Northern District of New York
Press releases recorded for this federal judicial district.
Utica Man Sentenced to 20 Years for Child PornographyRead the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced that John Killingbeck, 63, of Utica, New York was sentenced in federal court in Utica today on two counts of receiving and three counts of possessing child pornography, stemming from his conviction on those charges in December following a jury trial.
United States District Court Judge, Hon. David N. Hurd sentenced Killingbeck to a total of 20 years in federal prison: concurrent sentences of 20 years on each of his convictions for receiving child pornography, to be served concurrently to 10 year sentences on each of the possession charges. The Court further ordered that upon release from federal prison Killingbeck will be placed on federal supervised release for an additional 20 years. He will also have to register as a sex offender.
Killingbeck’s arrest was the result of an investigation by the Oneida County Child Advocacy Center, Oneida County District Attorney’s Office, and the Utica Police Department. The case was adopted for federal prosecution by the United States Secret Service and the United States Attorney’s Office as a part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, 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.justice.gov/psc.
The federal prosecution was handled by Assistant U.S. Attorney Lisa Fletcher.
Jett Industries Pays $500,000 to Settle Civil Fraud AllegationsRead the Press Release
Colliersville Contractor Accepts Responsibility for Submission of False Certification to EPA in Connection With Construction of a Water Pump Station in the Village of Briarcliff Manor
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian and Environmental Protection Agency (EPA) Inspector General Arthur A. Elkins, Jr. announced today that Jett Industries, Inc. (Jett) has paid the United States $500,000 to settle allegations that Jett violated the False Claims Act by falsely certifying compliance with the American Recovery and Reinvestment Act of 2009 (Recovery Act) in connection with a federally-funded contract it performed for the Village of Briarcliff Manor. Jett, a Colliersville-based general contractor, specializes in the construction and modification of water and wastewater treatment facilities.
In January 2009, Jett was awarded a contract to construct a water pump station for the Village of Briarcliff Manor (the Project). A component of the Project was a bladder surge tank, which was to be made, in part, of steel. Prior to the date Jett began construction on the Project, the company knew that it would be paid with Recovery Act funds and, as such, any steel used on the Project was required to be produced in the United States. As time went on, several Jett employees learned that the tank Jett ordered had been manufactured in France, and those same employees expressed concern amongst one another that installation of a French-manufactured tank on the Project may violate the Recovery Act’s “Buy American” provision. Nevertheless, Jett accepted delivery of and decided to install the non-compliant tank on the Project. A Jett employee later used a Jett computer to create a certification, purportedly from the tank’s manufacturer, which falsely asserted that the French-made tank had been manufactured in the United States. That same day, the same Jett employee sent the false certification to a consultant for the Village of Briarcliff Manor, falsely representing that the Project was compliant with the Recovery Act, so that Jett could obtain payment for the Project.
As part of the settlement, Jett admitted, acknowledged, and accepted responsibility for its actions, including an admission that one of its former employees created a false certification, and caused a third party to present that false certification to EPA, “to cover up Jett’s violation” of the requirement that all steel goods used on the Project be produced in the United States. Jett also agreed as part of the settlement to work with the Village of Briarcliff Manor to bring the Project into compliance with the Recovery Act.
United States Attorney Hartunian said: “Protecting taxpayer dollars is one of our core priorities. Companies that do business with the government must do so honestly, or suffer the consequences. The Recovery Act was designed to stimulate our Nation’s economy in the wake of an economic crisis unlike any since the Great Depression, and we will continue to pursue vigilantly those who misuse funds designated for that purpose. With today’s settlement, Jett has accepted responsibility for its misconduct and has agreed to fix a problem it alone created.”
“The American people trust that the laws of their land will be followed or, when they are not, violations will be rectified,” said EPA Inspector General Elkins. “This settlement is the result of a careful investigation and an excellent working relationship between the EPA Office of Inspector General and the United States Attorney’s Office for the Northern District of New York. I am most appreciative of that office’s support and look forward to working together in the future to ensure that public funds are used as intended.”
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 EPA’s Office of Inspector General, with assistance from officials with the Village of Briarcliff Manor. The United States was represented by Assistant United States Attorney Adam J. Katz.
Defendant Pleads Guilty to Federal Offense of Sex Trafficking of A ChildRead the Press Release
Defendant Faces Imprisonment term of 10 years to Life
BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that Edward Tilden, 32 years of age and from Utica, New York, pleaded guilty today in federal court to an offense charging him with Sex Trafficking Of A Child.
In pleading guilty, Edward Tilden admitted that in and about February of 2012, in the Broome, Oneida, and Onondaga counties in the Northern District of New York and elsewhere, defendant Tilden and others, aiding and abetting each other, while in and affecting interstate commerce, did knowingly recruit, entice, harbor, transport, provide, obtain, and maintain by any means a person with the initials M.L., who had not attained the age of 18 years, knowing, or in reckless disregard of the fact that M.L. would be caused to engage in one or more commercial sex acts, and did benefit, financially and by receiving things of value, from participation in the venture which has engaged in the act described above, in violation of Title 18, United States Code, §§ 1591(a) & (b) and 2.
Tilden further admitted that he and others, while aiding and abetting each other, knowingly recruited, enticed, harbored, transported, provided, obtained, and maintained a minor with the initials M.L., who was 16 years of age at the time, in order to prostitute M.L. to adult men in exchange for money and controlled substances. Tilden and the others photographed and caused M.L. to be photographed in sexually seductive poses wearing only lingerie and posted said photographs of M.L. on Backpage.com, an internet classified advertising website, offering M.L. for sex in exchange for money. Additionally, Tilden and the others utilized cellular telephones to send mass cellular texts offering M.L. for sex to customers in exchange for money. Furthermore, Tilden and the others transported and caused M.L. to be transported to various locations including hotels where M.L. was instructed and caused to engage in commercial sex acts, in that, M.L. engaged in sexual acts including intercourse and oral sex with customers in exchange for money and controlled substances. Tilden and the others benefitted, both financially and by receiving things of value, by prostituting M.L. to customers, in that, Tilden and the others shared the money and controlled substances acquired from customers with whom M.L. was caused to engage in sex acts.
The federal charge stems from an investigation conducted by the FBI-Albany Division, New York State Police, Oneida County District Attorney’s Office, Utica Police Department, and the Oneida County Child Advocacy Center. The investigation concerned a prostitution ring involved in selling a minor to engage in sexual conduct in exchange for money and drugs. The prostitution ring utilized the website Backpage.com to advertise the prostitution. The ring also utilized a texting network to advertise their prostitution business. The Oneida County District Attorney has charged several other defendants with state crimes in connection to this overall joint investigation.
Edward Tilden continues to be held in the custody of the U.S. Marshal’s Service pending sentencing. Tilden is scheduled to be sentenced on September 19, 2014. At sentencing, he faces a statutory mandatory minimum term of 10 years prison and a maximum of life. The maximum possible fine is $250,000.
Albany Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
ALBANY, NEW YORK – PAUL SCROM, age 63, of Albany, New York, pled guilty today in Albany before Senior United States District Judge Thomas J. McAvoy to one count of distribution of child pornography, 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 faces a statutory mandatory minimum sentence of five years and a maximum sentence of twenty years, as well as a lifetime term of supervised release, a maximum fine of $250,000, and mandatory registration as a sex offender. SCROM will be sentenced in Albany, New York on October 14, 2014.
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 residence 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.
Bruno Acquitted of Honest Services Mail Fraud Involving BriberyRead the Press Release
ALBANY, NEW YORK – A federal jury in Albany found Joseph L. Bruno, the former New York State Senate Majority Leader, not guilty of honest-services mail fraud following a two week trial before the Honorable Gary L. Sharpe, Chief United States District Judge.
Today’s verdict follows a prior trial and two appeals. In December of 2009, a jury convicted Bruno of carrying out a scheme to defraud the State of New York and its citizens of the right to his honest services by soliciting private business from, and entering into financial relationships with, persons or entities who were pursuing interests before the New York State Legislature or other state agencies, and concealing and failing to disclose the existence and true nature of such financial relationships, and the resulting conflicts of interest, while taking discretionary official actions benefitting parties with whom he had those relationships. Then, in 2010, the United States Supreme Court decided United States v. Skilling, holding that the honest services statute criminalizes only fraudulent schemes involving bribes or kickbacks.
On November 16, 2011, the United States Court of Appeals for the Second Circuit issued an opinion vacating Bruno’s conviction and authorizing a retrial, as requested by the United States. The Court of Appeals noted that the jury had been instructed pursuant to the law in effect at the time of the trial, which had not required bribery or kickbacks to constitute honest services fraud, but the subsequent Skilling decision had changed the law. In determining that a retrial was proper, the Court of Appeals reviewed the case against the elements of honest services fraud as altered by Skilling and held that the evidence presented at trial was sufficient for a reasonable jury to find that Bruno engaged in a quid pro quo bribery scheme under the standard announced in Skilling.
On May 3, 2013, a federal grand jury returned a superseding indictment, and Bruno filed a motion to dismiss that indictment on double jeopardy grounds. Chief Judge Sharpe denied the motion, and Bruno filed an interlocutory appeal denied by the Second Circuit on August 6, 2013.
United States Attorney 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 facts that were presented and tested by talented 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 conduct of public officials who intertwine personal business and the public trust. No less than the Court of Appeals for the Second Circuit examined this case and found that there was sufficient evidence of a quid pro quo bribery scheme for a reasonable jury to convict Mr. Bruno on these counts. As the history of this case demonstrates, whether Mr. Bruno’s conduct constituted a federal crime needed to be decided by a jury.”
The investigation which led to this indictment was conducted by the Albany Division of the Federal Bureau of Investigation. The United States was represented in this prosecution by Assistant United States Attorneys Elizabeth C. Coombe and William C. Pericak.
David Renz Will Not Face A Federal Death Penalty ProsecutionRead the Press Release
SYRACUSE, NEW YORK – The U.S. Department of Justice has declined to authorize a death penalty prosecution against David Renz in connection with a potential federal carjacking charge and the resulting murder of Lori Bresnahan on March 14, 2013, announced United States Attorney Richard S. Hartunian. The death penalty cannot be sought in any federal prosecution without prior written authorization of the Attorney General. Renz will now be sentenced in Onondaga County Court to imprisonment for life without parole based upon his pleas of guilty to first degree murder and predatory sexual assault against a child.1
United States Attorney Richard S. Hartunian stated, “No sentence that could ever be imposed in this case will undo the tragic death of Lori Bresnahan or the pain inflicted on the young victim, or adequately account for the depravity of the crimes committed. The mandatory life sentence in state court and the imposition of an additional 30 year federal consecutive sentence will insure that David Renz can do no further harm.”
All federal criminal prosecutions that carry a potential sentence of death are thoroughly reviewed pursuant to a detailed protocol established by the Department of Justice and involve careful consideration of applicable statutory mitigating and aggravating factors, the federal interest, and all the relevant facts and circumstances. The United States Attorney assembles and analyzes the evidence and applicable law, defense counsel is afforded an opportunity to submit matters in opposition to the death penalty, and the victim’s family is consulted and the views of family members taken into consideration. Following review by the Department’s Capital Case Section, the matter is forwarded to a committee of senior Justice Department lawyers, the Attorney General’s Capital Case Review Committee. The Review Committee then makes its recommendation to the Attorney General, who makes the final decision regarding whether to seek the death penalty.
For further information contact Executive Assistant United States Attorney John G. Duncan at (315)448-0672.
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1On April 10, 2013, an Onondaga County grand jury returned a 37-count indictment that charged Renz with kidnapping, rape, criminal sexual act, murder, and sexual assault related to the attack and murder. On July 17, 2013, Renz entered a plea of guilty in New York State court to first-degree murder and predatory sexual assault against a child, with an agreed-upon sentence of life imprisonment without the possibility of parole. Renz and the Onondaga County District Attorney’s Office agreed that Renz could withdraw his state guilty plea if the federal government sought the death penalty against him.
Orthopedic Surgeon Charged with Unlawful Distribution of OxycodoneRead the Press Release
ALBANY, NEW YORK – JEFFREY GUNDEL, M.D., of Gansevoort, New York, was arrested today and charged with unlawful distribution of oxycodone, announced United States Attorney Richard S. Hartunian and James J. Hunt, Acting Special Agent-in-Charge of the Drug Enforcement Administration, New York Division. Following an initial appearance before United States Magistrate Judge Christian F. Hummel, GUNDEL was released on conditions. If convicted, GUNDEL faces up to twenty years in prison, a fine of up to $1,000,000.00, and a term of supervised release.
The investigation is being conducted by the Drug Enforcement Administration.
The charges are merely accusations, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt in court.
Man Sentenced for Piloting Commerical Ships on Great Lakes with Fraudulent Coast Guard LicenseRead the Press Release
SYRACUSE, NEW YORK - Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Mark Anselm, 37, of Clayton, N.Y., was sentenced to seven years in prison before the U.S. District Judge Glen T. Suddaby after having pled guilty to six felony offenses that charged him with making false statements to officials of the United States Coast Guard, possession and use of an altered merchant marine license, and aggravated identity theft. In addition, Anselm was sentenced to three years of supervised release following his release from prison. While in prison and thereafter Anselm has been directed to submit to mental health counseling and treatment.
