District of New Jersey

NEWARK, N.J. - A Springfield, New Jersey, man was sentenced today to more than four years in prison for his role in a scheme that used bogus records and unqualified home health aides to defraud Medicare out of $7 million, U.S. Attorney Paul J. Fishman announced. 

Paul Mil, 67, previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with conspiracy to commit health care fraud, money laundering and tax evasion. Judge Hayden imposed the sentence today in Newark federal court.

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

Mil was the owner of People Choice Home Care Inc., a home health care agency located in Elizabeth, New Jersey, that provided home health aides and health care services to New Jersey residents. Mil was also the registered agent for HHCH Health Care Inc. in Linden, New Jersey, a home health care agency owned by Irina Krutoyarsky, 62, of Springfield, New Jersey. Home health aides visit patients at their homes and provide a variety of services, such as assistance with eating, dressing and grooming. These services were subsidized under the New Jersey Medical Assistance Program (Medicaid).

Mil, Krutoyarsky and others defrauded Medicaid through a variety of ways. First, they submitted false documents to the New Jersey Board of Nursing, the state agency responsible for issuing home health aide certifications. Krutoyarsky falsely represented that prospective home health aides had attended and satisfactorily completed required training and testing. In truth, Krutoyarsky charged prospective home health aides hundreds of dollars for fraudulently obtaining their certifications.   

Second, Mil, Krutoyarsky and others fraudulently billed Medicaid for services not actually rendered to patients. Numerous HHCH home health aides routinely falsified records that claimed they had visited patients and provided them health care services. In truth, these home health aides had other jobs, were on vacations overseas, or were in other parts of the state during the times they claimed they were with patients. In certain instances, home health aides gave cash kickbacks to patients who were also participating in the scheme. 

Third, Mil, Krutoyarsky and others hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. They then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides. 

In total, Mil and others defrauded Medicaid out of $7 million. After Medicaid paid the claims and transferred the funds into bank accounts controlled by Mil, he used the proceeds to purchase real estate and personal property.

Additionally, between 2007 and 2011, Mil cheated the IRS out of approximately $918,000 in taxes due and owing. As part of the scheme, home health aides were sent to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH and People Choice. Mil then cashed these checks at check cashing businesses and equally divided the cash with Krutoyarsky. On his corporate tax returns, he falsely characterized these payments as legitimate business deductions, thus reducing his business’ corporate taxes.  He then filed federal individual income tax returns that concealed this income.

In addition to the prison term, Judge Hayden sentenced Mil to serve three years of supervised release and ordered him to pay forfeiture of $7 million. As part of his plea agreement, Mil also had to forfeit six homes and properties in New Jersey and New York.

U.S. Attorney Fishman credited agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; New Jersey Office of the State Comptroller, Medicaid Fraud Division under the direction of Director Josh Lichtblau; The Enforcement Bureau of the New Jersey Attorney General’s Office on behalf of the Board of Nursing, Acting Attorney General Christopher S. Porrino; the New Jersey Department of Labor under the direction of Commissioner Harold J. Wirths; the Marlboro Police Department, under the direction of Chief Bruce Hall; and the U.S. Department of State-Diplomatic Security with the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorneys Peter Gaeta and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.

Defense Counsel: Nicholas G. Kaizer Esq., New York

TRENTON, N.J. – A Lancaster, Pennsylvania, man today admitted transporting goods stolen through a string of commercial burglaries in New Jersey, New York, and Pennsylvania, U.S. Attorney Paul Fishman announced. 

Jose Medina, 39, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to a superseding information charging him with one count of conspiracy to transport stolen goods in interstate commerce and one count of transportation of stolen goods in interstate commerce.

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

Jose Medina admitted that from October 2012 through August 2014, he conspired with his brother, Eliezer Medina, 38, of Ronks, Pennsylvania, and others to steal money by burglarizing stores in New Jersey, New York, Pennsylvania, and elsewhere, and thereafter transporting the stolen money across state lines. The conspiracy involved at least 22 burglaries and caused over $480,000 in losses. When committing the burglaries, the conspirators would typically scout the target store in advance, disable the alarm system, and use pry-bars, electrical saws, and other tools to gain access to the stores and safes.

The conspiracy charge to which Jose Medina pleaded guilty is punishable by a maximum penalty of five years in prison and carries $250,000 fine. The interstate transport of stolen goods charge is punishable by a maximum penalty of 10 years in prison and $250,000 fine.  

As part of his plea agreement, Medina has agreed to forfeit $487,364.44 in stolen proceeds. Sentencing is scheduled for Oct. 19, 2016.

U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of the FBI in Philadelphia Branch, under the direction of Special Agent in Charge William F. Sweeney Jr., with the investigation leading to today’s guilty plea. He also thanked the Paramus, New Jersey; Wayne, New Jersey; and Pennsauken Township, New Jersey, police departments; the N.J. State Police; and the Lancaster City, Pennsylvania; East Lampert, Pennsylvania; Manor Township, Pennsylvania; Manheim Township, Pennsylvania; and East Hempfield, Pennsylvania, police departments for their work on the case.

The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the Criminal Division in Newark.

Defense counsel:  Angelo Servidio, Esq.

Defendants to be Sentenced on Related Criminal Charges in August

NEWARK, N.J. – A Morris County, N.J., couple and their diagnostic imaging companies were ordered to pay more than $7.75 million for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests, U.S. Attorney for New Jersey Paul J. Fishman announced today.

Judge Stanley R. Chesler, sitting in Newark federal court, also found the defendants liable for knowingly submitting false claims for neurological tests conducted without physician supervision.

Judge Chesler ordered Nita K. Patel, 53, and Kirtish N. Patel, 53, both of Rockaway, New Jersey, and two companies that they owned and operated, Biosound Medical Services Inc. and Heart Solution PC, of Parsippany, New Jersey, to pay the United States $5 million in damages and $2.75 million in civil monetary penalties, plus interest for a total of $7,756,865. Judge Chesler ordered these payments after granting the United States’ motion for summary judgment on the two False Claims Act counts of a civil complaint that was filed in November 2015.

The Patels each pleaded guilty Nov. 17, 2015, to informations charging them with health care fraud related to this conduct.  Sentencing is currently scheduled for Aug. 16, 2016, before U.S. District Judge William H. Walls.

The government’s civil complaint alleged that defendants created fraudulent diagnostic test reports, forged physician signatures on these reports, and then billed Medicare for the fraudulent reports and the underlying tests that were used solely to create these reports. The complaint also alleged that defendants billed Medicare for neurological tests that they conducted without the required physician supervision.

The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case. The whistleblower – a former employee of Biosound who brought the misconduct to the government’s attention – will receive 15 to 25 percent of the more than $7.7 million recovered by the government.

U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading the judge’s order.

The government is represented by Assistant U.S. Attorney Charles Graybow of the U.S. Attorney’s Office Health Care and Government Fraud 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 $1.3 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug, and Cosmetic Act and other statutes.

The qui tam case is captioned U.S. ex rel. Jane Doe v. Heart Solution, PC, et al., No. 14-3644 (D.N.J.). 

Defense counsel:

Kirtish Patel: Anthony Fusco Jr. Esq., Passaic, New Jersey

Nita Patel: Frank Arleo Esq., West Orange, New Jersey

 

Counsel for relator:

Timothy J. McInnis Esq., New York

NEWARK, N.J. - A Nevada woman was convicted by a federal jury today for her role in a drug trafficking ring that supplied between 150 and 250 pounds of methamphetamine annually to the Jersey City, New Jersey, area from 2004 through 2014, U.S. Attorney Paul J. Fishman announced.

Margaret Tiangco, 40, of Las Vegas, was convicted of one count of distributing methamphetamine and one count of conspiring to distribute methamphetamine after a one-week trial before U.S. District Judge Kevin McNulty in Newark federal court. The jury deliberated for less than an hour before returning the verdict.

According to documents filed in this case and the evidence presented at trial:

In 2003, Tiangco moved to Orange County, California, where she made contact with bulk suppliers of methamphetamine and brokered an agreement to ship as much crystal methamphetamine to New Jersey as the other conspirators could sell.  Over the course of the next 10 years, Tiangco served as a broker, distributor, retailer and organizer in the network as she travelled between Orange County, California, Las Vegas, Nevada, and Jersey City, New Jersey.

Tiangco and at least 14 others B  all of whom have since pleaded guilty B were arrested in 2014 on methamphetamine distribution and conspiracy charges.  For more than one year, the DEA High Intensity Drug Trafficking Area Task Force (HIDTA) led an investigation into a methamphetamine distribution network that operated in at least seven states and was responsible for shipping between 150 and 250 pounds of methamphetamine annually to the Jersey City area from 2004 through 2014.

Agents performed numerous controlled purchases of methamphetamine from members of the conspiracy using confidential informants. Between February 2014 and May 2014, agents obtained court orders to wiretap phones used by John Freehauf, 39, of Jersey City, a former immigration officer with U.S. Customs and Border Protection who was one of Tiangco’s conspirators.           

The distributing methamphetamine and conspiracy to distribute methamphetamine counts each carry a minimum penalty of 10 years in prison, a maximum penalty of life in prison and a $10 million fine. Sentencing is scheduled for Nov. 9, 2016.

U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; law enforcement officers from the N.J. National Guard Counter Drug Task Force, under the direction of the Adjutant General, Brig. Gen. Michael L. Cunniff; the Edison Police Department, under the direction of Chief Thomas Bryan, and the Joplin, Missouri, Police Department, under the direction of Chief Matt Stewart, with the investigation leading to today’s verdict. 

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF).  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.

The government is represented by Assistant U.S. Attorneys Adam N. Subervi and Sharon Ashe of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Paulette L. Pitt, Esq.

NEWARK, N.J. – An associate of the DeCavalcante organized crime family of La Cosa Nostra was sentenced today to 60 months in prison for his role in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.

James Heeney, 36, of Elizabeth, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of conspiring to distribute more than 500 grams of cocaine. Judge Walls imposed the sentence today in Newark federal court.

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

Heeney was arrested and charged by complaint in March 2015, along with eight members of the DeCavalcante crime family. At his plea hearing, he admitted that between August 2012 and March 2013, in conjunction with other family associates, he sold more than one-half a kilo of cocaine to an undercover FBI agent for at least $30,000.  

In addition to the prison term, Judge Walls sentenced Heeney to four 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; the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem; detectives of the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; and the Union County Prosecutor’s Office, under the direction of Acting Union County Prosecutor Grace H. Park, for the investigation leading to today’s sentencing.

The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

Defense counsel: Paulette Pitt Esq. Woodbridge, New Jersey.

TRENTON, N.J. – A part owner of Bayway Lumber, a Linden, New Jersey, company that sold commercial and industrial products to numerous public and private entities, was sentenced today to 48 months in prison for his role in a scheme to defraud customers out of $708,386, U.S. Attorney Paul J. Fishman announced.

Robert R. Dattilo, 61, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiracy to commit mail and wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court.

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

From 2007 to November 2015, Dattilo conspired with others to defraud certain customers by engaging in fraudulent business practices, including overbilling, charging for more expensive items or larger quantities of items, and providing free items to employees of customers, then recouping the cost of the items (and additional profits) by overbilling and fraudulent billing.

At Dattilo’s direction, Bayway Lumber inflated the prices on items sold or intentionally failed to provide the prices called for in contractual agreements between Bayway Lumber and customers, including the University of Medicine and Dentistry of New Jersey (UMDNJ) and its successor entities – Rutgers University and University Hospital; the City of Elizabeth; and the New York Transit Authority. These methods included:

• Concealing the true cost of items to Bayway Lumber, sometimes by manually altering vendor invoices, in order to enable Bayway Lumber to bill UMDNJ higher mark-ups.

• Charging Elizabeth prices that did not apply the discounts called for by contracts.

• Consistently billing the Transit Authority for the most expensive items, such as doors, frames and door hardware, permitted by the contract, although Bayway Lumber was providing less-expensive items than what was ordered.

Dattilo also conspired to provide certain customers, such as the Philadelphia Housing Authority, Con Edison, the New York Department of Corrections and the City of Newark, with lower-quality lumber than the customers ordered and paid for. The lower-quality lumber, including “reject” lumber, did not meet certain industry specifications and was not of construction-grade quality, as required by contract.

