NEWARK, N.J. – A Bergen County, New Jersey, man was arrested today for his alleged role in an investment scheme that fraudulently obtained $1.525 million from at least three families from 2017 through 2019, U.S. Attorney Craig Carpenito announced.

Matthew Benjamin, 53, of Englewood, New Jersey, is charged by complaint with two counts of wire fraud and one count of securities fraud. He is scheduled to make his initial appearance today by videoconference before U.S. Magistrate Judge Cathy L. Waldor.

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

From May 2017 through August 2019, Benjamin falsely represented to at least three families that his company, Clear Solutions Group LLC, had lucrative contracts to purchase closeout or excess cosmetic inventory from Company A, which he would then resell at a mark-up to Company B. Benjamin told the victims that he had access to these closeout goods through his contacts in the cosmetics and fragrance industry, which he purportedly made through his work at his family’s cosmetic wholesale and distribution business prior to starting Clear Solutions Group. Benjamin induced the victims to provide him with money to purchase the inventory from Company A and promised significant profits in return. Instead of investing the money as he promised, Benjamin misappropriated the investor’s money for his own use and benefit.

Benjamin provided the victims with falsified documents, including fake purchase orders, invoices, promissory notes and bank records showing inflated assets of Clear Solutions Group. To lull victims and induce them to continue investing, Benjamin provided them with documents that purported to detail the investors’ profits.

Benjamin misrepresented to certain investors that portions of their profits on the investment contracts were being reinvested in additional deals to purchase and sell cosmetics, which in turn would generate more profits. From time to time, Benjamin made payments to the investors that were purportedly their profits on certain cosmetics contracts. 

In reality, Benjamin did not purchase or sell cosmetics with the money invested by the victims. Instead, Benjamin misappropriated the investors’ money by making payments to other investors in Clear Solutions Group, which were characterized as those investors’ profits from the nonexistent cosmetic contracts, thereby enabling Benjamin to continue to perpetuate his fraudulent scheme; and by funding Benjamin’s and his family’s lifestyle, including paying for car and house rental payments, food, international travel, legal fees, technology equipment, and summer camp tuition for his family members. The victims’ losses from the fraud perpetrated by Benjamin collectively totaled approximately $1 million.

The wire fraud counts are each punishable by a maximum of 20 years in prison and a fine of $250,000, or twice the gross amount of gain or loss from the offense, whichever is greater. The securities fraud count is punishable by a maximum of 20 years in prison and a fine of $5 million.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark, with the investigation leading to today’s charges.

The government is represented by Assistant U.S. Attorney Jennifer Kozar of the Economic Crimes Unit in Newark.

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

NEWARK, N.J. – A California man today admitted conspiring to commit wire and securities fraud in connection with his role in a $50 million internet-enabled fraud scheme, U.S. Attorney Philip R. Sellinger announced.

Allen Giltman, 56, of Irvine, California, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud.

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

From 2012 to October 2020, Giltman and others engaged in an internet-based financial fraud scheme, which generally involved the creation of fraudulent websites to solicit funds from investors. At times, the fraudulent websites were designed to closely resemble websites being operated by actual, well-known, and publicly reputable financial institutions; at other times, the fraudulent websites were designed to resemble legitimate-seeming financial institutions that did not exist. 

Victims of the fraud scheme typically discovered the fraudulent websites via internet searches. The fraudulent websites advertised various types of investment opportunities, most prominently the purchase of certificates of deposit, or CDs. The fraudulent websites advertised higher than average rates of return on the CDs to lure potential victims.

The fraudulent websites used a variety of means to appear legitimate and to gain and maintain the trust of prospective investors, including: (a) displaying the actual names and logos of real financial institutions; (b) purporting that the institutions were members of or regulated by the Federal Deposit Insurance Corporation (FDIC), Financial Industry Regulatory Authority (FINRA), the Securities Investor Protection Corporation, or New York Stock Exchange; (c) claiming that deposits made to the institutions associated with the fraudulent websites were FDIC-insured; and (d) using FINRA or FDIC member identification numbers issued to real financial institutions and real FINRA broker-dealers.

After discovering one of the fraudulent websites, victims would contact an individual – identified in the information as Giltman – by telephone or email as directed on the sites. During his communications with victims, Giltman impersonated real FINRA broker-dealers by using their names and FINRA Central Registration Depository numbers. He would then provide the victims with applications and wiring instructions for the purchase of a CD. The funds wired by the victims would then be moved to various domestic and international bank accounts, including accounts in Russia, the Republic of Georgia, Hong Kong, and Turkey. None of the victims received a CD after wiring the funds.

To date, law enforcement has identified at least 150 fraudulent websites created as part of the scheme. At least 70 victims of the fraud scheme nationwide, including in New Jersey, collectively transmitted approximately $50 million that they believed to be investments.

The wire fraud conspiracy charge carries a maximum penalty of 20 years and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greatest. The securities fraud charge carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross amount of gain or loss from the offense, whichever is greatest.  Sentencing is scheduled for May 10, 2022.

The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Giltman today based on the same conduct.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch in Newark, with the investigation leading to today’s guilty plea. He also thanked the SEC for the assistance provided by its Enforcement Division.

The government is represented by Assistant U.S. Attorney Anthony P. Torntore of the U.S. Attorney’s Cybercrime Unit in Newark.

PHILADELPHIA – Philadelphia District Attorney Rufus Seth Williams was indicted today on additional fraud charges stemming from his alleged use of political action committee (PAC) funds and official government vehicles for his personal benefit, Acting New Jersey U.S. Attorney William E. Fitzpatrick announced.

Williams, 50, of Philadelphia, is now charged in a superseding indictment with 11 counts of travel and use of interstate facilities to promote and facilitate bribery contrary to Pennsylvania law (the “Travel Act counts”), two counts of Hobbs Act extortion under color of official right, two counts of honest services wire fraud, 12 counts of wire fraud and two counts of mail fraud.

 Williams was originally charged in a 23-count indictment on March 21, 2017. The superseding indictment now contains 29 counts, including Counts 22 to 29 regarding Williams’ use of PAC funds and official vehicles.

The Fraud Involving PAC Funds Friends of Seth Williams, a/k/a “The Committee to Elect Seth Williams,” was a political action committee that accepted contributions from individuals to support Williams’ campaigns for public office. Under applicable law, the PAC funds could only be used in relation to political campaigns.

According to the superseding indictment, from August 2010 through August 2016, Williams allegedly defrauded the PAC by using its funds for personal expenditures, which he concealed by providing false or incomplete reports to the Commonwealth of Pennsylvania and to the City of Philadelphia.

For instance, between August 2010 and September 2010, the PAC disbursed two checks to a political consultant totaling approximately $4,136.59. The memo line on these checks falsely stated, “Political Consulting.” Within days of the political consultant receiving the PAC checks, Williams obtained checks from the political consultant’s account and deposited them into his own bank account. In total, Williams received approximately $4,036.59 of the approximately $4,136.59 that the political consultant received from the PAC between August 2010 and September 2010. Williams used these funds for personal expenses.

In addition, from October 2011 through April 2015, Williams incurred expenses at a social club for his personal benefit, including dinner parties, lodging, and family events, none of which were incurred in connection with any election. Williams used the PAC’s debit card to pay for these expenses, including charges of $677.98 for a New Year’s Eve celebration at the social club on Dec. 31, 2013 for Williams and his girlfriend; $195.50 for a facial and massage in January 2014; $777.19 for an April 10, 2014 birthday dinner that Williams held for his girlfriend; $491.50 for a massage, facial, gift card, and fitness classes in January 2015; approximately $2,674.41 for an April 10, 2015 birthday dinner that Williams held for his girlfriend; and approximately $211.50 for massages in May 2015.

From January 2013 through May 2015, Williams incurred expenses at a health club for his own personal benefit, including massages, facials, and clothing, none of which were incurred in connection with any election. Williams also used the PAC’s debit card to pay for these expenses, including charges for massages of $222.50 in January 2013, $209 in July 2013, $251.50 in September 2013, and $90 in November 2013.

The Fraud Involving Official Government Vehicles Williams also allegedly engaged in a scheme to use official vehicles – which were provided by the City of Philadelphia and a federal narcotics law enforcement program – for his personal benefit.

 

Some of those vehicles were obtained through grants provided by the High Intensity Drug Trafficking Area (HIDTA) program. The purpose of the HIDTA program was to reduce illegal drug trafficking and drug production in the United States by, among other things, facilitating cooperation among federal, state, and local law enforcement agencies. The HIDTA program provided resources and funding to enhance and promote regional drug control strategies within defined geographic areas. Each geographic area designated as a HIDTA was governed by an Executive Board comprised of federal, state, and local law enforcement agencies.

 

Williams was a member of the Executive Board for the HIDTA of Philadelphia and Camden, New Jersey. The District Attorney’s Office (DAO) assigned HIDTA vehicles to detectives in its Dangerous Drug Offender Unit (DDOU), which often conducted narcotics investigations with federal and state HIDTA partners. Vehicles owned or leased by these agencies could not be used for personal purposes.

According to the superseding indictment, Williams repeatedly used city and HIDTA vehicles for his personal use during non-working hours, including weeknights and weekends. Williams directed his security detail to leave a city or HIDTA vehicle at his home every weeknight, so that he would have access to it during all non-working hours. Williams used the vehicles to transport himself, family members, friends and other non-employees on non-DAO business, including personal trips outside of Philadelphia.

During the scheme, Williams had full-time access to city or HIDTA vehicles for nearly all of his personal vehicular needs and personally incurred almost no expenses related to the use of a personal vehicle for years, including costs of purchasing, leasing, or renting a vehicle, or paying for insurance, fuel, and maintenance.

In addition, Williams’ acquisition and use of the HIDTA vehicles, including a Nissan Armada SUV and two Chevrolet Tahoe SUVs, reduced the number of vehicles available to members of the DAO’s DDOU for undercover operations, surveillance, and other aspects of narcotics investigations.

Bribes Involving Business Owners and Fraud on a Nursing Home and Family Friends

Williams remains charged with the same three schemes that were detailed in the March 21, 2017 indictment:

• From July 2010 through May 2015, Williams allegedly had an arrangement with an individual identified in the superseding indictment as “Business Owner #1,” in which Williams, while serving as the Philadelphia District Attorney, accepted trips, money, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Business Owner #1.

• From March 2012 through July 2015, Williams allegedly had an arrangement with an individual identified in the superseding indictment as “Business Owner #2,” in which Williams accepted airline tickets, money, an automobile, and other things of value in exchange for performing and agreeing to perform official acts on behalf of Business Owner #2.

• From February 2012 through November 2013, Williams allegedly diverted a relative’s pension and Social Security payments to pay for his own personal expenses instead of applying them to the relative’s nursing home costs. In addition, after accepting $10,000 from friends of his relative intended to cover expenses for the relative’s nursing home care, Williams spent the money on his personal expenses instead.

The 29-count superseding indictment presents some alterations to the original counts, without changing the substance of the above allegations. Williams was arraigned on March 22, 2017, and entered a plea of not guilty. The trial is presently set for May 31, 2017.

Each of the Travel Act counts is punishable by a maximum potential penalty of five years in prison. The Hobbs Act extortion under color of official right and the wire and mail fraud charges are each punishable by a maximum potential penalty of 20 years in prison. Each count carries a potential fine of $250,000 or twice the gross gain or loss from the offense. The indictment also seeks forfeiture of a total of approximately $64,878.22, representing the sum of approximately $33,765.52 worth of bribe proceeds and approximately $31,112.70 worth of fraud proceeds.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Michael Harpster in Philadelphia; special agents of IRS-Criminal Investigation, Philadelphia Office, under the direction of Acting Special Agent in Charge Gregory Floyd, and special agents of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigation (HSI) Philadelphia, under the direction of Special Agent in Charge Marlon V. Miller, with the investigation. He also thanked the U.S. Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Nick DiGiulio, for its participation in the investigation.

The U.S. Attorney in the Eastern District of Pennsylvania recused his office from the investigation involving the Philadelphia District Attorney’s Office, and the matter was assigned to the U.S. Attorney’s Office for the District of New Jersey. Two prosecutors from the Eastern District of Pennsylvania office were assigned to the case, subject to the supervision of prosecutors in the New Jersey office.

The government is represented by Deputy Chief Eric W. Moran of the U.S. Attorney’s Office Criminal Division in Newark and Chief of Appeals Robert A. Zauzmer and Assistant U.S. Attorney Vineet Gauri of the U.S. Attorney’s Office in Philadelphia.

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

Defense counsel: Thomas F. Burke Esq., Philadelphia.

NEWARK, N.J. – The U.S. Attorney’s Office filed a proposed consent decree today to resolve its lawsuit against Roosevelt Care Centers (RCC) for violating Title I of the Americans with Disabilities Act (ADA), U.S. Attorney Philip R. Sellinger announced.

According to the complaint, which was filed in federal court on March 20, 2023, Roosevelt Care Centers unlawfully terminated a dietary worker whose disability inhibited her ability to lift objects heavier than 20 pounds. Prior to her termination, the employee had been successfully working at RCC for approximately 18 years and remained able to perform the essential functions of her position. Nonetheless, Roosevelt Care Centers terminated the dietary worker’s employment due to her disability without engaging in an interactive process to provide her with a reasonable accommodation.



