.S. Attorney’s Office for the District of New Jersey 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 $1.36 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.
Defense counsel: Kristen Santillo Esq., Newark
Former Nursery School Teacher, Camp Counselor Gets 97 Months in Prison for Receiving Sexually Explicit Images of ChildrenRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 97 months in prison for downloading sexually explicit videos and images of children to his home computer, Acting U.S. Attorney William E. Fitzpatrick announced.
James Paroline, 28, of Red Bank, New Jersey, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to Count One of an indictment charging him with receiving child pornography. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Paroline was employed in Monmouth County as an assistant at a nursery school and as a summer camp counselor at a private school. Between Feb. 26, 2015, and March 2, 2015, Paroline accessed a website known as “PlayPen,” an underground online bulletin board and website dedicated to the advertisement and distribution of child pornography. During that period, Paroline logged into PlayPen under the username “jimbobtropolis,” which he had registered with PlayPen using his personal email address, and downloaded multiple videos and images depicting the sexual abuse of children from the website.
In addition to the prison term, Judge Wolfson sentenced Paroline to 10 years of supervised release.
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. He also thanked officers of the Red Bank Police Department, under the direction of Chief of Police Darren McConnell; officers of the Middletown Police Department, under the direction of Chief Craig Weber; and detectives of the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni; for their assistance.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Darren Gelber Esq., Woodbridge, New Jersey
Five Plead Guilty in Multi-State Dog Fighting ProsecutionRead the Press Release
Four defendants pleaded guilty today and yesterday to federal charges for their roles in an inter-state dog fighting network spanning from New Mexico to New Jersey, announced Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division, and Acting United States Attorney for the District of New Jersey William E. Fitzpatrick. A fifth defendant pleaded guilty in June. U.S. District Judge Mary L. Cooper in Trenton accepted the following pleas:
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Anthony “Monte” Gaines, 36, of Vineland, New Jersey, a/k/a “Whiteboy,” pleaded guilty yesterday to two felony counts of conspiracy to buy, sell, receive, transport, deliver, and possess dogs intended for use in an animal fighting venture, and one felony count of possessing a dog intended for use in an animal fighting venture.
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Lydell Harris, 32, of Vineland, New Jersey, a/k/a “Sinn,” pleaded guilty yesterday to one felony count of conspiracy to sponsor or exhibit a dog in an animal fighting venture, and one felony count of possessing a dog intended for use in an animal fighting venture.
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Frank Nichols, 40, of Millville, New Jersey, pleaded guilty today to one felony count of conspiracy to transport, deliver and receive dogs intended for use in an animal fighting venture, and one felony count of possessing a stolen firearm subsequent to a felony conviction.
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Pedro Cuellar, 47, of Willow Springs, Illinois, pleaded guilty today to one felony count of conspiracy to transport, deliver, and receive dogs intended for use in an animal fighting venture.
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Mario Atkinson, 42, of Asbury Park, New Jersey, pleaded guilty on June 15, 2017 before Judge Anne E. Thompson in U.S. District Court in Trenton to one count of sponsoring or exhibiting a dog in an animal fighting venture, and one count of possessing a dog intended for use in an animal fighting venture.
Nichols and Harris pleaded guilty to indictments. Gaines, Cuellar, and Atkinson were charged with Bills of Information. Charges remain pending against four defendants.
According to court documents filed in connection with the cases, from October 2015 through June 1, 2016, the pleading defendants and their co-defendants and associates fought dogs – including to the death – and trafficked in dogs with other dog fighters in Indiana, Illinois, New Mexico, and elsewhere so that those dogs could be used in dog fights. They also maintained fighting dogs and dog fighting equipment such as dog treadmills, intravenous drug bags and lines, “breeding stands” used to immobilize female dogs, and chains weighing up to several pounds per linear foot. Agents found canine blood on the floor, walls, and ceiling of the basement of one defendant’s residence, indicating that the area was likely used as a dog fighting pit. Among other acts involved in the charges, one of the pleading defendants admitted that his dog died in his car on the way home after losing a dog fight.