In pleading guilty, Anselm admitted that during 2011 and 2012 he held himself out to federal officials, to various marina owners, and to other potential employers as being a licensed commercial ship pilot when he possessed no such license. Anselm admitted to having repeatedly presented fraudulent merchant marine licenses to employers and potential employers that he had altered to substitute his name. With his false licenses, he gained employment and captained various commercial ships on Lake Ontario including operating a tour boat within the 1000 Islands. His criminal conduct was discovered by the Coast Guard after he grounded a tug boat in Canadian waters on June 19, 2012 that he falsely claimed he owned. The ensuring investigation revealed numerous instances of Anselm holding himself out as a licensed commercial merchant marine captain based upon licenses that he had forged.
This case was investigated by Special Agents of the Coast Guard Investigative Service, Buffalo Field Office and Department of Homeland Security, Office of the Inspector General. Prosecution is being handled by Assistant United States Attorney Craig A. Benedict. Mr. Benedict may be contacted for questions regarding this case at 315-448-0726.
Tefft Pleads Guilty to Receiving Child PornographyRead the Press Release
Defendant Used his Computer and the Internet to Download and Save Dozens of Child Pornography Files
ALBANY, NEW YORK — TIMOTHY TEFFT, age 65, of Greenwich, New York, pled guilty today in Albany before Chief United States District Court Judge Gary L. Sharpe to one count of receiving child pornography, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. TEFFT faces at least five years of imprisonment and up to a maximum sentence of twenty years of imprisonment. TEFFT was detained pending his sentencing.
During the plea hearing, TEFFT admitted that between January 1, 2009 and May 3, 2011, he accessed the Internet and downloaded and possessed, from various websites, dozens of files that contained child pornography. TEFFT further admitted that on occasion he would save the child pornography files onto a thumb drive in order to view the files at a later time.
Sentencing is scheduled for September 3, 2014, at 9:00 a.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 Rick Belliss.
Staples Convicted of Production of Child PornograpyRead the Press Release
Local Karate Instructor Admits to Producing Child Pornography
PLATTSBURGH, NEW YORK – Ryan Staples, 37, of Chateaguay, pled guilty to three counts of production of child pornography today in United States District Court in Albany, New York, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Special Agent in Charge James Spero.
United States Attorney Richard S. Hartunian stated: “We will continue to aggressively pursue anyone and everyone who seeks to traumatize and sexually exploit our children. I commend the Department of Homeland Security and their investigators who worked so hard to bring this defendant to justice.”
“Child pornography creates a permanent record of a child’s sexual exploitation and each time it’s shared online, that child is victimized again," said Spero. "Traumatizing children for sexual purposes is one of the most despicable crimes HSI investigates. HSI will continue to relentlessly pursue child predators to rescue innocent victims and bring their abusers to justice.”
STAPLES faces a statutory mandatory minimum sentence of imprisonment for fifteen years on each count and a maximum sentence of imprisonment for thirty years on each count, a lifetime term of supervised release, a maximum fine of $250,000 on each count, and mandatory registration as a sex offender. STAPLES, who was remanded, will be sentenced in Albany on September 11, 2014 by United States District Judge Thomas J. McAvoy.
Staples pled guilty to three counts of production of child pornography involving three different victims. Staples admitted that he videotaped and took photographs of himself engaged in sexually explicit conduct with the three minor victims.
This prosecution resulted from an investigation conducted by the Department of Homeland Security, Homeland Security Investigations, Rouses Point. The case was prosecuted by Assistant United States Attorney Katherine Kopita.
Konn Convicted of Child Pornography OffensesRead the Press Release
Retired State Worker’s Child Pornography Collection Included
Thousands of Images and Over 800 MoviesALBANY, NEW YORK – Today, a federal jury trial that began Monday ended in the conviction of STEPHEN J. KONN, 63, of Clifton Park, New York, of the felony offenses of distribution of child pornography, receipt of child pornography, and possession of child pornography, 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.
KONN faces a statutory mandatory minimum sentence of imprisonment for five years and a maximum sentence of imprisonment for twenty years for each of the distribution and receipt convictions, and a maximum sentence of imprisonment for ten years for the possession conviction, as well as a lifetime term of supervised release, a maximum fine of $250,000, and mandatory registration as a sex offender. KONN, who was remanded, will be sentenced in Albany on September 4, 2014 by United States District Judge Mae A. D’Agostino.
The evidence presented at trial showed that KONN, a retired employee from the New York State Department of Taxation and Finance, 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.
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.
V-not Gang Member Sentenced to Prison TermRead the Press Release
Habakkuk Nickens -240 Month Sentence
SYRACUSE, NEW YORK –
RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces the sentencing of HABAKKUK NICKENS, age 28, of Syracuse, NY, an admitted member of the V-NOT Gang. NICKENS previously pled guilty to an indictment which charged him and ten others with conspiring to exploit their membership in the V-NOT Gang to engage in a pattern of racketeering activity which included acts of murder, drug trafficking, and robbery. NICKENS was sentenced today to 240 months in prison.
NICKENS, who was known on the street as “HB,” previously admitted his involvement in many acts, including being present when brother and co-defendant TITUS NICKENS possessed a gun; assaulting and stealing a .50 caliber handgun from a victim along with co-defendants RIADDA TRAVET and CHRISTOPHER MIKE; possessing a .38 caliber handgun; firing a handgun in the vicinity of West Brighton Avenue; participating, along with co-defendants CHRISTOPHER MIKE, JEFFREY POWELL, KAHARI SMITH, TITUS NICKENS, KENNETH JACKSON, DWAYNE HESTER, and others, in a gang fight against Bricktown Gang members on October 23, 2010; and being the driver of a vehicle at the time passenger and co-defendant KAHARI SMITH fired several shots into a rival gang member’s car, with others present including co-defendants JEFFREY POWELL, WILLIE SANDERS and one other person, which resulted in the death of Kihary Blue and the wounding of Bricktown Gang member Jarrell Williams.
All the other indicted V-NOT members previously pled guilty and have been sentenced.
The Indictment to which NICKENS pled alleges that from at least 2003 through May 2012 members of the V-Not Gang: (1) maintained a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine and marijuana; (2) protected that exclusive crack distribution territory with violence; (3) obtained drugs from various suppliers; (4) projected a very violent attitude and responded to violence with violence in order to preserve their stature in the gang community; (5) used graffiti, hand signs, and tributes on their clothing to slain gang members to signify their gang membership; (6) used criteria such as a willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carried and used firearms in connection with their gang activity.
There are multiple acts of violence and drug distribution set forth in the Indictment, including 1 murder, 10 other shootings, 8 other acts of gun possession, and 18 acts of crack distribution and/or possession with intent to distribute crack.
This prosecution resulted from a long-term investigation conducted by the Syracuse Gang Violence Task Force, which is comprised of agents and detectives from the following agencies: the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Troopers, the United States Marshals Service and the United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office). The Onondaga County District Attorney’s Office also assisted in the investigation.
Further questions or inquiries may be directed to Assistant U.S. Attorney, Carla Freedman, who is handling the case, at (315) 448-0672.
Utica Man Sentenced to 63 Months Incarceration Following Conviction on Drug ChargesRead the Press Release
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced that DEAN STEPPELLO, was sentenced before the Honorable Norman A. Mordue in U.S. District Court in Syracuse, New York to 63 months incarceration following his conviction of federal felony drug charges. STEPPELLO was also ordered to serve a three year term of supervised release following his term of incarceration and to pay a $200 special assessment.
STEPPELLO, 43, of Utica, New York was convicted on September 19, 2013, of two counts of Possession of Cocaine with Intent to Distribute following a four day jury trial. The jury also found he possessed over 500 grams of cocaine, requiring a mandatory minimum sentence of five years imprisonment.
The defendant was arrested by members of the New York State Police Community Narcotics Enforcement Team (“CNET”) in Utica as he attempted to deliver four ounces of cocaine. A subsequent search of the defendant’s residence resulted in the recovery of an additional pound and three quarters of cocaine, drug paraphernalia, a shotgun and four thousand dollars in cash.
The case was investigated by the New York State Police Community Narcotics Enforcement Team and was prosecuted by Assistant U.S. Attorneys Richard R. Southwick and Tamara B. Thomson. The Oneida County District Attorney’s Office also assisted in the prosecution of this matter.
Ogdensburg Orthodontist Sentenced to 97 Months Imprisonment for Attempting to Defraud the Irs Out of $36 Million DollarsRead the Press Release
ALBANY, NEW YORK – GLENN RICHARD UNGER, 62, of Ogdensburg, New York, was sentenced to 97 months imprisonment by Senior U.S. District Judge Thomas J. McAvoy, and ordered to pay $200,000 in restitution, announced Richard S. Hartunian, United States Attorney, Northern District of New York, and Kathryn Keneally, Assistant Attorney General of the Tax Division. On October 21, 2013, a U.S. District Court jury convicted UNGER of the following offenses: obstructing and impeding the Internal Revenue Service (IRS); filing false claims against the United States; tax evasion; and passing fictitious obligations.
The evidence at trial showed that:
• UNGER, a former orthodontist, engaged in a multi-year scheme to obstruct and impede the IRS by filing numerous false and fraudulent claims with the IRS for payment of a refund of taxes totaling approximately 36 million dollars. Between 2007 and 2011, UNGER filed 14 false tax returns claiming that he earned substantial income reported on IRS Forms 1099-OID, had substantial withholdings on that income, and was entitled to 36 million dollars in tax refunds. Despite numerous warning letters from the IRS that his returns were frivolous, he continued filing false tax returns.
• UNGER also attempted to evade payment of taxes he owed to the IRS. During 2004 and 2005, UNGER earned income and failed to file tax returns reporting that income. The IRS assessed taxes for those two years and also assessed penalties for filing frivolous tax returns. After the IRS filed a tax lien against UNGER, he attempted to file a false document with the Saratoga County Clerk’s office attempting to release the lien.
• UNGER also attempted to pay off a debt to another orthodontist with a fictitious document purported to be worth $200,000.
United States Attorney Hartunian said, "This lengthy prison sentence shows that tax defiers like Unger who use bogus tax schemes and pay debts with fictitious documents will be punished for their crimes. No one can set himself above the law for personal financial gain."
“Those who commit tax fraud by filing false and frivolous tax returns or failing to pay taxes risk criminal prosecution resulting in prison,” said Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division. “This sentence serves as one more example that tax defier conduct may result in severe repercussions, including imprisonment, restitution orders and fines.”
This prosecution resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation, New York Field Office, the Federal Bureau of Investigation, Albany Field Office, the New York State Police, and the Treasury Inspector General for Tax Administration. The case was prosecuted by Assistant United States Attorney Ransom P. Reynolds (NDNY) and Jeffrey Bender (DOJ Tax Division).
Postal Employee Stole $9,697.63 from Two Cayuga County Post OfficesRead the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced that JOHANNA KUHLMANN pled guilty Friday, April 11, 2014, to the felony offense of Theft of Government Property, in violation of 18 U.S.C. § 641, before the Hon. David N. Hurd in the United States District Court in Syracuse, New York. Sentencing for KUHLMANN is scheduled for August 8, 2014. As a result of the conviction, KUHLMANN is facing a term of imprisonment of up to ten years, supervised release of up to three years, a fine of up to $250,000, and a special assessment of $100.
KUHLMANN admitted that she took books of stamp from the Weedsport Post Office and converted them to cash at the Port Byron Post Office. KUHLMANN also admitted that she received payments for post office box rental fees but did not enter them into the United States Postal Service deposits. In total, KULHMANN admitted that she stole and converted to her own use $9,697.63, of cash which belonged to the United States Postal Service, between October 1, 2008 and January 9, 2011.
KUHLMANN’s prosecution is the result of an investigation by the United States Postal Service Office of Inspector General. The prosecution was handled in the United States Attorney’s Office by Assistant U.S. Attorney Tamara B. Thomson.
Florida Man Sentenced on Money Laundering ChargeRead the Press Release
Forfeits Nearly $10 Million Generated by Illegal Gambling Business
ALBANY, NEW YORK - Philip Gurian, 52, of Boca Raton, Florida, was sentenced today in United States District Court in connection with his previous guilty plea to conspiracy to commit money laundering, announced United States Attorney Richard S. Hartunian, Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division, and Toni M. Weiracuh, Special Agent-in-Charge, Internal Revenue Service - Criminal Investigation Division, New York Field Office. United States District Judge Mae A. D’Agostino sentenced Gurian to time served, to be followed by supervised release for 3 years, and to pay a $100,000 fine. Gurian had been incarcerated since his arrest on April 10, 2013. As part of his plea agreement and sentence, Gurian also forfeited a total of about $9,974,307.
A co-defendant, Michele Lasso-Barraza, 30, of Parkland, Florida, was sentenced to probation earlier this month in connection with her role in the gambling enterprise and money laundering conspiracy. She forfeited her interest in $8 million and was ordered to pay a $25,000 fine. Lasso-Barraza, a Panamanian citizen, was also deported as a result of her conviction.