To conceal this product substitution scheme, Dattilo directed Bayway Lumber employees to spray paint or rearrange the lower-quality lumber sent to the customer entities in order to hide any markings on the lumber that would indicate that it was the lower-quality lumber. At Dattilo’s direction, Bayway Lumber also issued invoices to customers that falsely described the lower-quality lumber as the higher-quality lumber that the customers ordered.

Employees of some of Bayway Lumber’s customers, including Amtrak, the Plainfield Board of Education and a Bergen County company identified in the information as “Company 1,” were given a variety of items, including electronics, tickets to sporting events, merchandise and gift cards. Bayway Lumber then overbilled and fraudulently billed those customers to recoup the cost of the gifts, plus additional profits. Dattilo kept a running tally of how much Bayway Lumber overbilled and fraudulently billed those customers, which Dattilo referred to as the “Bank,” to ensure that Bayway Lumber recovered the full cost of the free items.

In addition to the prison term, Judge Sheridan sentenced Dattilo to three years of supervised release and ordered him to pay restitution of $708,386 and a $2,000 fine.

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, under the direction of Acting Special Agent in Charge Timothy Gallagher; and the Office of Inspector General, Amtrak, under the direction of Special Agent in Charge Robert Koons, as well as investigators of the U.S. Attorney’s Office, with the investigation leading to today’s sentencing.   

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 and Barbara Ward, Acting Chief of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.    

Defense counsel: Alain Leibman Esq., Princeton, New Jersey

NEWARK, N.J. – A Jersey City, New Jersey, man today admitted using social media to promote a sophisticated website that sold fake driver’s licenses, some of which were later used to commit financial crimes, U.S. Attorney Paul J. Fishman announced.

Abraham Corcino, 34, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with conspiracy to commit fraud in connection with authentication features. 

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

From October 2012 through August 2014, Ricardo Rosario, 33, of Jersey City, with the assistance of Corcino and Alexis Scott Carthens, 38, of Newark, New Jersey, sold fake driver’s licenses over the Internet. In connection with their illegal operation, the defendants ran a website that was available at “fakeidstore.co” and “fakedlstore.com.”

A number of the fake driver’s licenses sold by Corcino and other conspirators were used by criminal actors in connection with “cash out” schemes where stolen credit card information, usually obtained through hacking or ATM skimming operations, was encoded on to counterfeit credit cards and used to steal cash from victims’ accounts. 

Rosario created and ran the website. Corcino and Carthens assisted Rosario by creating and mailing the fake driver’s licenses purchased through the website. Corcino also maintained an Instagram account to promote the website.

The website sold fake New Jersey, Florida, Illinois, Pennsylvania, Rhode Island, and Wisconsin driver’s licenses, and the website boasted that the licenses had “scannable barcodes” and “real” holographic overlays. The price for each fake driver’s license was approximately $150, but the website offered bulk pricing for orders of 10 or more.

The website allowed its users to pay by bitcoin, a cryptographic-based digital currency, or MoneyPak, a type of prepaid payment card that could be purchased at retail stores. The “FAQ” section of the website indicated that orders would be received approximately one to two days after payment was received and described the website’s policy with respect to returns: “No Refunds. No snitching.” 

At the plea hearing, Corcino admitted promoting the website on social media and mailing the fake driver’s licenses to the website’s customers. 

The conspiracy to commit fraud in connection with authentication features charge carries a maximum potential penalty of 15 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct. 19, 2016.

Carthens pleaded guilty to his role in the scheme on April 25, 2016 and awaits sentencing. The charges against Rosario are pending. The charges and allegations against him are merely accusations, and he is considered 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, and inspectors of the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge Cynthia Shoffner, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit and Barbara Ward, Acting Chief of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.

Defense counsel: Chistopher Adams, Esq.

NEWARK, N.J. – A West Orange, New Jersey, man who was the sole proprietor of two companies that purportedly provided printing and digital marketing services to the Newark Watershed Conservation and Development Corporation (NWCDC) today admitted his role in a conspiracy to fraudulently bill the NWCDC for more than $110,000 for work that was never performed, U.S. Attorney Paul J. Fishman announced.

Kevin Gleaton, 52, pleaded guilty before U.S. District Judge Jose Linares in Newark federal court to an information charging him with one count of conspiring to commit wire fraud with Donald Bernard, Sr., Linda Watkins Brashear, and others, to defraud the NWCDC of money and property and one count of misuse of Social Security numbers in connection with personal bankruptcy proceedings.

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

From May 2011 to September 2012, Gleaton conspired with Bernard, who was then employed as manager of Special Projects for the NWCDC, Brashear who was then the NWCDC executive director, and others, to defraud the NWCDC of more than $110,000 for work that was never performed by Gleaton or his companies. Gleaton was the owner of the Synergy Group, a company that received more than $58,000 in 2011 from the NWCDC, purportedly for printing services, as well as Mindshare Media, which received more than $52,000 from the NWCDC in 2012, purportedly for digital marketing services.

Gleaton deposited the payments issued to his companies by the NWCDC on the basis of fraudulent invoices, and then provided a substantial portion of the money received – more than $97,000 – to Bernard, who, in turn, shared a portion with Brashear, among others. Gleaton provided the money to Bernard either directly, or indirectly through the “consultant intermediary,” an individual who operated a firm that provided consulting services to the NWCDC. The conspiracy was facilitated by interstate wire transmissions, including emails sent by Bernard to Brashear and the consultant intermediary. Brashear pleaded guilty in December 2015 to scheming to defraud the NWCDC of her honest services in the affairs of the NWCDC by taking kickbacks (from various vendors including Gleaton), and of the NWCDC’s money and property, as well as to subscribing to a false federal personal income tax return. In January 2016, Bernard pleaded guilty to Counts 9 and 10 of a 20-count indictment returned in December 2014, charging him with the use of interstate facilities to promote and facilitate bribery in violation of the Travel Act, and Count 1 of an information that charged him with making and subscribing a false personal tax return.

Gleaton also admitted to using multiple Social Security numbers, other than the number lawfully issued to him by the Commission of Social Security, in connection with his bankruptcy filings in 2011 and 2012.

The counts of wire fraud conspiracy and misuse of Social Security numbers each carry a maximum potential penalty of five years in prison and a fine of the greatest of $250,000 per count or twice the gain or loss resulting from the offenses. Sentencing is scheduled for October 19, 2016.

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 Social Security Administration, Office of the Inspector General, Office of Investigations, New York Field Division under the direction of Special Agent in Charge John Grasso; U.S. Department of Housing and Urban Development Office of Inspector General, Newark office, under the direction of Special Agent in Charge Christina Scaringi; IRS–Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen; and criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s guilty plea. U.S. Attorney Fishman also thanked the New Jersey Comptroller’s Office, under the direction of Philip J. Degnan, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys Mala Ahuja Harker, Jacques Pierre and Leslie Schwartz of the U.S. Attorney’s Office Special Prosecutions Division.

Defense counsel:  Ray Hamlin Esq., Newark

CAMDEN, N.J. – A Camden County, New Jersey, man was arraigned today on an indictment returned last week by a federal grand jury in Camden for allegedly possessing and distributing images of child sex abuse and also for conspiring to sexually exploit two minor children, U.S. Attorney Paul J. Fishman announced.

Alexander Capasso, 42, of Collingswood, New Jersey, appeared before U.S. Magistrate Judge Karen M. Williams and was detained without bail.

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

Capasso was originally charged by complaint in July 2015 by the Washington, D.C., U.S. Attorney’s Office with receiving and distributing images of child pornography after having sent several images of child pornography to an undercover law enforcement officer. The case was transferred to the District of New Jersey by the filing of a complaint in November 2015. The indictment returned last week charges one count of conspiracy to sexually exploit two minor children, five counts of distribution of images of child pornography and one count of possession of additional images of child pornography. Capasso has been held in federal custody since his July 20, 2015 arrest.

In July 2015, Capasso answered an ad placed by an undercover officer and began a series of communications by which Capasso sought sexually explicit images of children from the officer and sent images containing child pornographic images to the officer. As a result of the communications, federal agents obtained a search warrant for Capasso’s home and seized various electronic media containing numerous additional images and videos of child sexual abuse. Included among those images were photographs and videos of two minor children manufactured by Capasso and his ex-girlfriend in southern New Jersey.

The count of conspiracy to sexually exploit children carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine.  The distribution of child pornography counts each carry a mandatory minimum penalty of five years in prison, a maximum possible penalty of 20 years in prison and fine of $250,000 per count. The count of possession of child pornography carries a maximum penalty of 10 years in prison and a $250,000.

U.S. Attorney Fishman credited special agents of the FBI, Philadelphia Division, under the direction of Special Agent in Charge William Sweeney, and the Washington, D.C., Field Office, under the direction of Assistant Director in Charge Paul M. Abbate, with the investigation leading to the charges.

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

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

Defense counsel: Gilbert J. Scutti Esq., Voorhees, New Jersey

TRENTON, N.J. – Two former executives of Louis Berger International (LBI), a New Jersey-based construction management company, have been sentenced in connection with a long-running bribery scheme to secure government construction management contracts by bribing officials in India, Indonesia, Vietnam and Kuwait. 

U.S. Attorney Paul J. Fishman of the District of New Jersey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, and Special Agent in Charge Timothy Gallagher of the FBI’s Newark Division made the announcement today.

Richard Hirsch, 62, of Makaati, Philippines, was sentenced by U.S. District Judge Mary L. Cooper to two years of probation and fined $10,000.  Hirsch previously served as the senior vice president responsible for the company’s operations in Indonesia, Thailand, the Philippines and Vietnam. James McClung, 60, of Dubai, United Arab Emirates, was sentenced by Judge Cooper on July 7, 2016, to one year plus one day in jail.  McClung previously served as the senior vice president responsible for the company’s operations in India and Vietnam. On July 17, 2015, McClung and Hirsch each pleaded guilty before Judge Cooper in Trenton federal court to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one substantive count of violating the FCPA.    

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

From 1998 through 2010, LBI and its employees, including Hirsch and McClung, orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts.  To conceal the payments, the conspirators made payments under the guise of “commitment fees,” “counterpart per diems” and other payments to third-party vendors.  In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to LBI or who supervised LBI’s work on contracts, the defendants admitted.

McClung cooperated with the government’s investigation by identifying other executives at LBI who had knowledge of bribery. Some of the information provided by McClung was also helpful to the government’s successful prosecution of LBI’s former CEO, Derrish Wolff, who pleaded guilty to accounting fraud in December 2014. 

On July 17, 2015, LBI entered into a deferred prosecution agreement and admitted its own criminal conduct, including its participation in a conspiracy to violate the anti-bribery provisions of the FCPA.  Pursuant to the DPA, LBI agreed to pay a $17.1 million criminal penalty, to implement rigorous internal controls, to continue to cooperate fully with the department and to retain a compliance monitor for at least three years. 

This case was investigated by the FBI’s Newark Division under the direction of Special Agent in Charge Gallagher. The government is represented by Assistant U.S. Attorney Thomas J. Eicher, chief of the Criminal Division for the U.S. Attorney’s Office, District of New Jersey, and Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section.  The Criminal Division’s Office of International Affairs also provided assistance.  

Defense counsel:

Hirsch: William G. Sullivan Esq., Chicago, Illinois

McClung: Kelly B. Kramer Esq., Washington, D.C.

CAMDEN, N.J. – A Hudson County, New Jersey, man was sentenced today to 60 months in prison for his role in a $13 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos in Wildwood and Wildwood Crest, New Jersey, U.S. Attorney Paul J. Fishman announced.

John Leadbeater, 59, of Kearny, New Jersey, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a superseding indictment charging him with conspiracy to commit wire fraud. Judge Simandle imposed the sentence today in Camden federal court.

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

Leadbeater and his conspirators located condominiums overbuilt by financially distressed developers in Wildwood and Wildwood Crest, New Jersey. They then recruited “straw buyers” from New Jersey, New York, Ohio, Arkansas, and California, to purchase those properties. The straw buyers had good credit scores, but lacked the financial resources to qualify for the mortgage loans. The conspirators created false documents, including loan applications that contained fraudulent financial and employment information, to make the straw buyers appear more credit-worthy and induce the lenders to make the loans. 

