Northern District of New York

ALBANY, NEW YORK - Richard S. Hartunian, United States Attorney for the Northern District of New York, said, “The searches today of locations associated with New York State Assembly Member William Scarborough are part of an ongoing investigation about which there will be no further comment at this time. Mr. Scarborough has not been charged and is presumed innocent.”

Federal Search Warrants Executed At 9 Locations In The Binghamton, New York Area.

BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that 14 members and associates of the Bloods Street Gang known as the “MacBallers” were charged today by way of a felony criminal complaint in federal court in Binghamton, New York with Engaging in a Drug Trafficking Conspiracy, pursuant to Title 21, United States Code, Sections 841(a)(1) and 846. Federal, state and local law enforcement teams executed arrest warrants in the greater Binghamton, New York area as well as in New York City. Defendants will make their appearances later today before a federal magistrate judge in federal court. Additionally, law enforcement also executed federal search warrants at 9 locations in the Binghamton, New York area including at the nightclub called “17 East”, located at 348 Clinton Street, Binghamton, New York, which was utilized and frequented by members of the MacBallers gang.

The investigation leading to today’s arrests and charges was conducted by members of a task force comprised of the U.S. Attorney’s Office, Binghamton, New York; FBI Albany Field Office and FBI New York Field Office; Broome County District Attorney’s Office; Binghamton Police Department; New York State Police; Broome County Sheriff’s Office; Johnson City Police Department; Endicott Police Department; and the U.S. Marshal’s Service.

The federal felony complaint charges that starting in September of 2009 and continuing up to the present, members and associates of the “MacBallers” set of the “Bloods” Street Gang operated in Binghamton, New York and were responsible for distributing large quantities of controlled substances including cocaine base (crack cocaine), powder cocaine, heroin, and marijuana in the greater Binghamton area. The complaint also charges that MacBaller members utilized rental vehicles and rental apartments to facilitate their drug trafficking conspiracy in order to “cook”, package, store, and transport controlled substances; utilized prepaid cellular telephones to contact drug customers and gang associates, both affiliated and unaffiliated to the MacBallers, in order to distribute controlled substances; engaged in gang meetings at various locations in the Binghamton area; utilized firearms including handguns to commit assaults, shootings, and to threaten others in furtherance of the MacBallers’ drug trafficking conspiracy.

The federal felony complaint also charges as follows as to each defendant:

a. DEREK CARR a/k/a “Jinx”, 29 years old, is affiliated to the Bloods Street Gang and believed to a member of the MacBallers. DEREK CARR is a close, personal associate of SAQUAN JOHNSON and who supplied SAQUAN JOHNSON with controlled substances including crack cocaine and heroin. DEREK CARR communicated with SAQUAN JOHNSON regarding the cooking, packaging, acquisition, and distribution of controlled substances including crack cocaine and heroin.

b. COURTNEY DOUGLAS a/k/a “Poppy”, 32 years old, is a member of the MacBallers who received supplies of crack cocaine and heroin from SAQUAN JOHNSON as well as crack cocaine from CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. and then distributed those controlled substances to drug customers. COURTNEY DOUGLAS communicated with other members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, and JUAN PENA regarding the acquisition, distribution, and resale of controlled substances including crack cocaine and heroin.

c. LAMONT CLEMONS a/k/a “Stime”, 39 years old, is believed to be a family relative (cousin) of CALVIN JOHNSON and who transported supplies of controlled substances and distributed controlled substances on behalf of CALVIN JOHNSON. LAMONT CLEMONS also supplied SAQUAN JOHNSON with controlled substances including crack cocaine, heroin, powder cocaine, and marijuana. LAMONT CLEMONS communicated with SAQUAN JOHNSON regarding the acquisition, storage, transportation, distribution, and resale of controlled substances including crack cocaine, powder cocaine, heroin, and marijuana.

d. CHAD EDWARDS a/k/a “Chaddy O”, 31 years old, is a high ranking member of the MacBallers who was responsible for distributing large quantities of crack cocaine in Binghamton, New York. CHAD EDWARDS worked closely with JUAN PENA AND REGINALD SIMMONS, JR. to distribute controlled substances and shared the same cellular telephones with these individuals. CHAD EDWARDS communicated with other members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, JUAN PENA, REGINALD SIMMONS, JR., SHARELL HOLTON, and COURTNEY DOUGLAS regarding the acquisition, packaging, and distribution of controlled substances.

e. SHARELL HOLTON a/k/a “Rell”, 35 years old, is a known controlled substances distributor in Binghamton, New York who is believed to have been supplied by members of the MacBallers’ drug trafficking conspiracy including JOHN MELVILLE, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. She allowed members of the MacBallers’ drug trafficking conspiracy, including JOHN MELVILLE and BRIAN WEST, to utilize her residence in Endicott, New York and distribute controlled substances from her residence. SHARELL HOLTON communicated with other known members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, and JUAN PENA regarding the acquisition, storage, and distribution of controlled substances as well as the collection of drug proceeds.

f. LESLIE HUGHES a/k/a “Les”, 41 years old, is a Bloods Street Gang member and a known controlled substances distributor in Binghamton, New York who supplied SAQUAN JOHNSON with controlled substances including crack cocaine. LESLIE HUGHES worked for CALVIN JOHNSON and supplied SAQUAN JOHNSON with controlled substances to include crack cocaine. LESLIE HUGHES communicated with SAQUAN JOHNSON regarding the acquisition, cooking/mixing, packaging, and distribution of controlled substances, including crack cocaine, and the collection of drug proceeds.

g. CALVIN JOHNSON a/k/a “Cal”, 38 years old, is a known controlled substances distributor in Binghamton, New York who operated the nightclub, “17 East”, which was utilized and frequented by members of the MacBallers’ drug trafficking conspiracy. He also supplied SAQUAN JOHNSON, LAMONT CLEMONS, LESLIE HUGHES, and others with controlled substances including crack cocaine, powder cocaine, and marijuana. CALVIN JOHNSON communicated with SAQUAN JOHNSON regarding the acquisition, distribution, and storage of controlled substances including crack cocaine, powder cocaine, and marijuana, as well as the acquisition of a handgun/firearm.

h. SAQUAN JOHNSON a/k/a “Banga” a/k/a “Sa”, 23 years old, is a member of the MacBallers gang and is known as an enforcer/shooter who was responsible for the distribution of large amounts of crack cocaine, powder cocaine, heroin, and marijuana to other members of the MacBallers’ drug trafficking conspiracy including GERALD NORFLEET and COURTNEY DOUGLAS. SAQUAN JOHNSON was supplied with controlled substances from CALVIN JOHNSON, LAMONT CLEMONS, DEREK CARR, CHAD EDWARDS, JUAN PENA, REGINALD SIMMONS, JR., and DAYNELL ROWLAND. SAQUAN JOHNSON also communicated with other members of the MacBallers’ drug trafficking conspiracy including DEREK CARR, COURTNEY DOUGLAS, LAMONT CLEMONS, CHAD EDWARDS, SHARELL HOLTON, LESLIE HUGHES, CALVIN JOHNSON, GERALD NORFLEET, JUAN PENA, DAYNELL ROWLAND, and REGINALD SIMMONS, JR. regarding the acquisition, distribution, transportation, and cooking/mixing of controlled substances including crack cocaine, powder cocaine, heroin, and marijuana, as well as robberies, assaults, and firearms violations.

i. JOHN MELVILLE a/k/a “Flip” a/k/a “Fat Boy”, 29 years old, is a high ranking member of the MacBallers gang. JOHN MELVILLE was known to traffic large quantities of controlled substances including crack cocaine and powder cocaine into Binghamton, New York in order to distribute controlled substances and supply additional members of the MacBallers’ drug trafficking conspiracy including SHARELL HOLTON, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR.

j. GERALD NORFLEET a/k/a “G”, 55 years old, purchased controlled substances from SAQUAN JOHNSON and distributed controlled substances including crack cocaine. Additionally, he collected drug proceeds derived from controlled substance sales on behalf of SAQUAN JOHNSON AND LAMONT CLEMONS. GERALD NORFLEET also provided transportation for SAQUAN JOHNSON in order to facilitate drug transactions in furtherance of the MacBallers’ drug trafficking conspiracy. GERALD NORFLEET communicated with SAQUAN JOHNSON regarding the acquisition, packaging, and distribution of controlled substances, and the collection of drug proceeds derived from the sales of controlled substance including crack cocaine.

k. JUAN PENA a/k/a “John John”, 30 years old, is a high ranking member of the MacBallers who was responsible for distributing large quantities of crack cocaine. At one time, JUAN PENA also paid CALVIN JOHNSON an amount of United States currency to control and operate various illegal gambling games at CALVIN JOHNSON’S nightclub, “17 East.” JUAN PENA also communicated with other members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, CHAD EDWARDS, REGINALD SIMMONS, JR., SHARELL HOLTON, COURTNEY DOUGLAS, and others regarding the acquisition and distribution of controlled substances.

l. DAYNELL ROWLAND a/k/a “Daylo”, 31 years old, is a suspected member of the MacBallers who resides in Syracuse, New York and was responsible for supplying SAQUAN JOHNSON and others with large amounts of controlled substances including marijuana and heroin. DAYNELL ROWLAND introduced SAQUAN JOHNSON to his (DAYNELL ROWLAND’S) heroin supplier residing in the New York City area so SAQUAN JOHNSON could obtain large quantities of heroin directly from this individual. DAYNELL ROWLAND also expressed a desire for SAQUAN JOHNSON to become his main heroin distributor in Binghamton, New York. DAYNELL ROWLAND communicated with SAQUAN JOHNSON regarding the acquisition, cooking, packaging, and distribution of controlled substances, and the collection of drug proceeds derived from the sales of controlled substances.

m. REGINALD SIMMONS, JR. a/k/a “Reg” a/k/a “Moe”, 30 years old, is a member of the MacBallers who was responsible for distributing large quantities of crack cocaine. REGINALD SIMMONS, JR. worked with JUAN PENA AND CHAD EDWARDS to distribute controlled substances and shared the same cellular telephones with them for the purpose of distribution of controlled substances. REGINALD SIMMONS, JR. also communicated with other additional members of the MacBallers’ drug trafficking conspiracy including SAQUAN JOHNSON, JUAN PENA, CHAD EDWARDS, SHARELL HOLTON, and COURTNEY DOUGLAS regarding the demand, acquisition, packaging, and distribution of controlled substances.

n. BRIAN WEST a/k/a “West”, 27 years old, is a member of the MacBallers who was responsible for distributing large quantities of crack cocaine.

BRIAN WEST trafficked controlled substances into the Binghamton, New York area with JOHN MELVILLE and who supplied other members of the MacBallers’ drug trafficking conspiracy including SHARELL HOLTON, CHAD EDWARDS, JUAN PENA, and REGINALD SIMMONS, JR. BRIAN WEST also utilized SHARELL HOLTON’S residence to distribute controlled substances.

If convicted, each defendant faces an imprisonment term of at least 10 years and up to life.

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

ALBANY, NEW YORK – PATRICIA ALFIERI, 53, of Schenectady, New York, was sentenced by Chief United States District Judge Gary L. Sharpe to 41 months imprisonment for mail fraud and filing a false return, announced United States Attorney Richard S. Hartunian and Internal Revenue Service Criminal Investigation Division Acting Special Agent in Charge Shantelle P. Kitchen. ALFIERI was also ordered to pay restitution to the Internal Revenue Service in the amount of $47,484.

As part of her December 4, 2013, guilty plea, AFLFIERI admitted that she mailed 65 bogus checks totaling more than $3.6 million to the IRS while she was a New York State Department of Taxation and Finance employee. ALFIERI’S actions caused the IRS to issue her more than $87,000 in bogus “overpayment refunds”. ALFIERI also admitted that she filed a false income tax return, over-reporting her federal income tax withholding and fabricating home mortgage interest and real estate tax payments.

The case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigation Division, and was prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

Received Thirty Months in Prison for Stealing from Vulnerable Seniors

ALBANY, NEW YORK – JASON S. KATZ, age 47, of Quebec, Canada, was sentenced today to thirty months in prison by United States District Court Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent-in-Charge Nicholas J. DiNicola. The defendant was also fined $10,000 and required to pay restitution of $8,000 to two victims. The sentence follows KATZ’s September 27, 2013 guilty plea to two counts of wire fraud. Judge D’Agostino ordered that KATZ begin serving his sentence immediately.

