NJ’s newest fraud office announces 1st conviction

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New Jersey Attorney General Matthew Platkin announced May 4 that a Sussex County man pleaded guilty to receiving more than $1.2 million in stolen funds though an international business email compromise (BEC) scheme targeting enterprises around the country.

Robert Herburger Jr.’s conviction is the first made under the Attorney General’s Office of Securities Fraud and Financial Crimes Prosecutions (OSFFCP), which launched in January to enhance the state’s ability to prosecute major financial crimes.

The 63-year-old, of Newton, pleaded guilty to a second-degree charge of receiving stolen property, as well as second-degree unlawful possession of an assault rifle and third-degree certain persons not to have weapons.

The type of scam he admitted to uses fraudulent email messages, purporting to be from a known source, to trick businesses and other entities into wiring payments for fees for services never rendered.

Investigators identified 10 business entities that suffered financial losses in connection with five bank accounts set up and controlled by Herburger. Those victims included law firms, retail corporations, private businesses and financial services providers.

Herburger admitted he incorporated fictitious businesses for the purpose of opening associated bank accounts in order to receive monies that he knew were stolen.

Prosecutors say from Nov. 3, 2017, through July 5, 2018, he received roughly $1.2 million in stolen money through various business email compromise schemes originating outside of the country. The investigation revealed that once the stolen funds were received by accounts opened and controlled by Herburger, he wired the money to foreign bank accounts, keeping a portion of the ill-gotten gains for himself.

Under the terms of the plea agreement, the state will recommend that Herburger be sentenced to five years in state prison, including a 42-month period of parole ineligibility. He will also be required to pay restitution to the victims. That sentencing is scheduled for June 30, 2023.

“Fraudsters operating outside of the U.S. often rely on U.S.-based co-conspirators to cover their tracks by moving stolen money through U.S. banks and then into foreign-controlled bank accounts via international wire transactions,” said Pablo Quinones, legal chief of the Office of Securities Fraud and Financial Crimes Prosecutions. “We are committed to bringing to justice individuals that facilitate foreign BEC schemes from New Jersey to help protect businesses and others from falling prey to such scams.”

Platkin said that OSFFCP was created to combat criminal financial schemes just like this, that defraud money from businesses, government agencies and financial institutions each year.

“Today’s plea underscores our commitment to protecting the public from criminals lurking in cyberspace and holding accountable individuals who serve as cogs that keep these criminal machines in motion,” said Platkin.