“Qualified individuals with disabilities must be given an equal opportunity to be part of the workforce. This settlement reflects the U.S. Attorney’s Office’s commitment to ending discriminatory employment practices and protecting the civil rights of all employees under the Americans with Disabilities Act.”



U.S. Attorney Philip R. SellingerUnder the terms of the consent decree, which must be approved by the court, RCC has agreed to pay $50,000 in compensation to the complainant. The settlement also requires RCC to train its staff on the ADA and to periodically submit reports about its compliance with the consent decree.

Title I of the ADA prohibits employers from discriminating against a qualified individual on the basis of disability. An employer may not demote, terminate, or deny employment opportunities to an employee who is otherwise qualified if the demotion or termination is based on the need to make reasonable accommodations for the employee. 

U.S. Attorney Sellinger created a Civil Rights Division with the sole focus on enforcing federal civil rights laws, including the ADA, with the goal of protecting and upholding the civil rights of those in our community. This matter was handled by the U.S. Attorney’s newly formed Civil Rights Division based on a referral from the Newark Area Office of the Equal Employment Opportunity Commission.

Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339.  Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD).

The government is represented by Assistant U.S. Attorney Thandiwe Boylan of the Civil Rights Division in Newark.





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NEWARK, N.J. – A Somerset County, New Jersey, woman today admitted fraudulently obtaining over $1 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL), U.S. Attorney Philip R. Sellinger announced.

Nivah Garcis, 51, of North Plainfield, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging her with one count of conspiracy to commit bank fraud, three counts of wire fraud, and one count of money laundering.

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

Garcis conspired with at least one individual to submit two fraudulent PPP loan applications to a lender on behalf of two purported businesses that she controlled, and further submitted three fraudulent EIDL loan applications to the U.S. Small Business Administration (SBA) on behalf of these businesses and another business that she owned. She then engaged in financial transactions with the loan proceeds, including for the purchase of property.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The applications Garcis submitted each contained fraudulent representations to the lender, a Federal Home Loan Bank member, and the SBA, including bogus federal tax documents purportedly from the IRS. Garcis also fabricated the existence of employees and wages paid through the purported businesses. According to IRS records, however, none of the purported tax documents that Garcis submitted in support of her loan applications were ever in fact filed with the IRS. Based on Garcis’ misrepresentations, her loan applications for her purported businesses were approved for approximately $1.05 million in federal COVID-19 emergency relief funds meant for distressed small businesses. Garcis then used the proceeds to purchase property and for various personal expenses.

The count of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The counts of wire fraud each carry a maximum penalty of 20 years in prison and a maximum fine of $250,000. The count of money laundering carries a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Jan. 31, 2023.

U.S. Attorney Sellinger credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy L Tomlins; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Acting Inspector in Charge Raimundo Marrero, Philadelphia Division; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Acting Special Agent in Charge Stephen Donnelly; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Acting Special Agent in Charge Richard. W. Reinhold, in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Katherine M. Romano and David E. Dauenheimer of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

NEWARK, N.J. – A former U.S. Army major and his wife today were sentenced for a third time for their respective roles in abusing their adopted children – who all were less than 4 years old and developmentally delayed – through neglectful and cruel acts, including breaking their bones, denying them medical attention, withholding water and force-feeding them hot sauce, Acting U.S. Attorney Rachael Honig announced.

Carolyn Jackson, 44, was sentenced to time served and her husband, John E. Jackson, 46, formerly a major in the Army at the Picatinny Arsenal Installation in Morris County, New Jersey, was sentenced to 18 months of home confinement.

Convicted by a jury in July 2015 on multiple counts of child endangerment, Carolyn Jackson had received 24 months in prison and John E. Jackson had received probation and 400 hours of community service when they were originally sentenced in December 2015. The government appealed their sentences to the U.S. Court of Appeals for the Third Circuit, which ruled in July 2017 that the District Court had committed several errors in the process of imposing those sentences. The defendants were resentenced on April 11, 2018. Carolyn Jackson received a sentence of 40 months in prison, with credit for time served. John Jackson received the same probationary sentence. The government appealed for a second time and the U.S. Court of Appeals vacated and remanded for a second resentencing after finding once again several errors.

The Jacksons were each found guilty following a four-month 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 also sentenced Carolyn Jackson to one year of supervised release.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch in Newark, with the investigation leading to today’s sentencings. She also thanked the U.S. Army Criminal Investigation Command, under the command of Major General David E. Quantock, and the Morris County Prosecutor’s Office, under the direction of Prosecutor Robert J. Carroll.

The government is represented by Assistant U.S. Attorneys John Romano and Naazneen Khan of the U.S. Attorney’s Office in Newark.

United States Attorney Susan T. Lehr announced that Robert A. Williams, age 29, of Omaha, Nebraska was sentenced on August 16, 2024, in federal court in Omaha for assault on a federal officer with a dangerous or deadly weapon. Chief United States District Judge Robert F. Rossiter, Jr. sentenced Williams to 33 months’ imprisonment. There is no parole in the federal system. After his release from prison, Williams will be required to complete a 3-year term of supervised release.

On November 30, 2023, Williams drove a blue Honda CR-V to the USSTRATCOM gate at Offutt Air Force Base. He stopped at the entry control point (ECP) as directed by entry controllers, both of whom were uniformed U.S. Air Force Security Forces Airmen. An entry controller, suspecting that Williams was driving under the influence, placed a cone in front of the CR-V. Williams ran over the cone and drove onto the installation at a high rate of speed. Controllers activated barriers past the ECP and Williams was forced to U-turn at least twice, eventually speeding back toward the ECP. The two controllers attempted to stop the CR-V while it was headed towards them. Williams narrowly missed hitting one of the Airmen and both were forced to move out of the way of the CR-V. The controllers were placed in immediate danger as the CR-V approached, and they fired rounds into the vehicle. Williams nonetheless drove the CR-V back through the ECP and off the installation.

Investigators determined that Williams purchased the CR-V from a used car dealer two days prior to the incident and subsequently located it at Williams’s address in Omaha. Once investigators learned his identity, Williams was positively identified as the driver of the CR-V by the Airmen at the ECP and through video evidence of the encounter at the ECP. A motor vehicle is considered a deadly or dangerous weapon when driven in a manner likely to endanger lives.

This case was investigated by the Federal Bureau of Investigation, the Air Force Office of Special Investigations, and the 55th Wing Security Forces Squadron at Offutt Air Force Base.

TRENTON, N.J. – The sole proprietor of a purported loan modification consulting company was sentenced today to 57 months in prison for fraudulently billing clients more than $400,000 for services that were never performed, U.S. Attorney Craig Carpenito announced.

Jeffrey Halpern, 63, of Hewlett, New York, previously pleaded guilty before U.S. District Judge Peter G. Sheridan to an information charging him with one count of wire fraud. Judge Sheridan imposed the sentence today in Trenton federal court.

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

Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.

In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of more than $400,000.

 

In addition to the prison term, Judge Sheridan sentenced Halpern to three years of supervised release and ordered to pay $411,000 in restitution.

U.S. Attorney Carpenito credited investigators with the U.S. Attorney’s Office and 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 sentencing. He also thanked the New York State Department of Financial Services, under the direction of Superintendent Maria T. Vullo; the Federal Housing Finance Agency Office of the Inspector General, under the direction of Mark Higgins; and the Nassau County District Attorney’s office, under the direction of District Attorney Madeline Singas, for their assistance.

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

Defense counsel: Mitchell C. Elman Esq., Port Washington, New York

NEWARK, N.J. – A Lyndhurst, New Jersey, man was sentenced today to 46 months in prison for fraudulently obtaining over $1.5 million from approximately 100 victims prior to high-profile initial public offerings (IPOs), Acting U.S. Attorney William E. Fitzpatrick announced.

Omar Hafez, 25, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him one count of wire fraud. Judge Walls imposed the sentence today in Newark federal court.

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

From July 2014 through December 2015, Hafez operated an investment fraud scheme in which he and others created a number of entities, including Lotus Global. Several of these entities had websites and social media pages listing Hafez as the CEO and advertising themselves as successful wealth management companies.

In order to deceive victim investors, Hafez represented that he had access to shares of various companies prior to their initial public offerings and could use that access to provide significant profits to investors. However, bank records for accounts controlled by Hafez and certain Lotus Global entities revealed that none of the money provided by victim investors was used to purchase shares or invest in any of the pre-IPO companies.

Instead, Hafez used the funds for his own benefit, including several large purchases at luxury car dealerships, including an approximately $87,000 purchase at Prestige Motors, an approximately $24,160 purchase at Signature Car Collections, and an approximately $8,690 purchase at Dream Cars National LLC. In addition, Hafez purchased numerous luxury goods, including an approximately $17,250 purchase at Tourneau Inc., an approximately $5,613 purchase at Louis Vuitton, and an approximately $3,000 purchase at Tiffany & Co., as well as airplane tickets and hotel stays for a single trip to Chicago totaling approximately $10,000.

Hafez employed numerous strategies to maintain the victims’ confidence and induce further investments. For example, bank records showed that Hafez occasionally used money from earlier victim investors in order to pay future victims “lulling” payments. In classic Ponzi scheme fashion, Hafez lied to investors and told them that these payments were returns on their investments.

As funds began to run out and investors demanded their money with increasing frequency, Hafez provided certain victim investors with checks for thousands of dollars, claiming that they represented investment returns or a refund of initial investments. When victim investors attempted to deposit or cash these checks, the checks were rejected due to insufficient funds because Hafez and others had already spent the victims’ money.

In addition to the prison term, Judge Walls sentenced Hafez to three years of supervised release. Hafez must also pay restitution of $1.5 million.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge James V. Buthorn, with the investigation leading to today’s sentence.

The government is represented by Assistant U.S. Attorney Courtney A. Howard of the U.S. Attorney’s Office Criminal Division in Newark.

Defense counsel: Joseph D. Rotella Esq., Newark

 

NEWARK, N.J. – The former secretary treasurer of Local 2254 of the American Federation of State, County, and Municipal Employees Union (AFSCME) today admitted embezzling $40,455 from the union’s checking and savings accounts, Acting U.S. Attorney Rachael Honig announced.

Linda Rogers, 71, of Jersey City, pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging her with embezzlement from the union, located at Jersey City Medical Center (JCMC).

According to the Indictment and the plea allocution:

Rogers was employed at JCMC and held a part-time position at Local 2254 as its secretary treasurer. In that role, she had sole control over the union’s checking and savings accounts. From July 2016 through August 2017, her daughter, Jennifer Rogers, who also recently pleaded guilty to the same charges, deposited 112 unauthorized checks from Local 2254 to their joint checking and savings accounts, totaling $35,267. From October 2016 through December 2016, Linda Rogers made six wire transfers from Local 2254’s savings account, totaling $5,188, into her personal credit card account. None of the expenditures were authorized, or for legitimate union purposes.

The count to which Linda Rogers pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for May 25, 2021.

Acting U.S. Attorney Honig credited investigators of the U.S. Department of Labor, Office of Labor Management Standards, under the direction of Adriana Vamvakas, Regional Director; and special agents of the Department of Labor (OIG), New York Region, under the direction of Special Agent in Charge Michael Mikulka, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

NEWARK, N.J. – Two former residents of Monmouth County, New Jersey, now residing in Frisco, Texas, were arrested today for their roles in fraudulently obtaining over $3 million in federal Paycheck Protection Program (PPP) payments, U.S. Attorney Philip R. Sellinger announced.

Jean E. Rabbitt, 51, formerly of Farmingdale, New Jersey, is charged by complaint with bank fraud, conspiracy to engage in monetary transactions in property derived from specified unlawful activity and engaging in monetary transactions in property derived from specified unlawful activity. Kevin Aguilar, 51, formerly of Farmingdale, is charged by complaint with conspiracy to engage in monetary transactions in property derived from specified unlawful activity and engaging in monetary transactions in property derived from specified unlawful activity. Rabbitt and Aguilar are scheduled to make their initial appearances by videoconference on March 3, 2022, before U.S. Magistrate Judge Kimberly C. Priest Johnson in the Eastern District of Texas.

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

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. In April 2020, Congress authorized over $300 billion in additional PPP funding.

The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal on the PPP loan to be forgiven if the business spends the loan proceeds on these expense items within a designated period of time after receiving the proceeds and uses at least a certain percentage of the PPP loan proceeds on payroll expenses.

