District of New Jersey
Press releases recorded for this federal judicial district.
Former Executive Director of Newark Watershed Conservation and Development Corporation Admits Role in Nearly $1 Million Kickback and Fraud SchemeRead the Press Release
NEWARK, N.J. – The former executive director of the Newark Watershed Conservation and Development Corp. (NWCDC) today admitted accepting approximately $999,000 in kickback payments in exchange for her assistance in awarding work to various vendors and contractors of the agency, U.S. Attorney Paul J. Fishman announced.
Linda Watkins Brashear, 56, of West Orange, New Jersey, pleaded guilty before U.S. District Judge José Linares in Newark federal court to Counts 1 and 5 of a five-count information charging her with a wire fraud scheme to defraud the NWCDC by accepting bribes and kickback payments from contractors and an employee of the corporation, which were funded by payments from the NWCDC based on fraudulently inflated invoices or issued for work that was not performed by the contractors (Count 1), and subscribing a false tax return for the year 2012 (Count 5).
According to documents filed in this case and statements made in court:
Brashear served as the executive director for the NWCDC from 2007 to March 2013. During this time, she and others devised a scheme to defraud the NWCDC of her honest services in the affairs of the NWCDC and of the NWCDC’s money and property. The object of the scheme was for Brashear and others to accept a substantial stream of concealed and undisclosed kickbacks from NWCDC contractors and an employee of the NWCDC for her direct and indirect benefit in exchange for action and assistance in the affairs of the NWCDC, and for her violating her official duties and responsibilities.
Between 2008 and March 2013, Brashear accepted approximately $999,000, in kickbacks financed through the receipt of payments by contractors and an employee of the NWCDC that were fraudulently obtained from the NWCDC with Brashear’s assistance, through materially false pretenses, representations and promises. In particular, Brashear accepted kickbacks as summarized below:
Time Period
Approximate Amount of Kickbacks
Paid By
September 2012 - March 2013
$39,000
NWCDC “Employee 1”
January 2009 – December 2012
$260,000
James Porter (identified in Count 1 as “partner of the special projects manager”)
January 2008 – June 2012
$70,000
Printing contractor
January 2011 – January 2013
$33,000
Marketing contractor
September 2012 – April 2013
$90,000
Cleaning contractor
April 2009 – February 2013
$118,000
Homeland Security contractor
January 2009 – May 2012
$40,000
Interior designer
January 2008 – March 2013
$177,000
Internet research consultant
October 2011 – March 2013
$29,000
Political consultant
April 2011 – September 2012
$32,000
Media consultant
January 2008 – March 2013
$27,000
Giacomo “Jack” DeRosa
May 2011 – March 2013
$84,000
Security consultant
Brashear routinely accepted payments from some of these contractors through Donald Bernard Sr. Brashear and Bernard also used their email accounts to facilitate this kickback and fraud scheme. Bernard was previously charged in December 2014 in a 20-count indictment with various federal offenses involving a scheme to defraud the NWCDC of his honest services and the NWCDC’s money and property by accepting and agreeing to accept bribes and kickbacks from certain NWCDC contractors, which were financed at least in part through the contractors’ fraudulent padding of invoices to the NWCDC.
Brashear admitted taking payments from James Porter, a contractor who pleaded guilty in January 2015 to conspiracy to defraud the NWCDC of honest services, money and property through the use of interstate wire transmissions, as well as tax evasion for his role in the kickback scheme. The roofing contractor referred to in Count 1 of the information, Giacomo “Jack” DeRosa, was charged in a six-count fraud and money laundering indictment in December 2014 for his role in passing kickbacks to Bernard, which were shared, in part, with Brashear.
Brashear also admitted making and subscribing a U.S. Individual Income Tax Return, Form 1040, for tax year 2012, signed and filed with the IRS under penalty of perjury, which she did not believe to be true and correct, including approximately $316,000 in unreported income that she received through the kickback payments.
The wire fraud charge to which Brashear pleaded guilty carries a maximum potential penalty of 20 years in prison. The charge of filing a false tax return carries a maximum potential penalty of three years in prison. Both charges are punishable by a fine of $250,000 or twice the amount of the pecuniary gain or loss from the offense. Sentencing is scheduled for April 5, 2016.
U.S. Attorney Fishman credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge Richard M. Frankel; IRS – Criminal Investigation, Newark Field Office, under the direction of Special Agent in Charge Jonathan D. Larsen; and the U.S. Department of Housing and Urban Development, Office of Inspector General, Newark office, under the direction of Special Agent in Charge Christina Scaringi, as well as criminal investigators of the U.S. Attorney’s Office, for the investigation leading to today’s guilty plea. U.S. Attorney Fishman also thanked the N.J. Office of the State Comptroller, under the direction of Acting State Comptroller Philip James Degnan, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys Jacques Pierre, Mala Ahuja Harker and Leslie Schwartz of the U.S. Attorney’s Office Special Prosecutions Division.
Defense counsel: Michael Baldassare Esq., Newark
Distributor for Large-Scale Drug Trafficking Organization Sentenced to 12 Years in PrisonRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 144 months in prison for his role in a large-scale drug trafficking organization that distributed heroin in Ocean and Monmouth Counties, U.S. Attorney Paul J. Fishman announced.
Jason O’Neal, a/k/a “Born,” 43, of Farmingdale, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of conspiracy to distribute heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
To date, 19 other alleged members or affiliates of the “Britt-Young Drug Trafficking Organization” – so named after its leaders, Rufus Young, a/k/a “Equan,” a/k/a “E-Money, and Robert Britt, a/k/a “True,” in the criminal complaint – have pleaded guilty to narcotics offenses.
According to documents filed in this case and statements made in court:
Between February 2013 and March 2014, O’Neal conspired with Rufus Young and others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young Drug Trafficking Organization. O’Neal admitted that he served as a supervisor and distributed between 100 and 400 grams of heroin in furtherance of the conspiracy.
In addition to the prison term, Judge Sheridan sentenced O’Neal to serve three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Aidan P. O’Connor Esq., Hackensack, New Jersey
Orthodox Jewish Rabbi Sentenced to Eight Years in Prison for Conspiring to Kidnap Jewish Husbands, Force Them to Consent to Religious DivorcesRead the Press Release
TRENTON, N.J. - An Orthodox Jewish Rabbi was sentenced today to 96 months in prison for conspiring to kidnap Jewish men in an effort to force them to give their wives religious divorces, referred to as “gets,” U.S. Attorney Paul J. Fishman announced.
Jay Goldstein a/k/a “Yaakov,” 61, of Brooklyn, New York, was previously convicted by a federal jury of Count One and Count Five of an indictment charging him with conspiracy to commit kidnapping and attempted kidnapping. Jay Goldstein was convicted following an eight-week trial before U.S. District Judge Freda L. Wolfson, who imposed the sentence today in Trenton federal court.
According to documents filed in this case and the evidence at trial:
On Dec. 1, 2009, in Lakewood, an Orthodox Jewish man, Israel Markowitz, was assaulted, placed in a van, tied up, beaten and shocked with a stun-gun until he agreed to give his wife a get.
On Oct. 16, 2010, in Lakewood, another Orthodox Jewish man, Ysrael Bryskman, was assaulted, tied up and beaten until he agreed to give his wife a get.
On Aug. 22, 2011, in Brooklyn, another Orthodox Jewish man, Usher Chaimowitz, and his roommate, Menachem Teitlebaum, were assaulted, tied up and beaten until Chaimowitz agreed to give his wife a get.
Based upon these incidents, the FBI began an undercover operation in August 2013 in which two FBI agents posed as a wife who was seeking a get from her recalcitrant husband, and her brother, who was trying to help her obtain the get. Over the next several weeks, the undercover agents had multiple recorded phone calls and in-person meetings with Mendel Epstein, 70, Lakewood, New Jersey. In those meetings, Epstein arranged to have his team kidnap the husband at a warehouse in exchange for $60,000.
On Oct. 9, 2013, Jay Goldstein, his sons Moshe Goldstein, 32, and Avrohom Goldstein, 36, and others – including Binyamin Stimler, 40, Simcha Bulmash, 32, David Hellman, 33, Sholom Shuchat, 31, all of Brooklyn, and Ariel Potash, 42, of Monsey, New York – traveled from New York to a warehouse in Middlesex County, New Jersey, to execute the planned kidnapping of the husband to force him to give the get.
They arrived at the warehouse in two dark minivans shortly after 8:00 p.m. Some of the kidnap team members put on masks and entered the warehouse office with the undercover agent posing as the brother. The remaining kidnappers walked around the outside with flashlights. Over the next 15 minutes, members of the kidnap team went in and out of the warehouse office wearing disguises, including ski masks, Halloween masks and bandanas. They discussed their plan for kidnapping and assaulting the husband, how they planned to grab him, pull him down, tie him up, and take his phone. Members of the kidnap team brought with them to the warehouse a 30-foot nylon rope, a blindfold, vodka, license plates they had switched out, and items used to ceremonially record the get. At 8:23 p.m., law enforcement moved into the warehouse office and arrested the eight men.
In addition to the prison term, Judge Wolfson sentenced Jay Goldstein to five years of supervised release.
Avrohom Goldstein, Potash, Shuchat, Moshe Goldstein, Hellman, and Bulmash have all pleaded guilty to one count of traveling in interstate commerce to commit extortion. Avrohom Goldstein and Potash were sentenced Nov. 19, 2015 to 45 and 14 months in prison, respectively. Shuchat was sentenced to time served on Nov. 19, 2015. Moshe Goldstein was sentenced Nov. 16, 2015 to 48 months in prison. Hellman and Bulmash were sentenced Nov. 17, 2015 to 44 and 48 months in prison, respectively. Martin Wolmark, 57, of Monsey, previously pleaded guilty to conspiracy to travel in interstate commerce to commit extortion and was sentenced Dec. 14, 2015 to 38 months in prison.
Epstein and Stimler were also previously convicted at trial of Count One of the indictment charging them with conspiracy to commit kidnapping. Stimler was additionally convicted on Count Five of the indictment, attempted kidnapping. Epstein and Stimler were sentenced yesterday to 120 and 39 months in prison, respectively.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the Lakewood Police Department with the investigation.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah M. Wolfe of the U.S. Attorney’s Office in Trenton.
Leader of Drug Trafficking Organization Sentenced to 15 Years in Prison for Conspiring to Sell Kilograms of Heroin in New JerseyRead the Press Release
TRENTON, N.J. – A leader of a large-scale drug trafficking organization was sentenced today to 15 years in prison for conspiring to distribute heroin in Ocean and Monmouth counties and elsewhere in New Jersey, U.S. Attorney Paul J. Fishman announced.
Rufus Young, a/k/a “Equan,” a/k/a “E-Money,” 42, of Asbury Park, New Jersey, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with conspiring to distribute 100 grams or more of heroin. Judge Sheridan imposed the sentence today in Trenton federal court.
To date, 19 other alleged members or affiliates of the “Britt-Young Drug Trafficking Organization” – so named after its leaders, Young and Robert Britt, a/k/a “True,” in the criminal complaint – have pleaded guilty to narcotics offenses.
According to documents filed in this case and statements made in court:
Between February 2013 and March 2014, Young conspired with others to distribute heroin in Ocean and Monmouth counties as part of the Britt-Young DTO. Young was a leader of the organization and was responsible for, among other things, supplying heroin to various sub-dealers who distributed the heroin to others. To carry out Britt-Young DTO’s drug trafficking business, Young maintained several stash house locations that he and his conspirators used to package, store and sell heroin, including a recording studio in Toms River and two apartments in Neptune, New Jersey. Young was responsible for distributing between one and three kilograms of heroin during the conspiracy.
In addition to the prison term, Judge Sheridan sentenced Young to four years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, Red Bank Resident Office, under the direction of Special Agent in Charge Richard M. Frankel; officers of the Brick Township Police Department, under the direction of Chief Nils R. Bergquist: and officers of the Toms River Police Department, under the direction of Chief Mitchell Little, with the investigation. He additionally credited special agents of the Bureau of Alcohol Tobacco Firearms and Explosives, under the direction of Special Agent in Charge George P. Belsky; inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; officers of the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni; and officers of the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato. He also thanked the Monmouth County Sheriff’s Office and the Neptune Township, Asbury Park, Marlboro, Long Branch and Freehold police departments for their roles in the case.
The government is represented by Assistant U.S. Attorney Nicholas Grippo of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Stacy A. Biancamano Esq., West Orange, New Jersey
Gloucester County, New Jersey, Man Charged with Producing Child Pornography with Hidden Camera in His BathroomRead the Press Release
CAMDEN, N.J. – A Williamstown, New Jersey, man who was charged on Dec. 4, 2015 with receiving images and videos of child sexual abuse was arrested again this morning by FBI agents on a new charge of producing child pornography, U.S. Attorney Paul J. Fishman announced.
Eric Ziegler, 37, is charged by criminal complaint with producing and receiving child pornography. He is scheduled to appear this afternoon before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.
According to documents filed in this case:
Beginning in February 2015, law enforcement officers learned that a user of an Internet account registered to a Williamstown residence was linked to an online community of individuals who regularly sent and received child pornography via a website that operated on an anonymous online network. Further investigation revealed that Ziegler, who previously worked from home providing technological support to computer users who work for financial institutions, was utilizing the anonymous network to view and receive images of child sexual abuse.
On Dec. 3, 2015, law enforcement officers executed a search warrant at Ziegler’s residence. An initial review of the evidence recovered revealed dozens of computer discs containing images of child sexual abuse, including images and video files of adult men engaged in intercourse with prepubescent girls.
Further review of Ziegler’s computer revealed still images and a video file showing prepubescent girls who were recorded in the first-floor bathroom of Ziegler’s Williamstown home. The images and video file, which focused on the girls’ genitalia, showed them changing into swimsuits and using the bathroom.
The search of Ziegler’s computer also revealed dozens of similar hidden-camera videos of prepubescent females ranging in age from 8 to 12. The videos were recorded in what appear to be fitting rooms, bathrooms and locker rooms. It is unknown at this time if Ziegler made those images himself or obtained them through other means. To date, law enforcement officers have positively identified four minor children who appear in the images and video file recovered from Ziegler’s computer. The investigation regarding the identification of additional victims is ongoing.
Anyone with information regarding possible victims of this activity is urged to contact the FBI in Cherry Hill, New Jersey at 856-795-9556.
The charge of producing child pornography is punishable by a mandatory minimum sentence of 15 years in prison, a maximum potential penalty of 30 years in prison and a $250,000 fine. The count of receiving child pornography is punishable by a mandatory minimum sentence 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 FBI, under the direction of Special Agent in Charge William F. Sweeney in Philadelphia, with the investigation leading to today’s arrest. U.S. Attorney Fishman also thanked the Monroe Township Police Department under the direction of Chief John McKeown for its assistance with the investigation.
The government is represented by Assistant U.S. Attorney Steven D’Aguanno of the New Jersey U.S. Attorney’s Office Camden Office.
The charges and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Rocco C. Cipparone Jr. Esq., Haddon Heights, New Jersey
Accountant for Michael ‘The Situation’ Sorrentino Admits Tax Fraud ConspiracyRead the Press Release
NEWARK, N.J. – The former tax preparer for television personality Michael “The Situation” Sorrentino and his brother, Marc Sorrentino, today admitted filing fraudulent tax returns on their behalf, U.S. Attorney Paul J. Fishman and Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
Gregg Mark, 51, of Spotswood, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiracy to defraud the United States.
According to documents filed in this case and statements made in court:
Mark, formerly an accountant at a Staten Island-based accounting firm, admitted preparing fraudulent tax returns for the Sorrentinos for tax years 2010 and 2011, during which time the Sorrentinos and their businesses – MPS Entertainment LLC and Situation Nation Inc. – received millions of dollars in income. To reduce the taxes the Sorrentinos owed, Mark caused to be prepared and filed with the IRS fraudulent business and personal tax returns. Mark admitted the Sorrentinos’ false returns defrauded the IRS out of $550,000 to $1.5 million.
