District of New Jersey
Press releases recorded for this federal judicial district.
New Jersey Doctor, Two Companies Agree to Pay $5.25 Million for Allegedly Submitting Bogus Claims to Federal Health Care ProgramsRead the Press Release
NEWARK, N.J. – Dr. Labib E. Riachi, 47, of Westfield, New Jersey, and two companies that he owns and operates, Riachi, Inc. and Center for Advanced Pelvic Surgery, LLC, both based in Westfield, have agreed to pay $5.25 million to resolve allegations that they falsely billed federal health care programs for tests that were never provided, among other claims, U.S. Attorney Paul J. Fishman announced today.
The settlement resolves allegations that the defendants routinely billed Medicare and Medicaid for anorectal manometry, an invasive diagnostic test, and electromyography, another diagnostic test, even though most of the tests were never performed. In addition, the settlement resolves claims that the defendants submitted claims to Medicare for physical therapy services that should not have been paid because they were not performed by a qualified therapist.
The allegations resolved by today’s settlement were raised in a civil lawsuit that the government filed on Feb. 10, 2016, in Newark federal court charging the defendants with violating the False Claims Act, among other illegal conduct.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, and the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, with the investigation leading to the settlement.
The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Lucy Muzzy 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 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 $645 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned United States v. Riachi, et al. (D.N.J.).
Defense counsel: Bruce Levy Esq. and Larry Lustberg Esq., Newark
Pakistani Citizen Admits Laundering Millions from Massive Computer Hacking and Telecommunications Fraud SchemeRead the Press Release
NEWARK, N.J. – A Pakistani citizen today admitted laundering over $19.6 million on behalf of the perpetrators of a massive international computer hacking and telecommunications fraud scheme, U.S. Attorney Paul J. Fishman announced.
Muhammad Sohail Qasmani, 47, formerly of Bangkok, Thailand, pleaded guilty before U.S. District Judge Katharine S. Hayden to an information charging him with one count of conspiracy to commit wire fraud. He remains detained without bail.
“Thanks to the hard work of the prosecutors and agents on this case, Qasmani acknowledged his role in an international scheme that hijacked the telephone networks of U.S. companies and ran up millions in bogus charges,” U.S. Attorney Fishman said. “Today, he admitted moving over $19 million in illicit proceeds across 10 countries and ensuring the dialers and hackers who perpetuated the scheme received their cut.”
“The successful investigation of Qasmani is a testament to the dedication, hard work, and commitment of the men and women of the FBI, the Enforcement and Removal Operations of the U.S. Customs and Border Protection, and the State Department," said FBI-Newark Acting Special Agent in Charge Andrew Campi.
According to documents filed in this and related cases and statements made in court:
This massive international telecommunications fraud scheme, allegedly led by Noor Aziz, 53, of Karachi, Pakistan, involved unauthorized access to the computer systems – commonly known as PBX systems – that ran the internal telephone networks of numerous businesses and organizations in the United States. Foreign-based hackers targeted the telephone systems of the victim corporations and placed calls to those systems in an attempt to identify unused telephone extensions. Once the hackers identified unused extensions, they illegally reprogrammed the telephone systems so that they could be used to make unlimited long distance calls, all of which were ultimately charged back to the victim corporations.
The hacked telephone systems were then used to make calls to premium telephone numbers – such as purported chat lines, adult entertainment, and psychic hotlines – that generated revenue based on the calls’ duration and were set up and controlled by Aziz. In actuality, the numbers provided no actual services. Telephone company representatives who suspected fraudulent activity and called the numbers heard recordings of fake rings, fake password prompts, fake voicemail messages, music, or dead air on continuous loops.
In 2008, Qasmani, who operated a money laundering and smuggling business in Thailand, agreed to launder proceeds of the scheme for Aziz. In furtherance of the conspiracy, Qasmani established multiple bank accounts to receive the money generated by the illicit telephone traffic. Qasmani also paid the hackers and dialers who worked for Aziz to keep the scheme going.
Specifically, over nearly four years, Qasmani initiated money transfers to approximately 650 unique transferees, located in at least 10 countries, including the Philippines, India, Pakistan, Malaysia, China, the United Arab Emirates, Saudi Arabia, Indonesia, Thailand, and Italy. Qasmani moved a total of approximately $19.6 million in fraud proceeds from November 2008 through Dec. 31, 2012. Qasmani kept laundering the money even after Aziz was arrested in connection with this scheme and later released by foreign authorities.
On Dec. 22, 2014, Special Agents of the FBI arrested Qasmani at Los Angeles International Airport after he arrived on a flight from Bangkok.
The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is scheduled for May 17, 2016.
Aziz was charged by indictment on June 20, 2012 and remains a fugitive. For more information, visit the FBI Cyber’s Most Wanted list. The charges and allegations against him are merely accusations, and he is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Campi, with the investigation leading to today’s guilty plea. He also thanked special agents with U.S. Immigration and Customs Enforcement's (ICE) Enforcement and Removal Operations (ERO) and U.S. Customs and Border Protection for their assistance in this case.
The government is represented by Assistant U.S. Attorney L. Judson Welle of the U.S. Attorney’s Office National Security Unit in Newark.
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Defense Counsel: Assistant Federal Public Defender Lisa Mack Esq., Newark
Doctor Charged with Accepting Thousands of Dollars in Cash Bribes for Referrals to Lab CompaniesRead the Press Release
NEWARK, N.J. – A doctor with offices in Toms River, New Jersey, was indicted today for accepting thousands of dollars in cash bribes in exchange for referring his patients to two lab companies that performed blood and DNA testing, U.S. Attorney Paul J. Fishman announced.
Vincent Destasio, 54, of Toms River, was indicted by a federal grand jury in Newark on one count of conspiracy to accept cash bribes and two substantive counts of accepting cash bribes. The indictment was unsealed today. Destasio will be arraigned on a date to be determined.
According to the indictment and statements made in court:
Destasio, a doctor of osteopathic medicine, was paid cash kickbacks by two sales representatives (Daniel Gilman and Kenneth Robberson) who were partners operating PROMED, which was a marketing and sales company specializing in blood testing laboratories and DNA laboratory testing companies. Gilman and Robberson have both pleaded guilty to an information charging them with conspiracy to bribe a physician and are awaiting sentencing.
From March 2014 through May 2015, Gilman and Robberson solicited Destasio by paying him cash bribes for referring patient lab work to two separate laboratories for which Gilman and Robberson provided marketing and sales. One company (Company 1) was a blood testing laboratory company and the other was a DNA laboratory testing company (Company 2). Neither Company 1 nor Company 2 had any knowledge of or involvement in the kickback scheme.
Gilman and Robberson received monthly commission checks from the two companies for referrals, for 10 percent of the reimbursements paid to the companies by various payors, including Medicare. After receiving the commission checks from the two companies, Gilman and Robberson would identify the number of patients Destasio had referred and pay him a cash kickback based on those patients. Destasio was paid a total of approximately $25,000 in cash bribes for his referrals.
Destasio faces a statutory maximum prison sentence of five years on each count in the indictment and a maximum fine equal to the greatest of $250,000 or twice the gross gain or loss from the offense. He will also forfeit $25,000, if convicted.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi 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 indictment.
The government is represented by Assistant U.S. Attorney Michael H. Robertson of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman 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 $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
Defense counsel: John J. Bruno Jr., Esq., Rutherford, New Jersey
Alleged Leader of Grape Street Crips Street Gang Charged in Connection with Four Murders, Three Attempted Murders as Part of Decades-Long Racketeering ConspiracyRead the Press Release
Three other alleged gang members arrested and charged federally
NEWARK, N.J. – The alleged long-time leader of the Grape Street Crips will appear in court today on charges linking him to four murders, three attempted murders, and numerous other crimes as part of a racketeering conspiracy, U.S. Attorney Paul J. Fishman announced.
Corey Hamlet, a/k/a “C-Blaze,” a/k/a “Blaze,” a/k/a “Blizzie,” a/k/a “Castor Troy,” 39, of Belleville, New Jersey, was charged today in a fourth superseding indictment with RICO conspiracy, violent crimes in aid of racketeering, aiding and abetting the use of firearms in furtherance of crimes of violence, witness tampering, robbery, extortion, and drug trafficking. Three other men, Sean L. Scott Sr., a/k/a “Ali Rock, 45; Keon Bethea, a/k/a “Fat Boy,” 33; and Jamil Harrison, a/k/a “L-Mel,” 32, all of Newark, were arrested today and charged by criminal complaint with distribution of heroin and crack-cocaine. The four defendants are scheduled to appear today before U.S. Magistrate Judge James B. Clark III in Newark federal court.
“Nine months ago we announced the arrests of more than 70 members – including the No. 2 and No. 3 highest ranking members – of the Grape Street Crips, a violent street gang we alleged controls much of the heroin trade in northern New Jersey,” U.S. Attorney Fishman said. “Today, we are announcing charges against Corey Hamlet, the leader of that organization, in an indictment that spells out his alleged role in at least four homicides and three attempted homicides in furtherance of his control of this drug trafficking organization. The people of Newark should not have to endure that kind of violence or the fear that it breeds. I am hopeful that these arrests will make the streets of this city safer.”
“The FBI’s mission at the beginning of this investigation was to significantly disrupt the Grape Street Crips criminal enterprise operating in Newark,” Andrew Campi, FBI-Newark Acting Special Agent in Charge, said. “The federal indictment and arrest of its leader, Corey Hamlet, has brought us closer to our ultimate goal of dismantling one of the most violent street gangs in the city. This investigation is a tremendous example of the positive impact law enforcement has on the community and when federal, county, and local authorities join together with a common purpose.”
“Today we have taken a very dangerous and violent person off the street,” Carl J. Kotowski, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division, said. “The people of Newark can be assured that the DEA will continue to pursue these violent predators.”
Hamlet’s indictment follows the coordinated takedown in May 2015 of 50 alleged members and associates of the Grape Street Crips, who were charged by criminal complaints with drug-trafficking, physical assaults, and witness intimidation. The charges – including today’s arrests – are the result of a long-running FBI and DEA investigation, in conjunction with the Essex County Prosecutor’s Office, the Newark Police Department and Essex County Sheriff’s Office Bureau of Narcotics.
According to documents filed in these cases and statements made in court:
Hamlet has allegedly served as the long-time leader of the New Jersey Grape Street Crips, even while serving prison sentences or being detained in federal or state correctional facilities. The New Jersey Grape Street Crips – a local set of a nationwide street gang founded in Los Angeles – engage in drug-trafficking and other criminal activities to enrich themselves and fellow gang members. In addition to these criminal activities, the gang’s rules provide that members must retaliate against individuals who cooperate with law enforcement. Gang members routinely engage in acts of intimidation and violence against witnesses, individuals who are believed to be cooperating with law enforcement, and law enforcement officers themselves. As the gang’s leader, Hamlet allegedly participated in and authorized acts of violence against rivals, suspected cooperating witnesses, and even fellow gang members who were perceived as being disloyal.
After completing a previous federal sentence, Hamlet and other gang members began to extort Victim One. After Victim One refused to pay the extortion demands, Hamlet targeted Victim One and associates of Victim One for violence. In early 2013, Hamlet authorized Corey Batts, 30, of Newark, and Tony Phillips, of Newark, to murder Victim Two, in part, because Hamlet believed that Victim Two, a member of the New Jersey Grape Street Crips, had grown too close to Victim One. On May 3, 2013, Batts and Phillips, acting on Hamlet’s orders, allegedly shot Victim Two repeatedly in the head and dumped the victim’s body on a Newark street.
In August 2013, Hamlet authorized Batts to murder Victim One. In October 2013, Hamlet met with Victim One at the Mall at Short Hills in Millburn, New Jersey, in a meeting that had been set-up by Victim Five, a member of the New Jersey Grape Street Crips who was a close associate of Victim One and who attempted to broker a truce between Hamlet and Victim One.
After the Short Hills meeting, Hamlet used a social media account to post a report from the Essex County Prosecutor’s Office purportedly indicating that Victim One had provided a statement to law enforcement. Just three days after Hamlet’s social media post, Batts and other gang members – acting on Hamlet’s orders – repeatedly shot and nearly killed Victim One and Victim Four, a bystander who was inside Victim One’s car.
Following the attempted murder of Victim One, Hamlet and other gang members perceived that Victim Five had been disloyal by attempting to put an end to the feud between Hamlet and Victim One. In November 2013, Aaron Terrell, 24, and Rashan Washington, 26, both of Newark, murdered Victim Five. Acting on Hamlet’s orders, Washington lured Victim Five into a Jeep Cherokee and then purposely left Victim Five alone, while Terrell shot Victim Five once in the head.
In November 2013, Hamlet allegedly told a conspirator that Victim Six, who was a relative of Victim One, had to be murdered. On March 3, 2014, Hamlet and another conspirator pulled up to a car being driven by Victim Six. Although Hamlet aimed a firearm at Victim Six and the car’s other occupants, Victim Six pulled off before any shots were fired. A short time later, however, Hamlet’s conspirator found Victim Six, and a car chase ensued. The chase concluded when Victim Six’s car crashed into other vehicles at Irvine Turner Boulevard and Spruce Street in Newark, and Hamlet’s conspirator fired numerous shots in the direction of Victim Six’s vehicle. Victim Six was shot and Victim Seven, a passenger in Victim Six’s car, was killed. Victim Eight, an innocent bystander who was a passenger in one of the vehicles crashed into at the intersection, was shot in the head and killed.
In addition to orchestrating these and other acts of violence, Hamlet conspired with other gang members to distribute 280 grams or more of crack-cocaine, conspired to distribute heroin, was involved in the extortion and robbery of other individuals, and threatened individuals whom he believed to be cooperating with law enforcement.
On each of the charges of RICO conspiracy, conspiracy to distribute crack-cocaine, and using firearms in furtherance of crimes of violence, Hamlet faces a maximum penalty of life in prison. The first count of using a firearm in furtherance of a crime of violence carries a mandatory minimum term of 10 years, while the second such count carries a mandatory minimum term of 25 years, which must be imposed consecutively to the first count. On the six counts of violent crimes in aid of racketeering, Hamlet faces terms of imprisonment ranging from three to 20 years.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi, and special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, for the investigation leading to the charges. Fishman thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; police officers and detectives of the Newark Police Department, 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. He also thanked officers assigned to the Safe Streets Task Force from the Orange and East Orange police departments and the Essex County Department of Corrections.
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, 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.
The charges and allegations contained in the federal criminal complaints and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. Attorney’s Office Files Civil Lawsuit Against New Jersey Doctor, Two Companies for Submitting Bogus Claims to Federal Health Care ProgramsRead the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the government has filed a complaint against a Union County, New Jersey, doctor and his medical practice companies for knowingly submitting millions of dollars in false claims to Medicare and Medicaid for thousands of diagnostic tests that were never performed and for physical therapy services performed by unqualified personnel.
The civil complaint, filed today in Newark federal court, charges Dr. Labib E. Riachi, 47, of Westfield, New Jersey, and two companies that he owns and operates, Riachi, Inc. and Center for Advanced Pelvic Surgery, LLC, both based in Westfield, with violating the False Claims Act, among other illegal conduct.
According to the complaint:
The defendants routinely billed Medicare and Medicaid for anorectal manometry, an invasive diagnostic test, and electromyography, another diagnostic test, even though most of the tests were never performed. In addition, the defendants submitted claims to Medicare for physical therapy services that should not have been paid because they were not performed by a qualified therapist. This scheme resulted in millions of dollars of reimbursement that would not have been paid but for the defendants’ misconduct.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, and the U.S. Department of Health and Human Services, Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the investigation leading to the complaint.
