District of New Jersey

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

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

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

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

 

 

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

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.

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

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

 

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.

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

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

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., Newark

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

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.

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

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

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

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

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

                             

 

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

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.

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:

• “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.”

• “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.”

• “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:

• “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.”

• 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.”

• 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

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.

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.

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

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

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. 

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.

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

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

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.

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

 

CAMDEN, N.J. – A Collingswood, New Jersey, man today admitted conspiring with his former girlfriend to produce sexually explicit images of two children, Acting U.S. Attorney William E. Fitzpatrick announced.

Alexander Capasso, 43, pleaded guilty before U.S. District Judge Jerome B. Simandle to Count One of an indictment charging him with conspiring with Janine Kelley, 36, of Audubon, New Jersey, to engage in the sexual exploitation of children.

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

Capasso began a sexual relationship with Kelley in 2010. During that relationship, Capasso took, or allowed Kelley to take, recorded images of Capasso engaged in sexually explicit conduct with a child. Capasso also took, or allowed Kelley to take, recorded images of Kelley engaged in sexually explicit conduct with two children.

According to the terms of the plea agreement, if accepted by the court, Capasso will receive a term of between 15 and 20 years in prison as well as a lifetime of supervised release. He also faces a potential $250,000 fine and must pay full restitution to the victims. Sentencing is scheduled for Sept. 20, 2017. Capasso has been in federal custody since his July 20, 2015 arrest.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI Philadelphia Division, under the direction of Special Agent in Charge Michael Harpster, and the FBI Washington D.C., Field Office, under the direction of Assistant Director in Charge Andrew Vale, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorneys Diana Carrig and Sara Aliabadi of the U.S. Attorney’s Office in Camden.

Defense counsel: Terri Lodge Esq., Cinnaminson, New Jersey

TRENTON, N.J. – An Ocean County, New Jersey, man was arrested and charged today for allegedly distributing images and videos of child sexual abuse, Acting U.S. Attorney William E. Fitzpatrick announced.

Michael A. Ruggiero, 35, of Forked River, New Jersey, a corrections officer at a juvenile detention facility, was arrested at work this morning by agents of the Department of Homeland Security, Homeland Security Investigations (HSI), on a complaint charging him with one count of distribution of child pornography. Ruggiero is expected to appear later today before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court.

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

 

From April 16, 2016, to April 19, 2016, Ruggiero used a mobile chat application to distribute and share over the internet images and videos of children engaged in sexual acts. Anyone with information regarding possible victims of this activity is urged to contact HSI in Newark: (973)-776-5500.

 

The charge of distributing child pornography carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.

 

Acting U.S. Attorney Fitzpatrick credited special agents HSI, under the direction of Acting Special Agent in Charge Brian A. Michael; inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Daniel Brubaker, Philadelphia Division; and members of the Ocean County Prosecutor’s Office, with the investigation leading to today’s charge.

 

The government is represented by Assistant U.S. Attorney Veronica Allende of the U.S. Attorney’s Criminal Division.

 

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

 

Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton

NEWARK, N.J. – A skilled nursing facility in Sussex County, New Jersey, has agreed to pay to the United States and the State of New York $888,000 to resolve allegations that it provided materially substandard or worthless nursing services to some patients, Acting U.S. Attorney William E. Fitzpatrick announced today.

 

Andover Subacute and Rehab Center Services Two Inc. (Andover) is a skilled nursing facility located in Andover, 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, with assistance from the Office of the Attorney General of the State of New York.

 

The United States and The State of New York contend that from July 1, 2010, to Dec. 31, 2012, Andover billed New York Medicaid for materially substandard or worthless nursing services provided to certain patients that failed to meet federal standards of care and federal statutory and regulatory requirements.

 

To resolve the federal and state civil claims, Andover has agreed to pay $395,508 to the United States and $492,492 to the State of New York. Andover will enter into a Corporate Integrity Agreement with the Office of Inspector General of the DHHS to enhance quality assurance, accountability and other aspects of its compliance operations.