“Justice is being delivered in these cases,” said Acting Assistant Attorney General Wood. “Ending animal fighting ventures and other inhumane practices depends upon the hard work of investigators and lawyers like those who brought these cases, and will also require continued partnership with federal, state, and local law enforcement agencies. Our Division is proud to be a leader in this worthy cause. We also applaud the work of the Humane Society in partnering with us to provide hope of recovery for the abused animals."
“The criminal conduct speaks to the cruel conditions in which these animals live,” Acting U.S. Attorney Fitzpatrick said. “This office, along with our law enforcement partners and the Humane Society, is working to end this illegal activity and punish those who abuse animals for their own enjoyment.”
“The provisions of the Animal Welfare Act were designed to protect animals from being used in illegal fighting ventures, which often entail other forms of criminal activity involving drugs, firearms and gambling,” said Special Agent-in-Charge Bethanne M. Dinkins of the U.S. Department of Agriculture’s Office of Inspector General. “Together with the Department of Justice, animal fighting is an investigative priority for USDA-OIG, and we will work with our law enforcement partners to investigate and assist in the criminal prosecution of those who participate in animal fighting ventures.”
This case is part of Operation Grand Champion, a coordinated effort across numerous federal judicial districts to combat organized dog fighting. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog fighting “victories.” To date, 98 dogs have been rescued as part of Operation Grand Champion, and either surrendered or forfeited to the government. The Humane Society of the United States assisted with the care of the dogs seized by federal law enforcement. The government is represented by Trial Attorney Ethan Eddy of the Justice Department’s Environmental Crimes Section, and Assistant U.S. Attorney Kathleen O’Leary. The case is being investigated by the U.S. Department of Agriculture – Office of Inspector General, the U.S. Department of Homeland Security – Homeland Security Investigations, and the Federal Bureau of Investigation.
Each animal fighting charge carries a maximum sentence of five years in prison and a $250,000 fine. The weapons charge against defendant Nichols carries a maximum sentence of ten years in prison and a $250,000 fine. The investigation is ongoing.
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Defendants Plead Guilty in Multi-State Dog Fighting ProsecutionRead the Press Release
New Jersey and Chicago-Area Defendants Convicted as Part of Operation Grand Champion
TRENTON, N.J. – Four men have admitted their respective roles in an interstate dog fighting network spanning from New Mexico to New Jersey, Acting U.S. Attorney William E. Fitzpatrick, District of New Jersey, and Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division, announced today.
The four defendants, arrested and charged as part of a coordinated effort across numerous federal judicial districts to combat organized dog fighting, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court:
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Frank Nichols, 40, of Millville, New Jersey, pleaded guilty today to one felony count of conspiracy to transport, deliver and receive dogs intended for use in an animal fighting venture, and one felony count of possessing a stolen firearm subsequent to a felony conviction.
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Pedro Cuellar, 47, of Willow Springs, Illinois, pleaded guilty today to one felony count of conspiracy to transport, deliver, and receive dogs intended for use in an animal fighting venture.
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Anthony “Monte” Gaines, 36, of Vineland, New Jersey, a/k/a “Whiteboy,” pleaded guilty yesterday to two felony counts of conspiracy to buy, sell, receive, transport, deliver, and possess dogs intended for use in an animal fighting venture, and one felony count of possessing a dog intended for use in an animal fighting venture.
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Lydell Harris, 32, of Vineland, New Jersey, a/k/a “Sinn,” pleaded guilty yesterday to one felony count of conspiracy to sponsor or exhibit a dog in an animal fighting venture, and one felony count of possessing a dog intended for use in an animal fighting venture.
A fifth defendant, Mario Atkinson, 42, of Asbury Park, New Jersey, pleaded guilty on June 15, 2017, before U.S. District Judge Anne E. Thompson in Trenton federal court to one count of sponsoring or exhibiting a dog in an animal fighting venture, and one count of possessing a dog intended for use in an animal fighting venture. Nichols and Harris pleaded guilty to indictments. Gaines, Cuellar, and Atkinson pleaded guilty to informations. Charges remain pending against four defendants.