According to the plea agreement, between May and August 2012, KATZ was involved in an international telemarketing scheme targeting elderly victims. The victims, ages 95 and 86 at the time, were repeatedly solicited over the telephone and instructed to wire tens of thousands of dollars to KATZ’s bank account in Plattsburgh, NY. The victims were told the money would be used to help arrange for the release of the victim’s child or grandchild from a Mexican jail and to pay fines associated with traffic accidents. At times, the caller impersonated the victim’s child or grandchild. KATZ was in Europe on a cruise in July 2012 when one of the victims wired him $42,000 under the belief that the funds would be used to help procure the release of her grandson from a Mexican jail. Judge D’Agostino described the fraud as “despicable.”

This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations, the Columbia Township Police Department in Brooklyn, Michigan, and the Waterloo, New York Police Department. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.

Charges included Interstate Travel in Aid of Racketeering and Concealment Money Laundering.

SYRACUSE, NEW YORK – William D. Humphries, age 67, of Lake City, South Carolina, was sentenced today principally to a term of 72 months imprisonment by the Hon. Norman A. Mordue. On November 11, 2013, Humphries was convicted after a two week long jury trial of one count of interstate travel in aid of racketeering, in violation of Title 18, United States Code, Section 1952(a)(1) and (a)(3), one count of a wire fraud conspiracy to defraud Canada of tax revenue, in violation of Title 18, United States Code, Sections 1343 and 1349, one count of a conspiracy to manufacture of tobacco products without a license in violation of Title 26, United States Code, Section 5672 and Title 18, United States Code, Section 371, and forty-one counts of concealment money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i).

Between 2005 and 2006, the defendant, a tobacco broker and wholesaler from South Carolina, conspired with other individuals living on the Akwesasne Indian Reservation (AMIR) to defraud Canada of tax revenue. In 2005, the defendant began working with a major manufacturer of cigarettes that was operating on the AMIR without the federally required bond and permit. The defendant provided “Canadian Blend” cut-rag tobacco and cigarette-making supplies to the unlicensed manufacturer. This tobacco was manufactured into cigarettes and subsequently smuggled into Canada without the payment of any legally required taxes to Canada. Between the summer of 2005 and May 2006, the defendant supplied the unlicensed manufacturer with approximately one load of cut-rag tobacco per week. The defendant supplied approximately 44 loads of tobacco, with each load producing 13,200,000 contraband cigarettes, causing a tax loss to Canada of approximately $40,000,000.

The unlicensed manufacturer was also engaged in a conspiracy to distribute marijuana smuggled in from Canada and then distributed throughout the United States. The proceeds of that marijuana distribution were used to fund the cigarette smuggling conspiracy, which employed the same smuggling routes used to bring marijuana into the United States from Canada.

In February 2006, after delivering a load of tobacco to the unlicensed manufacturer on the AMIR, the defendant was stopped on the AMIR for a vehicle infraction. Law enforcement officers seized approximately $88,000 in U.S. currency paid to Humphries for the sale of tobacco. A narcotics detection canine alerted to the currency, and officers were able to smell marijuana on the money. At trial, witness testimony established that the money found on Humphries was the proceeds of marijuana distribution.

In May 2006, the unlicensed manufacturers dealing with Humphries were arrested on federal marijuana charges and thereafter cooperated with the government. However, Humphries continued to sell tobacco and cigarette-making supplies to other unlicensed cigarette manufacturers based on the AMIR. Humphries continued to receive payments in the form of proceeds of marijuana sales from unlicensed manufacturers to which he had sold Canadian blend tobacco and supplies. In an attempt to disguise the source of the money, which was criminal proceeds, Humphries began taking substantial sums of U.S. currency to the Mohawk Bingo Palace, located on the AMIR. In recorded conversations heard by the jury with one of the government informants, he explained that he was inserting large sums of currency into the electronic bingo machines and then repeatedly cashing out at the cashiers’ window in an attempt to clean the marijuana smell from the money.

At sentencing, the Court ordered Humphries pay a special assessment of $4,400. The Court also ordered a money judgment against Humphries in the amount of $7,000,000. After the defendant completes his term of incarceration, he will serve a term of supervised release of 3 years.

The prosecution arose from the investigative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Royal Canadian Mounted Police, the Alcohol and Tobacco Tax and Trade Bureau, St. Regis Mohawk Tribal Police Force, Homeland Security Investigations, the Drug Enforcement Administration, the Massena Police Department, the United States Border Patrol, and the Rensselaer County Sheriff’s Office.

The government was represented at sentencing by Assistant United States Attorney Carl Eurenius. For further information, please contact AUSA Eurenius at (315) 448-0672.

SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced that David J. Renz, 30, of North Syracuse was sentenced in federal court in Syracuse today on one count of receiving and five counts of possessing child pornography.

United States Senior District Court Judge, Hon. Norman A. Mordue sentenced Renz to a total of 30 years in federal prison: 20 years on his conviction for receiving child pornography, to be served consecutively to concurrent 10 year sentences on each of the possession charges. Mordue ordered that the sentence shall run consecutively to the state court sentence Renz faces in Onondaga County Court based upon his guilty pleas there to Predatory Sexual Assault Against a Child and Murder in the First Degree, for crimes he committed while on pre-trial release for the child pornography charges. The state court sentencing is tentatively scheduled for May 16, 2014 in Onondaga County Court.

If ever released, Renz was ordered to be placed on federal supervised release for life, and will have to register as a sex offender.

Renz's arrest on the child pornography charges was the result of an investigation by the Federal Bureau of Investigation as a part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys’ Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.

The federal prosecution was handled by Assistant U.S. Attorney Lisa Fletcher.

Defendant Faces Imprisonment term of 10 years to Life

BINGHAMTON, NEW YORK - United States Attorney Richard S. Hartunian announced that Alexandria Samson Davall, from Utica, New York, pleaded guilty today in federal court to an offense charging her with Sex Trafficking Of A Child.

In pleading guilty, Davall admitted that in and about February of 2012, in the Broome, Oneida, and Onondaga counties in the Northern District of New York and elsewhere, defendant Alexandria Samson Davall and others, aiding and abetting each other, while in and affecting interstate commerce, did knowingly recruit, entice, harbor, transport, provide, obtain, and maintain by any means a person with the initials M.L., who had not attained the age of 18 years, knowing, or in reckless disregard of the fact that M.L. would be caused to engage in one or more commercial sex acts, and did benefit, financially and by receiving things of value, from participation in the venture which has engaged in the act described above, in violation of Title 18, United States Code, §§ 1591(a) & (b) and 2.

Davall further admitted that she and others, while aiding and abetting each other, knowingly recruited, enticed, harbored, transported, provided, obtained, and maintained a minor with the initials M.L., who was 16 years of age at the time, in order to prostitute M.L. to adult men in exchange for money and controlled substances. Davall and the others photographed and caused M.L. to be photographed in sexually seductive poses wearing only lingerie and posted said photographs of M.L. on Backpage.com, an internet classified advertising website, offering M.L. for sex in exchange for money. Additionally, Davall and the others utilized cellular telephones to send mass cellular texts offering M.L. for sex to customers in exchange for money. Furthermore, Davall and the others transported and caused M.L. to be transported to various locations including hotels where M.L. was instructed and caused to engage in commercial sex acts, in that, M.L. engaged in sexual acts including intercourse and oral sex with customers in exchange for money and controlled substances. Davall and the others benefitted, both financially and by receiving things of value, by prostituting M.L. to customers, in that, Davall and the others shared the money and controlled substances acquired from customers with whom M.L. was caused to engage in sex acts.

The federal charge stems from an investigation conducted by the FBI-Albany Division, New York State Police, Oneida County District Attorney’s Office, Utica Police Department, and the Oneida County Child Advocacy Center. The investigation concerned a prostitution ring involved in selling a minor to engage in sexual conduct in exchange for money and drugs. The prostitution ring utilized the website Backpage.com to advertise the prostitution. The ring also utilized a texting network to advertise their prostitution business. The Oneida County District Attorney has charged several other defendants with state crimes in connection to this overall joint investigation. The investigation is continuing.

Davall continues to be held in the custody of the U.S. Marshal’s Service pending sentencing. Davall is scheduled to be sentenced on July 22, 2014. At sentencing, she faces a statutory mandatory minimum term of 10 years prison and a maximum of life. The maximum possible fine is $250,000.

Faces New Jail Term of Up To 5 Years

SYRACUSE, NEW YORK – Paul Raymond Ross, 59, of Endwell, NY pled guilty today in United States District Court before the Honorable Thomas J. McAvoy to Interstate Stalking of a former witness against him in a previous federal prosecution – announced United States Attorney Richard S. Hartunian. In 2008 Ross pled guilty to making extortionate demands for $20,000 from a victim who has been identified publically by the initials “K.O.D.” The victim in that previous case provided assistance to the Federal Bureau of Investigation, including by producing copies of threatening communication received from the defendant. As a result of his plea in that earlier case, Ross was sentenced to 27 months in prison, followed by 3 years of supervised release. Upon completion of his sentence, Ross immediately began to stalk KOD electronically. That is, Ross began to send out thousands of electronic messages to the victim’s clients, her employees, the media, and, via the mail, to her in any effort to harass, injure, and cause her severe emotional distress and financial damage. Ross posted threatening photographs and made false statements about her.

On October 31, 2013, Ross was indicted by a federal grand jury for Retaliation Against a Witness and Interstate Stalking. He is being held in pretrial detention. His guilty plea today subjects him to a maximum possible penalty of 5 years in jail, a $250,000 fine, and 3 years of supervised release. Sentencing has been set for June 4, 2014 at 9:30 AM in Binghamton, NY.

This matter was investigated by Special Agents of the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorney Craig A. Benedict, who may be reached at 315-448-0672 with questions about the case.

ALBANY, NEW YORK – RAYMOND T. DRAKE, age 53, of Albany, New York, pled guilty today in Albany before Chief United States District Judge Gary L. Sharpe to two counts of distribution of child pornography, one count of receipt of child pornography, and three counts of possession of child pornography, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent in Charge Nicholas DiNicola. DRAKE, who was detained pending his sentencing, faces at least five years of imprisonment and up to 120 years of imprisonment.

As part of his guilty plea, DRAKE admitted that he distributed images of child pornography by e-mail and through a Peer-to-Peer file sharing program. On January 25, 2013, investigators searched DRAKE’s residence and recovered hundreds of images and several videos depicting child pornography. Sentencing is scheduled for July 7, 2014, in Albany, New York.

This case was investigated by the Department of Homeland Security, Homeland Security Investigations, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

LOS ANGELES – A Northern California man has been convicted of federal fraud charges for his involvement in a $7 million investment scheme that lured investors with false promises relating to the development of an alternative energy technology, Richard S. Hartunian, the United States Attorney for the Northern District of New York, announced today.

Richard M. Rossignol, 63, who now resides in Shingle Springs, California, was convicted on February 28 of one count of conspiracy to commit mail and wire fraud. The jury took less than six hours to render its verdict on the sole count.

United States District Judge Audrey B. Collins presided over the seven-week trial in United States District Court in Los Angeles. Following the verdict on Friday, Judge Collins scheduled a sentencing hearing for June 16. At sentencing, Rossignol faces a sentence of up to 20 years in federal prison.

Rossignol and a co-defendant – William A. Stehl, 69, of Ventura – were arrested in Oxnard, California four years ago in connection with an indictment filed in the Northern District of New York. Both men were charged with conspiracy to commit mail and wire fraud. Additionally, Stehl was charged with several tax charges and lying to federal agents.

The conspiracy count alleged that from 2001 up to the time of the indictment in March 2010, Stehl, Rossignol and others induced victims to invest money in companies that were purportedly developing or utilizing an alternative energy source Stehl claimed he had developed. Investors were told that one of Stehl’s applications related to the processing of precious metals allegedly contained in a slag pile in Silver City, New Mexico.

