Northern District of New York

United States Attorney Richard S. Hartunian announced today that a Utica man has been sentenced for his role in an insurance fraud scheme.

DAVID MORGAN, age 55, Utica, NY, was sentenced by United States District Court Judge Norman A. Mordue in Syracuse. MORGAN was sentenced to 21 months imprisonment and ordered to pay restitution in an amount exceeding $1.4 million. MORGAN will also serve three years of supervision following his release from incarceration.

DAVID MORGAN pled guilty on July 31, 2012 to mail fraud. MORGAN admitted that in or about 2005 he agreed to assist other conspirators in an insurance fraud scheme. The scheme involved a staged motor vehicle accident on Harbor Lock Road in Utica on March 20, 2006. On that date, Joseph Dellerba and Cynthia Morgan, David’s wife, claimed to have been injured while passengers in a Ford van which was struck by a Ryder truck driven by Michael Matrulli. In fact, the collision was staged, and Dellerba and Morgan were not passengers at the time of the impact. Dellerba and Morgan claimed to have been injured as a result of the accident and submitted false insurance claims, including claims for personal injuries, no fault benefits and disability benefits. Dellerba and Morgan sought medical treatment for non-existent injuries or injuries that they claimed were the result of the collision. David Morgan and his wife subsequently initiated a civil lawsuit seeking a monetary recovery as a result of injuries suffered by Cynthia in the fictitious accident. That suit was settled with a payment of $30,000 to the Morgans.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the New York State Department of Financial Services, Criminal Investigations Unit. The case was prosecuted by Assistant United States Attorney Edward R. Broton.

United States Attorney Richard S. Hartunian announced today the sentencing of an Oneida area man on charges of arson and insurance fraud.

JEFFREY E. TRUMAN, SR., 55, formerly of Oneida, New York, appeared for sentencing today in federal court in Syracuse on charges of aiding and abetting an arson, two counts of mail fraud, and one count of using fire to commit a federal felony. The charges stem from a fire that destroyed the former Oneida Casket Company Factory building in Oneida. In November 2005, TRUMAN, along with two partners purchased the vacant factory buildings for $175,000. On November 12, 2006, five days before an insurance policy was to lapse, the buildings were destroyed by fire. Subsequently, TRUMAN submitted an insurance claim for $4,178,500 in fire related losses. A subsequent investigation determined that the fire had been intentionally set by TRUMAN’s son, Jeffrey Truman, Jr. On November 3, 2010, a jury found that TRUMAN, SR. had aided and abetted his son in committing the arson and subsequently attempted to defraud Erie Insurance Company in submission of his fire claim.

United States District Court Judge Norman A. Mordue sentenced TRUMAN to 217 months imprisonment, to be followed by a three year term of supervised release. TRUMAN was also ordered to make restitution to Erie Insurance Company in the amount of $548,406.55.

Benjamin M. Lawsky, Superintendent of Financial Services, said: “The reckless scheme orchestrated by the defendant placed scores of innocent people in harm’s way and could well have resulted in a horrific tragedy. I commend the Oneida Police Department for their collaboration with DFS on the case and thank the U.S. Attorney’s Office’s efforts to bring the case to a successful conclusion culminating in today’s sentencing.”

The case was investigated by the Oneida City Police Department, the Federal Bureau of Investigation, the Madison County Sheriff’s Department, the New York State Police, the Financial Frauds and Consumer Protection Division of the New York State Department of Financial Services, and, the Oneida Fire Department Cause and Origin Team. The case was prosecuted by Assistant United States Attorney Edward R. Broton and Gwendolyn E. Carroll.

Defendant Attempted to Produce Sexually Explicit Videos of a Twelve-Year-Old Girl

ALBANY, NEW YORK — JASON FRANK, age 27, of Rochester, New York, pled guilty today in Albany before Chief United States District Court Judge Gary L. Sharpe to one count of attempted production of child pornography, announced United States Attorney Richard S. Hartunian and Joseph D’Amico, Superintendent of the New York State Police. FRANK faces a mandatory minimum sentence of at least fifteen years of imprisonment and up to a maximum sentence of thirty years of imprisonment. FRANK was detained pending his sentencing.

Pursuant to a written plea agreement, FRANK admitted that in February 2013 he began chatting online with what he believed was a twelve-year-old girl located in Albany, New York. The girl was actually an undercover investigator with the New York State Police. The online chat sessions quickly became sexual and over a span of approximately two months FRANK sent the girl still images and videos of child pornography in an effort to convince her to meet with him at a Syracuse hotel in order to film a sexual encounter with FRANK. On April 9, 2013, FRANK arrived at a hotel in Syracuse expecting to meet the twelve-year-old girl and engage in sexual acts with the girl. Instead, FRANK was arrested by the New York State Police. At the time of FRANK’s arrest, he was in possession of a digital camera with video recording capabilities and a thumb drive that contained still images and video of child pornography.

Sentencing is scheduled for November 27, 2013, at 9:00 a.m. in Albany, New York. This case was investigated by the New York State Police.

Defendants Produced Sexually Explicit Images of Seven-Year-Old Child

ALBANY, NEW YORK — United States Attorney Richard S. Hartunian, Matthew Scarpino, Resident Agent in Charge, Homeland Security Investigations, and Captain Timothy Munro, New York State Police Troop G, Bureau of Criminal Investigation, announce the filing of two criminal complaints charging RICHARD HASTINGS, age 21, and ROBERT HASTINGS, age 18, of Mayfield, New York, with production of child pornography.1 The defendants are brothers who live together. If found guilty of production of child pornography, each of the defendants faces a statutory minimum of at least fifteen years of imprisonment and up to a maximum sentence of thirty years of imprisonment, and a maximum fine of $250,000. The defendants had their initial appearances in Albany on August 8, 2013 before United States Magistrate Judge Randolph F. Treece. Both defendants were detained. They will have detention hearings on August 9, 2013 at 1:30 p.m.

According to the complaints:

Between July 27, 2013 and July 29, 2013, RICHARD HASTINGS produced sexually explicit photographs of a seven-year-old child, posted some of those photographs on a website, and e-mailed some of them to an undercover investigator with Queensland (Australia) Police

Services. In addition, on August 2, 2013, his brother, ROBERT HASTINGS, produced a sexually explicit video of the child.

This case is being investigated by Homeland Security Investigations and the New York State Police. This case is being prosecuted by Assistant United States Attorney Sean O’Dowd.

________________________________

1The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty.

McGinn Will Serve 15 Years in Prison and Smith Will Serve 10 Years

UTICA, NEW YORK - Timothy M. McGinn and David L. Smith, former owners of the Albany broker-dealer McGinn, Smith & Co., Inc. were sentenced today, in United States District Court in Utica, to significant terms of imprisonment, announced United States Attorney Richard S. Hartunian, Toni M. Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York Field Office, and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. McGinn was sentenced to serve 15 years in federal prison and to pay a $100,000 fine. Smith was sentenced to serve 10 years in federal prison and to pay a $50,000 fine. The defendants were convicted of conspiracy to commit mail and wire fraud, mail fraud, wire fraud, securities fraud, and filing false tax returns in February 2013, following a five-week jury trial. In addition to the prison terms and fines, U.S. District Judge David N. Hurd ordered $6,336,440 in forfeiture, a total of $5,992,800 in restitution, and 3 years of supervised release.

In sentencing McGinn, Judge Hurd said that what caused McGinn’s downfall was his arrogance in conducting business without regard for the law or the rules as long as he made money for himself and his favorite clients. In sentencing Smith, Judge Hurd said that Smith had led an impressive life and had an impressive family and friends, but what caused Smith’s downfall was going along with McGinn when he knew that what they were doing was wrong. Judge Hurd remanded both McGinn and Smith to custody to begin serving their sentences.

U.S. Attorney Hartunian said:

“As the stories told by the victims during the sentencing hearings today made clear, nothing can ever undo the terrible harm Timothy M. McGinn and David L. Smith inflicted on investors. Through false representations and material omissions, McGinn and Smith obtained investors’ hard-earned money and used it as their own. They covered their tracks by directing the creation of false accounting entries and the movement of money among accounts, and by misleading regulators. Their longstanding personal enrichment plan defrauded 841 victims of $30 million, leaving many investors devastated. The sentences imposed today send a strong message to those entrusted with investor funds that fraudulent business practices and tax cheating will not be tolerated. During the past three years, my office has charged ten people with investor fraud resulting in $64.2 million of loss to 1,676 victims. The eight defendants convicted to date were sentenced to more than 60 years in federal prison. These cases reflect our longstanding commitment to combating the corruption of the financial marketplace that shatters lives and undermines our economy. We will continue to work with all of our law enforcement partners to identify, investigate, and vigorously prosecute investor fraud cases. We are grateful for the dedication and thoroughness of IRS Criminal Investigations and the FBI in McGinn Smith and other investor fraud cases.”

Special Agent-in-Charge Weirauch stated, “In many ways, this investigation was all about trust: the trust investors place in their investment professionals and the trust that taxpayers have that their tax system will ensure that everyone pays their fair share. The defendants have now learned the cost of violating these trusts. Furthermore, today’s sentences and the earlier trial convictions will send strong messages to those who think about doing the same.”

Special Agent-in-Charge Vale stated, “We will continue to work with our partners to investigate investment fraud schemes. The resolution of this case was the direct result of outstanding teamwork between the U.S. Attorney’s Office, the Internal Revenue Service and the FBI.”

Six victims spoke at the sentencing hearings today, telling the Court that their losses represented life savings that they needed for living expenses, the support of their families, and their retirement.

According to the superseding indictment, the purpose of the conspiracy was to mislead investors and the Financial Industry Regulatory Authority, Inc. ("FINRA") regarding the safekeeping and use of investor money raised by 17 trusts, one corporation, and other entities; the risks of the trust offerings; the performance of the underlying income streams; the source of investor payments; and the improper diversion of investor money in order to obtain money from investors and enrich themselves. As a result of the defendant's conduct, the investors were not aware that the defendants had diverted approximately $4.1 million in connection with transactions related to the trusts for their own benefit and the benefit of another person.

The superseding indictment also alleged that, as part of the conspiracy, the defendants improperly diverted nearly $1 million; directed false accounting entries regarding those transactions in response to a document request from the broker-dealer's regulator, FINRA; and caused the false accounting entries to be submitted to FINRA. The alleged improper diversions fell into two categories: (a) the improper diversion of more than $473,000 of investor money from an escrow account to pay preferred clients who had unrelated investments (between May 15, 2008 and July 8, 2009); and (b) the improper diversion of $525,000 from bank accounts for three unrelated investments to pay the broker-dealer's employees (between November 14, 2008 and April 15, 2009). The superseding indictment also alleged that the defendants improperly used a corporation to conceal and disguise the true nature of the payroll diversions by passing the money from the three unrelated investments through that corporation and then to the broker-dealer. Finally, the superseding indictment alleged that the defendants misled FINRA about the preferred client diversions and the payroll diversions by (a) directing the creation of false accounting entries to conceal the true nature of these transactions in response to a document request from FINRA; and (b) causing the submission of these false accounting entries to FINRA.

Both McGinn and Smith were convicted on Counts 21 through 26 (securities fraud), which relate to the failure to disclose improperly diverted fees to investors in violation of federal securities laws. Counts 21 and 22 relate to $100,000 in fees paid in connection with TDM Verifier Trust 08, and Counts 23 through 26 relate to approximately $855,000 in fees paid in connection with Fortress Trust 08. All of these transaction fees were paid with investor money.

McGinn and Smith were also both convicted on the tax charges arising from their failure to declare the improperly diverted money on their personal tax returns for tax years 2006 through 2008 (Counts 27-29 for McGinn and Counts 30-32 for Smith). McGinn and Smith later described the money as "loans," but did not list them as such on personal financial statements. When FINRA discovered the false loan accounting entries for the diverted money, the defendants misled FINRA by directing the creation of backdated promissory notes.

Both McGinn and Smith were convicted on Count 10, and McGinn was convicted of Counts 4 through 6 and 11 through 13. Those mail and wire fraud counts relate to the Firstline Series B Trusts, which raised money from investors in connection with a loan of $2.4 million to Firstline Security, Inc., a company that generated alarm contracts. The superseding indictment alleged that the defendants did not tell investors when Firstline filed for bankruptcy and defaulted on loans. In addition, their firm sold approximately $600,000 of one of the Firstline investments without any disclosure of the bankruptcy or defaults. McGinn directed that investors receive $2 million of lulling payments by transferring money from other entities controlled by McGinn and Smith.

McGinn and Smith were both convicted on Count 14, and McGinn was convicted on Count 7. Those mail and wire fraud counts relate to the Integrated Excellence Trusts, for which the defendants raised about $1.2 million from investors in connection with a loan to benefit Integrated Excellence, Inc., which generated alarm contracts. The superseding indictment alleged that the defendants knew that the payments received from the loan were not sufficient to pay investors, but McGinn directed that investors receive lulling payments by transferring money from other entities controlled by McGinn and Smith.

McGinn and Smith were both convicted of Counts 8 and 9. Those mail fraud counts related to the improper diversion of investor money from an escrow account to pay preferred clients who had unrelated investments.

McGinn was also convicted on Counts 15 and 16. Those counts involved the diversion of approximately $142,000 of investor money from an escrow account to make payments to investors in other trusts.

