Northern District of New York
Press releases recorded for this federal judicial district.
Cicero Chiropractor Settles Civil Health Care Fraud ClaimsRead the Press Release
Joseph Borio Admits that he Caused the Submission of Unsubstantiated Claims for
Payment to Medicare and Agrees to Pay Nearly $400,000 to the United StatesALBANY, NEW YORK: Joseph Borio – the owner of Borio Chiropractic Health Center (BCHC), in Cicero, New York – has agreed to pay the United States $376,436.76 to resolve allegations that he violated the False Claims Act by submitting claims to Medicare using higher billing codes than appropriate and falsely certifying that the services billed were medically necessary, announced United States Attorney Richard S. Hartunian. As part of the settlement, Borio admitted that he and others submitted claims to Medicare that are unsupported by his records. He also agreed to implement additional compliance measures as a condition of his continued participation in Medicare and other federal health care programs.
In 2009, federal authorities received information suggesting that Borio had engaged in questionable billing practices. A subsequent investigation revealed that, from May 4, 2006 through April 9, 2008, Borio submitted 10,534 claims for payment to Medicare, which is far more than any other chiropractor in 45 upstate and central New York counties. He also billed for treating as many as 69 Medicare beneficiaries in a given day. Taking into account both Medicare and non-Medicare patients, Borio sometimes billed for personally treating hundreds of individuals in a single day. Of the claims Borio submitted to Medicare during this period, more than 99.9% were billed using the highest-reimbursing billing code (other chiropractors in the region billed that code, on average, just over 13% of the time). During this period, Borio billed that code nearly three times more than the region’s next highest biller. He also treated his Medicare beneficiaries, on average, almost three times more frequently than his peers.
United States Attorney Hartunian said: “The provision of Medicare benefits must be dictated by patient need, not provider greed. Pursuant to federal guidelines, chiropractors are required to submit bills based on the level of treatment required, not the highest rate of payment possible. Today’s settlement demonstrates our commitment to safeguarding the Medicare Trust Fund by holding accountable those providers who inflate their bills to maximize profits.”
“Individuals who defraud health care programs place additional burdens and costs on the health care system, which affects every American citizen. The FBI will continue to work closely with our law enforcement partners to identify individuals who defraud the system for personal gain,” said Special Agent in Charge Andrew W. Vale of the Federal Bureau of Investigation (FBI), Albany Division.
As part of today’s settlement, Borio entered into an integrity agreement with the United States Department of Health and Human Services – Office of Inspector General (HHS-OIG) requiring him and BCHC to engage in strict compliance efforts over the next three years. Under the agreement, Borio is required to retain an independent review organization to review the accuracy of his claims for services furnished to federal health care program beneficiaries.
“When chiropractors try to enrich themselves by misrepresenting the services they bill to taxpayer-funded health care programs, we will work hard to make sure they are held accountable for their deceptive schemes,” said Special Agent in Charge Thomas O’Donnell of HHS-OIG’s New York region.
This investigation and settlement were the result of a coordinated effort between the United States Attorney’s Office for the Northern District of New York, the FBI, HHS-OIG, and SafeGuard Services LLC (a Program Safeguard Contractor responsible for investigating fraud, waste, and abuse to the Medicare Program). The United States was represented by Assistant United States Attorney Adam J. Katz.
Schenectady Man Pleads Guilty to Firearms ChargeRead the Press Release
ALBANY, NEW YORK – JAMES A. WAGONER, 40, of Schenectady, New York, pled guilty to making a false statement in the acquisition of a firearm before United States District Court Judge Mae A. D’Agostino, on October 14, 2014, announced United States Attorney Richard S. Hartunian and James S. Higgins, Acting Special Agent-in-Charge of the New York Field Division of the United States Bureau of Alcohol, Tobacco, and Firearms. Wagoner faces up to ten years in prison, a fine of up to $250,000, and supervised release of up to three years. Sentencing is scheduled for February 12, 2015 in Albany, New York.
As part of his guilty plea, WAGONER admitted that in October 2009 he made a false statement to a federally licensed firearm dealer when he purchased a rifle in Albany, New York. Specifically, on an ATF 4473 Firearms Transaction Record, in response to a question about whether he was subject to a court order prohibiting him from harassing, stalking, or threatening his child or an intimate partner or the child of an intimate partner, he answered, no. At the time, he was subject to such an order. Federal firearms laws prohibit people subject to such orders from possessing firearms.
The case was investigated by the United States Bureau of Alcohol, Tobacco, and Firearms (ATF), Albany, NY. The case was prosecuted by Assistant United States Attorney Edward P. Grogan.
Cayuga County Man Indicted on Federal Child Enticement and Child Pornography ChargesRead the Press Release
Charges include possession, distribution and receipt of child pornography
SYRACUSE, NEW YORK – Auburn, NY resident MICHAEL J. MAHANNAH, age 31, was formally charged today in federal court in Syracuse on multiple counts, including attempted coercion and enticement of a minor, according to United States Attorney Richard S. Hartunian. Following an initial appearance before United States Magistrate Judge Andrew T. Baxter, Mahannah is being held without bond.
The twelve-count indictment returned by the federal Grand Jury charged Mahannah with the following crimes: Count 1 – Attempted Coercion and Enticement of an individual the defendant believed to be a twelve year-old male child (who was in fact an undercover police officer); Count 2 – Felony Offense Against a Minor by a Registered Sex Offender; Counts 3-7 – Distribution of Child Pornography; Counts 8-11 – Receipt of Child Pornography; and Count 12 – Possession of Child Pornography.
If found guilty of Counts 1 and 2, Mahannah faces a statutory minimum of at least 20 years in prison and a maximum term of life in prison. On Counts 3-11, the defendant faces a statutory minimum of at least 5 years in prison and a maximum of 20 years in prison. On Count 12, the defendant faces a maximum of 20 years in prison. Mahannah may be fined up to $250,000 on each count of conviction. Upon release from prison, he would be placed on Supervised Release for a mandatory minimum of at least five years and up to life. He would also be required to register as a sex offender.
The charges in the indictment are merely accusations and the defendant is presumed innocent until and unless proven guilty.
This case is being investigated by the United States Secret Service, the New York State Police, the Syracuse Police Department, and the Cayuga County District Attorney’s Office, as part of Project Safe Childhood.
Project Safe Childhood is a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Launched in May 2006 by the Department of Justice, and led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
The case is being prosecuted by Assistant United States Attorneys Lisa Fletcher and Nicolas Commandeur.
Imposter Pleads Guilty to Using False Identification at Champlain Port of EntryRead the Press Release
ALBANY, NEW YORK – WALTER ELICER LUNA CAYSEDA, 49, of Bronx, New York, pled guilty yesterday in Plattsburgh, New York, to making a false statement and aggravated identity theft before United States District Court Judge David N. Hurd announced United States Attorney Richard S. Hartunian, and U.S. Customs Director of Field Operations, Randy Howe, Buffalo, New York. On the false statement count, LUNA CAYSEDA faces up to five years in prison, supervised release of up to 3 years, and a fine of up to $250,000. He faces an additional consecutive sentence of at least two years on the aggravated identity theft count. Sentencing is scheduled for February 20, 2015 in Utica, New York.
“Given our on-going concerns for security on our borders, it is critically important we know the people entering and leaving our country are, indeed, who they say they are,” stated U.S. Attorney Hartunian. “I commend the Department of Homeland Security and the border agents for their continued vigilance.”
As part of his guilty plea, LUNA CAYSEDA admitted that on August 26, 2014, during an immigration inspection at the Champlain Port of Entry, he gave a false name and stated that he was a United States Citizen born in Puerto Rico when he was actually a citizen of Columbia who had been removed from the United States in 1997. LUNA CAYSEDA also admitted that he used a New York State Driver’s license bearing his picture and the true biographical information of the person he was pretending to be as proof of his identity and citizenship.
The case was investigated by the Department of Homeland Security, Customs and Border Protection, Champlain, New York. The case was prosecuted by Assistant United States Attorney Edward P. Grogan.
White Plains Area Man Sentenced to 151 Months Federal PrisonRead the Press Release
Man sentenced to federal prison for distributing cocaine in North Country
PLATTSBURGH, NEW YORK – On October 16, 2014, ROBERTO DELGADO, 35, of Ossining, New York was sentenced to 151 months in federal prison by United States District Court Judge Glenn Suddaby in Syracuse, New York announced United States Attorney Richard S. Hartunian and Drug Enforcement Administration Acting Special Agent in Charge James J. Hunt.
United States Attorney Hartunian said, “Keeping the supply of illegal drugs out of our communities is essential. We praise the work of our partner law enforcement agencies.”
“This sentencing is a result of collaboration between law enforcement to identify, investigate and arrest those responsible for supplying cocaine to our communities,” said DEA Acting Special Agent in Charge Hunt.
In March 2013, Delgado pled guilty to conspiracy to possess with intent to distribute and to distribute five kilograms or more of cocaine in the Northern District of New York, specifically in the Lake Placid area.
The sentence also includes a $15,000 fine, an eight year term of supervised release after the defendant completes his 151 month term of imprisonment, and a $100 special assessment.
The case was investigated by the Drug Enforcement Administration, New York State Police, and Lake Placid Police Department, the Saranac Lake Police Department, the Plattsburgh Police Department, the Clinton County Sheriff’s Office, the Franklin County District Attorney’s Office, and the Essex County District Attorney’s Office. Assistant United States Attorney Katherine Kopita prosecuted the case.
Belchertown, Ma Man Sentenced to 41 Months in Federal PrisonRead the Press Release
Central Massachusetts man sentenced to federal prison for distributing heroin in
North CountryPLATTSBURGH, NEW YORK – On October 14, 2014, ERNESTO MATOS, 33, of Belchertown, Massachusetts, was sentenced to 41 months in federal prison by Senior United States District Court Judge Thomas J. McAvoy in United States District Court in Albany, New York announced United States Attorney Richard S. Hartunian and Drug Enforcement Administration Acting Special Agent in Charge James J. Hunt.
“Heroin addiction and overdoses have been on the rise in our district. Eliminating the supply and making it more difficult to obtain are two essential steps to reducing the tragedies of addiction and overdose,” stated United States Attorney Richard S. Hartunian. “We will continue to work with our federal, state and local law enforcement partners to rid our communities of this horrible scourge.”
DEA Acting Special Agent in Charge Hunt stated, “Heroin has hit our towns hard. Over one hundred people die a day due to opioid overdoses and this sentencing exemplifies law enforcement’s commitment to ridding our streets of heroin and diverted pain medication.”
“With the assistance of the Drug Enforcement Administration agents, we were able to dismantle a drug distribution organization that was responsible for bringing a large amount of heroin to our area,” said Chief Christopher Premo, Malone Village Police Department. “We were also able to trace the heroin back to Holyoke MA, identifying the supplier to local distributers, further interrupting the flow of illegal drugs.”
Matos pled guilty in May 2014 to conspiracy to possess with intent to distribute and to distribute heroin. As part of that plea agreement, Matos admitted to distributing at least 100 grams of heroin. The charges stemmed from Matos’ role as a supplier of heroin to local dealers in the Malone area. The sentence also includes a three-year term of supervised release following Matos’ incarceration and a $100 special assessment.
The case was investigated by the Drug Enforcement Administration, New York State Police, Massachusetts State Police, Belchertown Police Department, Malone Village Police Departmentand the Franklin County District Attorney’s Office. Assistant United States Attorney Katherine Kopita prosecuted the case.