According to court documents filed in these cases and statements made in court:
From October 2015 through June 1, 2016, the defendants who pleaded guilty and their co-defendants and associates participated in dog fights – including to the death – and trafficked in dogs with other dog fighters in New Jersey, Indiana, Illinois, New Mexico, and elsewhere so that those dogs could be used in fights. They also maintained fighting dogs and dog fighting equipment, such as treadmills, intravenous drug bags and lines, “breeding stands” used to immobilize female dogs, and chains weighing up to several pounds per linear foot. Agents found canine blood on the floor, walls, and ceiling of the basement of one defendant’s residence, indicating that the area was likely used as a dog fighting pit. One of the defendants admitted that his dog died in his car on the way home after losing a dog fight.
“The criminal conduct speaks to the cruel conditions in which these animals live,” Acting U.S. Attorney Fitzpatrick said. “This office, along with our law enforcement partners and the Humane Society, is working to end this illegal activity and punish those who abuse animals for their own enjoyment.”
“Justice is being delivered in these cases,” Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division said. “Ending animal fighting ventures and other inhumane practices depends upon the hard work of investigators and lawyers like those who brought these cases, and will also require continued partnership with federal, state, and local law enforcement agencies. Our Division is proud to be a leader in this worthy cause. We also applaud the work of the Humane Society in partnering with us to provide hope of recovery for the abused animals."
“The provisions of the Animal Welfare Act were designed to protect animals from being used in illegal fighting ventures, which often entail other forms of criminal activity involving drugs, firearms and gambling,” Special Agent-in-Charge Bethanne M. Dinkins, U.S. Department of Agriculture - Office of Inspector General, said. “Together with the Department of Justice, animal fighting is an investigative priority for USDA-OIG, and we will work with our law enforcement partners to investigate and assist in the criminal prosecution of those who participate in animal fighting ventures.”
The charges are part of Operation Grand Champion, a coordinated effort across numerous federal judicial districts to combat organized dog fighting. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog fighting “victories.” To date, 98 dogs have been rescued as part of Operation Grand Champion, and either surrendered or forfeited to the government. The Humane Society of the United States assisted with the care of the dogs seized by federal law enforcement.
Each animal fighting charge carries a maximum sentence of five years in prison and a $250,000 fine. The weapons charge against defendant Nichols carries a maximum sentence of ten years in prison and a $250,000 fine. Sentencing for Nichols and Cuellar is scheduled for Nov. 29, 2017. Sentencing for Gaines and Harris is scheduled for Nov. 28, 2017. Sentencing for Atkinson is scheduled for Oct. 3, 2017. All sentencings are before Judge Thompson.
The government is represented by Assistant U.S. Attorney Kathleen O’Leary, District of New Jersey, and Trial Attorney Ethan Eddy of the Justice Department’s Environmental Crimes Section.
The investigation by the U.S. Department of Agriculture - Office of Inspector General; the U.S. Department of Homeland Security - Homeland Security Investigations; and the FBI is ongoing.
Nichols: Michael Calabro Esq., Newark
Cuellar: Joseph Rotella Esq., Newark
Harris: Herbert Waldman Esq., Springfield, New Jersey
Gaines: Vincent LaPaglia Esq., Hoboken, New Jersey
Atkinson: Christopher D. Adams Esq., Holmdel, New Jersey
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Two More Members of ATM Skimming Conspiracy Targeting Multiple New Jersey Bank Locations Plead GuiltyRead the Press Release
NEWARK, N.J. – Two members of a scheme that used secret card-reading devices and pinhole cameras on PNC and Bank of America ATMs to steal at least $428,581 pleaded guilty today in Newark federal court, Acting U.S. Attorney William E. Fitzpatrick announced.
