Former Red Bank auto shop owner sentenced for fraud

TRENTON — The owner of a defunct Red Bank auto body shop was sentenced to 108 months in federal prison Aug. 4 for his leadership role of a million-dollar automobile insurance fraud, bank fraud and money laundering scheme, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Joel A. Pisano also ordered John V. Cotona, aka John Bruno, 39, of Marlboro, to pay $1.275 million in restitution and to serve five years of supervised release upon the completion of his prison term.

On Jan. 10 Cotona pleaded guilty before Pisano to charges of conspiracy to commit mail fraud, conspiracy to launder money and bank fraud. At his plea hearing, Cotona stated that between January 2001 and June 2005, he operated Perfect Touch Auto Body in Red Bank. During this time period, Cotona conspired and agreed with others to submit false automobile property damage claims to various insurance companies, he admitted.

Cotona admitted that the false insurance claims included information that the subject vehicles suffered damage resulting from accidents that were actually fictitious. Cotona further admitted that in addition to making claims for purported repairs, many of the cars involved in the fictitious accidents were actually owned by him and titled in the names of other people or various shell companies that he controlled.

Cotona also admitted that he agreed to launder the proceeds of the scheme through bank accounts of the shell companies, which he controlled at Commerce Bank.

In addition, Cotona admitted that from May 2005 through June 2005, he defrauded Commerce Bank of approximately $154,950 by depositing bad checks into accounts he controlled and then withdrawing the proceeds of the checks before the checks were returned for insufficient funds.

Cotona was indicted, along with 10 other individuals, including his brother, Vincent G. Cotona, 44, of New York, in January 2007. All of the co-defendants have pleaded guilty to various offenses, including conspiracy to commit mail fraud, mail fraud, conspiracy to commit money laundering, structuring currency transactions, and making false statements to law enforcement officers.

Daniel Hanley, 42, of New York, Enrico Pipoli, 47, of Old Bridge, Glenn Geischen, 40, of Toms River, and John Cotona's wife, Vincenza Girone, 36, have been sentenced to probationary terms. The other defendants are pending sentencing before Pisano.

In determining an actual sentence, Pisano consulted the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors.

The judge, however, is not bound by those guidelines in determining a sentence.

In determining Cotona's actual sentence, the judge determined that under the sentencing guidelines, the insurance fraud and bank fraud schemes caused in excess of $1 million in losses to more than 10 victims, including Commerce Bank and various automobile insurance companies that did business in New Jersey and New York. Pisano further found that the defendant used sophisticated means, such as shell companies, in executing the scheme; that the defendant was the leader of the scheme; and that the defendant attempted to obstruct the government's investigation of his crimes by attempting to have a potential witness provide false information to law enforcement.

Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Among those credited by Christie with the investigation leading to the indictment were special agents of the U.S. Secret Service and the IRS Criminal Investigations Division; postal inspectors of the U.S. Postal Inspection Service; investigators with the Monmouth County Prosecutor's Office, and police officers with the Red Bank, Sayreville and Marlboro police departments.