Northern District of New York

Obtained More Than $500,000 of Gift Cards from Grocery Stores in Five States

ALBANY, NEW YORK – JAMESE L. WILLIAMS, 27, of Brooklyn, appeared today before Magistrate Judge Christian F. Hummel in federal court in Albany to be arraigned on a September 4, 2013 indictment charging her with conspiracy, access device fraud, and aggravated identity theft, announced United States Attorney Richard S. Hartunian and United States Secret Service Resident Agent in Charge William Leege.

According to the indictment, the charges relate to her use of counterfeit credit cards to fraudulently obtain more than $500,000 of gift cards at grocery stores in New York, Connecticut, Vermont, Massachusetts, and New Hampshire between October 2012 and January 2013. If convicted, WILLIAMS faces up to 5 years in prison on the conspiracy charge, 10 years in prison on the access device charge, and a mandatory two year consecutive term of imprisonment on the aggravated identity theft charge. She could also be ordered to pay a fine of up to $250,000 on each count.

The case was investigated by 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 defendant is presumed innocent until and unless proven guilty.

BINGHAMTON, NEW YORK – On October 10, 2013, a federal jury in Binghamton found JOHN LAWRENCE DOOLEY, 56, of Rochester, New York, guilty of (1) attempted enticement of a minor to engage in sexual activity, (2) attempted production of child pornography, and (3) committing a felony offense involving a minor while already required to register as a sex offender, announced United States Attorney Richard S. Hartunian, Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division, and Gregory Veitch, Chief, Saratoga Springs Police Department. DOOLEY faces at least 45 years and up to life imprisonment, a term of supervised release of at least five years and up to lifetime supervision, and a maximum fine of $500,000. DOOLEY is scheduled to be sentenced on February 10, 2014, before the Honorable Thomas J. McAvoy, Senior United States District Judge, in Albany, New York.

DOOLEY, a registered Level III sex offender, was arrested on May 11, 2012 in Saratoga Springs, New York, after he travelled there to meet “Kara,” a fifteen year old girl he met in a Yahoo! chat room. DOOLEY had been communicating with “Kara” for one and one-half months via Yahoo! Messenger. In reality, “Kara” was an undercover Saratoga Springs Police Investigator. During the online communications, the undercover investigator repeatedly told DOOLEY that “Kara’s” age was 15. DOOLEY told “Kara” that he would travel to Saratoga Springs, rent a motel room, have sex with her in the motel room, and capture that sexual conduct on digital photo and video. On May 11, 2012, Dooley drove from Rochester to Saratoga Springs, checked into his motel room, and brought with him various sexual devices, vodka, computer equipment, cameras, and presents for “Kara,” including lingerie.

This prosecution resulted from an investigation conducted by the Federal Bureau of Investigation, Albany, N.Y., and the Saratoga Springs Police Department. The case was prosecuted by Assistant United States Attorneys Jeffrey C. Coffman and Lisa Fletcher. Further questions may be directed to Assistant U.S. Attorney Elizabeth C. Coombe at (518) 431-0247.

Defendant Who Illegally Re-Entered the United States Sentenced to Ten Months Imprisonment

ALBANY, NEW YORK—HERMIS ANTONIO ADAMES, age 35, a citizen of the Dominican Republic, was sentenced today to ten months of imprisonment for illegally reentering the United States after removal by Chief United States District Court Judge Gary L. Sharpe, announced United States Attorney Richard S. Hartunian and Michael T. Phillips, Field Office Director, U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations. Following ADAMES’ sentence he will be remanded to the Department of Homeland Security for removal proceedings. Today’s sentencing followed ADAMES’ July 9, 2013, guilty plea.

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

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

Funds Will Hire School Resource Officers and assist with the start-up of the Troy Peer Court

Friday, November 1, 2013 -U.S. Attorney Richard S. Hartunian today announced two federal funding awards for Troy. The City of Troy has been awarded $375,000, through the U.S. Department of Justice Office of Community Oriented Policing Services (COPS), which will be used to hire three School Resource Officers (SROs). U. S. Attorney Hartunian also announced a Project Safe Neighborhoods award of$7,763 to be used to start the Troy Peer Court.

The Office of Community Oriented Policing Services (COPS), in the office of the U.S. Department of Justice, advances the practice of community policing in America's law enforcement agencies. One method of accomplishing this is through their grants programs and funding. Today's funding is for School Resource Officers (SROs). SROs are sworn law enforcement officers responsible for providing security and crime prevention strategies in the school environment. The responsibilities of SROs are similar to regular service police officers in that they have the ability to make arrests, respond to calls for service, and document incidents that occur within their jurisdiction.

Project Safe Neighborhoods (PSN) is a nationwide grant program administered by the U.S. Department of Justice to reduce gun and gang crime by networking existing local programs that target such crime. There are five elements to PSN: partnerships, strategic planning, training, community outreach and accountability. PSN funding has been used, among other things, to implement juvenile crime deterrence strategies, such as a peer court. By intervening early in a juvenile's deviant behaviors, the chances of changing those behaviors to positive, more productive ones is much more likely. Such early intervention can help reduce the number of youth engaging in gang activities and crime.

"In the wake of past tragedies, it's clear that we need to be willing to take all possible steps to ensure that our kids are safe when they go to school and our communities are safe at all times," said Attorney General Eric Holder. "These critical investments represent the Justice Department's latest effort to strengthen key law enforcement capabilities, and to provide communities with the resources they need to protect our young people. Especially in a time of increased challenges and limited budgets, our top priority must always be the safety and well-being of our children, their families and our communities."

"Keeping our children safe in school, along with securing the safety of our communities is of critical importance and I am pleased to join the Attorney General and the COPS Office in announcing these grants which will help provide our communities with the resources needed to accomplish this vital mission," said United States Attorney RichardS. Hartunian.

"When I was running for mayor," said Troy's Mayor Lou Rosamilia, "I emphasized the importance of School Resource Officers (SROs) in our schools. It's all about safety- of our students, faculty and staff. SROs develop relationships with our students, and in fact become role models for them. If a disturbance occurs in a building, the SROs are able to get the situation under control very quickly. And because the SROs are based in the schools, we don't have to take any patrols off our streets. We are honored to be included in this beneficial grant award."

"In the City of Troy, our schools have thousands of students, teachers and support staff spread out over two school districts for almost seven hours each school day. These schools really are micro neighborhoods, if you will, for 5 days per week from Sept through June. This grant provides us with the added opportunity to continue to exercise our community oriented policing and problem solving (COPPS) paradigm," said Troy Police Commissioner Anthony D. Magnetto. "It is through the COPPS philosophy that we are able to not only enhance our police response to problems but also to provide crime prevention services, and early intervention as well, by interacting with our kids on a personal level each and every school day. In these tough economic times, this grant allows us some fiscal relief for a program that the City of Troy has fully funded, and has been faithfully committed to, for over a decade."

City Council President Lynn Kopka said, "I've always been a staunch advocate for School Resource Officers (SROs) and now with this grant, we can continue utilizing SROs in our schools and free up other officers to effectively patrol our streets. This is fantastic news for Troy."

"With much less money, but the same level of importance and impact, I announce a small Project Safe Neighborhoods grant to help the start-up of a Troy Peer Court," added United States Attorney Hartunian. "Youth courts, or peer courts, are proven as a successful tool that intervenes on juvenile delinquency and crime. Success rates of near 90% of youth successfully completing their youth court sentence not committing another crime for another year or more have been documented in the majority of youth courts across the nation. Almost eight thousand dollars has been awarded to the Troy Police Department to start up the Troy Peer Court."

"Members of the Troy community including residents, business owners, agency and school representatives, the Troy Police Department, Rensselaer County Probation and County Attorney's Office and others have been meeting since March of this year because we are concerned about the level of juvenile crime in Troy and believe a peer court can be a successful early intervention. This funding will allow us now to recruit youth, train them and start hearing appropriate cases in the Troy Peer Court," said Rensselaer County Family Court Judge Elizabeth Walsh. "We are very grateful to the U. S. Attorney's Office for their support through all this planning and the opportunity to get started."

