TRENTON, N.J. – A former chiropractor with offices in Lakewood, New Jersey, was sentenced today to 60 months in prison for evading income taxes totaling more than half a million dollars from 2012 through 2015 and failing to report a Russian bank account, to which he wired more than $1.5 million, U.S. Attorney Craig Carpenito announced.

Carlo Amato, 57, of Beachwood, New Jersey, previously pleaded guilty before U.S. District Judge Michael A. Shipp to one count of tax evasion and one count of failure to file a report of foreign financial account (FBAR) while violating another law of the United States and as part of a pattern of illegal activity involving more than $100,000 in a 12-month period. Judge Shipp imposed the sentence today in Trenton federal court.

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

From 2012 through 2015, Amato operated a chiropractic office in Lakewood through two entities: Chiropractic Care Consultants Inc. and Accident Recovery Physical Therapy. He deposited, or caused to be deposited, checks for chiropractic services into accounts held in the names of his minor children. Amato knew that these checks were taxable as income, but he did not disclose the payments to his accountant, nor did he report them on his tax returns. Amato also failed to report as taxable income certain additional funds that were deposited into Chiropractic Care’s and Accident Recovery’s business bank accounts. For example, Amato reported $0 in taxable income and $0 in tax due on his 2014 income tax return. His taxable income for 2014 was, in fact, $561,258, and Amato admitted that the tax due and owing to the IRS for 2014 was $197,036. Amato admitted that he also evaded more than $300,000 in taxes for the tax years 2012, 2013, and 2015.

Amato, a U.S. citizen, admitted that in 2014, he had an account at UniCredit Bank in Russia. He admitted that he wired more than $1.5 million to Russian bank accounts, including the UniCredit Bank account, and that he knew that he was obligated to report any foreign bank account with an aggregate value of more than $10,000. Amato admitted that he nonetheless failed to file a report of foreign account, commonly known as an FBAR, for the year 2014. Amato also admitted that the funds he failed to report were the product of a fraudulent scheme in which Amato overbilled at least six insurance companies by more than $1 million by billing for services that were never rendered. Amato previously pleaded guilty in Ocean County Superior Court to first degree financial facilitation of criminal activity for money laundering of funds from the overbilling scheme.

In addition to the prison term, Judge Shipp sentenced Amato to three years of supervised release.

Under the terms of his plea agreement, Amato will file amended tax returns and make full restitution for the years 2012 through 2015 and file accurate FBARs for the years 2012 through 2017.

U.S. Attorney Carpenito credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s sentencing. U.S. Attorney Carpenito thanked the Ocean County Prosecutor’s Office, under the direction of Prosecutor Bradley D. Billhimer, and the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, for their roles in the investigation.

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the Criminal Division in Trenton.

Defense counsel: Thomas R. Ashley Esq., Newark

TRENTON, N.J. – A former chiropractor with offices in Lakewood, New Jersey, today admitted evading income taxes totaling more than half a million dollars from 2012 through 2015 and failing to report a Russian bank account, to which he wired more than $1.5 million, U.S. Attorney Craig Carpenito announced.

Carlo Amato, 57, of Beachwood, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to one count of tax evasion and one count of failure to file a report of foreign financial account (FBAR) while violating another law of the United States and as part of a pattern of illegal activity involving more than $100,000 in a 12-month period.

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

From 2012 through 2015, Amato operated a chiropractic office in Lakewood through two entities: Chiropractic Care Consultants Inc. and Accident Recovery Physical Therapy. He deposited, or caused to be deposited, checks for chiropractic services into accounts held in the names of his minor children. Amato knew that these checks were taxable as income, but he did not disclose the payments to his accountant, nor did he report them on his tax returns. Amato also failed to report as taxable income certain additional funds that were deposited into Chiropractic Care’s and Accident Recovery’s business bank accounts. For example, Amato reported $0 in taxable income and $0 in tax due on his 2014 income tax return. His taxable income for 2014 was, in fact, $561,258, and Amato admitted that the tax due and owing to the IRS for 2014 was $197,036. Amato admitted that he also evaded more than $300,000 in taxes for the tax years 2012, 2013, and 2015.

Amato, a U.S. citizen, admitted that in 2014, he had an account at UniCredit Bank in Russia. He admitted that he wired more than $1.5 million to Russian bank accounts, including the UniCredit Bank account, and that he knew that he was obligated to report any foreign bank account with an aggregate value of more than $10,000. Amato admitted that he nonetheless failed to file a report of foreign account, commonly known as an FBAR, for the year 2014.  Amato also admitted that the funds he failed to report were the product of a fraudulent scheme in which Amato overbilled at least six insurance companies by more than $1 million by billing for services that were never rendered. Amato previously pleaded guilty in Ocean County Superior Court to first degree financial facilitation of criminal activity for money laundering of funds from the overbilling scheme.

The tax evasion charge to which Amato pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gain to any person or loss to any victims of the offense. The failure to file a report of foreign account charge to which Amato pleaded guilty carries a maximum potential penalty of 10 years in prison and a fine of $500,000 or twice the gain to any person or loss to any victims of the offense. Sentencing is scheduled for Jan. 9, 2019.

Under the terms of his plea agreement, Amato will file amended tax returns and make full restitution for the years 2012 through 2015 and file accurate FBARs for the years 2012 through 2017.

U.S. Attorney Carpenito credited special agents of the IRS-Criminal Investigation, under the direction of Special Agent in Charge John Tafur, with the investigation leading to today’s guilty plea. U.S. Attorney Carpenito thanked the Ocean County Prosecutor’s Office, under the direction of Prosecutor Joseph D. Coronato, and the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, for their roles in the investigation.

The government is represented by Assistant U.S. Attorney Elisa T. Wiygul of the Criminal Division in Trenton.

NEWARK, N.J. – A federal grand jury today charged a sergeant with the Paterson Police Department with conspiring with other officers to violate individuals’ civil rights, and submitting a false police report to conceal their illegal activity, U.S. Attorney Craig Carpenito announced.

Sergeant Michael Cheff, 49, of Paterson, New Jersey, was charged in a two-count indictment with conspiring to deprive individuals of civil rights under color of law and with falsifying a police report. Cheff was previously charged by criminal complaint in January 2020. He will be arraigned in federal court on a date to be determined.

