District of New Jersey

NEWARK, N.J. – A lawyer who previously practiced in Jersey City, New Jersey, today admitted structuring approximately $200,000 in cash to avoid reporting requirements, U.S. Attorney Paul J. Fishman announced.

Magdy Fouad Anise, a/k/a “Michael Anise,” 52, of Aberdeen, New Jersey, pleaded guilty before U.S. District Judge William H. Walls in Newark federal court to Count Two of an indictment charging him with structuring.

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

Anise was an attorney at Anise & Anise, Attorneys at Law, located in Jersey City. From 2009 through 2011, Anise received cash kickbacks from doctors and others in exchange for personal-injury client referrals. In lieu of cash, Anise asked a doctor who gave him kickbacks to pay him with gold bars, give money to Anise’s church and pay Anise’s mortgage.

Anise admitted that from 2009 through 2012, he made cash deposits into five different bank accounts that he controlled in amounts less than $10,000, the amount that would have triggered the filing of a currency transaction report (CTR) with the IRS.

CTRs require disclosure of the identity of the individual who conducted the transaction and the individual or organization for whom the transaction was completed. Many individuals involved in illegal activities are aware of these reporting requirements and take active steps to cause financial institutions not to file CTRs in order to avoid detection of the movement of large amounts of U.S. currency. These steps are referred to as “structuring” and involve making multiple cash deposits or withdrawals in amounts of $10,000 or less on the same day or consecutive days in order to avoid CTR filings.

The charge of structuring cash transactions to avoid reporting requirements carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for June 22, 2016.

U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to today’s plea.

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: Roy Greenman Esq., Union

NEWARK, N.J. – Two East Orange, New Jersey, men are charged today with filing false federal income tax returns on behalf of inmates at the Essex County Correctional Facility (“Essex County Jail”) in order to fraudulently obtain income tax refunds that were used to pay for bail, lawyers, and other expenses, U.S. Attorney Paul J. Fishman announced.

Reginald Eaford, 45, and Winfred Moses, 48, are each charged by complaint with one count of conspiracy to defraud the United States and one count of aggravated identity theft. Both defendants are currently in custody. Moses will appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor. Eaford will appear on a date yet to be determined.

According to the complaint:

Eaford was an inmate at the Essex County Jail from approximately May 20, 2013 through Feb. 12, 2014. Law enforcement became aware that during his incarceration, Eaford deposited unusually large amounts of money into his inmate account. 

Through a review of the recorded telephone calls and records maintained by the Essex County Jail, law enforcement officers learned that Eaford, Moses, and others conspired to obtain social security numbers, dates of birth, and other information from inmates at the Essex County Jail.  Eaford and Moses would then generate false W-2 forms indicating that the inmates had earned income during the relevant tax year and that federal income tax had been withheld from their paychecks. Eaford and Moses would then file false federal income tax returns on behalf of the inmates and refund checks would be sent to the Essex County Jail or to Moses’s East Orange residence. The proceeds of the fraud were split among Eaford, Moses, and the relevant inmates.

According to interviews conducted by law enforcement of current and/or former inmates at the Essex County Jail, the fraudulent tax proceeds were used by inmates to pay for bail, lawyers, or other needs.

For example, on Nov. 2, 2013, Eaford placed a telephone call from the Essex County Jail to Moses. The call was recorded by the Essex County Jail. During the call, Eaford and Moses discussed the refund status for a tax return filed using a social security number belonging to an inmate at the Essex County Jail (“Inmate 1”).  IRS records indicate that Inmate 1’s 2013 tax return was filed electronically on March 18, 2014 by an individual using an IP address registered at Moses’s residence. In addition, Inmate 1’s 2013 tax return included a bogus W-2 form that claimed that Inmate 1 had earned $70,021 in wages, even though he had not received any W-2 form from any employer that year.

From Jan. 28, 2014 to April 22, 2014, 60 tax returns were filed in the same manner using an IP address registered at Moses’s residence, for a total of $368,557 in fraudulently-obtained tax refunds. The majority of those fraudulent tax returns were for current or former inmates of the Essex County Jail. Of the 60 tax returns, 24 listed Moses’s residence as the taxpayer’s address and 59 of the 60 tax returns contained W-2 forms that did not match IRS records.

The conspiracy charge carries a maximum potential sentence of five years in prison. The aggravated identity theft charges carry a mandatory sentence of two years in prison that must be served consecutively to the punishment imposed on the conspiracy charge.

U.S. Attorney Fishman credited special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, postal inspectors from the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge J.R. Ball, and the Internal Affairs Division of Essex County Jail, under the leadership of Warden Roy Hendricks, with the investigation leading to the charges.

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

The charges and the allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Defense counsel:        

Eaford: Assistant Federal Public Defender Lisa Mack Esq., Newark

Moses: Leigh-Anne Mulrey Esq., Morristown, New Jersey

NEWARK, N.J. – A Belleville, New Jersey, woman today admitted leading a conspiracy to illegally obtain and distribute oxycodone in New Jersey, U.S. Attorney Paul J. Fishman announced.

Victoria Horvath, 43, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an indictment charging her with conspiracy to distribute oxycodone.

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

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

Horvath admitted that, between Feb. 5, 2014 and Aug. 13, 2014, she personally went to various doctors’ offices and obtained prescriptions for pills containing oxycodone, had the prescriptions filled by various pharmacies, and sold the pills to members of the conspiracy and others. Horvath also drove other conspirators to specific doctors to obtain oxycodone prescriptions, assisted them in getting the prescriptions filled, and helped them sell the pills. 

For example, Horvath admitted that she, while working with multiple conspirators, sold 119 oxycodone pills to an undercover law enforcement officer in February 2014 in exchange for $2,020. Horvath also admitted to being an organizer and manager of the conspiracy.

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

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

Of the individuals originally charged with Horvath, Daniel Horvath, 27, Monica Horvath, 22, Johnny Horvath, 46, Tony Marco, 47, and Steven Horvath, 45, all of Rutherford, New Jersey, and Justin Farraj, 24, of Newark, New Jersey have pleaded guilty and await sentencing. Brian Perez, 23, was sentenced to a term of 40 months in prison in September 2014. Luis Rivera, 25, was sentenced to 54 months in prison in August 2015. Charges were dismissed against Belleville pharmacist Vincent Cozzarelli after his death in April 2014. The indictment remains pending against six other conspirators.

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

The government is represented by Assistant U.S. Attorney Sara F. Merin of the U.S. Attorney’s Office in Newark.

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

NEWARK, N.J. – The chief executive officer of a publicly traded microcap company made his initial court appearance in San Francisco today on charges he allegedly filed false reports with the U.S. Securities and Exchange Commission and made false statements in press releases and blog posts, U.S. Attorney Paul J. Fishman announced.

Cary Lee Peterson, 36, of Texas and Arizona, is charged by complaint with two counts of false certification and one count of securities fraud. FBI agents arrested Peterson March 13, 2016, at San Francisco International Airport when he arrived on an international flight. He is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph C. Spero in San Francisco federal court.

According to the complaint: 

Peterson, as CEO of RVPlus Inc., filed numerous false reports with the SEC, including:

• On Aug. 21, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $1.8 billion with the “Ministry of Environment for Katsina State Within the Federal Republic of Nigeria” to provide unspecified green energy products and services (the “Nigeria Agreement”);

• On Nov. 16, 2013, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $90 million with the “Commission of the Foreign Affairs to the Senate for the Republic of Haiti” (the “Haiti Agreement”);

• On Dec. 21, 2012, Peterson falsely certified on Form 10-Q for the quarter that ended Oct. 31, 2012 that RVPlus held $8,653,846 in short-term accounts receivable for services rendered under the Nigeria Agreement.He did so despite prior warnings from RVPlus’ auditors that reporting these receivables as revenue was improper;

• On Dec. 27, 2012, Peterson falsely certified on SEC Form 8-K that RVPlus had entered into a contract worth $10.5 million with the Federal Ministry of Planning & Economic Affairs for the Republic of Liberia (the “Liberia Agreement”);

• On March 28, 2013, Peterson falsely certified on SEC Form 10-Q for the quarter that ended on Jan. 31, 2013, that RVPlus held $17,590,837 in short-term accounts receivable from, among other sources, the Haiti and Liberia agreements.

The SEC suspended trading in RVPlus on July 19, 2013, due to questions concerning the accuracy of RVPlus’ periodic financial filings, including reported accounts receivable, assets, and operations.

In addition to the false SEC reports, Peterson also published false and misleading press releases and drafted blog posts under a phony name in which he touted the benefits of the Nigeria, Haiti, and Liberia agreements. 

Peterson also claimed that ECCO2 Corp., a not-for-profit owned by Peterson, had licensed certain intellectual property to RVPlus and that ECCO2 Corp. was an “affiliate organization” of the United Nations Convention on Climate Change. Peterson claimed that “[t]his status held with the sectors of the United Nations opens many windows of opportunity to over $100 billion in financial aid to fund ECCO2 projects.”  ECCO2 was never an “affiliate” of the U.N. Convention on Climate Change.  In fact, the U.N. wrote to Peterson on two separate occasions demanding that ECCO2 stop claiming that it was. 

Each count with which Peterson is charged carries a maximum penalty of 20 years in prison and a maximum fine of $5 million. The SEC also filed a civil complaint against Peterson today in New Jersey federal court in Newark alleging multiple counts of securities fraud. 

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 charges.  Mr. Fishman thanked special agents of the FBI, under the direction of Special Agent in Charge David J. Johnson, in San Francisco, and for their assistance with Mr. Peterson’s arrest.  He also thanked the Securities and Exchange Commission New York Regional office under the direction of Andrew M. Calamari, Regional Director. 

The government is represented by Assistant U.S. Attorney Jonathan M. Peck of the U.S. Attorney’s Office General Crimes Unit in Newark and Assistant U.S. Attorney Lloyd Farnham in San Francisco.