The COPS Hiring Program offers grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides the salary and benefits for officer and deputy hires for three years.

Grantees for the 2013 hiring program were selected based on their fiscal needs, local crime rates, and their community policing plans. There was an additional focus this year on agencies requesting assistance in developing school safety programs that would include the hiring of a school resource officer. School resource officer positions funded by the COPS Office are sworn law enforcement positions that work within a school district or facility, interacting directly with school administrators and students.

Overall the COPS Office funded awards to 263 cities and counties, aimed at creating 937 law enforcement positions. More than $125 million will be awarded nationally, including nearly $45 million to fund 356 new school resource officer positions.

The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has awarded over $14 billion to advance community policing, including grants awarded to more than 13 ,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance.

For the entire list of grantees and additional information about the 2013 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.

Project Safe Neighborhoods ("PSN") is a Department of Justice initiative to reduce gun crimes. It networks existing local law enforcement programs that target gun crimes and provides a focal point for community activists in their anti-violence and anticrime initiatives.

There are five elements to PSN: partnerships, strategic planning, training, community outreach and accountability.

In 2006, in response to the growing problem of violent gangs across the country, the Department expanded Project Safe Neighborhoods to include a focus on gangs and gang violence. The goal is to use strategies and partnerships with state and local law enforcement and communities pioneered under PSN to shut down violent gangs in America. As a result, although PSN remains "America's Network Against Gun Violence," each federal judicial district has incorporated antigang efforts into its PSN program.

More information can be found at http://www.justice.gov/psc.

An Overview of Youth Courts

Structure & Background
Youth Courts are an alternative to the traditional juvenile court system1
• Targets youth aged 11-17 years old.
• Deals with first time offenders charged with either a misdemeanor or status offense
• Addresses early stages of delinquency
• Based on elements of restorative justice, concentrating on the harm done to the person or community
• Seeks to reintegrate the youth into the community and not stigmatize them

Ensures offenders take responsibility for their actions, are held accountable, and make restitution for violating the law2
• Is completely voluntary; in most Youth Courts the offender must admit guilt
• Youth Court members are recruited from the community or school and trained to fill the roles of prosecutors, defense attorneys, juries, bailiffs and judges
• Typical offenses include theft, vandalism, assault, truancy, possession of marijuana, underage drinking etc.
• Sentences include community service, apologies to victims, workshops, essays on the effects of crime on society

Youth Courts offer an approach to engage the community in a partnership with the juvenile justice system3
• Imposes sentence, does not determine guilt
• Enforces positive peer pressure to help address the issues of delinquent behaviors in youths4
• Identifies problems and develops solutions for community and school issues
• Facilitates the development of sound problem-solving, decision-making and criticalthinking skills

Data
• Youth Courts have been rapidly expanding in the past decade from 78 programs in 1994 to over 1,400 currently5
• 60 percent of Youth Courts are funded with less than $50,000 per year6
• A cost benefit analysis of Onondaga County Youth Court showed a savings of approximately $1000 per youth diverted to Youth Court7
• 89 percent of respondents successfully complete the program8
• 39 percent of teen courts only accept first time offenders9

Outcomes
• 87-92 percent non-recidivism rate for successful completers of Youth Court10
• Enhanced perceptions of procedural justice
• Improved attitudes towards authority
• Better understanding of legal system
• Improved grades
• 1 in 5 juveniles return after completing the program to serve as volunteers
• The Taunton Youth Court showed the following accomplishments for 200811:

• Students provided 1,775 hours of volunteer services, valued at more than $18,000
• School suspension rates were reduced by 44 percent
• School attendance increased by 65 percent among participants

For more information:

More information about Youth Courts can be found at http://www.youthcourt.net.

____________________

1 OJJDP, Stickle, Connell, Wilson, and Gottfredson, 2008.
2HFI Report Series- Youth Courts: An Empirical Update and Analysis of Future Organizational and Research Needs, 2008
3NCJRS-Youth/Teen Court Diversion Programs, March 2013
4NCJRS-Youth/Teen Court Diversion Programs, March 2013
5NCJRS-Youth/Teen Court Diversion Programs, March 2013
6HFI Report Series- Youth Courts: An Empirical Update and Analysis ofFuture Organizational and Research Needs, 2008
7Onondaga County Youth Court Cost Benefit Analysis-1990
8HFI Report Series- Youth Courts: An Empirical Update and Analysis of Future Organizational and Research Needs, 2008
9OJJDP- Teen Courts A Focus on Research, Butts and Buck, October 2000
100nondaga County Youth Court Study- SU Maxwell Graduate School-1990
11Title V Incentive Grants for Local Delinquency Prevention Programs;2008 Report to Congress

SYRACUSE, NEW YORK –United States Attorney Richard S. Hartunian and Federal Bureau of Investigation (“FBI”) Albany Special Agent in Charge Andrew W. Vale, announced today the arrest of RYAN LETCHER, age 38, of Endicott, New York. LETCHER was indicted by a federal grand jury of one count of knowingly and willfully making a false statement in violation of 18 U.S.C. §1001(a)(3).

The indictment alleges that in March 2012, LETCHER mailed a letter to the Department of Defense (“DOD”) claiming that a DOD contractor was a foreign intelligence officer, when LETCHER knew that was not true. This charge carries a statutory maximum term of imprisonment of five years; supervised release of up to three years; a maximum fine of $250,000; and a special assessment of $100.

"The act of intentionally making false statements in order to harm others will not be tolerated. Making such fictitious, fraudulent statements can have a devastating impact on the victims and the community. The FBI will continue to work with our law enforcement partners to ensure this type malicious behavior is investigated and prosecuted," said Andrew W. Vale.

The case was investigated by the FBI and is being prosecuted by Assistant United States Attorney Tamara Thomson.

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

ALBANY, NEW YORK- United States Attorney RichardS. Hartunian announces he will hold a press conference with Troy Mayor Lou Rosamilia and Troy Police Commissioner Anthony D. Magnetto on Friday, November 1st at 10 AM at the Troy Middle School, 1976 Burdett Avenue, Troy, NY 12180.

Press releases and additional information will be available at the press conference.

PRESS CONFERENCE
FRIDAY, NOVEMBER 1sT
10:00 am
TROY MIDDLE SCHOOL
Troy Room
1976 Burdett Avenue, Troy, NY 12180

Agrees to Forfeit $8 Million Generated by Illegal Gambling Business
Hidden in Offshore Accounts

ALBANY, NEW YORK – Michele Lasso-Barraza, 30, of Parkland, Florida, pled guilty to conspiracy to commit money laundering today before United States District Judge Mae A. D’Agostino announced United States Attorney Richard S. Hartunian, Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division, and Toni M. Weiracuh, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York Field Office. Lasso-Barraza, who faces up to 20 years in prison and a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater, also agreed to forfeit her interest in $8 million. Sentencing is scheduled for February 28, 2014 at 12:30 pm before Judge D’Agostino in Albany. Co-defendant, Philip Gurian, 52, of Boca Raton, Florida, previously pled guilty to the same charge and is scheduled to be sentenced on February 6, 2014.

United States Attorney Hartunian said, “Another defendant, Michele Lasso-Barraza, has now admitted to her role in laundering $8 million generated by a sprawling illegal gambling operation which used the internet, phony corporations and offshore accounts. Those engaged in this type of activity, believing that their criminal conduct is well concealed, should now be on notice that law enforcement agencies at all levels – federal, state and local – are wise to their criminal tactics and committed to stopping them. I thank all of the law enforcement agencies involved in this investigation, particularly the Federal Bureau of Investigation, Internal Revenue Service- Criminal Investigation and the Albany County Sheriff’s Department, for their diligent work over several years to investigate this international money laundering operation, bring those responsible to justice and seize and forfeit their substantial ill-gotten gains.”

Special Agent-in-Charge Vale said, “This case illustrates the FBI’s ongoing commitment in working alongside our federal, state and local counterparts to root out illegal gambling locally, nationally and internationally. The plea of Ms. Lasso-Barraza to money laundering charges and the agreement to forfeit $8 million illustrates that the FBI will not tolerate this type of criminal activity at any level.”