Rabbitt submitted fraudulent PPP loan applications on behalf of four businesses that she controlled. The applications contained fraudulent representations to the lenders, including a Federal Home Loan Bank member, and the Small Business Administration (SBA), including fraudulent payroll records and tax records and false certifications as to the number of employees and gross revenue of Rabbitt’s businesses. According to IRS records, none of the purported tax documents that Rabbitt submitted to the PPP lenders were, in fact, filed with the IRS. Other government records showed that, contrary to the fraudulent payroll records and certifications, Rabbitt’s businesses had not in fact paid wages to any employees. Based on Rabbitt’s alleged misrepresentations in the loan applications, Rabbitt’s businesses received approximately $3.33 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

After Rabbitt’s businesses received the PPP loans through the fraudulent applications, Aguilar created sham payroll companies. Rabbitt then wrote checks from Rabbitt’s businesses to the sham payroll companies, falsely indicating on each check that the payments were for payroll. Rabbitt and Aguilar then transferred funds from the sham payroll companies to other companies that Aguilar created. Aguilar and Rabbitt then used the funds to purchase residential properties in Sherman, Texas, and to pay for personal expenses.

Rabbitt also made false and fraudulent statements and used falsified and fraudulent documents in support of applications for forgiveness of certain of the PPP loans. Based on Rabbitt’s false and fraudulent certifications and documents, the SBA paid more than $2 million dollars to lenders in connection with the fraudulent PPP loans Rabbitt obtained.

Each count of bank fraud carries a maximum penalty of 30 years in prison and a fine of $1 million. Each count of conspiracy to engage in monetary transactions in property derived from specified unlawful activity and engaging in monetary transactions in property derived from specified unlawful activity carries a maximum penalty of 10 years in prison. The conspiracy to engage in monetary transactions in property derived from specified unlawful activity and engaging in monetary transactions in property derived from specified unlawful activity carry a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. The court may impose an alternate fine of not more than twice the amount of the criminally derived property involved in the transaction.

U.S. Attorney Sellinger credited special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; postal inspectors of the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Raimundo Marrero; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney.

The government is represented by Assistant U.S. Attorneys Olajide Araromi and David V. Simunovich of the U.S. Attorney’s Office’s Government Fraud Unit, in Newark.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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

CAMDEN, N.J. – A Pennsylvania man has been arrested for committing immigration documents fraud and aggravated identity theft in New Jersey, U.S. Attorney Philip R. Sellinger announced today.

Luc Fikiri Matthews, 47, of Philadelphia, Pennsylvania was indicted on Feb. 9, 2022, on six counts of submitting false and fraudulent immigration documents and six counts of committing aggravated identity theft. Matthews is scheduled to make his initial appearance later today before U.S. Magistrate Judge Matthew J. Skahill.   

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

In 2017 and 2018, Matthews falsely represented himself as an immigration attorney in order to attract business from noncitizens who did not have legal permanent resident status in the United States. Under the Victims of Trafficking and Violence Prevention Act of 2000, the victims of certain qualifying crimes that occur in the United States, including noncitizen victims who might otherwise be subject to immigration removal proceedings, may be eligible to obtain a U Visa and remain in the United States. After agreeing to represent new clients and charging them fees, Matthews prepared and submitted false and fraudulent U Visa application documents to the U.S. Citizenship and Immigration Service. 

The documents prepared by Matthews included multiple fraudulent statements, such as falsely representing that his clients had been the victims of certain qualifying crimes, or containing false names, signatures, and other false means of identification, from various visa applicants and government officials located in New Jersey and New York. None of Matthews’ clients ever actually received a U Visa.

Each count of immigration documents fraud is punishable by up to 10 years in prison and a maximum fine of $250,000. Each count of aggravated identity theft is punishable by up to two years in prison, which must be served consecutively to any other term imposed, as well as a maximum fine of $250,000.

U.S. Attorney Sellinger credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special-Agent-in-Charge Jason J. Molina in Newark, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Sara Aliabadi of the U.S. Attorney’s Office’s Camden office.

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

TRENTON, N.J. – A Pennsylvania man admitted to his role in a scheme to fraudulently obtain over $4.8 million in federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) for himself and others, U.S. Attorney Philip R. Sellinger announced today.

Darryl Duanne Young, aka “Darryl Duanne Isom Young,” 60, of Kingston, Pennsylvania, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 14, 2023, to an information charging him with one count of conspiracy to commit bank fraud and one count of money laundering.





“This defendant admitted taking advantage of government programs that were specifically designed to provide needed financial assistance to Americans during the COVID-19 pandemic. Combatting pandemic fraud in all of its forms is a top priority for this office and our law enforcement partners. Together, we will continue to root out those who have exploited the suffering of others to line their own pockets, and bring them to justice.”



U.S. Attorney Philip R. Sellinger



“IRS Criminal Investigation special agents are specially equipped to follow the complex financial trail left by criminals,” Tammy Tomlins, Special Agent in Charge of IRS – Criminal Investigation Newark Field Office. “Let today’s plea serve as a proof of the commitment of IRS-CI and our law enforcement partners dedication to vigorously pursue those who took advantage of government programs intended to provide financial assistance to Americans in need during the COVID-19 pandemic.”

 “The CARES Act was created to assist to American citizens and businesses that were impacted financially by the COVID-19 Pandemic,” Christopher A. Nielsen, Inspector in Charge, Philadelphia Division, said. “However, as alleged, Darryl Young, and his co-conspirators, manipulated this critical lifeline through a sophisticated scheme that fraudulently obtained millions of dollars in Paycheck Protection Program (PPP) loans.  Postal Inspectors will continue to work with the U.S. Attorney’s Office, and our law enforcement partners, to identify and hold accountable, those individuals who steal pandemic relief to fulfill their own greed.” 

“Mr. Young admittedly obtained money from the Paycheck Protection Programs intended to assist those with critical needs during the pandemic,” Gail S. Ennis,  Social Security Administration Inspector General, said. “His criminal actions allowed him and his fellow conspirators to selfishly profit. We will continue to collaborate with our law enforcement partners to hold those accountable who misuse Social Security numbers, falsify documents, and fraudulently obtain access to federal benefit programs. I appreciate the collective efforts of the investigating agencies and the U.S. Attorney’s Office for prosecuting this case.”    

“Today’s guilty plea sends a clear message that those who fraudulently obtained funds from COVID-19 relief programs will be held accountable,” Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) said. “The FDIC OIG remains committed to working with our law enforcement partners to investigate and bring to justice those who participate in fraudulent schemes and threaten to undermine the integrity of our Nation’s banking system.”

“Today, Darryl Duanne Young admitted his role in stealing nearly $5 million in relief funds intended to support small businesses impacted by the COVID-19 global pandemic,” Homeland Security Investigations (HSI) Newark acting Special Agent in Charge Michael Alfonso said. “This is an egregious case of an individual taking advantage of an unprecedented public health crisis for personal gain. HSI Newark and our law enforcement partners will aggressively pursue those who perpetrate these illicit schemes and see that they are brought to justice.”

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

Young engaged in a scheme to illegally obtain for himself and his conspirators over $4.8 million in loans authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Young submitted and directed others to submit fraudulent PPP and EIDL loan applications, which fabricated numbers of employees and misrepresented company information, to induce lenders to approve the loan applications that they otherwise would not have approved. Among other things, Young submitted falsified tax documents and bank statements to a victim lender in support of PPP loan applications. Young personally received over $230,000 in PPP loans for businesses he controlled and received a percentage of loan proceeds for assisting in submitting fraudulent applications on behalf of others.

The applications Young submitted each allegedly contained fraudulent representations to the lender – including a victim lender that was a member bank of the Federal Home Loan Bank system – including bogus federal tax documents. According to IRS records, none of the purported tax documents that Young submitted in support of the loan applications were ever in fact filed with the IRS. Based on Young’s misrepresentations, loan applications for his purported businesses and the purported businesses of other applicants were approved for approximately $4.8 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. The charge of money laundering carries a maximum potential penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest. As part of his guilty plea, Young agreed to make restitution to the victim lenders for the full amount of the fraudulent PPP and EIDL loans.  Sentencing is scheduled for March 18, 2024.

U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Tomlins; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Nielsen Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Brian Tucker; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Alfonso, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Katherine M. Romano and David E. Dauenheimer of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

NEWARK, N.J. – A Clifton, New Jersey, man was sentenced today to 216 months in prison for health care fraud, obstructing a federal audit, and other charges associated with his illegal operation of an ambulance company despite having been banned from participating in federal health care programs, U.S. Attorney Paul J. Fishman announced.

 

Imadeldin Awad Khair, a/k/a “Nadr Awad,” 57, was previously convicted of all 17 counts of an indictment charging him with health care fraud, obstructing a federal audit, tax evasion, and money laundering. He was convicted following a nine-day bench trial before U.S. District Judge Susan D. Wigenton, who imposed the sentence today in Newark federal court.

 

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

 

In 2004, as a result of his conviction on a New Jersey state health care fraud charge, Khair was excluded from participating in any capacity in Medicare, Medicaid, or other federal health care programs for a minimum of 11 years. After realizing that he would be excluded from federal health care programs, Khair began operating a business named K&S Invalid Coach in his brother’s name. Since the date of his exclusion, Medicare and Medicaid paid over $9 million in claims submitted by K&S, none of which would have been paid had Medicare and Medicaid known that Khair was operating the business.

Khair’s plan to defraud Medicare and Medicaid began almost immediately after he was excluded by authorities from participating in federal health care programs. In 2004 and 2005, Khair recruited a business associate to tell authorities that Khair was his full-time employee so that Khair could continue running K&S in violation of his exclusion. Khair also used fraudulent paystubs provided by his business associate to convince authorities that he was not violating the terms of his exclusion.

In 2014, when special agents with the FBI and the U.S. Department of Health and Human Services, Office of Inspector General, executed a search warrant at K&S’s offices, Khair’s top managers directed employees via group text message to tell the agents that Khair’s brother was really in charge at K&S. In addition, on the first day of trial, Khair tried to influence a government witness just outside of the courtroom by claiming that he had over two dozen employees who were going to testify that his brother had really been in charge at K&S.

Khair also paid numerous K&S employees, including nearly all of the employees’ overtime wages, “off the books” and without withholding the necessary payroll taxes. To carry out the tax evasion scheme, Khair paid the wages in cash or handwritten check and directed K&S employees to keep two separate sets of books. Khair then directed company employees to send only the fraudulent set of books to the company’s payroll accountant.

In response to a U.S. Department of Labor audit of K&S in 2014, Khair held an employee meeting in which he directed K&S employees to lie to the Department of Labor by stating that they never worked more than 80 hours in a biweekly pay period. Khair also directed K&S employees to alter and falsify K&S timekeeping records to match the false amounts previously reported to the company’s payroll accountant.

The money laundering counts arose from K&S checks that were written and endorsed by Khair and made payable to “cash” or Khair himself, which were used to pay the undisclosed wages and enrich Khair personally.

In addition to the prison term, Judge Wigenton ordered Khair to serve three years of supervised release and pay restitution of $8.8 million.

 

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; special agents of the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorneys Danielle M. Corcione and Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division in Newark.

U.S. Attorney Fishman reorganized the health care fraud practice shortly after taking office, creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.32 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

 

Defense counsel: Harvey R. Poe Esq., Roseland, New Jersey

TRENTON, N.J. – A Somerset County, New Jersey, man admitted fraudulently obtaining over $850,000 in federal Paycheck Protection Program (PPP) loans U.S. Attorney Philip R. Sellinger, announced today.

Butherde Darius, 50, of North Plainfield, New Jersey, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 21, 2022, to an information charging him with one count of conspiracy to commit bank fraud, and one count of money laundering.

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

Darius conspired with at least one individual to submit a fraudulent PPP loan application to a lender on behalf of a purported business that he controlled, obtaining over $850,000. He engaged in various financial transactions with the fraudulently obtained loan proceeds. The application Darius and his conspirator submitted contained fraudulent representations to the lender – a Federal Home Loan Bank member – and the SBA, including bogus federal tax documents purportedly from the IRS. Darius also fabricated the existence of employees and wages paid through the purported businesses. According to IRS records, however, none of the purported tax documents that were submitted in support of the loan applications were ever filed with the IRS. Darius loan application for his purported business was approved for approximately $852,000 in federal COVID-19 emergency relief funds meant for distressed small businesses.  Darius then used a portion of the proceeds for various personal expenses.

The count of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. The count of money laundering carries a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for March 6, 2023.

U.S. Attorney Sellinger credited special agents of IRS – Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy L Tomlins; special agents of the Social Security Administration, Office of Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Acting Inspector in Charge Raimundo Marrero, Philadelphia Division; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Board of Governors of the Federal Reserve System Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Acting Special Agent in Charge Stephen Donnelly; special agents of the Federal Deposit Insurance Corporation – Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Ricky J. Patel in Newark, with the investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorneys David E. Dauenheimer and Katherine M. Romano of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

NEWARK, N.J. – A Somerset, New Jersey, man was sentenced today to 84 months in prison for accepting cash bribes and sex in exchange for providing employment authorization documents and concealing his employment of an undocumented immigrant at a hair salon he owned, Acting U.S. Attorney William E. Fitzpatrick announced.

Arnaldo Echevarria, 40, a former deportation officer with Immigration and Customs Enforcement (ICE), was previously convicted of Counts 1-6 and Counts 8 and 9 of an indictment charging him with seven counts of accepting bribes, one count of harboring an undocumented immigrant and one count of making false statements to immigration authorities. He was acquitted on Count 7, one of the bribery counts. Echevarria was convicted following a one-week trial before U.S. District Judge Esther Salas, who imposed the sentence today in Newark federal court.

