District of New Jersey
Press releases recorded for this federal judicial district.
Member of Trenton Drug Trafficking Organization Sentenced to Six Years in PrisonRead the Press Release
TRENTON, N.J. – A Trenton man was sentenced today to 72 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 today.
Keith Hunter, a/k/a “Meech,” 24, previously pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court 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, Hunter also admitted possessing at least one firearm during the conspiracy.
In December 2016, Hunter 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 alleged leader, Ishmael Abdullah.
According to documents filed in this case and statements made in court:
From June 2015 through December 2016, Hunter 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 Hunter coordinated the organization’s distribution of heroin through themselves and other conspirators. 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, Hunter and other members of the Abdullah DTO maintained joint access to multiple firearms.
In addition to the prison term, Judge Wolfson sentenced Hunter to four 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 Satellite Office, under the direction of Acting Special Agent in Charge Lawrence J. Panetta; 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 of Police Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief of Police John P. Stemler III; and detectives of the Mercer County Prosecutor’s Office, under the direction of Mercer County 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 Special Agent in Charge Terence S. Opiola; officers of the New Jersey 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: Robert J. Haney Esq., Princeton, New Jersey
Two New York Men Get over 12 Years in Prison for Armed Robbery, Carjacking, and Violent KidnappingRead the Press Release
NEWARK, N.J. – Two Rockland County, New York, men were sentenced to prison today for their roles in the December 2015 robbery of a North Jersey bar and the violent carjacking and kidnapping that took place shortly afterwards, Acting U.S. Attorney William E. Fitzpatrick announced.
Guillermo Carrillo-Iraheta, 20, and Juan Chiliseo-Vega, 20, both of Suffern, New York, were sentenced to 150 and 168 months in prison, respectively. Both defendants previously pleaded guilty to separate informations charging them with conspiracy to commit Hobbs Act Robbery, carjacking, and kidnapping. U.S. District Judge Jose L. Linares imposed the sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
On Dec. 25, 2015, Guillermo Carrillo-Iraheta, Chiliseo-Vega and others robbed a bar in Hawthorne, New Jersey, and subsequently fled with approximately $200 in cash.
Afterwards, in the early morning hours of Dec. 26, 2015, Guillermo Carrillo-Iraheta, Chiliseo-Vega, and others hailed a taxi in Paterson, New Jersey, and forcibly took the taxi from the driver. Guillermo Carrillo-Iraheta, Chiliseo-Vega and others forced the driver into the back of the vehicle and took over driving. They also caused seriously bodily injury to the driver by hitting him in the head with a beer bottle and slicing his throat with a knife before eventually leaving him on the side of the road in New York. The taxicab driver survived.
In addition to the prison terms, Judge Linares sentenced both defendants to five years of supervised release.
Wilbur Jonathan Barahona, 21, of Ridgewood, New Jersey, and Jostin Reyes, 21, of Waldwick, New Jersey, have also pleaded guilty to their roles in the bar robbery, carjacking and kidnapping. Balmore Carrillo-Iraheta, 20, of Suffern, and Oscar Avalos-Cortez, 23, of New City, New York, pleaded guilty to their roles in the bar robbery. All four defendants await sentencing.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, investigators from the Bergen County Prosecutor’s Office, under the direction of Prosecutor Gurbir S. Grewal, and the Ridgewood and Hawthorne Police Departments 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’s Criminal Division in Newark.
Defense counsel:
Guillermo Carrillo-Iraheta: Michele Ann Adubato Esq., Bayonne, New Jersey.
Chiliseo-Vega: Frank Arleo Esq., West Orange, New Jersey
Third Circuit Vacates Child Abuse Sentences Appealed by GovernmentRead the Press Release
Defendants Will Be Resentenced at a Later Date
NEWARK, N.J. – The U.S. Court of Appeals for the Third Circuit today ruled that a former U.S. Army major and his wife, convicted for having endangered the welfare of their adopted children through a series of physically abusive acts, must be resentenced, Acting U.S. Attorney William E. Fitzpatrick announced.
Convicted by a jury in July 2015 on multiple counts of child endangerment, Carolyn Jackson, 39, had received only 24 months in prison while her husband, John E. Jackson, 42, formerly a major in the Army at the Picatinny Arsenal Installation in Morris County, New Jersey, had received only probation and 400 hours of community service. The government had appealed their sentences to the U.S. Court of Appeals for the Third Circuit.
Today, the Court of Appeals ruled that the District Court had committed several errors in the process of imposing those sentences. As a result, the Jacksons will be resentenced at a later date, which has yet to be decided.
The government was represented by Assistant U.S. Attorney John Romano of the U.S. Attorney’s Office Appeals Division in Newark.
Jackson Verdict Release
Jackson Sentencing Release
Hospice Company to Pay $2 Million to Resolve Alleged False Claims Related to Unnecessary Hospice CareRead the Press Release
NEWARK, N.J. – A hospice company in Bensalem, Pennsylvania, has agreed to pay to the United States $2 million to resolve allegations that it provided unnecessary hospice services, Acting U.S. Attorney William E. Fitzpatrick announced today.
Compassionate Care of Gwynedd Inc. is a hospice provider based in Bensalem and a subsidiary of Compassionate Care Hospice Group Inc., a Florida corporation with its principal place of business in Parsippany, New Jersey. The settlement announced today 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 allegations arose from a whistle-blower suit filed under the False Claims Act.
The United States alleges that from Jan. 1, 2005, through Nov. 15, 2011, Compassionate Care of Gwynedd admitted patients who did not need hospice care and billed Medicare for these medically unnecessary services. The government alleges that the company admitted these patients by using a diagnosis of “debility” that was not medically justified.
The relators, or whistler-blowers, in the underlying qui tam will receive more than $350,000 as their statutory share of the recovery under the False Claims Act. The civil lawsuit was filed in the District of New Jersey and is captioned United States, et al., ex rel. Jane Doe and Mary Roe v. Compassionate Care Hospice, et al.
Acting U.S. Attorney Fitzpatrick credited special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorney Charles Graybow of the Health Care and Government Fraud Unit of the U.S. Attorney’s Office for the District of New Jersey and Trial Attorney Justin Draycott of the Department of Justice’s Civil Division. The Office of Inspector General and the Office of the General Counsel for the Centers for Medicare and Medicaid Services of the Department of Health and Human Services also participated in the investigation and settlement.
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.
The claims settled by this agreement are allegations only; there have been no admissions of liability.
Counsel for relators: Britton D. Monts Esq., Austin, Texas; Timothy J. McInnis Esq., New York
Counsel for defendant: Sean C. Cenawood Esq., New York
Atlantic City Man Charged with Receipt of Child PornographyRead the Press Release
CAMDEN, N.J. – An Atlantic City, New Jersey, man appeared in federal court today to face charges that he received images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
Keith M. Clack, 41, is charged by complaint with knowingly receiving images of child pornography. Clack appeared this morning before U.S. Magistrate Judge Karen M. Williams in Camden federal court and was detained.
According to the documents filed in this case and statements made in court:
In May 2017, law enforcement officers conducted an undercover operation in which electronic devices later identified as belonging to Clack were detected accessing and downloading more than 3,500 images of child pornography, including images of infants and toddlers being sexually abused, and child erotica.
Because Clack has a prior conviction for sexual assault on a minor and endangering the welfare of a minor, if convicted of the charge in the complaint, he faces a 15-year mandatory minimum term of imprisonment and a maximum potential sentence of 40 years in prison (increased from the ordinary five-year mandatory minimum and 20-year maximum terms). Clack also faces additional penalties upon conviction, including the greater of a $250,000 fine, or twice the gross gain or loss from the offense, and a term of supervised release of at least five years and up to life.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Atlantic City Police Department, under the direction of Chief Henry White; the Atlantic City Sheriff’s Department, under the direction of Frank Balles; the New Jersey Human Services Police, under the direction of Director Timothy Gallagher; and the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner, with the investigation.
The government is represented by Assistant U.S. Attorneys Diana Vondra Carrig and Patrick Askin of the U.S. Attorney’s Office in Camden.
Defense Counsel: Thomas Young Esq., Assistant Federal Public Defender, Camden
Philadelphia District Attorney Rufus Seth Williams Pleads Guilty to Federal Bribery ChargeRead the Press Release
PHILADELPHIA – Philadelphia District Attorney Rufus Seth Williams today admitted that he accepted tens of thousands of dollars’ worth of concealed bribes in exchange for his agreement to perform official acts, defrauded a nursing home and family friends of money earmarked for a family member’s care, and used political action committee funds and official government vehicles for his personal benefit, Acting New Jersey U.S. Attorney William E. Fitzpatrick announced.
Williams, 50, of Philadelphia, pleaded guilty before U.S. District Judge Paul S. Diamond to Count One of a superseding indictment charging him with travel and use of interstate facilities to promote and facilitate bribery contrary to Pennsylvania law. Williams was ordered detained until his sentencing, which is set for Oct. 24, 2017.
“The indictment alleged that, as District Attorney, Mr. Williams compromised himself and his elected office by using his office to help those willing to secretly pay him with valuable items like money, trips, and cars, as well as defrauding his political action committee and others,” Acting U.S. Attorney Fitzpatrick said. “Today, Mr. Williams admitted all of that conduct. He admitted that he misused the resources of the Philadelphia DA’s Office and his influence as an elected official for personal gain. He admitted defrauding his political action committee. He admitted defrauding his mother’s nursing home and her friends. Williams owed the public a duty to act according to the highest legal and ethical standards. Seth Williams breached that trust; he abused his power; and he will now be held accountable for his actions.”
“From his first day in office, Seth Williams sought to portray himself as a man of the people – a principled public servant and reformer, devoted to the cause of justice,” said Michael Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “Mr. Williams talked a good game. Unfortunately, ‘talk’ is all it was. In reality, he gamed the system. Feeling entitled to a certain lifestyle, he traded on his title of District Attorney in exchange for financial favors large and small. We’re gratified that Mr. Williams elected to change his plea, and admit to such brazen misconduct.”
According to documents filed in this case and statements made in court:
From July 2010 through May 2015, Williams had an arrangement with Mohammad N. Ali (identified in the indictment as “Business Owner #1) in which Williams, while serving as the Philadelphia District Attorney, accepted trips, money, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Ali, including contacting a Philadelphia police official in order to pressure and advise the official to assist Ali with security screenings at the airport. Williams also agreed to assist with criminal charges brought by the Philadelphia District Attorney’s Office against Ali’s associate.
From March 2012 through July 2015, Williams had an arrangement with Michael Weiss (identified in the superseding indictment as “Business Owner #2”) in which Williams accepted airline tickets, money, an automobile, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Weiss, including appointing him as Special Advisor to the Philadelphia District Attorney’s office in November 2012 and providing an official letter to the California Department of Alcoholic Beverage Control in order to influence a then-pending hearing to revoke or suspend Weiss’ California liquor license. In July 2015, Williams also obtained a police accident report at Weiss’ request.
In addition, from February 2012 through November 2013, Williams diverted his mother’s pension and Social Security payments to pay for his own personal expenses instead of applying them to his mother’s nursing home costs, as was his obligation under agreements with the nursing home. After accepting $10,000 from his mother’s friends intended to cover expenses for her nursing home care, Williams spent that money on his personal expenses as well.
From August 2010 through August 2016, Williams also defrauded the “The Committee to Elect Seth Williams” by using its funds for personal expenditures, including parties, birthday dinners, massages, and fitness classes. He concealed this fraud by providing false or incomplete reports to the Commonwealth of Pennsylvania and to the City of Philadelphia.
Lastly, Williams engaged in a scheme to use official vehicles – which were provided by the City of Philadelphia and a federal narcotics law enforcement program – for his personal benefit. Williams used the vehicles to transport himself, family members, friends and other non-employees on non-district attorney business, including personal trips outside of Philadelphia.
“The gifts Williams received represents the degree to which he was cheating the public," said IRS-CI Acting Special Agent in Charge Gregory Floyd. “No public official gets a free pass to ignore our laws. IRS CI will continue to ensure that our elected officials abide by their oath to faithfully discharge the duties of their office. It is unacceptable to accept benefits in exchange for performing official acts, but if you do IRS-Criminal Investigation will be there to seek justice on behalf of the citizens of Philadelphia."
“Homeland Security Investigations is pleased to have contributed to this investigation to hold accountable a public official who betrayed the trust of his community by engaging in such unscrupulous behavior,” Marlon V. Miller, special agent in charge of HSI Philadelphia, said. “The public places an enormous amount of trust in elected officers and they should be held accountable to a higher standard of conduct. HSI will continue to work jointly with our law enforcement partners to investigate those who exploit their official public positions for their personal benefit.”
The bribery charge to which Williams pleaded guilty is punishable by a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. As part of the plea agreement, Williams must forfeit $64,878.22, representing the sum of $33,765.52 worth of bribe proceeds and $31,112.70 worth of fraud proceeds.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Michael Harpster in Philadelphia; special agents of IRS-Criminal Investigation, Philadelphia Office, under the direction of Acting Special Agent in Charge Gregory Floyd, and special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) Philadelphia, under the direction of Special Agent in Charge Marlon V. Miller, with the investigation. He also thanked the U.S. Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Nick DiGiulio, for its participation in the investigation.
The U.S. Attorney in the Eastern District of Pennsylvania recused his office from the investigation involving the Philadelphia District Attorney’s Office, and the matter was assigned to the U.S. Attorney’s Office for the District of New Jersey. Two prosecutors from the Eastern District of Pennsylvania office were assigned to the case, subject to the supervision of prosecutors in the New Jersey office.