Cuban Sentenced for Illegal Re-entryRead the Press Release
ALBANY, NEW YORK – Rafael Cantin-Echevarria, 36, a citizen of Cuba who had been living in Stafford, Virginia, was sentenced on October 15, 2014 to serve 70 months in prison followed by two years of supervised release for illegally reentering the United States following removal by Senior United States District Court Judge Lawrence E. Kahn announced United States Attorney Richard S. Hartunian and Patrol Agent in Charge Norman Lague of United States Border Patrol, Champlain Station. Cantin-Echevarria had pled guilty in June. Following the completion of the term of imprisonment, the Department of Homeland Security will process Cantin-Echevarria for removal from the United States.
In May 2014, United States Border Patrol agents arrested Cantin-Echevarria after he was found hiding in the woods south of the border near Champlain, New York. In September 2006, an immigration judge had ordered that Cantin-Echevarria be removed from the United States, but he remained in the country until March 2014 when he went to Canada.
The case was investigated by the United States Border Patrol, Champlain, NY, and prosecuted by Assistant United States Attorney Edward Grogan.
Our Lady of Lourdes Memorial Hospital Has Paid More Than $3.37 Million to Resolve Self-disclosed Billing ImproprietiesRead the Press Release
ALBANY, NEW YORK – Our Lady of Lourdes Memorial Hospital, Inc. (Lourdes), a 242-bed hospital located in Binghamton, New York, has paid $3,373,898.28 to resolve False Claims Act liability stemming from Medicare billing improprieties that the hospital selfdisclosed to the federal government, announced United States Attorney Richard S. Hartunian.
During the course of an internal review, Lourdes determined that from February 2008 through September 2013, it had improperly billed and was thus overpaid by the Medicare program for hyperbaric oxygen therapy services rendered by a third party in a facility that failed to satisfy the requirements for “provider-based status” set forth in federal regulations. The hospital promptly took corrective steps to remedy the problem and then brought its findings to the government’s attention. Due in large part to Lourdes’s decision to self-disclose these issues and its cooperation throughout the government’s investigation, the hospital was required to pay far less than the treble damages and penalties that the United States is authorized to seek under the False Claims Act. Furthermore, the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) decided that Lourdes would not have to enter into a corporate integrity agreement or adopt other compliance measures.
United States Attorney Hartunian said: “Today’s settlement is an excellent example of how voluntary self-disclosure benefits both the integrity of health care programs and providers who discover and report evidence of improper billing in their organization. Lourdes should be commended for the manner in which it handled the disclosure.”
“In coordination with our law enforcement partners, our agency’s investigators and attorneys will continue to work with health care providers who use the self-disclosure protocol to resolve billing improprieties,” said Special Agent in Charge Thomas O’Donnell of HHS-OIG’s New York region.
The United States encourages all health care providers to self-disclose any known violations that have resulted in the submission of improper claims to federal health care programs. This investigation and settlement were the result of a coordinated effort between the United States Attorney’s Office for the Northern District of New York and HHS-OIG. Locally, the United States was represented by Assistant United States Attorney Adam J. Katz.
Husband and Wife Plead Guilty to Social Security FraudRead the Press Release
ALBANY, NEW YORK – SCOTT J. BORNT, 53, and his wife GERI MONDLIN-BORNT, 50, formerly of Gloversville, New York, each pled guilty yesterday in Albany to one count of social security fraud before Senior United States District Court Judge Thomas J. McAvoy announced United States Attorney Richard S. Hartunian and Special Agent in Charge Edward J. Ryan of the Social Security Administration, Office of Inspector General, Office of Investigations, New York Field Division. They face up to five years in prison and fines of up to $250,000. Sentencing is scheduled on February 9, 2015 in Albany, New York.
As part of their guilty pleas, BORNT and MONDLIN-BORNT admitted that they made false statements to the Social Security Administration to obtain disability insurance benefits payments to which they were not entitled. Specifically, they did not disclose income earned from their trucking business. As a result of their false statements, BORNT received $314,650 of fraudulent payments over six years, and MONDLIN-BORNT received $88,120 of fraudulent payments over seven years.
The case was investigated by the Social Security Administration, Office of Inspector General, with the assistance of the United States Secret Service.
Albany Man Sentenced for Distributing Child PornographyRead the Press Release
ALBANY, NEW YORK – PAUL SCROM, 63, of Albany, New York, was sentenced today by the Honorable Thomas J. McAvoy to 72 months in federal prison followed by a 10-year term of supervised release, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge of the Albany Division of the Federal Bureau of Investigation. SCROM is also required to register as a sex offender. The sentence follows SCROM’s May 22, 2014 guilty plea to distribution of child pornography.
As part of his guilty plea, SCROM admitted that he distributed images and movies of child pornography through a peer-to-peer file sharing program. On September 12, 2013, investigators searched SCROM’s home and recovered numerous images and videos depicting child pornography.
This case was investigated by the Federal Bureau of Investigation, Albany Division and is being prosecuted by Assistant United States Attorney Wayne A. Myers.
Konn Sentenced for Child Pornography OffensesRead the Press Release
Retired State Worker’s Child Pornography Collection Included
Thousands of Images and Over 800 MoviesALBANY, NEW YORK – STEPHEN J. KONN, 64, of Clifton Park, New York, was sentenced today by the Honorable Mae A. D’Agostino to 120 months in federal prison followed by a 25- year term of supervised release, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge of the Albany Division of the Federal Bureau of Investigation. The sentence follows KONN’s April 30, 2014 conviction, after a three-day federal jury trial, for distribution of child pornography, receipt of child pornography, and possession of child pornography.
The evidence presented at trial showed that KONN, a retired New York State Department of Taxation and Finance employee, used a peer-to-peer file trading program to distribute child pornography to an undercover FBI agent via the Internet. A subsequent search of KONN’s Clifton Park residence uncovered a computer containing over 4,000 images and 800 videos of child pornography, and evidence that KONN had been trading child pornography over the Internet for years.
Noting that “what went on here is not victimless,” Judge D’Agostino described KONN as leading a double life, and the materials he traded as “unspeakable” and “horrific in nature.”
This prosecution resulted from an investigation conducted by the Federal Bureau of Investigation, Albany Division. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.
Defendant Previously Convicted of Sexual Assault Sentenced for Failing to Register as A Sex OffenderRead the Press Release
ALBANY, NEW YORK – ANDRE NADEAU, age 55, of New Haven, Connecticut, was sentenced yesterday by the Honorable Thomas J. McAvoy to 18 months in federal prison followed by 20 years of supervised release for failing to comply with the Sex Offender Registration and Notification Act (“SORNA”). The sentence follows NADEAU’s May 1, 2014 guilty plea.
SORNA, also known as the Adam Walsh Protection and Safety Act, requires that a convicted sex offender register where he or she resides, is employed, or is enrolled as a student, and to keep any registrations current.
NADEAU, who was convicted of sexual assault and designated a sex offender by Connecticut, registered with Connecticut in 2001. In 2005, NADEAU was found in Mississippi and convicted by a Mississippi court for failing to register as a sex offender. In 2012, NADEAU registered as a sex offender in Mississippi and signed documents acknowledging his duty to register. In 2013, NADEAU was found living in Albany, New York, and he had not registered or updated his sex offender registration with New York, Mississippi, or Connecticut.
This case was investigated by the U.S. Marshals Service and prosecuted by Assistant United States Attorney Wayne A. Myers.
Chateauguay man sentenced to 90 years for producing child pornographyRead the Press Release
Former karate instructor receives maximum penalty
ALBANY, NY – United States Attorney Richard S. Hartunian announced a 90 year sentence imposed upon RYAN STAPLES, 37 years old, of Chateauguay, NY. The sentence was imposed today by U.S. District Court Senior Judge Thomas J. McAvoy.
On May 1, 2014, Staples pled guilty to three counts of production of child pornography involving three different minor victims. He admitted that he videotaped and took photographs of himself engaged in sexually explicit conduct with the victims between July and October 2010.
The Court imposed the maximum sentence of imprisonment for thirty years on each of the three counts and ordered the sentences on each count to run consecutively. The Court also imposed a lifetime term of supervised release and an order of forfeiture. The United States Attorney’s Office dismissed Count 4 of the indictment, Possession of Child Pornography. The defendant was remanded to the custody of the U.S. Marshals.
“Sexual exploitation crimes are among the most heinous, imposing a ‘life-time’ sentence on the minor victims involved,” stated United States Attorney Richard S. Hartunian. “It is fitting this defendant received a life-time of imprisonment as well. The damage done to these children is tragic. The most we can do is make sure this defendant will never be near another child again.”
U.S. Attorney Hartunian praised the collaborative work of law enforcement agencies in the north country of New York. “The cooperative work of the Department of Homeland Security, Homeland Security Investigations, Rouses Point and the Clinton County Sheriff’s Office was vital in this case. They did an outstanding investigative job.”
“These types of crimes are appalling and made worse when their perpetrators have ready access to young people," said HSI Special Agent in Charge James Spero. "However, the significant sentencing handed down today ensures Mr. Staples will never victimize another child. The sentencing should also serve as a stark reminder of the severe penalties that await those who engage in this type of depraved activity. The Clinton County Sheriff provided invaluable assistance in the investigation by conducting all of the forensic examinations."
This case was investigated by Homeland Security Investigations, Rouses Point and the Clinton County Sheriff Office. Prosecuting the case was Assistant United States Attorney Katherine Kopita.
Massena Woman Pleads Guilty to Identity Theft FraudRead the Press Release
Involved false income tax returns of over $200,000
SYRACUSE, NEW YORK –United States Attorney Richard S. Hartunian and IRS-Criminal Investigations, New York Field Office, Special Agent in Charge Shantelle P. Kitchen announced that Lacey Jane Hollinger, 27, of Massena, New York pled guilty yesterday in federal court in Syracuse, New York to mail fraud and aggravated identity theft in a case involving false federal income tax returns that resulted in the theft of over $200,000.00 from the IRS. Hollinger admitted that in 2011 and 2012 she contacted Massena area residents via Facebook and other electronic media to tell them they were eligible for a tax refund even though they were unemployed and had no income as part of a U.S. Government “stimulus program.” No such program existed. Several dozen responded, giving Hollinger their personal identification information (date of birth, social security number, etc.). Hollinger forwarded this information to others who used it to create false and fraudulent tax returns that generated over $200,000.00 in tax refunds. Hollinger, and others involved in the fraudulent scheme, stole these funds after they were electronically deposited in bank accounts they controlled in Arizona.
The Massena area residents never saw the tax returns, which falsely represented that they were self-employed and entitled to a refund. Some did get pre-paid debit cards that Hollinger and others caused them to receive in the mail. Many got nothing, with Hollinger and the other fraudsters keeping most of the refund money.
“Identify theft and false income tax filings are two crimes that are increasingly affecting the public,” stated United States Attorney Richard S. Hartunian. “The most important thing for citizens to remember is to never give their personal identifying information out to people they don’t know or who shouldn’t need that information.”
At sentencing on February 6, 2015, Lacey Jane Hollinger faces a maximum sentence of up to twenty (20) years for her conviction for mail fraud and a fine of up to $250,000.00 as well as restitution. She faces an additional maximum sentence of up to twenty (20) years for her plea of guilty to aggravated identity theft, with a mandatory minimum term of two (2) years imprisonment to be served consecutively to her mail fraud sentence. She faces up to three (3) years of supervised release following her release from prison.