 

Acting U.S. Attorney Fitzpatrick credited special agents from the DHHS, 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 Brett Elliott of the Department of Justice’s Civil Division. The government was assisted by Special Assistant Attorney General Sally G. Blinken of the Office of the Attorney General of the State of New York. The Office of Inspector General and the Office of the General Counsel for the Centers for Medicare and Medicaid Services of the DHHS 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 $1.33 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.

 

The claims settled by this agreement are allegations only; there have been no admissions of liability.

 

Defense counsel: Craig Goodstadt Esq., Andover, New Jersey

NEWARK, N.J. – A Newark man appeared in federal court today to face allegations that he possessed a firearm as a previously convicted felon, Acting U.S. Attorney William E. Fitzpatrick announced.

Richard D. Williams, 39, is charged by indictment with one count of being a felon in possession of a firearm. Williams was detained after his arraigned this afternoon before U.S. District Judge John Michael Vazquez in Newark federal court.

According to the documents filed in this case:

On Feb. 18, 2017, law enforcement officers spotted a white Infiniti car that fit the same description of a vehicle that had been reported stolen. The police attempted to conduct a motor vehicle stop of the Infiniti but it sped away at a very high rate of speed. The police pursued the Infiniti through Newark and into East Orange, New Jersey. Several other police cars and a Newark police department helicopter joined the pursuit.

The police chased the Infiniti until it was traveling east on South Orange Avenue near Bergen Street in East Orange. At that point, the Infiniti crossed into oncoming traffic and collided head-on into an unmarked Newark police SUV, causing both the Infiniti and the SUV to catch fire. The three Newark police officers inside the SUV were able to exit the vehicle safely.

Williams, the alleged driver of the Infiniti, got out of the car and attempted to flee but was caught by a Newark police officer. A N.J. State Trooper who assisted with the arrest searched Williams and allegedly recovered from his waistband a black Amadeo & Rossi special .38 revolver loaded with four rounds of .38 caliber SPL&P Winchester hollow-point ammunition. At the time, Williams had at least one prior felony conviction in federal court.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.

Acting U.S. Attorney Fitzpatrick credited ATF special agents, under the direction of Acting Special Agent in Charge Marcus S. Watson in Newark, with the investigation. He also thanked the Newark Department of Public Safety, under the direction of Director Anthony F. Ambrose, and the N.J. State Police, under the direction of Col. Rick Fuentes, for their assistance in this case.

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

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

Defense Counsel: Chester Keller Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – Bernards Township, New Jersey, has agreed to settle a federal civil lawsuit to resolve allegations that the township violated federal law when it denied zoning approval to allow the Islamic Society of Basking Ridge (ISBR) to build a mosque on property where zoning permitted houses of worship, U.S. Attorney William E. Fitzpatrick and Acting Assistant Attorney General Tom Wheeler of the Justice Department's Civil Rights Division announced today.

The settlement agreement also resolves allegations that at the time the ISBR’s application was pending, the township revised its zoning code to unreasonably limit any house of worship from building in the township. The settlement resolves a lawsuit the Justice Department filed in November 2016. A separate settlement resolving a similar lawsuit brought by the Islamic Society against the township has also been reached.

 

“Federal law requires towns to treat religious land use applications like any other land use application,” Acting U.S. Attorney Fitzpatrick said. “Bernards Township made decisions that treated the Islamic Society of Basking Ridge differently than other houses of worship. The settlement announced today corrects those decisions and ensures that members of this religious community have the same ability to practice their faith as all other religions.”

“Federal law protects people of all religious communities from discrimination and unlawful obstacles when they seek to build a place of worship,” Acting Assistant Attorney General Wheeler said. “Through this agreement, the Islamic Society of Basking Ridge and its members will be able to build a mosque and exercise the fundamental American right of freedom of worship.”

 

The United States’ complaint alleged that Bernards Township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when it discriminated against the Islamic Society based on its religion and the religion of its members. The complaint alleged that the township denied the application to build a mosque, applying standards and procedures to the Islamic Society that it had not applied to other religious and non-religious assemblies in the past; it imposed a substantial burden on the Islamic Society’s religious exercise; and it amended its zoning ordinance in a manner that imposes unreasonable limitations on all religious assemblies.