Stehl and Rossignol were charged with fraudulently obtaining money from investors by making false representations about the status of the process, claiming that contracts and licensing agreements had either been signed, or were about to be signed, and would result in significant financial returns for the investors. Stehl and Rossignol obtained more than $7 million from more than 300 victims. None of the investors received the returns promised by Stehl and Rossignol, and most of the money obtained was used for personal expenditures by Stehl and Rossignol.

Stehl was living near Saranac Lake in New York when the scheme started. Stehl moved to Southern California in late 2005, and Rossignol was convicted of conspiring with Stehl and others up to the time of the indictment. Fraud victims lived across the nation, including in Sacramento, California; Los Angeles; Charleston, West Virginia; and New York.

The indictment was originally filed in the Northern District of New York, but in October 2012, the case was transferred to the Central District of California to accommodate Stehl, who received injuries in an explosion occurring in a building in Sylmar, California, on August 9, 2011.

In November 2013, Judge Collins granted a request by Stehl’s attorneys to have a separate trial. Stehl is now scheduled to go to trial on July 22. Rossignol is free on bond.

The investigation in this case was conducted by Special Agents of the Internal Revenue Service Criminal Investigation, New York Field Office, and the Federal Bureau of Investigation, Albany, New York Resident Agency. The case is being prosecuted by Assistant United States Attorney Kevin P. Dooley of the Binghamton branch office in the Northern District of New York. Additional inquiries can be directed to AUSA Dooley at (607) 773-2887.

ALBANY, NEW YORK - Charles E. Fuller, 46, of Corinth, New York, a Saratoga County Deputy Sheriff, was charged today by criminal complaint with attempting to aid and abet the possession with intent to distribute 500 grams or more of cocaine, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. Fuller was arrested earlier today at the Saratoga County Sheriff’s Office and appeared before United States Magistrate Judge Christian F. Hummel at 3:00 p.m. A detention hearing is scheduled before United States Magistrate Judge Randolph F. Treece on March 3, 2014 at 2:00 p.m. If convicted, Fuller faces a maximum of 40 years in prison, a mandatory minimum period of imprisonment of 5 years, and a maximum fine of $5,000,000.

The complaint alleges that on or about February 27, 2014, members of the Federal Bureau of Investigation, with the assistance of a FBI confidential source, arranged for a controlled delivery by Charles E. Fuller of what was purported to be one kilogram of cocaine. After Fuller transported the confidential source and one kilogram of a substance the confidential source claimed was cocaine from a location in Albany County to a location in Warren County, the FBI confidential source paid Fuller $4,000 in prerecorded currency. Fuller is alleged to have engaged in this conduct while he was off-duty.

U.S. Attorney Hartunian said, “This is a difficult day for law enforcement in Saratoga County and beyond. The conduct by Deputy Sheriff Fuller alleged in the complaint constitutes a betrayal of both the citizens in the community that he is sworn to protect, but also the countless honest and dedicated law enforcement officers who put their lives on the line every day to keep us safe. We will continue to work with the FBI and our state and local law enforcement officers to root out this conduct wherever it lies.”

Special Agent in Charge Andrew W. Vale stated, “Corrupt law enforcement officers insult the many honorable officers who serve with integrity. Any law enforcement officer who violates his oath to protect the community and instead takes part in criminal activity should expect the same outcome as a criminal. The public has the right to be assured of the integrity of its public servants, in particular those charged with enforcing the law. Today’s arrest serves as a reminder that no one is above the law and that the FBI is committed to working with the law enforcement community to prevent the erosion of public trust that accompanies such incidents. I would like to extend my appreciation to Saratoga County Sheriff Zurlo for his cooperation throughout this investigation.”

Saratoga County Sheriff Michael H. Zurlo stated, "The allegations against Fuller are an affront to and undermine the integrity of the hardworking men and women of the Saratoga County Sheriff's Office. We will not tolerate corruption among our ranks. Our promise to the people of Saratoga County is that we will continue to work diligently to ensure that every member of this office deserves the respect and trust of our community."

A criminal complaint is merely a formal charge that a defendant has committed a violation of federal criminal law, and every defendant is presumed innocent until, and unless, proven guilty.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced the indictment of a physician and employee of a former Utica and Fulton area medical practice.

MAHESH KUTHURU, M.D., age 43, and BONNIE MEISLIN, age 42, were indicted by a federal grand jury in Syracuse on February 26, 2014. KUTHURU owned and operated Upstate Pain Management, which had medical offices at 59 South First Street, Fulton, New York and 287 Genesee Street, Utica, New York. BONNIE MEISLIN was an employee of Upstate Pain Management. The indictment charges MEISLIN and KUTHURU with engaging in a scheme to defraud Medicare by submitting claims for reimbursement that falsely represented that Dr. KUTHURU had performed medical services when in fact he had not. According to the indictment, KUTHURU purchased a medical practice in Las Vegas, Nevada, known as Desert Pain Management in November 2008. In July 2009 KUTHURU sold his home in Baldwinsville and purchased a home in Las Vegas. By January 2010 through at least September 2011, KUTHURU was spending the majority of his time at his Las Vegas medical practice, coming back to the Utica and Fulton offices to treat patients only a sporadic basis. The indictment further charges that from January 2010 through September 2011 there were substantial periods of time when there were no licensed medical personnel whatsoever in the Utica and Fulton offices and that patients there were seen only by unlicensed staff members who had received no formal medical training.

The indictment further charges KUTHURU with unlawful distribution of Schedule II controlled substances including Oxycodone, Oxycotin, Methadone and Morphine Sulphate.

MEISLIN had earlier been indicted on January 8 on charges of health care fraud. The recent indictment further specifies the nature of those charges. KUTHURU was arrested in Las Vegas on February 28. He is scheduled to appear for arraignment before United States Magistrate Judge Therese Wiley Dancks in Syracuse on March 12, 2014 at 2:00 pm.

Each of the thirty health fraud counts carries a maximum penalty of 10 years imprisonment and a fine of $250,000. Each of the fifteen counts of drug distribution carries a maximum penalty of 20 years imprisonment with a fine of $1,000,000.

The case was a joint investigation by the Federal Bureau of Investigation, the Drug Enforcement Administration, the New York State Bureau of Narcotics Enforcement, United States Department of Health and Human Services, New York State Worker’s Compensation Board, Safeguard Services, and Excellus Blue Cross & Blue Shield Special Investigations. The case is being prosecuted by Assistant U.S. Attorney Edward R. Broton.

The indictment merely sets forth an accusation and the defendants are presumed innocent until the charges are proved beyond a reasonable doubt.

Re-Entered United States Following 2009 Removal

ALBANY, NEW YORK – JAIR RENDON AGUILAR, age 26, a citizen of Mexico, was sentenced today to 37 months of imprisonment for illegally reentering the United States after removal by United States District Court Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian and Christopher Shanahan, Field Office Director, U.S. Immigration and Customs Enforcement, Enforcement and Removal Operations. Upon completion of AGUILAR’s sentence, he will be turned over to the Department of Homeland Security for removal proceedings. Today’s sentencing follows AGUILAR’s August 27, 2013, guilty plea.

AGUILAR was involuntarily removed from the United States to Mexico on July 16, 2009 following his 2008 conviction in King County Supreme Court for Assault 2nd Degree. On May 21, 2013, AGUILAR, who did not have permission to re-enter the United States, was encountered by Immigration and Customs Enforcement officers at the Ulster County Jail in Kingston, New York.

The case was investigated by the Department of Homeland Security, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations, Castle Point, New York.

ALBANY, NEW YORK – CHRISTOPHER J. WHITE, age 29, of Whitehall, New York, pled guilty today in Albany before United States District Judge Mae A. D’Agostino to receipt of child pornography, announced United States Attorney Richard S. Hartunian, Joseph D’Amico, Superintendent of the New York State Police, and Andrew Vale, Special Agent in Charge, Federal Bureau of Investigation. WHITE, who was detained pending his sentencing, faces at least fifteen years of imprisonment and up to forty years of imprisonment.

As part of his guilty plea, WHITE admitted that, following his 2010 Attempted Sexual Abuse in the 1st Degree conviction in Saratoga County Court, he used the Internet to search for, receive, and view images of child pornography. Sentencing is scheduled for June 9, 2014, in Albany, New York.

This case was investigated by the New York State Police and the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

TROY, NEW YORK – RICHARD S. ELY, age 27, of Troy, New York, was sentenced today to 63 months in prison by the Honorable Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian, Joseph Anarumo, Special Agent-in-Charge of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and Police Chief Steven Krokoff of the Albany Police Department. The sentence follows ELY’s February 18, 2013 guilty plea to illegally possessing a firearm.

On June 7, 2012, when executing a search warrant, police found a .22 caliber firearm and ammunition in ELY’s residence. ELY, who had two prior felony convictions (a 2007 conviction for criminal sale of a controlled substance and 2012 conviction for aggravated driving while under the influence with a child under age fifteen as a passenger), was prohibited from possessing firearms.

This prosecution resulted from an investigation conducted by the Albany Police Department and the United States Bureau of Alcohol, Tobacco, Firearms, and Explosives Albany Field Office. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.

WASHINGTON – Pharmaceutical company Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7 million to resolve criminal and civil liability arising from Endo’s marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the Food and Drug Administration (FDA), the Justice Department announced today. The resolution includes a deferred prosecution agreement and forfeiture totaling $20.8 million and civil false claims settlements with the federal government and the states and the District of Columbia totaling $171.9 million. Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern, Pa.

“FDA’s drug approval process is designed to ensure that companies market their products for uses that are proven to be safe and effective,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will hold accountable those who circumvent that process in pursuit of financial gain.”

In a criminal information filed today in the Northern District of New York, the government charged that, between 2002 and 2006, Endo Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was misbranded under the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA requires a company, such as Endo Pharmaceuticals Inc., to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. During the period of 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. The information alleges that, during the relevant time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc. was misbranded because its labeling lacked adequate directions for use in the treatment of non-PHN related pain, including low back pain, diabetic neuropathy and carpal tunnel syndrome. These uses were intended by Endo Pharmaceuticals Inc. but never approved by the FDA. The information further alleges that certain Endo Pharmaceuticals Inc. sales managers provided instruction to certain sales representatives concerning how to expand sales conversations with doctors beyond PHN and encouraged promotion of Lidoderm in workers’ compensation clinics.

In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals Inc. admitted that it intended that Lidoderm be used for unapproved indications and that it promoted Lidoderm to health care providers for those unapproved indications. Under the terms of the deferred prosecution agreement, Endo Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties and forfeiture. Endo Pharmaceuticals Inc. further agreed to implement and maintain a number of enhanced compliance measures, including making publicly available the results of certain clinical trials and requiring an annual review and certification of its compliance efforts by the Chief Executive Officer of its parent company, Endo Health Solutions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court for the Northern District of New York.

“The safety and efficacy of drugs must be shown by science, not sales pitches,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Drugs marketed for intended uses not approved by the FDA are misbranded because their labeling lacks adequate directions for those uses. This settlement emphasizes that public health is protected by labeling based on product performance, rather than profitability, and promotes enhanced efforts to ensure compliance with all requirements.”

In addition, Endo agreed to settle its potential civil liability in connection with its marketing of Lidoderm. The government alleged that, from March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs, including Medicaid, a jointly funded federal and state program, by promoting Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by the federal health care programs. Of the $171.9 million Endo has agreed to pay to resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.

“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear and honest judgment of doctors that their patients rely on and trust,” said U.S. Attorney for the Eastern District of Pennsylvania Zane D. Memeger. “Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses. This obligation takes precedence over the company’s bottom line.”

“The settlement announced today demonstrates the government’s continued scrutiny of pharmaceutical companies that interfere with FDA’s mission of ensuring that drugs are safe and effective for the American public,” said Special Agent in Charge of the FDA’s Office of Criminal Investigations’ New York Field Office Mark Dragonetti. “We will continue to work with our law enforcement partners to investigate and prosecute pharmaceutical companies that disregard the drug approval process and jeopardize the public health by engaging in the nationwide distribution of misbranded products.”

“Endo Pharmaceutical enriched themselves at the expense of the public,” said Special Agent in Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. “Patients will search for drug therapies to assist in pain management, and they deserve the right to drugs approved for such use. The FBI will continue to work with our federal partners to investigate companies such as Endo Pharmaceuticals to ensure patients are safe.”

Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General that requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which gave rise to this resolution. Among other things, the CIA requires Endo to implement an internal risk assessment and mitigation program and requires numerous internal and external reviews of promotional and other practices. The CIA also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.

“By marketing Lidoderm for uses not covered by federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”

The civil settlement resolves three lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. The actions were filed by Peggy Ryan, a former Lidoderm sales representative, Max Weathersby, another former Lidoderm sales representative and Gursheel S. Dhillon, a physician. The whistleblowers’ share of the settlement has not been determined.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

The civil settlement was handled by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Civil Division’s Commercial Litigation Branch. The criminal case was handled by the U.S. Attorney’s Office for the Northern District of New York and the Civil Division’s Consumer Protection Branch. These matters were investigated by the Federal Bureau of Investigation, the Food and Drug Administration Office of Criminal Investigation, the Department of Health and Human Services Office of Inspector General Office of Investigations, the Defense Criminal Investigative Service of the Department of Defense, the U.S. Postal Service Office of Inspector General and the Office of Personnel Management Office of Inspector General with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General and Office of General Counsel and Center for Medicare and Medicaid Services, the Food and Drug Administration’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.

Except as to conduct admitted in connection with the deferred prosecution agreement, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Ryan v. Endo Pharmaceuticals Inc., Civil Action No. 05-cv-3450, United States ex rel. Weathersby, et al. v. Endo Pharmaceuticals Inc., et al, Civil Action No. 10-cv-2039 and United States ex rel. Dhillon v. Endo Pharmaceuticals, Civil Action No. 11-cv-7767, all docketed in the Eastern District of Pennsylvania.

SYRACUSE, NEW YORK – Patricia Harrington, age 50, of Liverpool, New York, was sentenced in U.S. District Court today in connection with her guilty pleas to 11 Wire Fraud, Tax Fraud and Aggravated Identity Theft charges according to U.S. Attorney Richard S. Hartunian.

U.S. District Judge Glenn T. Suddaby sentenced Harrington to 24 months imprisonment in connection with her September 11, 2013 guilty pleas to submitting six false federal tax refund claims in the name of family members, without their knowledge, during 2011 and 2012. She also received a concurrent sentence of 24 months in connection with her guilty pleas to four counts of wire fraud in connection with a scheme to fraudulently obtain monies from the New York State Department of Labor in 2011 and 2012 by submitting false claims for unemployment benefits in the name of various family members, again, without their knowledge. Harrington also received an additional consecutive sentence of 24 months in connection with her guilty plea to Aggravated Identity Theft. Harrington had admitted she used the identity of another person to commit her crimes. She was also ordered to pay restitution to the New York State Department of Labor in the amount of $19,424 and $28,031.86 to the Internal Revenue Service along with interest and penalties.

At the time she committed these offenses she was serving a term of federal Supervised Release in connection with a conviction for a similar fraud scheme in Pennsylvania in 2009. In admitting that she violated the terms of her release, Judge Suddaby sentenced Harrington to serve an additional seven months imprisonment consecutive to the 48 month sentence imposed. She will serve a total of 55 months imprisonment. Upon her release, she is ordered to serve a term of supervised release of three years and ordered to complete 220 hours of community service.

Harrington had been previously prosecuted in Pennsylvania in 2008 for committing identity fraud over a two year period. There, she had submitted a series of fraudulent student loan applications in the names of relatives without their knowledge. In entering a guilty plea in Harrisburg in December 2008, she admitted that she had applied for approximately 13 fraudulent federal student loans, totaling some $139,000. Following her release from prison for that offense, she began serving a term of supervised release in April of 2010, which was transferred to the Northern District of New York. While living in the Syracuse area, she began the new scheme of applying for fraudulent unemployment benefits and federal tax refunds in the name of family members for which she was sentenced today.

U.S. Attorney Richard S. Hartunian stated, “I want to commend the local, state and federal investigators who worked closely together in bringing this case to justice. We will continue our efforts to seek out and prosecute those who seek to defraud honest citizens of their tax dollars.”

“New York State is a national leader in both preventing and identifying Unemployment Insurance Fraud,” said State Labor Commissioner Peter M. Rivera. “Fraud hurts businesses, those who depend on Unemployment Insurance benefits to support a family and all New Yorkers. Today’s sentencing brings to conclusion a case that exemplifies just how adept our investigators are and our mission to ensure anyone who commits fraud is caught.”

The case was investigated by the New York State Department of Labor, Office of Special Investigations, the Onondaga County Sheriff’s Department, the Onondaga County District Attorney’s Office, and the Internal Revenue Service, Criminal Division, Syracuse, New York.

The case was prosecuted by Executive Assistant United States Attorney John G. Duncan.

Guilty of methamphetamine and pseudoephedrine charges

SYRACUSE, NEW YORK – Terry R. Ross, age 52, and Wanda Kingsley, age 49, of Florence, New York, were found guilty today by a U.S. District Court jury of four felony counts, including a methamphetamine conspiracy involving the manufacture of 50 grams or more and a conspiracy to possess or distribute pseudoephedrine knowing it was intended to be used to manufacture a controlled substance - announced United States Attorney Richard S. Hartunian.

Following a three day jury trial, the defendants were convicted of a conspiracy to manufacture 50 grams or more of methamphetamine, in violation of Title 21, United States Code, Section 841(a)(1), (b)(1)(B) and 846, a conspiracy to possess or distribute pseudoephedrine knowing it was intended to be used to manufacture methamphetamine, in violation of Title 21, United States Code, Section 841(c)(1) and 846, and one count each of possessing or distributing pseudoephedrine knowing it was intended to be used to manufacture methamphetamine, in violation of Title 21, United States Code, Section 841(c)(1).

The evidence at trial showed that between 2010 and 2012, defendants Ross and Kingsley, individually and together with each other and with others, purchased pseudoephedrine pills from pharmacies in Oneida County, and knowingly provided the pills to other co-conspirators who used them on numerous occasions in the manufacture of methamphetamine. Between November 2010 and January 2012, Ross purchased pseudoephedrine pills on 21 separate occasions from Oneida county pharmacies, and Kingsley, Ross’ live-in girlfriend, purchased pseudoephedrine pills on 49 separate occasions. Ross and Kingsley also assisted in the methamphetamine manufacturing process in various ways, including procuring and assembling some of the necessary ingredients and apparatus for the meth “cook,” and providing assistance during the cooking process, in exchange for a portion of the finished product methamphetamine.

Ross is scheduled to be sentenced at 10:00 am on June 18, 2014, and Kingsley is scheduled to be sentenced at 10:15 am on that date.

The prosecution arose from the investigative efforts of the City of Oneida Police Department, the New York State Police, and the Drug Enforcement Administration.

The case was prosecuted by Assistant United States Attorney Carl Eurenius. For more information, please contact AUSA Eurenius at (315) 448-0672.

(Albany, New York) - United States Attorney Richard S. Hartunian has announced that the Northern District of New York collected $4,006,217.22 in criminal and civil actions in Fiscal Year 2013. Of this amount, $2,642,890.05 was collected in criminal actions and $1,363,327.17 was collected in civil actions. The U.S. Attorney’s Office also worked with other components of the Department of Justice to collect an additional $14,313,192.93 in cases pursued jointly. Of this amount, $2,601,102.21 was collected in criminal actions and $11,712,090.72 was collected in civil actions.

Additionally, the U.S. Attorney’s Office, working with partner agencies and divisions, collected $11,051,256 in criminal, civil and administrative forfeitures in 2013. Forfeited assets are deposited into the Department of Justice Asset Forfeiture Fund and are used to restore funds to crime victims and for a variety of law enforcement purposes.

Attorney General Eric Holder announced in January that the Justice Department collected approximately $8.1 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The more than $8 billion in collections in FY 2013 represents nearly three times the appropriated $2.76 billion budget for the 94 U.S. Attorney’s offices and the main litigating divisions in that same period.

“The department’s enforcement actions help to not only ensure justice is served, but also deliver a valuable return to the American people,” said Attorney General Holder. “It is critical that Congress provide the resources necessary to match the department’s mounting caseload. As these figures show, supporting our federal prosecutors is a sound investment.”

“As we go forward in these challenging economic times, collections continue to be a critically important part of our services to the citizens in our district," said U.S. Attorney Richard S. Hartunian. "The U.S. Attorney's Office is dedicated to protecting the public and recovering ill-gotten gains for the federal treasury and for victims of federal crime. Once again this year, the amount collected significantly exceeds the annual cost of our entire office operations."

Some notable cases in which funds were recovered by the U.S. Attorney’s Office during fiscal year 2013 include the following:

A. Forfeiture Cases

On December 19, 2012, defendant John Tebbetts, Syracuse area owner of the head shop chain known as “Tebb’s Head Shops,” was charged with and pled to possession with the intent to distribute, Schedule I controlled substances in violation of 21 U.S.C. § 841, possession with the intent to distribute a controlled substance analogue, as defined in 21 U.S.C. § 802(32), with the intent that it be used for human consumption, as provided for in 21 U.S.C. § 813, and one count in violation of 18 U.S.C. § 1957, engaging in a monetary transaction in property derived from a specified unlawful activity, for the purchase of a 2012 Forest River Berkshire Motor Home for $157,440 in U.S. Currency in the case of U.S. v. John Tebbetts. On April 22, 2013 the court signed a Preliminary Order of Forfeiture ordering the forfeiture of the 2012 Forest River Berkshire Motor Home, $286,376.37 in U.S. Currency, one 2004 Toyota Scion XB, one 2009 Cadillac CTS 4, and one 2005 GMC Savana G3500, as the proceeds of, and property facilitating the aforementioned violations.

In 2013, the U.S. Attorney’s Office forfeited $5,359,983.91 in real property, vehicles, bank accounts and currency in the case of U.S. v. Lonzinski, et al. This office is seeking to have the moneys collected thus far used to pay the restitution ordered in the amount of $14,108,623. This case involved the criminal prosecution of a mother and son, Laura Conarton and Scott Lonzinski, from the Binghamton area, who engaged in a loan fraud scheme which ultimately bankrupted the Broome County Teachers Federal Credit Union. Among the millions of dollars already seized, $162,347 has been credited to the National Credit Union Administration (NCUA) through administrative action undertaken by the U.S. Attorney’s Office. Upon the sale of forfeited real property, the remaining forfeited proceeds will be eligible for transfer to the NCUA.

B. Civil Actions

In September 2013, the Northern District of New York recovered $3.57 million as part of the settlement in the United States of America ex rel. Lynch v. Imagimed LLC, et al., a civil case filed under the False Claims Act’s qui tam provision. Imagimed LLC is a company that operated 14 different MRI sites in the Northeast, including sites in Elmira, DeWitt, Utica and Amsterdam. The settlement resolved allegations that Imagimed LLC, the company’s former owners, William B. Wolf III and Dr. Timothy J. Greenan, and the company’s former chief radiologist, Dr. Steven Winter submitted to federal healthcare programs false claims for magnetic resonance imaging (MRI) services. Imagimed owns and operates MRI facilities, located primarily in New York State, under the name “Open MRI.” More specifically, it was alleged that, from July 1, 2001, through April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims to Medicare, Medicaid and TRICARE for MRI scans performed with a contrast dye without the direct supervision of a qualified physician. Since a potential adverse side effect of contrast dye is anaphylactic shock, federal regulations require that a physician supervise the administration of contrast dye when it is used for an MRI. It was also alleged that from July 1, 2005, to April 23, 2008, Imagimed, Greenan, Wolf and Winter submitted claims for services referred to Imagimed by physicians with whom Imagimed had improper financial relationships, in that, in exchange for these referrals, Imagimed entered into sham on-call arrangements, provided pre-authorization services without charge and provided various gifts to certain referring physicians, in violation of the Stark Law and the Anti-Kickback Statute.