The government is represented by Assistant U.S. Attorneys Bernard J. Cooney and Lucy Muzzy 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 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 $640 million 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: Bruce Levy Esq. and Larry Lustberg Esq., Newark
Trenton Man Admits Intent to Distribute over 100 Grams of HeroinRead the Press Release
TRENTON, N.J. – A Trenton man who was found in possession of 143 grams of heroin and a loaded firearm pleaded guilty today to narcotics possession, U.S. Attorney Paul J. Fishman announced.
Dorian Brown, 36, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with possession with intent to distribute heroin.
According to documents filed in this case and statements made in court:
On June 4, 2014, Brown, who had been the target of an investigation led by detectives from the Mercer County Prosecutor’s Office, Special Investigations Unit, and officers from the Trenton Police Department, in cooperation with the U.S. Drug Enforcement Administration (DEA), was apprehended during the execution of search warrants on his car, as well as his Trenton home. Law enforcement seized approximately 130 grams of heroin from Brown’s home, where detectives also discovered a loaded semi-automatic handgun. An additional 13 grams of heroin was seized from Brown’s car.
The narcotics charge to which Brown pleaded guilty carries a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for May 17, 2016.
U.S. Attorney Fishman credited special agents of the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, and detectives of the Mercer County Prosecutor’s Office, Special Investigations Unit, under the direction of Acting Prosecutor Angelo J. Onofri, with the investigation leading to today’s guilty plea. He also thanked officers of the Trenton Police Department under the direction of Police Director Ernest Parrey 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: Brian P. Reilly, Esq., Assistant Federal Public Defender, Trenton
Former Attorney for Home Health Care Company Sentenced to 18 Months in Prison for Stealing over $2.6 Million from His EmployerRead the Press Release
TRENTON, N.J. – The former in-house counsel of an Ocean County, New Jersey-based home health care company was sentenced today to 18 months in prison for using his attorney trust account to steal more than $2.6 million from his employer, U.S. Attorney Paul J. Fishman announced.
Matthew S. Neugeboren, 39, of Manalapan, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging him with one count of wire fraud and one count of subscribing to a false tax return. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
From 2006 through 2013, Neugeboren was in-house counsel for Company A, a home health care company in Ocean County. As such, Neugeboren maintained an attorney trust account to pay for Company A’s expenses. To cover those expenses, Neugeboren requested checks and wire transfers be made from Company A’s bank accounts into his attorney trust account.
As part of the scheme, Neugeboren caused Company A to transfer more money into his attorney trust account than was necessary to cover company expenses. Neugeboren admitted that he used the additional money for his personal benefit, including gambling. Neugeboren admitted that from January 2008 through December 2012, he stole $2,644,912 from Company A.
In addition to the wire fraud scheme, Neugeboren knowingly and willfully filed a false tax return that failed to include approximately $630,000 in gross income that he received in calendar year 2011 from his scheme to defraud Company A.
In addition to the prison term, Judge Cooper ordered Neugeboren to serve three years of supervised release, entered a forfeiture order of $1,404,963 and ordered him to pay restitution of $1,404,963 to the victim company and $474,814 to the IRS.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi, and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Molly Lorber of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Justin P. Walder Esq., Roseland, New Jersey
Colorado Woman Sentenced to Two Years in Prison for Participation in Conspiracy to Illegally Transfer FirearmsRead the Press Release
TRENTON, N.J. – A former resident of Colorado was sentenced today to 24 months in prison for her involvement in a conspiracy to illegally transfer firearms from Colorado to a felon in New Jersey, United States Attorney Paul J. Fishman announced.
Krystel Lopez, 28, of Greeley, Colorado, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to one count of an indictment charging her with conspiracy to illegally transfer firearms interstate. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Between February and April 2013, Lopez purchased an assault rifle and a handgun in Colorado. Later in April 2013, she mailed both the assault rifle and the handgun to the business address of a known felon in New Jersey, who was prohibited from possessing such weapons.
In addition to the prison term, Judge Wolfson sentenced Lopez to two years of supervised release.
U.S. Attorney Fishman praised special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Courtney Howard and Special Assistant U.S. Attorney Thomas S. Kearney of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Michael Calabro Esq., Newark
Five Men Charged with Conspiracy to Distribute 55 Kilograms of NarcoticsRead the Press Release
NEWARK, N.J. – Five men who were arrested in Passaic County, New Jersey, with a combined 55 kilograms of heroin and cocaine in their possession appeared in Newark federal court today, U.S. Attorney Paul J. Fishman announced.
Edwin Alamo Jr., 21, of Bronx, New York, Sauro D. Estevez Figueredo, 48, of Miami, Florida, Emmanuel Gonzalez, 31, of Bronx, New York, Alberto Mora, 52, of Morriston, Florida, and Porfirio Peralta-Nunez, 37, of Jersey City, New Jersey, are each charged by criminal complaint with one count of conspiracy to distribute and possess with intent to distribute a kilogram or more of heroin. Figueredo and Mora are also charged with one count of conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine.
All five defendants appeared this afternoon before U.S. Magistrate Judge James B. Clark III and were remanded into custody.
According to the complaint filed today:
On Feb. 5, 2016, law enforcement observed a tractor trailer, driven by Figueredo and Mora, parked at an intersection near a store in Clifton, New Jersey. That afternoon, Gonzalez and Alamo drove to the tractor trailer and left with a suitcase given to them by Mora. Later, Peralta-Nunez arrived at the tractor trailer with two empty bags and left shortly afterwards with the bags filled.
Subsequent traffic stops later revealed 22 kilograms of heroin in Gonzalez and Alamo’s possession and 13 kilograms of heroin in Peralta-Nunez’s possession. Law enforcement also found 20 kilograms of cocaine still remaining at the tractor trailer, resulting in a total of 55 kilograms of seized narcotics. All five defendants were arrested that day.
The drug distribution conspiracy charges each carry a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $10 million fine.
The government is represented by Assistant U.S. Attorney Meredith Williams and Mary Toscano, Deputy Chief of the General Crimes Unit of the U.S. Attorney’s Office in Newark.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski in Newark, with the investigation leading to today’s charges.
The charges and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defense Counsel:
Alamo: Chester Keller Esq., First Assistant Public Defender, Newark
Figueredo: Michael D’Alessi Esq.
Gonzalez: James Murphy Esq., Princeton, New Jersey
Mora: David Schafer Esq., Assistant Federal Public Defender, Trenton
Peralta-Nunez: Brian Neary., Esq., Hackensack, New Jersey
Newark, New Jersey, Corrections Officer Convicted of Sexual Abuse of DetaineeRead the Press Release
NEWARK, N.J. – A former corrections officer with the Essex County Correctional Facility was convicted today by a federal jury for sexually assaulting a pretrial detainee and then lying about it to investigators, U.S. Attorney Paul J. Fishman announced.
Shawn D. Shaw, 43, of Newark, was convicted of both counts of an indictment charging him with depriving an individual of rights under color of law and obstruction of justice. He was convicted following a seven-day trial before U.S. District Judge Esther Salas in Newark federal court. The jury deliberated for two days before returning the guilty verdict. Judge Salas revoked the defendant’s bail and ordered him into custody following the verdict.
According to documents filed in this case and the evidence at trial:
Shaw was the only officer on duty in the female unit during the night of a snow blizzard on Dec. 28, 2010. During the night, Shaw made sexually explicit comments to the victim. Although she rejected his advances, records show that in the middle of the night, Shaw opened the victim’s cell door. The victim testified that Shaw entered her cell, and despite her saying “stop” and “no,” Shaw raped her. Expert testimony, including DNA analysis, corroborated the victim’s testimony that Shaw was her assailant.
When investigators questioned Shaw about the attack, he lied and intentionally omitted information from his statement in order to obstruct the investigation. Specifically, Shaw falsely stated that he did not make sexual comments to the detainee or enter the victim’s cell.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, with the investigation leading to today’s verdict. He also thanked the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, for its assistance.
The charge of deprivation of rights under color of law carries a maximum potential penalty of life in prison. The obstruction of justice count carries a maximum potential penalty of 20 years in prison. Each count also carries a maximum $250,000 fine. Sentencing is set for May 16, 2016.
The government is represented by Criminal Division Chief Thomas Eicher and Assistant U.S. Attorney Shana Chen of the U.S. Attorney’s Office in Newark, with assistance from Trial Attorney Shan Patel of the Justice Department’s Civil Rights Division.
Defense counsel: Mark A. Fury Esq., Mount Holly
Bronx, N.Y. Man Admits to Stealing $342,590 in Tax Refund ChecksRead the Press Release
NEWARK, N.J. - A New York man admitted today that he stole more than $340,000 in fraudulently obtained income tax refund checks issued by the United States, U.S. Attorney Paul J. Fishman announced.
Isaias Hernandez, 40, of Bronx, New York, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to Count Three of an indictment charging him with theft of government funds.
According to the documents filed in this case and statements made in Court:
Hernandez admitted stealing $342,590 from February 2012 through May 2012. Many of the fraudulently obtained income tax refund checks were deposited, with the proceeds withdrawn, in Hamilton, New Jersey.
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. SIRF schemes generally share a number of hallmarks. 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. They complete IRS-1040 tax return forms using the fraudulently obtained information and falsifying wages earned, taxes withheld and other data, always ensuring that fraudulent tax return generates a refund. The perpetrators then direct the U.S. Treasury Department to mail the refund checks to locations they control or can access. In some cases, they bribe mail carriers to remove the refund checks from their mail routes. With the fraudulently obtained refund checks in hand, the perpetrators generate cash proceeds by depositing the checks into bank accounts they control.
Hernandez admitted that he knew that the 48 double-endorsed tax refund checks he and others deposited into a bank account under his direct control did not belong to him or to the company named on the bank account. He admitted to personally withdrawing from that bank account $98,020 in cash and $99,700 in bank checks made out to an automobile auction. Hernandez admitted using money from the bank account for personal expenses, including but not limited to payments for an insurance school class and the purchase of liquor and clothing. He also admitted that he knew that the checks were issued by the IRS and the United States Treasury, and that it was illegal to deposit the tax refund checks and use the proceeds for his own benefit.
Hernandez was originally charged with six co-defendants (Luis Pena, Lourdes Ortiz, Raymundo Hernandez and Gloria Rivera of Bronx; Wellington Feliz and Fausto Bernard of Newark) in a criminal complaint alleging conspiracy to commit theft of government funds, relating to a SIRF scheme that caused more than $2.6 million in losses to the United States government. Of the originally charged defendants, four (Pena, Rivera, Ortiz and Raymundo Hernandez) pleaded guilty to and have been sentenced for their roles in the conspiracy, and one pleaded guilty to and was sentenced for a misprision of felony related to his failure to report the conspiracy (Bernard). One additional conspirator, Angel Fernandez of Newark, was charged in a separate complaint and also pleaded guilty to charges regarding his participation in the conspiracy. All have been ordered to pay restitution to victims and forfeiture to the United States. The remaining defendant, Feliz, who is named in the indictment with Hernandez, is a fugitive.
The charge to which Hernandez pleaded guilty carries a maximum penalty of 10 years in prison and a fine of the greater of $250,000, twice the gross amount of any pecuniary gain that any persons derived from the offense; or twice the gross amount of any pecuniary loss sustained by any victims of the offense.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; special agents of the U.S. Secret Service, under the direction of Acting Special Agent in Charge Kenneth Pleasant; and special agents of the U.S. Postal Service – Office of the Inspector General, under the direction of Special Agent in Charge Eileen Neff; and inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge James R. Ball, with the investigation leading to today’s guilty plea.
Sentencing before U.S. District Judge Madeline Cox Arleo is scheduled for May 2, 2016.
The government is represented by Assistant U.S. Attorneys Sara F. Merin and Joyce M. Malliet of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Stephen Turano, Esq., Newark, N.J.
Florida Man Admits Using Bogus Transportation Company to Defraud New Jersey Factoring Business Out of $220,000Read the Press Release
NEWARK, N.J. - A Seminole, Florida, man today admitted using phony invoices from his transportation company to obtain $220,000 from a New Jersey-based factoring business, U.S. Attorney Paul Fishman announced.
Karl Stehlin, a/k/a “Mark Sawyer,” 60, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to Count One of an indictment charging him with wire fraud.
According to documents filed in this case and statements made in Court:
Stehlin admitted that from June 2014 through September 2014, he defrauded a Bergen County, New Jersey, factoring business that purchased accounts receivable in return for short term financing. Stehlin created a bogus Idaho-based company, Sawyer Express Transportation Inc., and emailed accounts receivable invoices to the factoring company for transportation services that were never provided. As a result, Stehlin was able to defraud the factoring company out of $220,000 in advance payment on those invoices.
During his plea hearing, Stehlin also admitted using the same methods to defraud a Glendale, California, factoring business out of $127, 953.34 and a Las Vegas factoring business out of $524,025.28.
The wire fraud charge to which Stehlin pleaded guilty is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for May 24, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s plea. He also thanked special agents of the FBI Tampa Division, under the direction of Special Agent in Charge Paul Wysopal, for their assistance.
The government is represented by Assistant U.S. Attorneys Lakshmi Srinivasan Herman and Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit and Acting Chief Barbara Ward of the Asset Forfeiture and Money Laundering Unit in Newark.
Defense counsel: Michael Koribanics Esq., Clifton, New Jersey
Camden County, New Jersey, Man Admits Possessing Child Pornography While on Federal Supervised Release, State ParoleRead the Press Release
CAMDEN, N.J. - A previously convicted sex offender from Bellmawr, New Jersey, today admitted possessing images of child pornography that he acquired through social media and email correspondence with two boys, U.S. Attorney Paul J. Fishman announced.
Robert Pelle, 50, pleaded guilty before Chief U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of knowingly possessing child pornography.
According to documents filed in this case and statements made in court:
From April 2013 through July 2013, Pelle was still on supervised release and state parole after being incarcerated for possession of child pornography and related state charges from 2007. Pelle admitted today that in July 2013, he used a public library computer to access social networks and sexually explicit websites, which he was not permitted to do under conditions of his parole.
In addition, Pelle admitted that from April 2013 through July 2013, he used social media accounts and email to pose as a minor and communicate with two young boys. During the correspondence, Pelle asked one boy to send nude images of himself, which he did. Pelle also admitted sending one of those images to the other boy.
As a previously convicted sex offender, Pelle faces a mandatory minimum penalty of 10 years in prison, a maximum potential penalty of 20 years in prison, a lifetime of supervised release and a $250,000 fine. Pelle also faces an additional five years in prison because the crime was committed while on federal supervised release. Sentencing is scheduled for May 6, 2016.
U.S. Attorney Fishman credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge William F. Sweeney Jr. in Philadelphia, with the investigation leading to today’s plea. He also thanked the parole officers of the New Jersey Department of Parole, under the direction of Chairman James Plousis, and detectives from the Bellmawr Police Department, under the direction of Chief William Walsh, for their assistance.
The government is represented by Assistant U.S. Attorney Sara A. Aliabadi of the U.S. Attorney’s Office in Camden.
Defense counsel: Lori M. Koch, Esquire and Edward J. Crisonino, Esquire, Camden
Union County, New Jersey, Man Sentenced to 63 Months in Prison for Role in Scheme to Smuggle More Than Three Kilograms of Cocaine into the United StatesRead the Press Release
NEWARK, N.J. – An Elizabeth, New Jersey, man was sentenced today to 63 months in prison for his role in a conspiracy to smuggle approximately three kilograms of cocaine from Haiti into the United States, U.S. Attorney Paul J. Fishman announced.
Schirmer Monestime, 39, was previously convicted on an indictment charging him with one count of conspiracy to distribute cocaine following a four-day trial before U.S. District Judge Susan D. Wigenton. The jury deliberated for four hours before returning the guilty verdict. Monestime was originally arrested and charged by complaint on March 5, 2013. Judge Wigenton imposed the sentence today in Newark federal court.