According to statements made in court and evidence presented at trial:

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

Between 2012 and 2014, Echevarria agreed to obtain employment authorization documents for undocumented immigrants who were not lawfully present in the country. In return, Echevarria demanded and received approximately $75,000 in cash bribes, and demanded and received sex from one individual. In order to conceal them from immigration authorities, Echevarria falsely stated that they had been granted temporary protected status, which allows nationals from certain countries experiencing environmental disaster, ongoing armed conflict, or other extraordinary conditions to lawfully remain in the United States. None of the individuals who bribed Echevarria had actually applied for, or received, temporary protected status.

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

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

In addition to the prison term, Judge Salas sentenced Echevarria to three years of supervised release and ordered to pay forfeiture of $75,000.

Acting U.S. Attorney Fitzpatrick credited special agents of ICE, Office of Professional Responsibility, under the direction of Special Agent in Charge Keith Barwick, 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 in Newark, and Barbara Llanes, Deputy Chief of the General Crimes Unit.

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

HELENA  — A Utah man who admitted embezzling approximately $700,000 from a Montana company was sentenced today to 21 months in prison, to be followed by three years of supervised release, and ordered to pay $700,000 restitution, U.S. Attorney Jesse Laslovich said.

The defendant, Thomas Lynn Syddall, 50, of American Fork, Utah, who worked for a company owned by Anderson ZurMuehlen & Co., pleaded guilty in October 2023 to wire fraud and to money laundering-concealment as charged in an indictment.

Chief U.S. District Judge Brian M. Morris presided.

“For more than a year, Syddall stole hundreds of thousands of dollars from his employer through a calculated scheme using fictitious purchasing orders and invoices. Syddall’s conduct violated the trust of his employer for his own personal enrichment, which now makes him a federal felon. Our office, working with our law enforcement partners, will remain committed to holding white collar criminals accountable,” U.S. Attorney Laslovich said.

“IRS Criminal Investigation (CI) enforces the nation’s tax laws, but we also assist our federal law enforcement partners in these types of cases by following the money,” said Andy Tsui, Special Agent in Charge, Denver Field Office. “Our special agent’s ability to unravel embezzlement and money laundering schemes is vital to these types of investigations, and we will continue to work with our partners to hold criminals accountable for their actions.”

In court documents, the government alleged that Syddall was a salesman for Information Technology Corporation, which was owned by Anderson ZurMuehlen & Co. From about March 2020 to about August 2021 in Helena, Syddall embezzled money through multiple means, including creating bogus purchase orders and invoices, stealing inventory and directing payments to fictitious companies and unauthorized vendors. Syddall then sold the inventory, none of which was authorized, on eBay and KSL Classifieds. When questioned by other employees about the discrepancies in orders and payments, Syddall sent lulling emails attempting to cover up and prolong the fraud. In addition, Syddall concealed financial transactions by laundering proceeds from the wire fraud into third-party accounts. Syddall then directed the transfer of the money into accounts over which he had control. The government identified approximately $700,000 in restitution.

Assistant U.S. Attorney Ryan G. Weldon prosecuted the case. The FBI and IRS Criminal Investigation conducted the investigation.

XXX

NEWARK, N.J. – The daughter of a former secretary treasurer of a union at Jersey City Medical Center today admitted her role in helping her mother embezzle $40,455 from the union, U.S. Attorney Craig Carpenito announced.

Jennifer Rogers, 38, of Jersey City, New Jersey, pleaded guilty by videoconference before U.S. District Judge Stanley R. Chesler to Count One of an indictment charging her with embezzling from Local 2254 of the American Federal State County and Municipal Amalgamated Transit Workers Union (AFSCME) in Hudson County.

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

Linda Rogers was employed at the Jersey City Medical Center and also held a part-time position at Local 2254 as its secretary treasurer. In that role, she had sole control over the union’s checkbook and savings account. From July 2016 through August 2017, Jennifer Rogers, also an employee at the hospital at that time, deposited 112 unauthorized checks totaling $35,267 from Local 2254’s account to joint checking and savings accounts she owned with her mother. From October 2016 through December 2016, Linda Rogers allegedly made six telephonic wire transfers from the Local 2254’s savings account, totaling $5,188, into her personal credit card account. None of the expenditures were authorized or for legitimate union purposes.

The count of embezzlement from a labor union carries a maximum penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for April 20, 2021.

U.S. Attorney Carpenito credited the investigators of the U.S. Department of Labor, Office of Labor Management Standards, under the direction of Adriana Vamvakas, Regional Director; and special agents of the Department of Labor (OIG), New York Region, under the direction of Special Agent in Charge Michael Mikulka, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel V. Grady O’Malley of the U.S. Attorney’s Office’s Organized Crime/Gangs Unit.

The pending charges against Linda Rogers are merely accusations, and she is presumed innocent unless and until proven guilty.

 

NEWARK, N.J. – U.S. Attorney Craig Carpenito of the District of New Jersey today announced that more than $65 million in Department of Justice grants is available to help communities combat human trafficking and serve adults and children who are victimized in trafficking operations.

“Human trafficking crimes are among the most difficult cases our office handles,” U.S. Attorney Carpenito said. “The resources being made available by the Justice Department to all of our partners in battling this crime will go a long way in this fight. I encourage state and local agencies to apply to these grant programs for help obtaining the tools these funds will make available.”

“Our nation is facing difficult challenges, none more pressing than the scourge of human trafficking. Human traffickers pose a dire threat to public safety and countering this threat remains one of the Administration’s top domestic priorities,” Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs, said. “The Department of Justice is front and center in the fight against this insidious crime. OJP is making historic amounts of grant funding available to ensure that our communities have access to innovative and diverse solutions.”

The funding is available through OJP, the federal government’s leading source of public safety funding and crime victim assistance in state, local and tribal jurisdictions. OJP’s programs support a wide array of activities and services, including programs that support human trafficking task forces and services for human trafficking survivors. 

A number of funding opportunities are currently open, with several more opening in the near future. 

Missing and Exploited Children Training and Technical Assistance Program

https://ojjdp.ojp.gov/funding/opportunities/ojjdp-2020-17351

Total Available $1.8 million                                      Deadline 4/6/2020 (Extended)

 

Multidisciplinary Task Force Program to Combat Human Trafficking

Total Available $22 million                                       Opens week of 3/16/2020

 

Preventing Trafficking of Girls

Total Available $1.7 million                                       Opens week of 3/16/2020

 

Research and Evaluation on Trafficking in Persons   https://nij.ojp.gov/funding/opportunities/nij-2020-17324

Total Available $2.5 million                                       Deadline 4/20/2020   

 

Services for Victims of Human Trafficking

Total Available $16.5 million                                     Opens week of 3/16/2020

 

Specialized Training and Technical Assistance on Housing for Victims of Human Trafficking                                                                                                             

Total Available $2 million                                          Opens week of 3/16/2020

 

Human Trafficking Training and Technical Assistance Program

Total Available $5 million                                          Opens week of 3/16/2020

 

Improving Outcomes for Child and Youth Victims of Human Trafficking                          

Total Available $6 million                                          Opens week of 3/16/2020

 

Integrated Services for Minor Victims of Labor Trafficking

Total Available $8 million                                          Opens week of 3/16/2020

For more information regarding all OJP funding opportunities, visit https://www.ojp.gov/funding/explore/current-funding-opportunities

 

NEWARK, N.J. – The president and a top officer of a real estate investment company were charged for their roles in a scheme to defraud more than 2,000 investors in a $650 million Ponzi scheme, and with conspiring to evade $26 million in tax liabilities, U.S. Attorney Philip R. Sellinger announced today.

Thomas Nicholas Salzano, aka “Nicholas Salzano,” 64, of Secaucus, New Jersey, and Rey E. Grabato II, 43, of Hoboken, New Jersey, and the Republic of the Philippines, are charged in an 18-count indictment unsealed Oct. 12, 2022, with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, wire fraud, and conspiracy to defraud the United States. Salzano is also charged with two counts of aggravated identity theft, two counts of tax evasion, and five counts of subscribing to false tax returns.

Salzano was arrested Oct. 12, 2022, and is scheduled to appear by videoconference this afternoon before U.S. Magistrate Judge Leda Dunn Wettre. Grabato remains at large.

Also today, Arthur S. Scuttaro, 62, of Nutley, New Jersey, the former head of sales at National Realty Investment Advisors LLC (NRIA), pleaded guilty before U.S. District Judge Evelyn Padin in Newark federal court to an information charging him with one count of conspiracy to commit securities fraud in the same scheme. His sentencing is scheduled for Feb. 23, 2023.

“As charged in the indictment, these defendants schemed to create a high-pressure, fraudulent marketing campaign to hoodwink investors into believing that their bogus real estate venture generated substantial profits,” U.S. Attorney Sellinger said.  “In reality, their criminal tactics were straight out of the Ponzi scheme playbook so that they could cheat their investors and line their own pockets. Our message from today’s charges is that we remain deeply committed to rooting out all types of financial fraud schemes. These schemes undermine our markets and erode the public’s trust in investing. Together with our enforcement partners, we will continue to prioritize investigating and prosecuting financial crime in all of its forms.”   

“This case should serve as a cautionary tale to the consumer,” FBI Special Agent in Charge James E. Dennehy said. “Before you entrust your hard-earned savings to someone, do your research on the trustee and the product they are selling; become familiar with the red flags that can alert you to a fraud; don’t let dollar signs cloud your judgement; and remember the old adage that if it sounds too good to be true, it probably is. Slick pamphlets, flashy commercials, and ads that feature celebrities do not add up to the most important element – credibility. The FBI works diligently to protect the American public, arrest lawbreakers, and recoup whatever stolen funds haven’t evaporated. The sad fact is the consumer is rarely made whole. Skepticism and analysis are still the best protection.”

“This was a brazen scheme of staggering proportions,” Tammy Tomlins, IRS Criminal Investigation Acting Special Agent in Charge of the Newark Field Office, said. “These defendants prioritized their own greed, stealing $650 million from investors, while conspiring to evade $26 million in tax liabilities. The indictment sends a clear message that the IRS Criminal Investigation special agents and our law enforcement partners, remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means.”

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

Grabato was president of NRIA and Salzano was the firm’s shadow chief executive officer. From February 2018 through January 2022, Salzano and Grabato defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC, a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. These included false representations about NRIA’s financial position, how the defendants and their conspirators used fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.

The defendants executed their scheme through an aggressive multi-year, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors. The marketing campaign was intended to mislead investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of their own capital into the business, the defendants misappropriated millions of dollars of investor money.

Salzano concealed his true managerial role at NRIA while using Grabato as a stand-in CEO in an effort to avoid scrutiny by investors of Salzano’s prior guilty plea to defrauding small businesses in Louisiana through a large telecommunications company. 

Salzano and Grabato also orchestrated a separate conspiracy to defraud the IRS in its effort to collect $26 million in outstanding taxes Salzano owed to the U.S. Treasury. Salzano and Grabato are alleged to have lied to the IRS, used a web of nominees, opened bank accounts in the names of phony entities, and used false and fraudulent company documents. 

The conspiracy to commit securities fraud and conspiracy to defraud the United States counts charged in the indictment both carry a maximum penalty of five years in prison and a $250,000 fine. The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine. The wire fraud conspiracy and wire fraud counts are both punishable by a maximum penalty of 20 years in prison and a $250,000 fine. The tax evasion counts both carry a maximum penalty of five years in prison and a $100,000 fine. The subscribing to false tax return counts each carry a maximum penalty of three years in prison and a $100,000 fine. The aggravated identity theft counts carry a mandatory sentence of two years in prison, which must be served consecutively to any other sentence imposed.

In a separate civil action, the Securities and Exchange Commission filed a complaint today in the District of New Jersey against Salzano, Grabato, Scuttaro, and others based on the allegations underlying the Ponzi scheme alleged in the indictment and information.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins in Newark, with the investigation. He also thanked the Securities and Exchange Commission, New York Regional Office, for its cooperation and assistance during the investigation. 

The government is represented by Assistant U.S. Attorneys Jonathan Fayer, of the Economic Crimes Unit, and Lauren E. Repole, Chief of the General Crimes Unit.

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

NEWARK, N.J. – A Union County, New Jersey, man previously convicted of multiple felonies was found guilty in federal court of being a felon in possession of a firearm, U.S. Attorney Craig Carpenito announced today.

Jarrell L. Daniels, 29, of Elizabeth, New Jersey, was convicted after a two and a half-day trial before U.S. District Judge Kevin McNulty in Newark federal court of one count of being a felon in possession of a semi-automatic submachine gun with a high capacity magazine and multiple rounds of ammunition. The jury deliberated less than two hours before delivering the guilty verdict on Feb. 20, 2020.

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

On the morning of April 9, 2018, Daniels was walking down Irvington Avenue in Elizabeth, carrying a loaded .45 caliber Masterpiece Arms ACP submachine gun, with 30 additional rounds of ammunition in an extended magazine. Daniels was wearing a disguise, as well as latex gloves. He came upon his victim and opened fire, shooting at his victim 16 times, but none of the shots struck the victim. As he fled the scene, Daniels dropped his head covering and later stashed the gun and other items of clothing in a nearby trashcan. DNA on these items, as well as surveillance footage and ballistics evidence, ultimately enabled the authorities to identify Daniels as the shooter.