On Sept. 24, 2015, a grand jury in Newark returned a seven-count indictment charging the Sorrentinos with conspiracy to defraud the United States and filing false tax returns. Michael Sorrentino was also charged with failing to file a tax return. According to the indictment, the brothers received several million dollars in connection with Michael Sorrentino’s role as a cast member on the MTV television show “Jersey Shore” and other promotional activities. The brothers are charged with failing to report all of the income they received. They are also charged with claiming personal expenses as business expenses, including payments for luxury vehicles, high-end clothing, and making distributions – or direct payments – from the businesses to personal bank accounts. Both have pleaded not guilty; a trial date has not yet been set.
The conspiracy charge to which Mark pleaded guilty carries a statutory maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for March 24, 2016.
U.S. Attorney Fishman and Acting Assistant Attorney General Ciraolo credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Jonathan W. Romankow of the U.S. Attorney’s Office Criminal Division in Newark as well as Assistant Chief Tino M. Lisella and Trial Attorneys Yael T. Epstein and Jeffrey B. Bender of the Tax Division of the U.S. Department of Justice.
Defense counsel: Jack Arseneault Esq. and John Roberts Esq., Chatham, New Jersey
Two Orthodox Jewish Rabbis Sentenced to Prison for Conspiring to Kidnap Jewish Husbands, Force Them to Consent to Religious DivorcesRead the Press Release
TRENTON, N.J. - Two Orthodox Jewish Rabbis were sentenced to prison today for conspiring to kidnap Jewish men in an effort to force them to give their wives religious divorces, referred to as “gets,” U.S. Attorney Paul J. Fishman announced.
Rabbis Mendel Epstein, 70, of Lakewood, New Jersey, and Binyamin Stimler, 40, of Brooklyn, New York, were sentenced to 120 and 39 months in prison, respectively. They were both convicted at trial of Count One of an indictment charging them with conspiracy to commit kidnapping. Stimler was additionally convicted on Count Five of the indictment, attempted kidnapping. Judge Wolfson imposed both sentences today in Trenton federal court.
According to documents filed in this case and the evidence at trial:
On Dec. 1, 2009, in Lakewood, an Orthodox Jewish man, Israel Markowitz, was assaulted, placed in a van, tied up, beaten and shocked with a stun-gun until he agreed to give his wife a get.
On Oct. 16, 2010, in Lakewood, another Orthodox Jewish man, Ysrael Bryskman, was assaulted, tied up and beaten until he agreed to give his wife a get.
On Aug. 22, 2011, in Brooklyn, another Orthodox Jewish man, Usher Chaimowitz, and his roommate, Menachem Teitlebaum, were assaulted, tied up and beaten until Chaimowitz agreed to give his wife a get.
Based upon these incidents, the FBI began an undercover operation in August 2013 in which two FBI agents posed as a wife who was seeking a get from her recalcitrant husband, and her brother, who was trying to help her obtain the get. Over the next several weeks, the undercover agents had multiple recorded phone calls and in-person meetings with defendant Epstein. In those meetings, Epstein arranged to have his team kidnap the husband at a warehouse in exchange for $60,000.
On October 9, 2013, Stimler and others – including Jay Goldstein, 61, Moshe Goldstein, 32, Avrohom Goldstein, 36, Simcha Bulmash, 32, David Hellman, 33, and Sholom Shuchat, 31, all of Brooklyn, and Ariel Potash, 42, of Monsey, New York – traveled from New York to a warehouse in Middlesex County, New Jersey, to execute the planned kidnapping of the husband to force him to give the get.
They arrived at the warehouse in two dark minivans shortly after 8:00 p.m. Some of the kidnap team members put on masks and entered the warehouse office with the undercover agent posing as the brother. The remaining kidnappers walked around the outside with flashlights. Over the next 15 minutes, members of the kidnap team went in and out of the warehouse office wearing disguises, including ski masks, Halloween masks and bandanas. They discussed their plan for kidnapping and assaulting the husband, how they planned to grab him, pull him down, tie him up, and take his phone. Members of the kidnap team brought with them to the warehouse a 30-foot nylon rope, a blindfold, vodka, license plates they had switched out, and items used to ceremonially record the get.
At 8:23 p.m., law enforcement moved into the warehouse office and arrested the eight men, including Stimler. Epstein was arrested at his Brooklyn home the same night.
In addition to the prison terms, Judge Wolfson sentenced both Epstein and Stimler to five years of supervised release.
Avrohom Goldstein, Potash, Shuchat, Moshe Goldstein, Hellman, and Bulmash have all pleaded guilty to one count of traveling in interstate commerce to commit extortion. Avrohom Goldstein and Potash were sentenced Nov. 19, 2015 to 45 and 14 months in prison, respectively. Shuchat was sentenced to time served on Nov. 19, 2015. Moshe Goldstein was sentenced Nov. 16, 2015 to 48 months in prison. Hellman and Bulmash were sentenced Nov. 17, 2015 to 44 and 48 months in prison, respectively. Martin Wolmark, 57, of Monsey, previously pleaded guilty to conspiracy to travel in interstate commerce to commit extortion and was sentenced yesterday to 38 months in prison.
Jay Goldstein, who was convicted at trial of conspiracy to commit kidnapping and attempted kidnapping, is scheduled for sentencing tomorrow.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the Lakewood Police Department with the investigation.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah M. Wolfe of the U.S. Attorney’s Office in Trenton.
Defense counsel:
Mendel Epstein: Robert G. Stahl Esq. and Laura Gasiorowski Esq., Westfield, New Jersey
Binyamin Stimler: Nathan Lewin Esq., Washington, D.C.
Three Men Arrested in Hacking and Spamming Scheme; Targeted Personal Information of 60 Million PeopleRead the Press Release
NEWARK, N.J. – Three men from Florida, New Jersey, and Maryland were charged today with a wide-ranging computer hacking and identity theft scheme that compromised the personally identifiable information (PII) of millions of people and generated more than $2 million in illegal profits, U.S. Attorney Paul J. Fishman announced.
Timothy Edward Livingston, 30, of Boca Raton, Florida; Tomasz Chmielarz, 32, of Rutherford, New Jersey; and Devin James McArthur, 27, of Ellicott City, Maryland, are charged by indictment with conspiracy to commit fraud and related activity in connection with computers and conspiracy to commit wire fraud. Livingston and Chmielarz are also charged with conspiracy to commit fraud and related activity in connection with electronic mail.
According to the indictment:
Beginning as early as 2011, Livingston and others allegedly operated A Whole Lot of Nothing LLC — a business that specialized in sending unsolicited, or “spam,” emails on behalf of its clients. Livingston’s clients included legitimate businesses, such as insurance companies that wished to send bulk emails to advertise their businesses, as well as illegal entities, such as online pharmacies that sold narcotics without prescriptions. Typically, Livingston charged $5 to $9 for each spam email that resulted in a completed transaction for a client.
Many internet service providers used spam filters to prevent spam from reaching their customers’ email accounts. Beginning in January 2012, Livingston allegedly solicited Chmielarz to write computer programs to send spam in a manner that would conceal the true origin of the email and bypass spam filters. Livingston and Chmielarz started using proxy servers to send out spam messages using botnets to hide the true origin of the spam, help them remain anonymous, and to evade anti-spam filters and other spam blocking techniques. Livingston also registered certain websites used in the spam campaigns in the name of his alias, “Mark Lloyd,” to avoid detection.
Livingston and Chmielarz allegedly hacked into the email accounts of individuals and compromised and seized control of the mail servers of some of the corporate victims to further their spam campaigns. They created custom software designed to hack into the email accounts of customers of a company identified in the indictment as “Corporate Victim 1.” Once the email account software gained access to a Corporate Victim 1 user’s account, it created sub-accounts on the account and used them to send out spam. Livingston and Chmielarz programmed the email account software to access the mail server of Corporate Victim 1 through proxy servers to obscure their true identities. This allowed them to send out massive amounts of spam without identifying themselves as the senders, and instead using Corporate Victim 1’s mail servers and customer accounts.
Livingston and Chmielarz also allegedly created custom software that leveraged vulnerabilities in the websites of a number of corporations, including one identified in the indictment as “Corporate Victim 2” (the web form software), which allowed Livingston and Chmielarz to use Corporate Victim 2’s email servers to send out spam that appeared to be from Corporate Victim 2, but in reality was from Livingston and his conspirators.
Livingston, Chmielarz and McArthur also worked together to steal the confidential business information of the corporate victims, including databases containing the PII of millions of Americans, so that they could use that information in spam campaigns. In May of 2013, Livingston and Chmielarz discussed stealing confidential business information from “Corporate Victim 3,” as identified in the indictment. In an online chat, Livingston told Chmielarz, “here is the site I need scrapped (sic),” and provided Chmielarz with an address for Corporate Victim 3’s website and the login credentials for an employee. “Scraping” is a technique employed to extract large amount of data from websites.
In another online chat, Livingston told Chmielarz that the database they were going to steal from Corporate Victim 3 contained 10 million records. Livingston subsequently paid Chmielarz to write a computer program to steal the database.
From February 2014 through February 2015, McArthur worked as a sales representative at a corporation identified in the indictment as “Corporate Victim 4.” In a series of online chats in August 2014, Livingston, Chmielarz, and McArthur discussed using McArthur’s position at Corporate Victim 4 to steal confidential business information, including the PII of millions of the company’s customers.
On Aug.11, 2014, McArthur allegedly provided Livingston with access to a remote administration tool on a computer with access to the computer network of Corporate Victim 4 without authorization from his employer. McArthur gave Livingston and Chmielarz access to Corporate Victim 4’s computer network using the remote administration tool to steal the names, addresses, phone numbers, and email addresses of potential customers, current customers, and former customers. The defendants and others could use that information to send spam to those individuals.
Livingston told defendant Chmielarz that he estimated that Corporate Victim 4’s database had records for 50 million people; Livingston also discussed the technical challenges associated with stealing such a large volume of data from Corporate Victim 4.
In an online chat dated Sept. 3, 2014, Livingston and McArthur discussed the contents of the database that they had stolen from Corporate Victim 4. McArthur estimated that they had succeeded in stealing 24.5 million records.
The maximum potential penalties for each count are as follows:
Count
Defendants
Violation
Maximum Penalty
1
Livingston
Chmielarz
McArthur
Conspiracy to Commit Fraud and Related Activity in Connection with Computers
Five years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense
2
Livingston
Chmielarz
McArthur
Conspiracy to Commit Wire Fraud
20 years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense
3
Livingston
Chmielarz
Conspiracy to Commit Fraud and Related Activity in Connection with Electronic Mail
Five years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense
The indictment also notices the forfeiture of $299,653 from several bank accounts, a 2006 Ferrari F430 two-door Spider Convertible and a 2009 Cadillac Escalade SUV.U.S. Attorney Fishman credited special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s arrests.
The government is represented by Assistant U.S. Attorneys Daniel V. Shapiro of the Computer Hacking and Intellectual Property Section of the Economic Crimes Unit and Peter Gaeta of the Asset Forfeiture-Money Laundering Unit.
The charges and allegations contained in the indictment are merely accusations and the defendants are considered innocent unless and until proven guilty.
Defense counsel:
Livingston: Jeffrey Cox Esq., Boca Raton, Florida
Chmielarz: Michael Koribanics Esq., Clifton, New Jersey
New Jersey Couple Sentenced on Federal Child Abuse ChargesRead the Press Release
NEWARK, N.J. – A former U.S. Army major and his wife were sentenced today for abusing their adopted children, who all were less than 4 years old and developmentally delayed, through neglectful and cruel acts, including by breaking their bones, denying them medical attention, withholding water and force-feeding them hot sauce, U.S. Attorney Paul J. Fishman announced.
Carolyn Jackson, 38, was sentenced to 24 months in prison and her husband, John E. Jackson, 40, formerly a major in the Army at the Picatinny Arsenal Installation in Morris County, New Jersey, was sentenced to 400 hours of community service. The government had been seeking sentences of more than 19 years and more than 15 years, respectively.
“In every case, our office seeks a sentence that is fair and just in punishing the defendants and offering justice to the victims of their crimes,” U.S. Attorney Fishman said. “In this case, those victims were the children entrusted to the Jacksons’ care. Using the federal sentencing guidelines, our analysis of the crimes of which the Jacksons were convicted by a jury called for severe penalties. Obviously, we are disappointed that the court did not agree.”
The Jacksons were each found guilty in July 2015 following four months of trial before U.S. District Judge Katharine S. Hayden in Newark federal court of one count of conspiracy to endanger the welfare of a child; Carolyn Jackson was found guilty of 11 substantive counts of endangering the welfare of a child and John Jackson was found guilty of nine substantive counts of endangering the welfare of a child. Judge Hayden imposed the sentences today in Newark federal court.
The case falls under federal jurisdiction because the crimes were committed on a military base. John Jackson was discharged from the Army in May 2015.
According to documents filed in this case and the evidence at trial:
From August 2005 until April 23, 2010, Carolyn and John Jackson conspired to engage in a constant course of neglect and cruelty towards three children they fostered and then adopted. The Jacksons told their biological children not to report the physical assaults to others, saying that the punishments and disciplinary techniques were justified, as they were “training” the adopted children how to behave.
After John Jackson was informed by a family friend that the oldest biological child had revealed the abuse in the Jackson household, John Jackson reported the breach to Carolyn Jackson, who retaliated against that biological child by beating the child 30 times with a belt.
As part of the conspiracy, the Jacksons physically assaulted their adopted children with various objects, causing two children to sustain fractured bones (including a fractured spine, fractured skull and fractured upper arms); failed to seek prompt medical attention for their injuries; withheld sufficient nourishment and food from their adopted children; withheld adequate water from two of their children and, at times, prohibited them from drinking water altogether; forced two of the children to consume foods intended to cause them pain and suffering, such as red pepper flakes and hot sauce, and caused one child to ingest excessive sodium or sodium-laden substances while being deprived of water, leading to a life-threatening condition on two separate occasions in two states. The Jacksons even punished one adopted child, who had to resort to sneaking food and drinking from the toilet, by hitting the child, making the child ingest hot sauce, and forcing the child to eat a raw onion like an apple.
None of the children, adoptive and biological, remain in the custody of the defendants.
Judge Hayden sentenced both of the Jacksons to three years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, with the investigation leading to today’s convictions. He also thanked the U.S. Army Criminal Investigation Command, under the command of Major General Mark S. Inch, and the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp.
The government is represented by Assistant U.S. Attorneys Melissa L. Jampol and Joseph B. Shumofsky of the U.S. Attorney’s Office Criminal Division in Newark.
Monmouth County, New Jersey, Stock Promoter Admits Role in $33 Million Microcap Stock Manipulation SchemeRead the Press Release
NEWARK, N.J. – A Holmdel, New Jersey, man today admitted his role in a stock market manipulation scheme that artificially inflated the stock price of four publicly traded companies through manipulative trading and other fraudulent means, U.S. Attorney Paul J. Fishman announced.
Samuel DelPresto, 48, pleaded guilty today before U.S. District Judge Jose Linares in Newark federal court to an information charging him with conspiracy to commit securities fraud.
According to the documents filed in this case and statements made in court:
From 2008 through 2010, DelPresto, a penny stock promoter who owned and operated MLF Group LLC, participated in an extensive “pump-and-dump” scheme in which he and others fraudulently inflated the prices of certain shares in order to sell them later at artificially inflated prices. The scheme involved four public companies: BioNeutral Group Inc. (BONU), NXT Nutritionals Holdings Inc. (NXTH), Mesa Energy Holdings Inc. (MSEH), and Clear-Lite Holdings Inc. (CLRH) (collectively, the “Target Companies”).
As part of the scheme, DelPresto and others first obtained control over large blocks of the free trading shares of the Target Companies. Next, DelPresto and others “pumped” the price of those shares by, among other things, engaging in manipulative trading of the stocks of the Target Companies and disseminating promotional materials encouraging others to purchase them. After pumping the stocks, DelPresto and the other conspirators “dumped” them by selling large volumes of the Target Companies’ stock to victim investors. The target companies’ stock price would then drop, resulting in losses to the victims.
