Office of The Attorney General
- Anne Milgram, Attorney General
Division of Criminal Justice
- Deborah L. Gramiccioni, Director

TRENTON – Attorney General Anne Milgram and Criminal Justice Director Deborah L. Gramiccioni announced that the Division of Criminal Justice filed 966 cases in 2008 by indictment or accusation, a 47 percent increase over 2007. The cases involve more than 1,200 defendants.

It was the second straight year of big increases. The 2007 total of 658 cases was 11 percent above 2006.

Cases were up across the board in 2008, including a 107 percent increase for the Gangs & Organized Crime Bureau, a 61 percent increase for the Major Crimes Bureau, and a 21 percent increase for the Corruption Bureau. The Office of Insurance Fraud Prosecutor, which consistently ranks as one of the most productive insurance fraud prosecution offices in the U.S., logged a 19 percent increase in 2007, and edged out the 2007 total by one case in 2008.

These totals were reported for indictments and accusations filed by the bureaus:

“I’m proud of the Division of Criminal Justice and the members of each of its bureaus for the volume of cases filed and for the quality of those cases,” said Attorney General Milgram. “We are focusing our resources to achieve the maximum impact for the people of New Jersey.”

“We filed important cases last year, from our Corruption Bureau’s work in prosecuting Sharpe James with federal authorities and our own prosecution of Mims Hackett Jr. for official misconduct, to the strong efforts of our Gangs & Organized Crime Bureau in targeting the leaders of some of the most violent gangs in New Jersey,” Milgram added. “In addition, at a time when many residents are hurting financially, our Major Crimes Bureau and Office of Insurance Fraud Prosecutor are prosecuting defendants whose fraudulent conduct caused major losses for victims or, in other cases, hurt individuals or the state through higher premiums and losses to vital programs such as Medicaid and NJ FamilyCare.”

“It is an achievement to have charged nearly 1,000 cases last year,” said Director Gramiccioni. “Prosecuting corruption and fighting gangs continue to be top priorities for the Division of Criminal Justice, and we have achieved great success in those areas. We are also focusing on more complex white collar crime cases, including money laundering and mortgage fraud cases.”

“Each of the cases we charged is the product of thorough investigative work and careful legal preparation by our deputy attorneys general, detectives, civil investigators, analysts and support staff,” added Director Gramiccioni. “I commend their outstanding work, which was frequently conducted in partnership with the State Police and other law enforcement and government agencies.”

Corruption Bureau

In addition to successfully prosecuting former mayor Sharpe James of Newark with the U.S. Attorney’s Office, the Division of Criminal Justice Corruption Bureau filed and resolved a number of important cases, including these:

• $ Mims Hackett Jr., the former Orange mayor and former state assemblyman, was sentenced to five years in state prison in a case brought by the Corruption Bureau in which Hackett pleaded guilty to official misconduct for fraudulently billing the City of Orange for more than $5,000 in travel expenses he never incurred.
• $Former state assemblyman Neil Cohen was indicted in December on official misconduct and child pornography charges for allegedly using computers in the 20th Legislative District office to view child pornography and print copies of child pornography that he left around the office.
• $Department of Corrections administrator Gerald T. Kennedy was indicted in April for allegedly rigging bids, taking kickbacks and engaging in fraud in connection with $678,000 in state contracts.
• $ Former Irvington mayor Michael Steele was indicted in June for allegedly taking at least $120,000 in kickbacks for rigging contracts as business administrator for the Irvington Board of Education.
• $An ex-principal at H.B. Wilson Elementary School in Camden and his top aide pleaded guilty to stealing $14,000 in field trip funds and attempting to steal $25,000 in wages for fictitious meetings.
• $ In November, former Blairstown Township committeeman Ray Davis was sentenced to three years in prison for stealing $46,000 he diverted as chair of the $2.6 million municipal complex project.
• $ In October, the former CEO of a private education services corporation was sentenced to three years in prison for fraudulently overbilling New Jersey school districts in excess of $1.3 million.
• $Former chief judge Wanda Molina and former court administrator Virginia Pagan of the Jersey City Municipal Court were indicted in July for allegedly fixing parking tickets.
• $Two Bergenfield Borough Council members were indicted in December for allegedly forging resignations of fellow members of the borough’s Democratic committee before a special election.

Gangs & Organized Crime Bureau

Operation Broadway – A July indictment charged 15 members of the Nine Trey Headbustas gang, which controlled drug dealing in the Broadway section of Camden with violence and intimidation. The Bureau conducted the investigation with the High-Intensity Drug Trafficking Area Joint Camden Task Force.

Operation Swarm – In September, 12 members of the Paterson-based Nine Trey Hillside Beehive set of the Bloods, including its two top leaders, were charged in an investigation by the State Police, Division of Criminal Justice and Department of Corrections’ Special Investigations Division. The investigation also uncovered smuggling of drugs into state prisons.

Sex Money Murder – During 2008, the Bureau obtained guilty pleas and prison sentences for 25 out of 32 members of the violent Sex Money Murder set of the Bloods gang who were indicted in 2007. The two top leaders in Mercer County received prison sentences of 13 years and 12 years. A gang member from Pemberton faces a 40-year sentence after pleading guilty in a separate investigation.

Nine Trey – Prosecutions of the Nine Trey Gangsters set of the Bloods continued in 2008, with 27 of the 46 defendants indicted in 2007 pleading guilty and being sentenced to 5 to 16 years in prison.

CeaseFire – Bureau attorneys have been embedded in the Essex and Camden county prosecutors’ offices under the CeaseFire program, which seeks to reduce gun violence through aggressive prosecution of defendants involved in non-fatal shootings. They obtained 117 indictments and accusations for shootings, drug and weapons offenses and other crimes.