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

Eudy Ramos, Daniel Pent, Jonathan Bustios, Matthew Torres, and Frank Toledo were police officers with the Paterson Police Department. Cheff supervised their activities and approved their reports and other paperwork related to arrests and seizures of money, narcotics, and firearms. Ramos, Pent, Bustios, Torres, and Toledo, while on official duty, violated the civil rights of individuals in Paterson. They stopped and searched motor vehicles without any justification and stole cash and other items from the occupants. They also illegally stopped and searched individuals in buildings or on the streets of Paterson and seized cash from them. They concealed their activities by submitting to Cheff false reports that omitted, or lied about, their illegal activities. Cheff signed off on those false police reports, and routinely received a portion of these stolen monies from some of these officers. In 2016, Cheff told one of the officers to start “tagging,” or logging into evidence, some of the money that the officer was stealing, because effecting narcotics arrests without logging money into evidence would otherwise raise questions.

On Nov. 14, 2017, Cheff joined Bustios, Ramos, and Torres in stealing cash from an apartment in Paterson. Bustios, Ramos, and Torres stopped and arrested an individual in Paterson. Bustios stole a few hundred dollars from the individual during the arrest, then the officers went to the individual’s apartment, and were joined by Cheff. Torres stayed behind to guard the arrested individual, who was handcuffed in a police car, while Cheff, Ramos, and Bustios obtained consent to search the apartment by lying to the individual’s mother.

Cheff, Ramos, and Bustios then searched the individual’s room. Cheff located a safe inside a closet in the room and took money and narcotics from the safe. He handed a small portion of the money to Bustios and told Bustios to log it into evidence. Cheff put the rest of the money in his pocket. After the search, in a bathroom at the Paterson police station, Cheff gave Torres and Ramos a portion of the stolen money. Cheff also approved a police report that falsely stated that the officers had recovered $319 from on top of a shelf in the individual’s room.

Later that day, Bustios and Toledo exchanged text messages discussing Cheff’s theft of money. Bustios said, among other things, that Cheff “got us for over a stack today,” that “there was a safe” and that Cheff “grabbed the cash.” According to the individual whose apartment was searched, the safe contained approximately $2,700, and all of it was missing after the search was completed.

The conspiracy to violate civil rights charge carries a maximum penalty of 10 years in prison. The false records charge carries a maximum penalty of 20 years in prison. The maximum fine for each count is $250,000.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s indictment. He also thanked the Passaic County Prosecutor’s Office, under the direction of Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Paterson Police Chief Ibrahim “Mike” Baycora, and the Paterson Police Department Office of Internal Affairs for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Lee M. Cortes Jr., Chief of the Health Care Fraud Unit.

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

Defense counsel: John Lynch Esq., Union City

NEWARK, N.J. – A City of Paterson police officer today admitted conspiring with other officers to violate the civil rights of individuals in Paterson, using unreasonable and excessive force, and filing a false police report to conceal his criminal activity, U.S. Attorney Craig Carpenito announced.

Police Officer Daniel Pent, 32, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with conspiracy to violate individuals’ civil rights, using unreasonable and excessive force in violation of individuals’ civil rights, and filing a false police report.

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

Pent, along with Paterson police officers Eudy Ramos, Jonathan Bustios, Matthew Torres, Frank Toledo, and others, stopped and searched motor vehicles, without any justification, and stole cash and other items from the occupants. Pent and the other officers also stopped and searched individuals on the streets of Paterson, and illegally took their money. Pent and other officers arrested individuals in Paterson, seized cash from those individuals during the arrests, and split the cash proceeds among themselves. They covered up their criminal activity by filing false police reports. Pent admitted to the following illegal conduct:

• On Feb. 1, 2017, Pent and Ramos stopped and searched a vehicle in Paterson. They stole approximately $10,000 from the passenger of the vehicle and split it between themselves. Ramos and Pent then submitted an incident report to the Paterson Police Department in which they intentionally omitted any mention of the $10,000 theft.

• On May 27, 2016, Pent and Ramos arrested an individual, stole several hundred dollars in cash from the individual, and filled out a false currency seizure report that under-reported the amount of money the individual actually possessed. Pent and Ramos then applied a forged signature of the individual to the report to make it appear as though the individual had seen and agreed to the amount on the report.

While on official duty, Pent also routinely used unreasonable and excessive force in his encounters with individuals in Paterson, causing them bodily harm, including:

• Pent and other officers routinely delivered a “running tax” to individuals they arrested. If an individual ran from them, Pent and others would “tax” the individual by striking the individual multiple times, causing bodily injury.

• On Jan. 20, 2015, Pent and Ramos received a call regarding loud music coming from a vehicle on Doremus Avenue in Paterson. Pent and Ramos approached the individual in the vehicle, removed him from the vehicle and punched and kicked him. The individual suffered injuries, including eye injuries, as a result of Pent’s and Ramos’ excessive force.

The conspiracy to violate civil rights and the deprivation of civil rights charges each carry a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each count is $250,000. Pent's sentencing is scheduled for Jan. 14, 2020.

Bustios pleaded guilty in December 2018 to conspiring to deprive individuals of their civil rights and to extortion under color of official right. He is awaiting sentencing. Torres pleaded guilty in May 2019 to conspiring to deprive individuals of their civil rights and to filing a false police report. His sentencing is scheduled for Nov. 20, 2019. Toledo pleaded guilty in July 2019 to conspiring to deprive individuals of their civil rights, to using unreasonable and excessive force against individuals in Paterson, and to filing a false police report. His sentencing is scheduled for Oct. 22, 2019. Ramos pleaded guilty on Sept. 9, 2019, to conspiring to deprive individuals of their civil rights, to using unreasonable and excessive force against individuals in Paterson, and to filing a false police report. His sentencing is scheduled for Jan. 8, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

Defense counsel: Michael Calabro Esq., Newark

NEWARK, N.J. – A City of Paterson police officer today admitted conspiring with other officers to violate the civil rights of individuals in Paterson, using unreasonable and excessive force against individuals in Paterson, and filing a false police report to conceal his criminal activity, U.S. Attorney Craig Carpenito announced.

Eudy Ramos, 32, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to Counts 1 and 7 of an indictment against him, charging him with conspiracy to violate individuals’ civil rights and filing a false police report. Ramos also pleaded guilty to an information charging him with using unreasonable and excessive force in violation of individuals’ civil rights.