In March 2013, $8,065,411 was recovered as part of a $20.3 million dollar settlement in the United States of America, The State of New York and The St. Regis Mohawk Tribe v. Aluminum Company of America and Reynolds Metals Co. civil case. The settlement resolved allegations that, for decades, Alcoa Inc. (Alcoa West), Reynolds Metals Company (now Alcoa East) and the former GM Central Foundry plant, located in Massena, New York adjacent to the St. Regis Mohawk Tribe lands, had released hazardous substances into the St. Lawrence River environment. These substances, including polychlorinated biphenyls (PCBs), adversely impacted natural resources within the surrounding environment and contaminated the Mohawk community of Akwesasne by degrading natural resources used for traditional cultural practices. Most of this settlement, $18.5 million, will be combined with $1.8 million in restoration funds from a 2011 General Motors (GM) bankruptcy settlement, and used for restoration of the St. Lawrence River area. The settlement funds include the following components:

• Approximately $8.4 million of the settlement will go to the Mohawk Tribe to support traditional cultural practices, including an apprenticeship program to promote Mohawk language and traditional teachings. A portion of those funds will also support cultural institutions, including youth outdoor education programs and horticultural programs for medicine, healing and nutrition.
• More than $10 million from the GM and Alcoa/Reynolds settlements will be spent on a variety of ecological restoration projects, including restoration and/or enhancement of wetlands, stream banks, native grasslands, bird nesting and roosting habitat, fisheries and fish habitat, and acquisition of unique habitat under threat of development. These projects may also benefit cultural practices that depend on these restored natural resources.
• Nearly $2 million will be spent by Alcoa/Reynolds to develop and upgrade two boat launches on the Raquette River and construct three new launches on the Grasse River to improve fishing and boating access to rivers in the Massena area.

The litigation of this case was handled primarily by the Department of Justice’s Environment and Natural Resources Division, along with the National Oceanic and Atmospheric Administration, the U.S. Department of the Interior, the New York State Attorney General’s Office and the St. Regis Mohawk Tribe.

C. Criminal Actions

On March 4, 2011, defendant Lal B. Singh, as part of his sentence, was ordered by the Court to pay restitution in the amount of $3,610,538 to the Bank of New York in connection with his scheme to defraud committed while he was employed by the Bank in Manhattan. From 1993 through 2007, Singh served as a Section Manager in the Securities Redemption Department of the Bank. If customers did not redeem bonds that had been purchased upon the maturity date, the additional interest payments on the bonds would be transferred into a pooled account for unclaimed funds. If these funds are not claimed within three years, the bank was required to transfer these monies to the New York State Comptroller’s Office, Department of Unclaimed Funds. Through his job position, Singh had access to a data base that allowed him to view the unclaimed funds and to determine which funds were soon to be transferred to the state. Beginning in 1996, Singh created funds transfer requests to have funds transferred from the Unclaimed Funds accounts to one of several other accounts that belonged to individuals in the Schenectady area who agreed to assist Singh in the fraudulent funds transfer. Singh was able to make wire transfers totaling more than $3.6 million dollars. During the course of the investigation, it was discovered that Singh was entitled to a lump-sum benefit distribution from the Bank of New York Pension Plan in the amount of $281,350. After a Writ of Garnishment was issued to the Bank of New York, a check was issued by the Bank to the United States on November 21, 2012 in the amount of $229,278.59, which was then applied to the court-ordered restitution.

On January 31, 2013, defendant Joseph Dellerba was sentenced by Senior U.S. District Judge Norman A. Mordue. As part of his sentence, he was ordered to pay restitution in the amount of $1,429,458 to various insurance companies in connection with his conspiracy to defraud conviction involving a staged motor vehicle accident in Utica, New York. After a pre-trial financial investigation, Dellerba turned over $102,111, which represents a portion of the proceeds fraud. This amount was then applied toward the restitution he was ordered by the court to pay.

The U.S. Attorneys’ Offices, along with the department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.

The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.

Attached is a chart showing how the FY2013 $29,370,665 collections were distributed to the victims, government agencies serving the public and state and local law enforcement agencies.

ALBANY, NEW YORK – United States Attorney Richard S. Hartunian and Special Agent in Charge Andrew W. Vale of the Federal Bureau of Investigation, Albany Division, and Colonie New York Police Chief Steven Heider announced the arrest today of a Massachusetts man charged with enticing a 10 year old Albany County child to produce sexually explicit videos of himself and to then send those videos to him by email.

A criminal complaint unsealed in United States District Court this afternoon alleges that Brian Belanger, 21, of Worcester, Massachusetts, using the nickname “zombieshadow,” met the child on-line through Playstation 3. While talking through the game’s headset feature, Belanger told the child that someone was trying to kill Belanger, and that the child could help him by providing sexually explicit videos of himself that Belanger could in turn give to the other person. It is alleged that Belanger directed the child what to do in the videos, and that over the course of approximately three months the child emailed Belanger numerous times, attaching video files to the emails that depict the child engaged in sexually explicit conduct.1

Law enforcement was alerted on January 25, 2014, when the child’s father found the emails and videos on the child’s iPad. The investigation culminated with Belanger’s arrest today at his Worcester, Massachusetts residence. He made his initial appearance this afternoon in United States District Court in Albany before United States Magistrate Judge Hon. Randolph F. Treece, and was ordered detained pending a detention hearing scheduled for 2PM, Monday February 10, 2014. Belanger faces a mandatory minimum penalty of 15 years imprisonment, with a maximum penalty of 30 years, potential fines of up to $250,000, and a required term supervised release of at least 5 years, and up to life. A conviction would also require Belanger to register as a sex offender. Members of the community in the Worcester, Massachusetts area who have concerns or information regarding this case should call (508)-792-0214. Those in the Albany, New York area with information or concerns should call either (518) 431-0247, or 1-(888) 539-4535.

The investigation and arrest of Belanger is the result of an investigation by the Colonie New York Police Department, the Federal Bureau of Investigation, Albany Division, the New York State Police, the Worcester Massachusetts Police Department and the Federal Bureau of Investigation, Boston Field Division as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse.

Launched in May 2006 by the Department of Justice, and led by United States Attorneys' Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The case is being prosecuted by Assistant United States Attorney Lisa Fletcher, Project Safe Childhood Coordinator for the Northern District of New York.

___________

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

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced that, following a jury trial, JOSEPH VINCENT JENKINS, (43, of Geneva, New York) was found guilty in U.S. District Court in Syracuse, N.Y. of the felony offenses of Transportation of Child Pornography, in violation of Title 18, United States Code, Section 2252A(a)(1) and 2256(8)(A), and Possession of Child Pornography, in violation of Title 18, United States Code, Section 2252A(a)(5)(B) and 2256(8)(A). JENKINS is facing a statutory mandatory minimum sentence of 5 years and a maximum sentence of twenty years imprisonment for the Transportation of Child Pornography offense, for the Possession of Child Pornography charge a maximum sentence of imprisonment of ten years; a term of supervised release of at least five years and up to lifetime supervision, a maximum fine of $250,000.00 and mandatory registration as a sex offender. JENKINS is scheduled to be sentenced on June 17, 2014, before Judge Glenn T. Suddaby, in Syracuse, New York.

“Consumers of child pornography re-victimize the children abused by these horrific crimes and create demand for more of this material”, said Nicholas DiNicola, assistant special agent in charge of HSI Albany. “HSI special agents will continue to work with our partners on both sides of the border to identify these criminals and ensure they are brought to justice.”

United States Attorney Richard S. Hartunian said “This case should serve as a warning to those who download child pornography over the internet with the belief that they will never be caught. We will continue to pursue these offenders and prosecute them in the courts of the United States.”

JENKINS was arrested on May 24, 2009, at the Port of Lansdowne in Ontario, Canada, when he crossed the United States-Canadian border with a laptop and two thumb drives containing images and videos of child pornography. JENKINS was charged in Canada and failed to appear at his trial. A bench warrant was issued for his arrest by the Ontario Court of Justice. Federal Agents with Homeland Security Investigations took the case after a referral from the Ontario Provincial Police as the defendant entered the Port of Lansdowne from Jefferson County, New York, and had transported and possessed child pornography in the Northern District of New York before entering Canada.

This prosecution resulted from an investigation conducted by Homeland Security Investigations, Canada Border Services Agency, and Ontario Provincial Police. The case was prosecuted by Assistant United States Attorneys Tamara B. Thomson and Gwendolyn Carroll. Further questions may be directed to Executive Assistant U.S. Attorney John Duncan at (315) 448-0672.

Received Fourteen Years in Prison

ALBANY, NEW YORK – JOEL CUNNINGHAM, age 30, of Ottawa, Canada, was sentenced today to fourteen years in prison by United States District Court Judge Glenn T. Suddaby, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Assistant Special Agent-in-Charge Nick DiNicola. The sentence follows CUNNINGHAM’s September 20, 2013 guilty plea to one count of possession with intent to distribute a controlled substance.

On April 9, 2013, CUNNINGHAM was observed entering the United States from Canada through an unmanned border crossing in the Akwesasne Mohawk Reservation. Members of the Border Enforcement Security Task Force in Massena, New York followed CUNNINGHAM and later stopped him. Law enforcement officers searched the sport utility vehicle driven by CUNNINGHAM and found 58,183 grams of 3,4-Methylenedioxymethamphetamine Hydrochloride (commonly known as “Molly”), as well as over $140K in U.S. currency, in hidden compartments and duffel bags. The street value of the substance is over $5 million. CUNNINGHAM helped load the sport utility vehicle earlier that day.

This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations. The case was prosecuted by Assistant United States Attorney Wayne A. Myers.

ALBANY, NEW YORK – The federal criminal complaint charging Robert A. Butler with arson resulting in personal injury and death, in violation of Title 18, United States Code, Section 844(i), was dismissed today without prejudice, announced United States Attorney Richard S. Hartunian.

The complaint was filed on June 4, 2013, based on an affidavit alleging that on or about May 2, 2013, Butler used gasoline to start a fire at 438 Hulett Street, Schenectady, New York, resulting in the deaths of four people and the destruction of the building and its contents. The dismissal of the charge results in the release of Butler from federal custody.

The basis for the dismissal was set forth in the filed order as follows:

This case involves unusual and complex facts, with the complaint based upon allegations (in the affidavit in support of the complaint) that the defendant used gasoline to start a fire at a residential rental property in Schenectady, New York that resulted in the destruction of the building and its contents and the deaths of a father and three young children and very serious burn injuries for another child. The gravity of the crime and the potential punishments, the unusual and complex facts, including information regarding the involvement of others, and the circumstances regarding eyewitnesses necessitate further investigation.

U.S. Attorney Hartunian said, “We are completely committed to continuing this investigation until justice is done. We are grateful for the dedication of the New York Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, the Schenectady Police Department, and the Schenectady Fire Department to this case, and for the assistance of other federal agencies and police departments in the region. The victims of this horrific crime deserve and will continue to get our best efforts to secure justice.”

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

Defendant Used his Computer and the Internet to Download and Save Approximately 600 Child Pornography Files

ALBANY, NEW YORK — GARY MINER, age 45, of Glens Falls, New York, pled guilty today in Albany before United States District Court Judge Mae A. D’Agostino to one count of receiving child pornography and one count of possessing child pornography, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. On the child pornography receipt count, MINER faces at least five years of imprisonment and up to a maximum sentence of twenty years of imprisonment. On the child pornography possession count, MINER faces a maximum sentence of ten years of imprisonment. MINER was detained pending his sentencing.

During the plea hearing, MINER admitted that between January 2010 and November 29, 2011, he accessed the Internet and downloaded and possessed, from a website and other individuals who were distributing child pornography, approximately 600 files that contained child pornography.

Sentencing is scheduled for June 9, 2014, at 11:00 a.m. in Albany, New York. This case was investigated by the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Rick Belliss.

SYRACUSE, NEW YORK - BRADLEY S. LEADER (43, of Auburn, New York) was sentenced on Friday, January 30, 2014 by United States District Judge David N. Hurd, announced United States Attorney Richard S. Hartunian and Toni M. Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York Field Office. Following his May 28, 2013 guilty plea to filing a false tax return, Judge Hurd sentenced LEADER to 4 years probation, 120 hours of community service, and restitution in the amount of $68,604.93.

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.

This prosecution resulted from an investigation conducted by the Internal Revenue Service - Criminal Investigation. The case was prosecuted by Assistant United States Attorney Stephen C. Green.

