District of New Jersey
Press releases recorded for this federal judicial district.
Burlington County, New Jersey, Man Sentenced to Eight Years in Prison for Scheme to Rob Drug Dealers at GunpointRead the Press Release
CAMDEN, N.J. – A Willingboro, New Jersey, man was sentenced today to 96 months in prison for his role in a conspiracy to rob a drug stash house of multiple kilograms of cocaine that he believed would be stored at the location, U.S. Attorney Paul J. Fishman announced.
Sean Forman, a/k/a “C-Life,” 43, previously pleaded guilty before U.S. District Judge Noel L. Hillman to a two-count superseding information charging him with conspiracy to commit robbery and conspiracy to distribute cocaine. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
In January 2014, Forman, Robert Smith, 43, of Trenton, Derrick Adams, 30, of Florence and Willingboro, New Jersey, and Daquon Basnight, 25, Jamiil McFarlane, 24, and Morris Muse, 36, all of Trenton, planned a gunpoint robbery of a drug stash house in order to steal kilograms of cocaine from dealers at the location. During an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Smith was recorded – in the presence of Forman – discussing his willingness, if necessary, to kill the occupants of the stash house. Smith and Adams, in text message conversations and recorded communications, discussed their plan to rob the stash house while posing as law enforcement.
ATF special agents arrested the conspirators when they arrived at a meeting location in Maple Shade, New Jersey, on Jan. 30, 2014. After searching the conspirators and their vehicles, the agents recovered five firearms – including a sawed-off shotgun and two stolen handguns – as well as numerous rounds of ammunition, a ballistics vest, masks, gloves, and zip ties.
In addition to the prison terms, Judge Hillman ordered Forman to serve five years of supervised release.
Basnight, McFarlane, Muse, and Adams all previously pleaded guilty to their roles and have been sentenced to prison. Smith was convicted at trial and sentenced to 360 months in prison in November 2016.
U.S. Attorney Fishman credited special agents with the ATF Camden Field Office, under the direction of Acting Special Agent in Charge Scott C. Curley in Newark, with the investigation leading to today’s sentence. He also thanked the Drug Enforcement Administration (DEA) Maple Shade Field Office, as well as the Burlington City and Burlington Township police departments, for their assistance in this case.
The government is represented by Assistant U.S. Attorneys Justin C. Danilewitz and Howard Wiener of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Brian O’Malley Esq.
Albuquerque Felon Facing Federal Drug Trafficking and Firearms ChargesRead the Press Release
ALBUQUERQUE – During a hearing yesterday, a U.S. Magistrate Judge sitting in Albuquerque, N.M., found probable cause to support a criminal complaint charging Michael Gerard Smith, 55, of Albuquerque, with violating the federal narcotics and firearms laws. Today, the Magistrate Judge entered an order holding Smith in federal custody pending trial based on judicial findings that he poses a risk of flight and danger to the community. The federal charges against Smith were announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Will R. Glaspy of DEA’s El Paso Division, and Chief Gorden G. Eden, Jr., of the Albuquerque Police Department (APD).
Smith, whose criminal history includes 11 prior felony convictions for drug trafficking, robbery, false imprisonment and forgery offenses, is being prosecuted under the federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution. Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders primarily based on their prior criminal convictions for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible. Because New Mexico’s violent crime rate, on a per capita basis, is one of the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates.
Smith was arrested on Feb. 3, 2017, and charged by criminal complaint with methamphetamine and heroin trafficking offenses, and being a felon in possession of a firearm. According to the criminal complaint, APD officers allegedly seized approximately 94.5 grams of methamphetamine, 34.9 grams of heroin, a handgun, and cash in denominations consistent with street level drug trafficking while executing a search warrant at Smith’s residence.
If convicted, Smith faces a statutory mandatory minimum penalty of ten years and a maximum of life in prison on the drug trafficking charges, and a maximum of ten years in in prison for being a felon in possession of a firearm. If deemed an armed career criminal, Smith faces an enhanced penalty of not less than 15 years in prison for unlawfully possessing a firearm, and the potential of a life sentence on the drug trafficking charges if the United States files a prior felony information.
Charges in criminal complaints are merely accusations and defendants are presumed innocent unless found guilty in a court of law.
The case against Smith was investigated by the Albuquerque office of the DEA and the APD, and is being prosecuted by Assistant U.S. Attorney Norman Cairns as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico. Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities. Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico.
The HOPE Initiative is comprised of five components: (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning. HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners. Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative. Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.
Monmouth County, New Jersey, Nursery School Teacher, Camp Counselor Admits Receiving Sexually Explicit Images of ChildrenRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man today admitted downloading sexually explicit videos and images of children to his home computer, U.S. Attorney Paul J. Fishman announced.
James Paroline, 27, of Red Bank, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to Count One of an indictment charging him with receiving child pornography.
According to documents filed in this case and statements made in court:
Paroline was employed in Monmouth County as an assistant at a nursery school and as a summer camp counselor at a private school. Between Feb. 26, 2015, and March 2, 2015, Paroline accessed a website known as “PlayPen,” an underground online bulletin board and website dedicated to the advertisement and distribution of child pornography. During that period, Paroline logged into PlayPen under the username “jimbobtropolis,” which he had registered with PlayPen using his personal email address, and downloaded multiple videos and images depicting the sexual abuse of children from the website.
The count to which Paroline pleaded guilty carries a mandatory minimum term of five years in prison, a statutory maximum of 20 years in prison, and a $250,000 fine. Sentencing is scheduled for June 1, 2017.
U.S. Attorney Fishman 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 officers of the Red Bank Police Department, under the direction of Chief of Police Darren McConnell; officers of the Middletown Police Department, under the direction of Chief Craig Weber; and detectives of the Monmouth County Prosecutor’s Office, under the direction of Prosecutor Christopher J. Gramiccioni; for their assistance.
The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office Criminal Division in Trenton.
Warren County, New Jersey, Tax Preparer Charged with Tax Fraud and Defrauding BanksRead the Press Release
NEWARK – A Warren County, New Jersey, tax preparer was arrested this morning and charged with allegedly filing false returns on behalf of his clients and misappropriating clients’ funds, U.S. Attorney Paul J. Fishman announced.
Brian Allen Day, 54, of Port Murray, New Jersey, was indicted by a federal grand jury on four counts of aiding and assisting in the filing of false individual income tax returns for clients and four counts of defrauding banks by misappropriating clients’ funds based on misrepresentations about their purported tax payments owed to the IRS and by altering checks they paid to him for the purported tax liabilities and depositing the checks in his business bank accounts. He will appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the indictment:
Day is self-employed as a tax preparer and has various tax preparation businesses in New Jersey, such as PTS, Tax Consultants, and Tax Consultants LLC. For the tax years 2013 to 2015, Day prepared false individual income tax returns for various clients by fabricating and inflating expenses and deductions on Schedule A or supplemental loss deductions on Schedule E of their Form 1040s in order to obtain refunds in amounts greater than those to which they were entitled. The total amount of false deductions and expenses charged in the indictment is $383,773.
Additionally, from December 2011 through April 2015, Day misappropriated some of his taxpayer clients’ monies by falsely advising them that they owed certain tax payments to the IRS; directing his clients to give him checks made payable to the IRS to resolve these purported liabilities with the IRS; altering the checks made payable to the IRS to make them appear to be payable to Day’s tax preparation businesses; and then depositing the checks into his business bank accounts without making any payment to the IRS on behalf of the clients. By doing so, Day defrauded the financial institutions from which these checks were drawn. Day presented his clients with fraudulent documents purportedly issued by the IRS falsely stating that it had received payments for the purported liabilities. Day misappropriated $61,000 from his clients.
Each count of aiding and assisting in the filing of false tax returns carries a maximum potential penalty of three years in prison and a fine of $250,000 or twice the gross pecuniary gain or loss from the fraud. The bank fraud charges each carry a maximum potential penalty of 30 years in prison and a fine of $1 million.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and special agents of the U.S. Treasury Inspector General for Tax Administration (TIGTA) under the direction of Rodney A. Davis, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Jihee G. Suh of the General Crimes Unit in Newark.
Anyone who believes they may have been a victim of this defendant can contact IRS-Criminal Investigation at (732) 761-6439.
The charges and allegations contained in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense Counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark
Bergen County, New Jersey, Man Gets Probation for Helping Disguise Foreign Contributions During 2012 Presidential ElectionRead the Press Release
NEWARK, N.J. – A Paramus, New Jersey, man was sentenced today to one year of probation for helping funnel $80,000 in campaign contributions from a foreign source to the joint fundraising committee of the President of the United States during the 2012 presidential election, U.S. Attorney Paul J. Fishman announced.
Bilal Shehu, 48, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with knowingly and willfully making foreign contributions and donations in connection with the 2012 presidential election and to a fundraising and political campaign committee of the president, aggregating $25,000 or more during a calendar year. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
In September 2012, Shehu, a U.S. citizen living in New Jersey, received approximately $80,000 from a foreign source and provided it to a joint fundraising committee – including the authorized campaign committee of the president – to disguise the true origin of the money and so that a foreign national could attend a campaign event on Oct. 8, 2012, in San Francisco.
Federal law prohibits foreign nationals from making contributions to federal candidates or fundraising committees and, in order to attend the event, a foreign national needed to be accompanied by a U.S. citizen.
Shehu admitted that he received the $80,000 wire transfer into his New Jersey-based bank account from a foreign bank account in late September 2012, knowing that he was to provide it to the joint fundraising committee. In early October 2012, Shehu flew to San Francisco and attempted to gain entry into the San Francisco fundraising event with the foreign national, who was denied entry but was allowed to be photographed with the President.
No one on the joint fundraising committee has been accused of any wrongdoing and the committee has fully cooperated in the investigation leading to today’s sentencing.
William Argeros, 58, of Tampa, Florida, was also charged in this scheme and pleaded guilty on July 25, 2016. His sentencing is scheduled for Feb. 14, 2017.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Mark J. McCarren of the District of New Jersey’s Special Prosecutions Division and Trial Attorneys Charles Walsh and Peter Halpern of the Criminal Division’s Public Integrity Section.
Defense counsel: Alan M. Abramson Esq., New York
Atlantic County, NJ, Man Admits Scheme to Defraud Women over Telephone Dating ServicesRead the Press Release
CAMDEN, N.J. – An Atlantic County man who was previously sentenced in 2007 in connection with a scheme to defraud women over telephone dating services and in 2015 for violating the conditions of his federal supervised release admitted today to traveling in order to launder money in connection with a similar scheme, U.S. Attorney Paul J. Fishman announced.
Patrick Giblin, 52, formerly of Ventnor, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count of interstate travel and use of a facility in interstate and foreign commerce with the intent to launder money.
According to documents filed in this case and statements made in court:
From January 2013 to Dec. 16, 2014, Giblin allegedly posted advertisements and messages on telephone dating services throughout the United States. Giblin cultivated a telephone rapport with the women he spoke to on these services, falsely claimed that he would be relocating or travelling to the woman’s geographic area, and falsely represented that he wished to pursue a committed, romantic relationship with each woman. He then lied to the women about needing a loan, which he never intended to repay, for relocation or travel expenses. Giblin received money from the women he spoke to on the dating services via interstate wire services such as Western Union and MoneyGram. Giblin also directed women to transfer money through one of these services onto a payroll/debit card that he used. Giblin used some of his victims’ money in order to purchase airtime minutes for cellular telephones, which he in turn used to defraud additional women.
In October 2014, Giblin travelled from Atlantic County, New Jersey, to Albany County, New York. Giblin, who was on federal supervised release from a previous conviction, was not allowed to leave the state. While traveling in New York, Giblin continued to defraud women and used money he received from women to purchase additional airtime minutes and contact more women. Giblin’s victimized more than 10 women in various states, causing losses of $15,000 to $40,000.
Giblin was previously convicted of 10 counts of wire fraud in 2007 in connection with a similar scheme. In 2015, Giblin was imprisoned for violating the terms of his supervised release imposed in connection with the 2007 sentence. Giblin was also sentenced in 2013 in the Eastern District of Pennsylvania for escaping from a halfway house in Philadelphia, where he was living following the completion of the 2007 sentence. Giblin initiated the scheme in this current case at about the time that he escaped from the halfway house and resumed the scheme following the service of his sentence on the escape conviction.
The count to which Giblin pleaded guilty carries a maximum term of five years in prison and a fine of up to five years in prison and a fine of $250,000. He must also pay restitution to victims. As part of the plea agreement in this case, the U.S. Attorney’s Office will recommend that the Court sentence Giblin to the statutory maximum term of five years. Sentencing is scheduled for May 12, 2017.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charges. Fishman also thanked the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos in Newark, for its assistance in this case.