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

Ramos, along with other Paterson police officers, including Jonathan Bustios, Daniel Pent, Matthew Torres, Frank Toledo, and others, stopped and searched motor vehicles, without justification, and stole cash and other items from the occupants. Ramos and the other officers also stopped and searched individuals on the streets of Paterson, and illegally took their money. He and other officers also arrested individuals in Paterson, seized cash from them during the arrests, and split the cash proceeds among themselves. To cover up their criminal activity, Ramos and his fellow officers then filed false police reports. Ramos admitted to the following instances of illegal conduct:

• On Feb. 1, 2017, Ramos and Pent stopped and searched a vehicle in Paterson. They stole approximately $10,000 from the passenger of the vehicle and split it between themselves. Ramos and Pent then submitted an incident report to the Paterson Police Department in which they intentionally omitted any mention of the $10,000 theft.

• On Dec. 1, 2017, Ramos and Bustios stopped and searched an individual on a street corner in Paterson and stole approximately $1,000 from the individual. After the theft, a video of a portion of the encounter was posted to Twitter by a third party.

• On Dec. 2, 2017, Ramos and Toledo arrested an individual. During the arrest, they stole $1,000 from the individual and split the proceeds.

• On Dec. 7, 2017, Torres and Ramos conducted a vehicle stop in Paterson. They searched the vehicle, the driver, and the passenger, who had approximately $3,100 and marijuana. Ramos told the passenger that instead of charging the passenger with distribution of marijuana they could take $500 from the passenger and have the passenger sign a piece of paper. Ramos then purportedly placed a call to his superior and told the passenger that the superior officer said it had to be $800. Ramos took out a piece of white paper, wrote something on it, and told the passenger to sign it. Ramos and Torres released the driver and passenger and shared the stolen cash proceeds. They did not report the stop and search of the vehicle and its occupants, or the cash seizure, to the Paterson Police Department.

• On Feb. 20, 2018, Ramos and Bustios stopped and searched a vehicle and detained the driver and passenger of the vehicle. They stole a bag containing approximately $1,800 from the car. They then agreed to meet at Peach and Plum streets in Paterson, a location with no camera, where Bustios passed a portion of the illegally seized cash to Ramos through the window of Bustios’ police car. Bustios and Ramos did not report to the Paterson Police Department the fact that they had stopped and searched the vehicle, detained and searched its occupants, and taken cash, all without legal justification.

• On March 5, 2018, Ramos and Torres stopped and searched a vehicle, without legal basis. The occupants of the encounter filmed the encounter and posted the video to Instagram. They asked Ramos his basis for conducting the vehicle stop, and Ramos responded, “Random stop.” Ramos did not locate any cash inside the vehicle and departed the scene without taking anything.

While on official duty, Ramos also routinely used unreasonable and excessive force in his encounters with individuals in Paterson, causing them bodily harm:

• Ramos and other officers routinely delivered a “running tax” to individuals they arrested. If an individual ran from them, Ramos and others would “tax” the individual by striking the individual multiple times, causing bodily injury.

• On Jan. 20, 2015, Ramos and Pent received a call regarding loud music coming from a vehicle on Doremus Avenue in Paterson. They approached an individual in the vehicle, removed him, and began punching and kicking him. The individual suffered bodily injury, including eye injuries, as a result of Ramos’ and Pent’s excessive force.

• On Sept. 7, 2016, Ramos placed a handcuffed individual in the backseat of his police car, without a seatbelt, to transport the individual to Paterson Police Department headquarters. Ramos then depressed the brakes on his police car and forced the individual to slam his head against the divider in the backseat of the police car, a tactic known as “brake-checking.” After the individual slammed his head on divider, Ramos jokingly said, “What happened, man? You gotta put your seatbelt on.” Ramos recorded a video of this incident.

• On March 2, 2017, Ramos and Bustios were dispatched to a call regarding stolen property located in a vehicle in a parking garage. The individual who had stolen the property (Individual 1) was sitting in the vehicle. The individual whose property had been stolen (Individual 2) was angry and told Ramos and Bustios that he wanted to take a swing at Individual 1. Ramos and Bustios allowed him to do so. While Ramos and Bustios watched, Individual 2 punched Individual 1, who fell to the ground and hit his head, causing bodily injury. Bustios filmed the encounter.

The conspiracy to violate civil rights and the deprivation of civil rights charges each carry a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each count is $250,000. Sentencing is scheduled for Jan. 8, 2020.

Bustios pleaded guilty in December 2018 to conspiring to deprive individuals of their civil rights and to extortion under color of official right. Torres pleaded guilty in May 2019 to conspiring to deprive individuals of their civil rights and to filing a false police report. His sentencing is scheduled for Nov. 18, 2019. Toledo pleaded guilty in July 2019 to conspiring to deprive individuals of their civil rights, to using unreasonable and excessive force against individuals in Paterson, and to filing a false police report. His sentencing is scheduled for Oct. 22, 2019. On March 26, 2019, Pent was charged by complaint with conspiring to deprive individuals of their civil rights. The charge and allegations against him are merely accusations and he is presumed innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory Ehrie in Newark, with the investigation leading to today’s arrest. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division of the U.S. Attorney’s Office.

Defense counsel: Miles Feinstein Esq., Clifton, New Jersey

NEWARK, N.J. – A City of Paterson police officer today admitted conspiring to violate the civil rights of individuals in Paterson, using unreasonable and excessive force, and filing a false police report to conceal his criminal activity, U.S. Attorney Craig Carpenito announced.

Police Officer Frank Toledo, 30, of Paterson, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to a three-count information charging him with conspiracy to violate individuals’ civil rights, using unreasonable and excessive force in violation of individuals’ civil rights, and filing a false police report.

“The U.S. Attorney’s Office and our law enforcement partners remain committed to identifying and prosecuting corrupt police officers who violate the civil rights of our people,” U.S. Attorney Carpenito said. “We will continue to aggressively pursue these cases, and we are grateful to our counterparts at the FBI, the Paterson Police Department and the Passaic County Prosecutor’s Office, for their dedicated assistance on this investigation.”

“The FBI has a long history of standing with and assisting our fellow law enforcement officers,” Gregory W. Ehrie, FBI Special Agent in Charge in Newark, said. “When a police department finds rogue officers who violate civil rights, we will answer the call to help rid that department of anyone who tarnishes the badge they wear.”

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

Toledo, along with other Paterson police officers, including Eudy Ramos, Jonathan Bustios, Daniel Pent, Matthew Torres, and others, stopped and searched motor vehicles, without any justification, and stole cash and other items from the occupants. Toledo and the other officers also stopped and searched individuals on the streets of Paterson, and illegally took their money. Toledo and other officers arrested individuals in Paterson, took cash from them, and split it among themselves. To cover up their criminal activity, Toledo and his fellow officers then filed false police reports. For example, on Dec. 2, 2017, Toledo and Ramos stopped and arrested an individual in Paterson and stole approximately $1,000, which they split. Toledo and Ramos then filed a false police report omitting that they had stolen $1,000 from the arrestee.