Faces At Least Ten Years in Prison

SYRACUSE, NEW YORK – ALLAN PETERS, 42, of Malone, was found guilty of conspiracy to distribute more than 1,000 kilograms of marijuana by a jury yesterday following a four-day jury trial in Syracuse, New York before United States District Court Judge Glenn T. Suddaby, announced United States Attorney Richard S. Hartunian and James J. Hunt, Acting Special Agent in Charge of the Drug Enforcement Administration, New York Division (DEA). PETERS is scheduled to be sentenced on July 10, 2014 in Syracuse. He faces a maximum of life in prison and a $10,000,000 fine.

During trial, the government offered evidence that from at least 2005 through 2011, PETERS and many others smuggled thousands of pounds of marijuana into the United States and sent millions of dollars in drug proceeds back to Canada. They used property controlled by PETERS in Syne, Quebec, Canada on the Akwesasne Mohawk Indian Reservation as a staging area for the hockey bags of marijuana being smuggled into the United States. The bags, which normally contained 100 to 200 pounds of marijuana, were then transported into the United States.

Law enforcement officers seized marijuana from the smuggling organization on the following dates: (1) on May 8, 2009, the United States Border Patrol seized approximately 250 pounds of marijuana in North Hudson, New York; (2) on September 15, 2010, the Tribal Police Services and the New York State Police seized approximately 240 pounds of marijuana, after a high speed chase from the Akwsasne Mohawk Indian Reservation to Malone, New York; and (3) on March 1, 2011, the Akwesasne Mohawk Police Services and the United States Border Patrol seized approximately 100 pounds of marijuana in Hogansburg, New York.

The investigation and prosecution of PETERS was the result of a joint investigation by the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), the United States Border Patrol (USBP), Air and Marine Operations (AMO), the New York State Police, the St. Regis Mohawk Tribal Police Department (SRMTPD) the Akwasasne Mohawk Police Services (AMPS), and the District Attorneys of Franklin and Clinton Counties.

Any questions may be directed to Assistant U.S. Attorney Daniel C. Gardner in Plattsburgh, New York at 518-314-7800.

Attempted to Arrange a Sexual Encounter with a Twelve-Year-Old-Girl

ALBANY, NEW YORK – MICHAEL HEPPELLE, age 42, of Troy, New York was sentenced to ten (10) years of imprisonment for attempted online enticement of a minor on January 21, 2014 in Albany by Chief United States District Court Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. HEPPELLE, who had entered a guilty plea on September 19, 2013, was also ordered to serve a 15-year term of supervised release, to have no unsupervised contact with minors, and to register with the New York State Sex Offender Registry Program.

Between September 24, 2012 and October 3, 2012, HEPPELLE called a cooperating witness and offered to pay $500 if the cooperating witness could arrange for HEPPELLE to have a sexual encounter with a twelve-year-old girl. The cooperating witness reported his/her concerns to law enforcement, who in turn, told the cooperating witness to tell HEPPELLE that if he was serious about engaging in sexual acts with the twelve-year-old girl, he could meet the child on October 3, 2012 at a particular time, at a pre-arranged location in Rensselaer County. On October 3, 2012, HEPPELLE arrived at the pre-arranged location at the pre-determined time to meet with and engage in sexual acts with the girl. HEPPELLE was then arrested and was found to be in possession of $500 in U.S. currency, a cellular telephone, two condoms, and a lubricant typically used during sexual intercourse.

This case was investigated by the Federal Bureau of Investigation and the Rensselaer County Sheriff’s Office.

ALBANY, NEW YORK – Two men who were arraigned in June on a scheme to create a mobile, remotely operated, radiation emitting device appeared in U.S. District Court in Albany in separate proceedings today.

Eric J. Feight pleads guilty to Providing Material Support to Terrorists

Eric J. Feight, 55, of Hudson, New York, appeared before U. S. District Court Chief Judge Gary L. Sharpe this morning and entered a guilty plea to a felony Information charging him with Providing Material Support to Terrorists in violation of 18 U. S. C. Section 2339 A(a). Judge Sharpe scheduled sentencing for Feight on May 22, 2014 in U. S. District Court. Feight is being detained pending his sentencing. Feight faces a maximum term of imprisonment of 15 years and a fine of $250,000 and a term of supervised release, upon release, of up to life.

Glendon Scott Crawford is arraigned on new Indictment

In a separate proceeding, co-defendant Glendon Scott Crawford, 49, of Galway, New York, was arraigned before Magistrate Judge Christian F. Hummel on an Indictment, filed late last week, containing three charges relating to the development of and plans to use a remotely-operated radiation-emitting device to kill humans. In his appearance, Crawford entered not guilty pleas to the Indictment charging him with: (Count 1) Attempting to produce and use a radiological dispersal device, in violation of Title 18, United States Code, Section 2332h(a) and (c)(1); (Count2) Conspiracy to use a weapon of mass destruction, in violation of Title 18, United States Code, Section 2332a(a)(2)(C); and (Count 3) Distributing information relating to weapons of mass destruction, in violation of Title 18, United States Code, Section 842(p)(2)(A). The penalties for these offenses are, respectively: (Count 1) a maximum of life in prison, with a mandatory minimum of not less than 25 years and a $2,000,000 fine; (Count2) a maximum of life in prison and a $250,000 fine; (Count3) a maximum of 20 years in prison and a $250,000 fine. He was ordered detained pending further disposition of the charges. The charges are merely accusations and Crawford is presumed innocent until and unless proven guilty.

These cases 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 C. 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 315-448-0672.

Scheme Included Creation of a Remotely Operated X-ray Radiation
Emitting Device Designed to Kill Humans Silently

ALBANY, NEW YORK – Glendon Scott Crawford, age 49, of Galway, New York has been indicted on three federal felony counts related to his development of and plans to use a remotely-operated radiation-emitting device to kill human targets. The indictment, filed in U.S. District Court in Albany, New York last evening, charges Crawford with: (Count 1) Attempting to produce and use a radiological dispersal device, in violation of Title 18, United States Code, Section 2332h(a) and (c)(1); (Count2) Conspiracy to use a weapon of mass destruction, in violation of Title 18, United States Code, Section 2332a(a)(2)(C); and (Count 3) Distributing information relating to weapons of mass destruction, in violation of Title 18, United States Code, Section 842(p)(2)(A). The penalties for those offenses are, respectively: (Count 1) a maximum of life in prison, with a mandatory minimum of not less than 25 years and a $2,000,000 fine; (Count2) a maximum of life in prison and a $250,000 fine; (Count3) a maximum of 20 years in prison and a $250,000 fine. Crawford’s arraignment on the indictment has been scheduled in Albany for Wednesday, January 22, 2014 at 10:30 am before U.S. Magistrate Judge Christian F. Hummel.

The Indictment was announced by United States Attorney Richard S. Hartunian, Acting Assistant Attorney General for National Security, John Carlin, and Special Agent in Charge Andrew W. Vale of the Federal Bureau of Investigation, Albany Division. The charges filed today followed an 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.

Crawford and co-defendant Eric J. Feight were arrested on June 18, 2013 and have been held in custody since then by order of U.S. Magistrate Judge Christian F. Hummel. Charges against Feight on a criminal complaint remain pending. 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 defendant modified and intended to use was rendered inoperable at all times and posed no danger to the public.

The Indictment announced 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 C. Green and Richard Belliss, and Counterterrorism Section Trial Attorney Joseph Kaster.

The charges are merely accusations and the defendants are presumed innocent until and unless proven guilty. Further questions or inquiries may be directed to Executive Assistant United States Attorney John G. Duncan at 315-448-0672.

SYRACUSE, NEW YORK – Kaylon Pruitt, 23, of Whitesboro, New York pled guilty in federal court in Syracuse today to possessing a firearm as a convicted felon. Pruitt admitted that he possessed a loaded 12 gauge Mossberg Shotgun on October 15, 2013 when a New York State Parole officer visiting another person approached the front door of the defendant’s residence in Whitesboro, New York. The defendant answered the door while holding the shotgun. Pruitt was previously convicted of Burglary In the Second Degree, in Orangeburg County, South Carolina in 2010. He faces up to ten (10) years imprisonment and a fine of up to $250,000.00 when sentence is imposed on May 21, 2014 in Syracuse, according to United States Attorney Richard S. Hartunian.

The case was investigated by The New York State Division of Parole, The Village of Whitesboro Police Department and the United States Bureau of Alcohol, Tobacco, Firearms and Explosives (Syracuse, New York Office). The defendant was prosecuted by Assistant U.S. Attorney Richard R. Southwick with assistance from the Oneida County District Attorney’s Office.

For further information, contact AUSA Richard R. Southwick at (315) 448-0672.

ALBANY, NEW YORK – Richard S. Hartunian, United States Attorney for the Northern District of New York and Toni Weirauch, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, New York Field Office, announced that CRAIG MATUSZAK, age 49, of Gansevoort, New York, was sentenced Tuesday, January 14, 2014, in U.S. District Court in Albany, New York. U.S. District Judge Mae D’Agostino sentenced MATUSZAK to 63 months imprisonment, 3 years supervised release to follow the term of imprisonment, an order of restitution of $3,237,200.49 to Velocitel, Inc., an order of restitution of $439,019 to the Internal Revenue Service, and forfeiture of his home and vehicles.

On August 9, 2012, MATUSZAK pled guilty to one count of Mail Fraud in violation of Title 18, United States Code, Section 1341 and 2, and one count of Filing a False Income Tax Return in violation of Title 26, United States Code, Section 7206(1). MATUSZAK, an employee of Velocitel, Inc., admitted that he, together with an independent contractor for Velocitel, Inc., devised and executed a scheme to defraud Velocitel, Inc. by billing them for services that were never provided. MATUSZAK further admitted that he did not declare the income he received from the fraudulent scheme on his income tax return.

This prosecution resulted from a joint investigation conducted by the Internal Revenue Service, Criminal Investigations and the Federal Bureau of Investigation, Syracuse, N.Y. office. 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.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that Upstate Laboratories, Inc., 6034 Corporate Drive, East Syracuse, New York was sentenced today by the Hon. Judge Glenn T. Suddaby following its guilty plea to committing mail fraud related to the falsification of over 3,300 laboratory results from 2008 through 2010. Judge Suddaby imposed a $150,000 fine and placed Upstate on Probation for 5 years. Upstate has gone out of business but the Court ordered it to prepare an environmental compliance plan and permit government inspections should it ever resume business operations.

As set forth in the plea agreement and charge, Upstate Laboratories had 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.

This case was investigated by Special Agents of the Environmental Protection Agency, Office of Inspector General and Criminal Investigation Divisions. The case was 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.

Scheme Generated More Than $340,000

ALBANY, NEW YORK – MOFADDAL M. MURSHED, 36, AHMED A. ALGAHAIM, 54, FAISAL Q. MORSHED, 34, and IBRAHIM Q. MURSHED, 24, were arraigned today on an indictment charging them with conspiring to commit Supplemental Nutrition Assistance Program (“SNAP”) fraud by Magistrate Judge Randolph F. Treece announced United States Attorney Richard S. Hartunian, United States Department of Agriculture, Office of the Inspector General, Northeast Region Special Agent-in-Charge William G. Squires, Jr., Columbia County Sheriff David W. Harrison, Jr., and United States Secret Service Resident Agent-in-Charge William Leege. The case is set for trial on February 24, 2014.

SNAP, formerly known as the Food Stamp Program, uses tax dollars to subsidize food purchases by eligible low-income households. SNAP benefits may only be used to purchase food in approved retail food stores, and may not be exchanged for cash. According to the indictment, MOFADDAL M. MURSHED owned D&D’s Grocery & Deli, where AHMED A. ALGAHAIM, FAISAL Q. MORSHED, and IBRAHIM Q. MURSHED worked as employees. The indictment charges that the defendants generated more than $340,000 in fraudulent proceeds by providing cash to SNAP beneficiaries’ in exchange for SNAP benefits.

If convicted, the defendants face up to five years in prison. They could also be ordered to forfeit the proceeds of the offense and to pay a fine of up to $20,000.

The case was investigated by the United States Department of Agriculture, the Columbia County Sheriff’s Office, and the United States Secret Service, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent until and unless proven guilty.