The government is represented by Deputy Attorney-in-Charge Matthew J. Skahill and Assistant U.S. Attorney Gabriel J. Vidoni of the U.S. Attorney’s Office in Camden.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender (Camden)
Grape Street Crips Crack-Cocaine Wholesalers Plead Guilty to Racketeering, Drug Trafficking ChargesRead the Press Release
NEWARK, N.J. – Two crack-cocaine wholesalers for the New Jersey set of the Grape Street Crips gang today admitted their involvement in racketeering and drug trafficking conspiracies operating in Newark, New Jersey, U.S. Attorney Paul J. Fishman announced today.
Hakeem Vanderhall, a/k/a “Keem,” a/k/a “Sugar Bear,” 32, 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, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to Count 1 and Count 18 of a sixth superseding indictment charging them with racketeering conspiracy and conspiracy to distribute crack-cocaine.
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 of crack-cocaine, 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.
Under the terms of today’s plea agreements, both Vanderhall and Concepcion will be sentenced to 18 years in prison and five years of supervised release. Sentencing for both defendants is scheduled for May 16, 2017.
U.S. Attorney Fishman 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, for the investigation leading to the charges. 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:
Vanderhall: Joshua L. Markowitz Esq., Lawrenceville, New Jersey
Concepcion: Stephen Turano Esq., NewarkGloucester County, New Jersey, Man Admits Role in Camden Drug Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. - A Mantua, New Jersey, man today admitted overseeing a more than 15-month conspiracy to sell crack cocaine in Camden, New Jersey, U.S. Attorney Paul J. Fishman announced.
Harold Miller, 41, pleaded guilty before U.S. District Judge Joseph H. Rodriguez 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, Miller admitted that from May 2014 through Sept. 1, 2015, he oversaw a conspiracy to distribute crack cocaine on Pfeiffer Street in Camden. Miller admitted that as part of his role, he managed the drug sales on Pfeiffer Street and coordinated the supply of crack cocaine to other dealers.
The conspiracy charge carries a maximum potential penalty of 20 years in prison. Miller’s sentencing is scheduled for May 8, 2017.
Miller was arrested on Sept. 2, 2015 following an investigation by the FBI’s South Jersey Violent Offender and Gang Task Force. Rasheed Wise, Rodney Wall, and David Wilkerson, all of Camden, previously pleaded guilty to their roles in the conspiracy and await sentencing.
U.S. Attorney Fishman 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.
The government is represented by Deputy Attorney-in-Charge Matthew J. Skahill of the U.S. Attorney’s Office in Camden.
Defense counsel: Christopher O’Malley Esq., Assistant Federal Public Defender, Camden
Two Men Plead Guilty to Smuggling Foreign Nationals into the United StatesRead the Press Release
NEWARK, N.J. – Two men today admitted their roles in a conspiracy to illegally transport foreign nationals into the United States via commercial airline flights, U.S. Attorney Paul J. Fishman announced.
Nileshkumar Patel, 42, and Harsad Mehta, 68, both of India, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to separate superseding informations charging them each with one count of conspiracy to smuggle foreign nationals into the United States for commercial advantage and private financial gain.
According to documents filed in this case and statements made in court:
Patel and Mehta admitted that from June 2013 through October 2015, they conspired to make money by recruiting Indian nationals to enter and reside in the United States illegally. Patel and Mehta admitted that on July 24, 2014, they brought two Indian nationals to Bangkok, Thailand, so that they could be transported into the United States. They also admitted paying an individual – who was actually an undercover officer – to transport the foreign nationals from Thailand into Newark.
The conspiracy count carries a maximum potential sentence of 10 years in prison. Sentencing is scheduled for May 16, 2017.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola in Newark, with the investigation.
The government is represented by Assistant U.S. Attorney Francisco J. Navarro of the U.S Attorney’s Office National Security Unit in Newark.
Defense counsel:
Patel: Michael P. Koribanics Esq., Clifton, New Jersey
Mehta: Mark A. Berman Esq., River Edge, New Jersey
Passaic County Man Who Operated Clifton, New Jersey, Ambulance Company Despite Ban Sentenced to 18 Years in PrisonRead the Press Release
NEWARK, N.J. – A Clifton, New Jersey, man was sentenced today to 216 months in prison for health care fraud, obstructing a federal audit, and other charges associated with his illegal operation of an ambulance company despite having been banned from participating in federal health care programs, U.S. Attorney Paul J. Fishman announced.
Imadeldin Awad Khair, a/k/a “Nadr Awad,” 57, was previously convicted of all 17 counts of an indictment charging him with health care fraud, obstructing a federal audit, tax evasion, and money laundering. He was convicted following a nine-day bench trial before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence presented at trial:
In 2004, as a result of his conviction on a New Jersey state health care fraud charge, Khair was excluded from participating in any capacity in Medicare, Medicaid, or other federal health care programs for a minimum of 11 years. After realizing that he would be excluded from federal health care programs, Khair began operating a business named K&S Invalid Coach in his brother’s name. Since the date of his exclusion, Medicare and Medicaid paid over $9 million in claims submitted by K&S, none of which would have been paid had Medicare and Medicaid known that Khair was operating the business.
Khair’s plan to defraud Medicare and Medicaid began almost immediately after he was excluded by authorities from participating in federal health care programs. In 2004 and 2005, Khair recruited a business associate to tell authorities that Khair was his full-time employee so that Khair could continue running K&S in violation of his exclusion. Khair also used fraudulent paystubs provided by his business associate to convince authorities that he was not violating the terms of his exclusion.
In 2014, when special agents with the FBI and the U.S. Department of Health and Human Services, Office of Inspector General, executed a search warrant at K&S’s offices, Khair’s top managers directed employees via group text message to tell the agents that Khair’s brother was really in charge at K&S. In addition, on the first day of trial, Khair tried to influence a government witness just outside of the courtroom by claiming that he had over two dozen employees who were going to testify that his brother had really been in charge at K&S.
Khair also paid numerous K&S employees, including nearly all of the employees’ overtime wages, “off the books” and without withholding the necessary payroll taxes. To carry out the tax evasion scheme, Khair paid the wages in cash or handwritten check and directed K&S employees to keep two separate sets of books. Khair then directed company employees to send only the fraudulent set of books to the company’s payroll accountant.
In response to a U.S. Department of Labor audit of K&S in 2014, Khair held an employee meeting in which he directed K&S employees to lie to the Department of Labor by stating that they never worked more than 80 hours in a biweekly pay period. Khair also directed K&S employees to alter and falsify K&S timekeeping records to match the false amounts previously reported to the company’s payroll accountant.
The money laundering counts arose from K&S checks that were written and endorsed by Khair and made payable to “cash” or Khair himself, which were used to pay the undisclosed wages and enrich Khair personally.
In addition to the prison term, Judge Wigenton ordered Khair to serve three years of supervised release and pay restitution of $8.8 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Danielle M. Corcione and Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division in Newark.
U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, 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 $1.32 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: Harvey R. Poe Esq., Roseland, New Jersey
Bronx, New York, Man Sentenced to Four Years in Prison for Role in Conspiracy to Possess with Intent to Distribute 22 Kilograms of Heroin in New JerseyRead the Press Release
TRENTON, N.J. – A Bronx, New York, man was sentenced today to 48 months in prison for his role in a conspiracy to possess with intent to distribute 22 kilograms of heroin in New Jersey, U.S. Attorney Paul J. Fishman announced.
Edwin Alamo Jr., 22, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiracy to possess with intent to distribute more than one kilogram of heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
According to the documents filed in this case and statements made in court:
On Feb. 5, 2016, law enforcement observed a tractor-trailer, occupied by Sauro D. Estevez-Figueredo and Alberto Mora, parked at an intersection near a store in Clifton, New Jersey. That afternoon, Emmanuel Gonzalez and Alamo drove to the tractor-trailer and left with a suitcase given to them by Mora. Later, Porfirio Peralta-Nunez arrived at the tractor-trailer with two empty bags and left shortly afterwards with the bags filled.
Subsequent traffic stops allegedly revealed 22 kilograms of heroin in Gonzalez and Alamo’s possession. Additional quantities of narcotics were allegedly found in Peralta-Nunez’s possession. Law enforcement also found 10 kilograms of cocaine and 10 kilograms of fentanyl remaining at the tractor-trailer.
Alamo admitted that he went to Clifton to pick up narcotics from a tractor-trailer and that he obtained a suitcase containing approximately 22 kilograms of heroin.
In addition to the prison term, Judge Sheridan sentenced Alamo to three years of supervised release.
Co-defendants Mora and Gonzalez have pleaded guilty; Gonzalez was sentenced to 120 months in prison and Mora is awaiting sentencing. Charges and allegations pending against Peralta-Nunez and Estevez-Figueredo are merely accusations, and they are considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Meredith Williams of the Narcotics/OCDETF unit of the U.S. Attorney’s Office in Newark.
Defense counsel: Chester Keller Esq., First Assistant Federal Public Defender
Two Newark, New Jersey, Men Sentenced to More Than 14 Years in Prison for Carjacking and Other ChargesRead the Press Release
NEWARK, N.J. – Two Newark men who collectively carried out two armed carjackings and one attempted carjacking in September 2013 were each sentenced to prison today, U.S. Attorney Paul J. Fishman announced.
Dion Hines, 23, and Roosevelt Robinson, 25, were sentenced to 192 and 171 months in prison, respectively. Hines previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of attempted carjacking, two counts of carjacking, and one count of using a firearm during a crime of violence. Robinson previously pleaded guilty to an information charging him with one count of attempted carjacking, one count of carjacking, and one count of using a firearm during a crime of violence. Judge Hayden imposed both sentences today in Newark federal court.
According to documents filed in this case and statements made in court:
On Sept. 22, 2013, Hines, Robinson, and another male individual approached a Mercedes Benz sedan that was parked in a residential driveway in Newark. Hines brandished a handgun and ordered the driver to get out of the vehicle. The victim eventually got out of the car and Robinson sat in the driver’s seat. After Hines and the other male individual fled on foot, the victim fought Robinson, pulled him from the Mercedes Benz, and got back into the vehicle. Hines returned and fired two shots at the Mercedes Benz. Afterwards, Hines, Robinson, and the other male individual fled the scene.
On Sept. 26, 2013, Hines approached two individuals at a parking lot in Newark, threatened them with a handgun, and demanded the keys to their vehicles. After one of the victims gave Hines the keys to a 2009 Acura sedan, he got into the car and fled.
On the morning of Sept. 27, 2013, Hines was traveling in a dark-colored SUV driven by another individual. The SUV pulled in front of a Range Rover stopped at an intersection in Belleville, New Jersey, blocking the Range Rover’s path. Hines got out of the SUV and pointed a handgun at the driver of the Range Rover. Robinson, who followed the SUV in a separate vehicle, pulled over and stood watch. Hines pulled the driver out of the Range Rover, got into the vehicle and fled, followed by the SUV and Robinson’s vehicle.
In addition to the prison terms, Judge Hayden sentenced both Hines and Robinson to five years of supervised release.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark, Elizabeth, and Belleville police departments with the investigation.
The government is represented by Assistant U.S. Attorney J. Jamari Buxton of the U.S. Attorney’s Office Organized Crime/Gangs in Newark.
Defense Counsel:
Hines: John Yauch Esq., Assistant Federal Public Defender, Newark
Robinson: Paul Condon Esq., Jersey City, New Jersey
Middlesex County, New Jersey, Man Gets over Three Years in Jail for Particpating in International $200 Million Credit Card ScamRead the Press Release
TRENTON, N.J. – An Iselin, New Jersey, man was sentenced today to 46 months in prison for his role in one of the largest credit card fraud schemes ever charged by the U.S. Department of Justice, U.S. Attorney Paul J. Fishman announced.
Babar Qureshi, 63, previously pleaded guilty before U.S. District Judge Anne E. Thompson to Count One of an indictment charging him with conspiracy to commit bank fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Qureshi was originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; and finally, run up large loans.
The scope of the criminal fraud enterprise required Qureshi and other conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.
Qureshi’s role in the conspiracy was to take the phony cards and charge large amounts at complicit merchants, who would then pay him a portion of the charge. He used phony bank accounts to conceal his involvement and receive proceeds from the fraud, which he used for personal expenses, including his mortgage.
In addition to the prison term, Judge Thompson sentenced Qureshi to five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked postal inspectors under the direction of Inspector in Charge James V. Buthorn, the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, and the U.S. Social Security Administration, Office of the Inspector General, for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Daniel Shapiro and Deputy Chief Zach Intrater of the U.S. Attorney’s Office’s Economic Crimes Unit, and Sarah Devlin of the Assert Forfeiture and Money Laundering Unit.
Defense counsel: Alexander Spiro Esq., New York
Middlesex County, New Jersey, Man Sentenced to 37 Months in Prison for Tax EvasionRead the Press Release
NEWARK, N.J. – A Cranbury Township, New Jersey, man was sentenced today to 37 months in prison for failing to report over $1.5 million in income he fraudulently diverted to overseas shell companies, U.S. Attorney Paul J. Fishman announced.