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

NEWARK, N.J. – A family physician with offices in Cresskill and Little Falls, New Jersey, was sentenced today to 37 months in prison for defrauding Medicare, Medicaid and private insurance companies out $280,000 by billing them for non-existent office visits, U.S. Attorney Paul J. Fishman announced.

Albert Ades, 61, of Englewood, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to Count One of an indictment charging him with health care fraud. Judge Salas imposed the sentence today in Newark federal court.

According to the documents filed and statements made in court:

From 2005 through June 2014, Ades, a licensed family medicine doctor who owns and operates Albert Ades M.D., P.A., fraudulently billed Medicare, Medicaid and various private payors for face-to-face physician office visits that never happened. Ades wrote prescriptions, authorized refills or performed other tasks without ever seeing those patients on the billed dates. Ades admitted that he altered patients’ medical charts by inserting fabricated blood pressure readings, other vitals and clinical notes on patients’ charts to make it appear as if they had visited Ades’s office on the billed dates.  

Ades admitted that, between 2009 and 2013, his scheme caused a loss of approximately $280,000 to federal health care benefit programs and private insurers.

In addition to the prison term, Judge Salas sentenced Ades to three years of supervised release and ordered him to forfeit $280,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi; U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and investigators with the U.S. Attorney’s Office with the investigation leading to today’s sentencing. U.S. Attorney Fishman also thanked the National Insurance Crime Bureau for their assistance with the investigation.

The government is represented by Assistant U.S. Attorneys Jane H. Yoon and Danielle M. Corcione of the U.S. Attorney’s Health Care and Government Fraud Unit in Newark.

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

Defense counsel: Alexander Spiro Esq., New York 

NEWARK, N.J. – An Elmont, New York, woman was arrested today for allegedly orchestrating a multi-pronged H-1B visa fraud scheme through her shell Newark-based company, Care Worldwide (CWW), U.S. Attorney Paul J. Fishman announced.

Raina Massey, 51, is charged by complaint with two counts of wire fraud, one count of visa fraud, and one count of aggravated identity theft.  She is scheduled to appear this afternoon before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.

According to the complaint:

Non-United States citizens must have some kind of authorization to work legally in this country.  H-1B visas are non-immigrant visas designed to allow U.S.-based employers to recruit and employ non-U.S. citizen professionals.  H-1B visas are employer, not employee, driven, and are only issued for a specified, limited duration for “specialty occupations.” 

Foreign workers admitted under the H-1B program are known as “beneficiaries” of the visas. To obtain an H-1B visa, an employer has to apply on behalf of the beneficiary and complete various forms required for the visa to be approved. One of those forms is U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services Form I-797C, which is used to memorialize, among other things, that an application for an H-1B visa has been successfully filed on behalf of an H-1B beneficiary and that the application has been vetted by the U.S. government. Beneficiaries do not have to pay any fees in connection with the visa application and are not responsible for finding their own employment.

From February 2012 through March 2015, Massey and others executed the fraud scheme through her company, CWW, which purported to be a clinical research company, but was actually a shell company that did little to no legitimate work of any kind. Massey and others sought out and advertised for qualified foreign professionals, purportedly to work for CWW in clinical research positions as beneficiaries of H-1B visas. These beneficiaries became victims of the scheme because the advertised positions did not actually exist.

For one set of victims, Massey engaged in “benching,” a form of fraud in which Massey and others falsely represented that the beneficiaries would have specialty technical jobs waiting for them upon their arrival at CWW. After taking illegal payments from these beneficiaries, Massey and others then completed applications for H-1B visas for these beneficiaries. However, when the beneficiaries arrived in the United States, Massey and others employed them in menial tasks, such as handing out flyers on street corners.

For a second set of victims, Massey and others, after illegally taking payments from the victims, never actually applied for H-1B visas. Massey and others provided these victims with false and fraudulent Form I-797Cs, which contained receipt numbers from other, previously filed, H-1B visa applications.

For a third set of victims, Massey and others, after illegally taking payments from the victims based on fraudulent representations regarding H-1B visas, never provided any documentation whatsoever to the victims.

In all cases, Massey and others demanded and took illegal payments from victims in exchange for purportedly filing H-1B visa applications on behalf of the victims.

Each wire fraud count carries a maximum penalty of 20 years in prison; the visa fraud count carries a maximum penalty of 10 years in prison; and the aggravated identity theft count carries a mandatory sentence of two years in prison, to run consecutive to any sentence imposed on any other count. Each count carries a potential fine of up to $250,000, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the U.S. Department of State, under the direction of Special Agent in Charge David Schnorbus of the New York Field Office, and investigators from the U.S. Attorney’s Office, under the direction of Supervisory Criminal Investigator Thomas Mahoney, for the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Zach Intrater, Chief of the Criminal Division’s General Crimes Unit.

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

TRENTON N.J. – A Mercer County, New Jersey, man is scheduled to make his initial court appearance today on charges that he distributed images of child sexual abuse, U.S. Attorney Paul J. Fishman announced.

Christopher Walsh, 31, of Yardville, New Jersey, a school bus driver, was arrested on the evening of March 10, 2016, and charged by complaint with three counts of distributing images or video files containing child pornography via e-mail.  He is due to appear later today before U.S. Magistrate Judge Douglas E. Arpert in Trenton federal court.

According to the criminal complaint:

From June 15, 2014, to Jan. 10, 2016, Walsh’s e-mail account either sent or received 1,590 files that contained images of child sexual abuse. On Oct. 19, 2014, Walsh e-mailed another person an image depicting child sexual abuse, stating that Walsh himself was depicted in the image.  From July 30, 2015, to Aug. 2, 2015, Walsh exchanged e-mails with another email user in which he stated that he liked young children, that he was babysitting for particular children of whom he hoped to get photographs and with whom he hoped to “play,” and that one of the children had Down’s syndrome. During the exchange, Walsh sent a video depicting child sexual abuse to the other user. 

Walsh also sent additional videos to another email account on Aug. 5, 2015, stating that he, Walsh, created one video and that the other video depicted a child he had met on a school trip.

Each count of distribution of child pornography carries a mandatory minimum penalty of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Molly S. Lorber and Elisa T. Wiygul of the U.S. Attorney’s Office Criminal Division in Trenton.

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

CAMDEN, N.J. – A Deptford, New Jersey, man today admitted robbing five New Jersey banks and one Pennsylvania bank between June 2015 and September 2015, U.S. Attorney Paul J. Fishman announced.

Michael A. Fanelli, a/k/a Michael Carducci, 36, pleaded guilty before U.S. District Judge Reneé Marie Bumb in Camden federal court to an information charging him with six counts of bank robbery.

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

Bank

Location

Date

Cornerstone Bank

West Deptford, New Jersey

June 2, 2015

Fulton Bank

Mullica Hill, New Jersey

June 5, 2015

Malvern Federal Savings Bank

Concordville, Pennsylvania

July 22, 2015

Susquehanna Bank

Mullica Hill, New Jersey

July 28, 2015

Susquehanna Bank

Mullica Hill, New Jersey

Aug. 21, 2015

National Penn Bank

Florence, New Jersey

Sept. 24, 2015

 

Fanelli typically robbed each bank by approaching a teller, displaying what appeared to be a firearm, and demanding money.

Fanelli robbed the same Susquehanna Bank on July 28, 2015 and August 21, 2015. Immediately following his robbery of National Penn Bank on Sept. 24, 2015, Fanelli was followed by law enforcement officers to his residence, where he was taken into custody. 

Each bank robbery count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is set for June 17, 2016.

U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge William F. Sweeney in Philadelphia, with the investigation leading to today’s plea. He also thanked the West Deptford, Harrison Township, and Florence Township police departments, as well as the Gloucester County Prosecutor’s Office and the Pennsylvania State Police for their assistance.

The government is represented by Assistant U.S. Attorney Justin C. Danilewitz of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel: Lisa Lewis Esq., Assistant Federal Public Defender

CAMDEN, N.J. – A former employee of The Vacation Ownership Group LLC was sentenced today to 15 months in prison for his role in conspiring to defraud owners of timeshare properties by offering phony consulting services, U.S. Attorney Paul J. Fishman announced.

Steven Cox, a/k/a “Steve Coluzzi,” 52, of Ventnor, N.J., pleaded guilty on May 7, 2013, before U.S. District Judge Noel Hillman to a superseding information charging him with one count of conspiracy to commit mail and wire fraud. Judge Hillman imposed the sentence today in Camden federal court.

According to documents filed in these cases and statements made in court:

The Vacation Ownership Group, a/k/a VO Group LLC, had offices in Mays Landing and Egg Harbor Township, New Jersey, and claimed to offer consulting services to owners of timeshares, including cancelling, purchasing and upgrading the timeshares.

In 2010, Cox and several co-defendants started working at the VO Group and were trained by VO Group managers to call customers using prepared scripts. The defendants gave the customers the false impression that they were working for a bank or lending institution. After hearing defendants’ false representations, some customers sent checks to the VO Group. Cox told one victim that the victim could settle his timeshare debt for a large discount by mailing a $26,585 check to the VO Group. Cox admitted causing more than $200,000 in losses.

In addition to the prison term, Judge Hillman sentenced Cox to three years of supervised release. Restitution will be determined at a future hearing.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident

Agency, under the direction of Acting Special Agent in Charge Andrew Campi in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region, for their roles in the investigation leading to the guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.

The government is represented by Assistant U.S. Attorney R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel: Jeffrey M. Miller Esq., Philadelphia

TRENTON, N.J. - A Florida man today admitted trading on material, nonpublic information concerning Gilead Sciences Inc.’s $11 billion acquisition of New Jersey-based Pharmasset Inc., U.S. Attorney Paul J. Fishman announced.

Jay Fung, 42, of Delray Beach, Florida, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with conspiracy to commit securities fraud.