Internal Revenue Service-Criminal Investigation Special Agent-in-Charge Weirauch said, “International money laundering is not the victimless crime that some may think it is. Money laundering, including the laundering of illegal gambling proceeds, facilitates the underground, untaxed economy, which, in turn, harms our nation’s strength. IRS-Criminal Investigation is always ready to work with our law enforcement partners in the fight against this threat to our country.”

As part of the plea, Lasso-Barraza admitted her involvement in an illegal gambling business run by Gurian and others which used internet websites that allowed bettors to place thousands of wagers from the Capital District, Florida, Indiana, California, Texas, and Nevada. She also admitted to participating in the laundering of at least $8 million on behalf of Gurian that was generated from the illegal gambling business. That money was transferred to offshore accounts in Panama, Andorra, and the Cayman Islands. Lasso-Barraza created some sham entities and then set up some of the accounts in the names of those sham entities.

These charges were the result of a joint investigation initiated by the Albany County Sheriff’s Office, and joined by the Albany County District Attorney’s Office, the Saratoga District Attorney’s Office, the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the Broward County Money Laundering Task Force. The case is being prosecuted by Assistant United States Attorney Robert A. Sharpe.

Albany, NY United States Attorney Richard S. Hartunian is once again urging parents, grandparents, teachers, nurses and the community as a whole to help stop the abuse of prescription drugs among young people. The problem is more widespread than people think, and there are simple things everyone can do to save those who may fall into such abuse.

"The abuse of prescription and over-the-counter drugs happens in many, often innocent, ways, but the costs of such abuse can be astronomical," said U. S. Attorney Hartunian. "1 in 8 teens has reported getting high on over-the-counter cough medicine1 and 1 in 12 high school seniors reported nonmedical use of the prescription pain reliever Vicodin along with 1 in 20 reporting they've used OxyContin.2 After marijuana, prescription and over-the-counter medications account for most of the commonly abused drugs by our youth.3 These aren't drugs being manufactured behind closed doors and sold on street comers. These are substances readily available in each of our homes. We all have a responsibility in helping to stop this scary and upward trend of prescription drug abuse."

The trends of prescription drug abuse are escalating. More than one-half of the estimated 2.4 million first-time prescription drug abusers were females and about one-third of them were between 12 and 17 years old.4 Worse yet, among all young adults ages 18 to 25, 5.9% report using nonmedical drugs within the past month in the National Survey on Drug Use and Health study.5

"What's most alarming about these trends of use is where young people are obtaining these drugs," warns U.S. Attorney Hartunian. "Over half of those who reported nonmedical drug use said they were given the drugs by a friend or relative.6 Close to 20 percent said they took the substances from a friend or relative.7 In response, we must do all we can to monitor the prescription drugs that are in our possession, discard unused medications properly and talk with young people about the very real dangers of prescription drug abuse."

Each year the Drug Enforcement Administration hosts a national "Take-Back" day. This year's event is this Saturday, Oct. 26th. Plan to dispose safely of unused prescription drugs on that day at collection sites which will be open between 1 0 am to 2 pm. The public can find a nearby collection site by visiting www.dea.gov, clicking on the "Got Drugs?" icon, and following the links to a database where they can enter their zip code. Or they can call 1-800-882-9539.

The Partnership at Drugfree.org has new ads aimed at helping parents and grandparents understand how important it is to monitor the possession of their prescription medications, especially pain killers. You can view and share these ads with everyone you know: http://www.drugfree.org/videos/

Talk can be one of the most effective tools we have. Talking with your own children and grandchildren about the dangers of prescription drug abuse is important, just as in the past we have talked about the dangers of drinking, drinking and driving and the use of tobacco. When adults have open, honest discussions with young people, they take it to heart. And it just might be one of those conversations, in the end, that keeps your teen from trying nonmedical drugs.

"Take time this week. Don't put it off. Dispose of your unused prescriptions. Talk with the young people around you about these dangers. You may be saving a loved one's life," suggested U.S. Attorney Hartunian.

Steps YOU can take this week to help stop prescription drug abuse

1. DISPOSE of your unused prescription drugs, especially unused pain killers, on Saturday, Oct. 26th. Find a location near you by visiting http://www.dea.gov/index.shtml and clicking on the "Got Drugs?" icon or call1-800-882-9539.

2. WATCH AND SHARE these ads to learn how easy it is to obtain prescription drugs: http://www.drugfree.org/videos/

3. TALK with your own children and grandchildren about the dangers of using prescription drugs and over-the-counter medications that aren't meant for them. For ideas of what to say, go to www.drugfree.org

FREE EDUCATIONAL WEBINAR

Clink on this webinar link and share this link to learn more about Prescription Drug Abuse Link: http://neric.welearntube.org/?q=node/314

_________________

1The Medicine Abuse Project, The Partnership at Drugfree.org website http://medicineabuseproject.org/assets/documents/Preventing_teen_over_the_counter_cough_med_abuse_2014.pdf
2National Institute on Drug Abuse's Monitoring the Future Survey, 2010
3National Institute on Drug Abuse Research Report Series 5
4Ibid.
5National Survey on Drug Use and Health, 2010
6University of Michigan, 2010 Monitoring the Future Study
7Ibid.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that his office has settled a civil prosecution under the Clean Water Act. Riccelli Enterprises, Inc. filled in over 5 acres of federally regulated wetlands with a parking lot. Riccelli agreed to remove the illegal parking lot and pay a $50,000.00 fine. Riccelli signed a similar agreement with the State of New York, agreeing to remove the illegal parking lot and to pay an additional $50,000.00 fine.

Complaint

The federal settlement is based upon a Complaint filed in the U.S. District Court for the Northern District of New York. The Complaint’s allegations include the following: Riccelli Enterprises, Inc. and Riccelli Enterprises, LLC are corporations with offices located at 6131 East Taft Road, North Syracuse, Onondaga County, New York. The Clean Water Act prohibits the discharge of pollutants into navigable waters unless a permit is obtained from the U.S. Army Corps of Engineers (Corps). Sometime prior to July 30, 2008, and without seeking a permit from the Corps, Riccelli filled in wetlands to construct a parking lot at 6131 East Taft Road, North Syracuse. Riccelli used mechanized land-clearing and earth-moving equipment to fill in the parking lot.

An environmental study concluded that Riccelli had disturbed 6.06 acres of land, including 5.39 acres of regulated wetlands. The fill used by Riccelli to create the parking lot included dirt, spoil, rock, and sand, all of which are described as “pollutants” by the Clean Water Act. The Corps issued a Notice of Violation to Riccelli, which stated that Riccelli had filled in the parking lot without Department of the Army authorization and in violation of the Clean Water Act.

Consent Decree

In August, 2013 Riccelli and the United States signed a Consent Decree. The Consent Decree provides in part that 1) Riccelli shall pay a civil penalty to the United States in the amount of $50,000.00, 2) Riccelli shall restore the 5.39 acres of disturbed wetlands, pursuant to a “Wetland Restoration and Monitoring Plan” prepared by an environmental firm in January, 2013, and 3) the United States may enter Riccelli’s premises at all reasonable times to monitor Riccelli’s activities, obtain samples, verify data submitted to the United States, and inspect and evaluate Riccelli’s restoration efforts. The Wetland Restoration and Monitoring Plan provides that Riccelli shall excavate and remove the fill material, add topsoil as needed, reseed and revegetate the area, restore the area to its condition before the parking lot was installed, and its environmental firm will submit annual monitoring reports for five years, which will include studies of hydrology, and samples of vegetation from 15 plots.

After the parties signed the Consent Decree a notice was published in the Federal Register and public comment was invited. No comments or objections were received. On October 24, 2013 the Consent Decree was approved and ordered by the Hon. Gary L. Sharpe, Chief U.S. District Judge.

Diane Kozlowski, the Chief of the Regulatory Branch of the U.S. Army Corps of Engineers, Buffalo District, stated that, "[T]his resolution directly supports the Corps Regulatory Program's goal to provide strong protection of the nation’s aquatic environment, including wetlands, and help maintain the physical, chemical and biologic integrity of the nation’s waters. This resolution will help deter those entities who contemplate proceeding with a project in the vicinity of waters subject to regulation under the Clean Water Act without first contacting and coordinating with the Corps to obtain the proper authorizations required by law.”