Toledo communicated via text message with his conspirators regarding their illegal activity. In one text message, on Nov. 16, 2017, Toledo wrote to Bustios, “everything we do is illegal.” In another, Bustios sent Toledo a text message with an animated talking pig that said, “I’m tryin’ to go mango hunting. Let’s goooo.” Toledo replied with an address and wrote “meet me here,” telling Bustios to meet him at a location where they could look to illegally seize “mangos,” a code word for cash.

While on official duty, Toledo also routinely used unreasonable and excessive force in his encounters with individuals in Paterson, causing them bodily harm. For instance, in three incidents in 2017:

• Toledo chased and apprehended a juvenile, pushed the juvenile to the ground, and punched the juvenile several times. Toledo later told Bustios, “I’ve been borderline blacking out when I catch these n[ ]” and “I beat that n[ ] like he owed me money.” Toledo also told Bustios that when he used force on the juvenile, he “was no longer a cop.”

• Toledo and Ramos chased and tackled an individual in Paterson and struck the individual several times in the body. They then released the individual without filing charges. The incident was recorded by a third party and uploaded to YouTube. Toledo told Bustios that the individual who recorded the incident “missed the best part,” which was when Toledo “laid him out.” Toledo then said, “funny shit is that we cut him” and “didn’t even lock him up.”

• Toledo and Torres arrested an individual, handcuffed him behind his back, and placed him in the backseat of their police car. During the ride to police department headquarters, Toledo depressed the brakes on his police car in order to force the individual to slam his body and head against the divider in the backseat of the police car, a tactic known as “brake-checking.” Toledo recorded the incident on his cell phone and sent it to others.

The conspiracy to violate civil rights and the deprivation of civil rights charges each carry a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each count is $250,000. Sentencing is scheduled for Oct. 22, 2019.

Bustios pleaded guilty in December 2018 to conspiring to deprive individuals of their civil rights and to extortion under color of official right. Torres pleaded guilty in May 2019 to conspiring to deprive individuals of their civil rights and to filing a false police report. His sentencing is scheduled for Sept. 9, 2019.

Ramos was indicted in a nine-count indictment with conspiring to deprive individuals of their civils rights, depriving individuals of their civil rights, and filing false police reports. His case is pending before Judge Hayden. Daniel Pent was previously charged by complaint with conspiring to deprive individuals of their civil rights. His case, too, is pending. The charges and allegations against them are merely accusations, and they are presumed innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

Defense counsel: Dennis S. Cleary Esq., West Orange, New Jersey

NEWARK, N.J. – A City of Paterson police officer today admitted conspiring with other officers to violate the civil rights of individuals in Paterson, and to filing a false police report to conceal his criminal activity, U.S. Attorney Craig Carpenito announced.

Police Officer Matthew Torres, 30, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with conspiracy to violate individuals’ civil rights and filing a false police report.

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

Torres, along with other Paterson police officers, including Eudy Ramos, Jonathan Bustios, Daniel Pent, and others, stopped and searched motor vehicles, without any justification, and stole cash and other items from the occupants of the motor vehicles. Torres and the other officers sometimes used fake paperwork to trick individuals into believing that the cash seizures and vehicle stops represented legitimate law enforcement encounters. Torres and the other officers also stopped and searched individuals on the streets of Paterson, and illegally took their money. To cover up their criminal activity, Torres and his fellow officers filed false police reports.

For example, on Dec. 7, 2017, while on duty, Torres and Ramos conducted a vehicle stop in Paterson. Torres and Ramos searched the vehicle, the driver, and the passenger. The passenger advised Torres and Ramos that he had a small quantity of marijuana. He also had approximately $3,100. Ramos and Torres told the passenger that they could take $500 from the passenger and have him sign a piece of paper. Ramos then placed a call, purportedly to his superior, and told the passenger that the superior officer said it had to be $800. Ramos took out a piece of white paper, wrote something on it, and told the passenger to sign it. Afterwards, Torres and Ramos released the driver and passenger. Torres and Ramos stole approximately $800 from the passenger, and they shared the stolen cash proceeds. In order to conceal their theft of monies, Torres and Ramos each omitted the encounter from their daily Paterson Police Department activity logs.

The conspiracy to violate civil rights charge carries a maximum penalty of 10 years in prison. The false records count carries a maximum penalty of 20 years in prison. The maximum fine for each count is $250,000. Sentencing is scheduled for Sept. 9, 2019.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s arrest. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

Defense counsel: John C. Whipple Esq., Morristown, New Jersey

NEWARK, N.J. – A City of Paterson police officer was arrested today and charged with conspiring to violate the civil rights of motor vehicle occupants and others in Paterson, New Jersey, U.S. Attorney Craig Carpenito announced.

Daniel Pent, 32, of Paterson, was arrested by special agents of the FBI on a complaint charging him with conspiring to deprive individuals of civil rights under color of law. Pent is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

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

Pent, and other Paterson police officers, including Eudy Ramos, stopped and searched motor vehicles, without any justification, and stole cash and other items from the occupants of the motor vehicles. Pent, Ramos, and others also illegally stopped and searched individuals in buildings or on the streets of Paterson and seized cash from those individuals.

On Feb. 1, 2017, Pent and Ramos stopped and searched a vehicle in Paterson, detained and handcuffed the occupants, and stole approximately $10,000 from one of the occupants. Pent told Ramos that either they should take all of the money or they should take none of it, and they chose to take all of it. They split the money between themselves. Pent and Ramos subsequently arrested the victim and charged the victim with loitering in a drug area. Pent filled out a prisoner property report for the victim that falsely stated that the victim had approximately $36 on his person. Ramos and Pent submitted an incident report in which they omitted the fact that they had located, and seized, $10,000 from the victim.

A federal grand jury indicted Ramos on March 20, 2019, for his role in the conspiracy and other civil rights and false records charges. His case is pending before U.S. District Judge Katharine S. Hayden.

The conspiracy to violate civil rights charge carries a maximum penalty of 10 years in prison and a fine of $250,000.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s arrest. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

NEWARK, N.J. – A federal grand jury indicted a City of Paterson, New Jersey, police officer for conspiring to violate individuals’ civil rights by stopping and searching people in their vehicles and on the street and stealing their cash, U.S. Attorney Craig Carpenito announced.