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

In November 2011, a conspirator who worked at a global wealth management firm learned that Pharmasset was going to be sold for a significant profit per share. On Nov. 18, 2011, the conspirator passed the inside information to Fung, who then purchased call options and shares of Pharmasset.

On Nov. 21, 2011, Gilead publicly announced that it had entered into an agreement to acquire Pharmasset for approximately $11 billion, or $137 per share in cash. The purchase price represented an approximately 89 percent premium over Pharmasset’s closing price of $72.67 on Nov. 18, 2011.

Following the public announcement of Gilead’s acquisition of Pharmasset, Fung sold the Pharmasset shares and options he had purchased on Nov. 18, 2011, for total illegal profits of more than $250,000.

Fung faces a maximum penalty of five years in prison and a $250,000 fine, or twice the profits from the offense. Per his plea agreement, Fung must also consent to the entry of a forfeiture money judgment in the amount of $345,245. Sentencing is set for June 20, 2016.

The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against Fung today.

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 plea. He also thanked the SEC for the assistance provided by its Market Abuse Unit, under the direction of Joseph Sansone and Robert Cohen, and its Philadelphia Regional Office, under the direction of Sharon Binger.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit.

Today’s plea is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov

Defense counsel:  Jeffrey L. Cox, Boca Raton, Florida                                                                                                                                                               

NEWARK, N.J. – The Justice Department announced the launch of “Combating Religious Discrimination Today,” a new interagency community engagement initiative designed to promote religious tolerance, challenge religious discrimination and enhance enforcement of religion-based hate crimes.  The Justice Department’s Civil Rights Division, in partnership with other federal agencies, is hosting a series of community roundtables across the country that focus on protecting people and places of worship from religion-based hate crimes; combating religious discrimination, including bullying, in education and employment; and addressing unlawful barriers that interfere with the construction of places of worship.

The inaugural roundtable is taking place today at the U.S. Attorney’s Office in Newark and is focusing on addressing bullying and religious discrimination in schools. It will examine how students encounter bullying and harassment based on their actual or perceived religion, as well as discrimination based on religious clothing, holidays and expression.

Subsequent roundtables will focus on a variety of related topics, including a discussion in Dallas that will center on preventing and prosecuting religion-based hate crimes targeting individuals and houses of worship; a meeting in Birmingham, Alabama, that will examine religious discrimination in employment; and a convening in Detroit that will address discrimination by local zoning officials against congregants seeking to build places of worship.  The final roundtable will also concentrate on bullying and religious discrimination in schools and will take place in Palo Alto, California.

“Protecting the rights of everyone to worship as they choose is fundamental to our way of life,” U.S. Attorney Paul J. Fishman, District of New Jersey, said. “Our office has worked with our law enforcement partners to enhance and maintain connections with the many communities of faith that exist in a state as diverse as New Jersey. The discussions that we’re kicking off here today are a natural extension of that work, and I look forward to continuing this important dialogue with all of our partner agencies and the people we represent.”

“Hate-motivated violence, harassment and discrimination violate America’s laws and threaten our founding vision of a free and tolerant society that welcomes people from every creed and walk of life,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “Robust community engagement and meaningful dialogue can help our country fulfill its promise of religious freedom, and we look forward to tackling this challenging work with creative solutions in the months ahead.”

Agencies participating in the new initiative include the Departments of Education, Homeland Security (DHS) and Labor (DOL); the Equal Employment Opportunity Commission (EEOC); and within the Justice Department, the Civil Rights Division, FBI, Office of Justice Programs, Executive Office for U.S. Attorneys and Community Relations Service.  Agency officials will facilitate the roundtable discussions to help identify key priorities and lead robust dialogue with community members and civil rights advocates.

“We are eager to continue partnering with our federal colleagues to address bias and discrimination in our nation’s schools, and to continue our strong enforcement of federal civil rights laws to ensure that all students can learn in safe school environments,” said Catherine E. Lhamon, Assistant Secretary for Civil Rights at the Department of Education.

“Since DHS was established, we have worked closely with communities across the country to combat intolerance and ensure safety at houses of worship,” said Officer Megan H. Mack of the DHS Office for Civil Rights and Civil Liberties.  “Ensuring the protection of uniquely American rights and liberties is a fundamental part of DHS’s mission to build safe and resilient communities.  We look forward to expanding our already extensive engagement with communities by working closely with our federal partners on this effort.”

“A diverse and inclusive workplace reflects the strength and richness of America and its history,” said Director Patricia Shiu of the DOL Office of Federal Contract Compliance Programs.  “Built by immigrants from every corner of the world, our nation’s greatness must not be diminished by unlawful religious discrimination.  The Department of Labor welcomes the opportunity to collaborate with our federal partners on this important issue.”

“Our nation was founded on the principles of tolerance and equality,” said Jenny R. Yang, EEOC Chair.  “Working with our federal and community partners enables EEOC to better understand and address religious discrimination in the workplace, and to inform affected communities of protections under federal law.” 

The new initiative supplements the department’s long-standing criminal and civil enforcement efforts to prevent religious discrimination and religion-motivated hate crimes.  Since the 9/11 terrorists attacks, the department has investigated more than 1,000 incidents involving acts of violence, threats, assaults, vandalism and arson targeting diverse religious and ethnic groups, prosecuting dozens of these cases to the fullest extent of the law.  The Civil Rights Division, often in close partnership with other federal agencies, also utilizes civil enforcement to combat religious discrimination and protect religious freedom.  This includes preventing religious discrimination in education, through Title IV of the Civil Rights Act of 1964, and in employment, through Title VII of the Civil Rights Act of 1964.  In addition, the division enforces the Religious Land Use and Institutionalized Persons Act, which protects individuals, houses of worship and other religious institutions from discrimination in zoning and landmarking laws.  For more information about the new initiative, please email [email protected].  Additionally, EEOC is posting a ‘What You Should Know’ document today on its homepage, www.eeoc.gov, compiling EEOC’s resources regarding religious and national origin-based discrimination.

NEWARK, N.J. – A family doctor practicing in Bergen County, New Jersey, was charged today with accepting bribes in exchange for test referrals as part of a long-running and elaborate scheme operated by Biodiagnostic Laboratory Services LLC (BLS), of Parsippany, New Jersey, its president and numerous associates, U.S. Attorney Paul J. Fishman announced.

Bernard Greenspan, 78, of Saddlebrook, New Jersey, was indicted by a federal grand jury in Newark. The 10-count indictment charges Greenspan with one count of conspiring to commit violations of the Anti-Kickback Statute, the Federal Travel Act and wire fraud; three substantive violations of the Anti-Kickback Statute; three substantive violations of the Federal Travel Act; and three substantive violations of wire fraud. Greenspan will be arraigned at a later date.             

“The charges contained in the indictment allege an extremely lucrative pattern of soliciting and accepting illegal payments for referrals to a specific testing lab,” said U.S. Attorney Fishman. “This indictment is part of our continued commitment to prosecute those physicians who sought to enrich themselves through their involvement in the BLS bribery scheme.”

“The FBI, in conjunction with our law enforcement partners, the U.S. Department of Health and Human Services’ Office of Inspector General, the Internal Revenue Service, and the U.S. Postal Inspection Service, will continue to investigate allegations of fraud and kickback schemes that undermine the integrity of our health care system," stated Acting Special Agent in Charge Andrew Campi. "We urge anyone aware of this type of illegal activity to contact the FBI.”

“This indictment is another reminder that kickbacks in connection with federal health care programs are illegal and unacceptable,” said Scott J. Lampert, Special Agent in Charge, Office of Inspector General, U.S. Department of Health and Human Services. “Taking such payments subverts the notion that patients should come before profits.”

To date, 39 people – 26 of them doctors – 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 recovered more than $11.5 million through forfeiture.

According to the indictment:

Between March 2006 and April 2013, Greenspan received approximately $200,000 in bribes from BLS employees and associates. Greenspan periodically solicited, and received from the BLS employees and associates, monthly bribe payments in the form of sham rental, service agreement, and consultant payments. Greenspan solicited and received other bribes, including payment for holiday parties for Greenspan and his office staff. BLS hired – at Greenspan’s specific request – a patient of Greenspan’s with whom he was having a sexual relationship. Greenspan’s referrals generated approximately $3 million in lab business for BLS.

Greenspan is the second physician to be indicted in connection with the BLS bribery scheme. Brett Ostrager was indicted on Aug. 11, 2015, and pleaded guilty on Dec. 22, 2015, after his motion to dismiss the indictment was denied by Judge Chesler. He is awaiting sentencing. 

Each of the Anti-Kickback and Federal Travel Act counts carries a maximum potential sentence of five years in prison; each of the wire fraud counts carries a maximum potential penalty of 20 years in prison. All of the counts carry a maximum $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and HHS-OIG Special Agent in Charge Lampert.

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

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

Defense counsel: Damian Conforti Esq., Newark, NJ

NEWARK, N.J. – A self-employed loan broker today admitted using bogus documents and simultaneous applications at multiple banks to fraudulently obtain home equity lines of credit, resulting in losses of $1.3 million, U.S. Attorney Paul J. Fishman announced.

Sung Ho Mo, a/k/a “Douglas Mo,” 53, of Totowa, New Jersey, pleaded guilty  before U.S. District Judge Katharine S. Hayden to an information charging him with conspiracy to commit bank fraud.  He was previously arrested on Aug. 4, 2015 and released on bail.

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

Mo was the primary owner and operator of “Douglas Mo Mortgage,” a mortgage brokerage business in New Jersey. From 2005 through January 2014, Mo conspired with others, including a tax preparer, to fraudulently obtain home equity lines of credit and first mortgages.

As part of the scheme, Mo fraudulently obtained multiple home equity lines of credit from multiple banks, using his primary and secondary residences in Totowa as collateral for the loans. To trick the banks into issuing the lines of credit, Mo first engaged in a practice that he described as “shotgun loans,” in which he applied for several home equity lines of credit with multiple banks at the same time.  By engaging in this practice, Mo thwarted the banks’ efforts to learn of security interests held by other banks on his homes. 