Once the loans were approved, Leadbeater and his conspirators created and signed fraudulent closing documents in order to induce the mortgage lenders to send the loan proceeds in connection with real estate closings on the properties. Once the mortgage lenders sent the loan proceeds, Leadbeater and his conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to the other members of the conspiracy for their respective roles.

Leadbeater admitted to personally participating in fraudulent activity related to nine properties in Wildwood and Wildwood Crest.  He admitted causing mortgage lenders to fund $4,711,557 worth of mortgages based on the bogus loan applications and closing documents prepared by him and his conspirators.

In addition to the prison term, Judge Simandle sentenced Leadbeater to five years of supervised release. A restitution hearing has been set for July 28, 2016.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents of IRS-Criminal Investigation in Mays Landing, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark, for the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorneys Jacqueline M. Carle and Matthew T. Smith of the U.S. Attorney's Office Criminal Division in Camden.

Defense counsel: Thomas J. Cammarata Esq. and Jeffrey Garrigan Esq., Jersey City

NEWARK, N.J. –A Union County, New Jersey, woman today admitted accepting kickbacks in exchange for using her company as a “straw” contractor that allowed non-minority owned firms to circumvent regulations on federally funded transportation projects, U.S. Attorney Paul J. Fishman announced.

Carol Sanzo, 69, of Cranford, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to an information charging her with one count of conspiracy to commit wire fraud.   

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

The U.S. Department of Transportation requires that general contractors seeking to perform certain work on federally funded transportation projects must either subcontract, or demonstrate a good faith effort to subcontract, a percentage of the work to Disadvantaged Business Enterprises (DBEs), which include small businesses that are at least 51 percent owned by women, Hispanic Americans, African Americans, Native Americans, and Asian Americans.

Sanzo owned Sanzo Ltd., a purported broker and supplier of construction materials that she operated as a DBE. Sanzo admitted that in return for kickbacks, her company would act as a “straw” or “pass-through” DBE and accept payment for goods and services that were actually provided by non-DBE contractors on federally funded projects.

For instance, Sanzo admitted that from 2008 through July 2011, she acted as a pass-through between a prime contractor and a non-DBE fuel provider on the Willis Avenue Bridge Project in New York. In order to circumvent the DBE requirements, Sanzo submitted multiple documents that falsely represented that Sanzo Ltd. was supplying fuel to the Willis Avenue Bridge Project when it was actually being supplied by the non-DBE fuel company.

The wire fraud conspiracy to which Sanzo pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Oct. 18. 2016.

U.S. Attorney Fishman credited special agents with the U.S. Department of Transportation, Office of Inspector General, under the direction of Special Agent in Charge Douglas Shoemaker, and criminal investigators of the Port Authority, Office of Inspector General, under the direction of Inspector General Michael Nestor, with the investigation leading to today’s guilty plea.

The government is represented by Special Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Economic Crimes Unit and Barbara Ward, Acting Chief of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.

Defense counsel: Raymond Brown, Esq., Woodbridge, New Jersey

NEWARK, N.J. – Pharmaceutical Innovations Inc., based in Newark, New Jersey, pleaded guilty today to criminal charges and resolved a civil suit arising from the company’s distribution of ultrasound gel contaminated with bacteria, U.S. Attorney Paul J. Fishman of the District of New Jersey and Principal Deputy Assistant Attorney General Benjamin C. Mizer of Justice Department’s Civil Division announced. 

Pharmaceutical Innovations pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging it with two misdemeanor counts of introducing adulterated medical devices into interstate commerce. In addition to placing the company on two years of probation, Judge Salas ordered the company to pay a criminal fine of $50,000 and to forfeit an additional $50,000 – the approximate value of the adulterated gel.

In the civil settlement, which was also resolved today, Pharmaceutical Innovations agreed to the forfeiture and destruction of particular gel products that tested exceptionally high for infectious bacteria and agreed to a permanent injunction that requires independent experts and auditors to conduct regular inspections and certifications at the company’s expense.

“Pharmaceutical Innovations shipped defective products that exposed hospital patients to dangerous bacterial contamination,” U.S. Attorney Fishman said. “Today’s plea agreement and civil settlement require Pharmaceutical Innovations to accept responsibility for the contamination and take the necessary steps to prevent it from happening again.”

“The sale of adulterated medical devices puts patients at great risk,” said Principal Deputy Assistant Attorney General Mizer. “Device manufacturers that fail to comply with good manufacturing practices, thereby threatening patient safety, will be held accountable.”

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

Doctors and hospitals use ultrasound gel to take ultrasound scans, sonograms, EKGs, and similar procedures. In February 2012, a Michigan hospital reported that 16 surgical patients were infected with Pseudomonas aeruginosa, a bacterial pathogen.  The hospital believed the infections were associated with a particular lot of Pharmaceutical Innovations ultrasound gel.

A sample of that lot then tested positive for Pseudomonas aeruginosa.  A second lot was shipped in April 2012 and found to be contaminated with two types of bacteria, Pseudomonas aeruginosa and Klebsiella oxytoca.

The U.S. Department of Justice filed a civil suit in October 2014 against Pharmaceutical Innovations and its founder, owner, and longtime president, Gilbert Buchalter (Gilbert Buchalter was later dropped from the case; his son, Charles Buchalter, became company president and was added to the case).  The civil complaint alleged that the company was selling medical devices that the Food and Drug Administration (FDA) had not approved or cleared, that it was violating current good manufacturing practices, and that it failed to take required actions after receiving reports in February 2012 of serious injuries associated with its products.

The Consent Decree of Permanent Injunction requires Pharmaceutical Innovations to submit a detailed compliance plan to FDA within 20 days, and to have outside experts certify in writing by Oct. 31, 2016 that the company meets current good manufacturing practice requirements. At the company’s expense, the FDA will then conduct a follow-up inspection. For the next three years, Pharmaceutical Innovations must hire outside auditors to conduct and submit detailed audit reports to FDA. In addition, the company will forfeit and pay for the destruction of contaminated gel that the U.S. Marshals Service seized in April 2012 as part of a seizure and forfeiture case filed by the United States.

The investigations leading to the corporate guilty plea and civil settlements were conducted by special agents of the FDA’s Office of Criminal Investigations’ New York Field Office, under the direction of Acting Special Agent in Charge Jeffrey Ebersole.

Assistant U. S. Attorney R. David Walk Jr. of the District of New Jersey’s Health Care and Government Fraud Unit represented the government in the criminal prosecution, with the assistance of Associate Chief Counsel Lynn M. Marshall of the Department of Health and Human Services’ Office of General Counsel-Food and Drug Division. The government was represented in the civil cases by Trial Attorney Daniel K. Crane-Hirsch of the Department’s Consumer Protection Branch, Senior Counsel Michele Lee Svonkin and Associate Chief Counsel Julie A. Dohm of the Department of Health and Human Services’ Office of General Counsel–Food and Drug Division, Assistant U.S. Attorney Lucy Muzzy of the District of New Jersey’s Health Care and Government Fraud Unit, and Peter Gaeta of the District of New Jersey’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office of the District of New Jersey, including creating a stand-alone Health Care and Government Fraud Unit, which handles both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel: A. Ross Pearlson Esq., West Orange, New Jersey

TRENTON, N.J. – A Somerset County, New Jersey, man was sentenced today to 24 months in prison for possessing images of child sexual abuse on his computer, U.S. Attorney Paul J. Fishman announced.

Cliff Ramsay, 31, of Raritan, New Jersey, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of possession of child pornography. Judge Wolfson imposed the sentence today in Trenton federal court.

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

On Feb. 25, 2015, and Feb. 27, 2015, Ramsay – at the time a music teacher at a public middle school in Hunterdon County – accessed a website known to contain images, videos, and other material containing images of child sexual abuse. A search warrant was executed at Ramsay’s home on July 28, 2015, and numerous files containing child pornography were found on his computer.

In addition to the prison term, Judge Wolfson sentenced Ramsay to five years of supervised release. He will also be required to register as a sex offender.

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 the Somerset County Prosecutor’s Office, under the direction of Acting Prosecutor Michael H. Robertson; the Hunterdon County Prosecutor’s Office, under the direction of Anthony P. Kearns III; the Raritan Police Department, under the direction of Chief Kenneth McCormick; and the Readington Police Department, under the direction of Chief Sebastian Donaruma, for their assistance with this investigation.

The government is represented by Assistant U.S. Attorney J. Brendan Day of the U.S. Attorney’s Office Criminal Division in Trenton.

Defense counsel: Joshua D. Altman Esq., Trenton

CAMDEN, N.J. – A Vineland, New Jersey, man today admitted his role in a scheme to defraud a bank and to filing fraudulent tax returns, U.S. Attorney Paul J. Fishman announced.

Richard T. Pepe, 69, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle in Camden federal court to a superseding information charging him with one count of conspiracy to commit bank fraud and one count of fraud and false Statements on his 2008 U.S. Individual Income Tax Return.

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

From 2004 through October 2008 Pepe knowingly conspired and agreed with others to execute a scheme to defraud M&T Bank. The object of the conspiracy was for Pepe, the general manager of Chevrolet 73, and others acting on Pepe’s behalf, to fraudulently obtain money from M&T Bank, intended as floor plan financing for Chevrolet 73, by providing false information to the bank. Pepe then converted that money – $2.95 million – to his own use to pay for personal expenses for himself and his family members.

Pepe also admitted he made false statements on his 2008 U.S. Individual Income Tax Return by claiming his total income for tax year 2008 to be $36,628, when he knew and believed his total income to be in excess of that amount.

The conspiracy charge to which Pepe pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000.  The fraud and false statement charge to which Pepe pleaded guilty carries a maximum potential penalty of three years in prison and a fine of $250,000. As part of the plea agreement, Pepe will make full restitution for all losses and consented to the entry of a forfeiture money judgment of $2.95 million. Sentencing is scheduled for Oct. 14, 2016.

U.S. Attorney Fishman credited special agents of the FBI Philadelphia Division’s Cherry Hill Resident Agency, under the direction of Special Agent in Charge William F. Sweeney Jr., and special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney's Office Criminal Division in Camden.

Defense counsel: Thomas Young Esq. Assistant Federal Public Defender, Camden

NEWARK, N.J. – A Mountainside, New Jersey, man was sentenced today to 70 months in prison for his role in an international procurement network that obtained and smuggled more than $65 million worth of electronics from the United States to Russia in violation of export control laws, U.S. Attorney Paul J. Fishman announced.

Alexander Brazhnikov Jr., 37, a naturalized United States citizen born in Moscow, previously pleaded guilty before U.S. District Judge William J. Martini to an information charging him with one count of conspiracy to commit money laundering, one count of conspiracy to smuggle electronics from the United States, and one count of conspiracy to violate the International Emergency Economic Powers Act (IEEPA). Brazhnikov also agreed to the entry of a forfeiture money judgment against him in the amount of $65 million. Judge Martini imposed the sentence today in Newark federal court.

“Brazhnikov was responsible for nearly 2,000 illegal shipments of regulated, sensitive electronics components, many of which wound up in the hands of Russian military and security forces,” U.S. Attorney Fishman said. “He also admitted going to extraordinary lengths to conceal the nature and destination of the shipments, as well to hide the tens of millions of dollars in illegal proceeds generated by the scheme. The sentence imposed on him today reflects the seriousness of his crimes.”

Brazhnikov Jr. was arrested at his home on June 26, 2014, following a joint investigation by the FBI, the U.S. Department of Commerce (DOC), and the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). From January 2008 through June 2014, he was the owner, chief executive officer, and principal operator of four New Jersey microelectronics export companies, each of which were used in the various conspiracies uncovered by the investigation. Following his arrest, special agents seized $4,075,237 in proceeds related to the charged offenses, as well as real property and other assets valued at more than $600,000.

“Today's sentencing represents a collaborative effort among law enforcement agencies,” Jonathan Carson, Special Agent in Charge of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office, said. “I commend our colleagues at the FBI and Homeland Security Investigations for their efforts. The Office of Export Enforcement will continue to pursue violators of our export control laws by leveraging our unique authorities to protect national security.”