The government is represented by Deputy Chief Eric W. Moran of the U.S. Attorney’s Office Criminal Division in Newark and Chief of Appeals Robert A. Zauzmer and Assistant U.S. Attorney Vineet Gauri of the U.S. Attorney’s Office in Philadelphia.
Defense counsel: Thomas F. Burke Esq., Philadelphia.
Former EMT and Volunteer Firefighter Charged with Production of Child PornographyRead the Press Release
NEWARK, N.J. – An Iselin, New Jersey, man who worked as an emergency medical technician and volunteer firefighter was charged today with soliciting a child to take nude pictures of himself and send them online, Acting U.S. Attorney William E. Fitzpatrick announced.
Zachary Motta, 22, is charged by complaint with one count of sexual exploitation of children. He appeared in Newark federal court today before U.S. Magistrate Judge Steven C. Mannion and was detained.
According to the complaint:
Beginning in October 2016, Motta engaged in sexually explicit communications with a boy who told Motta that he was 12-years old. Over the course of their correspondence, Motta sent the minor victim images of himself in his EMT and firefighter uniforms and asked the boy to send him nude pictures. Motta warned the boy, “Just don’t get caught.” In response to Motta’s requests, the boy sent Motta nude images of his genitals on two occasions.
The charge of sexual exploitation of a child carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and the Middlesex County Prosecutor’s Office, under the direction of Andrew C. Carey, with the investigation.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations in the complaint are merely accusations, and Motta is presumed innocent unless and until proven guilty.
Defense counsel: Assistant Federal Public Defender Carol Gillen
Virginia Man Admits Robbing Four BanksRead the Press Release
CAMDEN, N.J. – A Virginia man admitted today that he robbed four banks – two in New Jersey and two in Baltimore, Maryland – during a spree in December 2016, Acting U.S. Attorney William E. Fitzpatrick announced.
Bruce Wayne Higgins, 43, of Herndon, Virginia, pleaded guilty before U.S. District Court Judge Renée Marie Bumb in Camden federal court to a four-count information charging him with robbing: (1) Dec. 10, 2016 – Howard Bank in Baltimore; (2) Dec. 13, 2016 -- Northwest Bank in Baltimore; (3) Dec.15, 2016 – TD Bank N.A. in Ocean City, New Jersey; and (4) Dec. 16, 2016 – Wells Fargo Bank in Atlantic City, New Jersey.
According to documents filed in this case and statements made in court:
On Dec. 15, 2016, a man entered a TD Bank in Ocean City and presented a teller with a note that read: “GUN IN Pocket, MONEY NOW or –BANG-.” He then took cash from the teller and fled on foot. Law enforcement officers issued a bulletin with a bank surveillance photograph. The robber was later identified as Higgins.
Through coordination with the FBI in Baltimore, Maryland, New Jersey agents learned that a robber with a similar physical description had robbed two banks and a business earlier that week in Baltimore.
On Dec. 16, 2017, a man fitting Higgins’s description walked into a TD Bank in Atlantic City. After recognizing Higgins from the police bulletin, a bank employee triggered the bank’s “hold-up” alarm, and Higgins left the bank and got into a taxicab. Officers from the Atlantic City Police Department (ACPD) arrived at the TD Bank and, following up on information provided by witnesses, issued a bulletin describing the taxicab’s number and direction of travel.
Having received the bulletin describing the taxicab, another ACPD officer located the taxicab near a Wells Fargo Bank in Atlantic City while Higgins was allegedly in the process of robbing that bank. Higgins entered the Wells Fargo Bank and presented a teller with a note that read, “Gun in Pocket, Money Now or Bang now.” After Higgins took the money and fled the bank, ACPD officers arrested him.
Higgins admitted to robbing two banks and a business in Baltimore, Maryland, as well as the two New Jersey banks. During each of the bank robberies, Higgins threatened the bank’s employees and fled.
Higgins faces a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense on each bank robbery. Under the terms of the plea agreement, Higgins has agreed to make full restitution to the banks – as well as to the victim of another robbery in Baltimore – for all of the losses resulting from his robbery spree. Sentencing is scheduled for Oct. 6, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark and Special Agent in Charge Gordon Johnson in Baltimore; the Ocean City Police Department, under the direction of Chief Chad Callahan; the Atlantic City Police Department, under the direction of Chief Henry White; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor Damon Tyner; the Baltimore County Police, under the direction of Chief Terrance Gordon; and the Fairfax County Police, under the direction of Chief of Police Col., Edwin C. Roessler Jr., with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S. Attorney’s Office in Camden.
Toms River, New Jersey, Sports Medicine Doctor Sentenced to One Year in Prison for Accepting $60,000 in Cash Bribes for Prescription Referrals, Health Care FraudRead the Press Release
CAMDEN, N.J. – A sports medicine doctor with a practice in Toms River, New Jersey, was sentenced today to one year and one day in prison for accepting more than $60,000 in cash bribes in return for referring pain cream prescriptions and falsifying health records on behalf of Prescriptions R Us (PRU), a compound pharmacy in Lakewood, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
James Morales, 47, of Toms River, previously pleaded guilty before U.S. District Judge Joseph H. Rodriguez to an information charging him with conspiracy to accept kickbacks and commit health care fraud. Judge Rodriguez imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
PRU was owned and operated by Vladimir Kleyman, 46, of Lakewood, New Jersey. As a compounding pharmacy, PRU prepared medication using different types and dosages of drugs in order to provide more personalized medications for patients. PRU supplied a topical cream for pain treatment that was made from ketamine (a Schedule III non-narcotic), lidocaine, diclofenac and other ingredients.
Morales operated Shore Sports Medicine, a medical practice in Toms River. Morales admitted that from February 2013 through December 2013, he accepted at least $60,000 in cash bribes from PRU in exchange for referring pain cream prescriptions.
Morales also admitted that on Dec. 19, 2013, Kleyman told Morales that the quantity of pain cream that Morales had prescribed was too high to get reimbursed by Horizon, a private health insurance plan. Kleyman asked Morales to start omitting quantity information on his prescriptions for the compounded pain cream. Morales admitted that he agreed to omit quantity information on prescriptions for patients enrolled in Horizon in order to help PRU obtain reimbursements.
In addition to the prison term, Judge Rodriguez sentenced Morales to two years of supervised release and pay $78,018 in restitution. The judge also entered a forfeiture order of $90,000 and fined Morales $5,000.
Kleyman previously pleaded guilty to conspiring to pay kickbacks in exchange for prescription referrals and committing health care fraud. He was sentenced on Nov. 4, 2015, to 20 months in prison, three years of supervised release and ordered to pay restitution of $477,000.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; and U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jacob T. Elberg, Chief of the Health Care & Government Fraud Unit in Newark.
The health care fraud practice at the New Jersey U.S. Attorney’s Office was reorganized to create a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.36 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: A. Ross Pearlson Esq., Matthew E. Beck Esq., William Finizio Esq., West Orange, New Jersey
Three Arrested, Eight Kilograms of Cocaine Seized in Takedown of New Brunswick Drug Distribution ConspiracyRead the Press Release
NEWARK, N.J. – Three individuals appeared in federal court today to face allegations that they conspired to distribute multi-kilogram quantities of cocaine in the New Brunswick, New Jersey area, Acting U.S. Attorney William E. Fitzpatrick announced.
Palemon Silvestre Sierra, 41, Indhira de los Santos Padilla, 33, both of New Brunswick, and Yunior Martinez-Jimenez, 30, of Somerset, New Jersey, are charged by complaint with one count of conspiracy to distribute five kilograms or more of cocaine. They were arrested June 27, 2017 and appeared today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the complaint:
On June 27, 2017, Martinez-Jimenez met two individuals at a location on Remsen Avenue in New Brunswick to allegedly sell two kilograms of cocaine. Padilla was in a car driven by Martinez-Jimenez.
After one of the individuals refused to follow Martinez-Jimenez to a second location to pick up the drugs, Martinez-Jimenez and Padilla traveled to a residence on Redmond Street in New Brunswick. Law enforcement observed Sierra exit the residence, retrieve an empty bag from Martinez- Jimenez’s vehicle, return to the residence and emerge minutes later with the bag, which he gave back to Martinez-Jimenez and Padilla.
Martinez-Jimenez and Padilla went back to meet the two individuals at the Remsen Avenue location. After Padilla handed the bag through the passenger side window of the individuals’ vehicle, law enforcement converged on the scene and arrested Martinez-Jimenez and Padilla. They also found two kilograms of cocaine in the bag.
At the direction of law enforcement, Martinez-Jimenez delivered the narcotics proceeds to Sierra at the Redmond Street residence. Sierra was then arrested. Afterwards, law enforcement searched the residence and seized approximately six more kilograms of cocaine from Sierra’s bedroom.
The possession with intent to distribute charge carries a minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $10 million fine.
Acting U.S. Attorney William E. 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 Brian A. Michael, with the investigation.
The government is represented by Assistant U.S. Attorney Tazneen Shahabuddin of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Middlesex County, New Jersey, Man Charged with Stealing $184,936 in Social Security BenefitsRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man charged with stealing his late great aunt’s Social Security benefits for 18 years made his initial court appearance today, Acting U.S. Attorney William E. Fitzpatrick announced.
Lance Nelson, 56, of Perth Amboy, New Jersey, is charged by complaint with stealing $184,936 in benefits from the Social Security Administration between 1998 and 2016. Nelson appeared before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to the complaint:
Nelson’s great aunt received Social Security benefits, which were sent to a joint bank account that she shared with Nelson at Bank of America. In February 1998, Nelson’s great aunt died, and the Social Security Administration, unaware of her death, continued to issue her monthly retirement benefits. From March 1998 until February 2016, the Social Security Administration sent $184,936 to the joint account. Nelson, who was not entitled to receive his great aunt’s retirement benefits, used the money for his own benefit. Between August 2009 and March 2016, Nelson caused $52,367 to be transferred from the joint account into Nelson’s individual savings and checking accounts. He also used ATMs to withdraw approximately $30,000 from the joint account between April 2011 and October 2015. Since at least 1998, Nelson earned $36,868 to $64,272 per year as an assistant zoning officer for the City of Perth Amboy.
The theft of federal funds charge carries a maximum potential penalty of up to 10 years in prison and a fine of up to $250,000, or twice the gross pecuniary gain or loss associated with the offense.
Acting U.S. Attorney Fitzpatrick credited special agents with the Social Security Administration - Office of the Inspector General, under the direction of Special Agent-in-Charge John F. Grasso of the New York Field Division, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Cari Fais of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Member of Camden, New Jersey, Drug Trafficking Organization Admits Drug DistributionRead the Press Release
CAMDEN, N.J. – A Camden man today admitted selling crack cocaine, Acting U.S. Attorney William E. Fitzpatrick announced.
Nafeez Griffin, a/k/a “Feez,” 31, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of distribution and possession with intent to distribute cocaine base.
According to documents filed in this case and statements made in court:
Griffin admitted that on Nov. 30, 2015, he sold crack cocaine to an undercover officer on the 1100 block of Lansdowne Avenue, which was then under the control of a drug distribution organization of which he was a member. Griffin also admitted that other members of the organization supplied drugs to him, and that he made sales of crack cocaine on other occasions. Griffin and others were originally charged by complaint on Sept. 9, 2016, following a long-term 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. Investigators also intercepted communications pursuant to court-authorized wiretaps on cellular telephones used by several members of the conspiracy.
The count to which Griffin pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Oct. 6, 2017.
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 leading to today’s guilty plea.
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: Justin T. Loughry Esq., Camden
Man Who Laundered Millions from Massive Computer Hacking and Telecommunications Fraud Scheme Gets 48 Months in PrisonRead the Press Release
NEWARK, N.J. – A Pakistani citizen was sentenced today to 48 months in prison for laundering more than $19.6 million on behalf of the perpetrators of a massive international computer hacking and telecommunications fraud scheme, Acting U.S. Attorney William E. Fitzpatrick announced.
Muhammad Sohail Qasmani, 49, formerly of Bangkok, Thailand, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiracy to commit wire fraud. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this and related cases and statements made in court:
This massive international telecommunications fraud scheme, allegedly led by Noor Aziz, 55, of Karachi, Pakistan, and responsible for total losses exceeding $70 million, involved unauthorized access to the computer systems – commonly known as PBX systems – that ran the internal telephone networks of numerous businesses and organizations in the United States. Foreign-based hackers targeted the telephone systems of the victim corporations and placed calls to those systems in an attempt to identify unused telephone extensions. Once the hackers identified unused extensions, they illegally reprogrammed the telephone systems so that they could be used to make unlimited long distance calls, all of which were ultimately charged back to the victim corporations.
The hacked telephone systems were then used to make calls to premium telephone numbers – such as purported chat lines, adult entertainment, and psychic hotlines – that generated revenue based on the calls’ duration and were set up and controlled by Aziz. In actuality, the numbers provided no actual services. Telephone company representatives who suspected fraudulent activity and called the numbers heard recordings of fake rings, fake password prompts, fake voicemail messages, music, or dead air on continuous loops.
In 2008, Qasmani, who operated a money laundering and smuggling business in Thailand, agreed to launder proceeds of the scheme for Aziz. In furtherance of the conspiracy, Qasmani established multiple bank accounts to receive the money generated by the illicit telephone traffic. Qasmani also paid the hackers and dialers who worked for Aziz to keep the scheme going.