Michael Q. Fu, 53, previously pleaded guilty before U.S. District Court Judge William H. Walls to an information charging him with one count of conspiring to evade income taxes and one substantive count of tax evasion. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Fu and Albert W. Chang, 69, of Princeton Junction, New Jersey, co-owned and operated United Products and Instruments Inc. (UNICO) located in Dayton, New Jersey. UNICO was established by Fu and Chang in 1991 and primarily engaged in the sale and export of microscopes and centrifuges for medical purposes.
As part of the conspiracy, Fu and Chang created two shell companies headquartered in China – Action Towers and Bench Top Laboratories. Fu and Chang then diverted business income to themselves by funneling money to the shell companies’ bank accounts and deducting the diverted funds from UNICO’s corporate tax return as the cost of goods sold or commission.
In addition, Fu and Chang had Shanghai Electric, a Hong Kong based utility company, overbill UNICO by approximately five percent on legitimate invoices. Once the invoices were paid by UNICO, they directed Shanghai Electric to wire transfer the overbilled amount to their accounts in China, which they used for their personal benefit. Fu and Chang failed to report any of that income on their federal income tax returns.
In addition to the prison term, Judge Walls sentenced Fu to three years of supervised release and ordered him to pay restitution of over $870,000.
Chang pleaded guilty to his role in the conspiracy in September 2016 and awaits sentencing.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola; and officers of the Springfield Police Department, under the direction of Chief John Cook, with the investigation.
The government is represented by Senior Litigation Counsel Margaret Ann Mahoney of U.S. Attorney’s Criminal Division in Newark.
Defense counsel: Steven Seltzer Esq., New York, New York
Fugitive Arrested in $200 Million Credit Card Fraud ScamRead the Press Release
NEWARK, N.J. – A New York man was arrested for his role in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.
Habib Chaudhry, 49, of Valley Stream, New York, was initially charged by complaint in February 2013 and then by indictment in September 2013. Chaudhry has been a fugitive for nearly four years. He is expected to make his initial appearance later today before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court.
According to documents filed in this case and statements made in court:
Chaudhry was indicted as part of a conspiracy – led by Tahir Lodhi, Babar Qureshi, Ijaz Butt, and others – to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Since then, 19 people, have pleaded guilty in connection with the scheme.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrow or spend as much as they could without repaying the debts. The scheme caused more than $200 million in confirmed losses to businesses and financial institutions.
The scope of the criminal fraud enterprise required the conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses for the false identities.
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading the charges. He also thanked postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James V. Buthorn, Newark Division, special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Mark McKevitt, and the U.S. Social Security Administration for their assistance.
The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Essex County, New Jersey, Man Admits That He Exchanged over $840,000 in ‘Snap’/Food Stamp Benefits for CashRead the Press Release
TRENTON, N.J. – An Irvington, New Jersey, man today admitted that he stole more than $840,000 from the U.S. Government through a scheme to exchange food stamps for cash, U.S. Attorney Paul J. Fishman announced.
Miguel Antonio Azcona, a/k/a “Miguel A. Azcona-Peralta,” 38, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an information charging him with one count of theft of government funds.
According to documents filed in this case and statements made in court:
Azcona was the owner of New Community Supermarket on Springfield Avenue in Newark, New Jersey. New Community Supermarket was a small grocery that was authorized to accept Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps). Azcona controlled a business bank account for New Community Supermarket to receive the reimbursements for SNAP benefits.
Azcona knew that as a SNAP retailer, he was not allowed to exchange food stamps for cash. Yet from August 2014 through Aug. 11, 2016, Azcona and others, including employees under his supervision, unlawfully redeemed SNAP benefits in exchange for cash rather than food. In return for exchanging SNAP benefits for cash, New Community Supermarket retained a portion of the transaction’s value for Azcona’s benefit.
At his plea hearing, Azcona admitted that his conduct resulted in losses of approximately $840,583.54.
The count of theft of government funds carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is set for May 3, 2017.
U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge Bethanne M. Dinkins in New York; and U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Criminal Division in Newark.
Defense counsel: David R. Oakley, Esq.
New York Man Pleads Guilty to Role in $2.89 Million Stolen Identity Refund SchemeRead the Press Release
NEWARK, N.J. – A Bronx, New York, man today admitted his role in a scheme to obtain stolen identity information and use it to file phony tax returns with the IRS, U.S. Attorney Paul J. Fishman announced.
Yerfri Castillo, 26, pleaded guilty before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to steal 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:
From January 2013 through May 2015, Castillo conspired with Jhan Luis Mejia Marcelino, 27, Odanys Orlando Rojas, a/k/a “El Fuerte,” 39, both of Bronx, and others to use stolen identities to commit tax refund fraud. Castillo admitted that he and others obtained stolen personal identifying information, including names and Social Security numbers, of victims located in New Jersey, Puerto Rico, and elsewhere. Afterwards, Castillo used the information to file fraudulent federal tax returns. Castillo also admitted that, once they received the refunds, he converted checks to cash or other proceeds for his own benefit.
Altogether, the conspiracy caused losses of over $2.89 million to the U.S. Treasury.
The conspiracy offense is punishable by a maximum potential penalty of five years in prison. The theft of government funds count is punishable by a maximum potential penalty of 10 years in prison. Both counts are punishable by a $250,000 fine, or twice the gain or loss resulting from the offense. The aggravated identity fraud charge is punishable by a mandatory two-year sentence to be served consecutively to any other term imposed. Sentencing is scheduled for May 2, 2017.
Both Mejia and Rojas pleaded guilty to their roles in September 2016 and await sentencing.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; special agents of the U.S. Postal Service Office of Inspector General, under the direction of Special Agent in Charge Monica Weyler; and special agents of the U.S. Secret Service, Newark Field Office, under the direction of Special Agent in Charge Mark McKevitt, with the investigation.
The government is represented by Assistant U.S. Attorney Elaine K. Lou of the Criminal Division in Newark.
Defense counsel: Edgar L. Fankbonner Esq.
Bergen County, New Jersey, Woman Sentenced to 25 Months in Prison in Check Fraud SchemeRead the Press Release
NEWARK, N.J. – A Bergen County, New Jersey, woman was sentenced today to 25 months in prison for her role in conspiring to deposit more than $1 million in fraudulent checks into different bank accounts, U.S. Attorney Paul J. Fishman announced.
Chunhua Jin, 46, of Ridgefield, New Jersey, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging her with one count of bank fraud conspiracy. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From July 2014 to April 2015, Jin and others opened accounts at banks, such as Bank of America, in the names of fake businesses. The conspirators then made small deposits and withdrawals over several weeks to make the accounts appear legitimate. Jin or a conspirator would eventually deposit a fake check for a large dollar amount into the account. The victim banks typically credited some or all of the deposit amount on the fake check for immediate withdrawal. The conspirators then withdrew as much money as possible from the account before the bank realized that the check was fraudulent and blocked further withdrawals. Jin and others made ATM cash withdrawals, submitted cash withdrawal slips and make debit card purchases on merchandise. Jin admitted that the scheme resulted in a loss to the banks of at least $1.7 million.
In addition to the prison term, Judge McNulty sentenced Jin to five years of supervised release and ordered restitution and forfeiture of $1.7 million.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn; investigators from the Middlesex County Prosecutor=s Office, under the direction of Prosecutor Andrew C. Carey; and investigators from the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Justin S. Herring of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Peter Weiner Esq., Union City, New Jersey
U.S. Attorney’s Office Files A.D.A. Complaint Against South Jersey Day Care FacilityRead the Press Release
CAMDEN, N.J. – The U.S. Attorney’s Office filed a complaint today against a corporation which operates a South Jersey day care facility for allegedly violating the Americans with Disabilities Act (ADA) by expelling a child with Down syndrome, U.S. Attorney Paul J. Fishman announced.
The complaint was filed in Camden federal court against Nobel Learning Communities (NLC), a Delaware corporation with its principal place of business in West Chester, Pennsylvania. NLC owns and operates Chesterbrook Academy, a private, pre-school facility in Moorestown, New Jersey.
According to the complaint:
NLC failed to make reasonable modifications for a child with Down syndrome and then expelled the child from Chesterbrook.
Chesterbrook offers day care and education programs for children from six weeks old through kindergarten. The child in this case was enrolled at Chesterbrook when less than a year old. Approximately two years after enrolling, Chesterbrook notified the parents that their child was being moved from the “beginner” program to the “intermediate” program. The parents provided the school with literature on delayed toilet training in children with Down syndrome. The child was moved into the intermediate program, and the principal informed the parents that the school was going to work on getting the child toilet trained by a set date. Approximately two months later, the school notified the child’s parents that it was expelling their child because the child was not toilet trained. The parents requested various modifications to allow the child to remain enrolled, but the school refused to implement the modifications and expelled the child.
The federal civil suit seeks, among other things, a judgment against NLC for violation of the ADA, an injunction against the company to prevent discrimination against individuals with disabilities, compensatory damages to be awarded to the child and the child’s parents and a civil penalty against NLC.
Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint. Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free information line at (800) 514-0301 and (800) 514-0383 (TDD).
The government is represented by Assistant U.S. Attorney Jordan M. Anger of the U.S. Attorney’s Office Civil Division in Newark.
Salesman for New Jersey Clinical Lab Sentenced to 20 Months in Prison for Bribing A Doctor in Test-Referral SchemeRead the Press Release
NEWARK, N.J. – A Berkeley Heights, New Jersey, man was sentenced today to 20 months in prison for bribing a doctor 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, U.S. Attorney Paul J. Fishman announced.
Michael J. Zarrelli, 50, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiring to bribe a doctor and one count of money laundering. Judge Chesler imposed the sentence today in Newark federal court.
According to documents filed in this and related cases and statements made in court:
Zarrelli admitted he agreed with BLS president David Nicoll, 42, of Mountain Lakes, New Jersey, his brother, Scott Nicoll, 36, of Wayne, New Jersey, and others to pay cash bribes to a doctor in return for referring patient blood specimens to BLS. The referrals sent to BLS by the doctor that Zarrelli bribed generated more than $400,000 in lab business for BLS.
In addition to the prison term, Judge Chesler sentenced Zarrelli to one year of supervised release. Zarrelli must also forfeit $247,264, representing the payment he received from BLS.
The investigation has thus far resulted in 41 guilty pleas – 27 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.
U.S. Attorney Fishman 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 and 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 Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman 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 $1.32 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 Critchley Esq., Roseland, New Jersey
New York Man Charged with Fort Lee, New Jersey, Bank RobberyRead the Press Release
NEWARK, N.J. – A Bronx, New York, man who was arrested on Jan. 13, 2017 in connection with a Fort Lee, New Jersey, bank robbery will make his initial court appearance tomorrow, U.S. Attorney Paul J. Fishman announced today.
Andres Dominguez, 38, is charged by complaint with one count of bank robbery and is scheduled to make his initial appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court tomorrow.
According to documents filed in this case and statements made in court:
On Jan. 12, 2017, Dominguez allegedly robbed the Bank of New Jersey in Fort Lee. According to bank employees and video surveillance, a man wearing a gray Nike hooded sweatshirt, a blue rubber glove, sunglasses, a wool hat, Adidas pants, and white sneakers entered the bank.
The robber approached one of the bank tellers with a large kitchen knife in his right hand and jumped onto the counter separating the tellers from customers. He then verbally demanded money from the teller and instructed the teller to give him all the money in the teller drawers or he would kill her. The teller complied, and the robber jumped back over the counter and fled the bank on foot. The robber was later identified as Dominguez.
When law enforcement later searched the area around the bank for evidence of the bank robbery, they recovered a large kitchen knife from a dumpster behind the bank. They also found two blue rubber gloves, a gray Nike hooded sweatshirt, and a dark wool hat on the street at various locations within a few blocks of the bank. Law enforcement later located Dominguez in the Bronx and arrested him.
The bank robbery charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and officers of the Fort Lee Police Department, under the direction of Chief Keith M. Bendul, with the investigation.
The government is represented by Assistant U.S. Attorney Jason S. Gould of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
McKesson Agrees to Pay Record $150 Million Settlement for Failure to Report Suspicious Orders of Pharmaceutical DrugsRead the Press Release
WASHINGTON – McKesson Corp. (McKesson), one of the nation’s largest distributors of pharmaceutical drugs, has agreed to pay a record $150 million civil penalty for alleged violations of the Controlled Substances Act (CSA), U.S. Attorney Paul J. Fishman and DEA Special Agent in Charge Carl J. Kotowski announced today.
“The epidemic of opioid abuse is carving an increasingly destructive path through our country,” U.S. Attorney Fishman said. “But nearly a decade ago, McKesson was sanctioned for violations that were contributing to the misuse of these prescription painkillers. Given a chance to implement a more robust system for monitoring the distribution of these products, the company instead chose to ignore its own compliance regime in favor of a bigger bottom-line. The consequences of McKesson's decision to circumvent its obligations are too devastating to ignore and warrant today's punishment.”
