District of New Jersey
Press releases recorded for this federal judicial district.
Pennsylvania Woman Sentenced to 40 Months in Prison for Role in International $200 Million Credit Card Fraud ConspiracyRead the Press Release
TRENTON, N.J. – A Philadelphia woman who participated in one of the largest credit card fraud schemes ever charged by the Justice Department was sentenced today to 40 months in prison, U.S. Attorney Paul J. Fishman announced.
Vernina Adams, 34, previously pleaded guilty before Judge Anne E. Thompson to an information charging her with one count of conspiracy to commit bank fraud. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Adams was originally charged in February 2013 as part of a conspiracy, led by Tahir Lodhi, Babar Qureshi, Ijaz Butt, and others, to fabricate more than 7,000 false identities and obtain tens of thousands of credit cards. Since then, 19 people, including Adams, have pleaded guilty in connection with the scheme.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a phony credit profile with the major credit bureaus; pump up the credit of the false identity by providing bogus information about that identity’s creditworthiness; then borrowed or spent as much as they could without repaying the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
The scope of the criminal enterprise required Adams and others to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.
Adams and her conspirators also used sophisticated methods – including a network of black-market businesses called “tradelines” providers – to commit fraud. Tradelines come in two varieties: primary tradelines and authorized user tradelines. Primary tradelines are lines of credit in a credit history. If a credit card user has primary tradelines in good standing, it can have a significant impact on the user’s credit score, enabling the user to borrow more from credit card issuers. A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another individual to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.
During her plea proceeding, Adams admitted advertising on Craigslist for individuals willing to add someone onto their credit cards. She also admitted selling other members of the conspiracy fraudulent tradelines, including by working with Acapulco Jewelry, a complicit business in California. Adams would extend a fictitious line of credit to a false identity, backdate the line of credit so it appeared to have existed for a longer period of time, then falsely report the line of credit had been paid.
In addition to the prison term, Judge Thompson sentenced Adams to five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked postal inspectors under the direction of Acting Inspector in Charge Cynthia Shoffner, special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Jeffrey Wood, and the U.S. Social Security Administration for their assistance.
The government is represented by Assistant U.S. Attorneys Zach Intrater and Daniel V. Shapiro of the U.S. Attorney’s Office Economic Crimes Unit, as well as Assistant U.S.
Attorney Barbara Ward, Acting Chief of the Asset Forfeiture and Money Laundering Unit.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Vernina Adams: Todd E. Henry Esq., Philadelphia
Justice Department Statements Regarding Court Approval of the Agreement with Newark, New Jersey, to Reform Unconstitutional Policing PracticesRead the Press Release
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 released the following statements regarding the U.S. District Court for the District of New Jersey’s approval of the department’s agreement with the city of Newark, New Jersey, to reform the police department’s unconstitutional practices:
“We appreciate the court’s swift approval of the Justice Department’s consent decree with the city of Newark,” said Principal Deputy Assistant Attorney General Gupta. “This agreement will help the Newark Police Department reform policies, improve systems and rebuild trust between officers and the community they serve. As Newark implements this agreement, we will continue to work closely with city officials, law enforcement and community members to put in place the necessary changes that can make Newark a national model for constitutional, effective and accountable policing. Once fully implemented, these reforms will make all of those in Newark – officers and civilians alike – safer. And these reforms will ensure that law enforcement in Newark complies with the Constitution and safeguards the civil rights of every Newark resident.”
“This consent decree, now approved by the court, provides a roadmap for reform in Newark and a model for best practices for police departments across the country,” said U.S. Attorney Fishman. “Implementing the systemic changes outlined in the consent decree will take time, but this is what the city of Newark and the men and women who serve in the Police department want and need, and it is what the people of Newark deserve: a first-class police department that keeps them safe and respects their constitutional rights.”
Former New Jersey Attorney Sentenced to Two Years in Prison for Generating $1 Million in Profit from Phony LawsuitsRead the Press Release
CAMDEN, N.J. – A former attorney in the Haddonfield, New Jersey, office of a firm specializing in toxic tort litigation was sentenced today to 24 months in prison for falsifying defendants’ names in more than 100 asbestos suits filed in New York State courts in order to increase business and his standing in the firm, U.S. Attorney Paul J. Fishman announced.
Arobert C. Tonagbanua, 47, of Sicklerville, New Jersey, previously pleaded guilty before U.S. District Judge Noel L. Hillman to an information charging him with one count of wire fraud. Judge Hillman imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
From 2008 through April 9, 2012, Tonagbanua worked at the Haddonfield office of a firm specializing in toxic tort litigation, workers’ compensation and immigration law, during which time he engaged in the wire fraud scheme.
Tonagbanua admitted he obtained copies of legitimately filed asbestos complaints and fraudulently altered them by deleting a named defendant and inserting the name of one or more of his firm’s clients. Unbeknownst to anyone else at the firm, he forwarded those fraudulently altered complaints by email, fax and otherwise to the firm’s clients, their representatives and insurance companies.
After notifying the firm’s clients of the suits, Tonagbanua – and others at the firm who were not involved in the scheme – undertook the representation of the clients, by attending depositions, answering discovery and even settling claims. It is estimated that Tonagbanua inserted his firm’s clients’ names into more than 100 lawsuits, resulting in the generation of more than $1 million in fraudulent fees, costs and settlements. Tonagbanua personally benefitted from the scheme through bonuses and increased compensation.
In addition to the prison term, Judge Hillman sentenced Tonagbanua to three years of supervised release. Tonagbanua must also pay remaining institution of $232,643.92.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge William F. Sweeney, Jr. in Philadelphia, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.
Defense counsel: Michael Miller Esq., Turnersville, New Jersey
New York Man Admits Robbing Bergen County BankRead the Press Release
NEWARK, N.J. – A Brooklyn, New York, man who was on the FBI’s Ten Most Wanted Fugitive List in 1988 today admitted robbing a TD Bank in Oakland, New Jersey, in April 2013, U.S. Attorney Paul J. Fishman announced.
John Edward Stevens, 62, pleaded guilty before U.S. District Judge Claire C. Cecchi to Count Two of an indictment charging him with armed bank robbery.
According to documents filed in this case and statements made in court:
Stevens admitted that on April 15, 2013, he robbed a TD Bank in Oakland. After entering the bank, Stevens approached several bank employees while carrying a zipper pouch. He opened the zipper pouch, pulled out what appeared to be a black handgun, and brandished it at one of the bank employees. He then took several thousand dollars in cash and fled the scene.
Approximately 20 minutes after the robbery, law enforcement stopped a vehicle that was reported stolen. The driver of the stolen vehicle was identified as Stevens. Law enforcement arrested Stevens and located a TD Bank bag filled with money in the vehicle.
Stevens has been convicted of at least eight prior armed bank robberies in the Central District of California and the Southern District of Ohio. Under the terms of today’s plea agreement – if accepted by the court – Stevens will be sentenced to 240 months in prison and three years of supervised release. Sentencing is scheduled for Sept. 7, 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 leading to today’s plea. He also thanked the Waldwick Police Department, the Oakland Police Department, the Ho-Ho-Kus Police Department and the Bergen County Sheriff’s Office for their contributions to the case.
The government is represented by Assistant U.S. Attorneys Melissa Wangenheim and Melissa Jampol of the Criminal Division in Newark.
Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey
Nevada Man Charged in $5 Million Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A Nevada man was arrested today and charged with defrauding investors out of more than $5 million dollars, U.S. Attorney Paul J. Fishman announced.
Lee Vaccaro, 44, of Las Vegas, Nevada, was arrested by special agents of the FBI this morning and charged by complaint with one count of conspiracy to commit securities fraud and one count of securities fraud. He is scheduled to appear later today before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to documents filed in this case and statements made in court:
Vaccaro and “Conspirator #1” allegedly sold investors interests in companies they controlled, and falsely represented to investors that the companies held warrants in eAgency, a California-based company developing mobile security products. Warrants are derivative securities that give the holder the right to purchase common stock at a specific price within a certain time frame.
Vaccaro and conspirator #1 allegedly made oral and written misrepresentations concerning the existence, number, validity, and term of eAgency warrants purportedly owned by the investment companies, as well as about the amount of money conspirator #1 had personally invested in and raised for eAgency, and conspirator #1’s current position at eAgency.
Vaccaro and conspirator #1 also allegedly created and showed to investors numerous forged documents purporting to reflect the issuance of warrants to entities controlled by Vaccaro, and the transfer of those warrants to a company controlled by conspirator #1. Most of the eAgency warrants purportedly transferred by Vaccaro to conspirator #1’s company had, in fact, never been issued.
Beginning in January 2011, the dollar amount of interests Vaccaro and conspirator #1 sold in the investment companies began to surpass the dollar amount of valid warrants held by the investment companies. Neither Vaccaro nor conspirator #1 disclosed to investors the risk that their investments would be diluted by the sale of additional interests in the companies.
Vaccaro and conspirator #1’s actions allegedly defrauded investors of more than $5 million.
The conspiracy to commit securities fraud count carries a maximum potential penalty of five years in prison and a fine of up to $250,000, or twice the gross amount of pecuniary gain or loss resulting from the offense. The securities fraud count carries a maximum potential penalty of 20 years in prison and a fine of up to $5 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Sanjay Wadhwa and the New Jersey Bureau of Securities, under the direction of Laura Posner.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Today’s charges are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov
Defense counsel: Robert C. Scrivo Esq., Newark
High-Level Member of Large-Scale, $5 Million ATM Skimming Scheme Sentenced to More Than Seven Years in PrisonRead the Press Release
NEWARK, N.J. – A Chicago man was sentenced today to 89 months in prison for his role in a large-scale, long-running, and lucrative scheme to steal bank customer account information – commonly referred to as “ATM skimming” – by installing hidden card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere, U.S. Attorney Paul J. Fishman announced.
Dinu Horvat, 29, was previously convicted on four counts of a superseding indictment – conspiracy to commit bank fraud, aggravated identity theft, conspiracy to possess 15 or more counterfeit access devices, and conspiracy to possess access device-making equipment – following a one-week trial before U.S. District Judge William J. Martini. Judge Martini imposed the sentence today in Newark federal court.
According to documents filed in this case and the evidence at trial:
Horvat was a high-level member of an extensive ATM skimming scheme organized by Marius Vintila, 33, who previously pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. The scheme defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million and affected thousands of bank customers.
Vintila and defendant Bogdan Radu, 33, designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Horvat and his partners then secretly installed the card-reader devices and the pinhole cameras panels onto bank ATMs and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions at ATMs.
The stolen data was used to create thousands of false and fraudulent ATM cards, which Horvat and others used to withdraw millions of dollars from customers’ bank accounts. Horvat also recruited others to participate in the scheme.
In addition to the prison term, Judge Martini sentenced Horvat to five years of supervised release and ordered him to pay restitution of $7.4 million.
The ATM skimming operation in which Horvat participated is one of the largest ever uncovered by law enforcement. To date, 13 of the 16 individuals charged in connection with the scheme, including Vintila and Radu, have pleaded guilty.
U.S. Attorney Fishman praised special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Jeffrey Wood; special agents of Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI) in Newark, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation. He also thanked the Barnegat Township Police Department and the Brick Township Police Department for their participation in the case.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David M. Eskew of the U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: E. Alexander Jardines Esq., West New York, New Jersey
Former Letter Carrier Pleads Guilty in Scheme to Steal and Cash Hundreds of Postal Money OrdersRead the Press Release
NEWARK, N.J. – A Little Egg Harbor, New Jersey, man today admitted his role in a scheme to steal and convert hundreds of blank U.S. Postal Service money orders, resulting in nearly $200,000 in losses, U.S. Attorney Paul J. Fishman announced.
Jonel Normil, 26, pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of conspiring to embezzle, convert to his use and the use of others U.S. Postal Service money orders.
According to the documents filed in this case, other cases, and statements made in court:
Normil was employed as a letter carrier with the U.S. Postal Service in Cape May Court House, New Jersey. He also picked up and dropped off mail at the U.S. Post Office in Stone Harbor, New Jersey.
Normil admitted that he used his position as a letter carrier to steal hundreds of U.S. Postal Service money orders from the Stone Harbor and Cape May Court House post offices. Normil gave the stolen money orders to other conspirators, who made them look legitimate and imprinted them with dollar values of $900 or $1,000 before depositing them into bank accounts or cashing them at post offices in New Jersey, New York, and Georgia.
The charge for conspiring to embezzle, steal, and convert blank U.S. Postal Service money orders carries a maximum penalty of five years in prison and $250,000 fine. As part of his plea agreement, Normil agreed to the entry of a forfeiture order against him in the amount of approximately $181,000, which represents the approximate losses to financial institutions and the U.S. Postal Service resulting from the scheme. His sentencing is scheduled for Aug. 16, 2016.
U.S. Attorney Fishman credited special agents of the U.S. Postal Service, Office of the Inspector General, under the direction of Executive Special Agent in Charge Monica Weyler of the Eastern Area Field Office, and the U.S. Postal Inspection Service, under the direction of Inspector in Charge David W. Bosch, Philadelphia Division, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: H. Robert Boney Esq., Mays Landing, New Jersey
Former CEO of Pharmacy Dispensing Service Admits to Federal Tax ChargeRead the Press Release
NEWARK, N.J. – The former chief executive officer of a company that provided pharmacy dispensing services today admitted to filing a false federal income tax return, U.S. Attorney Paul J. Fishman announced.
Gary J. Sekulski, 68, of Flanders, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden to Count 3 of an indictment charging him with filing a false federal income tax return for tax year 2009.
According to documents filed in this case and statements made in court:
Sekulski was the CEO and President of Healthcare Corporation of America (HCA), a New Jersey company that controlled a pharmacy dispensing service to public and non-profit entities. Sekulski admitted that for tax year 2009, received approximately $172,000 from HCA that he willfully failed to report on his federal income tax return. Sekulski admitted that he prepared this return himself, signed it under penalty of perjury, and caused it to be filed with the IRS knowing that it falsely reported his income. He admitted that he intentionally filed materially false federal income tax returns with the IRS for the 2007 and 2008 tax years. In all, Sekulski failed to report approximately $353,000 in taxable income.
The tax count to which Sekulski pleaded guilty carries a maximum potential penalty of three years in prison and a fine of $250,000 or twice the amount of pecuniary gain or loss from the offense. Sentencing is scheduled for Sept. 8, 2016.
U.S. Attorney Fishman credited special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Lee M. Cortes Jr. and Shirley U. Emehelu, of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: William C. Cagney Esq., New Brunswick, New Jersey
Cape May County, New Jersey, Man Sentenced to 10 Years in Prison for Possessing Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. - A West Wildwood, New Jersey, man was sentenced today to 120 months in prison for possessing images and videos of child sexual abuse, U.S. Attorney Paul J. Fishman announced.
Jeffrey Spicer, 45, previously pleaded guilty before U.S. District Judge Joseph E. Irenas to an information charging him with one count of knowingly possessing child pornography. U.S. District Judge Jerome B. Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Spicer admitted that he possessed images and videos of child sexual abuse on electronic and digital media that were seized from his residence pursuant to a search warrant executed on March 19, 2014. According to a forensic examination of these items, numerous images and videos of child sexual exploitation were discovered, including images on his cellular telephone, which he saved by taking screenshot photos with the telephone. The forensic examination further revealed that Spicer was using a password-protected “app” on his cell phone to store the child pornography.
In addition to the prison term, Judge Simandle sentenced Spicer to 10 years of supervised release and ordered him to pay $7,200 in restitution.
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; the Cape May County Prosecutor’s Office, under the direction of Prosecutor Robert L. Taylor; the Lower Township Police Department, under the direction of Chief William Mastriana; and the West Wildwood Police Department, under the direction of Chief Jackie Ferentz, with the investigation leading to today’s sentencing.
HSI encourages the public to report suspected child predators and any suspicious activity through its toll-free hotline at 1-866-347-2423 or by completing its online tip form. Both are staffed around the clock by investigators. For additional information about wanted suspected child predators, download HSI’s Operation Predator smartphone app or visit the online suspect alerts page.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney’s Office Special Prosecutions Division in Camden.
Defense counsel: Lisa Evans Lewis Esq., Camden
Philadelphia Man Admits That He Exchanged More Than $1.2 Million in ‘Snap’/Food Stamp Benefits for CashRead the Press Release
CAMDEN, N.J. – A Philadelphia man today admitted that he stole more than $1.2 million dollars from the U.S. Government through a food stamp scheme, U.S. Attorney Paul J. Fishman announced.
Kaher Abdullah, 57, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of theft of government funds.
