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Former Convergex Global Markets CEO Pleads Guilty For Role In Securities And Wire Fraud Scheme

August 9,2018

the staff of the Ridgewood blog

Short Hills NJ, The former Chief Executive Officer of ConvergEx Global Markets Limited (CGM Limited) pleaded guilty this afternoon in Newark federal court for his role in a scheme to commit securities and wire fraud from 2006 through 2011.

U.S. Attorney Craig Carpenito of the District of New Jersey, Assistant Attorney General Brian A. Benczkowski for the Justice Department’s Criminal Division, Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office, and Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service (USPIS) made the announcement.

Anthony Blumberg, 53, of Short Hills, New Jersey, pleaded guilty before Chief U.S. District Judge Jose L. Linares to Count One of a superseding indictment charging him with conspiracy to commit securities and wire fraud. Sentencing is scheduled for Dec. 5, 2018.

According to court documents, CGM Limited was a wholly owned subsidiary of ConvergEx Group LLC (ConvergEx Group). As part of his plea today, Blumberg admitted that clients placed orders to buy or sell securities with G-Trade Services LLC and ConvergEx Limited, subsidiaries of ConvergEx Group that offered global trading services to clients, which in turn routed orders to CGM Limited. Blumberg also admitted that Traders at CGM Limited executed the orders and sometimes added a “spread,” (a mark-down on the sale of a security or a mark-up on the purchase of a security) to the prices they had obtained for non-fiduciary clients.

To hide the fact that spread had been taken, on several occasions from 2007 to 2011, Blumberg and traders acting under his direction, acting in response to requests by clients for information that could reveal the existence of spread, sent false reports (known as “time and sales reports”) to these clients. The false time and sales reports contained fabricated details regarding the individual transactions, or “fills,” executed during the course of a day to complete a client’s orders, including false information concerning the number of shares involved in a fill, the time at which the fill was executed, and the price at which shares were either purchased or sold.

Blumberg also admitted that he and his conspirators agreed to violate a client’s instructions to provide real-time transactional data through an immediate data feed with details of trades that CGM Limited executed for the client by providing “batch fills” that hid the actual information the client sought.

Blumberg is the fourth individual to plead guilty as a result of the investigation into ConvergEx Group and CGM Limited’s practices. On Dec. 18, 2013, CGM Limited pleaded guilty to conspiracy to commit securities and wire fraud before Judge Linares. On the same day, ConvergEx Group entered into a deferred prosecution agreement. Collectively, the two ConvergEx entities paid $43.8 million in criminal penalties and restitution.

The case is being investigated by the FBI’s Washington Field Office and the Washington, D.C. and New York offices of the USPIS. The case is being prosecuted by Trial Attorney Gary A. Winters and Assistant Chief Justin D. Weitz of the Criminal Division’s Fraud Section and by Assistant U.S. Attorney Paul Murphy, Chief of the U.S. Attorney’s Office Economic Crimes Unit in Newark. The Department appreciates the substantial assistance of the Securities and Exchange Commission.

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Former New Jersey Corrections Officer Pleads Guilty To Receipt Of Child Porn

July 30,2018

the staff of the Ridgewood blog

Lodi NJ,  A former officer with the N.J. Department of Corrections today admitted receiving images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

Stephen Salamak, 38, of Lodi, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to an indictment charging him with receipt of child pornography.

According to documents filed in the case and statements made in court, Salamak used email to seek and obtain images of child pornography, including images of prepubescent children.

The receipt of child pornography charge carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Salamak will be required to register as a sex offender. Sentencing is currently scheduled for Nov. 15, 2018.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Danielle Alfonzo Walsman, Chief of the U.S. Attorney’s Office Public Protection Unit in Newark.

 

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Ocean County Lawyer Who Hosted Radio Show on Elder Law Pleads Guilty to Stealing Millions of Dollars from Elderly Clients

July 29,2018

the staff of the Ridgewood blog

Trenton NJ,  Attorney General Gurbir S. Grewal announced that a prominent Ocean County attorney who hosted a radio show and taught seminars on elder law pleaded guilty today to stealing millions of dollars from elderly clients of his law firm and laundering the money through various bank accounts, including his attorney trust and business accounts. The victims generally did not have close relatives to guard their interests and in some cases suffered from dementia.