Both McGinn and Smith were convicted on Count 17, which involved $35,000 Smith took directly from an escrow account holding investor funds for Integrated Excellence Sr. Trust 08. McGinn was convicted on Counts 18, 19, 20 which involved approximately $310,000 that McGinn took directly from escrow accounts holding investor funds.

This case was investigated by the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation, and prosecuted by Assistant United States Attorneys Elizabeth C. Coombe, Richard D. Belliss, and Wayne A. Myers.

This case was brought in connection with President Barack Obama’s Financial Fraud Task Force, which was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes and hold accountable those who helped bring about the last financial crisis. With more than 20 federal agencies, 94 U.S. Attorney’s Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

LOCAL CONTACT: Elizabeth C. Coombe
Assistant U.S. Attorney
Tel: (518) 431-0247

ALBANY, NY- Defendants Timothy M. McGinn and David L. Smith will be sentenced on Wednesday, August 7, 2013. McGinn will be sentenced at 10 am; Smith will be sentenced at 2 pm. Both sentencings will take place before United States District Judge David N. Hurd at the Alexander Pimie Federal Building, 10 Broad Street, Utica, New York.

A press conference will be held following the 2 pm sentencing in the Bankruptcy Hearing Room on the first floor of the Alexander Pirnie Federal Building, 10 Broad Street, Utica, NY 13501.

ALBANY, NEW YORK - United States Attorney Richard S. Hartunian announced that, following a jury trial, WILLIAM KEITH JAMIESON, (52, of Lancaster, PA) was found guilty in U.S. District Court in Albany, N.Y. of the felony offense of Attempted Enticement of a Minor, in violation of Title 18, United States Code, Section 2422(b). JAMIESON is facing a statutory mandatory minimum sentence of 10 years and a maximum sentence of up to life imprisonment, 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. JAMIESON is scheduled to be sentenced on November 26, 2013, before Chief Judge Gary L. Sharpe, in Albany, New York.

JAMIESON was arrested on July 2, 2012, at Congress Park in Saratoga Springs, New York, having traveled to the park to meet “Kara,” a teenage girl he met online and had been communicating with for four and a half months via internet chat relay, Yahoo!, and Skype. In reality, “Kara” was a female Saratoga Springs Police Investigator who was working undercover pretending to be a 14 year old girl in chat rooms policing for internet child predators. JAMIESON met “Kara” in the “dad&daughtersex” chat room. In the online communications, JAMIESON was repeatedly told “Kara’s” age was 14, and JAMIESON told “Kara” that he would travel to Saratoga Springs, rent a hotel room, and have sex with her in the hotel room. On July 2, 2012, JAMIESON rented a motel room near Congress Park, walked to a prearranged meeting spot, and instead of finding “Kara,” he met with an arrest team from the Albany Child Exploitation Task Force, including officers from the Saratoga Springs Police Department and the Rensselaer County Sheriff’s Office. A search of JAMIESON’s motel room revealed condoms, computer equipment, a camera, and a bottle of nail polish that he promised to bring as a present for “Kara.”

This prosecution resulted from an investigation conducted by the Federal Bureau of Investigation, Albany, N.Y., the Saratoga Springs Police Department, and the Rensselaer County Sheriff’s Office, as part of the Albany Child Exploitation Task Force. The case was prosecuted by Assistant United States Attorney Tamara B. Thomson. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315) 448-0672.

Former New York State Senate Majority Leader Will Face Retrial

ALBANY, NEW YORK - In an opinion issued today in United States v. Joseph L. Bruno, the United States Court of Appeals for the Second Circuit affirmed Chief U.S. District Judge Gary L. Sharpe’s decision to deny Bruno’s motion to dismiss the superseding indictment on double jeopardy grounds. The opinion clears the path for trial, and Chief Judge Sharpe has scheduled a status hearing on August 13th at 3:00 p.m.

In December of 2009, a jury convicted the former majority leader of the New York State Senate of two counts of honest services fraud. 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. In light of Skilling, Bruno’s conviction was vacated, but (on November 16, 2011) the Court of Appeals held that the Double Jeopardy Clause of the Fifth Amendment did not bar retrial of Bruno on an indictment that charged honest services fraud based a bribery or kickback theory because the evidence presented at trial was sufficient for a reasonable jury to find that Bruno accepted “payments that were intended to and did influence his conduct as a public official,” and that “Bruno’s actions deprived New York citizens of his honest services as a New York senator under the standard announced in Skilling.” After a federal grand jury returned a superseding indictment on May 3, 2013, Bruno filed a motion to dismiss the indictment on double jeopardy grounds. Chief Judge Sharpe denied the motion, and Bruno filed the interlocutory appeal denied today.

This case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant U.S. Attorneys Elizabeth C. Coombe and William C. Pericak. United States Attorney Richard S. Hartunian announced that, consistent with the decision by the Court of Appeals, the U.S. Attorney’s Office will seek resolution of this case by trial as soon as possible.

Defendant Who Received Thousands of Still Images and Videos of Child Pornography Sentenced to 96 Months in Prison

ALBANY, NEW YORK — RONALD J. LOVETT, age 67, of Niskayuna, New York, was sentenced today by United States District Court Judge Mae A. D’Agostino, in Albany to ninety-six (96) months of imprisonment for receiving child pornography images, announced United States Attorney Richard S. Hartunian and Matthew Scarpino, Resident Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations. LOVETT, who had entered a guilty plea on March 20, 2013, was also ordered to pay a fine of $17,500.00, to pay restitution totaling $5,661.83, to have no unsupervised contact with minors, and to register with the New York State Sex Offender Registry Program.

Between May 2007 and February 10, 2012, LOVETT used the Internet to access various child pornography websites and various file sharing networks. While accessing some of the child pornography websites or file sharing networks, LOVETT downloaded multiple still images and videos of child pornography onto his home computer, thumb drives, and external hard drives.

This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations.

Defendants Face Imprisonment terms of 10 years to Life

BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that Lynette Tilden, Edward Tilden, and Alexandria Samson Davall, all from Utica, New York, were arrested by the FBI and charged by a federal felony complaint with three federal offenses in connection to a joint federal and state investigation concerning a prostitution ring engaged in the sex trafficking of a minor. Defendants appeared in federal court in Syracuse, New York on July 16, 2013 and were remanded to the custody of the U.S. Marshal’s Service pending further proceedings.

The federal charges stem 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. In addition to the three defendants named above and being charged with federal crimes, the Oneida County District Attorney has charged several other defendants with state crimes in connection to this overall joint investigation. The investigation is continuing.

Defendants Lynette Tilden, Edward Tilden, and Alexandria Samson Davall have been charged with the following three federal offenses and face the following possible penalties if convicted:

1)[Sex Trafficking Of A Child]

In and about February of 2012, in the Northern District of New York and elsewhere, defendants Lynette Tilden, Edward Tilden, Alexandria Samson Davall, and others, while 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, or benefit, financially or by receiving anything of value, from participation in a venture which engaged in any such act, where the person had not attained the age of 18 years at the time, knowing that the person would be caused to engage in a commercial sex act.

In violation of Title 18, United States Code, Sections 1591(a) & (b) and Section 2. Potential Penalties: Statutory Mandatory Minimum 10 years prison and a Maximum of Life. Maximum possible Fine of $250,000.

2)[Persuading And Inducing A Child To Engage In Prostitution]

In and about February of 2012, in the Northern District of New York and elsewhere, defendants Lynette Tilden, Edward Tilden, Alexandria Samson Davall, and others, while aiding and abetting each other, while using any facility or means of interstate commerce, did knowingly persuade, induce, entice, and coerce an individual who had not attained the age of 18 years to engage in prostitution.

In violation of Title 18, United States Code, Section 2422(b) and Section 2.

Potential Penalties: Statutory Mandatory Minimum 10 years prison and a Maximum of Life. Maximum possible Fine of $250,000.

3)(Distribution Of Heroin And Cocaine To A Minor)

In and about February of 2012, in the Northern District of New York and elsewhere, defendants Lynette Tilden, Edward Tilden, and Alexandria Samson Davall, while aiding and abetting each other and who were at least 18 years of age at the time, knowingly and intentionally distributed a controlled substance to a person under 21 years of age, and more specifically a person who was 16 years of age at the time, in violation of Title 21, United States Code, Section 841(a)(1) and Title 18, United States Code, Section 2. That violation involved heroin and cocaine, Schedule I and II controlled substances, respectfully, in violation of Title 21, United States Code, Section 859(a).

Potential Penalties: Statutory Mandatory Minimum 1 year prison and a Maximum of 40 years. Maximum possible Fine of $1,000,000.

Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in court.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that Upstate Laboratories, Inc., 6034 Corporate Drive, East Syracuse, New York pled guilty before Judge Glenn T. Suddaby to one count of felony mail fraud related to the falsification of over 3,300 laboratory results from 2008 through 2010.

As set forth in the plea agreement and charge, Upstate Laboratories has been a certified laboratory in the business of performing chemical analysis of water and soil samples supplied by public and private clients. Samples for which chemical degradation was an issue required Upstate Laboratories to perform analysis within specified time-frames (“holding times”) after the samples were obtained. Upstate Laboratories further promised to utilize required procedures to ensure that the samples did not degrade.

For samples that required a prompt turnaround time, Upstate Laboratories charged a fee greater than for samples that did not. For all samples, Upstate Laboratories represented to clients that analysis would be and was performed in accordance with required analysis standards. Upstate Laboratories submitted invoices for its analysis and was paid through use of the United States mail.

Notwithstanding representations of proper and timely sample analysis, from 2008 through 2010 Upstate Laboratories engaged in the routine “backdating” of samples results where employees changed the dates when the samples were analyzed to make it appear that analysis had occurred within the required time periods when in fact they had not. Upstate Laboratories thereafter prepared false and fraudulent analysis reports representing that samples were properly analyzed within required time frames and that the results were valid when they were not. During the course of the scheme to defraud, Upstate Laboratories falsified results and mailed fraudulent results to clients including the following:

CLIENT NAME

1. Village of Moravia, NY
1. Two Guys From Italy Pizza Restaurant, West Monroe, NY
2. Town of Camillus, NY
3. Steuben County, NY – Division of Solid Waste
4. Oswego County, NY – Department of Health
5. Oswego County, NY – Department of Solid Waste
6. Cortland County, NY – Soil and Water Conservation District
7. Liquid Products, LLC, Waterloo, NY
8. Hanson Aggregates New York, LLC, Poland, NY
9. Casella Waste Systems via On-Site Technical Services, Wellsville, NY
10. A & P Water Testing, Morrisville, NY
11. Wolcott Landfill, Wolcott, NY
12. New York State Department of Transportation – Region 7
13. Hannibal Hills Trailer Park, Hannibal, NY
14. Ontario County, NY - Recycling and Landfill Management
15. Fulton County, NY - Department of Solid Waste
16. Barton and Loguidice, Liverpool, NY
17. Oswego Heat Treating, Inc – Oswego, NY
18. Town of Oswego, Oswego, NY
19. Agro-Farm, Inc, Norwich, NY
20. Tri-Boro Municipal Authority, Susquehanna, PA
21. Village of Endicott, NY – Waste Water Treatment Plant
22. Sullivan County, NY – Department of Public Works
23. Fagan Engineers via Franklin County, NY
24. Applied Testing and Geosciences, Bridgeport, PA
25. City of Tonawanda, NY
26. Oneida – Herkimer Solid Waste Authority, Utica, NY
27. Town of Lumberland, NY
28. Madison County, NY – Department of Solid Waste
29. Kerry Bio-Science, Rochester, MN
30. Ameresco, Inc, Various locations throughout United States

Upstate Laboratories has agreed to pay to the United States a criminal fine of $150,000, but that from this total, the amount up to the entire fine shall be suspended on the condition that it be paid at the date of imposition of sentence to victims identified in this plea agreement or identified by the Court as entitled to restitution. Nothing about the possible suspension of the criminal fine sets a maximum amount of restitution that must be paid. Rather, Upstate Laboratories must pay all restitution to victims as determined by the Court, even if the amount exceeds $150,000.

Also pursuant to the plea, Upstate Laboratories will be placed on a term of probation for five years. As part of its probation, Upstate Laboratories will be required to develop, fund and implement a comprehensive Environmental Compliance Plan ("ECP") to prevent future violations. Finally, Upstate Laboratories is not permitted to seek or take a tax deduction for any monies paid as a fine.

Sentencing has been set for December 4, 2013.

This case was investigated by Special Agents of the Environmental Protection Agency, Office of Inspector General and Criminal Investigation Divisions. The case is being prosecuted by Assistant United States Attorney Craig Benedict. Questions may be directed to AUSA Benedict at 315-448-0726 or cell phone 315-391-1110.

Albany, New York — Annie George, a/k/a Annie Kolath, a/k/a Sajimol George, age 41, of Rexford, New York, was sentenced today by Chief United States District Court Judge Gary L. Sharpe to five years of probation for harboring an illegal alien, announced United States Attorney Richard S. Hartunian and Matthew Scarpino, Resident Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations. George, who was found guilty on March 8, 2013 of one count of harboring an illegal alien following a five-day jury trial, was also sentenced to eight months of home detention.

Between about November 2005 and May 3, 2011, George harbored an illegal alien from India in her homes in Catskill, Menands, and Rexford, New York. During the course of the harboring, the illegal alien performed household chores for George and cared for George’s children.