Eudy Ramos, 28, of Paterson, was charged in a nine-count indictment with conspiring to violate, and violating, the civil rights of individuals in Paterson, and with filing multiple false reports to conceal his criminal conduct. Ramos was previously charged by criminal complaint in April 2018. He will be arraigned in federal court on a date to be determined.

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

Eudy Ramos, Jonathan Bustios, and Matthew Torres were police officers with the Paterson Police Department (PPD). From at least 2016 to April 2018, they and other police officers, identified in the indictment as PPD Officer 1 and PPD Officer 2, allegedly targeted, stopped, and searched vehicles and the occupants of those vehicles and illegally seized cash from them. They also illegally stopped and searched individuals in buildings or on the streets of Paterson and seized their cash. They split the cash among themselves and submitted false reports to the PPD, omitting their illegal conduct or lying about it.

Among the methods employed to carry out the conspiracy, Ramos and the other officers used text messages to communicate about their criminal conduct. For instance, on Feb. 24, 2018 Ramos sent a text message to Bustios and Torres asking if they were in the mood for “weekend mangoes,” using the code word “mango” to refer to the illegal seizure of cash. On Feb. 25, 2018, Ramos sent a text message to Bustios, telling Bustios that Ramos was “tryna get someone in a car,” referring to Ramos’ plan to illegally steal cash from the occupants of vehicles in Paterson. On Dec. 7, 2017, Bustios sent a text message to Ramos, “83 auburn back door is open,” and Ramos responded, “On my way.” The address 83 Auburn Street was one of several locations that Ramos and others targeted for illegal cash seizures.

Some instances of Ramos’ and his conspirators illegal conduct include:

On Feb.1, 2017, Ramos and another PPD officer stopped and searched a vehicle, detained and handcuffed the occupants, and stole approximately $10,000 from one of the passengers. Ramos and his conspirator split the money between themselves and omitted any mention of the $10,000 in the PPD incident report and prisoner property report.

On Dec. 1, 2017, Ramos and Bustios stopped and searched an individual on a street corner in Paterson and stole approximately $1,000 from the individual. After the theft, a video of a portion of the encounter was posted to Twitter.

On Dec. 7, 2017, Torres and Ramos conducted a vehicle stop in Paterson. Torres and Ramos searched the vehicle, the driver, and the passenger, who had $3,100 and marijuana. Ramos told the passenger that instead of charging the passenger with distribution of marijuana they could take $500 from the passenger and have the passenger sign a piece of paper. Ramos then purportedly placed a call to his superior and told the passenger that the superior officer said it had to be $800. Ramos took out a piece of paper, wrote on it, and told the passenger to sign it. The passenger did not know what was written on the paper. Afterwards, Torres and Ramos released the driver and passenger. Torres and Ramos shared the stolen cash proceeds. Ramos and Torres did not report the stop and search of the vehicle and its occupants, or the cash seizure, to the Paterson Police Department.

The conspiracy count carries a maximum penalty of 10 years in prison and the substantive Counts 2 to 6 each carry a maximum penalty of one year in prison. The false records counts each carry a maximum penalty of 20 years in prison. The maximum fine for the felony counts is $250,000, and the maximum fine for the misdemeanor Counts 2 to 6 is $100,000.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s indictment. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

Defense counsel: Miles Feinstein Esq., Clifton, New Jersey

NEWARK, N.J. – A City of Paterson, New Jersey, police officer was arrested today and charged with violating the civil rights of a driver and passenger during a motor vehicle stop, U.S. Attorney Craig Carpenito announced.

Police Officer Matthew Torres, 30, of Paterson, was arrested by federal agents this morning and charged by complaint with conspiring to deprive individuals of civil rights under color of law. Torres is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge Steven C. Mannion in Newark federal court.

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

Torres and other Paterson police officers, including Eudy Ramos, have without justification stopped and searched motor vehicles and stolen cash and other items from the occupants. The officers sometimes used fake paperwork to trick individuals into believing that the cash seizures and vehicle stops were legitimate.

For example, on Dec. 7, 2017, Torres and Ramos conducted a vehicle stop in Paterson, searched the vehicle, driver, and passenger and placed the driver in one police car and the passenger in the other. The passenger told Torres and Ramos that he possessed two bags of marijuana and $3,100. Ramos took the money, placed it on the backseat of the vehicle and told the passenger that he did not care about the marijuana. Ramos told the passenger that they could not simply let him go because his activity likely had been picked up by Paterson police cameras. Ramos said he and Ramos could take $500 from the passenger, have him sign a piece of paper, and then give that paper to the narcotics division. Ramos then placed a call, purportedly to his superior, and told the passenger that the superior officer said it had to be $800. Ramos took out a piece of white paper, wrote something on it, and told the passenger to sign it. The passenger did not know what was written on the paper. Afterwards, Torres and Ramos released the driver and passenger. According to the passenger, there was $1,000 missing from his original $3,100. Torres and Ramos shared the stolen cash proceeds. They did not report the illegal cash seizure to the Paterson Police Department.

The conspiracy to violate civil rights charge carries a maximum penalty of 10 years in prison and a fine of up to $250,000.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory Ehrie in Newark, with the investigation leading to today’s arrest. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

NEWARK, N.J. – A City of Paterson police officer today admitted conspiring with other officers to violate individuals’ civil rights and to personally accepting a firearm in exchange for reducing the charges on an arrestee, U.S. Attorney Craig Carpenito announced.

Police Officer Jonathan Bustios, 29, of Paterson, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with one count of conspiracy to violate individuals’ civil rights and one count of extortion under color of official right.

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

Bustios and Eudy Ramos were police officers with the Paterson Police Department. From at least 2016 to April 2018, Bustios, Ramos and others participated in a conspiracy in which they targeted and stopped certain individuals who were driving motor vehicles that they believed carried sums of money. Bustios, Ramos and others stopped the vehicles, searched the vehicles, driver, and passengers, and seized cash from the driver and passengers of the vehicles, without legal basis. They then split the cash among themselves and submitted false reports to the Paterson Police Department omitting the illegal vehicle stops and their thefts or lying about them.