According to documents filed in this case and statements made in court:
In June 2011, Abdullah opened Express Food Mart on South Broadway in Camden, New Jersey. From November 2011 until about October 2014, Express Food Mart was a small grocery store that was authorized to accept Supplemental Nutrition and Assistance Program (SNAP) benefits (formerly known as food stamps). The program is administered by the U.S. Department of Agriculture. Retail food stores that have been approved for participation in SNAP may sell food in exchange for food stamp benefits. They may not, however, exchange food stamp benefits for cash.
Every food stamp recipient receives an Electronic Benefits Transfer (EBT) card, similar to a debit card, with which to make purchases. Every retailer authorized to accept food stamp benefits has an EBT terminal. Food purchases are made by swiping the card at the terminal. After the customer enters a Personal Identification Number (PIN), the EBT terminal verifies the PIN, determines whether the customer’s account balance is sufficient to cover the proposed transaction and informs the retailer whether the transaction should be authorized or denied. If the transaction is authorized, the amount of the purchase is then deducted electronically from the food stamp benefits reserved for the customer, and the amount is credited to the retailer’s designated bank account.
Abdullah admitted he controlled a business bank account at CitiBank to receive the reimbursements for SNAP benefits. Bank records listed Abdullah as the president of the corporation that owned Express Food Mart. He admitted that from November 2011 until October 2014, the SNAP redemptions were more than $1.2 million. The volume of SNAP benefits reimbursement received at Express Food Mart substantially exceeded estimates for businesses of similar size, indicating large-scale food stamp fraud.
Law enforcement agents verified the fraudulent exchange of SNAP benefits for cash through the use of undercover law enforcement officers. During a series of transactions, undercover law enforcement agents exchanged SNAP benefits from Abdullah and other employees at Express Food Mart for cash. Abdullah admitted that, in general, he and other employees redeemed SNAP benefits for approximately 50 cents on the dollar.
A review of the bank records showed that Express Food Mart received through its Citibank Business account $1,264,006 for illegally redeemed SNAP benefits. Abdullah admitted that shortly after receiving the money in the Express Food Mart account, he transferred the money to another account which he used to pay personal expenses.
The count of theft of government funds carries a maximum penalty of 10 years in prison and a fine of $250,000, or two times the amount of the loss to the United States, whichever is greater. Under the terms of the plea agreement, Abduallah has agreed to the entry of a forfeiture money judgment for $1,264,006. Sentencing is scheduled for Sept. 13, 2016.
U.S. Attorney Fishman credited special agents of the U.S. Department of Agriculture, Office of Inspector General, under the direction of Special Agent in Charge William G. Squires in New York; and the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden in the criminal case.
Defense counsel: Justin Loughry Esq., Camden
ACPD Sergeant Admits Structuring and Making False Statements to FBIRead the Press Release
CAMDEN, N.J. – A sergeant with the Atlantic City Police Department (ACPD) today admitted structuring financial transactions to avoid currency reporting requirements and lying to federal agents, U.S. Attorney Paul J. Fishman announced.
Kiyia M. Harris, 39, of Egg Harbor Township, New Jersey, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of structuring and one count of making false statements to FBI agents during two interviews in December 2014.
According to documents filed in this case and statements made in court:
The charges concern Harris’ concealment of financial transactions conducted on behalf of her then-paramour, Donell Williams, who pleaded guilty on Jan. 27, 2016, before Judge Rodriguez to conspiracy to distribute cocaine from March 2012 to June 12, 2013. He also pleaded guilty to five counts of violating the terms of his supervised release from a 2010 federal drug conviction.
According to documents filed in this case and statements made in court:
While working as an ACPD officer, Harris was engaged in a personal relationship with Williams, who was on federal probation. In June 2012, Harris purchased a 1969 Camaro for Williams in her name and structured the payments for the car in such a manner as to avoid the filing of a Currency Transaction Report (CTR) by the car dealership and also to obscure Williams’ involvement in the purchase.
Harris caused $17,825 to be deposited in amounts less than $10,000. On June 8, 2012, Harris paid $9,999 to the dealership. Harris paid the balance due for the Camaro by check dated June 11, 2012, which was drawn on one of her personal accounts at TD Bank. Some of the monies Harris used to pay for the car were deposited into that same TD bank account on two separate dates at two different TD Bank branches.
CTR forms require disclosure of the identity of the individual who conducted the transaction and the individual or organization for whom the transaction was completed. Many individuals involved in illegal activities are aware of these reporting requirements and take active steps to cause financial institutions, including car dealerships, not to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency or currency obtained from illegal activities, including drug trafficking, a practice referred to as “structuring.” This typically involves making multiple cash payments, deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid CTR filings.
During two interviews with special agents from the FBI, Harris made false statements to agents: she falsely told FBI agents that she had never deposited cash into her bank accounts when, in actuality, from Jan. 8, 2007, through Nov. 26, 2014, Harris deposited more than $120,000 into her accounts. Harris repeatedly denied having engaged in financial transactions with Williams, when she in fact had helped him with the purchase of the 1969 Camaro, as well as paying a $6,500 deposit on a 2012 Harley Davidson motorcycle.
The counts to which Harris pleaded guilty each carry a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Aug. 10, 2016. According to the Atlantic City Police Department, Harris has been suspended without pay pending the outcome of the prosecution. Williams is scheduled to be sentenced on Sept. 7, 2016.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; the DEA’s New Jersey Division, under the direction of Special Agent in Charge Carl J. Kotowski; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; and the Atlantic City Police Department, under the direction of Police Chief Henry White, with the investigation leading to today’s guilty plea.
He also thanked the N.J. State Police; the Atlantic County Sheriff’s Office; the Bureau of Alcohol, Tobacco and Firearms; U.S. Immigration and Customs Enforcement (ICE)-Homeland Security Investigation (HSI); Cumberland County Sheriff’s Office and the Ventnor, Northfield and Millville police departments for their assistance.
The government is represented by Assistant U.S. Attorney Diana V. Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: James J. Leonard Jr. Esq. of Atlantic City, New Jersey
U.S. Attorney Paul J. Fishman, U.S. Senator Cory A. Booker to Deliver Remarks at Newark Prisoner Re-Entry Court GraduationRead the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman and U.S. Senator Cory A. Booker will deliver remarks this afternoon at the third graduation hosted by the “ReNew” court, a partnership among the U.S. District Court, the U.S. Attorney’s Office, the Federal Public Defender’s Office, and the U.S. Probation Office designed to help ex-offenders recently released from federal custody successfully reintegrate into society.
The event being held in Newark at the Frank R. Lautenberg Post Office and Courthouse, Courtroom 1 at 3:00 p.m.
ReNew, which stands for “re-entry into Newark,” is New Jersey’s first federal re-entry court in New Jersey. It provides participants with close supervision and tangible support services including job placement and training, education, treatment, and counseling. It also gives participants access to a network of support services for housing, identification, driving privileges, child support, and other domestic, health or legal issues that affect successful re-entry into society.
ReNew holds annual graduations for program participants who have successfully completed 52 weeks of rigorous requirements. Since 2013, ReNew has hosted two graduations and will hold its third today. As of today, there are approximately 60 federal re-entry courts around the country.
“Equipping reentrants with the right tools and support during and after their incarceration can help break the cycle of recidivism that traps so many of their peers,” U.S. Attorney Fishman said. “Today, we celebrate the hard work and commitment of the graduates. We also recognize the tireless efforts of our federal partners whose passion and dedication continue to give those returning from federal prison a second chance. It’s inspiring work and I’m proud that my office is leading it.”
Today’s event comes at the end of National Reentry Week, a nationwide undertaking started by the Obama Administration and the Justice Department to raise awareness about the urgency of re-entry issues and highlight efforts to reduce recidivism and help formerly incarcerated individuals compete for jobs, attain stable housing, and support their families. As part of National Reentry Week, the U.S. Attorney's Office, District of New Jersey (USAO NJ), has hosted a number of events, including:
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April 21, 2016 – In collaboration with the U.S. District Court and U.S. Probation Office, USAO NJ hosted a resource and employment fair in Camden, New Jersey, that connected employers with ex-offenders who are looking for jobs.
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April 25, 2016 – U.S. Attorney Fishman, U.S. Chief of Probation Willie Torres, ReNew Graduate Amare Terrell, and U.S. Federal Judges Noel Hillman and Karen Williams participated in a stakeholder’s panel at FCI Fairton to discuss what to expect upon release from incarceration, available resources for ex-offenders, common missteps, best practices to ensure successful re-entry, and how families can provide support.
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April 26, 2016 – USAO NJ and housing specialists with the U.S. Department of Housing and Urban Development (HUD) gave a presentation at the New Jersey Chapter of the National Association of Housing & Redevelopment Officials to reinforce HUD and White House guidance on how arrests and convictions should be used when screening individuals for public housing eligibility.
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April 27, 2016 – In collaboration with the U.S. District Court, U.S. Probation, and Essex County College, USAO NJ hosted a re-entry technology seminar, for individuals whose terms of incarceration prevented them from developing computer and internet skills.
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April 29, 2016 – Earlier today, USAO NJ, in collaboration with New Ark Farms (an urban farm in Newark that primarily hires ex-offenders) the U.S. District Court, the Federal Public Defender’s Office, and the U.S. Probation Office hosted an employer breakfast to discuss available jobs for ex-offenders and ways that the ReNew team can alleviate any concerns about hiring them.
Each year, more than 600,000 citizens return to their neighborhoods after serving time in federal and state prisons. Nationally, two out of every three people released from state prisons are rearrested for a new offense and about half are re-incarcerated within three years. The long-term impact of a criminal record prevents many of these individuals from obtaining employment, housing, higher education, and credit – and these barriers affect returning individuals even if they are unlikely to reoffend.
The U.S. Attorneys’ Offices and Bureau of Prisons are hosting hundreds of events in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, including job fairs and resource fairs, mock interview sessions, resume workshops, family engagement events. In addition, the Justice Department announced its “Roadmap to Reentry,” outlining five evidence-based principles of reform to be implemented by the Bureau of Prisons to ensure DOJ’s commitment to re-entry is incorporated throughout incarceration – from intake to release.
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Pennsylvania Man Sentenced to 95 Months in Prison for Robbing the Same Two Banks in 2015 That He Robbed in 2010Read the Press Release
CAMDEN, N.J. – A Pennsylvania man who was previously incarcerated for robbing a Citizens Bank in Philadelphia and a Cape Bank in Atlantic City, New Jersey, was sentenced today to 71 months in prison for robbing the same two banks after his release in April 2015; he was sentenced to an additional 24 months – to be served consecutively – for violation of supervised release, U.S. Attorney Paul J. Fishman announced.
Keith Ney, 54, formerly of Philadelphia, previously pleaded guilty before U.S. District Judge Reneé Marie Bumb to an information charging him with two counts of bank robbery and violating the conditions of his federal supervised release. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
In September 2011, Ney was convicted of robbing the Cape Bank at 1501 Pacific Avenue in Atlantic City and the Citizens Bank at 1234 Market Street in Philadelphia in 2010. He was later sentenced to 57 months in prison and a period of supervised release.
On April 22, 2015, Ney, who had recently finished his prison term and was on supervised release, entered the same Citizens Bank that he robbed in 2010 and approached the teller with a demand note stating that he had a gun. Ney took some cash and fled the bank.
Ney then took the bus to Atlantic City, where he entered the same Cape Bank that he robbed in 2010. Again, Ney approached the teller with a note stating that he had a gun and fled the bank with a small amount of cash. Afterwards, a bank employee exited the bank, approached an Atlantic City police officer who was working a traffic detail and told the officer that the bank had just been robbed. Ney was immediately spotted and taken into custody.
In addition to the prison time, Judge Bumb sentenced Ney to serve three years of supervised release and ordered restitution of $1,397.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; the Atlantic City Police Department under the direction of Chief Henry White; and the Philadelphia Police Department under with the direction of Commissioner Richard Ross Jr. with the investigation leading to today’s sentencing. He also thanked the U.S. Probation Office, under the direction of Chief Probation Officer Wilfredo Torres, for its assistance with this case.
The government is represented by Assistant U.S. Attorney Matthew J. Skahill of the U.S. Attorney's Office in Camden.
Defense counsel: Edward F. Borden Jr. Esq., Cherry Hill, New Jersey
Member of Large-Scale ATM Skimming Scheme Admits Role in Bank Fraud ConspiracyRead the Press Release
NEWARK, N.J. – A native of Romania who was arrested in Spain and extradited to the United States admitted today to participating in a large-scale, long-running scheme to steal bank customer account information, commonly referred to as “ATM skimming,” by installing secret card-reading devices and pinhole cameras on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere, U.S. Attorney Paul J. Fishman announced.
Robert Mate, a/k/a “Chioru,” a/k/a “Marcel Varga,” 29, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to Count One of a six-count indictment, which charged him with conspiracy to commit bank fraud. Of the other two individuals charged on the indictment, Alin Dumitru Carabus was apprehended in Spain and extradited to the United States, and his case is pending, and Ionut Vasile Ciurba-Stana remains at large.
According to documents filed in this case and other cases and statements made in court:
Mate participated as a high-level member of an extensive scheme to steal bank customer account information, commonly referred to as “ATM skimming,” by installing secret card-reading devices on ATMs throughout New Jersey, New York, Connecticut, Florida, and elsewhere. The scheme was organized by Marius Vintila, 33, who previously pleaded guilty to bank fraud conspiracy and aggravated identity theft charges. The scheme defrauded Citibank, TD Bank, Wells Fargo, and multiple other financial institutions out of at least $5 million and affected thousands of bank customers. Vintila and Bogdan Radu designed and constructed sophisticated card-reader devices and pinhole camera panels capable of reading and storing customers’ bank account information and personal identification numbers. Mate and others then secretly installed the card-reader devices and the pinhole camera panels onto bank ATMs, and removed them a few days later after they had recorded customer bank account information as customers performed routine bank transactions at ATMs. After the account information was stolen, the stolen data was used to create thousands of false and fraudulent ATM cards, which Mate and others used to withdraw millions of dollars from customers’ bank accounts.
The ATM skimming operation in which Mate participated is one of the largest ever uncovered by law enforcement. To date, 16 individuals have been charged in connection with this scheme; 13 have pleaded guilty, and one – Dinu Horvat – was convicted after a week-long trial.
The count of conspiracy to commit bank fraud to which Mate pleaded guilty is punishable by up to 30 years in prison and a $1 million fine. Sentencing is scheduled for Sept. 8, 2016.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Kenneth Pleasant, along with special agents of Immigration and Customs Enforcement, Homeland Security Investigations (HSI) in Newark, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to the above-referenced charges and pleas.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and David M. Eskew of the office’s Criminal Division.
Defense Counsel: Angelo Servidio Esq., Nutley, New Jersey
Former U.S. Postal Letter Carrier Admits Role in Stealing Tax Refund Checks as Part of ScamRead the Press Release
CAMDEN, N.J. – A former U.S. Postal employee from Burlington County, New Jersey, today admitted his role in a conspiracy to steal income tax refund checks from the U.S. Mail, U.S. Attorney Paul J. Fishman announced.
Earl Champagne, 47, of Willingboro, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with one count of theft of U.S. Mail and one count of theft of government money.
Stolen Identity Refund Fraud
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that results in more than $2 billion in losses annually to the Treasury. SIRF schemes generally share a number of hallmarks:
• SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals, who often reside in the Commonwealth of Puerto Rico.
• Participants complete Individual Income Tax Return 1040 Forms using the fraudulently obtained information, falsifying wages earned, taxes withheld and other data and always ensuring the fraudulent form generates a tax refund check from the U.S. Treasury.
• They direct the U.S. Treasury Department to mail the fraudulently obtained checks to locations the perpetrators control or can access. In some cases, SIRF perpetrators bribe mail carriers to remove the checks from their mail routes.
• With the checks in hand, they generate cash proceeds by depositing the Treasury checks into bank accounts that they control.
According to documents filed in this case and statements made in court:
From 1995 to November 2014, Champagne was employed by the U.S. Postal Service as a mail carrier. He was required to deliver mail that had been placed in the mail stream for delivery and was assigned to deliver mail to locations in Pennsauken, New Jersey.
Champagne admitted that from March 2014 to July 2014 he stole U.S. Treasury Checks from the mail and gave them to others. He said he was approached by two individuals who asked him to retrieve checks from the mail with the promise that he would be paid. The individuals told Champagne that the checks were IRS checks and that they would mostly be addressed to individuals with “Spanish” names. The individuals expected to either pick up the checks from Champagne or for him to notify them that the checks were in the mailbox so that they could retrieve the checks themselves. For this service, Champagne was paid $50 per check for every check stolen from the mail. Champagne admitted that he stole 72 U.S. checks totaling $442,776.