Second, Mo falsely inflated his income by paying a tax preparer  to produce false documents, including bogus W-2 forms, federal income tax returns and paystubs. Mo then submitted the fraudulent documents to the banks in support of his loan applications. After receiving home equity lines of credit, Mo used the proceeds for his own benefit and then defaulted on the loans. In addition, Mo obtained first mortgages for his clients using the same fraudulent scheme.

At sentencing, Mo faces a maximum potential penalty of 30 years in prison, a $1 million fine, and will be ordered to pay restitution. Sentencing is scheduled for June 13, 2016. 

U.S. Attorney Fishman praised agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, for the investigation leading to today’s plea.

The government is represented by Assistant U.S. Attorney Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.

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

TRENTON N.J. – A Middlesex County, New Jersey, man today admitted shoplifting Barnes and Noble merchandise, selling the goods on eBay and failing to report the illicit proceeds to the IRS, U.S. Attorney Paul J. Fishman announced.

Dominick James Izzo, 49, of Piscataway, New Jersey, and Port Orange, Florida, pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of transportation of stolen goods and one count of tax evasion.

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

Izzo admitted that he stole merchandise from Barnes & Noble stores in New Jersey, Florida and elsewhere using a “booster bag” lined with aluminum 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.

For the tax years 2009, 2010 and 2011, Izzo admitted he intentionally failed to report $399,485 in income he received in connection with the sale of stolen merchandise from Barnes & Noble and other businesses. As a result, Izzo owed the government approximately $67,360.

The transportation of stolen goods count to which Izzo pleaded guilty is punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine. The tax evasion count carries a maximum potential penalty of five years in prison and $250,000 fine. Sentencing is scheduled for June 10, 2016.  

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 leading to today’s plea.

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.

NEWARK, N.J. – A Romanian citizen today admitted orchestrating an international hacking scheme targeting retailers, security companies, medical offices and individuals in the United States, U.S. Attorney Paul J. Fishman announced.

Mircea-Ilie Ispasoiu, 30, of Drobeta-Turnu Severin, Romania, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to Count One and Count Seven of an indictment charging him with wire fraud and aggravated identity theft.

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

From August 2011 through February 2014, Ispasoiu was employed as computer systems administrator at a large financial institution in Romania. Ispasoiu’s scheme involved hacking networks belonging to retailers, security companies, medical offices and individuals in order to steal user names and passwords, personal identifiers and credit and debit card data. Ispasoiu also gained access to a computer at a large security company that ran background checks on job applicants. Ispasoiu stole the applicants’ personal identifying information, including their fingerprints.

The wire fraud charge to which Ispasoiu pleaded guilty carries a maximum potential penalty of 20 years in prison. The aggravated identity theft charge carries a mandatory two-year term of imprisonment to run consecutive to any other sentence. Both charges carry a $250,000 fine, or twice the gross gain or loss from the offenses. Sentencing is set for June 29, 2016.

U.S. Attorney Fishman credited the special agents of the U.S. Secret Service, Newark Field Office, under the direction of Acting Special Agent in Charge Jeffrey Wood, with the investigation leading to the plea. U.S. Attorney Fishman also thanked the Justice Department’s Office of International Affairs in Washington, as well as the Prosecutor’s Office attached to the High Court of Cassation and Justice in Romania and its law enforcement partners, for their support.

The government is represented by Assistant U.S. Attorney Daniel Shapiro of the Computer Hacking and Intellectual Property Section of the Office’s Economic Crimes Unit.

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

NEWARK, N.J. – A Polish citizen living in Garfield, New Jersey, was arrested this morning by U.S. Marshals as a result of an extradition request related to his alleged involvement in a 1996 murder in Poland, U.S. Attorney Paul J. Fishman announced.

Rafal Kaldon, 38, is charged by complaint with being a fugitive from a foreign county. He appeared this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court and was detained.

According to the complaint:

Pursuant to a treaty with the United States, the government of Poland submitted a formal request through diplomatic channels for Kaldon’s extradition.

On the evening of Aug. 25, 1996, Kaldon and an accomplice allegedly entered a disco in Poland, walked up to a man, and without speaking to him, began to beat him until he collapsed to the floor. Afterwards, they continued to kick and beat him. Witnesses in the disco attempted to resuscitate the victim, but he was pronounced dead at the scene. Kaldon allegedly retrieved his passport and cash from his sister immediately after the attack and fled Poland.

U.S. Attorney Fishman credited U. S. Marshals, under the direction of U.S. Marshal Juan Mattos in Newark, with the arrest of Kaldon after being a fugitive from Poland for almost 20 years.

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

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

NEWARK, N.J. – A former registered representative of a broker-dealer offering investment products and services, including variable life insurance and annuities, was sentenced today to 33 months in prison for using his position to steal more than $650,000 from the company’s clients, U.S. Attorney Paul J. Fishman announced. 

Kwen Y. Chun, 59, of Midland Park, New Jersey, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of mail fraud. Judge Wigenton imposed the sentence today in Newark federal court.

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

From September 1998 through June 2014, Chun was employed by the company as a registered agent, with authority to assist clients with withdrawing funds from annuities, applying for deferred annuities, and processing loan requests. Chun diverted funds that belonged to at least eight clients to bank accounts under his control and converted those funds to his own use.      

Chun opened a bank account in the name of one client, using the client’s identification without the client’s knowledge or permission. Based upon false representations to the company that the client was requesting withdrawals and loans, Chun caused the company to wire monies from the client’s insurance policies and annuity accounts into the phony account. Chun also admitted that he caused the company to mail numerous checks to his Midland Park residence based upon false representations to the company that at least three other clients had requested to take loans on their insurance policies, which he then deposited into accounts under his control.

Chun admitted to causing other clients to obtain loans from company insurance policies, or to provide him with checks and cash, which Chun falsely advised he would use to open investment accounts on behalf of those clients. Instead, Chun deposited those loan proceeds into bank accounts under his control. He admitted that he provided one of the company’s clients with fabricated statements that purported to show the interest and balance in the client’s fictitious investment account. Chun also provided two other clients with paperwork that purported to illustrate the benefits that they would receive for their alleged annuity investment.

In addition to the prison term, Judge Wigenton ordered Chun to serve two years of supervised release and pay $530,418.34 in restitution.

U.S. Attorney Fishman praised inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; criminal investigators with the U.S. Attorney’s Office in Newark; the N.J. Bureau of Securities, Office of the N.J. Attorney General, under the direction of Acting Attorney General John J. Hoffman; and the Bergen County Prosecutor’s Office, under the direction of Prosecutor Acting Prosecutor Gurbir S. Grewal, for the investigation leading to today’s sentencing.    

The government is represented by Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office Economic Crimes Unit and Assistant U.S. Attorney Peter Gaeta of the U.S. Attorney’s Office Asset Forfeiture and Money Laundering Unit in Newark.

Defense counsel: Joshua P. Cohn Esq., Saddle Brook, New Jersey

CAMDEN, N.J. – A Cumberland County, New Jersey, woman today admitted her role in a conspiracy to boost business at a tax preparation company she operated by preparing bogus income tax returns for her clients, U.S. Attorney Paul J. Fishman announced.

Noemi Pender, 57, of Rosenhayn, New Jersey, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to Count One of an indictment charging her with conspiring to aid and assist others in the preparation of false and fraudulent tax returns.

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

Pender was a tax preparer who operated Pender Tax Services in Rosenhayn. For the tax years 2007 through 2011, Pender and Grace Garrett, 63, of Pittsgrove, New Jersey, sought to increase referrals, enhance their business, and enrich themselves by preparing and filing income tax returns based on false information. They used a number of fraudulent practices, including falsely claiming a filer was a “head of household,” inventing and inflating deductions, creating fictitious dependents, and creating false credits for education and childcare.

The bogus returns resulted in a tax loss to the government of more than $340,000.

The conspiracy charge to which Pender pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for June 10, 2016. Garrett previously pleaded guilty to her role on May 19, 2015, and awaits sentencing on March 22, 2016.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Matthew T. Smith of the U.S. Attorney’s Office in Camden.

Defense counsel: Jeffrey Zucker Esq., Camden

Olympus Corp. of the Americas, Nation’s Largest Distributor of Endoscopes, Also Agrees to Reforms and Subsidiary Admits to Foreign Bribery

NEWARK, N.J. – The United States’ largest distributor of endoscopes and related equipment will pay $623.2 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals, U.S. Attorney Paul J. Fishman of the District of New Jersey and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division announced today.  U.S. Attorney Fishman and Principal Deputy Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division also announced that a subsidiary of the distributor will pay $22.8 million to resolve criminal charges relating to the Foreign Corrupt Practices Act (FCPA) in Latin America. 

Anti-Kickback Statute Violations

Olympus Corp. of the Americas (OCA) was charged in a criminal complaint filed today in Newark, New Jersey, federal court with conspiracy to violate the Anti-Kickback Statute (AKS), which prohibits payments to induce purchases paid for by federal health care programs.  OCA has entered into a three-year deferred prosecution agreement (DPA) that will allow it to avoid conviction if it complies with the reform and compliance requirements outlined in the agreement. 

“For years, Olympus Corporation of the Americas and Olympus Latin America dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid. It is appropriate that they be punished for that,” U.S. Attorney Fishman said. “At the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”

As a result of the conduct outlined in the government’s criminal complaint and DPA, OCA has agreed to pay a $312.4 million criminal penalty and $310.8 million to settle civil claims under the federal and various state False Claims Acts, the largest total amount paid in U.S. history for violations of the AKS and the largest amount ever paid by a medical device company.