In order to fraudulently inflate the price and volume of the Target Companies’ stocks, DelPresto’s conspirators paid cash kickbacks to an investment advisor in Las Vegas so that he would purchase the Target Companies’ stock on behalf of his clients. The purpose of these purchases was to, among other things, create the false appearance of market interest and demand in the stock; build trading volume that would be attractive to potential investors who would later receive promotional materials about the stock; and generate income to fund the promotional campaigns, including email blasts and newsletters, that occurred in the later phases of the scheme. Additionally, DelPresto and other conspirators engaged in coordinated trading of the Target Companies’ stock using various brokerage accounts that they owned or controlled, including the accounts of friends, family and other third parties.
The scheme collectively generated approximately $33 million in illicit trading proceeds, of which DelPresto received approximately $13 million.
The conspiracy count to which DelPresto pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for April 5, 2016.
The U.S. Securities and Exchange Commission (SEC) filed a civil complaint against DelPresto today.
U.S. Attorney Fishman credited special agent s of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to DelPresto’s guilty plea. He also thanked the SEC’s New York Regional Office, under the direction of Andrew Calamari, for its assistance in this matter.
The government is represented by Assistant U.S. Attorney Nicholas P. Grippo of the U.S. Attorney’s Office Economic Crimes Unit.
Defense Counsel: Jack Arsenault Esq., Chatham, New Jersey
Decavalcante Crime Family Associate Admits Distributing CocaineRead the Press Release
NEWARK, N.J. – An associate of the DeCavalcante organized crime family of La Cosa Nostra today admitted his role in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.
James Heeney, 36, of Elizabeth, New Jersey pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of conspiring to distribute more than 500 grams of cocaine.
According to documents filed in this case and statements made in court:
Heeney was arrested and charged by complaint in March 2015, along with eight members of the DeCavalcante crime family. He admitted that between August 2012 and March 2013, in conjunction with other family associates, he sold more than one-half a kilo of cocaine to an undercover FBI agent for at least $30,000.
The drug distribution count to which Heeney pleaded guilty carries a mandatory minimum of five years in prison, a maximum potential penalty of 40 years in prison and a $5 million fine. Sentencing is scheduled for March 23, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem; detectives of the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; and the Union County Prosecutor’s Office, under the direction of Acting Union County Prosecutor Grace H. Park, for the investigation leading to today’s plea.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Defense counsel: Paulette Pitt Esq. Woodbridge, New Jersey
Orthodox Jewish Rabbi Sentenced to More Than Three Years in Prison for Role in Conspiracy to Violently Extort Divorce Consent from Reluctant HusbandRead the Press Release
TRENTON, N.J. - An Orthodox Jewish rabbi was sentenced today to 38 months in prison for his role in a conspiracy to coerce a Jewish man to give his wife a religious divorce – referred to as a “get” – through threats of violence, U.S. Attorney Paul J. Fishman announced.
Martin Wolmark, 57, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with conspiracy to travel in interstate commerce to commit extortion. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
On Aug. 7, 2013, Wolmark, an ordained Orthodox Jewish rabbi, spoke with a woman and her brother about obtaining a Jewish divorce from the woman’s recalcitrant husband. A get is a divorce document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce. Unbeknownst to Wolmark, the woman and the brother were actually undercover FBI agents.
During the conversation, which was recorded by law enforcement, Wolmark informed the agents that there were two ways to go about obtaining a get from such a recalcitrant husband, one of which was to “nail him.” Wolmark also told the agents that coercing the husband into giving a get could be expensive. He then recommended that the agents speak with his colleague, Mendel Epstein, 70, of Lakewood, New Jersey, who he knew had previously used violence to coerce recalcitrant husbands into giving gets to their wives. Wolmark then initiated a conference call with the agents and Epstein.
On Aug. 14, 2013, the agents met with Epstein at his home to discuss the case further. On Oct. 2, 2013, Wolmark convened a rabbinical court (a “beth din”) with Epstein and Jay Goldstein in his office in Suffern, New York. The purpose of this proceeding was to determine whether there were grounds under Jewish law to coerce the husband into giving the get. The female agent also attended and recorded the meeting. During this meeting, Epstein discussed openly the plan to kidnap and assault the purported husband in order to obtain the get.
On Oct. 9, 2013, a group of Wolmark’s conspirators – including Jay Goldstein, 61, Moshe Goldstein, 32, Avrohom Goldstein, 36, Simcha Bulmash, 32, Binyamin Stimler, 40, David Hellman, 33, and Sholom Shuchat, 31, all of Brooklyn, and Ariel Potash, 42, of Monsey, New York – traveled from New York to a warehouse in Edison, New Jersey, with the intent of forcing the purported husband to give his wife a get by means of violence and threats of violence.
In addition to the prison term, Judge Wolfson ordered Wolmark to serve two years of supervised release and pay a $50,000 fine.
Avrohom Goldstein, Potash, Shuchat, Moshe Goldstein, Hellman, and Bulmash have all pleaded guilty to one count of traveling in interstate commerce to commit extortion. Avrohom Goldstein and Potash were sentenced Nov. 19, 2015 to 45 and 14 months in prison, respectively. Shuchat was sentenced to time served on Nov. 19, 2015. Moshe Goldstein was sentenced Nov. 16, 2015 to 48 months in prison. Hellman and Bulmash were sentenced Nov. 17, 2015 to 44 and 48 months in prison, respectively.
Epstein, Jay Goldstein and Stimler were all convicted at trial on April 21, 2015. Epstein, who was convicted of conspiracy to commit kidnapping, is scheduled for sentencing on Dec. 15, 2015. Stimler and Jay Goldstein, both convicted of conspiracy to commit kidnapping and attempted kidnapping, are scheduled for sentencing on Dec. 15, 2015 and Dec. 16, 2015, respectively.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.
Defense counsel: Benjamin Brafman Esq., New York
Middlesex County, New Jersey, Man Convicted of Trying to Import More Than 500 Grams of Heroin into the United StatesRead the Press Release
NEWARK, N.J. – A Sayreville, New Jersey, man was convicted today by a federal jury for his role in a conspiracy to import heroin from India into the United States, U.S. Attorney Paul J. Fishman announced.
Adolphus Nwokedi, 47, was convicted of an indictment charging him with one count of conspiring with others to import 100 grams or more of heroin. He was convicted following a three-day trial before U.S. District Judge Esther Salas in Newark federal court. The jury deliberated for about three hours before returning the guilty verdict.
According to documents filed in this case and the evidence at trial:
From Oct. 2013 through Dec. 2013, Nwokedi conspired with an individual in India to ship a parcel containing heroin into the United States. In return for $3,000, Nwokedi agreed to accept the package at his business address in Newark and then deliver it to another conspirator living in Bronx, New York. On Dec. 11, 2013, customs officers at the John F. Kennedy International Airport mail facility intercepted the parcel and found 524 grams of heroin. On Jan. 2, 2014, agents with Homeland Security Investigations conducted a controlled delivery of the parcel. Nwokedi personally accepted the parcel in Newark and was subsequently arrested.
The conspiracy count carries a mandatory minimum of five years in prison and a maximum potential penalty of 40 years in prison. Sentencing is set for March 21, 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 Acting Special Agent in Charge Kevin Kelly, with the investigation.
The government is represented by Assistant U.S. Attorneys David M. Eskew and Melissa Wangenheim of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Kevin F. Carlucci Esq., Assistant Federal Public Defender, Newark
Morris County, New Jersey, Man Sentenced to Five Years in Prison for Distributing Sexually Explicit Images of ChildrenRead the Press Release
TRENTON, N.J. – A Madison, New Jersey, man was sentenced today to 60 months in prison for distributing images of child sexual abuse from his home computer, U.S. Attorney Paul J. Fishman announced.
Michael Hodukavich, 25, previously pleaded guilty before U.S. District Judge Freda L. Wolfson to an information charging him with one count of distributing child pornography over the Internet. Judge Wolfson imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Hodukavich admitted that, on Nov. 20 and 21, 2014, he distributed videos and images depicting child sexual abuse on the Internet via peer-to-peer file sharing software, which allowed others access to the material in shared directories. An undercover agent discovered and downloaded the images and videos, and the username and IP address of the sharer was traced back to Hodukavich’s residence. Hodukavich also admitted to having more than 600 images of child sexual abuse saved on his computer.
In addition to the prison term, Judge Wolfson sentenced Hodukavich to five years of supervised release.
U.S. Attorney Fishman credited special agents of FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the Madison Police Department, under the direction of Chief of Police Darren P. Dachisen Sr., with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Melissa M. Wangenheim of the U.S. Attorney’s Office General Crimes Unit in Newark.
Defense counsel: James S. Friedman Esq., Newark
Long Island Man Admits Role in International $200 Million Credit Card Fraud ConspiracyRead the Press Release
TRENTON, N.J. - A Hicksville, New York, man today admitted his role in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.
Ijaz Butt, 56, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to Count One of an indictment charging him with conspiracy to commit bank fraud.
According to documents filed in this case and statements made in court:
Butt was originally charged in February 2013 as part of a conspiracy to fabricate more than 7,000 false identities to obtain tens of thousands of credit cards. Since then, 19 people, including Butt, have pleaded guilty in connection with the scheme.
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; and finally, run up large loans.
The scope of the criminal fraud enterprise required Butt and other conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.
Butt admitted that he 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.
The conspiracy charge to which Butt pleaded guilty carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 21, 2016.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel in Newark; postal inspectors, under the direction of Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, for the investigation leading to today’s sentencing. 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 Economic Crimes Unit and Barbara Ward, Acting Chief 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: Kenneth W. Kayser Esq., East Hanover, New Jersey
Former New Jersey Resident Admits He Conspired to Provide Material Support to ISILRead the Press Release
NEWARK, N.J. – A former resident of Bergen County, New Jersey, today admitted that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, U.S. Attorney Paul J. Fishman, Assistant Attorney General for National Security John P. Carlin, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division announced.
Nader Saadeh, 20, of Rutherford, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of conspiring with others to provide material support to ISIL. He remains detained without bail.
“Nader Saadeh is the last of the three defendants charged in the District of New Jersey in this case to admit his role in trying to provide material support to a known terrorist organization,” U.S. Attorney Fishman said. “ISIL is intent on threatening the safety of Americans here and abroad, and we and our law enforcement partners are just as intent on stopping them.”
“Nader Saadeh conspired with others, including his brother, to travel to Syria to join ISIL,” Assistant Attorney General Carlin said. “Counterterrorism is the National Security Division’s highest priority and we will continue to hold accountable those who seek to provide material support to designated foreign terrorist organizations.”
“Today in the District Court of New Jersey Nader Saadeh admitted he conspired to provide material to the Islamic State of Iraq and the Levant (ISIL),” FBI Special Agent in Charge Richard M. Frankel said. “He is one of three New Jersey men who conspired to travel overseas to join ISIL but were stopped by the outstanding work of the Newark FBI’s Joint Terrorism Task Force. I ask the citizens of New Jersey to remain vigilant and contact the FBI if they see or hear something suspicious.”
According to documents filed in this and related cases and statements made in court:
Saadeh admitted that prior to his arrest on Aug. 10, 2015, by the FBI-Newark Joint Terrorism Task Force (JTTF), he planned to travel overseas to join ISIL along with others. Saadeh discussed his plans to join ISIL with his brother, Alaa Saadeh, Samuel Rahamin Topaz, Munther Omar Saleh, and Fareed Mumuni, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted that he and these other men watched ISIL-related videos, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.
On May 5, 2015, Saadeh departed the United States with plans to travel overseas to join ISIL in furtherance of the conspiracy, according to his statements in court today. Saadeh admitted that once he reached ISIL-controlled territory he intended to fight on behalf of ISIL. Saadeh further admitted that Saleh assisted him by giving him a contact who would facilitate his travel from Turkey to ISIL in Syria.
Saadeh admitted that prior to his departure from the United States Saleh showed him technical drawings for making homemade bombs. Saadeh admitted that Saleh and Mumuni discussed plans to carry out an attack in ISIL’s name using homemade bombs at locations in New York City, including Times Square, the World Trade Center, and Vaughn College of Aeronautics and Technology, in Queens, New York.
Saadeh admitted knowing that ISIL was a designated terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes, and executing individuals who did not obey ISIL’s commands.
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000. Sentencing is scheduled for March 18, 2016.
Saadeh’s alleged conspirators are being prosecuted and are currently in federal custody. On Sept. 9 and Oct. 29, 2015, respectively, Topaz and Alaa Saadeh pleaded guilty before Judge Wigenton to conspiring to provide material support to ISIL. Saleh and Mumuni have been indicted on terrorism-related charges brought by the U.S. Attorney’s Office for the Eastern District of New York.
The charges and allegations against Saleh and Mumuni are merely accusations, and they are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman and Assistant Attorney General Carlin credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark, and the Newark JTTF with the investigation leading to today’s guilty plea. The JTTF is made up of agents and officers from the U.S. Department of Homeland Security’s Homeland Security Investigations, Bergen County Prosecutor’s Office, Passaic County Prosecutor’s Office, New Jersey State Police, Paterson Police Department, and New York City Police Department, among other federal, state, and local law enforcement agencies.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the U.S. Attorney’s Office National Security Unit in Newark, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Defense counsel: Frank P. Arleo Esq., West Orange, New Jersey
Former New Jersey Resident Admits Conspiring to Provide Material Support to ISILRead the Press Release
A former resident of Bergen County, New Jersey, today admitted that he conspired to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division.
Nader Saadeh, 20, a former resident of Rutherford, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton of the District of New Jersey in Newark to an information charging him with one count of conspiring with others to provide material support to ISIL. He remains detained without bail.
“Nader Saadeh conspired with others, including his brother, to travel to Syria to join ISIL,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority and we will continue to hold accountable those who seek to provide material support to designated foreign terrorist organizations.”
“Nader Saadeh is the last of the three defendants charged in the District of New Jersey in this case to admit his role in trying to provide material support to a known terrorist organization,” said U.S. Attorney Fishman. “ISIL is intent on threatening the safety of Americans here and abroad, and we and our law enforcement partners are just as intent on stopping them.”
“Today in the District Court of New Jersey Nader Saadeh admitted he conspired to provide material to the Islamic State of Iraq and the Levant (ISIL),” said Special Agent in Charge Frankel. “He is one of three New Jersey men who conspired to travel overseas to join ISIL but were stopped by the outstanding work of the Newark FBI’s Joint Terrorism Task Force. I ask the citizens of New Jersey to remain vigilant and contact the FBI if they see or hear something suspicious.”
According to documents filed in this and related cases and statements made in court:
Saadeh admitted that prior to his arrest on Aug. 10, 2015, by the FBI Joint Terrorism Task Force (JTTF), he planned to travel overseas to join ISIL along with others. Saadeh discussed his plans to join ISIL with his brother, Alaa Saadeh, Samuel Rahamin Topaz, Munther Omar Saleh and Fareed Mumuni, and admitted that at various times each of them indicated that they wanted to join ISIL. Saadeh also admitted that he and these other men watched ISIL-related videos, some of which depicted the execution of individuals – both Muslim and non-Muslim – regarded by ISIL as enemies.
On May 5, 2015, Saadeh departed the United States with plans to travel overseas to join ISIL in furtherance of the conspiracy, according to his statements in court today. Saadeh admitted that once he reached ISIL-controlled territory he intended to fight on behalf of ISIL. Saadeh further admitted that Saleh assisted him by giving him a contact who would facilitate his travel from Turkey to ISIL in Syria.
Saadeh admitted that prior to his departure from the United States, Saleh showed him technical drawings for making homemade bombs. Saadeh further told the court that Saleh and Mumuni discussed plans to carry out an attack in ISIL’s name using homemade bombs at locations in New York City, including Times Square, the World Trade Center and Vaughn College of Aeronautics and Technology, in Queens, New York.