 

As part of the settlement, Bernards Township has agreed to permit the Islamic Society to construct a mosque on its property. The township has also agreed that its leaders and other township employees will undergo training on the requirements of RLUIPA. It has also agreed to publicize its non-discrimination policies and periodically report to the Justice Department on its compliance with the settlement agreement. The township has also agreed to amend its zoning ordinance to limit the zoning restrictions placed on houses of worship. In a separate settlement agreement, the township agreed to pay the Islamic Society $3.25 million to resolve its claims for damages and attorney’s fees caused by the denial of the mosque application.

 

The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division; Assistant U.S. Attorney Kelly Horan Florio, Civil Rights Unit, Civil Division; and Trial Attorney Beth Pepper, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.

 

RLUIPA prohibits discrimination in land use and zoning decisions. People who believe they have been subjected to discrimination in land use or zoning decisions may contact the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339 or the Civil Rights Division Housing and Civil Enforcement Section at (800) 896-7743.

 

NEWARK, N.J. – A gang member who sold crack-cocaine for the New Jersey set of the Grape Street Crips was sentenced today to 112 months in prison, Acting U.S. Attorney William E. Fitzpatrick announced.

Ernest Valentine, a/k/a “Bop,” 32, previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with conspiracy to distribute 28 grams or more of crack-cocaine. Judge Linares 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, including the neighborhood of 6th Avenue and North 5th Street. Valentine obtained crack-cocaine from more senior gang members and associates who used and shared a dedicated cell phone to accept orders for thousands of clips of crack-cocaine. These gang-members included Hakeem Vanderhall, a/k/a “Keem,” a/k/a “Sugar Bear,” Eric Concepcion, a/k/a “Eddie Arroyo,” a/k/a “E-Wax,” a/k/a “Wax,” and Rashan Washington, a/k/a “Shoota.”

To protect their gang and drug territory, the New Jersey Grape Street Crips operating in the 6th Avenue and North 5th Street location 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 Linares sentenced Valentine to five years of supervised release.

Acting U.S. Attorney Fitzpatrick credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s sentencing. 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 Department of Public Safety and Newark Police Division, under the direction of Director Anthony A. 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 A. Kamar of the OCDETF/Narcotics Unit 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: Stacy A. Biancamano Esq., Chatham, New Jersey

NEWARK, N.J. – A Newark man today admitted robbing five banks in October and November 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Jermaine Mason, a/k/a “Asim Harris,” 39, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging him with five counts of bank robbery.

According to documents filed in this case and statements made in court, Mason robbed the following banks on the dates set forth below:

Bank

Location

Date

Kearny Bank

Harrison

Oct. 21, 2016

PNC Bank

Jersey City

Nov. 3, 2016

Popular Community Bank

Newark

Nov. 17, 2016

Provident Bank

Jersey City

Nov. 18, 2016

Provident Bank

Kearny

Nov. 29, 2016

Mason admitted that during each of the above robberies, he either presented a note demanding cash from bank tellers or verbally demanded money.

The bank robbery charges each carry a maximum penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 29, 2017.

Mason was originally arrested by state authorities on Nov. 30, 2016 and has been in custody since that time. Prior to his arrest, he was on federal supervised release for a federal bank robbery conviction after he robbed several banks in 2006 and 2007.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s guilty plea. He also thanked the U.S. Marshals, the Kearny, Jersey City, Harrison, and Newark police departments, as well as the Hudson County and Essex County Prosecutor’s Offices for their efforts in the investigation and apprehension of Mason.

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

Defense counsel: Kevin Carlucci Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A Bergen County, New Jersey, man today admitted participating 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.

Wilbur Jonathon Barahona, 21, of Ridgewood, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to a three-count information charging him with conspiracy to commit Hobbs Act Robbery, carjacking, and kidnapping.