The count on which Daniels was convicted is punishable by a maximum of 10 years in prison and a fine of up to $250,000. Sentencing has not yet been scheduled.

U.S. Attorney Carpenito credited law enforcement officers of the Elizabeth Police Department, under the direction of Police Chief John Brennan, Jr.; the Union County Sheriff’s Office, under the direction of Sheriff Peter Corvelli; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson; and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo, with the investigation leading to the guilty verdict.

The government was represented by Assistant U.S. Attorneys Vera Varshavsky and Sammi Malek of the Criminal Division of the U.S. Attorney’s Office in Newark.

Defense counsel: Peter Willis Esq. and Maximillian Novel Esq., Jersey City, New Jersey

NEWARK, NJ. – An India- and New Jersey-based man who operated jewelry companies in New York City’s Diamond District admitted today to spearheading a scheme to illegally evade customs duties for more than $13.5 million of jewelry imports into the United States and with illegally processing more than $10.3 million through an unlicensed money transmitting business, U.S. Attorney Philip R. Sellinger announced.

Monishkumar Kirankumar Doshi Shah, aka “Monish Doshi Shah, 39, of Mumbai, India, and Jersey City, New Jersey, pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to an information charging him with one count each of conspiracy to commit wire fraud and operating and aiding and abetting the operation of an unlicensed money transmitting business.

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

From December 2019 through April 2022, Shah engaged in a scheme to evade duties for shipments of jewelry from Turkey and India to the United States. Shah would ship and/or instruct his conspirators to ship goods from Turkey or India – which would have been subject to an approximately 5.5 percent duty if shipped directly to the United States – to one of Shah’s companies in South Korea. Shah’s conspirators in South Korea would change the labels on the jewelry to state that they were from South Korea instead of Turkey or India, and then ship them to Shah or his customers in the United States, thereby unlawfully evading the duty. Shah would also make and instruct his customers to make fake invoices and packing lists to make it look like Shah’s South Korean companies were actually ordering jewelry from Turkey or India. Shah also instructed a third-party shipping company to provide false information to U.S. Customs and Border Protection (CBP) concerning the origin of the jewelry. During the scheme, Shah shipped approximately $13.5 million of jewelry from South Korea to the United States without paying the appropriate duty.

From July 2020 through November 2021, Shah owned and/or operated numerous jewelry companies in New York City’s Diamond District, including MKore LLC, MKore USA Inc., and Vruman Corp. Shah used these entities to conduct more than $10.3 million in illegal financial transactions for customers, including converting cash to checks or wire transfers. Shah would also collect cash from customers and use other individuals’ jewelry companies to convert the cash into wires or checks. At times, Shah and other members of the money transmitting business moved more than a million dollars of cash in a single day. In exchange for their services, Shah or other members of the money transmitting business charged a fee. None of Shah’s or his associates’ companies were registered as money transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN).

As part of his plea agreement, Shah agreed to pay restitution to CBP in the amount of $742,500 for the wire fraud scheme and forfeiture in the amount of $11.13 million for the wire fraud and unlicensed money transmitting schemes.

The wire fraud conspiracy charge is punishable by a maximum of 20 years in prison. The charge of operating and aiding and abetting the operation of an illegal money transmitting business carries a maximum penalty of five years in prison. Each count is also punishable by a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Jan. 23, 2025.

U.S. Attorney Sellinger credited special agents and task force officers of IRS – Criminal Investigation, under the direction of Special Agent in Charge Jenifer L. Piovesan in Newark; special agents of  Homeland Security Investigations New York, under the direction of Acting Special Agent in Charge Darren B. McCormack; special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge William S. Walker; and special agents with U.S. Customs and Border Protection at the Port of New York/Newark, under the direction of Port Director TenaVel Thomas, with the investigation leading to today’s guilty plea. He also thanked U.S. Customs and Border Protection in New York; Homeland Security Investigations in Seoul, South Korea; the Korea Customs Service in South Korea; the Seoul Customs Special Investigation Office in South Korea; the U.S. Drug Enforcement Administration in Paterson; the Parsippany-Troy Hills Police Department; the Morristown Police Department; the Federal Deposit Insurance Corporation – Office of Inspector General; and the Justice Department’s Money Laundering and Asset Recovery Section (MLARS).

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorneys Marko Pesce and Olta Bejleri of the Economic Crimes Unit in Newark.





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TRENTON, N.J. – Four New Jersey men were charged with conspiring to illegally traffic in firearms, including privately manufactured handguns, in Ocean County, U.S. Attorney Philip Sellinger announced today.

James Hyres, 38, of Toms River, New Jersey, Dennis McMickle, 35, of Brick, New Jersey, James Opalenik, 51, of Ocean Gate, New Jersey, and Edward Trost, III, 36, of Toms River, are each charged by criminal complaint with conspiracy to traffic in firearms and trafficking in firearms. Hyres and McMickle are also charged with two counts of possession of a firearm by a previously convicted felon. McMickle and Opalenik are also charged with one count of unlawfully possessing a firearm with an obliterated serial number.

Hyres and Opalenik were arrested this morning in Ocean County. Opalenik is scheduled to appear today before U.S. Magistrate Judge Tonianne J. Bongiovanni in Trenton federal court. Hyres is scheduled to have his initial appearance on July 30, 2024, before Judge Bongiovanni.  McMickle and Trost were already in custody in Monmouth County and Ocean County, respectively, on unrelated state criminal charges.

According to the complaint:

From April 2024 through May 2024, Hyres, McMickle, Opalenik, and Trost were members of a gun trafficking conspiracy that operated in and around Ocean County. During that time, Hyres manufactured privately made firearms, also known as PMFs or “ghost guns,” for resale using various component parts, including firearm frames manufactured by Hyres using a 3D printer. Hyres, assisted by McMickle and Trost, then sold PMFs and other traditional firearms for profit to others, including a confidential source working at the direction and supervision of the FBI. Opalenik, assisted by McMickle, sold a semi-automatic rifle to the confidential source in furtherance of the firearms trafficking conspiracy. McMickle also sold the confidential source a 9-millimeter semi-automatic handgun in January 2024. Law enforcement’s investigation revealed that none of these defendants held a federal license to deal or manufacture firearms. Hyres, McMickle, and Trost each have prior felony convictions and are prohibited from possessing a firearm under federal law.

The counts of conspiracy to traffic in firearms, trafficking in firearms, and possession of a firearm by a previously convicted felon each carry a maximum potential penalty of 15 years in prison and a $250,000 fine. The count of unlawfully possessing a firearm with an obliterated serial number carries a maximum penalty of five years in prison and a $250,000 fine.    

U.S. Attorney Sellinger credited agents with the FBI Newark Red Bank Jersey Shore Safe Streets Task Force, under the direction of FBI Special Agent in Charge James E. Dennehy, with the investigation leading to the charges and arrests. He also thanked the Ocean County Sheriff’s Office, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Newark Field Division, the Lakewood, New Jersey, Police Department, and the Toms River, New Jersey, Police Department for their assistance in the investigation.

The government is represented by Assistant U.S. Attorney Ian D. Brater of the U.S. Attorney’s Office’s Criminal Division in Trenton.

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





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TRENTON, N.J. – The sole proprietor of a purported loan modification consulting company today admitted that he fraudulently billed clients more than $400,000 for services that were never performed, Acting U.S. Attorney William E. Fitzpatrick announced.

Jeffrey Halpern, 62, of Hewlett, New York, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court to an information charging him with one count of wire fraud.

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

Between 2009 and 2016, Halpern operated JCK Marketing and solicited business from individuals who were seeking home loan modifications on their residential mortgages. Halpern told these individuals that, for a fee, he would negotiate loan modifications on their behalf.

In actuality, Halpern pocketed the funds but performed little or no actual services in connection with the purported loan modifications. Halpern also repeatedly demanded money for “bank fees” from his victims, even though none of the related financial institutions charged fees for loan modifications. During the relevant time period, Halpern defrauded at least 26 victims of over $400,000.

The wire fraud charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. As part of his plea agreement, Halpern must also pay restitution to the victims. Sentencing is scheduled for Nov. 22, 2017.

Acting U.S. Attorney Fitzpatrick credited investigators with the U.S. Attorney’s Office and special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation. He also thanked the New York State Department of Financial Services, under the direction of Superintendent Maria T. Vullo; the Federal Housing Finance Agency Office of the Inspector General, under the direction of Special Agent in Charge Steven Perez; and the Nassau County District Attorney’s office, under the direction of District Attorney Madeline Singas, for their assistance.

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

Defense counsel: Mitchell C. Elman Esq., Port Washington, New York

NEWARK, NJ. –  An India- and New Jersey-based man who operated jewelry companies in New York City’s Diamond District was sentenced to 30 months incarceration for spearheading a scheme to illegally evade customs duties for more than $13.5 million of jewelry imports into the United States and for illegally processing more than $10.3 million through an unlicensed money transmitting business, Acting U.S. Attorney Vikas Khanna announced.Monishkumar Kirankumar Doshi Shah, a/k/a “Monish Doshi Shah” (Shah), 40, of Mumbai, India and Jersey City, New Jersey, previously pleaded guilty before U.S. District Judge Esther Salas to a two-count Information charging him with conspiracy to commit wire fraud and operating and aiding and abetting the operation of an unlicensed money transmitting business. Judge Salas imposed the sentence in Newark federal court and remanded Shah to begin serving his sentence.According to documents filed in this case and statements made in court:From in or around December 2019 through in or around April 2022, Shah engaged in a scheme to evade duties for shipments of jewelry from Turkey and India to the United States. Shah would ship and/or instruct his co-conspirators to ship goods from Turkey or India—which would have been subject to an approximately 5.5% duty if shipped directly to the United States—to one of Shah’s companies in South Korea. Shah’s co-conspirators in South Korea would change the labels on the jewelry to state that they were from South Korea instead of Turkey or India, and then ship them to Shah or his customers in the United States, thereby unlawfully evading the duty. Shah would also make and instruct his customers to make fake invoices and packing lists to make it look like Shah’s South Korean companies were actually ordering jewelry from Turkey or India. Shah also instructed a third-party shipping company to provide false information to U.S. Customs and Border Protection (CBP) concerning the origin of the jewelry. During the scheme, Shah shipped approximately $13.5 million of jewelry from South Korea to the United States without paying the appropriate duty.In addition, from in or around July 2020 through in or around November 2021, Shah owned and/or operated numerous jewelry companies in New York City’s Diamond District, including MKore LLC, MKore USA Inc, and Vruman Corp. Shah used these entities to conduct more than $10.3 million in illegal financial transactions for customers—including converting cash to checks or wire transfers. Shah would also collect cash from customers and use other individuals’ jewelry companies to convert the cash into wires or checks. At times, Shah and other members of the money transmitting business moved hundreds of thousands of dollars in a single day. In exchange for their services, certain members of the money transmitting business charged a fee. None of Shah’s or his associates’ companies were registered as money transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN).In addition to the prison term, Judge Salas ordered restitution in the amount of $742,500 for the wire fraud scheme and forfeiture in the amount of $11,126,982.33 for the wire fraud and unlicensed money transmitting schemes.  In addition, the Court imposed a two-year term of supervised release.Acting U.S. Attorney Khanna credited special agents and task force officers of the Internal Revenue Service – Criminal Investigation, under the direction of Special Agent in Charge Jenifer Piovesan in Newark; special agents with Homeland Security Investigations New York, under the direction of Special Agent in Charge William S. Walker; special agents with Homeland Security Investigations Newark, under the direction of Special Agent in Charge Spiros Karabinas; and special agents with U.S. Customs and Border Protection at the Port of New York/Newark, under the direction of Acting Port Director Jeffrey R. Greene, with the investigation leading to today’s sentence. He also thanked U.S. Customs and Border Protection in New York; Homeland Security Investigations in Seoul, South Korea; the Korea Customs Service in South Korea; the Seoul Customs Special Investigation Office in South Korea; the U.S. Drug Enforcement Administration in Paterson; the Parsippany-Troy Hills Police Department; the Morristown Police Department; the Federal Deposit Insurance Corporation – Office of Inspector General; and the Justice Department’s Money Laundering and Asset Recovery Section (MLARS) for their assistance in the investigation.This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.The government is represented by Assistant U.S. Attorneys Olta Bejleri of the Economic Crimes Unit and Marko Pesce, Deputy Chief of the Bank Integrity, Money Laundering, and Recovery Unit in Newark.                                                 ###Defense Attorney: Rahul Agarwal, Esq.