“HSI will continue to use all the resources at its disposal to prevent sensitive and restricted technology from being exported illegally,” Special Agent in Charge Terence S. Opiola, HSI, Newark, said. “HSI as the principal enforcer of export controls will continue to ensure that sensitive technology doesn’t fall into the wrong hands.”

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

Brazhnikov Jr. and his companies are part of a sophisticated procurement network that has surreptitiously acquired large quantities of license-controlled electronic components from American manufacturers and vendors and exported those items to Russia on behalf of Russian business entities that were authorized to supply them to the Ministry of Defense of the Russian Federation, the Federal Security Service of the Russian Federation (the FSB), and Russian entities involved in the design of nuclear warheads, weapons, and tactical platforms.

The defendant conspired with his father, Alexander Brazhnikov Sr., owner of a Moscow-based procurement firm whose agents helped initiate the purchase of electronics components from United States vendors and manufacturers on behalf of the conspirators’ clients in Russia.  Brazhnikov Jr. finalized the purchase and acquisition of the requested components from the various distributors, then repackaged and shipped them to Moscow. He routinely falsified the true identity of the end-user of the components and the true value of the components in order to avoid filling out required export control forms. Brazhnikov Jr. purposefully concealed the true destination of the parts that were exported by directing that the shipments be sent to various “shell” addresses in Russia – some of which have been identified as vacant storefronts and apartments – which were established and controlled by the Moscow-based network. All shipments initially directed to the shell addresses were redirected to a central warehouse controlled by the conspirators’ Moscow-based network.

The funds for the network’s illicit transactions were obtained from the various Russian purchases and initially deposited into one of the conspirators’ primary Russia-based accounts.  Disbursements for purchases were made from that primary Russian account through one or more foreign accounts held by shell corporations  in the British Virgin Islands, Latvia, Marshall Islands, Panama, Ireland, England, United Arab Emirates, and Belize, and ultimately into one of the defendant’s U.S.-based accounts. The network’s creation and use of dozens of bank accounts and shell companies abroad was intended to conceal the true sources of funds in Russia, as well as the identities of the various Russian defense contracting firms receiving U.S. electronics components.

In addition to the prison term and forfeiture, Judge Martini sentenced Brazhnikov to three years of supervised release and fined him $75,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the U.S. Department of Commerce, under the direction of Special Agent in Charge Carson, New York Field Office; and special agents of HSI, under the direction of Special Agent in Charge Opiola, with the investigation leading to today’s sentencing. He also thanked officers from the Union County Police Department, under the direction of Captain Chris Debbie; and officers of the Mountainside Police Department, under the direction of Police Chief Allan Attanasio, for their important contributions to the investigation. The U.S. Justice Department’s Office of International Affairs provided assistance with this case.

The government is represented by Assistant U.S. Attorneys Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Peter Gaeta of the office’s Asset Forfeiture and Money Laundering Unit in Newark.

Defense counsel: Jack Arseneault Esq., Chatham, New Jersey

NEWARK, N.J. – SRA International Inc. and Galaxy Scientific Corp. will pay more than $1.1 million to resolve civil claims relating to a scheme to bill for, and capture, unlawful profits on certain military contracts, U.S. Attorney Paul J. Fishman of the District of New Jersey announced today. 

In the civil settlement, SRA International Inc. (SRA), Galaxy Scientific Corp. (GSC), Galaxy Technology LLC (GTech), and Engineering Integrated Services L.L.C. (EIS), agreed to pay $1,105,087 plus accrued interest to the federal government to resolve allegations under the False Claims Act. The United States alleged that in 2004 and 2005 GSC used shell affiliates to improperly induce the Government to fund and award task orders, disguise actual costs, misrepresent what work was actually performed, and capture unlawful profit.

With respect to a task order involving the use of image and audio compression technology over low-bandwidth networks (Task Order 29 under the Communications-Electronics Life Cycle Management Command’s [CECOM’s] Rapid Response Contract No. DAAB07-03-D-B011), the United States alleged that GSC, a company whose majority shareholder and CEO was Dr. James Yoh, created a shell affiliate, GTech, a company wholly owned by Dr. Yoh, which it used to disguise actual costs, misrepresent what work was actually performed, and capture unlawful profit.  

In another task order involving communications in the Kuwait-Iraq theater of operations (Task Order Y601 of the same contract above), the United States alleged that GSC created another shell affiliate, EIS, again owned and controlled by Dr. Yoh, to improperly induce the government to fund and award the task order, disguise actual costs and capture unlawful profit. 

The civil settlement resolves a False Claims Act lawsuit filed under the FCA’s qui tam provisions in federal court in the District of New Jersey by John Carr, who worked as a contracting officer for GSC. As part of today’s resolution, Mr. Carr will receive approximately $250,000 from the civil settlement amount.

U.S. Attorney Fishman credited Resident Agent in Charge Richard Monticello of the Defense Criminal Investigative Service, New Jersey Resident Agency, and Investigative Auditor Brandy Saul of the Defense Contract Audit Agency, Mid-Atlantic Region, for the investigation leading to the settlement.

The government is represented by Assistant U.S. Attorney David E. Dauenheimer of the U.S. Attorney’s Office’s Civil Division in Newark and Trial Attorney Arnold Auerhan of the Civil Frauds Section in the U.S. Department of Justice.

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

Counsel for relator: Eric H. Jaso Esq., New York, and William J. Hardy Esq., Washington, D.C.

NEWARK, N.J. – A doctor with a practice in Clifton, New Jersey, today admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Juan Espindola, 58, of Montclair, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging him with violating the Federal Travel Act by accepting bribes to refer patient blood specimens to BLS.

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

Espindola admitted that between April 2011 and June 2012, he received bribes of approximately $1,500, largely on a monthly basis, from an individual working on behalf of BLS, referred to in the information as “Individual 1.”

Individual 1 falsely characterized the payments as “consulting fees” and made the payments via check. In reality, Espindola did not provide consultant services to Individual 1 or BLS – the consultant fees were merely a sham intended to conceal the bribe payments. In exchange, Espindola referred patient blood samples to BLS. Espindola’s referrals generated approximately $65,000 in lab business for BLS.

The Travel Act charge to which Espindola pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. His sentencing is scheduled for Oct. 12, 2016.

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.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; 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 IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation. 

The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney 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 $1.29 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 Stahl, Esq., Westfield, New Jersey

NEWARK, N.J. – A North Bergen, New Jersey, man was sentenced today to 300 months in prison for his role in a series of at least 27 burglaries and attempted burglaries across six states, U.S. Attorney Paul J. Fishman announced.

Daniel “Tokyo” Gatson, 44, was previously convicted of one count of conspiracy to transport stolen property in interstate commerce and 11 substantive counts of interstate transportation of stolen property. Gatson was convicted following a three-week trial before U.S. District Judge William J. Martini, who imposed the sentence today in Newark federal court.

According to documents filed in this case and the evidence presented at trial:

Gatson, his cousin Anthony “T.J.” Hanks, 36, of Brooklyn, New York,  and numerous other conspirators, including four defendants who previously pleaded guilty and testified against Gatson and Hanks, took part in at least 27 burglaries and attempted burglaries in New Jersey, New York, Pennsylvania, Virginia, North Carolina, and Georgia, causing losses of over $3.5 million dollars, mainly in stolen jewelry and cash.

Typically, Gatson, Hanks and others would identify homes in affluent residential neighborhoods and conduct surveillance of the target residences, looking for indications that no one was home.

Before robbing a target residence, Gatson, Hanks and others would cut wires running to and from the residence, including phone, cable, and alarm connections. Then, while wearing masks and gloves, they would forcibly break in to the target residence, usually by smashing through the front door, while a getaway driver remained nearby in a rented minivan, often maintaining contact with one of the burglars inside the target residence by cell phone. Gatson was apprehended on Oct. 11, 2013, while attempting to flush stolen jewelry down a hotel toilet.

In addition to the prison term, Judge Martini sentenced Gatson to three years of supervised release.

Hanks, who was convicted at trial of one count of conspiracy to transport stolen property in interstate commerce and three counts of interstate transportation of stolen property, is scheduled for sentencing on Sept. 20, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the Bergen County Prosecutor’s Office, under the direction of Acting Prosecutor Gurbir S. Grewal, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Josh Hafetz of the Organized Crime/Gangs Unit in Newark and Special Assistant U.S. Attorney Thomas S. Kearney of the Bergen County Prosecutor’s Office.

Defense counsel: Michael Pedicini Esq., Chatham, New Jersey

A Paramus, New Jersey, man pleaded guilty today to helping to 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, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey.

Bilal Shehu, 48, pleaded guilty before U.S. District Judge Madeline Cox Arleo of the District of New Jersey 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.  Sentencing has been scheduled for Oct. 5, 2016.

Pursuant to his plea agreement, Shehu, a U.S. citizen living in New Jersey, admitted that in September 2012, he received approximately $80,000 from a foreign source and provided it to a joint fundraising committee—including the authorized campaign committee of the president—in an effort 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.  In late September 2012, Shehu received an $80,000 wire transfer into his New Jersey-based bank account from a foreign bank account, knowing that he was to provide it to the joint fundraising committee, he admitted.  Shehu admitted that in early October 2012, he 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 guilty plea. 

The FBI investigated the case.  Trial Attorneys Charles Walsh and Peter Halpern of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mark J. McCarren of the District of New Jersey’s Special Prosecutions Division are prosecuting the case. 

TRENTON, N.J. – A Long Branch, New Jersey, man today admitted using his computer to possess and distribute images of child sexual abuse via a peer-to-peer file-sharing network, U.S. Attorney Paul J. Fishman announced.

Donald Haring, 61, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with possession and distribution of child pornography. 

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

Haring admitted that he knowingly used a computer from his home to share images and videos of child sexual abuse with other members of a publicly-available, peer-to-peer file-sharing network. Haring also admitted to possessing at least three videos and 600 images of child sexual abuse on his computer and other electronic devices.

Haring faces a maximum potential penalty of 20 years in prison, a minimum penalty of five years in prison, a fine of $250,000, and up to a lifetime of supervised release. Sentencing is scheduled for Oct. 7, 2016.

U.S. Attorney Fishman credited 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, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel:  Charles M. Moriarty, Esq.

NEWARK, N.J. – A former director of Samsung America Inc.’s Korea Export Department was sentenced today to 75 months in prison for his role in a scheme to embezzle more than $1 million from the company from 2002 through 2007, U.S. Attorney Paul J. Fishman announced.

John Y. Lee, a/k/a “Yong Kook Lee,” 53, of West New York, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of wire fraud and one count of subscribing to false individual income tax returns. Judge Wigenton imposed the sentence today in Newark federal court.

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

During his plea hearing, Lee admitted his role in an elaborate scheme to embezzle funds from Samsung America, a Ridgefield Park-based global trading and investment company and American subsidiary of the Korean conglomerate Samsung Corp.

Lee admitted that in September 2000, he created a fictitious entity that he called the Engelhard Supple (sic) Co. to make it appear as though that entity was actually Engelhard Corp., a provider of metal refining services based in Iselin, New Jersey. Lee admitted creating numerous false financial documents, including invoices, purchase orders and payment applications that made it appear that Samsung Corning Precision Glass Ltd., a joint venture involving the Samsung Corporation and Corning Inc., had ordered services from Engelhard. In fact, no real services had been ordered or provided. Lee simply submitted these fraudulent documents to Samsung America to induce Samsung America to wire money directly into a bank account Lee controlled.

In an effort to conceal his fraudulent conduct, Lee sent false documents to Samsung America’s accounting department. In his plea agreement, Lee admitted that the loss to the company was between $1 million and $2.5 million. He also acknowledged that he signed and filed a 2006 Individual Income Tax Return that failed to include $339,138 he had embezzled from Samsung America in 2006.

In addition to the prison term, Judge Wigenton sentenced Lee to three years of supervised release and ordered him to pay to Samsung America Inc. restitution of $1,693,271.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and investigators from the N.J. Division of Criminal Justice, under the direction of Acting N.J. Attorney General Christopher S. Porrino, with the investigation leading to today’s sentencing.

The government is represented by Special Assistant U.S. Attorney Stephanie Raney of the U.S. Attorney’s Office’s General Crimes Unit.