The case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigations (Syracuse, New York Field Office), under the direction of Special Agent in Charge Shantelle P. Kitchen. It is being prosecuted by Assistant United States Attorney Richard Southwick.
Federal Grand Jury Hands Down Superseding Indictment Against Stephen M. Howells Ii and Nicole F. VaiseyRead the Press Release
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced that a federal grand jury in Syracuse has handed down a 21 count superseding indictment against defendants STEPHEN M. HOWELLS II and NICOLE F. VAISEY. The superseding indictment, filed today, accuses HOWELLS with child exploitation offenses in all 21 counts, and charges VAISEY together with HOWELLS in 10 of the counts.
The superseding indictment specifies six different victims of the charged offenses.
HOWELLS, age 39, and VAISEY, age 25, both of Hermon, NY, are charged with one count (Count 1) of conspiracy to sexually exploit children between September 2013 and August 2014. They are also charged together with nine substantive counts (Counts 2 – 10) of exploiting three of the children during that time period. The nine counts represent nine separate dates on which the exploitation occurred.
In addition, HOWELLS is charged alone in six additional substantive counts (Counts 11 – 16), representing six additional dates, for the exploitation of four children.
The final five counts (Counts 17 – 21) of the superseding indictment charge HOWELLS with the possession of child pornography on each of five separate hard drives recovered from his residence. It is alleged that the images and video files possessed on these drives involve images of prepubescent minors and minors under the age of 12. The images and videos charged in these counts are separate and apart from those charged in the first 16 counts of the superseding indictment.*
HOWELLS and VAISEY face imprisonment of at least 15 years imprisonment, and up to 30 years on the conspiracy charge, and on each of the substantive exploitation counts. HOWELLS also faces a maximum sentence of 20 years on each of the possession counts. Conviction on any count requires a term of supervised release of a minimum of 5 years and up to life to follow any term of incarceration. In addition, conviction on any count of the superseding indictment will require HOWELLS and VAISEY to register as sex offenders.
United States Attorney Richard S. Hartunian said, “Sexual exploitation of minors is the most depraved, predatory abuse of our children. We will continue our efforts to make certain that every offense these defendants have committed is prosecuted to the fullest extent of the law. Our goal is that they will never be near children again.” Special Agent in Charge, Andrew W. Vale of the Federal Bureau of Investigation, Albany Division, stated, “This case epitomizes law enforcement's ability to keep our children safe when federal, state, and local agencies work together. The FBI will continue to work with our law-enforcement partners to identify any additional crimes committed by these defendants.”
St. Lawrence County Sheriff Kevin Wells stated, “As the lead County law enforcement agency in this case, we appreciate the teamwork in discovering and identifying these additional victims. The interagency cooperation in this investigation has been invaluable. We will continue our efforts and work with our law enforcement partners to ensure that these defendants are brought to justice for any crimes they have committed.”
St. Lawrence County District Attorney Mary E. Rain stated, “The St. Lawrence County District Attorney’s Office is pleased our Federal partners in prosecution are vigilantly pursuing charges which provide greater penalties than those New York law affords. From the beginning of this case, our Federal partners have bestowed upon our community their expertise, experience, and vast resources for which we are much appreciative. “
This case is being investigated by the St. Lawrence County Sheriff’s Office, the Federal Bureau of Investigation, Albany Division, and the St. Lawrence County District Attorney’s Office, with substantial assistance from the New York State Police.
The case is brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.projectsafechildhood.gov.
*The charges are merely allegations; the defendants are presumed innocent until and unless proven guilty.
Utica Tax Preparer Sentenced for Preparing False Tax ReturnsRead the Press Release
RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York announces that JAMES BUTCHER (58, of Little Falls, NY), an accountant engaged in the business of preparing tax returns, was sentenced to 12 months and 1 day imprisonment, as well as 1 year supervised release and restitution to the IRS in the amount of $79,771.00 for his felony conviction for aiding and assisting in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2).
During the plea hearing on April 2, 2014, before the Honorable David N. Hurd in Utica, NY, BUTCHER admitted the following: That he was the owner and operator of a tax preparation business named Jim’s Income Tax Service, which he operated out of his residence located in Little Falls, New York. From 2007 through 2010, he prepared forty false Form 1040 returns for fourteen of his clients. All forty of the 1040 forms contained false or inflated “Schedule A” deductions. Specifically, they all contained false or inflated charitable deductions and some also included false or inflated unreimbursed employee expenses. In preparing these forty returns, the defendant created and falsified expenses and deductions relating to charitable contributions and job expenses. He further admitted that he inflated deductions without being directed to do so by his clients. The total tax loss resulting from the forty false and fraudulent returns for tax years 2007-2010 is $140,446.00.
This prosecution resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigations, Syracuse, New York. The case was prosecuted by Assistant United States Attorney Ransom P. Reynolds. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315-448-0672).
A.g. Schneiderman, Comptroller Dinapoli and U.s. Attorney Hartunian Announce Arrest and Indictment of Nys Assemblyman William ScarboroughRead the Press Release
Separate State and Federal Indictments Accuse Assemblyman of Stealing Campaign
Funds and Fraudulently Collecting Travel ReimbursementsNEW YORK – Attorney General Eric Schneiderman, Comptroller Thomas P. DiNapoli and United States Attorney for the Northern District Richard S. Hartunian today announced the arrest and indictment of New York State Assemblyman William Scarborough for allegedly stealing campaign funds and falsely collecting travel reimbursements. The 23-count state indictment accuses the Southeast Queens Assemblyman of withdrawing and diverting over $40,000 from the bank account of the “Friends of Bill Scarborough” campaign committee and then using those funds for personal expenses. The 11-count federal indictment charges Scarborough with improperly claiming “per diem” expenses for travel that didn’t take place. If convicted on all charges, he faces up to 37 years in prison.
“The crimes Mr. Scarborough is accused of committing represent a shameful breach of the trust his constituents placed in him,” said Attorney General Schneiderman. “New Yorkers are repeatedly asked to have faith in our leaders, and it appears that faith has been shattered once again. Every time my office arrests a corrupt public official, it sends the message that there must be one set of rules for everyone and no one is above the law, no matter how powerful or well-connected. I also want to thank Comptroller DiNapoli and U.S. Attorney Hartunian – cases like that are made possible only through the great collaboration of our law-enforcement partners.”
"Elected officials cannot use taxpayer money or campaign funds as their personal piggy banks. Assemblyman Scarborough tried to game the system, thinking he could get away with it,” New York State Comptroller Thomas P. DiNapoli said. "Through our joint investigation, we revealed that Assemblyman Scarborough allegedly submitted fraudulent travel vouchers and filed false reports on his use of campaign funds. I will continue to partner with Attorney General Eric Schneiderman, U.S. Attorney Richard Hartunian, the Federal Bureau of Investigation and prosecutors across the state to root out corruption and bring corrupt officials to justice."
U.S. Attorney Richard S. Hartunian said: “Today’s indictments demonstrate the commitment of state and federal authorities to combat the fraud and corruption that has plagued our political system. Our elected officials are expected to safeguard the integrity of their office and follow all the rules. When they fail to do so, law enforcement will respond. I heartily commend Attorney General Schneiderman and Comptroller DiNapoli for their vigorous pursuit of this case. The collaboration between state and federal investigators that has brought about these indictments has proven to be an effective tool in identifying and rooting out corruption in our state government.”
State Indictment
According to documents made public today in connection with the state investigation, part of an ongoing effort between Schneiderman and DiNapoli known as “Operation Integrity” and conducted with the assistance of the FBI, Scarborough engaged in a pattern of illegal activity over the last seven years. Bank records obtained as part of the investigation show that between January 2007 and March 2014, Scarborough made numerous withdrawals and transfers from his campaign committee’s account totaling approximately $38,000. Some of that money was taken out directly as cash withdrawals; some was transferred into his personal account, according to the indictment and court papers. Additionally, Scarborough deposited five checks made payable to “Friends of Bill Scarborough,” totaling $3,450, directly into his personal bank account.The state indictment, filed in New York State Supreme Court in Albany, accuses Mr. Scarborough of then spending that cash for his own personal use, in violation of New York State Election Law, which says that “[c]ontributions received by a candidate or a political committee … shall not be converted by any person to a personal use.”
Mr. Scarborough also allegedly attempted to conceal his illegal conduct by not reporting the withdrawals to the state Board of Elections, as legally required. Between 2007 and 2014, there were 21 separate filings made with the Board of Elections that did not account for the withdrawals. Additionally, the money has never been accounted for in the campaign committee’s financial records.
The indictment charges Scarborough with two felony counts of Grand Larceny and 21 felony counts of Offering a False Instrument for Filing.
Federal Indictment
The federal investigation, conducted by the United States Attorney’s Office and the Albany Division of the Federal Bureau of Investigation, focused on the alleged improper claiming of “per diem” payments and other travel-related expenses from 2009 to 2012. In a federal indictment, filed today in United States District Court in Albany, Assemblyman Scarborough has been charged with four (4) counts of Theft Concerning a Program Receiving Federal Funds for allegedly submitting 174 false reimbursement vouchers for per diem expenses, mileage and tolls in excess of $40,000 between January 2009 and December 2012. If convicted, Scarborough faces a maximum term of imprisonment of not more than 10 years and a $250,000 fine. Scarborough was also charged with seven (7) counts of Wire Fraud relating to communications directing payment of specific false New York State Travel Vouchers to his bank account. If convicted, these counts carry a maximum term of imprisonment of not more than 20 years and fine up to $250,000.The Attorney General, Comptroller and U.S. Attorney thank the Albany office of the FBI and Deputy Comptroller Nelson Sheingold and Investigator Rebecca Shanley of the State Comptroller’s Office for their cooperation and assistance in this investigation.
Prosecuting the state case is Senior Counsel Darren Miller of the Attorney General’s Public Integrity Bureau, which is led by Deputy Bureau Chief Stacy Aronowitz and Bureau Chief Daniel Cort. Kelly Donovan is the Executive Deputy Attorney General for Criminal Justice. The state’s investigation was handled by Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam of the Investigation Bureau, which is led by Chief Dominick Zarrella. Forensic auditor Jason Blair and legal analyst Sara Pogorzelski provided additional assistance.
The federal investigation was handled by the FBI, Albany Division. The federal case is being prosecuted by Assistant U.S. Attorney Jeffrey Coffman.
All charges are merely accusations and all defendants are presumed innocent unless and until proven guilty in a court of law.
United States Attorney Hartunian Addressed Taxpayers Against Fraud Conference and Detailed Office’s Fraud-fighting EffortsRead the Press Release
Discussed Northern District of New York’s Aggressive Civil Frauds Program
ALBANY, NEW YORK – On Wednesday, September 17, 2014, United States Attorney Richard S. Hartunian and other senior Department of Justice officials addressed the membership of Taxpayers Against Fraud, a nonprofit organization dedicated to combating fraud against the government and protecting public resources through public-private partnerships. The Acting Associate Attorney General of the United States spoke about the Department of Justice’s national fraud priorities, while United States Attorney Hartunian addressed his office’s aggressive and innovative efforts to fight fraud in upstate and central New York.