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

Barahona admitted that on Dec. 25, 2016, he and others forcibly 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, Barahona and others hailed a taxi in Paterson, New Jersey, and forcibly took the taxi from the driver. Barahona admitted that he and others forced the driver into the back of the vehicle and took over driving. Barahona also admitted that during the carjacking, other conspirators 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.

The kidnapping charge carries a maximum potential penalty of life imprisonment. The carjacking charge carries a maximum potential penalty of 25 years in prison. The conspiracy charge carries a maximum potential penalty of up to 20 years in prison. Sentencing is scheduled for Aug. 16, 2017.

Balmore Carrillo-Iraheta, 19, of Suffern, New York, who previously was indicted for his role in the Hobbs Act Robbery of the Hawthorne bar, pleaded guilty before Judge Linares in Newark federal court on May 15, 2017, to one count of conspiracy to commit Hobbs Act Robbery. All six men originally charged by complaint for their respective roles in the Hobbs Act Robbery, carjacking, and kidnapping have pleaded guilty and 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 leading to today’s guilty plea.

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: Carol Gillen Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – A Queens, New York, man was sentenced today to 50 months in prison for his role in a scheme to distribute controlled substance analogues, which are designer drugs that have chemical structures and hallucinogenic effects similar to Schedule I controlled substances, Acting U.S. Attorney William E. Fitzpatrick announced.     

Elmostafa Charif, 37, previously pleaded guilty before U.S. District Judge Kevin McNulty to an indictment charging him with one count of conspiracy to distribute, and one count of possessing with intent to distribute, the controlled substance analogues NM2201 and 5F-AMB. NM2201 and 5F-AMB are most closely related to synthetic Tetrahydrocannabinol, or THC.

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

Since February 2011, the Drug Enforcement Administration (DEA) has been investigating the importation, distribution, and use of designer drugs popularly known as synthetic cannabinoids. “K2” and “Spice” are common examples of synthetic cannabinoids.

Synthetic cannaboids are created when damiana leaves – an inert, plant-like substance – are sprayed with controlled substance analogues and treated with synthetic flavoring. The flavored and treated damiana leaves are then smoked by users.

Charif admitted that on April 13, 2015, he conspired with others to purchase and distribute approximately 10 kilograms of synthetic cannabinoids, including approximately five kilograms of NM2201 and approximately five kilograms of 5F-AMB. Charif also admitted that he purchased liquid flavoring and damiana leaves with the controlled substance analogues, knowing that they would be used to create a product that was smoked or otherwise consumed by users.

NM2201 and 5F-AMB are each controlled substance analogues as defined under the Analogue Act due to the fact that both NM2201 and 5F-AMB have chemical structures and hallucinogenic properties similar to the Schedule I controlled substances 5F-PB-22 and ADB-PINACA, respectively.

In addition to the prison term, Judge McNulty sentenced Charif to two 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, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the Organized Crime Drug Enforcement Task Force Unit in Newark.

NEWARK, N.J. – A Ukrainian hacker was sentenced today to 30 months in prison for his role in an international scheme to hack into three business newswires, steal yet-to-be published press releases containing non-public financial information, and use that information to make trades that generated approximately $30 million in illegal profits, Acting U.S. Attorney William E. Fitzpatrick announced.
 
Vadym Iermolovych, 29, of Kiev, Ukraine, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft. Judge Arleo imposed the sentence today in Newark federal court.

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

Iermolovych admitted that he was personally involved in the hacks into Marketwired L.P. (Marketwired), PR Newswire Association LLC (PRN), and Business Wire (collectively, the “Victim Newswires”). He admitted to hacking into PRN’s network between January 2013 and March 2013. He also admitted that he obtained a set of user credentials of PRN employees stolen from a computer hack into a social networking website and then used at least one of those credentials to ultimately gain access into PRN’s computer network. Iermolovych also admitted that he sold press releases stolen from the network intrusion into Marketwired, and purchased access into Business Wire’s network, all in furtherance of a larger conspiracy to profit from the stolen draft press releases.