The theft of U.S. Mail and theft of government money charges to which Champagne pleaded guilty each carry a maximum potential penalty of 15 years in prison and a fine of $250,000. Champagne's sentencing is scheduled for Aug. 3, 2016.
U.S. Attorney Fishman credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan Larsen, and U.S. Postal Service, Office of Inspector General, under the direction of Special Agent in Charge Monica Weyler, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden.
Defense counsel: Michael Riley Esq., Mount Holly, New Jersey
New York Man Charged in Scheme to Sell New Jersey Driver’sRead the Press Release
NEWARK, N.J. – A Bronx, New York, man who allegedly posted online advertisements in which he fraudulently offered authentic commercial driver’s licenses without the testing and identification requirements will appear in federal court today, U.S. Attorney Paul J. Fishman announced.
Mahmoud Odetallah, a/k/a “Mike,” 26, is charged by complaint with one count of wire fraud. Odetallah was arrested yesterday by FBI special agents. He is scheduled to appear this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.
According to the complaint:
From August 2015 to February 2016, Odetallah allegedly claimed to sell authentic commercial driver’s licenses in one or more Craigslist advertisements. During this time, he solicited and accepted $1,000 in cash from an individual cooperating with the FBI, who is identified in the complaint as the “CW,” for the purchase of a New Jersey commercial driver’s license (“CDL”).
On Oct. 11, 2015, Odetallah allegedly posted an advertisement selling CDLs without the required testing and identification requirements. The advertisement also represented that Odetallah was New Jersey Motor Vehicle Commission (“MVC”) employee or affiliated with an employee of the MVC.
During a Nov. 17, 2005 telephone call, the CW, acting under the supervision of the FBI, responded to the October Craigslist advertisement by calling Odetallah. During the call, Odetallah instructed the CW to supply a copy of the CW’s identification as well as two passport-sized photographs and anything mailed to the CW within the last 90 days as proof of address. Odetallah, claiming that he worked at the MVC, informed the CW that the transaction would occur in the vicinity of the MVC office in North Bergen, New Jersey.
On Jan. 13, 2016, Odetallah met with the CW at a coffee shop near the North Bergen MVC office. Shortly before the meeting, and at Odetallah’s direction, the CW sent a photograph of his purported passport to Odetallah via text message. At the coffee shop, Odetallah obtained a $1,000 cash payment from the CW for the purchase of a CDL, along with copies of the CW’s purported passport. Odetallah then left the coffee shop, promising the CW that he would return shortly with the CDL.
However, Odetallah never returned. After defrauding the CW of $1,000, Odetallah harassed the CW for the payment of an additional $1,000. On Feb. 6, 2016, Odetallah sent a text message to the CW containing an image of the CW’s purported passport identification page, which displayed the CW’s photograph and assumed name, and then sent a separate text message to the CW stating, “Now you must pay 1000$ [sic] again. Good luck[.]”
The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
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 charge.
The government is represented by Assistant U.S. Attorney Shirley U. Emehelu of the U.S. Attorney’s Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Anyone with information concerning this alleged scheme should contact the FBI at 973-792-3000.
Essex County, New Jersey, Man Admits Selling Fake Driver’s Licenses Online, Filing Bogus Tax ReturnsRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man today admitted selling fake driver’s licenses through an online shop and filing fraudulent tax returns using stolen identity information, U.S. Attorney Paul J. Fishman announced.
Alexis Scott Carthens, 38, pleaded guilty before U.S. District Judge Jose L. Linares to a an information charging him with one count of conspiracy to commit fraud in connection with authentication features and one count of conspiracy to defraud the government with respect to claims.
According to documents filed in this case and statements made in court:
From October 2012 through August 2014, Ricardo Rosario, 33, of Jersey City, New Jersey, with the assistance of Carthens and Abraham Corcino, 34, of Jersey City, 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 Rosario 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.
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.”
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.
At today’s plea hearing, Carthens admitted that his role was to create the driver’s licenses and to mail them to the website’s customers. Carthens also admitted that he believed that some of the website’s clients were using the fake driver’s licenses to commit credit card fraud.
Carthens also admitted to his involvement in a separate scheme, spanning from December 2012 through November 2013, to use stolen personally identifiable information to steal tax refund money from the government. At today’s plea hearing, Carthens admitted using information stolen from a medical lab to file false and fraudulent tax returns. Carthens also admitted to working with at least one other conspirator, who assisted Carthens by providing him with email addresses and physical addresses to receive the fraudulently claimed tax refund money.
The count of conspiracy to commit fraud in connection with authentication features 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. The count of conspiracy to defraud the government with respect to claims carries a maximum potential penalty of 10 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Aug. 1, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; inspectors of the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James R. Buthorn; and special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Andrew S. Pak of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit and Assistant U.S. Attorney Barbara Ward, Acting Chief of the office’s Asset Forfeiture and Money Laundering Unit.
The charges against Rosario and Corcino are still pending. The charges and allegations against them are merely accusations and the defendants are considered innocent unless and until proven guilty.
Defense counsel: Wanda M. Akin Esq., Newark
Atlantic County, New Jersey, Man Sentenced to 18 Years in Prison for $3 Million Time-Share Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Absecon, New Jersey, man was sentenced today to 18 years in prison for his role in a $3 million conspiracy to scam customers by offering phony consulting services to owners of timeshares through the New Jersey-based Vacation Ownership Group LLC, U.S. Attorney Paul J. Fishman announced.
Ian Resnick, 41, was previously convicted in September 2013 of one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. He was convicted following a seven-week trial before U.S. District Judge Noel L. Hillman, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
Resnick and his codefendants schemed to defraud hundreds of timeshare owners by offering fraudulent consulting services through their company, the Vacation Ownership Group (now VO Financial). Adam Lacerda, 32, of Egg Harbor Township, New Jersey, the company founder, president and chief executive officer, devised the company’s fraudulent sales pitches. He directed his sales force to tell numerous lies to VO customers, including that VO worked with the banks holding the customers’ loans, would use money sent by customers to pay off the customers’ loans on their timeshares, and could cancel customers’ timeshares with money back.
His wife, Ashley Lacerda, 36, the company vice president and chief operating officer, sent fraudulent contracts to customers and managed the office. Resnick, a convicted bank robber, started as a salesman giving the fraudulent sales pitch but became Adam Lacerda’s enforcer, with the title “director of compliance.” Genevieve Manzoni, 50, of Lake Worth, Florida, was a top VO sales representative who falsely told one victim she worked with a bank, another victim that she worked with a timeshare developer.
All four defendants were convicted at the same trial. The 14 victims who testified – including business executives, veterans, senior citizens, a lawyer and a professor – were defrauded out of tens of thousands of dollars by the defendants’ sophisticated scheme.
In addition to the prison term, Judge Hillman sentenced Resnick to three years of supervised release. Restitution will be determined at a later date.
Adam Lacerda was sentenced to 27 years in prison on June 25, 2015. Ashley Lacerda is scheduled to be sentenced June 3, 2016; Manzoni was sentenced in December 2015 to 42 months in prison.
U.S. Attorney Fishman credited special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Acting Special Agent in Charge Jonathan Mellone, New York Region, for the investigation. He also thanked the N.J. Department of Labor and Workforce Development for its assistance.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Ian Resnick: Michael E. Reilly Esq., Philadelphia
Adam Lacerda: Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent Esq., Marlton, New Jersey
Genevieve Manzoni: Ralph A. Jacobs Esq., Philadelphia
Pennsylvania Man Charged in Alleged $35 Million Fraud Against Veterans’ Education GI BillRead the Press Release
NEWARK, N.J. – A Harrisburg, Pennsylvania, man will appear in federal court today to face charges that he conspired to defraud millions from the Post 9/11 GI Bill, a federal education benefits program designed to help veterans who served in the armed forces following the terrorist attacks on Sept. 11, 2001, U.S. Attorney Paul J. Fishman announced.
David Alvey, 49, is charged by complaint with one count of conspiracy to commit wire fraud. Special agents with the U.S. Department of Veterans Affairs, Office of Inspector General, the FBI, and the U.S. Department of Education, Office of Inspector General, arrested Alvey this morning in Maryland. He will appear this afternoon before U.S. Magistrate Judge Stephanie A. Gallagher in Maryland federal court.
“The Post 9/11 GI Bill was designed to provide educational opportunities to a generation of men and women who served in the U.S. Armed Forces following the attacks on 9/11,” U.S. Attorney Fishman said. “Alvey and others allegedly sought to pillage those well-earned benefits as part of a complex $35 million scam that targeted veterans and enrolled them in unapproved online courses without their knowledge. Rooting out fraud against the government is always a priority of this office, especially when the conduct exploits those who serve our country with such courage.”
“The allegations of fraud committed by David Alvey are extremely serious because not only did his scheme potentially harm the Department of Veterans Affairs, it also victimized our nations deserving veterans and their families,” Jeffrey G. Hughes, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General’s Northeast Field Office, said. “The VA’s education benefit program is meant to help our veterans who have selflessly made great sacrifices for our country and now are in need of VA assistance. Any fraud against this program directly impacts our nation’s heroes.”
According to the complaint unsealed today:
From November 2009 through August 2013, Alvey and others engaged in a conspiracy to defraud the United States by obtaining tuition assistance and other education-related benefits under the Post 9/11 Education Assistance Act, more commonly known as the Post 9/11 GI Bill.
The Post 9/11 GI Bill provides educational assistance to eligible veterans of the United States Armed Forces by paying for veterans’ tuition, housing costs, and other educational costs and fees as long as the courses of study meet certain criteria. Due to the fact that the tuition benefits under the Post 9/11 GI Bill are paid by the United States directly to the school, all entities involved in developing and administering the courses must be fully disclosed to the United States in order for the government to properly assess the courses for approval.
Over the course of the conspiracy, Alvey, operating largely through his own company, ED4MIL LLC (“ED4MIL”), partnered with a New Jersey university (the “University”), to obtain approval from the United States to receive tuition and other education benefits under the Post 9/11 GI Bill for several online non-credit training and certification courses. These courses were purportedly developed, taught, and administered by the faculty of the University, but were, in fact, actually developed, taught, and administered by undisclosed and unapproved sub-contractors of ED4MIL, including an online correspondence school located in Pennsylvania.
Alvey and others at ED4MIL developed marketing materials and a script to be used by ED4MIL salespersons at various military bases around the United States in order to market to and enroll thousands of veterans in the courses. These “field representatives” employed by ED4MIL traveled across the United States pitching the fraudulent courses to veterans using the marketing materials and script developed by Alvey and others at ED4MIL. Field representatives were instructed to identify themselves to veterans as employees of the University, and were specifically told not to mention ED4MIL or the online correspondence school in which the veterans were actually enrolled. The marketing materials were emblazoned with the University’s insignia, and the field representatives wore t-shirts and handed out pens bearing the University’s name. The field representatives, and several other employees at ED4MIL, were also given University email addresses with which to communicate with the veterans.
Alvey and others then nominally enrolled the veterans in the University while simultaneously enrolling them in the unapproved online correspondence courses. Due to the fact that Alvey and others concealed the true source of the courses and the contract relationships between the University and ED4MIL, the veterans were unaware that the courses they were taking were actually being taught and administered by the online correspondence school.
Even though the University contributed no content or value to the courses whatsoever, the University charged the Post 9/11 GI Bill between ten and thirty times the prices charged by the online correspondence school for the same courses. While most courses at the correspondence school cost between approximately $600 and $1,000 in tuition, the University charged between approximately $5,000 and $26,000 per course. Over the course of the conspiracy, Alvey and others caused the United States to pay out over approximately $35 million in total benefits.
“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” said Special Agent in Charge Timothy Gallagher. “Our job is to protect victims, especially our veterans who are on the front lines keeping our country safe, and these charges reflect our commitment to that goal.”
“Scams like this steal money from hardworking taxpayers and legitimate students – and in this case, our veterans – and that is completely unacceptable," Brian Hickey, Special Agent in Charge of the U.S. Department of Education, Office of Inspector General's Northeastern Regional Office, said. "OIG is committed to fighting student financial aid fraud and we will continue to aggressively pursue those that participate in these types of crimes."
The wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of Inspector General, Criminal Investigation Division, Northeast field office, under the direction of Special Agent in Charge Jeffrey G. Hughes in Newark; the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Brian Hickey of the Northeastern Region, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney David M. Eskew of the Economic Crimes Unit, Assistant U.S. Attorneys Jane Yoon and Lucy Muzzy of the Health Care and Government Fraud Unit, and Assistant U.S. Attorney Jafer Aftab of the Asset 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: Judith Germano Esq., Montclair
Former Member of Mount Olive Township Board of Education Admits Role in Scheme to Defraud School DistrictRead the Press Release
TRENTON, N.J. – A former member of the Mount Olive Township Board of Education (MOBOE) today admitted his role in a scheme to defraud the school district of $371,000, U.S. Attorney Paul J. Fishman announced.
Robert Mania, 47, of Flanders, New Jersey, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with wire fraud.
According to documents filed in this case and statements made in court:
From 2007 to 2009, while serving as a board member, Mania and others took part in a scheme to increase the amount of commissions to be paid on the school district’s account and then divert a portion of the commission payments to a company controlled by an individual, referred to in the information as the “Associate,” for distribution to Mania and his co-schemers. Mania admitted secretly inflating the commission rate and then diverting to himself approximately $371,000 in commission payments.
To conceal the rate increase and payments, Mania caused the district’s health insurance provider to send the annual disclosure statements generated by the health insurance carrier – which detailed the true commission rate and the payments to the associate’s company – to Mania’s own personal post office box, rather than to the school district. Approximately $606,000 in commissions was diverted to the associate’s company for distribution to Mania and his co-schemers, including approximately $371,000 that was received by Mania.
The wire fraud charge to which Mania pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the amount of the gain or loss from the offense. Sentencing is scheduled for July 27, 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, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Lee M. Cortes Jr. of the U.S. Attorney’s Office Special Prosecutions Division.
Defense counsel: James A. Plaisted Esq., Roseland, New Jersey
Eight Years in Prison for Youth Organization Leader Who Admitted Sexually Abusing Children, Possessing Images of Child Sexual AbuseRead the Press Release
NEWARK, N.J. – A Union County, New Jersey man who admitted sexually abusing children and possessing images of child sexual abuse was sentenced today to 96 months in prison, U.S. Attorney Paul J. Fishman announced.
Gregory J. Aker, 46, of Linden, New Jersey previously pleaded guilty before U.S. District Judge Susan G. Wigenton to an information charging him with possession of child pornography. Judge Wigenton imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
Aker was a leader with a boys’ youth organization and a religious education teacher with his church. On Feb. 22, 2014, Aker was arrested by the Linden Police Department for sexual assault and endangering the welfare of two minor children.
After his arrest, law enforcement obtained multiple computers and electronic storage media from Aker’s residence. Today, Aker admitted that the devices belonged to him and contained more than 600 images and dozens of videos of child sexual abuse that he knowingly collected. Aker also admitted sexually abusing more than one child who was known to him on more than one occasion.
In addition to the prison term, Judge Wigenton sentenced Aker to a lifetime of supervised release. Aker will be required to register as a sex offender.
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 Union County Prosecutor’s Office and the Linden Police Department with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman of the U.S. Attorney’s Criminal Division in Newark.
Defense counsel: Jeffrey Hark Esq., Cherry Hill, New Jersey
Doctor Sentenced to Two Years in Prison for Taking Bribes in Test-Referrals Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor with a medical practice in Randolph, New Jersey was sentenced today to 24 months in prison for accepting bribes in exchange for test referrals as part of a long-running scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.
Gary Safier, 73, of Randolph, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes and one count of filing a false tax return. Judge Chesler imposed the sentence today in Newark federal court.
Including Safier, 39 people – 27 of them physicians – 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. A 28th physician – Bernard Greenspan – was indicted in March. His trial is scheduled for September 2016.
According to documents filed in this and related cases and statements made in court:
Safier admitted that from August 2007 through March 2013, he accepted bribes in return for referring patient blood specimens to BLS. Initially, the bribes were paid under the guise of bogus lease and service agreements between BLS and his medical office. Later, BLS paid Safier in monthly cash payments that, at times, exceeded $10,000 per month. According to the information, the total amount of bribes paid by BLS to Safier from the sham agreements and cash payments exceeded $353,000.
Safier also admitted that on his federal tax returns for 2010 and 2011, he failed to report $90,000 in bribes he received from BLS.