Mr. Hartunian was asked to focus his remarks on the Northern District of New York’s application of the False Claims Act, which is the United States’ strongest civil tool to deter and redress fraud committed against government programs. The Act has unique qui tam provisions, which allow private citizens to file suit alleging fraud on behalf of the government. If the government prevails in the action, the whistleblower (known as a “relator”) receives up to 30 percent of the recovery. The Department of Justice secured $3.8 billion in False Claims Act settlements and judgments last fiscal year alone, of which relators received $345 million. Several million of those dollars were recovered as a result of cases worked by Mr. Hartunian’s staff.
“As a United States Attorney, my responsibilities include protecting the public fisc and our people from harm. I am committed to fulfilling that responsibility aggressively and fairly, and I have instructed my staff to be both aggressive and fair in their interpretation and application of the False Claims Act,” explained United States Attorney Hartunian. Mr. Hartunian highlighted the following fraud cases that his office resolved this past year:
Marketing of prescription drugs for unapproved uses: His office, in conjunction with its colleagues in the Eastern District of Pennsylvania, resolved criminal and civil investigations arising from Endo Pharmaceuticals’ marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the Food and Drug Administration. In total, the company agreed to pay $192.7 million in civil damages, criminal forfeiture, and monetary penalties and to enter into a deferred prosecution agreement with enhanced compliance measures. This settlement emphasized that public health is protected by compliance with FDA’s drug approval process and requirement that product labeling be based on performance, rather than profitability.
Administering drugs outside of the presence of a qualified physician: Thanks to the assistance of a whistleblower, his office reached a $3.57 million settlement to resolve allegations that Imagimed (operating as “Open MRI”), its owners, and chief radiologist, submitted false claims to federal healthcare programs for magnetic resonance imaging services with a contrast dye without the direct supervision of a qualified physician. Since a potential adverse side effect of contrast dye is anaphylactic shock, federal regulations require that a physician supervise the administration of contrast dye when it is used for an MRI. Such a resolution stripped away the profit motive for circumventing the physician supervision requirements that safeguard patients.
Violations of the Recovery Act’s “Buy American” requirement: His office recently resolved, for $500,000, a case involving allegations that Jett Industries, a Colliersville-based general contractor, had falsely certified compliance with the American Recovery and Reinvestment Act’s “Buy American” provision. Jett purchased key project components in France, and then created and submitted paperwork in an effort to mislead the government into believing that the cheaper, French-made products were produced in the United States.
City acknowledges that it mismanaged federal funds: Another recent case that involved a seven-figure monetary recovery, an admission of wrongdoing, and other forward-looking (non-monetary) components was a settlement reached last month with the City of New York. This settlement resolved allegations, brought to our attention by a whistleblower, that the New York City Human Resources Administration (HRA) violated the False Claims Act by causing various managed care organizations to provide health care coverage to individuals that HRA knew, or should have known, were ineligible to receive benefits through New York State’s Medicaid program. As part of the settlement, HRA accepted responsibility for failing to timely review and close Medicaid cases after being provided information that the beneficiaries moved outside of New York City, and it admitted that its inaction caused one or more MCOs to receive payments to insure individuals who were ineligible for benefits through New York State’s Medicaid program. HRA also agreed as part of the settlement to establish a process to investigate and close Medicaid cases whenever it learns that a beneficiary no longer resides within its coverage area.
Unlawful physician compensation arrangements: A settlement was also reached last month with the New York Heart Center. In that case, a group of upstate New York cardiologists agreed to pay $1.34 million to resolve allegations that its physicians’ compensation was determined using a formula that took into account the volume or value of each physician’s ordering of designated health services from other physicians in the practice, in violation of the Stark Law. By pursuing such cases, physicians in Northern New York and elsewhere will think twice before entering into financial arrangements where a physician’s medical judgment may be compromised by financial incentives.
Billing the government for no-show jobs: With the assistance of another whistleblower, his office resolved allegations that Ithaca-based defense contractor Agave BioSystems and its president submitted false claims to the Department of Defense, seeking reimbursement for work that was never performed. Mr. Hartunian concluded his remarks at the conference with the following observation: “The Northern District of New York is committed to building a leading qui tam practice because the False Claims Act works. It works because it is an effective tool to fight fraud across the full spectrum of federal programs. It works because it provides powerful incentives for companies and individuals to do business honestly. And it works because it safeguards taxpayer money, protects public safety, and improves confidence in government.”
New York State Youth Courts to Meet Monday in SyracuseRead the Press Release
Youth Courts meet at Syracuse University College of Law
MONDAY– September 22, 2014- 9amSYRACUSE, NEW YORK – U.S. Attorney Richard S. Hartunian and Retired New York State Court of Appeals Judge Judith Kaye will speak at the annual meeting of New York State Youth Courts at the new Syracuse University College of Law at Dineen Hall.
U.S Attorney Hartunian stated “Youth Courts are one of the most effective ways to reduce juvenile crime. More Communities need to support this innovative way of deterring teens from becoming involved in the criminal justice system”
Syracuse area youth court students will be conducting a mock hearing exercise.
9:00am Guest Speakers – Dean Hannah R. Arterian, Syracuse University College of Law & Richard S. Hartunian, United States Attorney Northern District of New York
Keynote Address – Judge Judith S. Kaye, Co-Chair, NYSBA Committee on Youth Courts
10:15-10:45am – Mock Hearing, Melanie Gray Ceremonial Courtroom
11:00am-12:00pm – Concurrent Workshops:
Innovative Practices and Volunteer Training – MacNaughton Collaboratory
Presenters: Katherine Chambers, Warren County Youth Court and Sharese Crouther, Brownsville Youth Court
Positioning for Sustainability – Conference Room 222
Presenter: Jack Levine, NAYC Program Director
12:00-1:00pm – Lunch, MacNaughton Collaboratory1:00-2:00pm –Melanie Gray Ceremonial Courtroom
Implications of “Raising the Age” in NYS on Youth Courts – Center for Youth Executive Director Elaine Spaull, PhD., JD2:00-3:15pm – Facilitated Roundtable Discussions, MacNaughton Collaboratory
How Youth Courts can prepare for changes in NYS – Facilitated by Marilyn MoreySaint Lawrence County Man and Woman Indicted on Federal Child Sexual Exploitation and Child Pornography ChargesRead the Press Release
Charges include sexual exploitation of three children
SYRACUSE, NEW YORK – Hermon, NY residents STEPHEN M. HOWELLS, II, age 39, and NICOLE F. VAISEY, age 25, were formally charged today in federal court in Syracuse on multiple counts including conspiracy to sexually exploit children and sexual exploitation of children according to United States Attorney Richard S. Hartunian and Special Agent in Charge, Andrew W. Vale of the Federal Bureau of Investigation, Albany Division.
The five count indictment returned by a federal Grand Jury charged Howells and Vaisey with the following crimes: Count 1 - Conspiracy to Sexually Exploit Children involving two minor female victims (V-1 and V-2) and Count 2 - Sexual Exploitation of a Child (V-1). Counts 3 and 4 charge Howells and Vaisey, individually, with Sexual Exploitation of a third female child (V-3). Howells was also charged in Count 5 with Possession of Child Pornography.1
If found guilty on Counts 1 – 4, each defendant faces a statutory minimum of at least fifteen years imprisonment and a maximum term of thirty years imprisonment. On Count 5, Howells faces a maximum term of twenty years imprisonment. Both defendants may be fined up to $250,000 on each count of conviction. Upon release from prison, they would be placed on Supervised Release for a mandatory minimum at least five years and up to life. They would also be required to register as sex offenders.
United States Attorney Hartunian said, “This indictment charges Howells and Vaisey with enticing and coercing children to engage in sexual conduct and making a video recording of it. The Department of Justice is committed to the safety and well-being of every child and has placed a high priority on combating sexual exploitation of minors. We will continue to work closely with our state and local partners to identify and prosecute those who prey on our children.”
Anyone having information regarding this case may contact the Federal Bureau of Investigation at 1-800-CALL-FBI.
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1The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.
Press AdvisoryRead the Press Release
Saint Lawrence County kidnapping case
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian will conduct a press conference on Thursday, Sept. 18th at 11:30 AM, in the U.S. Attorney’s Office, 9th floor, 100 S. Clinton Street, Syracuse, NY.
No further information will be provided prior to the press conference.
Heath Powers Indicted for Production, Distribution, and Possession of Child PornographyRead the Press Release
Plattsburgh man indicted on 13 counts related to production, distribution, and possession of
child pornographyPLATTSBURGH, NEW YORK – A federal grand jury returned an indictment today charging Heath Powers, 33 years old of Plattsburgh, with 11 counts of production of child pornography, 1 count of distribution of child pornography, and 1 count of possession of child pornography announced United States Attorney Richard S. Hartunian and Federal Bureau of Investigation Special Agent-in-Charge Andrew W. Vale.
If the defendant is convicted, he faces at least 15 years and up to 30 years in prison on each production of child pornography charge; at least 5 years and up to 20 years in prison on the distribution of child pornography charge; and up to 20 years of prison on the possession of child pornography charge. If convicted, he also faces for each count a fine of up to $250,000, a lifetime term of supervised release and registration as a sex offender.
The case is being investigated by the Federal Bureau of Investigation. The prosecution is being handled by Assistant United States Attorney Katherine Kopita.
The charges in the indictment are merely accusations and the defendant is presumed innocent until and unless proven guilty.
If anyone has information regarding this matter, please contact the Federal Bureau of Investigation at telephone number 1-800-CALL-FBI.
SYRACUSE, NEW YORK - Guilty pleas for violations of the Clean Water Act entered.Read the Press Release
SYRACUSE, NEW YORK - Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today the entry of guilty pleas for violations of the Clean Water Act by Mark Pullyblank, 53, of Caledonia, NY, William Clements, 53, of Victor, New York, and Crane-Hogan Structural Systems, Inc., 3001 Brockport Road, Spencerport, New York, (which employs Pullyblank and Clements) before the Honorable Thomas J. McAvoy in federal district court in Binghamton, NY.
Crane-Hogan is a company that uses hydro-demolition to renovate concrete structures. Hydro-demolition uses high pressure water to remove concrete from buildings such as parking garages, dams, bridges, and highways prior to resurfacing. The waste-water from the hydrodemolition process contains a slurry of industrial waste including concrete residue which has a highly caustic pH and total suspended solids, both of which are pollutants under the Clean Water Act. Mark Pullyblank was Crane-Hogan’s Project Manager in charge of renovation projects at the Binghamton Governmental Center Parking Garage and Johnson City Wilson Hospital Parking Garage throughout 2008 and 2009. He directed workers to discharge concrete slurry into the Susquehanna River for portions of two years, and into the Binghamton-Johnson City Publically Owned Treatment Works (POTW) during the summer 2009, both without Clean Water Act permits and without treatment for the high pH. William Clements was also a Project Manager in charge of the Johnson City Wilson Hospital Parking Garage renovation who participated in the unpermitted POTW discharges in 2009.
The Clean Water Act was enacted into law in 1972. Since that time it has been illegal to discharge pollutants into waters of the United States without a permit and without approved pretreatment prior to discharge. The Susquehanna River is a navigable water of the United States that provides drinking water to many thousands of individuals. It traverses through New York State, Pennsylvania, and Maryland and flows into the Chesapeake Bay and Atlantic Ocean. Mark Pullyblank and Crane-Hogan both plead guilty to felony violations of the Clean Water Act. William Clements pled guilty to a misdemeanor Clean Water Act violation. Pullyblank faces a maximum possible penalty of three years in prison and a $700,000 fine, plus supervised release thereafter. Crane-Hogan faces a maximum fine of $750,000 and five years of probation. If the plea agreement is accepted by the court, Crane-Hogan will be required to prepare and implement an environmental compliance plan to alter its policies and practices so as to reduce the likelihood of future criminal environmental conduct. William Clements faces a maximum possible term of incarceration of one year and a fine of $350,000 plus a term of supervised release. Sentencing will take place on January 23, 2014 in Binghamton, NY at 11:30AM for Mark Pullyblank, 1:30PM for Crane-Hogan, and 2:00PM for William Clements.