In one incident, on Feb. 20, 2018, while on duty and in uniform, Bustios pulled over and stopped behind a BMW, while Ramos stopped in front of the BMW. Bustios and Ramos exited their police cars and searched the front and back of the BMW and the trunk, and Bustios and Ramos detained and searched the two occupants of the BMW. They put each of the occupants into the backseat of Ramos’s police car. Bustios then stole a bag containing approximately $1,800 from the car and left the scene, and Ramos released the two detained occupants of the BMW. Ramos drove to meet Bustios, who passed a portion of the recovered cash to Ramos through the window of Bustios’ police car. Bustios and Ramos did not report to the Paterson Police Department the fact that they had stopped and searched the BMW, detained and searched its occupants, and taken cash, all without any warrants or legal justification.

Bustios also pleaded guilty to extortion under color of official right, arising out of an incident on March 14, 2018. Bustios arrested and detained an individual and placed the individual in the backseat of his police car. Bustios told the individual that he would not charge him with resisting arrest and would allow him to keep the cash that the he had on him, in exchange for which the individual would find Bustios a firearm. Bustios said, “I ain’t gonna charge you with resisting, and I’m letting you keep your money, bro.” Bustios then told the individual, “If you don’t wanna make the deal, you don’t have to make the deal.” The individual ultimately agreed to the deal and directed Bustios to the location of a firearm. Bustios recovered the firearm and kept it without turning it in to the Paterson Police Department. As promised, he did not charge the individual with resisting arrest. Bustios also submitted an arrest report in which he failed to mention any details about having a recovered a firearm.

The conspiracy to violate civil rights count carries a maximum penalty of 10 years in prison. The extortion under color of official right count carries a maximum penalty of 20 years in prison. The maximum fine for both charges is $250,000. Sentencing is scheduled for April 9, 2019.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea. He also thanked the Passaic County Prosecutor’s Office, under the direction of Passaic County Prosecutor Camelia M. Valdes, the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, and the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the Criminal Division.

Defense counsel: Michael Koribanics, Clifton, New Jersey

NEWARK, N.J. – Two Passaic County, New Jersey, men were arrested today for allegedly violating the civil rights of two individuals during a motor vehicle stop in Paterson, New Jersey, with one officer also being charged with extortion for personally accepting a firearm in exchange for reducing the charges on an arrestee, U.S. Attorney Craig Carpenito announced.

Jonathan Bustios, 28, and Eudy Ramos, 31, both of Paterson, New Jersey, were arrested by federal agents this morning and charged by complaint with conspiring to deprive individuals of civil rights under color of law. Bustios was also charged with one count of extortion under color of official right. Both defendants are scheduled to appear this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court.

According to the complaint:

The investigation uncovered instances in which Bustios and Ramos, both officers of the Paterson Police Department, allegedly stopped motor vehicles, detained the occupants, and searched those vehicles without any justification. On certain occasions, Bustios and Ramos also took cash and other items without justification before releasing the detained occupants.

For example, on Feb. 20, 2018, while on duty, Bustios pulled over a BMW and stopped behind the vehicle, while Ramos stopped his police car in front of the vehicle. Bustios and Ramos exited their police cars and proceeded to search the front and back of the BMW and the trunk. Bustios and Ramos also detained and searched the two occupants of the BMW and put them into the backseat of Ramos’ police car.

After searching the BMW, Bustios left the scene, drove for ten minutes, then stopped his police car and took out a white plastic bag that was filled with cash. Bustios also took out a firearm. He then called Ramos, after which Ramos released the two detained occupants of the BMW and drove to meet Bustios. Bustios passed a portion of the recovered cash to Ramos through the window of Bustios’ police car.

Later that day, Bustios and Ramos turned in the firearm that they had recovered. In the offense report pertaining to the firearm, they told a false story about having recovered the firearm due to a tip by a concerned citizen. In fact, there was no tip by a concerned citizen. They did not report to the Paterson Police Department that they had stopped and searched the BMW, detained and searched its occupants, and taken cash, all without any warrants.

Bustios was also charged with extortion under color of official right for an incident that allegedly occurred on March 14, 2018. Bustios arrested and detained an individual and placed the individual in the backseat of his police car. Bustios then told the individual that Bustios would not charge the individual with resisting arrest and would allow the individual to keep the cash that the individual had on him, in exchange for the individual helping Bustios acquire a firearm. Specifically, Bustios said, “I ain’t gonna charge you with resisting, and I’m letting you keep your money bro.” Bustios then told the individual, “If you don’t wanna make the deal, you don’t have to make the deal.”

The individual ultimately agreed and directed Bustios to the location of a firearm, which Bustios allegedly recovered and kept without turning it over to the Paterson Police Department. According to Paterson Police Department records, as he had promised, Bustios did not charge the individual with resisting arrest. Bustios also submitted an arrest report in which he failed to mention any details about recovering a firearm.

The conspiracy to violate civil rights count with which Bustios and Ramos are charged carries a maximum penalty of 10 years in prison. The extortion under color of official right count with which Bustios is charged carries a maximum penalty of 20 years in prison.

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

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Bradley W. Cohen in Newark, with the ongoing investigation leading to today’s arrest. He also thanked the Paterson Police Department, under the direction of Paterson Police Director Jerry Speziale and Police Chief Troy Oswald, as well as the Paterson Police Department Office of Internal Affairs, for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Rahul Agarwal, Deputy Chief of the U.S. Attorney’s Office Criminal Division.

NEWARK, N.J. – The Justice Department today announced a coordinated health care fraud enforcement action across seven federal districts in the Northeastern United States, involving more than $800 million in losses and the distribution of over 3.25 million pills of opioids in “pill mill” clinics and doctors’ offices. The takedown includes new charges and convictions by guilty plea against 54 defendants for their roles in submitting nearly $800 million in fraudulent claims made to federal payers, including 15 doctors or medical professionals, and 24 defendants are charged for their roles in diverting opioids.

The cases prosecuted by this Office in connection with the takedown reflect all of the different facets of our health care and opioids work. Doctors, marketing executives, pharmacists, and the owners and operators of a genetic testing laboratory have been charged with, or have plead guilty to a range of criminal conduct, including: the criminal prescription of highly-addictive opioid pills to patients with no medical need, the paying of kickbacks and other fraud related to unnecessary genetic testing, fraud and abuse in the compounded medicines business, and other crimes that victimize federal health care programs like Medicare and Medicaid, as well as patients across New Jersey who need medical care.

Today’s enforcement actions were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force (MFSF), as well as the U.S. Attorney’s Offices for the District of New Jersey, Eastern District of Pennsylvania, Western District of Pennsylvania, Eastern District of New York, Western District of New York, District of Connecticut, and District of Columbia. The MFSF is a partnership among the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG. In addition, IRS-Criminal Investigation, DOD-DCIS, FDA-OIG, the Medicaid Fraud Control Unit, and other federal and state law enforcement agencies participated in the operation.