This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations.

LOCAL CONTACT: Rick Belliss
Assistant U.S. Attorney
Tel: (518) 431-0247

Albany, New York —HERMIS ANTONIO ADAMES, age 35, a citizen of the Dominican Republic, pled guilty today in United States District Court in Albany before Chief United States District Court Judge Gary L. Sharpe to one count of re-entry by a previously removed alien, announced United States Attorney Richard S. Hartunian.

ADAMES, a citizen of the Dominican Republic, was involuntarily removed from the United States to the Dominican Republic on May 6, 2009. On April 3, 2013, ADAMES, who did not have permission to re-enter the United States, was encountered by Immigration and Customs Enforcement officers near the bus station on Central Avenue in Albany.

Sentencing is scheduled for November 6, 2013, at 11:00 a.m. in Albany, New York. ADAMES faces a maximum sentence 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. ADAMES was detained pending his sentencing.

This case was investigated by the Department of Homeland Security, Immigration and Customs Enforcement (ICE), Albany, New York.

LOCAL CONTACT: Rick Belliss
Assistant U.S. Attorney
Tel: (518) 431-0247

As Part of these Pleas: Saquan Evans Admits to Killing 20 Month Old Child, Shooting Four People, Gun Possessions and Possessing Substantial Gang Paraphernalia
Ernest Hester Admits to a Shooting, Gun Possessions and a Gang Assault at a Denny’s Restaurant in Syracuse

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announces that SAQUAN EVANS, age 23, and ERNEST HESTER, age 24, both residents of Syracuse, pled guilty today in U.S. District Court in Syracuse to an indictment which charged them and 12 others with conspiring to exploit their membership in the Bricktown Gang to engage in a pattern of racketeering activity which included multiple acts of murder, drug trafficking, and robbery. All fourteen defendants have now guilty in this matter.

As part of their pleas, EVANS and HESTER admitted that the Bricktown Gang has operated within the City of Syracuse from at least 2000 through the present and that members of the Bricktown Gang: (1) maintain a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine, cocaine and marijuana; (2) protect that exclusive crack distribution territory with violence if necessary; (3) obtain drugs from suppliers in New York City and elsewhere; (4) project a very violent attitude and respond to violence with violence in order to preserve their stature in the gang community; (5) on occasion use hand signs, wear blue colored bandanas and have tattoos, all of which are intended to signify their gang membership; (6) use criteria such as willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carry and use firearms in connection with their gang activity.

EVANS also admitted as part of his plea that he: (1) possessed a handgun in the 200 Block of Oakwood Avenue on March 4, 2006; (2) was involved in a shooting in the vicinity of 1300 South State Street on November 7, 2006; (3) jointly possessed a 9 mm handgun along with several co-defendants, including ERNEST HESTER, in the 200 block of Baker Avenue on November 15, 2006; (4) shot four rival gang members as they sat at a table playing cards at 321 Shirley Drive on November 7, 2012; (5) shot and killed 20 month old Rashad Walker, Jr., while intending to kill a rival gang member, on November 28, 2010; and (6) possessed substantial gang paraphernalia including a detailed gang roster, writings, drawings, photos, rap lyrics and clothing.

HESTER also admitted as part of his plea that he: (1) along with a co-defendant, shot at three people in the 500 block of West Colvin Street on April 2, 2005; (2) possessed ten bags of crack cocaine after being shot in the 100 block of Beard Avenue on October 19, 2006; (3) jointly possessed a 9 mm handgun, as noted above, that occurred on November 15, 2006; (4) jointly possessed a .45 caliber handgun and a 9 mm handgun, along with multiple co-defendants, while together in a vehicle at 1400 Erie Blvd. West on December 13, 2008; and (5) actively participated in the stabbing of four persons inside a Denny’s restaurant on Erie Blvd East on January 30, 2011.

Both EVANS and HESTER are scheduled to be sentenced in December, 2013. Each faces up to life imprisonment, a $250,000 fine, and up to five years of supervised release following any period of incarceration.

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: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Troopers, and the United States Marshals Service. The Onondaga County District Attorney’s Office also assisted in the investigation.

Further questions or inquiries may be directed to Assistant U.S. Attorney, John M. Katko, who is handling the case, at (315) 448-0672.

As Part of Plea Jarrell Williams Admits to Previously Unsolved Homicide

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announces that JARRELL WILLIAMS, age 22, of Syracuse, pled guilty today in U.S. District Court in Syracuse to an indictment which charged him and 13 others with conspiring to exploit their membership in the Bricktown Gang to engage in a pattern of racketeering activity which included multiple acts of murder, drug trafficking, and robbery. Eleven other defendants have already pled guilty and the charges against two others remain pending.

As part of his plea WILLIAMS admitted that the Bricktown Gang has operated within the City of Syracuse from at least 2000 through the present and that members of the Bricktown Gang: (1) maintain a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine, cocaine and marijuana; (2) protect that exclusive crack distribution territory with violence if necessary; (3) obtain drugs from suppliers in New York City and elsewhere; (4) project a very violent attitude and respond to violence with violence in order to preserve their stature in the gang community; (5) on occasion use hand signs, wear blue colored bandanas and have tattoos, all of which are intended to signify their gang membership; (6) use criteria such as willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carry and use firearms in connection with their gang activity.

WILLIAMS also admitted as part of his plea that he possessed handguns on a regular basis during the relevant time period. He also admitted that: (1) on September 4, 2007 he shot a rival gang member in the back in the 1000 block of Cannon Street; and (2) later that same evening he killed Anthony Ford and wounded a female victim in the head by firing several shots from a handgun at them. The Ford homicide was heretofore unsolved.

WILLIAMS is scheduled to be sentenced on October 30, 2013. He faces up to life imprisonment, a $250,000 fine, and up to five years of supervised release following any period of incarceration.

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: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Troopers, and the United States Marshals Service. The Onondaga County District Attorney’s Office also assisted in the investigation.

Further questions or inquiries may be directed to Assistant U.S. Attorney, John M. Katko, who is handling the case, at (315) 448-0672.

SYRACUSE, NEW YORK – Cy D. Rayder, age 29, of Williamstown, New York, was sentenced today by the Hon. Frederick J. Scullen to a term of thirty-six months imprisonment for his guilty plea to possessing and distributing a listed chemical, pseudoephedrine, knowing it was intended to be used to manufacture methamphetamine. Between September and December, 2011, Rayder purchased pseudoephedrine pills from pharmacies in Oswego, Oneida, and Jefferson counties, which pills he provided to another individual who, in turn, used the pills to manufacture methamphetamine. In return for the pills, Rayder received finished product methamphetamine, which he ingested. Eventually, Rayder learned how to manufacture methamphetamine himself, and thereafter used the pills he purchased to manufacture methamphetamine. Rayder knew there were restrictions on the sale of pseudoephedrine, and that the sales were documented by the pharmacies, so, to avoid scrutiny, Rayder on occasion purchased pseudoephedrine from different stores on the same day. On fourteen separate occasions between September and December of 2011, Rayder purchased pseudoephedrine pills with an aggregate weight of 33.6 grams of pseudoephedrine from Oswego, Oneida, and Jefferson county pharmacies, knowing at all times the pills he purchased were intended to be used in, and were in fact used in the manufacture of methamphetamine.

After he finishes his sentence of incarceration, Rayder will thereafter be placed on supervised release for a period of three years. Rayder was also ordered to pay a special assessment of $100.

The Rayder case was investigated by the New York State Police and the Syracuse Drug Enforcement Agency.

The case was prosecuted by Assistant U.S. Attorney Carl G. Eurenius, who can be reached at 448-0672.

Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Mark Anselm, 37, of Clayton, N.Y., was indicted by a federal grand jury on twelve counts for making false statements to Coast Guard and Department of Homeland Security officials (counts 1-3), possession and use of an altered Merchant Marine License (counts 4-7), fraud in connection with identification documents (count 8), and aggravated Identity theft (counts 9-12), in violation of 18 U.S.C. §§ 1001, 2197, 1028(a)(6) and 1028A. If convicted, Anselm faces a maximum possible penalty of fifty-three years in prison and a three million dollar fine.

Anselm is charged with having held himself out to federal officials, to various marina owners, and to other potential employers as a licensed commercial ship pilot when in fact he possesses no such license. He is charged with having repeatedly presented a falsified merchant marine license that Anselm altered to substitute his name. On June 19, 2012 Anselm piloted a commercial tug boat on Lake Ontario which he grounded. A follow-up investigation revealed numerous instances of Anselm holding himself out as a licensed commercial merchant marine captain.

An Indictment is a mere allegation of wrongdoing. All individuals are presumed innocent until and unless convicted beyond a reasonable doubt in a court of law.

This case was investigated by Special Agents of the Coast Guard and Department of Homeland Security. 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.

Scheme included creation of a remotely operated X-ray radiation emitting device designed to kill humans silently

ALBANY, NEW YORK - United States Attorney Richard S. Hartunian and Special Agent in Charge Andrew Vale of the Federal Bureau of Investigation, Albany Division, today announced that Glendon Scott Crawford, age 49, of Galway, New York and Eric J. Feight, age 54, of Hudson, New York have been arrested and charged with conspiracy to provide material support to terrorists in violation of 18 U.S.C. § 2339A. The arrests followed a lengthy investigation by the Albany FBI Joint Terrorism Task Force that began in April 2012 when authorities received information that Crawford had approached local Jewish organizations seeking out individuals who might offer assistance in helping him with a type of technology that could be used against people he perceived as enemies of Israel. If convicted, each faces a maximum sentence of fifteen years imprisonment, a $250,000 fine and a term of supervised release up to five years following any period of incarceration.

Crawford and Feight are scheduled to appear today at 1:30pm before Magistrate Judge Christian F. Hummel in U.S. District Court in Albany, New York.

As charged in a Complaint1 filed in U.S. District Court in Albany, the essence of the defendants’ scheme was the creation of a mobile, remotely operated, radiation emitting device capable of killing targeted individuals silently with lethal doses of X-ray radiation. The defendants plotted to use this device against unwitting victims who would not immediately be aware that they had absorbed lethal doses of radiation, the harmful effects of which would only appear days after the exposure. This was an undercover investigation and, unbeknownst to the defendants, the device that the defendants designed and intended to use was rendered inoperable at all times and posed no danger to the public.

United States Attorney Richard S. Hartunian stated, “This case demonstrates how we must remain vigilant to detect and stop potential terrorists, who so often harbor hatred toward people they deem undesirable. We give special thanks to those who quickly alerted law enforcement authorities to this devious plan. I also commend the members of the Albany FBI Joint Terrorism Task Force for their unwavering commitment over the past 14 months to uncover the details of this plot, before anyone could be harmed bringing about today’s arrests.”

Special Agent in Charge Andrew Vale stated, “I would like to thank all members of our Joint Terrorism Task Force for their continued commitment in ensuring the safety of our community against all threats. It is the obligation of the FBI and our law enforcement partners to protect the public when individuals create plans to commit violent acts such as those charged today. I would like to stress that operations to thwart violent plots are only successful with the cooperation of members of the public and with collaboration among federal, state and local agencies.”

New York State Police Superintendent Joseph A. D’Amico said, “The interception of this alleged terrorist activity would not have been possible without the determination and cooperation between state police investigators and the FBI Joint Terrorism Task Force. This investigation revealed unthinkable plotting and planning of terrorist activity that targeted unsuspecting innocent citizens. We remain committed to ensuring the safety of all citizens and will work diligently to identify these types of threats and stop those who seek to cause harm.

The charges today resulted from a long-term investigation conducted by the Albany FBI Joint Terrorism Task Force, which includes the Department of Homeland Security, New York State Police, Albany Police Department, Troy Police Department, and New York City Police Department. The United States Attorney’s Office also acknowledged the assistance of the Criminal Division and National Security Division of the United States Department of Justice. The case is being prosecuted by Assistant United States Attorneys Stephen Green and Richard Belliss, and Counterterrorism Section Trial Attorney Joseph Kaster.

Further questions or inquiries may be directed to Executive Assistant United States Attorney John G. Duncan at 518-431-0247.

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1The allegations contained in the Complaint are mere accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.

SYRACUSE, NEW YORK —United States Attorney Richard S. Hartunian announced that Wei Yee Cheng, 43, of Ithaca, New York, has been sentenced following his conviction for a violation of 26 U.S.C. § 7206(1), filing a false tax return.

On January 8, 2013, the defendant pled guilty to Count 1 of single-count Information 12-CR-566, charging the defendant with willfully making and subscribing U.S. Corporation Income Tax Return Form 1120-A for taxpayer Green Olive, Inc. for the calendar year 2007, falsely declaring the amount of income of the Kyushu Japanese Restaurant, operated by Green Olive, Inc., to be $774,769.00, omitting the Kyushu’s Restaurant’s cash income of $164,545.00, all in violation of Title 26, United States Code, Section 7206(1).

The defendant was sentenced by J. Thomas McAvoy in Binghamton, NY. The defendant was sentenced to a term of probation for a period of 4 years, and was ordered to pay restitution to the Internal Revenue Service in amount of $223,327.00, an amount that reflected the tax losses from the years 2006-2010. The defendant was also ordered to perform 100 hours of community service and to pay a special assessment of $100.