Specifically, over nearly four years, Qasmani initiated money transfers to approximately 650 unique transferees, located in at least 10 countries, including the Philippines, India, Pakistan, Malaysia, China, the United Arab Emirates, Saudi Arabia, Indonesia, Thailand, and Italy. Qasmani moved a total of approximately $19.6 million in fraud proceeds from November 2008 through Dec. 31, 2012. Qasmani kept laundering the money even after Aziz was arrested in connection with this scheme and later released by foreign authorities.
On Dec. 22, 2014, Special Agents of the FBI arrested Qasmani at Los Angeles International Airport after he arrived on a flight from Bangkok.
In addition to the prison term, Judge Hayden sentenced Qasmani to two years of supervised release. Qasmani must also forfeit $25,000 and pay restitution of $71,761,956.34.
Aziz was charged by indictment on June 20, 2012 and remains a fugitive. For more information, visit the FBI Cyber's Most Wanted list. The charges and allegations against him are merely accusations, and he is considered innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s guilty plea. He also thanked officers with U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO) and U.S. Customs and Border Protection for their assistance in this case.
The government is represented by Assistant U.S. Attorney L. Judson Welle, coordinator of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit.
Defense Counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark
Former Jersey City Police Officer Admits Conspiracy to Commit Fraud and Accept Corrupt PaymentsRead the Press Release
NEWARK, N.J. – A former Jersey City police officer today admitted accepting approximately $55,000 in corrupt payments in exchange for helping employers operate at worksites without the required presence of an off-duty police officer and for helping a police officer obtain compensation for off-duty work he did not perform, Acting U.S. Attorney William E. Fitzpatrick announced.
Anthony Iannicco, 48, of Jersey City, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with one count of conspiracy to commit fraud and accept corrupt payments.
According to documents filed in this case and statements made in court:
Iannicco was a police officer with the Jersey City Police Department (JCPD) from 1995 to 2016. From 2008 through 2016, his duties included serving as the “assistant pick coordinator” for Jersey City’s West District. As the assistant pick coordinator, Iannicco assigned police officers to off-duty details.
Under Jersey City’s municipal code, off-duty police officers were not permitted to receive cash payments directly from off-duty employers. Rather, the employers were supposed to pay Jersey City, which would then pay the off-duty police officers, minus certain fees, taxes and deductions, including an administrative fee payable to Jersey City per hour that the off-duty police officers worked.
Iannicco conspired with numerous employers to cut Jersey City out of the process of hiring and compensating off-duty police officers. Generally, Iannicco permitted these employers to operate at worksites without the presence of a police officer when such a presence was required. In exchange, Iannicco accepted cash payments directly from these employers in violation of Jersey City rules and regulations.
In addition, Iannicco provided fraudulent off-duty employment vouchers to another police officer, identified in the information as “Co-Conspirator 1,” falsely representing that Co-Conspirator 1 completed off-duty assignments that Co-Conspirator 1 never worked. Jersey City subsequently paid Co-Conspirator 1 based on these fraudulent vouchers. In exchange for providing these fraudulent vouchers, Iannicco accepted cash payments from Co-Conspirator 1.
Altogether, from 2011 to 2016, Iannicco collected payments of approximately $55,000 directly from off-duty employers and from Co-Conspirator 1.Iannicco faces a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Pursuant to the plea agreement, Iannicco is required to forfeit the $55,000 that he received. Sentencing is set for Oct. 3, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy A. Gallagher in Newark, with the investigation.
JCPD is cooperating with the investigation.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: John A. Azzarello Esq., Morristown, New Jersey
New York Entrepreneur Sentenced to 41 Months in Prison for Defrauding Investors Out of More Than $3 MillionRead the Press Release
NEWARK, N.J. - A New York man was sentenced today to 41 months in prison for a two-year scheme in which he defrauded multiple victims who believed they were investing in businesses that offered a popular fitness training program, Acting U.S. Attorney William E. Fitzpatrick announced.
Joshua Bryce Newman, 37, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of wire fraud. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Newman was a self-styled entrepreneur who engaged in a variety of business ventures, including venture capital work, a film production company, and, more recently, in businesses offering a popular fitness training program. By 2011 and 2012, Newman found himself with mounting legal and financial troubles largely as a result of judgments and liens filed against him and his film production company, Cyan Pictures, relating to their failed film project that was meant to produce and distribute a film about the New York Yankees entitled “Keeper of the Pinstripes.”
From 2012, Newman made material misrepresentations to solicit investments and loans purportedly for various fitness business ventures he was working on, when his true intent was to use the money for his own purposes, including repaying others who had invested in one of his prior projects.
Newman often supplied his victims with doctored or bogus documentation in order to obtain the investment capital and loans. He then lulled his victims into believing that their investment money was safe or that he was in a position to repay their loans by making further misrepresentations and supplying them with additional phony documents. The false documents he used included doctored operating agreements, false statements of ownership percentages held by various individuals, and bogus documents purporting to show the amount of annual partnership gains or losses reported to the IRS.
Newman also misrepresented to his potential partners, purported investors, and lenders in one of his business ventures that he had raised millions of dollars in funding for the project, when he knew that no such funds had been raised.
When investors raised concerns about their investments, Newman typically gave them false assurances and agreed to return the funds. In reality, he often had no funds to return, and so he would make various excuses, including that he had sent wires that had been delayed in the banking system when no such wire had been sent. He often stalled for time by giving his victims checks drawn on accounts with insufficient funds to cover the amount of the checks.
On at least one occasion, Newman sent a picture of the purported wire transfer order for $165,000 to an investor who had threatened legal action and told the investor that the funds were on the way, even though Newman knew that no such funds had been or would be furnished to the investor. Newman defrauded approximately 30 victims of approximately $3 million.
In addition to the prison term, Judge Walls sentenced Newman to three years of supervised release and ordered him to pay restitution of $3,118,165.82.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Paul A. Murphy, Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
Defense counsel: Priya Chaudhry Esq., New York; Eric Kanefsky Esq., Newark
Middlesex County, New Jersey, Man Sentenced to 94 Months in Prison for Distribution and Possession of Child PornographyRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man was sentenced today to 94 months prison for distributing and possessing images of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.
John Fricovsky, 58, of Edison, New Jersey, previously pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of distribution of child pornography and one count of possession of child pornography. Judge Vazquez imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
Fricovsky admitted that in February 2015 he sent an email attaching an image of child sexual abuse involving a child under the age of 12. He also admitted to, in December 2015, possessing computer devices containing at least 10, but fewer than 150, images of child sexual abuse.
In addition to the prison term, Judge Vazquez sentenced Fricovsky to 10 years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents with Homeland Security Investigations, under the direction of Acting Special Agent in Charge Brian Michael, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Lisa Mack Esq., Assistant Federal Public Defender, Newark
Middlesex County, New Jersey, Man Admits Role in Ethylone Distribution ConspiracyRead the Press Release
NEWARK, N.J. – A Perth Amboy, New Jersey, man today admitted his role in a conspiracy to distribute approximately 1.5 kilograms of ethylone, a Schedule I controlled substance, Acting U.S. Attorney William E. Fitzpatrick announced.
Paul Hutchison, 35, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of conspiring to distribute ethylone.
According to documents filed in this case and statements made in court:
On Oct. 16, 2015, a lawful search of Hutchison’s residence in Perth Amboy revealed that he possessed approximately 1.5 kilograms of ethlyone, which he conspired with others to distribute in and around Middlesex County. Ethylone, sometimes referred to as “bath salts” or “molly,” is an illegal synthetic drug that stimulates the central nervous system and can cause hallucinogenic effects.
The conspiracy charge to which Hutchison pleaded guilty carries a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for Oct. 16, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration (DEA), under the direction of Charge Carl J. Kotowski in Newark, with the investigation.
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.
Defense Counsel: Bruce Regenstreich Esq., New York
Member of Violent Grape Street Crips Gang Admits Racketeering ConspiracyRead the Press Release
Plea Agreement Calls for 25-Year Prison Sentence
NEWARK, N.J. – A member of the New Jersey set of the Grape Street Crips today admitted his role in a racketeering conspiracy that involved shooting rival gang members and conspiracies to distribute heroin and crack-cocaine, Acting U.S. Attorney William E. Fitzpatrick announced.
Justin Carnegie, a/k/a “Dew Hi,” a/k/a “Dew,” a/k/a “D,” 30, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to five counts in a sixth superseding indictment charging him with RICO conspiracy, conspiracy to commit aggravated assault with a dangerous weapon, conspiracy to possess a firearm, and separate conspiracies to distribute one kilogram of heroin and 280 grams or more of crack-cocaine.
According to documents filed in this case and statements made in court:
The N.J. Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark, including the area of 6th Avenue and North 5th Street and public-housing complexes at Pennington Court, Oscar Miles, the Millard Terrell Homes, the John W. Hyatt homes and the former James Baxter Terrace complex.
Carnegie admitted that on Oct. 7, 2013, he and other gang members sought to avenge the murder of a fellow gang member who had recently been killed by rival gang members. Carnegie and his fellow gang members travelled to the area of Avon Avenue in Newark where one of Carnegie’s fellow gang members discharged approximately 14 rounds in an attempt to shoot members of the rival gang. After returning to their staging area after the shooting, Carnegie fled law enforcement who attempted to arrest him and his fellow gang members.
Carnegie and other gang members frequently used social media to promote the gang’s reputation for violence and drug-trafficking. For example, Carnegie has previously stated “we be straight rat killing,” referring to the gang’s practice of intimidating or killing cooperating witnesses.
Carnegie and fellow gang members frequently carried and stock-piled firearms in furtherance of the gang’s activities. In May 2010, Carnegie stored a loaded Romarm SA Cugir 7.62x39 assault rifle and an American Industries Calico M100 .22LR carbine, along with ammunition for both weapons, in Orange, New Jersey.
Finally, Carnegie admitted to participating in conspiracies to distribute one kilogram or more of heroin and 180 grams or more of crack-cocaine.
Under the terms of the plea agreement, if accepted by the court, Carnegie will be sentenced to 25 years in prison and 10 years of supervised release. Sentencing is scheduled for Oct. 10, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation. Acting U.S. Attorney Fitzpatrick also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Robert D. Laurino, police officers and detectives of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry Kamar of the District of New Jersey’s Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
Defense counsel: John J. Roberts Esq., Chatham, New Jersey.
Essex County, New Jersey, Man Gets 108 Months in Prison for Crack-Cocaine DistributionRead the Press Release
NEWARK, N.J. – An Irvington, New Jersey, man who distributed multiple kilograms of crack-cocaine and powder cocaine was sentenced today to 108 months in prison, Acting U.S. Attorney William E. Fitzpatrick announced.
Antonio Bivens, a/k/a “Mo,” 44, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a superseding information charging him with one count of conspiracy to distribute 280 grams or more of crack-cocaine. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Bivens was a member of a drug trafficking organization supervised by Kenneth Hammond, a/k/a “Saleem,” 49, also of Irvington. Bivens distributed multiple kilograms of crack-cocaine and powder cocaine out of two residences owned by Hammond in Irvington. In November 2015, law enforcement officers raided the residences and seized approximately two kilograms of crack-cocaine and 12 kilograms of powder cocaine.
In addition to the prison term, Judge Hayden sentenced Bivens to four years of supervised release. Hammond previously pleaded guilty to his role in the conspiracy and was sentenced on June 21, 2017 to 108 months in prison.
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Assistant U.S. Attorneys Barry A. Kamar and Elaine K. Lou of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Brian Neary Esq., Hackensack, New Jersey
Two Ocean County, New Jersey, Couples Charged with Conspiring to Steal Government FundsRead the Press Release
Arrests Part of Joint State and Federal Effort to Prosecute Public Assistance Fraud
TRENTON, N.J. – Two couples from Lakewood, New Jersey, were arrested this morning on charges that they failed to report their sizable incomes in order to fraudulently collect hundreds of thousands of dollars in public assistance benefits, Acting U.S. Attorney William E. Fitzpatrick announced.
Rachel Sorotzkin, 32, and Mordechai Sorotzkin, 35, are charged by complaint with one count of conspiring to steal government funds. Yocheved Nussbaum, 40, and Shimon Nussbaum, 42, also of Lakewood, are charged in a separate complaint with one count of conspiring to steal government funds. The Sorotzkins and the Nussbaums, all of Lakewood, are expected to make their appearances this afternoon before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court.
According to the complaints:
From 2011 through 2014, Rachel and Mordechai Sorotzkin applied for and received Medicaid health insurance benefits for themselves and their children. After being approved for Medicaid benefits in August of 2011, the Sorotzkins received significant windfalls – including a lump sum payment of $1 million from Rachel Sorotzkin’s business in April of 2013 – which they failed to report to Medicaid officials. Despite earning in excess of $1 million in each of the 2012 and 2013 calendar years, the Sorotzkins continued to use their Medicaid cards, ultimately defrauding the government of approximately $96,000 in taxpayer-funded medical care.
In a separate scheme, Yocheved and Shimon Nussbaum applied for and received public benefits for themselves and their children from 2011 through 2014, despite their significant income. In the years prior to and during the conspiracy, the Nussbaums created a variety of companies that were nominally run by relatives but were actually controlled by the Nussbaums. They opened various bank accounts in the names of these companies and used funds from these accounts to cover personal expenses.
In applying for Medicaid, Section 8 housing, and SNAP food benefits, the Nussbaums grossly underreporting their true income by failing to include the income from these business accounts. Despite annual income of up to as high as approximately $1.8 million in 2013, the Nussbaums continued to receive taxpayer-funded health, housing and food benefits through August of 2014, ultimately defrauding the government of approximately $178,000.