The charges involve individuals contributing to the opioid epidemic, including medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the Centers for Disease Control, approximately 115 Americans die every day of an opioid-related overdose.

Today’s arrests and guilty pleas come one-year after the Department of Justice announced the formation of the Newark/Philadelphia Regional MFSF, a joint law enforcement effort that brings together the resources and expertise of the Health Care Fraud Unit in the Criminal Division’s Fraud Section, the U.S. Attorney’s Offices for the District of New Jersey and the Eastern District of Pennsylvania, as well as law enforcement partners. The Strike Force focuses its efforts on aggressively investigating and prosecuting complex cases involving patient harm, large financial loss, and the illegal prescribing and distribution of opioids and other dangerous narcotics.

“Rooting out and prosecuting abuses within our health care system is a top priority for my office,” Craig Carpenito, U.S. Attorney for the District of New Jersey, said. “In New Jersey, these illegal activities run the gamut from over-prescribing dangerous opioids, to running pharmacies improperly, to mis-prescribing unnecessary medications, to tricking patients – often the elderly or vulnerable – into seeking expensive genetic testing or compounded prescriptions they don’t need. Today’s message should be clear: We are dedicated to combatting all forms of illegal activity in the health care arena. If you put patients’ health at risk with criminal intent, you will be dealt with as a criminal.”

“Physicians and other medical professionals who fraudulently bill our federal health care programs are stealing from taxpayers and robbing vulnerable patients of necessary medical care. The medical professionals and others engaging in criminal behavior by peddling opioids for profit continue to fuel our nation’s drug crisis,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The Department of Justice will continue to use every tool at our disposal, including data analytics and traditional law enforcement techniques, to investigate, prosecute, and punish this reprehensible behavior and protect federal programs from abuse.”

“The FBI does not care about your status in life, your professional standing, your level of income, or your personal connections when you break the law,” Assistant Special Agent in Charge Wayne Jacobs of the FBI’s Newark Field Office said. “If you try to scam the system, if you exploit your professional license just to pad your pockets, if you mortgage your morals just to inflate your bank account, you will only find yourself in deeper debt. We are committed to protecting the public; we are intent on rooting out fraud and corruption; we are duty-bound to track down and arrest anyone who is breaking our federal laws. Don’t be next.”

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Among those charged in the District of New Jersey are the following:

Two Doctors Mis-Prescribing Opioids

• Evangelos Megariotis, 66, of Clifton, New Jersey, an orthopedic surgeon who owns and operates Clifton Orthopedic Associates in Clifton, New Jersey. Megariotis was charged by complaint with prescribed large amounts of controlled substances, such as oxycodone, Percocet, Xanax, and promethazine with codeine outside the usual course of medical practice and without a legitimate purpose. He wrote these allegedly illegal prescriptions to patients he knew were abusing opioids. In two years, Megariotis allegedly prescribed more than 1.4 million tablets of oxycodone and over 450 gallons of promethazine with codeine cough syrup to his patients. The Government is represented by Assistant U.S. Attorney Erica Liu, Deputy Chief of the Criminal Division.

• Joseph Santiamo, 64, of Staten Island, New York, a doctor who specialized in geriatric care, was charged by complaint with prescribing powerful opioids to patients he knew were addicted. According to the complaint, Santiamo also solicited sexual favors from some patients in return for writing them an opioid prescription. In a recorded statement to agents, Santiamo admitted he knew his prescriptions were being abused, but kept writing them anyway. Just twenty of Santiamo’s patients allegedly received more than 100,000 oxycodone pills for no legitimate medical purpose. The Government is represented by Assistant U.S. Attorney Brian Urbano of the Criminal Division.

Ex-Sales Rep. Committing Compounding Fraud:

• Kent Courtheyn, of Kent, Ohio, a former medical device sales representative, indicted for his alleged role in marketing compounded (i.e. customized) medicines to patients who didn’t need them. Courtheyn allegedly steered prescriptions for these expensive compounded medications to his conspirators, and took a cut for his role. The indictment alleges that the scheme caused at least $10 million in losses to participating health care plans, at least $3.5 million of which was paid by TRICARE, the federal program that pays for health care services for veterans. The Government is represented by Assistant U.S. Attorney Erica Liu, Deputy Chief of the Criminal Division.

PrimeAid Pharmacy Indictment:

• Yana Shtindler, 44, and Samuel “Sam” Khaimov, 47, both of Glen Head, New York; Alex Fleyshmakher, 33, of Morganville, New Jersey; and Ruben Sevumyants, 36, of Marlboro, New Jersey, charged by indictment. From 2009 through August 2017, Prime Aid Pharmacies (located in Union City, New Jersey and Bronx, New York) engaged in a slew of fraudulent activities including: (a) paying illegal bribes and kickbacks to doctors and doctors’ employees in exchange for prescription referrals to Prime Aid; (b) billing health insurance providers for medications that were never actually provided to patients; and (c) opening new pharmacies and concealing the true ownership of those pharmacies to obtain lucrative contracts they otherwise would not have obtained. The scheme of billing for medications that were never dispensed to patients was so egregious that Prime Aid received reimbursement payments of over $65 million for prescription medications that it never even ordered from distributors or had in stock. In total, Prime Aid’s multiple schemes defrauded Medicare, Medicaid, and private insurers out of at least $99 million. The Government is represented by Assistant U.S. Attorneys Joshua L. Haber and Jason Gould of the Criminal Division.

Empire Pharmacy Criminal Complaint:

• Eduard “Eddy” Shtindler, 36, of Paramus, New Jersey, charged by complaint with conspiracy to commit health care fraud and conspiracy to pay illegal kickbacks to a doctor. From 2012 through at least 2017, Shtindler owned and operated Empire Pharmacy in West New York, New Jersey. For most of that time, Shtindler allegedly paid bribes to a psychiatrist in Hudson County, New Jersey, to induce the doctor to send prescriptions to Empire. On occasion, Shtindler secreted cash bribes in pill bottles that were delivered to the doctor. In exchange for these bribes, the doctor steered patients to Empire pharmacy. In addition, starting in 2015, Empire – at Shtindler’s direction – perpetrated a fraudulent scheme to induce doctors to send expensive specialty medication prescriptions to Empire. Specialty medications often required “prior authorization” before being approved for reimbursement by Medicare, Medicaid, and some private insurance providers. To receive prior authorization approval more quickly and successfully than any other pharmacies, Empire employees, including two pharmacists, repeatedly falsified prior authorization forms for medications for various conditions, including psoriasis and Hepatitis C. In total, Empire defrauded Medicare and Medicaid out of at least $2 million. The Government is represented by Assistant U.S. Attorney Joshua L. Haber of the Criminal Division.