“Pharmaceutical companies are our first line of defense in the fight against prescription opioid abuse,” SAC Kotowski said. “If they turn a blind eye to suspicious orders of pharmaceutical controlled substances they are contributing to this epidemic. This settlement sends a clear message that even corporations need to do their part to fight this devastating opioid epidemic.”
The nationwide settlement requires McKesson to suspend sales of controlled substances from distribution centers in Colorado, Ohio, Michigan and Florida for multiple years. The staged suspensions are among the most severe sanctions ever agreed to by a DEA registered distributor. The settlement also imposes new and enhanced compliance obligations on McKesson’s distribution system.
In 2008, McKesson agreed to a $13.25 million civil penalty and administrative agreement for similar violations. In this case, the government alleged again that McKesson failed to design and implement an effective system to detect and report “suspicious orders” for controlled substances distributed to its independent and small chain pharmacy customers – orders that are unusual in their frequency, size, or other patterns. From 2008 until 2013, McKesson supplied various U.S. pharmacies an increasing amount of oxycodone and hydrocodone pills, frequently misused products that are part of the current opioid epidemic.
The government’s investigation developed evidence that even after designing a compliance program after the 2008 settlement, McKesson did not fully implement or adhere to its own program. In Colorado, for example, McKesson processed more than 1.6 million orders for controlled substances from June 2008 through May 2013, but reported just 16 orders as suspicious, all connected to one instance related to a recently terminated customer.
In addition to the monetary penalties and suspensions, the government and McKesson agreed to enhanced compliance terms for the next five years. Among other things, McKesson has agreed to specific, rigorous staffing and organizational improvements; periodic auditing; and stipulated financial penalties for failing to adhere to the compliance terms. Critically, the settlement will require McKesson to engage an independent monitor to assess compliance – the first independent monitor of its kind in a CSA civil penalty settlement.
This was a multi-district investigation that involved DEA Field Divisions in the following locations: Boston, Chicago, Denver, Detroit, Miami, Newark, San Francisco, St. Louis, and the Washington District Office. The following U.S. Attorney’s Offices participated in the case: Central District of California, Eastern District of California, District of Colorado, Middle District of Florida, Eastern District of Kentucky, Northern District of Illinois, District of Massachusetts, Eastern District of Michigan, District of Nebraska, District of New Jersey, Northern District of West Virginia, and Western District of Wisconsin.
In the District of New Jersey, the government was represented by Senior Litigation Counsel Anthony J. LaBruna and Assistant U.S. Attorney Mark Orlowski of the Civil Division of the U.S. Attorney’s Office.
U.S. Attorneys’ Offices for the District of Colorado and the Northern District of West Virginia, along with DEA Office of Chief Counsel and Diversion Control Division, led the civil settlement negotiations. DEA’s Denver, Detroit and Miami Field Divisions, and its Washington Division Office led the administrative and civil investigation. The Criminal Division’s Narcotic and Dangerous Drug Section (NDDS) also coordinated and assisted in negotiating certain portions of the settlement.
Leader of Camden, New Jersey, Drug Trafficking Organization Pleads Guilty to Distribution Conspiracy and Firearm OffensesRead the Press Release
CAMDEN, N.J. - A Camden man today admitted his role in a crack cocaine distribution conspiracy operating in Camden, U.S. Attorney Paul J. Fishman announced.
Jason Boyd, a/k/a “Teddy,” a/k/a “Teddy Reek,” and a/k/a “Fatboy,” 36, 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 and one count of possession of a firearm in furtherance of a drug trafficking crime.
According to documents filed in this case and statements made in court:
Boyd admitted that he sold, and directed others to sell, crack cocaine in and around the 1100 block of Lansdowne Avenue in Camden. Boyd also admitted that he provided crack cocaine to other members of the conspiracy and collected proceeds from the sales.
Boyd, who was one of the leaders of the conspiracy, was charged along with seven others in September 2016 following an investigation by the FBI’s South Jersey Violent Offender and Gang Task Force. During the investigation, law enforcement recovered a .40 caliber handgun that was kept by the conspirators in connection with their drug trafficking activities.
The distribution conspiracy charge carries a maximum potential penalty of 20 years in prison and a $1 million fine. The firearms charge carries a mandatory minimum sentence of five years in prison to be served consecutively to the conspiracy charge. Sentencing is scheduled for April 28, 2017.
Codefendant Derek Stallworth, a/k/a “AK” and a/k/a “A,” 20, of Camden, pleaded guilty to his role in the conspiracy on Dec. 8, 2016 and is scheduled to be sentenced on March 24, 2017.
U.S. Attorney Fishman 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: Jose Ongay Esq., Mount Ephraim, New Jersey
Ocean County, New Jersey, Man Sentenced to 10 Years in Prison for Robbing Eight BanksRead the Press Release
TRENTON, N.J. – An Ocean County, New Jersey, man was sentenced today to 120 months in prison for robbing eight banks in New Jersey and New York, U.S. Attorney Paul J. Fishman announced.
Steven Wisnowski, 33, of Barnegat, New Jersey, previously pleaded guilty before U.S. District Judge Peter J. Sheridan in Trenton federal court to an eight-count superseding information charging him with the bank robberies.
According to documents filed in this case and statements made in court:
Wisnowski admitted that between Oct. 30, 2013, and Jan. 7, 2014, he robbed eight banks, seven of which were in New Jersey, and one of which was in New York:
Bank Name
Location
Date
PNC Bank
Edison
Oct. 30, 2013
TD Bank
Brick
Nov. 7, 2013
Santander Bank
Brick
Nov. 15, 2013
Ridgewood Savings Bank
Bayside (NY)
Nov. 22, 2013
Columbia Bank
Edison
Nov. 27, 2013
TD Bank
Toms River
Dec. 2, 2013
PNC Bank
Aberdeen
Dec. 9, 2013
Fulton Bank
Edison
Jan. 7, 2014
Wisnowski used a similar procedure for each robbery: he entered the banks wearing hats, hooded jackets, and wigs to conceal his identity, approached the bank tellers, and demanded money. In some instances, Wisnowski made the tellers believe he was armed and also threatened some tellers with violence.
During the Columbia Bank robbery, Wisnowski appeared to point something at the teller from under his clothing, as if he had a gun. Wisnowski then demanded money, stating: “Give me all your hundreds.” As the teller gathered the money, Wisnowski counted backwards from 10. He then fled with the money.
During the Fulton Bank robbery, Wisnowski gave a teller a manila envelope and stated, “Give me what I want and nobody gets hurt. I want large bills.” He then pulled up his sweatshirt as if he had a gun. The teller gathered the money and placed it in the envelope, after which Wisnowski fled.
Law enforcement tracked Wisnowski’s vehicle to the scene of the Fulton Bank robbery. Officers approached Wisnowski as he exited the bank and ordered him to the ground at gunpoint. Wisnowski threw the envelope filled with cash and fled. Law enforcement officers pursued Wisnowski and apprehended him moments later.
In addition to the prison term, Judge Sheridan sentenced Wisnowski to three years of supervised release and ordered to pay restitution of $22,240.
U.S. Attorney Fishman praised 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 the Edison, Aberdeen, Brick, Toms River, and New York City police departments, and the Middlesex, Ocean, and Monmouth County prosecutors’ offices for their contributions to the case.
The government is represented by Assistant U.S. Attorney Jamari Buxton of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel: Chester Keller Esq., Assistant Federal Public Defender, Newark
Justice Department and State Partners Secure Nearly $864 Million Settlement with Moody’s Arising from Conduct in the Lead up to the Financial CrisisRead the Press Release
The Department of Justice, 21 states, and the District of Columbia reached a nearly $864 million settlement agreement with Moody’s Investors Service Inc., Moody’s Analytics Inc., and their parent, Moody’s Corporation, the Department announced today. The settlement resolves allegations arising from Moody’s role in providing credit ratings for Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDO), contributing to the worst financial crisis since the Great Depression.
The agreement resolves pending state court lawsuits in Connecticut, Mississippi, and South Carolina, as well as potential claims by the Justice Department, 18 states and the District of Columbia.
The settlement follows an investigation by the Justice Department’s Consumer Protection Branch and the U.S. Attorney’s Office for the District of New Jersey into potential claims pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and investigations conducted by various State Attorneys General pursuant to state law.
"Moody’s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession," said Principal Deputy Associate Attorney General Bill Baer. "Today’s settlement contains not only a significant penalty and factual admissions of its conduct, but also a commitment by Moody’s to new and continued compliance measures designed to ensure the integrity of credit ratings going forward."
"Our investigation revealed, and Moody’s has now acknowledged, that Moody’s used a more lenient standard than it had itself published," said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. "Investors relied on Moody’s credit ratings to be objective and independent, and they naturally expected Moody’s to follow its own published methods."
"Moody’s touted a particularly robust analytical framework for rating RMBS and CDOs," said U.S. Attorney Paul J. Fishman for the District of New Jersey. "Moody’s now admits that it deviated from its methodologies and failed to disclose those changes to the public. People making decisions on how to invest their money thought they could rely on the ratings Moody’s assigned to these products. When securities are not rated openly and honestly, individual investors suffer, as does confidence in all parts of the financial sector."
The multi-faceted settlement includes a Statement of Facts in which Moody’s acknowledges key aspects of its conduct, and a compliance agreement to prevent future violations of law. The Statement of Facts addresses Moody’s representations to investors and the public generally about: (1) its objectivity and independence; (2) its management of conflicts of interest; (3) its compliance with its own stated RMBS and CDO rating methodologies and standards; and (4) the analytic integrity of certain rating methodologies.
The Statement of Facts addresses whether Moody’s credit ratings were compromised by what Moody’s itself acknowledged were the conflicts of interest inherent in the so-called "issuer pay" model, under which Moody’s and other credit rating agencies are selected by the same entity that puts together and markets the rated securities and therefore stands to benefit from higher credit ratings.
Among other things, Moody’s acknowledges in the Statement of Facts:
- Moody’s published and maintained online its "Code of Professional Conduct" for the stated purpose of promoting the "integrity, objectivity, and transparency of the credit ratings process," including managing conflicts of interest that it publicly acknowledged arose from the fact that RMBS and CDO issuers determined whether to retain Moody’s to rate these securities.
- Moody’s acknowledges that it passed these conflicts on to the managing directors of the business units, who were then asked to resolve the "dilemma" between maintaining ratings quality and the need to win business from the issuers that selected them.
- Moody’s publicly stated that its ratings "primarily address the expected credit loss an investor might incur," which included its assessment of both the "probability of default" and the "loss given default" of rated securities.
- Starting in 2001, Moody’s RMBS group began using an internal tool in rating RMBS that did not calculate the loss given default or expected loss for RMBS below Aaa and did not incorporate Moody’s own rating standards. Instead, the tool was designed to "replicate" ratings that had been assigned based on a previous model that calculated expected loss for each tranche and incorporated Moody’s rating level standards. In October 2007, a senior manager in Moody’s Asset Finance Group (AFG) noted the following about Moody’s RMBS ratings derived from the tool: "I think this is the biggest issue TODAY. [A Moody’s AFG Senior Vice President and research manager]’s initial pass shows that our ratings are 4 notches off."
- Starting in 2004, Moody’s did not follow its published idealized expected loss standards in rating certain Aaa CDO securities. Instead, Moody’s began using a more lenient standard for rating these Aaa securities but did not issue a publication about this practice to the general market.
- In 2005, Moody’s authorized the expanded use of this practice to all Aaa CDO securities and, in 2006, formally authorized the use of this practice, or of an even more lenient standard, to all Aaa structured finance securities. Throughout this period, although "[m]any arrangers and issuers were aware" that Moody’s was using a more lenient Aaa standard, Moody’s did not issue publications about these decisions to the general market.
The Statement of Facts further addresses other important aspects of Moody’s rating methodologies, including its "inconsistent use of present value discounts" in assigning CDO ratings and its selection of assumptions about the correlations between assets in CDOs.
Under the terms of the compliance commitments, Moody’s agrees to maintain a host of measures designed to ensure the integrity of its credit ratings. These include:
- Separation of Moody’s commercial and credit rating functions by excluding analytical personnel from any commercial related discussions and excluding personnel responsible for commercial functions from determining credit ratings or developing rating methodologies;
- Independent review and approval of changes to rating methodologies by maintaining separate groups to develop and review rating methodologies;
- Changes to ensure that specified personnel are not compensated on the basis of the company’s financial performance;
- Enhancing Moody’s oversight functions to monitor the content of press releases and the timeliness of methodology development;
- Deploying new technological platforms and centralized systems for documentation of rating procedures; and
- Certifications of compliance by the President/CEO of Moody’s with these commitments for at least five years.
"The Department of Justice is committed to working with companies that are willing to admit what they did and take steps to enhance compliance," said Deputy Assistant Attorney General Jonathan Olin for the Department’s Consumer Protection Branch. "Non-monetary measures such as those agreed to today are part of the Department’s comprehensive approach to protect the American people by promoting a culture of compliance across industries."