This case was investigated by Criminal Investigators with the New York State Department of Environmental Conservation, Bureau of Environmental Crimes Investigations, and Special Agents of the United States Environmental Protection Agency. Assistance with this case has been provided by the New York State Office of General Services, the Binghamton City Engineer, and the Binghamton-Johnson City Publically Owned Treatment Works. The case is being prosecuted by Assistant United States Attorney Craig Benedict. Questions may be directed to AUSA Benedict at 315-391-1110.
Corrected ATTORNEY GENERAL HOLDER RECOGNIZES LOCAL FEDERAL PROSECUTORSRead the Press Release
Albany, NY – Assistant United States Attorneys Elizabeth Coombe, Richard Belliss and Wayne Myers and former Assistant United States Attorney John Katko were among the 243 members of the Department of Justice recognized by Attorney General Eric Holder at the 30th annual Director’s Awards Ceremony on Wednesday in Washington, D.C.
In his prepared remarks, Attorney General Holder told the awardees, “Locally, nationally, and internationally, you represent the very best that this Department has to offer. Your work embodies our ongoing commitment – not merely to win cases, but to do justice; to protect our fellow citizens from crime, violence, and terrorism; to empower the most vulnerable among us; and to uphold the rule of law.”
Assistant United States Attorneys Elizabeth Coombe, Richard Belliss, and Wayne Myers were recognized for the successful investigation and prosecution of Timothy McGinn and David Smith, two Albany-area securities brokers who devised and executed a $30 million investment fraud scheme. The defendants owned and operated a prominent Albany broker-dealer specializing in the securitization of burglar alarm, broadband, cable, and telephone services contracts. Along with associates who were also indicted, convicted, and sentenced, the lead defendants used a complex arrangement of trusts, holding companies, and layered financial transactions to siphon investor funds for personal expenses; to pay purported returns to some investors to encourage additional investment and conceal significant losses; to cover operating expenses of the broker-dealer; and to conceal from both investors and regulators these improper diversions of investor funds. The defendants, whose criminal conduct wiped out the life savings of numerous investors, received sentences of 15 and 10 years in prison.
Former Assistant United States Attorney John Katko was recognized for the investigation and racketeering prosecution of 25 members of the “Bricktown” and “V-NOT” street gangs. Both gangs were involved in multiple murders, armed assaults, and robberies, as well as firearm and cocaine base trafficking. The investigations solved numerous acts of violence that had occurred during a 2010 gang war, including the tragic drive-by murder of an uninvolved high school basketball star and the killing of a 20-month-old child in a misguided act of retaliation.
United States Attorney Richard S. Hartunian said, “We thank Attorney General Holder for recognizing the hard work of four of our dedicated prosecutors. Our office has 41 other diligent lawyers who fight crime and injustice every day on behalf of the citizens in our district.”
Feds Share $8.9 Million with Local Law Enforcement AgenciesRead the Press Release
Forfeited Assets from 2009 drug case distributed to 33 law enforcement agencies
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian announced today the distribution of $12,515,738 which represented the proceeds of assets seized in a marijuana distribution conspiracy. Of the total assets, $8,923,708.19 have been distributed to thirty-three law enforcement agencies in the Capitol District area and as far away as Illinois and California. Joining in the announcement was Wilbert L. Plummer, Associate Special Agent in Charge of the New York Division, of the United States Drug Enforcement Administration and James R. Burns, Jr., Assistant Special Agent in Charge, Albany District Office, of the Drug Enforcement Administration.
The remaining $3,592,029.81 went to the Department of Justice Asset Forfeiture Program. The primary mission of the Program is to employ asset forfeiture powers in a manner that enhances public safety and security. Asset forfeiture laws are intended to enable law enforcement agencies to disrupt and dismantle criminal organizations and deprive them of their illegal profits.
U.S. Attorney Hartunian stated, “What started as a simple traffic stop in Illinois turned into a well-orchestrated, multi-state effort involving the collaboration of many agencies resulting in the sentencing of five drug traffickers and forfeiture of millions of dollars of assets. By attacking large scale drug trafficking organizations and stripping them of their ill-gotten profits, we make a hard-hitting impact, stopping the distribution of drugs and ensuring the safety of our communities. We are pleased to use our federal resources to provide these forfeited assets to our partner agencies.”
DEA Acting Special Agent in Charge James J. Hunt stated, “Canori reaped millions from the illicit sale of marijuana in the Albany area contributing to drug abuse and drug addiction. Due to law enforcement’s cooperation, those millions will now be used to stop drug trafficking, curb drug abuse and support law enforcement’s ongoing efforts to keep our cities safe and secure.”
The case started on June 13, 2009 when Illinois State Police found approximately 334 pounds of marijuana hidden in a car trailer during a routine traffic stop. The drugs were intended to be transported from California to upstate New York for distribution. Through a controlled delivery executed with the Albany DEA Office, the delivery was completed, resulting in the arrest of three co-conspirators, Melissa Giove, Eric Canori and Robert Reinfurt, and eventually two others, Pamela Grosch and Sara Shafer. All five were later convicted in U.S. District Court for drug offenses.
At the time of his arrest, $1,473,543 in cash was seized from Eric Canori’s Wilton residence, along with approximately 40 pounds of marijuana. A subsequent search of a home in Ross, CA, rented by Canori, resulted in the seizure of an additional $688,660. Law enforcement agents were later provided with the locations of buried gold and silver bars and coins. 172 gold bars, 161 gold coins and a one hundred ounce silver bar were recovered, forfeited and eventually auctioned. Two pickup trucks and one trailer were also seized and forfeited.
As set forth below, agencies receiving a share of the $8,923,708.19 of forfeited assets include twenty local police departments, sheriff’s offices and district attorney’s offices, four New York State agencies and one federal agency. Additionally four Illinois law enforcement agencies and four California law enforcement agencies shared in the distribution. All received a percentage of the shared assets because of their cooperative work on the case.
This case was investigated by the Drug Enforcement Administration and the Internal Revenue Service. The case was prosecuted by Assistant United States Attorney Richard Belliss.
U.S. v. Canori et al. asset sharing Chart
Second Defendant Convicted in $8 Million Fraud Scheme Concerning Purported Alternative Energy TechnologyRead the Press Release
Fraud Scheme Originated in Saranac Lake, New York
LOS ANGELES –A Ventura, California man has pleaded guilty to federal fraud charges for his involvement in an $8 million investment scheme that lured investors with false promises relating to the development of an alternative energy technology, Richard S. Hartunian, the United States Attorney for the Northern District of New York, announced today.
William A. Stehl, 69, pleaded guilty in federal court in Los Angeles on September 2 to five counts: conspiracy to commit mail and wire fraud, lying to federal agents, two counts of attempting to evade the payment of federal income taxes for calendar years 2003 and 2004, and subscribing to a false federal income tax return for calendar year 2003.
Stehl entered his plea before United States District Judge Terry J. Hatter, Jr., who scheduled a sentencing hearing for December 15, 2014. At sentencing, Stehl faces up to 38 years in federal prison.
Judge Hatter allowed Stehl to enter guilty pleas based on the 1970 United States Supreme Court decision in North Carolina v. Alford, which held there is no constitutional bar to a defendant entering a plea of guilty without acknowledging his guilt, if, the defendant concludes he would be convicted after a trial. Stehl and a co-defendant – Richard M. Rossignol, 64, of Los Angeles, California – were arrested in Oxnard, California four years ago in connection with an indictment filed in the Northern District of New York. Both men were charged with conspiracy to commit mail and wire fraud. Additionally, Stehl was charged with several tax charges and lying to federal agents.
The conspiracy count alleged that from 2001 up to the time of the indictment in March 2010, Stehl, Rossignol and others induced victims to invest money in companies that were purportedly developing or utilizing an alternative energy source Stehl claimed he had developed. Investors were told that one of Stehl’s applications related to the processing of precious metals allegedly contained in a slag pile in Silver City, New Mexico.
Stehl and Rossignol were charged with fraudulently obtaining money from investors by making false representations about the status of the process, claiming that contracts and licensing agreements had either been signed, or were about to be signed, that would result in significant financial returns for the investors. Stehl, Rossignol, and others obtained more than $8 million from more than 300 victims, and attempted to obtain at least an additional $50 million. None of the investors received the returns promised by Stehl and Rossignol, and most of the money obtained was used for personal expenditures.
Stehl was living near Saranac Lake, New York, when the scheme started. Stehl moved to Southern California in late 2005. Fraud victims lived across the nation.
Although the indictment was originally filed in federal court in Binghamton, New York, in October 2012 the case was transferred to the Central District of California to accommodate Stehl, who received injuries in an explosion that occurred in a building in Sylmar, California, on August 9, 2011.
In November 2013, Judge Audrey B. Collins, who previously presided over the case, granted a request by Stehl’s attorneys for a separate trial.
Stehl remains free on bond pending sentencing.
Trial and Sentencing of Co-Defendant Richard Rossignol
Rossignol’s case went to trial in Los Angeles on January 14, 2014. On February 28, the jury convicted Rossignol of the sole count he faced, conspiracy to commit mail and wire fraud. On July 28, Judge Collins sentenced Rossignol to 20 years – the maximum statutory sentence – and immediately remanded him into custody. Judge Collins also ordered Rossignol to pay more than $8.1 million in restitution to the fraud victims. Judge Collins described the fraud as being among the most egregious she had seen in her 20 years on the federal bench.
The investigation in this case was conducted by Special Agents of the Internal Revenue Service - Criminal Investigation, New York Field Office, and the Albany, New York, Field Office of the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Kevin P. Dooley of the Binghamton branch office in the Northern District of New York. Additional inquiries can be directed to AUSA Dooley at (607) 343-3713, or Executive Assistant John Duncan at (315) 448-0672.
Press AdvisoryRead the Press Release
Press Conference to be held Monday, September 8, 2014 1:30 PM
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian will be conducting a press conference Monday, September 8, 2014 at 1:30 PM in the U.S. Attorney’s Office, 2nd Floor, James T. Foley Courthouse, 445 Broadway, Albany, NY.
An announcement will be made regarding the sharing of significant asset forfeitures from a drug case with 33 law enforcement agencies.
Press releases will be distributed at the press conference. No other information will be available until the press conference.
Plattsburgh Man Arrested for Production of Child PornographyRead the Press Release
PLATTSBURGH, NEW YORK – Heath Powers, 33, of Plattsburgh, was arrested on August 11, 2014, and charged by complaint with production of child pornography announced United States Attorney Richard S. Hartunian and Federal Bureau of Investigation Special Agent-in-Charge Andrew W. Vale. Following an initial appearance before United States Magistrate Judge Larry Kudrle, Powers has been held without bond. If convicted, Powers faces at least 15 years and up to 30 years in prison, followed by a lifetime term of supervised release, a $250,000 fine, and registration as a sex offender.
The case is being investigated by the Federal Bureau of Investigation. If anyone has information regarding this matter, please contact the Federal Bureau of Investigation at telephone number 1- 800-CALL-FBI. The prosecution is being handled by Assistant United States Attorney Katherine Kopita.