Gurian operated a large-scale illegal gambling business using internet websites which allowed bettors to place thousands of wagers from the capital area of New York, Florida, Indiana, California, Texas, and Nevada. Gurian and Lasso-Barraza laundered in excess of $8 million generated from the illegal gambling business by causing wire transfers to offshore accounts in Panama, Andorra, and the Cayman Islands. Some of the offshore accounts were in the names of sham entities and corporations created by Lasso-Barraza on behalf of Gurian.
Gurian was charged as the result of a joint investigation initiated by the Albany County Sheriff’s Office, and joined by the Albany County District Attorney’s Office, the Saratoga District Attorney’s Office, the Federal Bureau of Investigation, the Internal Revenue Service- Criminal Investigation, the Broward County Money Laundering Task Force, and the office of the United States Attorney for the Northern District of New York.
The case was prosecuted by Assistant United States Attorney Robert A. Sharpe.
New York Attorney Stanley L. Cohen Pleads Guilty to Federal Tax ChargeRead the Press Release
SYRACUSE, NEW YORK - Stanley L. Cohen, an attorney with offices on Avenue D, New York City and Jeffersonville, New York, entered a guilty plea in United States District Court in Syracuse this morning to a felony offense of corruptly obstructing and impeding the Internal Revenue Service, according to United States Attorney Richard S. Hartunian and Acting IRS Criminal Investigations Special Agent-in-Charge Shantelle P. Kitchen.. Sentencing is scheduled in U.S. District Court on August 21, 2014 at 10:00 am before the Hon. Norman A. Mordue.
Under terms of a plea agreement, Cohen is to be sentenced to 18 months incarceration. He is also required within the next ten days to enter guilty pleas in the Southern District of New York to pending charges of failure to file income tax returns. As part of his agreement, Cohen is also required to pay all federal and state income taxes due and owing from the years 2005 through 2010. He has also waived any appeal and collateral attack of his conviction.
This case followed a lengthy investigation led by the Internal Revenue Service-Criminal Investigations, Syracuse Office. Investigators found that the defendant failed to file both federal and state tax returns for the years 2005-2010. In those years, he only filed a single extension to file his return and made only a modest payment towards taxes due and owing. He subsequently never filed state or federal tax returns for these six years.
In court, the government stated that its evidence revealed that in the tax year 2004, the last year Cohen filed an income tax return, he had claimed gross receipts of $289,000 when in fact investigators ascertained that he had deposits in excess of $426,000 for that year. Investigators determined that for the years 2004 through 2010, Cohen had deposits totaling $3,673,906.85 in his financial accounts.
In the course of the investigation, judicially authorized search warrants were executed at Cohen’s law office on Avenue D in New York City and his law office in his home in Jeffersonville, New York. Investigators found that essentially he kept no financial records regarding income or payment of fees from clients. From 2005 to 2010, he also failed to file either a 1099 or W2 for payments made to a law office assistant, who performed services for him during those years.
A search warrant executed on a safe deposit box that Cohen maintained in a bank in Jeffersonville, New York revealed that he had $50,000 in cash. Bank records revealed that Cohen accessed his safety deposit box 77 times from 2006 through 2008 and made deposits of cash totaling approximately $504,000 at that bank. Additional investigation revealed that approximately $183,500 of this amount was deposited by Cohen on days when he accessed his safety deposit box. On many occasions, Cohen made multi-thousand dollar cash deposits at the Jeffersonville bank and frequently exchanged small bills for $100 bills.
Additional evidence developed during the investigation revealed that Cohen made deposits of cash to his financial accounts as follows:
In 2004 he made in excess of $194,000 in cash deposits, in 2005 more than $237,000, in 2006 more than $321,000, in 2007 more than $395,000, in 2008 more than $405,000, in 2009, after the execution of the referenced search warrants, he deposited more than $54,000 and in 2010 more than $147,000 in cash. Many of these deposits were made in amounts under $10,000, thus avoiding the filing of currency transaction reports required under the law.
Investigators also found that Cohen would cause wire transfers of cash to his accounts to be made by clients, many of whom were residents of the Akwesasne Reservation. These wire transfers all made by MoneyGram from the Speedway Convenience Store located near the Reservation. The wire transfers totaled more than $643,000 between October 2004 and December of 2008.
United States Attorney Richard S. Hartunian stated, “As citizens, we all have an obligation to pay our fair share of taxes needed to support the United States. Stanley Cohen sought to avoid his tax obligations by consistently failing to file his federal and state tax returns over a six year period and by operating his law practice in a manner that corruptly hid millions of dollars in legal fees from the Internal Revenue Service. No citizen, especially an attorney, is above the law. The Internal Revenue Service has done a commendable job in helping to bring Mr. Cohen to justice.”
Acting Special Agent in Charge Shantelle P. Kitchen said, “The investigation and prosecution of individuals who brazenly attempt to obstruct the Internal Revenue Service and to prevent it from performing its mission is vital to maintaining public confidence in our tax system. In addition to serving as a warning to those who might contemplate similar activity, this outcome provides the honest American taxpayer with a timely reassurance that their government is committed to making sure that everyone pays their fair share.”
The case was investigated by the Internal Revenue Service-Criminal Investigations, Syracuse Office, the New York State Police and the Drug Enforcement Administration. The case was prosecuted by Assistant United States Attorneys Stephen Green and John Duncan.
For further information please contact Assistant U.S. Attorney John Duncan at 315-448-0672.
Sentence of 70 Months in Prison for Marijuana ConspiracyRead the Press Release
PLATTSBURGH, NEW YORK – ALAIN FORGET, 43, was sentenced on April 4, 2014 by United States District Court Judge Glenn T. Suddaby to 70 months imprisonment and four years supervised release for conspiracy to possess with intent to distribute and to distribute more than one hundred (100) kilograms of marijuana announced United States Attorney Richard S. Hartunian.
On February 28, 2012, FORGET pled guilty to an information, charging conspiracy to possess with intent to distribute and to distribute a controlled substance, in violation of 21 U.S.C. §§846 and 841(b)(1)(B). FORGET participated in a large scale drug trafficking organization designed to import thousands of pounds of marijuana into the United States and he help generate millions of dollars in drug proceeds. In addition to personally smuggling loads of marijuana into the United States, FORGET assumed a leadership role within the organization, recruiting others into the smuggling scheme and directing their activities.
The investigation and prosecution of FORGET was the result of a joint investigation between the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), the New York State Police (NYSP), the United States Border Patrol (USBP), the Plattsburgh Police Department, and Clinton County Sheriff’s Office.
Any questions may be directed to Assistant U.S. Attorney John Duncan in Syracuse, New York at 315-448-0672.
Sentence of 120 Months in Prison for Marijuana ConspiracyRead the Press Release
PLATTSBURGH, NEW YORK – NICHOLAS VARACALLI, 66, was sentenced on April 3, 2014 by United States District Court Judge Glenn T. Suddaby to 120 months imprisonment and five years supervised release for conspiracy to possess with intent to distribute and to distribute more than one thousand (1,000) kilograms of marijuana announced United States Attorney Richard S. Hartunian.
On December 19, 2013, VARACALLI pled guilty to Count 1 of superseding indictment 10-CR- 534 (GTS), charging conspiracy to possess with intent to distribute and to distribute a controlled substance, in violation of 21 U.S.C. §§846 and 841(b)(1)(A). VARACALLI played a key role in an international drug smuggling organization designed to import thousands of pounds of marijuana into the United States and helped generate millions of dollars in drug proceeds. The defendant, along with co-defendant’s Denis Vachon and Jacques Perrault, was responsible for coordinating the acquisition and delivery of large quantities of marijuana, communicating with marijuana dealers in the United States to arrange marijuana shipments and receiving the proceeds of the transactions to pay the suppliers and other members of the organization.
On March 4, 2014, co-defendant Jacques Perrault pled guilty to Count 1 of superseding indictment 10-CR-534. Perrault is scheduled to be sentenced on July 10, 2014.
The investigation and prosecution of VARACALLI was the result of a joint investigation between the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), the New York State Police (NYSP), the United States Border Patrol (USBP), the Plattsburgh Police Department, and Clinton County Sheriff’s Office.
Any questions may be directed to Assistant U.S. Attorney John Duncan in Syracuse, New York at 315-448-0672
Ronald House Sentenced on Obstruction of Justice ChargesRead the Press Release
ALBANY, NEW YORK – Richard S. Hartunian, United States Attorney for the Northern District of New York, announced that RONALD L. HOUSE, 58, of Rochester, New York was sentenced today in Buffalo, New York on his November, 2013 conviction for three counts of obstruction of justice and one count of making materially false statements.
Hon. William M. Skretny, Chief United States District Judge for the Western District of New York sentenced House to 48 months imprisonment, 2 years supervised release and a money judgment of $32,000.
House’s conviction came after a jury trial in Buffalo, New York charging that he endeavored to obstruct justice on behalf of criminal defendants with cases pending in the United States District Court in Rochester. He was convicted of obstructing two cases by endeavoring to fraudulently attribute information to criminal defendants that they could use in exchange for sentencing leniency, and in one case, for pre-trial release. As to a third case he was also convicted of obstructing justice by making false representations to a United States Probation Officer in an effort to persuade the officer from filing a supervised release violation against the offender.
House was also convicted of making materially false statements to the then-director of a Rochester halfway house in order to obtain extra liberty for an inmate by falsely representing that the inmate was going to be with House at a church men’s group, while knowing that the inmate instead was going to use the time to spend time with a girlfriend.
HOUSE’s arrest and conviction are the result of an investigation by the Federal Bureau of Investigation - Buffalo Division, the Internal Revenue Service – Criminal Investigation, New York Field Office, the City of Rochester Office of Public Integrity, and the Rochester Police Department. The prosecution was handled by Northern District of New York Assistant U.S. Attorney Lisa Fletcher, who can be reached at 315-448-0672.
Brooklyn Woman Pleads Guilty to Identity TheftRead the Press Release
ALBANY, NEW YORK – JAMESE L. WILLIAMS, 29, of Brooklyn, pled guilty today before United States District Judge Mae A. D’Agostino to conspiracy to commit access device fraud, access device fraud, and aggravated identity theft, announced United States Attorney Richard S. Hartunian and the United States Secret Service. WILLIAMS is scheduled to be sentenced on August 6, 2014, in Albany, New York. She faces a two-year mandatory minimum on the aggravated identity theft charge, up to ten years of prison on the access device fraud charge and up to five years of prison on the conspiracy charge. She also faces a fine of up to $250,000 on each charge.
In the plea agreement, WILLIAMS admitted that, from October 2012 through January 2013, she and her co-conspirators used hundreds of counterfeit credit cards bearing stolen account numbers to purchase gift cards at Price Chopper grocery stores throughout New York, Massachusetts, New Hampshire, and Connecticut. WILLIAMS admitted that she should be held accountable for transactions of $548,381.
The case was investigated by the United States Secret Service and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Albany Man Arrested for Impersonating Federal OfficerRead the Press Release
ALBANY, NEW YORK – SAMUEL DAVID KRAMER, 53, of Albany, New York was arrested today and charged with impersonating a Deputy United States Marshal announced United States Attorney Richard S. Hartunian, Ron Gardella, Special Agent-in-Charge, United States Department of Justice Office of the Inspector General, New York Field Office, and Major Steven James, Troop G Commander, New York State Police. Following an initial appearance before United States Magistrate Judge Randolph F. Treece, Kramer was released. If convicted, Kramer faces up to 3 years in prison.
The investigation is being conducted by agents with the Department of Justice Office of the Inspector General and the New York State Police. Anyone with information relevant to this investigation is asked to contact the New York State Police, Troop G Headquarters at (518) 783- 3211.
The charges are merely accusations, and the defendant is presumed innocent until and unless proven guilty.
Accountant Enters Guilty Plea to 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, entered a guilty plea to the felony offense of aiding and assisting in the preparation of false tax returns, in violation of Title 26, United States Code, Section 7206(2). The defendant is facing a statutory maximum of 3 years imprisonment, a maximum fine of $250,000.00, and restitution to the IRS for tax years 2007-2010. BUTCHER is scheduled to be sentenced on August 1, 2014, before the Honorable David N. Hurd in Utica, NY.
During the plea hearing on April 2, 2014, 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).
Schenectady Man Arraigned on Fraud Scheme Involving False Advertisements of Motor VehiclesRead the Press Release
ALBANY, NEW YORK – On Thursday, March 27, 2014, FREDERICK HOLLINGSHED, a/k/a FRANKLIN HOLLINGSHED, 47, of Schenectady, NY, was arraigned on a ten-count indictment charging him with wire fraud, misuse of a social security number, and possession with intent to use or transfer false identification documents by United States Magistrate Judge Christian F. Hummel, announced United States Attorney Richard S. Hartunian and United States Secret Service Resident Agent in Charge William Leege. Judge Hummel ordered that HOLLINGSHED be detained pending trial in this matter. He faces a maximum term of imprisonment of 20 years on each of the eight wire fraud counts and up to five years on each of the other counts. He also faces a fine of up to $250,000 on each count.