This case was investigated by the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorney Gwen Carroll. For further information, contact Executive Assistant U.S. Attorney John G. Duncan at 315-448-0672.

Albany, New York — HENRY J. RAUCHE, III, age 28, of Delmar, New York, was sentenced yesterday by Senior United States District Court Judge Lawrence E. Kahn to 78 months of imprisonment for his role in a heroin distribution conspiracy, announced United States Attorney Richard S. Hartunian, Brian R. Crowell, Special Agent-in-Charge of the U.S. Drug Enforcement Administration (DEA), New York Field Division, and Joseph Anarumo, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms & Explosives, New York Field Division. RAUCHE, who had entered guilty pleas on July 3, 2012 to one count of conspiracy to possess with intent to distribute 74 grams of heroin, and one count of possessing a firearm in furtherance of a drug trafficking crime, was also sentenced to three years of supervised release following his term of imprisonment. RAUCHE was detained following his sentencing.

In May 2011, RAUCHE was part of a heroin distribution conspiracy that sought to distribute approximately $7,500 worth of heroin in the Capital District. RAUCHE also possessed a handgun and rifle that he used to protect his heroin and drug money from theft by other drug dealers.

This case was investigated by the Drug Enforcement Administration, the Bureau of Alcohol, Tobacco, Firearms & Explosives, and the Bethlehem Police Department.

Pescanova, Inc. Failed to Comply with National and International Regulations Governing the Importation and Exportation of Chilean Sea Bass

[Albany, New York] United States Attorney Richard S. Hartunian announced today that his office has settled a civil action it brought against Pescanova, Inc. (d/b/a Pescanova USA), an international seafood company with offices in Coral Gables, Florida, based upon the company’s exportation, and subsequent re-importation, of 9,600 pounds of Patagonian toothfish (also known as Chilean Sea Bass or Dissostichus eleginoides) on October 24 and December 15, 2010. As part of the settlement, Senior United States District Court Judge Lawrence E. Kahn issued a Consent Decree which authorized civil penalties, forfeiture and permanent injunctive relief against Pescanova. As part of the settlement, Pescanova will pay civil penalties totaling $35,000.00, forfeit $96,013.76, (the proceeds from the sale of the toothfish which were exported and re-imported) and the company is enjoined from committing similar violations in the future.

The Patagonian toothfish, an Antarctic Marine Living Resource (“AMLR”), is found in deep waters around Antarctica and the sub-Antarctic islands, as well as off the coast of Patagonia, a region in the southern part of Argentina and Chile. The United States is one of the largest and most lucrative markets for toothfish in the world. This fish is particularly susceptible to the threats of illegal fishing because it is commercially valuable and, as a slow-growing species, reaches marketable size before reaching sexual maturity. There is concern that these characteristics make toothfish particularly vulnerable to serious population declines if its harvest and trade are not monitored and controlled. The United States is a party to the international Convention on the Conservation of Antarctic Marine Living Resources and a member of the Commission for the Conservation of Antarctic Marine Living Resources (“CCAMLR”). CCAMLR has adopted binding conservation measures to address the conservation of Antarctic marine living resources, including the harvest and trade of toothfish. Members of CCAMLR are required to implement these binding measures with respect to their vessels and nationals. CCAMLR has implemented a Catch Documentation Scheme (“CDS”) designed to prevent and discourage the unlawful harvest and trade of toothfish by tracking toothfish from the point of harvest to the point of import for consumption. As part of the CDS, those authorized to harvest, import or export toothfish, must complete a Dissostichus Catch Document (“DCD”), a form which seeks specific information concerning the harvesting, importation and exportation of toothfish. In order to carry out its obligations with CCAMLR, including those related to the conservation of toothfish, the United States enacted the Antarctic Marine Living Resource Convention Act (“AMLRCA”). To implement the AMLRCA, the National Marine Fisheries Service (“NMFS”) promulgated regulations imposing various requirements on those who engage in the harvest and trade of toothfish and which are designed to help prevent illegal, unregulated, and unreported catches of toothfish. The Complaint, which was filed today in U.S. District Court in Albany, alleges that Pescanova did not comply with CCAMLR’s CDS, or with the United States’ implementing laws and regulations, when it failed to complete DCDs prior to exporting and re-importing toothfish in October and December of 2010.

Richard S. Hartunian, United States Attorney for the Northern District of New York, stated that “The United States has entered into a treaty with a number of nations and my office will enforce its provisions in this district. The treaty is designed to protect and preserve an Antarctic Marine Living Resource for which there is a concern that it will become extinct if its harvesting and trade are not monitored and controlled. It is important that we aggressively protect such species so that future generations are able to enjoy them.”

"NOAA continues to work cooperatively with the Department of Homeland Security Investigations, Customs and Border Protection, the Food and Drug Administration, and with other Nations," said Logan Gregory, special agent in charge of NOAA's Office of Law Enforcement's Northeast Division. "We do this to help ensure a level playing field in all sectors of the seafood industry."

The government’s Complaint alleges in part the following: Pescanova is a corporation with its principle place of business in Coral Gables, Florida that engages in the business of, among other things, importing and exporting seafood, including Patagonian toothfish. Sometime in July of 2010, Pescanova employees were trained by an employee of the National Oceanic and Atmospheric Administration (NOAA) concerning the trade requirements pertaining to Patagonian toothfish. Later that year, in October of 2010, Pescanova sold and transported 9,600 pounds of frozen Patagonian toothfish to a Canadian company from the United States through the Champlain, New York Port of Entry. The fish in question had been legally caught, and Pescanova had previously imported it into the United States from Argentina after filing the appropriate DCD with NOAA. Pescanova transported this toothfish to Canada without first completing an application for, and obtaining, the required validated export or re-export document (“Approval Action of Catch Documentation for Toothfish” form) issued by a NMFS designee.

When the toothfish were subsequently tested by officials from the Canadian Food Inspection Agency (“CFIA”), it was determined that they did not comply with CFIA’s standards for mercury. As a result, the fish could not be sold for consumption in Canada. On December 15, 2010, Pescanova arranged to have these fish transported from Canada to the United States through the Champlain Port of Entry. Once again, Pescanova did not first submit an application and obtain the required preapproval from the NMFS prior to importing these fish. The toothfish were seized by United States Customs and Border Protection officers on January 14, 2011, and eventually auctioned for $96,013.76.

Under the terms of the settlement, Pescanova will pay a civil administrative penalty of $22,000.00 to NOAA, a civil penalty of $13,000.00 to the United States Department of Justice, and consents to the administrative forfeiture of the $96,013.76 obtained from the sale of the 9,600 pounds of fish. In addition, Pescanova and its employees are permanently enjoined from importing, re-importing, exporting, or re-exporting Patagonian toothfish, or any other Antarctic marine living resources, unless they comply with the procedures promulgated by the CCAMLR and with the United States’ implementing laws and regulations. Pescanova agreed that in the event it imports, re-imports, exports or re-exports toothfish, or any other Antarctic marine living resources in violation of law or regulation, it will pay to the United States, upon the first violation, a civil contempt penalty of one hundred dollars ($100.00) for each pound, or portion thereof, of toothfish, or any other Antarctic marine living resources it so imports or exports. For each successive violation, Pescanova will pay a contempt penalty of five hundred dollars ($500.00) for each pound, or portion thereof, of toothfish or any other Antarctic marine living resources.

This matter is assigned to Assistant U.S. Attorney Thomas Spina Jr. News inquiries should be directed to Executive Assistant United States Attorney John Duncan [(315) 448-0672]. The investigation was conducted by agents with the United States Department of Commerce, National Oceanic and Atmospheric Administration (“NOAA”), and officers with the United States Department of Homeland Security Investigations, Customs and Border Protection.

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York announces that CHRISTOPHER BEVANS, (38 of Baldwinsville, NY) entered a guilty plea to the felony offense of subscribing a false income tax return, in violation of Title 26, United States Code, Section 7206(1). The defendant is facing a statutory maximum sentence of 3 years imprisonment, a maximum fine of $250,000.00 and restitution to the IRS in the amount of $75,725. BEVANS is scheduled to be sentenced on October 9, 2013, before the Honorable Mae D’Agostino, in Albany, New York.

During the plea hearing on June 13, 2013, BEVANS admitted that in 2007 and 2008 he was an employee of Velocitel, Inc., a telecommunications company, and during that employment he earned additional income from another Velocitel employee and Velocitel subcontractor. This income was in addition to the wages disclosed on his W-2 forms. The additional income paid to CHRISTOPHER BEVANS for 2007 was $59,600, and for 2008 was $162,550, for a total of $222,150. BEVANS failed to include the $59,600 as income on his 2007 personal federal tax return and $162,550 as income on his 2008 personal federal tax return. Each of these returns were made and signed by him under penalty of perjury. BEVANS knew these tax returns were false because each substantially under reported his income and tax liability for that year. The foregoing resulted in a tax deficiency to the IRS totaling $75,725.

This prosecution resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigations and the Federal Bureau of Investigation, Syracuse, N.Y. The case was prosecuted by Assistant United States Attorney Tamara B. Thomson. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315) 448-0672.

[Plattsburgh, New York]— ERIC C. WILSON, age 23, of Saint Regis Falls, New York, was sentenced on June 8, 2013 in Utica, New York, by United States District Judge David N. Hurd to 12 months and one day of imprisonment for possessing with intent to distribute 50 kilograms or more of marijuana, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Special Agent-in-Charge James Spero. WILSON pled guilty to the charge on January 25, 2013. He was released until July 16, 2013 when he must report to prison.

The United States-Canadian border divides the reservation into an American portion – the Saint Regis Mohawk Reservation – and a Canadian portion – the Akwesasne Mohawk Reservation. On January 28, 2010, officers of the Saint Regis Mohawk Tribal Police (United States) and the Akwesasne Mohawk Police Service (Canada) saw a car driven by Wilson cross from the United States into Canada and then back through an unguarded and unmarked border crossing on the Saint Regis Mohawk Reservation in northern New York. A Detective Sergeant of the Saint Regis Mohawk Tribal Police who was cross-designated as a “customs officer” with Immigration and Customs Enforcement (ICE) found the car, followed it with another police officer, and then stopped it. Officers searched the car and found three large hockey bags with a total of 124.544 pounds of marijuana in the trunk.

The District Court (Hon. David N. Hurd, United States District Judge) suppressed the evidence based upon its finding that the sergeant stopped the car beyond the boundaries of the reservation, and that the sergeant failed to comply with the ICE approval procedures for the exercise of his authority as a customs officer. The district court’s decision is reported at United States v. Wilson, 754 F. Supp. 2d 450 (N.D.N.Y. Dec. 8, 2010).

The Court of Appeals reversed, holding that “the stop was justified by probable cause to believe that Wilson had entered the United States in violation of law” and that the sergeant was a validly designated customs officer authorized to effect the stop, so his failure to follow an internal ICE policy did not give rise to a Fourth Amendment violation. The Court of Appeals also held that there was probable cause to search the car for marijuana smuggled over the border.

United States Attorney Hartunian said, “My office is committed to working with tribal authorities and federal law enforcement officers to stop smugglers from using the Mohawk territory to bring drugs into our communities. This case illustrates how tribal authorities, federal law enforcement officers, and Canadian agencies all collaborate to ensure that there are no gaps in law enforcement coverage on and around the Mohawk territory.”

The case was investigated by the Saint Regis Mohawk Police Department, the Akwesasne Mohawk Police Service, the United States Border Patrol, and Immigration and Customs Enforcement - Homeland Security Investigations. It was prosecuted by Assistant United States Attorney Elizabeth Horsman.

Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Edward Palmer, 47, of Phoenix, N.Y., pled guilty in U.S. District Court in Syracuse before the Honorable Frederick J. Scullin, to a felony violation of the Clean Air Act, 42 U.S.C. § 7413(c). Palmer is scheduled to be sentenced on October 30, 2013 at 10:30 a.m. in Syracuse. He faces a maximum penalty of five years in prison and a $250,000 fine.

Palmer is the owner of Carbonsted, LLC, a company that owns the former Nestles Plant, 555 Fourth Street, Fulton, NY. The plant contains pipes with more than two thousand of feet of friable asbestos insulation. Palmer engaged in asbestos renovation activities without filing a notification with the United States Environmental Protection Agency. He directed unlicenced individuals to perform asbestos removal without wetting the asbestos and keeping it wet, and without properly disposing of the asbestos at a state-approved landfill.

Asbestos exposure has been determined to cause various forms of cancer, asbestosis, and mesothelioma, a nearly always fatal disease. The Environmental Protection Agency has determined that there is no safe level of exposure to asbestos. This case was investigated by Special Agents of the Environmental Protection Agency, and N.Y. State Department of Environmental Conservation. Inspectors with the NYS Department of Labor also assisted. Prosecution is being handled by Assistant United States Attorney Craig A. Benedict. Mr. Benedict may be contacted for questions regarding this case at 315-448-0672.

[Plattsburgh, New York]—United States Attorney Richard S. Hartunian and Homeland Security Investigations Special Agent in Charge James Spero announce that NATHAN SAMSON MARTIN, age 31, Akwesasne, New York, pled guilty on June 4, 2013 to conspiring to bring and bringing illegal aliens into the United States and transporting them within the United States, and failure to appear at federal court proceedings after his pretrial release. United States District Court Judge Glenn T. Suddaby, Syracuse, New York, accepted his guilty pleas.