Five other members of the conspiracy – two computer hackers and three securities traders – were charged by federal indictment brought by the District of New Jersey (DNJ). The related 23-count DNJ indictment charged Ivan Turchynov, 29, Oleksandr Ieremenko, 25, and Pavel Dubovoy, 34, all of Ukraine, as well as Arkadiy Dubovoy, 52, and Igor Dubovoy, 30, both of Alpharetta, Georgia. Arkadiy Dubovoy and Igor Dubovoy both pleaded guilty to the wire fraud conspiracy charged in Count One of the DNJ indictment on Feb. 18, 2016 and Jan. 20, 2016, respectively.

The Eastern District of New York (EDNY), in a related indictment, charged four securities traders: Vitaly Korchevsky, 51, of Glen Mills, Pennsylvania, Vladislav Khalupsky, 46, of Brooklyn, New York, and Odessa, Ukraine, Leonid Momotok, 48, of Suwanee, Georgia, and Alexander Garkusha, 49, of Cummings and Alpharetta, Georgia. Garkusha pleaded guilty to the wire fraud conspiracy charged in Count One of the EDNY indictment on Dec. 21, 2015. Momotok pleaded guilty to the same charge on Aug. 2, 2016. 

As alleged in the indictments, between February 2010 and August 2015, computer hackers based in Ukraine gained unauthorized access into the computer networks of the Victim Newswires. They used a series of targeted cyber-attacks, including “phishing” attacks and SQL injection attacks, to gain access to the computer networks. The hackers moved through the computer networks and stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material information.

The hackers shared the stolen releases with the traders using overseas computer servers that they controlled. In a series of emails, the hackers even shared “instructions” on how to access and use the overseas server where they shared the stolen releases with the traders, and the access credentials and instructions were distributed amongst the traders.  The traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases for publicly traded companies from Marketwired and PRN.

The traders generally traded ahead of the public distribution of the stolen releases, and their trading activities shadowed the hackers’ capabilities to exfiltrate stolen press releases. In order to execute their trades before the releases were made public, the traders sometimes had to execute trades in extremely short windows of time between when the hackers illegally accessed and shared the releases and when the press releases were disseminated to the public by the newswires, usually shortly after the close of the markets.  Frequently, all of this activity occurred on the same day.  Thus, the trading data often showed a flurry of trading activity around a stolen press release just prior to its public release.

The traders traded on stolen press releases containing material nonpublic information about hundreds of companies, including Align Technology Inc., Caterpillar Inc., Hewlett Packard, Home Depot, Panera Bread Co., and Verisign Inc.

The traders paid the hackers for access to the overseas servers based, in part, on a percentage of the money the traders made from their illegal trading activities. The hackers and traders used foreign shell companies to share in the illegal trading profits.

In addition to the prison term, Judge Arleo sentenced Iermolovych to three years of supervised release and ordered him to pay restitution of $3,004,685.06.

Acting U.S. Attorney Fitzpatrick credited special agents of the U.S. Secret Service, Criminal Investigations Division, under the direction of Director Randolph D. Alles, and special agents from the U.S. Secret Service Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, with the investigation. He also thanked the U.S. Securities and Exchange Commission, for its significant cooperation and assistance in the investigation and the newswires, which cooperated with law enforcement over the course of the investigation.

The government is represented by Assistant U.S. Attorneys Daniel Shapiro, Justin Herring, and Svetlana Eisenberg of the Economic Crimes Unit, Computer Hacking & Intellectual Property Section, David M. Eskew, Chief of the General Crimes Unit, Trial Attorney Andrew S. Pak, of the Department of Justice’s Criminal Division Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.

Defense counsel: Donna Newman Esq., New York

NEWARK, N.J. – An East Orange, New Jersey, man today admitted his role in the September 2015 armed robbery of a club in Passaic, New Jersey, Acting U.S. Attorney William E. Fitzpatrick announced.

Shaheed Blamahsah, a/k/a “Aboo,” 29, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to a two-count information charging him with one count of conspiracy to commit Hobbs Act robbery and one count of brandishing a firearm during a crime of violence.

