United States Department of Justice United States Attorney ...

[Pages:110]United States Department of Justice United States Attorney's Office District of New Jersey

Office Report 2002 - 2008

Christopher J. Christie U.S. Attorney

Significant Cases

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" Introduction........................................................................................................................i

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" 2002

______________________________________________________________________________ Marty Barnes, Mayor of Paterson - Extortion.....................................................................2 The Daniel Pearl Case -Terrorism...................................................................................... 2 Roger Duronio - Computer "Logic Bomb".........................................................................2 Forbes and Shelton - Cendant Corp....................................................................................3 Calderon et al. - Human Trafficking...................................................................................4 The Perez Organization - Camden Drugs and Gangs.........................................................4 Greater Newark Safer Cities Initiative Roundup................................................................5 Sara Bost - Irvington Mayor...............................................................................................6 Shipping Company and Captain - Ocean Dumping...........................................................6 Rene Abreu, et al. - Bank Fraud.........................................................................................7 Trakhtenberg et al. - Human Trafficking............................................................................7 James Treffinger - Essex County Executive.......................................................................8 Robert Janiszewski, et al. - Hudson County Executive......................................................8 "TOEFL" - Terrorism Prevention.......................................................................................9 Robert Burrick - Law Firm Partner, Embezzler................................................................10 Terrence D. Weldon, et al - Ocean Township Mayor, Bid Rig "Phase One"...................10 Dominick Russo - Deputy U.S. Marshal, Embezzlement.................................................12 Hackensack University Medical Center, Medicare Overbilling.......................................12

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" 2003

______________________________________________________________________________ Hemant Lakhani - Terrorism Prevention, International Arms Smuggling........................15 Double ii Bloods - Racketeering, Gun Trafficking...........................................................16 Superior Court Judge Stephen W. Thompson - Sex Travel, Child Pornography..............16 Hoffecker and Myers - Securities Fraud............................................................................17 Morales - Camden Drug Trafficking, HIDTA...................................................................18 Civil Medical Malpractice

Trial.........................................................................................18 Alan Clark - Major League Baseball Memorabilia Fraud.................................................19 Kenneth Jenkins - Camden Drug Dealer, Real Estate "Flipper"...................................... 19 Al Moroccan Empire or Moors - An Odd Case With Some Very Difficult Defendants...20 Medi-Hut - Corporate Fraud..............................................................................................20 Roy Campbell - Gangs, Gun Trafficking...........................................................................21

Anthony Russo - Hoboken Mayor, Extortion....................................................................21 Cooper Health and Cathedral Healthcare - Medicare Fraud..............................................22 Joseph Nardone, Sr., and Son - Labor Union Corruption..................................................23 Atlantic States Cast Iron Pipe - Environmental Crimes, Workplace Safety......................23 Stone Harbor Borough - U.S. Sues to Protect Piping Plover Habitat................................24 ______________________________________________________________________________

" 2004

______________________________________________________________________________ Regpay - International Child Pornography Enterprise, Money Laundering......................27 Operation Firewall - Identity Theft and Credit Card Fraud...............................................27 Quest Diagnostics - Medicare Recovery...........................................................................28 SHAC - Animal Enterprise Protection Act........................................................................29 Charles Kushner, et al. - Tax Fraud, Witness Retaliation, False Statements to FEC........30 The Curry Organization - Newark Drug Traffickers.........................................................31 Harry G. Parkin - Mercer County Public Corruption........................................................31 Cooper and Nesti - $80 Million Fraud ($10 Million to Buy a Stake in the N.J. Devils)...32 Charles D. Conway - Attorney Who Fleeced Dead Client's Charitable Foundation........33 CMC Electronics - Qui Tam, Army Procurement Fraud...................................................33 Suprema Specialties, Inc. - Accounting Fraud..................................................................34 David D'Amiano - Political Fundraising, Extortion: "Machiavellian".............................34 Asbury Park Drug Task Force - Drugs and Gangs............................................................35 Herbert Axelrod - Philanthropist-Turned-Fugitive Tax Evader........................................36 James M. Dwyer - $35 Million Bank Fraud......................................................................36 Atlantic City Prostitution Ring - Conspiracy.....................................................................37 N.J. Division of Motor Vehicles - Conspiracy to Produce Fraudulent Drivers Licenses..37