According to the indictment and evidence at trial:
On Feb 28, 2013, while conducting routine examinations of express mail parcels arriving from Haiti, law enforcement examined a parcel addressed to Bobby Lewis, 59, of Elizabeth. The examination revealed a package containing six large picture frames filled with a powdery-white substance that field-tested positive for cocaine. The net weight of the cocaine in the picture frames was approximately three kilograms.
Law enforcement officers replaced the drugs in the parcel with fake cocaine. On March 4, 2015, an undercover postal inspector delivered the parcel to Lewis, who signed for it at his Elizabeth address. Law enforcement surveillance observed Lewis take the parcel to a nearby parking lot and signal an approaching vehicle driven by Monestime. Although Monestime did not stop to receive the parcel, he later admitted that he intended to do so.
In addition to the prison term, Judge Wigenton sentenced Monestime to three years of supervised release.
Charges against Lewis are still pending. The charges and allegations against him are merely accusations, and he is presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of U.S. Department of Homeland Security-Homeland Security Investigations (DHS-HSI), under the direction of Special Agent in Charge Terence S. Opiola, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Barry A. Kamar of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: Cynthia H. Hardaway Esq., Montclair, New Jersey.
New York Man Sentenced to 51 Months in Prison for International $200 Million Credit Card Fraud ConspiracyRead the Press Release
TRENTON, N.J. – A New York man was sentenced today to 51 months in prison for his role in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.
Shafique Ahmed, 55, of Floral Park, New York, previously pleaded guilty before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court to an information charging conspiracy to commit bank fraud. U.S. District Judge Anne E. Thompson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:Ahmed and others were originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Members of the conspiracy doctored credit reports to pump up the spending and borrowing power associated with the cards. They then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts – causing more than $200 million in confirmed losses to businesses and financial institutions.
The scheme involved a three-step process in which the defendants would make up a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus; pump up the credit of the false identity by providing false information about that identity’s creditworthiness to those credit bureaus; finally, run up large loans.
The scope of the criminal fraud enterprise required Ahmed and his conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.
Ahmed admitted that he and others helped obtain credit cards in the name of third parties – many of which were fictional – then directed the credit cards to be mailed to addresses controlled by members of the conspiracy. He also admitted they knew the cards would be used fraudulently at businesses.In addition to the prison term, Judge Thompson sentenced Ahmed to five years of supervised release and entered a forfeiture order for $1 million against him.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to the guilty pleas, as well as postal inspectors, under the direction of Postal Inspector in Charge Marie L. Kelokates, and special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Kenneth Pleasant. He also thanked the U.S. Social Security Administration for its role in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the U.S. Attorney’s Office Criminal Division and Barbara Ward of the office’s Asset Forfeiture and Money Laundering 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: Joseph Giaramita Esq., BrooklynHeroin Supplier for Atlantic City ‘Dirty Block’ Gang Sentenced to 13 Years in PrisonRead the Press Release
TRENTON, N.J. - A Paterson, New Jersey, man was sentenced today to 156 months in prison for his role as a primary heroin supplier for a criminal street gang that used threats, intimidation and violence to maintain control of the illegal heroin trade in Atlantic City, New Jersey, U.S. Attorney Paul J. Fishman announced.
Mark Frye, 35, previously pleaded guilty before U.S. District Judge Anne E. Thompson to a superseding information charging him with conspiracy to distribute more than one kilogram of heroin. Judge Thompson imposed the sentence today in Trenton federal court.
According to the documents filed in this case and statements made in court:
Frye and Maurice Thomas, 34, of Patterson, worked together in a sophisticated drug distribution scheme which was based in the Presidential Towers apartment complex in Paterson.
Law enforcement agents obtained several wiretaps over a period of six months and recorded thousands of phone calls and text messages, including calls between Frye and “Dirty Block” leader Mykal Derry, 35, of Atlantic City, and Tyrone Ellis, 33, of Galloway, New Jersey, two Atlantic City heroin dealers. In addition, FBI agents conducted surveillance of drug meetings at the apartment complex in Paterson and observed and photographed Frye meeting with both Derry and Ellis on numerous occasions.
Frye, along with Thomas, obtained large quantities of pre-packaged heroin from major drug suppliers in the Paterson area and then supplied the drugs to numerous customers, routinely selling thousands of dollars’ worth of pre-packaged heroin to Derry and Ellis.
On Feb. 17, 2013, Frye was arrested by troopers from the New Jersey State Police after they seized an Audi Sedan he was driving and found a bag containing 200 “bricks” of heroin (each brick contained 50 individual packets of heroin, for a total of approximately 10,000 packets of heroin). Frye was able to make bail within 24 hours, but was ultimately arrested in March 2013 by FBI agents on the federal drug conspiracy charge. Sentencing in the state case in Passaic County Superior Court is still pending.
At his plea hearing, Frye admitted that he supplied at least 1, 200 bricks of heroin as part of the conspiracy. The wire recordings of Frye’s numerous calls and text messages with Derry and Ellis, as well as the trial testimony of a cooperating witness with firsthand knowledge of Frye’s drug trafficking activities, establish that Frye supplied heroin on a daily basis for at least six months between October 2012 and March 2013.
In addition to the prison term, Judge Thompson sentenced Frye to serve eight years of supervised release.
Thomas pleaded guilty on Sept. 18, 2014 to conspiracy to distribute more than one kilogram of heroin and awaits sentencing. Ellis pleaded guilty on Nov. 10, 2015 to conspiracy to distribute more than 100 grams of heroin and awaits sentencing. Derry, who was convicted at trial for drug conspiracy and weapons charges, was sentenced Jan. 7, 2015 to a lifetime in prison.
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 Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s sentencing.
He also thanked the N.J. State Police, the Atlantic County Sheriff’s Office, the Northfield Police Department, the Vineland Police Department, the Brigantine Police Department, and the Millville Police Department for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Mallqui-Burgos of the Atlantic County Prosecutor’s Office.
Defense counsel: Michael Engle Esq., Philadelphia
Two Burlington County, New Jersey, Men Sentenced to Nine Years in Prison for Their Roles in South Jersey Bank Robbery SpreeRead the Press Release
CAMDEN, N.J. - Two Burlington County men who teamed up to rob multiple South Jersey banks between September 2013 and January 2014 were both sentenced today to 108 months in prison, U.S. Attorney Paul J. Fishman announced.
Shalir Hall, 22, of Edgewater Park, New Jersey, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to an information charging him with nine counts of bank robbery. David Glenn, 24, of Burlington Township, New Jersey, previously pleaded guilty before Judge Simandle to an information charging him with seven counts of bank robbery. Judge Simandle imposed both sentences today in Camden federal court.
According to documents filed in this case and statements made in court:
Hall and Glenn robbed the following New Jersey banks on the dates set forth below:
Bank
Location
Date
Participants
Beneficial Savings Bank
Willingboro
Sept. 27, 2013
Hall
Beneficial Savings Bank
Willingboro
Nov. 14, 2013
Hall, Glenn
Beneficial Savings Bank
Willingboro
Nov. 26, 2013
Hall, Glenn
PNC Bank
Mount Laurel
Nov. 29, 2013
Hall, Glenn
3rd National Bank
Delran
Dec. 12, 2013
Hall, Glenn
Roma Bank
Delran
Dec. 12, 2013
Hall, Glenn
Columbia Savings Bank
Maple Shade
Dec. 17, 2013
Hall
TD Bank
Bellmawr
Jan. 8, 2014
Hall, Glenn
PNC Bank
East Windsor
Jan. 8, 2014
Hall, Glenn
Hall robbed the Beneficial Savings Bank in Willingboro on Sept. 27, 2013, by threatening and intimidating bank employees, demanding money and then fleeing the bank. Hall then joined forces with Glenn, and the two went on to commit seven additional robberies in New Jersey – taking turns alternating between going into the banks and staying in the getaway vehicle. Hall committed the Dec.17, 2013 robbery of Columbia Savings Bank on his own.
In addition to the prison terms, Judge Simandle sentenced both Hall and Glenn to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agents in Charge Richard M. Frankel and William F. Sweeney Jr. in Newark and Philadelphia, respectively, with the investigation leading to the sentences.
He also credited the Camden County Prosecutor’s Office and the Burlington County Prosecutor=s Office; the Burlington County Sheriff’s Department Warrant Unit; and the U.S. Marshals Service New York/New Jersey Regional Fugitive Task Force; as well as the East Windsor Township Police Department, Willingboro Police Department, Maple Shade Police Department, Delran Township Police Department, Mount Laurel Police Department, Philadelphia Police Department and the Hazelton, Pennsylvania Police Department for their work in this case.
The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney=s Office Criminal Division in Camden.
Defense counsel:
Hall: Gina A. Capuano, Esquire, Cherry Hill, New Jersey
Glenn: Lisa Evans Lewis Esq., Assistant Federal Public Defender, Camden
Middlesex County, New Jersey, Man Charged with Transporting More Than $200,000 Worth of Stolen Barnes & Noble MerchandiseRead the Press Release
NEWARK, N.J. – A Middlesex County, New Jersey, man will appear in federal court today to face charges that he used eBay to sell more than $200,000 worth of Barnes and Noble merchandise he shoplifted using a “booster bag,” U.S. Attorney Paul J. Fishman announced.
Dominick James Izzo, 49, of Piscataway, New Jersey, and Port Orange, Florida, is charged by criminal complaint with one count of transportation of stolen goods. He appeared this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court and was released on a $250,000 unsecured bond.
According to the complaint:
Izzo allegedly stole merchandise from Barnes & Noble stores in New Jersey, Florida and elsewhere using a “booster bag” to evade anti-theft alarms. He then listed the stolen merchandise on eBay using nominee seller accounts to conceal his identity. Izzo accepted payment for the stolen merchandise from purchasers via nominee PayPal accounts. Once Izzo received funds via domestic wire transfer from the purchasers, he shipped the stolen merchandise from New Jersey and Florida to the purchasers in several different states.
The transportation of stolen goods charge is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Fishman credited postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, 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 Lakshmi Srinivasan Herman of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense Counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark
Former NBA Player and CEO of the George Group Sentenced to Nine Years in Prison for Role in a $2 Million Ponzi SchemeRead the Press Release
C. Tate George, former NBA basketball player and the CEO of purported real estate development firm The George Group, was sentenced today to 108 months in prison for his role in orchestrating a $2 million investment fraud scheme, announced U.S. Attorney Paul J. Fishman for the District of New Jersey.
After a three-week trial before U.S. District Judge Mary L. Cooper September 2013, a jury deliberated for four hours before convicting George, 47, of Newark, New Jersey, of all of four counts of the indictment. Judge Cooper imposed the sentence today in Trenton federal court.
“Those who perpetrate Ponzi schemes shamelessly trade on relationships with those who trust them,” U.S. Attorney Fishman said. “In this case, George relied on his sports stardom to attract unwitting investors. His crimes justified today’s lengthy sentence.”
“By shamelessly cashing in on his celebrity C. Tate George stole $2 million from investors who trusted him as a former NBA athlete,” said Special Agent in Charge Richard M. Frankel for the FBI’s Newark Division. “George used the money to pay other investors in the Ponzi-style scheme and lined his pockets with the rest, funding extensive renovations on his home, paying for his daughter’s sixteenth birthday party and producing a reality video about himself.”
According to documents filed in this case and evidence presented at trial:
George, a former player for the New Jersey Nets and Milwaukee Bucks professional basketball teams, held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management. He pitched prospective investors, including several former professional athletes, to invest with the firm and told them their money would be used to fund The George Group’s purchase and development of real estate development projects, including projects in Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney trust account and personally guaranteed the return of their investments, with interest.
Based on George’s representations, investors invested more than $2 million in The George Group between 2005 and 2011, which he deposited in both the firm’s and his personal bank account. Instead of using investments to fund real estate development projects as promised, George used the money from new investors to pay existing investors in Ponzi-scheme fashion, as well as paying for his daughter’s sixteenth birthday party, extensive renovations on his New Jersey home (that has since been foreclosed), the mortgage on a New Jersey home, the mortgage on a Florida home, taxes to the Internal Revenue Service (IRS) and traffic tickets. The defendant gave money to family members and friends. He also spent $2,905 for a reality video about himself – a “sizzle reel” for “The Tate Show” – which was made available on YouTube. The George Group had virtually no income-generating operations.
During the sentencing proceeding, prosecutors asserted George had presented the court with fraudulent character witness letters. The defendant claimed the letters, which contained suspicious similarities, were sent to the court in support of a more lenient sentence. Some of the individuals who purportedly sent the letters signed declarations stating that they did not write the letters nor did they authorize the letters to be sent to the court on their behalf.
In addition to prison time, Judge Cooper also sentenced George to three years of supervised release, ordered him to $2.55 million in restitution and entered a forfeiture money judgment of $2.55 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; and criminal investigators with the U.S. Attorney’s Office, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Zach Intrater of the U.S. Attorney’s Office Criminal Division in Newark.
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Former NBA Player and CEO of the George Group Sentenced to Nine Years in Prison for Role in A $2 Million Ponzi SchemeRead the Press Release
TRENTON, N.J. – C. Tate George, former NBA basketball player and the CEO of purported real estate development firm The George Group, was sentenced today to 108 months in prison for his role in orchestrating a $2 million investment fraud scheme, U.S. Attorney Paul J. Fishman announced.
After a three-week trial before U.S. District Judge Mary L. Cooper September 2013, a jury deliberated for four hours before convicting George, 47, of Newark, New Jersey, of all of four counts of the indictment. Judge Cooper imposed the sentence today in Trenton federal court.
“Those who perpetrate Ponzi schemes shamelessly trade on relationships with those who trust them,” U.S. Attorney Fishman said. “In this case, George relied on his sports stardom to attract unwitting investors. His crimes justified today’s lengthy sentence.”
“By shamelessly cashing in on his celebrity C. Tate George stole $2 million from investors who trusted him as a former NBA athlete,” FBI-Newark Special Agent in Charge Richard M. Frankel said. “George used the money to pay other investors in the Ponzi-style scheme and lined his pockets with the rest, funding extensive renovations on his home, paying for his daughter’s sixteenth birthday party and producing a reality video about himself.”
According to documents filed in this case and evidence presented at trial:
George, a former player for the New Jersey Nets and Milwaukee Bucks professional basketball teams, held himself out as the CEO of The George Group and claimed to have more than $500 million in assets under management. He pitched prospective investors, including several former professional athletes, to invest with the firm and told them their money would be used to fund The George Group’s purchase and development of real estate development projects, including projects in Connecticut and New Jersey. George represented to some prospective investors that their funds would be held in an attorney trust account and personally guaranteed the return of their investments, with interest.
Based on George’s representations, investors invested more than $2 million in The George Group between 2005 and 2011, which he deposited in both the firm’s and his personal bank account. Instead of using investments to fund real estate development projects as promised, George used the money from new investors to pay existing investors in Ponzi-scheme fashion, as well as paying for his daughter’s sixteenth birthday party, extensive renovations on his New Jersey home (that has since been foreclosed), the mortgage on a New Jersey home, the mortgage on a Florida home, taxes to the IRS, and traffic tickets. The defendant gave money to family members and friends. He also spent $2,905 for a reality video about himself – a “sizzle reel” for “The Tate Show” – which was made available on YouTube. The George Group had virtually no income-generating operations.
During the sentencing proceeding, prosecutors asserted George had presented the court with fraudulent character witness letters. The defendant claimed the letters, which contained suspicious similarities, were sent to the court in support of a more lenient sentence. Some of the individuals who purportedly sent the letters signed declarations stating that they did not write the letters nor did they authorize the letters to be sent to the court on their behalf.