ALBANY, NEW YORK – DAVID M. GAMBUZZA, 40, of Gloversville, was arraigned today on an indictment charging him with manufacturing marijuana by Magistrate Judge Randolph F. Treece announced United States Attorney Richard S. Hartunian and New York State Police Bureau of Criminal Investigations Captain Scott P. Coburn. The case is set for trial on February 18, 2014. According to the indictment, GAMBUZZA manufactured 50 or more marijuana plants. If convicted, GAMBUZZA faces up to 20 years in prison. He could also be ordered to pay a fine of up to $1,000,000. GAMBUZZA was released pending trial.

The case was investigated by the New York State Police and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

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

ALBANY, NEW YORK – STUART ALAN MEAD (61, of Brant Lake New York) was sentenced on December 12, 2013 by Senior United States District Court Judge Lawrence E. Kahn to 1 year of incarceration, 2 years of supervised release, 200 hours of community service, and a $5,000 fine for evading federal income tax announced United States Attorney Richard S. Hartunian and Toni M. Weirauch, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York Field Office. MEAD was also ordered to pay $94,601 in restitution to the United States.

As MEAD admitted during his August 29, 2013 guilty plea, between April of 2006 and August of 2010, he attempted to conceal the nature and extent of his assets from the Internal Revenue Service by underreporting the amount of income he earned for rental property he owned in Brant Lake.

This prosecution resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation.

Moved from Elk City, Oklahoma to Saratoga Springs, New York

ALBANY, NEW YORK – EUGENE PERIARD, age 34, of Saratoga Springs, New York, was sentenced to time served for failing to update his sex offender registration information yesterday in Albany by Chief United States District Court Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian and David McNulty, U.S. Marshal for the Northern District of New York. PERIARD, who had entered a guilty plea on August 15, 2013, was also ordered to serve a five year term of supervised release and to register with the New York State Sex Offender Registry Program.

In 2007, PERIARD was convicted of a sex offense in the State of Oklahoma. In early April 2013, PERIARD moved from Elk City, Oklahoma to Saratoga Springs, New York and lived in Saratoga Springs until the time of his arrest on April 30, 2013. Records from the sex offender registries in Oklahoma and New York established that PERIARD did not update his change of address information in Oklahoma and did not register as a sex offender in New York.

This case was investigated by the U.S. Marshals Service and the Saratoga Springs Police Department.

Kenneth Jackson - 92 Month Sentence. Donald Johnson - 108 Month Sentence

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces the sentencings of KENNETH JACKSON, age 29 and DONALD JOHNSON, Jr., age 26, both of whom are admitted members of the V-NOT Gang. Both JACKSON and JOHNSON previously pled guilty to an indictment which charged them and nine others with conspiring to exploit their membership in the V-NOT Gang to engage in a pattern of racketeering activity which included acts of murder, drug trafficking, and robbery. JACKSON was sentenced yesterday to 92 months in prison and JOHNSON was sentenced today to 108 months in prison.

The Indictment to which JACKSON and JOHNSON pled alleges that from at least 2003 through May 2012 members of the V-Not Gang: (1) maintained a specific geographic territory within the City of Syracuse in which only gang members can sell crack cocaine and marijuana; (2) protected that exclusive crack distribution territory with violence; (3) obtained drugs from various suppliers; (4) projected a very violent attitude and responded to violence with violence in order to preserve their stature in the gang community; (5) used graffiti, hand signs, and tributes on their clothing to slain gang members to signify their gang membership; (6) used criteria such as a willingness to use violence, ability to sell drugs, and familial connections to determine membership; and (7) routinely carried and used firearms in connection with their gang activity.

There are multiple acts of violence and drug distribution set forth in the Indictment, including 1 murder, 10 other shootings, 8 other acts of gun possession, and 18 acts of crack distribution and/or possession with intent to distribute crack.

JACKSON, who was known on the street as KAROME, which meant "Killer Affiliated Ruler Over Many Enemies," admitted his involvement in many acts, including possessing crack cocaine and drug proceeds, participating in a gang fight at the Juke Box Bar along with multiple co-defendants, firing at least 22 shots from an AK-47 into the home of a rival gang member while in a car with multiple co-defendants, and shooting at a rival gang member. JOHNSON, admitted his involvement in multiple drug trafficking crimes. The indictment also alleged JOHNSON’s involvement in an act of gun possession and a shooting.

Multiple other V-NOT Gang members are set to be sentenced over the next month.

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.

Sent the IRS more than $3.6 million in bogus payments

ALBANY, NEW YORK – PATRICIA ALFIERI, 53, of Schenectady, pled guilty today before Chief U.S. District Judge Gary L. Sharpe to mail fraud and filing a false federal income tax return, announced United States Attorney Richard S. Hartunian and Internal Revenue Service Criminal Investigation Division Special Agent in Charge Toni M. Weirauch. ALFIERI is scheduled to be sentenced on March 11, 2014, in Albany, New York. She faces a maximum term of incarceration of twenty years and a fine of up to $250,000 for the mail fraud charge, and a maximum term of incarceration of three years and a fine of up to $100,000 for the charge of filing a false federal income tax return.

In the plea agreement, ALFIERI admitted that from 2008 through 2013, she mailed 65 bogus checks, in a total amount of more than $3.6 million, to the Internal Revenue Service to cause the IRS to issue “overpayment refunds” to her. Her actions caused the IRS to issue her more than $87,000. The defendant created many of the checks using a computer.

ALFIERI also admitted that she submitted false tax returns to the IRS in 2008, 2009, and 2010 in an effort to avoid paying income tax. Those returns were false because ALFIERI (1) claimed that her federal income tax withholding was higher than it actually was and (2) claimed that she had paid home mortgage interest and real estate taxes when she had not.

The case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigation Division, and is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

SYRACUSE, NEW YORK – Richard S. Hartunian, United States Attorney for the Northern District of New York, announced that JOHN GIBSON, III, age 38, of Oswego, N.Y. was sentenced today before the Honorable Glenn T. Suddaby in the United States District Court in Syracuse, New York.

GIBSON was sentenced to 3 years probation in connection with his plea to Theft of Government Property, in violation of Title 18, United States Code, Section 641. Additionally, GIBSON was ordered to pay $33,072.68 in restitution; was ordered to serve 6 months of home detention and two months of weekend incarceration; ordered to perform 100 hours of community service; and pay a special assessment of $100.

On June 4, 2013, GIBSON admitted that from June 2012 through August 2012, he purchased 91 postal money orders using 42 checks drawn on closed checking accounts in the total amount of $33,072.68.

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

Planned to Create Still Images and Videos of a 12-Year-Old Girl

ALBANY, NEW YORK – JASON FRANK, age 27, of Rochester, New York, was sentenced to fifteen (15) years of imprisonment for attempted production of child pornography on November 27, 2013 in Albany by Chief United States District Court Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian and Joseph D’Amico, Superintendent of the New York State Police. FRANK, who had entered a guilty plea on August 8, 2013, was also ordered to serve a 10-year term of supervised release, to have no unsupervised contact with minors, and to register with the New York State Sex Offender Registry Program.

In February 2013, FRANK began chatting online with an undercover New York State Police officer posing as a twelve-year-old girl in Albany, New York. Over approximately two months, FRANK sent the undercover officer still images and videos of child pornography in an effort to convince her to meet with him at a Syracuse hotel so that he could have sex with her and film it. On April 9, 2013, FRANK arrived at a hotel in Syracuse expecting to meet the girl and to create child pornography, but he was arrested by the New York State Police. At the time of FRANK’s arrest, he possessed a digital camera with video recording capabilities and a thumb drive that contained still images and videos of child pornography.

This case was investigated by the New York State Police.

Defendant Alleged to Have Received and Possessed
Approximately 600 Child Pornography Files

ALBANY, NEW YORK – A two-count criminal complaint has been filed in the Northern District of New York charging HARRY GATES, age 47, of Schenectady, New York, with receipt and possession of child pornography, announced United States Attorney Richard S. Hartunian and Nicholas DiNicola, Assistant Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations.1 If convicted, GATES faces at least five years of imprisonment and up to twenty years of imprisonment on the receipt of child pornography charge and up to ten years of imprisonment on the possession of child pornography charge as well as a maximum fine of $250,000. GATES is held without bond pending his preliminary hearing which has been scheduled for December 10, 2013 at 1:30 p.m. before the Honorable Christian F. Hummel, United States Magistrate Judge.

According to the complaint, between February 2012 and November 22, 2013, GATES searched for and downloaded several hundred still image and video files of child pornography onto his home computer using the Internet and file sharing programs.

This case is being investigated by Homeland Security Investigations. This case is being prosecuted by Assistant United States Attorney Rick Belliss.

_______________________

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

Defendant Who Transported Illegal Alien Sentenced to Two Years Supervised Release

ALBANY, NEW YORK –TRUDIAN SIMMONDS, age 31, of Springfield, Massachusetts, was sentenced today to “time served” (7 days) and five months of home detention for transporting an illegal alien within the United States by United States District Court Judge Mae A. D’Agostino, announced United States Attorney Richard S. Hartunian and Wade Laughman, Patrol Agent-in-Charge, United States Border Patrol. Simmonds, who was found guilty on May 22, 2013 following a three-day jury trial, will serve the five months of home detention during two years of supervised release.

On August 9, 2012, Simmonds entered the United States alone from Canada at the Massena Port of Entry and then drove to a parking lot on the Akwesasne Mohawk Indian Reservation where she picked up a Jamaican citizen who had illegally entered the United States from Canada earlier that day. Simmonds was transporting the man away from the border area when she was stopped and arrested by Border Patrol agents.

This case was investigated by the U.S. Border Patrol, Massena, New York.

Jarrell Williams Held Accountable for Multiple Shootings and the Murder of Anthony Ford

SYRACUSE, NEW YORK –

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that JARRELL WLLIAMS, age 23, of Syracuse, was sentenced today in U.S. District Court in Syracuse to 420 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, WILLIAMS 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.

WILLIAMS also admitted to, and was held accountable for, multiple acts of violence he committed on behalf of the Bricktown Gang including the fatal shooting 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. WILLIAMS shot Ford and the female victim because he mistakenly believed Ford to be involved in a gang when in fact Ford was not part of any gang. This shooting occurred a mere three hours after WILLIAMS shot an East Side gang member in the back as part of an ongoing war between the Bricktown and East Side gangs.

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.

SYRACUSE, NEW YORK - Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Mark Anselm, 37, of Clayton, N.Y., pled guilty before the U.S. District Judge Glen T. Suddaby to six felony offenses that charged him with making false statements to officials of the United States Coast Guard, possession and use of an altered merchant marine license, and aggravated identity theft.

In pleading guilty, Anselm admitted that during 2011 and 2012 he held himself out to federal officials, to various marina owners, and to other potential employers as being a licensed commercial ship pilot when he possessed no such license. Anselm admitted to having repeatedly presented fraudulent merchant marine licenses to employers and potential employers that he had altered to substitute his name. With his false licenses, he gained employment and operated various commercial ships on Lake Ontario. His criminal conduct was discovered by the Coast Guard after he grounded a tug boat in Canadian waters on June 19, 2012. The ensuring investigation revealed numerous instances of Anselm holding himself out as a licensed commercial merchant marine captain based upon licenses that he had forged.

Anselm is scheduled to be sentenced on March 28, 2014, in Syracuse, NY. He faces a maximum term of incarceration of 27 years, and a fine of up to $1.5 million. The sentence imposed for aggravated identity theft contains a mandatory minimum 2 year term of incarceration and must run consecutively to the sentence imposed on any other count.

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.

Indictment Filed In Scheme to Defraud The IRS

SYRACUSE, NEW YORK – United States Attorney Richard S. Hartunian announced today that an Indictment was filed in United States District Court for the Northern District of New York charging Lacey Jane Hollinger, 27, of Massena, New York and Elaine Monique Zavala-Charres, 33, of Phoenix, Arizona with seven (7) counts of operating a mail fraud scheme to defraud the Internal Revenue Service and two (2) counts aggravated identity theft. The mail fraud charges carry a maximum sentence of up to twenty (20) years imprisonment, a period of supervised release and a fine of up to $250,000.00. The aggravated identity theft charges carry a sentence of two years imprisonment.

The indictment alleges that Hollinger and Zavala-Charres operated the scheme to defraud the IRS from January 2012 to May 2013 in St. Lawrence County, New York and elsewhere. The scheme involved using personal identification information acquired through fraud used to file tax returns with false income levels to generate fraudulent refunds. The scheme involved the submission of over $500,000.00 in fraudulent tax returns to IRS in tax years 2011 and 2012, primarily in New York and Arizona.