Robert Novy, 66, of Brick, N.J., pleaded guilty today to first-degree money laundering before Superior Court Judge Michael T. Collins in Ocean County. Under the plea agreement, the state will recommend that Novy be sentenced to 10 years in state prison, including three years and four months of parole ineligibility. In pleading guilty, Novy admitted that he stole millions of dollars from law clients. The state’s investigation revealed that he stole nearly $3 million from at least two dozen victims.  Novy is scheduled to be sentenced on Sept. 28.

Novy must pay restitution to his victims out of two funds totaling $4 million that are being created using assets previously seized from him by the state: one fund of $3 million to provide restitution to client victims, heirs, estates and trusts already identified through the state’s investigation, and a second fund of $1 million to provide restitution, with court approval, for others not previously identified who come forward with proof that they were victims of thefts.  Novy also must surrender his license to practice law in New Jersey and pay $500,000 to the state as an anti-money laundering profiteering penalty.

Deputy Attorneys General Peter Gallagher and William Conlow prosecuted Novy and took the guilty plea for the Division of Criminal Justice Financial & Computer Crimes Bureau. The guilty plea is the result of an investigation by the Division of Criminal Justice Financial & Computer Crimes Bureau, assisted by the New Jersey Division of Taxation Office of Criminal Investigation.

As an expert in elder law, Novy hosted a bi-monthly radio program “Inside the Law,” focusing on topics of concern to senior citizens. He was arrested on Oct. 18, 2016.  Detectives executed a search warrant at the time at his firm, Novy & Associates, on Ridgeway Avenue in Manchester, seizing billing records and other evidence. The Attorney General’s Office obtained court orders freezing over $4 million in assets held by Novy and his firm and appointing a trustee to oversee the firm’s business operations.

“By exploiting elderly clients and stealing their life savings, Novy sank to the lowest levels of greed, dishonesty, and callousness,” said Attorney General Grewal. “This guilty plea serves justice by ensuring that Novy will face a substantial prison sentence and that his victims will receive restitution from assets already seized from him by the Division of Criminal Justice.”

“A fundamental concern in this case was to secure restitution for Novy’s many victims, including his elderly clients and the heirs and beneficiaries who had millions of dollars stolen from them,” said Director Veronica Allende of the Division of Criminal Justice.  “Through this guilty plea, we have achieved that goal and have sent a strong message that lawyers and others who hold positions of trust will be held accountable if they betray that trust and steal from those who are vulnerable.”

The case was referred to the Division of Criminal Justice by Ocean County Surrogate Jeffrey W. Moran. Novy also was investigated by the New Jersey Office of Attorney Ethics, which issued an ethics complaint against him on Jan. 26, 2016, and assisted the Division of Criminal Justice.

The investigation revealed that Novy stole funds from elderly and deceased clients who often did not have a close relative to claim their estate or challenge Novy’s actions.  He used the stolen funds for his own benefit, paying personal and business expenses.  Novy gained control through wills, powers of attorney, and trust documents, making himself the sole financial decision-maker for the clients. When clients had sizeable assets in the form of an annuity or life insurance policy, Novy directed insurance companies to redeem the policies and send the money directly to him. In some cases, when challenged by trustees or relatives about particular funds that had been withdrawn from client accounts, Novy claimed they were “administrative errors” and repaid the funds.

The Division of Criminal Justice obtained a state grand jury indictment on April 30, 2018 charging that Novy engaged in three different schemes by which he stole funds from clients:

  1. In one scheme, Novy simply transferred funds from his clients’ personal bank accounts or from his clients’ liquidated personal assets into his own bank account.
  2. In the second scheme, Novy transferred funds from his clients’ personal accounts or liquidated assets into IOLTA (Interest on Lawyer Trust Account) sub-accounts that he controlled.  The powers of attorney executed by the victims legally required Novy to place their assets into independent trust funds selected by the victims that would manage their assets, so the act of placing the funds into accounts that he controlled constituted a theft by Novy.
  3. In the third scheme, Novy transferred client funds from various accounts – including the clients’ personal accounts, the clients’ IOLTA sub-accounts, or the firm’s attorney trust account – into the firm’s operating and disbursement accounts.  Novy excessively billed the clients for power of attorney fees without any supporting invoices.