Saadeh admitted knowing that ISIL was a designated foreign terrorist organization and was taking over territory overseas, expelling non-Muslims from their homes and executing individuals who did not obey ISIL’s commands.
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000. Sentencing is scheduled for March 18, 2016.
Saadeh’s alleged conspirators are being prosecuted and are currently in federal custody. On Sept. 9 and Oct. 29, 2015, respectively, Topaz and Alaa Saadeh pleaded guilty before Judge Wigenton to conspiring to provide material support to ISIL. Saleh and Mumuni have been indicted on terrorism-related charges brought by the U.S. Attorney’s Office of the Eastern District of New York. The charges and allegations against Saleh and Mumuni are merely accusations, and they are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman and Assistant Attorney General Carlin credited special agents of the FBI, under the direction of Special Agent in Charge Frankel in Newark, and the JTTF with the investigation leading to today’s guilty plea. The JTTF is made up of agents and officers from the U.S. Department of Homeland Security’s Homeland Security Investigations, Bergen County Prosecutor’s Office, Passaic County Prosecutor’s Office, New Jersey State Police, Paterson Police Department, and New York City Police Department, among other federal, state, and local law enforcement agencies.
The government is represented by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta and Francisco J. Navarro of the District of New Jersey, with assistance from Trial Attorney Robert Sander of the National Security Division’s Counterterrorism Section.
Nader Saadeh Information
Nader Saadeh Plea Agreement
Former CEO and Managing Partner of Defunct Public Charter Flight Company Indicted for Multimillion-Dollar Wire Fraud and Bank FraudRead the Press Release
The former CEO and a managing partner of a now-defunct public charter flight company were indicted today on fraud and conspiracy charges for their alleged roles in a multimillion-dollar fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Todd A. Damiani of the U.S. Department of Transportation Office of Inspector General made the announcement.
Judy Tull, 70, of Denton, Texas, and Kay Ellison, 55, of Kentucky, were each charged with one count of conspiracy to commit wire fraud and bank fraud, seven counts of wire fraud and seven counts of bank fraud. Tull and Ellison were the co-owners and, respectively, the CEO and managing partner of Southern Air & Tours, doing business as Myrtle Beach Direct Air & Tours (Direct Air), a public charter flight operator headquartered in Myrtle Beach, South Carolina.
The U.S. Department of Transportation’s regulations required charter operators to financially protect passengers either by posting a security or by keeping passenger payments for future flights in an escrow account with an approved bank. According to the indictment, Direct Air maintained such an account at a bank in New Jersey. Under the escrow agreement, the bank would not release these payments to Direct Air until Direct Air submitted a request for payment and a summary report detailing the completed flights and passengers, according to the indictment.
The indictment alleges that Tull, who handled Direct Air’s flight operations, and Ellison, who was involved in its customer reservations: made or caused others to make “ghost” reservations for fictitious passengers in Direct Air’s reservation system; submitted fraudulent documents, including request for payments and summary reports to the bank; requested payment for certain amounts on two occasions; and concealed the criminal activity and their participation in the criminal activity.
According to the indictment, in or around March 2012, Direct Air ceased operations and at that time, passengers had purchased tens of thousands of tickets for future travel, the funds for which should have been in the escrow account. At that time, however, the indictment alleges that the escrow account was $30 million short.
An indictment is merely a formal accusation. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
The U.S. Department of Transportation’s Office of Inspector General investigated the case. Trial Attorney L. Rush Atkinson and Senior Litigation Counsel Carol L. Sipperly of the Criminal Division’s Fraud Section, and Deputy Chief Scott McBride and Assistant U.S. Attorney Andrew Kogan of the District of New Jersey are prosecuting the case.
Former CEO and Managing Partner of Public Charter Company Both Charged with Defrauding New Jersey Bank, Other Financial Institutions Out of Millions of DollarsRead the Press Release
NEWARK, N.J. – The former CEO and Managing Partner of a now-defunct South Carolina public charter operator were charged today with using fraudulent documents and “ghost” reservations to collect millions in passenger payments to which they were not entitled.
Judy Tull, 70, of Denton, Texas, and Kay Ellison, 55, of Kentucky, were each indicted by a federal grand jury in Newark federal court with one count of conspiring to commit wire fraud and bank fraud, seven counts of wire fraud and seven counts of bank fraud.
New Jersey U.S. Attorney Paul J. Fishman, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Todd A. Damiani of the U.S. Department of Transportation, Office of Inspector General, made the announcement today.
According to the indictment:
Tull and Ellison co-founded Southern Air & Tours, d/b/a Myrtle Beach Direct Air & Tours, also known as “Direct Air,” a public charter operator headquartered in Myrtle Beach, South Carolina. In 2007, Direct Air began booking airline reservations and arranging for charter flights to be flown by contracted airline carriers. Direct Air offered airline services in a number of cities, including Newark. Tull served as Direct Air’s Chief Executive Officer, handled its flight operations, and dealt with its credit card processors and corporate bank. Ellison served as Direct Air’s Managing Partner and was involved in customer reservations.
U.S. Department of Transportation regulations required charter operators to protect passengers financially by posting a security or keeping passenger payments for future flights in a designated depository with an approved bank. As such, Direct Air maintained an escrow account at a New Jersey bank, identified in the complaint as “Bank 1.” Passenger payments for future flights were deposited into the account. Direct Air and the “Bank 1” agreed that these payments would not be released to Direct Air until completion of the flights. Also, the requests for payment had to include a summary detailing the flights and passengers purportedly flown.
As part of the scheme, Tull and Ellison allegedly employed a variety of techniques designed to overstate the revenues associated with recently completed flights, including making “ghost” reservations for fictitious passengers in Direct Air’s reservation system and submitting fraudulent summary reports to the bank. They also “double-dipped” by submitting release requests for passenger payments designated as “membership fees” prior to the completion of the flights, and then after the flights were completed, submitted release requests for the same funds. Lastly, they concealed their criminal activity by sending fraudulent financial statements to credit card processing companies and investors.
Direct Air ceased operations in March 2012 and filed for bankruptcy. At the time it ceased operations, passengers had purchased tens of thousands of tickets for future travel. As a result, pursuant to the DOT regulations, there should have been $30 million held in the Bank #1 escrow account. Instead, there was only $1 million in the account.
Each count of the indictment is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
U .S. Attorney Fishman credited law enforcement agents with the U.S. Department of Transportation, Office of the Inspector General, under the direction of Special Agent in Charge Todd Damiani, with the investigation leading to today’s charges.
The government is represented by Deputy Chief Scott McBride and Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit, Acting Chief Barbara Ward of the Asset Forfeiture and Money Laundering Unit and Trial Attorneys L. Rush Atkinson and Carol L. Sipperly of the U.S. Department of Justice’s Criminal Division, Fraud Section.
Defense counsel:
Tull: Clinton W. Smith Esq., Charleston, West Virginia
Ellison: James B. Lees Jr. Esq., Charleston, West Virginia
Union County, New Jersey, Man Sentenced to 12 Years in Prison for Recruiting A Girl to Work as A ProstituteRead the Press Release
NEWARK, N.J. – A Plainfield, New Jersey, man was sentenced today to 144 months in prison for arranging sexual encounters involving a 15-year-old girl in return for payment, U.S. Attorney Paul J. Fishman announced.
Ronald Garris Jr., 31, previously pleaded guilty before U.S. District Judge Jose L. Linares to an information charging him with one count of sex trafficking of a minor. Judge Linares imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Garris admitted that on June 14, 2013, he met a 15-year-old girl at a Best Western Hotel in South Plainfield, New Jersey, and recruited her to work as a prostitute. On June 18, 2013, Garris posted an advertisement on backpage.com that contained explicit photographs of the girl, including her telephone number and the town in which she was located. Garris admitted arranging “dates” in which the girl was expected to perform sexual acts in exchange for payment. Garris also admitted that on June 21, 2013, the girl went to the Howard Johnson Express Inn in New Brunswick, New Jersey, for sexual encounters that he arranged.
In addition to the prison term, Judge Linares sentenced Garris to five years of supervised release. Garris must register as a sex offender.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the New Brunswick Police Department and the Middlesex County Prosecutor’s Office with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Meredith Williams and Danielle Corcione of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Assistant Federal Public Defender Linda Foster Esq., Newark
Previously Convicted Felon from Newark, New Jersey, Charged with Firearms Possession, Drug Distribution OffensesRead the Press Release
NEWARK, N.J. – A Newark, New Jersey, man with at least six felony convictions in New Jersey courts was arrested today after federal law enforcement officers found four handguns, a 12-guage shotgun and more than 500 grams of cocaine at his residence, U.S. Attorney Paul J. Fishman announced.
Carlos Bess, 35, of Newark, New Jersey, is charged by criminal complaint with one count of possessing with intent to distribute 500 grams of cocaine and five counts of being a felon in possession of a firearm. He appeared this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and was detained.
According to the complaint:
Since June 2015, agents with the Drug Enforcement Administration (DEA) and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) have been investigating the sales of narcotics, including heroin and cocaine, in and around Middlesex and Essex Counties. Pursuant to a lawful search warrant executed at Bess’s Newark residence this morning, federal agents found a loaded .357 revolver, two loaded .380 pistols, a loaded 9 millimeter pistol, a 12-gauge shotgun and more than 500 grams of cocaine.
U.S. Attorney Fishman credited special agents with the ATF, under the direction of Special Agent in Charge George P. Belsky in Newark, and special agents with the DEA, under the direction of Special Agent in Charge Carl J. Kotowski, with the investigation.
The government is represented by Assistant U.S. Attorney Melissa Wangenheim of the U.S. Attorney’s Office Criminal Division in Newark.
The charges and allegations contained in the complaints are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Defense counsel: John H. Yauch Esq., Assistant Federal Public Defender, Newark
Bergen County, New Jersey, Man Charged in Alleged Investment Fraud SchemeRead the Press Release
NEWARK, N.J. – A North Arlington, New Jersey, man will appear in federal court today to face charges that he fraudulently obtained hundreds of thousands of dollars from investors prior to high-profile initial public offerings (IPOs) and then used the funds for lavish personal expenses, U.S. Attorney Paul J. Fishman announced.
Omar Hafez, 23, is charged by complaint with one count of conspiracy to commit wire fraud. FBI special agents and U.S. Postal inspectors arrested Hafez last night. He is scheduled to appear this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.
According to the complaint unsealed today:
From July 2014 to December 2015, Hafez and others solicited funds from victim investors, purportedly to be invested in shares of various companies prior to their IPOs. As a result, the victims provided Hafez and others with hundreds of thousands of dollars. However, instead of purchasing shares in those companies, Hafez and the other conspirators used the funds for their own benefit.
Hafez and others created a number of entities through which they operated the scheme, including but not limited to: Lotus Global Wealth Management, Lotus Wealth Management, Lotus Global Capital Investments Corporation, Lotus Global Capital Partners LLC, Lotus Global LLC, Lotus Global Property Management Corporation, Lotus Global Holdings LLC (collectively the “Lotus Global Entities”) and O.P.I. Wealth Management Corporation. Hafez held himself out to be the Chief Executive Officer (CEO) of the Lotus Global Entities.
For example, in February 2015, Hafez told an individual referred to in the complaint as “Victim 1” that he was CEO of Lotus Global and had access to pre-IPO shares of high-profile companies, including an entity referred to in the complaint as “Company A,” a cloud communications company that allowed software developers to integrate voice, text and other communications services into mobile and web applications. Hafez represented that following Company A’s IPO, the value of the shares would increase significantly, providing Victim 1 with significant profits after Hafez sold the shares. As a result, Victim 1 sent Hafez a $100,000 check to purchase shares of Company A.
In March 2015 and April 2015, Hafez represented to Victim 1 that he could sell Victim 1 pre-IPO shares of an entity referred to in the complaint as “Company B,” an Internet domain registrar and web hosting company. Again, Hafez represented that following the company’s IPO, the value of the shares would increase significantly. As a result, Victim 1 sent Hafez a wire in the amount of approximately $300,000 for shares of Company B.
None of the approximately $400,000 provided by Victim 1 was used to purchase shares of Company A, Company B or any other pre-IPO company. Instead, Hafez and other conspirators used Victim 1’s money for personal expenses, including an $87,000 purchase at Prestige Motors – a luxury car dealership – as well as approximately $100,000 in cash withdrawals.
The wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and postal inspectors with the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Courtney A. Howard of the U.S. Attorney’s Office Criminal Division in Newark.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
If you believe you are a victim of or otherwise have information concerning this alleged scheme, you are encouraged to contact the FBI at 973-792-3000.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Defense counsel: Richard Coughlin Esq., Camden
Atlantic County, New Jersey, Tax Preparer Convicted of Tax FraudRead the Press Release
CAMDEN, N.J. – An Atlantic County, New Jersey, tax preparer was convicted today of tax fraud for including fraudulent credits and deductions on federal tax returns for his clients in an effort to gain repeat business for himself, U.S. Attorney Paul J. Fishman announced.
Tinh Van Vo, 59, of Egg Harbor Township, New Jersey, was convicted of 10 counts of aiding and assisting in the preparation of false federal income tax returns following a two-week trial before U.S. District Judge Robert B. Kugler in Camden federal court. The jury deliberated two hours before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial:
Vo prepared and filed fraudulent U.S. Individual Income Tax Returns through his business, TVO Services in Atlantic City, New Jersey. The returns attached schedules for fictitious educational credits, charitable contributions, and job expenses the taxpayers were not entitled to take – all to generate fraudulently inflated refunds.
Each false tax return count carries a maximum potential penalty of three years in prison and a $250,000 fine. Sentencing for Vo is scheduled for March 9, 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 verdicts.
The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the Criminal Division in Camden, New Jersey.
Defense counsel: William J. Hughes Jr. Esq., Atlantic City, New Jersey
Somerset County, New Jersey, Man Admits Knowingly Possessing Air Tank Filled with Heroin and CocaineRead the Press Release
NEWARK, N.J. – A Somerset, New Jersey, man who was pulled over with an air tank hiding 19 kilograms of cocaine and seven kilograms of heroin today admitted his intent to distribute the drugs in the Jersey City, New Jersey, area, U.S. Attorney Paul J. Fishman announced.
Richard Vasquez Rodriguez, 35, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to a superseding information charging him with one count of distribution and possession with intent to distribute cocaine and one count of distribution and possession with intent to distribute heroin.
According to documents filed in this case and statements made in court:
On Jan. 16, 2014, Rodriguez was driving a 2005 Blue Chevrolet Tahoe on the New Jersey Turnpike headed towards Jersey City. Law enforcement officers pulled over Rodriguez and he consented to a search of the vehicle.
Law enforcement found an air tank, similar to a helium tank for filling balloons, lying in the back of the Chevrolet Tahoe. Upon closer inspection, it appeared that one end of the air tank had been removed at some point and welded back together. A search of the air tank revealed that it contained approximately 19 kilograms of cocaine and seven kilograms of heroin. Rodriguez admitted today that he transported the air tank with the intent to distribute the cocaine and heroin.
Both distribution offenses to which Rodriguez pleaded guilty carry a maximum penalty of 20 years in prison and a $1 million fine. Sentencing is scheduled for March 16, 2016.
U.S. Attorney Fishman credited special agents of the Drug Enforcement Administration (DEA), Newark Division, under the direction of Special Agent in Charge Carl J. Kotowski, and officers of the N.J. State Police, under the direction of Col. Joseph R. Fuentes, superintendent of the state police, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorneys Jacques S. Pierre, Joyce M. Malliet and Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Dennis D.S. McAlevy Esq., Union City, New Jersey
Florida Woman Sentenced to Three and A Half Years in Prison for Role in $3 Million Time-Share Mortgage Fraud SchemeRead the Press Release
CAMDEN, N.J. – A Lake Worth, Florida, woman was sentenced today to 42 months in prison for her role in a $3 million conspiracy to scam customers by offering phony consulting services to owners of timeshares through the New Jersey-based Vacation Ownership Group LLC, U.S. Attorney Paul J. Fishman announced.