Ark Labs Genetic Testing Indictment:

• Dr. Matthew S. Ellis, 53, of Gainesville, Florida; Edward B. Kostishion, 59, of Lakeland, Florida; Kyle D. Mclean, 36, of Arlington Heights, Illinois; Kacey C. Plaisance, 38, of Altamonte Springs, Florida; Jeremy Richey, 39, of Mars, Pennsylvania; and Jeffrey Tamulski, 46, of Tampa, Florida. Kostishion, Plaisance, and Richey operated Ark Laboratory Network LLC (Ark), a company that purported to operate a network of laboratories that facilitated genetic testing. Ark partnered with Privy Health, Inc., a company that McLean operated, and another company to acquire DNA samples and Medicare information from hundreds of patients through various methods, including offering $75 gift cards to patients, all without the involvement of a treating health care professional. Ellis, a physician based in Gainesville, served as the ordering physician who authorized genetic testing for hundreds of patients across the country that he never saw, examined, or treated. These included patients from New Jersey and various other states where Ellis was not licensed to practice medicine. Through this process, Ellis, Kostishion, Plaisance, and McLean submitted and caused to be submitted fraudulent orders for genetic tests to numerous clinical laboratories. These orders falsely certified that Ellis was the patients’ treating physician and, in many cases, contained false information indicating that a patient had a personal or family history of cancer, when, in fact, the patient had no cancer history whatsoever. In 2018 alone, Medicare paid clinical laboratories at least approximately $4.6 million for genetic tests that Ellis ordered in this manner. In addition, Kostishion, Plaisance, Richey, and Tamulski entered into kickback agreements with certain clinical laboratories under which the laboratories would pay Ark a bribe in exchange for delivering DNA samples and orders for genetic tests. The bribe payments were based on the percentage of Medicare revenue that the laboratories received in connection with the tests. Among other things, Kostishion, Plaisance, Richey, and Tamulski concealed these kickback arrangements through issuing sham invoices to laboratories that purportedly reflected services provided at an hourly rate even though the parties had already agreed upon the bribe amount, which was based on the revenue the laboratories received. In 2018, the clinical laboratories paid Ark at least approximately $1.8 million in bribes. The Government is represented by Assistant U.S. Attorney Bernard Cooney of the Criminal Division.

Doctor Pleads Guilty in Compounding Case

• Bernard Ogon M.D., 46, of Burlington, New Jersey, pleaded guilty on September 25, 2019 to one count of health care fraud conspiracy for his participation in a vast compounded medication telemedicine conspiracy. As part of the conspiracy, Ogon admittedly signed prescriptions for compounded medications (that is, medications with ingredients of a drug tailored to the needs of a particular patient) without having established a doctor-patient relationship, spoken to the patient or conducting any medical evaluation. Ogon often signed preprinted prescription forms—with patient information and medication already filled out—where all that was required was his signature. Then, instead of providing the prescription to the patient, Ogon would return the prescriptions to specific compounding pharmacies involved in the conspiracy. Ogon was paid $20 to $30 for each prescription he signed, and his participation in the conspiracy caused losses to health care benefit programs of over $24 million, including losses to government health care programs of over $7 million. The Government is represented by Assistant U.S. Attorney Jason Gould of the Criminal Division.

The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

U.S. Attorney Carpenito also thanked special investigators from his office for their work on these cases.

A complaint, information or indictment is merely an accusation, and all defendants are presumed innocent until and until proven guilty.

NEWARK, N.J. – A doctor based in Gainesville, Florida, was charged with conspiracy to commit health care fraud for ordering genetic tests for patients he never saw or treated, U.S. Attorney Craig Carpenito announced today.

Matthew S. Ellis, 53, of Gainesville, Florida, is charged by complaint with one count of conspiracy to commit health care fraud. Ellis made his initial appearance today before U.S. Magistrate Judge Mark Falk in Newark federal court and was released on $250,000 unsecured bond.

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

Ellis served as the chief medical officer for Ark Laboratory Network LLC, a company that purported to operate a network of laboratories that facilitated genetic testing. Two conspirators who operated Ark, Edward Kostishion, 59, and Kacey Plaisance, 37, both of Florida, were each charged by complaint on Jan. 15, 2019, with one count of conspiracy to commit health care fraud.

In October 2018, Kostishion and Plaisance contacted a clinical laboratory in New Jersey and proposed sending the laboratory 10 DNA swabs for genetic tests in return for approximately 50 percent of the total Medicare payments the laboratory received as a result of the tests. Kostishion later sent 10 test orders to the laboratory that listed Ellis as the “Ordering Physician” and contained a certification from Ellis that the tests were medically reasonable and necessary. The test requests contained fraudulent information regarding medical histories and conditions, and falsely represented that Ellis provided the patients with information regarding genetic testing.

One of the test requests, relating to “Patient 1,” indicated that Patient 1 had a personal history of breast cancer at age 44, a prerequisite for Medicare coverage of the particular test requested.  However, on Nov. 29, 2018, Patient 1 confirmed to law enforcement officials that the information on the test request was false; Patient 1 never had cancer and never told anyone about having cancer. Patient 1 also stated that Patient 1 submitted to the DNA swab after seeing an advertisement on Facebook that offered a $100 gift card for people interested in genetic testing.  Patient 1 stated that the DNA swab was not taken at a medical office, but rather in a “plain old office building” and that “some random guy” took the swab. Patient 1 confirmed never seeing or speaking to a treating physician about the genetic testing, and never saw or spoke to Ellis, the ordering physician listed on the test request. 

Ellis practices medicine in Florida, but Patient 1 was located in Oklahoma. All 10 of the patients in the test requests were located in Oklahoma, Arizona, Tennessee, or Mississippi. None of the patients were located in Florida. Additional investigation revealed that Ellis was not licensed to practice medicine in Oklahoma.  

The health care fraud count carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.

U.S. Attorney Carpenito credited the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott Lampert; and special agents of the U.S. Attorney’s Office for the District of New Jersey, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Bernard J. Cooney of the Health Care and Government Fraud Unit of the U.S. Attorney’s Office in Newark.

The charges and allegations against the defendants are merely accusations, and they are presumed innocent unless and until proven guilty.