Richard S. Hartunian, United States Attorney for the Northern District of New York, stated that “The United States Attorney’s Office is committed to the protection of the environment and the aggressive enforcement of the Clean Water Act. This case reflects a coordinated effort by this office,the Department of Justice, and the U.S. Army Corps of Engineers.”

This matter is assigned to Assistant U.S. Attorney Charles E. Roberts. Colin Ozanne, Esq. of the U.S. Army Corps of Engineers Buffalo District, and Eric Hostetler, Esq. of the U.S. Department of Justice are also assigned. News inquiries should be directed to Executive Assistant U.S. Attorney John Duncan, tele. (315) 448-0672.

Members of International Drug Trafficking Organization
Conspired to Acquire 80 Kilograms of Cocaine from Federal Agent

ALBANY, NEW YORK – A jury in Albany convicted a Reading, Pennsylvania man of conspiracy to distribute and possess with intent to distribute more than five kilograms of cocaine following a two-day jury trial, announced United States Attorney Richard S. Hartunian and James Spero, Special Agent-in-Charge, Homeland Security Investigations. Miguel Reyes, 50, faces at least ten years of imprisonment, a maximum term of imprisonment of up to life, and a $10,000,000 fine. Sentencing is scheduled for February 10, 2014 at 11:30 a.m. in Albany, New York before the Honorable Thomas J. McAvoy.

The evidence at trial showed that, in 2004, REYES conspired to obtain 80 kilograms of cocaine from undercover law enforcement officers posing as cocaine traffickers from Montreal, Quebec. Members of the conspiracy intended to distribute the cocaine throughout the United States. Two other members of the conspiracy, who were convicted in 2004 and 2005, delivered $200,000 in U.S. currency to undercover law enforcement officers in exchange for a portion of the cocaine. REYES was arrested in early 2013 after attempting to enter the United States from Mexico.

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

ALBANY, NEW YORK –HERBERTO BALDOMERO COBON-VASQUEZ, age 34, of Cobleskill, New York, was sentenced today to “time served” (108 days) for illegally reentering the United States after removal by United States District Judge Mae A. D’Agostino announced United States Attorney Richard S. Hartunian and Department of Homeland Security Director of Enforcement and Removal Operations Thomas Homan. COBON-VASQUEZ was remanded to the custody of the Department of Homeland Security for removal proceedings. Today’s sentencing followed COBON-VASQUEZ’s August 28, 2013, guilty plea.

COBON-VASQUEZ, a citizen of Guatemala, was deported to Guatemala on February 8, 2001. He unlawfully re-entered the United States and, on July 1, 2013, was found in Cobleskill, New York, after he was involved in a traffic accident and arrested for driving without a license.

This case was prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

Tried to Bilk $36 Million from the IRS

ALBANY, NEW YORK – A federal jury in Albany returned its verdict today convicting GLENN RICHARD UNGER (62, of Ogdensburg, NY) of the following offenses: obstructing and impeding the Internal Revenue Service (IRS); filing false claims against the United States; tax evasion; and passing fictitious obligations announced Richard S. Hartunian, United States Attorney, Northern District of New York, Toni M. Weirauch, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, New York Field Office, and Andrew W. Vale, Special Agent in Charge of the Federal Bureau of Investigation, Albany Division. Sentencing is scheduled for March 10, 2014 before Senior U.S. District Judge Thomas J. McAvoy.

U.S. Attorney Hartunian stated, “This trial detailed the callous contempt for state and federal authority that is the hallmark of the sovereign citizen movement. Like other sovereign citizens, GLENN RICHARD UNGER filed numerous false claims for refunds, tried to avoid paying his fair share of taxes, filed false documents with the Saratoga County Clerk’s office and attempted to pay a debt with a phony promissory note. We will continue to work with our law enforcement partners to aggressively investigate and prosecute anyone who refuses to honor every citizen’s duty to file honest tax returns and pay their taxes. I congratulate the IRS CID, the FBI, the New York State Police, and the Treasury Inspector General for Tax Administration for their diligence, professionalism, and hard work in bringing about a just and appropriate verdict.”

Special Agent-in-Charge Toni Weirauch said, “The prosecution of individuals who brazenly attempt to obstruct the Internal Revenue Service and prevent it from performing its mission is vital to maintaining public confidence in our tax system. This verdict conveys a strong message to those who contemplate abusing the tax system: They will be investigated, prosecuted and convicted. It also reassures the honest American taxpayer that the government is committed to making sure that everyone pays their fair share.”

SAC Vale stated, “The FBI is committed to vigorously investigate individuals like Mr. Unger who steal from the federal government for financial gain through schemes designed to avoid payment of taxes and other obligations owed the federal government. The victims of such schemes are the hardworking taxpayers in America, and we will continue to pursue these sovereign citizen movements, which result in damages for law-abiding citizens.”

The evidence at trial showed that between 2007 and 2011, UNGER filed 14 false tax returns claiming that he earned substantial income reported, had substantial withholdings on that income, and was entitled to $36 million in tax refunds. Despite numerous warning letters from the IRS that his returns were frivolous, he continued filing false tax returns.

In addition to obstructing the IRS by filing false and fraudulent claims for refund, the evidence at trial also showed that UNGER attempted to evade payment of taxes he owed to the IRS. During 2004 and 2005, UNGER earned income and failed to file tax returns reporting that income. The IRS assessed taxes for those two years and also assessed penalties for filing frivolous tax returns. After the IRS filed a tax lien against UNGER, UNGER attempted to file a false document with the Saratoga County Clerk’s office attempting to release the lien. Evidence at trial also showed that UNGER tried to pay off a debt to another orthodontist with a fictitious document purported to be worth $200,000.00.

As a result of the convictions, the defendant is facing a total statutory maximum term of imprisonment of 25 years and a maximum fine of $250,000.00

This prosecution resulted from an investigation conducted by the Internal Revenue Service, Criminal Investigation, New York Field Office, the Federal Bureau of Investigation, Albany Field Office, the New York State Police, and the Treasury Inspector General for Tax Administration. The case was prosecuted by Assistant United States Attorney Ransom P. Reynolds (NDNY) and Jeffrey Bender (DOJ Tax Division).

TROY, NEW YORK – RICHARD S. ELY, 27, of Troy, New York, entered a guilty plea yesterday before the Honorable Mae A. D’Agostino to an indictment charging him with being a convicted felon in possession of a firearm 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 defendant is facing a maximum sentence of ten years in prison, a term of supervised release of up to three years, and a maximum fine of $250,000. ELY is being detained pending his sentencing which is scheduled for February 20, 2014.

According to the plea agreement: On June 7, 2012, a search was conducted at ELY’s residence in Troy, New York. The search of ELY’s residence resulted in the seizure of a .22 caliber firearm and ammunition which belonged to ELY. ELY had previously been convicted of two felonies: (1) a 2007 conviction for criminal sale of a controlled substance and (2) a 2012 conviction for aggravated driving while under the influence with a child under age fifteen as a passenger.

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 is being prosecuted by Assistant United States Attorney Wayne A. Myers.

Town Of Halfmoon Supervisor Charged in Two-Count Indictment Alleging Extortion
“Under Color of Official Right”and False Statements

ALBANY, NEW YORK – Town of Halfmoon Supervisor Melinda Wormuth appeared today before Magistrate Judge Randolph F. Treece in federal court in Albany to be arraigned on two felony charges, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent in Charge of the Federal Bureau of Investigation.1

Ms. Wormuth, 46, of Halfmoon, NY was charged yesterday in a sealed indictment, which was unsealed today at her initial appearance. Count One of the Indictment charges Ms. Wormuth with accepting money in return for her official actions. Specifically, she is charged with having received $7,500 in cash, which was characterized as “consultant fees,” in return for using her official position as Town Supervisor and as a member of the Saratoga County Board of Supervisors to lobby for the legalization of professional Mixed Martial Arts. Count Two of the Indictment charges her with lying to federal investigators about legal advice she claimed to have obtained while accepting the “consultant fees.” If convicted, Ms. Wormuth faces up to 20 years in prison on Count One and up to 5 years in prison on Count Two. She could also be ordered to pay a fine of up to $250,000 on each count.