According to the indictment: HOLLINGSHED obtained $66,001.80 from people who believed that they were buying motor vehicles advertised on websites and through electronic mail. In reality, no vehicles were ever actually for sale. In addition, HOLLINGSHED misrepresented his social security number on a bank account application and possessed seven fraudulent social security cards.
The prosecution resulted from an investigation by the United States Secret Service. The case is being prosecuted by Assistant United States Attorney Sean O’Dowd.
The indictment merely sets forth an accusation, and the defendant is presumed innocent unless and until the charges are proved beyond a reasonable doubt.
Queens Man Sentenced for Bribery of A Public OfficialRead the Press Release
ALBANY, NEW YORK – YANG CHIA TIEN, a/k/a ANDREW TIEN, 62, of Queens, NY, was sentenced on March 25, 2014 to 69 months in federal prison on three counts of bribery of a public official by Chief United States District Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian, Homeland Security Investigations Assistant Special Agent in Charge Nicholas DiNicola, and New York State Police Special Investigations Unit Major Thomas G. Marmion.
On November 14, 2013, a federal jury in Albany convicted TIEN of making three payments totaling $51,000 to a person he believed to be an immigration official to try to obtain green cards for illegal aliens from Malaysia and China. In reality, the recipient of the payments was an undercover law enforcement officer with Homeland Security Investigations.
The prosecution resulted from a joint undercover investigation by ICE-Homeland Security Investigations and the New York State Police. The case was prosecuted by Assistant United States Attorney Sean O’Dowd.
Jose Alvarado, Aka Chewee, Sentenced in Federal Court to 20 Years in Federal Prison for Engaging in A Drug Trafficking Conspiracy in Binghamton, New YorkRead the Press Release
The Plea And Sentencing Of Jose Alvarado Resulted From An Investigation Into Drug Trafficking Activities of the Almighty Latin King and Queen Nation (ALKQN) Gang Members And Their Associates in the Binghamton, New York area.
BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that Jose Alvarado, aka Chewee, 25 years old from Binghamton, New York, was sentenced today in federal court in Binghamton, New York to 20 years in federal prison and to be followed by 10 years of post-release supervision.
The investigation leading to today’s sentencing of Jose Alvarado was conducted by members of a task force comprised of the U.S. Attorney’s Office, Binghamton, New York; FBI Albany Field Office; Broome County District Attorney’s Office; Binghamton Police Department; New York State Police; Broome County Sheriff’s Office; Johnson City Police Department; Endicott Police Department; and the U.S. Marshal’s Service.
Following an extensive investigation by the task force, Jose Alvarado and several others were indicted by a federal grand jury. On October 3, 2013, Alvarado pled guilty to Count 1 of single-count Indictment 12-CR-445. Count 1 charges from about May of 2011 through September of 2012, in Broome County, in the Northern District of New York and elsewhere, defendants Luis Masso-Diaz, aka Wewe; Jose Alvarado, aka Chewee; Reynaldo Bones, aka Javy; Victor Texidor, aka Machito; Jose Alicea, aka Papo; and others conspired to knowingly and intentionally possess with intent to distribute and to distribute one or more controlled substances, in violation of Title 21, United States Code, Sections 841(a)(1) and 846. That violation involved 280 grams or more of a mixture or substance containing cocaine base, in violation of Title 21, United States Code, Section 841(b)(1)(A); 500 grams or more of a mixture or substance containing a detectable amount of cocaine, in violation of Title 21, United States Code, Section 841(b)(1)(B); 100 grams or more of a mixture or substance containing a detectable amount of heroin, in violation of Title 21, United States Code, Section 841(b)(1)(B); oxycontin, percocet, and morphine, in violation of Title 21, United States Code, Section 841(b)(1)(C); and vicodin, in violation of Title 21, United States Code, Section 841(b)(1)(E).
Reynaldo Bones, aka Javy, 28 years old from Binghamton, New York, was previously also sentenced in federal court to 135 months in federal prison and 5 years of post-release supervision. The remaining defendants are awaiting sentencing and remain in custody with the U.S. Marshal’s Service.
Defendant Pleads Guilty to Federal Offense of Sex Trafficking of A ChildRead the Press Release
Defendant Faces Imprisonment term of 10 years to Life
BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that Lynette Tilden, from Utica, New York, pleaded guilty today in federal court to an offense charging her with Sex Trafficking Of A Child.
In pleading guilty, Lynette Tilden admitted that in and about February of 2012, in the Broome, Oneida, and Onondaga counties in the Northern District of New York and elsewhere, defendant Tilden and others, aiding and abetting each other, while in and affecting interstate commerce, did knowingly recruit, entice, harbor, transport, provide, obtain, and maintain by any means a person with the initials M.L., who had not attained the age of 18 years, knowing, or in reckless disregard of the fact that M.L. would be caused to engage in one or more commercial sex acts, and did benefit, financially and by receiving things of value, from participation in the venture which has engaged in the act described above, in violation of Title 18, United States Code, §§ 1591(a) & (b) and 2.
Tilden further admitted that she and others, while aiding and abetting each other, knowingly recruited, enticed, harbored, transported, provided, obtained, and maintained a minor with the initials M.L., who was 16 years of age at the time, in order to prostitute M.L. to adult men in exchange for money and controlled substances. Tilden and the others photographed and caused M.L. to be photographed in sexually seductive poses wearing only lingerie and posted said photographs of M.L. on Backpage.com, an internet classified advertising website, offering M.L. for sex in exchange for money. Additionally, Tilden and the others utilized cellular telephones to send mass cellular texts offering M.L. for sex to customers in exchange for money. Furthermore, Tilden and the others transported and caused M.L. to be transported to various locations including hotels where M.L. was instructed and caused to engage in commercial sex acts, in that, M.L. engaged in sexual acts including intercourse and oral sex with customers in exchange for money and controlled substances. Tilden and the others benefitted, both financially and by receiving things of value, by prostituting M.L. to customers, in that, Tilden and the others shared the money and controlled substances acquired from customers with whom M.L. was caused to engage in sex acts.
The federal charge stems from an investigation conducted by the FBI-Albany Division, New York State Police, Oneida County District Attorney’s Office, Utica Police Department, and the Oneida County Child Advocacy Center. The investigation concerned a prostitution ring involved in selling a minor to engage in sexual conduct in exchange for money and drugs. The prostitution ring utilized the website Backpage.com to advertise the prostitution. The ring also utilized a texting network to advertise their prostitution business. The Oneida County District Attorney has charged several other defendants with state crimes in connection to this overall joint investigation. The investigation is continuing.
Tilden continues to be held in the custody of the U.S. Marshal’s Service pending sentencing. Tilden is scheduled to be sentenced on July 29, 2014. At sentencing, she faces a statutory mandatory minimum term of 10 years prison and a maximum of life. The maximum possible fine is $250,000.
ALBANY, NEW YORK - Richard S. Hartunian, United States Attorney for the Northern Districtof New York, makes statement regarding New York State Assembly Member William Scarborough.Read the Press Release
ALBANY, NEW YORK - Richard S. Hartunian, United States Attorney for the Northern District of New York, said, “The searches today of locations associated with New York State Assembly Member William Scarborough are part of an ongoing investigation about which there will be no further comment at this time. Mr. Scarborough has not been charged and is presumed innocent.”
14 “bloods” Street Gang Members---“macballers” Set---charged in A Federal Felony Complaint with Engaging in A Drug Trafficking Conspiracy in Binghamton, New YorkRead the Press Release
Federal Search Warrants Executed At 9 Locations In The Binghamton, New York Area.
BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that 14 members and associates of the Bloods Street Gang known as the “MacBallers” were charged today by way of a felony criminal complaint in federal court in Binghamton, New York with Engaging in a Drug Trafficking Conspiracy, pursuant to Title 21, United States Code, Sections 841(a)(1) and 846. Federal, state and local law enforcement teams executed arrest warrants in the greater Binghamton, New York area as well as in New York City. Defendants will make their appearances later today before a federal magistrate judge in federal court. Additionally, law enforcement also executed federal search warrants at 9 locations in the Binghamton, New York area including at the nightclub called “17 East”, located at 348 Clinton Street, Binghamton, New York, which was utilized and frequented by members of the MacBallers gang.
The investigation leading to today’s arrests and charges was conducted by members of a task force comprised of the U.S. Attorney’s Office, Binghamton, New York; FBI Albany Field Office and FBI New York Field Office; Broome County District Attorney’s Office; Binghamton Police Department; New York State Police; Broome County Sheriff’s Office; Johnson City Police Department; Endicott Police Department; and the U.S. Marshal’s Service.
The federal felony complaint charges that starting in September of 2009 and continuing up to the present, members and associates of the “MacBallers” set of the “Bloods” Street Gang operated in Binghamton, New York and were responsible for distributing large quantities of controlled substances including cocaine base (crack cocaine), powder cocaine, heroin, and marijuana in the greater Binghamton area. The complaint also charges that MacBaller members utilized rental vehicles and rental apartments to facilitate their drug trafficking conspiracy in order to “cook”, package, store, and transport controlled substances; utilized prepaid cellular telephones to contact drug customers and gang associates, both affiliated and unaffiliated to the MacBallers, in order to distribute controlled substances; engaged in gang meetings at various locations in the Binghamton area; utilized firearms including handguns to commit assaults, shootings, and to threaten others in furtherance of the MacBallers’ drug trafficking conspiracy.
The federal felony complaint also charges as follows as to each defendant:
a. DEREK CARR a/k/a “Jinx”, 29 years old, is affiliated to the Bloods Street Gang and believed to a member of the MacBallers. DEREK CARR is a close, personal associate of SAQUAN JOHNSON and who supplied SAQUAN JOHNSON with controlled substances including crack cocaine and heroin. DEREK CARR communicated with SAQUAN JOHNSON regarding the cooking, packaging, acquisition, and distribution of controlled substances including crack cocaine and heroin.
b. COURTNEY DOUGLAS a/k/a “Poppy”, 32 years old, is a member of the MacBallers who received supplies of crack cocaine and heroin from SAQUAN JOHNSON as well as crack cocaine from CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. and then distributed those controlled substances to drug customers. COURTNEY DOUGLAS communicated with other members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, and JUAN PENA regarding the acquisition, distribution, and resale of controlled substances including crack cocaine and heroin.
c. LAMONT CLEMONS a/k/a “Stime”, 39 years old, is believed to be a family relative (cousin) of CALVIN JOHNSON and who transported supplies of controlled substances and distributed controlled substances on behalf of CALVIN JOHNSON. LAMONT CLEMONS also supplied SAQUAN JOHNSON with controlled substances including crack cocaine, heroin, powder cocaine, and marijuana. LAMONT CLEMONS communicated with SAQUAN JOHNSON regarding the acquisition, storage, transportation, distribution, and resale of controlled substances including crack cocaine, powder cocaine, heroin, and marijuana.
d. CHAD EDWARDS a/k/a “Chaddy O”, 31 years old, is a high ranking member of the MacBallers who was responsible for distributing large quantities of crack cocaine in Binghamton, New York. CHAD EDWARDS worked closely with JUAN PENA AND REGINALD SIMMONS, JR. to distribute controlled substances and shared the same cellular telephones with these individuals. CHAD EDWARDS communicated with other members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, JUAN PENA, REGINALD SIMMONS, JR., SHARELL HOLTON, and COURTNEY DOUGLAS regarding the acquisition, packaging, and distribution of controlled substances.
e. SHARELL HOLTON a/k/a “Rell”, 35 years old, is a known controlled substances distributor in Binghamton, New York who is believed to have been supplied by members of the MacBallers’ drug trafficking conspiracy including JOHN MELVILLE, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. She allowed members of the MacBallers’ drug trafficking conspiracy, including JOHN MELVILLE and BRIAN WEST, to utilize her residence in Endicott, New York and distribute controlled substances from her residence. SHARELL HOLTON communicated with other known members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, and JUAN PENA regarding the acquisition, storage, and distribution of controlled substances as well as the collection of drug proceeds.
f. LESLIE HUGHES a/k/a “Les”, 41 years old, is a Bloods Street Gang member and a known controlled substances distributor in Binghamton, New York who supplied SAQUAN JOHNSON with controlled substances including crack cocaine. LESLIE HUGHES worked for CALVIN JOHNSON and supplied SAQUAN JOHNSON with controlled substances to include crack cocaine. LESLIE HUGHES communicated with SAQUAN JOHNSON regarding the acquisition, cooking/mixing, packaging, and distribution of controlled substances, including crack cocaine, and the collection of drug proceeds.
g. CALVIN JOHNSON a/k/a “Cal”, 38 years old, is a known controlled substances distributor in Binghamton, New York who operated the nightclub, “17 East”, which was utilized and frequented by members of the MacBallers’ drug trafficking conspiracy. He also supplied SAQUAN JOHNSON, LAMONT CLEMONS, LESLIE HUGHES, and others with controlled substances including crack cocaine, powder cocaine, and marijuana. CALVIN JOHNSON communicated with SAQUAN JOHNSON regarding the acquisition, distribution, and storage of controlled substances including crack cocaine, powder cocaine, and marijuana, as well as the acquisition of a handgun/firearm.
