Police arrested six individuals (one still at large) allegedly involved in a loan sharking and credit card scam operation that impacted several hundred unsuspecting credit card holders in Essex, Passaic and Morris counties. The takedown, dubbed "Operation Cash Flow," defrauded victims a total of approximately $1 million on an annual basis. The investigation is continuing and additional arrests are expected.
The arrests were made December 4, during early morning raids, at multiple locations, by members of the Essex County Prosecutor's Office, United States Secret Service, Bergen County Prosecutor's Office and Caldwell Police Department. The arrests stem from a four-month investigation that originated in Caldwell where local eatery merchants were victimized when their credit cards were swiped, duplicated and later charged on average of several thousand dollars.According to Deputy Chief Assistant Prosecutor Thomas Fennelly, the alleged loan sharking scam originated from area eatery owners, who had suffered difficult economic times, allegedly approached the named defendants for unsecured loans at high interest rates. When their loan payments became delinquent, they were allegedly approached by the named defendants to participate in a credit card swiping scam. The eatery owners would allow the swiping of merchant credit cards to be duplicated and later scammed in return for payment towards their deficient loans.
During the pre-dawn raids the following people were arrested:
John Paladino 44, of Clifton was charged with several counts of Criminal Usury, Conspiracy, Fraudulent Credit Card Usage and Theft by Deception. In addition, Paladino along with his girlfriend Darlene Priester, 37, of the same address were charged with distribution of CDS (Cocaine and Marijuana) and Conspiracy to sell CDS. Additional charges are pending. Paladino's bail as been set at $250,000 and Priester's bail is set at $10,000. Paladino has been on federal probation from a previous racketeering conviction.
Ramzi Musleh, 49, of Clifton, was charged with several counts of Conspiracy, Fraudulent Use of Credit Cards and Theft by Deception. His bail was sent a $150,000.
During the four month investigation the following people were arrested:
Robert Giaconia, 32, was arrested at his Passaic home. He was charged with Conspiracy to violate NJ Narcotics Laws and Possession CDS (Percocet). Bail was set at $10,000.
Katherine Paladino, 48, (John Paladino's Cousin) of Hasbrouck Heights, was arrested for Conspiracy to Violate the NJ Narcotics Laws. Her bail is set at $10,000.
Some of eateries involved were the Italianissmo Restaurant, 435 Bloomfield Avenue, in Caldwell and the Baloco Restaurant, 110 Vincent Drive, in Clifton.
The investigation is ongoing.
Essex County Prosecutor Paula T. Dow commended the members from the Essex County Prosecutor's Office, United States Secret Service, Bergen County Prosecutor's Office and the Caldwell Police Department for the investigation. Dow also praised members from the American Express credit card company for assisting in the investigation.
— ANDY LAGOMARSINO, NEWJERSEYNEWSROOM.COM