The conspiracy counts each carry a maximum potential penalty of up to five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
In related arrests also carried out this morning, the Ocean County Prosecutor’s Office is charging four additional people at the state level for allegedly defrauding public assistance programs. Mordechai Breskin, 37, and Jocheved Breskin, 35, of Lakewood, are charged with 2nd degree theft by deception for wrongfully collecting approximately $585,662 in Medicaid, SNAP, HUD and SSI benefits between January 2009 through December 2014. Zalmen Sorotzkin, 39, and Tzipporah Sorotzkin, 35, of Lakewood, are charged with 2nd degree theft by deception for wrongfully collecting approximately $338,642 in Medicaid, SNAP, HUD and SSI benefits between January 2009 and April 2014.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Ocean County Prosecutor’s Office, under the direction of Ocean County Prosecutor Joseph D. Coronato; the New Jersey Office of the State Comptroller, under the direction of State Comptroller Philip James Degnan; the New Jersey Department of the Treasury – Office of Criminal Investigation; under the direction of Special Agent in Charge Charles Giblin; the Social Security Administration - Office of the Inspector General, under the direction of Special Agent in Charge John Grasso; the Lakewood Police Department; and criminal investigators of the U.S. Attorney’s Office with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorney Molly S. Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty
Maryland Man Sentenced to 12 Months in Prison for Stealing Works of Art and Selling Them in Southern New JerseyRead the Press Release
CAMDEN, N.J. – A Rock Hall, Maryland, man was sentenced today to 12 months in prison for stealing at least 40 pieces of art and bringing them to New Jersey to sell them, Acting U.S. Attorney William E. Fitzpatrick announced.
William C. Reed III, 42, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with one count of interstate transportation of stolen property. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:Starting in June 2013, Reed worked as a caretaker for an individual in Rock Hall. Reed’s client was an art collector and dealer, who collected and maintained an eclectic collection of fine art by American and European artists. The collection included paintings, sculptures and etchings.
Between June 2014 and November 2014, Reed took various works of art from his client’s Rock Hall property without his permission and sold the art at various locations, including a pawn shop in Salem, New Jersey, and to an individual in Chestertown, Maryland.
In addition to the prison term, Judge Kugler sentenced Reed to three years of supervised release and ordered him to pay restitution of $92,240.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI’s Art Crime Team, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, with the investigation leading to today’s sentencing. He also thanked the Rock Hall Police Department, under the direction of Chief Steven W. Moore, for its assistance in this case.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: Lisa Lewis Esq., Camden
Homeowner Pleads Guilty to Defrauding Banks in ‘Shotgun’ Loan SchemeRead the Press Release
NEWARK, N.J. – A Ridgefield Park, New Jersey, man today admitted his role in a scheme to use false information and simultaneous loan applications at multiple banks to fraudulently obtain home equity lines of credit, a practice known as “shotgunning,” Acting U.S. Attorney William E. Fitzpatrick announced.
Rafael Popoteur, 65, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiring to commit bank fraud between 2012 and 2014.
According to documents filed in the case and statements made in court:
From 2012 through January 2014, Popoteur, Simon Curanaj, and others conspired to fraudulently obtain multiple home equity lines of credit (HELOCs) from banks on a residential property in New Jersey. To get the banks to extend lines of credit they would not have otherwise approved, Popoteur, Curanaj, and others transferred ownership of a Ridgefield Park property to Popoteur, who also lived at the property.
Popoteur, Curanaj, and others then applied for three HELOCs from multiple banks using the Ridgefield Park property as collateral. They hid from the lenders the fact that the property was either already subject to senior liens that had not yet been recorded, or that the same property was offered as collateral for a line of credit from another lender. The applications also falsely inflated Popoteur’s income. The equity in the property was far less than the amount of the HELOC loans Popoteur and others applied for.
The victim banks eventually issued loans to Popoteur in excess of $495,000. After the victim banks deposited money into Popoteur’s bank accounts, Popoteur disbursed portions of it to Curanaj and others. In 2014, Popoteur defaulted on all three HELOC loans.
The conspiracy to commit bank fraud count carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct. 10, 2017.
The charges against Curanaj are still pending and he is presumed innocent unless and until proven guilty.
Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Federal Finance Housing Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; and special agents of the FBI, under the direction Special Agent in Charge Timothy Gallagher of the Newark office, with the investigation.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Criminal Division in Newark and Special Assistant U.S. Attorney Kevin DiGregory of the FHFA, Office of the Inspector General.
Defense counsel: Jean Barrett Esq., Montclair
Grape Street Crips Crack-Cocaine Wholesaler Sentenced to 11 Years in Prison for Racketeering, Drug Trafficking ChargesRead the Press Release
NEWARK, N.J. – A crack-cocaine wholesaler for the New Jersey set of the Grape Street Crips was sentenced today to 132 months in prison for his involvement in racketeering and drug trafficking conspiracies operating in Newark, Acting U.S. Attorney William E. Fitzpatrick announced.
James S. Gutierrez, a/k/a “Bad News,” 26, of Newark, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to Count 1 and Count 18 of a sixth superseding indictment charging him with racketeering conspiracy and conspiracy to distribute crack-cocaine. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
The New Jersey Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark. Gutierrez and other members of the gang accepted orders for, and distributed, thousands of clips of crack-cocaine to other distributors, including other gang members.
To protect their gang and drug territory, the New Jersey Grape Street Crips operating in the area of 6th Avenue and North 5th Street in Newark used “community guns” that were easily accessible to gang members. During the course of the investigation, law enforcement agents seized numerous firearms, including a .410 caliber assault rifle, a.45 caliber Thompson semi-automatic carbine, a 7.62 caliber assault rifle, and numerous semi-automatic handguns.
In addition to the prison term, Judge Arleo sentenced Gutierrez to five years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose; and the Essex County Sheriff’s Office under the direction of Armando B. Fontoura, for their assistance in this case.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
Defense counsel: Edward J. Plaza Esq., Little Silver, New Jersey
Cardiac Monitoring Companies and Executive Agree to Pay $13.45 Million to Resolve False Claims Act AllegationsRead the Press Release
AMI Monitoring Inc. aka Spectocor, its owner, Joseph Bogdan, Medi-Lynx Cardiac Monitoring LLC, and Medicalgorithmics SA, the current majority owner of Medi-Lynx Cardiac Monitoring LLC, have agreed to resolve allegations that they violated the False Claims Act by billing Medicare for higher and more expensive levels of cardiac monitoring services than requested by the ordering physicians, the Department of Justice announced today. Spectocor and Bogdan have agreed to pay $10.56 million, and Medi-Lynx and Medicalgorithmics have agreed to pay $2.89 million.
“Independent diagnostic testing facilities that improperly steer physicians to order higher levels of service will be held accountable,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will vigilantly ensure the appropriate use of our country’s limited Medicare funds.”
From 2011 through 2016, Spectocor, headquartered in McKinney, Texas, and Joseph Bogdan, allegedly marketed the Pocket ECG as capable of performing three separate types of cardiac monitoring services—holter, event, and telemetry. When a physician sought to enroll a patient for Pocket ECG, however, the enrollment process allegedly only allowed the physician to enroll in Pocket ECG for the service which provided the highest rate of reimbursement provided by a patient’s insurance, thus steering the ordering physician to a more costly level of service. In 2013, Medi-Lynx, a related company headquartered in Plano, Texas, began selling the Pocket ECG and allegedly adopted this same enrollment procedure. Medicalgorithmics SA, a limited liability company based in Warsaw, Poland, acquired a controlling interest in Medi-Lynx in September 2016.
“Sophisticated medical technology can be used to help doctors dramatically improve the lives of their patients, but it can also be misused to fraudulently increase medical bills,” said Acting U.S. Attorney William E. Fitzpatrick for the District of New Jersey. “Today’s settlement demonstrates that the federal government is committed to preserving the integrity of the Medicare system and ensuring that Medicare funds are spent only for patient care.”
“Billing for unneeded services, as the government alleged, takes unfair advantage of Medicare patients and steals from taxpayers,” said Special Agent in Charge Scott J. Lampert for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “OIG, along with our law enforcement partners, will aggressively investigate these crimes.”
The settlements resolve allegations filed in a lawsuit by Eben Steele, a former sales manager at Spectocor. The lawsuit was filed in a federal court in Newark, New Jersey, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in this case. Mr. Steele will receive approximately $2.4 million from the two settlements.
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 900-HHS-TIPS (800-447-8477).
The settlements were the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of New Jersey and the HHS-OIG.
The case is captioned United States ex rel. John Doe v. Spectocor Enterprise Services, LLC, et al., Case No. 14-1387 (KSH) (D. N.J.). The claims resolved by the settlements are allegations only and there has been no determination of liability.
Cardiac Monitoring Companies and Executive Agree to Pay $13.4 Million to Resolve False Claims Act AllegationsRead the Press Release
NEWARK, N.J. – Four companies and one executive have agreed to pay more than $13.4 million, including interest, to resolve allegations that they billed Medicare for higher and more expensive levels of cardiac monitoring services than had been ordered by doctors, Acting U.S. Attorney William E. Fitzpatrick and Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division announced today.
AMI Monitoring Inc. and its affiliate, Spectocor LLC, both based in McKinney, Texas, agreed to pay $9.56 million, plus interest. Joseph H. Bogdan, 55, of Fairview, Texas, president and owner of the companies, has agreed to pay $1 million plus interest. Medi-Lynx Cardiac Monitoring LLC, headquartered in Plano, Texas, and its majority owner, MEDICALgorithmics S.A., a biotechnology company based in Warsaw, Poland, have agreed to pay $2.89 million.
“Sophisticated medical technology can be used to help doctors dramatically improve the lives of their patients, but it can also be misused to fraudulently increase medical bills,” Acting U.S. Attorney Fitzpatrick said. “Today’s settlement demonstrates that the federal government is committed to preserving the integrity of the Medicare system and ensuring that Medicare funds are spent only for patient care.”
“Independent diagnostic testing facilities that improperly steer physicians to order higher levels of service will be held accountable,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “We will vigilantly ensure the appropriate use of our country’s limited Medicare funds.”
“Billing for unneeded services, as the government alleged, takes unfair advantage of Medicare patients and steals from taxpayers,” said Special Agent in Charge Scott J. Lampert for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “OIG, along with our law enforcement partners, will aggressively investigate these crimes.”
According to documents filed in this case and the contentions of the United States contained in the settlement agreement:
From 2011 through 2016, AMI and Spectocor marketed the PocketECG cardiac monitoring device under an exclusive distribution agreement with MEDICALgorithmics, the device’s manufacturer. AMI and Spectocor, both independent diagnostic testing facilities, marketed the device to doctors as being capable of performing three different types of cardiac monitoring services: Holter, event, or telemetry. The companies and Mr. Bogdan, however, knowingly designed the device’s online enrollment process to steer unwitting doctors to select “telemetry” – which provided the highest rate of reimbursement – for all Medicare patients, even when they wanted to select one of the less expensive services. This marketing, promotion, and enrollment process resulted in the submission of false claims to Medicare.
In 2013, a former co-owner of Spectocor and AMI formed Medi-Lynx as an independent diagnostic testing facility that also marketed the PocketECG device under an agreement with MEDICALgorithmics. From 2013 through 2016, Medi-Lynx also employed the same device enrollment procedure and marketing scheme, resulting in the submission of false Medicare claims. In addition to manufacturing the PocketECG, MEDICALgorithmics acquired a controlling interest in Medi-Lynx in September 2016.
The allegations were raised in a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblower – a former AMI employee who brought the misconduct to the government’s attention – will receive $2.4 million of the $13.4 million that the government recovered.
U.S. Attorney Fitzpatrick and Acting Assistant Attorney General Readler credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, as well as investigators with the U.S. Attorney’s Office in Newark, with the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Andrew A. Caffrey III of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
The U.S. Attorney’s Office reorganized its health care fraud practice in 2010, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.36 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
The case is captioned United States ex rel. Doe v. Spectocor Enterprise Services LLC, et al. (D.N.J.). The claims settled by this agreement are allegations only, and there has been no determination of liability.
Defense counsel:
Sean McKenna Esq., Dallas, Texas
Counsel for AMI Monitoring Inc., Spectocor LLC, and Joseph H. Bogdan
Bergen County, New Jersey, Man Sentenced to 46 Months in Prison for $1.5 Million Ponzi SchemeRead the Press Release
NEWARK, N.J. – A Lyndhurst, New Jersey, man was sentenced today to 46 months in prison for fraudulently obtaining over $1.5 million from approximately 100 victims prior to high-profile initial public offerings (IPOs), Acting U.S. Attorney William E. Fitzpatrick announced.
Omar Hafez, 25, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him one count of wire fraud. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From July 2014 through December 2015, Hafez operated an investment fraud scheme in which he and others created a number of entities, including Lotus Global. Several of these entities had websites and social media pages listing Hafez as the CEO and advertising themselves as successful wealth management companies.
In order to deceive victim investors, Hafez represented that he had access to shares of various companies prior to their initial public offerings and could use that access to provide significant profits to investors. However, bank records for accounts controlled by Hafez and certain Lotus Global entities revealed that none of the money provided by victim investors was used to purchase shares or invest in any of the pre-IPO companies.
Instead, Hafez used the funds for his own benefit, including several large purchases at luxury car dealerships, including an approximately $87,000 purchase at Prestige Motors, an approximately $24,160 purchase at Signature Car Collections, and an approximately $8,690 purchase at Dream Cars National LLC. In addition, Hafez purchased numerous luxury goods, including an approximately $17,250 purchase at Tourneau Inc., an approximately $5,613 purchase at Louis Vuitton, and an approximately $3,000 purchase at Tiffany & Co., as well as airplane tickets and hotel stays for a single trip to Chicago totaling approximately $10,000.