Genevieve Manzoni, 50, was previously convicted in September 2013 of one count of mail fraud and one count of conspiracy to commit mail and wire fraud. She was convicted following a seven-week trial before U.S. District Judge Noel L. Hillman, who imposed the sentence today in Camden federal court.
According to documents filed in this case and the evidence presented at trial:
Manzoni and her codefendants were part of a scheme to defraud hundreds of timeshare owners by offering fraudulent consulting services through Vacation Ownership Group (now VO Financial). Adam Lacerda, 31, of Egg Harbor Township, New Jersey, the company founder, president and chief executive officer, devised the company’s fraudulent sales pitches. He directed his sales force to tell numerous lies to VO customers, including that VO worked with the banks holding the customers’ loans, would use money sent by customers to pay off the customers’ loans on their timeshares, and could cancel customers’ timeshares with money back.
His wife, Ashley Lacerda, 36, the company vice president and chief operating officer, sent fraudulent contracts to customers and managed the office. Ian Resnick, 40, of Absecon, New Jersey, a convicted bank robber, started as a salesman giving the fraudulent sales pitch but became Adam Lacerda’s enforcer, with the title “director of compliance.” Manzoni was a top VO sales representative who falsely told one victim she worked with a bank, another victim that she worked with a timeshare developer.
All four defendants were convicted at the same trial. The 14 victims who testified – including business executives, veterans, senior citizens, a lawyer and a professor – were defrauded out of tens of thousands of dollars by the defendants’ sophisticated scheme.
In addition to the prison term, Judge Hillman ordered Manzoni to serve three years of supervised release and pay restitution of $174,842.13.
Adam Lacerda was sentenced to 27 years in prison on June 25, 2015. Ashley Lacerda and Resnick still await sentencing.
U.S. Attorney Fishman credited special agents of FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Richard M. Frankel 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 the investigation. He also thanked the N.J. Department of Labor and Workforce Development for its assistance.
The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Criminal Division in Camden.
Defense counsel:
Adam Lacerda: Mark E. Cedrone Esq., Philadelphia
Ashley Lacerda: Charles Nugent Esq., Marlton, New Jersey
Ian Resnick: Michael E. Reilly Esq., Philadelphia
Genevieve Manzoni: Ralph A. Jacobs Esq., Philadelphia
Gloucester County, New Jersey, Man Charged with Receiving Images of Child Sexual AbuseRead the Press Release
CAMDEN, N.J. – A Williamstown, New Jersey, man who was found with 41 computer disks containing images and videos of child sexual abuse was arrested this morning by FBI agents, U.S. Attorney Paul J. Fishman announced.
Eric Ziegler, 37, of Williamstown, New Jersey, is charged by criminal complaint with receiving child pornography. He is scheduled to appear this afternoon before U.S. Magistrate Judge Ann Marie Donio in Camden federal court.
According to documents filed in this case:
Beginning in February 2015, law enforcement officers learned that a user of an Internet account registered to a Williamstown residence was linked to an online community of individuals who regularly sent and received child pornography via a website that operated on an anonymous online network. Further investigation revealed that Ziegler, who works from home providing technological support to computer users who work for financial institutions, was utilizing the anonymous network to view and receive images of child sexual abuse.
On Dec. 3, 2015, law enforcement officers executed a search warrant at Ziegler’s residence. An initial review of the evidence recovered revealed dozens of computer discs containing images of child sexual abuse, including images and video files of adult men engaged in intercourse with prepubescent girls.
The count of receiving child pornography is punishable by a mandatory minimum sentence of five years in prison and a maximum penalty of 20 years in prison. The charge also carries a maximum $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge William F. Sweeney in Philadelphia, with the investigation leading to today’s arrest.
The government is represented by Assistant U.S. Attorney Steven D’Aguanno of the New Jersey U.S. Attorney’s Office Camden Office.
The charge and allegations contained in the complaint are merely accusations, and the defendant is considered innocent unless and until proven guilty.
Former Bergen County, New Jersey, Democratic Chairman Sentenced to 35 Months in Prison on Racketeering ChargesRead the Press Release
NEWARK, N.J. – The former chairman of the Bergen County Democratic Organization (BCDO), was sentenced today to 35 months in prison for his role in a racketeering scheme involving fraud and soliciting and accepting bribes as a party official, U.S. Attorney Paul J. Fishman announced.
Joseph A. Ferriero, 58, was found guilty in April 2015 following an eight-week trial before U.S. District Judge Esther B. Salas in Newark federal court. The jury deliberated four days before finding Ferriero guilty of conducting the BCDO’s affairs through a pattern of racketeering activity (Count One), using the mail and facilities in interstate commerce to promote bribery and distribute bribe proceeds (Count Three) and wire fraud (Count Five).
“The sentence handed down today to Joseph Ferriero is the final result of his running a local political organization as a criminal enterprise,” U.S. Attorney Fishman said. “He used his power and position to enrich himself through a racketeering operation fueled by influence peddling, bribes and kickbacks. Punishing this kind of political corruption has been – and continues to be – a priority for this office.”
“Today’s sentencing of Joseph A. Ferriero reaffirms the FBI’s commitment to combat public corruption in New Jersey and serves as a reminder that those individuals who violate the public’s trust will be held accountable,” Richard M. Frankel, FBI Special Agent in Charge, of the Newark Division, said.
According to documents filed in this case and the evidence at trial:
Ferriero served as the chairman of the BCDO from 1998 until January 2009 and was the sole member of SJC Consulting LLC. The jury found Ferriero accepted bribes in his capacity as BCDO chairman in the course of a scheme involving SJC. Ferriero agreed with John Carrino, a Nutley, New Jersey-based attorney and software developer, that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained as a result of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.
In addition to the prison term, Judge Salas sentenced Ferriero to three years of supervised release, ordered him to pay restitution of $11,875 and entered an order of forfeiture for $11,875.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Frankel, and investigators from the U.S. Attorney’s Office, under the direction of Supervisory Criminal Investigator Thomas Mahoney, with the investigation leading to today’s sentencing.
The government is represented by Counsel to the U.S. Attorney Rachael A. Honig and Assistant U.S. Attorney Barbara Llanes of the Special Prosecutions Division in Newark.
Defense counsel: Michael Baldassare, Jennifer Mara and Dillon Malar Esqs., Newark
U.S. Attorney’s Office/District of New Jersey Collects $102.5 Million in Civil and Criminal Actions in Fiscal Year 2015Read the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the District of New Jersey collected $102,476,557 in criminal and civil actions in Fiscal Year 2015. Of this amount, $64,631,183 was collected in criminal actions and $37,845,373 was collected in civil actions.
The District of New Jersey worked with other U.S. Attorneys’ Offices and components of the Department of Justice to collect an additional $9.27 billion in cases pursued jointly with these offices. Of this amount, $279,806 was collected in criminal actions and $9,265,900,389 was collected in civil actions.
Attorney General Loretta E. Lynch announced today that the Justice Department collected $23.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2015. The more than $23.1 billion in collections in FY 2015 represents more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 93 U.S. Attorneys’ Offices and the main litigating divisions in that same period.
“Our office is responsible for keeping the public safe from all kinds of abuse, from violent crime to financial exploitation,” U.S. Attorney Fishman said. “As part of that mission, the public servants in our office continue collect far more in fines, penalties, asset forfeiture, restitution and settlements than our operating expenses. Using that money to make crime victims whole, invest in our law enforcement partners and help fund the general treasury is good economics and good for public safety.”
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
For example, in the District of New Jersey in December 2014, OtisMed Corp. and its former chief executive officer admitted intentionally distributing knee replacement surgery cutting guides after their application for marketing clearance had been rejected by the Food and Drug Administration (FDA), and the corporation agreed to pay more than $80 million to resolve its related criminal and civil liability. The company was fined $34.4 million and ordered to pay $5.16 million in criminal forfeiture. In a separate civil settlement, OtisMed agreed to pay $40 million plus interest to resolve its civil liability.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Additionally, the U.S. Attorney’s Office in New Jersey, working with partner agencies and divisions, collected $18,808,153 in asset forfeiture actions in FY 2015. Forfeited assets deposited into the Department of Justice Assets Forfeiture Fund are used to restore funds to crime victims and for a variety of law enforcement purposes.
As a result of criminal and civil asset forfeiture actions prosecuted by the U.S. Attorney’s Office in New Jersey in conjunction with partner agencies and divisions, $18,808,153 was deposited into the Department of Justice and Department of Treasury asset forfeiture funds in FY 2015. Monies from the assets forfeiture funds are returned to victims of financial crimes and used for various law enforcement purposes.
In FY 2015 the U.S. Attorney’s Office in New Jersey also obtained final orders of forfeiture for property that is being held pending sale, including 2,251 pieces of artwork valued at more than $15 million that the government’s complaint alleged was purchased by Philip Rivkin with the proceeds of a fraudulent scheme that sold fake credits for renewable energy. In June, Rivkin pleaded guilty in the Southern District of Texas to mail fraud and a Clean Air Act violation. The forfeited artwork includes works by some of the country’s most influential photographers, including Alfred Stieglitz and Edward Weston. The numerous Stieglitz prints include a waxed palladium print titled “Georgia O’Keeffe,” which Rivkin purchased for $675,000, and numerous prints of Marilyn Monroe.
MS-13 Member Pleads Guilty in Violent Racketeering ConspiracyRead the Press Release
Defendant Admitted his Participation in MS-13 and Witness Retaliation Murder Conspiracy
A North Plainfield, New Jersey, man pleaded guilty today to conspiracy to commit murder in furtherance of a racketeering enterprise known as La Mara Salvatrucha, or MS-13, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division.
Jose Romero-Aguirre, aka Conejo, 29, pleaded guilty before U.S. District Judge Stanley R. Chesler of the District of New Jersey, who scheduled sentencing for March 16, 2016. Romero-Aguirre remains detained pending sentencing.
According to court documents, MS-13 is a national and international gang with branches or “cliques” operating throughout the United States, including in Plainfield, New Jersey. In connection with his plea, Romero-Aguirre admitted that he was a member of the Plainfield Locos Salvatrucha (PLS) Clique of MS-13 for a period of time continuing through at least August 2011. Romero-Aguirre admitted that in or around July 2011, MS-13 members began investigating the arrest of several members of the PLS Clique to identify those who had provided police with information on the arrestees, contrary to PLS rules. Romero-Aguirre admitted that he participated in phone calls with other incarcerated MS-13 members discussing the need to find and kill the witnesses and that he agreed to relay the murder instructions from the incarcerated members to the other MS-13 members.
Twelve other members and associates of the PLS Clique are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, attempted murder, robbery, extortion, witness retaliation and sexual assault.
FBI’s Newark Division, U.S. Immigration and Customs Enforcement-Homeland Security Investigations’ Newark Field Office, the Plainfield Police Department and the Union County, New Jersey, Prosecutor’s Office investigated the case. Assistant U.S. Attorneys James Donnelly and Jamari Buxton of the District of New Jersey and Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section are prosecuting this case.
Civil Settlement Reached with Environmental Testing Company over Claims That Testing Procedures Were Not FollowedRead the Press Release
NEWARK, N.J. – An environmental testing company headquartered in Dayton, New Jersey, will pay $3 million to resolve allegations that it failed to follow proper EPA methodology during some of its tests, U.S. Attorney Paul Fishman announced today.
Accutest Corp., also known as Accutest Laboratories (Accutest) is an environmental testing laboratory founded in 1956. It provides environmental analytical services to industrial, engineering/consulting, and government clients, according to its website.
The settlement resolves allegations that between Jan. 1, 2011, and Dec. 31, 2013, Accutest failed to properly follow EPA standards in analyzing certain soil and water samples in its semi-volatile and extraction laboratories. It was alleged that Accutest did not properly extract samples because: (1) It did not perform the required number of shakes for waste water samples, (2) it did not wait the required amount of time in between shakes of the samples, and (3) it did not properly “spike” samples with a known compound as part of the quality control process, possibly affecting the quality control process in place to ensure that materials in the sample were fully extracted. It was also alleged that Accutest altered the settings on their gas chromatography/mass spectrometry machines and disregarded calibration protocols.
In addition to the $3 million payment by Accutest, the company has agreed to fully comply with the requirements of its certifying bodies regarding notice of the allegations and has agreed to notify any of its clients that could have been impacted by the alleged conduct.
U.S. Attorney Fishman credited special agents of the Environmental Protection Agency under the direction of Special Agent in Charge Thomas E. Muskett of the Environmental Protection Agency, Office of Inspector General, Office of Investigations, Washington Field Office; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Craig W. Rupert; the U.S. Army Criminal Investigation Division, Major Procurement Fraud Unit, Mid-Atlantic Fraud Field Office, under the direction of Special Agent in Charge Larry S. (Scott) Moreland. He also thanked the U.S. Navy Criminal Investigative Service – Northeast Field Office and the U.S. Air Force Office of Special Investigations.
The government is represented by Assistant U.S. Attorney Mark C. Orlowski of the U.S. Attorney’s Civil Division in Newark.
The case is captioned U.S. ex rel. Koroush Vaziri, et al. v. Accutest Laboratories, Civil Action, No. 3:13-CV-02223-FLW-TJB.
Defense counsel: Lisa A. Krigsten Esq., Kansas City, Missouri
Counsel for relator: Neil Mullen Esq., Montclair, New Jersey
Union County, New Jersey, Man Admits Role in $6 Million Mortgage Fraud SchemeRead the Press Release
NEWARK N.J. – An Elizabeth, New Jersey, man today admitted recruiting straw buyers and submitting bogus loan applications as part of large-scale mortgage fraud scheme involving properties in northern New Jersey, U.S. Attorney Paul J. Fishman announced.
Miguel LaRosa, 48, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court of an information charging him with one count of conspiracy to commit wire fraud.
According to documents filed in this case and statements made in court:
LaRosa admitted that, from March 2011 through November 2012, he conspired with others to fraudulently obtain mortgages using falsified loan applications, supporting documents and closing documents. In addition to recruiting straw buyers to purchase properties, LaRosa and others created misleading certifications that bank accounts contained a specific amount of money when they actually contained less, prepared false appraisal reports, back-dated deeds and used unlicensed title agents to close transactions and disburse the mortgage proceeds.
Overall, the conspiracy in which LaRosa was involved resulted in more than $6 million in fraudulent loans and exposed lenders and the Federal Housing Administration to more than $2 million in potential losses.
The conspiracy to commit wire fraud charge is punishable by a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for March 10, 2016.
U .S. Attorney Fishman credited law enforcement agents of the FBI Newark Mortgage Fraud Task Force, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge Maria L. Kelokates; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Steven Perez; special agents of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), under the direction of Special Inspector General Christy Romero; special agents of IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and the Hudson County Prosecutor’s Office, under the direction of Prosecutor Esther Suarez, for their roles in the investigation leading to today’s plea.
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 Unit in Newark.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
Defense Counsel: Dennis S. Cleary Esq., Newark
Two Associates of Decavalcante Crime Family Admit Distributing CocaineRead the Press Release
NEWARK, N.J. – Two associates of the DeCavalcante organized crime family of La Cosa Nostra today admitted their roles in distributing more than 500 grams of cocaine, U.S. Attorney Paul J. Fishman announced.
John Capozzi, 34, of Union, New Jersey, and Mario Galli, 23, of Toms River, New Jersey, each pleaded guilty before U.S. District Judge William H. Walls to an information charging them with one count of distribution of more than 500 grams of cocaine.
According to documents filed in this case and statements made in court:
Capozzi and Galli were arrested and charged by complaint in March 2015, along with eight members of the DeCavalcante crime family. They both admitted that between Dec. 12, 2014, and March 2015, in conjunction with other family associates, they sold more than one-half a kilo of cocaine to an undercover FBI agent for at least $78,000.