In addition to prison time, Judge Cooper also sentenced George to three years of supervised release, ordered him to $2.55 million in restitution and entered a forfeiture money judgment of $2.55 million.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Maria L. Kelokates; and criminal investigators with the U.S. Attorney’s Office, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Joseph B. Shumofsky and Zach Intrater of the U.S. Attorney’s Office Criminal Division in Newark.
This case is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s 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 more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Defense counsel: Pro se; John A. Azzarello Esq., Morristown, standby counsel
Ukrainian Citizen Admits Using Army of 13,000 Infected Computers to Loot Log-In Credentials, Payment Card DataRead the Press Release
NEWARK, N.J. – The administrator of two criminal online hacking forums today admitted stealing log-in and payment card data as part of an international hacking conspiracy, U.S. Attorney Paul J. Fishman announced.
Sergey Vovnenko, a/k/a “Sergey Vovnencko,” “Tomas Rimkis,” “Flycracker,” “Flyck,” “Fly,” “Centurion,” “MUXACC1,” “Stranier,” and “Darklife,” 29, most recently of Naples, Italy, pleaded guilty before the U.S. District Judge Esther Salas in Newark federal court to Count One and Count Three of an indictment charging him with wire fraud conspiracy and aggravated identity theft.
Vovnenko was arrested on June 13, 2014, following an international investigation led by the U.S. Secret Service in coordination with Italian law enforcement. He had been detained by the Italian authorities pending the resolution of extradition proceedings, which he contested for more than 15 months.
According to documents filed in this case and statements made in court:
From September 2010 through August 2012, Vovnenko and his conspirators operated an international criminal organization that hacked into the computers of individual users and companies located in the United States and elsewhere. They used that access to steal user names and passwords for bank accounts and other online services, as well as debit and credit card numbers and related personal identifying information.
Vovnenko admitted that, in order to steal this data, he operated a “botnet” – more than 13,000 computers infected with malicious computer software – programmed to gain unauthorized access to computers and to identify, store, and export information from hacked computers. A number of the infected computers were located in New Jersey. Vovnenko admitted using malware known as “Zeus” to steal banking information and record the keystrokes of the users of infected computers.
According to the indictment, Vovnenko was a high-level administrator of several online criminal forums and used his position to traffic in the data he stole as part of the conspiracy. These forums featured electronic bulletin boards, which members used to publicly communicate with all members and also send private messages directly to individual members.
The public and private discussions on these forums typically pertained to criminal activity, including the purchase, sale, and use of stolen log-in credentials and payment card data, as well as discussions related to cybercrime activity such as malicious computer hacking. For example, in August 2012, one of the forums offered various illicit products for sale, including access to compromised computer servers located in the United States. A price was listed for each product, and customers could click an “order” button and purchase the product using “credits” associated with their accounts.
The wire fraud conspiracy charge to which Vovnenko pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. The aggravated identity theft charge carries a mandatory two-year sentence, to be served consecutively to the conspiracy charge. Sentencing is scheduled for May 2, 2016.
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations Division, under the direction of Director Joseph P. Clancy, and special agents from the Newark Field Office, under the direction of Acting Special Agent in Charge Kenneth Pleasant, with the ongoing investigation leading to today’s plea.
He also thanked the Department of Justice’s Office of International Affairs in Washington and its attaché in Rome; the Office of the U.S. Ambassador to the Italian Republic and the Republic of San Marino, John R. Phillips; and the Italian Ministry of Justice and Italian law enforcement officials for their extraordinary support.
The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the U.S. Attorney’s Office Economic Crimes Unit.
Defense Cousel: Timothy Anderson Esq., Red Bank, New Jersey
Trader Pleads Guilty to Largest Known Computer Hacking and Securities Fraud SchemeRead the Press Release
NEWARK, N.J. – Igor Dubovoy, 28, Alpharetta, Georgia, today admitted his role in an international scheme to hack into three business newswires and steal yet-to-be published press releases containing non-public financial information that was then used to make trades that allegedly generated approximately $30 million in illegal profits, New Jersey U.S. Attorney Paul J. Fishman announced.
Igor Dubovoy pleaded guilty before U.S. District Judge Madeline Cox Arleo to Count One of an indictment charging him with conspiracy to commit wire fraud. He was arrested on Aug. 11, 2015, in connection with a federal indictment brought by the District of New Jersey (DNJ) charging five individuals – two computer hackers and three securities traders – in a large-scale, international conspiracy to hack and steal press releases containing confidential nonpublic financial information relating to hundreds of companies traded on the NASDAQ and NYSE from three newswires.
In addition to Igor Dubovoy, the 23-count DNJ indictment charges Ivan Turchynov, 27, Oleksandr Ieremenko, 24, and Pavel Dubovoy, 32, all of Ukraine, and Arkadiy Dubovoy, of Alpharetta, Georgia. The defendants are all charged with wire fraud conspiracy, securities fraud conspiracy, wire fraud, securities fraud, and money laundering conspiracy. Additionally, Ivan Turchynov and Oleksandr Ieremenko are charged with computer fraud conspiracy, computer fraud, and aggravated identity theft.
The Eastern District of New York (EDNY), in a related indictment charged four securities traders: Vitaly Korchevsky, 50, of Glen Mills, Pennsylvania, Vladislav Khalupsky, 45, of Brooklyn, New York and Odessa, Ukraine, Leonid Momotok, 47, of Suwanee, Georgia, and Alexander Garkusha, 47, of Cummings and Alpharetta, Georgia. The EDNY defendants are charged with wire fraud conspiracy, securities fraud conspiracy, securities fraud, and money laundering conspiracy. On Dec. 21, 2015, Alexander Garkusha pleaded guilty to Count One of the EDNY indictment, charging him with conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
Between February 2010 and August 2015, Turchynov and Ieremenko, computer hackers based in Ukraine, gained unauthorized access into the computer networks of Marketwired L.P. (Marketwired), PR Newswire Association LLC (PRN), and Business Wire. They used a series of targeted cyber-attacks, including “phishing” attacks and SQL injection attacks, to gain access to the computer networks. The hackers moved through the computer networks and stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material financial information.
At one point, one of the hackers sent an online chat message in Russian to another individual stating, “I’m hacking prnewswire.com.” In another online chat, Ieremenko told Turchynov that he had compromised the log-in credentials of 15 Business Wire employees.
The hackers shared the stolen releases with the traders using overseas computer servers that they controlled. In a series of emails, the hackers even shared “instructions” on how to access and use the overseas server where they shared the stolen releases with the traders, and the access credentials and instructions were distributed amongst the traders. In an email, which was sent by one of the traders, the instructions for accessing the overseas server suggested that users conceal their Internet Protocol address when accessing the server as a precaution to avoid detection. For traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases for publicly traded companies from Marketwired and PRN for publicly traded companies. Trading data obtained over the course of the investigation showed that, after the shopping list was sent, the traders and others traded ahead of several of the press releases listed on it.
The traders generally traded ahead of the public distribution of the stolen releases, and their trading activities shadowed the hackers’ capabilities to exfiltrate stolen press releases. In order to execute their trades before the releases were made public, the traders sometimes had to execute trades in extremely short windows of time between when the hackers illegally accessed and shared the releases and when the press releases were disseminated to the public by the newswires, usually shortly after the close of the markets. Frequently, all of this activity occurred on the same day. Thus, the trading data often showed a flurry of trading activity around a stolen press release just prior to its public release.
The traders traded on stolen press releases containing material nonpublic information about the following publicly traded companies that included, among hundreds of others: Align Technology, Inc.; Caterpillar Inc.; Hewlett Packard; Home Depot; Panera Bread Co.; and Verisign, Inc.
The traders paid the hackers for access to the overseas servers based, in part, on a percentage of the money the traders made from their illegal trading activities. The hackers and traders used foreign shell companies to share in the illegal trading profits.
At today’s plea hearing, Igor Dubovoy admitted that when he and others purchased stolen press releases from the computer hackers operating in Ukraine, he knew they contained earnings announcements for publicly trading companies that had not yet been made public. Igor Dubovoy also admitted that he sent the releases to Korchevsky so that he could review them and determine which trades would be profitable based on the stolen material information.
Based on Korchevsky’s recommendations, Igor Dubovoy then executed trades using a number of different brokerage accounts in his name and in Arkadiy Dubovoy’s name, as well as any entities they owned. He also admitted that he provided the hackers with access to at least one trading account held by Arkadiy Dubovoy so that they could confirm how much money was being made from the stolen information. According to Igor Dubovoy, the hackers were paid 50 percent of any profits made in the stock market based on the stolen press releases they provided.
The maximum potential penalties for Count One, conspiracy to commit wire fraud, is 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Criminal Investigations Division, under the direction of Director Joseph P. Clancy, and special agents from the Newark Field Office, under the direction of Acting Special Agent in Charge Kenneth Pleasant, with the ongoing investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Andrew S. Pak, Daniel Shapiro, David M. Eskew, and Nicholas Grippo of the Economic Crimes Unit, Computer Hacking & Intellectual Property Section, 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: Lawrence S. Lustberg, Esq., Mary Frances Palisano, Esq., Gibbons PC
Gloucester County, New Jersey Man Sentenced to Six Years in Prison for Operating Mortgage Foreclosure Rescue, Real Estate Ponzi SchemeRead the Press Release
CAMDEN, N.J. – A Woolwich Township, New Jersey, was sentenced today to 72 months in prison for scamming distressed homeowners into giving him their houses and then soliciting fake real estate investments from private investors – secured by those same properties – that netted him more than $3 million in illicit profits, U.S. Attorney Paul J. Fishman announced.
Randy Poulson, 44, previously pleaded guilty before U.S. District Judge Renée Marie Bumb to Count One of an indictment charging him with mail fraud. Judge Bumb imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Poulson owned and operated Equity Capital Investments, LLC and Poulson Russo LLC and was the former president of the South Jersey Real Estate Investors Association. Paulson gave speeches, seminars, monthly dinners and various private tutorial sessions, purporting to teach real estate investing tips to individuals who paid fees to attend.
Poulson engaged in a two-pronged scheme. First, he promised to pay the mortgages of distressed homeowners facing foreclosure if they sold their homes to him. Using this method, Poulson obtained the deeds to more than 25 distressed homeowners’ residences, causing them to vacate the homes so renters could move in. Afterwards, Poulson then stopped making the monthly mortgage payments, causing those mortgages to go into foreclosure without the distressed homeowners’ knowledge.
In the second part of the scheme, Poulson solicited seminar attendees and other private investors to invest in Equity Capital Investments, which purportedly bought and sold real estate. Poulson told the investors that their money would be used to acquire and rehabilitate a property, which Poulson claimed he would rent out and then sell for a 10 to 20 percent return on the investment.
The properties for which Poulson solicited the investments were those he acquired in the first part of the scheme. Although Poulson claimed that he would use funds to acquire and rehabilitate those properties, Poulson spent the money on personal expenses and to repay other investors. As a result of the scheme, Poulson was able to fraudulently obtain more than $3 million from investors.
In addition to the prison term, Judge Bumb sentenced Poulson to three years of supervised release and ordered him to pay $2.58 million in restitution.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special
Agent in Charge Richard M. Frankel, in Newark, for the investigation leading to today’s sentencing.
The government is represented by Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Gilbert J. Scutti Esq., Somerdale, New Jersey
CEO of New Jersey Engineering Consulting Firm Sentenced to One Year in Prison for Role in Unemployment Insurance Fraud ConspiracyRead the Press Release
Also Failed to Collect More Than $100,000 in Payroll Taxes
TRENTON, N.J. – The head of an engineering consulting firm in Wall Township, New Jersey, was sentenced today to 12 months and a day in prison for a scheme in which several of his employees fraudulently collected unemployment benefits while he paid the remaining portion of their salaries, U.S. Attorney Paul J. Fishman announced.
Lino DeAlmeida Jr., 67, of Point Pleasant, New Jersey, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of conspiracy to defraud the N.J. State Division of Unemployment Insurance (NJUI) and one count of failing to collect Social Security, Medicare, and income payroll taxes. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
DeAlmeida operated an engineering consulting firm, Consolidated Construction Management Services (CCMS) in Wall Township. In late 2011, DeAlmeida told his four employees that due to financial difficulties, he could not continue paying their salaries. He proposed a scheme in which the employees would claim to have been terminated from CCMS and seek unemployment benefits from the NJUI. In return, he promised to continue to pay them “under the table” for the remaining portion of their salaries that would not be covered by the benefits. Three of the CCMS employees agreed to the scheme and submitted false applications with the NJUI.
DeAlmeida’s employee/conspirators received a total of $130,363 in benefits between July 2011 and January 2013 while receiving CCMS checks from DeAlmeida. In addition, DeAlmeida failed to pay payroll taxes of $109,068 on the undisclosed wages of $790,860 he and his conspirators received during the scheme.
In addition to the prison term, Judge Wolfson sentenced DeAlmeida to two years of supervised release, fined him $10,000, ordered him to pay restitution of $138,532 to NJUI and pay his unpaid federal corporate and personal taxes.
U.S. Attorney Fishman credited special agents of the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region; and 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 V. Grady O’Malley, Senior Litigation Counsel of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.
Defense counsel: Jeffrey D. Smith Esq., Teaneck, New Jersey
Atlantic County, New Jersey, Man Admits Role in Large-Scale Crack Cocaine Trafficking ConspiracyRead the Press Release
CAMDEN, N.J. – A Pleasantville, New Jersey, man today admitted participating in a nearly three-year conspiracy to distribute cocaine and crack cocaine in the Atlantic City, New Jersey area, U.S. Attorney Paul J. Fishman announced.
Ronald Douglas Byrd, 51, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to Count One of an indictment charging him with conspiring with others to distribute more than 280 grams of crack cocaine.
According to documents filed in this case and statements made in court:
From February 2012 through Dec. 10, 2014, Byrd admitted that he and others engaged in a drug trafficking conspiracy through which Byrd distributed more than one kilogram of crack cocaine. Members of the conspiracy used Byrd’s Pleasantville residence and at least two other residences in Pleasantville and Absecon to store and package cocaine and crack cocaine.
The distribution conspiracy charge to which Byrd pleaded guilty is punishable by a minimum penalty of 10 years in prison, a maximum potential penalty of life in prison and a $10 million fine. Sentencing is scheduled for June 10, 2016.
Byrd is the sixth person to plead guilty to participating in this drug trafficking conspiracy. Kareem Taylor, 41, of Atlantic City; Talib Tiller, 43, of Mays Landing, New Jersey; John Wellman, 41, of Somers Point, New Jersey; and Phillip Horton, 50, of Los Angeles, California, have all pleaded guilty and await sentencing. Francisco Alberto Rascon-Muracami, 22, of Obregon, Mexico, was sentenced Oct. 30, 2015 to 70 months in prison. Trial for the remaining defendants is scheduled for May 23, 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 Richard M. Frankel; the Drug Enforcement Administration’s Newark 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 plea.
He also thanked the N.J. State Police; the Bureau of Alcohol, Tobacco and Firearms; U.S. Immigration and Customs Enforcement (ICE)-Homeland Security Investigation (HSI); U.S. Postal Inspection Service; 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 Vondra Carrig of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Michael Huff Esq., Philadelphia
Owner of Union County, New Jersey, Home Health Care Agency Admits Role in Scheme That Bilked Medicaid Out of $7 MillionRead the Press Release
NEWARK, N.J. - A Springfield, New Jersey, man today admitted his role in a scheme that used bogus records and unqualified home health aides to defraud Medicare out of $7 million, U.S. Attorney Paul J. Fishman announced.
Paul Mil, 66, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with conspiracy to commit health care fraud, money laundering and tax evasion.
According to documents filed in this case and statements made in court:
Mil was the owner of People Choice Home Care Inc., a home health care agency located in Elizabeth, New Jersey, that provided home health aides and health care services to New Jersey residents. Mil was also the registered agent for HHCH Health Care Inc. in Linden, New Jersey, a home health care agency owned by Irina Krutoyarsky, 61, of Springfield, New Jersey. Home health aides visit patients at their homes and provide a variety of services, such as assistance with eating, dressing and grooming. These services were subsidized under the New Jersey Medical Assistance Program (Medicaid).