Hafez employed numerous strategies to maintain the victims’ confidence and induce further investments. For example, bank records showed that Hafez occasionally used money from earlier victim investors in order to pay future victims “lulling” payments. In classic Ponzi scheme fashion, Hafez lied to investors and told them that these payments were returns on their investments.
As funds began to run out and investors demanded their money with increasing frequency, Hafez provided certain victim investors with checks for thousands of dollars, claiming that they represented investment returns or a refund of initial investments. When victim investors attempted to deposit or cash these checks, the checks were rejected due to insufficient funds because Hafez and others had already spent the victims’ money.
In addition to the prison term, Judge Walls sentenced Hafez to three years of supervised release. Hafez must also pay restitution of $1.5 million.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, 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 sentence.
The government is represented by Assistant U.S. Attorney Courtney A. Howard of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Joseph D. Rotella Esq., Newark
Union County, New Jersey, Man Charged in Microcap Stock Manipulation SchemeRead the Press Release
NEWARK, N.J. – The owner of a purported business consulting firm was arrested today for operating a $1.1 million scheme that artificially inflated the stock price of a publicly traded company he controlled, Acting U.S. Attorney William E. Fitzpatrick announced.
James Farinella, 46, of Springfield, New Jersey, is charged by complaint with one count of securities fraud. He will make his initial appearance this afternoon before U.S. Magistrate Judge Leda D. Wettre in Newark federal court.
According to the complaint:
From June 2012 through December 2012, Farinella and others allegedly operated a “pump-and-dump” stock manipulation scheme to fraudulently inflate the prices of Pazoo Inc. (PZOO). Pazoo had little or no real business operations, and when it started trading in June 2012, Farinella controlled 98 percent of the free-trading shares in Pazoo.
Farinella and other conspirators allegedly “pumped” the price of those shares by orchestrating a series of trades between accounts they controlled to create the appearance that Pazoo stock was rising in price and heavily traded. In order to further inflate the prices, Farinella and his conspirators also disseminated misleading promotional materials to lure investors to purchase the stocks, including touting Pazoo as a leading provider of nutritional supplements for people and their pets.
After pumping the stocks, Farinella and his conspirators “dumped” them by selling large volumes of the stock to investors at artificially inflated prices. The companies’ stock prices then dropped, causing victims of the scheme to suffer losses. The alleged stock manipulation scheme generated approximately $1.1 million in gross trading proceeds.The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine.
The charge and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The U.S. Securities and Exchange Commission (SEC) is filing a civil complaint against Farinella 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 U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Andrew Calamari, for its assistance in this matter.
The government is represented by Assistant U.S. Attorney Justin S. Herring of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Owner of Computer School Admits $2.8 Million Veterans’ Retraining Assistance Program Education FraudRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, woman who owned a computer training center today admitted stealing $2.8 million from a program designed to help veterans find employment, Acting U.S. Attorney William E. Fitzpatrick announced.
Elizabeth Honig, 52, of Morganville, New Jersey, pleaded guilty before U.S. District Judge Peter Sheridan in Trenton federal court to an information charging her with one count of theft of government funds
According to documents filed in this case and statements made in court:
Honig owns Computer Insight Learning Center (CILC), a computer training school based in Eatontown, New Jersey. She helped 182 veterans enroll to receive federal funding under a program – funded by the Department of Veterans Affairs (VA) and the Department of Labor – designed to help older, unemployed veterans receive training and find employment in high demand occupations. The vast majority of these veterans were either not eligible or not actually attending the training.
Honig’s program was approved by the VA to provide education and training to military veterans, including veterans who received tuition assistance under the Veteran’s Retraining Assistance Program (VRAP), which offered up to 12 months of benefits for older, unemployed veterans between the ages of 35 and 60. This program provided training assistance to unemployed veterans for programs designed to lead to a high-demand occupation.
Honig admitted she logged on to the applications system more than 100 times and certified that she was the actual veteran who was applying for benefits. She supplied false information about employment status to qualify to attend her school and receive funding from the VA. Honig then certified to the VA that the veterans enrolled in her Business Software Applications Program – approved by the VA as a 14-week course costing approximately $4,000 – were attending for up to one year. Honig also certified that the veterans were attending full-time, in-class, knowing that 62 of those veterans lived out of the state. CILC is not eligible to be approved to provide online education.
Honig allowed veterans to attend less than the required hours, to stop attending prior to completion, or, in many cases, never attend at all. Honig failed to report the non-attendance to VA, which is required by law after 30 days of non-attendance, as long as the veterans continued to pay her a monthly fee. This caused the VA to continue payments to veterans who were not entitled to the funds. Honig’s monthly fee of approximately $750 also resulted in overpayments by veterans far in excess of the VA approved $4,000 course tuition.
The count to which Honig pleaded guilty carries a maximum punishment of 10 years in prison and a fine of either $250,000, twice the gross amount of her gain from the crime, or twice the loss suffered by any victims, whichever is greatest. Sentencing is scheduled for Sept. 25, 2017.
Acting U.S. Attorney Fitzpatrick credited the Northeast Field Office, U.S. Department of Veterans Affairs, Office of Inspector General, under the direction of Special Agent in Charge Donna L. Neves; and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Deborah J. Gannett of the Healthcare and Government Fraud Unit in Newark.
Defense counsel: Evan Nappen Esq., Eatontown
Leaders of Violent Bloods Street Gang Sentenced to 30 Years in Prison for Racketeering ConspiracyRead the Press Release
NEWARK, N.J. – Two leaders of the Sex Money Murder set of the Bloods street gang were each sentenced to 360 months in prison for their respective roles in a racketeering conspiracy that involved murder, attempted murder, conspiracy to commit murder, and conspiracy to distribute heroin, Acting U.S. Attorney William E. Fitzpatrick announced today.
Narik Wilson, a/k/a “Spaz,” 32, and Emil Rutledge, a/k/a “Diddy,” 28, both of Newark, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to Count Two of a superseding indictment charging them with racketeering conspiracy. Wilson was sentenced today by Judge Wigenton in Newark federal court. Rutledge was sentenced by Judge Wigenton on Jun 20, 2017.
According to documents filed in this case and statements made in court:
The Bloods street gang is organized into subgroups that operate in specific geographic locations. Sex Money Murder is the subgroup that operates primarily in Essex County, New Jersey.
Wilson and Rutledge, high-ranking members in Sex Money Murder, admitted that from 2007 to 2011, they committed a series of violent crimes to advance the gang’s objectives. Wilson, the leader, or “O.G.,” of Sex Money Murder, admitted that he directed the murder and attempted murder of eight rival gang members in and around Newark. Rutledge, a “captain,” or “shot-caller,” of Sex Money Murder, admitted that he and others carried out a number of the shootings ordered by Wilson, causing series injuries to others and the death of a victim.
Wilson admitted that he conspired with and directed other members of Sex Money Murder to murder the following individuals described in the indictment:
Feb. 4, 2007
Attempted murder of a rival gang member, (Victim 1)
Feb. 16, 2007
Attempted murder of a rival gang member (Victim 2)
Oct. 29, 2010
Attempted murder of a rival gang member (Victim 3)
June 16, 2011
Attempted murder of rival gang members (Victims 4-7)
July 14, 2011
Murder of a rival gang member (Victim 8)
Aug. 3, 2011
Attempted murder of a rival gang member (Victim 6)
Rutledge admitted that, acting at Wilson’s direction, he and others carried out drive-by shootings of Victims 3 through 7 on the above-described dates. Rutledge also admitted that he and others killed Victim 8 in a drive-by shooting. In addition, Wilson and Rutledge admitted conspiring to distribute more than one kilogram of heroin in and around Newark.
Judge Wigenton also sentenced both defendants to five years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI and the FBI’s Safe Streets Task Force, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Essex County Prosecutor Carolyn A. Murray; the Essex County Sheriff’s Office, under the direction of Sheriff Armando V. Fontoura; and the Newark Department of Public Safety, under the direction of Anthony F. Ambrose, with the investigation.
He also thanked special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski; and special agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), under the direction of Acting Special Agent in Charge Marcus S. Watson, for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Dara Govan and Mary Toscano, Chief of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel:
Wilson: Michael N. Pedicini Esq., Chatham, New Jersey
Rutledge: Timothy R. Anderson Esq., Red Bank, New Jersey
Grape Street Crips Crack-Cocaine Wholesalers Get 18 Years in Prison for Racketeering, Drug Trafficking ChargesRead the Press Release
NEWARK, N.J. – Two crack-cocaine wholesalers for the New Jersey set of the Grape Street Crips were each sentenced today to 18 years in prison for their roles in racketeering and drug trafficking conspiracies operating in Newark, Acting U.S. Attorney William E. Fitzpatrick announced.
Hakeem Vanderhall, a/k/a “Keem,” a/k/a “Sugar Bear,” 33, of East Orange, New Jersey, and Eric Concepcion, a/k/a “Eddie Arroyo,” a/k/a “E-Wax,” a/k/a “Wax,” 30, of Clifton, New Jersey, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to Count 1 and Count 18 of a sixth superseding indictment charging them with racketeering conspiracy and conspiracy to distribute crack-cocaine. Judge Arleo imposed the sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
The New Jersey Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark. Vanderhall, Concepcion and other members of the gang, including Jamar Hamilton, a/k/a “Gunner,” Tyquan Clark a/k/a “Tah,” and Rashan Washington, a/k/a “Shoota,” used and shared a dedicated cell phone to accept orders for, and distribute, thousands of clips of crack-cocaine to other distributors, including other gang members.
To protect their gang and drug territory, the New Jersey Grape Street Crips operating in the area of 6th Avenue and North 5th Street in Newark used “community guns” that were easily accessible to gang members. During the course of the investigation, law enforcement agents seized numerous firearms, including a .410 caliber assault rifle, a.45 caliber Thompson semi-automatic carbine, a 7.62 caliber assault rifle, and numerous semi-automatic handguns.
In addition to the prison terms, Judge Arleo sentenced both Vanderhall and Concepcion to five years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski in Newark, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose; and the Essex County Sheriff’s Office under the direction of Armando B. Fontoura, for their assistance in this case.
The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry A. Kamar of the U.S. Attorney’s Office Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
Defense counsel:Vanderhall: Joshua L. Markowitz Esq., Lawrenceville, New Jersey
Concepcion: Stephen Turano Esq., NewarkFive Doctors Plead Guilty in Connection with Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – Five doctors today admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.
George Roussis, 44, of Staten Island, New York; Nicholas Roussis, 48, of Staten Island; Jorge J. Figueroa, 58, of Wayne, New Jersey; and Basel Batarseh, 57, of Franklin Lakes, New Jersey, each pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to separate informations charging them each with one count of accepting bribes in violation of the Federal Travel Act.
Yousef Zibdie, 53, of Wayne, New Jersey, who was indicted on June 6, 2017 with Aiman Hamdan and Kristina Hamdan, pleaded guilty before Judge Chesler to all 11 counts against him in the indictment, including participating in the bribery conspiracy, violating the Federal Anti-Kickback statute, violating the Federal Travel Act, honest services wire fraud and conspiracy to commit money laundering.
According to documents filed in these cases and statements made in court:
George Roussis, a pediatrician, and his brother, Nicholas Roussis, an obstetrician-gynecologist, both with practices in Staten Island, accepted cash payments totaling approximately $175,000 from BLS employees and associates between October 2010 and April 2013. In addition, at the request of the Roussis brothers, BLS paid for strip club trips, including paying women to perform lap dances and engage in sex acts with George and Nicholas Roussis. In exchange, George and Nicholas Roussis referred their patients’ blood specimens to BLS, generating more than $1,450,000 and $250,000 of lab business for BLS, respectively.
Figueroa, an internal medicine doctor with a practice in Fair Lawn, New Jersey, accepted checks, cash and other bribe payments totaling approximately $200,000 from BLS employees and associates between May 2007 and April 2013. In exchange, Figueroa generated more than $1,400,000 in lab business for BLS.
Batarseh, an internal medicine doctor with a practice in West New York, New Jersey, accepted monthly bribe checks of $3,200 totaling more than $104,000 from BLS employees and associates between November 2007 and August 2010. In exchange, Batarseh generated more than $1,300,000 in lab business for BLS.
Zibdie, an internal medicine doctor with a practice in Woodland Park, New Jersey, accepted monthly bribe checks totaling approximately $80,000 from BLS employees and associates, including co-defendant Kristina Hamdan. In exchange, Zibdie generated more than $930,000 in lab business for BLS.
The investigation has thus far resulted in 50 convictions – 36 of them doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
The investigation has to date recovered more than $13 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
The Travel Act charges to which each of the five doctors pleaded guilty is punishable by a maximum potential penalty of five years in prison. It also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
The conspiracy to engage in bribery charge and Federal Anti-Kickback Statute violations to which Zibdie pleaded guilty are punishable by a maximum potential penalty of five years in prison. The honest services wire fraud charges and conspiracy to commit money laundering charges to which Zibdie pleaded guilty are punishable by a maximum potential penalty of twenty years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
The sentencings for all five defendants have been scheduled for Dec. 6, 2017.