The settlement includes a $437.5 million federal civil penalty, which is the second largest payment of this type ever made to the federal government by a ratings agency. The remainder will be distributed among the settlement member states in alignment with terms of the agreement. The states involved in today’s settlement include Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina and Washington as well as the District of Columbia.
The matter was handled by Consumer Protection Branch Senior Litigation Counsel Sondra L. Mills, and Trial Attorney James T. Nelson; and by the U.S. Attorney’s Office District of New Jersey Deputy Chief, Civil Division Leticia Vandehaar and Assistant U.S. Attorneys Thomas G. Strong and Alex S. Weinberg.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. 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.
Justice Department and State Partners Secure $864 Million Settlement with Moody’s Arising from Conduct in the Lead up to the Financial CrisisRead the Press Release
NEWARK, N.J. – The U.S. Department of Justice, 21 other states, and the District of Columbia reached a $864 million settlement agreement with Moody’s Investors Service Inc., Moody’s Analytics Inc. and their parent, Moody’s Corporation, the Department announced today. The settlement resolves allegations arising from Moody’s role in providing credit ratings for Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDO), contributing to the worst financial crisis since the Great Depression.
The agreement resolves pending state court lawsuits in Connecticut, Mississippi, and South Carolina, as well as potential claims by the Justice Department, 18 states and the District of Columbia.
The settlement follows an investigation by the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s Consumer Protection Branch into potential claims pursuant to the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and investigations conducted by various State Attorneys General pursuant to state law.
“Moody’s touted a particularly robust analytical framework for rating RMBS and CDOs,” U.S. Attorney Fishman said. “Moody’s now admits that it deviated from its methodologies and failed to disclose those changes to the public. People making decisions on how to invest their money thought they could rely on the ratings Moody’s assigned to these products. When securities are not rated openly and honestly, individual investors suffer, as does confidence in all parts of the financial sector.”
“Moody’s failed to adhere to its own credit rating standards and fell short on its pledge of transparency in the run-up to the Great Recession,” said Principal Deputy Associate Attorney General Bill Baer. “Today’s settlement contains not only a significant penalty and factual admissions of its conduct, but also a commitment by Moody’s to new and continued compliance measures designed to ensure the integrity of credit ratings going forward.”
“Our investigation revealed, and Moody’s has now acknowledged, that Moody’s used a more lenient standard than it had itself published,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Investors relied on Moody’s credit ratings to be objective and independent, and they naturally expected Moody’s to follow its own published methods.”
The multi-faceted settlement includes a Statement of Facts in which Moody’s acknowledges key aspects of its conduct, and a compliance agreement to prevent future violations of law. The Statement of Facts addresses Moody’s representations to investors and the public generally about: (1) its objectivity and independence; (2) its management of conflicts of interest; (3) its compliance with its own stated RMBS and CDO rating methodologies and standards; and (4) the analytic integrity of certain rating methodologies.
The Statement of Facts addresses whether Moody’s credit ratings were compromised by what Moody’s itself acknowledged were the conflicts of interest inherent in the so-called “issuer pay” model, under which Moody’s and other credit rating agencies are selected by the same entity that puts together and markets the rated securities and therefore stands to benefit from higher credit ratings.
Among other things, Moody’s acknowledges in the Statement of Facts:
- Moody’s published and maintained online its “Code of Professional Conduct” for the stated purpose of promoting the “integrity, objectivity, and transparency of the credit ratings process,” including managing conflicts of interest that it publicly acknowledged arose from the fact that RMBS and CDO issuers determined whether to retain Moody’s to rate these securities.
- Moody’s acknowledges that it passed these conflicts on to the managing directors of the business units, who were then asked to resolve the “dilemma” between maintaining ratings quality and the need to win business from the issuers that selected them.
- Moody’s publicly stated that its ratings “primarily address the expected credit loss an investor might incur,” which included its assessment of both the “probability of default” and the “loss given default” of rated securities.
- Starting in 2001, Moody’s RMBS group began using an internal tool in rating RMBS that did not calculate the loss given default or expected loss for RMBS below Aaa and did not incorporate Moody’s own rating standards. Instead, the tool was designed to “replicate” ratings that had been assigned based on a previous model that calculated expected loss for each tranche and incorporated Moody’s rating level standards. In October 2007, a senior manager in Moody’s Asset Finance Group (AFG) noted the following about Moody’s RMBS ratings derived from the tool: “I think this is the biggest issue TODAY. [A Moody’s AFG Senior Vice President and research manager]’s initial pass shows that our ratings are 4 notches off.”
- Starting in 2004, Moody’s did not follow its published idealized expected loss standards in rating certain Aaa CDO securities. Instead, Moody’s began using a more lenient standard for rating these Aaa securities but did not issue a publication about this practice to the general market.
- In 2005, Moody’s authorized the expanded use of this practice to all Aaa CDO securities and, in 2006, formally authorized the use of this practice, or of an even more lenient standard, to all Aaa structured finance securities. Throughout this period, although “[m]any arrangers and issuers were aware” that Moody’s was using a more lenient Aaa standard, Moody’s did not issue publications about these decisions to the general market.
The Statement of Facts further addresses other important aspects of Moody’s rating methodologies, including its “inconsistent use of present value discounts” in assigning CDO ratings and its selection of assumptions about the correlations between assets in CDOs.
Under the terms of the compliance commitments, Moody’s agrees to maintain a host of measures designed to ensure the integrity of its credit ratings. These include:
- Separation of Moody’s commercial and credit rating functions by excluding analytical personnel from any commercial related discussions and excluding personnel responsible for commercial functions from determining credit ratings or developing rating methodologies;
- Independent review and approval of changes to rating methodologies by maintaining separate groups to develop and review rating methodologies;
- Changes to ensure that specified personnel are not compensated on the basis of the company’s financial performance;
- Enhancing Moody’s oversight functions to monitor the content of press releases and the timeliness of methodology development;
- Deploying new technological platforms and centralized systems for documentation of rating procedures; and
- Certifications of compliance by the President/CEO of Moody’s with these commitments for at least five years.
“The Department of Justice is committed to working with companies that are willing to admit what they did and take steps to enhance compliance,” said Deputy Assistant Attorney General Jonathan Olin for the Department’s Consumer Protection Branch. “Non-monetary measures such as those agreed to today are part of the Department’s comprehensive approach to protect the American people by promoting a culture of compliance across industries.”
The settlement includes a $437.5 million civil penalty, which is the second largest payment of this type ever made to the federal government by a ratings agency. The remainder will be distributed among the settlement member states in alignment with terms of the agreement. The states involved in today’s settlement include Arizona, California, Connecticut, Delaware, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, South Carolina and Washington as well as the District of Columbia.
The matter was handled by Consumer Protection Branch Director Michael S. Blume, Senior Litigation Counsel Sondra L. Mills, and Trial Attorney James T. Nelson; and by the U.S. Attorney’s Office District of New Jersey Deputy Chief, Civil Division Leticia Vandehaar and Assistant U.S. Attorneys Thomas G. Strong and Alex S. Weinberg.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch. 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.
Amtrak Supervisor Admits Overbilling FraudRead the Press Release
NEWARK, N.J. – An Amtrak supervisor today admitted fraudulently overbilling Amtrak overtime and regular hours that he claimed to be working when he was actually not present at Amtrak work sites, U.S. Attorney Paul J. Fishman announced.
Donald Harper Sr., 47, of Somerset, New Jersey, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court to an information charging him with one count of converting to his own use federal government funds.
According to documents filed in this case and statements made in court:
Harper, who has been employed by Amtrak since February 1990, supervised 19 employees in a work gang on the Signals side of the Communications and Signals Department of Amtrak’s New York Division. During the summer of 2015, Amtrak employees under Harper’s supervision performed work on a project known as the Positive Train Control installation, which was a project, mandated by Congress, to put in place advanced technological components that could automatically stop or slow a train in order to prevent accidents or derailments. Between October 2014 and October 2015, Harper fraudulently billed Amtrak for 27.75 regular hours and 192.25 overtime hours when he was not actually present at Amtrak work sites, resulting in a loss to Amtrak of over $20,000.
The count to which Harper pleaded guilty carries a maximum potential penalty of one year in prison and a fine of $250,000, or twice the gain or loss resulting from the offense, whichever is greater. The terms of the plea agreement require Harper to make full restitution of $20,346. Sentencing is scheduled for April 20, 2017.
U.S. Attorney Fishman credited special agents of Amtrak’s Office of Inspector General, Office of Investigations, Philadelphia office, under the direction of Special Agent in Charge Robert J. Koons, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Mala Ahuja Harker of the U.S. Attorney’s Office Special Prosecutions Division.
Defense counsel: Linda Foster Esq., Assistant Federal Public Defender
New York Man Sentenced to 20 Years in Prison for Robbing Bergen County BankRead the Press Release
NEWARK, N.J. – A Brooklyn, New York, man who was on the FBI’s 10 Most Wanted Fugitive List in 1988 was sentenced today to 240 months in prison for robbing a TD Bank in Oakland, New Jersey, in April 2013, U.S. Attorney Paul J. Fishman announced.
John Edward Stevens, 63, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to Count Two of an indictment charging him with armed bank robbery. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Stevens admitted that on April 15, 2013, he robbed a TD Bank in Oakland. After entering the bank, Stevens approached several bank employees while carrying a zipper pouch. He opened the zipper pouch, pulled out what appeared to be a black handgun, and brandished it at one of the bank employees. He then took several thousand dollars in cash and fled the scene.
Approximately 20 minutes after the robbery, law enforcement stopped a vehicle that was reported stolen. The driver of the stolen vehicle was identified as Stevens. Law enforcement arrested Stevens and located a TD Bank bag filled with money in the vehicle.
Stevens has been convicted of at least eight prior armed bank robberies in the Central District of California and the Southern District of Ohio.
In addition to the prison term, Judge Cecchi sentenced Stevens to three years of supervised release.
U.S. Attorney Fishman 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 plea. He also thanked the Waldwick Police Department, the Oakland Police Department, the Ho-Ho-Kus Police Department and the Bergen County Sheriff’s Office for their contributions to the case.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the Criminal Division in Newark.
Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New JerseyPassaic County, New Jersey, Doctor Charged with Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor practicing in Passaic County, New Jersey, was charged today with 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, U.S. Attorney Paul J. Fishman announced.
Salvatore Conte, 52, of Totowa, New Jersey, is charged by indictment with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. Conte will be arraigned at a later date.
According to the indictment:
From February 2009 through April 2013, Conte received bribes totaling approximately $130,000 from BLS employees and associates. Conte periodically solicited, and received from the BLS employees and associates, monthly bribe payments in the form of sham rental, service agreement, and consultant payments. Conte’s referrals generated approximately $525,000 in lab business for BLS.
Conte is the fifth physician to be indicted in connection with the BLS bribery scheme. Ahmed El Soury and Thomas Savino were indicted on Dec. 13, 2016 and Dec. 20, 2016, respectively. Brett Ostrager – who was indicted Aug. 11, 2015 and pleaded guilty on Dec. 22, 2015 – was sentenced on June 8, 2016 to 37 months in prison. Bernard Greenspan was indicted on March 14, 2016 and is scheduled for trial on Jan. 31, 2017.
The investigation has thus far resulted in 41 guilty pleas – 27 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 Anti-Kickback and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud charges are each punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman 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 and 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 Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman 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 $1.32 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: Robert Baer Esq., Wayne, New Jersey
Two Indicted in $6.6 Million Health Care Fraud Against Horizon Blue Cross Blue Shield and Auto Workers UnionRead the Press Release
NEWARK, N.J. – A former union official and an insurance broker have been charged in connection with their roles in conspiring to defraud Horizon Blue Cross Blue Shield and the United Auto Workers (UAW) Local 2326 Health Care Plan of millions of dollars, U.S. Attorney Paul J. Fishman announced today.
Sergio Acosta, 66, of Passaic New Jersey, formerly the president of Local 2326, and Lawrence Ackerman, 53, of Old Tappan, New Jersey, were both indicted by a federal grand jury on one count each of conspiring to defraud Horizon Blue Cross Blue Shield and one count each of conspiring to defraud the union’s self-insured health care plan. An arraignment for both defendants will be scheduled at a later date.
According to the indictment:
Acosta was an employee of Local 2326 and was its president from 2002 to 2008. During this time, he was responsible for conducting the union’s operations as well as its benefits plan. In 2008, he became a representative and employee of the UAW International Union, yet continued to serve as the union’s trustee to the benefit plan.
Ackerman was the chief operating officer of Atlantic Business Associates ABA, Atlantic Medical Associates (AMA), AM Law, Atlantic International Group and Pro-Tech Automotive services. In actuality ABA and AMA were “shell” companies allegedly created by Ackerman, through which he marketed health insurance nationally to people who were not, in fact, employees of ABA and AMA. He used ABA and AMA to create the appearance of employment status for individuals who were improperly seeking health care coverage through the benefit plan.