Mil, Krutoyarsky and others defrauded Medicaid through a variety of ways. First, they submitted false documents to the New Jersey Board of Nursing, the state agency responsible for issuing home health aide certifications. Krutoyarsky falsely represented that prospective home health aides had attended and satisfactorily completed required training and testing. In truth, Krutoyarsky charged prospective home health aides hundreds of dollars for fraudulently obtaining their certifications.
Second, Mil, Krutoyarsky and others fraudulently billed Medicaid for services not actually rendered to patients. Numerous HHCH home health aides routinely falsified records that claimed they had visited patients and provided them health care services. In truth, these home health aides had other jobs, were on vacations overseas, or were in other parts of the state during the times they claimed they were with patients. In certain instances, home health aides gave cash kickbacks to patients who were also participating in the scheme.
Third, Mil, Krutoyarsky and others hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. They then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides.
In total, Mil and others defrauded Medicaid out of $7 million. After Medicaid paid the claims and transferred the funds into bank accounts controlled by Mil, he used the proceeds to purchase real estate and personal property.
Additionally, between 2007 and 2011, Mil cheated the IRS out of approximately $918,000 in taxes due and owing. As part of the scheme, home health aides were sent to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH and People Choice. Mil then cashed these checks at check cashing businesses and equally divided the cash with Krutoyarsky. On his corporate tax returns, he falsely characterized these payments as legitimate business deductions, thus reducing his business’ corporate taxes. He then filed federal individual income tax returns that concealed this income.
Nine other individuals, including Krutoyarsky, have already pleaded guilty to their respective roles in the scheme.
The conspiracy and money laundering counts to which Mil pleaded guilty each carry a maximum potential penalty of 10 years in prison. The tax evasion count carries a maximum potential penalty of five years in prison. Each charge carries a potential $250,000 fine. Sentencing is scheduled for May 3, 2016. In addition, Mil will be ordered to pay a $7 million forfeiture money judgment to the United States and to forfeit six homes and properties in New Jersey and New York, as well as hundreds of thousands of dollars seized from bank accounts he controlled.
U.S. Attorney Fishman credited agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; New Jersey Office of the State Comptroller, Medicaid Fraud Division under the direction of Director Josh Lichtblau; The Enforcement Bureau of the New Jersey Attorney General’s Office on behalf of the Board of Nursing, Acting Attorney General John Jay Hoffman; the New Jersey Department of Labor under the direction of Commissioner Hal Wirths; the Marlboro Police Department, under the direction of Chief Bruce Hall; and the U.S. Department of State-Diplomatic Security for the investigation leading to today’s plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorneys Peter Gaeta and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: Nicholas G. Kaizer Esq., New York
Ocean County, New Jersey, Man Admits Bribing Doctor as Part of Compounding Pharmacy Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Manchester, New Jersey, man today admitted paying tens of thousands of dollars in bribes to a sports medicine doctor on behalf of Prescriptions R Us, a compound pharmacy in Lakewood, New Jersey, U.S. Attorney Paul J. Fishman announced.
Howard Wertheim, 67, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with one count of paying kickbacks.
According to documents filed in this case and statements made in court:
Wertheim admitting that from February 2013 through October 2013, he worked for Vladimir Kleyman, 44, of Lakewood, New Jersey, the president and pharmacist-in-charge of Prescriptions R Us. As a compounding pharmacy, Prescriptions R Us prepared medication using different types and dosages of drugs in order to provide more personalized medications for patients. Prescriptions R Us supplied a topical cream for pain treatment that was made from ketamine (a Schedule III non-narcotic), lidocaine, diclofenac and other ingredients.
Wertheim admitted that Kleyman paid him to help recruit and pay physicians to refer their prescriptions to Prescriptions R Us. Wertheim admitted that as part of the scheme, he paid tens of thousands of dollars in cash bribes to James Morales, 45, a sports medicine doctor with a practice in Toms River, New Jersey, in exchange for referring pain cream prescriptions.
The kickback charge to which Wertheim pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 25, 2016. As part of his plea agreement, Wertheim must forfeit $25,000, representing the money he made as payment for his work as a middle-man in the scheme.
Morales, who admitted accepting more than $60,000 in cash bribes as part of the scheme, pleaded guilty to an information charging him with conspiracy to accept kickbacks and health care fraud on June 29, 2015 and awaits sentencing. Kleyman, who previously pleaded guilty to an information charging him with conspiracy to pay kickbacks and to commit health care fraud on Oct. 14, 2014, was sentenced Nov. 4, 2015 to 20 months in prison.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Jane H. Yoon and R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $640 million 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: William Cunningham, Brick, New Jersey
Essex County, New Jersey, Man Charged with Two Bank Robberies and Using Firearm in Connection with Crime of ViolenceRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man charged with robbing Capital One Bank in Newark twice, including once in an armed robbery, will make his initial court appearance today, U.S. Attorney Paul J. Fishman announced.
Gregory A. Jones, 59, of Newark, is charged by complaint with two counts of bank robbery and one count of using a firearm during the commission of a crime of violence. Jones is expected to make his initial appearance this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the complaint and statements made in court:
On May 6, 2014, Jones entered the Capital One Bank wearing dark glasses and a scarf and presented the teller a note demanding cash. After Jones left the bank with stolen money, including a dye pack, law enforcement recovered a pair of dark glasses and a scarf near the bank next to currency, saturated with ink from the dye pack. DNA recovered from the glasses and the scarf matched a DNA sample that previously was lawfully obtained from Jones. He was later identified based on surveillance video and witness statements.
On Sept. 19, 2014, Jones entered the bank again, brandished a firearm from underneath his sweater, and told a teller to give him money, stating that he had a gun and would shoot. Jones fired the weapon into the ceiling. He was later identified using surveillance video and witness statements.
Jones has been detained in the Essex County Jail on state charges related to the May 6, 2014 robbery.
The bank robbery counts each carry a maximum potential penalty of up to 20 years in prison and a fine of up to $250,000 or twice the gross pecuniary gain or loss. The discharging a firearm during the bank robbery count carries a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison, which must be served consecutive to the other counts.
U.S. Attorney Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; N.J. State Police, under the direction of Col. Rick Fuentes; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Public Safety Director Anthony Ambrose, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney Svetlana M. Eisenberg of the U.S. Attorney’s Office General Crimes Unit in Newark.
The charges and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Atlantic City Man Sentenced to 30 Months in Prison for Conspiring with Alleged Members of Organized Crime Family and Others in Fraud SchemeRead the Press Release
CAMDEN, N.J. – An Atlantic City, New Jersey, man was sentenced today to 30 months in prison for assisting members and associates of an organized crime family in a fraud scheme, U.S. Attorney Paul J. Fishman announced.
John Parisi, 54, previously pleaded guilty before U.S. District Judge Robert B. Kugler to conspiring to defraud FirstPlus Financial Group Inc. (FPFG), a Texas-based financial services company targeted for extortionate takeover and looting by a group led by Nicodemo S. Scarfo. Judge Kugler imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Parisi and 12 others – including his cousin, Scarfo, an alleged member of the Lucchese La Cosa Nostra (LCN) crime family, and Salvatore Pelullo, an alleged associate of the Lucchese and Philadelphia LCN families – were variously charged in a November 2011 indictment with a racketeering conspiracy, including acts of securities fraud, wire fraud, mail fraud, bank fraud, extortion, interstate travel in aid of racketeering, money laundering and obstruction of justice. The indictment charged that FPFG was targeted for extortionate takeover and looting by a group of the conspirators. A substantial part of the enterprise’s activities occurred in New Jersey, including communications and the transfer of money into and out of the state. John Parisi admitted that he joined the conspiracy in April 2007.
Parisi managed a family trust and a limited liability company on behalf of Scarfo as part of the scheme to defraud FPFG. Parisi said Scarfo directed him in the use of various bank accounts through which Scarfo received hundreds of thousands of dollars between July 2007 and April 2008 as part of the scheme. As alleged in the indictment, the money involved proceeds of the fraud that Scarfo allegedly received as part of a fraudulent “consulting” agreement between his shell company, Learned Associates, and one controlled by Pelullo. The money also involved proceeds received from the fraudulent sale of Scarfo and Pelullo’s worthless companies to FPFG in 2007. The receipt of the fraudulent proceeds often occurred in the form of wire transfers from accounts in Pennsylvania to accounts in New Jersey.
Parisi admitted that beginning in February 2008 he assisted Scarfo and his then-fiancée, Lisa Marie Scarfo, obtain a mortgage for a $715,000 house in Egg Harbor Township, New Jersey, that the Scarfos intended to purchase. Lisa Marie Scarfo pleaded guilty on Sept. 17, 2013, to a conspiracy to make a false mortgage loan application in connection with the purchase of the Egg Harbor Township house.
In addition to the prison term, Judge Kugler sentenced Parisi to two years of supervised release and ordered him to pay $14 million in restitution.
Scarfo, Pelullo, and William and John Maxwell were convicted in convicted in July 2014 of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice, after a six-month trial before Judge Kugler. Scarfo and Pelullo were previously sentenced to 30 years in prison. William and John Maxwell were previously sentenced to 20 and 10 years in prison, respectively.
U.S. Attorney Fishman credited special agents of the FBI in Newark, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing. They also thanked the U.S. Department of Labor-Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations New York Region, the FBI’s Philadelphia Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives for their roles in the case.
The government is represented by Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the New Jersey U.S. Attorney’s Office Camden Office.
Defense counsel: Lisa Evans Lewis Esq., Camden
Three People Charged with Sex Trafficking of MinorRead the Press Release
TRENTON, N.J. – Two people appeared in federal court today on charges they conspired to engage in sex trafficking of a minor and engaged in sex trafficking of a minor, U.S. Attorney Paul J. Fishman announced.
Aaron Gray, 29, a/k/a “AR,” Aja Easley, 22, both of Camden, appear this afternoon before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court. Gray, Easley and a third defendant, Kenneth Mertz, 35, of Collingswood, who remains at large, are each charged in a three-count complaint with conspiracy to engage in sex trafficking of a minor and with sex trafficking of a minor. Gray is also charged with being a felon in possession of a firearm. Gray and Easley were ordered detained without bail.
According to the documents filed in this case:
On March 2, 2015, Easley allegedly communicated with the victim, a minor, using a social media website. She told the victim she was “worried about” the victim because of a previous assault by the victim’s boyfriend. She offered the victim money, clothing and shelter and met with the victim at the Camden Transportation Center. Easley allegedly told the victim about a dating website and said the victim could make money through the website by going on “dates.” Easley and the victim later met Gray and Mertz at a residence in Camden. Mertz then drove everyone to a motel in Cherry Hill.
At the motel, Gray and Easley allegedly attempted to convince the victim to engage in commercial sex acts and took suggestive photos of the victim, which were used as part of an advertisement on the website. Easley used her cellular telephone to communicate with multiple individuals who responded to the ad. Gray gave the victim instructions on what to do when the respondents arrived. The victim observed Gray in possession of a firearm and also observed a collapsible nightstick, which was later determined to belong to Mertz.
On March 3, 2015, at a motel in Mount Laurel, New Jersey, the victim engaged in sex acts with multiple individuals, who responded to the ad and paid money to the defendants. The defendants later told the victim they were taking the victim to Atlantic City, New Jersey, to meet another person who had responded to the ad.
On the way to Atlantic City, the defendants allegedly agreed to let the victim stop at a residence in Gloucester City, New Jersey. The victim went inside and contacted the police, leading to the defendants’ arrest.
The count of conspiracy to engage in the sex trafficking of a minor carries a maximum penalty of life in prison. The substantive count of sex trafficking of a minor carries a statutory mandatory minimum of 10 years in prison and a statutory maximum of life in prison. The felon-in-possession count carries a maximum statutory penalty of 10 years in prison. Each count also carries a maximum fine of $250,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, and members of the Mount Laurel Police Department, under the direction of Police Chief Dennis Cribben, and the Gloucester City Police Department, under the direction of Acting Police Chief Michael Morell, with the investigation leading to the charges.
The government is represented by Assistant U.S. Attorney J. Brendan Day in Trenton.
The charges and allegations summarized above are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Mercer County, New Jersey, Man Sentenced to 70 Months in Prison for Cocaine Trafficking OffenseRead the Press Release
TRENTON, N.J. – A Mercer County, New Jersey, man was sentenced today to 70 months in prison for possessing with the intent to distribute 157 grams of cocaine base, U.S. Attorney Paul J. Fishman announced.
Donald Jackson, 32, of Trenton, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an indictment charging him with possessing with intent to distribute 28 grams or more of cocaine base. Judge Thompson imposed sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
On Jan. 30, 2014, Jackson, who had been the target of an investigation led by detectives from the Mercer County Prosecutor’s Office, Special Investigations Unit, and officers from the Trenton Police Department, was apprehended in the parking lot of the Gregory Elementary School. A search of his vehicle – in which he had been traveling with two young children – revealed a loaded .45 caliber handgun with a defaced serial number, as well as a plastic bag containing 16 grams of cocaine base. On the same day, a search of an apartment to which Jackson had access and from which he operated his trafficking operations uncovered an additional 141 grams of cocaine base.
In addition to the prison term, Judge Thompson sentenced Jackson to five years of supervised release and fined him $1,000.
U.S. Attorney Fishman credited special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge George P. Belsky Jr.; and detectives of the Mercer County Prosecutor’s Office, Special Investigations Unit, under the direction of Acting Prosecutor Angelo J. Onofri, with the investigation leading to today’s sentencing. He also thanked officers of the Trenton Police Department under the direction of Police Director Ernest Parrey 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.
Colombian Cartel Leader Sentenced to 11 Years in Prison for Trafficking Narcotics Sold in the United StatesRead the Press Release
NEWARK, N.J. - A Colombian cartel leader expelled from Venezuela to face federal charges in New Jersey for his role in an international cocaine distribution conspiracy was sentenced today to 132 months in prison, U.S. Attorney Paul J. Fishman announced.
Colombian national Salomon Camacho Mora, 71, a/k/a “Papa Grande,” a/k/a “El Viejo,” a/k/a “Hector,” was arrested in Valencia, Venezuela, on Jan. 13, 2010, and subsequently expelled by Venezuelan authorities to the United States. Camacho was originally indicted in September 2002 in U.S. District Court for the District of New Jersey and had been designated a Consolidated Priority Organization Target (CPOT) by the Department of Justice. He was a New Jersey FBI fugitive for more than eight years.
On Oct. 15, 2014, Camacho pleaded guilty before U.S. District Judge William H. Walls to Count Seven of a superseding indictment charging him with conspiracy to commit narcotics trafficking. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Camacho admitted that he and members of his drug organization purchased multi-kilogram quantities of cocaine from processing laboratories located in Colombia and arranged for the transportation of the cocaine to various shipping ports in Venezuela. Camacho and members of his drug organization then sold the cocaine shipments to other drug trafficking organizations operating in Puerto Rico, the Dominican Republic and the United States.
He also acknowledged that others in his organization received and stored the drug shipments in Venezuela, and arranged for their maritime transportation to Puerto Rico and the United States.
In addition to the prison term, Judge Walls sentenced Camacho to five years of supervised release. Camacho must also forfeit $1.6 million and eight Colombian properties that were the product of ill-gotten gains.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; the Drug Enforcement Administration (DEA), under the direction of Special Agent in Charge Carl J. Kotowski in Newark; and the New Jersey National Guard Anti-Narcotics Task Force for the investigation.