The charges in the complaint are merely accusations and the defendant is presumed innocent until and unless proven guilty.
Alien Sentenced for Illegal Re-entryRead the Press Release
Had Been Removed Five Times
ALBANY, NEW YORK – Jesus Vasquez-Loyola (28, of Valatie, NY) was sentenced today to serve 14 months in prison by Chief United States District Court Judge Gary L. Sharpe announced United States Attorney Richard S. Hartunian and the Department of Homeland Security, Immigration and Customs Enforcement (ICE). In May, Vasquez-Loyola pled guilty to illegally reentering the United States following removal, a felony under federal law. Following the completion of the term of imprisonment, the Department of Homeland Security will process Vasquez-Loyola for removal from the United States to Mexico.
In April 2014, Vasquez-Loyola was arrested by New York State Police Officers in Kinderhook, New York and charged with several offenses including driving while intoxicated. Vasquez-Loyola had been previously removed to Mexico five times, most recently in July 2012 after his conviction in the Northern District of New York for illegally entering the United States after removal.
The case was investigated by the Department of Homeland Security, Immigration and Customs Enforcement (ICE), Albany, NY.
Mechanicville Man Indicted on Child Pornography ChargesRead the Press Release
Alleged Production of Child Pornography
ALBANY, NEW YORK – A grand jury returned an indictment charging ROBERT McLAUGHLIN, age 57, of Mechanicville, New York, with two counts of production of child pornography, announced United States Attorney Richard S. Hartunian.1 McLAUGHLIN faces up to 30 years of imprisonment and a maximum fine of $250,000 on each count.
McLAUGHLIN had his initial appearance and arraignment on the charges in Albany today before the Honorable Christian F. Hummel, United States Magistrate Judge. McLAUGHLIN was detained pending resolution of the charges.
According to the indictment, between 2012 and 2014, McLAUGHLIN engaged in sexually explicit conduct with two young girls and also produced visual depictions of such conduct.
This case is being investigated by the New York State Police and the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Lisa M. Fletcher and Special Assistant United States Attorney Amanda W. Cox.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about Internet safety education, please visit www.usdoj,gov/psc and click on the “resources” tab.
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1The charge is merely an accusation, and the defendant is presumed innocent until and unless proven guilty.
Revised Syracuse Man Sentenced on Gun ChargeRead the Press Release
SYRACUSE, NEW YORK – Yesterday, Derrick Richards (42, of Syracuse, NY) was sentenced to 37 months imprisonment in U. S. District Court according to United States Attorney Richard S. Hartunian. In February, Richards pled guilty to possessing a firearm as a convicted felon, a felony under federal law. In addition to his term of incarceration, U.S. District Court Judge Glenn T. Suddaby ordered that Richards be placed on a 3 year term of federal supervised release.
In June 2013, Syracuse Police officers were called to a residence on W. Calthrop Avenue in Syracuse regarding a domestic dispute complaint involving a weapon. During their investigation police determined Richards was in possession of a 9mm Hi-Point rifle. Given that Richards had previously been convicted of Robbery in the First Degree, he was prohibited from possessing any firearms.
The case was investigated by the Syracuse Police Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Syracuse Resident Office and prosecuted by Assistant U.S. Attorney Richard Southwick.
Former Saratoga County Deputy Sheriff Pleads Guilty to Drug ChargeRead the Press Release
Transported a Confidential Source Who Claimed to Possess Cocaine in an FBI Sting
ALBANY, NEW YORK —CHARLES E. FULLER, age 46, of Corinth, New York, pled guilty today in Albany before Chief United States District Court Judge Gary L. Sharpe to one count of attempting to aid and abet the possession with intent to distribute a controlled substance, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in- Charge, Federal Bureau of Investigation, Albany Division. Fuller faces at least five years of imprisonment and up to forty years of imprisonment.
During the plea hearing, Fuller admitted that in February of 2014, while he was employed as a Saratoga County Deputy Sheriff, he accepted a total of $5,000 from a confidential source supervised by the Federal Bureau of Investigation as payment for transporting the confidential source while the source was carrying what Fuller believed to be cocaine. The source actually had imitation cocaine. The defendant made two trips from Albany to Warren County: one on February 19, 2014 and one on February 27, 2014. During the first trip, the defendant drove the source with what he believed to be 250 grams of cocaine in return for $1,000, and during the second trip, the defendant transported the source with what he believed to be one kilogram of cocaine in return for $4,000.
Sentencing is scheduled for December 18, 2014, at 1:00 p.m. in Albany, New York. This case was investigated by the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Daniel Hanlon.
New York Heart Center to Pay More Than $1.33 Million to Settle Allegations of False Claims Act and Stark Law ViolationsRead the Press Release
Cardiology Practice Allegedly Compensated Physicians for Improper Referrals
ALBANY, NEW YORK: Cardiovascular Specialists, P.C., d/b/a New York Heart Center (NYHC) – a group practice of cardiologists with offices throughout central and northern New York – has agreed to pay the United States $1,336,636.98 plus interest to resolve allegations that it violated the False Claims Act and the Physician Self-Referral Law (commonly known as the Stark Law) by knowingly compensating its physicians in a manner that violated federal law, announced United States Attorney Richard S. Hartunian.
The Stark Law is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives that encourage referrals for unnecessary services, which drive up health care costs for Medicare beneficiaries and the Medicare program. The law prohibits physicians from referring Medicare beneficiaries to health care providers, including providers in their own group medical practices, for certain services if their financial relationships with the provider do not fall within an exception to the Stark Law. In the case of financial relationships between a medical practice and its physicians, the exceptions do not permit practices to compensate physicians in a manner that directly takes into account the volume or value of the physician’s referrals for services that are not personally performed by the ordering physician. If a group’s financial relationship with a physician does not satisfy an exception, the group cannot bill Medicare for the physician’s prohibited referrals.
The settlement announced today resolves allegations that, from September 2007 through August 2008, compensation for each NYHC partner-physician was determined using a formula that took into account the volume or value of that physician’s referrals for nuclear scans and CT scans, in violation of the Stark Law and the False Claims Act. The government’s investigation revealed that NYHC adopted this formula with knowledge that it could violate the Stark Law.
United States Attorney Hartunian said: “Today’s settlement is another example of this office’s commitment to ensure that services paid for by federal health care programs are based on the best interests of patients rather than the financial interests of referring physicians. The United States Department of Health and Human Services’ Office of Inspector General should be commended for bringing this issue to light and for its outstanding investigation.”
“Medical decisions should always be made on the basis on what’s best for the patient’s health, not the physician’s finances. The compensation system in place in this case had the potential to influence medical judgment, which would be unacceptable,” said Special Agent in Charge Thomas O’Donnell of the Department of Health and Human Services Office of Inspector General (HHS-OIG), New York region.
The investigation and settlement were the result of a coordinated effort between the United States Attorney’s Office for the Northern District of New York and HHS-OIG, with the assistance of the Department of Justice’s Civil Division. Locally, the United States was represented by Assistant United States Attorney Adam J. Katz.
Rochester Man, A Registered Sex Offender, Sentenced to 45 Years for Attempting to Entice A Minor and to Produce Child PornogrpahyRead the Press Release
ALBANY, NEW YORK – JOHN DOOLEY, age 57, of Rochester, New York, was sentenced today by Senior United States District Judge Thomas J. McAvoy to 45 years of imprisonment for (1) attempted enticement of a minor to engage in sexual activity; (2) attempted production of child pornography, and (3) committing a felony offense involving a minor while already required to registered as a sex offender, announced United States Attorney Richard S. Hartunian, Saratoga Springs Police Chief Gregory Veitch, and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. A jury found DOOLEY guilty of the offenses in October 2013 following a three-day trial.
DOOLEY, a registered Level III sex offender with two previous convictions for sexual abuse of a minor, was arrested on May 11, 2012, in Saratoga Springs, New York, after he travelled there to meet “Kara,” a fifteen year old girl he met in a Yahoo! chat room. “Kara” was actually an undercover Saratoga Springs Police Investigator, and DOOLEY had been communicating with “Kara” for one and one-half months via Yahoo! Messenger. During the online communications, the undercover investigator repeatedly told DOOLEY that “Kara” was 15. DOOLEY told “Kara” that he would travel to Saratoga Springs, rent a motel room, have sex with her, and capture that sexual conduct on digital photo and video. On May 11, 2012, Dooley drove from Rochester to Saratoga Springs, checked into his motel room, and brought with him various sexual devices, vodka, computer equipment, cameras, and presents for “Kara,” including lingerie.
This prosecution resulted from an investigation conducted by the Saratoga Springs Police Department and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
New York City to Pay More Than $1 Million to Resolve Medicaid False Claims Act LawsuitRead the Press Release
New York City Human Resources Administration Accepts Responsibility for Causing
Managed Care Organizations to Insure Individuals who were Ineligible
for Benefits through New York State’s Medicaid ProgramALBANY, NEW YORK – The City of New York has agreed to pay the United States $1.05 million to settle allegations that the New York City Human Resources Administration (HRA) violated the False Claims Act by causing various insurance companies (known as “managed care organizations” or “MCOs”) to provide health care coverage to individuals that HRA knew, or should have known, were ineligible to receive Medicaid benefits through New York State’s Medicaid program, according to United States Attorney Richard S. Hartunian.
Medicaid is a matching program in which the United States shares with the States the cost of medical services for low income and disabled individuals. Several MCOs have contracted with the State of New York to provide health care coverage to Medicaid beneficiaries who reside in New York City in exchange for fixed monthly payments. Many individuals who qualify for Medicaid also receive assistance under the federal Supplemental Security Income (SSI) program, which provides financial assistance to the elderly, blind, and disabled. In many States, including New York, SSI recipients automatically qualify to receive Medicaid benefits. When a Medicaid beneficiary residing in New York City moves to another State and enrolls for SSI benefits, the federal government provides written or electronic notification to the New York State Department of Health (DOH), which administers the Medicaid program throughout New York. Once DOH receives this information, it must promptly forward it to HRA. HRA, in turn, has an obligation to quickly review the information and, where appropriate, close a beneficiary’s Medicaid case if it determines that the beneficiary has moved out of New York City. If HRA fails to timely close a Medicaid case after learning from DOH or from another source that the beneficiary has relocated to another State, the MCO insuring that person will continue receiving monthly payments to insure an individual who is no longer eligible for Medicaid coverage in New York.
The United States’ investigation revealed that, although MCOs on several occasions notified HRA in writing that certain beneficiaries may have moved out of State, HRA failed to appropriately follow up on that information and work with DOH to ensure that MCOs stopped receiving monthly payments. As part of the settlement, HRA accepted responsibility for failing to timely review and close certain Medicaid cases after being provided information that those beneficiaries may have moved outside of New York City, and it admitted that its inaction caused one or more MCO to receive payments to insure individuals who were ineligible for benefits through New York State’s Medicaid program. HRA also agreed as part of the settlement to establish a process to investigate and close Medicaid cases whenever it receives information suggesting that a Medicaid beneficiary no longer resides within its coverage area.
United States Attorney Hartunian said: “Safeguarding public dollars is one of this office’s top priorities. When the United States entrusts other entities to administer federally funded programs, they must ensure that government funds are put to proper use. With today’s settlement, HRA has accepted responsibility for its past inaction and agreed to implement measures that will help ensure scarce taxpayer dollars are not wasted paying MCOs in New York to insure individuals who have moved to other States. I would like to thank the agents and auditors from the United States Department of Health and Human Services’ Office of Inspector General for their diligent efforts bringing this matter to a successful conclusion.”