The charges are the result of an ongoing investigation by the Federal-State Anti-Corruption Task Force that includes the Federal Bureau of Investigation, the New York Attorney General’s Office, the Internal Revenue Service, the New York Comptroller’s Office, and others.

United States Attorney Hartunian stated: “These charges are an example of the culture of corruption which has no place in New York State public offices. Citizens trust their public officials to behave ethically, and it is a travesty when this pubic trust is broken. I will continue to work with my federal and state partners to ensure that public officials uphold that trust and, when they don’t, are held accountable for their actions.”

United States Attorney Hartunian also cited the cooperation of state and federal investigators in pursuing this investigation and the coordination of state and federal prosecutors in developing the specific charges brought today.

Special Agent in Charge Vale stated, “Today’s arrest demonstrates the FBI’s commitment to the investigation of corruption at all levels of government. Together with our law enforcement partners, the FBI will continue to work to ensure that all those who participate in corrupt schemes, which erode our communities and defraud those they are entrusted to serve, are held accountable for their actions.”

The prosecution is being handled by Assistant U.S. Attorney Michael Olmsted in Syracuse, NY. Press inquiries should be directed to Assistant U.S. Attorney Elizabeth Coombe.

_____________________________

1An Indictment is a mere accusation, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

SYRACUSE, NEW YORK – David J. Renz, 29, of North Syracuse entered guilty pleas in federal court in Syracuse today to all counts of a six count Indictment charging him with receipt and possession of child pornography, announced United States Attorney Richard S. Hartunian.

By his plea, Renz admitted that when FBI agents interviewed him in June of 2012 he consented to their search of a computer he used to download and store child pornography. He was arrested in January, 2013 after agents located over 500 video files and over 3,000 image files depicting child pornography on his computer. Renz also pled guilty to 5 counts of possession of child pornography related to images and videos he possessed on DVDs and a CD seized from his residence on the date of his arrest.

Upon sentencing, Renz faces a mandatory minimum sentence of 5 years in federal prison, a maximum term of imprisonment of 20 years, for the charge of receiving child pornography, and a maximum term of imprisonment of 10 years on each of the possession charges. In addition, he faces fines of up to $250,000 on each count and mandatory supervised release of no less than 5 years and up to life following any term of incarceration. In addition, conviction of the charged offenses will require Renz to register as a sex offender. Sentencing is scheduled for February10, 2014.

Renz's arrest 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 is being handled by Assistant U.S. Attorney Lisa Fletcher, who can be reached at 448-0672.

Investigation Yields Seizures of Crack, Heroin, and Cocaine

PLATTSBURGH, NEW YORK – Four men have been indicted and arrested on federal felony drug trafficking charges, announced United States Attorney Richard S. Hartunian. The arrests followed a year-long investigation led by Homeland Security Investigations (HSI), the Massena Police Department (MPD), the Saint Lawrence County Sheriff’s Department and the New York State Police (NYSP).

The indictment charges the following individuals with conspiracy to possess with intent to distribute and to distribute a controlled substance in violation of 21 U.S.C. § 846:

 Matthew Malu, aka “Compo” and “Capo,” 24, of New York City
 Ian Hendricks, aka “Jew,” 19, of Massena, New York
 Star Perrin, 34, of Massena, New York

Each defendant listed above faces a mandatory minimum sentence of five (5) years imprisonment, a forty (40) year maximum term of imprisonment, and the possibility of a $5,000,000 fine.

A separate indictment charges Adam Gauthier, 24, of Massena, New York, with possession with the intent to distribute a controlled substance. Gauthier faces a twenty (20) year maximum term of imprisonment and the possibility of a $1,000,000 fine.

The investigation revealed that this organization used suppliers in New York City to obtain large quantities of cocaine, heroin and crack for redistribution. After obtaining the drugs, the organization employed couriers to transport the drugs from New York City to Massena, New York, where the organization’s distribution network sold ounce and gram quantities of the drugs to drug users and other wholesale drug dealers in the area.

During the investigation, law enforcement officers seized drugs and money from the defendants, to include:

1. On March 15, 2013, law enforcement officers from the Syracuse Police Department and HSI seized approximately 82.5 grams of heroin from Adam Gauthier.
2. On September 13, 2013, officers from HSI, NYSP, and MPD seized approximately 27.32 grams of crack, 29.94 grams of powder cocaine, and 117.38 grams of heroin from a package sent to Ian Hendricks. 3. On September 27, 2013, offices from HSI and MPD seized approximately $5,000 in cash from Star Perrin.

The District Attorneys of Clinton, Franklin and St. Lawrence Counties, the Saint Regis Mohawk Tribal Police Department, the United States Customs and Border Protection Office of Air and Marine, the United States Customs and Border Protection Office of Field Operations, the Drug Enforcement Administration, the Royal Canadian Mounted Police, the New York Attorney General’s Office, the Oneida Indian Nation Police and the Customs and Border Protection United States Border Patrol assisted in the investigation.

The United States is represented in this prosecution by Assistant U.S. Attorney Daniel C. Gardner and Assistant U.S. Attorney Katherine Kopita.

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

SYRACUSE, NEW YORK – A jury convicted a Utica, New York resident of federal drug felony charges following a four day jury trial, announced United States Attorney Richard S. Hartunian.

Dean A. Steppello, 43, of Utica, New York was convicted of two counts of Possession of Cocaine With Intent to Distribute. The jury also found he possessed over 500 grams of cocaine, requiring a mandatory minimum sentence of five years imprisonment and a maximum sentence of up to twenty years imprisonment. Sentencing is scheduled for January 30, 2014 in United States District Court in Syracuse.

The case followed the arrest of the defendant on June 25, 2008 by members of the New York State Police Community Narcotics Enforcement Team (“CNET”) in Utica as he attempted to deliver four ounces of cocaine. A subsequent search of the defendant’s residence resulted in the recovery of an additional pound and three quarters of cocaine, drug paraphernalia, a shotgun and four thousand dollars in cash.

The case was investigated by the New York State Police Community Narcotics Enforcement Team and was prosecuted by Assistant U.S. Attorneys Richard R. Southwick and Tamara B. Thomson.

Defendant Sentenced to Time Served

ALBANY, NEW YORK—IGNACIO HERNANDEZ-LOPEZ, age 39, a citizen of Mexico, pled guilty and was sentenced today in United States District Court in Albany before United States District Court Judge Mae A. D’Agostino to one count of re-entry by a previously removed alien, announced United States Attorney Richard S. Hartunian. HERNANDEZ-LOPEZ was sentenced to time served.

HERNANDEZ-LOPEZ, a citizen of Mexico, was involuntarily removed from the United States to Mexico on March 17, 2004. On August 16, 2013, HERNANDEZ-LOPEZ, who did not have permission to re-enter the United States, was encountered by Immigration and Customs Enforcement officers in Whitehall, New York.

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

THOMAS DOMBROSKI, age 54, of North Syracuse, New York, was sentenced in U.S. District Court in Syracuse on September 20, 2013 to 5 years probation and ordered to perform 100 hours of community service for defrauding the U.S. Postal Service and U.S. Department of Labor of $18,353.54 by making false statements and representations to obtain federal workers compensation benefits according to U.S. Attorney Richard S. Hartunian.

DOMBROSKI falsely represented that he was not employed, self-employed, or involved in any business enterprise during periods of time in 2010 and 2011 when he was collecting federal workers compensation benefits. He was receiving benefits based upon a claimed injury to his right shoulder that he said made him unable to use his right arm. In fact, DOMBROSKI, worked for his own company, Picture Perfect Contractors, installing and repairing roofs and providing general home repair services during the times he collected benefits. Agents videotaped DOMBROSKI installing roofs, carrying building materials, repairing gutters, loading and carrying logs and firewood, carrying cement cinder blocks, and lifting a 55-pound air compressor.

This case was investigated by the U.S. Postal Service Office of Inspector General and the U.S. Department of Labor, Office of Inspector General.