NEWARK, N.J. – The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) was sentenced today to 144 months in prison for orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.Thomas Nicholas Salzano, aka “Nicholas Salzano,” 66, of Secaucus, New Jersey, previously pleaded guilty before U.S. District Judge Evelyn Padin to securities fraud, conspiracy to commit wire fraud, and conspiracy to defraud the United States. Salzano admitted he made numerous misrepresentations to investors while he secretly ran NRIA behind the scenes. He admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends. Salzano also admitted to misappropriating millions of dollars from investors to enrich himself and his family and friends and failing to report and pay taxes on those misappropriated funds. Judge Padin imposed the sentence today in Newark federal court.“For years, Salzano, operating from the shadows to conceal his prior history of fraud,  told lie after lie to investors, continuously deceived them, and operated his business as a Ponzi scheme, through which he stole money from thousands of investors in order to support his lavish lifestyle. His greed and flagrant disregard for the law caused staggering losses in excess of $650 million. This office will continue to prioritize prosecuting individuals, like Salzano, who engage in rampant fraud to ensure they are held accountable with long jail sentences and are ordered to make their victims whole.”U.S. Attorney Philip R. Sellinger“Salzano trampled on the trust that his clients placed in him to invest their money prudently but instead he stole their investments for his own self-enrichment through his atrocious scheme which resulted in the theft of over $650 million,” said Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. “Today’s sentencing of Salzano should send a message to others who choose to prey on innocent victims through similar investment fraud schemes that IRS – Criminal Investigation and our law enforcement partners are committed to pursuing justice for all Americans that are victimized by these schemes. Salzano’s clients were not the only victim of this scheme, every American taxpayer was also victimized by Salzano when he failed to pay tens of millions of dollars in taxes which would have funded local schools, infrastructure projects, and social programs for those in need.”According to documents filed in this case and statements made in court:From February 2018 through January 2022, Salzano and others defrauded investors and potential investors of NRIA Partners Portfolio Fund I LLC (the “Fund”), a real estate fund operated by NRIA, of $650 million through lies, deception, misleading statements, and material omissions. These included the financial position of NRIA, the manner in which the defendants and their conspirators used Fund investor money, and Salzano’s managerial role at NRIA and his history of fraud.Salzano and his conspirators executed their scheme through an aggressive multiyear, nationwide marketing campaign that involved thousands of emails to investors; advertisements on billboards, television, and radio; and meetings and presentations to investors. Salzano led and directed the marketing campaign, which employed deception, material misrepresentations and omissions, and falsified documents to manipulate investors, which were intended to mislead Fund investors into believing that NRIA was a solvent business that generated significant profits. In reality, NRIA generated little to no profits and operated as a Ponzi scheme, which was kept afloat by new investors. Despite investing almost none of his own capital into the business, Salzano misappropriated millions of dollars of investor money to support his lavish lifestyle, including expensive dinners, extravagant birthday parties, and payments to family and associates who did not work at NRIA.Salzano concealed his true managerial role at NRIA in an effort to avoid scrutiny from investors of his history of fraud at a large telecommunications company. In addition to defrauding investors, Salzano orchestrated a separate, but related, conspiracy to avoid paying taxes on his misappropriated funds.In addition to the prison term, Judge Padin sentenced Salzano to three years of supervised release. As part of his plea agreement, Salzano has agreed to a forfeiture money judgment of $8.52 million, full restitution of $507.4 million to the victims of his offenses, and has agreed to pay $6.46 million to the IRS.U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Chavis in Boston; and special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation, with assistance from FBI Headquarters Criminal Investigative Division.The government is represented by Assistant U.S. Attorneys Jonathan Fayer, Lauren E. Repole, and John Mezzanotte, of the U.S. Attorney’s Office’s Criminal Division, and Trial Attorney Samuel Bean of the U.S. Justice Department’s Tax Division. 

NEWARK, N.J. – A South Carolina investment fund manager today admitted his role in a scheme to fraudulently obtain over $20 million from investors through misrepresentations about trading strategy and fund performance, Acting U.S. Attorney Rachael A. Honig announced.

George Heckler, 64, of Charleston, South Carolina, pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to an information charging him with one count of securities fraud.      

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

Heckler managed, controlled or was involved with multiple investment funds, including Conestoga Partner Holdings (Conestoga), Cassatt Short Term Trading Fund LP (Cassatt), CV Special Opportunity Fund LP (CVSO), and TA1 LLC (TA1). 

From 2014 to 2018, Heckler misrepresented to investors that he would invest their funds in particular trading strategies. Instead, he diverted their funds out of Cassatt and TA1 for purposes inconsistent with the trading strategies, including to pay out millions of dollars to other investors. Heckler also used investors’ funds to cover investment losses suffered by other funds under his management and/or control.

Heckler solicited investments from Victim-1, claiming the investments would be invested in Cassatt, which employed a “first loss” trading strategy intended to protect investors from losses. However, as of December 2013, Cassatt no longer had a brokerage account that was necessary to employ the represented trading strategy. Despite Cassatt no longer having a brokerage account, in 2014, Heckler represented to Victim-1 that Cassatt was still engaged in a first loss trading strategy and solicited Victim-1’s investment in Cassatt. In September 2014, Victim-1 invested approximately $9.1 million in Cassatt, relying on Heckler’s representation that Victim-1’s money would be invested consistent with Cassatt’s first loss trading strategy.  Heckler used $4.6 million of Victim-1’s investment to repay existing investors and the remainder to satisfy other obligations Heckler owed that were unrelated to Cassatt.

Heckler also approached Victim-2 about the possibility of creating a hedge fund that would deploy capital to first-loss traders, who would serve as the “first loss” protection for investors’ capital. In late 2015, Victim-2 formed a hedge fund, utilizing the concept proposed by Heckler (Entity-1). In 2015 and 2016, Entity-1 invested $10.1 million in TA1 via a participation agreement that provided that Entity-1’s investment would be used for an “options arbitrage dividend recapture trade,” otherwise known as the “skate trade.” In fact, none of Entity-1’s investment was used for the “skate trade.”  Entity-1’s investment was used for other purposes, including repaying others who had previously invested with Heckler.

Over the course of the scheme, Heckler sent out statements to investors that misled them into believing the value of their investments was increasing, when, in fact, the value was declining. Heckler took approximately $1 million in fees and distributions from the fraudulently obtained investments for his personal use. 

The securities fraud count carries a maximum penalty of 20 years in prison and a $5 million fine. Sentencing is scheduled for July 15, 2021.

The U.S. Securities and Exchange Commission has filed a civil complaint against Heckler based on the allegations underlying the securities fraud charge.

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge Michael J. Driscoll, Philadelphia Field Office, with the investigation leading to the charge. 

The government is represented by Assistant U.S. Attorneys Catherine R. Murphy and Andrew Macurdy of the U.S. Attorney’s Office Criminal Division.

NEWARK, N.J. – A former New Jersey resident was sentenced today to 29 months in prison for his role in an investment scheme through which he fraudulently obtained more than $1.52 million from at least three families from 2017 through 2019, U.S. Attorney Philip R. Sellinger announced.

Matthew Benjamin, 54, formerly of Englewood, New Jersey, and now of New York, previously pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging him with one count of wire fraud and one count of securities fraud. Judge Cecchi imposed the sentence today in Newark federal court.

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

From May 2017 through August 2019, Benjamin falsely represented to at least three families that his company, Clear Solutions Group LLC, had lucrative contracts to purchase closeout or excess cosmetic inventory from a company, which he would then resell at a mark-up to a second company. Benjamin told the victims that he had access to these closeout goods through his contacts in the cosmetics and fragrance industry, which he purportedly made through his work at his family’s cosmetic wholesale and distribution business prior to starting Clear Solutions Group. Benjamin induced the victims to provide him with money to purchase the inventory from the first company and promised significant profits in return. Instead of investing the money as he promised, Benjamin misappropriated the investors’ money for his own use and benefit.

Benjamin provided the victims with falsified documents, including fake purchase orders, invoices, promissory notes and bank records showing inflated assets of Clear Solutions Group. To lull victims and induce them to continue investing, Benjamin provided them with documents that purported to detail the investors’ profits.

Benjamin misrepresented to certain investors that portions of their profits on the investment contracts were being reinvested in additional deals to purchase and sell cosmetics, which in turn would generate more profits. From time to time, Benjamin made payments to the investors that were purportedly their profits on certain cosmetics contracts.

In reality, Benjamin misappropriated the investors’ money by making payments to other investors in Clear Solutions Group, which were characterized as those investors’ profits from the nonexistent cosmetic contracts, thereby enabling Benjamin to continue to perpetuate his fraudulent scheme and funding Benjamin’s lifestyle, including paying for car and house rental payments, food, international travel, legal fees, technology equipment, and summer camp tuition for his family members.

In addition to the prison term, Judge Cecchi sentenced Benjamin to three years of supervised release and ordered forfeiture of $1.53 million and restitution of $909,539.

The U.S. Securities and Exchange Commission has filed a civil complaint against Benjamin based on allegations underlying the securities fraud charge. 

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Jennifer S. Kozar and Catherine R. Murphy, Chief of the Economic Crimes Unit of the U.S. Attorney’s Office.

CAMDEN, N.J. – The president and CEO of a commercial diving school was sentenced today to 27 months in prison for fraudulently obtaining funding from the U.S. Department of Education (DOE) and the U.S. Department of Veterans Affairs (VA) for the school and its students, U.S. Attorney Philip R. Sellinger announced.

Tamara Brown, 58, of Haddon Heights, New Jersey, previously pleaded guilty by videoconference before U.S. District Judge Joseph H. Rodriguez to an information charging her with one count of wire fraud. Judge Rodriguez imposed the sentence today by videoconference.

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

From January 2012 through July 2018, Brown owned a private, for-profit commercial diving school, which offered educational programs in commercial diving and underwater welding and salvage. As a for-profit institution, the diving school was required to be accredited through an approved accreditation body to be eligible to receive tuition funds from the DOE’s Higher Education Act’s programs. The VA also relies upon the accreditation in evaluating the eligibility of veteran students to receive student aid funding. Given that more than 80 percent of the diving school’s students received financial assistance from the Department of Education, the school stood to lose its largest source of tuition funding for its students if it lost its accreditation.

Prior to 2012, the diving school had been properly accredited. However, when renewing the diving school’s accreditation that year, Brown submitted fraudulent information to the accrediting authority. For example, Brown reported rates of employment of the school’s graduates of between 81 to 84 percent, when the employment rates were closer to 50 to 60 percent, significantly lower than the rate required to maintain accreditation. Brown also provided fraudulent information pertaining to the school’s holding of “advisory board” meetings required for accreditation to ensure that the school’s curriculum would educate students to meet the current demands of the industry and prospective employers. In the school’s accreditation application, Brown reported holding advisory board meetings on various dates and also submitted what purported to be minutes of nine such board meetings. The diving school did not have a formal advisory board and did not regularly conduct meetings as required. Brown submitted wholly fabricated meeting minutes for at least six of the nine dates listed in the school’s accreditation application and, therefore, did not satisfy the minimum accreditation requirements. The diving school nonetheless continued to regularly receive DOE funds via wire transfers, including a wire transfer which occurred on Jan. 18, 2017.

In addition to the prison term, Judge Rodriguez sentenced Brown to three years of supervised release, fined her $50,000 and ordered restitution of $1.1 million.

U.S. Attorney Sellinger credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; the Philadelphia Resident Agency of the U.S. Department of Education, Office of Inspector General, under the direction of Special Agent in Charge Terry V. Harris, and the Northeast Field Office of the U.S. Department of Veterans Affairs Office of Inspector General, under the direction of Special Agent in Charge Christopher F. Algieri, with the investigation leading to today’s sentencing.

Students who can show that their school misled them or engaged in other misconduct in violation of certain state laws may be eligible for the discharge of some or all federal student loan debt under certain circumstances pursuant to the Borrower Defense Loan Discharge program. Former students of Divers Academy International who wish to seek federal loan forgiveness may apply at www.studentaid.gov/borrower-defense/.

The government is represented by Assistant U.S. Attorney Diana Vondra Carrig of the U.S Attorney’s Office in Camden.

NEWARK, NJ. – Five men who work in New York City’s Diamond District were arrested today and charged with illegally processing more than $600 million through unlicensed money transmitting businesses, U.S. Attorney Philip R. Sellinger announced.

Raj Vaidya, 26; Rakesh Vaidya, 51; Shrey Vaidya, 23; and Neel Patel, 26, all of Edison, New Jersey; and Youssef Janfar, aka “Joe Rodeo,” 57, of Great Neck, New York, are each charged by complaint with one count of operating and aiding and abetting the operation of an unlicensed money transmitting business. The defendants appeared before U.S. Magistrate Judge Edward S. Kiel in Newark federal court and were released on unsecured bond.

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

Since 2019, Raj Vaidya, Rakesh Vaidya, Shrey Vaidya, and Patel have operated numerous purported diamond, gold, and jewelry companies in New York City’s Diamond District, including Arya Diamond Jewellery USA Inc., d/b/a “Karats & Carats,” Diamspark LGD LLC, Royal Diamonds LLC, Raj Gold and Diamond LLC, Royal Arya Jewellery Inc, and Raj Gold and Diamond Inc. Janfar also purportedly operated companies in the Diamond District, including Rodeo of NY, d/b/a “Sarah Jewels.” The defendants used these and other entities as fronts to conduct hundreds of millions of dollars in illegal financial transactions for customers – including converting cash to checks or wire transfers – in exchange for substantial fees. At times, they moved millions of dollars in cash in a single day. None of their companies were registered as money transmitting businesses with New York, New Jersey, or the Financial Crimes Enforcement Network (FinCEN).