In addition to the prison term, Judge Chesler sentenced Safier to two years of supervised release. He must also forfeit $353,152.84.
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 Assistant Inspector in Charge James R. Buthorn; 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 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: Raymond M. Brown Esq., Woodbridge, New Jersey
Crack-Cocaine Supplier and Dealer for New Jersey Grape Street Crips Gang Plead Guilty to Drug Trafficking ChargesRead the Press Release
NEWARK, N.J. – Two Newark, New Jersey, men admitted their roles in a drug trafficking conspiracy controlled by the New Jersey set of the Grape Street Crips, U.S. Attorney Paul J. Fishman announced today.
Leonardo Arroyo, a/k/a “Leo,” 32, pleaded guilty today before U.S. District Judge Claire C. Cecchi in Newark federal court to an information charging him with conspiracy to distribute 280 grams or more of crack-cocaine. Rakeem Hankerson, a/k/a “Rocco,” 25, pleaded guilty yesterday before U.S. District Judge Madeline Cox Arleo to a superseding information charging him with conspiracy to distribute 28 grams or more of crack-cocaine.
According to documents filed in this case and statements made in court:
The New Jersey Grape Street Crips gang controlled drug trafficking and other criminal activities in various areas of Newark, including the neighborhood of 6th Avenue and North 5th Street. Arroyo supplied both cocaine and crack-cocaine to gang members who used and shared a dedicated cell phone to accept orders for, and distribute, thousands of clips of crack-cocaine to other crack-cocaine distributors. 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,” Tyquan Clark a/k/a “Tah,” Christopher Coelho, a/k/a “Brazil,” and Rashan Washington, a/k/a “Shoota.”
Hankerson was a member of the New Jersey Grape Street Crips who purchased distribution quantities of crack-cocaine from more senior gang members and sold it to retail level customers on the street.
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.
The charge to which Arroyo pleaded guilty carries a minimum of 10 years in prison, a maximum of life in prison, and a $10 million fine. The charge to which Hankerson pleaded guilty carries a minimum of five years in prison, a maximum of 40 years in prison, and a $5 million fine. Sentencing for Arroyo and Hankerson are set for July 26, 2016 and July 25, 2016, respectively.
Clark, Hamilton, Coelho, and numerous other gang members and associates have pleaded guilty to their role in the conspiracy and await sentencing. Charges against Vanderhall, Concepcion, and Washington remain pending. The charges and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.
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:
Arroyo: Susan Cassell, Ridgewood, New Jersey
Hankerson: John P. Holliday, Trenton, New Jersey
Blood Lab Owner Sentenced to Nine Months in Prison for Paying Thousands in Cash Bribes for ReferralsRead the Press Release
NEWARK, N.J. – An owner of a blood diagnostic company located in Essex County, New Jersey, was sentenced today to nine months in prison for paying a doctor cash bribes for patient lab work referrals, U.S. Attorney Paul J. Fishman announced.
Phillip Biondello, 49, of Basking Ridge, New Jersey, previously pleaded guilty before U.S. District Judge Madeline Cox Arleo to an information charging him with violating the Anti-Kickback Statute. Judge Arleo imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From June 2011 through June 2013, Biondello paid a doctor cash bribes in return for patient blood sample referrals to Biondello’s company, including a $24,000 bribe paid to the doctor on May 7, 2013. The doctor’s referrals generated approximately $176,710.84 for Biondello’s company.
In addition to the prison term, Judge Arleo sentenced Biondello to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special
Agent in Charge Timothy Gallagher in Newark, 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 sentencing.
The government is represented by Assistant U.S. Attorney Joseph N. Minish 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: Joseph A. Hayden Jr. and Kevin Buchan Esq., Roseland, New Jersey.
Two New York Men Arraigned on Wire Fraud Charges for Credit and Gift Card Fraud SchemeRead the Press Release
NEWARK N.J. – Two New York men who allegedly defrauded credit card companies of hundreds of thousands of dollars are expected to appear in court later today, U.S. Attorney Paul J. Fishman announced.
Nikolay Krechet, 45, of Queens, New York, and James Olla, 24, of Brooklyn, New York, are each charged with one count of conspiracy to commit wire fraud and four counts of wire fraud. They were originally charged by complaint on May 28, 2015, and indicted by a federal grand jury on Feb. 18, 2016. They both arraigned before U.S. Magistrate Judge Leda Dunn Wettre in Newark federal court and entered pleas of not guilty.
According to documents filed in this case and statements made in court:
From January 2014 to August 2015, Krechet, Olla, and others procured stolen information related to credit cards belonging to various individuals, including a victim living in New Jersey. Using this stolen information, the conspirators obtained gift cards from various retailers and then either sold the cards or used them to purchase goods, which they then sold.
Each count of wire fraud and conspiracy to commit wire fraud carries a maximum potential penalty of 30 years in prison and a fine of up to $1 million.
U.S. Attorney Fishman credited special agents of FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Secret Service, under the direction of Acting Special Agent in Charge Kenneth Pleasant; and the U.S. Postal Inspection Service, under the director of Assistant Inspector in Charge James R. Buthorn, with the investigation.
The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the General Crimes Unit and Assistant U.S. Attorney Sarah Devlin of the Asset Forfeiture and Money Laundering Unit.
Defense counsel: Krechet: Thomas Ambrosio Esq., Lyndhurst, New Jersey
Olla: Andrew Olesnycky Esq., Westfield, New Jersey
Owners of Tax Preparation Business Get Multi-Year Prison Sentences for Filing Bogus Tax Returns for Prison InmatesRead the Press Release
TRENTON, N.J. – The owners of a tax preparation business that filed fraudulent tax returns on behalf of inmates at various New Jersey prisons were sentenced today to multi-year prison sentences, U.S. Attorney Paul J. Fishman and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
Kamal J. James, a/k/a “Bro Messiah Aziz El,” 34, of Seaford, Delaware, and Crystal G. Hawkins, a/k/a “Sis. Crystal Gabri El,” 39, of Laurel, Delaware, were sentenced to 96 and 48 months in prison, respectively. They were previously charged in a superseding indictment with one count of conspiracy, 16 counts of making false claims and three counts of mail fraud. They were convicted on all counts following a one-week trial before U.S. District Judge Peter G. Sheridan, who imposed the sentences today in Trenton federal court.
According to the superseding indictment and the evidence at trial:
Between October 2011 and October 2013, James and Hawkins operated Release Refunds, a purported tax preparation business – previously based in Brick, New Jersey, and in Seaford – through which they solicited current and former New Jersey prison inmates as clients and then filed fraudulent tax returns on their behalf. The company is no longer in business.
James and Hawkins sent Release Refunds “promotional” flyers to inmates at various New Jersey prisons and halfway houses offering tax return preparation services. The pair asked inmates interested in Release Refunds’ services to provide basic identification information and to sign income tax returns and other IRS documents, but not to include any information about their income or withholdings. James and Hawkins then filled in the missing income information on the return forms, fabricating the inmates’ earnings to trigger fraudulent and inflated refunds.
During the course of the investigation, an undercover IRS-Criminal Investigation agent posing as an inmate in a New Jersey prison submitted a completed Release Refunds form and sent it to James and Hawkins. They then sent the “inmate” blank income tax forms and other IRS documents and instructions to sign the documents. James and Hawkins did not request any financial information from the undercover agent before preparing three fraudulent tax returns – including false income information that James and Hawkins provided – to be filed on behalf of the agent for tax years 2010 through 2012. The fraudulent returns resulted in several thousand dollars in refunds and a $1,485 fee for the defendants.
In addition to the prison terms, Judge Sheridan sentenced both James and Hawkins to three years of supervised release and ordered them to pay restitution of $570,897.
U.S. Attorney Fishman and Acting Assistant Attorney General Ciraolo credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentences. They also thanked the U.S. Postal Inspection Service, under the direction of Assistant Inspector in Charge James V. Buthorn; and the N.J. Department of Corrections, under the direction of Commissioner Gary M. Lanigan, for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Criminal Division in Trenton and former Trial Attorney Thomas Jaworski of the Justice Department’s Tax Division.
Defense counsel:
James: Pro se; (Bruce Throckmorton Esq., Trenton, standby counsel)
Hawkins: Pro se; (Andrea Bergman Esq. Assistant Federal Public Defender, Trenton, standby counsel)
Freedom Mortgage Corp. Agrees to Pay $113 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
NEWARK, N.J. – Freedom Mortgage Corp. has agreed to pay the United States $113 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting single family mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements for the FHA insurance program, the Justice Department announced today. Freedom Mortgage is headquartered in Mt. Laurel, New Jersey.
“Freedom Mortgage did not properly comply with FHA rules for the mortgages it was generating and did not adequately monitor early payment defaults,” U.S. Attorney Paul J. Fishman for the District of New Jersey said. “It also failed to report to HUD the defaults it did discover, as required by its participation in the program. Today’s settlement recognizes those failures and imposes an appropriate sanction.”
“It is imperative that mortgage lenders that participate in the FHA insurance program follow the rules and requirements set forth by HUD,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to work with our partners at HUD, its Office of Inspector General, and U.S. Attorneys around the country to protect homeowners and taxpayers from those who knowingly seek to abuse the FHA program for their own gain.”
During the period covered by the settlement, Freedom Mortgage participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and endorsing mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that Freedom Mortgage failed to comply with certain FHA origination, underwriting and quality control requirements.
As part of the settlement, Freedom Mortgage admitted to the following facts:
Between Jan. 1, 2006, and Dec. 31, 2011, it certified mortgage loans for FHA insurance that did not meet HUD underwriting requirements and were therefore not eligible for FHA mortgage insurance. Freedom Mortgage did not adhere to FHA’s quality control (QC) requirements. Between 2006 and 2008, Freedom Mortgage did not share its early payment default (EPD) QC reviews with production and underwriting management, nor did it require responses to its EPD QC findings from its production or underwriting staff. Due to staffing limitations between 2008 and 2010, Freedom Mortgage did not always perform timely QC reviews or perform audits of all EPD loans, as required by HUD. An EPD is a loan that becomes 60 days past due within the first six months of the loan. The EPD QC reviews that Freedom Mortgage did perform revealed high defect rates, exceeding 30 percent between 2008 and 2010. Yet, between 2006 and 2011, Freedom Mortgage did not report a single improperly originated loan to HUD, despite its obligation to do so. In 2012, after identifying hundreds of loans that “possibly should have been self-reported to HUD,” it reported only one. As a result of Freedom Mortgage’s conduct, HUD insured hundreds of loans that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured and subsequently incurred substantial losses when it paid insurance claims on the ineligible loans approved by Freedom Mortgage.
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and demonstrates HUD OIG’s continued efforts to combat fraud in the origination of single family mortgages insured by the FHA,” HUD Inspector General David A. Montoya said.
“FHA-approved lenders have a responsibility to comply with underwriting standards,” HUD’s General Counsel Helen Kanovsky said. “We are gratified that Freedom Mortgage Corporation has accepted responsibility for its actions.”
The settlement was the result of a joint investigation conducted by HUD, HUD OIG, the Civil Division’s Commercial Litigation Branch, and Senior Litigation Counsel Anthony J. LaBruna and Assistant U.S. Attorney Mark Orlowski of the Civil Division of the U.S. Attorney’s Office for the District of New Jersey.
Former Owner of Defense Contracting Businesses Sentenced to 57 Months in Prison for Illegally Exporting Military Blueprints to India Without a LicenseRead the Press Release
The former owner of two New Jersey defense contracting businesses was sentenced today to 57 months in prison for conspiring to send sensitive military technical data to India, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Paul J. Fishman of the District of New Jersey.
Hannah Robert, 50, of North Brunswick, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson of the District of New Jersey to conspiracy to violate the Arms Export Control Act by exporting to India military technical drawings without prior approval of the U.S. Department of State.
“Hannah Robert circumvented the U.S. government and provided export-controlled technical data related to various types of military technology to an individual in India,” said Assistant Attorney General Carlin. “We will vigorously prosecute and bring to justice those who abuse their access to sensitive defense information and violate the Arms Export Control Act.”
“Hannah Robert conspired to send to another country thousands of technical drawings of defense hardware items and sensitive military data,” said U.S. Attorney Fishman. “She was also charged with manufacturing substandard parts that were not up to spec, in violation of the contracts she signed with the Department of Defense. Enforcement of the Arms Export Control Act is critical to the defense of our country.”
According to documents filed in this case and statements made in court:
In June 2010, Robert was the founder, owner and president of One Source USA LLC, a company located at her then-residence in Mount Laurel, New Jersey, that contracted with the U.S. Department of Defense (DoD) to supply defense hardware items and spare parts. In September 2012, Robert opened another defense company, Caldwell Components Inc., based at the same address. Along with a resident of India identified only as P.R., Robert owned and operated a third company located in India that manufactured defense hardware items and spare parts.
From June 2010 to December 2012, Robert conspired to export to India defense technical drawings without obtaining the necessary licenses from the U.S. Department of State. The exported technical drawings include parts used in the torpedo systems for nuclear submarines, military attack helicopters and F-15 fighter aircraft.
In addition to United States’ sales, Robert and P.R. sold defense hardware items to foreign customers. Robert transmitted export-controlled technical data to P.R. in India so that Robert and P.R. could submit bids to foreign actors, including those in the United Arab Emirates (UAE), to supply them or their foreign customers with defense hardware items and spare parts. Neither Robert nor P.R. obtained approval from the U.S. Department of State for this conduct.
On Aug. 23, 2012, P.R. emailed Robert requesting the technical drawing for a particular military item. P.R.’s email forwarded Robert an email from an individual purporting to be “an official contractor of the UAE Ministry of Defence,” and who listed a business address in Abu Dhabi, UAE. The UAE e-mail requested quotations for a bid for the “blanket assembly” for the CH-47F Chinook military helicopter and listed the “End User” for the hardware item as the UAE Armed Forces. Later that same day, Robert replied to P.R.’s email, attaching, among other things, the electronic file for an export-controlled technical drawing titled “Installation and Assy Acoustic Blankets, STA 120 CH-47F,” to be used in the Chinook attack helicopter.
In October 2010, Robert transmitted the military drawings for these parts to India by posting the technical data to the password-protected website of a Camden County, New Jersey, church where she was a volunteer web administrator. This was done without the knowledge of the church staff. Robert e-mailed P.R. the username and password to the church website so that P.R. could download the files from India. Through the course of the scheme, Robert uploaded thousands of technical drawings to the church website for P.R. to download in India.
On June 25, 2012, P.R. e-mailed Robert, stating: “Please send me the church web site username and password.” The e-mail was in reference to both an invoice to and a quote for a trans-shipper known to Robert as a broker of defense hardware items for an end user in Pakistan. This individual used a UAE address for shipping purposes. Later that day, Robert replied to this e-mail, providing a new username and password for the church website so that P.R. could download the particular defense drawings.
On Oct. 5, 2012, Robert e-mailed P.R. with the subject line “Important.” The e-mail referenced the Pakistan trans-shipper, a separate potential sale to individuals in Indonesia and the church website: “Please quote [the Pakistan trans-shipper] and Indonesia items today[.] [Dr]awings I cannot do now as if the size exceeds then problem, I should be watching what I upload, will do over the weekend[.] Ask me if you need any drawing . . . . Talk to you tomorrow . . . .”
There were also quality issues with the parts that Robert provided to the DoD. After the DoD in October 2012 disclosed that certain parts used in the wings of the F-15 fighter aircraft, supplied by one of One Source USA’s United States customers, failed, Robert and P.R. provided the principal of their customer with false and misleading material certifications and inspection reports for the parts. These documents, to be transmitted to the DoD, listed only One Source USA’s New Jersey address and not the address of the actual manufacturer in India, One Source India. As a result of the failed wing pins, the DoD grounded approximately 47 F-15 fighter aircraft for inspection and repair, at a cost estimated to exceed $150,000.
Until November 2012, Robert was an employee of a separate defense contractor in Burlington County, New Jersey, where she worked as a system analyst and had access to thousands of drawings marked with export-control warnings and information on this defense contractor’s bids on DoD contracts. Robert misrepresented to her employer the nature and extent of her involvement with One Source USA in order to conceal her criminal conduct.
The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.
Assistant Attorney General Carlin joined U.S. Attorney Fishman in thanking the special agents of the DoD’s Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert; and special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing.
The case is being prosecuted by Assistant U.S. Attorneys Fabiana Pierre-Louis and L. Judson Welle of the District of New Jersey, with assistance from the National Security Division’s Counterespionage Section.