Florin Mares, 49, and his brother, Gabriel Mares, 44, both of College Point, New York, pleaded guilty before U.S. District Judge Esther Salas to separate informations charging them each with one count of conspiracy to commit bank fraud and one count of aggravated identity theft.
According to documents filed in this case and statements made in court:
Florin Mares, Gabriel Mares, and others sought to defraud financial institutions and their customers by illegally obtaining customer account information, including account numbers and personal identification numbers. Florin Mares and Gabriel Mares both admitted that between March 2015 and July 2016, they made unauthorized cash withdrawals using the counterfeit ATM cards.
The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing for both defendents is set for Nov. 20, 2017.
Joel Abel Garcia, Victor A. Hanganu, Radu Bogdan Marin, Marcel Peckham, Catalin Mihai Dragomir, Eduard Vasilica Ticu, Silvester Florentin Papp, Stefan Dumitru, and Florian Calin Crainic also pleaded guilty to their roles in the scheme. To date, 11 of the 13 defendants charged in this matter have been convicted.
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Newark Division, under the direction Acting Special Agent in Charge Debra Parker, along with the U.S. Secret Service’s Boston Field Office; Longmeadow, Massachusetts, Police Department; Cambridge, Massachusetts, Police Department; and Medford, Massachusetts, Police Department investigated the case with assistance from Bank of America Security and Fraud Section and PNC Bank Security Division. The Middlesex County, Massachusetts, District Attorney’s Office; U.S. Attorney’s Office of the Eastern District of New York and U.S. Attorney’s Office of the District of Massachusetts Springfield Division assisted in the investigation and prosecution.
The government is represented by Assistant U.S. Attorney Kelly Graves of the U.S. Attorney’s Office Criminal Division in Newark and Trial Attorney Marianne Shelvey of the Justice Department’s Criminal Division Organized Crime and Gang Section.
Defense counsel:
Florin Mares: David Glazer Esq., Livingston, New Jersey
Gabriel Mares: Laurie Fierro Esq., Kinnelon, New Jersey
Atlantic County, New Jersey, Man Sentenced to Five Years in Prison for Scheme to Defraud Women over Telephone Dating ServicesRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, man who was sentenced in 2007 in connection with a scheme to defraud women over telephone dating services and in 2015 for violating the conditions of his federal supervised release was sentenced today to 60 months in prison for traveling to launder money in connection with a similar scheme, Acting U.S. Attorney William E. Fitzpatrick announced.
Patrick Giblin, 53, formerly of Ventnor, New Jersey, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of interstate travel and use of a facility in interstate and foreign commerce with the intent to launder money. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From January 2013 to Dec. 16, 2014, Giblin allegedly posted advertisements and messages on telephone dating services throughout the United States. Giblin cultivated a telephone rapport with the women he spoke to on these services, falsely claimed that he would be relocating or travelling to the woman’s geographic area, and falsely represented that he wished to pursue a committed, romantic relationship with each woman. He then lied to the women about needing a loan, which he never intended to repay, for relocation or travel expenses. Giblin received money from the women he spoke to on the dating services via interstate wire services such as Western Union and MoneyGram. Giblin also directed women to transfer money through one of these services onto a payroll/debit card that he used. Giblin used some of his victims’ money in order to purchase airtime minutes for cellular telephones, which he in turn used to defraud additional women.
In October 2014, Giblin travelled from Atlantic County, New Jersey, to Albany County, New York. Giblin, who was on federal supervised release from a previous conviction, was not allowed to leave the state. While traveling in New York, Giblin continued to defraud women and used money he received from women to purchase additional airtime minutes and contact more women. Giblin victimized more than 10 women in various states, causing losses of $15,000 to $40,000.
Giblin was previously convicted of 10 counts of wire fraud in 2007 in connection with a similar scheme. In 2015, Giblin was imprisoned for violating the terms of his supervised release imposed in connection with the 2007 sentence. Giblin was also sentenced in 2013 in the Eastern District of Pennsylvania for escaping from a halfway house in Philadelphia, where he was living following the completion of the 2007 sentence. Giblin initiated the scheme in this current case at about the time that he escaped from the halfway house and resumed the scheme following the service of his sentence on the escape conviction.