The drug distribution count to which Capozzi and Galli each pleaded guilty carries a mandatory minimum of five years, a maximum of 40 years in prison and a $5 million fine. Sentencing for both defendants is scheduled for March 21, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the N.J. State Commission of Investigation, under the direction of Acting Executive Director Lee C. Seglem; the Waterfront Commission of New York Harbor, under the direction of Executive Director Walter M. Arsenault; and the Union County Prosecutor’s Office, under the direction of Acting Union County Prosecutor Grace H. Park.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney James Donnelly of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.
Defense counsel:
Capozzi: Neil G. Duffy III Esq., Union, New Jersey
Galli: James N. Butler Jr. Esq., Asbury Park, New Jersey
Somerset County, New Jersey, Man Charged with Using Bogus Non-Profit to Deceive Seniors into Unnecessary Genetic TestingRead the Press Release
Paid Healthcare Providers to Falsely Claim Tests Were Necessary, Defrauding Medicare of More than $1 million
NEWARK, N.J. – A Somerset, New Jersey, man was arrested this morning and charged with using the non-profit The Good Samaritans of America to defraud the Medicare program by convincing hundreds of senior citizens to submit to unnecessary genetic testing, U.S. Attorney Paul J. Fishman announced.
Seth Rehfuss, 41, was charged by criminal complaint with one count of healthcare fraud. He is scheduled to appear later today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court.
According to the complaint:
From July 2014 and continuing through the present, Seth Rehfuss and others used The Good Samaritans of America to gain access to low-income senior housing complexes. Rehfuss and other members of the scheme claimed that The Good Samaritans of America was a “trusted non-profit” that assisted senior citizens in navigating federal benefit programs. In reality, The Good Samaritans of America was a front to present information about genetic testing. Rehfuss used advertisements for free ice cream to ensure attendance at the presentations.
In order to convince senior citizens to submit to genetic testing, Rehfuss used fear-based tactics during the presentations, including suggesting the senior citizens would be vulnerable to heart attacks, stroke, cancer and suicide if they did not have the genetic testing. In addition, Rehfuss claimed that the genetic testing allowed for “personalized medicine.”
As part of the scheme, defendant Rehfuss and others frequently took DNA swabs in the community rooms where the presentations took place or made arrangements to visit the senior citizen’s apartment on another day to take the DNA swab. Regardless of the timing or location of the swabbing, the DNA swab was collected without the involvement of any healthcare provider and without any determination by a healthcare provider that such testing was medically necessary or appropriate.
In order to get the tests authorized, Rehfuss used advertisements on Craigslist to recruit healthcare providers for the scheme. After entering into contractual relationships with The Good Samaritans of America, the healthcare providers received requisition forms that often included a patient’s personal information, Medicare information, medication lists and diagnosis codes. The healthcare providers were paid thousands of dollars per month to sign their names to requisition forms authorizing testing for patients they never examined and were in no way involved in the patients’ care or treatment. As a result, Rehfuss caused the Medicare program to pay more than $1 million to two clinical laboratories, from which defendant Rehfuss obtained commissions of tens of thousands of dollars.
The investigation revealed that Rehfuss and others were actively working towards expanding the scheme outside of New Jersey into other states, including: Georgia, Delaware, Virginia, Maryland, Pennsylvania, South Carolina, Michigan, Mississippi, Florida, Tennessee and Arizona.
The healthcare fraud charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited special agents of the U.S. Department of Health and Human Services – Office of the Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, along with investigators from the United States Attorney’s Office for the District of New Jersey and the U.S. Marshals Service Asset Forfeiture Program, with the investigation leading to the charges.
The pending charges against Rehfuss are merely allegations, and he is considered innocent unless and until proven guilty.The government is represented by Assistant U.S. Attorney Danielle M. Corcione of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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: TBD
Pennsylvania Woman Convicted for Millions of Dollars in Fraudulent Sales of Telecom EquipmentRead the Press Release
NEWARK, N.J. – A Pennsylvania woman was convicted today for her role in a long-running, large-scale scheme involving the fraudulent sale of telecommunications equipment belonging to a company she worked for as a consultant, U.S. Attorney Paul J. Fishman announced.
Following an 11-day trial before U.S. District Judge Peter G. Sheridan in Trenton federal court, Juanita L. Berry, 47, of Phoenixville, Pennsylvania, was convicted of four counts of wire fraud, which caused more than $3.5 million in losses, and two counts of tax evasion for evading taxes in 2010 and 2011. The jury deliberated for 75 minutes before returning the guilty verdicts.
According to documents filed in this case and the evidence at trial:
From 2008 to 2011, Berry worked as a consultant for an Indiana company that installed and removed telecommunications systems, first as a sales representative and later as the company’s vice president for major accounts. Initially, Berry worked out of the company’s Levittown, Pennsylvania, facility and, later, out of its Dayton, New Jersey, facility. The “brains” of the telecommunications systems the company installed and removed were the electronic circuit boards of varying complexity that range in price between several hundred to tens of thousands of dollars.
Berry owned a company named J. Starr Communications Inc., (J. Starr) through which she arranged her consulting agreement and allegedly operated her fraudulent scheme.
Without the knowledge or authorization of the telecommunications company’s management, Berry sold both used cards and new cards with other telecommunications equipment owned by the company as though such equipment belonged to her or J. Starr. She then pocketed the proceeds from such fraudulent sales. Berry deceived employees at the Levittown and Dayton facilities into thinking that the shipments of used cards were part of the telecommunications company’s normal course of business. Between 2008 and 2011, the Florida company that purchased the cards from Berry or J. Starr wired in excess of $3.5 million in payment to J. Starr’s bank account.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, for the investigation leading to today’s conviction.
The government is represented by Senior Litigation Counsel Andrew Leven and Assistant U.S. Attorney Lucy Muzzy of the U.S. Attorney’s Office in Newark.
Defense counsel: David E. Schafer Esq., Lawrenceville, New Jersey
Owner and Employees of Defense Contracting Firm Charged with Conspiracy to Defraud the U.S. Department of Defense and to Violate the Arms Export Control ActRead the Press Release
NEWARK, N.J. – The owner and two employees of a New Jersey defense contracting business were charged today in connection with an alleged scheme to fraudulently acquire lucrative manufacturing contracts with the U.S. Department of Defense (DoD), U.S. Attorney Paul J. Fishman announced.
Ferdi Murat Gul, a/k/a “Fred Gull,” 39, of Turkey, was charged with one count of wire fraud conspiracy, one count of conspiring to violate the Arms Export Control Act and five counts of violating the act. Fatih Civi, a/k/a “Frank Civi,” 44, of Paterson, New Jersey, and Serap Basci, a/k/a “Sarah Basci,” 29, of Clifton, New Jersey, both naturalized U.S. citizens born in Turkey, were arrested today and each charged in a separate complaint with one count of wire fraud conspiracy and one count of conspiring to violate the Arms Export Control Act for their roles in conspiring with Gul to defraud the DoD and to export military technical drawings to Turkey without prior approval from the U.S. Department of State. Civi and Basci made their initial court appearance earlier today before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court. Gul remains at large.
According to the documents filed in this case and statements made in court:
Gul is the principal owner, chief executive officer, and general manager of two companies: Bright Machinery Manufacturing Group Inc. (BMM), a defense contracting company in Paterson, New Jersey; and FMG Machinery Group (FMG), a purported manufacturing company with addresses in Paterson, New Jersey, and Long Island City, New York. Gul also has an ownership interest in HFMG Insaat (HFMG), a manufacturing company located in Turkey. Civi is BMM’s production manager; Basci is BMM’s sales and purchasing manager, and is responsible for handling the company’s government sales, commercial sales, and purchasing activities.
Over the past five years, BMM allegedly obtained hundreds of contracts with the DoD by falsely claiming that the military parts it contracted to produce would be manufactured in the United States. From October 2010 through June 2015, the total value of the contracts awarded to BMM under this scheme was $7.3 million.
The complaint alleges that Gul routinely submitted to DoD electronic bids that contained false representations about BMM’s purported domestic manufacturing operations. He submitted quotes to the DoD claiming that BMM would provide military goods manufactured in the United States, when in fact the company relied almost exclusively on Gul’s Turkish-based production facilities at HFMG. Gul routinely and unlawfully exported drawings and technical data, some of which was subject to U.S. export control laws, in order to secretly manufacture military parts in Turkey. Gul, Civi, and Basci then supplied those foreign-made parts to unwitting DoD customers in the United States.
The conspirators allegedly took substantial measures to conceal their illicit manufacturing activities and ongoing fraud. Gul and Basci routinely submitted forged certifications and fabricated information by e-mail to DoD representatives in New Jersey, which falsely represented that BMM and its U.S.-based subcontractors performed necessary quality control procedures in their purported domestic manufacture of military parts. Civi routinely met with DoD representatives at BMM’s Paterson facility to review and confirm the same false information that had been electronically submitted by Gul and Basci. DoD personnel were deceived into authorizing payment to BMM for military parts that were not, in fact, manufactured in the United States, in direct violation of DoD protocol and, in some instances, U.S. export control laws. The conspirators’ shipping and banking transactions were conducted in a manner to eliminate any direct links between the conspirators’ foreign manufacturing process at HFMG and their U.S. based-operations at BMM.
BMM fraudulently acquired 346 contracts from the DoD, purportedly for the domestic manufacture of military parts. Some of these contracts included the manufacture of parts for torpedoes used in U.S. Navy submarines, bomb ejector racks and armament utilized in U.S. Air Force aircraft, and firearms and mine clearance systems used by U.S. military personnel abroad. In several instances, subsequent testing by the DoD revealed that parts supplied by the conspirators had numerous design flaws and non-conformities and were unusable.
The count of wire fraud conspiracy carries a maximum penalty of 20 years in prison and a fine of $250,000. The count of conspiracy to violate the Arms Control Export Act carries a maximum penalty of five years in prison and a fine of $250,000. The counts of violating the Arms Control Export Act carry a maximum penalty of 20 years in prison and a $1 million fine.
The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.
U.S. Attorney Fishman credited special agents of the U.S. Department of Defense, Defense Criminal Investigative Service Northeast Field Office, under the leadership of Special Agent in Charge Craig W. Rupert, and special agents of the Department of Homeland Security, Homeland Security Investigations, Counter Proliferation Investigations, under the supervision of Acting Special Agent in Charge Kevin Kelly, with the investigation leading to today’s charges.
The government is represented by Assistant U.S. Attorneys Dennis C. Carletta of the U.S. Attorney’s Office National Security Unit, and Sarah Devlin of the office’s Asset Forfeiture Unit, in Newark, along with the assistance of Trial Attorney David Recker of the Justice Department’s National Security Division.
The charges and allegations contained in the federal criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Ms-13 Gang Member Admits Role in Witness Retaliation Murder ConspiracyRead the Press Release
NEWARK, N.J. – A MS-13 gang member from Somerset County, New Jersey, today admitted relaying instructions to murder government witnesses from incarcerated gang members, New Jersey U.S. Attorney Paul J. Fishman and Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division announced.
Jose Romero-Aguirre, a/k/a “Conejo,” 29, of North Plainfield, New Jersey, pleaded guilty before U.S. District Judge Stanley R. Chesler to Count 26 of an indictment charging him with conspiracy to commit murder in furtherance of a racketeering enterprise known as La Mara Salvatrucha, or MS-13.
According to the documents filed and statements made in court:
MS-13 is a national and international gang composed primarily of immigrants or descendants from El Salvador. Branches, or “cliques,” of MS-13 operate throughout the United States, including Plainfield, New Jersey. MS-13 members are required to commit acts of violence to maintain membership and discipline within the gang.
According to statements made by Romero-Aguirre in court, he was a member of the Plainfield Locos Salvatrucha (PLS) clique of MS-13 from at least August 2011. Romero-Aguirre admitted that he conspired with other members of MS-13 to engage in racketeering activity, including acts of murder, robbery, extortion and drug trafficking.
Romero-Aguirre admitted that one of the central rules of MS-13 forbids any member from ever providing information about the gang’s criminal activity to the police. According to Romero-Aguirre, MS-13 members began investigating the arrest of several members of his clique in or around July 2011. Romero-Aguirre participated in phone calls with other incarcerated MS-13 members and discussed the need to find and kill the witnesses responsible for these arrests. Romero-Aguirre agreed to relay the murder instructions from the incarcerated members to the other MS-13 members at large, including a message that the MS-13 members had 24 days to eliminate one of the government witnesses. Romero-Aguirre also admitted that he agreed to pass these murder instructions because he believed it would preserve his own position within MS-13.
The conspiracy charge to which Romero-Aguirre pleaded guilty carries a maximum potential penalty of ten years in prison and a $250,000 fine. He remains detained pending his sentencing, which is currently scheduled for March 16, 2016.
Twelve additional members and associates of the PLS clique of MS-13 are scheduled for trial in front of U.S. District Judge Stanley R. Chesler on February 9, 2016. The charges include several counts of murder, attempted murder, robbery, extortion, witness retaliation and sexual assault.
U.S. Attorney Fishman credited special agents of Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), Newark Division, under the direction of Acting Special Agent in Charge Kevin Kelly, and the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s plea. They also thanked the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Grace H. Park, and the Plainfield Police Department, for their work on the case.
The government is represented by Assistant United States Attorneys James Donnelly and Jamari Buxton of the U.S. Attorney’s Office Criminal Division in Newark as well as Trial Attorney Kevin L. Rosenberg with the Justice Department Criminal Division’s Organized Crime and Gang Section.
Defense counsel: Christopher L. Patella Esq., Bayonne, New Jersey
Miami-Dade, Florida, Police Officer Sentenced to 10 Years in Prison for Role in Cocaine Distribution ConspiracyRead the Press Release
NEWARK, N.J. – A former lieutenant with the Miami-Dade Police Department, Internal Affairs, was sentenced today to 120 months in prison for his role in a narcotics conspiracy, including purchasing six firearms for a drug trafficking organization and smuggling those weapons through security checkpoints at the Miami International Airport, U.S. Attorney Paul J. Fishman announced.
Ralph Mata, 46, a/k/a “the Milk Man,” of Broward County, Florida, previously pleaded guilty before U.S. District Court Judge Susan D. Wigenton to an information charging him with one count of aiding and abetting a narcotics conspiracy, one count of conspiring to distribute cocaine and one count of engaging in monetary transactions in property derived from unlawful activity. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
From June 2012 through November 2012, Mata purchased at least six firearms from a gun store in Florida, which ultimately were provided to members of the Juan Arias Drug Trafficking Organization. Using his prior experience as a lieutenant assigned to the Miami International Airport, as well as his law enforcement contacts at the airport, Mata and others smuggled the six firearms through airport security checkpoints and onto a commercial airliner destined for the Dominican Republic.
Mata also provided advice, guidance and counsel to Juan Arias regarding the means and methods the drug trafficking organization should use to import and distribute cocaine. Mata transported narcotics proceeds for the organization.
He also engaged in monetary transactions in property derived from the sale of narcotics. On March 28, 2013, Mata traveled from Miami to New Jersey and received approximately $60,000 in narcotics proceeds from Juan Arias and others. Using a portion of that $60,000, Mata made separate $10,000 cash deposits at two different bank locations in Fort Lee, New Jersey. As payment for his assistance to the drug trafficking organization, Mata accepted a total of approximately $100,000 in cash and gifts from the Juan Arias drug trafficking organization.
In addition to the prison term, Judge Wigenton sentenced Mata to five years of supervised release and fined $15,000. As part of his plea, Mata must forfeit the $75,405 seized on April 9, 2014.
U.S. Attorney Fishman credited special agents of the FBI’s Garret Mountain Resident Office, under the direction of Special Agent in Charge Richard M. Frankel in Newark; special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Carl J. Kotowski; 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. He also thanked the Miami FBI, the Miami-Dade Police Department, the Miami-Area Corruption Task Force and the U.S. Immigration and Custom Enforcement’s Homeland Security Investigations, New York, for their assistance with the investigation.