Former Owner of Defense Contracting Businesses Sentenced to 57 Months in Prison for Illegally Exporting Military Blueprints to India Without A LicenseRead the Press Release
TRENTON, N.J. – The former owner of two New Jersey defense contracting businesses was sentenced today to 57 months in prison for conspiring to send sensitive military technical data to India, U.S. Attorney Paul J. Fishman and Assistant Attorney General for National Security John P. Carlin announced.
Hannah Robert, 50, of North Brunswick, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to Count Six of a superseding indictment, which charged her with conspiracy to violate the Arms Export Control Act by exporting to India military technical drawings without prior approval of the U.S. Department of State. Judge Thompson imposed the sentence today in Trenton federal court.
“Hannah Robert conspired to send to another country thousands of technical drawings of defense hardware items and sensitive military data,” U.S. Attorney Fishman said. “She was also charged with manufacturing substandard parts that were not up to spec, in violation of the contracts she signed with the Department of Defense. Enforcement of the Arms Export Control Act is critical to the defense of our country.”
“Hannah Robert circumvented the U.S. government and provided export-controlled technical data related to various types of military technology to an individual in India,” said Assistant Attorney General Carlin. “We will vigorously prosecute and bring to justice those who abuse their access to sensitive defense information and violate the Arms Export Control Act.”
According to documents filed in this case and statements made in court:
In June 2010, Robert was the founder, owner, and president of One Source USA LLC, a company located at her then-residence in Mount Laurel, New Jersey, that contracted with the U.S. Department of Defense (DoD) to supply defense hardware items and spare parts. In September 2012, Robert opened another defense company, Caldwell Components Inc., based at the same address. Along with a resident of India identified only as “P.R.,” Robert owned and operated a third company located in India that manufactured defense hardware items and spare parts.
From June 2010 to December 2012, Robert conspired to export to India defense technical drawings without obtaining the necessary licenses from the U.S. Department of State. The exported technical drawings include parts used in the torpedo systems for nuclear submarines, in military attack helicopters, and in F-15 fighter aircraft.
In addition to United States’ sales, Robert and P.R. sold defense hardware items to foreign customers. Robert transmitted export-controlled technical data to P.R. in India so that Robert and P.R. could submit bids to foreign actors, including those in the United Arab Emirates (UAE), to supply them or their foreign customers with defense hardware items and spare parts. Neither Robert nor P.R. obtained approval from the U.S. Department of State for this conduct.
On Aug. 23, 2012, P.R. e-mailed Robert requesting the technical drawing for a particular military item. P.R.’s e-mail forwarded Robert an e-mail from an individual purporting to be “an official contractor of the UAE Ministry of Defence,” and who listed a business address in Abu Dhabi, UAE. The UAE e-mail requested quotations for a bid for the “blanket assembly” for the CH-47F Chinook military helicopter and listed the “End User” for the hardware item as the UAE Armed Forces. Later that same day, Robert replied to P.R.’s e-mail, attaching, among other things, the electronic file for an export-controlled technical drawing titled “Installation and Assy Acoustic Blankets, STA 120 CH-47F,” to be used in the Chinook attack helicopter.
In October 2010 Robert transmitted the military drawings for these parts to India by posting the technical data to the password-protected website of a Camden County, New Jersey, church where she was a volunteer web administrator. This was done without the knowledge of the church staff. Robert e-mailed P.R. the username and password to the church website so that P.R. could download the files from India. Through the course of the scheme, Robert uploaded thousands of technical drawings to the church website for P.R. to download in India.
On June 25, 2012, P.R. e-mailed Robert, stating: “Please send me the church web site username and password.” The e-mail was in reference to both an invoice to and a quote for a trans-shipper known to Robert as a broker of defense hardware items for an end user in Pakistan. This individual used a UAE address for shipping purposes. Later that day, Robert replied to this e-mail, providing a new username and password for the church website so that P.R. could download the particular defense drawings.
On Oct. 5, 2012, Robert e-mailed P.R. with the subject line “Important.” The e-mail referenced the Pakistan trans-shipper, a separate potential sale to individuals in Indonesia, and the church website: “Please quote [the Pakistan trans-shipper] and Indonesia items today[.] [Dr]awings I cannot do now as if the size exceeds then problem, I should be watching what I upload, will do over the weekend[.] Ask me if you need any drawing . . . . Talk to you tomorrow . . . .”
There were also quality issues with the parts that Robert provided to the DoD. After the DoD in October 2012 disclosed that certain parts used in the wings of the F-15 fighter aircraft, supplied by one of One Source USA’s United States customers, failed, Robert and P.R. provided the principal of their customer with false and misleading material certifications and inspection reports for the parts. These documents, to be transmitted to the DoD, listed only One Source USA’s New Jersey address and not the address of the actual manufacturer in India, One Source India. As a result of the failed wing pins, the DoD grounded approximately 47 F-15 fighter aircraft for inspection and repair, at a cost estimated to exceed $150,000.
Until November 2012, Robert was an employee of a separate defense contractor in Burlington County, New Jersey, where she worked as a system analyst and had access to thousands of drawings marked with export-control warnings and information on this defense contractor’s bids on DoD contracts. Robert misrepresented to her employer the nature and extent of her involvement with One Source USA in order to conceal her criminal conduct.
In addition to the prison term, Judge Thompson ordered Robert to serve three years of supervised release and pay $181,015.27 in restitution.
The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.
U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert; and special agents of the Department of Homeland Security, Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Fabiana Pierre-Louis of the U.S. Attorney’s Office Criminal Division in Trenton, and L. Judson Welle of the U.S. Attorney’s Office National Security Unit, with assistance from the National Security Division’s Counterespionage Section.
Defense counsel: David E. Schafer Esq., Lawrenceville, New Jersey
Atlantic County, New Jersey, Man Admits Possessing Child Pornography, Sending Lewd Image to A MinorRead the Press Release
CAMDEN, N.J. - An Egg Harbor Township, New Jersey, man today admitted using online messaging applications to solicit nude photos from minors and transmit a lewd photo to a girl, U.S. Attorney Paul J. Fishman announced.
Zackary McFerren, 24, pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with one count of possession of child pornography and one count of transferring obscene matter to a minor.
According to documents filed in this case and statements made in court:
McFerren admitted that between March 2015 and May 2015, he possessed multiple images of child pornography on his home computer. He also admitted that in April 2015, he used the “Kik” messaging application under the screen name “Emily” to communicate with a minor girl in the Philadelphia area. McFerren admitted that during the conversations, he asked the minor girl and her friend to take nude photographs of themselves and their genitalia. The girl then sent McFerren at least 14 such photographs.
In addition, McFerren admitted that in September 2015, he used Snapchat to send a picture of his penis to a Florida girl who was under the age of 16.
Both charges to which McFerren pleaded guilty carry a maximum potential penalty of 10 years in prison and $250,000 fine. Sentencing is scheduled for July 21, 2016.
U.S. Attorney Fishman credited the FBI’s Child Exploitation Task Force, including special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and detectives of the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain, with the investigation leading to today’s plea. He also thanked the FBI’s Philadelphia Division, the Egg Harbor Township Police Department and the Bay County, Florida, Sheriff’s Office for their assistance.
The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney=s Office Criminal Division in Camden.
Defense counsel: Edward Crisonino, Esq., Collingswood, New Jersey
Essex County, New Jersey, Woman Sentenced to 21 Months in Prison for Role in Stolen Identity Refund Fraud SchemeRead the Press Release
TRENTON, N.J. – An Essex County, New Jersey, woman was sentenced today to 21 months in prison for conspiring to obtain more than $1 million through fraudulently generated refund checks issued by the U.S. Treasury, U.S. Attorney Paul J. Fishman announced.
Marie Poitevien, 54, of Orange, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging her with conspiring to steal government funds. Judge Thompson imposed the sentence today in Trenton federal court.
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks:
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SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals.
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SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
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They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
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With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
According to documents filed in this case and statements made in court:
From October 2009 through June 2013, Poitevien participated in a scheme in which her conspirators made fraudulent tax refund applications and had the U.S. Treasury send the refund checks to Poitevien’s residence. Poitevien then negotiated the checks by depositing them into her personal bank account and withdrawing the funds. Poitevien admitted cashing 298 tax refund checks, made payable to 139 different victims and totaling $1,101,689.
In addition to the prison term, Judge Thompson sentenced Poitevien to two years of supervised release.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Linda Foster Esq. Assistant Federal Public Defender, Trenton
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Monmouth County, New Jersey, Man Charged with Production and Receipt of Images of Child Sexual AbuseRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was arrested today for allegedly soliciting an underage girl to produce images of herself engaged in sexually explicit conduct and send the images to him through an online instant messaging application, U.S. Attorney Paul J. Fishman announced.
Matthew Kaminsky, 49, of Matawan, New Jersey, is charged by complaint with one count of production of images containing child pornography, and one count of receiving images containing child pornography via the internet. He is scheduled to appear later today before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court.
According to documents filed in this case and statements made in court:
Kaminsky allegedly met various underage girls through online chat applications and sent them naked pictures of himself. In late January of 2015, over the course of several days, he began corresponding with a 13-year-old girl over an online chat application and induced her to take nude pictures of herself and to send them to him.
In March 2015 law enforcement officers recovered computer equipment belonging to Kaminsky containing images and videos appearing to be of child sexual abuse.
Law enforcement officers located and interviewed the 13-year-old girl Kaminsky had chatted with online in January of 2015, and she confirmed that she had chatted online with Kaminsky and had sent him nude pictures of herself at his request.
The count of receipt of child pornography carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine. The count of production of child pornography carries a mandatory minimum penalty of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Molly S. Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Hudson County, New Jersey, Man Convicted of Production and Distribution of Child PornographyRead the Press Release
TRENTON, N.J. – A Hudson County, New Jersey, man was convicted today for posing as a teenage boy, and at times a teenage girl, to solicit underage females online to produce images of themselves engaged in sexually explicit conduct, possessing, and distributing those images to others, U.S. Attorney Paul J. Fishman announced.
Erik Vanderbeck, 49, of Bayonne, New Jersey, was convicted of two counts of production of child pornography, one count of distribution of child pornography and one count of possession of child pornography. The jury deliberated approximately one hour following a one-week trial before U.S. District Judge Freda L. Wolfson in Trenton federal court.
According to documents filed in this case and the evidence at trial:
Vanderbeck allegedly met various minor females in Internet chat rooms while pretending to be a teenage boy, and at times, a teenage girl. Over the course of their correspondence, Vanderbeck would ask them to send him nude images of themselves. Once Vanderbeck received nude images, he would threaten to post the victim’s nude images online unless she sent more. In some cases, Vanderbeck would send nude images that he had received from certain of his victims to other minors to induce them to self-produce child pornography. When one of the victims threatened to report Vanderbeck to the authorities, he replied, “The cops will never catch me.”
Law enforcement officers executed a search warrant at Vanderbeck’s home in Bayonne on July 22, 2014. They recovered computer equipment belonging to Vanderbeck containing images appearing to be of child pornography. Several of his victims said they produced images of child sexual abuse out of fear and in response to his threats.
Each count of production of child pornography carries a maximum potential penalty of 30 years in prison; the distribution count carries a maximum potential penalty of 20 years in prison; and the possession count carries a maximum potential penalty of 10 years in prison. All of the counts also are punishable by a $250,000 fine. Sentencing is scheduled for July 14, 2016..
U.S. Attorney Fishman credited postal inspectors with the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James Ball in Newark, and the Bayonne Police Department, under the direction of Chief Drew Niekrasz, with the investigation leading to the today’s guilty verdict. He also thanked the Missouri Internet Crimes Against Children Task Force for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Danielle Alfonzo Walsman and Danielle Corcione of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Joshua Markowitz Esq., Lawrenceville
North Jersey Real Estate Developer Admits Soliciting Bribe to Palisades Park OfficialRead the Press Release
NEWARK, N.J. – A real estate developer and landlord of commercial buildings in Palisades Park, New Jersey, today admitted soliciting a $50,000 bribe payment to a Palisades Park borough official, U.S. Attorney Paul J. Fishman announced.
Chung S. Kho, 68, of Fort Lee, New Jersey, pleaded guilty to an information charging him with one count of using facilities in interstate commerce to promote bribery.
According to the documents filed in this case and statements made in court:
Beginning in October 2010, Kho met with an individual (“Individual #1”) who sought to open a karaoke business at a multi-unit commercial building in Palisades Park owned by Kho. During the initial discussions between Kho and Individual #1 about opening the karaoke business, Kho guaranteed that there would be no problem in obtaining a change-of-use approval from Palisades Park to operate a karaoke business at the location.
Kho admitted today that, between October and December 2010, he used his cellphone to facilitate the offer of a bribe payment by Individual #1 to a borough official in Palisades Park for a favorable decision by the borough official regarding the change-of-use request. According to Kho, that offer involved a payment of $30,000 to obtain approval for one karaoke business and $50,000 to obtain approval for two karaoke businesses. Individual #1 initially was hesitant to make the payment. By the time Individual #1 agreed to pay the bribe, Kho informed him that it was too late to make the payment.
The charge of using facilities in interstate commerce to promote bribery 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. Sentencing is scheduled for July 18, 2016.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Division, Garret Mountain Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher; special agents of the U.S. Department of Housing and Urban Development, Office of the Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation.
The government is represented by Assistant U.S. Attorney Jacques S. Pierre of the Special Prosecutions Division in Newark.
Defense counsel: Edward T. Kang, Esq., Alston & Bird LLP
Jamaican Man Charged in Lottery Fraud SchemeRead the Press Release
NEWARK, N.J. – A Jamaican man was charged today with defrauding residents of the United States and Canada by allegedly tricking them into believing they had won multimillion-dollar lotteries and sweepstakes, U.S. Attorney Paul J. Fishman announced.
Ricardo Reid, 30, of Jamaica, West Indies, was indicted by a federal grand jury on one count of conspiracy to commit mail and wire fraud. He will be arraigned at a date to be determined.
According to the indictment:
Reid and others would target their victims by purchasing client lists of elderly and vulnerable individuals from brokers specializing in such information. Reid and his conspirators would initiate contact with the victims by telephone calls from Jamaica and falsely represent themselves to be lottery officials, bankers, or IRS agents.
Reid and his conspirators would then falsely inform the victims that they had won millions of dollars in a lottery or sweepstakes, but in order to redeem these winnings, they had to pay registration and/or other fees and taxes. Reid and his conspirators would direct the victims to pay the bogus fees using several methods, including mailing cash or money orders to other victims or to other members of the conspiracy in the United States. The money was then either smuggled to Jamaica or deposited into United States bank accounts and withdrawn from ATMs located in Jamaica. In other instances, the victims were directed to either wire the bogus fees through Western Union or Money Gram directly to Jamaica.
Reid and his conspirators would generally direct the victims to make repeated payments of fees until either the victim’s funds were depleted or, after realizing they had been scammed, the victims refused to make additional payments. At times, Reid and his conspirators induced and caused the victims to liquidate assets in order to pay the bogus fees.
Reid and his conspirators would conceal their identities using various methods, including aliases like “Robert Gates,” “Mr. Bogohazian,” “Damien Boswell,” “Mr. Washington,” and “Mark Anderson,” and the use of call forwarding and Magic Jack to make and receive calls while masking their phone number and location.
The alleged victims include an 88-year-old resident of Arkansas who lost $110,932; a 57-year-old New Jersey resident who lost $249,394; a 76-year-old Canadian resident who lost $71,919; and a 74-year-old resident of Puerto Rico, who lost $64,433.
The conspiracy count with which Reid is charged carries maximum punishment of 20 years in prison and a fine of up to $250,000.
U.S. Attorney Fishman credited special agents of the Homeland Security Investigations, under the direction of Special Agent in Charge Terence Opiola in Newark; and the U.S. Postal Inspection Service, under the direction of Acting Postal Inspector in Charge James Ball, with the investigation leading to today’s indictment.
The USPIS is warning older Americans and caregivers to beware foreign lottery or sweepstakes schemes. No legitimate sweepstakes or lottery will ask for fees or taxes to be paid in order to claim a prize. Anyone contacted to play a foreign lottery or sweepstakes should follow these tips:
• Don’t give out personal or financial information to anyone over the Internet or phone;
• Never wire or send money to anyone, anywhere who says you’ve won a foreign lottery or sweepstakes;
• Don’t be pressured into making an immediate decision;
• Never purchase anything until you get all the information in writing.
• Visit deliveringtrust.com for helpful information on protection from fraud.
Mail fraud can be reported online at: www.postalinspectors.uspis.gov or by phone at 1-877-876-2455.