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" 2005

______________________________________________________________________________ Operation "Bid Rig" - 11 Current and Former Monmouth County Public Officials........40 Charles Cart - Union Embezzlement.................................................................................41 Marlboro Township Mayor - Bribery, Tax Evasion..........................................................41 Dr. Joan Jaszczult - Illegal Distribution of Prescriptions for Controlled Substances........42 N.J. State Police Trooper - Securities Fraud......................................................................43 David W. Banach - Hand-held Laser Shined Into Aircraft Cockpit..................................43 Camden Violent Crime Initiative.......................................................................................44 Arabo - Computer Crime Targeting Commercial Competitors.........................................44 Giblin - Dating Service Scam Artist..................................................................................45 Altagracia "Grace" Rosario - Fraudulent Document Ring................................................45 Pollution Settlement - $2 Million in Community Service Payments to New Jersey Causes...........................................................................................................46 UMDNJ - Medicaid Overbilling, Deferred Prosecution, Monitorship..............................47 TeleServices Internet Group, Inc., - Securities Fraud.......................................................48

Bristol Myers Squibb - Deferred Prosecution Agreement, Indictment of Senior Officers..............................................................................................................................48 Aragoncillo and Aquino - Espionage................................................................................50 Paterson Schools - Public Corruption...............................................................................50 Operation "Royal Charm" - Asian Organized Crime, Smuggling, Counterfeiting...........51 Larry "Little Guy" Dentico, et al. - Organized Crime and Racketeering..........................52 Thomas Weatherly - Firearm Possession by a Career Criminal....................................... 52 Luisa Medrano, et al. - Human Trafficking, Harboring Illegal Aliens..............................53 ______________________________________________________________________________

" 2006

______________________________________________________________________________ St. Barnabas Health Care System - $265 Million Medicare Fraud Settlement.................55 Operation "Emissary" - Internet Child Pornography.........................................................55 Andy Lin - Computer "Logic Bomb"................................................................................56 Senator John A. Lynch, Jr. - Honest Services Mail Fraud, Tax Evasion..........................57 Parmatic Filter Corporation - Defense Contractor Fraud Against the United States........58 Gantt, Johnson & Taylor - Serial Bank Robbers...............................................................58 Angelo Prisco - Organized Crime Figure..........................................................................59 Pollution Settlements - More Community Service Payments to New Jersey Causes.......60 Jose Luis Notario, et al. - Prostitution Ring Involving Smuggled Mexican Females.......60 Terrance D. Stradford - $2.76 Million Mortgage Fraud....................................................61 Mayor Joseph Foy, Sr. - Tax Evasion................................................................................62 Dr. Charlene C. DeMarco - Fraud Against Lou Gehrig's Disease Patients......................62 Frank Abate - More Monmouth County Corruption.........................................................63 The M.O.B. Boys - Camden Drugs and Gangs..................................................................63 Lakewood Cheder School - Civil Recovery of Federal School Lunch Program Funds........................................................................................................64 Jake Brahm - Internet Terrorism Hoax Directed at NFL Stadiums...................................64 St. Preux - Immigration Fraud...........................................................................................65 Michael Guibilo - Former FBI Informant turned Serial Bank Robbery............................65 Crips Gang Members - Drugs and Weapons Roundup.....................................................66 Solomon Dwek - $50 Million Bank Fraud........................................................................66 William Baskerville - Death Penalty Case for Conspiracy to Murder a Witness..............67 Callaway & Sloan El - South Jersey Corruption...............................................................68 Vincent Filipelli - Organized Crime..................................................................................69

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" 2007

______________________________________________________________________________ Sharpe James, Tamika Riley - Honest Services Mail Fraud..............................................71 James "The Hat Bandit" Madison - Serial Bank Robber...................................................71 Bank Robbery Gang - Death of FBI Special Agent Barry Lee Bush................................72 Able Labs - Securities Fraud, Misbranded and Adulterated Drugs...................................73 Fort Dix Plot - Terrorism...................................................................................................73

Khawar Gardazi - Murder Abroad of a U.S. Citizen.........................................................74 M/T Clipper Trojan - Environmental Crimes, $4.75 Million in Penalties........................75 Paterson Public Housing - Public Employees On The Take.............................................75 Wayne Bryant, Michael Gallagher - Pension Padding Public Corruption........................76 Perez-Vallejo Organization - Suburban Camden Drug Traffickers...................................77 Bloods "Sex Money Murder" Gang - Drug Distribution...................................................77 Operation "Broken Boards" - Public Corruption...............................................................78 Mayfield & Coward - Prostitution of Minors....................................................................79 Hips and Knees Surgical Implant Industry - Deferred Prosecution Agreements..............80 New Brunswick Housing Rehabilitation Program - Bribery and Extortion......................81 David and Anna Delle Donna - Mayor of Guttenberg and Wife, Public Corruption........82 FAA Supervisor - Procurement Fraud...............................................................................83 Reginald Greene - Financial Fraud from Behind Prison Bars...........................................83 "Gangster Killer Bloods" - Gang & Drug Distribution.....................................................84 ______________________________________________________________________________