This case was conducted under the auspices of the Organized Crime Drug Enforcement Task Force (OCDETF), 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 government is represented by Assistant U.S. Attorneys Mary E. Toscano, Deputy Chief of the General Crimes Unit, Criminal Division, and José R. Almonte of the Special Prosecutions Division in Newark and Barbara Ward, Acting Chief, Asset Forfeiture and Money Laundering Unit.
Defense counsel: Jay V. Surgent Esq., Parsippany, New Jersey, and Bruce H. Fleisher Esq., Miami
Former Corrections Officer Sentenced to Two Years in Prison for Accepting Cash Bribes in Exchange for Smuggling Contraband into Essex County Correctional FacilityRead the Press Release
NEWARK, N.J. – A former Essex County corrections officer was sentenced today to 24 months in prison for accepting bribes in exchange for smuggling contraband, including cell phones and tobacco, into the Essex County Correctional Facility, a federal pretrial detention facility, U.S. Attorney Paul J. Fishman announced.
John Grosso, 42, of Belleville, New Jersey, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of conspiring to commit extortion under color of official right. Judge Chesler imposed the sentence today in Newark federal court.
According to the documents filed in this case and statements made in court:
Grosso, a former corrections officer at the Essex County Correctional Facility, admitted that in December 2013, he agreed to accept cash bribes in return for his assistance smuggling cell phones and cigarettes to an inmate. Grosso met with the inmate’s relative in Secaucus, New Jersey, to accept the contraband and bribe before delivering the items to the inmate.
In addition to the prison term, Judge Chesler sentenced Grosso to one year of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, and the Internal Affairs Division of Essex County Correctional Facility, under the leadership of Warden Roy Hendricks, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office Special Prosecutions Division and Robert L. Frazer of the Criminal Division, Organized Crime/Gangs Unit, in Newark.
Defense counsel: Elizabeth H. Smith Esq., Mendham, New Jersey
Essex County, New Jersey, Man Sentenced to More Than Eight Years in Prison for Armed CarjackingRead the Press Release
NEWARK, N.J. – An East Orange, New Jersey, man was sentenced today to 97 months in prison for stealing a car while carrying a firearm in January 2014, U.S. Attorney Paul J. Fishman announced.
Alsharif Scriven, 27, previously pleaded guilty before U.S. District Judge Susan D. Wigenton to an information charging him with one count of theft of a motor vehicle by force, violence and intimidation and one count of using a firearm in furtherance of a crime of violence. Judge Wigenton imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
In the early evening of Jan. 8, 2014, an individual was parking his 2012 Honda Accord at his Newark residence. When the victim exited the vehicle to open the garage door, Scriven, who was carrying a firearm, jumped into the open driver’s side door and attempted to steal the car. After a struggle with the victim, Scriven ultimately took control of the vehicle and drove away.
In addition to the prison term, Judge Wigenton sentenced Scriven to serve five years of supervised release.
U.S. Attorney Fishman credited criminal investigators of the U.S. Attorney’s Office in Newark, as well as the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray, the Union County Prosecutor’s Office under the direction of Acting Prosecutor Grace H. Park, the Essex County Police Department and the Union County Police Department, 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 in Newark.
Defense counsel: Chester Keller Esq., First Assistant Federal Public Defender, Newark
Essex County, New Jersey, Man Sentenced to More Than 21 Years in Prison for Multiple CarjackingsRead the Press Release
NEWARK, N.J. – An Essex County, New Jersey, man was sentenced today to 255 months in prison for his role in three gunpoint carjackings and an attempted carjacking within a one-week period and to firing his gun during one of the robberies, U.S. Attorney Paul J. Fishman announced.
Corey Thermitus, 23, of Newark, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with three counts of theft of a motor vehicle by force, violence and intimidation; one count of attempted theft of a motor vehicle by force, violence and intimidation; and one count of discharging a firearm in furtherance of a violent crime. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
On Dec. 21, 2012, Thermitus was a passenger in a car that had stopped on a street in the Ironbound section of Newark. Thermitus and several other men exited the car and approached two people standing next to a Toyota Corolla that had just parked. Thermitus brandished a gun at the victims, while another man searched the victims and took the keys to the Toyota Corolla. Once the men had the keys, Thermitus and the other men fled the scene in both vehicles.
He also admitted that on Dec. 26, 2012, he and another man were in the area of 6th Avenue and N. 9th Street in Newark, when they approached a Nissan Altima. Thermitus approached the passenger side of the vehicle, where one of the victims was seated, and attempted to open the door, but the victim resisted and attempted to hold the door closed. Thermitus then told an accomplice to shoot a second victim who was standing next to the car. In response, both victims stepped away from the Nissan Altima and the other man fled the area in the vehicle.
Thermitus admitted that on Dec. 28, 2012, he took a Honda Accord at gunpoint from a victim who was seated in the car in the driveway of a Newark residence. Once the victim got out of the car, Thermitus and two other men fled the area in the Honda Accord. Approximately one hour later, the three men traveled to Midland Place in Newark in the carjacked Accord, where he and one of the other men attempted to carjack a Nissan Pathfinder at gunpoint. Thermitus and another man approached the Nissan Pathfinder while one of the victims in the vehicle was parking it in the garage of a residence. Thermitus pointed a gun at the victim and demanded the victim get out of the vehicle. The victim resisted and drove down the driveway and down the street to escape the carjacking attempt. Moments later, the victim returned to the residence to find Thermitus and the other two men attempting to escape in the carjacked Honda Accord. When another person came outside of one of the residences on the street to check on the commotion, Thermitus fired a shot at the person. The three men fled the scene in the carjacked Honda Accord. No one was injured in the attack.
In addition to the prison term, Judge Walls also sentenced Thermitus to five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; the Essex County Prosecutor’s Office, under the direction of Acting Prosecutor Carolyn A. Murray; and the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos, with the investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorney Dara Aquila Govan of the Organized Crimes/Gangs Unit in Newark.
Defense counsel: Peter Carter Esq., Assistant Federal Public Defender, Newark
Two New York Men Sentenced to Prison for Roles in International $200 Million Credit Card Fraud ConspiracyRead the Press Release
TRENTON, N.J. – Two Staten Island, New York, men were sentenced today for their roles in one of the largest credit card fraud schemes ever charged by the Justice Department, U.S. Attorney Paul J. Fishman announced.
Khawaja Ikram, 43, and Mohammad Khan, 51, were sentenced to 25 and 12 months in prison, respectively. Ikram previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of conspiracy to commit bank fraud. Khan previously pleaded guilty before U.S. Magistrate Judge Madeline C. Arleo to an information charging him with conspiracy to defraud the United States. Judge Thompson imposed both sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:Ikram and Khan 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; and finally, run up large loans.
The scope of the criminal fraud enterprise required Ikram, Khan and other conspirators to construct an elaborate network of false identities. Across the country, the conspirators maintained more than 1,800 “drop addresses,” including houses, apartments and post office boxes, which they used as the mailing addresses of the false identities.
Ikram and Khan admitted they 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. They also admitted they knew the cards would be used fraudulently at businesses, with Khan admitting to personally using the cards.In addition to the prison terms, Judge Thompson ordered Ikram and Khan to serve five and three years of supervised release, respectively. Ikram was also fined $10,000.
U.S. Attorney Fishman praised special agents of the FBI’s Cyber Division, under the direction of Special Agent in Charge Richard M. Frankel; postal inspectors, under the direction of Inspector in Charge Maria L. Kelokates; and special agents of the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli, for the investigation leading to today’s sentencing. 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 Economic Crimes Unit and Barbara Ward, Acting Chief 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:Ikram: Neil G. Duffy III Esq., Union, New Jersey
Khan: Stephan Mahler Esq., Kew Gardens, New York
Four New York Men Each Sentenced to More Than Eight Years in Prison for Armed Robberies of New York and New Jersey StoresRead the Press Release
TRENTON, N.J. – Four New York men were sentenced to prison for participating in the armed robberies of New York and New Jersey electronics stores, U.S. Attorney Paul J. Fishman announced.
Carl Williams, 32, of Brooklyn, New York, and Leonard Arrington, 29, of Roslyn Heights, New York, were sentenced today to 168 months and 102 months in prison, respectively. Terrell McQueen, 31, and Kajuan Crawley, 28, both of Brooklyn, were sentenced yesterday to 168 and 150 months in prison, respectively. U.S. District Judge Anne Thompson imposed all four sentences in Trenton federal court.
Carl Williams previously pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to a superseding indictment charging him with conspiracy to commit Hobbs Act robberies and brandishing a firearm in furtherance of a crime of violence. Arrington pleaded guilty before Judge Pisano to an information containing the same charges. McQueen and Crawley pleaded guilty before Judge Joel Pisano to separate superseding informations charging them each with one count of conspiracy to commit Hobbs Act robberies.
According to documents filed in this case and statements made in court:
From May 30, 2012, through Jan. 16, 2013, Carl Williams, Arrington, McQueen, Crawley and others conspired to commit a series of gunpoint electronic store robberies in New Jersey and New York. McQueen provided the firearms used in the New Jersey robberies, coordinated the resale of the stolen merchandise and distributed the profits from the robberies to the other perpetrators. During each robbery, conspirators would assign “look-outs” to remain outside while the rest of the group, armed with a gun, entered the store, locked the front doors, and tied-up employees and customers with zip ties.
Following the June 21, 2012, armed robbery of a Radio Shack in Rockville Center, New York, several conspirators, including Crawley, were apprehended by officers with the Nassau County Police Department, but Carl Williams, Arrington and others managed to escape. Afterwards, Carl Williams and Arrington robbed electronics stores in New Jersey.
On Sept. 20, 2012, Arrington, brandishing a firearm, walked into a T-Mobile store in Linden, New Jersey, with Carl Williams. Crawley, out on bail after his arrest following the June 21, 2012 robbery, served as a look-out. Arrington and Williams tied up the employees in the back of the store, stole approximately 50 to 60 cell phones and fled in a Land Rover. McQueen, Eric Williams, 34, of Brooklyn, and others then delivered the stolen phones to a cell phone store in Brooklyn.
On Oct. 2, 2012, Arrington, brandishing a firearm, entered a T-Mobile store in Woodbridge, New Jersey, with another man. After locking the front door, the men tied up the employees in the back of the store and stole approximately 40 cell phones. One of the robbers then called the getaway driver, who drove them away in a Land Rover. Afterwards, McQueen, Eric Williams and others delivered the stolen phones to the same Brooklyn store.
In addition to the prison terms, Judge Thompson sentenced Arrington to serve five years of supervised release. Carl Williams, McQueen and Crawley were each sentenced to three years of supervised release.
U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, with the investigation. He also thanked the Linden and Woodbridge Police Departments in New Jersey, as well as the New York City and Nassau County Police Departments and the Kings County District Attorney’s Office in New York for their work in this case.
The government is represented by Assistant U.S. Attorney Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division.
Defense counsel:
Williams: Mark Berman Esq., River Edge, New Jersey
Arrington: Dennis Cleary Esq., Newark, New Jersey
McQueen: Anthony J. Pope Esq., Newark
Crawley: Maria Noto Esq., Matawan, New Jersey
Disbarred New York Attorney Found Guilty of Fraudulent Ticket Resale and Real Estate Investment Schemes, Money LaunderingRead the Press Release
NEWARK, N.J. – A disbarred New York attorney was convicted today by a federal jury for his role in a ticket resale fraud scheme and a real estate investment fraud conspiracy that bilked multiple victims out of more than $3 million from 2011 to the present, U.S. Attorney Paul J. Fishman announced.
Pasquale Stiso, a/k/a “Pat Stiso,” 55, of New Rochelle, New York, was convicted of all ten counts of a superseding indictment charging him with one count of conspiracy to commit wire fraud, six substantive counts of wire fraud, and three counts of money laundering. He was convicted following a seven-day trial before U.S. District Judge William J. Martini in Newark federal court. The jury deliberated for 90 minutes before returning the verdict.
According to documents filed in this case and evidence at trial:
Since 2011, co-defendant Paul Mancuso, 49, of Glen Rock, New Jersey, held himself out as an investor, broker, and developer of various purported investments. Mancuso obtained from his victims substantial investments for various projects that, in fact, either did not exist at all or in which Mancuso had no actual involvement. Stiso held himself out as an individual who was working with Mancuso on various purported projects. Many of the victims of Stiso and Mancuso’s schemes lost all or substantially all of the money they invested with Mancuso and Stiso. Many even lost all or most of their life savings.
Stiso and Mancuso falsely represented to some victims that they would purchase event tickets, such as tickets to New York Giants football games, New York Yankees playoff games, the Super Bowl, and other sporting events and concerts, at a lower or wholesale rate, and then resell them to members of the public at an inflated rate, creating profits for their investors. In reality, Stiso and Mancuso did not buy tickets with their victims’ money.
In one of the real estate schemes, Stiso and Mancuso falsely represented to victims that they were investors in a real estate development project in Valley Cottage, New York, and that investor money would be used to purchase an interest in real property. The real property interest would then be resold at an increased price, creating profits for their investors. In reality, Stiso and Mancuso did not invest in any such real estate project with their victims’ money. Instead, they engaged in monetary transactions designed to funnel, and in many instances launder, the victims’ investments for their own benefit, including paying illegal gambling debts and money owed to loan sharks. Stiso and Mancuso were heavily involved in illegal gambling pursuits and both owed substantial sums of money to loan sharks and one of their bookmakers.
The charge of wire fraud conspiracy and the substantive counts of wire fraud each carry 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. Each money laundering count carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greatest. Stiso’s sentencing is scheduled for March 3, 2016.
Mancuso previously pleaded guilty in federal court to conspiring with Stiso to commit wire fraud and is scheduled for sentencing on Jan 12, 2016.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; and criminal investigators of the U.S. Attorney’s Office with the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Francisco J. Navarro and Anthony J. Mahajan of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Henry E. Klingeman Esq., Newark
Ernesto Cerimele Esq., Newark
Two Leaders, 13 Members, of Notorious Newark Heroin Ring ChargedRead the Press Release
NEWARK, N.J. – Fifteen people were charged today for their respective roles in one of Newark’s largest and most successful heroin distribution organizations, which operated out of a residential building on Johnson Avenue and sold millions of dollars’ worth of the drug, U.S. Attorney Paul J. Fishman announced.
Among those arrested and charged today are the two alleged leaders of the operations – Almalik Anderson and Quawee Jones (see chart below), who are charged with engaging in a continuing criminal enterprise. They are also charged, along with the 13 other defendants, with one count each of conspiracy to distribute heroin. The nine defendants who are in custody are scheduled to have their initial court appearances later today before U.S. Magistrate Judge Steven C. Mannion in Newark federal court. Six defendants remain at large.
“The charges in the complaint describe a 24/7 illegal drug bazaar that has operated in the middle of a residential neighborhood for years,” U.S. Attorney Fishman said. “This location is just a few doors away from the playing fields of Malcolm X. Shabazz High School and the playground and basketball courts of Terrell James Park. Law abiding citizens shouldn’t have to worry about drug dealing where their children are trying to learn and play. Today’s arrests culminate a coordinated effort by our office, the FBI and local law enforcement to shut down this scourge, and to help reclaim the neighborhood.”
“Almalik Anderson operated a multi-million dollar heroin business out of a residential building in Newark which was ‘closed’ for business today by the FBI and our partners on the Safe Streets Task Force,” Richard M Frankel, FBI special agent in charge, Newark, said. “We are confident taking Anderson and his crew off the streets of Newark will have direct impact on reducing violent crime in the city.”
According to the complaint:
This drug-trafficking group operated out of a residential building at 25 Johnson Ave., Newark. The defendants allegedly ran a sophisticated operation that took advantage of the building’s location on a dead-end street, making it difficult for law enforcement to infiltrate the distribution network despite a constant streams of buyers entering the building at all hours of the day and night. “Lookouts” were paid by the defendants to alert them to any police activity coming onto the block from the only access point on Clinton Avenue. Police could not infiltrate the building without lookouts detecting their presence and signaling the sellers. Members of the drug trafficking organization set up an escape route whereby residents were paid to keep their doors unlocked. The dealers in the hallways would run through the building and exit via fire escapes at the rear of the building or simply hide within the apartments before police could apprehend them. In addition to being paid to keep their doors unlocked, residents were also paid not to report to law enforcement the drug-trafficking activity that was open and notorious within the building’s public areas.