Defense counsel: K. Anthony Thomas Esq. Assistant Federal Public Defender, Newark
Co-Owner of Company That Originated Millions in Fraudulent Mortgages Sentenced to 21 Months in PrisonRead the Press Release
NEWARK, N.J. - The co-owner of a mortgage company that was responsible for a long-running, large-scale mortgage fraud scheme that caused millions in losses was sentenced today to 21 months in prison, U.S. Attorney Paul J. Fishman announced.
Lester Soto, 59, of Freehold, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with two counts of conspiracy to commit bank fraud. Judge Salas imposed the sentence today in Newark federal.
According to the documents filed in this and other cases, as well as statements in court:
From September 2006 to May 2008, Soto and others, including fake document creators, a complicit lawyer and paralegal, and numerous loan officers, engaged in two related mortgage fraud conspiracies through a company called Premier Mortgage Services (Premier). Soto and his conspirators targeted properties in low-income areas of New Jersey. After recruiting “straw buyers,” Soto and his conspirators used a variety of fraudulent documents to make it appear as though the straw buyers possessed far more assets and income than they actually did.
Soto and his conspirators then submitted these fraudulent documents as part of mortgage loan applications to financial institutions. Relying on these fraudulent documents, financial institutions provided mortgage loans for the subject properties. Soto and his conspirators then split the proceeds from the mortgages among themselves and others by using fraudulent settlement statements (HUD-1s), which hid the true sources and destinations of the mortgage funds provided by financial institutions. The straw buyers had no means of paying the mortgages, and many of the properties entered into foreclosure proceedings.
Besides being a part-owner of Premier, Soto also acted as a loan officer on certain Premier mortgage loan applications and took a percentage of Premier’s profits. Soto employed document makers to create false and fraudulent documents and put mortgage brokers at Premier in contact with these document makers to create other false and fraudulent documents. Soto instructed Premier employees to provide him with loan files that Premier employees believed contained suspicious information, and then personally shepherded these loan files through to funding.
Other conspirators, including Isaac DePaula, 36, of Brazil, Adilson Silva, 50, of Union, New Jersey, and Klary Arcentales, 47 of Lyndhurst, New Jersey, were loan officers at Premier. DePaula, Silva, and Arcentales recruited straw buyers, provided false and fraudulent documents to the straw buyers, and incorporated false and fraudulent documents into loan applications to induce financial institutions to fund mortgage loans. The loan officers profited illegally by receiving a commission from Premier for each mortgage loan that they closed and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for themselves, often via shell corporations or nominee bank accounts.
Rodrigo Costa, 35, of Brazil, created false and fraudulent documents, including Verifications of Deposit (VODs) and Verifications of Rent (VORs). Other defendants, including DePaula and Silva, then submitted Costa’s fraudulent documents to support the fraudulent mortgage loan applications of various straw buyers. For his participation, Costa received a portion of the illicit proceeds from the mortgages.
Michael Rumore, 57, of Toms River, New Jersey, was an attorney licensed in the State of New Jersey. Rumore served as the settlement agent on mortgage loans brokered by DePaula, Silva, and Soto for various subject properties. Rumore used his status as an attorney to further the fraudulent scheme, including by convening closings, receiving funds from lenders, and preparing HUD-1s that purported to reflect the sources and destinations of funds for mortgages on subject properties B when in fact, the HUD-1s were neither true nor accurate. Rumore disbursed mortgage loan proceeds directly to Premier, Soto, DePaula, and Silva, including amounts not reflected on the HUD-1s. Rumore received a fee for each fraudulent loan in which he participated.
Antonio Pimenta, 48, of Neshanic Station, New Jersey, owned and managed Kelmar Construction Co. (Kelmar). Kelmar built properties that were then sold to straw buyers utilizing fraudulent mortgage loans brokered by Arcentales.
In addition to the prison term, Judge Salas ordered Soto to serve five years of supervised release and pay restitution of $3,745,344.19.
Arcentales, one of the loan officers who provided fraudulent documents to financial institutions on behalf of straw buyers, was recently sentenced on March 28, 2016 to 18 months in prison. Linda Cohen, 58, of Orange, New Jersey, a paralegal who served as the settlement agent on mortgage loans brokered by Arcentales for various properties, was sentenced on March 30, 2016 to six months in prison.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentence. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal and Zach Intrater of the U.S. Attorney’s Office Criminal Division.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov
Defense counsel: Jeff Smith Esq., of Teaneck, New Jersey
Bergen County, New Jersey, Man Admits Embezzling Millions of Dollars from North Jersey BusinessRead the Press Release
TRENTON, N.J. – The former chief financial officer of a Bergen County business today admitted to embezzling millions of dollars from the company and to evading taxes, U.S. Attorney Paul J. Fishman announced.
Gomidas Garabed Hartounian, 52, of Franklin Lakes, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to a superseding information charging him with one count of wire fraud and one count of tax evasion.
According to documents filed in this case and statements made in court:
From April 2007 through April 2014, Hartounian was the CFO for “Company A,” a for-profit company with its principal place of business in Englewood, New Jersey. Hartounian is also the sole owner of MGB LLC, a company registered to his residence. Hartounian fraudulently designated MGB as a vendor in Company A’s accounting system without disclosing that he controlled MGB. He directed Company A employees to issue checks to MGB for freight services that MGB supposedly provided Company A. When asked for the MGB invoices, he claimed that he was maintaining them in his office.
Because Hartounian didn’t have sole signatory power, he forged the signatures of the chief executive officer or the chief operating officer before depositing the checks into bank accounts that he controlled. Hartounian also had checks issued directly from Company A bank accounts to pay for his personal expenses, including real estate taxes to the Borough of Franklin Lakes for $6,562 in August 2011.
Hartounian also admitted that he filed a false federal tax return, Form 1040, for the calendar year 2012 in which he knowingly did not report $1.29 million in income that he received as the sole owner of MGB. Instead, Hartounian falsely understated his income for 2012 as $133,290.
The wire fraud count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss resulting from the crime. The tax evasion count carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss resulting from the crime. Sentencing is scheduled for Aug. 16, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and 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 Shana W. Chen of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.stopfraud.gov.
Defense counsel: Alan Silber Esq., Roseland, New Jersey
Atlantic County, New Jersey, Tax Preparer Sentenced to Two Years in Prison for Tax FraudRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, tax preparer was sentenced today to 24 months in prison for including fraudulent credits and deductions on federal tax returns for his clients in an effort to gain repeat business, U.S. Attorney Paul J. Fishman announced.
Tinh Van Vo, 50, of Egg Harbor Township, New Jersey, was previously convicted of 10 counts of aiding and assisting in the preparation of false federal income tax returns following a two-week trial before U.S. District Judge Robert B. Kugler, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence at trial:
Vo prepared and filed fraudulent U.S. Individual Income Tax Returns through his business, TVO Services in Atlantic City, New Jersey. The returns attached schedules for fictitious educational credits, charitable contributions, and job expenses the taxpayers were not entitled to take – all to generate fraudulently inflated refunds.
In addition to the prison term, Judge Kugler sentenced Vo to one year of supervised release. During that time, Vo is prohibited from employment that allows him to prepare or assist in the preparation of tax returns. Vo must also pay a $15,000 fine.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden, New Jersey.
Defense counsel: William J. Hughes Jr. Esq., Atlantic City, New Jersey
Compliance Officer Admits Rigging Contractor Selection Process for Union City Community Development Agency ProjectsRead the Press Release
NEWARK, N.J. – A compliance officer with the Union City Community Development Agency (UCCDA) today admitted that he manipulated the contractor selection process for federally funded residential rehabilitation and sidewalk replacement projects, causing losses of $40,000 to $95,000, U.S. Attorney Paul J. Fishman announced.
Washington Borgono, 65, of North Bergen, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to Count Two of an indictment charging him with obtaining by fraud, converting and misapplying government funds provided by the UCCDA.
According to documents filed in this case and statements made in court:
Between April 2007 and February 2013, Borgono was a compliance officer at the UCCDA, a local government agency that received grant funds from the U.S. Department of Housing and Urban Development (HUD). Among the programs that the UCCDA operated through this HUD funding were a residential rehabilitation program and a sidewalk replacement program.
From 2007 through 2013, Borgono manipulated the contractor selection process for HUD-funded residential rehabilitation and sidewalk replacement projects through false and misleading bids. Borgono instructed certain contractors, such as Leovaldo Fundora, a contractor in Guttenberg, New Jersey, to obtain and submit higher, phony bids from other contractors in order to improperly award residential rehabilitation and sidewalk replacement projects to the contractors of Borgono’s choice. Borgono also instructed certain contractors, such as Joseph Lado, of Fort Lee, New Jersey, to bid under a certain specified amount on residential rehabilitation and sidewalk replacement projects, to ensure those contractors obtained those projects. At other times, Borgono instructed certain contractors to submit phony higher bids from their own companies, for residential rehabilitation and sidewalk replacement projects, to ensure that certain contractors were awarded the projects. In other instances, Borgono discarded the lowest bid for sidewalk replacement projects to ensure that Borgono’s contractors of choice would be awarded the sidewalk replacement projects. Fundora, Lado, UCCDA Inspector Johnny Garces and Stanley Parzych, a contractor in Jersey City, New Jersey, previously pleaded guilty to criminal charges for their roles in this scheme and await sentencing.
The charge of obtaining by fraud, converting and misapplying government funds carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Sentencing is scheduled for July 19, 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 Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Barbara R. Llanes and José R. Almonte of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel: Louis A. Zayas Esq., North Bergen
California CPA Sentenced to 57 Months in Prison for Defrauding New Jersey Religious Center, California Non-Profit Out of More Than $4 MillionRead the Press Release
NEWARK, N.J. – A California CPA was sentenced today to 57 months in prison for abusing his positions at a worship center in New Jersey and a non-profit in California to steal more than $4 million, U.S. Attorney Paul J. Fishman announced.
Donald Gridiron, 51, of Pomona, California, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of wire fraud and one count of filing a false tax return. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court:
A religious facility located in Rahway, New Jersey, hired Gridiron based, in part, on his connections with individuals in the religious community as well as his standing within that community. The religious facility agreed to pay Gridiron a monthly salary and reimburse him for reasonable expenses related to his work. In addition, Gridiron was the treasurer for a non-profit entity registered in California.
Gridiron used his employment with the worship center and his status with the non-profit to illegally syphon money without their consent or authorization. In total, Gridiron transferred more than $4 million to accounts he controlled. Gridiron then used the funds for his own use, including mortgage payments, luxury car payments and gambling expenses. Gridiron also failed to report this income on his tax returns, including $950,000 he stole during the 2011 tax year.
In addition to the prison term, Judge McNulty sentenced Gridiron to three years of supervised release and ordered him to pay restitution of approximately $5.16 million ($4,815,964 to the worship center, including $200,000 to insurers who have paid the worship center; and $348,450 to the foundation.)
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, and law enforcement officers of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel: Candace Hom Esq., Newark, New Jersey
21 Defendants Charged with Fraudulently Enabling Hundreds of Foreign Nationals to Remain in the United States Through Fake ‘Pay to Stay’ New Jersey CollegeRead the Press Release
“College” Created as Part of Homeland Security Investigations Sting Operation
Twenty-one brokers, recruiters and employers from across the United States who allegedly conspired with more than 1,000 foreign nationals to fraudulently maintain student visas and obtain foreign worker visas through a “pay to stay” New Jersey college were arrested this morning by federal agents, U.S. Attorney Paul J. Fishman for the District of New Jersey announced.
The defendants (see chart below) were arrested in New Jersey and Washington by special agents with U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and charged in 14 complaints with conspiracy to commit visa fraud, conspiracy to harbor aliens for profit and other offenses. All the defendants, with the exception of Yanjun Lin aka Aimee Lin, 25, of Flushing, New York, will appear today before U.S. Magistrate Judge Steven C. Mannion of the District of New Jersey in Newark, New Jersey, federal court. Lin will appear before U.S. Magistrate Judge Karen L. Strombom in the Western District of Washington federal court.
“‘Pay to Stay’ schemes not only damage our perception of legitimate student and foreign worker visa programs, they also pose a very real threat to national security,” U.S. Attorney Fishman said. “Today’s arrests, which were made possible by the great undercover work of our law enforcement partners, stopped 21 brokers, recruiters and employers across multiple states who recklessly exploited our immigration system for financial gain.”
“While the United States fully supports international education, we will vigorously investigate those who seek to exploit the U.S. immigration system,” said Director Sarah R. Saldaña for ICE. “As a result of this operation, HSI special agents have successfully identified and closed a gap in the student visa system and have arrested 21 individuals alleged to be amongst the system’s most egregious violators.”
“Individuals engaged in schemes that would undermine the remarkable educational opportunities afforded to international students represent an affront to those who play by the rules,” said Special Agent in Charge Terence S. Opiola for ICE Homeland Security Investigations. “These unscrupulous individuals undermine the integrity of the immigration system. Our special agents are committed to addressing, identifying fraud in order to better protect the system as a whole.”
According to the complaints unsealed today and statements made in court:
The defendants, many of whom operated recruiting companies for purported international students, were arrested for their involvement in an alleged scheme to enroll foreign nationals as students in the University of Northern New Jersey, a purported for-profit college located in Cranford, New Jersey (UNNJ). Unbeknownst to the defendants and the foreign nationals they conspired with, however, the UNNJ was created in September 2013 by HSI federal agents.
Through the UNNJ, undercover HSI agents investigated criminal activities associated with the Student and Exchange Visitor Program (SEVP), including, but not limited to, student visa fraud and the harboring of aliens for profit. The UNNJ was not staffed with instructors or educators, had no curriculum and conducted no actual classes or education activities. The UNNJ operated solely as a storefront location with small offices staffed by federal agents posing as school administrators.
UNNJ represented itself as a school that, among other things, was authorized to issue a document known as a “Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students,” commonly referred to as a Form I-20. This document, which certifies that a foreign national has been accepted to a school and would be a full-time student, typically enables legitimate foreign students to obtain an F-1 student visa. The F-1 student visa allows a foreign student to enter and/or remain in the United States while the student makes normal progress toward the completion of a full course of study in an SEVP accredited institution.
During the investigation, HSI special agents identified hundreds of foreign nationals, primarily from China and India, who previously entered the U.S. on F-1 non-immigrant student visas to attend other SEVP- accredited schools. Through various recruiting companies and business entities located in New Jersey, California, Illinois, New York and Virginia, the defendants then enabled approximately 1,076 of these foreign individuals – all of whom were willing participants in the scheme – to fraudulently maintain their nonimmigrant status in the U.S. on the false pretense that they continued to participate in full courses of study at the UNNJ.
Acting as recruiters, the defendants solicited the involvement of UNNJ administrators to participate in the scheme. During the course of their dealings with undercover agents, the defendants fully acknowledged that none of their foreign national clients would attend any actual courses, earn actual credits, or make academic progress toward an actual degree in a particular field of study. Rather, the defendants facilitated the enrollment of their foreign national clients in UNNJ to fraudulently maintain student visa status, in exchange for kickbacks, or “commissions.” The defendants also facilitated the creation of hundreds of false student records, including transcripts, attendance records and diplomas, which were purchased by their foreign national conspirators for the purpose of deceiving immigration authorities.
In other instances, the defendants used UNNJ to fraudulently obtain work authorization and work visas for hundreds of their clients. By obtaining this authorization, a number of defendants were able to outsource their foreign national clients as full-time employees with numerous U.S.-based corporations, also in exchange for commission fees. Other defendants devised phony IT projects that were purportedly to occur at the school. These defendants then created and caused to be created false contracts, employment verification letters, transcripts and other documents. The defendants then paid the undercover agents thousands of dollars to put the school’s letterhead on the sham documents, to sign the documents as school administrators and to otherwise go along with the scheme.
All of these bogus documents created the illusion that prospective foreign workers would be working at the school in some IT capacity or project. The defendants then used these fictitious documents fraudulently to obtain labor certifications issued by the U.S. Secretary of Labor and then ultimately to petition the U.S. government to obtain H1-B visas for non-immigrants. These fictitious documents were then submitted to the U.S. Customs and Immigration Services (USCIS). In the vast majority of circumstances, the foreign worker visas were not issued because USCIS was advised of the ongoing undercover operation.
In addition, starting today, HSI Newark is coordinating with the ICE Counterterrorism and Criminal Exploitation Unit (CTCEU) and the SEVP to terminate the nonimmigrant student status for the foreign nationals associated with UNNJ, and if applicable, administratively arrest and place them into removal proceedings.
The chart below outlines the charges for each defendant. The charges of conspiracy to commit visa fraud and making a false statement each carry a maximum potential penalty of five years in prison and a $250,000 fine. The charges of conspiracy to harbor aliens for profit and H1-B Visa fraud each carry a maximum penalty of 10 years in prison and $250,000 fine.