“This settlement is yet another example of OIG’s commitment to ensuring that federal health care programs are administered with integrity,” said Thomas O’Donnell, Special Agent in Charge, United States Department of Health and Human Services, Office of Inspector General (HHS-OIG), New York Regional Office.
The government’s investigation was triggered by a whistleblower lawsuit filed under the qui tam provisions of the False Claims Act, which allow private persons, known as “relators,” to file civil actions on behalf of the United States and share in any recovery. The relator in this case will receive $175,000 from the settlement.
The investigation and settlement were the result of a coordinated effort between the United States Attorney’s Office for the Northern District of New York and HHS-OIG. The United States was represented by Assistant United States Attorney Adam J. Katz.
Greene County Man Pleads Guilty to Social Security FraudRead the Press Release
ALBANY, NEW YORK – RICHARD J. GODDEAU, age 46, of Athens, New York, pled guilty today in Albany to one count of Social Security fraud and one count of theft of government property before Chief United States District Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian, Special Agent in Charge Edward J. Ryan of the Social Security Administration, Office of Inspector General, Office of Investigations, New York Field Division, the United States Secret Service, and Shelly Binkowski, Inspector in Charge, United States Postal Inspection Service, Boston Division.
As part of his guilty plea, GODDEAU admitted that he made false statements to Social Security Administration personnel to obtain Social Security Supplemental Security Income benefits payments to which he was not entitled. For example, he concealed that he was operating a business and living with his wife, and falsely claimed that he was paying rent and living at a different address.
GODDEAU faces up to 5 years of prison on the Social Security fraud count, 10 years of prison on the theft of government property count, and fines of up to $250,000 on both counts. GODDEAU’s plea agreement also requires that he pay $54,285 in restitution to the Commissioner of Social Security. GODDEAU will be sentenced in Albany, New York, on December 2, 2014.
This case was investigated by the Social Security Administration, Office of Inspector General, with the assistance of the United States Secret Service and the United States Postal Inspection Service, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Jamesville Man Enters Guilty Plea to Conspiracy to Commit Bank FraudRead the Press Release
RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York announces that DAVID PIZIO (58, of Jamesville, NY) entered a guilty plea in U.S. District Court to the felony offense of conspiracy to commit bank fraud. The defendant is facing a statutory maximum of 30 years imprisonment and a maximum fine of $1,000,000.00. PIZIO is scheduled to be sentenced on December 5, 2014, before the Honorable David N. Hurd in Utica, NY.
During the plea hearing on July 24, 2014, PIZIO admitted he was one of the owners of Syracuse Suburban Airport, LLC (“SSA”). In 2004, SSA purchased a 93 acre reliever airport site in Hastings, New York for $350,000.00. Between 2004 and 2009, SSA received five Federal Aviation Administration (“FAA”) grants totaling approximately $2,973,621.00 to be used for planning and development at the reliever airport in Hastings.
On April 29, 2005, SSA obtained a line of credit from First Niagara Bank in the amount of $650,000.00. The line of credit agreement stated that the loan proceeds were to be used by SSA only for airport expenditures reimbursable by the FAA through the grants. The line of credit agreement specifically listed DAVID PIZIO as one of the persons authorized to make requests for loans under the line of credit. PIZIO was authorized to sign for all bank accounts bearing the name of SSA, including the First Niagara line of credit.
$125,000.00 to a Texas real estate project
On December 13, 2005, PIZIO submitted an invoice to First Niagara Bank for the release of loan proceeds in the amount of $125,000.00 for the purchase of airport equipment. On that same day, First Niagara Bank transferred $125,000.00 into SSA’s checking account at First Niagara Bank. PIZIO never intended to use the $125,000.00 to purchase airport equipment. Instead, PIZIO invested the $125,000.00 in a Texas real estate project without the knowledge or consent of First Niagara Bank.
$97,604.00 to the Upstate New York Bean Company
In 2006, PIZIO opened an investment brokerage account in the name of Gildner Road Associates (“GRA”). GRA was a corporation owned by PIZIO. Thereafter, PIZIO submitted an invoice to First Niagara Bank for the release of funds in the amount of $97,604.00 for the purchase of airport equipment. On that same day, First Niagara Bank transferred $97,604.00 into SSA’s checking account at First Niagara Bank. PIZIO never intended to use the $97,604.00 to purchase airport equipment. Instead, PIZIO transferred $96,000.00 from the GRA checking account to the investment account without the knowledge or consent of First Niagara Bank. In June of 2006, PIZIO transferred the money to the Upstate New York Bean Company. In 2006, PIZIO was affiliated with the Upstate New York Bean Company located in Marcellus, New York. In June 2006, PIZIO received First Niagara Bank loan proceeds in the form of checks from the Upstate New York Bean Company. The Upstate New York Bean Company is currently out of business.
This prosecution resulted from an investigation conducted by the U.S. Department of Transportation-Office of Inspector General, and the Federal Bureau of Investigations. The case was prosecuted by Assistant United States Attorney Ransom P. Reynolds. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315-448-0672).
New Hartford Man Indicted for Filing False Tax ReturnsRead the Press Release
RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York announces that a federal grand jury in Syracuse has returned an indictment charging DINO F. TUCCIARONE (56, of New Hartford, NY) with filing false tax returns with the Internal Revenue Service (“IRS”). If found guilty, the defendant faces a statutory maximum sentence of 3 years and a maximum fine of $100,000.00 per count of conviction.
The indictment alleges the defendant filed false Form 1040 tax returns with the IRS for tax years 2007 through 2009. Specifically, the indictment alleges that, under the penalty of perjury, the defendant falsely underreported his income for all three tax years.
The charges and allegations contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
This prosecution resulted from an investigation conducted by the Internal Revenue Service Criminal Investigation Division, Syracuse, New York. The case was prosecuted by Assistant United States Attorney Ransom P. Reynolds. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315-448-0672).
Capital District Man and Woman Arraigned on Social Security Disability and Workers’ Compensation Fraud ChargesRead the Press Release
ALBANY, NEW YORK – JOHN W. CALTABIANO, Jr., 47, of Cairo, New York, and COLLEEN J. McCARTEN, 41, of Coxsackie, New York, appeared today before Magistrate Judge Randolph F. Treece in U.S. District Court in Albany to be arraigned on an 11-count July 17, 2014, indictment charging them with engaging in a fraudulent scheme to obtain Social Security Disability and New York State Workers’ Compensation benefits, announced United States Attorney Richard S. Hartunian and Special Agent Edward J. Ryan of the Social Security Administration, Office of the Inspector General, Office of Investigations, New York Field Division.
According to the indictment, CALTABIANO and McCARTEN conspired to fraudulently obtain payments by submitting false information in connection with CALTABIANO’s Social Security Disability and Workers’ Compensation claims. The indictment alleges that McCARTEN and CALTABIANO submitted documents to the Social Security Administration falsely stating that CALTABIANO could not go out alone or drive, and that McCARTEN led CALTABIANO into a Workers’ Compensation Board hearing as if he was blind, when in fact CALTABIANO regularly moved without assistance and drove a car.
If convicted, CALTABIANO and McCARTEN face up to 20 years in prison on a conspiracy to commit mail fraud count and each of five mail fraud counts, up to five years in prison on each of two Social Security Disability fraud counts and two false statements counts, and up to 10 years in prison on a theft of government property count. They could also be ordered to pay fines of up to $250,000 on each count.
The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.
The indictment resulted from an investigation conducted by the Social Security Administration, Office of the Inspector General, with assistance from the Workers’ Compensation Board, Office of Fraud Inspector General. The case is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Utica Physician Acquitted of Health Care Fraud and Mail Fraud Charges in Connection with His Billing PracticesRead the Press Release
SYRACUSE, NEW YORK – A federal jury in Utica, New York found Dilip D. Kachare, a Utica, New York physician, not guilty of three counts of health care fraud and sixteen counts of mail fraud following a four week trial before the Honorable David N. Hurd, United States District Judge.
Today’s verdict follows a prior three week trial in October/November 2013, when a mistrial was declared after a jury was unable to reach a decision after three days of deliberation.
United States Attorney Richard S. Hartunian said, “Although this was not the outcome we expected based on the evidence presented, we believe that justice is served when a case is fully and fairly adjudicated before an impartial, attentive jury who listened to the facts that were presented and tested by lawyers on both sides of the issue; that is what happened here and we accept the jury’s verdict. We bring cases based on the facts and the law, not popularity or other good works, and we do not shy away from difficult cases, especially those involving the misappropriation of public funds.”
The indictment resulted from an investigation conducted by the U.S. Department of Health and Human Services Office of Inspector General and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Kevin P. Dooley of the Binghamton office. Further inquiries can be directed to Executive Assistant U.S. Attorney John Duncan at the (315) 448-0672.
Warren County Man Sentenced to 120 Months in Prison for Possessing and Receiving Child PornographyRead the Press Release
Defendant Used his Computer and the Internet to Download and Save Approximately 600 Child Pornography Files
ALBANY, NEW YORK – GARY MINER, age 45, of Glens Falls, New York was sentenced on July 10, 2014 to 120 months of imprisonment for possessing and receiving child pornography by United States District Court Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. MINER, who had entered a guilty plea on February 6, 2014, was also ordered to serve a 25 year term of supervised release, to have no unsupervised contact with minors, and to register with the New York State Sex Offender Registry Program.
Between January 2010 and November 29, 2011, MINER used the Internet to download approximately 600 files that contained child pornography from a website and other individuals.
This case was investigated by the Federal Bureau of Investigation.
C.p. Buckner Steel Erection, Inc. Enters into $825,000 Settlement of Claims Related to Employment of Illegal AliensRead the Press Release
ALBANY, NEW YORK –C.P. Buckner Steel Erection Inc., (“Buckner”) of Graham, North Carolina has agreed to pay $825,000 in civil forfeiture over two years as part of a settlement in an investigation of its employment of illegal aliens announced United States Attorney Richard S. Hartunian and U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), Assistant Special Agent in Charge, Nicholas DiNicola. As part of the settlement agreement, if Buckner fully complies with the terms of the settlement agreement, the United States Attorney for the Northern District of New York agrees not to pursue corporate criminal charges against Buckner for its employment of illegal alien workers before March 31, 2009.
The government’s investigation documented that Buckner employed workers at projects who were not eligible to work. The investigation began in January 2009 following a tip that Buckner had transported illegal aliens from North Carolina to a Beech-Nut project in Montgomery County, New York. Regarding that project, on January 22, 2009 and February 18, 2009, HSI arrested a total of nine Buckner employees, including two supervisors, because they were unlawfully present in the United States. Six of those employees were released, and Buckner continued to employ them. In addition, after the first arrests, the employees moved from a hotel located within one mile of the project to one thirty miles away. This move was approved by Buckner.
On February 28, 2009, when auditors from the New York State Department of Labor (“DOL”) and the New York State Bureau of Criminal Investigation (“BCI”) appeared unannounced at the project to interview employees, all but one employee, who was also not authorized to work, fled. Those employees, as approved by Buckner, went to North Carolina and continued working for Buckner there despite the fact that they were not authorized to work. Until April 2009, Buckner failed to make further inquiry regarding the work authorization status of those employees who had fled and other employees in its workforce who Buckner had sponsored for green cards consciously avoiding the inferences that could be drawn from the combination of the Buckner’s sponsorship of the employees in the green card program, the crew’s action in the Northern District of New York, and HSI’s arrest of Buckner employees in 2008 and 2009. In addition, Buckner had received repeated notices over multiple years from the SSA of hundreds of irregularities in the social security numbers used for employment purposes by its workers.
