Morris Plains man guilty in ‘Operation April Fools’

A Morris Plains man has been sentenced to probation for his role in an unemployment insurance fraud scheme that will put his son-in-law behind bars for up to 12 years.

Acting Attorney General John J. Hoffman announced on Friday that accountant Todd P. Halpern, 49, of Livingston was sentenced to state prison for orchestrating a scheme in which he and several co-defendants defrauded the state of nearly $700,000 by filing false claims for unemployment benefits.

The co-defendants included Halpern’s father-in-law, Jack Chesner, 82, of Morris Plains, and his father, George J. Halpern, 76, of Short Hills. Both men received sentences of probation.

Todd Halpern was sentenced to 12 years in state prison, including four years of parole ineligibility, by Superior Court Judge Timothy P. Lydon in Mercer County. Halpern pleaded guilty on Nov. 18, 2013 to first-degree money laundering and second-degree theft by deception. Halpern also was ordered to pay more than $500,000 in restitution.

He was indicted with 12 other defendants on June 11, 2013 as a result of “Operation April Fools,” a joint investigation by the Division of Criminal Justice and the Department of Labor and Workforce Development.

Hoffman said Halpern, who was never licensed as an accountant in New Jersey, used his fraud schemes to fund lavish expenditures. He spend thousands on luxury items including season tickets to the New York Giants, jewelry, gold and silver. He also bought several expensive vehicles including a Cadillac Escalade, Lexus GX-470 and a classic 1957 Chevy Bel Air.

“Halpern was selfishly living a life of luxury by stealing public funds that are intended to be a financial lifeline for workers who are down on their luck,” Hoffman said in announcing the sentences. “He committed one of the biggest thefts ever from the state’s unemployment insurance trust fund, and he rightfully will serve one of the longest sentences for such a theft.”

Halpern admitted that, from October 2008 to May 2012, he orchestrated a scheme in which he and his co-defendants stole from the state by filing fraudulent claims for unemployment benefits. The 36 false claims they filed paid benefits totaling $694,606, Hoffman said.

Hoffman said the investigation revealed that Halpern filed unemployment insurance claims using identities stolen from clients, and filed fraudulent employment records in the names of businesses he served in order to support the claims.

Among the other defendants in the case were David Altman, 43, of Plainfield, who was sentenced to three years in state prison. Two others, Augustin Gomez, 31, of Jersey City, and Henry Ford, 55, of Plainfield, received jail sentences of 364 days and six months, respectively.

The Department of Labor says it has implemented new security measures to detect fraud in connection with claims filed for unemployment benefits. Software changes, Hoffman said, enabled the department’s information technology systems to identify a lead on April 1, 2012 that prompted the investigation leading to the indictment of Halpern and his co-defendants. Because of the date, the investigation was dubbed “Operation April Fools.”

“The Department of Labor has implemented cutting-edge security measures to catch con artists like Halpern, and we will continue to work closely with labor investigators to prosecute such offenders to the full extent of the law,” said Director Elie Honig of the Division of Criminal Justice. “This lengthy prison sentence should deter others from attempting this type of scheme to steal unemployment benefits.”

“We are constantly upgrading our defenses against these fraudsters. Since 2011, our anti-fraud measures have prevented more than $535 million from being improperly drained from the state’s Unemployment Insurance Trust Fund, allowing this administration to bring the debt-ridden trust fund back into solvency years ahead of schedule. The effort has enabled New Jersey businesses to avoid millions of dollars in tax hikes that would have been triggered by law to replenish the trust fund,” said Harold J. Wirths, Commissioner of the Department of Labor and Workforce Development.

Staff Writer William Westhoven: 973-428-6627; wwesthoven@dailyrecord.com.