NO MORE SMILES

For­mer den­tist and as­so­ci­ates fac­ing more charges for $12M credit card scam at Smiles II strip club >>

The Trentonian (Trenton, NJ) - - FRONT PAGE - By Isaac Avilucea iav­ilucea@21st-cen­tu­ry­media.com @IsaacAvilucea on Twit­ter

TREN­TON » Not even braces could cor­rect this ex-den­tist’s crooked smile.

For­mer den­tist Kevin Lipka had his den­tistry li­cense sus­pended for three years in the 1990s, and ap­par­ently went into the strip club busi­ness af­ter that, be­fore he and his wife, Shelly, went com­pletely rogue.

The Lip­kas and seven as­so­ci­ates were all frowns when the state At­tor­ney Gen­eral’s Of­fice came to town and busted up their $12 million scam in­volv­ing stolen credit cards and hot gift cards.

In­ves­ti­ga­tors from the Di­vi­sion of Crim­i­nal Jus­tice teamed up with the Roxbury Po­lice De­part­ment in 2015 on the probe dubbed “Op­er­a­tion Smiles,” tar­get­ing the ex-den­tist, 63, who owned Smiles II, a strip club bar on Route 46 in Roxbury.

Lipka’s wife, Shelly, also got wrapped up in the al­leged scheme that em­ployed a crew of “run­ners.”

The in­ter­net is chock full of sto­ries about the Lip­kas al­leged wheel­ing and deal­ing over the years. And some outer stretches of the ether con­tain las­civ­i­ous and un­sub­stan­ti­ated claims about Kevin Lipka’s sex life.

The re­tired den­tist de­scribed him­self as an en­tre­pre­neur who liked work­ing with peo­ple who “think out­side the box and who are a lit­tle off cen­ter,” ac­cord­ing to his pro­file on the Jewish Busi­ness Net­work web­site.

Liens have been placed on the bar, two of the Lip­kas’ homes worth a com­bined $4 million, and two more homes owned by Kevin Lipka in Es­sex Fells and Belvedere, as well as a ve­hi­cle, and mul­ti­ple bank ac­counts.

“Credit card fraud of the type al­leged in this case is be­com­ing a ma­jor source of il­licit rev­enue for or­ga­nized crim­i­nal groups in the cy­ber age and a costly drain on the fi­nan­cial ser­vice and re­tail in­dus­tries,” At­tor­ney Gen­eral Gur­bir Gre­wal said in a state­ment. “These ring mem­bers al­legedly were pro­lific in pur­chas­ing stolen credit card in­for­ma­tion on the dark web, turn­ing it into plas­tic, and ul­ti­mately con­vert­ing the plas­tic into mil­lions of dol­lars in cash.”

The cou­ple set up SheKev Inc., the par­ent com­pany which op­er­ated the strip club, in 1994, ac­cord­ing to on­line busi­ness di­rec­to­ries.

The cou­ple set up the busi­ness a year be­fore Kevin Lipka’s den­tistry li­cense was yanked, and his Bloom­field prac­tice even­tu­ally shut­tered, by the state over al­le­ga­tions of in­surance fraud.

The Liv­ingston cou­ple, along with five as­so­ci­ates, was orig­i­nally hauled in by the au­thor­i­ties in July 2016, af­ter search war­rants were ex­e­cuted at Smiles II, Kevin Lipka’s home, his ve­hi­cle and other lo­ca­tions, lead­ing to the seizure of thou­sands of gift cards and other doc­u­ments re­lated the scheme.

They were charged with head­ing up a $9 million scheme, sparked by a call to Roxbury Po­lice from an outof-state law en­force­ment agency that had tracked gift cards pur­chased with stolen credit card in­for­ma­tion to Smiles II where they were “cashed out,” the AG’s Of­fice said.

Roxbury Po­lice tapped the Di­vi­sion of Crim­i­nal Jus­tice Gangs & Or­ga­nized Crime Bureau to head up a sprawl­ing in­ves­ti­ga­tion that un­cov­ered a trea­sure trove of al­leged mis­deeds at the bar.

Au­thor­i­ties con­tin­ued in­ves­ti­gat­ing since the ini­tial ar­rests, lead­ing to two more ar­rests Fri­day of run­ners Chin­tan Pa­tel, 34, of Edi­son, and Adam Fer­gu­son, 26, of Bronx, N.Y, who split some prof­its from the scheme, au­thor­i­ties said.

They are ac­cused of pro­vid­ing Lip­kas with stolen credit cards and il­le­gally ac­quired gift cards to use in their mad plan. Oth­ers pre­vi­ously ar­rested in­clude al­leged part­ner Kevin Bae, 30, of Edge­wa­ter, who shared a back ac­count with Lipka and al­legedly had mil­lions of dol­lars trans­ferred into their joint ac­count; Eric Olsen, 49, of Roxbury, a day­time man­ager at Smilles II in charge of fi­nances.

The au­thor­i­ties al­lege Olsen and a night­time Smiles II man­ager, Peter Vasilipous, 73, of El­iz­a­beth, spent hours at the strip joint pro­cess­ing trans­ac­tions of stolen gift and credit cards. Kevin Ro­driguez, 25, of White­hall, Pa., and Jor­dan Turner, 25, Ja­maica, N.Y, are also ac­cused of be­ing part of the cou­ple’s run­ner crew.

They were all hit with a 19-count in­dict­ment, handed up in Mer­cer County, that in­cludes charges of rack­e­teer­ing, con­spir­acy, money laun­der­ing and re­ceiv­ing stolen prop­erty. Kevin Lipka, Bae, Ro­driguez and Turner are each charged with theft by de­cep­tion.