Acosta and Ackerman allegedly conspired to defraud Horizon Blue Cross Blue Shield of $5.6 million by covering 700 to 800 ineligible participants recruited by Ackerman from across the country. After Horizon discovered the fraud and rescinded its coverage from Local 2326, Acosta allegedly permitted the same ineligible participants to continue being covered by the Local 2326 self-insured health care plan. After just five months, an additional $1 million in losses were incurred.
Each of the counts with which the defendants are charged carries a maximum penalty of 10 years in prison and a $250,000 fine.
The charges and accusations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael Mikulka; the Office of Employee Benefit Security Act (EBSA), under the direction of Regional Director Jonathan Kay; and the Office of Labor Management Standards, under the supervision of District Director Andriana Vamvakas, with the investigation leading to today’s charges.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Defense counsel:
Ackerman: Robert Kipnees Esq., Roseland, New Jersey
Acosta, Alan Silber Esq., Roseland, New Jersey
Bergen County, New Jersey, Woman Sentenced to 37 Months in Prison for Role in Cocaine Trafficking ConspiracyRead the Press Release
NEWARK, N.J. – A Bergenfield, New Jersey, woman was sentenced today to 37 months in prison for her role in a conspiracy to traffic approximately two kilograms of cocaine from Puerto Rico to New Jersey, U.S. Attorney Paul J. Fishman announced.
Sasha Melendez, 38, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging her with one count of conspiring to distribute cocaine. Judge Cecchi imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Melendez was the subject of an investigation by the U.S. Postal Inspection Service and the Drug Enforcement Administration (DEA) of an ongoing conspiracy to import cocaine from Puerto Rico. She was arrested on March 24, 2015 in Bergen County after she accepted delivery of a mail parcel from Puerto Rico containing approximately two kilograms of cocaine. Melendez admitted at her plea hearing that she conspired with co-defendant Ramis Esteves, 33, of New York, to distribute the cocaine.
In addition to the prison term, Judge Cecchi sentenced Melendez to three years of supervised release.
Estevez previously pleaded guilty to his role in the conspiracy and awaits sentencing.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office General Crimes Unit.
Defense Counsel: Stacey Van Malden, Esq.
Mercer County, New Jersey, Man Sentenced to 135 Months in Prison for Distributing Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Mercer County, New Jersey, man was sentenced today to 135 months in prison for distributing images of child sexual abuse from his home computer, U.S. Attorney Paul J. Fishman announced.
Shawn Brown, 35, of Ewing, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to one count of a three-count an indictment charging him with distributing child pornography over the Internet. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Brown admitted that on July 14, 2013, he distributed a video depicting child sexual abuse on the Internet to another individual via instant messaging software. Authorities were first alerted to Brown’s conduct when an undercover agent discovered and downloaded images and videos containing child pornography that Brown had made available to users of a peer-to-peer file sharing network. Law enforcement traced the username and IP address of the sharer back to Brown’s residence. A review of Brown’s electronic devices, seized pursuant to a search warrant, revealed that Brown had been using aliases to contact underage girls online via instant messaging software and social media, where he had created a fake profile posing as a teenage boy.
In addition to the prison term, Judge Thompson sentenced Brown to lifetime supervised release.
U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Lisa Van Hoeck Esq., Assistant Federal Public Defender, Trenton
Auto Dealer Arrested in $2 Million Fraud on Russian CitizensRead the Press Release
NEWARK, N.J. – A New Jersey auto dealer was charged today for allegedly defrauding more than 140 Russian citizens who were customers of his auto sales business, U.S. Attorney Paul J. Fishman announced.
Sergey Kapustin, 47, of Warminster, Pennsylvania, was arrested today by special agents of the FBI and charged by complaint with one count of wire fraud and conspiring to commit wire fraud. He will appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to documents filed in this case and statements made in court:
Kapustin was the owner and president of Global Auto Group, Effect Auto Sales and G Auto Sales, located in Elizabeth, New Jersey. Global bought and sold used cars, typically high-end vehicles that were classified as “salvaged.”
From January 2011 through December 2014, Kapustin allegedly operated business through a scheme to defraud customers, who usually lived in Russia, Ukraine or members of the former Soviet Union. Kapustin had one or more Russian language websites that offered for sale luxury vehicles, including Mercedes and Lexus that were normally priced below market value, that could be shipped to Finland for easy delivery to Russian citizens, if they agreed to pay full price upfront for the vehicle. Kapustin was Russian and his websites were geared to buyers who believed they were getting a “good deal” from a fellow countryman who could be trusted to follow through once the purchase price had been paid.
After the buyers would wire the full price to one or more bank accounts controlled by Kapustin, he would allegedly give them a litany of excuses and reasons for delay in delivery. Unbeknownst to them, more often than not Kapustin had neither possession of nor title to the vehicles being sold. At some point, the victim would be offered a different, often inferior car, burdened with added shipping and storage costs. The unsophisticated buyer, desperate to acquire something for money already spent, would oftentimes wire additional money to rescue the car from its storage; all to no avail. Those very few cars that did land in Finland were normally the product of salvage auctions for vehicles that had been immersed in or flooded with salt water and were inoperable. Kapustin allegedly stole approximately $2 million in this manner.
The count with which Kapustin is charged carries a maximum penalty of 20 years and $250,000 fine.
U.S. Attorney Fishman credited the special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to Kapustin’s arrest.
The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office Organized Crime/Gangs Unit.
The charge and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Pharmacist Admits Illegally Distributing Oxycodone from Medford, New Jersey ‘Pill Mills’Read the Press Release
CAMDEN, N.J. – A Burlington County, New Jersey, pharmacist today admitted his role in a long-running conspiracy to illegally distribute and dispense large quantities of oxycodone and other controlled substances from two pharmacies located in Medford, New Jersey, U.S. Attorney Paul J. Fishman announced.
David Goldfield, 58, of Medford Lakes, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to Count 1 of an indictment charging him with conspiracy to illegally distribute and dispense oxycodone and other Schedule II controlled substances, and Counts 10 through 15, which charge him with multiple substantive counts of illegal distribution and dispensing of oxycodone.
The guilty plea comes just six weeks after Goldfield and Michael Ludwikowski, 44, of Medford, were arrested on Nov. 14, 2016.
According to documents filed in this case and statements made in court:
Goldfield was employed by Ludwikowski at Olde Medford Pharmacy and Medford Family Pharmacy. Goldfield admitted that from January 2010 through August 2013, he conspired with Ludwikowski to distribute and dispense oxycodone for individuals they knew were obtaining the pain killers for resale or for non-medical use.
Goldfield admitted, based upon his training and experience, as well as the “red flags” he observed, it was obvious that many of the oxycodone prescriptions that Goldfield and Ludwikowski filled were fraudulent. These red flags included prescriptions for oxycodone that appeared to have been “washed” or “bleached.” According to the indictment, this was achieved through a chemical process that removed the original writing for a non-narcotic substance. The customers then rewrote the prescriptions for their drug of choice, including oxycodone.
Other red flags included customers who were believed to be drug addicts, or believed to be selling or abusing the oxycodone; customers seeking oxycodone with residential addresses far from the Medford area, including for example, Camden, New Jersey; the same customer presenting oxycodone prescriptions in numerous different names, including the names of both men and women; and customers presenting oxycodone prescriptions for a 30-day supply multiple times a week.
On occasions that Goldfield had suspicions about the legitimacy of particular prescriptions, Ludwikowski allegedly told Goldfield to fill some of those prescriptions anyway. In addition, Goldfield admitted that he and Ludwikowski stored bottles of oxycodone in a pull-out drawer to which pharmacy employees working at the front counter would have easy access, rather than in a locked safe.
When Ludwikowski became concerned with the high number of oxycodone prescriptions that were being filled, Ludwikowski and Goldfield – in an attempt to evade law enforcement – turned away customers who were bringing in fraudulent prescriptions by telling them that the Drug Enforcement Administration (DEA) had reduced their supply of oxycodone.
The conspiracy charge and each substantive count of illegal distribution and dispensing of oxycodone charge to which Goldfield pleaded guilty carry a maximum potential penalty of 20 years in prison and a $1 million fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 31, 2017.
The allegations against Ludwikowski are merely accusations, and he is innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Timothy Gallagher; the DEA New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski; the Medford Police Department under the direction of Chief Richard J. Meder; the Moorestown Police Department under the direction of Chief Lee R. Lieber; the Florence Police Department under the direction of Chief John Bunce; and the Lumberton Police Department under the direction of Chief Tony Diloreto, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz and Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney’s Office in Camden, as well as Assistant U.S. Attorney Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Defense counsel: Gilbert J. Scutti, Esq.
New Jersey Resident Charged with Sex Assault on AirplaneRead the Press Release
NEWARK, N.J. – A Mercer County, New Jersey, man appeared in federal court today to face charges that he sexually abused a woman on a flight from India to Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.
Ganesh Parkar, 40, of Windsor, New Jersey, was charged by criminal complaint with one count of abusive sexual contact on an airplane. Parkar, who is an Indian citizen, had his initial appearance this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court and was released on $50,000 unsecured bond, home detention with electronic monitoring and surrender of his passport and all travel documents.
According to the complaint:
While on a Dec. 21, 2016, Air India flight from Mumbai to Newark, Parkar moved from his ticketed seat in the business class section of the plane to the economy class section and sat next to a female passenger seated in a center row. When the woman fell asleep, Parkar placed his hand on her breast without her consent.
The abusive sexual contact charge carries a statutory maximum of up to two years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; special agents of Immigration and Customs Enforcement’s Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Terence S. Opiola; and the Port Authority Police Department of New York-New Jersey, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Jihee G. Suh of the U.S. Attorney’s Criminal Division in Newark.
Airline Pilot Who Held Global Entry Card Admits Smuggling $195,736 Cash Through Newark AirportRead the Press Release
NEWARK, N.J. – A United States commercial airline pilot who held a U.S Customs and Border Protection (CBP) Global Entry Card today admitted smuggling $195,736 in undeclared currency into the country at Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.
Anthony Warner, 55, of Dallas, Texas, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with bulk cash smuggling.
According documents filed in this case and statements made in court:
Global Entry is a CBP program that allows expedited clearance upon arrival in the United States for pre-approved travelers who have been determined to be low-risk. Pre-approval must be completed before enrollment, and the process includes a background check and an in-person interview. At airports, program members proceed to Global Entry kiosks, present their machine-readable passport or U.S. permanent resident card, place their fingers on the scanner for fingerprint verification, and complete a Customs verification. The kiosk issues the traveler a transaction receipt and directs the traveler to baggage claim and the exit.
When Warner arrived at Newark Liberty International Airport on Jan. 10, 2016, the Global Entry computer system was not functioning, so he presented his customs declaration to a CBP officer. CBP’s screening determined that he was carrying a laptop-style bag that contained $195,736 in United States currency wrapped in newspaper. He also had 10 rings, four sets of earrings, and other assorted jewelry of undetermined value.
Warner’s possession of currency was contrary to the statements in his customs declaration and verbal statements that he made to CBP. Because of this, Warner was arrested by special agents of Immigration and Customs Enforcement’s Homeland Security Investigations.
The charge to which Warner pleaded guilty carries a maximum punishment of five years in prison and forfeiture of all property involved in the offense. In his plea agreement, Warner agreed to forfeit the $195,736 in undeclared U.S. currency. Sentencing is scheduled for April 18, 2017.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Terence S. Opiola, and U.S. Customs and Border Protection, under the leadership of Robert E. Perez, Director, New York Field Office, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit in Newark.
Defense counsel: Steven Altman and Jeffrey Altman Esqs., New Brunswick, New Jersey
Two Men Receive Multi-Year Prison Sentences for Scheme to Rob Drug Dealers at GunpointRead the Press Release
CAMDEN, N.J. – Two Camden, New Jersey, men were sentenced to prison today for their roles in a conspiracy to rob a drug stash house of multiple kilograms of cocaine that they believed would be stored at the location, U.S. Attorney Paul J. Fishman announced.
Cordero Hodge, 25, and Jameel Pierce, 25, were sentenced to 160 and 140 months in prison, respectively. Hodge and Pierce previously pleaded guilty in May 2016 to separate superseding informations charging them each with one count of conspiracy to distribute and to possess with intent to distribute 500 grams or more of cocaine, and one count of possessing a firearm in furtherance of a drug trafficking crime. U.S. District Judge Jerome B. Simandle imposed both sentences today in Camden federal court.
According to documents filed in this case and statements made in court:
In October 2013, Hodge and Pierce planned a gunpoint robbery of a drug stash house in order to steal multiple kilograms of cocaine from drug dealers at the location.
During the investigation – which led to the recovery of a sawed-off shotgun from Pierce and a .40 caliber firearm from Hodge – Pierce was recorded saying that he and Hodge would “off them,” referring to killing the occupants of the stash house. Hodge was recorded seeking a silencer for his firearm, saying that he could use a potato, but that it would not silence a .40 caliber firearm.