“The Department of Justice has longstanding concerns about improper financial relationships between medical device manufacturers and the health care providers who prescribe or use their products,” said Principal Deputy Assistant Attorney General Mizer.  “Such relationships can improperly influence a provider’s judgment about a patient’s health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody.  In addition to yielding a substantial recovery for taxpayers, this settlement should send a clear message that we will not tolerate these types of abusive arrangements, and the pernicious effects they can have on our health care system.”

“The FBI’s stance on corruption and fraud is that of zero tolerance and therefore one of our highest priorities,” said Acting Special Agent in Charge Andrew Campi, FBI-Newark. “In this time of international commerce, whether at home or overseas, the FBI is committed to fighting both corruption and fraud. Companies should have the opportunity to prosper through honest business practices, not the practice of bribery and back room deals.”

In a separate DPA, Olympus Latin America Inc. (OLA), a subsidiary of OCA, will pay a $22.8 million criminal penalty for violations of the FCPA.

The criminal complaint against OCA, which OCA agrees is true, charges that OCA won new business and rewarded sales by giving doctors and hospitals kickbacks, including consulting payments, foreign travel, lavish meals, millions of dollars in grants and free endoscopes.  For example:

• OCA gave a hospital a $5,000 grant to facilitate a $750,000 sale;

• OCA held up a $50,000 research grant until a second hospital signed a deal to purchase Olympus equipment;

• OCA paid for a trip for three doctors to travel to Japan in 2007 as a quid pro quo for their hospital’s decision to switch from a competitor to Olympus; and

• a doctor with a major role in a New York medical center’s buying decisions received free use of $400,000 in equipment for his private practice.

These and other kickbacks helped OCA obtain more than $600 million in sales and realize gross profits of more than $230 million. 

The criminal complaint alleges that the improper payments happened while Olympus lacked training and compliance programs.  Unlike other medical and surgical products companies, Olympus did not create the position of compliance officer until 2009 and did not hire an experienced compliance professional until August 2010. 

The DPA requires OCA to adopt several compliance measures to remedy its problems:

• OCA must enhance its compliance training and maintain an effective compliance program;

• OCA must maintain a confidential hotline and website for OCA employees and customers to report wrongdoing.

• OCA’s chief executive officer and board of directors must certify annually that the program is effective; and

• OCA must adopt an executive financial recoupment program requiring executives who engage in misconduct or fail to promote compliance to forfeit up to three years of performance pay.

Larry Mackey, a former federal prosecutor best known for trying the Oklahoma City bombing cases, has been selected as an independent monitor to evaluate and oversee Olympus’ compliance with the DPA.  He was selected by U.S. Attorney Fishman under department guidelines and approved by the Deputy Attorney General.  The DPA and monitor will remain in place for three years and can be extended for another two years if Olympus violates the DPA. 

In the civil settlement, Olympus agrees to pay $310.8 million to the federal government and the states to resolve claims that Olympus’s payment of kickbacks caused false claims to be submitted to federal health care programs Medicare, Medicaid and TRICARE, violating not only the AKS but also the federal and various state False Claims Acts.  The federal share of the civil settlement is $267.3 million, and Olympus will pay $43.5 million to participating states that contributed to the falsely claimed Medicaid payments at issue.

The civil settlement resolves a lawsuit filed by John Slowik, the former chief compliance officer of OCA, in the District of New Jersey, under the federal and various state False Claims Act. The federal False Claims Act contains a qui tam, or whistleblower, provision that permits whistleblowers to file suit on behalf of the United States for false claims against the government, and to share in any recovery.  Mr. Slowik will receive $44.1 million from the federal share and $7 million from the state share of the civil settlement amount.

FCPA Violations

In a separate criminal complaint filed today in Newark federal court, OCA’s Miami-based subsidiary OLA was charged with FCPA violations in connection with improper payments to health officials in Central and South America, and OLA entered a separate three-year DPA.  According to court documents, from 2006 until August 2011, OLA implemented a plan to increase medical equipment sales in Central and South America by providing payments to health care practitioners at government-owned health care facilities.  These payments included cash, money transfers, personal grants, personal travel and free or heavily discounted equipment.  The primary method to deliver these illicit benefits was through “training centers,” nominally set up to educate and train doctors, but which OLA used to provide benefits to pre-selected practitioners.  OLA and its conspirators paid nearly $3 million to practitioners to induce the purchase of Olympus products and recognized more than $7.5 million in profits as a result.

“Olympus Latin America admitted to bribing publicly employed health care providers and hospital officials across Central and South America so that it could illegally win business and sell its products,” said Principal Deputy Assistant Attorney General Bitkower.  “OLA’s illegal tactics in Central and South America mirrored Olympus’s conduct in the United States.  The FCPA resolution announced today demonstrates the department’s commitment to ensuring the integrity of the health-care equipment market, regardless whether the illegal bribes occur in the U.S. or abroad.”

OLA entered into the DPA with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the District of New Jersey.  The agreement requires OLA to pay a criminal penalty of $22.8 million, retain the same compliance monitor as for OLA (Mr. Mackey) for a period of three years, and implement a number of compliance measures.  The department reached this resolution based on a number of factors, including that OLA did not voluntarily disclose the misconduct in a timely manner, but did receive credit of a 20 percent reduction on its penalty for its cooperation, including its extensive internal investigation, translation of numerous foreign language documents and collecting, analyzing and organizing voluminous evidence.

Corporate Integrity Agreement

In addition to the criminal and civil resolutions, Olympus executed a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG).  The CIA details the compliance program OCA must maintain, which must include:

• compliance responsibilities for OCA management and the board of directors;

• a health care compliance code of conduct that includes certain standards;

• training and education that includes specified standards;

• requirements for consulting arrangements, grants and charitable contributions, management of field assets and review of travel expenses;

• risk assessment and mitigation process; and

• review procedures for testing the compliance program.

”Olympus Corp. of the Americas' and its subsidiaries' greed-fueled kickback scheme threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid,” said Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General's region including NJ.  “HHS-OIG and our law enforcement partners remain vigilant and committed to protecting beneficiaries and taxpayers from those seeking to unlawfully enrich themselves.”

The U.S. Attorney’s Office of the District of New Jersey prosecuted the criminal case under the AKS against Olympus and, with the Civil Division’s Commercial Litigation Branch, reached the civil settlement.  The U.S. Attorney’s Office of the District for New Jersey and the Criminal Division’s Fraud Section prosecuted the criminal case under the FCPA against OLA.  The HHS Office of Counsel to the Inspector General, the FBI, HHS-OIG Office of Criminal Investigations and the National Association of Medicaid Fraud Control Units provided assistance.

The investigations were conducted jointly by special agents and investigators from the FBI Newark Field Office, under the direction of Acting Special Agent in Charge Andrew Campi; the HHS-OIG, under the direction of Special Agent in Charge Scott J. Lampert; and the FBI Allentown, Pennsylvania, Field Office, under the direction of Special Agent in Charge William F. Sweeney Jr. in Philadelphia.

Assistant U.S. Attorneys R. David Walk Jr. and Deborah J. Gannett of the District of New Jersey’s Health Care and Government Fraud Unit in Newark represented the government in the AKS criminal prosecution.  David E. Dauenheimer, deputy chief of the Civil Division for the District of New Jersey, and Senior Trial Counsel David T. Cohen of the DOJ Civil Division’s Commercial Litigation Branch represented the government in the prosecution of the civil case.  Mary Riordan and Nicole Caucci of the HHS-OIG negotiated the CIA.  

DOJ Fraud Section Trial Attorney James P. McDonald and Assistant U.S. Attorneys Walk and Gannett prosecuted the FCPA case. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.

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

NEWARK, N.J. – A Ringwood, New Jersey, man was sentenced today to three years of probation for transporting an American black bear he illegally killed in New Jersey across state lines to New York, and covering up the crime by creating false records and staging a fake kill site, U.S. Attorney Paul J. Fishman announced.

Martin Kaszycki, 36, previously pleaded guilty before U.S. Magistrate Judge Leda D. Wettre to an information charging him with two counts of violating the Lacey Act by transporting a bear he had illegally killed in Newfoundland, New Jersey, to Sterling State Forest in New York, and covering up the crime by making false statements and staging a fake kill site. Judge Wettre imposed the sentence today in Newark federal court.

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

On Oct. 5, 2012, Kaszycki killed a 450-pound, male, America black bear from an elevated tree stand, with a bow and arrow, out of hunting season, after setting out bait for the bear within 300 feet of the stand near his place of business in Newfoundland, all in violation of New Jersey state laws. He then drove the bear across state lines to New York, where he falsely told a New York weigh station employee that he had killed the bear in New York’s Sterling State Forest, causing the employee to record the false information on a New York state Bear Data Form.

On Oct. 8, 2012, Kaszycki drove the hide and skull of the bear to a taxidermy shop in Pennsylvania to arrange for the parts to be mounted for a trophy display and falsely represented to a taxidermist that he had hunted the bear in New York, causing the taxidermist to record that information on a New York State Department of Environmental Conservation Taxidermist Bear Report.

When N.J. Division of Fish and Wildlife Officers confronted Kaszycki about the bear on Oct. 10, 2012, at his place of business, Kaszycki told them he had killed the bear in New York. Later that night, Kaszycki drove the guts of the bear to Sterling State Forest in New York, where he placed them in the woods to stage a fake kill site. When confronted again the next day by state officials about the bear, he led those officials to the staged kill site and told them it was the location where he had killed the bear.

The Lacey Act prohibits the interstate transport of wildlife taken or possessed in violation of any state law or regulation as well as the making of a false record for wildlife that has been or is intended to be transported in interstate commerce. New Jersey state laws prohibit the hunting of an American black bear out of season. New Jersey laws also prohibit the hunting of these bears while elevated in a standing tree within 300 feet of a baited area or with a bow and arrow.

As part of his plea agreement, Kaszycki must pay a fine of $5,000 to the U.S. Fish and Wildlife Service Lacey Act Reward Fund. He must also forfeit the skull and hide of the bear and pay $1,250 to the Woodlands Wildlife Refuge for the care and release of orphaned and injured American black bears in New Jersey.