The Lip­kas face charges of mis­con­duct by a cor­po­rate of­fi­cial, tax fraud and tax eva­sion.

The case is be­ing han­dled in Mor­ris County where defendants are ex­pected to be ar­raigned on the charges at a later date, au­thor­i­ties said.

Au­thor­i­ties be­lieve the gift card and stolen credit card ploy was pretty so­phis­ti­cated. It be­gan in April

2014, when the ac­cused hatched a plan they set in mo­tion to de­fraud re­tail­ers, banks, credit card pro­cess­ing com­pa­nies and credit card hold­ers in April

The plot worked like this, ac­cord­ing to the au­thor­i­ties: The defendants used a ma­chine to slap to­gether “cloned” credit cards us­ing stolen credit card info, pur­chased off the “dark web.”

That in­for­ma­tion was placed onto plas­tic bank cards equipped with mag­netic strips that ap­peared le­git­i­mate, au­thor­i­ties said.

Run­ners took those cards and used them to buy pre­paid gift cards from Mas­ter Card, Visa and Amer­i­can Ex­press at re­tail stores, in­clud­ing Target and Home De­pot, across South­east Penn­syl­va­nia and Brook­lyn, New York, in­ves­ti­ga­tors said.

Once they had the gift cards in hand, they were cashed through fake trans­ac­tions at Smiles II, swip­ing cards that pumped money into ac­counts linked up to She-Kev Inc. Some of the sus­pects bought liquor from the strip joint us­ing the stolen credit or gift cards.

A cut of the kitty was divvied up among the run­ners, the Lip­kas and their part­ners, who took about 20 per­cent.

The sus­pects hatched other ways to get their hands on gift cards, in­clud­ing a more com­mon “grand­par­ent” scam where callers posed as locked-up rel­a­tives who needed bail money. The vic­tims were told to buy gift cards to pay the bail and told to give a in­for­ma­tion to a fake “po­lice of­fi­cer” who was in­volved in the ar­rest.

An­other scheme in­volved the al­leged sale of ve­hi­cles through eBay and Craigslist that di­rected pur­chases to buy the ve­hi­cles with pre­paid gift cards from credit com­pa­nies. But the vic­tims never got their cars shipped out, the au­thor­i­ties said.

Other times, the Lip­kas and some of the sus­pects re­turned stolen high-end power drills to Home De­pot with­out re­ceipts for store credit, to­tal­ing $368,000, then hawked store credit on a gift card buy­back web­site.

The Lip­kas have a col­or­ful history.

Kevin Lipka had his den­tistry li­cense sus­pended in 1995, but the sus­pen­sion was ul­ti­mately “stayed,” and he was put on pro­ba­tion for three years. Lipka and his part­ner, Michael Kanef­sky, who once op­er­ated the Den­tal Cen­ter on the 600 block of Bloom­field Av­enue in Bloom­field , were sued by Delta Den­tal Plan of New Jersey over al­le­ga­tions of fraud.

The state Di­vi­sion of Con­sumer Af­fairs got in­volved, and the mat­ter was re­solved with­out for­mal pro­ceed­ings. The terms also re­quired Lipka to pay a $12,500 penalty to the Board of Den­tistry and per­form 300 hours of den­tal work at a board-ap­proved fa­cil­ity within a year and a half of the ap­proval of the agree­ment, ac­cord­ing to the con­sent or­der.

The state’s or­der out­lined con­tin­ued mon­i­tor­ing over­sight of Lipka’s den­tal prac­tice’s billing and records as part of reg­u­lar, unan­nounced au­dits.

In 2001, New Jersey Hills Me­dia Group re­ported Smiles II’s liquor li­cense was con­di­tion­ally re­newed de­spite what town­ship of­fi­cials called a history re­plete with “vi­o­la­tions of lewd con­duct” and con­stant noise com­plaints.

The strip club was re­quired as a con­di­tion of the li­cense re­newal to have se­cu­rity ap­proved by the town­ship on duty.

In 2009, Kevin Lipka lost an ap­peal of a judg­ment against his com­pany She-Kev Inc. af­ter he was found to vi­o­lated the state’s Smoke Free Air Act 41 times in 2006, re­sult­ing in nearly $40,000 in fines

Kevin Lipka had con­tacted Roxbury Town­ship about ap­ply­ing for a cigar bar ex­emp­tion but never fol­lowed through in fil­ing the nec­es­sary pa­per­work to get the ex­emp­tion.

That ap­par­ently didn’t stop him from al­low­ing pa­trons to smoke in­side Smiles II and, ac­cord­ing to the state’s ap­peal re­sponse, telling staff that he had got­ten the ex­emp­tion.

Then in 2010, the Lip­kas got ham­mered again by a New Jersey court when a judge or­dered them to pay le­gal fees to at­tor­ney Philip Vinick whom they stiffed, ac­cord­ing to Law360, which wrote about the case.

The Lip­kas were feud­ing with the at­tor­ney over more than $76,000 they racked up in le­gal fees.

The at­tor­ney tried to set­tle for about $13,000 less that the to­tal bill, but the Lip­kas of­fered a low­ball $5,000 set­tle­ment.

PHOTOS FROM NEW JERSEY AT­TOR­NEY GEN­ERAL’S OF­FICE

Top row l to r: Kevin Lipka, Shel­ley Lipka, Kevin Bae, Eric Olsen, Peter Vasilipous. Bot­tom row, l to r: Kevin Ro­driguez, Jor­dan Turner, Chin­tan Pa­tel, Adam Furge­son.

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