h. SAQUAN JOHNSON a/k/a “Banga” a/k/a “Sa”, 23 years old, is a member of the MacBallers gang and is known as an enforcer/shooter who was responsible for the distribution of large amounts of crack cocaine, powder cocaine, heroin, and marijuana to other members of the MacBallers’ drug trafficking conspiracy including GERALD NORFLEET and COURTNEY DOUGLAS. SAQUAN JOHNSON was supplied with controlled substances from CALVIN JOHNSON, LAMONT CLEMONS, DEREK CARR, CHAD EDWARDS, JUAN PENA, REGINALD SIMMONS, JR., and DAYNELL ROWLAND. SAQUAN JOHNSON also communicated with other members of the MacBallers’ drug trafficking conspiracy including DEREK CARR, COURTNEY DOUGLAS, LAMONT CLEMONS, CHAD EDWARDS, SHARELL HOLTON, LESLIE HUGHES, CALVIN JOHNSON, GERALD NORFLEET, JUAN PENA, DAYNELL ROWLAND, and REGINALD SIMMONS, JR. regarding the acquisition, distribution, transportation, and cooking/mixing of controlled substances including crack cocaine, powder cocaine, heroin, and marijuana, as well as robberies, assaults, and firearms violations.
i. JOHN MELVILLE a/k/a “Flip” a/k/a “Fat Boy”, 29 years old, is a high ranking member of the MacBallers gang. JOHN MELVILLE was known to traffic large quantities of controlled substances including crack cocaine and powder cocaine into Binghamton, New York in order to distribute controlled substances and supply additional members of the MacBallers’ drug trafficking conspiracy including SHARELL HOLTON, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR.
j. GERALD NORFLEET a/k/a “G”, 55 years old, purchased controlled substances from SAQUAN JOHNSON and distributed controlled substances including crack cocaine. Additionally, he collected drug proceeds derived from controlled substance sales on behalf of SAQUAN JOHNSON AND LAMONT CLEMONS. GERALD NORFLEET also provided transportation for SAQUAN JOHNSON in order to facilitate drug transactions in furtherance of the MacBallers’ drug trafficking conspiracy. GERALD NORFLEET communicated with SAQUAN JOHNSON regarding the acquisition, packaging, and distribution of controlled substances, and the collection of drug proceeds derived from the sales of controlled substance including crack cocaine.
k. JUAN PENA a/k/a “John John”, 30 years old, is a high ranking member of the MacBallers who was responsible for distributing large quantities of crack cocaine. At one time, JUAN PENA also paid CALVIN JOHNSON an amount of United States currency to control and operate various illegal gambling games at CALVIN JOHNSON’S nightclub, “17 East.” JUAN PENA also communicated with other members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, REGINALD SIMMONS, JR., SHARELL HOLTON, COURTNEY DOUGLAS, and others regarding the acquisition and distribution of controlled substances.
l. DAYNELL ROWLAND a/k/a “Daylo”, 31 years old, is a suspected member of the MacBallers who resides in Syracuse, New York and was responsible for supplying SAQUAN JOHNSON and others with large amounts of controlled substances including marijuana and heroin. DAYNELL ROWLAND introduced SAQUAN JOHNSON to his (DAYNELL ROWLAND’S) heroin supplier residing in the New York City area so SAQUAN JOHNSON could obtain large quantities of heroin directly from this individual. DAYNELL ROWLAND also expressed a desire for SAQUAN JOHNSON to become his main heroin distributor in Binghamton, New York. DAYNELL ROWLAND communicated with SAQUAN JOHNSON regarding the acquisition, cooking, packaging, and distribution of controlled substances, and the collection of drug proceeds derived from the sales of controlled substances.
m. REGINALD SIMMONS, JR. a/k/a “Reg” a/k/a “Moe”, 30 years old, is a member of the MacBallers who was responsible for distributing large quantities of crack cocaine. REGINALD SIMMONS, JR. worked with JUAN PENA AND CHAD EDWARDS to distribute controlled substances and shared the same cellular telephones with them for the purpose of distribution of controlled substances. REGINALD SIMMONS, JR. also communicated with other additional members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, JUAN PENA, CHAD EDWARDS, SHARELL HOLTON, and COURTNEY DOUGLAS regarding the demand, acquisition, packaging, and distribution of controlled substances.
n. BRIAN WEST a/k/a “West”, 27 years old, is a member of the MacBallers who was responsible for distributing large quantities of crack cocaine.
BRIAN WEST trafficked controlled substances into the Binghamton, New York area with JOHN MELVILLE and who supplied other members of the MacBallers’ drug trafficking conspiracy including SHARELL HOLTON, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. BRIAN WEST also utilized SHARELL HOLTON’S residence to distribute controlled substances.
If convicted, each defendant faces an imprisonment term of at least 10 years and up to life.
All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in court.
Schenectady Woman Sentenced to 41 Months Imprisonment for Sending the Irs More Than $3.6 Million in Bogus PaymentsRead the Press Release
ALBANY, NEW YORK – PATRICIA ALFIERI, 53, of Schenectady, New York, was sentenced by Chief United States District Judge Gary L. Sharpe to 41 months imprisonment for mail fraud and filing a false return, announced United States Attorney Richard S. Hartunian and Internal Revenue Service Criminal Investigation Division Acting Special Agent in Charge Shantelle P. Kitchen. ALFIERI was also ordered to pay restitution to the Internal Revenue Service in the amount of $47,484.
As part of her December 4, 2013, guilty plea, AFLFIERI admitted that she mailed 65 bogus checks totaling more than $3.6 million to the IRS while she was a New York State Department of Taxation and Finance employee. ALFIERI’S actions caused the IRS to issue her more than $87,000 in bogus “overpayment refunds”. ALFIERI also admitted that she filed a false income tax return, over-reporting her federal income tax withholding and fabricating home mortgage interest and real estate tax payments.
The case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigation Division, and was prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Canadian Man Sentenced for Defrauding Elderly VictimsRead the Press Release
Received Thirty Months in Prison for Stealing from Vulnerable Seniors
ALBANY, NEW YORK – JASON S. KATZ, age 47, of Quebec, Canada, was sentenced today to thirty months in prison by United States District Court Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent-in-Charge Nicholas J. DiNicola. The defendant was also fined $10,000 and required to pay restitution of $8,000 to two victims. The sentence follows KATZ’s September 27, 2013 guilty plea to two counts of wire fraud. Judge D’Agostino ordered that KATZ begin serving his sentence immediately.
According to the plea agreement, between May and August 2012, KATZ was involved in an international telemarketing scheme targeting elderly victims. The victims, ages 95 and 86 at the time, were repeatedly solicited over the telephone and instructed to wire tens of thousands of dollars to KATZ’s bank account in Plattsburgh, NY. The victims were told the money would be used to help arrange for the release of the victim’s child or grandchild from a Mexican jail and to pay fines associated with traffic accidents. At times, the caller impersonated the victim’s child or grandchild. KATZ was in Europe on a cruise in July 2012 when one of the victims wired him $42,000 under the belief that the funds would be used to help procure the release of her grandson from a Mexican jail. Judge D’Agostino described the fraud as “despicable.”
This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations, the Columbia Township Police Department in Brooklyn, Michigan, and the Waterloo, New York Police Department. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.
South Carolina Tobacco Broker SentencedRead the Press Release
Charges included Interstate Travel in Aid of Racketeering
and Concealment Money Laundering.SYRACUSE, NEW YORK – William D. Humphries, age 67, of Lake City, South Carolina, was sentenced today principally to a term of 72 months imprisonment by the Hon. Norman A. Mordue. On November 11, 2013, Humphries was convicted after a two week long jury trial of one count of interstate travel in aid of racketeering, in violation of Title 18, United States Code, Section 1952(a)(1) and (a)(3), one count of a wire fraud conspiracy to defraud Canada of tax revenue, in violation of Title 18, United States Code, Sections 1343 and 1349, one count of a conspiracy to manufacture of tobacco products without a license in violation of Title 26, United States Code, Section 5672 and Title 18, United States Code, Section 371, and forty-one counts of concealment money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i).
Between 2005 and 2006, the defendant, a tobacco broker and wholesaler from South Carolina, conspired with other individuals living on the Akwesasne Indian Reservation (AMIR) to defraud Canada of tax revenue. In 2005, the defendant began working with a major manufacturer of cigarettes that was operating on the AMIR without the federally required bond and permit. The defendant provided “Canadian Blend” cut-rag tobacco and cigarette-making supplies to the unlicensed manufacturer. This tobacco was manufactured into cigarettes and subsequently smuggled into Canada without the payment of any legally required taxes to Canada. Between the summer of 2005 and May 2006, the defendant supplied the unlicensed manufacturer with approximately one load of cut-rag tobacco per week. The defendant supplied approximately 44 loads of tobacco, with each load producing 13,200,000 contraband cigarettes, causing a tax loss to Canada of approximately $40,000,000.
The unlicensed manufacturer was also engaged in a conspiracy to distribute marijuana smuggled in from Canada and then distributed throughout the United States. The proceeds of that marijuana distribution were used to fund the cigarette smuggling conspiracy, which employed the same smuggling routes used to bring marijuana into the United States from Canada.
In February 2006, after delivering a load of tobacco to the unlicensed manufacturer on the AMIR, the defendant was stopped on the AMIR for a vehicle infraction. Law enforcement officers seized approximately $88,000 in U.S. currency paid to Humphries for the sale of tobacco. A narcotics detection canine alerted to the currency, and officers were able to smell marijuana on the money. At trial, witness testimony established that the money found on Humphries was the proceeds of marijuana distribution.
In May 2006, the unlicensed manufacturers dealing with Humphries were arrested on federal marijuana charges and thereafter cooperated with the government. However, Humphries continued to sell tobacco and cigarette-making supplies to other unlicensed cigarette manufacturers based on the AMIR. Humphries continued to receive payments in the form of proceeds of marijuana sales from unlicensed manufacturers to which he had sold Canadian blend tobacco and supplies. In an attempt to disguise the source of the money, which was criminal proceeds, Humphries began taking substantial sums of U.S. currency to the Mohawk Bingo Palace, located on the AMIR. In recorded conversations heard by the jury with one of the government informants, he explained that he was inserting large sums of currency into the electronic bingo machines and then repeatedly cashing out at the cashiers’ window in an attempt to clean the marijuana smell from the money.
At sentencing, the Court ordered Humphries pay a special assessment of $4,400. The Court also ordered a money judgment against Humphries in the amount of $7,000,000. After the defendant completes his term of incarceration, he will serve a term of supervised release of 3 years.
The prosecution arose from the investigative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Royal Canadian Mounted Police, the Alcohol and Tobacco Tax and Trade Bureau, St. Regis Mohawk Tribal Police Force, Homeland Security Investigations, the Drug Enforcement Administration, the Massena Police Department, the United States Border Patrol, and the Rensselaer County Sheriff’s Office.
The government was represented at sentencing by Assistant United States Attorney Carl Eurenius. For further information, please contact AUSA Eurenius at (315) 448-0672.
David Renz Sentenced on Federal Child Pornography OffensesRead the Press Release
SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced that David J. Renz, 30, of North Syracuse was sentenced in federal court in Syracuse today on one count of receiving and five counts of possessing child pornography.
United States Senior District Court Judge, Hon. Norman A. Mordue sentenced Renz to a total of 30 years in federal prison: 20 years on his conviction for receiving child pornography, to be served consecutively to concurrent 10 year sentences on each of the possession charges. Mordue ordered that the sentence shall run consecutively to the state court sentence Renz faces in Onondaga County Court based upon his guilty pleas there to Predatory Sexual Assault Against a Child and Murder in the First Degree, for crimes he committed while on pre-trial release for the child pornography charges. The state court sentencing is tentatively scheduled for May 16, 2014 in Onondaga County Court.
If ever released, Renz was ordered to be placed on federal supervised release for life, and will have to register as a sex offender.
Renz's arrest on the child pornography charges was the result of an investigation by the Federal Bureau of Investigation as a part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, 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.justice.gov/psc.
The federal prosecution was handled by Assistant U.S. Attorney Lisa Fletcher.
Defendant Pleads Guilty to Federal Offense of Sex Trafficking of A ChildRead the Press Release
Defendant Faces Imprisonment term of 10 years to Life
BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that Alexandria Samson Davall, from Utica, New York, pleaded guilty today in federal court to an offense charging her with Sex Trafficking Of A Child.
In pleading guilty, Davall admitted that in and about February of 2012, in the Broome, Oneida, and Onondaga counties in the Northern District of New York and elsewhere, defendant Alexandria Samson Davall and others, aiding and abetting each other, while in and affecting interstate commerce, did knowingly recruit, entice, harbor, transport, provide, obtain, and maintain by any means a person with the initials M.L., who had not attained the age of 18 years, knowing, or in reckless disregard of the fact that M.L. would be caused to engage in one or more commercial sex acts, and did benefit, financially and by receiving things of value, from participation in the venture which has engaged in the act described above, in violation of Title 18, United States Code, §§ 1591(a) & (b) and 2.