Special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) arrested Hodge and Pierce when they arrived at a meeting location in Maple Shade, New Jersey, on Oct. 18, 2013.
A subsequent ballistics comparison linked the same .40 caliber firearm recovered on Oct. 18, 2013 to evidence recovered from the scene of the Aug. 25, 2013 murder of Surinder Singh, who worked as an attendant at Garden State Fuel gas station in Woodbury, New Jersey.
In addition to the prison terms, Judge Simandle sentenced Pierce and Hodge to five years of supervised release.
U.S. Attorney Fishman credited special agents with the ATF Camden Field Office, under the direction of Special Agent in Charge George P. Belsky in Newark, with the investigation leading to today’s sentences. He also thanked the Drug Enforcement Administration (DEA) Maple Shade Field Office, as well as the Gloucester County Prosecutor’s Office, the Cherry Hill Police Department, and the Maple Shade Police Department.
The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Hodge: Teri S. Lodge Esq.
Pierce: John F. Renner Esq.
Owner of Day Trading Firm Charged in Worldwide Simulator Trading Account SchemeRead the Press Release
Scheme Targeted Hundreds of Investors in Over 30 Countries, Including the United States
NEWARK, N.J. – A Thai man was arrested and charged with allegedly orchestrating a scheme to defraud hundreds of investors worldwide of at least $1.4 million through his operations of a purported online day trading firm, U.S. Attorney Paul J. Fishman announced today.
Naris Chamroonrat, 33, of Bangkok, Thailand, is charged by complaint with one count of conspiracy to commit securities fraud and one count of wire fraud. Chamroonrat was arrested by special agents of the FBI on Dec. 20, 2016, at the Los Angeles International Airport in California. He is scheduled to appear later today before U.S. Magistrate Judge Frederick Mumm in Los Angeles federal court.
According to the complaint:
From December 2013 to June 2015, Chamroonrat and his conspirators allegedly solicited individual investors to open day-trading accounts with his company, Nonko Trading, and to wire thousands of dollars to the company to fund those accounts. Instead of using the money to fund the accounts, he and his conspirators allegedly stole $1.4 million from more than 260 investors in more than 30 countries. To cover up the theft, Chamroonrat provided the victims with online trading simulator, or “demo,” accounts, but told the investors they were real accounts to be used to trade securities. The majority of those funds were transferred to foreign bank accounts controlled by Chamroonrat and used for personal expenses or other unauthorized transactions. The victims of the scheme included at least 180 investors from the United States, including several in New Jersey.
Chamroonrat and others chose as victims those customers they believed would not make money day trading, and would therefore be less likely to try to withdraw funds from their accounts. These inexperienced, unsophisticated “losing” traders would simply believe they lost their money trading in the open markets. If traders on the demo accounts started to appear profitable, Nonko would switch them to real accounts.
Chamroonrat and his conspirators discussed the scheme in detail in email and online chat communications. In one online communication between Chamroonrat and a conspirator on Feb. 3, 2014, Chamroonrat allegedly discussed the scheme, which he commonly referred to as Nonko’s “TRZ Program.” He stated, “We also have the trz program, where instead [of] a live account it’s a trz account and if they blow it all up, then great, firm still profits.” The conspirator responded: “and thing with TRZ that freaks me out … THE ONLY THING … someone … will make money … what happens when they do make money?” Chamroonrat replied, “bump them off of trz, put them on a real account[,] give them more leverage in exchange for a profit split.”
The conspiracy count with which Chamroonrat is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
In a separate civil action, the Securities and Exchange Commission today filed a complaint in Newark federal court charging Chamroonrat with violating and aiding and abetting violations of the antifraud provisions of the securities laws. The complaint seeks a permanent injunction as well as the return of ill-gotten gains plus interest and penalties.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, with the investigation leading to today’s charges. He also thanked the SEC for its valuable assistance in the investigation.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the Economic Crimes Unit.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Belmar Fire Marshal Admits Committing Time Card FraudRead the Press Release
TRENTON, N.J. – A former Borough of Belmar fire marshal and senior lead fire protection inspector with the Picatinny Arsenal Fire Department today pleaded guilty to fraudulently reporting his hours on time cards to the Borough of Belmar, causing it losses of approximately $34,141, U.S. Attorney Paul J. Fishman announced.
John Rizzitello, 45, of Nashville, Tennessee, formerly of Freehold, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with fraudulently obtaining funds that belonged to the Borough of Belmar, a local government receiving federal funds.
According to documents filed in this case and statements made in court:
From January 2013 to December 2014, Rizzitello intentionally reported, and was compensated for, working approximately 1,540 hours for the Borough of Belmar Fire Department that he did not work, including instances when he was actually working at Picatinny Arsenal.
During the plea hearing, Rizzitello also admitted that he intentionally reported, and was compensated for, working approximately 508 hours for the Picatinny Fire Department that he did not work, causing losses to Picatinny of approximately $10,644.
The charge to which Rizzitello pleaded guilty carries a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 27, 2016.
U.S. Attorney Fishman credited investigators with the Picatinny Arsenal Criminal Investigations Unit, under the direction of Picatinny Arsenal Garrison Commander Lieutenant Colonel Jeffrey Ivey, the Picatinny Arsenal Inspector General and Internal Review office, under the direction ARDEC Director John Hedderich, and criminal investigators with the U.S. Attorney’s Office with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Barbara R. Llanes of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Ryan J. Clark, Esq., New Jersey
Union County, New Jersey, Man Gets over Four Years in Prison for Conspiracy to Import Ethylone from ChinaRead the Press Release
NEWARK, N.J. – A Rahway, New Jersey, man was sentenced today to 57 months in prison for his role in a conspiracy to traffic approximately four kilograms of ethylone from China to New Jersey, U.S. Attorney Paul J. Fishman announced.
Michael Correa, 32, previously pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiring to distribute Ethylone, a Schedule I controlled substance. Judge Hayden imposed the sentence in Newark federal court.
According to documents filed in this case and statements made in court:
From October 2013 through July 2014, Correa conspired with Thomas Seymore, 38, of Carteret, New Jersey, and others to distribute approximately four kilograms of ethylone, which had been ordered from China and shipped to a location in Teaneck, New Jersey. Ethylone, sometimes referred to as “bath salts” or “molly,” is an illegal synthetic drug that stimulates the central nervous system and can cause hallucinogenic effects.
In addition to the prison sentence, Judge Hayden also sentenced Correa to three years of supervised release. Seymore pleaded guilty to his role in the scheme on Oct. 25, 2016 and is scheduled for sentencing on Feb. 1, 2017.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski; special agents of the U.S. Department of Homeland Security-Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola; and postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation.
The government is represented by Assistant U.S. Attorney Jonathan M. Peck of Organized Crime Drug Enforcement Task Force Unit (OCDETF).
Defense Counsel: Steven Altman Esq., New Brunswick, New Jersey
Retired Amtrak Supervisor Admits He Accepted Gratuities from Amtrak VendorRead the Press Release
TRENTON, N.J. – A former supervisor at Amtrak in Essex County, New Jersey, today admitted soliciting and accepting more than $7,000 worth of items for his personal use from a vendor as a reward for spending more than $185,000 with the vendor in his capacity as an Amtrak Building and Bridges Supervisor, U.S. Attorney Paul J. Fishman announced.
Louis Moschitti, 68, of Fairless Hills, Pennsylvania, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of corruptly soliciting things of value with the intent to be rewarded in connection with transactions of Amtrak—a federally funded organization.
According to documents filed and statements made in court:
From April 2010 to July 2013, Moschitti, a building and bridges supervisor, used his Amtrak Procurement Charge Card to make more than $185,000 in purchases from Bayway Lumber, a Linden, New Jersey, company that sold commercial and industrial products. He received items worth more than $7,000 intended as a reward for his official purchases. These included a Panasonic television, a Nikon camera, Michelin tires, and an Onkyo sound system. Moschitti retired from Amtrak in August 2014. Robert Dattilo, a part owner of Bayway Lumber, previously pleaded guilty to conspiracy to commit mail and wire fraud in connection with this and other fraudulent activity and was sentenced by Judge Sheridan on July 15, 2016 to four years in prison.
The charge to which Moschitti pleaded guilty carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Sentencing is scheduled for March 27, 2017.
U.S. Attorney Fishman credited special agents with the Office of Inspector General, U.S. Department of Housing and Urban Development, under the direction of Special Agent in Charge Christina Scaringi; special agents of the FBI direction of Special Agent in Charge Timothy Gallagher; and the Office of Inspector General, Amtrak, under the direction of Special Agent in Charge Robert Koons, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Barbara R. Llanes and Cari Fais of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Marc Leibman Esq., New Jersey
New York Man Sentenced to 10 Years in Prison for Role in Conspiracy to Distribute 22 Kilograms of HeroinRead the Press Release
TRENTON, N.J. – A Bronx, New York, man was sentenced today to 120 months in prison for driving to Clifton, New Jersey, to pick up a suitcase filled with 22 kilograms of heroin, U.S. Attorney Paul J. Fishman announced.
Emmanuel Gonzalez, 32, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiracy to distribute and possess with intent to distribute a kilogram or more of heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
According to the documents filed in this case and statements made in court:
On Feb. 5, 2016, law enforcement observed a tractor trailer, driven by Sauro D. Estevez Figueredo, 48, of Miami, and Alberto Mora, 53, of Morriston, Florida, parked at an intersection near a store in Clifton. That afternoon, Gonzalez and Edwin Alamo Jr., 22, of Bronx, drove to the tractor trailer and left with a suitcase given to them by Mora.
Subsequent traffic stops later revealed 22 kilograms of heroin in Gonzalez and Alamo’s possession. Law enforcement also found 10 kilograms of cocaine and 10 kilograms of fentanyl still remaining at the tractor trailer.
In addition to the prison term, Judge Sheridan sentenced Gonzalez to five years of supervised release.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Meredith Williams of the OCDETF/Narcotics Unit of the Criminal Division in Newark.
Defense Counsel: James Murphy Esq., Princeton, New Jersey
New York Doctor Charged with Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor practicing in Staten Island, New York, was charged today with 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, U.S. Attorney Paul J. Fishman announced.
Thomas V. Savino, 57, of Staten Island, was indicted by a federal grand jury in Newark. The indictment charges Savino with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. Savino will be arraigned at a later date.
According to the indictment:
From July 2012 through April 2013, Savino received cash bribes totaling at least $25,000 from BLS employees and associates. Savino’s referrals generated approximately $375,000 in lab business for BLS.
Savino is the fourth physician to be indicted in connection with the BLS bribery scheme. Ahmed El Soury was indicted Dec. 13, 2016 and arraignment this afternoon in Newark federal court. Brett Ostrager – who was indicted Aug. 11, 2015 and pleaded guilty on Dec. 22, 2015 – was sentenced on June 8, 2016 to 37 months in prison. Bernard Greenspan was indicted on March 14, 2016 and is scheduled for trial on Jan. 31, 2017.
The investigation has thus far resulted in 41 guilty pleas – 27 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 Anti-Kickback and Federal Travel Act counts are each punishable by a maximum potential penalty of five years in prison. The wire fraud charges are each punishable by a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine, or twice the gross gain or loss from the offense.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman 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 and 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 Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
U.S. Attorney Paul J. Fishman 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 $1.32 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: Mauro M. Wolfe, Esq., New York, NY
New Jersey Member of Violent, International Street Gang Sentenced to Life in Prison for Racketeering-Related ChargesRead the Press Release
NEWARK, N.J. – A member of the New Jersey branch of the international street gang “La Mara Salvatrucha,” or “MS-13,” was sentenced to life in prison today for his role in the brutal murder of an associate of MS-13 in May 2011, U.S. Attorney Paul J. Fishman announced.
Cruz Flores, a/k/a “Bruja,” 30, of Bound Brook, New Jersey, was previously convicted of Count 18 and Count 19 of an indictment charging him with conspiracy to commit murder in aid of racketeering and murder in aid of racketeering. He was convicted following a 16-week trial before U.S. District Judge Stanley R. Chesler, who imposed the sentence today in Newark federal court.
According to the documents filed in this case and the evidence presented at trial:
MS-13 is a national and transnational gang with branches or “cliques” operating throughout the United States, including in Plainfield, New Jersey. Flores was a member of the “Plainfield Locos Salvatruchas” (PLS) clique of MS-13 that was founded by Santos Reyes-Villatoro, a/k/a “Mousey,” 43, of Bound Brook, and operated in Union, Somerset, and Middlesex Counties.
On May 8, 2011, Flores murdered a victim who was caught socializing with 18th Street gang members. After the gang’s leadership “green-lit” the murder, Flores and another MS-13 member cut his throat, beat him with a bat and stabbed him in the back 17 times.
Flores was originally charged in a 26-count indictment returned by a federal grand jury in September 2013. As of today, 13 of the 14 individuals charged in that indictment have been convicted and sentenced. One defendant remains a fugitive.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; Immigration and Customs Enforcement, Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris; and Homeland Security Investigations (ICE-HSI), under the direction of Special Agent in Charge Terence S. Opiola, with the investigation. He also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, for long, close collaboration on the case.