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

On Sept. 6, 2015, Blamahsah and at least two other conspirators agreed to rob a club in Passaic at gunpoint. During his plea hearing, Blamahsah admitted that he knowingly and willfully participated in the robbery and that he and another conspirator brandished a firearm and threatened to use violence against a club employee. He also admitted that he and the other conspirator took $26,084 in cash from the club before fleeing in a getaway car.

The count of brandishing a firearm during a crime of violence carries a mandatory minimum sentence of seven years in prison and that sentence must be consecutive to any other sentence imposed. The Hobbs Act conspiracy charge carries a statutory maximum of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Blamahsah’s sentencing is scheduled for Sept. 11, 2017.

Blamahsah was originally charged with Jimmy Cooper, a/k/a “Flip,” 32, of Irvington, New Jersey, and Keontrae Lawrence, a/k/a “Taz,” 28, of South Orange, New Jersey, in November 2016. Cooper and Lawrence were indicted by a federal grand jury on March 24, 2017 for their alleged roles in the robbery of the Passaic club. The charges against Cooper and Lawrence are merely allegations, and they are presumed innocent unless and until proven guilty.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and members of the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Sheriff’s Office, the Passaic Police Department, and the Newark Division of Public Safety for their assistance.

The government is represented by Assistant U.S. Attorney Elaine K. Lou of the U.S. Attorney’s Office’s Criminal Division in Newark.

Defense counsel: Kevin Buchan Esq., Holmdel

 

NEWARK, N.J. – Two Essex County, New Jersey, men were arrested this morning and charged in connection with a scheme that allegedly caused losses of approximately $500,000 by deceiving victim banks into crediting certain customer accounts that could be fraudulently accessed by members of the conspiracy, Acting U.S. Attorney William E. Fitzpatrick announced.

 

Yaseen Salih, 19, of East Orange, New Jersey, and Chad Brown, 21, of Orange, New Jersey, are charged by complaint with one count of conspiracy to commit bank fraud. They appeared today before U.S. Magistrate Judge Mark Falk in Newark federal court. Salih was released on $200,000 bond. Brown was detained.

 

According to the complaint:

 

From September 2015 through the present, Salih, Brown, and others conspired to fraudulently obtain money from two victim banks.

 

First, Salih, Brown and others obtained information pertaining to actual bank accounts belonging to customers of the two victim banks, including the customers’ bank account numbers and their personal identification numbers. In some instances, the conspirators obtained debit cards associated with the accounts or Salih and Brown personally requested access from the account owners.

 

Afterwards, a member of the conspiracy called a teller at the victim bank. After deceiving the teller into believing that the caller was an employee of the victim bank, the caller convinced the teller to credit funds into the above customer accounts.

 

Once the funds were credited into the customer accounts, members of the conspiracy used debit cards associated with the accounts to obtain the fraudulently credited funds, either by withdrawing the funds directly from ATM machines at branch locations of the victim banks, or by purchasing postal money orders.

 

To date, the losses associated with the conspiracy exceed approximately $500,000.

 

The conspiracy to commit bank fraud charge 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.

 

Acting U.S. Attorney Fitzpatrick credited postal inspectors from the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to the charges.

 

The government is represented by Assistant U.S. Attorney Ari Fontecchio 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.

 

Defense counsel:

 

Salih: Hassen Ibn Abdellah Esq.

Brown: Perry Primavera Esq.

 

 

NEWARK, N.J. – The owners and operators of a purported hedge fund were indicted by a federal grand jury yesterday for allegedly defrauding approximately 20 investors by making extraordinary guarantees about investment returns and then using the money for extravagant purchases or to pay off other victims, Acting U.S. Attorney William E. Fitzpatrick announced. 

Alcibiades Cifuentes, 34, and his wife, Jennifer Wee Cifuentes, 36, both of West New York, New Jersey, are charged with four counts of wire fraud, one count of conspiring to commit wire fraud, and one count of stealing funds intended for investment in commodities. The arraignment is pending.