Davall further admitted that she and others, while aiding and abetting each other, knowingly recruited, enticed, harbored, transported, provided, obtained, and maintained a minor with the initials M.L., who was 16 years of age at the time, in order to prostitute M.L. to adult men in exchange for money and controlled substances. Davall and the others photographed and caused M.L. to be photographed in sexually seductive poses wearing only lingerie and posted said photographs of M.L. on Backpage.com, an internet classified advertising website, offering M.L. for sex in exchange for money. Additionally, Davall and the others utilized cellular telephones to send mass cellular texts offering M.L. for sex to customers in exchange for money. Furthermore, Davall and the others transported and caused M.L. to be transported to various locations including hotels where M.L. was instructed and caused to engage in commercial sex acts, in that, M.L. engaged in sexual acts including intercourse and oral sex with customers in exchange for money and controlled substances. Davall and the others benefitted, both financially and by receiving things of value, by prostituting M.L. to customers, in that, Davall and the others shared the money and controlled substances acquired from customers with whom M.L. was caused to engage in sex acts.
The federal charge stems from an investigation conducted by the FBI-Albany Division, New York State Police, Oneida County District Attorney’s Office, Utica Police Department, and the Oneida County Child Advocacy Center. The investigation concerned a prostitution ring involved in selling a minor to engage in sexual conduct in exchange for money and drugs. The prostitution ring utilized the website Backpage.com to advertise the prostitution. The ring also utilized a texting network to advertise their prostitution business. The Oneida County District Attorney has charged several other defendants with state crimes in connection to this overall joint investigation. The investigation is continuing.
Davall continues to be held in the custody of the U.S. Marshal’s Service pending sentencing. Davall is scheduled to be sentenced on July 22, 2014. At sentencing, she faces a statutory mandatory minimum term of 10 years prison and a maximum of life. The maximum possible fine is $250,000.
Man Admits Stalking Former Federal Witness Against HimRead the Press Release
Faces New Jail Term of Up To 5 Years
SYRACUSE, NEW YORK – Paul Raymond Ross, 59, of Endwell, NY pled guilty today in United States District Court before the Honorable Thomas J. McAvoy to Interstate Stalking of a former witness against him in a previous federal prosecution – announced United States Attorney Richard S. Hartunian. In 2008 Ross pled guilty to making extortionate demands for $20,000 from a victim who has been identified publically by the initials “K.O.D.” The victim in that previous case provided assistance to the Federal Bureau of Investigation, including by producing copies of threatening communication received from the defendant. As a result of his plea in that earlier case, Ross was sentenced to 27 months in prison, followed by 3 years of supervised release. Upon completion of his sentence, Ross immediately began to stalk KOD electronically. That is, Ross began to send out thousands of electronic messages to the victim’s clients, her employees, the media, and, via the mail, to her in any effort to harass, injure, and cause her severe emotional distress and financial damage. Ross posted threatening photographs and made false statements about her.
On October 31, 2013, Ross was indicted by a federal grand jury for Retaliation Against a Witness and Interstate Stalking. He is being held in pretrial detention. His guilty plea today subjects him to a maximum possible penalty of 5 years in jail, a $250,000 fine, and 3 years of supervised release. Sentencing has been set for June 4, 2014 at 9:30 AM in Binghamton, NY.
This matter was investigated by Special Agents of the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Craig A. Benedict, who may be reached at 315-448-0672 with questions about the case.
Albany Man Pleads Guilty to Distribution of Child PornographyRead the Press Release
ALBANY, NEW YORK – RAYMOND T. DRAKE, age 53, of Albany, New York, pled guilty today in Albany before Chief United States District Judge Gary L. Sharpe to two counts of distribution of child pornography, one count of receipt of child pornography, and three counts of possession of child pornography, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent in Charge Nicholas DiNicola. DRAKE, who was detained pending his sentencing, faces at least five years of imprisonment and up to 120 years of imprisonment.
As part of his guilty plea, DRAKE admitted that he distributed images of child pornography by e-mail and through a Peer-to-Peer file sharing program. On January 25, 2013, investigators searched DRAKE’s residence and recovered hundreds of images and several videos depicting child pornography. Sentencing is scheduled for July 7, 2014, in Albany, New York.
This case was investigated by the Department of Homeland Security, Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
California Man Guilty in $7 Million Fraud Scheme Concerning Purported Alternative Energy TechnologyRead the Press Release
LOS ANGELES – A Northern California man has been convicted of federal fraud charges for his involvement in a $7 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.
Richard M. Rossignol, 63, who now resides in Shingle Springs, California, was convicted on February 28 of one count of conspiracy to commit mail and wire fraud. The jury took less than six hours to render its verdict on the sole count.
United States District Judge Audrey B. Collins presided over the seven-week trial in United States District Court in Los Angeles. Following the verdict on Friday, Judge Collins scheduled a sentencing hearing for June 16. At sentencing, Rossignol faces a sentence of up to 20 years in federal prison.
Rossignol and a co-defendant – William A. Stehl, 69, of Ventura – 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, and would result in significant financial returns for the investors. Stehl and Rossignol obtained more than $7 million from more than 300 victims. None of the investors received the returns promised by Stehl and Rossignol, and most of the money obtained was used for personal expenditures by Stehl and Rossignol.
Stehl was living near Saranac Lake in New York when the scheme started. Stehl moved to Southern California in late 2005, and Rossignol was convicted of conspiring with Stehl and others up to the time of the indictment. Fraud victims lived across the nation, including in Sacramento, California; Los Angeles; Charleston, West Virginia; and New York.
The indictment was originally filed in the Northern District of New York, but in October 2012, the case was transferred to the Central District of California to accommodate Stehl, who received injuries in an explosion occurring in a building in Sylmar, California, on August 9, 2011.
In November 2013, Judge Collins granted a request by Stehl’s attorneys to have a separate trial. Stehl is now scheduled to go to trial on July 22. Rossignol is free on bond.
The investigation in this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation, New York Field Office, and the Federal Bureau of Investigation, Albany, New York Resident Agency. 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) 773-2887.
Saratoga County Sheriff’s Deputy Arrested in Fbi StingRead the Press Release
ALBANY, NEW YORK - Charles E. Fuller, 46, of Corinth, New York, a Saratoga County Deputy Sheriff, was charged today by criminal complaint with attempting to aid and abet the possession with intent to distribute 500 grams or more of cocaine, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. Fuller was arrested earlier today at the Saratoga County Sheriff’s Office and appeared before United States Magistrate Judge Christian F. Hummel at 3:00 p.m. A detention hearing is scheduled before United States Magistrate Judge Randolph F. Treece on March 3, 2014 at 2:00 p.m. If convicted, Fuller faces a maximum of 40 years in prison, a mandatory minimum period of imprisonment of 5 years, and a maximum fine of $5,000,000.
The complaint alleges that on or about February 27, 2014, members of the Federal Bureau of Investigation, with the assistance of a FBI confidential source, arranged for a controlled delivery by Charles E. Fuller of what was purported to be one kilogram of cocaine. After Fuller transported the confidential source and one kilogram of a substance the confidential source claimed was cocaine from a location in Albany County to a location in Warren County, the FBI confidential source paid Fuller $4,000 in prerecorded currency. Fuller is alleged to have engaged in this conduct while he was off-duty.
U.S. Attorney Hartunian said, “This is a difficult day for law enforcement in Saratoga County and beyond. The conduct by Deputy Sheriff Fuller alleged in the complaint constitutes a betrayal of both the citizens in the community that he is sworn to protect, but also the countless honest and dedicated law enforcement officers who put their lives on the line every day to keep us safe. We will continue to work with the FBI and our state and local law enforcement officers to root out this conduct wherever it lies.”
Special Agent in Charge Andrew W. Vale stated, “Corrupt law enforcement officers insult the many honorable officers who serve with integrity. Any law enforcement officer who violates his oath to protect the community and instead takes part in criminal activity should expect the same outcome as a criminal. The public has the right to be assured of the integrity of its public servants, in particular those charged with enforcing the law. Today’s arrest serves as a reminder that no one is above the law and that the FBI is committed to working with the law enforcement community to prevent the erosion of public trust that accompanies such incidents. I would like to extend my appreciation to Saratoga County Sheriff Zurlo for his cooperation throughout this investigation.”
Saratoga County Sheriff Michael H. Zurlo stated, "The allegations against Fuller are an affront to and undermine the integrity of the hardworking men and women of the Saratoga County Sheriff's Office. We will not tolerate corruption among our ranks. Our promise to the people of Saratoga County is that we will continue to work diligently to ensure that every member of this office deserves the respect and trust of our community."
A criminal complaint is merely a formal charge that a defendant has committed a violation of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.
SYRACUSE, NEW YORK - A physician and employee of a former Utica and Fulton area medical practice indicted.Read the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced the indictment of a physician and employee of a former Utica and Fulton area medical practice.
MAHESH KUTHURU, M.D., age 43, and BONNIE MEISLIN, age 42, were indicted by a federal grand jury in Syracuse on February 26, 2014. KUTHURU owned and operated Upstate Pain Management, which had medical offices at 59 South First Street, Fulton, New York and 287 Genesee Street, Utica, New York. BONNIE MEISLIN was an employee of Upstate Pain Management. The indictment charges MEISLIN and KUTHURU with engaging in a scheme to defraud Medicare by submitting claims for reimbursement that falsely represented that Dr. KUTHURU had performed medical services when in fact he had not. According to the indictment, KUTHURU purchased a medical practice in Las Vegas, Nevada, known as Desert Pain Management in November 2008. In July 2009 KUTHURU sold his home in Baldwinsville and purchased a home in Las Vegas. By January 2010 through at least September 2011, KUTHURU was spending the majority of his time at his Las Vegas medical practice, coming back to the Utica and Fulton offices to treat patients only a sporadic basis. The indictment further charges that from January 2010 through September 2011 there were substantial periods of time when there were no licensed medical personnel whatsoever in the Utica and Fulton offices and that patients there were seen only by unlicensed staff members who had received no formal medical training.
The indictment further charges KUTHURU with unlawful distribution of Schedule II controlled substances including Oxycodone, Oxycotin, Methadone and Morphine Sulphate.
MEISLIN had earlier been indicted on January 8 on charges of health care fraud. The recent indictment further specifies the nature of those charges. KUTHURU was arrested in Las Vegas on February 28. He is scheduled to appear for arraignment before United States Magistrate Judge Therese Wiley Dancks in Syracuse on March 12, 2014 at 2:00 pm.
Each of the thirty health fraud counts carries a maximum penalty of 10 years imprisonment and a fine of $250,000. Each of the fifteen counts of drug distribution carries a maximum penalty of 20 years imprisonment with a fine of $1,000,000.
The case was a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the New York State Bureau of Narcotics Enforcement, United States Department of Health and Human Services, New York State Worker’s Compensation Board, Safeguard Services, and Excellus Blue Cross & Blue Shield Special Investigations. The case is being prosecuted by Assistant U.S. Attorney Edward R. Broton.
The indictment merely sets forth an accusation and the defendants are presumed innocent until the charges are proved beyond a reasonable doubt.
Illegal Alien from Mexico Sentenced to 37 Months in PrisonRead the Press Release
Re-Entered United States Following 2009 Removal
ALBANY, NEW YORK – JAIR RENDON AGUILAR, age 26, a citizen of Mexico, was sentenced today to 37 months of imprisonment for illegally reentering the United States after removal by United States District Court Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian and Christopher Shanahan, Field Office Director, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations. Upon completion of AGUILAR’s sentence, he will be turned over to the Department of Homeland Security for removal proceedings. Today’s sentencing follows AGUILAR’s August 27, 2013, guilty plea.
AGUILAR was involuntarily removed from the United States to Mexico on July 16, 2009 following his 2008 conviction in King County Supreme Court for Assault 2nd Degree. On May 21, 2013, AGUILAR, who did not have permission to re-enter the United States, was encountered by Immigration and Customs Enforcement officers at the Ulster County Jail in Kingston, New York.
The case was investigated by the Department of Homeland Security, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, Castle Point, New York.
Washington County Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
ALBANY, NEW YORK – CHRISTOPHER J. WHITE, age 29, of Whitehall, New York, pled guilty today in Albany before United States District Judge Mae A. D’Agostino to receipt of child pornography, announced United States Attorney Richard S. Hartunian, Joseph D’Amico, Superintendent of the New York State Police, and Andrew Vale, Special Agent in Charge, Federal Bureau of Investigation. WHITE, who was detained pending his sentencing, faces at least fifteen years of imprisonment and up to forty years of imprisonment.
As part of his guilty plea, WHITE admitted that, following his 2010 Attempted Sexual Abuse in the 1st Degree conviction in Saratoga County Court, he used the Internet to search for, receive, and view images of child pornography. Sentencing is scheduled for June 9, 2014, in Albany, New York.
This case was investigated by the New York State Police and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.
Troy Man Sentenced for Illegal Possession of A FirearmRead the Press Release
TROY, NEW YORK – RICHARD S. ELY, age 27, of Troy, New York, was sentenced today to 63 months in prison by the Honorable Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian, Joseph Anarumo, Special Agent-in-Charge of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and Police Chief Steven Krokoff of the Albany Police Department. The sentence follows ELY’s February 18, 2013 guilty plea to illegally possessing a firearm.