The charge of operating and aiding and abetting the operation of an illegal money transmitting business carries a maximum penalty of five years in prison and a fine of $250,000, or twice the gross amount of any pecuniary gain that any persons derived from the offense or of any pecuniary loss sustained by any victims of the offense, whichever is greatest.

U.S. Attorney Sellinger credited special agents and task force officers of IRS - Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; special agents and task force officers of the U.S. Drug Enforcement Administration, under the direction of Special Agent in Charge Cheryl Ortiz in Newark; and special agents of Homeland Security Investigations Newark, under the direction of Special Agent in Charge Ricky J. Patel; with the investigation leading to the charges. He also thanked the Justice Department’s Money Laundering and Asset Recovery Section (MLARS), the Parsippany-Troy Hills Police Department, the Morristown Police Department, the Federal Deposit Insurance Corporation – Office of Inspector General, and the New York City Police Department for their assistance in the investigation.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

The government is represented by Assistant U.S. Attorneys Mark J. Pesce of the Economic Crimes Unit, Olta Bejleri of the Organized Crime/Gangs Unit, and Angelica Sinopole of the Health Care Fraud Unit in Newark.

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

 





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NEWARK, N.J. – Three Essex County correctional officers and one sergeant have been charged with conspiring to violate a pretrial detainee’s civil rights, Acting U.S. Attorney Rachael A. Honig announced today.

Officers Angel Chaparro, 38, Damion James, 40, and Luis Ortiz, 29, and Sgt. Herman Pride, 51, are each charged by complaint with one count of conspiracy to violate civil rights.  Pride and Ortiz were arrested on March 4, 2021, and had their initial appearances before U.S. Magistrate Judge James B. Clark III. Both were released on bail. Chaparro and James were arrested this morning and will have their initial appearances by videoconference Judge Clark this afternoon. 

According to the criminal complaint:

On the evening of Aug. 17, 2020, a federal pretrial detainee at Essex County Correctional Facility (ECCF) squirted a mixture of urine, yogurt, and milk onto a correctional officer. The detainee subsequently was transported to a disciplinary cell, where Chaparro, James, and Ortiz assaulted the detainee, striking him multiple times. Pride did not intervene to stop the assault. At the end of the assault, Pride said, “okay, that’s enough.” During the assault, James’ watch fell off. He and other officers returned to the detainee’s cell to retrieve his watch.

The detainee asked for, and was initially denied, medical assistance. The victim later told Pride that if Pride would provide the victim with medical attention, the victim would lie and say that he had fallen off his bed. Pride refused to provide any medical attention. Two days later, the detainee was finally taken to the emergency room at University Hospital in Newark. He was diagnosed with large swelling and tenderness in the right side of his face and discoloration and bruising around his right eye.

The defendants all were required to submit documentation regarding their use of force.  None of them submitted any such reports. Instead, Chaparro signed a false report indicating that no force had been used. 

Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; and the Essex County Correctional Facility Internal Affairs Bureau, under the direction of Director Alfaro Ortiz and the Office of the Warden, with the investigation leading to the charges.

The government is represented by Acting Principal Assistant U.S. Attorney Rahul Agarwal.

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

NEWARK, N.J. – A Union County, New Jersey, man convicted of being a felon in possession of a semi-automatic submachine gun with a high capacity magazine was sentenced today to 120 months in prison, Acting U.S. Attorney Rachael A. Honig announced.

Jarrell L. Daniels, 29, of Elizabeth, New Jersey, was convicted on Feb. 21, 2020, after a two and a half-day trial before U.S. District Judge Kevin McNulty in Newark of one count of being a felon in possession of a semi-automatic submachine gun with a high capacity magazine and multiple rounds of ammunition.  

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

On the morning of April 9, 2018, Daniels was walking down Irvington Avenue in Elizabeth carrying a loaded .45 caliber Masterpiece Arms ACP submachine gun with 30 additional rounds of ammunition in an extended magazine. Daniels was wearing a disguise, as well as latex gloves. He came upon his victim and opened fire, shooting at his victim 16 times, but none of the shots struck the victim. As he fled, Daniels dropped his head covering and later stashed the gun and other items of clothing in a nearby trashcan. DNA on these items, as well as surveillance footage and ballistics evidence, ultimately enabled the authorities to identify Daniels as the shooter.

In addition to the prison term, Judge McNulty sentenced Daniels to three years of supervised release.

Acting U.S. Attorney Honig credited law enforcement officers of the Elizabeth Police Department, under the direction of Police Chief Giacomo Sacca.; the Union County Sheriff’s Office, under the direction of Sheriff Peter Corvelli; special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; special agents of the Bureau of Alcohol Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Charlie J. Patterson; and the Union County Prosecutor’s Office, under the direction of Acting Prosecutor Lyndsay V. Ruotolo, with the investigation leading to today’s sentencing.

The government was represented by Assistant U.S. Attorneys Vera Varshavsky and Sammi Malek of the Criminal Division of the U.S. Attorney’s Office in Newark.

NEWARK, N.J. – A New Jersey doctor today admitted using his medical license – and allowing other to use his medical license – to purchase prescription oncology medications under false pretenses for the purpose of selling them for profit, U.S. Attorney Philip R. Sellinger announced.

Joel Lerner, 62, of Warren, New Jersey, a board-certified podiatrist and operator of a medical supply group purchasing organization, pleaded guilty by videoconference before U.S. District Judge Susan D. Wigenton to an information charging him with unlawfully selling prescription cancer medication, which had been previously purchased using his medical license and under the representation that such medication was to be used to treat his patients.

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

While working in his medical practice’s offices in various locations in New Jersey, Lerner was recruited by an individual who owned a pharmacy and also owned and operated two businesses that were wholesale distributors of prescription drugs. At the request of this individual and others working with him, and in return for commissions and discounts on other medical supplies purchased by Lerner for his group purchasing organization, Lerner used his medical license – and allowed others to use it – to purchase expensive prescription drugs, primarily, cold-chain biologic infusion medications that typically are used to treat cancers, macular degeneration, and autoimmune diseases. By recruiting and using Lerner and his medical license to purchase the drugs, these individuals were able to obtain prescription drugs from the pharmaceutical manufacturers’ authorized distributors that they would not otherwise have been permitted to purchase. They were then able to sell them at a profit through their two businesses.

In purchasing the drugs, Lerner and the two individuals made numerous false and misleading representations to the pharmaceutical manufacturers and authorized distributors, including that Lerner purchased the drugs to use to treat his patients, and that the drugs would not be resold or redistributed. In actuality, none of the drugs were administered to Lerner’s patients, but were ultimately sold to customers of the two businesses for a profit. In an effort to obscure the fact that he was illegally buying and selling prescription drugs purchased under his medical license, Lerner sold and transferred the prescription drugs in the name of his group purchasing organization. The scheme ran from December 2014 through November 2018, during which more than $1.2 million in prescription drugs were purchased in Lerner’s name and using his medical license.

The sale of prescription drugs purchased by a healthcare entity is punishable by a maximum of three years in prison and a $10,000 fine. In his plea agreement, Lerner also agreed to make restitution for the full amount of any loss resulting from his offense. Sentencing is scheduled for July 18, 2023.

U.S. Attorney Sellinger credited special agents of the U.S. Food and Drug Administration’s Office of Criminal Investigations New York Field Office, under the direction of Special Agent in Charge Fernando P. McMillan; and special agents of U.S. Attorney’s Office, under the direction of Special Agent in Charge Thomas Mahoney, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Diana Vondra Carrig and Sara A. Aliabadi of the U.S Attorney’s Office in Camden.

NEWARK, N.J. – TD Bank, N.A. (TDBNA), the 10th largest bank in the United States, and its parent company TD Bank US Holding Company (TDBUSH) (together with TDBNA, “TD Bank”) pleaded guilty today and agreed to pay over $1.8 billion in penalties to resolve the U.S. Attorney’s Office for the District of New Jersey and the Justice Department’s investigation into violations of the Bank Secrecy Act (BSA) and money laundering.TDBNA pleaded guilty before U.S. District Judge Esther Salas in Newark federal court to conspiring to fail to maintain an anti-money laundering (AML) program that complies with the BSA, fail to file accurate Currency Transaction Reports (CTRs), and launder money. TDBUSH pleaded guilty to causing TDBNA to fail to maintain an AML program that complies with the BSA and to fail to file accurate CTRs.TD Bank’s guilty pleas are part of a coordinated resolution with the Board of Governors of the Federal Reserve System (FRB), as well as the Treasury Department’s Office of the Comptroller of the Currency (OCC) and Financial Crimes Enforcement Network (FinCEN).“By making its services convenient for criminals, TD Bank became one,” said Attorney General Merrick B. Garland. “Today, TD Bank also became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first US bank in history to plead guilty to conspiracy to commit money laundering. TD Bank chose profits over compliance with the law — a decision that is now costing the bank billions of dollars in penalties. Let me be clear: our investigation continues, and no individual involved in TD Bank’s illegal conduct is off limits.”“TD Bank prioritized growth and convenience over following its legal obligations. As a result of staggering and pervasive failures in oversight, it willfully failed to monitor trillions of dollars of transactions – including those involving ACH transactions, checks, high-risk countries, and peer-to-peer transactions – which allowed hundreds of millions of dollars from money laundering networks to flow through the bank, including for international drug traffickers. The bank was aware of these risks and failed to take steps to protect against them, including for two networks prosecuted in New Jersey and elsewhere – one that dumped piles of cash on the bank’s counters and another that allegedly withdrew amounts from ATMs 40 to 50 times higher than the daily limit for personal accounts.”U.S. Attorney Philip R. Sellinger“For years, TD Bank starved its compliance program of the resources needed to obey the law. Today’s historic guilty plea, including the largest penalty ever imposed under the Bank Secrecy Act, offers an unmistakable lesson: crime doesn’t pay — and neither does flouting compliance,” said Deputy Attorney General Lisa Monaco. “Every bank compliance official in America should be reviewing today’s charges as a case study of what not to do. And every bank CEO and board member should be doing the same. Because if the business case for compliance wasn’t clear before — it should be now.”“For nearly a decade, TD Bank failed to update its anti-money laundering compliance program to address known risks. As bank employees acknowledged in internal communications, these failures made the bank an ‘easy target’ for the ‘bad guys.’ These failures also allowed corrupt bank employees to facilitate a criminal network’s laundering of tens of millions of dollars,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “U.S. financial institutions are the first line of defense against money laundering and illicit finance. When they participate in crime rather than prevent it, we will not hesitate to hold them accountable to the fullest extent of the law.”According to court documents, between January 2014 and October 2023, TD Bank had long-term, pervasive, and systemic deficiencies in its U.S. AML policies, procedures, and controls but failed to take appropriate remedial action. Instead, senior executives at TD Bank enforced a budget mandate, referred to internally as a “flat cost paradigm,” requiring that TD Bank’s budget not increase year-over-year, despite its profits and risk profile increasing significantly over the same period. Although TD Bank maintained elements of an AML program that appeared adequate on paper, fundamental, widespread flaws in its AML program made TD Bank an “easy target” for perpetrators of financial crime.Over the last decade, TD Bank’s federal regulators and TD Bank’s own internal audit group repeatedly identified concerns about its transaction monitoring program, a key element of an appropriate AML program necessary to properly detect and report suspicious activities. Nonetheless, from 2014 through 2022, TD Bank’s transaction monitoring program remained effectively static, and did not adapt to address known, glaring deficiencies; emerging money laundering risks; or TD Bank’s new products and services. For years, TD Bank failed to appropriately fund and staff its AML program, opting to postpone and cancel necessary AML projects prioritizing a “flat cost paradigm” and the “customer experience.”Throughout this time, TD Bank intentionally did not automatically monitor all domestic automated clearinghouse (ACH) transactions, most check activity, and numerous other transaction types, resulting in 92% of total transaction volume going unmonitored from Jan. 1, 2018, to April 12, 2024. This amounted to approximately $18.3 trillion of transaction activity. TD Bank also added no new transaction monitoring scenarios and made no material changes to existing transaction monitoring scenarios from at least 2014 through late 2022; implemented new products and services, like Zelle, without ensuring appropriate transaction monitoring coverage; failed to meaningfully monitor transactions involving high-risk countries; instructed stores to stop filing internal unusual transaction reports on certain suspicious customers; and permitted more than $5 billion in transactional activity to occur in accounts even after the bank decided to close them.TD Bank’s AML failures made it “convenient” for criminals, in the words of its employees. These failures enabled three money laundering networks to collectively transfer more than $670 million through TD Bank accounts between 2019 and 2023. Between January 2018 and February 2021, one money laundering network processed more than $470 million through the bank through large cash deposits into nominee accounts. The operators of this scheme provided employees gift cards worth more than $57,000 to ensure employees would continue to process their transactions. And even though the operators of this scheme were clearly depositing cash well over $10,000 in suspicious transactions, TD Bank employees did not identify the conductor of the transaction in required reports. In a second scheme between March 2021 and March 2023, a high-risk jewelry business moved nearly $120 million through shell accounts before TD Bank reported the activity. In a third scheme, money laundering networks deposited funds in the United States and quickly withdrew those funds using ATMs in Colombia. Five TD Bank employees conspired with this network and issued dozens of ATM cards for the money launderers, ultimately conspiring in the laundering of approximately $39 million. The Justice Department has charged over two dozen individuals across these schemes, including two bank insiders. TD Bank’s plea agreement requires continued cooperation in ongoing investigations of individuals.As part of the plea agreement, TD Bank has agreed to forfeit $452,432,302.00 and pay a criminal fine of $1,434,513,478.40, for a total financial penalty of $1,886,945,780.40. TD Bank has also agreed to retain an independent compliance monitor for three years and to remediate and enhance its AML compliance program. TD Bank has separately reached agreements with the FRB, OCC, and FinCEN, and the Justice Department will credit $123.5 million of the forfeiture toward the FRB’s resolution.The Justice Department reached its resolution with TD Bank based on a number of factors, including the nature, seriousness, and pervasiveness of the offenses, as a result of which TD Bank became the bank of choice for multiple money laundering organizations and criminal actors and processed hundreds of millions of dollars in money laundering transactions. Although TD Bank did not voluntarily disclose its wrongdoing, it received partial credit for its strong cooperation with the Department’s investigation and the ongoing remediation of its AML program. TD Bank did not receive full credit for its cooperation because it failed to timely escalate relevant AML concerns to the Department during the investigation. Accordingly, the total criminal penalty reflects a 20% reduction based on the bank’s partial cooperation and remediation.IRS Criminal Investigation, Federal Deposit Insurance Corporation Office of Inspector General, and Drug Enforcement Administration investigated the case. The Morristown Police Department, the U.S. Attorney’s Office for the District of Puerto Rico, Homeland Security Investigations, U.S. Customs and Border Protection, and the New York City Police Department provided substantial assistance.Assistant U.S. Attorneys Mark J. Pesce of the Economic Crimes Unit and Angelica Sinopole for the District of New Jersey’s Health Care Fraud Unit and Trial Attorneys D. Zachary Adams and Chelsea R. Rooney of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) prosecuted the case.MLARS’ Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system. Since its creation in 2010, the Bank Integrity Unit has prosecuted financial institutions for violations of the BSA, money laundering, sanctions, and other laws, imposing total penalties of over $25 billion.This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