Acting U.S. Attorney William E. Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman, Senior Litigation Counsel Joseph N. Minish and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
The New Jersey U.S. Attorney’s Office reorganized its health care fraud practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.34 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel:
George Roussis: Peter Bennett Esq., Red Bank, New Jersey
Nicholas Roussis: Joseph R. Corozzo Esq., New York, New York
Jorge J. Figueroa: Gerald Krovatin Esq., Newark, New Jersey
Basel Batarseh: Curtis LaForge Esq., Saddle Brook, New Jersey
Yousef Zibdie: Eric Kanefsky Esq., Newark, New Jersey
Five Defendants Arraigned in 15-Kilogram Cocaine Distribution ConspiracyRead the Press Release
NEWARK, N.J. – Five men who were arrested in California with 15 kilograms of cocaine bound for New Jersey were arraigned today in Newark federal court, Acting U.S. Attorney William E. Fitzpatrick announced.
Froylan Gil Palomares, a/k/a “Froilan Gill,” 39, a Mexican national; Efrain Cardenas Alcaras, a/k/a “Ifrain Alcaras Cardenas,” 39, of Sunnyside, Washington; Sergio Kevin Calvio Ayala, a/k/a “Kevin Calveo” 28, of Fontana, California; Luis Tomas Alba Urena, 53, of Prospect Park, New Jersey; and Javier Armando Cortes Quintal, 48, a Mexican national, are charged by indictment with conspiracy to distribute and possess with intent to distribute more than five kilograms of cocaine. The defendants were arraigned in Newark federal court before U.S. District Judge William H. Walls and were detained.
According to documents filed in this case:
From Aug. 31, 2016, through Feb. 8, 2017, law enforcement officers monitored communications between Alba and others. Those communications led to the seizure of approximately one kilogram of cocaine that Alba and Quintal allegedly sold to another individual in California on Sept. 26, 2016. Alba, Quintal, and the individual later negotiated the sale of kilograms of cocaine that the individual would transport to New Jersey. After agreeing to the details of the cocaine delivery, Alba and the individual traveled from New Jersey to California to conduct the transaction.
On Feb. 8, 2017, law enforcement officers observed Quintal, Alba, Gil Palomares, Calvio and Cardenas Alcaras meet with the individual in the parking lot of a retail establishment in Burbank, California. Cardenas Alcaras and Calvio allegedly directed the individual to the interior of a Jeep to inspect the drug shipment. Once the presence of cocaine in the Jeep was confirmed, law enforcement arrested the defendants and seized 15 kilograms of cocaine from the scene, along with a .380 caliber pistol.
Each defendant faces a mandatory minimum term of 10 years in prison and a potential maximum sentence of life in prison. The defendants also face a maximum $10 million fine.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Defense counsel:
Froylan Gil Palomares: Mark Leibman Esq.
Efrain Cardenas Alcaras: Michael V. Calabro Esq.
Sergio Kevin Calvio Ayala: Bruce S. Rosen Esq.
Luis Tomas Alba Urena: Linwood A. Jones Esq.
Javier Armando Cortes Quintal: Julian Wilsey Esq.
Essex County, New Jersey, Man Gets 108 Months in Prison for Crack-Cocaine DistributionRead the Press Release
Kenneth Hammond, a/k/a “Saleem,” 49, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to a superseding information charging him with one count of conspiracy to distribute 280 grams or more of crack-cocaine. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Hammond supervised a drug trafficking organization that employed multiple associates, including Antonio Bivens, a/k/a “Mo,” 44, also of Irvington. Hammond also stored and distributed multiple kilograms of crack-cocaine and powder cocaine in two residences that he owned in Irvington. In November 2015, law enforcement officers raided Hammond’s residences and seized approximately two kilograms of crack-cocaine and 12 kilograms of powder cocaine.
In addition to the prison term, Judge Hayden sentenced Hammond to five years of supervised release. Bivens previously pleaded guilty to his role in the conspiracy and is scheduled to be sentenced by Judge Hayden on June 27, 2017.
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Assistant U.S. Attorneys Barry A. Kamar and Elaine K. Lou of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: John D. Lynch Esq., Union City, New Jersey
Essex County, New Jersey, Man Gets 51 Months in Prison for Prison Tax ScamRead the Press Release
NEWARK, N.J. – An East Orange, New Jersey, man was sentenced today to 51 months in prison for his role in a conspiracy to file false federal income tax returns on behalf of inmates at the Essex County Correctional Facility, Acting U.S. Attorney William E. Fitzpatrick announced.
Reginald Eaford, 47, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with conspiracy to make and present false, fictitious, and fraudulent claims to the IRS. Judge Walls imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
From 2013 through Aug. 5, 2014, Eaford, Winfred Moses, 49, also of East Orange, and others conspired to file bogus federal tax returns in order to fraudulently obtain tax refunds.
Eaford was an inmate at the Essex County Correctional Facility from approximately May 20, 2013 through Feb. 12, 2014. As part of the scheme, Eaford, Moses, and others obtained social security numbers, dates of birth, and other information from inmates at the jail. Eaford and Moses would then generate false W-2 forms indicating that the inmates had earned income during the relevant tax year and that federal income tax had been withheld from their paychecks.
Afterwards, Eaford and Moses filed false federal income tax returns on behalf of the inmates and had the refund checks sent to the Essex County Correctional Facility or to Moses’s East Orange residence. The proceeds of the fraud were split among Eaford, Moses, and the relevant inmates. Eaford and Moses admitted that they filed 112 phony tax returns that sought approximately $670,206 in fraudulent refunds.
In addition to the prison term, Judge Walls sentenced Eaford to three years of supervised release and ordered him to pay restitution of $200,045.
Moses also previously pleaded guilty to his role in the scheme and was sentenced April 12, 2017 to 26 months in prison.
Acting U.S. Attorney Fitzpatrick credited special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, postal inspectors from the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, and the Internal Affairs Division of Essex County Jail, under the leadership of Warden Roy Hendricks, with the investigation.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark, New Jersey
California Man Admits Scheme to Steal 94,000 Debit and Credit Cards from Michaels’ Stores in 19 StatesRead the Press Release
CAMDEN, N.J. – A Riverside, California, man today admitted his role in a conspiracy to steal 94,000 credit and debit cards from customers at approximately 80 Michaels’ Stores and use that information to make fraudulent withdrawals from the customers’ bank accounts, Acting U.S. Attorney William E. Fitzpatrick announced.
Angel Angulo, 27, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count One and Count Two of an indictment charging him with conspiracy to commit bank fraud and aggravated identity theft.
According to documents filed in this case and statements made in court:
The conspirators installed devices that acquired customers’ bank account and personal identification number (PIN) information on point of sale (POS) terminals at stores operated by Michaels. The stolen account information was used to produce counterfeit bank cards, which were used with the stolen PINs to withdraw funds from the compromised bank accounts.
The conspirators allegedly replaced 88 POS terminals in 80 different stores operated by Michaels across 19 states, including New Jersey, with counterfeit POS devices. Each counterfeit device was equipped with wireless technology, which the conspirators used to retrieve the stolen information. From February 2011 to April 2011, conspirators stole approximately 94,000 debit and credit card account numbers.
From April 2011 to May 2011, Angulo, Crystal Banuelos, and others obtained counterfeit cards with the corresponding PIN numbers written on them from other conspirators. They used the cards and PIN numbers to withdraw money using ATMs from hundreds of bank accounts. On May 14, 2011, Angulo and Banuelos possessed 179 counterfeit cards in New Jersey.
The charge of conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison and a $1 million fine. The charge of aggravated identity theft carries a mandatory penalty of two years in prison, to be served consecutively to any other sentence. Angulo’s sentencing is scheduled for Sept. 25, 2017.
Banuelos previously pleaded guilty to her role in the scheme and awaits sentencing.
Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
Defense counsel: Lisa Lewis, Esq., Federal Public Defender
Bergen County Doctor Sentenced to 41 Months in Prison for Taking Bribes in Test-Referral SchemeRead the Press Release
NEWARK, N.J. – A family doctor practicing in Bergen County, New Jersey, was sentenced today to 41 months in prison for accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, Acting U.S. Attorney William E. Fitzpatrick announced.
Bernard Greenspan, 79, of River Edge, New Jersey, was convicted March 6, 2017, of one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. Greenspan was convicted following a 11-day trial before U.S. District Judge William H. Walls, who imposed the sentence today in Newark federal court.
“The defendant in this case abused his position of trust by taking bribes in return for referring his patients to BLS,” Acting U.S. Attorney Fitzpatrick said. “People need to trust that their doctors are making medical decisions based on what is in their best interest and not based on who will pay them a bribe.”
“Patients have every right to insist that their physician is making medical referrals based on what is best for the patient—not what’s best for the doctor’s bank account,” said Special Agent in Charge Timothy Gallagher of the Newark FBI Field Office. “Bernard Greenspan decided to accept bribes in exchange for referrals and deprived patients of their right to honest services. These types of kickback arrangements cripple the healthcare industry and severely impact patient care. The FBI remains committed to investing its resources to combat these types of schemes.”
According to the indictment and testimony at trial, between March 2006 and April 2013, Greenspan received bribes totaling approximately $200,000 from BLS employees and associates. Greenspan periodically solicited and received monthly bribe payments in the form of sham rental, service agreement, and consultant payments.
In addition, Greenspan solicited and received other bribes, including payment for holiday parties for Greenspan and his office staff and additional cash bribes for ordering specific blood tests. In addition, BLS hired – at Greenspan’s specific request –a patient of Greenspan’s with whom he was having a sexual relationship. Greenspan’s referrals generated approximately $3 million in lab business for BLS.
The investigation has thus far resulted in 44 convictions – 30 of them of doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case.
“Dr. Greenspan violated the Hippocratic Oath taken by medical professionals when he pledged to ‘come for the benefit of the sick, remaining free of all intentional injustice,” Inspector in Charge James V. Buthorn of U.S. Postal Inspection Service, Newark Division, said. “The culture of kickbacks and bribery have no place in our healthcare system, and the U.S. Postal Inspection Service was proud to do our part, working with our law enforcement partners to ensure justice was served today.”
The investigation has recovered more than $13 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
In addition to the prison term, Judge Walls sentenced Greenspan to one year of supervised release, fined him $125,000 and ordered forfeiture of $203,693.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Gallagher; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation.
The government was represented at trial by Assistant U.S. Attorneys Joseph N. Minish and Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
The U.S. Attorney’s Office, District of New Jersey, reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.34 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: Damian Conforti Esq. and Eric Kanefsky Esq., Newark, NJ
Member of Trenton Drug Trafficking Organization Admits Heroin Conspiracy, Unlawful Possession of FirearmRead the Press Release
TRENTON, N.J. – A Trenton man today admitted possessing a firearm as a previously convicted felon and participating in a drug trafficking organization that allegedly distributed hundreds of grams of heroin in the Trenton area, Acting U.S. Attorney William E. Fitzpatrick announced today.
Christopher Proctor, a/k/a “Bris,” a/k/a “Bris Broctor,” 22, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to a two-count information charging him with conspiracy to distribute and possess with intent to distribute 100 grams or more of heroin and unlawful possession of a firearm by a convicted felon.
In December 2016, Proctor 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. Proctor is the fifth of the 10 defendants to plead guilty.
According to documents filed in this case and statements made in court:
From January 2016 through December 2016 Proctor participated 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 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 Elijah Abdullah.
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 the narcotics conspiracy, Elijah Abdullah and other members of the Abdullah DTO maintained joint access to multiple firearms.
In addition to receiving, possessing, and selling heroin as part of the conspiracy, Proctor – a previously convicted felon – was arrested on Aug. 23, 2017 by Trenton police officers in possession of a loaded Glock 27 semiautomatic handgun and multiple rounds of ammunition.
The conspiracy charge carries a mandatory minimum term of five years in prison, a maximum potential penalty of 40 years in prison, and a $5 million fine. The firearms possession charge carries a maximum potential sentence of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 26, 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 Acting Special Agent in Charge Marcus S. Watson; 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 of Police Nicholas Sutter; officers of the Ewing Police Department, under the direction of Chief of Police John P. Stemler III; and detectives of the Mercer County Prosecutor’s Office, under the direction of Mercer County 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 Brian A. Michael; officers of the New Jersey 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: Aidan P. O’Connor Esq, Hackensack, New Jersey
Members of Camden, New Jersey, Drug Trafficking Organization Sentenced to PrisonRead the Press Release
CAMDEN, N.J. – A Camden, New Jersey, man was sentenced today for his role in a crack cocaine distribution conspiracy, one of three members of a drug trafficking organization sentenced this week, Acting U.S. Attorney William E. Fitzpatrick announced.
Tony Wilson, a/k/a “Tony Langston,” a/k/a “Tone,” and a/k/a “H,” 25, 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 and one count of possession of a firearm in furtherance of a drug trafficking crime. He was sentenced today to 96 months in prison.
On June 14, 2017, Jason Boyd, a/k/a “Teddy,” a/k/a “Teddy Reek,” and a/k/a “Fatboy,” 37, was sentenced to 96 months in prison. Boyd had previously pleaded guilty to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base and one count of possession of a firearm in furtherance of a drug trafficking crime.
On June 13, 2017, Derek Stallworth, a/k/a “AK” and a/k/a “A,” 21, of Camden, was sentenced to 96 months in prison. Stallworth had previously pleaded guilty to the same charges for his role in the conspiracy.
All three defendants were sentenced by Judge Simandle in Camden federal court. In addition to their prison terms, they were each sentenced to five years of supervised release.
According to documents filed in this case and statements made in court:
Wilson, Boyd and Stallworth admitted their respective roles in an organization that sold crack cocaine around the 1100 block of Lansdowne Avenue in Camden. Wilson also admitted that he possessed a .40 caliber handgun in connection with the organization’s drug trafficking activities.
Wilson, Boyd, Stallworth and others were originally charged by complaint on Sept. 9, 2016, following a long-term 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. Investigators also intercepted communications pursuant to court-authorized wiretaps on cellular telephones used by several members of the conspiracy.