The charges and allegations contained in the complaints are merely accusations and the defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement, under the leadership of Director Saldaña; HSI Newark, under the leadership of Special Agent in Charge Opiola; U.S. Immigration and Customs Enforcement, Counterterrorism and Criminal Exploitation Unit, under the leadership of Unit Chief Robert Soria; U.S. Citizenship and Immigration Services, Fraud Detection and National Security Section, under the leadership of Associate Director Matthew Emrich; the Student and Exchange Visitor Program, under the leadership of Deputy Assistant Director Louis M. Farrell; U.S. Citizenship and Immigration Services, Vermont Service Center, Security Fraud Division, under the leadership of Associate Center Director Bradley J. Brouillette; U.S. Department of State, Bureau of Consular Affairs, Office of Fraud Prevention Programs, under the leadership of Director Josh Glazeroff; and the FBI, Joint Terrorism Task Force, under the leadership of Timothy Gallagher in Newark, for their contributions to the investigation.
He also thanked the Accrediting Commission of Career Schools and Colleges (ACCSC), under the leadership of Executive Director Michale S. McComis, and the New Jersey Office of Higher Education, under the leadership of Secretary of Higher Education Rochelle R. Hendricks, for their assistance. In addition, U.S. Attorney Fishman thanked the New Jersey Motor Vehicle Commission and the New York State Department of Motor Vehicles, as well as the U.S. Attorney’s Offices for the Central District of California, Eastern District of New York, Eastern District of Virginia, Southern District of New York, Central District of Illinois, Peoria Division, and the Northern District of Georgia for their help.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit and Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Defendant Name
Age
Residence
Charges
Jun Shen aka Jeanette Shen
32
Levittown, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jiaming Wang aka Celine Wang,
34
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Philip Junlin Li
33
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zitong Wen aka Kate Wen
27
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Chaun Kit Yuen aka Alvin Yuen
24
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Ting Zue aka Tiffany Xue
28
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Yanjun Lin aka Aimee Lin
25
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zheng Zhang aka Vicky Zhang
26
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Xue Yong Liu aka Jack Liu
29
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Minglu Li aka Vivian Lee
36
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jason Li aka Jason Liu aka Fen Lee
43
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Tajesh Kodali
44
Edison, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jyoti Patel
34
Franklin Park, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Shahjadi M. Parvin aka Sarah Patel
54
Hackensack, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Narendra Singh Plaha
44
Hillsborough, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Sanjeev Sukhija
35
North Brunswick, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Harpreet Sachdeva
26
Somerset, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Avinash Shankar
35
Bloomington, Illinois
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Karthik Nimmala
32
Smyrna, Georgia
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Govardhan Dyavarashetty aka Vardhan Shetty
35
Avenel, New Jersey
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
Syed Qasim Abbas aka Qasim Reza aka Nayyer
41
Brooklyn, New York
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
21 Defendants Charged with Fraudulently Enabling Hundreds of Foreign Nationals to Remain in the United States Through Fake ‘Pay to Stay’ New Jersey CollegeRead the Press Release
“College” created as part of Homeland Security Investigations sting operation
NEWARK, N.J. - Twenty-one brokers, recruiters, and employers from across the United States who allegedly conspired with more than 1,000 foreign nationals to fraudulently maintain student visas and obtain foreign worker visas through a “pay to stay” New Jersey college were arrested this morning by federal agents, New Jersey U.S. Attorney Paul J. Fishman announced.
The defendants (see chart below) were arrested in New Jersey and Washington by special agents with U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and charged in 14 complaints with conspiracy to commit visa fraud, conspiracy to harbor aliens for profit, and other offenses. All the defendants, with the exception of Yanjun Lin, will appear today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Lin will appear before U.S. Magistrate Judge Karen L. Strombom in the Western District of Washington federal court.
“‘Pay to Stay’ schemes not only damage our perception of legitimate student and foreign worker visa programs, they also pose a very real threat to national security,” U.S. Attorney Fishman said. “Today’s arrests, which were made possible by the great undercover work of our law enforcement partners, stopped 21 brokers, recruiters and employers across multiple states who recklessly exploited our immigration system for financial gain.”
“While the United States fully supports international education, we will vigorously investigate those who seek to exploit the U.S. immigration system,” said ICE Director Sarah R. Saldaña. “As a result of this operation, HSI special agents have successfully identified and shut down multiple operations which have abused the student visa program.”
“Individuals engaged in schemes that would undermine the remarkable educational opportunities afforded to international students represent an affront to those who play by the rules. These unscrupulous individuals undermine the integrity of the immigration system,” said ICE Homeland Security Investigations Special Agent in Charge Terence S. Opiola. “Our special agents are committed to addressing, identifying fraud in order to better protect the system as a whole.”
According to the complaints unsealed today and statements made in court:
The defendants, many of whom operated recruiting companies for purported international students, were arrested for their involvement in an alleged scheme to enroll foreign nationals as students in the University of Northern New Jersey, a purported for-profit college located in Cranford, New Jersey (UNNJ). Unbeknownst to the defendants and the foreign nationals they conspired with, however, the UNNJ was created in September 2013 by HSI federal agents.
Through the UNNJ, undercover HSI agents investigated criminal activities associated with the Student and Exchange Visitor Program (SEVP), including, but not limited to, student visa fraud and the harboring of aliens for profit. The UNNJ was not staffed with instructors or educators, had no curriculum, and conducted no actual classes or education activities. The UNNJ operated solely as a storefront location with small offices staffed by federal agents posing as school administrators.
UNNJ represented itself as a school that, among other things, was authorized to issue a document known as a “Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students,” commonly referred to as a Form I-20. This document, which certifies that a foreign national has been accepted to a school and would be a full-time student, typically enables legitimate foreign students to obtain an F-1 student visa. The F-1 student visa allows a foreign student to enter and/or remain in the United States while the student makes normal progress toward the completion of a full course of study in an SEVP accredited institution.
During the investigation, HSI special agents identified hundreds of foreign nationals, primarily from China and India, who previously entered the U.S. on F-1 non-immigrant student visas to attend other SEVP- accredited schools. Through various recruiting companies and business entities located in New Jersey, California, Illinois, New York, and Virginia, the defendants then enabled approximately 1,076 of these foreign individuals – all of whom were willing participants in the scheme – to fraudulently maintain their nonimmigrant status in the U.S. on the false pretense that they continued to participate in full courses of study at the UNNJ.
Acting as recruiters, the defendants solicited the involvement of UNNJ administrators to participate in the scheme. During the course of their dealings with undercover agents, the defendants fully acknowledged that none of their foreign national clients would attend any actual courses, earn actual credits, or make academic progress toward an actual degree in a particular field of study. Rather, the defendants facilitated the enrollment of their foreign national clients in UNNJ to fraudulently maintain student visa status, in exchange for kickbacks, or “commissions.” The defendants also facilitated the creation of hundreds of false student records, including transcripts, attendance records, and diplomas, which were purchased by their foreign national conspirators for the purpose of deceiving immigration authorities.
In other instances, the defendants used UNNJ to fraudulently obtain work authorization and work visas for hundreds of their clients. By obtaining this authorization, a number of defendants were able to outsource their foreign national clients as full-time employees with numerous U.S.-based corporations, also in exchange for commission fees. Other defendants devised phony IT projects that were purportedly to occur at the school. These defendants then created and caused to be created false contracts, employment verification letters, transcripts, and other documents. The defendants then paid the undercover agents thousands of dollars to put the school’s letterhead on the sham documents, to sign the documents as school administrators, and to otherwise go along with the scheme.
All of these bogus documents created the illusion that prospective foreign workers would be working at the school in some IT capacity or project. The defendants then used these fictitious documents fraudulently to obtain labor certifications issued by the U.S. Secretary of Labor and then ultimately to petition the U.S. government to obtain H1-B visas for non-immigrants. These fictitious documents were then submitted to the U.S. Customs and Immigration Services (USCIS). In the vast majority of circumstances, the foreign worker visas were not issued because USCIS was advised of the ongoing undercover operation.
In addition, starting today, HSI Newark is coordinating with the ICE Counterterrorism and Criminal Exploitation Unit (CTCEU) and the SEVP to terminate the nonimmigrant student status for the foreign nationals associated with UNNJ, and if applicable, administratively arrest and place them into removal proceedings.
The chart below outlines the charges for each defendant. The charges of conspiracy to commit visa fraud and making a false statement each carry a maximum potential penalty of five years in prison and a $250,000 fine. The charges of conspiracy to harbor aliens for profit and H1-B Visa fraud each carry a maximum penalty of 10 years in prison and $250,000 fine.
The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement, under the leadership of Director Sarah R. Saldaña; HSI Newark, under the leadership of Special Agent in Charge Terence S. Opiola; U.S. Immigration and Customs Enforcement, Counterterrorism and Criminal Exploitation Unit, under the leadership of Unit Chief Robert Soria; U.S. Citizenship and Immigration Services, Fraud Detection and National Security Section, under the leadership of Associate Director Matthew Emrich; the Student and Exchange Visitor Program, under the leadership of Deputy Assistant Director Louis M. Farrell; U.S. Citizenship and Immigration Services, Vermont Service Center, Security Fraud Division, under the leadership of Associate Center Director Bradley J. Brouillette; U.S. Department of State, Bureau of Consular Affairs, Office of Fraud Prevention Programs, under the leadership of Director Josh Glazeroff; and the FBI, Joint Terrorism Task Force, under the leadership of Timothy Gallagher in Newark, for their contributions to the investigation.
He also thanked the Accrediting Commission of Career Schools and Colleges (ACCSC), under the leadership of Executive Director Michale S. McComis, and the N.J. Office of Higher Education, under the leadership of Secretary of Higher Education Rochelle R. Hendricks, for their assistance. In addition, U.S. Attorney Fishman thanked the N.J. Motor Vehicle Commission and the New York State Department of Motor Vehicles, as well as the U.S. Attorney’s Offices for the Central District of California, Eastern District of New York, Eastern District of Virginia, Southern District of New York, Central District of Illinois, Peoria Division, and the Northern District of Georgia for their help.
The government is represented by Assistant U.S. Attorney Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Defendant Name
Age
Residence
Charges
Jun Shen, a/k/a “Jeanette Shen”
32
Levittown, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jiaming Wang, a/k/a “Celine Wang,”
34
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Philip Junlin Li
33
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zitong Wen, a/k/a “Kate Wen”
27
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Chaun Kit Yuen, a/k/a “Alvin Yuen”
24
Rowland Heights, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Ting Zue, a/k/a “Tiffany Xue”
28
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Yanjun Lin, a/k/a “Aimee Lin”
25
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Zheng Zhang a/k/a “Vicky Zhang”
26
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Xue Yong Liu a/k/a “Jack Liu”
29
New York, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Minglu Li, a/k/a “Vivian Lee”
36
Los Angeles, California
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jason Li, a/k/a “Jason Liu,” “Fen Lee”
43
Flushing, New York
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Tajesh Kodali
44
Edison, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Jyoti Patel
34
Franklin Park, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Shahjadi M. Parvin, a/k/a “Sarah Patel”
54
Hackensack, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Narendra Singh Plaha
44
Hillsborough, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Sanjeev Sukhija
35
North Brunswick, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Harpreet Sachdeva
26
Somerset, New Jersey
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Avinash Shankar
35
Bloomington, Illinois
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Karthik Nimmala
32
Smyrna, Georgia
– Conspiracy to commit visa fraud
– Conspiracy to harbor aliens for profit
Govardhan Dyavarashetty, a/k/a “Vardhan Shetty”
35
Avenel, New Jersey
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
Syed Qasim Abbas a/k/a “Qasim Reza,” and “Nayyer”
41
Brooklyn, New York
– H1-B Visa fraud
– False statements
– Conspiracy to harbor aliens for profit
Monmouth County Man Gets 87 Months in Prison for Intent to Distribute over 150 Grams of MethamphetamineRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 87 months in prison for possessing 162 grams of methamphetamine with intent to distribute, U.S. Attorney Paul J. Fishman announced.
Theodore Santaguida, 42, of Ocean Township, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with possessing with intent to distribute methamphetamine. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
On Dec. 23, 2014, a task force of FBI and Ocean Township law enforcement executed a federal search warrant at Santaguida’s apartment, and seized 162 grams of methamphetamine.
In addition to the prison term, Judge Cooper sentenced Santaguida to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to today’s sentencing. He also thanked officers of the Ocean Township Police Department under the direction of Chief of Police Steven R. Peters for their assistance.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Scott Krasny Esq., West Trenton, New JerseyMulti-Year Prison Sentences for Two New Jersey Men Who Extorting Thousands of Dollars from Hudson County ProjectRead the Press Release
NEWARK, N.J. – Two New Jersey men were sentenced to prison today for extorting thousands of dollars in corrupt payments in connection with arranging approvals to provide landfill materials for a Hudson County Improvement Authority (“HCIA”) project, U.S. Attorney Paul J. Fishman announced.
Gerard Pica, 66, of Middletown, New Jersey, and James Castaldo, 60, of Beachwood, New Jersey were sentenced to 35 and 51 months in prison, respectively. Pica previously pleaded guilty before U.S. District Judge Jose L. Linares to Count Four of an indictment charging him with conspiracy to commit extortion under color of official right. Castaldo previously pleaded guilty before Judge Linares to Count One of the indictment charging him with conspiracy to commit extortion under color of official right. Judge Linares imposed both sentences today in Newark federal court.
According to the documents filed in this case and statements made in court:
The HCIA was overseeing the construction of a nine-hole public golf course located at Lincoln Park West in Jersey City, New Jersey (the “LPW project”). As part of its construction, the LPW project required several hundred thousand cubic yards of soil, fill material and crushed stone to be incorporated into the site, as well as to serve as road bedding during the construction of the golf course. As the overseer of the LPW project, one of the functions of the HCIA – either directly or through a designated contractor – was to serve as a gatekeeper for any material to be delivered to the LPW site. It was the HCIA’s responsibility to solicit, evaluate and decide which contractors’ proposals to accept for the provision of soil and fill material for the LPW project.
Castaldo ran Renda Enterprises LLC, which provided interstate transportation and broker services that moved or received recycled waste and other materials. Pica had been employed by the HCIA as an environmental scientist and had the ability to influence the HCIA’s decisions regarding the selection of contractors to provide soil and fill material to the LPW project. An individual referred to in the indictment as “Employee 1” also had authority over the selection of contractors seeking to provide materials for the project site.
From August 2010 through November 2011, Pica, Castaldo and others schemed to obtain payments from certain contractors in exchange for Pica and Employee 1’s assistance in getting approval for certain companies to provide materials for the LPW project.
Pica admitted that he arranged to obtain corrupt payments from “Individual 3,” the owner of a recycling business in Bayonne, New Jersey. Pica admitted using his authority at the HCIA to ensure that Individual 3 and Individual 3’s company received approval to provide Class B materials, including crushed stone, for the LPW project. As part of the agreement, Individual 3 would pay Castaldo a fee – $2 per cubic yard of fill and soil material delivered to the site – for the benefit of Pica, Castaldo and Employee 1. Pica admitted receiving approximately $6,600 in December 2010 as a partial payment of his share. In addition, Pica admitted to creating a fraudulent invoice from a separate company which he owned for monies purportedly owed to him by Renda Enterprises. Pica admitted that he accepted a check for $6,000 from Renda Enterprises in April 2011, knowing that this amount was further payment of his share which he extorted from Individual 3.
Castaldo admitted that in early 2011, he met with Pica and a person referred to in the indictment as “Individual 1,” who was the owner of a full service environmental consulting firm seeking authorization to dump soil and fill material at the LPW site. Castaldo admitted that he, Pica and Individual 1 agreed upon the amount per cubic yard that Individual 1 would have to pay in return for Pica’s assistance in ensuring Individual 1 would receive authorization to dump the material at the LPW site. Castaldo acknowledged that in July 2011, Renda Enterprises received two payments totaling more than $8,600 as corrupt payments for allowing Individual 1 to dump more than 2,600 cubic yards of fill materials at the LPW site.
In addition to the prison terms, Judge Linares sentenced both Pica and Castaldo to three years of supervised release. They are also jointly responsible for restitution of $53,861.
U.S. Attorney Fishman credited special agents from the FBI, under direction of Special Agent in Charge Timothy Gallagher in Newark and special agents with the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem, for the investigation.
The government is represented by Assistant U.S. Attorney Mark McCarren of the U.S. Attorney’s Office Special Prosecutions Division in Newark.