Defense Counsel: Paul Brickfield Esq., River Edge, New Jersey

NEWARK, N.J. – A former pharmaceutical employee today admitted accepting thousands of dollars in exchange for obtaining and filling her own medically unnecessary prescriptions for compounded medication and creams, causing losses of $250,971, U.S. Attorney Paul J. Fishman announced.

Stephanie Naar, 27, of St. Louis, Missouri, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging her with conspiracy to commit health care fraud.

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

Naar, a former employee of a New Jersey pharmaceutical company, admitted that in February 2015, she was recruited by an individual identified in the information as “co-conspirator #1 (CC-1),” a former employee of the same pharmaceutical company, to assist a marketing business identified in the information as “Company A.”  Company A was paid by various compounding pharmacies for referring beneficiaries whose insurance plans would pay for compounded medication, such as pain creams, scar creams and vitamins.

 CC-1 offered Naar “commission” payments in return for compounded medication, creams and vitamins that Naar obtained at specific specialty pharmacies and were billed to her employer’s prescription drug benefit plan. In furtherance of the scheme, Naar received a preprinted prescription form with compounded medications and creams from CC-1, took the forms to her doctor, and asked her doctor to prescribe those medications.

Afterwards, the compounded prescription products were sent to Naar from a pharmacy outside her home state. On March 26, 2015, Naar received a $3,565 check from Company A, which was a percentage of the amount paid by Naar’s employer to the compounding pharmacy for filling the prescription.

During the spring, summer and fall of 2015, Naar refilled her compounded self- prescriptions on forms provided by CC-1 and Company A at certain specific compounding pharmacies selected by Company A, and in return, received commission checks and wire transfers from Company A. Altogether she received $22,445 for her role in the conspiracy.

Naar also admitted that during the Fall of 2015, CC-1 directed her to a “telemedicine doctor” referred to in the information as “co-conspirator #2 (CC-2),” a doctor with whom Naar had no preexisting relationship, for the purpose of obtaining medically unnecessary compounded pain cream so that Company A would provide her continued monetary reimbursements. CC-2 was located in New York and was not licensed in Missouri. 

Naar faces a statutory maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Oct 4, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and U.S. Department of Defense, Defense Criminal Investigative Service, Office of Inspector General, under the direction of Special Agent in Charge Craig Rupert, with the ongoing investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney Melissa L. Jampol of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

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 $1.29 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: Thomas J. Matthes, St. Louis

NEWARK, N.J. – A Bergen County, New Jersey, man today admitted 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, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District of New Jersey announced.

Bilal Shehu, 48, of Paramus, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court 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.

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 an $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 guilty plea.

The charge to which Shehu pleaded guilty carries a maximum potential penalty of five years and a $250,000 fine. Sentencing is scheduled for Oct. 5, 2016. 

The FBI investigated the case. The government is represented by Assistant U.S. Attorney Mark J. McCarren of the District of New Jersey’s Special Prosecutions Division Trial Attorneys Charles Walsh and Peter Halpern of the Criminal Division’s Public Integrity Section.

Defense counsel: Alan M. Abramson Esq., New York

Company Ordered to Forfeit All of its Assets

NEWARK, N.J. – Biodiagnostic Laboratory Services LLC (BLS), the Parsippany, New Jersey clinical lab at the center of a long-running and elaborate test referral scheme operated by its president and numerous associates, pleaded guilty and was sentenced today in federal court, U.S. Attorney Paul J. Fishman announced.

BLS pleaded guilty before U.S. District Judge Stanley R. Chesler in Newark federal court to an information charging it with one count of conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act and one count of conspiracy to commit money laundering. Following the plea, BLS was sentenced by Judge Chesler. The company, which is no longer operational, must forfeit all of its assets.

The investigation has resulted in 40 guilty pleas – 26 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.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; 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 IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation.  

The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.

U.S. Attorney 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 $1.29 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: Steven Backfisch Esq., Westfield, New Jersey

NEWARK, N.J. – A Newark man was sentenced today to 564 months in prison for his role in three gunpoint carjackings and an attempted carjacking within a 10-day period, U.S. Attorney Paul J. Fishman announced.

Jamie Manning, 31, was previously convicted on all nine counts of a superseding indictment: one count of conspiracy to commit theft of a motor vehicle by force, violence and intimidation; three counts of carjacking; one count of attempted carjacking; and four counts of using a firearm in furtherance of a crime of violence. Manning was convicted following a six-day trial before U.S. District Judge William H. Walls, who imposed the sentence today in Newark federal court.

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

On Dec. 20, 2012, Manning and another conspirator approached the owner of 2004 Honda Accord. Manning pressed a firearm into the victim’s side and demanded that the victim give him keys to the car. Manning and the other conspirator took the victim’s keys and purse, demanded the PIN to the victim’s debit card and attempted to push the victim into the Accord’s trunk. Manning and the other conspirator got into the Accord and fled.

During the early morning hours of Dec. 26, 2012, Manning and Corey Thermitus, 24, of Newark, approached two individuals entering a parked, 2002, four-door Nissan Altima on a street in Newark. Manning pointed a firearm at one of the victims and both Manning and Thermitus ordered the victims to get out of the car. After robbing and threatening the victims, Manning and Thermitus fled the area in the carjacked vehicle.

On Dec. 28, 2012, Thermitus approached an individual sitting in a 2011, four-door Honda Accord that was parked in the driveway of a home in Newark. Thermitus pointed a firearm at the victim and ordered the victim out of the car. After threatening to shoot the victim, Thermitus, Manning and another man fled the area in the victim’s car.

Later that night, Thermitus, Manning and a third man drove in the carjacked Honda Accord to a residential area in Newark. Thermitus and Manning approached two individuals, one of whom was a young child, who were sitting in a parked, 2006, four-door Nissan Pathfinder in the driveway of a residence. Thermitus pointed a gun at the driver of the vehicle while Manning approached the rear passenger side of the vehicle, but the driver managed to escape in the car. As the assailants fled in the Honda Accord, Thermitus fired a gun in the direction of an individual who had come outside of a residence to investigate.

In addition to the prison term Judge Walls sentenced Manning to five years of supervised release.

Thermitus previously pleaded guilty to an information charging him with three counts of theft of a motor vehicle by force, violence and intimidation; one count of attempted theft of a motor vehicle by force, violence and intimidation; and one count of discharging a firearm in furtherance of a violent crime. He was sentenced to 255 months in prison on Dec. 2, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Anthony Ambrose, with the investigation leading to today’s verdict.

The government is represented by Assistant U.S. Attorney Dara Aquila Govan of the Organized Crime/Gangs Unit in Newark and Senior Litigation Counsel Vincent Grady O’Malley of the Criminal Division in Newark.

Defense counsel: Frank Arleo Esq., West Orange, New Jersey

NEWARK, N.J. – A disbarred New York attorney was sentenced today to 43 months in prison for his involvement in a ticket resale fraud scheme and a real estate investment fraud conspiracy that bilked multiple victims out of more than $3 million, U.S. Attorney Paul J. Fishman announced.

Pasquale Stiso, a/k/a “Pat Stiso,” 55, of New Rochelle, New York, was previously convicted of all 10 counts of a superseding indictment charging him with one count of conspiracy to commit wire fraud, six substantive counts of wire fraud, and three counts of money laundering. He was convicted following a seven-day trial before U.S. District Judge William J. Martini, who imposed the sentence today in Newark federal court.

According to documents filed in this case and evidence at trial:

Since 2011, co-defendant Paul Mancuso, 49, of Glen Rock, New Jersey, held himself out as an investor, broker, and developer of various purported investments. Mancuso obtained from his victims substantial investments for various projects that, in fact, either did not exist at all or in which Mancuso had no actual involvement. Stiso held himself out as an individual who was working with Mancuso on various purported projects. Many of the victims of Stiso and Mancuso’s schemes lost all or substantially all of the money they invested with Mancuso and Stiso. Many even lost all or most of their life savings.

Stiso and Mancuso falsely represented to some victims that they would purchase event tickets, such as tickets to New York Giants football games, New York Yankees playoff games, the Super Bowl, and other sporting events and concerts, at a lower or wholesale rate, and then resell them to members of the public at an inflated rate, creating profits for their investors. In reality, Stiso and Mancuso did not buy tickets with their victims’ money.

In one of the real estate schemes, Stiso and Mancuso falsely represented to victims that they were investors in a real estate development project in Valley Cottage, New York, and that investor money would be used to purchase an interest in real property. The real property interest would then be resold at an increased price, creating profits for their investors.

In reality, Stiso and Mancuso did not invest in any such real estate project with their victims’ money. Instead, they engaged in monetary transactions designed to funnel, and in many instances launder, the victims’ investments for their own benefit, including paying illegal gambling debts and money owed to loan sharks. Stiso and Mancuso were heavily involved in illegal gambling pursuits and both owed substantial sums of money to loan sharks and one of their bookmakers.

In addition to the prison term, Judge Martini sentenced Stiso to three years of supervised release and ordered him to pay restitution of $460,000.

Mancuso previously pleaded guilty in federal court to conspiring with Stiso to commit wire fraud and awaits sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, and criminal investigators of the U.S. Attorney’s Office with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Anthony J. Mahajan of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel:    Henry E. Klingeman Esq., Newark

                              Ernesto Cerimele Esq., Newark

NEWARK, N.J. – A Warwick, New York, man was sentenced today to life in prison for coercing a minor to engage in sexually explicit conduct and traveling from New York to Passaic County, New Jersey, to have sexual intercourse with another minor, U.S. Attorney Paul J. Fishman announced.

Clifford W. Wares, 43, was previously convicted of all six counts of an indictment charging him with one count of production of child pornography, one count of interstate travel to engage in illicit sexual conduct, two counts of online enticement of a minor to engage in criminal sexual conduct, and two counts of interstate extortionate threat. Wares was convicted following a six-day trial before U.S. District Judge Esther Salas, who imposed the sentence today in Newark federal court. 

According to the documents filed in this case and the evidence presented at trial:

From June 2011 through October 2011, Wares used email, telephone and Facebook to communicate with a 13-year-old girl in Passaic County (“Victim 1”). Wares used a fake Facebook account to pretend to be another minor who was known to Victim 1 and introduce himself as someone with whom Victim 1 should communicate. Afterwards, Wares sent Victim 1 pornographic images and engaged in sexually explicit communications, ultimately asking that she send him images and videos of herself nude or engaging in sex acts, which she did. On occasions when she did not comply, Wares threatened to distribute nude images of Victim 1 to her parents and friends.

In June 2011, Wares met a 14-year-old girl residing in Passaic County (“Victim 2”) via an online social network. From June 2011 through August 2011, Wares regularly engaged in sexually explicit communications with Victim 2, sent her pornographic images and told her that he was interested in “hanging out” with her. Wares then drove from his home in Warwick, New York, to Passaic County where he picked her up in his vehicle. Wares engaged in sex acts with Victim 2 in a nearby park. After a second encounter, Wares threatened to harm Victim 2’s reputation and property when she refused to meet him again.

Wares was ultimately apprehended after a search for him was conducted via land and helicopter in an Orange County, New York park. Among his possessions upon his arrest were a roll of duct tape, a pair of handcuffs, a knife, and a handwritten list of the names of other minors who were known to Victims 1 and 2.

At today’s sentencing hearing, Judge Salas found that, subsequent to his arrest, Wares also attempted to intimidate his victims into refusing to testify against him by sending anonymous letters threatening their own lives and those of their families. Judge Salas found that this conduct (which was unsuccessful) constituted obstruction of justice by Wares, leading to a two-level increase in Wares’ offense level under the advisory U.S. Sentencing Guidelines, and further justified the life sentence imposed.

U.S. Attorney Fishman credited Special Agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, the New Jersey Regional Computer Forensics Laboratory, the Passaic County Prosecutor’s Office, and the New York State Police with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Meredith J. Williams of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Thomas Ambrosio Esq., Lyndhurst, New Jersey.            

NEWARK, N.J. – A resident of the Philippines has been charged in connection with a large-scale and sophisticated identity theft scheme targeting high-profile victims, U.S. Attorney Paul J. Fishman announced today.