In addition to the prison term, Judge Kugler sentenced Giblin to three years of supervised release and ordered him to pay $39,130 in restitution.
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 sentencing. He also thanked the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos in Newark, for its assistance in this case.
The government is represented by Deputy Attorney-in-Charge Matthew J. Skahill and Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office in Camden.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender (Camden)
PHH Agrees to Pay $74 Million to Resolve Alleged False Claims Act Liability Arising from Mortgage LendingRead the Press Release
NEWARK, N.J. – PHH Corp., PHH Mortgage Corp. and PHH Home Loans (PHH) have agreed to pay the United States $74,453,802 to resolve allegations that they violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA), guaranteed by the United States Department of Veteran Affairs (VA), and purchased by the Federal Housing Finance Agency (FHFA) that did not meet applicable requirements, the Justice Department announced today. PHH Corp. and PHH Mortgage Corp. are headquartered in Mount Laurel, New Jersey, while PHH Home Loans is headquartered in Edina, Minnesota. PHH has agreed to pay $65 million to resolve the FHA allegations and $9.45 million to resolve the VA and FHFA allegations.
“This settlement requires PHH to pay back to the taxpayers of the United States millions of dollars in loans that never should have been made,” Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey said. “By failing to ensure the creditworthiness of borrowers and otherwise failing to make sure the loans met HUD underwriting requirements, loans were insured by FHA that should not have been.”
“Government mortgage programs designed to assist homeowners — including programs offered by the FHA, VA, Fannie Mae and Freddie Mac — depend on lenders to approve only eligible loans,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”
The settlements announced today resolve allegations that PHH failed to comply with certain FHA, VA, and FHFA origination, underwriting, and quality control requirements.
Since January 2006, PHH has participated as a Direct Endorsement Lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.
As part of the settlement, PHH admitted the following facts concerning the FHA loans:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s self-reporting requirements. Examples of loan defects that PHH admitted resulted in loans being ineligible for FHA mortgage insurance included:
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Failing to document the borrowers’ creditworthiness, including paystubs, verification of employment, proper credit reports, and verification of the borrowers’ earnest money deposit and funds to close.
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Failing to document the borrower’s claimed net equity in a prior residence or documentation showing that the borrower had paid off significant debts. Including these debts in the borrower’s liabilities resulted in the borrower exceeding HUD’s debt-to-income ratio requirements for FHA-insured loans.
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Insuring a loan for FHA mortgage insurance even though the borrower did not meet HUD’s minimum statutory investment for the loan.
In 2007, PHH audited a targeted sample of government loans for closing or pre-insuring requirements and found that its “percent accurate” did not exceed 50 percent during 2007. Since 2006, HUD has required self-reporting of material violations of FHA requirements. However, between Jan.1, 2006, and Dec. 31, 2011, PHH Home Loans did not self-report any loans to HUD until 2013, after the United States commenced its investigation resulting in this Settlement Agreement.
As a result of PHH’s conduct and omissions, PHH admitted, HUD insured loans endorsed by PHH that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured. It admitted that HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
In addition, from at least 2005 to2012, PHH was a VA approved lender, originating and underwriting mortgage loans and obtaining VA loan guarantees. Also from at least 2009 to 2013, PHH sold mortgage loans to the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp. (Freddie Mac). The FHFA provides oversight to Fannie Mae and Freddie Mac. The settlement resolves the United States’ contentions that PHH originated and underwrote VA loans that were ineligible for the loan guarantee program, and sold loans to the Freddie Mac and Fannie Mae that did not meet their requirements.
“This case demonstrates HUD’s resolve in protecting the integrity of its mortgage insurance programs for the benefit of all Americans, and in particular, first time homebuyers,” said Dane Narode, HUD’s Associate General Counsel for Program Enforcement. “We are gratified that PHH has accepted responsibility for its actions.”