MARTIN was one of three people indicted in April 2010 for conspiring to smuggle aliens from Canada into the United States for commercial gain in 2009 and 2010. He is the second defendant of the three defendants charged to plead guilty to his role in the conspiracy. Another defendant, Carl THOMPSON, previously pled guilty and was sentenced to three years of imprisonment. A third defendant, Dennis JOCKO of Cornwall Island, Ontario, remains a fugitive after absconding from pre-trial supervision upon release by United States Magistrate Judge Kudrle.

Public court documents show that on February 8, 2010, Akwesasne Mohawk Police Service officers in Canada alerted Saint Regis Mohawk Tribal Police Department officers and U.S. Border Patrol agents to a vehicle that crossed the “ice bridge” from Cornwall Island, Ontario, to St. Regis Village, Quebec, and proceeded into Franklin County, New York. After law enforcement officers in New York observed the vehicle drop off a person in Hogansburg, they attempted to stop the vehicle for an immigration inspection. The driver, later identified as MARTIN, attempted to flee but was apprehended. The person that MARTIN dropped off was an illegal alien who had just been commercially smuggled into the United States from Canada through the Saint Regis Mohawk Reservation. MARTIN received part of the smuggling fee, according to the smuggled alien. A U.S. Magistrate Judge released MARTIN on February 9, 2010, subject to supervision by the U.S. Probation Office. However, MARTIN failed to appear for a hearing as ordered by U.S. District Judge Suddaby on January 4, 2011, and an arrest warrant was issued. On January 7, 2013, the defendant was found and arrested in the United States on the federal warrant by the Saint Regis Mohawk Tribal Police.

MARTIN pled guilty to all charges without a plea agreement. He faces a statutory maximum of ten years and a minimum of three years of imprisonment on the charge of bringing, or aiding and abetting the bringing, of illegal aliens to the United States. The charge of failure to appear has a statutory maximum of five years of imprisonment, as do the other two counts of conspiracy and transporting aliens, but federal law requires that the court run any sentence for failure to appear consecutive to any other sentence. The Court set the case for sentencing on October 10, 2013 and ordered MARTIN to remain in jail pending sentencing.

The case was investigated by Homeland Security Investigations (HSI), Massena, New York, with assistance from the United States Border Patrol, Saint Lawrence County Sheriff’s Department, Saint Regis Mohawk Tribal Police Department, Akwesasne Mohawk Police Service, Royal Canadian Mounted Police, Ontario Provincial Police, Canadian Border Services Agency, and Surete Du Quebec. The case is being prosecuted by the United States Attorney’s Office for the Northern District of New York.

Any questions may be directed to Executive Assistant U.S. Attorney John G. Duncan in Syracuse, New York at (315) 448-0672 or Assistant U.S. Attorney Elizabeth Horsman in Plattsburgh, New York at 518-314-7800.

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York announces that LLOYD F. MARTIN, JR., (68, of Jamesville, NY) entered a guilty plea to the felony offense of subscription of a false income tax return, in violation of Title 26, United States Code, Section 7206(1). The defendant is facing a statutory maximum sentence of 3 years imprisonment, a maximum fine of $250,000.00 and restitution to the IRS in the amount of $184,655.00. MARTIN is scheduled to be sentenced on October 13, 2013, before the Honorable Frederick J. Scullin.

During the plea hearing on June 4, 2013, MARTIN admitted the following. From 2006 through 2008, MARTIN was the president of a commercial construction company named Henderson-Johnson Co., Inc., located in Syracuse, New York. During that time, MARTIN realized income in the approximate amount of $657,640.57 from Henderson-Johnson over and above the income he reported on his personal federal income tax returns. Specifically, MARTIN received income from Henderson-Johnson in the form of payments toward personal expenses, such as the purchase and maintenance of a jet airplane. MARTIN failed to include $255,645.99 as income on his 2006 personal federal tax return, $241,892.78 as income on his 2007 personal federal tax return, and $160,101.80 as income on his 2008 personal federal tax return. Each of these returns were made and signed by him under penalty of perjury. MARTIN knew these tax returns were false because each substantially under reported his income and tax liability for that year. The foregoing resulted in a tax deficiency to the IRS totaling $184,655.00.

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.

United States Attorney Richard S. Hartunian announced today that his office has settled a civil prosecution under the False Claims Act. This case involves allegations that an Ithaca-based defense contractor, Agave BioSystems, Inc. and its President, Noe Salazar, submitted false claims to the United States Department of Defense, fraudulently seeking payment for labor expenses when in fact those expenses were not incurred, and the claimed labor in fact was not performed. The defendants have paid $300,000.00 to settle this matter.

This case started as a “whistleblower” or qui tam lawsuit filed by a former Agave employee, Rafik Tawadrous. In February 2010, Mr. Tawadrous filed a Complaint which alleged that Agave had committed fraud in its performance of government contracts. This Complaint was then investigated by agents and auditors from several federal agencies: the Defense Criminal Investigative Service (DCIS), U.S. Army Criminal Investigation Division (Army CID), the Defense Contract Audit Agency (DCAA), and the Federal Bureau of Investigation (FBI). The investigation confirmed material parts of Mr. Tawadrous’ allegations. The United States then entered this lawsuit and filed its own Complaint (“Complaint in Intervention”), reflecting those investigative findings, on April 26, 2013.

The government’s Complaint alleges in part the following: Agave is a small company located at 401 East State Street, Ithaca, New York. Agave largely performs scientific research and other work related to government defense contracts. Noe Salazar was the CEO and President of Agave until his death on October 6, 2012. In 2006, the Department of Defense conducted an audit of Agave’s claimed expenses. During that audit, Noe Salazar created two false time cards for one family member, namely his daughter, which claimed that his daughter had performed work on a government contract when in fact she had not. Noe Salazar submitted the false time cards to the Department of Defense. Also, Agave claimed it had incurred salary expenses for other family members, when these family members had not performed work to the extent claimed by Agave. Agave submitted the false and inflated salary expenses to the Department of Defense, which relied upon them in calculating the monies that would be paid to Agave, regarding approximately 44 contracts with the U.S. Army, Navy, Air Force, and Defense Threat Reduction Agency.

The government’s Complaint alleges misconduct only by Noe Salazar and Agave, and does not allege misconduct by any other person, family member or entity.

This action was filed pursuant to the federal qui tam statute, 31 U.S.C. §3730, which allows a private person to file a civil action on behalf of the United States, alleging that false claims have been submitted to the United States. This is part of the False Claims Act, which allows the government to file civil prosecutions, typically for defense procurement fraud and health care fraud. After a qui tam Complaint is filed, the United States commences an investigation and determines whether to join the lawsuit (“intervene”) or to decline intervention. In this case, as discussed above, the United States commenced an investigation and determined that it would join the lawsuit. Pursuant to court order and federal law, the original Complaint in this case remained under seal, while the United States conducted its investigation and determined whether to intervene. The person who initially files the lawsuit (“relator”) is entitled to a share of the proceeds. The relator in this case, Rafik Tawadrous, will receive 18% of the settlement proceeds ($300,000.00), or $54,000.00.

Craig W. Rupert, Special Agent in Charge, U.S. Department of Defense, Defense Criminal Investigative Service, stated that “Schemes to intentionally overbill the United States Department of Defense by any company or individual erode public confidence and undermine the mission of our military services. The DCIS and its law enforcement partners will continue to tirelessly pursue and investigate fraud allegations in order to safeguard the American taxpayer and military members.”

Richard S. Hartunian, United States Attorney for the Northern District of New York, stated that “The United States Attorney’s Office is committed to pursuing those who defraud the government under the False Claims Act, especially those who defraud the Department of Defense. When the military is defrauded, less money is available to support and protect our troops abroad. Such fraud is inexcusable.”

This matter is assigned to Assistant U.S. Attorney Charles E. Roberts. News inquiries should be directed to Executive Assistant United States Attorney John Duncan, tele. (315) 448- 0672.

The relator, Rafik Tawadrous, is represented by David Koenigsberg, Esq., of New York City, tele. (212) 223-2100.

Richard S. Hartunian, United States Attorney for the Northern District of New York, announced that JOHN GIBSON, III, age 37, of Oswego, N.Y., pled guilty today to the felony offense of Theft of Government Money, before the Hon. Glenn T. Suddaby in the United States District Court in Syracuse, New York. Sentencing for GIBSON is scheduled for October 9, 2013. As a result of the conviction, GIBSON 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.

GIBSON admitted that he purchased 91 postal money orders with checks drawn on closed checking accounts in the total amount of $33,072.68, in violation of Title 18, United States Code, Section 641.

GIBSON’s prosecution is the result of a joint investigation by U.S. Postal Inspection Service and the United States Postal Service Office of Inspector General. The investigation began in June 2012.

This prosecution was handled in the United States Attorney’s Office by Assistant U.S. Attorney Tamara B. Thomson.

Albany, New York – United States Attorney Richard S. Hartunian and Special Agent-in- Charge Joseph Anarumo, Jr. of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives announce that a federal criminal complaint filed today charges Robert A. Butler, 27, with arson resulting in personal injury and death, in violation of Title 18, United States Code, Section 844(i). The affidavit in support of the complaint alleges that on or about May 2, 2013, Butler used gasoline to start a fire at 438 Hulett Street, Schenectady, New York, resulting in the destruction of the building and its contents and the deaths of four people: David Terry, age 32, and three children: Michael Terry, age 3; Layah Terry, age 2; and Donovan Duell, who was 11 months old, and put Safyre Terry, age 5, in the hospital with severe injuries. There is federal jurisdiction over the arson because the building at 438 Hulett Street was a rental property not occupied by the owner and the U.S. Supreme Court has determined that such rental of real estate is an activity that affects interstate commerce.

A criminal complaint is merely an accusation and Butler is presumed innocent unless and until proven guilty. Trial on a federal felony charge must be premised upon an indictment by a grand jury. If indicted and then convicted, Butler faces a maximum sentence of a fine of up to the greater of $250,000 or twice the gross pecuniary loss to victims, and up to life imprisonment or the death penalty. No decision has been made by the Department of Justice regarding whether to seek the death penalty in this case; that determination is ultimately made by the Attorney General of the United States.

Butler’s had his initial appearance this afternoon and was remanded to custody until a detention hearing on Monday, June 10, 2013, at 1:30 p.m.

The investigation which led to this indictment was conducted by 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. The case is being prosecuted by First Assistant U.S. Attorney Grant C. Jaquith and Assistant U.S. Attorney Wayne Myers.

Schenectady County District Attorney Robert M. Carney said: "Shortly after the arrest of Robert Butler on charges of Arson in the First Degree, I asked the United States Attorney to consider the case for federal prosecution. I did so for several reasons. Federal jurisdiction is always a possibility with significant arson cases and the federal Bureau of Alcohol, Tobacco, Firearms and Explosives was already investigating this case along with the Schenectady Police and Fire Departments. Second, there are significant procedural differences between the state and federal systems regarding the type of evidence which must be presented to a Grand Jury that I believed favored consideration of federal prosecution in this case given the ongoing nature of this investigation by law enforcement and the necessity of moving forward expeditiously. Finally, there are sentencing enhancements possible in the federal system that would more appropriately address the harm caused by this criminal act, beyond the maximum sentence of 25-life Mr. Butler would face if he were to be convicted of murder in the second degree and arson in the first degree in state court. I thank Mr. Hartunian for his willingness to go forward with this prosecution and am grateful that I have always been able to count on him for collaboration and assistance in fulfilling our mutual obligations to safeguard our communities."

United States Attorney Richard S. Hartunian said, “The horrible tragedy that occurred at 438 Hulett Street on May 2 nd cried out for the dedication and collaboration of all of law enforcement and fire investigators in the pursuit of justice for the victims of the fire and the person who set it, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Schenectady Police Department, and the Schenectady Fire Department immediately responded with the thorough investigation which led to this federal charge. We thank District Attorney Carney for his leadership and the work of his office in the immediate aftermath of the fire. We are committed to continuing the investigation and the federal prosecution until justice is done.”

ATF Special Agent-in-Charge Joseph Anarumo, Jr. said, “Arson is a reprehensible crime and is even more heinous when small children are killed as a result. I take comfort in knowing that the dogged investigative efforts of the ATF, the Schenectady Police Department and the United States Attorney's Office has resulted in an arrest today. The deaths of those victims will not be in vain and the alleged actions of the defendant will now be addressed in a court of law.”

Schenectady Police Chief Brian Kilcullen said, “The investigation into last month's Hulett Street fatal fire was and remains a collaborative effort between local, state, and federal law enforcement agencies. We will continue to dedicate any necessary resources to the United States Attorney's Office to assist in the prosecution of this matter in federal court.”

Inquiries may be addressed to First Assistant U.S. Attorney Grant C. Jaquith at (518) 431- 0247.

United States Attorney Richard S. Hartunian will hold a Press Conference today regarding arrests in a large-scale Central New York drug organization based in Oneida County.

DATE: May 29, 2013
TIME: 2:00 pm
LOCATION: United States Attorney’s Office
100 S. Clinton Street, Room 900
Syracuse, New York 13261

No further information will be released prior to the Press Conference.