According to the indictment:

Alicbiades and Jennifer Wee Cifuentes allegedly engaged in an investment fraud scheme from 2012 through March 2015. They fraudulently induced victims to invest in the foreign currency and commodity markets through Cifuentes Fund Management (CFM), their hedge fund that purportedly invested in foreign currencies, and then almost immediately spent those investment funds on personal items, such as an Audi R8 and jewelry. The couple would then pay back a portion of the victims’ money with money received from newly duped victims. They allegedly defrauded approximately 20 victims of approximately $500,000. 

Each count of wire fraud and wire fraud conspiracy carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The count of commodities theft carries a maximum potential penalty of 10 years in prison and a $1 million fine, or twice the gross gain or loss from the offense.

Acting U.S. Attorney Fitzpatrick credited inspectors of the U.S. Postal Inspection Services under the direction of Inspector in Charge James V. Buthorn, and criminal investigators with the U.S. Attorney’s Office, for the investigation. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Division of Consumer Affairs, under the direction of Attorney General Christopher Porrino and Bureau Chief Christopher W. Gerold, as well as the U.S. Commodity Futures Trading Commission’s Division of Enforcement, under the direction of Director James M. McDonald, for their respective roles in the investigation.

The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office’s Economic Crimes Unit.  

Defense counsel:

Alcibiades Cifuentes: Joseph Rotella Esq.
Jennifer Wee Cifuentes: Aidan O'Connor Esq. 

NEWARK, N.J. – A Passaic County, New Jersey, man today admitted robbing a TD Bank in Hawthorne, New Jersey, in February 2016, Acting U.S. Attorney William E. Fitzpatrick announced.

Robert Somers, 45, of Little Falls, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of bank robbery.

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

On Feb.17, 2016, Somers robbed the TD Bank in Hawthorne, New Jersey, by handing a teller a note that read: “this is a hold up,” and demanding cash. The teller handed Somers cash. Somers demanded more money, and a second teller handed him additional cash. Somers fled the bank in a car driven by another individual.

The bank robbery charge carries a maximum penalty of 20 years in prison and a $250,000 fine or twice the gain to the defendant or loss to any victims. Sentencing is scheduled for Sept. 5, 2017.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Hawthorne Police Department, under the direction of Chief Richard McAuliffe; the Pennsylvania State Police, under the direction of Col. Tyree C. Blocker; and the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Jihee G. Suh and Karen D. Stringer of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Gary Cutler Esq., Newark

NEWARK, N.J. – An internal medicine doctor practicing in Yonkers, New York, 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.

Ricky J. Sayegh, 44, of Scarsdale, New York, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with accepting cash bribes in violation of the Federal Travel Act.

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

Sayegh admitted accepting cash bribes in return for referring blood specimens to BLS. From February 2010 through April 2013, Sayegh received bribes totaling approximately $400,000 from BLS employees and associates. Sayegh’s referrals generated more than $1.4 million in lab business for BLS.

The investigation has thus far resulted in 45 convictions – 31 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 $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 charge to which Sayegh 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. Sayegh’s sentencing is scheduled for Sept. 6, 2017.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of 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. 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: Michael Bachner Esq., New York

NEWARK, N.J. – A Monmouth County, New Jersey, woman today admitted her role in a scheme to defraud a bank and bank regulators, Acting U.S. Attorney William E. Fitzpatrick announced.

Donna Conroy, 57, of Middletown, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging her with one count of conspiring to make false entries to deceive a bank and bank regulators, and to influence those regulators, and one count of making false entries.

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

 

The three-phase scheme took place from 2009 to 2010. The first phase was to fraudulently infuse $7 million of capital into FSB. In the second phase of the scheme, various conspirators caused FSB to make millions of dollars in loans based on material misrepresentations in order to cover up the fraudulent nature of the capital infusion and end inquiries from FSB’s auditors. The final phase involved lying to the FDIC and FSB, among others, about the fraudulent capital infusion and loans.

 

The conspiracy count to which Conroy pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross loss sustained by any victim. The count of making false entries carries a maximum potential penalty of 30 years in prison and a fine of $1 million or twice the gross pecuniary gain derived from the offense or twice the gross loss sustained by any victim. Sentencing is scheduled for Aug. 24, 2017.