Camden Violent Crime Task Forces – Many attorneys and detectives in the Bureau have been working on Governor Corzine’s Safe Streets and Neighborhoods Camden Violent Crime Task Forces, which were initiated in June 2008. These multi-agency task forces have made 306 arrests for crimes including murder, assault with a firearm, drug and gun trafficking offenses, and armed robbery. During task force investigations, 40 firearms were seized, including 13 assault weapons, along with significant quantities of narcotics.

E-Trace Program – The Bureau indicted five men for trafficking guns from Pennsylvania into New Jersey as a result of a partnership with the State Police and U.S. Department of Alcohol, Tobacco, Firearms and Explosives that utilizes ATF’s E-trace system for tracking guns used in crimes.

State v. Coppola – Through a cooperative effort of the Bureau and the U.S. Attorney’s Office in Brooklyn, captured fugitive Michael J. Coppola, a Genovese Crime Family capo, was indicted in the Eastern District of New York on charges of racketeering and racketeering conspiracy that include, as a predicate act, the 1977 execution-style murder of John "Johnny Cokes" Lardiere.

Winters Prosecution – Former Clayton Borough police chief Frank Winters pleaded guilty in September to stealing from Mothers Against Drunk Driving and his police department. He was sentenced to seven years in prison and ordered to pay $180,000 in restitution to MADD. The Bureau investigated and prosecuted the case with the State Police Organized Crime Control Bureau South.

Major Crimes Bureau

The 514 cases filed by the Major Crimes Bureau included mortgage fraud, tax fraud, securities fraud, and labor fraud cases filed by the Financial Crimes Unit; prosecution of a major gambling ring by the Casino Prosecutions Unit; and an investigation spearheaded by the Environmental Crimes Unit that led to charges in the dumping of medical waste on the beaches of Avalon last summer.

State v. McFarland – An intensive investigation by the Environmental Crimes Bureau, the Avalon Police and the Cape May County Prosecutor’s Office resulted in the arrest and subsequent indictment of a Pennsylvania dentist, Thomas McFarland, for allegedly dumping the needles and other medical-type waste that washed up on the beach in Avalon during the last week of August 2008.

Operation High Roller – The Casino Prosecutions Unit obtained an indictment in April charging 24 members of a multimillion-dollar sports betting ring that operated inside the Borgata Hotel Casino poker room. Guilty pleas were obtained from 17 of the defendants, including the two leaders of the ring, Andrew Micali and Jack Buscemi, Jr. The leaders each face up to five years in state prison.

State v. Spiro Pollatos, et.al. – A Monmouth County man, Spiro Pollatos, led others in a mortgage fraud scheme involving the theft of $2.7 million. Pollatos pleaded guilty in October to first-degree money laundering and faces up to 15 years in prison. He must pay full restitution. His girlfriend pleaded guilty in June to second-degree money laundering and faces 10 years in prison.

State v. Jeffrey Southard – Jeffrey Joseph Southard of Pittsgrove allegedly stole more than $1.3 million from investors. In December, he was arrested by bureau detectives and the FBI on charges of first-degree money laundering, theft and securities fraud. He is being held in a federal facility.

State v. Victoria Rivera – A Bergen County woman and her boyfriend were sentenced to 10 years and three years in prison, respectively, for stealing $828,000 by filing fraudulent state tax returns.

State v. Jeffrey Scott Lafferty – Lafferty was sentenced to 10 years in state prison for stealing approximately $790,000 from clients of his investment firm, which had a mailing address in Red Bank and offered specialized financial services for podiatrists. The case was investigated by the New Jersey Bureau of Securities, the Division of Criminal Justice and federal authorities.

Office of Insurance Fraud Prosecutor

In 2008, OIFP charged 182 defendants. Defendants charged by accusation were up 9 percent from 2007. OIFP obtained fines, judgments, penalties and restitution orders totaling more than $41 million, representing a 220-percent increase over 2007, and imposed 776 civil insurance fraud sanctions, up 3 percent from 2007. The Medicaid Fraud Control Unit assisted in national Medicaid fraud settlements involving pharmaceutical companies that resulted in recoveries of more than $13 million for New Jersey for its Medicaid program in 2008.

Operation PharmScam – In January 2008, 14 people were charged, including the owners of a pharmacy and a clinic in Essex County, in an ongoing investigation into schemes in which completed prescription forms for HIV/AIDS drugs and other expensive medicines were bought from indigent patients so Medicaid could be billed for drugs that were never dispensed. The total fraud is estimated to have exceeded $2 million. The clinic owner, Bryan X. Chandler, pleaded guilty to health care claims fraud, as did two pharmacy operators who were charged separately, Abdul Bari and John Borges. Bari was sentenced to three years in prison and ordered to pay $500,000 in restitution and fines. Chandler and Borges face sentences of three to five years in prison under their pleas.

State v. Irwin B. Seligsohn, et al. – In February, Irwin B. Seligsohn was sentenced to three years in prison, becoming the first New Jersey lawyer to be sent to prison for the illegal use of runners. Racketeering and conspiracy charges were filed against Seligsohn, his law partner, their firm, and 47 other individuals in connection with the firm’s use of runners to recruit individuals to feign auto accident injuries. To date, 26 defendants, including both attorneys and the firm, have pleaded guilty.

State v. Touch of Life Home Health Care Agency, et al. – In December, the two owners of a Newark home health care agency, Touch of Life, and their office coordinator pleaded guilty to fraud charges. An OIFP investigation determined they defrauded Medicaid out of almost $1 million by billing Medicaid for services that were not provided and services that did not qualify for reimbursement.

# # #