Scam Caused the Internal Revenue Service to Send $87,153 to the Woman

Albany, New York — On May 24, 2013, a grand jury returned an indictment charging PATRICIA ALFIERI, age 52, of Schenectady, New York, with (1) five counts of mail fraud; (2) one count of obstructing the Internal Revenue laws; and (3) three counts of filing a false income tax return announced United States Attorney Richard S. Hartunian and Internal Revenue Service Criminal Investigation Special Agent in Charge Toni Weirauch. Trial is set for July 29, 2013 before the Honorable Gary L. Sharpe in Albany, New York.

Counts 1 through 5 charge the defendant with mail fraud. Count 6 charges the defendant with obstructing the Internal Revenue laws. The indictment alleges that the defendant mailed checks to the Internal Revenue Service totaling $3,672,327, drawn on (a) accounts which did not exist; (b) accounts which were closed; and (c) accounts with insufficient funds, causing the Internal Revenue Service to send her six “overpayment” refunds totaling $87,153.99. The maximum potential penalty for each of Counts 1 through 5 is imprisonment for 20 years, supervised release for 3 years, and a fine of $250,000 or twice the gross pecuniary gain or loss. The maximum potential penalty for Counts 6 is imprisonment for 3 years, supervised release for 1 year, and a fine of $3,000 or twice the gross pecuniary gain or loss.

Counts 7 through 9 charge the defendant with filing false personal income tax returns for 2008 through 2010. The indictment alleges that the defendant submitted false returns claiming that she had paid real estate taxes and home mortgage interest when she had not and also that her employer had withheld more income tax than it had. The maximum potential penalty for each of Counts 6 through 9 is imprisonment for 3 years, supervised release for 1 year, and a fine of $100,000 or twice the pecuniary gain or loss.

The Indictment includes allegations for forfeiture of $87,153.99 in proceeds of the mail fraud offenses charged.

ALFIERI was arraigned on May 28, 2013 before the Honorable Christian F. Hummel, United States Magistrate Judge, at the Federal Courthouse in Albany.

This case is being investigated by the Internal Revenue Service, Criminal Investigation Division. This case is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.

LOCAL CONTACT: Elizabeth C. Coombe
Assistant U.S. Attorney
Tel: (518) 431-0247

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that two indictments unsealed today in United States District Court charge eighteen (18) persons with being members of two drug trafficking conspiracies operating in Utica, New York. The Indictments allege that the groups trafficked cocaine and cocaine base (crack).1 The defendants were charged with conspiring to distribute these drugs from the summer of 2011 through June 26, 2012. The following defendants were arrested or sought today :

US v. SEAN HAGANS, et al. 5:13-CR-137
Sean Hagans, a/k/a “Pretty,” 42, of Utica, NY, Timothy Rider, 46, of Utica, NY, Alexis Tarris, 26, Frankfort, NY, Scott Fyfe, 41, Utica, NY, and
Michael Lynch, 39, of Utica, NY.

US v. REID SOOK, et al. 5:13-CR-187
Reid Sook, a/k/a “Country,” 38, of Utica, NY, Arthur Charles Robinson, 24, of Utica, NY, John Robinson, a/k/a “Pooh Bear,” 38, of Utica, NY, Cecil Jeffrey Palmer, a/k/a “Cry Baby,” 42, of Utica, NY, Alexis Tarris, 26, Frankfort, NY, Scott Fyfe, 41, Utica, NY, Brandon Winn, 20, of Niagara Falls, NY, Dennis Amsdill, 29, of Lewiston, NY, Kimberly Springer, 31, of Utica, NY, Raymond Schloop, 41, of Utica, NY, Jim Caruso, 46, of Utica, NY, Michael Rossi, a/k/a “Ross,” 50, of Utica, NY,

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1The allegations contained in the Indictments are mere accusations; and the defendants are presumed innocent unless and until proven guilty in a court of law.

United States Attorney Richard S. Hartunian announced today that a Utica man has been sentenced for his role in an insurance fraud scheme and money laundering charge.

On May 28, 2013, JOSEPH DEMME, age 67, Whitesboro, NY, was sentenced by United States District Court Judge Norman A. Mordue in Syracuse. DEMME was sentenced to 15 months imprisonment and ordered to pay restitution in an amount exceeding $1.4 million. DEMME will also serve three years of supervision following his release from incarceration.

DEMME pled guilty on May 29, 2012 to conspiracy to commit mail fraud and money laundering. DEMME admitted that in or about 2005 he agreed to assist other conspirators in an insurance fraud scheme. The scheme involved a staged motor vehicle accident on Harbor Lock Road in Utica on March 20, 2006. On that date, Joseph Dellerba and Cynthia Morgan claimed to have been injured while passengers in a Ford van which was struck by a Ryder truck driven by Michael Matrulli. In fact, the collision was staged, and Dellerba and Morgan were not passengers at the time of the impact. Dellerba and Morgan claimed to have been injured as a result of the accident and submitted false insurance claims, including claims for personal injuries, no fault benefits and disability benefits. Dellerba and Morgan sought medical treatment for non-existent injuries or injuries that they claimed were the result of the collision.

The money laundering conviction stems from an October 10, 2007 incident where DEMME applied for and obtained a $25,000 loan from Rome Savings Bank in New Hartford, New York. The proceeds of the loan were derived from unlawful activity, in that in support of this loan application, DEMME submitted to the bank a false U.S. Individual Income Tax Return form 1040 for the year 2006, which overstated his income and had not been filed with the Internal Revenue Service.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the New York State Insurance Frauds Bureau. The case was prosecuted by Assistant United States Attorney Edward R. Broton.

Shawntell Rush Was A Long Time Gang Member Who Often Possessed Handguns In Connection With His Gang Activity

SYRACUSE, NEW YORK –

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that SHAWNTELL RUSH, age 29, of Syracuse, was sentenced today in U.S. District Court in Syracuse to 140 months imprisonment for his role in conspiring to engage in a pattern of racketeering activity through his membership in the Bricktown Gang, a violent street gang operating on the streets of Syracuse.

As part of his plea, RUSH admitted that the Bricktown Gang operated within the City of Syracuse from at least 2000 through the present and that members of the Bricktown Gang: (1) maintain a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine, cocaine and marijuana; (2) protect that exclusive crack distribution territory with violence if necessary; (3) obtain drugs from suppliers in New York City and elsewhere; (4) project a very violent attitude and respond to violence with violence in order to preserve their stature in the gang community; (5) on occasion use hand signs, wear blue colored bandanas and have tattoos, all of which are intended to signify their gang membership; (6) use criteria such as willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carry and use firearms in connection with their gang activity.

RUSH also admitted to a robbery and multiple acts of gun possession as part of his gang activity.

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, John M. Katko, who is handling the case, at (315) 448-0672.

United States Attorney Richard S. Hartunian announced today that Bradley S. Leader, 42, of Auburn, New York, pled guilty to filing a false personal income tax return in tax year 2007.

Leader is a chiropractor who has worked at Leader Chiropractic, a chiropractic center located in Auburn, New York. From 2005-2009, he realized income in the approximate amount of $225,000 over and above the income he reported on his personal tax returns. This was accomplished by Leader not providing all pertinent information to his tax preparer; specifically he did not disclose to his tax preparer or identify on his tax returns additional gross receipts information (personal checks received from patients and certain insurance company checks). In his plea agreement, Leader admitted he failed to include $55,513.87 as income on his 2005 personal federal tax return, $38,412.83 as income on his 2006 personal federal tax return, $47.435.90 as income on his 2007 personal federal tax return, $43,130.86 as income on his 2008 personal federal tax return, and $42,036.00 as income on his 2009 personal federal tax return. Leader knew the returns he filed each year were false because each substantially under reported his income for that year. As a result, Leader owes more than $68,000 in back taxes for the years 2005-2009.

United States District Judge David N. Hurd scheduled sentencing for September 27, 2013 at 2:00 p.m. in Utica. Leader faces a maximum term of imprisonment of three years and a fine of $100,000. In addition, the defendant will be required to pay all back taxes due and owing for the tax years 2005-2009.

The case was investigated by the Internal Revenue Service, Criminal Investigations. The case was prosecuted by Assistant U.S. Attorney Stephen C. Green.

Albany, New York —United States Attorney Richard S. Hartunian and David McNulty, U.S. Marshal for the Northern District of New York, announce the filing of a criminal Complaint charging EUGENE PERIARD, age 33, of Saratoga Springs, New York, with failing to update his sex offender registration information.1 The Complaint charges that on or about April 30, 2013, PERIARD failed to update his sex offender registration information by advising authorities that he had moved from Elk City, Oklahoma to Saratoga Springs, New York. If found guilty of the charge in the Complaint, the defendant faces a statutory maximum sentence of ten years imprisonment and a maximum fine of $250,000.00.

PERIARD had his initial appearance in Albany on May 23, 2013 before the Honorable Christian F. Hummel, United States Magistrate Judge. PERIARD was detained pending his next court appearance.

This case was investigated by the U.S. Marshals Service and the Saratoga Springs Police Department. This case is being prosecuted by Assistant United States Attorney Rick Belliss.

LOCAL CONTACT: Rick Belliss
Assistant U.S. Attorney
Tel: (518) 431-0247

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1The charge is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

Defendant Alleged to Have Communicated Online with an Undercover Investigator Posing as a
Twelve Year Old Girl in Order to Send Her Images of Child Pornography and to Arrange a
Meeting in a Syracuse Hotel Where Sexual Acts Would be Filmed

Albany, New York —United States Attorney Richard S. Hartunian and Joseph D’Amico, Superintendent of New York State Police, announce the filing of a three-count criminal Complaint charging JASON FRANK, age 27, of Rochester, New York, with the attempted online enticement of a minor, the attempted production of child pornography, and the transportation of child pornography. 1 According to the Complaint, between about February 2013 and April 2013, FRANK engaged in online chats with an undercover New York State Police investigator posing as a twelve year old girl. FRANK’s online chats urged the twelve year old girl to meet him for an encounter in which FRANK would perform oral sex on the girl and then have sexual intercourse with the girl. On or about April 9, 2013, FRANK attempted to produce images of child pornography when he showed up at a Syracuse hotel in possession of a digital camera, expecting to meet the twelve year old girl for purposes of a sexual encounter that would be filmed. Finally, between about February 2013 and April 2013 FRANK transported files of child pornography to the undercover investigator by sending the undercover investigator multiple still image files of child pornography via the Internet.

If found guilty of attempted online enticement of a minor, the defendant faces a statutory minium of at least ten years imprisonment and up to a maximum sentence of life imprisonment, and a maximum fine of $250,000.00. If found guilty of attempted production of child pornography, the defendant faces a statutory minium of at least fifteen years imprisonment and up to a maximum sentence of thirty years imprisonment, and a maximum fine of $250,000.00. If found guilty of transporting child pornography, the defendant faces a statutory minimum of at least five years imprisonment and up to a maximum sentence of twenty years imprisonment, and a maximum fine of $250,000.00.

FRANK had his initial appearance in Albany on May 23, 2013 before the Honorable Christian F. Hummel, United States Magistrate Judge. FRANK was detained pending his next court apperance.

This case was investigated by the New York State Police .This case is being prosecuted by Assistant United States Attorney Rick Belliss.

LOCAL CONTACT: Rick Belliss
Assistant U.S. Attorney
Tel: (518) 431-0247

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1The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.

United States Attorney Richard S. Hartunian announced that JIMMY L. MORSE, 34, was arrested today at a residence in Locke, New York, and charged with the federal offense of failing to register as a sex offender.1

A criminal complaint unsealed today alleges that in June of 2002 MORSE was convicted in East Baton Rouge, Louisiana of Aggravated Oral Sexual Battery against a child, and sentenced to 4 years imprisonment. MORSE was also notified that he was required to register as a sex offender until April of 2020. MORSE last complied with his registration requirements in Louisiana in 2008, and a warrant was issued for him there in 2010 as a result.

In April of 2013 the United States Marshals Service received information from authorities in Louisiana that MORSE may be living in Cayuga County, New York. After investigation, the Marshals Service determined that MORSE’s conviction would require him to register as a sex offender in New York, and that he had not registered as required.

MORSE was located today at a residence in Locke, New York and arrested on a warrant signed yesterday by Hon. Therese Wiley Dancks, United States Magistrate Judge. He made his initial appearance before her today, and has been remanded pending disposition of his case.

The charge filed against MORSE carries with it a maximum sentence of 10 years, a fine of up to $250,000, and a term of supervised release of at least 5 years and up to life.

MORSE’S arrest is the result of an investigation by the United States Marshals Service Sex Offender Investigation Branch, North East Region, and the New York/New Jersey Regional Fugitive Task Force with the assistance of the Cayuga County Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Lisa Fletcher as part of Project Safe Childhood. 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 identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.autotrader.com/.

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1The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.

United States Attorney Richard S. Hartunian announced today that a Syracuse woman has been sentenced for her role in a series of aggravated identity thefts, three of which were committed after she had been indicted and while she was under federal court supervision.

Today Maurisha Dixon, age 25, was sentenced by United States District Court Judge David N. Hurd in Utica. DIXON was sentenced to 60 months imprisonment and ordered to pay restitution in an amount exceeding $55,000 with $36,694 going to Sallie Mae, $5,000 to The College Loan Corporation, and the remainder to KeyBank. DIXON will also serve four years of supervision following her release from incarceration and was ordered to pay a special assessment of $1,100. She was remanded to prison immediately following sentencing.