“This settlement resolves allegations of reckless origination and underwriting of VA guaranteed mortgage loans,” said Michael J. Missal, Inspector General, for the Office of Inspector General for the Department of Veteran Affairs (VA OIG). “It sends a clear message that the VA OIG will aggressively protect the integrity of this crucial program which helps so many of our veterans buy, build, or repair their homes. I would also like to thank the U.S. Attorney’s Offices for partnering with us to achieve this significant result.”
An investigation into the allegations resolved by these settlements was commenced jointly by the U.S. Attorney’s Offices for the Districts of New Jersey, Minnesota and the Southern District of Florida, in conjunction with the Department of Justice’s Civil Division. After the investigation was commenced, a whistleblower lawsuit was filed under the False Claims Act by a former employee of PHH, raising similar as well as additional allegations of fraud. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery.
The settlements were the result of joint investigations conducted by HUD, the HUD Office of Inspector General, the Veterans Administration’s Office of Inspector General, the FHFA Office of Inspector General, the Department of Justice’s Civil Division, and the U.S. Attorney’s Offices for the District of Minnesota, District of New Jersey, Southern District of Florida, and Eastern District of New York. Assistant United States Attorneys Anthony LaBruna and Mark Orlowski represented the District of New Jersey in this investigation and settlement: Ann Bildtsen represented the District of Minnesota, and James Weinkle represented the Southern District of Florida. The claims asserted against PHH are allegations only, and there has been no determination of liability.
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Nassau County, New York, Man Admits Defrauding Multiple Residential Mortgage HoldersRead the Press Release
TRENTON, N.J. – The sole proprietor of a purported loan modification consulting company today admitted that he fraudulently billed clients more than $400,000 for services that were never performed, Acting U.S. Attorney William E. Fitzpatrick announced.
Jeffrey Halpern, 62, of Hewlett, New York, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton 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 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.
In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of over $400,000.
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, Halpern must also pay restitution to the victims. Sentencing is scheduled for Nov. 22, 2017.
Acting U.S. Attorney Fitzpatrick credited investigators with the U.S. Attorney’s Office and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the New York State Department of Financial Services, under the direction of Superintendent Maria T. Vullo; the Federal Housing Finance Agency Office of the Inspector General, under the direction of Special Agent in Charge Steven Perez; and the Nassau County District Attorney’s office, under the direction of District Attorney Madeline Singas, for their assistance.
The government is represented by Assistant U.S. Attorney Sammi Malek of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Mitchell C. Elman Esq., Port Washington, New York
Former Bergen County, New Jersey, Democratic Chairman’s Prison Sentence for Racketeering AffirmedRead the Press Release
PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit today upheld the 35-month prison sentence of the former chairman of the Bergen County Democratic Organization (BCDO), who was convicted at trial for his role in a racketeering scheme involving bribery and fraud, Acting U.S. Attorney William E. Fitzpatrick announced.
Joseph A. Ferriero, 60, had raised multiple issues on appeal, each of which was rejected in a unanimous, precedential opinion written by Judge Anthony J. Scirica.
Ferriero had argued, among other things, that the evidence convicting him of bribery was insufficient. The Court disagreed, noting that the evidence showed he had agreed to accept payments from a software services company soliciting business from various Bergen County towns, in exchange for recommending the company to those towns. It noted that, as BCDO “party chair, Ferriero’s recommendations carried great weight.”
The Court reached a similar conclusion regarding the sufficiency of the evidence showing Ferreiro had committed fraud. It noted that, in response to an inquiry from one of those towns about who was involved in the software services company, Ferriero had concealed his financial interest in the company’s revenues.
The Court also rejected Ferriero’s arguments that the constitution prevented New Jersey’s bribery statute from applying to his conduct. It held there was no constitutional issue because “New Jersey’s bribery law does not punish legitimate First Amendment activity.” Instead, “[i]t punishes corrupt agreements in which party officials accept payment in exchange for making a particular decision or recommendation, expressing a particular opinion, or voting a particular way . . . . Such corrupt agreements do not enjoy First Amendment protection.”
