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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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Cliffside Park, Man Charged with Distributing Images of Child Sexual Abuse

July 29,2018

the staff of the Ridgewood blog

Cliffside Park NJ,  A Cliffside Park, New Jersey, man was arrested by federal agents today for allegedly distributing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.

George Karkantzelis, 27, was arrested at his home by agents of the Department of Homeland Security, Homeland Security Investigations (HSI). He is charged by complaint with one count of distributing child pornography.

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

Karkantzelis used peer-to-peer file sharing on his computer to distribute files containing images and videos of child sexual abuse, including images of prepubescent children. He made his initial appearance today before U.S. Magistrate Court Judge Steven C. Mannion and was released into third-party custody.

The charge of distributing child pornography carries a mandatory minimum sentence of five years in prison, a maximum potential penalty of 20 years in prison, and a $250,000 fine.

U.S. Attorney Craig Carpenito credited HSI special agents, under the direction of Special Agent in Charge Brian Michael, with the investigation leading to today’s arrest.

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

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

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Oradell Man Admits Role In Multiple Bank Robberies And Robberies Of Liquor Store And Gas Station

Mahwah Bank Robbery Foiled as Getaway Car Crashes

file photo by Boyd loving

July 26,2018

the staff of the Ridgewood blog

Oradell NJ, An Oradell, New Jersey, man today admitted robbing four banks, a liquor store, and a gas station between June 2017 and December 2017, U.S. Attorney Craig Carpenito announced.

Joel Robbins, 47, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with four counts of bank robbery and two counts of Hobbs Act robbery.

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

Robbins robbed the following locations on the dates set forth below:

Bank

Location

Date

Chase Bank Whippany June 6, 2017
Santander Bank Parsippany July 20, 2017
The Liquor Factory Hopatcong October 15, 2017
Chase Bank Edgewater October 25, 2017
Raceway Gas Station Pinebrook November 26, 2017
TD Bank Mahwah December 3, 2017

In the TD Bank robbery, Robbins walked into the bank wearing gray pants, a black jacket, sunglasses, a dark skull cap, and light-colored latex gloves. As he entered the bank, Robbins pulled a bandana over his face. Robbins’s accomplice, Wanda Soel, 52, of Hasbrouck Heights, New Jersey, allegedly waited for Robbins in a Toyota Corolla parked outside the bank.

Robbins pulled a black handgun (later determined to be fake) from his waistband and pointed it at two bank tellers, demanded money from them and warned them not to “make me have to kill you.” The tellers complied and handed Robbins money. Robbins took the money and walked out of the bank, dropping several bills as he departed.

Robbins got into the passenger seat of the Corolla and Soel allegedly drove them away. Nearby law enforcement officers, who had received a report of the bank robbery while it was in progress, pursued the Corolla. Soel allegedly drove into the parking lot of a nearby hotel, where she and Robbins tried to switch places so Robbins could drive. When Soel got out of the Corolla, she tripped and fell, and Robbins drove away without her. Law enforcement officers arrested Soel in the hotel parking lot. Her bank robbery charges are pending.

Robbins drove out of the hotel parking lot but eventually hit a curb, blew a tire, and crashed. Law enforcement officers caught up to the Corolla and arrested Robbins. They recovered U.S. currency sticking out of Robbins’s pants and other cash bills strewn inside the Corolla, along with a fake black handgun. Officers also recovered sunglasses, a bandana, a dark knit cap, and latex gloves from the Corolla, resembling the items Robbins was seen wearing when he robbed the bank. Robbins was wearing a black jacket when he was arrested.

The counts of bank robbery and Hobbs Act robbery with which Robbins is charged each carry a maximum punishment of 20 years in prison and a $250,000 fine.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie, with the investigation leading to the charge. He also thanked the Mahwah Township Police Department for its contribution to the case, as well as the police departments of Hanover Township, Parsippany, Hopatcong, Edgewater and Montville.

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

The charges and allegations against Soel are merely accusations, and she is presumed innocent unless and until proven guilty.

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Former New Jersey Teacher And Summer Camp Employee Admits Production Of Child Pornography

July 17,2018

the staff of the Ridgewood blog

Newark NJ, A Morris County, New Jersey, man today admitted his role in producing images of child sexual abuse, U.S. Attorney Craig Carpenito announced.
Colin M. Skeele, 32, of Florham Park, New Jersey, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to an information charging him with one count of producing child pornography. Skeele was previously arrested and charged by complaint on Aug. 4, 2016.

According to documents filed in this case and statements made in court:
Skeele previously worked as a counselor at a boys’ summer camp in Hardwick, New Jersey, and as a teacher at parochial schools in Boonton, New Jersey, and Stirling, New Jersey.
In 2011, Skeele became Facebook friends with a boy that Skeele met while working as a counselor at a boys’ summer camp in Hardwick, New Jersey. In Facebook messages with the minor, Skeele offered to pay money for the minor to take sexually explicit photographs to send to Skeele. In one instance, Skeele paid the boy approximately $100 to send nude images of himself. Skeele later sent at least one pornographic image of that minor to another minor that had also attended the summer camp.

On multiple occasions in February 2012, Skeele communicated online with individuals located in the Philippines to purchase live child sexual abuse shows, which Skeele viewed via an online video chat service. Instant messages obtained during the investigation revealed that Skeele used an online fund transfer service to purchase live sexual abuse videos of young children.

Anyone with information regarding possible victims of this activity is urged to contact the Department of Homeland Security in Newark, New Jersey, at 973-776-5500.
The charge of producing child pornography to which Skeele pleaded guilty is punishable by a mandatory minimum sentence of 15 years in prison, a maximum potential penalty of 30 years in prison, and a $250,000 fine. Sentencing is scheduled for Oct. 22, 2018.

U.S. Attorney Carpenito credited special agents of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael, with the investigation that led to today’s guilty plea.

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Owner of New Jersey Hedge Fund Sentenced to Six Years in Prison for Defrauding Investors of $4 Million

Golden Globes Nominations

July 16,2018

the staff of the Ridgewood blog

Montclair NJ,  The owner and manager of a New Jersey hedge fund was sentenced today to 72 months in prison for defrauding two investors of $4 million, U.S. Attorney Craig Carpenito announced.
Nicholas Lattanzio, 62, of Montclair, New Jersey, was previously convicted on all counts of an indictment charging him with two counts of wire fraud and two counts of securities fraud following a three-week trial before U.S. District Judge Kevin McNulty, who imposed the sentence today in Newark federal court.

According to documents filed in this case and the evidence at trial:
From June 2013 through November 2014, Lattanzio orchestrated a large-scale scheme through which he, his hedge fund, the Black Diamond Capital Appreciation Fund L.P. (BD Fund), and several other related entities collected millions of dollars in upfront fees from two unsuspecting corporate investors in exchange for the promise of future loans or investment opportunities that did not materialize. Instead of investing the victims’ money as promised, Lattanzio stole the majority of the funds and used them to pay himself more than $500,000 in salary. He used the money for numerous personal expenses, including the purchase of a $1 million home in Montclair, New Jersey, a new Range Rover, a $10,000 diamond ring, and the payment of $500,000 in credit card debt that he incurred for other personal expenses. Lattanzio lied to the victims about the status of their funds to conceal the scheme and mislead them into believing that their investments were safe.

In addition to the prison term, Judge McNulty sentenced Lattanzio to three years of supervised release and ordered him to pay restitution of $3.93 million.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, for the investigation leading to today’s sentencing. He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office, under the direction of Marc P. Berger, and the N.J. Bureau of Securities, within the State Attorney General’s Division of Consumer Affairs, under the direction of Attorney General Gurbir S. Grewal.

The government is represented by Assistant U.S. Attorneys Nicholas P. Grippo and Daniel V. Shapiro of the Economic Crimes Unit, and Assistant U.S. Attorney Peter Gaeta of the Office’s Asset Recovery and Money Laundering Unit.

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A Bergen County, Man Sentenced to 63 Months in Prison for Purchasing Live Webcam Shows of Child Sexual Abuse

July 16,2018

the staff of the Ridgewood blog

Wallington NJ, A Wallington, New Jersey, man was sentenced today to 63 months in prison for purchasing live child sex shows from individuals overseas, U.S. Attorney Craig Carpenito announced.
Stephen Hallett, 67, previously pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with receipt of child pornography. Judge McNulty imposed the sentence today in Newark federal court.
According to documents filed in the case and statements made in court.

Hallett purchased live child sex shows from individuals located in the Philippines. He admitted that on Feb. 4, 2015, he received a webcam transmission of a minor engaging in sexually explicit conduct. Hallett also admitted purchasing live webcam shows of children engaging in sexually explicit conduct on dozens of occasions between 2013 and 2015.

In addition to the prison term, Judge McNulty sentenced Hallett to five years of supervised release and imposed a $5,000 Justice for Victims of Trafficking Act assessment.
U.S. Attorney Carpenito credited special agents of U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations (HSI), under the direction of Special Agent in Charge Brian Michael in Newark, with the investigation leading to today’s sentencing.

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

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Bergen County, New Jersey, Man Admits Conspiring To Defraud The IRS By Filing False Corporate Tax Returns

IRS_logo

July 7,2018

the staff of the Ridgewood blog

Elmwood Park NJ, A Bergen County, New Jersey, man today admitted conspiring with his father to file false federal tax returns for shell companies, resulting in $191,953 in fraudulent refunds, U.S. Attorney Craig Carpenito announced.
Jason Crespo, 35, of Elmwood Park, New Jersey, pleaded guilty before U.S. District Judge Jose L. Linares in Newark federal court to an information charging him with one count of conspiring with Jose Crespo, his father, to defraud the IRS by filing false corporate tax returns and cashing the resulting fraudulent refund checks.

According to the documents filed in this case and statements made in court:
Between 2010 and 2012, Jason and Jose Crespo filed numerous false federal corporate tax returns – IRS Forms 1120 – for fake businesses, knowing that the businesses were not real and that the credits claimed on the tax returns were false. The Crespos took advantage of fuel excise tax credits offered under federal tax law. The federal government taxes gasoline, diesel fuel, and certain other types of fuel, but certain commercial uses of these fuels are nontaxable. Businesses that purchase fuel for a nontaxable use can claim a tax credit by filing a “Credit for Federal Tax Paid on Fuels” – IRS Form 4136.
In one instance Jason and Jose Crespo filed a federal corporate tax return for 2008 for Jason Cleaning Service Corp. that falsely claimed a fuel excise tax credit of $14,556 and a resulting refund of $10,592. In fact, Jason Cleaning Service Corporation was a shell company and the fuel excise tax credit and other tax return numbers were false. Jason Crespo received and cashed the $10,592 refund check at a check-cashing facility in Guttenberg, New Jersey. He cashed many other refund checks for similar false tax returns at this same facility.

Jose Crespo pleaded guilty on Sept. 11, 2017, before Judge Linares to engaging in the fuel excise tax credit scheme and another tax fraud scheme, both of which claimed fraudulent refunds from the IRS of approximately $1.5 million. Jose Crespo was sentenced on Dec. 20, 2017, to three years in prison.

Marilyn Crespo, Jose Crespo’s wife, pleaded guilty on March 1, 2018, before Judge Linares to engaging in the same fuel excise tax credit scheme and causing a loss to the IRS of $286,742. She was sentenced June 27, 2018, to one year and one day in prison.

The filing a false tax return count carries a maximum potential penalty of three years in prison, and a potential $250,000 fine, or twice the gross gain or loss from the offense. Jason Crespo’s sentencing is set for Oct. 4, 2018.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Bryant Jackson, with the investigation leading to today’s guilty plea.