In addition, Kaszycki is prohibited from hunting, shooting, wounding, trapping, fishing, or killing wildlife or wild animals anywhere in the United States by any means during the term of probation or renew any license, permit, or other certificate that would entitle him to hunt during that time. He must also publish a statement in the N.J. Division of Fish and Wildlife (NJDFW) Hunting and Trapping Digest acknowledging the criminal conduct to which he has pleaded guilty.

U.S. Attorney Fishman credited special agents of the U.S. Fish and Wildlife Service, Office of Law Enforcement, under the direction Resident Agent in Charge Preston Fant, as well as the N.J. Division of Fish and Wildlife, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Kathleen P. O’Leary of the U.S. Attorney's Office Health Care and Government Fraud Unit in Newark.

Defense counsel: Peter L. Festa Esq., Paterson, New Jersey

NEWARK, N.J. – A Passaic County, New Jersey, member of the New Jersey set of the Grape Street Crips today admitted his leadership role in a conspiracy to distribute 2.8 kilograms of crack-cocaine, U.S. Attorney Paul J. Fishman announced.

Jamar Hamilton, a/k/a “Gunner,” 27, of Totowa, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to Count 22 of the fourth superseding indictment charging him with participating in a continuing criminal enterprise, a statute that applies to organizers, supervisors, or managers of drug-trafficking organizations who derive substantial income from their criminal activities.

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

The New Jersey set of the Grape Street Crips controlled drug trafficking and other criminal activities in various areas of Newark. Hamilton 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,” Tyquan Clark a/k/a “Tah,” and Rashan Washington, a/k/a “Shoota,” used and shared a dedicated cell phone to accept orders for, and distribute, thousands of clips of crack-cocaine to other distributors of crack-cocaine, including members of the New Jersey Grape Street Crips.

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

The charge to which Hamilton pleaded guilty carries a statutory mandatory minimum of 20 years in prison, a maximum of life in prison and a $2 million fine. Sentencing is set for June 9, 2016.

Clark has pleaded guilty to his role in the conspiracy and awaits sentencing. Charges against Vanderhall, Concepcion, and Washington remain pending. The charges and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.

U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski, and special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi, with the investigation leading to today’s guilty plea. 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 Director Anthony A. Ambrose; and the Essex County Sheriff’s Office, under the direction of Armando B. Fontoura, for their work on the investigation.

The government is represented by Assistant U.S. Attorneys Osmar J. Benvenuto and Barry A. Kamar of the Organized Crime Drug Enforcement Task Force (OCDETF)/Narcotics Unit of the Criminal Division in Newark.

This case was conducted under the auspices of 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: Howard P. Lesnik Esq., Newark

NEWARK, N.J. – A Bergen County man today admitted selling fraudulent massage therapy training certificates to workers at various massage parlors in order to facilitate prostitution activities at those locations, U.S. Attorney Paul J. Fishman announced.

Robert W. Miller, 67, of Westwood, N.J., pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with using facilities in interstate commerce to promote prostitution, and performing an act to promote, manage, establish, carry on and facilitate that unlawful activity. 

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

Miller served as a Westwood councilman for approximately seven years prior to his resignation in 2015, and previously served as a councilman in the Village of Ridgewood, New Jersey, from 1996 to 1998. He owned and operated RWM Associates Inc., which purported to provide personnel department services for small and medium-sized businesses. Miller held himself out as a businessman who, for a fee of $500 to $2,500, could provide a massage therapy training certificate to anyone who wished to obtain a massage license with the State of New Jersey without receiving the required training. He also offered to provide a transcript listing the classes purportedly taken and the grades received by customers willing to pay for the fraudulent massage training certificate. 

Between January 1997 and August 2013, Miller provided at least 50 fraudulent massage therapy training certificates to 25 different massage parlors located in Union, Passaic, Hudson and Middlesex counties. He admitted he knew that many of the massage parlors were being operated as fronts for prostitution and that the phony documents allowed the workers to continue to engage in prostitution activities under the guise of providing legitimate massage services. Miller also used A.R.M. Enterprises L.L.C., a separate company which he owned, to place advertisements in newspapers for massage parlors using discrete wording which signaled that the massage parlor was also a prostitution business. 

The charge to which Miller pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. As part of his plea agreement, defendant Miller will forfeit $95,926, consisting of $25,826 seized from his residence in August of 2013 as well as an additional $70,100 which he provided to the FBI in December of 2014, which Miller acknowledged represented property derived from or traceable to his unlawful activity.  Sentencing is scheduled for May 19, 2016. 

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

The government is represented by Assistant U.S. Attorney Mark J. McCarren of the U.S. Attorney’s Office’s Special Prosecutions Division in Newark.

Defense counsel: Linda Foster Esq. Assistant Federal Public Defender, Newark                

NEWARK, N.J. – A West New York, New Jersey, man was sentenced today to 19 months in prison for paying cash bribes to a West New York fire official to eliminate millions of dollars in outstanding fines and penalties on buildings with fire code violations, U.S. Attorney Paul J. Fishman announced.

Victor Coca, 50, previously pleaded guilty before U.S. District Judge Esther Salas to Count One and Count Two of an indictment charging him with paying bribes to a local government employee. Judge Salas imposed the sentence today in Newark federal court.

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

Coca was the owner and president of a general contracting company in West New York. Two buildings in West New York had outstanding fines for fire code violations. The first building, located on Bergenline Avenue and owned by a friend of his, had approximately $14,500 in fines and penalties for outstanding fire code violations. Coca agreed to pay a fire official for the West New York Bureau of Fire Prevention, a witness who was voluntarily cooperating with federal authorities, a $2,000 cash bribe to eliminate the outstanding fire code fines and penalties. On March 27, 2014, Coca handed the fire official a $2,000 cash bribe.

The second building, located on Hudson Avenue and partly-owned by Coca, had more than $8.7 million in fines and penalties for outstanding fire code violations. Coca paid a $5,000 cash bribe to the fire official in return for the fire official purportedly reducing the amount due to the West New York Bureau of Fire Prevention to the initial fine amount of $5,000. 

In addition to the prison term, Judge Salas sentenced Coca to two years of supervised release.

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 sentencing.

The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

NEWARK, N.J. – A federal grand jury today indicted a Somerset, New Jersey, man for allegedly accepting cash bribes and sex in exchange for providing employment authorization documents and for concealing his employment of an undocumented immigrant at a hair salon he owned, U.S. Attorney Paul J. Fishman announced.

Arnaldo Echevarria, 38, a former deportation officer with Immigration and Customs Enforcement (ICE), is charged by indictment with seven counts of accepting bribes, one count of harboring an undocumented immigrant and one count of making false statements to immigration authorities. Echevarria will be arraigned in federal court on a date to be determined. He was originally charged by complaint on Apr. 9. 2015.

According to the documents filed in this case:

As a deportation officer, Echevarria enforced immigration and customs laws by identifying, locating, arresting and removing undocumented immigrants from the United States and by supervising certain undocumented immigrants who had not yet been deported.  Undocumented immigrants subject to a deportation order often were able to obtain employment authorization documents which allowed them to legally work in the United States for a one-year period and which could be renewed annually. 

Between 2012 and 2014, Echevarria agreed to obtain employment authorization documents for approximately seven undocumented immigrants who were not lawfully present in the country. In return, Echevarria demanded and received approximately $78,000 in cash bribes. In order to conceal them from immigration authorities, Echevarria falsely stated that they had been granted temporary protected status, which allows nationals from certain countries experiencing environmental disaster, ongoing armed conflict, or other extraordinary conditions to lawfully remain in the United States. None of the individuals who bribed Echevarria had actually applied for, or received, temporary protected status.

In addition to the cash bribes, Echevarria also allegedly demanded and received sex from two of the individuals, one of whom became pregnant with Echevarria’s child. Despite Echevarria encouraging her to have an abortion, the woman delivered the child, and Echevarria told her that no one could find out that he was the child’s father. Afterwards, Echevarria continued to have sex with this individual in exchange for his help with her employment authorization documents.

In December 2012, Echevarria received permission from his superiors at ICE to open a hair salon in West Orange, New Jersey. Echevarria certified to ICE that the hair salon would not conflict with ICE matters and would not involve undocumented workers. However, Echevarria employed his girlfriend at the time, an undocumented immigrant, to manage the salon. Echevarria’s girlfriend had entered the United States illegally, using the name and identification of an individual in Puerto Rico to obtain a Pennsylvania identification card.

Echevarria allegedly knew his girlfriend resided in the United States illegally. Prior to opening the hair salon, Echevarria queried the name and date of birth of his girlfriend’s alias in various law enforcement databases. After opening the salon, Echevarria allegedly ensured that his girlfriend’s illegal status remained a secret by signing the lease for her apartment and by placing her cable and electric bills in his name. In addition to driving his girlfriend and other employees to and from the salon each day, Echevarria also paid the employees in cash and never asked them to fill out employment eligibility paperwork. 

The seven bribery counts each carry a maximum potential penalty of 15 years in prison and a $250,000 fine, twice the gross gain or loss from the offense, or three times the monetary equivalent of the things of value accepted by the defendant. The charges of harboring and making false statements are each punishable by a maximum potential penalty of five years in prison and $250,000 fine, or twice the gross gain or loss arising from the offense. 

U.S. Attorney Fishman credited special agents of ICE, Office of Professional Responsibility, under the direction of Acting Special Agent in Charge John McCabe, with the investigation leading to today’s indictment.

The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

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

Defense counsel: Michael Koribanics Esq., Clifton, New Jersey

CAMDEN, N.J. – Two former employees of The Vacation Ownership Group LLC were sentenced today to prison terms for conspiring to defraud owners of timeshare properties, U.S. Attorney Paul J. Fishman announced.

