Phony invoice scheme discovered

Jersey City resident charged with wire fraud for alleged embezzlement

A former program manager of an international freight forwarding company has been arrested on charges that he allegedly embezzled more than $550,000 from the company, according to United States Attorney Craig Carpenito.

Morten Nielsen, 36, a Danish national living in Jersey City, is charged with two counts of wire fraud.

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According to documents filed in this case and statements made in court, as program manager for the unnamed international freight forwarding company in Edison called Company A in the complaint, Nielsen was responsible for the company’s contract relating to the Egyptian Foreign Military Sales program (EFMP).

The program, between the government of Egypt and the U.S. Department of Defense (DOD), facilitates the sale and repair of military equipment from the DOD to Egypt.

Nielsen was responsible for ensuring all safeguards and logistics for the transportation of certain classified material between the United States and Egypt and for submitting paperwork and billing invoices on behalf of Company A to the Egyptian government.

Once approved, those invoices were forwarded to the DOD for payment to the company.

According to the Sept. 30 complaint, Nielsen allegedly sent fraudulent invoices on behalf of his employer to the Egyptian government that included charges for services performed by a fake company he created, “Summit Transportation.”

“Summit Transportation … was a company created by NIELSEN to facilitate his scheme to defraud Company A,” states the complaint. “Summit Transportation purportedly has no employees or office space, did not transact any business, and shared an address with Nielsen’s home address in Jersey City, New Jersey.”

Alleged shams and scams

This sham company allegedly did not perform any services for Nielsen’s employer.

Nielsen allegedly caused Company A to submit approximately 84 fraudulent invoices to the Egyptian Program Office (EPO) purporting to bill the EPO for logistical and transportation services Company A and its subcontractors performed in support of the EFMP.

Some of these invoices allegedly contained three fraudulent charges from Summit Transportation as well as charges from legitimate subcontractors who actually performed transportation services on behalf of Company A.

One of the invoices Nielsen allegedly caused to be submitted to the EPO included a $14,995 charge for work purportedly performed by Summit Transportation relating to the EFMP.

The EPO approved and forwarded the invoice containing the fraudulent charge of $14,995 to Defense Finance and Accounting Service with the DOD for payment to Company A.

On or about June 22, 2019, Nielsen allegedly used Company A’s credit card to initiate a wire transfer from Company A’s Edison, New Jersey, office to Summit Transportation’s account.

On or about June 22, 2020, Nielsen allegedly initiated a wire transfer from Summit Transportation’s account for $4,995 to his personal bank account.

Nielsen allegedly repeated this pattern over a two-year period ultimately obtaining approximately $559,000.

Each count of wire fraud carries a maximum penalty of 20 years in prison and a fine of $250,000.

U.S. Attorney Carpenito credited the following for the investigation leading to the charges: special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; special agents of the DOD – Office of Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Jason J. Molina.

Assistant U.S. Attorney Margaret Mahoney of the Government Frauds Unit in Newark represents the government in this case.

The charges and allegations contained in the complaint are merely accusations. Nielsen is presumed innocent unless and until proven guilty.

For updates on this and other stories check www.hudsonreporter.com and follow us on Twitter @hudson_reporter. Marilyn Baer can be reached at Marilynb@hudsonreporter.com.

 

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