" 2008

______________________________________________________________________________ Local 825 - Union Embezzlement, Labor Payments.........................................................86 Dennis Oury and Joseph Ferriero - Corrupt Influence in Grants Consulting Company....86 State Senator Joseph Coniglio - Honest Services Mail Fraud...........................................87 Linden Neighborhood Redevelopment Program - Bribery................................................88 UMDNJ - Cardiac Physician Kickbacks...........................................................................88 New Jersey Affordable Homes Corp. - Investment and Mortgage Fraud.........................89 Senior Vice President of Wachovia Securities - Bank Larceny........................................90 Derrick M. Jones - Murder in Furtherance of Drug Trafficking.......................................90 American Macro Growth - $20 Million Bank Fraud.........................................................91 John J. Montefusco and Son - Official Corruption............................................................91 South Jersey Federal Credit Union Official - Bank Fraud.................................................92 Glyn Richards, All Freight Logistics, Inc. - Investment Fraud Ponzi Scheme..................92 Dr. Pravin Vasoya - Illegal Distribution of Controlled Substance....................................93 Newark Airport Employees - Drug Trafficking and Treasury Check Theft/Counterfeiting....................................................................94 USAO Attorney's - District of New Jersey.......................................................................95 USAO Staff - District of New Jersey.................................................................................99

Credits and acknowledgments: Report compiled and edited by Public Affairs Officer Michael Drewniak. Desktop Publishing by Information and Technology Specialist Nicholas Nagorny and

Legal Assistant Carmen Gajdzisz.

Message from the United States Attorney's Office

On January 17, 2002, a new era began at the United States Attorney's Office in New Jersey. Already an office with a sterling history based on the leadership of outstanding former U.S. Attorneys including Frederick Lacey, Herbert Stern and Michael Chertoff, the office now faced a challenge never before seen in the history of federal law enforcement. The terrorist attacks of September 11, 2001 forever changed the priorities of law enforcement in the United States. The new United States Attorney would be inheriting that challenge. The prevention of domestic terrorism would be the office's top priority. During his investiture speech on January 28, 2002, United States Attorney Christopher J. Christie also detailed a number of other priorities he would set for his new office.

Confronting New Jersey's corrupt political system was priority number two. The new U.S. Attorney's words, spoken nearly seven years ago, seem now to be prescient given the performance of this office in fighting political corruption:

"As I begin my time on this watch, I have a simple message for New Jersey's public officials. If you keep your oath and serve the people, you will have no greater ally. If you break your oath, if you choose to lie, to cheat and steal from those who you were sworn to serve, you will have no greater enemy. There is no more simple test of right versus wrong and this United States Attorney will make sure that those who violate the public trust will pay for that betrayal and they will pay with their freedom."

The other main challenges laid out in that speech for the office and all of law enforcement were to aggressively pursue violent street gangs and to work to uncover the disgrace of trafficking in human beings, particularly young women brought into this country to become sex slaves.

The main question left after detailing those priorities was how to turn aspirations into reality. The office decided to first turn inward and decide if they were doing all they could with the resources they were being given by the Department of Justice.

U.S. Attorney Christie decided to do something that had never been done before in this office--to consider a wholesale reorganization of the office's operations in an attempt to increase efficiency, effectiveness, communication and productivity. He chose to begin that task by meeting individually with each Assistant United States Attorney to ask them how they would reorganize and change the office. Over his first three months, he met privately with each of his then 125 AUSAs. He listened, he took notes and he asked questions. Out of those meetings (and through the hard work of his senior staff) a plan evolved which would lead to greater accountability and productivity for every member of the office.

In May of 2002, the office reorganization was announced. Two previously stand alone divisions were merged into the existing Criminal Division and that new Criminal Division was divided into eight units, each with a detailed focus. Unit Chiefs would oversee a specific subject area and no more than eight AUSAs. The chiefs would meet with the U.S. Attorney and his senior staff every ten days to update them on the work of their group and receive policy direction. A renewed focus on narcotics, violent crime, organized crime, public protection, commercial crimes, government fraud, securities & health care fraud and, of course, terrorism would be the hallmark of this new model. To deal with the historical imbalance of assets in Southern New Jersey, he established the new Deputy U.S. Attorney position for South Jersey. He appointed long-time Camden County Prosecutor Lee A. Solomon to the position and increased staffing by 25 percent. Also, political corruption would be handled by the Special Prosecutions Division, which would remain an independent division reporting directly to the U.S. Attorney and his senior staff. It represented a sea change in the management of the office. What were the results for law enforcement in New Jersey?

