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camden county, n.J., man convicted for $1.2 million phony pizza shop investment scam, other offenses



FOR IMMEDIATE RELEASE

November 27, 2013


 

CAMDEN, N.J. — A federal jury convicted a Camden County, N.J., man today for allegedly defrauding an investor out of approximately $1.2 million he claimed would be invested in a pizza shop, then laundering that money, failing to report it to the IRS and threatening the victim to keep quiet about his crimes, U.S. Attorney Paul J. Fishman announced.

Giovanni Arena, 58, of Laurel Springs, N.J., was found guilty of 15 counts of mail fraud, eight counts of money laundering, three counts of failure to file income tax returns and one count of tampering with witnesses following a seven-day trial before Chief U.S. District Judge Jerome B. Simandle in Camden federal court. The jury deliberated less than four hours before delivering the guilty verdicts. Arena was acquitted on seven counts of mail fraud and one count of money laundering.

According to documents filed in this case and the evidence at trial:

Arena’s scheme defrauded a single investor of approximately $1.2 million from 2004 through 2008. Arena, who had operated pizza restaurants in the past, enticed the victim to send checks and cash through the U.S. mail to invest in the purchase of a pizza shop in southern New Jersey. Rather than using the money to buy a restaurant, Arena purchased luxury automobiles – including a Maserati Coupe and Chevrolet Camaro – gambled at Atlantic City Casinos and paid his living expenses.

The jury reviewed casino records that showed the defendant spent many hours at the gaming tables, losing more than $700,000 in four years of Atlantic City gambling. During the trial, the jury watched surveillance video of the defendant buy in at a black jack table using $81,000 in cash he brought to the table in a shopping bag.

In addition, Arena willfully did not file his individual tax returns for tax years 2006, 2007
and 2008, failing to report hundreds of thousands of dollars in income to the IRS. After federal agents served search warrants on Arena’s property during the course of the investigation, Arena instructed the victim investor to lie to federal investigators and made threatening statements, saying, “you better not put me in trouble because if you put me in trouble, I’ll put you in trouble.”

Each mail fraud count carries a maximum potential penalty of 20 years in prison and a $500,000 fine. Each money laundering count carries a maximum potential penalty of 10 years in prison and a $250,000 fine or twice the value of the property involved in the transaction. Each failure to file tax returns count carries a maximum potential of one year in prison and a $100,000 fine or twice the gain resulting from the offense or twice the loss to any victim. The tampering with a witness or victim count carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for March 18, 2014.

U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen in Newark, and inspectors of the U.S. Postal Inspection Service, under the direction of Inspector in Charge David W. Bosch, Philadelphia Division, with the investigation leading to today’s verdict.

The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney’s Office Criminal Division in Camden.

13-453                                                   

Defense counsel: Brian S. O’Malley Esq., Haddon Heights, N.J.

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