DIXON pleaded guilty on August 24, 2012 to four counts of aggravated identity theft, one count of wire fraud, three counts of false representation of a social security number, and three counts of committing an offense while on supervised release (11 felony counts in total). DIXON admitted that she stole and misused without authorization the identities and personal information of four individuals - some known to her, and some unknown - and used that information to defraud financial institutions in a series of schemes involving student loans and credit cards. In executing those schemes, DIXON created and used false documents, counterfeited government agency letterhead, and falsely represented herself as the individuals whose identities she had stolen.

The case was investigated by the Social Security Administration - Office of Inspector General and the Office of the Inspector General for the U.S. Department of Education. The case was prosecuted by Assistant United States Attorney Stephen C. Green.

Syracuse, NY—United States Attorney Richard S. Hartunian today announced that a federal jury has convicted ROSARIO GAMBUZZA (age 48) of East Syracuse, NY and ERNEST SNELL (age 43) of Syracuse, NY, of conspiring to import and distribute a controlled substance analogue, known on the street as “Molly,” in Syracuse, New York between January 2010 and April 2011. GAMBUZZA was also convicted on 19 counts of money laundering in connection with $73,000 dollars he wired to a co-conspirator in Shanghai, China to purchase “Molly,” a designer drug similar to the Schedule I controlled substance, MDMA. Each defendant faces a maximum term of imprisonment of twenty (20) years, up to a $1 million fine, and at least three (3) years of supervised release following any period of incarceration. Sentencing has been scheduled for October 11, 2013 before U.S. District Judge Glenn T. Suddaby.

These prosecutions resulted from an investigation first undertaken in the spring of 2009. Agencies included the Syracuse Resident Office of the Drug Enforcement Administration (DEA), the Internal Revenue Service (IRS)- Criminal Investigation Division (Syracuse Resident Office), the Onondaga County Sheriff’s Office, the Syracuse Police Department, the Department of Homeland Security- HSI, the Onondaga County District Attorney’s Office, the United States Marshals Service, the New York State Police, and the United States Attorney’s Office for the Northern District of New York. The investigation, which included wiretaps on two of the defendants’ telephones, revealed that this drug trafficking organization was responsible for the distribution of over one hundred (100) kilograms of “Molly” during the course of the conspiracy. The “Molly,” manufactured in factories in China, was shipped to distributors in the Syracuse area, as well as other areas in the United States, where it was then distributed to others by members of the conspiracy. The large scale drug trafficking conspiracy, based in Central New York, involved co-conspirators located in Florida, California, Texas, Virginia and elsewhere. Twenty of the twenty-two indicted co-conspirators have been convicted.

United States Attorney Richard S. Hartunian stated “This successful prosecution was brought about through the excellent cooperation of local, state, federal law enforcement agencies working together to combat the influx of ‘designer drugs’ produced by illicit drug manufacturers overseas. I commend theses agencies for their tireless pursuit of those responsible for importing and distributing these drugs on our streets.”

DEA Special Agent in Charge Brian R. Crowell stated, "This investigation of local distributors of the manmade synthetic drug called 'molly,' led our investigators to China on an international conspiracy and 22 federal indictments. DEA and our local, state, federal and international law enforcement partners identified those responsible for peddling this lab-created poison for profit in our communities from the street corner dealer to the source of supply based in China. This investigation and trial unraveled a complex network of 'molly' traffickers. There remains one fugitive attorney Kenneth Feria of Hollywood, California and one fugitive hiding in China named Lei Zhang."1

IRS-Criminal Investigation Special Agent in Charge Toni Weirauch said, “These convictions are significant as they send a strong message to those who are contemplating entering this emerging area of the illegal drug industry and bringing these toxic substances to our communities. Moreover, this investigation and trial highlight to the public – especially to our youth – how dangerous bath salts are. IRS-Criminal Investigation remains committed to working with our law enforcement partners in the fight against all kinds of illegal drugs.”

The case was prosecuted by Assistant U.S. Attorneys Carla Freedman and John G. Duncan. Further questions or inquiries may be directed to Assistant United States Attorney Carla Freedman at (315) 448-0672.

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1As to these defendants, the indictment contains only allegations and the defendants are presumed innocent until and unless proven guilty in a court of law.

Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today the Indictment of Mark Pullyblank, 52, of Caledonia, NY, William Clements, 52, of Victor, New York, and Crane-Hogan Structural Systems, Inc., 3001 Brockport Road, Spencerport, New York, which employs Pullyblank and Clements.

Crane-Hogan is a company engaged in hydro-demolition in which high pressure water is used to remove concrete from buildings such as parking garages prior to resurfacing. The waste-water from the hydro-demolition process contains a slurry of industrial waste including remnants of concrete which has a very high pH. Mark Pullyblank and William Clements were project supervisors in charge of demolition projects at the Binghamton Governmental Center Parking Garage and Johnson City Wilson Hospital Parking Garage throughout 2008 and 2009.

The Clean Water Act was enacted into law in 1972. Since that time it has prohibited the discharge of pollutants into waters of the United States without approved waste-water treatment and a permit, or into a permitted publically owned treatment works (POTW), unless in compliance with an approved pretreatment program. The Susquehanna River is a navigable water of the United States that provides drinking water to numerous individuals. It drains into the Chesapeake Bay and into the Atlantic Ocean.

The three defendants are charged in a nine count felony Indictment with discharging untreated industrial waste-water from a hydro-demolition process without a permit in violation of the Clean Water Act. More specifically, Mark Pullyblank and Crane-Hogan are charged in counts one through six with discharging untreated industrial waste-water directly into the Susquehanna River from a hydro-demolition project conducted at the Binghamton Governmental Center Parking Garage. Crane-Hogan is charged in Count Seven with similar industrial waste-water discharges into the Susquehanna River from the Wilson Parking Garage, Johnson City, New York. William Clements, Mark Pullyblank, and Crane-Hogan are charged in counts 8 and 9 with discharging industrial waste-water into the Binghamton-Johnson City Joint Sewage Treatment Plant, without an approved industrial pretreatment permit, in violation of the Clean Water Act.

The allegations in the Indictment are mere accusations and all persons are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This case is being investigated by Investigators with the New York State Department of Environmental Conservation, Bureau of Environmental Crimes Investigations and Special Agents of the Environmental Protection Agency. Assistance with this case has been provided by the New York State Office of General Services, the Binghamton City Engineer, and the Binghamton-Johnson City Publically Owned Treatment Works. The case is being prosecuted by Assistant United States Attorney Craig Benedict. Questions may be directed to AUSA Benedict at 315-448-0726.

United States Attorney Richard S. Hartunian announced today that two Utica area men have pled guilty to committing a string of bank robberies.

ZACHARIAH EDWARDS, 21, of Frankfort, and NICHOLAS FERRONE, 21, of Utica, admitted robbing:

Chase Bank, 6004 Court Street, Syracuse, New York of $2,156 on January 14, 2013; Berkshire Bank, 2080 Western Avenue, Guilderland, New York of $2,566 on January 23, 2013; Chase Bank, 4425 East Genesee Street, Dewitt, New York of $4,680.75 on January 28, 2013; Trustco Bank, 2050 Western Avenue, Guilderland, New York of $1,930 on February 13, 2013; Bank of America, 638 Memorial Drive, Chicopee, Massachusetts of $3,300 on February 25, 2013; Key Bank, 1610 Eastern Parkway, Schenectady, New York of $3,700 on March 1, 2013; and M&T Bank, 5170 West Taft Road, Syracuse, New York of $3,446 on March 4, 2013.

In addition, FERRONE admitted to a robbery of the Alliance Bank at 142 Genesee Street, Oneida, New York of $2,240 on January 3, 2013. Although no weapons were displayed the robbers told the tellers they were armed during the course of several of the robberies.

EDWARDS has been held without bail since his arrest on March 8, 2013. FERRONE has likewise been held without bail since his arrest on March 11, 2013. They will both continue to be detained until their sentencing which is scheduled for October 1, 2013 before Senior U.S. District Judge Frederick J. Scullin, Jr. Bank robbery carries a maximum penalty of twenty years imprisonment and a fine of $250,000 on each count.

The investigation has been a multi-agency effort, including participation by the Dewitt Police Department, the New York State Police, the Guilderland Police Department, the Oneida Police Department, the Onondaga County Sheriff’s Office, Chicopee, Massachusetts Police Department, Schenectady Police Department and the Federal Bureau of Investigation. The case is being prosecuted by AUSA Edward R. Broton.

United States Attorney Richard S. Hartunian announced the arrest today of a Phoenix, New York man on federal child pornography charges.

A federal criminal complaint unsealed today charges RICHARD J. WATKINS, age 48, with knowingly distributing, receiving, and possessing child pornography via the Internet. The complaint alleges that in September of 2012 WATKINS made files depicting child pornography available to others on the internet by way of a file sharing program, and that an undercover police officer was able to obtain from WATKINS’ computer video files depicting children engaged in sexually explicit conduct. The complaint further alleges that following the execution of a search warrant at WATKINS’ Phoenix residence, the New York State Police found that WATKINS possessed hundreds of video files of child pornography on media seized from his residence.

WATKINS was arrested on the federal charges this morning, and made his initial appearance before Hon. Andrew T. Baxter, United States Magistrate Judge, who ordered him detained pending a hearing scheduled for Monday, May 6, 2013.

For his distribution and receipt of child pornography, WATKINS faces a mandatory minimum penalty of 5 years imprisonment, a maximum penalty of 20 years; For possessing child pornography his maximum potential sentence of imprisonment is 10 years. Each count carries with it a maximum fine of $250,000, a required term of supervised release of at least 5 years, and up to life, and his registration as a sex offender.

The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.

WATKINS’ arrest is the result of an investigation by the New York State Police, and the United States Secret Service. It is being prosecuted by Assistant U.S. Attorney Lisa Fletcher. WATKINS’ prosecution by the United States Attorney's Office is 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 identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

SYRACUSE, NY –United States Attorney Richard S. Hartunian announced that BONNIE SIMSON, 41, of Manlius, NY entered a plea of guilty in U.S. District Court in Syracuse on April 30, 2013, to an indictment charging her with one count of embezzlement from a program receiving federal funds, in violation of Title 18, United States Code, Section 666(a)(1)(A).

Ms. Simson faces a maximum term of imprisonment of 10 years, a fine of $250,000 and a term of supervised release of three years. From December of 2000 until March, 2011, Simson was employed as the manager of the Patient Telephone and Television Services Program ("PTTSP") at St. Joseph's Hospital in Syracuse, New York. During that time, Simson stole currency from envelopes containing payments made by individual patients to the PTTSP and then inaccurately reported the amount of currency payments made by the patients in order to conceal her embezzlement. The government has charged that Ms. Simson embezzled in excess of $800,000, but Ms. Simson maintains that the amount of stolen funds is lower. The amount of stolen funds will be determined at sentencing.

This case resulted from an investigation conducted by the Electronic Crimes Task Force staffed by members of the United States Secret Service, Syracuse Resident Office, and Syracuse Police Department. The case is being prosecuted by Assistant U.S. Attorney Gwendolyn Carroll. Sentencing is currently set for September 13,2013 at 10:00 in Utica, New York.

All press inquiries may be made to Executive Assistant United States Attorney John G. Duncan, who may reached at (315) 448-0672.

Albany, New York – United States Attorney General Eric Holder today announced the appointment of Northern District of New York United States Attorney Richard S. Hartunian to serve a two-year term on the Attorney General's Advisory Committee (AGAC). Hartunian was one of six U.S. Attorneys appointed to the AGAC, comprised of the U.S. Attorneys selected from 16 of the 93 federal judicial districts in the United States, plus the U.S. Attorney for the District of Columbia and representatives of the three litigating divisions led by U.S. Attorneys – criminal, civil, and appellate.

United States Attorney Hartunian said, “I am honored to have been appointed by Attorney General Holder to serve on his Advisory Committee, and look forward to working with him and the U.S. Attorneys representing other districts to protect, promote, and enhance the fair administration of justice across our nation.”

Hartunian has served as the United States Attorney for the Northern District of New York since the beginning of 2010. He had been an Assistant United States Attorney since 1997, serving as the Northern District’s Narcotics Chief and Organized Crime Drug Task Force Coordinator from 2006 until he became U.S. Attorney. He is a 1983 graduate of Georgetown University and 1986 graduate of Albany Law School of Union University. Prior to joining the U.S. Attorney’s Office, Hartunian served as an Assistant District Attorney for the Office of District Attorney in Albany County and worked in private practice.

The Attorney General’s Advisory Committee was established in 1973; it is responsible for considering and making recommendations to the Attorney General regarding establishing and modifying the policies and procedures of the U.S. Department of Justice, cooperating with State Attorneys General and other state and local officials, promoting greater consistency in the application of legal standards, and formulating programs to improve the quality of justice at all levels throughout the United States.

The Attorney General’s press release announcing the appointment of U.S. Attorney Hartunian and five other U.S. Attorneys is attached.

United States Attorney, Richard S. Hartunian, announced that William P. Stiles, 43, of Deposit, Broome County, New York, was sentenced today in United States District Court to twenty four weekends of incarceration, and five years supervised release for the felony crimes of wire fraud and tax evasion.