The case was investigated by IRS Criminal Investigations, Syracuse, New York Office.

The charges in the indictment are mere allegations and the defendants are presumed innocent until and unless proven guilty in a court of law.

Syracuse, NY- United States Attorney Richard S. Hartunian announced the indictment of ten (10) individuals in connection with a large synthetic marijuana distribution organization in Central New York. Those arrested in the synthetic marijuana distribution conspiracy this morning include the following:

ABDALQADER MANSOUR, age 44, Syracuse, New York; RASHEED MANSOUR, age 23, Camillus, New York; JOE AREF, age 28, Nederland, Texas; ARAFAT KHOUDOUR, age 29, Beaumont, Texas; ALI BEDWAN, age 25, Port Arthur, Texas; ABED ZAHRAN, age 55, North Syracuse, New York; AMJAD MANSOUR, age 25, Syracuse, New York; and
ZIAD MANSOUR, age 33, Camillus, New York.

All of these individuals have been indicted by a federal grand jury with conspiring to possess with the intent to distribute and distributing synthetic marijuana. If convicted, the defendants face up to a twenty (20) years imprisonment, up to a $1 million fine, and at least three (3) years of supervised release following any period of incarceration.1 Arraignments are scheduled in U.S. District Court in Syracuse for 1:30 p.m. today before Magistrate Judge David E. Peebles.

These prosecutions resulted from an investigation undertaken in the fall of 2012 by the Syracuse Resident Office of the Drug Enforcement Administration (DEA), the Onondaga County Sheriff’s Office (OCSO), the Syracuse Police Department (SPD), the New York State Police (NYSP), the United States Marshals Service, and the U.S. Attorney’s Office.

The investigation, which included wiretaps on one of the defendant’s telephones, revealed that this synthetic marijuana trafficking organization was responsible for the manufacture and distribution of approximately 100 to 200 pounds of synthetic marijuana per month. The synthetic marijuana was manufactured in clandestine locations in and around Syracuse by members of the conspiracy. The defendants utilized chemicals such as UR-144 (a Schedule I controlled substance), which they imported from China and elsewhere; they sprayed the chemicals on leafy plant material, added flavoring, and then placed the synthetic marijuana product in packages labeled “Scooby Snax,” “WTF,” “Blue Caution,” and other names. The packages were then distributed to local convenience stores, as well as shipped to co-conspirators in Texas, Ohio, and South Carolina for distribution to customers.

Search warrants were executed in Texas and at the following locations this morning:

202 Van Rensselaer Street, Apartment #1, Syracuse, NY, 1500 Elm Circle, Apartment #7, Camillus, NY, 430 Spencer Street, Storage Unit D-151, Syracuse, NY, 104 Lorian Drive, Syracuse, NY, 344 North Salina Street, Syracuse, NY, 1805 S. Geddes Street, Syracuse, NY, 300 Otisco Street, Syracuse, NY, 1504 South Avenue, Syracuse, NY, 1000 Butternut Street, Syracuse, NY, 1223 Butternut Street, Syracuse, NY, 500 Oakwood Avenue, Syracuse, NY, 1215 Lodi Street, Syracuse, NY, 359 S. Salina Street, Syracuse, NY, 2002 E. Fayette Street, Syracuse, NY, and
801 Butternut Street, Syracuse, NY.

To date, the following items have been recovered: An AR-15 rifle; Ruger handgun, approximately 10 kilograms of synthetic chemicals, several thousand packets of prepackaged synthetic marijuana; approximately $75,000 in U.S. currency; two vehicles; and equipment used to manufacture the synthetic marijuana.

U.S. Attorney Richard S. Hartunian stated, “This case is an example of the challenges faced by law enforcement in combatting the ever changing methods utilized by drug dealers to create synthetic drugs. Today’s arrests demonstrate that our dedicated local, state and federal law enforcement agencies are up to this task. We will continue to aggressively investigate and prosecute those who seek to profit from the sale of these illegal poisons to the youth of our community.”

Drug Enforcement Administration, Special Agent in Charge of the New York Division Brian R. Crowell said, “Synthetic marijuana is nothing more than poison sprayed on poison,” stated DEA Special Agent in Charge Brian R. Crowell. “This organization was manufacturing and distributing100 to 200 pounds of synthetic marijuana per month. They packaged the synthetic marijuana in distribution bags labeled 'Scooby Snax,’ to target our youth. Synthetic drugs are poison. Over the past two years, there were 7,452 exposures of synthetic marijuana reported to the American Association of Poison Control Centers. Kids need to stay away from this and these traffickers have our undivided attention.” SAC Crowell would like to commend the DEA Syracuse Resident Office, the Onondaga County Sheriff’s Office, the Syracuse Police Department, the New York State Police, the United States Marshals Service, the Onondaga District Attorney’s Office, the New York Attorney General’s Office, the Camillus Police Department, and the U.S. Attorney’s Office, Northern District of New York. Further questions or inquiries may be directed to Assistant United States Attorney Carla Freedman, the prosecutor handling the case, at (315) 448-0672.

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1The charge announced today is merely an allegation and the defendants are presumed innocent unless and until proven guilty in a court of law.

ALBANY, NEW YORK – On November 14, 2013, a federal jury in Albany found YANG CHIA TIEN, a/k/a ANDREW TIEN, 62, of Queens, NY, guilty of three counts of bribery of a public official, announced United States Attorney Richard S. Hartunian, Homeland Security Investigations Assistant Special Agent in Charge Nicholas DiNicola, and New York State Police Special Investigations Unit Major Thomas G. Marmion. Sentencing is scheduled for March 10, 2013 at 9:00 a.m. before Chief United States District Judge Gary L. Sharpe.

TIEN was convicted of paying a total of $51,000 to a federal immigration official with the corrupt intent to influence official acts, namely the granting of lawful permanent resident status to aliens. In reality, the recipient was an undercover law enforcement officer with Homeland Security Investigations. The payments took place on May 1, 2008, July 11, 2008, and October 8, 2008. The evidence at trial showed that TIEN made these payments in an effort to secure green cards for his “customers,” illegal aliens from Malaysia and China.

For each count of conviction, TIEN faces a maximum term of imprisonment of fifteen years and a maximum fine of $250,000.

The prosecution resulted from a joint investigation by ICE-Homeland Security Investigations and the New York State Police. The case was prosecuted by Assistant United States Attorney Sean O’Dowd.

SYRACUSE, New York - Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Edward Palmer, 47, of Phoenix, N.Y., was sentenced in U.S. District Court in Syracuse before the Honorable Frederick J. Scullin, for a felony violation of the Clean Air Act, 42 U.S.C. § 7413(c), related to the illegal removal and disposal of asbestos. Palmer was sentenced to serve sixth months of home detention as part a two year term of Probation. He was further ordered to pay a criminal fine of $25,000 and to perform 50 hours of community service.

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 unlicensed 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.

Guilty of 44 wire fraud and money laundering charges

SYRACUSE, NEW YORK – William David Humphries, age 67, of Lake City, South Carolina, was found guilty today by a U.S. District Court jury of forty-four felony counts, including interstate travel in aid of racketeering, a wire fraud conspiracy to defraud Canada of tax revenue, a conspiracy for the unlicensed manufacture of tobacco products, and concealment money laundering – announced United States Attorney Richard S. Hartunian and Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Thomas J. Cannon.

U.S Attorney Hartunian stated, “I would like to commend the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the other state, federal, and Canadian law enforcement agencies for their excellent investigative efforts in bring about today’s guilty verdict. We will continue our efforts with ATF and our other law enforcement partners to prosecute those individuals and organizations that seek to profit from the illicit smuggling of tobacco across our border.”

Bureau of Alcohol, Tobacco, Firearms and Explosives Special Agent in Charge Cannon stated that “Today’s conviction of Mr. Humphries sends a clear and resounding message to all those involved in the illicit trade of cigarette trafficking that their schemes to defraud the United States Government and neighboring Canada will not be tolerated. The Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Attorney’s Office and our law enforcement partners that comprise the Northern Border Initiative remain steadfast not only in our fight to interdict the illegal flow of tobacco, but also ensuring those criminally responsible be brought to justice.”

Following a two week jury trial, Humphries was convicted of interstate travel in aid of racketeering, in violation of Title 18, United States Code, Section 1952(a)(1) and (a)(3), a wire fraud conspiracy to defraud Canada of tax revenue, in violation of Title 18, United States Code, Sections 1343 and 1349, a conspiracy to manufacture of tobacco products without a license in violation of Title 26, United States Code, Section 5672 and Title 18, United States Code, Section 371, and forty-one counts of concealment money laundering, in violation of Title 18, United States Code, Sections 1956(a)(1)(B)(i).

Between 2005 and 2006, the defendant, a tobacco broker and wholesaler from South Carolina, conspired with other individuals living on the Akwesasne Indian Reservation (AMIR) to defraud Canada of tax revenue. In 2005, the defendant began working with a major manufacturer of cigarettes that was operating on the AMIR without the federally required bond and permit. The defendant provided “Canadian Blend” cut-rag tobacco and cigarette-making supplies to the unlicensed manufacturer. This tobacco was manufactured into cigarettes and subsequently smuggled into Canada without the payment of any legally required taxes to Canada. Between the summer of 2005 and May 2006, the defendant supplied the unlicensed manufacturer with approximately one load of cut-rag tobacco per week. The defendant supplied approximately 44 loads of tobacco, with each load producing 13,200,000 contraband cigarettes, causing a significant tax loss to Canada.

The unlicensed manufacturer was also engaged in a conspiracy to distribute marijuana smuggled in from Canada and then distributed throughout the United States. The proceeds of that marijuana distribution were used to fund the cigarette smuggling conspiracy, which employed the same smuggling routes used to bring marijuana into the United States from Canada.

In February 2006, after delivering a load of tobacco to the unlicensed manufacturer on the AMIR, the defendant was stopped on the AMIR for a vehicle infraction. Law enforcement officers seized approximately $88,000 in U.S. currency paid to Humphries for the sale of tobacco. A narcotics detection canine alerted to the currency, and officers were able to smell marijuana on the money. At trial, witness testimony established that the money found on Humphries was the proceeds of marijuana distribution.

In May 2006, the unlicensed manufacturers dealing with Humphries were arrested on federal marijuana charges and thereafter cooperated with the government. However, Humphries continued to sell tobacco and cigarette-making supplies to other unlicensed cigarette manufacturers based on the AMIR. Humphries continued to receive payments in the form of proceeds of marijuana sales from unlicensed manufacturers to which he had sold Canadian blend tobacco and supplies. In an attempt to disguise the source of the money, which was criminal proceeds, Humphries began taking substantial sums of U.S. currency to the Mohawk Bingo Palace, located on the AMIR. In recorded conversations heard by the jury with one of the government informants, he explained that he was inserting large sums of currency into the electronic bingo machines and then repeatedly cashing out at the cashiers’ window in an attempt to remove the smell of marijuana from the money.

The prosecution arose from the investigative efforts of the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Royal Canadian Mounted Police, the Alcohol and Tobacco Tax and Trade Bureau, St. Regis Mohawk Tribal Police Force, Homeland Security Investigations, the Drug Enforcement Administration, the Massena Police Department, the United States Border Patrol, and the Rensselaer County Sheriff’s Office.

The case was prosecuted by Assistant United States Attorneys Carl Eurenius and Gwendolyn Carroll. For further information, please contact AUSA Eurenius at (315) 448-0672.

SYRACUSE, NEW YORK –LLOYD F. MARTIN, JR., (68, of Jamesville, NY) was sentenced to 3 years probation with 6 months home detention, a $25,000.00 fine and 50 hours of community service for his conviction for filing a false income tax return according to RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York. Prior to the sentencing, MARTIN paid the IRS approximately $388,000.00 in back taxes, penalties and interest.

During entry of his guilty plea, MARTIN admitted that from 2006 through 2008, he was the president of a commercial construction company named Henderson-Johnson Co., Inc., located in Syracuse, New York. During that time, MARTIN realized income of approximately $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 admitted he knew these tax returns were false because each substantially under reported his income and tax liability for that year.

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.