NEWARK, N.J. – A Florida man will make his initial court appearance today on charges related to his role in a scheme to fraudulently obtain over $1.6 million in federal Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loan (EIDL) payments, U.S. Attorney Philip R. Sellinger announced.

Mohamed A. Awad, 60, of Ocala, Florida, is charged by complaint with two counts of wire fraud. He was arrested July 21, 2022, in Virginia and made his initial appearance this afternoon before U.S. Magistrate Judge William E. Fitzpatrick in the Eastern District of Virginia. He was detained pending transfer to the District of New Jersey.

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

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to millions of Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. The PPP allowed qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities.

The CARES Act also authorized the U.S. Small Business Association to provide EIDLs of up to $2 million, through the Economic Injury Disaster Loan Program, to eligible small businesses experiencing substantial financial disruption due to the COVID-19 pandemic.

Awad engaged in a scheme to illegally obtain over $1.6 million in PPP and EIDL loans through numerous misrepresentations to lenders. He submitted fraudulent loan applications that fabricated numbers of employees and misrepresented company information, to induce PPP and EIDL lenders to approve the loan applications that they otherwise would not have approved.  Awad submitted falsified tax documents in support of PPP applications. According to IRS records, none of the purported tax documents that Awad submitted were ever in fact filed with the IRS. Awad transferred the loan proceeds among various bank accounts he controlled, withdrawing significant amounts in cash and transferring at least approximately $760,000 out of the country via wire transfers to banks based in Egypt.

The charges each carry a maximum penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross gain to the defendant or gross loss to the victim, whichever is greatest.

U.S. Attorney Sellinger credited special agents of the IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Tammy Tomlins; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division; special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the Office of Inspector General for the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection, under the direction of Stephen Donnelly, Eastern Region; special agents of the Federal Deposit Insurance Corporation – Office of Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Katherine M. Romano of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

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

NEWARK, N.J. – The U.S. Attorney’s Office today filed a lawsuit in U.S. District Court for the District of New Jersey charging Roosevelt Care Centers for violating Title I of the Americans with Disabilities Act (ADA), U.S. Attorney Philip R. Sellinger announced.

The lawsuit alleges that Roosevelt Care Centers, a long-term care facility operated by the Middlesex County Improvement Authority, unlawfully terminated a dietary worker whose disability inhibited her ability to lift objects heavier than 20 pounds.

“No one should be denied their right to work because of a disability,” U.S. Attorney Philip R. Sellinger said. “The Americans with Disabilities Act was enacted to prohibit employers from denying employment to people with disabilities without making a reasonable accommodation. The U.S. Attorney’s Office is committed to protecting the civil rights and ensuring equal employment opportunities for all individuals with disabilities.”

Before sustaining an injury that caused the permanent lifting impairment, the employee had been successfully working at Roosevelt Care Centers for approximately 18 years and remained able to perform the essential functions of her position. Nonetheless, Roosevelt Care Centers terminated the dietary worker’s employment due to her disability without engaging in an interactive process to provide her with a reasonable accommodation.

Title I of the ADA prohibits employers from discriminating against a qualified individual on the basis of disability in regard to the hiring, advancement or discharge of employees; employee compensation; and other terms, conditions, or privileges of employment. An employer may not demote, terminate, or deny employment opportunities to an employee who is otherwise qualified if the demotion or termination is based on the need to make reasonable accommodations for the employee. 

This matter was handled by the U.S. Attorney’s Civil Rights Division based on a referral from the Newark Area Office of the Equal Employment Opportunity Commission. U.S. Attorney Sellinger created a Civil Rights Division last year with the goal of protecting and upholding the civil rights of those in our community.

Individuals who believe they may have been victims of discrimination may file a complaint with the U.S Attorney’s Office at http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or call the U.S. Attorney’s Office Civil Rights Hotline at (855) 281-3339.  Additional information about the ADA can be found at www.ada.gov, or by calling the Department of Justice’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD).

The government is represented by Assistant U.S. Attorney Thandiwe Boylan of the Civil Rights Division in Newark.

The complaint is an allegation of unlawful conduct. The allegation must still be proven in federal court.

 





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NEWARK, N.J. – A Florida man appeared in court today on charges that he laundered funds related to a $30 million wire fraud scheme, U.S. Attorney Craig Carpenito announced.

Denis Sotnikov, 36, of Hallandale Beach, Florida, is charged by complaint with one count of money laundering. He appeared today before U.S. Magistrate Judge Jared M. Strauss in a Fort Lauderdale, Florida, federal court and was detained.

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

Between April 2018 and March 2020, individuals engaged in an internet-based financial fraud scheme, which generally involved the creation of fraudulent websites to solicit funds from individuals seeking to invest money. At times, the websites were designed to closely resemble websites being operated by actual, well-known, and publicly reputable financial institutions; at other times, the fraudulent websites were designed to resemble financial institutions that seemed legitimate, but did not, in fact, exist.

Victims of the fraud scheme typically discovered the fraudulent websites via internet searches. The fraudulent websites advertised various types of investment opportunities, most prominently the purchase of certificates of deposit, or CDs, with higher than average rates of return on the CDs to lure potential victims.

To date, at least 70 victims of the fraud scheme nationwide, including in New Jersey, have collectively transmitted at least $30 million that they believed to be investments.

In many instances, the victims would contact an individual or individuals via telephone or email, as directed on a fraudulent website, who provided the victims with applications and wiring instructions for the purchase of a CD. The funds wired by the victims would then be moved to various domestic and international bank accounts, including accounts in Russia, the Republic of Georgia, Hong Kong, and Turkey. None of the victims received a CD after wiring the funds.

Sotnikov received funds from at least 18 victims of the fraud scheme, totaling $6 million, in accounts at various domestic banks that were controlled by him or by a close relative. Of this amount, $3.7 million was either frozen by the banks or returned to victims, and $707,380 was wired overseas by Sotnikov. The remaining stolen funds – $1.5 million – were transferred to numerous other accounts controlled by Sotnikov and used to fund personal expenditures, including down payments on several luxury vehicles, purchases at high-end retail stores such as Louis Vuitton, Tiffany & Co., and Cartier, rent exceeding $9,000 per month on a home in Florida, several vacations, living expenses and bills.

The money laundering charge is punishable by a maximum of 20 years in prison and a fine of up to $500,000, or twice the value of the property involved, whichever is greater.

The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Sotnikov and several companies associated with him today based on the same conduct.

U.S. Attorney Carpenito credited special agents of the FBI, including the FBI’s Cyber Crimes Task Force, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark. He also thanked the SEC for the assistance provided by its Enforcement Division.

The government is represented by Assistant U.S. Attorneys Anthony P. Torntore and Jamie L. Hoxie of the U.S. Attorney’s Cybercrimes Unit in Newark.

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

Defense counsel: Roman Groysman Esq., Fort Lauderdale

NEWARK, N.J. – A Passaic County correctional officer and two sergeants were arrested today for allegedly violating a pretrial detainee’s civil rights and conspiracy to obstruct justice, U.S. Attorney Philip R. Sellinger announced.

Sergeants Jose Gonzalez, 45, and Donald Vinales, 38, and Officer Lorenzo Bowden, 39, are charged by complaint with one count of deprivation of rights under color of law and one count of conspiracy to obstruct justice. Bowden is also charged with one count of making false statements. Gonzalez, Vinales and Bowden are scheduled to have their initial appearances this afternoon before U.S. Magistrate Judge Michael A. Hammer in Newark federal court. 

According to the criminal complaint:

On Jan. 22, 2021, a pretrial detainee at the Passaic County Jail splashed a mixture containing urine onto a correctional officer. The following day Gonzalez, Vinales and Bowden transported the detainee through an area of the jail that does not have a video surveillance camera, which correctional officers and inmates at the jail have referred to as a “blind spot.” While in that “blind spot,” Gonzalez and Vinales assaulted the detainee, while he was handcuffed. They knocked him to the ground and struck him multiple times. Bowden did not intervene to stop the assault. One day after the assault, the detainee was taken to a local hospital, which documented injuries from the assault.

The defendants all were required to submit documentation regarding their use of force.  None of them submitted any such reports. 

In April 2022, after receiving federal grand jury subpoenas in connection with this investigation, Gonzalez, Vinales and Bowden, among others, met to discuss the federal investigation. During that meeting, the group agreed not to cooperate with the federal investigation and also agreed to say that nothing had happened to the detainee (referring to the assault). During an interview with federal investigators in October 2022, Bowden falsely stated that the detainee had not been assaulted and that there had not been any meeting or communication among those who participated in or witnessed the assault.

The count of deprivation of rights under color of law is punishable by a maximum of 10 years in prison. The count of count of conspiracy to obstruct justice is punishable by a maximum of 20 years in prison. The count of making false statements is punishable by a maximum of five years in prison.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark; and the Passaic County Sheriff’s Office Division of Internal Affairs, under the direction of Sheriff Richard H. Berdnik, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorney Benjamin Levin of the Criminal Division and the Civil Rights Division’s Criminal Civil Rights Task Force in Newark.

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

 





gonzalezetal.complaint.pdf

NEWARK, N.J. – A former U.S. Army major and his wife were sentenced today for their respective roles in abusing their adopted children, who all were less than 4 years old and developmentally delayed, through neglectful and cruel acts, including breaking their bones, denying them medical attention, withholding water and force-feeding them hot sauce, U.S. Attorney Craig Carpenito announced.

Carolyn Jackson, 40, was sentenced to 40 months in prison and her husband, John E. Jackson, 42, formerly a major in the Army at the Picatinny Arsenal Installation in Morris County, New Jersey, was sentenced to three years of probation. Both will get credit for time already served.

Convicted by a jury in July 2015 on multiple counts of child endangerment, Carolyn Jackson had originally received 24 months in prison and John E. Jackson had received probation and 400 hours of community service when they were originally sentenced in December 2015. The government appealed their sentences to the U.S. Court of Appeals for the Third Circuit, which ruled in July 2017 that the District Court had committed several errors in the process of imposing those sentences.

“Obviously, we are disappointed that the court did not agree with the sentences we sought,” U.S. Attorney Carpenito said. “This is a case where the victims were children, horribly abused by the foster parents to whom they were entrusted. A punishment that was severe – but fair – was warranted.”

The Jacksons were each found guilty following a four-month 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 also sentenced Carolyn Jackson to three years of supervised release.

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 investigation leading to today’s sentencings. He also thanked the U.S. Army Criminal Investigation Command, under the command of Major General David E. Quantock, and the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp.

The government is represented by Deputy U.S. Attorney Thomas Eicher and Assistant U.S. Attorney John Romano of the U.S. Attorney’s Office in Newark.