On June 7, 2012, when executing a search warrant, police found a .22 caliber firearm and ammunition in ELY’s residence. ELY, who had two prior felony convictions (a 2007 conviction for criminal sale of a controlled substance and 2012 conviction for aggravated driving while under the influence with a child under age fifteen as a passenger), was prohibited from possessing firearms.
This prosecution resulted from an investigation conducted by the Albany Police Department and the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives Albany Field Office. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.
Endo Pharmaceuticals and Endo Health Solutions to Pay $192.7 Million to Resolve Criminal and Civil Liability Relating to Marketing of Prescription Drug Lidoderm for Unapproved UsesRead the Press Release
WASHINGTON – Pharmaceutical company Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7 million to resolve criminal and civil liability arising from Endo’s marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the Food and Drug Administration (FDA), the Justice Department announced today. The resolution includes a deferred prosecution agreement and forfeiture totaling $20.8 million and civil false claims settlements with the federal government and the states and the District of Columbia totaling $171.9 million. Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern, Pa.
“FDA’s drug approval process is designed to ensure that companies market their products for uses that are proven to be safe and effective,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will hold accountable those who circumvent that process in pursuit of financial gain.”
In a criminal information filed today in the Northern District of New York, the government charged that, between 2002 and 2006, Endo Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was misbranded under the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA requires a company, such as Endo Pharmaceuticals Inc., to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. During the period of 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. The information alleges that, during the relevant time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc. was misbranded because its labeling lacked adequate directions for use in the treatment of non-PHN related pain, including low back pain, diabetic neuropathy and carpal tunnel syndrome. These uses were intended by Endo Pharmaceuticals Inc. but never approved by the FDA. The information further alleges that certain Endo Pharmaceuticals Inc. sales managers provided instruction to certain sales representatives concerning how to expand sales conversations with doctors beyond PHN and encouraged promotion of Lidoderm in workers’ compensation clinics.
In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals Inc. admitted that it intended that Lidoderm be used for unapproved indications and that it promoted Lidoderm to health care providers for those unapproved indications. Under the terms of the deferred prosecution agreement, Endo Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties and forfeiture. Endo Pharmaceuticals Inc. further agreed to implement and maintain a number of enhanced compliance measures, including making publicly available the results of certain clinical trials and requiring an annual review and certification of its compliance efforts by the Chief Executive Officer of its parent company, Endo Health Solutions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court for the Northern District of New York.
“The safety and efficacy of drugs must be shown by science, not sales pitches,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Drugs marketed for intended uses not approved by the FDA are misbranded because their labeling lacks adequate directions for those uses. This settlement emphasizes that public health is protected by labeling based on product performance, rather than profitability, and promotes enhanced efforts to ensure compliance with all requirements.”
In addition, Endo agreed to settle its potential civil liability in connection with its marketing of Lidoderm. The government alleged that, from March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs, including Medicaid, a jointly funded federal and state program, by promoting Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by the federal health care programs. Of the $171.9 million Endo has agreed to pay to resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.
“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear and honest judgment of doctors that their patients rely on and trust,” said U.S. Attorney for the Eastern District of Pennsylvania Zane D. Memeger. “Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses. This obligation takes precedence over the company’s bottom line.”
“The settlement announced today demonstrates the government’s continued scrutiny of pharmaceutical companies that interfere with FDA’s mission of ensuring that drugs are safe and effective for the American public,” said Special Agent in Charge of the FDA’s Office of Criminal Investigations’ New York Field Office Mark Dragonetti. “We will continue to work with our law enforcement partners to investigate and prosecute pharmaceutical companies that disregard the drug approval process and jeopardize the public health by engaging in the nationwide distribution of misbranded products.”
“Endo Pharmaceutical enriched themselves at the expense of the public,” said Special Agent in Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. “Patients will search for drug therapies to assist in pain management, and they deserve the right to drugs approved for such use. The FBI will continue to work with our federal partners to investigate companies such as Endo Pharmaceuticals to ensure patients are safe.”
Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General that requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which gave rise to this resolution. Among other things, the CIA requires Endo to implement an internal risk assessment and mitigation program and requires numerous internal and external reviews of promotional and other practices. The CIA also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.
“By marketing Lidoderm for uses not covered by federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”
The civil settlement resolves three lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. The actions were filed by Peggy Ryan, a former Lidoderm sales representative, Max Weathersby, another former Lidoderm sales representative and Gursheel S. Dhillon, a physician. The whistleblowers’ share of the settlement has not been determined.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The civil settlement was handled by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Civil Division’s Commercial Litigation Branch. The criminal case was handled by the U.S. Attorney’s Office for the Northern District of New York and the Civil Division’s Consumer Protection Branch. These matters were investigated by the Federal Bureau of Investigation, the Food and Drug Administration Office of Criminal Investigation, the Department of Health and Human Services Office of Inspector General Office of Investigations, the Defense Criminal Investigative Service of the Department of Defense, the U.S. Postal Service Office of Inspector General and the Office of Personnel Management Office of Inspector General with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General and Office of General Counsel and Center for Medicare and Medicaid Services, the Food and Drug Administration’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.
Except as to conduct admitted in connection with the deferred prosecution agreement, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Ryan v. Endo Pharmaceuticals Inc., Civil Action No. 05-cv-3450, United States ex rel. Weathersby, et al. v. Endo Pharmaceuticals Inc., et al, Civil Action No. 10-cv-2039 and United States ex rel. Dhillon v. Endo Pharmaceuticals, Civil Action No. 11-cv-7767, all docketed in the Eastern District of Pennsylvania.
Liverpool Woman Sentenced to 55 Months Imprisonment for Fraud Against the New York State Department of Labor and the Internal Revenue ServiceRead the Press Release
SYRACUSE, NEW YORK – Patricia Harrington, age 50, of Liverpool, New York, was sentenced in U.S. District Court today in connection with her guilty pleas to 11 Wire Fraud, Tax Fraud and Aggravated Identity Theft charges according to U.S. Attorney Richard S. Hartunian.
U.S. District Judge Glenn T. Suddaby sentenced Harrington to 24 months imprisonment in connection with her September 11, 2013 guilty pleas to submitting six false federal tax refund claims in the name of family members, without their knowledge, during 2011 and 2012. She also received a concurrent sentence of 24 months in connection with her guilty pleas to four counts of wire fraud in connection with a scheme to fraudulently obtain monies from the New York State Department of Labor in 2011 and 2012 by submitting false claims for unemployment benefits in the name of various family members, again, without their knowledge. Harrington also received an additional consecutive sentence of 24 months in connection with her guilty plea to Aggravated Identity Theft. Harrington had admitted she used the identity of another person to commit her crimes. She was also ordered to pay restitution to the New York State Department of Labor in the amount of $19,424 and $28,031.86 to the Internal Revenue Service along with interest and penalties.
At the time she committed these offenses she was serving a term of federal Supervised Release in connection with a conviction for a similar fraud scheme in Pennsylvania in 2009. In admitting that she violated the terms of her release, Judge Suddaby sentenced Harrington to serve an additional seven months imprisonment consecutive to the 48 month sentence imposed. She will serve a total of 55 months imprisonment. Upon her release, she is ordered to serve a term of supervised release of three years and ordered to complete 220 hours of community service.
Harrington had been previously prosecuted in Pennsylvania in 2008 for committing identity fraud over a two year period. There, she had submitted a series of fraudulent student loan applications in the names of relatives without their knowledge. In entering a guilty plea in Harrisburg in December 2008, she admitted that she had applied for approximately 13 fraudulent federal student loans, totaling some $139,000. Following her release from prison for that offense, she began serving a term of supervised release in April of 2010, which was transferred to the Northern District of New York. While living in the Syracuse area, she began the new scheme of applying for fraudulent unemployment benefits and federal tax refunds in the name of family members for which she was sentenced today.
U.S. Attorney Richard S. Hartunian stated, “I want to commend the local, state and federal investigators who worked closely together in bringing this case to justice. We will continue our efforts to seek out and prosecute those who seek to defraud honest citizens of their tax dollars.”
“New York State is a national leader in both preventing and identifying Unemployment Insurance Fraud,” said State Labor Commissioner Peter M. Rivera. “Fraud hurts businesses, those who depend on Unemployment Insurance benefits to support a family and all New Yorkers. Today’s sentencing brings to conclusion a case that exemplifies just how adept our investigators are and our mission to ensure anyone who commits fraud is caught.”
The case was investigated by the New York State Department of Labor, Office of Special Investigations, the Onondaga County Sheriff’s Department, the Onondaga County District Attorney’s Office, and the Internal Revenue Service, Criminal Division, Syracuse, New York.
The case was prosecuted by Executive Assistant United States Attorney John G. Duncan.
Two Oneida Residents Convicted on Drug ChargesRead the Press Release
Guilty of methamphetamine and pseudoephedrine charges
SYRACUSE, NEW YORK – Terry R. Ross, age 52, and Wanda Kingsley, age 49, of Florence, New York, were found guilty today by a U.S. District Court jury of four felony counts, including a methamphetamine conspiracy involving the manufacture of 50 grams or more and a conspiracy to possess or distribute pseudoephedrine knowing it was intended to be used to manufacture a controlled substance - announced United States Attorney Richard S. Hartunian.
Following a three day jury trial, the defendants were convicted of a conspiracy to manufacture 50 grams or more of methamphetamine, in violation of Title 21, United States Code, Section 841(a)(1), (b)(1)(B) and 846, a conspiracy to possess or distribute pseudoephedrine knowing it was intended to be used to manufacture methamphetamine, in violation of Title 21, United States Code, Section 841(c)(1) and 846, and one count each of possessing or distributing pseudoephedrine knowing it was intended to be used to manufacture methamphetamine, in violation of Title 21, United States Code, Section 841(c)(1).
The evidence at trial showed that between 2010 and 2012, defendants Ross and Kingsley, individually and together with each other and with others, purchased pseudoephedrine pills from pharmacies in Oneida County, and knowingly provided the pills to other co-conspirators who used them on numerous occasions in the manufacture of methamphetamine. Between November 2010 and January 2012, Ross purchased pseudoephedrine pills on 21 separate occasions from Oneida county pharmacies, and Kingsley, Ross’ live-in girlfriend, purchased pseudoephedrine pills on 49 separate occasions. Ross and Kingsley also assisted in the methamphetamine manufacturing process in various ways, including procuring and assembling some of the necessary ingredients and apparatus for the meth “cook,” and providing assistance during the cooking process, in exchange for a portion of the finished product methamphetamine.
Ross is scheduled to be sentenced at 10:00 am on June 18, 2014, and Kingsley is scheduled to be sentenced at 10:15 am on that date.
The prosecution arose from the investigative efforts of the City of Oneida Police Department, the New York State Police, and the Drug Enforcement Administration.
The case was prosecuted by Assistant United States Attorney Carl Eurenius. For more information, please contact AUSA Eurenius at (315) 448-0672.
U.s. Attorney's Office Collects $29.3 Million in Civil & Criminal Actions and Forfeitures in Fy 2013Read the Press Release
(Albany, New York) - United States Attorney Richard S. Hartunian has announced that the Northern District of New York collected $4,006,217.22 in criminal and civil actions in Fiscal Year 2013. Of this amount, $2,642,890.05 was collected in criminal actions and $1,363,327.17 was collected in civil actions. The U.S. Attorney’s Office also worked with other components of the Department of Justice to collect an additional $14,313,192.93 in cases pursued jointly. Of this amount, $2,601,102.21 was collected in criminal actions and $11,712,090.72 was collected in civil actions.
Additionally, the U.S. Attorney’s Office, working with partner agencies and divisions, collected $11,051,256 in criminal, civil and administrative forfeitures in 2013. Forfeited assets are deposited into the Department of Justice Asset Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.
Attorney General Eric Holder announced in January that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.
“The department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the American people,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”
“As we go forward in these challenging economic times, collections continue to be a critically important part of our services to the citizens in our district," said U.S. Attorney Richard S. Hartunian. "The U.S. Attorney's Office is dedicated to protecting the public and recovering ill-gotten gains for the federal treasury and for victims of federal crime. Once again this year, the amount collected significantly exceeds the annual cost of our entire office operations."
Some notable cases in which funds were recovered by the U.S. Attorney’s Office during fiscal year 2013 include the following:
A. Forfeiture Cases
On December 19, 2012, defendant John Tebbetts, Syracuse area owner of the head shop chain known as “Tebb’s Head Shops,” was charged with and pled to possession with the intent to distribute, Schedule I controlled substances in violation of 21 U.S.C. § 841, possession with the intent to distribute a controlled substance analogue, as defined in 21 U.S.C. § 802(32), with the intent that it be used for human consumption, as provided for in 21 U.S.C. § 813, and one count in violation of 18 U.S.C. § 1957, engaging in a monetary transaction in property derived from a specified unlawful activity, for the purchase of a 2012 Forest River Berkshire Motor Home for $157,440 in U.S. Currency in the case of U.S. v. John Tebbetts. On April 22, 2013 the court signed a Preliminary Order of Forfeiture ordering the forfeiture of the 2012 Forest River Berkshire Motor Home, $286,376.37 in U.S. Currency, one 2004 Toyota Scion XB, one 2009 Cadillac CTS 4, and one 2005 GMC Savana G3500, as the proceeds of, and property facilitating the aforementioned violations.