He also thanked the Somerset County Prosecutor’s Office, under the direction of Acting Prosecutor Michael H. Robertson, and the Middlesex County Prosecutor’s Office, under the direction of Prosecutor Andrew C. Carey, for their roles. He also acknowledged the U.S. Attorney’s Offices for the Eastern District of Virginia and the District of Maryland, as well as the Plainfield Police Department, Union County Police Department, Union County Sheriff’s Office, Elizabeth Police Department, North Plainfield Police Department, Union County Department of Corrections, Prince George’s County, Maryland, Police Department and the U.S. Marshal’s Service for their assistance.
The government is represented by Assistant U.S. Attorneys James M. Donnelly and J. Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark and by Kevin L. Rosenberg, former Trial Attorney in the Organized Crime and Gang Section of the Department of Justice.
Defense counsel: David Ruhnke Esq. and Linwood Jones Esq.
Two Essex County, New Jersey, Men Admit Roles in Prison Tax ScamRead the Press Release
NEWARK, N.J. – Two East Orange, New Jersey, men today admitted their roles in a conspiracy to file false federal income tax returns on behalf of inmates at the Essex County Correctional Facility, U.S. Attorney Paul J. Fishman announced.
Reginald Eaford, 46, and Winfred Moses, 48, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to separate informations charging them each with conspiracy to make and present false, fictitious, and fraudulent claims to the IRS.
According to the documents filed in this case and statements made in court:
From 2013 through Aug. 5, 2014, Eaford, Moses, 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.
The conspiracy charge carries a maximum potential sentence of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for March 28, 2017.
U.S. Attorney Fishman 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:
Eaford: Assistant Federal Public Defender Lisa Mack Esq., Newark, New Jersey
Moses: Leigh-Anne Mulrey Esq., Morristown, New Jersey
Sussex County, New Jersey, Man Sentenced to 210 Months in Prison for Kidnapping and Murder-For-Hire PlotRead the Press Release
NEWARK, N.J. – A Newton, New Jersey, man was sentenced today to 210 months in prison for planning the kidnapping and murder of a woman he met online, U.S. Attorney Paul J. Fishman announced.
Christopher Thieme, 36, of Sussex County, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of attempted kidnapping and one count of murder-for-hire. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Thieme admitted that from December 2015 through Jan. 4, 2016, he sought assistance from an associate to kidnap and ultimately murder a woman whom Thieme had previously met through an online dating service. Thieme’s associate alerted law enforcement to Thieme’s plans and cooperated with the investigation into Thieme’s plot.
In early January, at the direction of law enforcement, Thieme’s associate introduced Thieme to an undercover FBI agent posing as a hitman. Thieme explained to the undercover FBI agent that, once the victim was kidnapped, Thieme would empty the victim’s bank accounts and fraudulently sell off her home, the proceeds of which Thieme planned to use to pay for the kidnapping and murder.
In addition to the prison term, Judge Wigenton sentenced Thieme to three years of supervised release and ordered him to pay restitution of $1,034.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked members of the Passaic County Prosecutor’s Office, the New Jersey State Police, the Newton Police Department, the Paramus Police Department, the Paterson Police Department, the Roxbury Police Department, and the Wayne Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark
Justice Department Reaches Agreement with Princeton University to Resolve Americans with Disabilities Act Compliance ReviewRead the Press Release
The Justice Department announced today that it reached an agreement with Princeton University to resolve a compliance review initiated in May 2014 regarding Princeton’s treatment of students with mental health disabilities and its policies and practices related to requests for reasonable modifications, withdrawals and leaves of absences.
The agreement details specific steps Princeton will take to strengthen its policies, practices and training to benefit all current and future Princeton students with disabilities. Under the agreement, Princeton will:
- revise its policies to explicitly describe the types of accommodations students with disabilities may request, including modifications to university policies, rules and regulations; where students may submit each type of accommodation request; and how Princeton will evaluate those requests;
- revise the websites for its Office of Disability Services and its Office of the Dean of Undergraduate Students to direct students to relevant policies and procedures related to requesting reasonable accommodations;
- revise its leave policy and practices, consistent with regulations implementing Title III of the Americans with Disabilities Act (ADA); and
- provide annual training, including references to updated policies, on Title III of the ADA, with a focus on mental health disability discrimination, to all faculty and staff responsible for evaluating and/or deciding requests from students for reasonable accommodations.
“This agreement reflects the critical role that colleges and universities play in fulfilling the ADA’s promise of equal opportunity, full participation, independent living and economic self-sufficiency,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “By working directly with students with disabilities to determine appropriate accommodations, colleges and universities can meet their obligations under the ADA.”
“The ADA, which is one of this country's most comprehensive pieces of civil rights legislation, prohibits discrimination and guarantees that people with disabilities have the same opportunities as everyone else to participate in the mainstream of American life,” said U.S. Attorney Paul J. Fishman of the District of New Jersey. “Through this agreement, students with disabilities move closer to achieving full equality and integration into places of higher education.”
For more information please visit the department’s website www.ada.gov. Those interested in finding out more about the ADA may also call the Justice Department’s toll-free ADA information Line at 800-514-0301 or 800-514-0383 (TDD).
The compliance review was conducted jointly by the Civil Rights Division’s Disability Rights Section and the U.S. Attorney’s Office of the District of New Jersey. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office of the District of New Jersey is available on its website at www.justice.gov/usao/nj.
Princeton University
Justice Department Reaches Agreement with Princeton University to Resolve Americans with Disabilities Act Compliance ReviewRead the Press Release
NEWARK, N.J. – The Justice Department and the U.S. Attorney’s Office, District of New Jersey, announced today that they have reached an agreement with Princeton University to resolve a compliance review initiated in May 2014 regarding Princeton’s treatment of students with mental health disabilities and its policies and practices related to requests for reasonable modifications, withdrawals, and leaves of absences.
The agreement details specific steps Princeton will take to strengthen its policies, practices, and training to benefit all current and future Princeton students with disabilities. Under the agreement, Princeton will:
- revise its policies to explicitly describe: the types of accommodations students with disabilities may request, including modifications to University policies, rules, and regulations; where students may submit each type of accommodation request; and how Princeton will evaluate those requests;
- revise the websites for its Office of Disability Services and its Office of the Dean of Undergraduate Students to direct students to relevant policies and procedures related to requesting reasonable accommodations;
- revise its leave policy and practices, consistent with regulations implementing Title III of the Americans with Disabilities Act (ADA); and
- provide annual training, including references to updated policies, on Title III of the ADA, with a focus on mental health disability discrimination, to all faculty and staff responsible for evaluating and/or deciding requests from students for reasonable accommodations.
“The ADA, which is one of this country's most comprehensive pieces of civil rights legislation, prohibits discrimination and guarantees that people with disabilities have the same opportunities as everyone else to participate in the mainstream of American life,” U.S. Attorney Paul J. Fishman, District of New Jersey, said. “Through this agreement, students with disabilities move closer to achieving full equality and integration into places of higher education.”
“This agreement reflects the critical role that colleges play in fulfilling the promise of the ADA: equality of opportunity, full participation, independent living, and economic self-sufficiency,” Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division, said. “By working directly with students with disabilities to determine appropriate accommodations, colleges and universities can meet their obligations under the ADA.”
For more information or for a copy of the agreement, please visit the department’s website www.ada.gov. Those interested in finding out more about the ADA may also call the Justice Department’s toll-free ADA information Line at 800-514-0301 or 800-514-0383 (TDD).
The compliance review was conducted jointly by the Civil Rights Division’s Disability Rights Section and the U.S. Attorney’s Office for the District of New Jersey. Additional information about the Civil Rights Division is available on its websites at www.justice.gov/crt . Additional information about the U.S. Attorney’s Office/District of New Jersey’s Civil Rights Unit is available on its website at: https://www.justice.gov/usao-nj/civil-rights-enforcement .
The government is represented by Assistant U.S. Attorney Michael E. Campion, chief of the U.S. Attorney’s Office/District of New Jersey’s Civil Rights Unit, and Erin Richmond, trial attorney, U.S. Department of Justice, Civil Rights Division, Disability Rights Section.
- revise its policies to explicitly describe: the types of accommodations students with disabilities may request, including modifications to University policies, rules, and regulations; where students may submit each type of accommodation request; and how Princeton will evaluate those requests;
Jersey City, New Jersey, Man Indicted for $3.5 Million Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A Jersey City, New Jersey, man was indicted today on charges that he fraudulently obtained $3.5 million from two investors by falsely representing that his businesses had secured lucrative contracts to sell olive oil to major retailers, U.S. Attorney Paul J. Fishman announced.
Antonio Fasolino, 60, who was originally charged by complaint with one count of wire fraud in June 2016, is now charged by indictment with three counts of wire fraud and one count of transacting in criminal proceeds.
According to the indictment:
Fasolino owned several companies that were purportedly involved in the manufacture, sale and distribution of pasta, tomato sauce, olive oil and other food products. In 2012, Fasolino allegedly obtained approximately $3.5 million from two victims by falsely representing that Fasolino’s companies had been awarded lucrative contracts to sell olive oil. In fact, there were never any such contracts, and Fasolino spent the money on himself, including car and mortgage payments, apartment rentals, a wedding, college tuition and credit card payments.
Each count of wire fraud carries a maximum potential penalty of 20 years in prison. The transacting in criminal proceeds count carries a maximum potential penalty of 10 years in prison. Each charge in the indictment is also punishable by a potential $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charges. He also thanked special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen for their roles in the investigation.
The government is represented by Assistant U.S. Attorney Lakshmi Herman and Deputy Chief Zach Intrater of the U.S. Attorney’s Office’s Economic Crimes Unit, and Assistant U.S. Attorney Sarah Devlin of the Assert Forfeiture and Money Laundering Unit.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Defense counsel: Alan Silber Esq., Roseland, New Jersey
U.S. Immigration Manager for Information Technology Company Admits Obstruction of JusticeRead the Press Release
NEWARK, N.J. – A U.S. immigration manager for an information technology company today admitted that he obstructed federal investigations as part of a scheme to fraudulently obtain foreign worker visas, U.S. Attorney Paul J. Fishman announced.
Hari Karne, 32, of Hyderabad, India, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with conspiracy to obstruct justice.
According to the information:
SCM Data Inc. and MMC Systems Inc. offered consultants to clients in need of IT support. Both companies recruited foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas. The H-1B program allows businesses in the United States to temporarily employ foreign workers with specialized or technical expertise in a particular field, such as accounting, engineering or computer science. The U.S. Department of Homeland Security, U.S. Citizenship and Immigrations Services (USCIS) approves and processes applications for residency within the United States, and the U.S. Department of Labor (USDOL) is responsible for the enforcement of labor regulations, including immigration-related employment standards and worker protections.
Karne’s conspirators recruited foreign workers with purported IT expertise who sought work in the United States. The conspirators then sponsored the foreign workers’ H-1B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States. When submitting the visa paperwork to USCIS, the conspirators represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas.
Contrary to these representations and in violation of the H-1B program, the conspirators paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems. The conspirators told the foreign workers who were not currently working that if they wanted to maintain their H-1B visa status, they would need to come up with what their gross wages would be in cash and give it to SCM Data and MMC Systems so the companies could issue payroll checks to the foreign workers.
The conspirators then encouraged the foreign workers to submit the bogus payroll checks to USCIS as proof that the workers were engaged in full-time work despite the fact that they were not working for the companies. Once USDOL launched an audit of SCM Data and MMC Systems, the conspirators fabricated leave or vacation slips to USDOL for the time periods that the foreign workers were not working to conceal the fact that they were not paid during those time periods as required by federal law.
Karne – who was a U.S. immigration manger with SCM Private Limited in India, which had service agreements with SCM Data and MMC Systems – admitted that he advised foreign workers to pay SCM Data and MMC Systems in cash the approximate amount they were supposed to be paid by the companies in order to generate false payroll records.
In or before January 2015, MMC Systems stopped paying a person – referred to in the information as “Individual 1” – on a third-party contract. Karne admitted that on Feb. 20, 2015, he instructed Individual 1 to pay MMC Systems in cash so that MMC Systems could issue a check to Individual 1 and falsely claim that MMC Systems had paid Individual 1 wages in January 2015. On Feb. 20, 2015, Karne explained to Individual 1 the importance of having paystubs and employment status because USCIS would inquire about both.
Karne further admitted that in February 2015 and March 2015, in response to a USDOL audit, he assisted SCM Data and MMC Systems in the preparation of false leave slips for foreign workers that were submitted to the USDOL to conceal the fact that the foreign workers were not paid during those time periods as required by federal law.
Karne faces a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 3, 2016.
U.S. Attorney Fishman praised special agents of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola, and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the U.S. Attorney’s Office’s National Security Unit in Newark.
Defense Counsel: Vikas Dhar, Esq.