U.S. Attorney Fishman also thanked the U.S. Department of Justice Criminal Division's Office of International Affairs for providing assistance in this matter. Additionally, he thanked the Venezuelan agencies Oficina Nacional Anti Drogas (ONA), Servicio Bolivariano de Intelligencia Nacional, (SEBIN), Servicio Administrativo de identificacion migracion y Extranjeria, (SAIME) and the Colombian law enforcement authorities for their assistance in Camacho’s arrest and deportation.
The government is represented by Assistant U.S. Attorney Adam N. Subervi of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: William Clay Esq., Miami
Ocean County, New Jersey, Couple Sentenced for Roles in Conspiracy to Kidnap Jewish Husband, Force Him to Give His Wife Religious DivorceRead the Press Release
TRENTON, N.J. - A husband and wife from Lakewood, New Jersey, were sentenced today for their roles in a conspiracy to kidnap a Jewish man and force him to give his wife a religious divorce, known as a “get,” U.S. Attorney Paul J. Fishman announced.
David Wax, 53, who previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with conspiracy to commit kidnapping, was sentenced to 84 months in prison. Judy Wax, 51, who previously pleaded guilty before Judge Wolfson to an information charging her with misprision of a felony, was sentenced to two years of probation. Judge Wolfson imposed both sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:
David Wax admitted that in October 2010, he and his conspirators agreed to force a Jewish man to give his wife a get, a document which, according to Jewish law, must be presented by a husband to his wife to effect their divorce.
David Wax lured the victim from Brooklyn, New York, to Wax’s home in Lakewood on Oct. 17, 2010, under the pretense that the victim would work on Talmudic books that David Wax was publishing. When the victim arrived, he was brought upstairs, blindfolded, handcuffed and bound. The victim was then assaulted by Wax and his conspirators until he provided the get.
Judy Wax admitted that she and her husband later replaced a blood-soaked carpet in their home in order to conceal the kidnapping. She also admitted to knowingly failing to notify the authorities of the kidnapping.
The family of the victim’s wife paid David Wax approximately $100,000 to obtain the forced get. His conspirators received approximately $50,000.
In addition to the prison term, Judge Wolfson sentenced David Wax to two years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.
Defense counsel:
David Wax: Mitchell J. Ansell Esq., Ocean, and Edward Dauber Esq., Newark, New Jersey
Judy Wax: Steven Secare Esq., Toms River, New Jersey.
Major U.S. Airline Pilot Who Holds Global Entry Card Charged with Bulk Cash Smuggling, Making False StatementsRead the Press Release
NEWARK, N.J. – A United States commercial airline pilot who holds a U.S Customs and Border Protection (CBP) Global Entry Card was arrested yesterday morning after allegedly attempting to smuggle $195,736 in undeclared currency into the country, U.S. Attorney Paul J. Fishman announced.
Anthony Warner, 55, of Dallas, Texas, was arrested at Newark Liberty International Airport by special agents of Immigration and Customs Enforcement’s Homeland Security Investigations after arriving as a passenger on a flight from Mumbai, India. He is charged by complaint with one count of bulk cash smuggling and one count of making false statements. He made his initial appearance before U.S. Magistrate Judge Steven C. Mannion and was released on $100,000 bond.
According documents filed in this case and statements made in court:
Global Entry is a CBP program that allows expedited clearance upon arrival in the United States for pre-approved travelers who have been determined to be low-risk. Pre-approval must be completed before enrollment, and the process includes a background check and an in-person interview. At airports, program members proceed to Global Entry kiosks, present their machine-readable passport or U.S. permanent resident card, place their fingers on the scanner for fingerprint verification, and complete a Customs verification. The kiosk issues the traveler a transaction receipt and directs the traveler to baggage claim and the exit.
When Warner arrived at Newark Liberty International Airport, the Global Entry computer system was not functioning, so he presented his customs declaration to a CBP officer. CBP’s screening determined that he was carrying a laptop-style bag that contained $195,736 in United States currency wrapped in newspaper. He also had 10 rings, four sets of earrings, and other assorted jewelry of undetermined value.
Warner’s possession of currency was contrary to the statements in his customs declaration and verbal statements
Count One of the complaint carries a maximum term of imprisonment of five years and a fine of $250,000. Count two of the complaint, bulk cash smuggling, carries a maximum term of imprisonment of five years and forfeiture of all property involved in the offense.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s Homeland Security Investigations, Newark Division, under the direction of Special Agent in Charge Terence S. Opiola, and U.S. Customs and Border Protection, under the leadership of Robert E. Perez, Director, New York Field Office, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorney Sara F. Merin of the OCDETF/Narcotics Unit in Newark.
Defense counsel: Jeffrey Altman and Steven Altman Esqs., New Brunswick, New Jersey
‘Dirty Block’ Gang Leader Sentenced to Life in Prison for Drug Conspiracy and Weapons ChargesRead the Press Release
CAMDEN, N.J. – The leader of a criminal street gang that used threats, intimidation and violence to maintain control of the illegal drug trade in Atlantic City, New Jersey, was sentenced today to life in prison for drug conspiracy and weapons charges, U.S. Attorney Paul J. Fishman announced.
Mykal Derry, a/k/a “Koose,” 35, of Atlantic City, was previously convicted of conspiracy to distribute one kilogram or more of heroin, distributing heroin, maintaining a place for the purposes of storing and distributing heroin, possessing, brandishing and discharging firearms in furtherance of the drug conspiracy and using a communications device in furtherance of a drug trafficking crime. Mykal Derry was convicted following a six-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:
Mykal Derry was the leader of the gang known as “Dirty Block,” a/k/a “Crime Fam,” “3.6.6.12,” or “3.6,” which operated in a geographic area of Atlantic City and controlled the lucrative drug trafficking area of the Stanley Holmes public housing complex, Brown’s Park and the surrounding area.
The evidence showed that Derry and other members of the group routinely carried loaded handguns and engaged in at least eight drug related shootings between October 2010 and February 2013, including the shooting of a teenager on April 17, 2011, which left the teenager paralyzed. The trial testimony of a cooperating witness established that Derry had his cousin shoot the teenager because he was cooperating with police in an earlier case involving Derry and other drug associates’ assault of the teenager in October 2010.
Additional testimony established that Mykal Derry and his brother, Malik Derry, a/k/a “Lik,” 24, also of Atlantic City, planned and carried out the shooting murder of a rival drug dealer in Atlantic City on the evening of Feb. 10, 2013. Mykal Derry told members of his gang that he wanted them to “put him down” (referring to an order to shoot the rival dealer) when they saw him. Malik Derry shot the victim in the head from close range while riding a bicycle past him as the victim stood in front of an Atlantic City restaurant.
The murder weapon, a stolen .380 caliber semi-automatic handgun, was later recovered from the drop ceiling in an apartment located on Green Street in Atlantic City, which, at the time, was shared by Mykal Derry and his girlfriend, Kimberly Spellman, 34, of Egg Harbor Township, New Jersey. Atlantic City police detectives also found 18 “bricks” of heroin (approximately 900 individual packets of heroin) and drug packaging materials inside the apartment.
The evidence presented by the government at trial consisted of recordings of hundreds of telephone calls and text messages between Mykal Derry and over twenty other members of the drug gang, physical evidence including the recovery of twenty firearms, ballistics evidence from shooting scenes, crime scene evidence from eight different shooting scenes in Atlantic City, recovery of substantial quantities of heroin and drug packaging materials, approximately $40,000 in drug proceeds, the testimony of dozens of FBI agents and Atlantic City police detectives, the testimony of ballistics experts, a narcotics expert, and the testimony of two cooperating witnesses who had previously pleaded guilty to federal drug trafficking offenses.
Malik Derry still awaits sentencing after being convicted at trial of conspiracy to distribute one kilogram or more of heroin, possessing and discharging firearms in furtherance of the conspiracy and using a communications device in furtherance of a drug trafficking crime. Spellman previously pleaded guilty to a superseding information charging her with conspiracy to distribute heroin and awaits sentencing.
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 Richard M. Frankel; the Atlantic County Prosecutor’s Office, under the direction of Prosecutor James P. McClain; the Atlantic City Police Department, under the direction of Chief Henry White; and the South Jersey Safe Streets Violent Incident and Gang (Safe Streets) Task Force, with the investigation leading to today’s sentencing.
He also thanked the N.J. State Police, the Atlantic County Sheriff’s Office, the Northfield Police Department, the Vineland Police Department, the Brigantine Police Department, and the Millville Police Department for their contributions.
The government is represented by Assistant U.S. Attorneys Patrick Askin and Justin Danilewitz of the U.S. Attorney’s Office in Camden and Special Assistant U.S. Attorney Edmund Mallqui-Burgos of the Atlantic County Prosecutor’s Office.
Defense Counsel: Emmett Madden Esq., Philadelphia
Union County, New Jersey, Man Arrested, Charged with Aiming Laser Pointer at WABC-TV HelicopterRead the Press Release
NEWARK, N.J. - A Union County, New Jersey, man was arrested today and charged with aiming a laser pointer at a WABC-TV helicopter, U.S. Attorney Paul J. Fishman announced.
Stiven Lopez-Bender, 26, of Elizabeth, New Jersey, was charged by complaint with one count of aiming a laser pointer at an aircraft. Lopez-Bender is scheduled to make his initial appearance today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.
According to documents filed in this case and statements made in court:
On Nov. 11, 2015, a reporter working for WABC-TV, Channel 7, New York, an affiliate of ABC Inc., requested a helicopter operator, also working on behalf of WABC, to fly the helicopter to a location in Elizabeth to cover a story on a house fire. At approximately 5:20 pm, while facing south at an altitude of approximately 1,000 feet, a green laser was aimed at and struck the flight deck of the helicopter through the main windshield.
The reporter and the helicopter operator saw Lopez-Bender emerge from a sports utility vehicle, reach into the passenger side, and then point a green laser at the helicopter, causing a second laser strike to the helicopter.
The helicopter operator lowered the helicopter to approximately 500 feet. As Lopez-Bender walked towards an apartment building, Lopez-Bender turned and again pointed the green laser towards the helicopter before entering the apartment building.
The helicopter operator then circled the area at an altitude of approximately 800 feet.
Within approximately 10 minutes, the helicopter was again lasered from a window in the apartment building Lopez-Bender had just entered.
The count with which Lopez-Bender is charged carries a maximum punishment of five years in prison and a $250,000 fine.
U.S. Attorney Fishman credited special agents, detectives and investigators assigned to the Joint Terrorism Task Force, under the direction of FBI Special Agent in Charge Richard M. Frankel, and members of the Elizabeth Police Department, under the direction of Police Director James Cosgrove, with the investigation leading to the charge.
The government is represented by Assistant U.S. Attorney Joyce M. Malliet of the National Security Unit in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Property Manager Sentenced to 15 Months in Prison for Role in Multimillion-Dollar Mortgage FraudRead the Press Release
CAMDEN, N.J. – A property manager was sentenced today to 15 months in prison for his role in a scheme to defraud financial institutions as part of a multimillion-dollar mortgage fraud that used phony documents and “straw buyers” to make illegal profits on over-developed condominiums in the Wildwood, New Jersey, area, U.S. Attorney Paul J. Fishman announced.
Paul Watterson, 55, of Mountainside, New Jersey, previously pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Judge Simandle imposed the sentence today in Camden federal court.
According to documents filed in this case and statements made in court:
Watterson and his conspirators identified homes in Wildwood and Wildwood Crest and recruited straw buyers to purchase those properties at the inflated rates. The straw buyers had good credit scores, but lacked the financial resources to qualify for mortgage loans. Watterson created fraudulent loan applications that contained false information about the straw buyers’ employment, income, assets and intended use of the properties. Watterson also obtained on behalf of his conspirators false documents to support the phony loan applications for certain straw purchasers. Watterson’s actions were designed to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Watterson and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Watterson’s conspirators took a portion of the proceeds, having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles. Watterson received $273,600 from five separate real estate transactions.
In addition to the prison term, Judge Simandle sentenced Watterson to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel: Thomas R. Ashley Esq., Newark
Leader of International, $200 Million Credit Card Fraud Scam Sentenced to 80 Months in PrisonRead the Press Release
TRENTON, N.J. – A New York man was sentenced today to 80 months for leading one of the largest credit card fraud schemes ever charged by the U.S. Department of Justice, U.S. Attorney Paul J. Fishman announced.
Tahir Lodhi, 56, of Hicksville, N.Y., previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him 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:
Lodhi directed the activities of a number of other conspirators in fabricating more than 7,000 false identities to obtain tens of thousands of credit cards. They doctored credit reports to pump up the spending and borrowing power associated with the cards. Lodhi and others then borrowed or spent as much as they could, based on the phony credit history, but did not repay the debts, causing more than $200 million in confirmed losses to businesses and financial institutions.
The scheme involved a three-step process in which the defendants would:
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“Make up” a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.
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“Pump up” the credit of the false identity by providing false information about that identity’s creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity’s credit report, making it appear that the false identity had excellent credit.
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“Run up” large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and Lodhi and his conspirators reaped the profits.
The Sham Companies
The enormous size and scope of the criminal fraud enterprise required Lodhi and his conspirators to construct an elaborate network of false identities. Across the country, Lodhi and his 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.
They created dozens of sham companies that did little or no legitimate business, obtained credit card terminals for the companies and then ran up charges on the fraudulent cards. To accept payments in the form of credit cards, a business must establish a merchant account with an entity known as a merchant processor. The merchant processor provides the business with equipment to process credit cards, receives payments from credit card companies for credit cards run at the business, and deposits those payments, minus a fee, into the business’ bank account. When the merchant processors shut down accounts operated by the conspirators for fraud, they would apply for new terminals and create new companies.
The sham companies also served as “furnishers,” providing the credit bureaus with false information about the credit history of numerous false identities of people who purportedly worked at or owned the companies.
Tradelines
Lodhi and his 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. Lodhi and his conspirators, however, trafficked in fraudulent primary tradelines.
A second kind of tradeline is the “authorized user” tradeline, where a credit card holder adds another, so-called “authorized user,” to a credit card account. This raises the credit score of the authorized user, who inherits some of the primary user’s credit history.
Certain of Lodhi’s conspirators created and sold fake lines of credit for false identities made up by Lodhi and others. These fraudulent primary tradelines were then used to increase the credit limits on fraudulent cards, so that the conspirators could reap even larger profits. Lodhi and other conspirators used the authorized user tradelines to create new identities.
Complicit Businesses
Lodhi and his conspirators also relied upon complicit businesses, including several jewelry stores in the Jersey City, N.J., area, to extract money from the fraudulent cards. The complicit businesses would allow certain conspirators to conduct sham transactions on the phony cards and would then receive the proceeds from the credit card companies and split them with the other conspirators. These complicit businesses maintained multiple credit card merchant processing accounts at the same time. By operating dozens of accounts, these businesses furthered the conspiracy by allowing more fraudulent transactions to be processed before the merchant processors shut down the account. The proceeds from these merchant terminals were deposited into various business checking accounts, and the money was paid out to the owners of the complicit businesses, along with other conspirators.
Lavish SpendingThe conspiracy generated enormous profits for Lodhi and his conspirators – even though they spent millions of dollars sustaining the elaborate network of drop addresses and running credit reports on the thousands of false identities. Records of the New York and New Jersey Departments of Labor reveal that many of Lodhi’s conspirators had no reported legitimate employment in the last five years. Nonetheless, Lodhi and his conspirators used the proceeds of the criminal enterprise to buy luxury automobiles, electronics, spa treatments, expensive clothing and millions of dollars in gold. They also stockpiled large sums of cash. Law enforcement discovered approximately $70,000 in cash in the oven of one of Lodhi’s conspirators.