 

Acting U.S. Attorney Fitzpatrick credited special agents of the FDIC, Office of Inspector General, under the direction of Special Agent in Charge Patti Tarasca, New York Region; the FBI, under the direction of Special Agent in Charge Timothy Gallagher, Newark; and the Office of the Special Inspector General for Trouble Asset Relief Program, under the direction of Special Inspector General Christy Goldsmith Romero, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel Andrew Leven of the U.S. Attorney=s Office Economic Crimes Unit in Newark.

TRENTON, N.J. – An Elizabeth, New Jersey, man today admitted possessing a shotgun, a rifle, and two handguns despite being a previously convicted felon, Acting U.S. Attorney William E. Fitzpatrick announced.

Daniel Bigelow, 28, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with three counts of being a felon in possession of a firearm.

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

Bigelow admitted that despite having prior felony convictions in Union County Superior Court and New York State Supreme Court, he knowingly possessed firearms on three separate occasions. Bigelow admitted that he possessed a Savage Arms Stevens Model 320 12-gauge shotgun on Dec. 29, 2015 and a Hi-Point Model C9 9mm pistol on March 31, 2016. Bigelow also admitted to having a Hi-Point Model 995 9mm rifle and a Smith and Wesson Model 686 .357 revolver in his possession on April 12, 2016.

The felon in possession of a firearm charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 21, 2017.

Acting U.S. Attorney Fitzpatrick credited ATF special agents, under the direction Acting Special Agent in Charge Marcus S. Watson in Newark, with the investigation. He also thanked the Elizabeth Police Department for its assistance.

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

Defense counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark

NEWARK, N.J. – The U.S. Attorney’s Office of the District of New Jersey, the U.S. Department of Justice and 28 states have reached an $8 million settlement with Omnicare Inc. resolving allegations arising from a whistle-blower suit filed under the False Claims Act. The agreement was announced today by Acting U.S. Attorney William E. Fitzpatrick.

The settlement follows an investigation by the U.S. Attorney’s Office of the District of New Jersey and the Commercial Litigation Branch of the Justice Department’s Civil Division. The United States alleged that Omnicare, in an effort to increase business efficiency and profit, designed and implemented an automated label verification system at certain locations that utilized a less specific drug code – known as “MEDID” – during its automated Stage II pharmacist verification process, instead of the more specific National Drug Code (NDC).

This system resulted in the submission by Omnicare of claims for generic drugs different from those actually dispensed to Medicare and Medicaid beneficiaries. It also resulted in the dispensing of drugs with patient-specific labels displaying the incorrect manufacturer or NDC.  The government alleged that the false manufacturer and NDC information on the labels, and within Omnicare’s electronic dispensing information, affected Omnicare’s ability to properly track and, if necessary, conduct patient-level recalls of such drugs.

“Ensuring accuracy in the dispensing of and billing for medication in the Medicare Part D and Medicaid Programs, especially to long-term care patients, is vital to public safety,” Acting U.S. Attorney Fitzpatrick said. 

The relators, or whistler-blowers, in the underlying qui tam will receive more than $2 million as their statutory share of the recovery and to resolve their employment based claims in accordance with the False Claims Act. The civil lawsuit was filed in the District of New Jersey and is captioned U.S. et al. ex rel. Elizabeth Corsi and Christopher Ezzie v. Omnicare Inc.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, for the investigation leading to the settlement.  

The government is represented by the U.S. Attorney’s Office District of New Jersey, Deputy Chief, Civil Division, David Dauenheimer and Assistant U.S. Attorney Bernard Cooney of the Office’s Health Care and Government Fraud Unit, and the Department of Justice’s Civil Division, Senior Litigation Counsel Laurie A. Oberembt. 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 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 $1.33 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.

For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at http://www.justice.gov/usao-nj.

Counsel for relators: Charles C. Goetsch Esq., New Haven, Connecticut.
Counsel for defendant: Michael Martinez Esq., New York