FBI Arrests North Caldwell Man: Company President Charged With Wire Fraud

NORTH CALDWELL, NJ — FBI agents arrested a North Caldwell man on Tuesday and charged him with fraudulently using funds that he allegedly solicited for bulk medical supply and consumer goods transactions, U.S. Attorney Paul Fishman announced.

Michael Esposito, 45, was charged by complaint with one count of wire fraud, prosecutors said. Esposito appeared Tuesday in Newark federal court and was released on bail afterwards.

According to the complaint, Esposito was the president of three companies that purported to be in the business of purchasing consumer products in bulk from manufacturers for resale to wholesalers and retailers.

Prosecutors said that in August 2013, Esposito allegedly told an individual - referred to in the complaint as "Victim 1” - that he had a customer that backed out of the purchase of medical supplies. Victim 1 was then able to locate a buyer to whom Victim 1 could sell the goods for profit. However, after Victim 1 wired Esposito funds for the medical supplies, Esposito allegedly used the funds for unrelated expenses, including payments to apparent victim investors from prior transactions, restaurant bills, and salary for himself and others.

Prosecutors charge that Esposito also sent Victim 1 numerous fraudulent communications that the delivery of the medical supplies was imminent.

Esposito never delivered the medical supplies to Victim 1, prosecutors said.

Authorities alleged that Esposito also sent Victim 1 “numerous emails” detailing a series of investment opportunities in which Esposito would purchase consumer goods in bulk at substantial discounts.

“Esposito offered to give Victim 1 a significant profit from these deals in return for Victim l's investment,” prosecutors alleged. “Again, Esposito used the funds for his own benefit instead of making the purported investments. He also sent Victim 1 emails and text messages falsely stating that certain deals were in progress or that problems with Esposito's bank were preventing him from wiring funds to Victim 1.”

Prosecutors said that altogether, Victim 1 had more than $1 million wired to Esposito for the medical supplies and consumer goods transactions. During this time, Esposito allegedly caused approximately $517,000 to be sent by wire transfer to Victim 1, falsely representing that these funds were the return of principal and profits from successful deals, then converted the rest of the funds for his own use.

Since January 2014, Esposito has ceased communicating with Victim 1, prosecutors said.

The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, prosecutors stated.

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