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 leading to this week’s sentencings.
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:
Wilson: Michael Huff Esq., Mount Ephraim, New Jersey
Boyd: Jose Ongay Esq., Mount Ephraim
Stallworth: Anne C. Singer, Haddonfield, New Jersey
Deputy Attorney General Recognizes District EmployeeRead the Press Release
WASHINGTON – Michelle Martinez, administrative officer for the Camden office of the U.S. Attorney’s Office, District of New Jersey, was one of 179 members of the Department of Justice recognized by Deputy Attorney General Rod Rosenstein, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 33rd Director’s Awards Ceremony today in Washington, D.C.
The District of New Jersey was one of 35 districts represented at the ceremony, which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.
In his prepared remarks, Deputy Attorney General Rosenstein told the awardees: “These 179 award recipients embody the best of the Department of Justice. Today’s honorees have earned the esteem of their colleagues. But most importantly, you have earned the gratitude of your fellow citizens – whose communities you have made safer, whose lives you have improved, and whose trust you have rewarded.”
Ms. Martinez’s nomination recognizes her exceptional commitment to the Department’s mission and her sustained excellence as an Administrative Support Specialist. She has effectively and efficiently managed the Camden Office for more than a decade and is respected by everyone in the office for her professionalism, dedication and commitment to the Department’s mission.
“Without Michelle’s able assistance, the Camden office simply would not function with the level of efficiency and productivity for which it has come to be known by the judges in the District and by our law enforcement partners,” Acting U.S. Attorney William E. Fitzpatrick said. “She is the engine that keeps the office running.”
Ms. Martinez effectively functions as the Administrative Officer for the Camden Office, supervising all of the day-to-day operations and working closely with the General Services Administration (GSA), the EOUSA, the District Court, outside contractors and vendors, and the Office’s budget and human resource officers.
Ms. Martinez oversaw a major renovation of the Camden Office, which is located in a historic federal courthouse. She coordinated on a regular basis with Office leadership, the GSA, EOUSA, and the District Court, reviewing architectural plans, discussing the renovation, and dealing with issues as they arose. She also conceived of and developed the idea to convert unused space in the Office's reception area into three new offices. By carefully managing the office’s overall expenses and minimizing other costs and working with Office leadership, Ms. Martinez was able to find enough room in the budget to permit this construction at substantial cost savings and accommodate the Office’s growing needs.
Ms. Martinez also serves as the legal assistant to the First Assistant U.S. Attorney, Attorney-in Charge, and Deputy Attorney-in-Charge, in addition to other line attorneys. She manages all of the personnel who make up the Camden Office’s administrative and support staff, trains new support staff when they enter on duty and supervises the legal assistants in Camden, providing guidance on a daily basis with regard to questions and issues that arise. Ms. Martinez is frequently asked to take on additional special projects, at the request of the U.S. Attorney, the Attorney-in-Charge in Camden, and the Department, and always does so graciously and with great enthusiasm.
EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ offices around the country. For more information on EOUSA and its mission, visit http://www.justice.gov/usao.
Middlesex Borough Fire Inspector and Another Individual Charged in Strongarm Extortion SchemeRead the Press Release
NEWARK, N.J. – A fire inspector for Middlesex Borough and other New Jersey municipalities and another individual have been charged with conspiracy to commit extortion using threats of force, violence, and fear, Acting U.S. Attorney William E. Fitzpatrick announced today.
Billy A. Donnerstag, 49, of Hackettstown, New Jersey, and Joseph P. Martinelli, 64, of Kenvil, New Jersey, are charged by complaint with one count of conspiracy to commit extortion. Donnerstag is expected to make his initial appearance this afternoon before U.S. Magistrate Judge James B. Clark III in Newark federal court. Martinelli is expected to make his initial appearance on June 16, 2017, before Judge Clark.
According to the complaint:
From December 2016 and through June 2017, Donnerstag and Martinelli conspired to extort the owner and operator of a real estate development and construction company. The victim, identified in the complaint as “Individual 1,” was allegedly threatened with physical harm if Individual 1 did not pay thousands of dollars to Donnerstag and Martinelli, both of whom intimated that they had connections to organized crime. In a series of telephone and in-person conversations with Individual 1, Donnerstag and Martinelli told Individual 1 that, in addition to being a fire inspector for Middlesex Borough, Donnerstag also collected debts. Martinelli and Donnerstag allegedly wanted Individual 1 to pay Martinelli because Individual 1 had not paid Martinelli enough money for the sale of a property a decade earlier.
Donnerstag described himself to Individual 1 as “the guy that you don’t want to see,” “a problem for you right now,” and “someone that you need to deal with about this issue.” Donnerstag explained that he was a collector of debts who operated outside of the legal system and was “not somebody who’s in the yellow pages.” Donnerstag further explained that people who did not want to deal with lawyers would “rather deal with somebody like me, who’s just very cut and dry” because “I get the job done . . . and I get it done fast. Don’t ask me . . . how I get it done fast, cause you already know how I get it done fast.” Donnerstag told Individual 1 to ask others about Donnerstag’s father, whom Donnerstag referred to as “Jerry the Jew,” because, according to Donnerstag, “that’s what I do.” According to publicly available information, in the 1970s, Gerald Donnerstag of Belleville, New Jersey, a/k/a “Jerry the Jew,” reportedly was connected to organized crime, and was convicted of murder in Scranton, Pennsylvania, and theft in Essex County, New Jersey.
Donnerstag made a series of threatening statements to Individual 1 regarding the consequences of failing to pay, including:
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“if you were in front of me right now, you’d be on the floor. Okay? Cause I don’t talk—I don’t get talked to like that. You don’t know who I am.”
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“You need to iron this out with Joe. Again, if, if I have to come meet you now—again, it, it, it, it’d become, it’s gonna be a problem.”
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“What I do, is I make sure that people don’t take advantage of other people. Do you understand that? Now I also do other things, but this is one of the things that I do. Now, again if you’re not figuring wh, what my business is by now, you’re either, and again I, I say this with as much respect as I can, either an idiot, or you’re just lying because you don’t want to, to, to understand that I come from somewhere that most people don’t wanna see.”
Martinelli similarly made threatening statements to Individual 1 about what Donnerstag would do if Individual 1 failed to pay, including:
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“He’s [Donnerstag] a collector. And when he sees those kind of dollars, he gets a percentage of ‘em. He comes hell bent for election. He don’t fucking care . . . . He comes—he’ll collect the money one way or the other that’s the way he is. I don’t want to get involved in that.”
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When asked if Individual 1 could choose not to pay: “If—you know—I can only go so far with this guy cause I don’t know when he’ll stop down to see you.”
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When asked what would happen if Individual 1 would not pay: “you may get a visit. And he’s going to probably want something because he already came out once and that’s his problem, and once he starts, he don’t stop. He’s hopin’ I settle it, that’s what he’s hopin’. And I’m hopin’ I can settle it with something, with some kind of figures, I don’t care how. . . .”
During the conspiracy, over two separate meetings (both of which were lawfully recorded), Donnerstag and Martinelli obtained $15,000 in cash from Individual 1. The cash had been provided by law enforcement officials.
The count of conspiracy to commit extortion carries a maximum potential penalty of up to 20 years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss.
Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, New Jersey, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Lee M. Cortes, Jr. of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense counsel:
Donnerstag: Carol Gillen Esq. Assistant Federal Public Defender, Newark
Martinelli: Brian N. DiGiacomo Esq., Madison, New Jersey
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Eight People Charged in Takedown of Camden Drug Trafficking OrganizationRead the Press Release
CAMDEN, N.J. - Federal and local law enforcement authorities arrested eight people this week for their alleged roles in a drug trafficking organization that distributed cocaine, crack cocaine, and heroin in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.
John Gunther, 34, of Blackwood, New Jersey, George Williams, 42 of Oaklyn, New Jersey, Taleaf Gunther, 31, William Roland, 35, Daron Suiter, 23, Karim Johnson, 38, Latoya Whealton, 32, and Rajai Gaines, 33, all of Camden, are charged by complaint with one count of drug trafficking conspiracy.
Taleaf Gunther, Williams, Whealton, Suiter, and Johnson were arrested June 14, 2017. John Gunther, Roland, and Gaines were arrested June 13, 2017. All eight defendants appeared before U.S. Magistrate Judge Joel Schneider in Camden federal court on their respective arrest dates – except for Taleaf Gunther who appeared today – and were detained.
According to the complaints:
The defendants are members of a drug trafficking organization that dealt cocaine, crack cocaine, and heroin in and around Camden, with criminal activities concentrated on the 1700 block of Filmore Street. The organization also supplied drugs to customers and other distributors elsewhere.
John Gunther and Taleaf Gunther, the alleged leaders and managers of the operation, obtained bulk supplies of narcotics, prepared and packaged those controlled substances for street level sale, provided crack cocaine and heroin to other members for resale to customers, collected drug proceeds, and oversaw the daily sales and operation of the organization. Other members of the organization – including Roland, Suiter, Johnson, and Whealton – assisted in the preparation, distribution, and sale of the drugs. Williams allegedly supplied the organization with heroin. Gaines allegedly assisted with the preparation of drugs for resale.
An investigation led by the FBI used surveillance, confidential informants, cooperating witnesses, more than 20 controlled drug purchases, record checks, a GPS vehicle tracker, and multiple telephone wiretaps to uncover the operations of the drug trafficking organization.
The drug trafficking conspiracy count carries a maximum potential penalty of 20 years in prison and a $5 million fine.
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; the Camden County Sherriff’s Department under the direction of Sherriff Gilbert Wilson; the Cherry Hill Police Department, under the direction of William Monaghan; and the N.J. State Police, under the direction of Col. Rick Fuentes, with the investigation leading to the charges.
He also thanked the Gloucester Township Police Department, U.S. Immigration and Customs Enforcement, and U.S. Department of Health and Human Services for their assistance.
The government is represented by Assistant U.S. Attorney Gabriel J. Vidoni and Special Assistant U.S. Attorney Erin M. Fay of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the complaints are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Chief Financial Officer of Educational Services Company Sentenced to 19 Months in Prison for Tax Crimes Resulting in $1.4 Million LossRead the Press Release
TRENTON, N.J. – A Pottersville, New Jersey, man was sentenced today to 19 months in prison for filing a false tax return and evading corporate taxes of American Tutor Inc., a company that offered supplemental educational services to New Jersey school districts, Acting U.S. Attorney William E. Fitzpatrick announced.
James Wegeler, 74, previously pleaded guilty before U.S. District Judge Anne E. Thompson to one count of corporate tax evasion and one count of aiding and assisting in the filing of a false tax return. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Wegeler was a certified public accountant who served as the vice president and chief financial officer of American Tutor. In 2013, Wegeler filed a return on behalf of American Tutor that contained materially false information in order to reduce American Tutor’s tax liability. Wegeler intentionally inflated American Tutor’s business expenses by claiming that it paid wages, tips and other compensation to its employees above and beyond what it had actually paid during the tax year 2012.
In addition, in 2011, Wegeler intentionally prepared a fraudulent tax return for an individual taxpayer that did not include substantial income the taxpayer had earned in tax year 2010. Wegeler admitted that his actions resulted in a total tax loss of $1,494,521 to the IRS.
In addition to the prison term, Judge Thompson sentenced Wegeler to three years of supervised release.
Acting U.S. Attorney Fitzpatrick credited special agents of the IRS, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents with the U.S. Department of Education Office of Inspector General, under the direction of Assistant Special Agent in Charge Debbi Mayer, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Vikas Khanna of the U.S. Attorney’s Office Special Prosecutions Division.
Cherry Hill Doctor and Son Admit Defrauding Medicare, Agree to $1.78 Million SettlementRead the Press Release
CAMDEN, N.J. – A doctor and his chiropractor son today admitted conspiring to defraud Medicare by using unqualified people to give physical therapy to Medicare recipients, Acting U.S. Attorney William E. Fitzpatrick announced.
Robert Claude McGrath D.O., 65, and his son Robert Christopher McGrath, 47, both of Cherry Hill, New Jersey, each pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to separate informations charging them each with conspiracy to commit health care fraud.
The McGraths, together with their practice, the Atlantic Spine & Joint Institute, have also agreed to pay $1.78 million as part of a civil settlement to resolve allegations that they illegally billed Medicare for those treatments.
“Elderly patients who need physical therapy deserve properly licensed and supervised caregivers,” Acting U.S. Attorney Fitzpatrick said. “Instead, the McGraths for years used unqualified and unsupervised employees to treat their patients, all while fraudulently billing Medicare for the phony services.”
“Patients undergoing physical therapy at the McGraths’ practice sought simply to feel and move better,” said Michael Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “It seems all the defendants sought was to enrich themselves at those patients’ – and U.S. taxpayers’ – expense. Medicare fraud deals a big blow to a critical piece of our health care system. Every dollar lost to bogus billing is a dollar less to use for legitimate treatments and services.”
According to documents filed in this case and statements made in court:
The McGraths owned and operated Atlantic Spine & Joint Institute, a medical practice with offices in Westmont, New Jersey, and Wayne, Pennsylvania. Under Medicare rules, physical therapy had to be provided by Robert Claude McGrath or by a trained physical therapist under his supervision. However, from January 2011 through April 2016, the McGraths sought to defraud Medicare by employing unlicensed, untrained persons to give physical therapy to Medicare patients, at times when Robert Claude McGrath was not even in the office to supervise. They then submitted bills to Medicare fraudulently identifying Robert Claude McGrath as the provider of physical therapy.