Alfred Giordano, a/k/a “Alex Jordan,” 36, of Belmar, New Jersey, was sentenced to 18 months in prison and Francis Santore, a/k/a “Frank Martin,” 56, of Northfield, New Jersey, was sentenced to 12 months in prison. Both defendants previously pleaded guilty before U.S. District Court Judge Noel L. Hillman to informations charging them with one count of conspiracy to commit mail and wire fraud and one count of mail fraud. Judge Hillman imposed the sentences today in Camden federal court.

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

The Vacation Ownership Group, a/k/a VO Group LLC (VO Group), purported to offer consulting services to owners of timeshares, including timeshare cancellation services.

In January 2010, Giordano started working at the VO Group and was trained by Adam Lacerda to call customers using prepared scripts. Giordano would call customers and give them the false impression that he was working for a bank or lending institution and that he had the customer’s “complaint file” in front of him. After hearing Giordano’s false representations, some customers sent checks to the VO Group. Giordano admitted to causing over $120,000 in losses. Giordano also admitted to devising a separate scheme to defraud the New Jersey Department of Labor by collecting unemployment compensation benefits while working at the VO Group. Giordano admitted to applying for and collecting $13,676 in unemployment compensation benefits to which he was not entitled.

Santore started working at the VO Group in October 2010, where he was alleged trained by Lacerda to lie to customers using prepared scripts. Santore admitted that he would give customers the false impression that he was working for a bank or lending institution. He also admitted that he allowed customers to continue operating under the false impression given by his co-workers that the VO Group had the customer’s “complaint file” from a timeshare resort developer in front of them. Santore admitted that he regularly lied to customers in order to perpetrate the scam. Some of those customers then sent checks to the VO Group. Santore admitted that he falsely told a customer that if the customer paid $8,562 to the VO Group, the group would eliminate the customer’s approximately $18,000 mortgage debt with a timeshare developer. Santore admitted causing more than $70,000 in losses.  Santore also devised a separate scheme to defraud the California unemployment system by collecting $16,200 in unemployment compensation benefits while working at the VO Group.

In addition to the prison terms, Judge Hillman sentenced both defendants to three years of supervised release. Restitution will be determined at a hearing to be scheduled.

U.S. Attorney Fishman credited special agents from the FBI’s Atlantic City Resident Agency, under the direction of Acting Special Agent in Charge Andrew Campi in Newark; and special agents from the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, New York Region, for their roles in the investigation leading to these guilty pleas. He also thanked the N.J. Department of Labor, Benefit Payment Control Unit, for its assistance.

The government is represented by Assistant U.S. Attorney R. David Walk, Jr. of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel:

Giordano: Martin I. Isenberg Esq., Gibbsboro, New Jersey

Santore: Robert A. Mintz Esq., Newark

TRENTON, N.J. - A professional day trader today admitted personally making more than $1.2 million in illicit profits by repeatedly trading on inside information divulged to him in violation of confidentiality agreements, U.S. Attorney Paul J. Fishman announced.

Paul Petrello, 54, of Boca Raton, Florida, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with one count of conspiracy to commit securities fraud and one count of securities fraud.

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

On numerous occasions between May 2010 and August 2013, Petrello and others, using inside information obtained by Petrello’s friend and business associate, Steven Fishoff, 58, of Westlake Village, and Fishoff’s employees, short sold securities of at least 13 public companies. 

For each of these offerings, Fishoff or one or more of the day traders that he employed —including his friend, Ronald Chernin, 67, of Oak Park, California, and his brother-in-law, Steven Costantin, 55, of Farmingdale, New Jersey — entered into confidentiality or “wall-crossing” agreements as representatives of Fishoff’s trading entities, whereby they agreed not to disclose or trade on inside information concerning the offerings and were “brought over the wall” for the narrow purpose of determining whether to purchase the offered securities. 

In breach of the wall-crossing agreements, Fishoff tipped Petrello about the confidentially marketed offerings by advising Petrello of the stock trading symbols of the companies, as well as the timing and sometimes the pricing of the upcoming offerings. Fishoff generally provided Petrullo with the inside information in code:  first, text messaging Petrello only the first two letters of the company’s stock trading symbol; and second, calling Petrello and telling him the last two letters of the symbol.

In addition, Fishoff also directed Petrello to pass inside information related to the stock offerings to an individual identified as “CC-1” in the information. At other times, Fishoff directly tipped CC-1 about an upcoming offering.

At Fishoff’s recommendation, Petrello short sold the stock of the public companies in anticipation of a drop in the stocks’ price when the stock offerings were disclosed to the public. Petrello and his conspirators traded through the accounts of their respective trading entities or through related accounts that they controlled. 

By trading on the nonpublic information, Petrello and his conspirators gained more than $3.9 million in profits over the course of the three-year scheme, with Petrello personally making more than $1.2 million.  Petrello split his profits with Fishoff, generally on a 50-50 basis, as compensation for the inside information that Fishoff provided.

The conspiracy count to which Petrello pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. The securities fraud count carries a maximum potential penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for May 25, 2016.

Fishoff has been indicted, and Chernin and Costantin have been charged by complaint for their own involvement in the insider trading scheme. The charges and allegations contained in the indictment and complaint are merely accusations, and defendants are presumed 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 Andrew Campi in Newark, for the investigation leading to today’s guilty plea.  He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office under the direction of Sanjay Wadhwa.

The government is represented by Assistant U.S. Attorney’s Shirley U. Emehelu and Nicholas P. Grippo of the Criminal Division of the U.S. Attorney’s Office in Newark, as well as Acting Chief Barbara Ward and Assistant U.S. Attorney Sarah Devlin of the Office’s Asset Forfeiture and Money Laundering Unit.

Today’s plea is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

Defense counsel: David M. Rosenfield Esq. and Howard R. Elisofon Esq., New York

TRENTON, N.J. – Two women today admitted their involvement in schemes to bribe corrections officers to smuggle contraband to inmates inside the Essex County Jail, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.

Deidra Harrison, 51, of Newark, New Jersey, pleaded guilty before U.S. District Judge Mary L. Cooper to Count One of an indictment charging her with conspiring to commit extortion under color of official right. Karen Adrianzen, 38, of North Bergen, New Jersey, pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging her with conspiring to pay bribes to Essex County Jail corrections officers. Harrison and Adrianzen have both been released on bail.

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

In November 2013, Channel Lespinasse, 32, of Florham Park, New Jersey, a corrections officer at the Essex County Jail and Harrison’s daughter, agreed to deliver a cell phone to an inmate inside the Essex County Jail in exchange for $1,000. Harrison retrieved the cell phone and the $1,000 payment from an FBI undercover agent outside of the jail and passed the cell phone and the cash payment along to Lespinasse. Lespinasse then smuggled the cell phone into the jail and delivered it to the inmate.

On multiple occasions between September 2013 and May 2014, Jason Perez, 40, of Guttenberg, New Jersey, a federal pretrial detainee at the Essex County Jail, directed Adrianzen to pay cash bribes to various Essex County Jail corrections officers. At Perez’s direction, Adrianzen obtained contraband, including marijuana and cell phones, and delivered them to the corrections officers along with the cash bribes. After the corrections officers delivered the contraband to Perez, he ultimately sold the marijuana and cell phones to other inmates in the jail, who paid for the contraband via Western Union money transfers executed by their friends and family. Adrianzen and others collected the money transfers on Perez’s behalf.           

The charge for conspiring to commit extortion under color of official right, to which Harrison pleaded guilty, carries a maximum penalty of 20 years in prison and a $250,000 fine. The charge of conspiring to bribe public officials, to which Adrianzen pleaded guilty, carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing for Harrison and Adrianzen is scheduled for June 3, 2016 and May 31, 2016, respectively.

On Jan. 13, 2015, Lespinasse pleaded guilty to conspiring to commit extortion under color of official right and awaits sentencing on April 20, 2016. Perez pleaded guilty to conspiring to pay bribes to public officials on May 4, 2015 and awaits sentencing on March 1, 2016.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, and investigators with the Internal Affairs Division of Essex County Jail, under the leadership of Warden Roy Hendricks, with the investigation leading to today’s pleas.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Rob Frazer of the Organized Crime/Gangs Unit in Newark.

Defense counsel:

Harrison: Frank Guzman, Jersey City, New Jersey

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

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

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

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

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

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

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

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

Dattilo also conspired to provide certain customers, such as the Philadelphia Housing Authority, Con Edison, the New York Department of Corrections and the City of Newark, with lower-quality lumber than the customers ordered and paid for. The lower-quality lumber, including “reject” lumber, did not meet certain industry specifications and was not of construction-grade quality, as required by contract. To conceal this product substitution scheme, Dattilo directed Bayway Lumber employees to spray paint or rearrange the lower-quality lumber sent to the customer entities in order to hide any markings on the lumber that would indicate that it was the lower-quality lumber. At Dattilo’s direction, Bayway Lumber also issued invoices to customers that falsely described the lower-quality lumber as the higher-quality lumber that the customers ordered.

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

The charge to which Dattilo pleaded guilty carries a maximum potential penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Sentencing is scheduled for May 23, 2016.

U.S. Attorney Fishman credited special agents with the Office of Inspector General, U.S. Department of Housing and Urban Development, under the direction of Special Agent in Charge Christina Scaringi; special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi; and the Office of Inspector General, Amtrak, under the direction of Special Agent in Charge Robert Koons, as well as investigators of the U.S. Attorney’s Office, for conducting the investigation leading to today’s guilty plea.   

The government is represented by Assistant U.S. Attorneys Barbara R. Llanes and Cari Fais of the U.S. Attorney’s Office Special Prosecutions Division in Newark.    

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

TRENTON, N.J. – A New York attorney was sentenced today to 57 months in prison for defrauding two multi-national companies out of hundreds of thousands of dollars by fraudulently billing them for services that were never provided, U.S. Attorney Paul J. Fishman announced.      