Novy was charged with money laundering because he engaged in transactions involving the stolen funds and the various accounts – primarily his attorney trust accounts and/or attorney business accounts – by which he concealed the source of the stolen funds and used them to promote his criminal activities.

Deputy Attorneys General Gallagher and Conlow prosecuted the case for the Division of Criminal Justice Financial & Computer Crimes Bureau under the supervision of Deputy Bureau Chief Mark Kurzawa and Deputy Division Director Christine Hoffman. The case was investigated by Detective Michael Arduini, Detective Michael Woods, Lt. Anne Hayes, Investigator Jordan Thompson, Investigator Wayne Cummings and Analyst Terri Drumm.  Deputy Attorney General Derek Miller and Investigator Debra Maiorano handled the state’s forfeiture action. Attorney General Grewal thanked the Ocean County Surrogate, the New Jersey Office of Attorney Ethics and the Division of Taxation Office of Criminal Investigation for their valuable assistance in the investigation. Special Agents Mike Mullane and Will Makar investigated for the Division of Taxation Office of Criminal Investigation.

Persons, relatives, heirs, estates or trusts who believe they are victims of Novy and can offer proof of damages should write to Deputy Attorney General Kara R. Webster in the State Office of Victim Witness Advocacy at WebsterK@njdcj.org, or if they do not have email access, phone (609) 376-2444.

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Ex-Motor Vehicle Commission Clerk Pleads Guilty and Faces Prison for Selling Drivers Licenses from Lodi MVC

MVC

April 17,2018

the staff of the Ridgewood blog

Lodi NJ,  Attorney General Gurbir S. Grewal announced that a former New Jersey Motor Vehicle Commission clerk pleaded guilty today to operating a scheme in which he accepted tens of thousands of dollars in payments in return for allowing over 200 people to obtain permits and licenses without passing required exams.

Rodman Lora, 39, of Ridgewood, N.Y., a former clerk at the Lodi MVC Agency, pleaded guilty today to charges of conspiracy (2nd degree), computer criminal activity (2nd degree), and tampering with public records (3rd degree) before Superior Court Judge James J. Guida in Bergen County. The state will recommend that Lora be sentenced to seven years in state prison, including two years and four months of parole ineligibility. He must forfeit his pension and will be permanently barred from public employment. Lora was charged in an investigation by the Division of Criminal Justice Specialized Crimes Bureau, the New Jersey Motor Vehicle Commission and the Bergen County Sheriff’s Office. The investigation revealed that Lora altered MVC driver records for over 200 people between 2014 and 2016, enabling them to obtain various permits and licenses without having passed the mandatory written and/or driving exams, including commercial driver’s licenses with school bus and HazMat endorsements. In return, he received cash payments averaging over $700 per license or permit.

The following two men were indicted with Lora and pleaded guilty today before Judge Guida to tampering with public records (3rd degree):
Luis Tiburcio, 46, of Passaic, N.J., was paid to act as a “runner” for Lora and bring him customers in the illegal scheme. The state will recommend that he be sentenced to three years in state prison.
Masood Ahmadi, 55, of Lake Hiawatha, N.J., is the owner of Ideal Transportation, a school bus company operating in northern New Jersey. He sent people seeking commercial driver’s licenses to Lora to obtain licenses through the scheme, including relatives and persons seeking employment with his company. The state will recommend that he be sentenced to probation.

Deputy Attorney General Christopher J. Keating prosecuted the defendants and took the guilty pleas for the Division of Criminal Justice. Sentencing for the defendants is scheduled for June 15.
“When motor vehicle clerks engage in fraud involving driver’s credentials, public safety is compromised,” said Attorney General Grewal. “It is particularly alarming that school bus drivers were being licensed illegally. My office will aggressively prosecute the illegal brokering and sale of driver’s licenses.”

“We will continue to work with the MVC to protect the public by identifying and charging those who engage in this type of fraud,” said Director Elie Honig of the Division of Criminal Justice. “Through this far-reaching investigation, we charged 70 people, including numerous customers of this illicit scheme.”