Defense counsel:
Pica: Edward Plaza, Esq., Newark
Castaldo: Matthew J. Heagen, Toms River
Justice Department Reaches Agreement with City of Newark, New Jersey, to Reform Police Department’s Unconstitutional PracticesRead the Press Release
The Justice Department announced today it has reached a comprehensive settlement with the city of Newark, New Jersey, that will bring wide-ranging reforms and changes to the Newark Police Department (NPD). The agreement, which is subject to court approval, resolves the department’s findings that NPD has engaged in a pattern or practice of unconstitutional stops, searches, arrests, use of excessive force and theft by officers in violation of the First, Fourth and 14th Amendments. The proposed consent decree also resolves the department’s findings that NPD’s law enforcement practices had a disparate impact on minorities in Newark.
The Justice Department’s findings were announced in July 2014 following a comprehensive investigation into the NPD started in May 2011. The investigation also found that this pattern of constitutional violations has eroded public confidence in the police. As a result, public safety suffers and the job of delivering police services was more difficult and more dangerous.
“This agreement holds the potential to make Newark a national model for constitutional, effective and accountable community policing in the 21st century,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice looks forward to working closely with the city as we implement this agreement and begin to change policies, improve systems and rebuild trust between Newark police officers and the residents they serve.”
“The men and women who wear the uniform of the Newark Police Department bring enormous dedication, integrity and pride to their jobs every day,” said U.S. Attorney Paul Fishman of the District of New Jersey. “At the same time, the department is challenged in fundamental ways and has engaged in a pattern and practice of unconstitutional policing in a broad range of areas. And it is also clear that the Police Department’s relationship with the people of the city has suffered dramatically from the combination of those practices. Community trust has deteriorated, and that in turn has compromised the effectiveness of the Department. Today we are taking a major step toward breaking that cycle.”
Under the consent decree, the city of Newark and NPD will implement comprehensive reforms in 12 substantive areas. The agreement ensures that:
- NPD will improve officer training to ensure that officers develop the necessary technical and practical skills required to carry out NPD directives consistently.
- NPD will revise search and seizure policies, training and supervision to ensure that all stops, searches and arrests are conducted in accordance with the Constitution and in a manner that takes into account community priorities.
- NPD will integrate bias-free policing principles into all levels of the organization, including comprehensive training of officers and supervisors.
- NPD will reform use of force policies, including requirements for using de-escalation techniques whenever possible and appropriate, prohibiting retaliatory force and ensuring mandatory reporting and investigation standards following use of force.
- NPD will deploy in-car and body-worn cameras to promote accountability, instill community confidence and improve law enforcement records.
- NPD will implement measures to prevent theft of property by officers, including robust reporting and complete accounting of property or evidenced seized.
- Office of Professional Standards investigators will be appropriately qualified and trained. Investigations of civilian complaints will be conducted in an objective, thorough and timely manner.
- Newark will create a civilian oversight entity to give voice to and pursue concerns of its residents.
- NPD will develop protocols for conducting compliance reviews and integrity audits.
- NPD will implement steps to ensure that the disciplinary process is fair and consistent.
- NPD will improve records management and early intervention systems and collect data on all uses of force and investigatory stops, searches and arrests, and develop a protocol for the comprehensive analysis of the data. The information will be publicly reported.
- NPD will strengthen its public information programs to ensure that members of the public are informed of NPD’s progress toward reform.
Newark and the Department of Justice have jointly proposed Peter Harvey to lead the team of experts that will monitor the city’s compliance with the agreement. Harvey is a former New Jersey Attorney General, and has experience under a Justice Department consent decree in the New Jersey State Police Case. He brings a deep understanding of issues specific to New Jersey and Newark and has direct experience overseeing organizational change and law enforcement reforms. Harvey will propose a team of local and nationally-recognized experts who are all committed to ensuring effective and constitutional policing, subject to the approval of the city and the Justice Department.
The investigation was conducted jointly by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office of the District of New Jersey. For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information about the U.S. Attorney’s Office of the District of New Jersey, please visit http://www.justice.gov/usao/nj.
NPD Consent Decree
NPD Complaint
NPD Fact Sheet
SPL Police Accomplishments
Justice Department Reaches Agreement with City of Newark, New Jersey, to Reform Police Department’s Unconstitutional PracticesRead the Press Release
NEWARK, N.J. – The Justice Department announced today it has reached a comprehensive settlement with the city of Newark, New Jersey, that will bring wide-ranging reforms and changes to the Newark Police Department (NPD). The agreement, which is subject to court approval, resolves the department’s findings that NPD has engaged in a pattern or practice of unconstitutional stops, searches, arrests, use of excessive force and theft by officers in violation of the First, Fourth and 14th Amendments. The proposed consent decree also resolves the department’s findings that NPD’s law enforcement practices had a disparate impact on minorities in Newark.
The Justice Department’s findings were announced in July 2014 following a comprehensive investigation into the NPD started in May 2011. The investigation also found that this pattern of constitutional violations has eroded public confidence in the police. As a result, public safety suffers and the job of delivering police services was more difficult and more dangerous.
“This agreement holds the potential to make Newark a national model for constitutional, effective, and accountable community policing in the 21st century,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice looks forward to working closely with the city as we implement this agreement and begin to change policies, improve systems and rebuild trust between Newark police officers and the residents they serve.”
“The men and women who wear the uniform of the Newark Police Department bring enormous dedication, integrity, and pride to their jobs every day,” Paul Fishman, U.S. Attorney for the District of New Jersey, said. “At the same time, the department is challenged in fundamental ways and has engaged in a pattern and practice of unconstitutional policing in a broad range of areas. And it is also clear that the Police Department’s relationship with the people of the city has suffered dramatically from the combination of those practices. Community trust has deteriorated, and that in turn has compromised the effectiveness of the Department. Today we are taking a major step toward breaking that cycle.”
Under the consent decree, the city of Newark and NPD will implement comprehensive reforms in 12 substantive areas. The agreement ensures that:
- NPD will improve officer training to ensure that officers develop the necessary technical and practical skills required to carry out NPD directives consistently.
- NPD will revise search and seizure policies, training and supervision to ensure that all stops, searches and arrests are conducted in accordance with the Constitution and in a manner that takes into account community priorities.
- NPD will integrate bias-free policing principles into all levels of the organization, including comprehensive training of officers and supervisors.
- NPD will reform use of force policies, including requirements for using de-escalation techniques whenever possible and appropriate, prohibiting retaliatory force and ensuring mandatory reporting and investigation standards following use of force.
- NPD will deploy in-car and body-worn cameras to promote accountability, instill community confidence and improve law enforcement records.
- NPD will implement measures to prevent theft of property by officers, including robust reporting and complete accounting of property or evidenced seized.
- Office of Professional Standards investigators will be appropriately qualified and trained. Investigations of civilian complaints will be conducted in an objective, thorough and timely manner.
- Newark will create a civilian oversight entity to give voice to and pursue concerns of its residents.
-
NPD will develop protocols for conducting compliance reviews and integrity audits.
-
NPD will implement steps to ensure that the disciplinary process is fair and consistent.
-
NPD will improve records management and early intervention systems and collect data on all uses of force and investigatory stops, searches and arrests, and develop a protocol for the comprehensive analysis of the data.The information will be publicly reported.
-
NPD will strengthen its public information programs to ensure that members of the public are informed of NPD’s progress toward reform.
Newark and the Department of Justice have jointly proposed Peter Harvey to lead the team of experts that will monitor the city’s compliance with the agreement. Harvey is a former New Jersey Attorney General, and has experience under a Justice Department consent decree in the New Jersey State Police Case. He brings a deep understanding of issues specific to New Jersey and Newark and has direct experience overseeing organizational change and law enforcement reforms. Harvey will be assisted by a variety of local and nationally-recognized experts who are all committed to ensuring effective and constitutional policing.
The investigation was conducted jointly by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office of the District of New Jersey. For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt. For more information about the U.S. Attorney’s Office of the District of New Jersey, please visit http://www.justice.gov/usao/nj.
Two Men Admit Roles in Three Year, Cross-Country Insider Trading Scheme That Netted More Than $3.9 MillionRead the Press Release
TRENTON, N.J. - Two day traders today admitted participating in a multi-year insider trading scheme that made over $3.9 million in illicit profits by exploiting material information in violation of confidentiality agreements, U.S. Attorney Paul J. Fishman announced.
Ronald Chernin, 67, of Oak Park, California, and Steven Costantin, 55, of Farmingdale, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to separate informations charging them each with one count of conspiracy to commit securities fraud and one count of securities fraud.
According to documents filed in this case and statements made in court:
Chernin and Costantin worked as day traders for Costantin’s brother-in-law, Steven Fishoff, 58, of Westlake Village, California. Between May 2010 and August 2013, Chernin, Costantin, and Fishoff, as well as a business associate referred to as “Trader A,” expressed interest in participating in numerous stocks offerings by publicly traded companies.
Chernin, Costantin, and other members of the day trading operation falsely characterized their trading entities as legitimate, full-service financial management firms with as much as $150 million in assets under management, in order to increase the likelihood that the investment bankers would solicit them to participate in the stock offerings.
Before providing confidential information concerning the companies or the terms of the proposed sales, the investment bankers first required that Chernin, Costantin, Fishoff, Trader A, and their associated trading entities, enter into confidentiality or “wall-crossing” agreements whereby they agreed not to disclose or trade on the inside information and were brought “over the wall” for the narrow purpose of determining whether to purchase the offered securities.
Instead, Chernin, Costantin, and Fishoff violated the confidentiality agreements by directly or indirectly tipping each other and others with the inside information concerning the stock offerings; short selling the issuers’ stock in anticipation of a drop in price when the stock offerings were disclosed to the public; and covering their short positions once the stock offerings were disclosed. Additionally, Fishoff tipped his friend, Paul Petrello, 54, of Boca Raton, Florida, and another friend identified in the documents as “CC-1.”
By trading on the nonpublic information, Chernin, Costantin, and their conspirators gained more than $3.9 million in illicit profits over the course of the three-year scheme. Chernin and Costantin shared 50 percent of their profits with Fishoff.
The conspiracy count to which Chernin and Costantin each pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine. Chernin and Costantin are both scheduled for sentencing on July 7, 2016.
Petrello previously pleaded guilty to his role in the scheme and is scheduled for sentencing on May 25, 2016. Fishoff has been indicted for his involvement in the insider trading scheme. The charges and allegations contained in the indictment are merely accusations, and Fishoff is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s guilty pleas. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Sanjay Wadhwa.
The government is represented by Assistant U.S. Attorneys Shirley U. Emehelu and Nicholas P. Grippo of the Criminal Division of the U.S. Attorney’s Office in Newark, as well as Acting Chief Barbara Ward and Assistant U.S. Attorney Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.
Today’s pleas are part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov
Defense counsel:
Ronald Chernin – John P. Lacey, Esq., Roseland, NJ
Steven Costantin – Scott A. Resnik, Esq., New York, NY
Passaic County, New Jersey, Man Charged with Illegally Possessing Machine GunsRead the Press Release
NEWARK, N.J. –A Ringwood, New Jersey, man will appear in federal court today to face charges that he possessed 17 machine guns, which are illegal under federal law, U.S. Attorney Paul J. Fishman announced.
Mariusz Cebula, 36, is charged by complaint with knowingly possessing machine guns, which are defined as weapons that can shoot more than one shot automatically, without manual reloading, by a single function of the trigger. Cebula was arrested yesterday by federal agents and will appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.
According to the complaint:
On July 17, 2015, law enforcement officers arrived at Cebula’s residence to serve a temporary restraining order on Cebula. Law enforcement officers conducted a search of his residence in furtherance of the temporary restraining order, as well as pursuant to a search warrant and Cebula’s oral consent. The search revealed that Cebula was in possession of approximately 262 high capacity magazines for firearms, as well as dozens of other firearms components, ammunition, accessories and manufacturing tools.
Approximately 17 of the firearms and firearm components that Cebula possessed were later determined to be machine guns under federal law. Of the 17 machine guns recovered from Cebula’s residence, some were found to be operational as automatic weapons, including, but not limited to, the following:
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A 9mm Lugar caliber, STEN Mk II type firearm, assembled using a machine gun receiver of unknown origin and original STEN-type machinegun parts, bearing a mark of identification of “86939,” but bearing no serial number.
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A C.G. Haenel 9mm caliber, MP-41 select-fire machine gun, bearing serial number 2108.
Cebula was also found to be in possession of two short-barreled rifles and one silencer.
The machine gun possession charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), under the direction of Special Agent in Charge George P. Belsky, and the Ringwood Police Department, under the direction of Chief Joseph Walker, with the investigation leading to the charge. He also thanked the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, for its role in the case.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense Counsel: Miles Feinstein Esq., Clifton, N.J.
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Two New York Men Each Sentenced to over Two Years in Prison for Defrauding Home Depot Through ‘Double-Dipping’ SchemeRead the Press Release
TRENTON, N.J. – Two Brooklyn, New York, men were sentenced to prison today for fraudulently obtaining more than $250,000 through an elaborate “double-dipping” scheme that they committed at various Home Depot locations throughout the United States, including New Jersey, U.S. Attorney Paul J. Fishman announced.
Renauld Medard, 75, and Wesly Dieudonne, 31, were sentenced to 30 and 28 months in prison, respectively. They were previously convicted on all counts of an indictment charging them with one count of conspiracy to commit wire fraud and four counts of wire fraud. They were convicted following a four-day trial before U.S. District Judge Anne E. Thompson, who imposed the sentences today in Trenton federal court.
According to documents filed in this case and the evidence at trial:
As part of the scheme, Medard and Dieudonne purchased various items from Home Depot locations in New Jersey, New York, Maryland, Connecticut and Pennsylvania using cash, credit cards or store credit. Medard and Dieudonne also went to Home Depot stores and compiled identical sets of goods as listed in receipts from previous purchases. Under the guise that they had forgotten to purchase an item, usually an inexpensive one, they used receipts from previous purchases to deceive cashiers into believing that the new sets of goods had already been bought.
Medard and Dieudonne also went to Home Depot to return items stolen in the scheme. In some instances, they presented a receipt in order to effectuate the return. In other instances, they obtained a refund for store credit without presenting a receipt. From July 2009 through November 2011, Medard and Dieudonne fraudulently obtained Home Depot store credit and refunds totaling over $250,000.
In addition to the prison terms, Judge Thompson ordered Medard to serve three years of supervised release and pay $260,477.79 in restitution. Dieudonne was ordered to serve three years of supervised release and pay $197,632.79 in restitution.
U.S. Attorney Fishman credited special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Jeffrey Wood in Newark, with the investigation.
The government is represented by Assistant U.S. Attorneys David M. Eskew and Andrew D. Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense counsel:
Medard: Robert John Haney Esq., Princeton, New Jersey
Dieudonne: Andrea Bergman Esq., Trenton
Somerset County, New Jersey, Man Arraigned on Child Pornography ChargesRead the Press Release
TRENTON, N.J. – A Branchburg, New Jersey, man appeared in federal court today to face charges for his alleged role in a conspiracy to produce sexually explicit images of children through a website he operated from his home computer, U.S. Attorney Paul J. Fishman announced.
Jonathan Soto, 26, was arraigned this morning before U.S. District Judge Freda L. Wolfson in Trenton federal court and pleaded not guilty to both counts of an indictment charging him with conspiracy to produce child pornography and possession of child pornography. He was previously arrested and charged by federal complaint on April 16, 2015, and remains in federal custody pending the charges.
According to the indictment:
From July 2014 through April 2015, Soto administered and operated a website designed to produce child pornography by tricking minor victims into engaging in sexually explicit activity on web cameras. Users of the website created false profiles on popular social media websites purporting to be young children, aged from about 10 to 16.
Using these false profiles, the users chatted with actual minor children and lured the minor victims to other websites to engage in private chats. Once in a private chat room, users then persuaded child victims to engage in sexually explicit activity. Unbeknownst to the victims, when they engaged in sexually explicit activity, they were secretly recorded, and those videos were shared with other users on Soto’s website.
FBI special agents executed a search warrant at Soto’s residence on or about April 15, 2015, and discovered computer equipment containing multiple videos of child pornography which had been downloaded from Soto’s website.
The conspiracy to produce child pornography count carries a minimum penalty of fifteen years in prison, a maximum potential penalty of thirty years in prison, and a $250,000 fine. The possession of child pornography count carries a maximum potential penalty of 10 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 Branchburg Township Police Department, under the direction of Chief David Young, with the investigation.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the U.S. Attorney’s Office General 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.
Defense counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark