Date: Dec. 12, 2024 Contact: newsroom@ci.irs.gov Newark, NJ — Pantaleo “Leo” Pellegrini, the former Hoboken director of Health and Human Services and director of the Department of Environmental Services, pleaded guilty today before U.S. District Judge Michael E. Farbiarz in Newark federal court to an information charging him with embezzling money from the City of Hoboken and filing a false tax return. According to documents filed in this case and statements made in court: While working for the City of Hoboken, Pellegrini embezzled money from the City of Hoboken by diverting payments intended for the City of Hoboken to bank accounts he controlled. Pellegrini also embezzled money from the City of Hoboken by submitting invoices for his personal business expenses, which City of Hoboken unknowingly paid. Additionally, Pellegrini did not report the embezzled money on his personal tax returns, and thereby made and subscribed a false personal tax return. Pellegrini had oversight over the City of Hoboken’s Division of Cultural Affairs’ Division of Health; Division of Parks, Recreation & Public Works; Division of Rent Leveling and Stabilization; and Division of Senior Services. He therefore had oversight responsibilities related to certain public recreational facilities, including soccer fields that could be reserved by both Hoboken and non-Hoboken residents for a fee paid to the City of Hoboken. Through this arrangement, the City of Hoboken Department of Parks, Recreation & Public Works sponsored a non-profit recreation soccer league open to all Hoboken residents aged 5 to 13 (the “Youth Soccer League”), which was funded by the City of Hoboken and participant fees. Also during the charged time period, an adult soccer league open to Hoboken and non-Hoboken residents (the “Adult Soccer League”) was in operation, which was funded from participant fees. Pellegrini developed a scheme to divert the Adult Soccer League’s participant fee payments intended for the City of Hoboken to a business account on which he was a signatory (the “Pellegrini Soccer Business Account”) and which was registered to a soccer-related entity linked to him (the “Pellegrini Soccer Business Entity”). At various times, Pellegrini told an individual who operated the Adult Soccer League–“Individual-1”—to sign checks for the rental of public recreation facilities but leave the payee blank for Pellegrini to fill in later. Pellegrini later filled in the name of the Pellegrini Soccer Business Entity and deposited the checks into the Pellegrini Soccer Business Account, without the knowledge of Individual-1. During the relevant time period, Pellegrini was also the Owner and President of a private travel soccer club that was open to Hoboken residents and non-Hoboken residents (the “Pellegrini Private Soccer Club”). Pellegrini also submitted or caused the submission to the City of Hoboken invoices associated with the Pellegrini Private Soccer Club, which Pellegrini falsely or fraudulently represented to the City of Hoboken as invoices eligible for reimbursement by the City of Hoboken. As a result, the City of Hoboken—at Pellegrini’s direction—unknowingly paid tens of thousands of dollars to the Pellegrini Private Soccer Club’s vendors for the Pellegrini Private Soccer Club’s expenses, and also unknowingly paid tens of thousands of dollars directly to Pellegrini through the Pellegrini Private Soccer Club. Pellegrini intentionally did not disclose and report the income from the above-described embezzlement scheme, thereby causing his tax returns to understate a substantial amount of the income he received. The count of embezzlement carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 fine, or twice the gross gain to the defendant or loss to the victim, whichever is greatest. The count of filing a false tax return carries a maximum penalty of three years in prison and a maximum fine of $250,000 fine, or twice the gross gain to the defendant or loss to the victim, whichever is greatest. Sentencing is scheduled for April 29, 2025. U.S. Attorney Sellinger credited special agents of IRS Criminal Investigation (IRS-CI), under the direction of Special Agent in Charge Jenifer L. Piovesan in Newark and special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado in Newark, with the investigation leading to the guilty plea. The government is represented by Assistant U.S. Attorneys Mark J. McCarren and Matthew Specht of the Special Prosecutions Division. IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