Lodhi’s conspirators also moved millions of dollars through accounts under their control, and wired millions of dollars overseas. An analysis of 169 bank accounts of the defendants, sham companies, and complicit businesses has identified $60 million dollars in proceeds that flowed through the accounts, much of it withdrawn in cash. The conspirators wired millions of dollars to Pakistan, India, the United Arab Emirates, Canada, Romania, China and Japan. Due to the massive scope of the conspiracy, which involved more than 25,000 fraudulent credit cards, loss calculations are ongoing. Final figures may grow beyond the present confirmed losses of more than $200 million.
The investigation previously resulted in the arrest of 22 defendants and the seizure of more than $4 million in gold from jewelry stores in Jersey City.
In addition to the prison term, Judge Thompson sentenced Lodhi to five years of supervised release and fined him $25,000.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel, for the investigation leading to today’s guilty plea. He also thanked postal inspectors under the direction of Postal Inspector in Charge Marie L. Kelokates, the U.S. Secret Service, under the direction of Special Agent in Charge David Beach, and the U.S. Social Security Administration for their roles in the investigation.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro and Zach Intrater of the Economic Crimes Unit and Barbara Ward of the Asset Forfeiture Unit of the U.S. Attorney’s Office in Newark.
Defense counsel: Howard Simmons Esq., New York
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Ms-13 Gang Member Admits Plans to Kill Rival Gang Members and WitnessesRead the Press Release
NEWARK, N.J. – An MS-13 gang member from Union County, New Jersey, today admitted that after being arrested on charges of plotting to kill rival gang members, he and others planned to murder suspected government witnesses from prison, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.
Julio Adalberto Orellana-Carranza, a/k/a “Player,” 27, of Plainfield, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging him with conspiring to engage in a racketeering enterprise known as La Mara Salvatrucha, or MS-13.
According to the documents filed and statements made in court:
MS-13 is a national and international gang composed primarily of immigrants or descendants from El Salvador. Branches, or “cliques,” of MS-13 operate throughout the United States, including Plainfield. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang.
According to statements made by Orellana-Carranza in court, he was a member of the Plainfield Locos Salvatrucha (PLS) clique of MS-13 from at least August 2011. Orellana-Carranza admitted that he conspired with other members of MS-13 to engage in racketeering activity including murder, robbery, extortion and drug trafficking.
Orellana-Carranza stated that in June 2011, he and other members of the PLS clique plotted to kill members of rival gangs on the streets of Plainfield. Orellana-Carranza further admitted that after being arrested on those charges, he and other jailed MS-13 members hatched a plan to intimidate and/or kill individuals they believed were cooperating with law enforcement in the prosecution of MS-13 members.
Orellana-Carranza faces a maximum potential penalty of 20 years in prison and a $250,000 fine. Orellana-Carranza will remain detained pending sentencing, which is currently scheduled for May 4, 2016.
Eleven additional members and associates of the PLS clique of MS-13 are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, conspiracy to commit murder, robbery, extortion, witness retaliation and sexual assault.
U.S. Attorney Fishman and Assistant Attorney General Caldwell credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, and ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, with the investigation leading to today’s plea. They also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, and the Plainfield Police Department, for their work on the case.
The government is represented by Assistant United States Attorneys James Donnelly and
Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark as well as Trial
Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section.
Defense counsel: Bruce Rosen Esq., Roseland, New Jersey
MS-13 Member Admits Plan to Kill Rival Gang Members and WitnessesRead the Press Release
A Plainfield, New Jersey, man pleaded guilty today to one count of conspiring to engage in a racketeering enterprise known as La Mara Salvatrucha, or MS-13.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division made the announcement.
Julio Adalberto Orellana-Carranza, aka Player, 27, pleaded guilty before U.S. District Judge Stanley R. Chesler of the District of New Jersey, who scheduled sentencing for May 4, 2016. Orellana-Carranza remains detained pending sentencing.
According to court documents, MS-13 is a national and international gang with branches or “cliques” operating throughout the United States, including in Plainfield. In connection with his plea, Orellana-Carranza admitted that he was a member of the Plainfield Locos Salvatrucha (PLS) Clique of MS-13 for a period of time continuing through at least August 2011. Orellana-Carranza admitted that in June 2011, he and other members of the PLS clique plotted to kill rival gang members in Plainfield. Orellana-Carranza also admitted that after local authorities arrested him for that plot, he and other jailed MS-13 members hatched a plan to intimidate and/or kill individuals they believed were cooperating with law enforcement in the prosecution of MS-13 members.
Eleven other members and associates of the PLS Clique are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, conspiracy to commit murder, robbery, extortion, witness retaliation and sexual assault.
Co-defendant Jose Romero-Aguirre, aka Conejo, pleaded guilty on Dec. 2, 2015.
FBI’s Newark Division, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations’s Newark Field Office, ICE-Enforcement and Removal Operations, the Plainfield Police Department and the Union County, New Jersey, Prosecutor’s Office investigated the case. Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys James Donnelly and Jamari Buxton of the District of New Jersey are prosecuting this case.
Sussex County, New Jersey, Man Charged with Kidnapping and Murder-For-Hire PlotRead the Press Release
NEWARK, N.J. – A Newton, New Jersey, man appeared in federal court today to face charges that he planned the kidnapping and murder of a Paterson, New Jersey, woman, U.S. Attorney Paul J. Fishman announced.
Christopher Thieme, 35, is charged by criminal complaint with one count of murder-for-hire and one count of attempted kidnapping. He appeared this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court and was detained.
According to the complaint:
From December 2015 through Jan. 4, 2016, Thieme sought assistance from an associate in order to kidnap and ultimately murder a female victim whom Thieme had previously met through an online dating service. Thieme’s associate alerted law enforcement to Thieme’s plans, and cooperated with law enforcement’s investigation into Thieme’s plot.
In early January, at the direction of law enforcement, Thieme’s associate introduced Thieme to an undercover FBI agent posing as a hitman. Thieme explained to the undercover FBI agent that, once the victim was kidnapped, Thieme planned to empty her bank accounts and fraudulently sell off her home, the proceeds of which Thieme planned to use to pay for the kidnapping and murder. On Jan. 4, 2016, Thieme met his associate and the undercover hitman and drove them to the victim’s home and other locations where the victim could be found. Thieme was apprehended shortly afterwards.
The murder-for-hire charge carries a statutory maximum of 10 years in prison and $250,000 fine. The attempted kidnapping charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine.
The charges and allegations in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to the charges. He also thanked members of the Passaic County Prosecutor’s Office, the New Jersey State Police, the Newton Police Department, the Paramus Police Department, the Paterson Police Department, the Roxbury Police Department, and the Wayne Police Department for their assistance.
The government is represented by Assistant U.S. Attorney Josh Hafetz of the U.S. Attorney’s Organized Crime/Gangs Unit in Newark.
Defense counsel: Patrick McMahon Esq., Assistant Federal Public Defender, Newark
Monmouth County Man Charged with Illegally Possessing Machine GunsRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man today made his initial appearance in federal court on charges that he possessed 36 machine guns, which are illegal under federal law, U.S. Attorney Paul J. Fishman announced.
John Lafergola, 52, of Millstone Township, New Jersey, was charged by complaint with knowingly possessing machine guns, defined as a weapon that can shoot automatically more than one shot, without manual reloading, by a single function of the trigger. Lafergola appeared today before U.S. Magistrate Judge Lois H. Goodman and was detained without bail.
According to the documents filed in this case and statements made in court:
In the early morning of Oct. 5, 2014, law enforcement officers responded to a call from Lafergola’s residence, where they learned he allegedly pointed a handgun at another member of his household. It was learned that possessed 72 firearms – including 36 machine guns – and dozens of firearms components, ammunition, accessories, and manufacturing tools.
Of those 36 machine guns, 13 were found to be operational as automatic weapons, each of which was found to have been assembled out of separate components, including a machine gun receiver of unknown origin, including:
- A 9 mm Luger caliber, FBP M948-type firearm, 31 ½ inches long, bearing no serial number nor manufacturer’s marks of identification;
- A 9 mm Luger caliber, Suomi M31-type firearm, 34 inches long, and bearing no manufacturer’s marks of identification;
- A 7.62x25 mm caliber, M56-type firearm, 34 ½ long, bearing no serial number nor manufacturer’s marks of identification.
Lafergola also was found to be in possession of three short-barreled rifles, including one that had an obliterated serial number; two silencers; and items determined by local law enforcement to be non-smoke gunpowder, fuses, other materials that could be used to make explosive devices, and explosive devices.
U.S. Attorney Fishman credited special agents of the ATF, under the direction of Special Agent in Charge George P. Belsky, and the N.J. State Police, under the direction of Col. Rick Fuentes, superintendent, with the investigation leading to the charges. He also thanked the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni, for its role in the case.
The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the U.S. Attorney’s Office Criminal Division in Trenton.
The charge and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Evan Nappen Esq., Eatontown, New Jersey
Former Newark Watershed Conservation Official and Former Contractor Admit Roles in Bribery and Kickback SchemeRead the Press Release
NEWARK, N.J. – A former high-ranking employee of the Newark Watershed Conservation and Development Corp. (NWCDC) today admitted accepting $956,948 in kickback payments for his and the former executive director’s assistance in awarding work to contractors, U.S. Attorney Paul J. Fishman announced.
Donald Bernard Sr., 68, of West Orange, New Jersey, pleaded guilty before U.S. District Judge Jose Linares in Newark federal court to Counts 9 and 10 of a 20-count indictment returned in December 2014, charging him with the use of interstate facilities to promote and facilitate bribery in violation of the Travel Act, and Count 1 of an information that charges him with making and subscribing a false personal tax return for the 2009 tax year.
Separately before Judge Linares, Giacomo “Jack” DeRosa, 59, of Clinton Township, New Jersey, who was also previously indicted in December 2014, pleaded guilty today to Counts 4 through 6 of the indictment charging him with laundering a portion of $85,000 he provided to Bernard from January 2008 to August 2012 in connection with roofing work that Bernard facilitated for DeRosa with the NWCDC.
According to documents filed in these and other cases and statements made in court:
Bernard served as a consultant to the NWCDC (from 2008 to January 2010) and then as a salaried employee (from January 2010 to March 2013). From 2008 to March 2013, Bernard was part of a corrupt arrangement with former NWCDC Executive Director Linda Watkins Brashear to solicit $956,948 in cash kickbacks from certain NWCDC contractors in exchange for providing them work and other assistance. Bernard and Brashear facilitated NWCDC payments to contractors to fund cash kickbacks to themselves, knowing payments were inflated above the amount of any work performed. They knew that in numerous instances no work at all had been performed. Bernard and Brashear used their email accounts to facilitate this scheme.
Two contractors from whom Bernard and Brashear obtained substantial cash kickbacks were Jim P. Enterprises and New Beginnings Environmental Services, both companies hired to perform landscaping, snow removal, clean-up and sign-posting services, which were affiliated with Bernard but purportedly operated by James Porter. Bernard admitted receiving $409,823 in bribes and kickbacks from Porter’s companies, funded by inflated and fraudulently obtained payments from the NWCDC, during the period January 2008 to December 2012. Bernard also admitted receiving approximately $85,000 from Essex Home Improvements, a contracting company operated by DeRosa, during the period January 2008 to March 2013, which he received either directly or indirectly through companies Bernard controlled.
Bernard also admitted filing a U.S. Individual Income Tax Return, Form 1040, for tax year 2009, which did not include approximately $314,000 in unreported income he received in kickbacks.
Brashear pleaded guilty on Dec. 21, 2015, to devising a scheme to defraud the NWCDC as well as filing a false tax return by failing to report substantial income she received in connection with the kickback scheme. Among the approximately $1 million in kickbacks that Brashear admitted receiving were approximately $260,000 from James Porter and $27,000 from DeRosa. Porter pleaded guilty in January 2015 to conspiracy to defraud the NWCDC of honest services, money and property through the use of interstate wire transmissions, as well as tax evasion for his role in the kickback scheme.
DeRosa admitted that from January 2008 to August 2012 he provided Bernard with a stream of payments totaling approximately $85,000 for Bernard’s action and assistance in procuring NWCDC roofing work for DeRosa’s company. DeRosa provided these payments to Bernard either directly, or to Bernard’s consulting firm, or to a Newark-based civic organization run by Bernard, the African American Heritage Parade Committee. DeRosa also admitted to laundering $20,000 of the money by having it paid to Bernard indirectly through intermediaries in order to disguise DeRosa or Essex Home Improvements as the source of the funds. Two intermediaries DeRosa admitted to using to launder funds provided to Bernard included a subcontractor doing work for DeRosa’s company and James Porter.
The Travel Act charges to which Bernard pleaded guilty each carry a maximum potential penalty of five years in prison; the charge of filing a false tax return is punishable by a maximum potential penalty of three years in prison. Under the terms of the plea, the sentences on all three counts to which Bernard pleaded guilty shall run consecutively. All charges are also punishable by a fine of $250,000 or twice the amount of the pecuniary gain from the offense.
The money laundering counts to which DeRosa pleaded guilty each carry a maximum penalty of 20 years in prison and a maximum fine equal to the greatest of $500,000; twice the value of the property involved in the money laundering transactions; or twice the gain or loss resulting from the offense.
Sentencing for both defendants is scheduled for April 7, 2016.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Richard M. Frankel; IRS – Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Housing and Urban Development, Office of Inspector General, Newark office, under the direction of Special Agent in Charge Christina Scaringi, as well as criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s guilty pleas. U.S. Attorney Fishman also thanked the N.J. Office of the State Comptroller, under the direction of Acting State Comptroller Philip James Degnan, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Jacques Pierre, Mala Ahuja Harker, and Senior Litigation Counsel Leslie Schwartz of the U.S. Attorney’s Office Special Prosecutions Division.
Defense counsel:
Bernard: Thomas Ashley Esq., Newark
DeRosa: Anthony Pope Esq., Newark
Decavalcante Crime Family Associate Gets Six Years in Prison for Cocaine Distribution, Planning A Prostitution BusinessRead the Press Release
NEWARK, N.J. – An associate of the DeCavalcante crime family of La Cosa Nostra was sentenced today to 72 months in prison for selling 1,915 grams of cocaine, planning a prostitution operation and possessing a 12-gauge shotgun as a convicted felon, U.S. Attorney Paul J. Fishman announced.
Anthony Stango, 34, of Brick, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with conspiracy to distribute 500 grams or more of cocaine, use of the telephone in interstate commerce to promote a prostitution operation and possession of a firearm by a convicted felon. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Stango was arrested March 12, 2015, as part of a sweep of 10 members of the DeCavalcante crime family, which operated in New Jersey and elsewhere. The crime family engaged in numerous offenses, including fraud, distribution of controlled substances, prostitution, gambling, the sale of stolen and contraband goods, murder, assault, extortion, and other crimes of violence.
Stango admitted conducting a drug operation that, on eight separate occasions from December 2014 to March 2015, sold a total of 1,915 grams of cocaine to an undercover law enforcement officer. During that same time period, Stango worked to set up a prostitution operation in New Jersey. Recorded conversations reflected discussions he had with a conspirator (identified as “CS”) who at the time was living in Nevada. Stango advised CS that he had already talked to one or more prostitutes about the details of the operation, their fees and the conditions under which the women would be providing services. Stango also admitted possessing an H&R Pardner 12-gauge pump action shotgun while being a convicted felon.
In addition to the prison term, Judge Walls sentenced Stango to serve five years of supervised release.
U.S. Attorney Fishman credited the members of the FBI’s Organized Crime Task Force under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; the Bayonne Police Department, under the direction of Chief Drew Niekrasz; and the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem, with the investigation leading to today’s sentencing. He also thanked the FBI’s Las Vegas office and the Union County Prosecutor’s Office for their roles in the investigation.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Defense counsel: Gary Mizzone Esq., Little Falls, New Jersey
Bergen County, New Jersey, Man Sentenced to Three Years in Prison for Failing to Register as A Sex OffenderRead the Press Release
NEWARK, N.J. – A Teaneck, New Jersey, man was sentenced today to 36 months in prison for failing to register as a sex offender when he moved to New Jersey in the fall of 2013, U.S. Attorney Paul J. Fishman announced.