According to documents filed in this case and the evidence presented at trial:
Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC. The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer, that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained because of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.
In addition to his prison sentence, which will be followed by three years’ supervised release, the Court affirmed the order requiring Ferriero to pay restitution.
The government was represented by Assistant U.S. Attorney Bruce P. Keller of the U.S. Attorney’s Office Appeals Division in Newark. Assistant U.S. Attorney Barbara Llanes, now Chief of the General Crimes Unit, represented the government at Ferriero’s trial.
Owners of Hudson County, New Jersey, Scrap Metal Company Charged with 17-Year Conspiracy to Defraud CustomersRead the Press Release
NEWARK, N.J. – The owners of Cinelli Iron & Metal Co. (CIMCO) were arrested today and charged with 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, and his brother, Joseph Cinelli Sr., 61, of Montvale, New Jersey, are charged by indictment with one count of conspiracy to commit wire fraud and five counts of wire fraud. They were arrested this morning and are expected to appear this afternoon before U.S. Magistrate Cathy L. Waldor in Newark federal court.
David Barteck, 53, of Wood Ridge, New Jersey, the former chief financial officer of CIMCO, pleaded guilty on July 26, 2017 before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit wire fraud.
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, Joseph Cinelli Sr., Barteck 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.
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.
During his plea hearing, Barteck 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. His sentencing is scheduled for Oct. 30, 2017.
The charges and allegations contained in the indictment are merely accusations, and Craig Cinelli and Joseph Cinelli Sr. are 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.
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:
Craig Cinelli: Ray Flood, Esq., Hackensack, New Jersey
Joseph Cinelli Sr.: Jonathan Goldstein, Esq., Newark, New Jersey
David Barteck: John J. Bruno Jr. Esq. and John F. Latoracca Esq., Rutherford, New Jersey
Getaway Driver Involved in North Jersey Bar Robbery Sentenced to Two Years in PrisonRead the Press Release
NEWARK, N.J. – A Rockland County, New York, man was sentenced today to 24 months in prison for his role in a conspiracy to rob a bar in Hawthorne, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
Oscar Avalos-Cortez, 23, of New City, New York, previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with conspiracy to commit Hobbs Act Robbery. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Dec. 25, 2015, Avalos-Cortez drove at least six conspirators to a bar in Hawthorne, where they forcibly robbed the bar and subsequently fled with approximately $200 in cash in Avalos-Cortez’s car.
In addition to the prison term, Judge Linares sentenced Avalos-Cortez to three years of supervised release.
Avalos-Cortez was originally charged with Wilbur Jonathan Barahona, 21, of Ridgewood, New Jersey, Guillermo Carrillo-Iraheta, 20, of Suffern, New York, Balmore Carrillo-Iraheta, 20, of Suffern, Juan Chiliseo-Vega, 20, of Suffern, and Jostin Reyes, 21, of Waldwick, New Jersey, in November 2016.
Chiliseo-Vega, Guillermo Carrillo-Iraheta and Reyes previously pleaded guilty in Newark federal court to three-count informations in connection with their involvement in the conspiracy to commit Hobbs Act Robbery, as well as a carjacking and kidnapping in which Avalos-Cortez was not involved. On July 7, 2017, Chiliseo-Vega was sentenced to 168 months in prison and Guillermo Carrillo-Iraheta was sentenced to 150 months in prison. Reyes is scheduled to be sentenced Oct. 18, 2017.
Balmore Carrillo-Iraheta was indicted by a federal grand jury on April 18, 2017, for his role in the conspiracy to rob the bar. The charges against Barahona for his role in the robbery, carjacking, and kidnapping are still pending. Both men are presumed 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, as well as the Ridgewood and Hawthorne Police Departments, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Elaine K. Lou and Karen D. Stringer of the U.S. Attorney’s Office’s Criminal Division in Newark.