The defendants each face 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 both defendants is scheduled for Sept. 19, 2017.
“These criminals face serving time in prison as well as paying out a $1.78 million settlement,” said Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Additionally, my agency reserves the right to exclude both father and son from Medicare, Medicaid, and other federal health programs.”
“People trust medical professionals to treat them and not cheat them,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations’ Metro Washington Field Office. “Our office will continue to work with our federal law enforcement partners to pursue and bring to justice those who would exploit this vulnerable population.”
In the related civil settlement, also announced today, the McGraths and Atlantic Spine agreed to pay $1.78 million plus interest to the federal government to resolve allegations that the fraudulent bills submitted under the McGraths’ scheme caused false claims to be submitted to Medicare in violation of the False Claims Act.
The civil settlement resolves certain claims filed by Linda Stevens, a former billing manager at Atlantic Spine, in the District of New Jersey, under the federal False Claims Act. The federal False Claims Act contains a qui tam, or whistleblower, provision that permits whistleblowers to file suit on behalf of the United States for false claims against the government, and to share in any recovery. Ms. Stevens will receive approximately $338,200 from the settlement proceeds, along with her attorney’s fees.
Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Harpster in Philadelphia, special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Lampert, and special agents from the Food and Drug Administration, Office of Criminal Investigations, under the direction of Special Agent in Charge McCormack, with the investigation.
Assistant U.S. Attorneys R. David Walk Jr. and Andrew A. Caffrey III of the U.S. Attorney’s Office Health Care and Government Fraud Unit represented the government in the criminal case and the civil case, respectively.
The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-along 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 $1.33 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:
Robert Christopher McGrath and Atlantic Spine & Joint Institute: Riza I. Dagli Esq., Roseland, New Jersey.
Robert Claude McGrath: Perry Primavera Esq., Hackensack, New Jersey
Counsel for Relator Linda Stevens: Brian J. McCormick Jr., Philadelphia
Administrator of Camden Nonprofit Admits Embezzling FundsRead the Press Release
CAMDEN, N.J. – A Cherry Hill, New Jersey, woman today admitted embezzling over $40,000 from a nonprofit that provided mental health services to Camden’s poorest residents, Acting U.S. Attorney William E. Fitzpatrick announced.
Maria Tavera, 53, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging her with embezzling from a health care benefit program.
According to documents filed in this case and statements made in court:
Tavera was an administrator of Nueva Vida Behavioral Health Center of New Jersey, a nonprofit that provided mental health services to the Camden community, mostly to Medicaid beneficiaries.
Tavera regularly embezzled money from the Nueva Vida bank account in addition to her salary and used the money for personal expenses. She admitted that she used her Nueva Vida debit card to pay dental expenses, make purchases at a guitar store, withdraw cash, and shop for clothes and hardware. In total, Tavera embezzled over $40,000 from Nueva Vida.
Tavera faces a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 15, 2017.
Her husband, Cesar Tavera, the former Executive Director of Nueva Vida, previously pleaded guilty to defrauding Medicaid and embezzling money from Nueva Vida. He awaits sentencing.
Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, and special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation. He also thanked the Medicaid Fraud Division of the New Jersey Office of the State Comptroller.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.
The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-along 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 $1.32 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: Gilbert J. Scutti Esq., Somerdale, New Jersey
Two New York Men Sentenced to Prison for Roles in $1 Million Stolen Identity Refund SchemeRead the Press Release
NEWARK, N.J. – Two men from Bronx, New York, were each sentenced today to 61 months in prison for their roles in a scheme to obtain stolen identity information and use it to file phony tax returns with the IRS, Acting U.S. Attorney William E. Fitzpatrick announced.
Jhan Luis Mejia Marcelino, 27, and Odanys Orlando Rojas, a/k/a “El Fuerte,” 39, previously pleaded guilty before U.S. District Judge John Michael Vazquez to separate informations charging them each with one count of conspiracy to commit theft of government funds, one count of theft of government funds, and one count of aggravated identity theft.
According to documents filed in this case and statements made in court:
Mejia and Rojas admitted that from January 2013 through May 2014, they obtained stolen personal identifying information, including names and Social Security numbers, of victims located in New Jersey, Puerto Rico, and elsewhere. Afterwards, Mejia, Rojas and others used the information to file fraudulent federal tax returns. They also admitted that once they received the refunds, they converted the checks to cash or other proceeds for their own benefit. Overall, the scheme caused losses of over $1 million to the U.S. Treasury.
In addition to the prison terms, Judge Vazquez sentenced each defendant to three years of supervised release and ordered them to pay restitution of $1,109,938.
Acting U.S. Attorney Fitzpatrick credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; and the U.S. Secret Service, under the direction of Special Agent in Charge Mark Mckevitt, with the investigation.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the Criminal Division in Newark.
Defense counsel:
Marcelino: John Yauch Esq. Rojas: Tim Anderson Esq.South Jersey Man Admits to Distributing HeroinRead the Press Release
CAMDEN, N.J. – A Camden man today admitted distributing heroin in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.
Jose Correa, a/k/a “Ciego,” 45, pleaded guilty before U.S. District Judge Renee M. Bumb in Camden federal court to an information charging him with one count of distributing and possessing with intent to distribute heroin.
According to documents filed in this case and statements made in court:
Correa admitted selling at least 410 grams of heroin to two cooperating witnesses on five separate dates. The sales took place in Camden County and occurred between October 2015 and February 2016. He also admitted to possessing with the intent to distribute a quantity of heroin on the day that he was arrested. Correa was initially charged by complaint on Feb. 25, 2016, and is currently released on bond.
The drug distribution charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. Correa’s sentencing is scheduled for Sept. 15, 2017.
This investigation and prosecution is the result of a collaborative law enforcement initiative by the Philadelphia-Camden High-Intensity Drug Trafficking Area (PCHIDTA), which comprises federal, state and local law enforcement agencies using a coordinated approach to combat drug trafficking and other crimes. PCHIDTA initiatives prioritize violent crimes and emphasize disruption of drug trafficking organizations and criminal activity.
Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski; Delaware River Port Authority, under the direction of Chief John L. Stief; the Camden County Prosecutor’s Office, under the direction of Prosecutor Mary Eva Colalillo; the Camden County Metro Police Department, under the direction of Chief J. Scott Thomson; and the N.J. State Police, under the direction of Col. Rick Fuentes, with the investigation leading to today’s guilty plea. He also thanked the Camden County Sheriff’s Department for its assistance.
The government is represented by Special Assistant U.S. Attorney Erin M. Fay of the U.S. Attorney’s Office Criminal Division in Camden.
General Manager of South Jersey Car Dealership Sentenced to Five Years in Prison for Bank Fraud Conspiracy, Tax ChargesRead the Press Release
CAMDEN, N.J. – A Vineland, New Jersey, man was sentenced today to 60 months in prison for his role in a scheme to defraud a bank and for filing a fraudulent tax return, Acting U.S. Attorney William E. Fitzpatrick announced.
Richard T. Pepe, 70, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a superseding information charging him with one count of conspiracy to commit bank fraud and one count of fraud and false statements on his 2008 U.S. Individual Income Tax Return. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From 2004 through October 2008, Pepe was the general manager of Chevrolet 73. The object of the conspiracy was for Pepe and others acting on his behalf to fraudulently obtain money from M&T Bank, intended as floor plan financing for Chevrolet 73, by providing phony information to the bank, including false liabilities and profits on Chevrolet 73’s monthly financial statements. Pepe then used that money – over $2.95 million – for personal expenses.
Pepe also admitted falsely claiming that his income was $36,628 on his 2008 individual tax return when he knew his actual income exceeded that amount.
In addition to the prison term, Judge Simandle sentenced Pepe to three years of supervised release and ordered him to pay forfeiture in the amount of $2,950,270.57.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI Philadelphia Division’s Cherry Hill Resident Agency, under the direction of Special Agent in Charge Michael Harpster, and special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: Thomas Young Esq., Assistant Federal Public Defender, Camden
Filipino National Sentenced to 63 Months in Prison for Running $9 Million Stolen Credit and Debit Card Cybercrime RingRead the Press Release
NEWARK, N.J. – A Filipino national was sentenced today to 63 months in prison for running an international cashing operation that monetized stolen credit and debit card information obtained through computer hacking and ATM skimming operations, Acting U.S. Attorney William E. Fitzpatrick announced.
Angelo Virtucio, a/k/a “ZaiR,” a/k/a “ZaiRe,” a/k/a “Omega,” a/k/a “Omega10,” 31, of Quezon City, Philippines, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of conspiracy to commit bank fraud. Virtucio was arrested in the Southern District of Florida on Jan. 29, 2015 and was extradited to the District of New Jersey on Feb. 11, 2015. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Virtucio monetized millions of dollars from stolen credit and debit card data using a global network of “cashers” to enter into unauthorized financial transactions using the accounts related to the stolen information. The stolen credit card data was primarily obtained through computer hacking; the stolen debit card data was mostly obtained through ATM skimming operations. After purchasing the stolen data from other cybercriminals, Virtucio and his conspirators encoded it onto counterfeit credit and debit cards. The cashers used the counterfeit cards to make unauthorized ATM withdrawals and purchases at physical retail locations.
In addition to the prison term, Judge Wigenton sentenced Virtucio to two years of supervised release.
Acting U.S. Attorney Fitzpatrick credited the special agents of the U.S. Secret Service, Newark Division, under the direction of Special Agent in Charge Mark McKevitt, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney L. Judson Welle, coordinator of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit.
Defense counsel: Kathleen Theurer Esq. and A. Paul Condon Esq., Jersey City, New Jersey
South Jersey Man Admits Role in Crack Distribution ConspiracyRead the Press Release
CAMDEN, N.J. - A Camden man today admitted his role in a crack cocaine distribution conspiracy operating in Camden, Acting U.S. Attorney William E. Fitzpatrick announced.
Julian Dickerson, a/k/a “Juelz,” 30, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of conspiracy to distribute and to possess with intent to distribute cocaine base.
According to documents filed in this case and statements made in court:
Dickerson admitted that he was a member of an organization that controlled the distribution of drugs, including crack cocaine, in and around the 1100 block of Lansdowne Avenue in Camden. Dickerson admitted that he was supplied crack cocaine by other members of the conspiracy, which he sold to customers in the area and to an undercover officer on several occasions.
Dickerson – along with Joseph Boyd, Jason Boyd, Tony Wilson, Preston Thomas, Derek Stallworth, Jeffrey Whitaker, and Nafeez Griffin – was originally charged 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.
The drug distribution conspiracy charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. Dickerson’s sentencing is scheduled for Sept. 29, 2017.
Jason Boyd, Stallworth, and Wilson have all pleaded guilty to drug distribution conspiracy and firearms possession and await sentencing. Joseph Boyd pleaded guilty to drug distribution conspiracy and awaits sentencing. The charges against Thomas, Whitaker, and Griffin are still pending, 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: Michael Riley Esq.
Paterson Doctor and Wife, Woodland Park Doctor, Charged in Test-Referral Bribe Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A cardiologist with a practice in Paterson, New Jersey, his wife, and a doctor with a practice in Woodland Park, New Jersey, were charged today with accepting bribes in exchange for test referrals as part of a long-running scheme involving Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.
A federal grand jury returned a 16-count indictment charging Aiman Hamdan, 50; his wife, Kristina Hamdan 39; and Yousef Zibdie, 53, all of Wayne, New Jersey, with conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud, and substantive violations of the Anti-Kickback Statute, the Federal Travel Act, and wire fraud. The defendants will be arraigned before U.S. District Judge Stanley Chesler on a later date.
According to the indictment:
From September 2008 to April 2013, Aiman Hamdan, a cardiologist, received from BLS bribes and other items of value, including a $500,000 loan, and a trip to Florida on a private jet for the purpose of fishing and visiting strip clubs, in exchange for generating millions of dollars of patient referrals. Kristina Hamdan paid bribes to several doctors through a sham entity that also paid the Hamdans’ household and personal expenses. Zibdie, doctor of internal medicine with a practice in Woodland Park, was bribed by Kristina Hamdan in exchange for generating more than $900,000 in lab business for BLS.
Aiman Hamdan and Zibdie are the fifth and sixth doctors indicted in connection with the BLS bribery scheme. Brett Ostrager, Salvatore Conte, and Ahmed El Soury all pleaded guilty after being indicted. On June 8, 2016, Ostrager was sentenced to 37 months in prison. Judge Chesler is scheduled to sentence El Soury on July 20, 2017 and Conte on September 20, 2017. Bernard Greenspan was indicted in March 2016 and convicted after trial in March 2017. Greenspan is scheduled to be sentenced before U.S. District Judge William H. Walls on June 20, 2017.
Aiman Hamdan, Kristina Hamdan and Zibdie face a maximum potential penalty of five years in prison on each of the Anti-Kickback and Federal Travel Act counts and a maximum potential penalty of 20 years in prison on each of the wire fraud counts. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
Acting U.S. Attorney William E. Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert with the ongoing investigation leading to today’s indictment.
The investigation has thus far resulted in 45 guilty pleas – 31 of them from doctors – in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has to date recovered more than $12 million through forfeiture. On June 28, 2016, BLS, which is no longer operational, pleaded guilty and was required to forfeit all of its assets.
The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
The New Jersey U.S. Attorney’s Office reorganized its health care fraud practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel:
Aiman Hamdan: Lee Vartan Esq., New York
Kristina Hamdan: Zahid Quraishi Esq., Morristown, New Jersey
Zibdie: Christopher Adams Esq., Holmdel, New Jersey