The drug operation worked out of the first floor hallway of the building nearly 24 hours a day and was well-known among heroin users, who came from long distances in several different counties throughout New Jersey. The defendants allegedly worked in carefully planned “shifts” of approximately five distributors in order to handle the constant flow of heroin buyers. The heroin sold was of a high quality and, thus, attracted numerous buyers. The heroin was sold in various “brands,” which were stamped onto the glassine envelopes that contained the heroin, allowing buyers to identify and purchase the brands that they preferred. The defendants sold on average one to two kilograms of heroin per week between February 2015 and November 2015, the investigation revealed.
Based upon the quantities sold, information from court-authorized wiretaps of the two leaders’ phones, and other evidence obtained in the case, the profit from the heroin distribution at 25 Johnson Avenue is estimated to be between $4 million and $7 million a year. The charges are the result of an investigation led by the FBI, which included court-authorized wiretaps, numerous undercover recorded purchases of heroin from at least 15 different individuals inside the building, and seizures of heroin and guns.
The count of running a continuing criminal enterprise carries a minimum sentence of 20 years and a maximum sentence of life in prison. The count of conspiracy to distribute one kilogram or more of heroin carries a minimum sentence of 10 years and a maximum sentence of life in prison.
U.S. Attorney Fishman credited special agents of the FBI and task force officers assigned to the FBI’s Safe Streets Task Force, of FBI Special Agent in Charge Richard M. Frankel, for the investigation leading to the charges. He also thanked police officers and detectives of the Newark Police Department, under the direction of Director Eugene Venable and Chief Anthony Campos; the Essex County Sheriff’s Office under the direction of Armando B. Fontoura; the N.J. State Parole Board, under the direction of Chairman James T. Plousi; and the Orange Police Department, under Director John Wade Jr., for their work on the investigation.
The government is represented by Assistant U.S. Attorney Robert Frazer of the Organized
Crime/Gangs Unit in the Criminal Division in Newark.
The charges and allegations contained in the federal criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Defendant
Age
Residence
Charge
Almalik Anderson, a/k/a “S,” a/k/a “Sco”
36
Newark
Continuing criminal enterprise;
Conspiracy to distribute heroin
Quawee Jones, a/k/a “Hatman”
32
Newark
Continuing criminal enterprise;
Conspiracy to distribute heroin
Kasim Bacon, a/k/a “City”
37
unknown
Conspiracy to distribute heroin
Maurice Green, a/k/a “Crack”
21
Newark
Conspiracy to distribute heroin
Davin Lee, a/k/a “Kiss”
26
Newark
Conspiracy to distribute heroin
Christopher Williams, a/k/a “Whooty”
28
Newark
Conspiracy to distribute heroin
*Elijah Henderson, a/k/a “Fresh”
27
Newark
Conspiracy to distribute heroin
*Shakir Amos, a/k/a “Ya Ya”
29
Newark
Conspiracy to distribute heroin
*Omar Johnson, a/k/a “Flip”
30
Newark
Conspiracy to distribute heroin
*Shaahid Cureton, a/k/a “Dilly”
31
Newark
Conspiracy to distribute heroin
*Darryle Robinson, a/k/a “Silk”
39
Newark
Conspiracy to distribute heroin
Melvin Ellison, a/k/a “Mellie”
25
Newark
Conspiracy to distribute heroin
*Darren Brown, a/k/a “D-Block”
28
Newark
Conspiracy to distribute heroin
Temir Hill, a/k/a “Goldie”
29
Newark
Conspiracy to distribute heroin
Salik Amos, a/k/a “Slim”
21
Newark
Conspiracy to distribute heroin
*denotes still at large
Three New York Men Sentenced for Traveling to New Jersey to Violently Extort Divorce Consent from Recalcitrant HusbandRead the Press Release
TRENTON, N.J. – Three New York men were sentenced today for their roles in a scheme to cross state lines and violently coerce a recalcitrant husband to grant his wife a religious divorce, U.S. Attorney Paul J. Fishman announced.
Avrohom Goldstein, 36, of Brooklyn, New York, was sentenced to 45 months in prison. Ariel Potash, 42, of Monsey, New York, was sentenced to 14 months in prison. Sholom Shuchat, 31, of Brooklyn, was sentenced to time served. All three defendants previously pleaded guilty before U.S. District Judge Freda L. Wolfson to separate informations charging them each with one count of traveling in interstate commerce to commit extortion. Judge Wolfson imposed all three sentences today in Trenton federal court.
According to documents filed in this case and statements made in court:
On Oct. 9, 2013, Avrohom Goldstein, Potash, Shuchat and a group of conspirators – including Avrohom’s brother, Moshe Goldstein, 32, his father, Jay Goldstein, 61, David Hellman, 33, Simcha Bulmash, 32, and Binyamin Stimler, 40, all of Brooklyn – traveled from New York to a warehouse in Edison, New Jersey, with the intent of forcing a Jewish husband to give his wife a “get,” a document which, according to Jewish Law, must be presented by a husband to his wife to effect their divorce.
Avrohom Goldstein, Potash and Shuchat admitted that when they arrived at the warehouse, the group met with an individual who, unbeknownst to them, was an undercover FBI agent posing as the husband’s brother in law. Avrohom Goldstein and others discussed a plan to confine, restrain and threaten the victim. Shuchat was there to witness and authenticate the get, which Potash would later deliver to the wife.
The group was then arrested by a team of FBI agents and charged by criminal complaint – along with rabbis Mendel Epstein, 70, of Lakewood, New Jersey, and Martin Wolmark, 57, of Monsey – in connection with the scheme.
Avrohom Goldstein also admitted that on Aug. 22, 2011, he and others went to a residence in Brooklyn where they restrained, assaulted and injured another recalcitrant husband and his roommate in an attempt to extort a divorce from the husband.
In addition to the prison term, Judge Wolfson sentenced Avrohom Goldstein, Potash, and Shuchat to each serve two years of supervised release.
Moshe Goldstein previously pleaded guilty to one count of traveling in interstate commerce to commit extortion and was sentenced Nov. 16, 2015 to four years in prison. Hellman and Bulmash previously pleaded guilty to one count of traveling in interstate commerce to commit extortion and were sentenced Nov. 17, 2015 to 44 and 48 months in prison, respectively. Wolmark, who pleaded guilty to conspiracy to travel in interstate commerce to commit extortion, is scheduled for sentencing on Dec. 14, 2015.
Epstein, Jay Goldstein and Stimler were all convicted at trial on April 21, 2015. Epstein, who was convicted of conspiracy to commit kidnapping, is scheduled for sentencing on Dec. 15, 2015. Stimler and Jay Goldstein, both convicted of conspiracy to commit kidnapping and attempted kidnapping, are scheduled for sentencing on Dec. 15, 2015 and Dec. 16, 2015, respectively.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, for the investigation leading to today’s sentencing. He also thanked the Lakewood, New Jersey, Police Department for its role.
The government is represented by Assistant U.S. Attorneys R. Joseph Gribko and Sarah Wolfe of the U.S. Attorney’s Office in Trenton.
Defense counsel:
Goldstein: Charles Edward Waldron Esq., Lawrenceville, New Jersey
Potash: Jacob Laufer Esq., New York
Shuchat: Ellen B. Resnick Esq., New York
New Jersey Couple Sentenced for Roles in Tax FraudRead the Press Release
TRENTON, N.J. – A Union County, New Jersey certified public accountant who ran a tax return preparation business with his wife was sentenced today to four years in prison for his role in a multi-year tax fraud scheme, in which he filed hundreds of false tax returns with the IRS to generate fraudulently inflated refunds for clients, some of which he took for himself, U.S. Attorney Paul J. Fishman announced.
Following a two-week trial before U.S. District Judge Anne E. Thompson in June 2015, Courtney Johnson, 45, of Union Township, New Jersey, was convicted of six counts of aiding and assisting in the preparation of false federal income tax returns. Judge Thompson imposed the sentence today in Trenton federal court. Johnson’s wife, Carol Johnson, 45, who ran the business with him, previously pleaded guilty to misprision of a felony and was sentenced Nov. 5, 2015, to three years of probation. The Johnsons operated tax preparation businesses in South Orange and Jersey City, New Jersey.
According to documents filed in this case and the evidence at trial:
Courtney Johnson prepared and filed federal individual income tax returns that were materially false and fraudulent. The returns attached schedules for fictitious businesses that the taxpayers did not own or operate, inflated charitable contributions, fabricated itemized deductions – all to generate fraudulently inflated refunds.
Judge Thompson also sentenced Courtney Johnson to one year of supervised release, fined him $50,000 and ordered him to pay $10,280 in restitution. She ordered Carol Johnson to pay $93,385 in restitution.
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 verdict.
The government is represented by Assistant U.S. Attorneys Jane H. Yoon and Jillian J. Reyes of the Criminal Division in Newark.
Defense counsel:
Courtney Johnson: Thomas R. Ashley Esq., Newark
Carol Johnson: Leslie Sinemus Esq., South Orange, New Jersey
U.S. Attorney’s Office Files Civil Lawsuit Against New Jersey Couple and Two Diagnostic Companies for Falsifying Diagnostic Test Reports and Failing to Properly Supervise TestsRead the Press Release
NEWARK, N.J. – U.S. Attorney Paul J. Fishman announced today that the government has intervened in a False Claims Act lawsuit and filed a complaint against a Morris County, New Jersey, couple and their diagnostic imaging companies for knowingly submitting false claims to Medicare for thousands of falsified diagnostic test reports and the underlying tests.
Nita K. Patel, 53, and Kirtish N. Patel, 53, both of Rockaway, New Jersey, owners and operators of Biosound Medical Services Inc. and Heart Solution PC of Parsippany, New Jersey, each pleaded guilty Nov. 17, 2015, to informations charging them with health care fraud related to this conduct.
The civil complaint alleges that defendants created fraudulent diagnostic test reports, forged physician signatures on these reports, and then billed Medicare for the fraudulent reports and the underlying tests that were used solely to create these reports. The complaint alleges that defendants billed Medicare for neurological tests that they conducted without the required physician supervision. The complaint also alleges that defendants knowingly submitted false claims for neurological tests conducted without physician supervision.
The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in this case.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; 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 filing of today’s complaint.
The government is represented by Assistant U.S. Attorney Charles Graybow of the U.S. Attorney’s Office Health Care and Government Fraud Unit.
U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $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.
The case is captioned U.S. ex rel. Jane Doe v. Heart Solution, PC, et al., No. 14-3644 (D.N.J.).
Defense counsel:
Kirtish Patel: Anthony Fusco, Jr., Esq., Passaic, New Jersey
Nita Patel: Frank Arleo, Esq., West Orange, New Jersey
Counsel for Relator:
Timothy J. McInnis, Esq., New York, New York
New York Doctor Sentenced to More Than Three and A Half Years in Prison for Taking Bribes in Test-Referral Scheme with New Jersey Clinical LabRead the Press Release
NEWARK, N.J. – A doctor with a practice in Rockville Centre, New York, was sentenced today to 46 months in prison for 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.
Brett Halper, 41, of Glen Head, New York, previously pleaded guilty before U.S. District Judge Stanley R. Chesler to an information charging him with one count of accepting bribes. Judge Chesler imposed the sentence today in Newark federal court.
Including Halper, 38 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. The investigation has so far recovered more than $11.5 million to date through forfeiture.
According to documents filed in this and related cases and statements made in court:
Halper admitted that from January 2011 through April 2013, he accepted bribes in return for referring patient blood specimens to BLS and was often paid in excess of $5,000 per month. Halper’s referrals generated approximately $2,900,000 in lab business for BLS.
In addition to the prison term, Judge Chesler sentenced Halper to serve two years of supervised release and fined him $100,000. Halper must also forfeit $325,000.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; 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 sentence.
The government is represented by Assistant U.S. Attorney Joseph N. Minish, Senior Litigation Counsel Andrew Leven, 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 $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: Marc Agnifilo Esq., New York
Morris County, New Jersey, Plastic Surgeon Found Guilty of Evading Taxes on More Than $5 Million in IncomeRead the Press Release
NEWARK, N.J. – A plastic surgeon with a practice in Basking Ridge, New Jersey, was convicted today by a federal jury of fraudulently diverting millions in corporate earnings for his personal use, costing the United States nearly $3 million in tax revenue between 2006 and 2010, U.S Attorney Paul Fishman announced.
David Evdokimow, 55, of Harding Township, New Jersey, was convicted of all eight counts of a superseding indictment charging him with one count of conspiring to defraud the United States, four counts of personal income tax evasion and three counts of corporate tax evasion. He was convicted following three-week trial before U.S. District Judge Noel L. Hillman in Camden federal court. The jury deliberated for a day before returning the verdict.
According to the superseding indictment and evidence at trial:
Evdokimow ran his medical practice through a corporation called De’Omilia Plastic Surgery P.C. (De’Omilia). He conspired with others to conceal millions of dollars of taxable income from the IRS by forming shell corporations and then having trusted associates open bank accounts for those corporations. Evdokimow then convinced these trusted associates to give him their signatures or signature stamps so that he had full access to the shell company bank accounts while at the same time being able to conceal his connection to those accounts. He and the other conspirators then funneled millions of dollars in De’Omilia income into the bank accounts of the shell corporations and falsely claimed that these transfers were legitimate business expenses. Evdokimow also used bank accounts in the name of De’Omilia to pay his personal expenses, and falsely claimed those were business expenses too.
Evdokimow used the shell corporation and De’Omilia bank accounts to pay for more than $5.8 million in personal expenses, including designer apparel, jewelry, vacations, artwork, and multiple residences, all of which he falsely claimed as business expenses.
Evdokimow also opened accounts at several banks in order to cash checks received directly from patients for professional medical services. Between 2009 and 2011, Evdokimow cashed over $360,000 in checks from patients, which he failed to report on his federal income tax returns.
Evdokimow was convicted of concealing over $5.8 million in income from tax years 2006 to 2010. By concealing this income, Evdokimow evaded paying almost $3 million in taxes during that period.
Each of the counts with which Evdokimow is charged carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Feb. 24, 2016.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s verdict.
The government is represented by Assistant U.S. Attorneys Paul Murphy and Justin Herring of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: James Kridel Esq., Clifton, New Jersey
Monmouth County, New Jersey, Man Sentenced to 14 Months in Prison for Possessing Explicit Images of 12-Year Old Pennsylvania GirlRead the Press Release
TRENTON, N.J. – A Monmouth County, New Jersey, man was sentenced today to 14 months in prison for possessing sexually explicit images of a 12-year old Pennsylvania girl with whom he had an online relationship, U.S. Attorney Paul J. Fishman announced.
Chad Weber, 23, of Colt’s Neck, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of possessing images of child pornography. Judge Thompson imposed the sentence today in Trenton federal court.
According to documents filed in the case and statements made in court:
In April 2013, law enforcement agents learned Weber had been communicating with a 12-year-old girl from Pennsylvania. The agents obtained and reviewed copies of various chat logs and other internet-based messages, which reflect Weber’s online communications with the victim between February 2013 and April 2013. Many of these communications were sexually explicit. Weber and the victim also traded sexually explicit photographs of each other through the internet and discussed the photographs in online chats. During some of these communications, Weber acknowledged that the victim was 12 years old. Weber admitted possessing these sexually explicit photographs of the minor victim on his cell phone and computer.
In addition to the prison term, Judge Thompson sentenced Weber to 10 years of supervised release. As part of his guilty plea, Weber must pay restitution of $5,570, forfeit the computer and cell phone he used to commit the offense and register as a sex offender.
U.S. Attorney Fishman credited special agents of the U.S. Department of Homeland Security Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Special Agent in Charge Kevin Kelly in Newark, for 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: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton