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For Immediate Release:  
For Further Information Contact:
March 9, 2006

Office of The Attorney General
- Zulima V. Farber, Attorney General
Division of Criminal Justice
- Gregory A. Paw, Director

 

John R. Hagerty
609-984-1936

 

Division of Criminal Justice Charges Six North Jersey
Men and Pa Resident with $500,000 Coupon Fraud

TRENTON - Attorney General Zulima V. Farber and Gregory A. Paw, Director, Division of Criminal Justice, announced the unsealing of a State Grand Jury indictment charging six Hudson County residents and a Pennsylvania man with concocting a New Jersey-based, multi-state coupon redemption fraud scheme that netted hundreds-of-thousands of dollars in illegal profits. The Division of Criminal Justice - Financial Crimes Bureau investigation was conducted in conjunction with the Washington D.C.- based Coupon Information Corporation.

“Allegations outlined in the criminal indictment detail an elaborate scheme wherein store owners in four East Coast states were solicited by the defendants to participate in what turned out to be a fraudulent coupon redemption program. The defendants were able to convincingly pull-off the scam and obtain hundreds-of-thousands of dollars in illegal profits from national manufacturer coupon programs,” said Attorney General Farber.

According to Criminal Justice Director Paw, the State Grand Jury indictment charged the seven defendants with First Degree Money Laundering, conspiracy, and theft by deception. The indictment charges the defendants with organizing, directing, and financing a multi-state coupon fraud scheme that netted more than $580,000 in illegally obtained payments on behalf of retail stores ineligible to participate in coupon redemption programs. The defendants are identified as:

  • Shahin Kayed, aka Mustafa, 62, 1500 72nd St., North Bergen, Hudson County. Arrested Jan. 19 in Hudson County. Bail set at $100,000.
  • Rizek Kayed, aka Ricky, 46, 1504 73rd St., North Bergen, Hudson County. Arrested Jan. 19 in Hudson County. Bail set at $200,000.
  • Mohammad Awadalla, aka Mike, 47, 6335 Kennedy Blvd., North Bergen, Hudson County. Arrested Jan. 19 in Hudson County. Bail set at $100,000.
  • Gazi Nassrallah, aka Jino, 43, 7700 Kennedy Blvd., North Bergen, Hudson County. Surrendered to Division of Criminal Justice on Feb. 1. Bail set at $200,000. -more-
  • Siyam Kayed, aka Sammy, 43, 1500 72nd St., North Bergen, Hudson County. Arrested Jan. 19 in Hudson County. Bail set at $150,000.
  • Belal Dalia, 23, 9001 Durham Ave., North Bergen, Hudson County. Surrendered to Division of Criminal Justice on Jan. 23. Bail set at $150,000.
  • Ribhi Mustafa, aka Ray, 29, 924 Unruh Ave., Phila., PA. Surrendered to Division of Criminal Justice on Feb. 1 after initial arrest in Philadelphia. Bail set at $100,000.

Director Paw said the State Grand Jury indictment alleges that from October, 1999 through July, 2004, the defendants contacted at least 54 stores and/or retail outlets in New Jersey, New York, Pennsylvania and Maryland soliciting participation in a coupon redemption “promotion” which would “qualify” the store owners to receive cash payments by redeeming manufacturer coupons. The three-count indictment charges that the defendants did not work for a coupon company and that the stores solicited to participate in the “promotion” were not entitled to coupon redemption funds.

The indictment charges that after unwitting store owners agreed to participate in the purported “promotion,” the defendants prepared store participation applications and sent the forms to various coupon clearing houses which sort coupons for reimbursement by manufacturers. The indictment alleges that the applications grossly inflated the size of the store and the amount of coupon-related sales. In many instances, the stores did not accept manufacturers coupons. Based on the fraudulent submissions, it is alleged that tens-of-thousands of coupons were submitted to clearing houses which issued checks totaling more than $580,000 to the store owners. It is charged that the defendants demanded fifty percent or more of the monies received by store owners.

The investigation was coordinated by Deputy Attorney General William T. McGovern and State Investigator Rick Watson of the Division of Criminal Justice - Financial Crimes Bureau, Money Laundering Section, in conjunction with the Coupon Information Corporation (CIC) - a not-for-profit corporation formed by manufacturers who issue cents-off coupons in the United States. The CIC cooperates with appropriate public authorities in the investigation and prosecution of persons and/or entities engaged in suspected coupon fraud activities. Additional investigative assistance was provided by the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Eastern District of Wisconsin.

The indictment was handed up to Mercer County Superior Court Judge Linda R. Feinberg on Jan. 11 and sealed pending arrest and arraignment of the defendants. The defendants are scheduled to appear before Hudson County Superior Court Judge Kevin Callahan on March 28. If convicted on all counts, the defendants face more than 20 years in state prison and fines exceeding $200,000. An indictment is merely an accusation. The defendants are presumed innocent until proven guilty in a court of law.

Additional information, including a copy of the State Grand Jury indictment, is available via the Division of Criminal Justice Web site at www.njdcj.org.

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