Further information regarding this case can be obtained by contacting Assistant United States Attorney Tamara Thomson at (315) 448-0672.

Statewide Youth Courts being honored in federal court ceremony

ALBANY, NY – Monday, September 23, 2013 at 1:00 PM in the Ceremonial Courtroom of the James T. Foley U. S. Courthouse, 445 Broadway, Albany, NY, Youth Courts from across New York State will be recognized for their service to youth. The ceremony will include a mock hearing presented by Youth Court members from the Bethlehem and Colonie Youth Courts. Attending the ceremony will be more than a hundred youth court directors and youths. Dignitaries attending and participating will be the Honorable Judith S. Kaye, former Chief Judge of the New York State Court of Appeals, Honorable Bernard J. Malone, Jr., former Judge of the New York State Supreme Court, Appellate Division, United States District Court Judges, and Albany Mayor Gerald Jennings. The event will be hosted by the Honorable Richard S. Hartunian, United States Attorney for the Northern District of New York. The event is co-sponsored by the New York State Bar Association and the Association of New York State Youth Courts.

Cameras will be allowed in the Ceremonial Courtroom. Press packages will be available at the event.

EVENT: Celebration of New York State Youth Courts
DATE: Monday, September 23, 2013
TIME: 1:00 PM
LOCATION: James T. Foley U. S. Courthouse
Ceremonial Courtroom, 4th Floor
445 Broadway
Albany, NY

Albany, New York - JOSE REYES BLANCO RUTIAGA, age 29, a citizen of Mexico, pled guilty yesterday before Senior United States District Court Judge Lawrence E. Kahn, in Albany, New York to the felony offense of re-entry by a previously removed alien, announced United States Attorney Richard S. Hartunian.

BLANCO RUTIAGA, a citizen of Mexico, was involuntarily removed from the United States to Mexico on March 4, 2010 and again on April 17, 2010. On August 21, 2013, BLANCO RUTIAGA, who did not have permission to re-enter the United States, was encountered by an Immigration and Customs Enforcement officer at the Rensselaer, New York, City Court.

Sentencing for is scheduled for January 22, 2014, at 10:30 a.m. in Albany, New York. BLANCO RUTIAGA faces a maximum sentence of imprisonment of up to 2 years, supervised release of up to 1 year, a fine of up to $250,000, and a special assessment of $100. BLANCO RUTIAGA was detained pending his sentencing.

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

Defendant Caught Smuggling Over 128 Pounds MDMA into the United States from Canada ALBANY, NEW YORK – JOEL CUNNINGHAM, age 30, of Ottawa, Canada, pled guilty today in Albany before United States District Court Judge Glen T. Suddaby to one count of possession with intent to distribute a controlled substance, announced United States Attorney Richard S. Hartunian and Homeland Security Investigations Special Agent-in-Charge James Spero. CUNNINGHAM faces a maximum sentence of 20 years in prison, and is being detained pending his sentencing.

During the plea proceeding, CUNNINGHAM admitted that, on April 9, 2013, he loaded a sport utility vehicle with 58,183 grams of 3,4-Methylenedioxymethamphetamine Hydrochloride (commonly known as “Molly”) and then drove the sport utility vehicle from Canada into the United States through an unmanned border, intending to take the “Molly” to New York City for redistribution.

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 and found the “Molly,” as well as over $140K in U.S. currency, in hidden compartments and duffel bags.

Sentencing is scheduled for February 7, 2014 at 10:00 a.m. in Albany. This case was investigated by U.S. Immigration and Customs Enforcement, Homeland Security Investigations. The case is being prosecuted by Assistant United States Attorney Wayne Myers.

Defendant Used his Cellular Telephone to Attempt to Arrange a Sexual Encounter with a
Twelve-Year-Old Girl

ALBANY, NEW YORK — MICHAEL HEPPELLE, age 42, of Troy, New York, pled guilty today in Albany before Chief United States District Court Judge Gary L. Sharpe to one count of attempted online enticement of a minor, announced United States Attorney Richard S. Hartunian and Andrew W. Vale, Special Agent-in-Charge, Federal Bureau of Investigation, Albany Division. HEPPELLE faces a mandatory minimum sentence of at least ten years of imprisonment and up to a maximum sentence of life imprisonment. HEPPELLE was detained pending his sentencing.

Pursuant to a written plea agreement, HEPPELLE admitted that between approximately September 24, 2012 and October 3, 2012, he 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 her 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.

Sentencing is scheduled for January 21, 2014, at 9:00 a.m. in Albany, New York. This case was investigated by the Federal Bureau of Investigation and the Rensselaer County Sheriff’s Office. This case is being prosecuted by Assistant United States Attorney Rick Belliss.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian, announces that TERRELL WRIGHT, age 29, of Syracuse, pled guilty today in U.S. District Court in Syracuse to the Indictment, which charged him with: (1) assaulting two detectives from the Syracuse Gang Violence Task Force (“GVTF”) (Count One); (2) use and carry of a handgun during the assault (Count Two); and (3) being a convicted felon in possession of a handgun (Count Three).

As part of his plea WRIGHT admitted the following facts:

On Tuesday, December 18, 2012, Syracuse Police detectives Melvin DeBottis and Timothy Galanaugh were both federally deputized members of the Syracuse Gang Violence Task Force ("GVTF"). At approximately 12:50 p.m. that day, while engaged in the performance of their official duties, DeBottis and Galanaugh were driving in a government-issued vehicle when they observed Person A, a suspected East Side gang member, walking westbound in the 1600 block of East Fayette Street in Syracuse, New York with his brother, the defendant. Because Person A was suspected of being involved in a shooting the night before, the detectives decided to stop and talk with him. As they were pulling their vehicle to the curb, they observed the defendant pull a small, black semi-automatic handgun from his waistband and point it at DeBottis and Galanaugh. DeBottis and Gallanaugh both drew their handguns as they got out of the car and advanced towards the defendant and Person A shouting "drop the gun." At that point, Person A was subdued and the defendant ran off. A chase ensued and the defendant was found hiding in a plastic deck box a few minutes later. The gun in question, a Glock model 27, .40 caliber handgun, with a laser sight, was recovered on the ground a few feet from where the defendant had pointed it at DeBottis and Galanaugh.

During his plea allocution, WRIGHT admitted under oath that he has never had a job and he made his money by selling drugs on the streets of Syracuse.

WRIGHT faces the following maximum penalties at sentencing, which is scheduled for March 10, 2014:

Count One: Up to 20 years imprisonment, followed by three years of supervised release, and up to a $250,000 fine;

Count Two: At least seven years imprisonment that must run consecutive to any sentence on Counts One and Three, followed by three years of supervised release, and up to a $250,000 fine;

Count Three: Up to 10 years imprisonment, followed by three years of supervised release, and up to a $250,000 fine;

WRIGHT acknowledged that he has two prior felony drug convictions and was currently on parole from the second conviction. Thus, he qualifies as a Career Offender under the federal sentencing guidelines and he will face greater punishment.

Further questions or inquiries may be directed to Assistant U.S. Attorney John M. Katko, who is prosecuting the case, at (315) 448-0916.

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that NATE KING, age 23, of Syracuse, pled guilty this morning in U.S. District Court in Syracuse to an indictment which charged him and ten others with conspiring to exploit their membership in the V-NOT Gang to engage in a pattern of racketeering activity which included acts of murder, attempted murder, drug trafficking, and robbery. KING is the tenth defendant to plead guilty in this case.

The case against Kahari Smith, the sole remaining co-defendant, remains pending. King is presumed innocent until the case against him reaches its conclusion.

At sentencing, KING faces up to life imprisonment, a $250,000 fine, and five years of supervised release following any period of incarceration.

The Indictment to which KING 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. With respect to the murder, the Indictment includes allegations that on November 26, 2010, gang member Kahari Smith shot and killed Kihary Blue on Interstate 81 in downtown Syracuse as part of an ongoing feud between the V-Not and Bricktown gangs.

The trial for Kahari Smith is set to commence on October 1, 2013, in Syracuse. However, a hearing has been scheduled for this afternoon at 3:30 p.m. in Syracuse before the Hon. Norman Mordue for a possible disposition of the case.

