TRENTON – Acting Attorney General John J. Hoffman announced that a Laurence Harbor doctor and a co-conspirator were indicted yesterday by a state grand jury on first-degree charges that they allegedly facilitated a sophisticated money laundering scheme from 2005 to 2011 that allowed the physician to hide approximately $3.6 million in income from his medical practices, which resulted in his underpayment of approximately $327,000 in taxes owed to the State of New Jersey.
Dr. Manoj Patharkar, 44, and his co-conspirator, Mohammed Shamshair, 51, of Sayreville, were charged with first-degree conspiracy, two counts of first-degree money laundering, second-degree theft by deception, second-degree misconduct by a corporate official, seven counts of third-degree filing fraudulent tax returns, three counts of third-degree failure to pay taxes, and third-degree tampering with public records or information.
The State also charged the corporations Patharkar owned, Pain Management Associates of Central Jersey (Edison) and Prospect Pain Management Associates (Passaic), with first-degree conspiracy, two counts of first-degree money laundering and other, lesser charges, related to the alleged crimes.
Both men were apprehended today by detectives from the Division of Criminal Justice. They are being held at Middlesex County Jail.
“While the defendants’ alleged scheme was novel and sophisticated, their motive was simple and familiar: greed,” said Acting Attorney General Hoffman. “As evidenced by the litany of charges, we believe these men have woven together a series of serious crimes that have victimized the New Jersey taxpayers.”
“Our indictment of these defendants is proof that our office will vigorously prosecute white-collar crime and that even those sworn to treat the infirm are capable of committing theft,” said Division of Criminal Justice Director Elie Honig. “Stealing is stealing – whether it’s pickpocketing or complicated tax evasion – there is no moral distinction.”
The State is alleging that Patharkar used two separate schemes to launder $3.6 million through his practices, Pain Management Associates of Central Jersey in Edison and Prospect Pain Management Associates in Passaic.
In the first scheme, Patharkar allegedly reduced his income tax obligations by fabricating the existence of employee payroll and wage expenses. According to the indictment, Shamshair secured the personal identifying information (including social security numbers, names, dates of birth, and addresses) of about 28 people. These 28 people became “phantom employees” for both practices. In order to give the scheme a semblance of legitimacy, Patharkar allegedly issued at least 1,574 checks totaling $2,184,642 made payable (or otherwise attributable) to these 28 phantom employees.
In May, the individual that allegedly provided the personal details of the phantom employees, Irfan Raza, 44, of Valley Stream, N.Y., pleaded guilty to second-degree conspiracy in Middlesex County Superior Court in connection with this case. Raza, a certified public accountant, admitted to helping Patharkar and Shamshair launder the doctor’s income in exchange for a cut of the illicit funds.
In the second scheme, Patharkar received approximately 4,310 checks totaling $1,413,511 from various companies and persons, including several national and regional insurance carriers, for medical services he provided. Patharkar allegedly deposited those checks into his personal bank accounts and did not claim those funds on his personal or corporate tax filings.
First-degree crimes carry state prison sentences of up to 20 years in prison and a criminal fine of up to $200,000. Second-degree crimes carry prison sentences of up to 10 years in prison and a $150,000 fine, while third-degree crimes carry prison sentences of five years and a fine of $15,000. The charges announced today are merely accusations and the defendants are presumed innocent until proven guilty.
Deputy Attorney General T.J. Harker coordinated the investigation and presented the case to the grand jury. Lieutenant Lisa Shea and Detectives Kim Allen and John Campanella investigated the case. Detective Campanella also testified in grand jury. Financial analysis was provided by Analysts Kim Geis and Rita Gillis. Investigative support regarding the taxation aspects of the case was provided by Auditor Charlene Singleton of the Department of Treasury, Office of Criminal Investigation. Additional legal and investigative support was provided by Deputy Attorneys General Jillian Carpenter, Lilianne Daniel and Bradford Mueller and Detectives Natalie Brotherston, Cortney Lawrence, Taryn Seidner, Anthony Correll and Analyst Bethany Schussler.