Peter Locsin, 35, of Talisay City, Philippines, was indicted by a federal grand jury on one count of bank fraud conspiracy and two counts of aggravated identity theft. The indictment was returned May 10, 2016, and unsealed today. The case is assigned to U.S. District Judge John M. Vasquez.

According to documents filed in this case:

Locsin allegedly conspired with others to defraud banks and credit card companies by compromising accounts held at those institutions by certain individuals, usually well-known or celebrity account-holders. Locsin and others first compromised personal identifying information (PII) – including names, dates of birth, Social Security numbers, address history, and work history. Locsin and his conspirators fraudulently accessed the individual accounts through websites or other online means, as well as through telephone calls.

Locsin and his conspirators used those accounts to make, or attempt to make, wire transfers of funds, order merchandise, order emergency replacement cards, add supplemental cardholders to accounts, or change addresses related to those accounts – none of which was authorized by the account-holders. 

The count of bank fraud conspiracy carries a maximum potential penalty of 30 years in prison, and the counts of aggravated identity theft each carry a maximum potential penalty of two years in prison. 

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 indictment.

The government is represented by Assistant U.S. Attorney Zach Intrater, Deputy Chief of the of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

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

CAMDEN, N.J. – A doctor with offices in Toms River, New Jersey, today admitted accepting thousands of dollars in exchange for patient referrals to two lab companies that performed blood and DNA testing, U.S. Attorney Paul J. Fishman announced.

Vincent Destasio, 54, of Toms River, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to Count 1 of an indictment charging him with conspiracy to accept cash bribes.

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

Destasio, a doctor of osteopathic medicine, was paid cash kickbacks by two sales representatives – Daniel Gilman, 63, of Ocean Grove, New Jersey, and Kenneth Roberson, 46, of Wall, New Jersey – who were partners operating PROMED, a marketing and sales company specializing in blood testing laboratories and DNA laboratory testing companies.  

From March 2014 through May 2015, Gilman and Robberson solicited Destasio by paying him cash bribes for referring patient lab work to two separate laboratories for which Gilman and Robberson provided marketing and sales. One company (Company 1) was a blood testing laboratory company and the other was a DNA laboratory testing company (Company 2). Neither Company 1 nor Company 2 had any knowledge of or involvement in the kickback scheme.   

Gilman and Robberson received monthly commission checks from the two companies for referrals. After receiving the commission checks from the two companies, Gilman and Robberson would identify the number of patients Destasio had referred and pay him a cash kickback based on those patients. Destasio was paid thousands of dollars in cash bribes for his referrals. 

Destasio faces a statutory maximum sentence of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Sept. 26, 2016.

Gilman and Robberson have both pleaded guilty to an information charging them with conspiracy to bribe a physician and await sentencing.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and 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, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.

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 $1.29 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: John J. Bruno Jr., Esq., Rutherford, New Jersey

CAMDEN, N.J. – Two New Jersey men were each sentenced to more than 16 years in prison for their roles in a large-scale conspiracy to ship stolen luxury cars to Hong Kong and elsewhere, U.S. Attorney Paul J. Fishman announced.

Andrew Clarke, 43 of Irvington, New Jersey, and Llewellyn Clarke, 42 of North Plainfield, New Jersey, were sentenced to 300 and 195 months in prison, respectively. Both were previously convicted on all four counts of a superseding indictment charging them each with one count of conspiracy to transport stolen motor vehicles and three counts of transportation of stolen motor vehicles in interstate and foreign commerce. They were convicted following a three-week trial before U.S. District Judge Robert B. Kugler, who imposed the sentences today in Camden federal court.

According to documents filed in in this case and evidence presented at trial:

The stolen car exportation ring was investigated by a multi-agency task force led by Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI). The investigation revealed that the Clarkes were purchasing stolen luxury cars from thieves operating in northern New Jersey and New York.

The Clarke brothers then recruited other conspirators to “re-tag” those cars, or have fraudulent vehicle identification numbers placed on the cars to mask the fact that they were stolen, and then had false title documents produced for those cars in New Jersey and Georgia. After the fake documents were created, the Clarkes shipped several of those stolen cars, valued between $1.9 and $2.1 million, from New Jersey to Hong Kong, while other cars were shipped to Georgia, Maryland and elsewhere. Once overseas or out-of-state, the stolen cars were then re-sold, some to unsuspecting buyers who later learned that their vehicles were in fact stolen.

In addition to the prison terms, Judge Kugler sentenced both defendants to three years of supervised release.

 U.S. Attorney Fishman credited special agents of ICE HSI, under the leadership of Executive Associate Director Peter Edge and Acting Special Agent in Charge Terence S. Opiola, and the N.J. State Police, under the direction of Superintendent Col. Rick Fuentes, for the investigation leading to today’s sentences. He also thanked U.S. Customs and Border Protection; the Waterfront Commission of New York Harbor; Essex County Prosecutor Carolyn Murray, Middlesex County Prosecutor Andrew C. Carey, Hudson County Prosecutor Esther Suarez, and Union County Acting Prosecutor Grace H. Park, the Essex and Hudson County Sheriff’s Departments, the Newark Police Department, the U.S. Coast Guard Investigative Service, the Port Authority of New York and New Jersey, the New Jersey Motor Vehicle Commission, the Georgia Department of Revenue, and the Maryland State Police for their roles.

The government is represented by Assistant U.S. Attorney José R. Almonte and James M. Donnelly of the U.S. Attorney’s Office Criminal Division in Newark

Defense counsel:

Andrew Clarke: Brian O’Malley Esq., Haddon Heights, New Jersey

Llewellyn Clarke: Paul Sarmousakis Esq., Avalon, New Jersey

NEWARK, N.J. – A Newark man today admitted distributing large quantities of heroin and oxycodone in and around downtown Newark, U.S. Attorney Paul J. Fishman announced today.

Lamont Vaughn a/k/a “Mont,” a/k/a “True V,” 33, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to Count One and Count Fourteen of an indictment charging him with conspiracy to distribute 100 grams or more of heroin and oxycodone and being a felon in possession of a firearm.

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

Between August 2012 and August 7, 2013, Vaughn conspired with others to distribute large quantities of heroin and oxycodone out of a downtown Newark clothing store called Ballas Boutique. Over the course of the conspiracy, Vaughn and others sold drugs out of Ballas Boutique to a confidential source more than 35 times. The majority of the sales were audio and video recorded.

Additionally, law enforcement intercepted conversations of Vaughn and his conspirators pursuant to court orders. The intercepted conversations revealed that Vaughn had multiple employees who sold drugs for him at Ballas Boutique. The intercepted conversations further revealed that Vaughn had multiple, established sources of supply for heroin and oxycodone.

On Aug. 7, 2013, law enforcement officers executed arrest and search warrants at Ballas Boutique and at Vaughn’s home in Newark. Among the items recovered from Vaughn’s bedroom were dozens of oxycodone pills, two firearms, and a large amount of cash.

Under the terms of today’s plea agreement – which has been accepted by the court – Vaughn will be sentenced to 65 months in prison and up to five years of supervised release. Sentencing is scheduled for Oct 5, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, as well as the N.J. State Police Street Gangs North Unit with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Margaret Ann Mahoney and Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Lamont Vaughn, Pro Se

NEWARK, N.J. – A Bergenfield, New Jersey, woman today admitted 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, 37, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging her with one count of conspiring to distribute cocaine. 

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 today that she conspired with co-defendant Ramis Esteves, 33, of New York, to distribute the cocaine. 

The conspiracy charge to which Melendez pleaded guilty today carries a maximum potential penalty of 20 years in prison and $1 million fine. Sentencing is scheduled for Oct. 4, 2016.

The charge and allegations against Esteves are merely accusations, and he is presumed innocent unless and until proven guilty.

U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia L. Shoffner, 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.

NEWARK, N.J. – A Newton, New Jersey, man today admitted that he planned 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, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of attempted kidnapping and one count of murder-for-hire. 

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.

The attempted kidnapping charge carries a potential penalty of 20 years in prison and a $250,000 fine. The murder-for-hire charge carries a potential penalty of 10 years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 21, 2016.

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. 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

TRENTON, N.J. – An Ocean County, New Jersey, man today admitted robbing eight banks in New Jersey and New York, U.S. Attorney Paul J. Fishman announced.

Steven Wisnowski, 32, of Barnegat, New Jersey, 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 went on a crime spree and 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.

The bank robbery charges to which Wisnowski pleaded guilty each carry a maximum penalty of 20 years in prison and a fine of $250,000.  Sentencing is scheduled for Oct. 11, 2016.

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 guilty plea.  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

NEWARK, N.J. – A Passaic County, New Jersey, man was sentenced today to 60 months in prison for receiving sexually explicit images of children from his computer, U.S. Attorney Paul J. Fishman announced. 

Thomas Bachalis, 32, of West Milford Township, New Jersey, pleaded guilty on March 14, 2016, before U.S. District Judge Ester Salas to an information charging him with receipt of child pornography. Judge Salas imposed the sentence today in Newark federal court. 

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

Bachalis previously admitted that in August 2013 he was a member of a publicly available peer-to-peer file sharing network on the internet, which he used to receive images of child sexual abuse.  

In addition to the prison term, Judge Salas sentenced Bachalis to five 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; the Passaic County Sheriff’s Office, under the direction of Sheriff Richard H. Berdnik; and the West Milford Police Department, under the direction of Chief Timothy Storbeck, with the investigation leading to today’s sentencing. 

The government is represented by Assistant U.S. Attorney Courtney A. Howard of the U.S. Attorney’s Office Criminal Division in Newark.

NEWARK, N.J. – A Monsey, New York, man appeared in federal court today to face charges that he sexually abused a woman on a flight from Israel to Newark Liberty International Airport, U.S. Attorney Paul J. Fishman announced.

Yoel Oberlander, 35, was charged by criminal complaint with one count of abusive sexual contact on an airplane. Oberlander had his initial appearance this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was detained.

According to the complaint:

While on a May 29, 2016 El Al flight from Tel Aviv to Newark, Oberlander was seated next to a female passenger and her mother. During the flight, Oberlander repeatedly placed his hand on the female passenger’s thigh and breast without her consent.

Oberlander is a registered sex offender. He was previously convicted in 2002 in New York for sexual abuse in the second degree, arising from his sexual assault of an eleven-year-old girl.

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, and the Port Authority of New York-New Jersey, with the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Criminal Division in Newark.

Defense counsel: David Goldstein Esq., Montvale, New Jersey

NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 240 months in prison for his role in an armed carjacking spree between June 6, 2012, and June 22, 2012 U.S. Attorney Paul J. Fishman announced. 

Jahleel McLendon, 22, of Newark, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with five counts of theft of a motor vehicle by force, violence, and intimidation, and one count of brandishing a firearm in furtherance of a crime of violence. Judge McNulty imposed the sentenced today in Newark federal court. 

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

On June 6, 2012, McLendon approached a man sitting in the driver’s seat of a parked Chrysler 300 and ordered him out of the car at gunpoint. Several hours later, McLendon was still driving the Chrysler 300 when Newark police officers attempted to pull him over. McLendon led police on a car chase, eventually losing control of the vehicle and crashing into two parked cars and two utility poles. He eluded capture that day, and three days later, McLendon and an accomplice carjacked an Acura TL at gunpoint while the victim was loading the trunk of the car.

On June 15, 2012, McLendon and an accomplice carjacked a Chevrolet Trailblazer at gunpoint, and approximately twenty minutes later, used that Trailblazer to carjack a BMW 325 at a gas station in Newark. On June 22, 2012, McLendon carjacked a Chevrolet Impala at gunpoint.  When the driver attempted to resist, McLendon threatened to shoot her. Less than two hours later, McLendon was still driving the Impala when Newark police officers attempted to pull him over. McLendon again led the police on a car chase before he drove into an empty parking lot and fled on foot. Newark Police officers quickly caught McLendon and arrested him. He was found to be possession of a loaded handgun and 46 glassine bags of heroin. 

In addition to the prison term, Judge McNulty also sentenced McLendon to five years of supervised release.

U.S. Attorney Fishman credited the Newark Police Department, under the direction of Police Director Anthony Ambrose; special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; detectives with the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and investigators in the U.S. Attorney’s Office with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Cari Fais of the Newark office.