Under the settlement agreement, which remains in effect until July 10, 2016, Buckner agrees to cooperate fully and actively with the U.S. Attorney’s Office and the government entities involved in the investigation. Buckner is also required to continue remedial hiring actions implemented after it learned about the investigation on March 31, 2009. Those actions include using DHS’s “E-Verify” screening program for all new hires, verifying the social security numbers of all Buckner employees, and maintaining an employee hotline to receive reports of any suspected violation of law at the company.
The investigation was conducted by HSI. The case is being handled by Assistant United States Attorneys Edward Grogan and Gwendolyn Carroll.
Watertown Area Hospital Settles Health Care LawsuitRead the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that his office has settled a civil action under the False Claims Act, against the Carthage Area Hospital. This case involves allegations that the Carthage Area Hospital (“Carthage”) doublebilled Medicare for operating room services and ambulatory services from September 1, 2006 through June 30, 2010. Carthage submitted approximately 1900 claims for payment to Medicare which improperly contained both revenue code 360 (operating room services) and revenue code 490 (ambulatory surgery).
The parties have agreed to a civil resolution of this case, in which Carthage will pay the United States $750,000.00. While the United States was entitled to seek double or treble damages plus fines and penalties under the False Claims Act, this settlement reflects single damages (the approximate amount of the excess billing), in light of the unique circumstances of this case and the full cooperation of Carthage throughout this investigation.
Richard S. Hartunian, United States Attorney for the Northern District of New York, stated that “Health care fraud is a priority of the Department of Justice and this office. This settlement reflects an appropriate resolution of this case in light of the circumstances. We wish to recognize the full cooperation of Carthage throughout this investigation.”
This case was investigated by the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS OIG”). The excess billing was confirmed by the HHS OIG investigation, as well as a self-audit conducted by Carthage.
This matter is assigned to Assistant U.S. Attorney Charles E. Roberts. News inquiries should be directed to Executive Assistant United States Attorney John Duncan, tele. (315) 448- 0672.
Albany Man Indicted on Mail Fraud ChargesRead the Press Release
Lottery Fraud Scheme Targeted Elderly Victims
ALBANY, NEW YORK – A federal grand jury returned an indictment yesterday charging DOUGLAS WATSON, 30, of Albany, NY, with three counts of mail fraud in connection with an “advance-fee scam” that targeted elderly victims, announced United States Attorney Richard S. Hartunian, United States Postal Inspection Service - Boston Division Inspector-in-Charge Shelly Binkowski, and Homeland Security Investigations Assistant Special Agent-in-Charge Nicholas DiNicola. If convicted, WATSON faces up to twenty years in prison and a fine of up to $250,000 on each count. WATSON was arraigned in Albany on Thursday, July 10, 2014, before United States Magistrate Judge Christian F. Hummel and was released on a $25,000 secured bond.
According to the indictment, WATSON received at least $25,000 from elderly victims in Massachusetts and Washington, D.C. who sent him money through the United States Mail after being told that they had won the lottery and needed to pay “taxes” and “fees” to claim their winnings. In reality, they had not won any lottery.
The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.
The indictment resulted from an investigation conducted by the United States Postal Inspection Service and Homeland Security Investigations, with the assistance of the Pittsfield, Massachusetts Police Department. The case is being prosecuted by Assistant United States Attorney Sean O’Dowd.
Watertown Man Enters Guilty Plea to Firearms and Armed Robbery ChargesRead the Press Release
RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York announces that ROBERT A. WILLIAMS (22, of Watertown, NY) entered a guilty plea to the felony offenses of being a convicted felon in possession of firearms and ammunition, in violation of Title 18, United States Code, Section 922(g)(1), and using and carrying a firearm during and in relation to a crime of violence, in violation of Title 18, United States Code, Section 924(c)(1)(A). The defendant is facing a statutory maximum of life, a mandatory minimum of 25 years imprisonment and a maximum fine of $250,000.00 per count of conviction. WILLIAMS is scheduled to be sentenced on November 14, 2014, before the Honorable Glenn T. Suddaby in Syracuse, NY.
During the plea hearing on July 8, 2014, WILLIAMS admitted the following. On July 31, 2013 at approximately 12:41 am, WILLIAMS and another male entered Sunoco located at 1222 Washington Street, Watertown, New York intending to commit a robbery. After entering Sunoco, WILLIAMS pointed a sawed-off 12 gauge shotgun at the store clerk and stated “give me your money.” The clerk then opened the cash register drawer and placed approximately $513.00 in United States currency in a store bag. At the same time, the other male removed approximately $395.00 in tobacco products from behind the counter and instructed the clerk to get on the floor.
WILLIAMS further admitted that he had also possessed a Remington rifle and a Savage shotgun at his Watertown residence. In 2012, WILLIAMS was convicted in Jefferson County Court of four counts of Third Degree Burglary.
This prosecution resulted from an investigation conducted by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, Syracuse, New York, the Watertown Police Department and the Metro-Jefferson Drug Task Force. The case was prosecuted by Assistant United States Attorney Ransom P. Reynolds. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315-448-0672).
John Tebbetts Sentenced in Federal CourtRead the Press Release
Owner of Tebbs Head shops Sentenced to 87 Months
SYRACUSE, NEW YORK – RICHARD S. HARTUNIAN, United Sates Attorney, Northern District of New York, announces that JOHN TEBBETTS, age 34, of Rome, NY, was sentenced today in U.S. District Court in Syracuse to 87 months imprisonment, followed by 3 years of supervised release, for distributing synthetic drugs from his 12 head shops.
As part of his plea, TEBBETTS admitted to owning several Tebbs head shops in Central New York and Maine, as well as a warehouse in Oneida. TEBBETTS admitted that he possessed the Schedule I controlled substances: AM-2201, JWH-122, JWH-203, and JWH-250, all synthetic cannabinoids (commonly referred to as “Spice” or “K2”) with the intent to distribute these products. TEBBETTS also admitted to possessing controlled substance analogues (synthetic cathinones, commonly known as “Bath Salts”) with the intent to distribute them and intending that these substances be used for human consumption. Lastly, TEBBETTS admitted to purchasing a 2012 motor home for over $157,000.00 which was cash proceeds from his illegal sale of controlled substances and controlled substance analogues. As part of his plea, TEBBETTS agreed to forfeit six vehicles, including the motor home, and over $314,000.00.
These prosecutions resulted from a lengthy investigation undertaken in the spring of 2012 by the Syracuse Resident Office of the Drug Enforcement Administration (DEA), along with the Onondaga County Sheriff’s Office, and the Department of Homeland Security.
Further questions or inquiries may be directed to Assistant United States Attorney Carla Freedman, the prosecutor handling the case, at (315) 448-0672.
Former Saratoga County Deputy Sheriff Sentenced to Five Years on Drug ChargeRead the Press Release
Transported a Confidential Source Who Claimed to Possess Cocaine in an FBI Sting
ALBANY, NEW YORK —CHARLES E. FULLER, age 46, of Corinth, New York, was sentenced today by Chief United States District Court Judge Gary L. Sharpe to five years in prison for attempting to aid and abet the possession with intent to distribute a controlled substance, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division.
As Fuller admitted during his August 20, 2014 guilty plea, in February of 2014, while he was employed as a Saratoga County Deputy Sheriff, he accepted a total of $5,000 from a confidential source supervised by the Federal Bureau of Investigation (“FBI”) as payment for transporting the confidential source while the source was carrying what Fuller believed to be cocaine. The source actually had imitation cocaine. The defendant made two trips from Albany to Warren County: one on February 19, 2014 and one on February 27, 2014. During the first trip, the defendant drove the source with what he believed to be 250 grams of cocaine in return for $1,000, and during the second trip, the defendant transported the source with what he believed to be one kilogram of cocaine in return for $4,000.
This prosecution resulted from an investigation conducted by the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Daniel Hanlon.
Cicero Man Charged with Mailing Fake Anthrax/ricin LettersRead the Press Release
SYRACUSE, NEW YORK - This morning, agents from the Federal Bureau of Investigation, Syracuse Office, and the United States Postal Inspection Service, arrested BRIAN DANIEL NORTON, age 59, of Cicero, New York, on federal felony charges of mailing threatening communications and transmitting false information and hoaxes in violation of 18 U.S.C. §876(c) and 1038(a), respectively, according to United States Attorney Richard S. Hartunian.
The charges relate to conduct by Norton in mailing 21 threatening letters containing white powder, alleged to be either anthrax or ricin to various addresses in the Syracuse, New York area and elsewhere beginning in about 1997 and continuing through 2012. Those receiving the letters included LeMoyne College and Bishop Ludden High School in Syracuse, as well as U.S. Senator John McCain, then-Secretary of Defense Robert Gates and former Congresswoman Ann Marie Buerkle. Later analysis of the powder contained in the letters proved that it was harmless.
Norton made an initial appearance in U.S. District Court in Syracuse before the Hon. David E. Peebles today. If convicted, Norton faces a maximum possible sentence of ten years incarceration. He is being detained pending a detention hearing scheduled for Monday, June 16th at 11am.
The case is being investigated by the Federal Bureau of Investigation, Syracuse Resident Office and the United States Postal Inspection Service, Syracuse Office, and prosecuted by Assistant United States Attorney Stephen C. Green.
For additional information, contact Executive Assistant U.S. Attorney John G. Duncan at 315-448-0672.
The charges in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Washington County Man Sentenced to 15 Years for Receiving Child PornographyRead the Press Release
ALBANY, NEW YORK – CHRISTOPHER J. WHITE, age 29, of Whitehall, New York, was sentenced today to 15 years in prison for receiving child pornography by United States District Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian, Joseph D’Amico, Superintendent of the New York State Police, and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation. WHITE must also serve a life term of supervised release and register as a sex offender.
As part of his February 24, 2014, guilty plea, WHITE admitted that, following his 2010 Attempted Sexual Abuse in the First Degree conviction in Saratoga County Court, he used the Internet to search for, receive, and view images of child pornography.
This case was investigated by the New York State Police and the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Troy Man Pleads Guilty to Receiving Child PornographyRead the Press Release
ALBANY, NEW YORK – DANIEL J. KEMPROWSKI, age 25, of Troy, New York, pled guilty today in Albany to one count of receipt of child pornography and three counts of possession of child pornography before Chief United States District Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Albany Division of the Federal Bureau of Investigation.
KEMPROWSKI, who was detained pending his sentencing, faces at least five years and up to 80 years of imprisonment, a lifetime term of supervised release, and fines of $250,000 on each of the four counts. He must also register as a sex offender. KEMPROWSKI will be sentenced in Albany, New York, on September 4, 2014.
As part of his guilty plea, KEMPROWSKI admitted that from June 2010 through September 2012, he downloaded still images and videos of child pornography through a file sharing program. On September 6, 2012, an investigator accessed file sharing network and downloaded four video files depicting child pornography from the defendant’s computer. On January 18, 2013, investigators searched KEMPROWSKI’s residence and recovered approximately 1,300 images and 185 videos depicting child pornography.
This case was investigated by the Federal Bureau of Investigation, Albany Division, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.