This prosecution resulted from a long-term investigation conducted by the Syracuse Gang Violence Task Force, which is comprised of agents and detectives from the following agencies: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Police, and the United States Marshals Service. The Onondaga County District Attorney’s Office and the Drug Enforcement Administration - Syracuse office, also assisted in the investigation.

Further questions or inquiries may be directed to Assistant U.S. Attorney John M. Katko, who is prosecuting the case, at (315) 448-0916.

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that KAHARI SMITH, age 28, of Syracuse, pled guilty this morning in U.S. District Court in Syracuse to an indictment which charged him and ten others with conspiring to exploit their membership in the V-NOT Gang to engage in a pattern of racketeering activity which included acts of murder, attempted murder, drug trafficking, and robbery. SMITH is the last defendant to plead guilty in this eleven defendant case.

At sentencing, SMITH faces up to life imprisonment, a $250,000 fine, and five years of supervised release following any period of incarceration.

The Indictment to which SMITH 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.

As part of his plea, SMITH admitted to multiple acts that he committed in furtherance of the gang’s activities, the most prominent of which was his intentional killing of Henninger High School basketball star Kihary Blue on November 26, 2010. In that incident, Smith shot and killed Kihary Blue on Interstate 81 in downtown Syracuse as part of an ongoing feud between the V-Not and Bricktown gangs. Co-defendant Habakkuk Nickens admitted in court earlier this week that he drove a vehicle into position on the highway so that SMITH could fire the deadly shots into the vehicle in which Blue was a passenger in the middle of the back seat.

Other acts SMITH admitted to included the following: (1) possessing crack cocaine and a starter pistol in the presence of co-defendants Titus Nickens, Dwayne Hester and Donald Johnson, Jr., on October 24, 2007; (2) possessing crack cocaine, marijuana and U.S. currency, along with co-defendants Jermeere McKinnon, Titus Nickens, Jeffrey Powell and others on November 7, 2007; (3) possessing crack cocaine and U.S. currency in the presence of co-defendant Donald Johnson, Jr., on March 23, 2009; (4) present with co-defendants Riadda Travet and Jeffrey Powell when Powell shot a rival gang member in the head on November 1, 2009; (5) participation, along with co-defendants Christopher Mike, Jeffrey Powell, Habakkuk Nickens, Titus Nickens, Kenneth Jackson, Dwayne Hester, and others, in a gang fight against Bricktown Gang members on October 23, 2010; (6) participation in a drive-by shooting of a rival gang member’s house, along with co-defendants Christopher Mike, Jeffrey Powell and Kenneth Jackson; and (7) shooting of Bricktown Gang member Jaycee Floyd on March 19, 2011.

U.S. Attorney Richard Hartunian stated: “This plea signifies the end of a very violent chapter in gang activity that plagued the Valley section of Syracuse for the better part of a decade. We are pleased to have brought to justice all these V-Not Gang defendants and to have solved a particularly brutal, tragic and senseless murder of an innocent young athlete named Kihary Blue who, by all accounts, was a fine, upstanding member of our community. Let this serve as yet another example of our relentless pursuit of gang activity in the City of Syracuse.”

This prosecution resulted from a long-term investigation conducted by the Syracuse Gang Violence Task Force, which is comprised of agents and detectives from the following agencies: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Police, and the United States Marshals Service. The Onondaga County District Attorney’s Office and the Drug Enforcement Administration - Syracuse office, also assisted in the investigation.

Further questions or inquiries may be directed to Assistant U.S. Attorney John M. Katko, who is prosecuting the case, at (315) 448-0916.

SYRACUSE, NEW YORK - Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Martin S. Kimber, 60, of Ruby, New York, was sentenced today by Senior U.S. District Judge Lawrence E. Kahn to 14 years in prison, 5 years supervised release thereafter, forfeiture of his home and car which were used to store the mercury, and $200,450.48 in restitution to the Albany Medical Center following his guilty plea to using a toxic chemical, mercury, as a weapon (counts one and two), and tampering with consumer products (count three) at the Albany Medical Center, in Albany, NY. Kimber admitted that on four occasions he spread mercury, a potentially fatal neurotoxin, throughout various areas of the Albany Medical Center in ways which could lead to inhalation or absorption of the mercury, to retaliate for what he thought were unfair hospital bills.

When Kimber entered his guilty plea on November 29, 2012 he admitted that:

On December 10, 2010 and December 23, 2010, he received medical treatment at the Albany Medical Center, Albany, New York. On various dates thereafter, including on January 24, 2011, he wrote to express concern about having to pay for his medical care. On February 22, 2011, the Albany Medical Center Associate Medical Director wrote back and explained why the bills were appropriate, and discussed the outcome associated with Kimber having provided inaccurate information about his injury, and his decision not to complete the care prescribed by his treating physician.

On March 28, 2011, April11, 2011, June 23, 2011, and March 2, 2012, patients, visitors, and hospital personnel discovered liquid mercury deposited in sundry locations throughout the Albany Medical Center. On March 28, 2011, mercury was found in the level D basement, the hallway outside the Post-Operative Care Unit, the Triage window in the Emergency Room, and in the tracks to the door of the center elevator for Building D. Hospital; emergency response units identified and collected several pounds of mercury. On April 11, 2011, mercury was found in the men's bathroom on the AI level and in the main hallway in Building E, extending from the M doors to the elevator lobby. Approximately one to two pounds of mercury was collected by emergency response personnel. On June 23, 2011, mercury was found on the pedestrian ramp leading from the main lobby up to the pedestrian parking garage bridge and in the E-1 corridor exiting the Choice Cafe and the center elevator of Building A elevator triplex. Approximately two pounds of mercury was collected. On March 2, 2012, mercury was found in the cafeteria at Albany Medical Center, in the salad bar, in an apple bowl, in a banana basket, in a toaster, on a table by the coffee station, in the cooler for the packaged salad dressing, in the ice cream freezer, and in a container of chicken tenders that were being warmed under heating lamps and were available for purchase and consumption by cafeteria customers.

Kimber admitted he was responsible for each of these mercury disposals, and for tampering with the described products, including the mercury, each item of food, and the restaurant equipment, to include salad, fruit, toaster, table, cooler, freezer, and heating lamps. The food products and food containers into and near which the defendant deposited mercury affected interstate commerce. Kimber further admitted his purpose in disposing of the mercury throughout the Albany Medical Center on multiple occasions was to cause panic at the hospital leading to the closing down of the facility by causing a loss of business when people became fearful of gaining treatment and eating there.

On March 29, 2012, a search by law enforcement officers revealed that Kimber possessed two canisters of mercury, one stored in his car and the other stored in his house. Both canisters of mercury were seized by the officers. An FBI search of his computer showed that he engaged in searches at sites where more mercury could be purchased.

Mercury is a well-documented hazardous substance. Among other things, mercury is a neurotoxin that can kill human nerve cells. Mercury is readily absorbed through unbroken skin. Inhalation and other forms of absorption can lead to death, brain and lung damage, impairment of speech, constriction of the visual field, hearing loss and somatosensory change, and other serious bodily injuries. Having been a licensed pharmacist for 36 years, Kimber well understood these dangers, and that the heating of mercury, including the placing of mercury on or in toasters, and on or around heated food, greatly increased the likelihood that mercury would vaporize into the air and be inhaled by individuals consuming such food or using or near such heating devices. As part of his sentence, Kimber was ordered to abandon his computer in which child pornography was found and further ordered to:

Pay restitution to the Albany Medical Center in the amount of $200,451.48;

Pay restitution in full to the United States for any expenses incurred incident to the seizure, storage, handling, transportation, and destruction of any property seized in connection with an investigation of his use of mercury as a chemical weapon;

Forfeit his residence at 8 Lena Lane, Ruby, New York; and

Forfeit his 2007 Pontiac Solstice.

Kimber was arrested on April 25, 2012, by Special Agents of the United States Environmental Protection Agency. On March 2, 2012, following a hearing, Kimber was detained as a danger to the community. He was ordered to remain in jail following imposition of sentence.