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

NEWARK, N.J. – Five members of the international street gang “Mara Salvatrucha” (also known as MS-13) – including two top-ranking members who were directing gang operations from California prison cells – today admitted their roles in crimes including racketeering, conspiracy to commit murder, extortion and drug trafficking, U.S. Attorney Paul J. Fishman announced.

The defendants include Amilcar Romero, 47, a/k/a “Chichi,” and Joel Antonio Cortez, 41, a/k/a “Pee Wee,” both currently serving state prison sentences in California, and both of whom served as chief deputies to the leader of Mara Salvatrucha’s “national program.” They pleaded guilty today before U.S. District Judge Stanley Chesler in Newark federal court.

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

The “national program,” also known as the “unification of the barrio,” sought to bring all of Mara Salvatrucha’s local sets, or “cliques,” in the United States under a single, cohesive leadership structure. The goal of the national program was to increase the nationwide collection of extortion proceeds, known as “rent,” and to use these rent-collection networks to establish new drug distribution channels from California to the East Coast.  Mara Salvatrucha leaders allegedly struck a deal with the Mexican Mafia, a California prison gang, and certain Mexican drug cartels, including La Familia Michoacana, to supply methamphetamine and other drugs at cheap prices to gang members on the East Coast, including in New Jersey.

Three members of the “Hudson Locotes Salvatruchas”—a local branch, or “clique,” based in Hudson County, New Jersey, pleaded guilty to their roles in conspiring to murder an MS-13 member that had violated the gang’s rules and the member’s brother, who was alleged to belong to a rival gang.  Luis Lopez-Guzman, 26, a/k/a “Nino, of Union City, New Jersey;” Hector Carranza-Solis, 32, a/k/a “Blackie;” of West New York, New Jersey, and Rudy Gutierrez, 24, a/k/a “Chiqui,” of Union City, admitted that they participated in telephone calls and other discussions with the leadership of the gang in the United States and El Salvador to seek permission to kill the rival gang members. Law enforcement learned of the murder plot during the course of this investigation and arrested the defendants before it could be completed.

Romero and Cortez served as the top deputies to Jose Juan Rodriguez-Juarez. Rodriguez-Juarez was a made member, or “carnale,” in the Mexican Mafia, and he leveraged his status within the powerful prison gang to assert control over all Mara Salvatrucha activities in the United States. Within Mara Salvatrucha, Rodriguez-Juarez was known by his gang moniker, “Dreamer,” but when he assumed control of the national program, he became known as “Sacerdote,” Spanish for “the priest.”

By autumn 2013, Rodriguez-Juarez had assigned Romero to serve as the primary point-of-contact between the leadership of Mara Salvatrucha in the United States and El Salvador, while Cortez assumed responsibility for recruiting Mara Salvatrucha cliques on the East Coast to join the national program. Both are also alleged to have ordered violence on the East Coast, including Cortez’s authorization of the November 2013 murder plot in Hudson County, and Romero’s order to east coast-based gang members to collect money on behalf of the gang by force and violence. Romero and Cortez collaborated with MS-13 gang leaders in New Jersey, Virginia, Maryland, and elsewhere to establish a distribution chain for cheap Mexican cartel drugs, including heroin and crystal methamphetamine. Part of the profit from that drug distribution chain would then be funneled back to the gang’s leadership in California to further promote the gang’s criminal activity.

All five defendants who pleaded guilty today will be sentenced Sept. 14, 2016. (See chart below.)

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 pleas. The investigation also involved substantial assistance from multiple FBI field offices, including the Los Angeles, California, office. U.S. Attorney Fishman also thanked the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, for their work on this case. He also acknowledged the U.S. Attorney’s Office for the Central District of California for their assistance in the ongoing investigation.

The government is represented by Assistant U.S. Attorneys James M. Donnelly and J. Jamari Buxton of the U.S Attorney’s Office Organized Crime/Gangs Unit in Newark.

Defense counsel:

Romero: John P. McDonald Esq., Somerville, New Jersey

Cortez: Howard Brownstein Esq., Union City, New Jersey

Carranza-Solis: Laurie M. Fierro Esq., Kinnelon, New Jersey

Gutierrez: Jerome A. Ballarotto Esq., Trenton, New Jersey

Lopez-Guzman: A. Paul Condon Esq., Jersey City, New Jersey

 

Maximum Penalties

Count

Charge

Defendants

Maximum Penalty

1.  

Racketeering Conspiracy

Romero

Cortez

Gutierrez

Life in prison

(Romero, Cruz)

20 years in prison

(Gutierrez)

4

Conspiracy to Commit Murder in Aid of Racketeering

Gutierrez

Carranza-Solis

Lopez-Guzman

10 years in prison

 

CAMDEN, N.J. - A Burlington County, New Jersey, man was indicted by a federal grand jury today for allegedly selling firearms to criminals in South Jersey, U.S. Attorney Paul J. Fishman announced.

Fr’Neil Hickson, 36, a/k/a “Philly,” of Willingboro, New Jersey, was charged by indictment with one count of dealing in firearms without a federal firearms license, one count of conspiracy to deal in firearms and transport firearms interstate for sale without a license, and one count of possession of firearms by a convicted felon.

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

Hickson allegedly conspired with Joshua Jackson, 35, a/k/a “Apple, a/k/a “Trent,” of Willingboro and Columbus, Ohio; and Terrance Laboo, 43, a/k/a “Terrance Reeves,” a/k/a “Mus,” of Oaklyn, New Jersey, to deal in firearms without a federal firearms license.

Firearms were bought through straw purchasers and at gun shows in Ohio and transported into New Jersey by Jackson and Antonio Berry, of Columbus, Ohio, either in a vehicle rented by Jackson, or by Berry, who took Greyhound buses from Columbus, Ohio, to Philadelphia, Pennsylvania, Camden and Mount Laurel, New Jersey. Berry allegedly carried duffel bags that contained multiple firearms, which were sold and delivered to Hickson and Laboo. Hickson and Laboo sold the guns to drug dealers and other felons in southern New Jersey, including in Camden and Willingboro. Hickson also obtained guns from other sources in Virginia and Pennsylvania and transported them back to New Jersey for unlicensed sales to his customers.

Jackson and Laboo previously pleaded guilty before U.S. District Judge Robert B. Kugler to dealing in firearms without a license, conspiracy to deal in firearms without a license, and possession of firearms by a convicted felon. Both await sentencing in July 2016.

The counts of conspiracy to deal in firearms without a license and dealing firearms without a license each carry a maximum potential penalty of five years in prison and a $250,000 fine. The count of possession of firearms by a convicted felon carries a maximum penalty of 10 years in prison and a maximum fine of $250,000.           

U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky Jr., Newark Field Division; and Essam Rabadi, Special Agent in Charge of ATF’s Philadelphia Field Division, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Patrick C. Askin of the U.S. Attorney's Office in Camden.

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

Defense counsel: Michael N. Huff Esq., Camden

NEWARK, N.J. – Two women have admitted to their respective roles in a conspiracy to illegally obtain and distribute oxycodone in New Jersey, U.S. Attorney Paul J. Fishman announced today.

Alexis Horvath, 27, of Belleville, New Jersey, pleaded guilty today before U.S. District Judge Esther Salas in Newark federal court to an indictment charging her with conspiracy to distribute oxycodone. Sabrina Vajda, 32, of Brooklyn, New York, pleaded guilty before Judge Salas on June 13, 2016, to a superseding information charging her with conspiracy to distribute oxycodone. 

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

Using confidential sources, physical surveillance, and recorded text messages and telephone calls, investigators with the Drug Enforcement Administration (DEA) discovered that members and suppliers of a drug trafficking organization secured prescriptions for oxycodone and other controlled substances from various doctors in New Jersey, filled them at pharmacies in Belleville and elsewhere, and sold the drugs for a profit. The investigation identified Horvath and Vajda as members of the drug trafficking organization.

Horvath admitted that between Feb. 5, 2014, and Aug. 13, 2014, she personally obtained prescriptions for oxycodone-containing pills from doctors, had those prescriptions filled at pharmacies, and then re-sold the pills to others.  She admitted that she bought 70 30 mg. oxycodone pills from one conspirator on June 29, 2014 in Jersey City, New Jersey, and then sold them to another conspirator. 

Vajda admitted that between May 3, 2014 and Aug. 13, 2014, she also worked with other conspirators to obtain prescriptions for oxycodone-containing pills from doctors, had those prescriptions filled at pharmacies, and then resold the pills to others. On May 7, 2014, she went to a doctor’s office near Paterson, New Jersey with three conspirators and obtained a prescription for pills that contained oxycodone from that doctor. She then sold the oxycodone pills from her prescription to others.

Oxycodone is a Schedule II controlled substance – meaning that it has a high potential for abuse, a currently accepted medical use with severe restrictions, and abuse of the drug may lead to severe psychological or physical dependence.

The charge to which Horvath and Vajda each pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $1 million fine. Sentencing for Horvath and Vajda is scheduled for Sept. 19, 2016.

Of the individuals originally charged with Horvath and Vajda, Victoria Horvath, 43, and Rickie Horvath, 54, of Belleville, New Jersey; Monica Horvath, 22, Tony Marco, 47, and Steven Horvath, 45, all of Rutherford, New Jersey, and Justin Farraj, 24, and Matthew Policarpio, 28, of Newark, have pleaded guilty and await sentencing. Brian Perez, 23, was sentenced to a term of 40 months in prison in September 2014. Luis Rivera, 25, was sentenced to 54 months in prison in August 2015. Daniel Horvath, 27, was sentenced to 27 months in prison and Johnny Horvath, 46, was sentenced to 30 months in prison in April 2016. Charges were dismissed against Belleville pharmacist Vincent Cozzarelli after his death in April 2014.

The indictment remains pending against four other conspirators.  The charges and allegations in the indictment against them are merely accusations, and they remain innocent unless and until proven guilty.

U.S. Attorney Fishman credited the DEA’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation leading to the guilty pleas.

The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit of the U.S. Attorney’s Office in Newark.  This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF).  The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

Defense counsel:

Horvath: Anthony Iacullo Esq., Nutley, New Jersey

Vajda:  Laurie Fierro Esq., Kinnelon, New Jersey

NEWARK, N.J. - An Elizabeth, New Jersey, man today admitted repeatedly aiming a laser pointer at a television news helicopter, U.S. Attorney Paul J. Fishman announced.

Stiven Lopez-Bender, 27, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an information charging him with one count of aiming a laser pointer at an aircraft. 

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

On Nov. 11, 2015, a news helicopter went to a location in Elizabeth to cover a story. Lopez-Bender admitted that when the helicopter arrived at the location, he aimed a green laser and struck the flight deck of the helicopter through the main windshield. 

Lopez-Bender also admitted he pointed the green laser at the helicopter a second time as he emerged from his SUV and again as he walked toward an apartment building. Afterwards, he pointed the green laser at the helicopter for a fourth time from a window in the apartment building he had just entered.    

The charge is punishable by a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Sept. 28, 2016.

U.S. Attorney Fishman credited Special Agents and Joint Terrorism Task Force Officers of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and members of the Elizabeth Police Department, under the leadership of Police Director James Cosgrove, with the investigation leading to today’s plea.

The case is being prosecuted by Joyce M. Malliet of the U.S. Attorney’s Office National Security Unit in Newark.

Defense Counsel: David Holman, Esq.

NEWARK, N.J. – A former corrections officer with the Essex County Correctional Facility was sentenced today to 300 months in prison for sexually assaulting a pretrial detainee and then lying about it to investigators, U.S. Attorney Paul J. Fishman, District of New Jersey, and Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, announced.

Shawn D. Shaw, 42, of Newark, was previously convicted of both counts of an indictment charging him with depriving an individual of rights under color of law and obstruction of justice following a seven-day trial before U.S. District Judge Esther Salas. The jury deliberated for two days before returning the guilty verdict. Judge Salas imposed the sentence today in Newark federal court.

“The defendant’s conduct in this case is especially abhorrent considering his role as a public servant overseeing the safety and well-being of the prisoners in his charge,” U.S. Attorney Fishman said. “His sentence appropriately reflects the serious nature of his crime and the government’s intolerance of such criminal behavior by those who wear a badge.”

