NEWTON, NJ (Sussex County) — A Sussex County man Thursday pleaded guilty to receiving more than $1.2 million in stolen funds in an international business email compromise (BEC) scheme targeting businesses throughout the United States, according to Attorney General Matthew J. Platkin.
The conviction is the first to be obtained under the Attorney General’s new Office of Securities Fraud and Financial Crimes Prosecutions (OSFFCP), which was established under the Division of Criminal Justice in January to enhance and expand the State’s existing efforts to prosecute major financial crimes in New Jersey.
Robert J. Herburger, Jr., 63, of Newton pleaded guilty to second-degree receiving stolen property in a hearing before Superior Court Judge Thomas J. Critchley in Sussex County. Herburger also pleaded guilty to second-degree unlawful possession of an assault rifle and third-degree certain persons not to have weapons, Platkin said.
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. Herburger will also be required to pay restitution to the victims of the scheme, Platkin said.
Sentencing is scheduled for June 30, 2023, Platkin said.
BEC scams use fraudulent email messages purportedly from a known source to trick businesses and other entities into wiring payments for fees for services never rendered.
In pleading guilty, Herburger admitted he incorporated fictitious businesses for the purpose of opening associated bank accounts in order to receive monies that he knew were stolen. From November 3, 2017 through July 5, 2018, Herburger received approximately $1,210,377 in monies stolen 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 proceeds for himself.
“Our Office of Securities Fraud and Financial Crimes Prosecutions was created to combat criminal financial schemes like this that defraud billions of dollars from businesses, government agencies, and financial institutions each year,” Platkin said. “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.”
“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 Legal Chief Pablo Quiñones 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.”
During the course of the investigation, DCJ detectives identified a total of 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.
During the plea hearing, Herburger also admitted that at the time of his arrest, he was unlawfully in possession of an assault rifle, and further admitted that he was prohibited from owning weapons due to his prior criminal history.