Stiles was chief operating officer and part owner of Aeden Waterford, Inc. (AWI), a payroll and human services company located in the city of Binghamton. Stiles stole more than $500,000 from approximately 100 business clients of AWI between November, 2005, and November, 2010. The money stolen by Stiles was supposed to be used by Stiles to pay client employment withholding taxes, but instead was deposited by Stiles into Stiles’ personal bank accounts. Stiles used the funds stolen from AWI clients for his own personal benefit. Stiles further admitted he evaded income taxes due on the stolen money.

In addition to home confinement and supervised release, District Court Judge Thomas J. McAvoy ordered Stiles to pay $64,466.00 in back taxes to the Internal Revenue Service, and $529,607.29 in restitution to the victims of his crime.

The case was investigated by the Internal Revenue Service, Criminal Investigations, the Federal - Bureau of Investigation, Binghamton Resident Office, and was prosecuted by the U.S. Department of Justice, U.S. Attorney’s Office.

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that AMADIS HUNTER, age 25, of Syracuse, was sentenced today in U.S. District Court in Syracuse to 89 months imprisonment for his role in conspiring to engage in a pattern of racketeering activity through his membership in the Bricktown Gang, a violent street gang operating on the streets of Syracuse.

As part of his plea, HUNTER admitted that the Bricktown Gang operated within the City of Syracuse from at least 2000 through the present and that members of the Bricktown Gang: (1) maintain a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine, cocaine and marijuana; (2) protect that exclusive crack distribution territory with violence if necessary; (3) obtain drugs from suppliers in New York City and elsewhere; (4) project a very violent attitude and respond to violence with violence in order to preserve their stature in the gang community; (5) on occasion use hand signs, wear blue colored bandanas and have tattoos, all of which are intended to signify their gang membership; (6) use criteria such as willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carry and use firearms in connection with their gang activity.

This case involved multiple acts of violence and drug distribution carried out by various gang members on a regular basis, as alleged in the Indictment, including but nor limited to 2 instances of knife violence, 2 murders, 8 other shootings, 7 other acts of gun possession, 12 acts of crack distribution and/or possession with intent to distribute crack, and a major gang assault that occurred within a Denny’s restaurant on Erie Boulevard in Dewitt, New York.

With respect to the two murders, the Indictment includes allegations that gang members killed innocent victims on two separate occasions as gang members sought retaliation against rival gang members. One such allegation involves the November 2010 murder by Bricktown gang member SAQUAN EVANS of a 20 month old child named Rashad Walker, Jr., as Walker sat in a car seat with his mother by his side in the 300 block of Coolidge Avenue. The other murder allegation involves the September 2007 fatal shooting by Bricktown gang members JARRELL WILLIAMS and ERNEST HESTER of Anthony Ford in the 1600 block of East Fayette Street, Syracuse. A female who was with Ford at the time was shot in the head but survived. EVANS, WILLIAMS and HESTER have not pled guilty and are expected to go to trial on this federal RICO charge later this summer. The 11 other defendants 1 in this case have all pled guilty and many of them have already been sentenced to varying lengths of imprisonment.

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: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Troopers, and the United States Marshals Service. The Onondaga County District Attorney’s Office also assisted in the investigation.

Further questions or inquiries may be directed to Assistant U.S. Attorney, John M. Katko, who is handling the case, at (315) 448-0672.

Defendants jeopardize integrity of program meant to assist hard working Americans

Albany, New York--RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that seven United States Postal Service employees have plead guilty to making false statements to obtain unemployment benefits to which they were not entitled. These guilty pleas are part of an ongoing national sweep targeting fraud by Postal workers in claiming unemployment benefits. In each case, the defendants lied about their eligibility for benefits by either falsely claiming to be unemployed or under-reporting their income, and fraudulently obtaining benefits ranging from $5,396 to $26,218.

All seven Postal employees entered guilty pleas to one count informations charging them with making false statements to obtain unemployment benefits they were not entitled to in violation of Title 18, United States Code, Section 1919. At the guilty plea and sentencing each defendant was ordered to pay restitution in full for the fraud they committed. The defendants and the fraud amount in each case are as follows:

Erin Gagnon, 37 of Plattsburgh, New York, $26,218; Clarence Reed, 46 of Schenectady, New York, $11,255; Nicole Martin, 41 of Brooklyn, New York, $5,396; Donnel Richardson, 30 of Brooklyn, New York, $9,007; Kelly Williams, 36 of Nyack, New York, $16,605; Angela Blazejewski, 35 of Rocky Point, New York, $11,542; and
John Congiusti, 31 of Bronx, New York, $8,896.

“We are always vigilant in enforcing the law, even when the case, sadly, involves public servants. The actions of these defendants undermine America’s trust in others serving the public and impede the system in benefitting those truly in need,” said United States Attorney Richard S. Hartunian. “Unemployment benefits are meant to provide crucial financial assistance to workers who become unemployed through no fault of their own. We will continue to work with our law enforcement partners to stop fraudulent schemes such as these which ultimately hurt the American taxpayers.”

“Today’s guilty pleas highlight the importance of this multi-agency investigation to identify fraud in benefit programs such as the U.S. Department of Labor’s Unemployment Insurance Program. We will continue to work with our law enforcement partners to investigate those who seek to obtain benefits to which they are not entitled,” stated Robert Panella, Special Agent-in-Charge of the New York Regional Office of the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.

"These pleas come as a result of the excellent investigative collaboration between the U.S. Postal Service Office of Inspector General, the New York State Department of Labor- Office of Special Investigations and the Department of Labor Office of Inspector in General", said Rafael A. Medina, Special Agent in Charge of the USPSOIG's Northeast Area Field Office. "The Postal Service prides itself in its dedicated and professional employees, but the small percentage who stray away from those professional standards should know that law enforcement, at all levels, will always work closely to combat fraud against any federal or state program."

“Unemployment Insurance fraud - especially when it’s committed by government employees who should be serving taxpayers, not stealing from them – is something we at the Department of Labor have a zero tolerance policy on,” said State Labor Commissioner Peter M. Rivera. “Our Major Case Unit at the Labor Department continues to uncover these acts of deception on a daily basis and I am proud of the work we have done together with the U. S. Attorney for the Northern District of New York to bring these individuals to justice.”

This prosecution resulted from a joint investigation conducted by the U.S. Postal Service Office of Inspector General, New York State Department of Labor, Office of Special Investigations, and US Department of Labor OIG, Office of Labor Racketeering and Fraud Investigations.

This case was prosecuted by Assistant U.S. Attorney, Geoffrey J. L. Brown.

ALBANY, N.Y.—Matthew Rogers, of Miami, Florida, a citizen of the United Kingdom and a resident alien of the United States, who worked for McGinn, Smith & Co., Inc. as a senior managing director from 2007 until 2009, was sentenced today to one year of probation and ordered to pay a $10,000 fine by United States District Judge David N. Hurd, announced United States Attorney Richard S. Hartunian, Toni M. Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York Field Office, and Andrew W. Vale, Special-Agent-in-Charge, Federal Bureau of Investigation, Albany Division. The sentence follows Rogers’ November 29, 2011 guilty plea to filing a false income tax return related to his failure to declare $948,000 in fees that he had received between 2006 and 2009 in connection with private placement offerings sold by McGinn, Smith & Co., Inc.

In 2009, Rogers executed backdated promissory notes regarding some of the transactions to make it appear that they were loans. Rogers knew that these backdated promissory notes would be submitted to FINRA. In addition, on his 2009 return, Rogers falsely declared that $873,000 of the $948,000 was income in 2009 for “forgiveness of indebtedness” when he knew that this was false because the money was never a loan and was received over several tax years. Rogers admitted the following details in connection with his guilty plea:

The 2006 Fees

On September 29, 2006, Timothy M. McGinn, David L. Smith, and Matthew Rogers formed TDM Cable Funding LLC. That same day, TDM Cable Funding LLC purchased $2.6 million of cable contracts related to two Florida housing developments. The McGinn, Smith & Co., Inc. broker-dealer then raised over $3.5 million from investors seeking to invest in those cable contracts. In 2006, Rogers received $385,000 in fees from TDM Cable Funding LLC in connection with the September 2006 offering. His partners, Timothy M. McGinn and David L. Smith, received similar fees.

On January 10, 2007, Rogers submitted a personal financial statement to Mercantile Bank in Boca Raton, Florida requiring him to list all sources of income and all liabilities for 2006. Rogers concealed the $385,000 in fees that he had received in 2006 by failing to include it as income that he had received in 2006. Rogers also did not list the fees as “loans.”

In the fall of 2007, when Rogers gathered materials to prepare his 2006 federal income tax return, he called Timothy M. McGinn who told him that the $385,000 of fees were “loans,” and said “that’s the way it is.”

On October 15, 2007, Rogers signed the 2006 joint U.S. Individual Income Tax Return prepared for himself and his wife under the penalty of perjury knowing that the total income of $196,566 reported on line 22 of the return was false because it did not reflect the $385,000 in fees that he had received. The return was filed on October 18, 2007 at the Atlanta, Georgia service center.

The 2007 Fees and Return

During 2007, Rogers received $278,000 in fees in connection with three McGinn, Smith & Co., Inc. offerings which raised more than $10 million from investors.

On November 13, 2008, Rogers filed the joint 2007 U.S. Individual Income Tax Return prepared for himself and his wife under the penalty of perjury knowing that the total income reported was false because it did not reflect the $278,000 in fees that he had received in 2007.

The 2008 Fees and Return

During 2008, Rogers received $285,000 in fees in connection with a McGinn, Smith & Co., Inc. offering that raised more than $3 million from investors.

On January 20, 2009, Rogers submitted a personal financial statement to Mercantile Bank in Boca Raton, Florida requiring him to list all sources of income and all liabilities for 2008. Rogers concealed the $285,000 in fees that he had received in 2008 by failing to include it as income that he had received in 2008. Rogers also did not list the fees as “loans.”

On October 19, 2009, Rogers filed the joint 2008 U.S. Individual Income Tax Return prepared for himself and his wife under the penalty of perjury knowing that the total income reported was false because it did not reflect the $285,000 in fees that he had received.

The 2009 Fees

On June 10, 2009, Rogers received $25,000 in fees in connection with a McGinn, Smith & Co., Inc. offering which raised more than $1 million from investors.

The Execution of Backdated Promissory Notes

In November 2009, Timothy M. McGinn pressured Rogers to sign promissory notes in connection with several of the fee transactions involving TDM Cable Funding LLC. When Rogers learned about the promissory notes, he called McGinn. McGinn told Rogers that FINRA needed the notes and that Rogers had to sign them. Rogers, who did not want to be required to repay the fees that he had received, obtained a November 13, 2009 letter from McGinn, as managing member of TDM Cable Funding LLC, stating that the “debt” related to those fee transactions would be “forgiven” over four years. After receiving this fraudulent “forgiveness-of-debt” letter, Rogers executed the promissory notes. The only date on the promissory notes was the date of each transaction. Although Rogers knew that the promissory notes would be provided to FINRA, Rogers did not date his signature, and the promissory notes did not reveal that Rogers signed them in November 2009, more than two years after the transactions had actually occurred.

The 2009 Return Falsely Declaring $873,000 as “Forgiveness of Indebtedness”

On October 15, 2010, after Rogers became aware of the federal criminal investigation, Rogers filed his 2009 income tax return declaring $873,000 of the $948,000 of fees that he had received from 2006 through 2008 as income. Rogers falsely described the $873,000 as “forgiveness of indebtedness” despite knowing the fees had never been a loan and that he had an express agreement with McGinn that he would not have to repay the fees.

The total amount of loss is the tax loss resulting from Rogers's failure to declare the $948,000 that he received in fees.

The investigation was conducted by the Criminal Investigation Division of the Internal Revenue Service and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorneys Elizabeth C. Coombe, Richard D. Belliss, and Wayne A. Myers of the United States Attorney’s Office for the Northern District of New York.

LOCAL CONTACT: Elizabeth C. Coombe
Assistant U.S. Attorney
Tel: (518) 431-0247

Syracuse, New York —United States Attorney Richard S. Hartunian announced that BRYAN M. COLE, 30, of Cicero, New York pled guilty today in United States District Court to attempting to persuade a child he believed to be 11 years old to engage in unlawful sexual contact with him.

In his plea today, COLE admitted that in 2010 he contacted a female child on the Internet. After the child’s parents reported his sexually inappropriate chats to police, law enforcement took over the child’s account, and continued to correspond with COLE. Today COLE admitted that in those chats it was clear to him that the child was 11 years old, that he discussed engaging in sexually explicit conduct with the child, and that he arranged to meet with the child at a North Syracuse apartment on December 23, 2010, a day he believed was her 12th birthday, with the intent to engage in sexual conduct with her. When COLE arrived at the apartment as arranged, he was met by members of the New York State Police and arrested. He has remained in federal custody since his arrest.

COLE is scheduled to be sentenced for his offense on August 23, 2013 before Hon. David N. Hurd in Utica, New York. He faces a mandatory minimum sentence of 10 years, with a maximum sentence of life imprisonment. Any sentence of imprisonment must be followed by a term of supervised release of no less than 5 years, and up to life. He will also be required to register as a sex offender, and may be fined up to $250,000.

COLE’s arrest was a result of investigation by the City of Fulton Police Department and the New York State Police, with the assistance of the United States Secret Service, and is being prosecuted by Assistant United States Attorney Lisa Fletcher. This cooperative investigation and federal prosecution is a 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.