“The defendant abused his position of power to exploit a vulnerable individual whom he was tasked with protecting,” said Principal Deputy Assistant Attorney General Gupta.  “While no amount of jail time can undo the harm he caused, I am hopeful that this sentence will provide some level of resolution to the victim who had the strength and resolve to report the assault.”    

According to documents filed in this case and the evidence at trial:

Shaw was the only officer on duty in the female unit during the night of a snow blizzard on Dec. 28, 2010. During the night, Shaw made sexually explicit comments to the victim. Although she rejected his advances, records show that in the middle of the night, Shaw opened the victim’s cell door. The victim testified that Shaw entered her cell, and despite her saying “stop” and “no,” Shaw raped her. Expert testimony, including DNA analysis, corroborated the victim’s testimony that Shaw was her assailant.

When investigators questioned Shaw about the attack, he lied and intentionally omitted information from his statement in order to obstruct the investigation. Shaw falsely stated that he did not make sexual comments to the detainee or enter the victim’s cell.

In addition to the prison term, Judge Salas sentenced Shaw to five years of supervised release and ordered him to pay restitution of $6,000 to the victim.

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 the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, for its assistance.

The government is represented by Criminal Division Chief Thomas Eicher and Assistant U.S. Attorney Shana Chen of the U.S. Attorney’s Office in Newark, with assistance from Trial Attorney Shan Patel of the Justice Department’s Civil Rights Division.

Defense counsel: Mark A. Fury Esq., Mount Holly                                                                                                                         

Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Paul J. Fishman of the District of New Jersey announced today that Shawn D. Shaw, 42, of Newark, New Jersey, a former correctional officer with the Essex County, New Jersey, Correctional Facility, was sentenced today to 25 years in prison for sexually assaulting a pretrial detainee and then lying about it to investigators.

Shaw was convicted on Feb. 5, 2016, of both counts of an indictment charging him with depriving an individual of rights under color of law and obstruction of justice following a seven-day trial before U.S. District Judge Esther Salas of the District of New Jersey.  Judge Salas imposed the sentence today in Newark federal court.

“The defendant abused his position of power to exploit a vulnerable individual whom he was tasked with protecting,” said Principal Deputy Assistant Attorney General Gupta.  “While no amount of jail time can undo the harm he caused, I am hopeful that this sentence will provide some level of resolution to the victim who had the strength and resolve to report the assault.”

“The defendant’s conduct in this case is especially abhorrent considering his role as a public servant overseeing the safety and well-being of the prisoners in his charge,” said U.S. Attorney Fishman.  “His sentence appropriately reflects the serious nature of his crime and the government’s intolerance of such criminal behavior by those who wear a badge.”

According to documents filed in this case and the evidence at trial:

Shaw was the only officer on duty in the female unit during a blizzard on Dec. 28, 2010.  During the night, Shaw made sexually explicit comments to the victim.  Although she rejected his advances, records show that in the middle of the night, Shaw opened the victim’s cell door.  The victim testified that Shaw entered her cell, and despite her saying “stop” and “no,” Shaw raped her.  Expert testimony, including DNA analysis, corroborated the victim’s testimony that Shaw was her assailant.

When investigators questioned Shaw about the attack, he lied and intentionally omitted information from his statement in order to obstruct the investigation.  Shaw falsely stated that he did not make sexual comments to the detainee or enter the victim’s cell.

In addition to the prison term, Judge Salas sentenced Shaw to five years of supervised release and ordered him to pay $6,000 in restitution.

This case was investigated by the FBI’s Newark Division and was prosecuted by Criminal Division Chief Thomas Eicher and Assistant U.S. Attorney Shana Chen of the District of New Jersey and Trial Attorney Shan Patel of the Civil Rights Division’s Criminal Section.

TRENTON, N.J. - A Pottersville, New Jersey, man today admitted filing a false tax return and evading corporate taxes of American Tutor Inc., a company that offered supplemental educational services to New Jersey school districts, U.S. Attorney Paul J. Fishman announced.

James Wegeler, 73, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to one count of corporate tax evasion and one count of aiding and assisting in the filing of a false tax return as charged in the information filed today.

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

Wegeler was a certified public accountant who served as the vice president and chief financial officer of American Tutor. In 2013, Wegeler filed a return on behalf of American Tutor that contained materially false information in order to reduce American Tutor’s tax liability.  Wegeler intentionally inflated American Tutor’s business expenses by claiming that it paid wages, tips and other compensation to its employees above and beyond what it had actually paid during the tax year 2012.

In addition, in 2011, Wegeler intentionally prepared a fraudulent tax return for an individual taxpayer that did not include substantial income the taxpayer had earned in tax year 2010.

Wegeler admitted that his actions resulted in a total tax loss of $1,494,521 to the IRS.

The corporate tax evasion charge carries a maximum potential penalty of five years in prison. The charge of aiding and assisting in the filing of false tax returns carries a potential penalty of three years in prison. Both charges are punishable by a potential $250,000 fine. Sentencing is scheduled for Oct. 5, 2016.

U.S. Attorney Fishman credited special agents of the IRS, under the direction of Special Agent in Charge Jonathan D. Larsen, and special agents of the U.S. Department of Education, under the direction of Special Agent in Charge Brian M. Hickey, with the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney José R. Almonte of the U.S. Attorney’s Office Special Prosecutions Division.

Defense counsel: Thomas Calcagni, Newark, New Jersey

TRENTON, N.J. – An internal medicine physician practicing in Jamesburg, New Jersey, was sentenced today to 12 months in prison for accepting bribes in exchange for patient referrals to a mobile diagnostic company, U.S. Attorney Paul J. Fishman announced.

Paresh Patel, 55, of Franklin Township, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with violating the Anti-Kickback Statute. Judge Cooper imposed the sentence today in Trenton federal court.

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

From September 2009 through December 2013, Paresh Patel accepted more than $174,000 in bribes for referring his patients to the Morris County-based mobile diagnostic testing company, Biosound Medical Services (referenced in the Information as “Company 1”), operated by Nita K. Patel and Kirtish N. Patel (no relation to Paresh Patel). As part of the bribes, Biosound Medical Services paid Paresh Patel’s property tax obligations and home renovation expenses.

In addition to the prison term, Paresh Patel was also ordered to pay a $6,000 fine. He has also forfeited more than $174,000 he received as part of the bribery scheme.

Nita K. Patel and Kirtish N. Patel, pleaded guilty on Nov. 17, 2015 to health care fraud for forging physician signatures on diagnostic reports that were never reviewed by a specialist physician and were actually authored by Kirtish N. Patel, who did not have a medical license. Both await sentencing.

U.S. Attorney Fishman credited 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 the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Office Health Care and Government Fraud Unit 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 $1.29 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: Riza Dagli Esq.

                                                           

NEWARK, N.J. – A doctor who admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates was sentenced today to 37 months in prison, U.S. Attorney Paul J. Fishman announced.

Bret Ostrager, 51, of Woodbury, New York, a doctor with practices in Nassau County, New York, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to Counts One, Two and Five of an indictment charging him with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act by accepting bribes, one substantive violation of the Anti-Kickback Statute, and one substantive violation of the Federal Travel Act. Judge Chesler imposed the sentence today in Newark federal court.

Ostrager is one of 39 people – 26 of them doctors – who have pleaded guilty 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.

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

Ostrager admitted that, between February 2011 and April 2013, he received monthly cash bribes of approximately $3,300 from BLS employees and associates. He periodically solicited and received from the BLS employees and associates tickets and meals that cost thousands of dollars. These additional bribes in response to specific requests from Ostrager included tickets to a New York Mets baseball game, a New York Knicks basketball game, a Katy Perry concert, a Justin Bieber concert, and the Broadway show “Newsies.” In exchange, Ostrager referred patient blood samples to BLS. Ostrager’s referrals generated approximately $909,000 in lab business for BLS.

In addition to the prison term, Judge Chesler sentenced Ostrager to one year of supervised release, fined him $30,000 and ordered forfeiture of $101,271.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner; 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 IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Joseph N. Minish, Danielle Alfonzo Walsman, and Jacob T. Elberg, Chief of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark, as well as Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.

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 $1.29 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: Marc Agnifilo Esq., New York

NEWARK, N.J. – A Jersey City man was arrested today on charges that he defrauded investors using phony contracts he had to sell olive oil to major retailers and then used the money for purchases, U.S. Attorney Paul J. Fishman announced. 

Antonio Fasolino, 59, of Jersey City, New Jersey, was arrested by special agents of the FBI and charged by complaint with wire fraud. He is scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.     

According to the criminal complaint:

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 engaged in an investment fraud scheme in which he obtained more than $3.4 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.

The count of wire fraud with which the defendant is charged carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss caused by the scheme.

U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Timothy Gallagher, for the investigation leading to the arrests. 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. Attorneys Lakshmi Herman and 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 charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Defense counsel: Alan Silber Esq., Roseland, New Jersey

NEWARK, N.J. - A Jersey City, New Jersey, man today admitted stealing more than $250,000 from the Jersey City Child Development Centers Inc. (“JCCDC”), an organization that provided early childhood development services and education to under-privileged children, U.S. Attorney Paul J. Fishman announced.

Robert E. Mays, 38, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of wire fraud.

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

Mays was the executive director of JCCDC from Sept. 2013 to May 2014. Mays admitted that he stole more than $250,000 from JCCDC by unilaterally increasing his annual salary from $96,500 to $155,000 after being employed by JCCDC for only two months. He also admitted that he created false board of director’s minutes to give the impression JCCDC authorized the salary increase.

In addition, Mays admitted he withdrew funds from a JCCDC bank account to pay for unauthorized personal expenses, including a 2007 Maserati Quattroporte and a fur coat worth thousands of dollars.

The wire fraud count to which Mays pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the gross gain or loss resulting from the scheme, as well as mandatory restitution in the full amount of the loss to JCCDC. Sentencing is scheduled for Sept. 20, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to today’s plea. He also thanked the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys José R. Almonte and Mala Ahuja Harker of the U.S. Attorney’s Office’s Special Prosecutions Division and Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.

Defense counsel: Alexander W. Booth Jr., Union City, New Jersey

NEWARK, N.J. – A gang member who sold crack-cocaine for the New Jersey set of the Grape Street Crips pleaded guilty today to drug trafficking charges, U.S. Attorney Paul J. Fishman announced.

Ernest Valentine, a/k/a “Bop,” 31, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with conspiracy to distribute 28 grams or more of crack-cocaine.

On June 2, 2016, Trae Roberts, a/k/a “Trae Pound,” 24, pleaded guilty to the same charge. To date, 37 members and associates of the NJ Grape Street Crips have pleaded guilty to drug trafficking, firearms and other charges.

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

The New Jersey Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark, including the neighborhood of 6th Avenue and North 5th Street. Both Valentine and Roberts obtained crack-cocaine from more senior gang members and associates who used and shared a dedicated cell phone to accept orders for thousands of clips of crack-cocaine. These gang-members included Hakeem Vanderhall, a/k/a “Keem,” a/k/a “Sugar Bear,” Eric Concepcion, a/k/a “Eddie Arroyo,” a/k/a “E-Wax,” a/k/a “Wax,” and Rashan Washington, a/k/a “Shoota.”

To protect their gang and drug territory, the New Jersey Grape Street Crips operating in the 6th Avenue and North 5th Street location used “community guns” that were easily accessible to gang members. During the course of the investigation, law enforcement agents seized numerous firearms, including a .410 caliber assault rifle, a.45 caliber Thompson semi-automatic carbine, a 7.62 caliber assault rifle, and numerous semi-automatic handguns.

Both Valentine and Robert face a five-year mandatory minimum term of imprisonment, a maximum potential sentence of 40 years in prison, and a $5 million fine.

U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, for the investigation leading to the guilty pleas. U.S. Attorney Fishman also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, police officers and detectives of the Department of Public Safety and Newark Police Division, under the direction of Director Anthony A. Ambrose, and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry A. Kamar of the OCDETF/Narcotics Unit of the Criminal Division in Newark.

This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.

Defense counsel:

Valentine: Stacy A. Biancamano Esq., Chatham, New Jersey

Roberts: Jean D. Barrett Esq., Montclair, New Jersey