Richard Joseph, a/k/a “Richard Beltre,” a/k/a “Joseph Richards,” a/k/a “Aaron Joseph,” 43, who is classified as a Tier III sex offender in New York, was previously convicted of one count of failing to register or update a registration as required by the Sex Offender Registration and Notification Act (“SORNA”). Joseph was convicted following a bench trial before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court.
SORNA requires that all sex offenders who, among other things, travel in interstate or foreign commerce, must register as a sex offender and keep that registration current in each jurisdiction where the sex offender resides.
According to documents filed in this case and the factual stipulations presented at trial:
Joseph was required to register as a sex offender due to his 2002 conviction in New York for rape in the third degree. He first registered as a sex offender in New York using the alias “Richard J. Beltre” in 2006 and knew that he was required to register as a sex offender every time he changed his address. However, when Joseph was released from the custody of the N.Y. State Department Correctional Services in 2013, he failed to report as directed by the N.Y. State Division of Parole and a warrant was issued for his arrest. He was eventually arrested on Oct. 11, 2013, having lived in Bergen County since Sept. 7, 2013. During that time, Joseph failed to register as a sex offender in New Jersey.
In addition to the prison term, Judge Wigenton sentenced Joseph to serve three years of supervised release.
U.S. Attorney Fishman credited the U.S. Marshals Service, under the direction of U.S. Marshal Juan Mattos, Jr., and the U.S. Marshals Service New York/New Jersey Regional Fugitive Task Force with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorneys Sara F. Merin and Jane H. Yoon of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Timothy Donohue Esq., West Orange, New Jersey
Two Monmouth County, New Jersey, Members of Drug Trafficking Organization Each Sentenced to More Than 20 Months in PrisonRead the Press Release
TRENTON, N.J. – Two Monmouth County men were sentenced to prison today for their roles in a large-scale drug trafficking organization that distributed heroin in Ocean and Monmouth counties, U.S. Attorney Paul J. Fishman announced.
Tyshon Young, a/k/a “Young Money,” a/k/a “Young Boy,” 30, of Asbury Park, New Jersey, and Matthew Miller, a/k/a “Star,” 41, of Neptune, New Jersey, were sentenced to 21 and 36 months in prison, respectively. Young and Miller previously pleaded guilty before U.S. District Judge Peter G. Sheridan to separate informations charging them with one count of conspiracy to distribute heroin. Judge Sheridan imposed both sentences today in Trenton federal court.
To date, 20 alleged members or affiliates of the “Britt-Young Drug Trafficking Organization” – so named after its leaders, Robert Britt and Rufus Young, in the criminal complaint – have pleaded guilty to narcotics offenses.
According to documents filed in this case and statements made in court:
Between February 2013 and March 2014, Tyshon Young conspired with Rufus Young and others to distribute heroin in Ocean and Monmouth counties. Tyshon Young admitted distributing between 40 and 60 grams of heroin in furtherance of the conspiracy. Miller admitted that, between February 2013 and March 2014, he agreed to store between 40 and 60 grams of heroin at his residence for use in the distribution conspiracy.
In addition to the prison terms, Judge Sheridan sentenced Young and Miller to each serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
The allegations in the complaint against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Defense Counsel:
Young: James R. Murphy Esq., Princeton, New Jersey
Miller: Charles Edward Waldron Esq., Lawrenceville, New Jersey
New York Health Care Professional Sentenced to Prison; Another Pleads Guilty in Connection with Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A physician’s assistant was sentenced to prison, and a doctor admitted taking bribes in connection with a long-running and elaborate test referral scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced today.
Leonard Marchetta, 49, of Staten Island, New York, a physician’s assistant who previously pleaded guilty to one count of accepting bribes, was sentenced to 42 months in prison. Bret Ostrager, 50, of Woodbury, New York, a doctor with practices in Nassau County, New York, pleaded guilty to Count One, Count Two and Count Five of an indictment charging him with conspiracy to violate the Anti-Kickback Statute and the Federal Travel Act by accepting bribes, one substantive violation of the Anti-Kickback Statute, and one substantive violation of the Federal Travel Act. Both the sentencing and plea hearing took place today before U.S. District Judge Stanley R. Chesler in Newark federal court.
Marchetta and Ostrager are two of the 39 people – 26 of them doctors – who have pleaded guilty in connection with the bribery scheme, which its organizers have admitted involved millions of dollars in bribes and resulted in more than $100 million in payments to BLS from Medicare and various private insurance companies. It is believed to be the largest number of medical professionals ever prosecuted in a bribery case. The investigation has to date recovered more than $12 million through forfeiture.
According to documents filed in this case and statements made in court:
Marchetta previously admitted that he accepted bribes in return for referring patient blood specimens to BLS and was paid approximately $3,000 per month. Marchetta’s referrals generated approximately $660,000 in lab business for BLS.
Ostrager admitted today that, between February 2011 and April 2013, he received monthly cash bribes of approximately $3,300 from BLS employees and associates. He periodically solicited and received from the BLS employees and associates tickets and meals that cost thousands of dollars. These additional bribes in response to specific requests from Ostrager included tickets to a New York Mets baseball game, a New York Knicks basketball game, a Katy Perry concert, a Justin Bieber concert, and the Broadway show “Newsies.” In exchange, Ostrager referred patient blood samples to BLS. Ostrager’s referrals generated approximately $909,000 in lab business for BLS.
Each count to which Ostrager pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. His sentencing is scheduled for March 29, 2016.
In addition to the prison term he received today, Marchetta must serve three years of supervised release and forfeit $72,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; 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 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 $640 million 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:
Marchetta: Leo Duval Esq., Staten Island
Ostrager: Marc Agnifilo Esq., New York
Member of Grape Street Crips Street Gang Sentenced to Five Years in Prison; Two Other Members Plead Guilty to Drug Trafficking ChargesRead the Press Release
NEWARK, N.J. – A member of the New Jersey set of the Grape Street Crips gang was sentenced today to 60 months in prison for conspiring to distribute crack-cocaine, and two other members of the gang have pleaded guilty to drug trafficking charges, U.S. Attorney Paul J. Fishman announced.
Willie Brooks, a/k/a “Animal,” 24, was sentenced by U.S. District Judge José Linares in Newark federal court for conspiring to distribute crack-cocaine. Max LaRue, a/k/a “Max,” 26, pleaded guilty today before Judge Linares to an information charging him with one count of conspiracy to distribute crack-cocaine. On Dec. 21, Tyquan Clark, a/k/a “Tah,” 29, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to Count 21 of the third superseding indictment charging him with engaging in a continuing criminal enterprise.
According to documents filed in these cases and statements made in court:
The Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark. Clark and other members of the gang, including 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;” Jamar Hamilton, a/k/a “Gunner,” a/k/a “Jamaal A. Hamilton;” and Rashan Washington, a/k/a “Shoota,” operated a continuing criminal enterprise in the area of 6th Avenue and North 5th Street in Newark. The enterprise allegedly sold crack-cocaine to other distributors of the drug, including other members of the gang. Brooks and LaRue were two distributors who were members of the gang and obtained crack-cocaine from the criminal enterprise.
To protect their gang and drug territory, the Grape Street Crips used “community guns” that were easily accessible to gang members. Law enforcement agents seized numerous firearms, including a .410-caliber assault rifle, a .45-caliber Thompson semi-automatic carbine, a 7.62-caliber assault rifle, and numerous semi-automatic handguns.
In addition to the prison term, Judge Linares sentenced Brooks to five years of supervised release.
The conspiracy to which LaRue pleaded guilty carries a statutory mandatory minimum punishment of five years in prison and a maximum of 40 years in prison, and a maximum fine of $5 million. His sentencing is scheduled for April 6, 2016. The charge to which Clark pleaded guilty carries a statutory mandatory minimum term of 20 years in prison and a maximum of life in prison, and a maximum fine of $2 million. He is scheduled to be sentenced on March 28, 2016.
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 Richard M. Frankel, for the investigation leading to the charges. He also thanked prosecutors and detectives of the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, police officers and detectives of the Newark Police Department, under the direction of Acting Public Safety Director Anthony 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, Elizabeth M. Harris, and Barry A. Kamar of the Criminal Division in Newark.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF) and the FBI’s Safe Streets Task Force, a partnership between federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering organizations and those primarily responsible for the nation’s illegal drug supply.
Defense counsel:
Brooks: John P. McDonald Esq. Somerville, New Jersey
LaRue: Michael J. Pappa Esq., Hazlet, New Jersey
Clark: Howard Brownstein Esq., Union City, New JerseyTwo Hudson County, New Jersey, Ms-13 Gang Members Charged with Conspiring to Kill Suspected WitnessRead the Press Release
NEWARK, N.J. – Two Hudson County, New Jersey, men appeared in federal court today to face charges that they conspired to kill a gang member who was suspected of cooperating with law enforcement, U.S. Attorney Paul J. Fishman announced.
Juan Pablo Escalante-Melgar, a/k/a “Humilde,” 26, and Elmer Cruz-Diaz, a/k/a “Locote,” 27, both of Union City, New Jersey, are charged in a one-count criminal complaint with conspiring to kill an individual to prevent them from communicating with a law enforcement officer. Escalante-Melgar and Cruz-Diaz made their initial appearances this afternoon before U.S. Magistrate Judge James B. Clark III and were detained. Both were originally taken into custody on Sept. 3, 2015 for immigration charges.
According to the complaint:
Escalante-Melgar and Cruz-Diaz are members of the international street gang Mara Salvatrucha, commonly known as “MS-13.” Multiple sub-sets, or “cliques,” of MS-13 operate in Hudson County including Pinos Locos Salvatrucha (the “Pinos clique”) and Hudson Locotes Salvatrucha (the “Hudson Locotes clique”). Escalante-Melgar was the “First Word,” or leader, of the Pinos clique; Cruz-Diaz was the First Word of the Hudson Locotes clique.
MS-13’s rules strictly prohibit cooperating with law enforcement, and it is well understood within the gang that police informants will be punished by death. The process of obtaining authorization to kill a disobedient gang member is known as “green lighting.” Obtaining a “green light” typically requires the authorization of a clique leader and, in some cases, approval from gang leaders in California or El Salvador. When preparing to kill disloyal or disobedient gang members, MS-13 often assigns gang members to follow the targeted individuals to learn their patterns and movements, enabling the gang to carry out the murders at opportune times without alerting law enforcement.
On Aug. 11, 2015, law enforcement intercepted a telephone call between a high-ranking MS-13 member in El Salvador (“Gang Leader-1”), Escalante-Melgar and another MS-13 member. During the call, Gang Leader-1 told Escalante-Melgar and the other MS-13 member that they needed to kill three individuals, including Victim-1, a member of the Hudson Locotes clique who was suspected of cooperating with law enforcement.
Four days later, on August 15, 2015, law enforcement intercepted a telephone call between Cruz-Diaz and another MS-13 member. During that call, Cruz-Diaz confirmed that senior MS-13 members in El Salvador had authorized the green lighting – or murder – of Vicitm-1, and went on to state that the gang would likely assign members of another MS-13 clique to “watch” Victim-1 in preparation for the killing.
On the evening of Aug. 16, 2015, Escalante-Melgar spoke by telephone with another MS-13 member and confirmed that four individuals, including Victim-1, had been green lighted. Escalante-Melgar explained to the other MS-13 members that the gang would take its time carrying out the murders in order to prevent gang members from being arrested.
On the evening on Aug. 31, 2015, Cruz-Diaz and Escalante-Melgar had separate telephone conversations with another member of MS-13. During the calls, the MS-13 member informed Cruz-Diaz and Escalante-Melgar that he had seen Victim-1 on the street in Union City, New Jersey.
Cruz-Diaz ordered the MS-13 member to follow Victim-1 to see what time Victim-1 left and returned home. Cruz-Diaz informed the caller that another MS-13 member had previously been assigned to follow Victim-1. Escalante-Melgar likewise ordered the caller to follow Victim-1, and instructed the caller to contact Escalante-Melgar with developments.
The conspiracy charge carries a maximum potential penalty of life in prison and a $250,000 fine.
The charge and allegations in the complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, ICE’s Enforcement and Removal Operations (ERO), under Newark Field Office Director John Tsoukaris, and the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s charges. He also thanked the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, the Union City Police Department, and the West New York Police Department for their work on the case.
The government is represented by Assistant United States Attorneys James Donnelly and Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark as well as Trial Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section.
Defense Counsel:
Escalante-Melgar: Leigh-Anne Mulrey Esq., Newark
Cruz-Diaz: Perry Primavera Esq., Hackensack, New Jersey
Las Vegas Investment Adviser Indicted in $30 Million Microcap Stock Manipulation SchemeRead the Press Release
NEWARK, N.J. – A federal grand jury today indicted a Las Vegas investment adviser for allegedly accepting hundreds of thousands of dollars in cash kickbacks in return for his assistance in getting his clients to purchase microcap stocks that were the subject of a stock market manipulation scheme, U.S. Attorney Paul J. Fishman announced.
Donald S. Toomer, 44, of Henderson, Nevada, is charged by indictment with one count of conspiracy to commit securities fraud and investment adviser fraud, two counts of securities fraud, and two counts of investment adviser fraud.
According to the indictment:
Between 2008 and 2010, Toomer participated in an extensive “pump-and-dump” scheme in which he and others fraudulently inflated the prices of certain shares in order to sell them later at artificially inflated prices. The scheme involved four public companies: BioNeutral Group Inc. (BONU), NXT Nutritionals Holdings Inc. (NXTH), Mesa Energy Holdings Inc. (MSEH), and Clear-Lite Holdings Inc. (CLRH) (collectively, the “Target Companies”).
First, other conspirators obtained control over large blocks of the free trading shares of the Target Companies. Next, Toomer and others “pumped” the price of those shares by, among other things, engaging in manipulative trading of the stocks of the Target Companies and disseminating promotional materials encouraging others to purchase them. Finally, they “dumped” them by selling large volumes of the Target Companies’ stock to victim investors. The target companies’ stock price would then drop, resulting in losses to the victims.
As part of the scheme, Toomer caused his clients to purchase the stock of the Target Companies in order to create the false impression of market interest and demand in the stock of the Target Companies; build trading volume that would be attractive to potential investors who would later receive promotional materials about the stock; and generate income to fund the promotional campaigns that occurred in the later phases of the scheme.
Toomer made various material misrepresentations and omissions to his clients to obtain their authorization to buy the Target Companies’ stock in their brokerage accounts, including falsely representing that he had done independent research regarding the Target Companies. He also failed to disclose the cash payments or other compensation that he received in exchange for convincing his clients that the Target Companies were promising investments.
Over the course of the conspiracy, Toomer received hundreds of thousands of dollars in cash kickbacks from his conspirators’ illicit trading profits, none of which were disclosed to his investment advisory clients. Rather than providing investment recommendations and advice based upon the best interests of his clients, as he was legally required to do, Toomer allegedly made investment recommendations based on his own personal interests and those of his conspirators.
The scheme collectively generated over $30 million in illicit trading proceeds.
The conspiracy count with which Toomer is charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. The securities and investment adviser fraud counts each carry a maximum potential penalty of five years in prison and a $5 million fine.
The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.
The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against Toomer today.
On Dec. 15, 2015, Samuel DelPresto, 48, a stock promoter from Holmdel, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares to a one-count information charging him with conspiracy to commit securities fraud for his involvement in the scheme.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s indictment. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Andrew Calamari, for its assistance in this matter.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit in Newark.
Defense Counsel: Michael Critchley Esq., Roseland, New Jersey