In 2013, the U.S. Attorney’s Office forfeited $5,359,983.91 in real property, vehicles, bank accounts and currency in the case of U.S. v. Lonzinski, et al. This office is seeking to have the moneys collected thus far used to pay the restitution ordered in the amount of $14,108,623. This case involved the criminal prosecution of a mother and son, Laura Conarton and Scott Lonzinski, from the Binghamton area, who engaged in a loan fraud scheme which ultimately bankrupted the Broome County Teachers Federal Credit Union. Among the millions of dollars already seized, $162,347 has been credited to the National Credit Union Administration (NCUA) through administrative action undertaken by the U.S. Attorney’s Office. Upon the sale of forfeited real property, the remaining forfeited proceeds will be eligible for transfer to the NCUA.
B. Civil Actions
In September 2013, the Northern District of New York recovered $3.57 million as part of the settlement in the United States of America ex rel. Lynch v. Imagimed LLC, et al., a civil case filed under the False Claims Act’s qui tam provision. Imagimed LLC is a company that operated 14 different MRI sites in the Northeast, including sites in Elmira, DeWitt, Utica and Amsterdam. The settlement resolved allegations that Imagimed LLC, the company’s former owners, William B. Wolf III and Dr. Timothy J. Greenan, and the company’s former chief radiologist, Dr. Steven Winter submitted to federal healthcare programs false claims for magnetic resonance imaging (MRI) services. Imagimed owns and operates MRI facilities, located primarily in New York State, under the name “Open MRI.” More specifically, it was alleged that, from July 1, 2001, through April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims to Medicare, Medicaid and TRICARE for MRI scans performed 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. It was also alleged that from July 1, 2005, to April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims for services referred to Imagimed by physicians with whom Imagimed had improper financial relationships, in that, in exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute.
In March 2013, $8,065,411 was recovered as part of a $20.3 million dollar settlement in the United States of America, The State of New York and The St. Regis Mohawk Tribe v. Aluminum Company of America and Reynolds Metals Co. civil case. The settlement resolved allegations that, for decades, Alcoa Inc. (Alcoa West), Reynolds Metals Company (now Alcoa East) and the former GM Central Foundry plant, located in Massena, New York adjacent to the St. Regis Mohawk Tribe lands, had released hazardous substances into the St. Lawrence River environment. These substances, including polychlorinated biphenyls (PCBs), adversely impacted natural resources within the surrounding environment and contaminated the Mohawk community of Akwesasne by degrading natural resources used for traditional cultural practices. Most of this settlement, $18.5 million, will be combined with $1.8 million in restoration funds from a 2011 General Motors (GM) bankruptcy settlement, and used for restoration of the St. Lawrence River area. The settlement funds include the following components:
- Approximately $8.4 million of the settlement will go to the Mohawk Tribe to support traditional cultural practices, including an apprenticeship program to promote Mohawk language and traditional teachings. A portion of those funds will also support cultural institutions, including youth outdoor education programs and horticultural programs for medicine, healing and nutrition.
- More than $10 million from the GM and Alcoa/Reynolds settlements will be spent on a variety of ecological restoration projects, including restoration and/or enhancement of wetlands, stream banks, native grasslands, bird nesting and roosting habitat, fisheries and fish habitat, and acquisition of unique habitat under threat of development. These projects may also benefit cultural practices that depend on these restored natural resources.
- Nearly $2 million will be spent by Alcoa/Reynolds to develop and upgrade two boat launches on the Raquette River and construct three new launches on the Grasse River to improve fishing and boating access to rivers in the Massena area.
The litigation of this case was handled primarily by the Department of Justice’s Environment and Natural Resources Division, along with the National Oceanic and Atmospheric Administration, the U.S. Department of the Interior, the New York State Attorney General’s Office and the St. Regis Mohawk Tribe.
C. Criminal Actions
On March 4, 2011, defendant Lal B. Singh, as part of his sentence, was ordered by the Court to pay restitution in the amount of $3,610,538 to the Bank of New York in connection with his scheme to defraud committed while he was employed by the Bank in Manhattan. From 1993 through 2007, Singh served as a Section Manager in the Securities Redemption Department of the Bank. If customers did not redeem bonds that had been purchased upon the maturity date, the additional interest payments on the bonds would be transferred into a pooled account for unclaimed funds. If these funds are not claimed within three years, the bank was required to transfer these monies to the New York State Comptroller’s Office, Department of Unclaimed Funds. Through his job position, Singh had access to a data base that allowed him to view the unclaimed funds and to determine which funds were soon to be transferred to the state. Beginning in 1996, Singh created funds transfer requests to have funds transferred from the Unclaimed Funds accounts to one of several other accounts that belonged to individuals in the Schenectady area who agreed to assist Singh in the fraudulent funds transfer. Singh was able to make wire transfers totaling more than $3.6 million dollars. During the course of the investigation, it was discovered that Singh was entitled to a lump-sum benefit distribution from the Bank of New York Pension Plan in the amount of $281,350. After a Writ of Garnishment was issued to the Bank of New York, a check was issued by the Bank to the United States on November 21, 2012 in the amount of $229,278.59, which was then applied to the court-ordered restitution.
On January 31, 2013, defendant Joseph Dellerba was sentenced by Senior U.S. District Judge Norman A. Mordue. As part of his sentence, he was ordered to pay restitution in the amount of $1,429,458 to various insurance companies in connection with his conspiracy to defraud conviction involving a staged motor vehicle accident in Utica, New York. After a pre-trial financial investigation, Dellerba turned over $102,111, which represents a portion of the proceeds fraud. This amount was then applied toward the restitution he was ordered by the court to pay.
The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
Attached is a chart showing how the FY2013 $29,370,665 collections were distributed to the victims, government agencies serving the public and state and local law enforcement agencies.
Massachusetts Man Arrested for On-line Activity with Albany County ChildRead the Press Release
ALBANY, NEW YORK – United States Attorney Richard S. Hartunian and Special Agent in Charge Andrew W. Vale of the Federal Bureau of Investigation, Albany Division, and Colonie New York Police Chief Steven Heider announced the arrest today of a Massachusetts man charged with enticing a 10 year old Albany County child to produce sexually explicit videos of himself and to then send those videos to him by email.
A criminal complaint unsealed in United States District Court this afternoon alleges that Brian Belanger, 21, of Worcester, Massachusetts, using the nickname “zombieshadow,” met the child on-line through Playstation 3. While talking through the game’s headset feature, Belanger told the child that someone was trying to kill Belanger, and that the child could help him by providing sexually explicit videos of himself that Belanger could in turn give to the other person. It is alleged that Belanger directed the child what to do in the videos, and that over the course of approximately three months the child emailed Belanger numerous times, attaching video files to the emails that depict the child engaged in sexually explicit conduct.1
Law enforcement was alerted on January 25, 2014, when the child’s father found the emails and videos on the child’s iPad. The investigation culminated with Belanger’s arrest today at his Worcester, Massachusetts residence. He made his initial appearance this afternoon in United States District Court in Albany before United States Magistrate Judge Hon. Randolph F. Treece, and was ordered detained pending a detention hearing scheduled for 2PM, Monday February 10, 2014. Belanger faces a mandatory minimum penalty of 15 years imprisonment, with a maximum penalty of 30 years, potential fines of up to $250,000, and a required term supervised release of at least 5 years, and up to life. A conviction would also require Belanger to register as a sex offender. Members of the community in the Worcester, Massachusetts area who have concerns or information regarding this case should call (508)-792-0214. Those in the Albany, New York area with information or concerns should call either (518) 431-0247, or 1-(888) 539-4535.
The investigation and arrest of Belanger is the result of an investigation by the Colonie New York Police Department, the Federal Bureau of Investigation, Albany Division, the New York State Police, the Worcester Massachusetts Police Department and the Federal Bureau of Investigation, Boston Field Division 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, 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 Attorney Lisa Fletcher, Project Safe Childhood Coordinator for the Northern District of New York.
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1The charges are merely accusations and Belanger is presumed innocent until and unless proven guilty.
Geneva Man Convicted of Transporting and Possessing Child PornographyRead the Press Release
SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced that, following a jury trial, JOSEPH VINCENT JENKINS, (43, of Geneva, New York) was found guilty in U.S. District Court in Syracuse, N.Y. of the felony offenses of Transportation of Child Pornography, in violation of Title 18, United States Code, Section 2252A(a)(1) and 2256(8)(A), and Possession of Child Pornography, in violation of Title 18, United States Code, Section 2252A(a)(5)(B) and 2256(8)(A). JENKINS is facing a statutory mandatory minimum sentence of 5 years and a maximum sentence of twenty years imprisonment for the Transportation of Child Pornography offense, for the Possession of Child Pornography charge a maximum sentence of imprisonment of ten years; a term of supervised release of at least five years and up to lifetime supervision, a maximum fine of $250,000.00 and mandatory registration as a sex offender. JENKINS is scheduled to be sentenced on June 17, 2014, before Judge Glenn T. Suddaby, in Syracuse, New York.
“Consumers of child pornography re-victimize the children abused by these horrific crimes and create demand for more of this material”, said Nicholas DiNicola, assistant special agent in charge of HSI Albany. “HSI special agents will continue to work with our partners on both sides of the border to identify these criminals and ensure they are brought to justice.”
United States Attorney Richard S. Hartunian said “This case should serve as a warning to those who download child pornography over the internet with the belief that they will never be caught. We will continue to pursue these offenders and prosecute them in the courts of the United States.”
JENKINS was arrested on May 24, 2009, at the Port of Lansdowne in Ontario, Canada, when he crossed the United States-Canadian border with a laptop and two thumb drives containing images and videos of child pornography. JENKINS was charged in Canada and failed to appear at his trial. A bench warrant was issued for his arrest by the Ontario Court of Justice. Federal Agents with Homeland Security Investigations took the case after a referral from the Ontario Provincial Police as the defendant entered the Port of Lansdowne from Jefferson County, New York, and had transported and possessed child pornography in the Northern District of New York before entering Canada.
This prosecution resulted from an investigation conducted by Homeland Security Investigations, Canada Border Services Agency, and Ontario Provincial Police. The case was prosecuted by Assistant United States Attorneys Tamara B. Thomson and Gwendolyn Carroll. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315) 448-0672.
Canadian Man Sentenced for Smuggling More Than $5 Million Worth of “molly” into the United StatesRead the Press Release
Received Fourteen Years in Prison
ALBANY, NEW YORK – JOEL CUNNINGHAM, age 30, of Ottawa, Canada, was sentenced today to fourteen years in prison by United States District Court Judge Glenn T. Suddaby, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent-in-Charge Nick DiNicola. The sentence follows CUNNINGHAM’s September 20, 2013 guilty plea to one count of possession with intent to distribute a controlled substance.
On April 9, 2013, CUNNINGHAM was observed entering the United States from Canada through an unmanned border crossing in the Akwesasne Mohawk Reservation. Members of the Border Enforcement Security Task Force in Massena, New York followed CUNNINGHAM and later stopped him. Law enforcement officers searched the sport utility vehicle driven by CUNNINGHAM and found 58,183 grams of 3,4-Methylenedioxymethamphetamine Hydrochloride (commonly known as “Molly”), as well as over $140K in U.S. currency, in hidden compartments and duffel bags. The street value of the substance is over $5 million. CUNNINGHAM helped load the sport utility vehicle earlier that day.
This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.
Butler Arson Homicide Charge Dismissed Without PrejudiceRead the Press Release
ALBANY, NEW YORK – The federal criminal complaint charging Robert A. Butler with arson resulting in personal injury and death, in violation of Title 18, United States Code, Section 844(i), was dismissed today without prejudice, announced United States Attorney Richard S. Hartunian.
The complaint was filed on June 4, 2013, based on an affidavit alleging that on or about May 2, 2013, Butler used gasoline to start a fire at 438 Hulett Street, Schenectady, New York, resulting in the deaths of four people and the destruction of the building and its contents. The dismissal of the charge results in the release of Butler from federal custody.
The basis for the dismissal was set forth in the filed order as follows:
This case involves unusual and complex facts, with the complaint based upon allegations (in the affidavit in support of the complaint) that the defendant used gasoline to start a fire at a residential rental property in Schenectady, New York that resulted in the destruction of the building and its contents and the deaths of a father and three young children and very serious burn injuries for another child. The gravity of the crime and the potential punishments, the unusual and complex facts, including information regarding the involvement of others, and the circumstances regarding eyewitnesses necessitate further investigation.
U.S. Attorney Hartunian said, “We are completely committed to continuing this investigation until justice is done. We are grateful for the dedication of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the Schenectady Police Department, and the Schenectady Fire Department to this case, and for the assistance of other federal agencies and police departments in the region. The victims of this horrific crime deserve and will continue to get our best efforts to secure justice.”
Questions may be addressed to First Assistant U.S. Attorney Grant C. Jaquith at 518-431-0247.