“The MVC does not tolerate any type of criminal activity whatsoever, either from customers or employees,” said Acting MVC Chair and Chief Administrator Sue Fulton. “This case is a prime example of our efforts to weed out fraud and abuse, enhancing security throughout the entire organization. We will continue to work with our partners in law enforcement to ensure the quality and integrity of our motor vehicle services, and the safety of New Jersey drivers.”
Nine defendants were indicted with Lora, including the two who pleaded guilty today and seven others. Two previously pleaded guilty to tampering with public records and face sentences of probation: Carlos Vicuna, 37, of Elizabeth, N.J., was a “runner” for the scheme, and Jose Lora, 45, of Newark, N.J., Lora’s brother, received a commercial driver’s license without passing the written exam. Charges are pending against one defendant and four others were admitted into the Pre-Trial Intervention Program.

Beyond the indictment charging those 10 defendants, the investigation led to charges against 60 other customers and runners, bringing the total defendants to 70. Eight of those 60 pleaded guilty to tampering with public records and face probation, and 52 were admitted into the Pre-Trial Intervention Program.

Deputy Attorney General Christopher Keating presented the indictment to the state grand jury for the Division of Criminal Justice Specialized Crimes Bureau. The investigation was conducted by Detective Cecil Boone, Sgt. Kelly Howard, Detective Jessica Marcacci and Analyst Terri Drumm, under the supervision of Sgt. Andrea Salvatini, Lt. Bill Newsome, Deputy Bureau Chief Andrew Johns, Deputy Bureau Chief Jacqueline Smith, and Division of Criminal Justice Deputy Director Jill Mayer.

The Motor Vehicle Commission uncovered the alleged scheme involving Lora and referred the case to the Division of Criminal Justice after an initial internal investigation and audit. Attorney General Grewal thanked the Motor Vehicle Commission’s Division of Security, Investigations & Internal Audit for its referral and valuable assistance. He also thanked the following agencies that assisted in the investigation: Bergen County Sheriff’s Office, New Jersey Department of Education, New Jersey Department of Labor and Workforce Development, New Jersey Department of Treasury-Division of Payroll, Lodi Police Department, and U.S. Department of Homeland Security.

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Roommate Dharun Ravi pleads guilty to charge in Rutgers webcam case

BY SUZANNE RUSSELL
MYCENTRALJERSEY.COM |
USA TODAY NETWORK

NEW BRUNSWICK — A former Rutgers University student whose roommate killed himself after being captured on a webcam kissing another man has pleaded guilty to attempted invasion of privacy.

Thursday’s plea from Dharun Ravi, 24, a former Plainsboro resident, comes after an appeals court last month threw out a 15-count conviction against him in a case that stemmed from the 2010 death of 18-year-old Tyler Clementi.

http://www.northjersey.com/news/roommate-dharun-ravi-pleads-guilty-to-charge-in-rutgers-webcam-case-1.1683763?utm_campaign=Observer_NJ_Politics&utm_content=New%20Campaign&utm_source=Sailthru&utm_medium=email&utm_term=New%20Jersey%20Politics

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Former Glen Rock cop pleads guilty to sexting teen girls, selling surrendered guns

glen_rock_theridgewoodblog

BY ALLISON PRIES
STAFF WRITER |
THE RECORD

A former Glen Rock police officer — whose duties included working with juveniles and handling evidence — admitted Thursday that he sent sexually explicit text messages to two teenage girls and that he pawned guns that were surrendered to the department.

Eric Reamy, 51, of Fair Lawn accepted a pre-indictment plea deal before Judge Susan J. Steele in Superior Court in Hackensack that will likely send him to prison for three to five years.

His sentencing is scheduled for June 24.

Reamy stood with his hands – one bearing a gold wedding band – folded at his waist while admitting that he sent suggestive text messages and naked pictures to two girls, ages 14 and 17. Both youths were involved in complaints that he, as the juvenile officer for Glen Rock police, was investigating.

http://www.northjersey.com/news/former-glen-rock-cop-pleads-guilty-to-sexting-teen-girls-selling-surrendered-guns-1.1522190