After a two-week trial before U.S. District Judge Michael Shipp in June 2015, a jury deliberated for three hours before convicting Marijan Cvjeticanin, 52, of St. James, New York, of all nine counts of the indictment charging him with mail fraud. Judge Shipp imposed the sentence today in Trenton federal court.

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

From September 1996 to September 2012, Cvjeticanin worked for Wildes & Weinberg P.C., a New York law firm specializing in immigration law, first as a paralegal and then as an attorney. Among other clients, the firm represented Automatic Data Processing Inc. (ADP) and Broadridge Financial Solutions Inc. (Broadridge) in connection with various immigration law matters. Cvjeticanin was the case manager handling day-to-day tasks, such as preparing Department of Labor certifications and applications for permanent residency for certain foreign workers of those companies employed in the United States on a temporary basis.

The application process required ADP and Broadridge to place job advertisements in the geographic location where the relevant position was located and demonstrate that there were no minimally qualified United States citizens available to fill that position. Wildes & Weinberg arranged for an independent advertising agency to contract with ADP and Broadridge to place the advertisements.

At some point prior to 2010, Cvjeticanin caused ADP and Broadridge to replace the independent advertising agency with Flowerson Holdings Inc., a/k/a Flowerson Advertising (Flowerson). Unbeknownst to Wildes & Weinberg, ADP, or Broadridge, Cvjeticanin was the owner and principal of Flowerson. From that point until September 2012, Flowerson purportedly handled all of the certification advertisement obligations for ADP and Broadridge. In reality, Cvjeticanin did not place the majority of the advertisements as required and instead pocketed the monies paid to him by ADP and Broadridge.

In September 2012, Wildes & Weinberg learned through a routine audit of employee email accounts that Cvjeticanin owned and controlled Flowerson and fired him. The subsequent investigation revealed that between 2010 and September 2012, ADP and Broadridge collectively paid Flowerson approximately $579,000 for advertisements relating to permanent residency applications. Virtually all of the invoices that Flowerson submitted to ADP and Broadridge included charges for advertisements purportedly placed in Computer World magazine as well as advertisements placed in newspapers such as The New York Times, The Boston Globe, The Star-Ledger, The Seattle Times, and others. However, Cvjeticanin never placed the majority of advertisements. Instead, he kept the money for his personal benefit.

The investigation also revealed that from time to time the government would conduct audits of labor certifications submitted on behalf of ADP and Broadridge and request additional information from the filer, including copies of the print advertisements that had been placed. Cvjeticanin was responsible for gathering the print advertisements responsive to the government audit requests. Because Cvjeticanin had not placed most of the print advertisements, he was unable to provide the copies. Cvjeticanin took out advertisements after he received notice of the audit. Cvjeticanin then fraudulently superimposed those advertisements on a newspaper from another date and made a photocopy, which he submitted to the government. The photocopied submissions purported to show that the relevant advertisements had been placed on the appropriate dates.

In addition, during today’s sentencing proceeding, prosecutors asserted that Cvjeticanin had also been practicing law in the immigration courts after his conviction despite having been suspended from such practice by the U.S. Department of Justice, Executive Office for Immigration Review, Board of Immigration Appeals. Cvjeticanin was suspended from practice before the Board of Immigration Appeals, the immigration courts, and the Department of Homeland Security as of Nov. 2, 2015, because of his felony convictions in this matter. Cvjeticanin was also ordered to notify his clients of his suspension. Nevertheless, Cvjeticanin continued to represent clients before the immigration courts in New York City into 2016. Cvjeticanin is also currently the subject of disbarment proceedings in New York State.

In addition to prison time, Judge Shipp sentenced Cvjeticanin to three years of supervised release and ordered him to forfeit $668,977.

U.S. Attorney Fishman credited special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Terence S. Opiola, Newark Field Office, and the U.S. Department of State Diplomatic Security Service, New York Field Office, under the direction of Special Agent in Charge David Schnorbus, with the investigation leading to today’s sentencing.

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

Defense counsel: Lorraine Gauli-Rufo Esq., Verona, New Jersey; Thomas Ambrosio, Esq., Lyndhurst, New Jersey

More Than 150,000 Press Releases Stolen from Three Major Newswire Companies, Used to Generate Approximately $30 Million in Illegal Trading Profits

NEWARK, N.J. – Arkadiy Dubovoy, 51, of 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.

Arkadiy 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 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.

“Today, another defendant pleads guilty to his role in an international plot to loot non-public press releases from three major newswire companies and exploit them for millions in illicit proceeds,” U.S. Attorney Fishman said. “The conviction of Arkadiy Dubovoy, who admitted trading on the stolen information and splitting the profits with hackers in Ukraine, was made possible by the hardworking prosecutors and agents who unraveled this unprecedented scheme.”

“For more than three decades, the Secret Service has been a leader in investigating cybercrimes and protecting the U.S. financial infrastructure,” Joseph P. Clancy, Director of the U.S. Secret Service, said.  “This case embodies a vital part of the agency’s integrated mission and the success that we have achieved in investigating these highly complex crimes. There will always be inherent challenges in investigating cybercrime, but the Secret Service is committed to working with our law enforcement and global partners to safeguard the Nation’s financial infrastructure.”

In addition to Arkadiy Dubovoy, the 23-count New Jersey federal indictment charges Ivan Turchynov, 27, Oleksandr Ieremenko, 24, and Pavel Dubovoy, 32, all of Ukraine, and Igor Dubovoy, 28, 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. Igor Dubovoy pleaded guilty to his role on Jan. 20, 2016.

The U.S. Attorney’s Office for 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.  The traders created “shopping lists” or “wish lists” for the hackers listing desired upcoming press releases for publicly traded companies from Marketwired and PRN. 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, Arkadiy Dubovoy admitted that when he purchased the 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. Arkadiy Dubovoy also admitted that he sent the releases to either Korchevsky or Khalupsky so that they could review them and determine which trades would be profitable based on the stolen material information.

Arkadiy Dubovoy also admitted that he directed others, including Igor Dubovoy and Korchevsky, to manage the brokerage account he used as part of the scheme. He also admitted that he provided the hackers with access to at least one of his trading accounts so that they could confirm how much money was being made from the stolen information. According to Arkadiy Dubovoy, his arrangement with the hackers gave them approximately 50 percent of any profits resulting from the stolen press releases they provided.

The conspiracy charge to which Arkadiy Dubovoy pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

U.S. Attorney Fishman credited 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 Jeffrey Wood, 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: Michael Critchley, Sr., Esq., Michael Critchley, Jr., Esq., Critchley, Kinum & Vazquez, LLC

NEWARK, N.J. – A Newark, New Jersey, man was charged today with committing five bank robberies in Union and Essex Counties from August 2015 through October 2015, U.S. Attorney Paul J. Fishman announced.

James Glenn, 59, of Newark, New Jersey, is charged by criminal complaint with five counts of bank robbery. He appeared this afternoon before U.S. Magistrate Judge Leda D. Wettre in Newark federal court and was detained.

According to the complaint, Glenn robbed the following New Jersey banks on the dates set forth below:

Bank

Location

Date

Connect One Bank

Union

Aug. 28, 2015

Hudson City Savings Bank

Roseland

Sept. 9, 2015

TD Bank

Orange

Sept. 25, 2015

Connect One Bank

Union

Sept. 28, 2015

Santander Bank

Union

Oct. 16, 2015

Glenn typically robbed the banks using notes that threatened physical harm and demanded cash. For instance, during the Sept. 9, 2015 robbery, Glenn handed the teller a handwritten note indicating, “[t]his is a robbery . . . [t]his is not your money so be careful – [n]o alarms [n]o dye pack I know them.  No one wants to get hurt so remember I know where you live.”  Also, during the spree, Glenn robbed the same Connect One Bank in Union, New Jersey, including threatening the same teller, on Aug. 28, 2015 and Sept. 28, 2015. He was arrested by the Union Township police department on Oct. 27, 2015.   

The bank robbery charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi in Newark, with the investigation leading to the charges. He also thanked the Union Township, Roseland, and Orange police departments, as well as the Union County Prosecutor’s Office, the Essex County Prosecutor’s Office, and the NJ State Parole Board for their assistance.

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

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

Defense counsel: Leticia Olivera Esq., Assistant Federal Public Defender

NEWARK, N.J. – A Mercer County, New Jersey, man was sentenced to 255 months in prison for transporting an underage boy across state lines for the purpose of engaging in sexual activity, U.S. Attorney Paul J. Fishman announced.

Jayme Shannon, 53 of East Windsor, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to an information charging him with interstate transportation of a minor for illicit purposes and doing so while being a registered sex offender. Judge Salas imposed the sentence today in Newark federal court. 

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

In September 2013, Shannon met a 15-year-old boy in the internet chat room “Chatavenue.com,” and continued to communicate with the victim in September and October 2013. 

On Oct. 14, 2013, Shannon arranged to meet the victim at the Skyview Motel in Fort Lee, New Jersey. After renting a motel room that morning, Shannon drove from New Jersey to New York, where he picked up the victim. Shannon then drove the victim from New York to the Skyview Motel and engaged in sexual conduct with the victim. Shannon was arrested later that day when Fort Lee police officers found him with the victim inside the motel.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Acting Special Agent in Charge Andrew Campi; the Bergen County Prosecutor’s Office, under the direction of Acting Prosecutor Gurbir S. Grewal; and the Fort Lee Police Department, under the direction of Chief Keith M. Bendul, with the investigation leading to today’s sentencing.

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

Defense counsel: Ron Bar-Nadav Esq. and Benjamin Morton Esq., Hackensack, New Jersey

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

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.

16-041                                                             ###

Defense Counsel:  Assistant Federal Public Defender Lisa Mack Esq., Newark

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

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.

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, 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

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

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

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, 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                                                                                                                          

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.

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, 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

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.

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., Brooklyn

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 

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

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