Each and every year after the reorganization, the office brought more federal criminal cases than the year before, from Fiscal Year 2002 (when the plan was implemented) to Fiscal Year 2007. (See Table 1)

Not only were there more cases, but bigger and more significant cases every year. In the area of terrorism, two important national cases in the post 9/11 era were brought in New Jersey. U.S. v. Hemant Lakhani, was the case of an Indian born, British citizen who was attempting to sell shoulder fired missiles to what he believed to be a terrorist group intent on using them to shoot passenger airliners out of the sky above Newark Airport. The FBI's Joint Terrorism Task Force infiltrated the operation and the 71 year old Mr. Lakhani was convicted and sentenced to 47 years in prison without parole. The current prosecution of the six men accused of plotting to attack U.S. soldiers at Fort Dix (the Fort Dix Six) was uncovered through sixteen months of hard work from the Philadelphia Joint Terrorism Task Force. The case will be tried in October of 2008 in Camden.

The battle against political corruption has produced truly remarkable results. By the end of Fiscal Year 2008, more than 130 public officials, elected and appointed, have been convicted without a single acquittal. The cases have run the gamut from powerful statewide figures like former Essex County Executive Jim Treffinger, former State Senate President John Lynch and former Newark Mayor Sharpe James to local elected officials like Mayor Martin Barnes of Paterson, Mayor Raymond O'Grady of Middletown and five members of the Pleasantville school board. This list also includes power brokers like real estate magnate Charles Kushner, former Hudson County Executive Bob Janiszewski and Mercer County Chief of Staff Harry Parkin. Republicans and Democrats. Local corruption and statewide corruption networks. None have been immune from scrutiny or above that promise made by the U.S. Attorney in January of 2002.

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National street gangs like the Bloods, the Crips and the Latin Kings and local sets like Sex, Money, Murder and the notorious Perez organization from Camden have been subject to the use of new tools by federal law enforcement. For the first time, the RICO statute was used here in New Jersey against a street gang and its members to remove an entire gang from a city neighborhood. For the first time, a gun dealer in Ohio was indicted in New Jersey with the street gang members he armed with illegally sold handguns from his store over 600 miles away.

No District in the country has placed more resources on the problem of human trafficking or gotten better results: Decades long prison sentences without parole for women who trafficked teenage girls into New Jersey and forced them into prostitution for their own profit; sure and swift punishment for those who traffic dozens of young women into New Jersey to exploit them for profit as nude dancers. These cases send a strong message to everyone that no form of slavery will be permitted in this state and that those who profit from these actions will be punished.

Every type of white collar criminal learned that New Jersey was not a place to try to ply your trade: A sentence of a dozen years for the Chairman of the former fraud ridden Cendant Corporation. Bringing Bristol Myers Squibb to justice for defrauding shareholders. Finally slowing the flood of taxpayer dollars out of the scandal ridden University of Medicine and Dentistry of New Jersey (UMDNJ). Ending the practice of the artificial hip and knee industry paying doctors tens of millions of dollars in illegal kickbacks and costing the Medicare system untold hundreds of millions of dollars.

None of this work could have been accomplished without the fabulous partnership between the office and our federal partners at the FBI, DEA, ATF, ICE, Secret Service, Postal Inspection Service, Department of Labor-OIG, HHS-OIG, DCIS and IRS-CID. None of this work could have been done without a group of extraordinary AUSAs. The roster of subsequent career accomplishments by the AUSAs who have served during this last seven years is unprecedented. One has served as Counsel to the Governor, NJ Attorney General and, now, Chief Justice of the NJ Supreme Court. One now serves as New Jersey's first State Comptroller. Two serve as county prosecutors, the chief law enforcement officers in their counties. Two have served as First Assistant NJ Attorney General and one as the head of the NJ Division of Criminal Justice. One serves on the U.S. 3rd Circuit Court of Appeals, with one each serving as a U.S. District Court Judge and a U.S. Magistrate Judge. Five have been appointed to New Jersey Superior Court judgeships. The quality of the work done by the office is matched by the quality of the people who have served in this Administration.

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