United States Attorney Hartunian said, “Congratulations and thank you to the Environmental Protection Agency, the Federal Bureau of Investigation, and the Food & Drug Administration-Office of Criminal Investigations, whose cooperative investigation quickly brought the defendant to justice for this very dangerous conduct; to the patients, visitors, and hospital personnel who discovered the mercury; and to the emergency response units who collected it. Their alertness and professionalism prevented the dire consequences that could have resulted from the defendant’s use of several pounds of mercury as a chemical weapon and contaminating food and food service items at a hospital.”

“There are honest accidents and there are clear cases of criminal conduct,” said Vernesa Jones-Allen, Special Agent in Charge of EPA’s Criminal Investigation Division in New York. “The defendant’s action threatened public health and safety and sent an innocent victim to the hospital. Today's sentence demonstrates that this kind of behavior will not be tolerated. EPA is encouraged by the level of partnership shown by the local, state and federal law enforcement agencies involved in this joint investigation.”

“The defendant demonstrated a disregard for the potentially life-threatening consequence of his actions and for the potential harm that he could have inflicted” said Special Agent in Charge Mark Dragonetti of the FDA’s Office of Criminal Investigations, New York Field Office. “We will continue to work with our law enforcement counterparts to aggressively pursue those who place the public health at risk and harm others by tampering with food, drugs or other FDA- regulated products.”

This case was investigated by Special Agents of the Environmental Protection Agency, the Federal Bureau of Investigation, and the Food & Drug Administration-Office of Criminal Investigations. Assistance has been provided by the Towns of Albany and Ulster Police Departments. The case was prosecuted by Assistant United States Attorney Craig Benedict, to whom questions may be directed at 315-448-0672 or cell phone 315-391-1110.

Alleged Possession of Three Thumb Drives Containing Child Pornography

ALBANY, NEW YORK — A grand jury returned an indictment charging TIMOTHY TEFFT, age 64, of Greenwich, New York, with three counts 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.1 TEFFT faces up to ten years of imprisonment and a maximum fine of $250,000 on each count.

TEFFT had his initial appearance and arraignment on the charges in Albany today before the Honorable Christian F. Hummel, United States Magistrate Judge. TEFFT was detained pending his trial which has been scheduled for November 18, 2013 at 9:30 a.m. before Chief United States District Court Judge Gary L. Sharpe.

According to the indictment, between January 1, 2010 and May 3, 2011, TEFFT possessed three thumb drives, each of which contained images of child pornography.

This case is being investigated by the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Rick Belliss.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources.”

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

ALBANY, NEW YORK – A federal jury in Albany returned its verdict following the two-day trial of GUILLERMO ANTONIO SUAREZ, 48, of Gaithersburg, Maryland, announced United States Attorney Richard S. Hartunian and Customs and Border Protection Director of Field Operations James T. Engleman. The jury found SUAREZ guilty of all three felony counts charged in the indictment: (1) alien smuggling, (2) attempting to transport an illegal alien, and (3) inducing an alien to illegally enter the United States. He faces up to 10 years in prison on the first count, up to 5 years in prison on the other two counts, a $250,000 fine on each count, and up to three years of supervised release. SUAREZ is scheduled to be sentenced on January 6, 2014, before the Honorable Thomas J. McAvoy, United States District Judge, in Albany, New York.

SUAREZ, a lawful permanent resident, was arrested on November 19, 2012, in Fort Covington, New York, after he helped his nephew, an alien, enter the United States from Canada outside a designated port of entry. SUAREZ dropped his nephew off on the Canadian side of the border and entered the United States through the Fort Covington port of entry by car while his nephew crossed the border through the woods, on foot, approximately three miles east of the port of entry. During inspection, Customs and Border Protection Officers found maps of the border and luggage belonging to SUAREZ’S nephew inside SUAREZ’S car.

This case was investigated by U.S. Customs and Border Protection and the U.S. Border Patrol. The case was prosecuted by Assistant United States Attorneys Jeffrey C. Coffman and Edward P. Grogan. Further questions may be directed to Assistant U.S. Attorney Elizabeth C. Coombe at (518) 431-0247.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that Patricia Harrington, 50, of Liverpool, New York, entered guilty pleas in U.S. District Court, in Syracuse, to multiple counts of filing false federal tax returns, wire fraud and aggravated identity theft. Harrington faces a maximum sentence of 20 years and a fine of $250,000. Sentencing has been scheduled for January 29, 2014 in U.S. District Court. She has been ordered detained in the custody of the U.S. Marshal pending sentencing.

In entering her guilty pleas before the Hon. Glenn T. Suddaby, Harrington admitted that she filed six false federal tax returns under her own name and names of relatives, without their knowledge, for tax years 2010 and 2011. She wrongfully received almost $24,000 in tax refunds from the Internal Revenue Service over a two year period.

She also pled guilty to four counts of federal wire fraud in connection with another scheme she devised to obtain Unemployment Insurance benefits from the New York State Department of Labor. In implementing this scheme, she opened four separate accounts at various local banks, via the internet, using personal identification information taken from other individuals without their knowledge. She thereafter filed false unemployment benefits claims, via the internet, causing unemployment benefits to be deposited into the fraudulent bank accounts. Under this scheme, she netted almost $15,000 in New York State unemployment benefits.

Harrington also pled guilty to a single count of Aggravated Identity Theft admitting that she knowingly and wrongfully used the personal identification information of another person to carry out her wire fraud scheme. The aggravated identity theft conviction carries a mandatory sentence of two years incarceration consecutive to any other sentences imposed in the case.

At the time the current offenses were committed, Harrington was on federal supervised release following her 2008 conviction in Pennsylvania for Identity Theft that resulted from a scheme where she wrongfully obtained more than $100,000 in student loans from the Pennsylvania Higher Education Assistance Program.

This prosecution resulted from an investigation conducted by the Onondaga County Sheriff’s Department, the New York State Department of Labor, the Syracuse U.S. Probation Office, the Internal Revenue Service, Criminal Investigations, Syracuse Office, and the Onondaga County District Attorney’s Office. The case was prosecuted by Executive Assistant U.S. Attorney John G. Duncan. For further information contact Mr. Duncan at 315-448-0672.

RICHARD S. HARTUNIAN, United States Attorney, Northern District of New York, announces that TITUS NICKENS, age 30, of Syracuse, pled guilty this morning in U.S. District Court in Syracuse to an indictment which charged him and ten others with conspiring to exploit their membership in the V-NOT Gang to engage in a pattern of racketeering activity which included acts of murder, attempted murder, drug trafficking, and robbery. NICKENS is the eighth defendant to plead guilty in this case. The case against three co-defendants remains pending.

At sentencing, NICKENS faces up to life imprisonment, a $250,000 fine, and three years of supervised release following any period of incarceration.

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

There are multiple acts of violence and drug distribution set forth in the Indictment, including 1 murder, 10 other shootings, 8 other acts of gun possession, and 18 acts of crack distribution and/or possession with intent to distribute crack. With respect to the murder, the Indictment includes allegations that on November 26, 2010, gang member Kahari Smith shot and killed Kihary Blue on Interstate 81 in downtown Syracuse as part of an ongoing feud between the V-Not and Bricktown gangs.

Trial for the remaining three defendants - Kahari Smith, Habakkuk Nickens and Nathan King - is set to commence on October 1, 2013, in Syracuse.

This prosecution resulted from a long-term investigation conducted by the Syracuse Gang Violence Task Force, which is comprised of agents and detectives from the following agencies: United States Department of Justice, Bureau of Alcohol, Tobacco, and Firearms (Syracuse Office), the Syracuse Police Department, the Onondaga County Sheriff's Department, the New York State Police, and the United States Marshals Service. The Onondaga County District Attorney’s Office and the Drug Enforcement Administration - Syracuse office, also assisted in the investigation.

Further questions or inquiries may be directed to Assistant U.S. Attorney John M. Katko, who is prosecuting the case, at (315) 374-3605.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced today that a Camillus man has been sentenced for his role in building and possessing a pipe bomb.

MICHAEL LaVALLEE, age 22, was sentenced by Senior United States District Judge Norman A. Mordue in Syracuse. LaVALLEE was sentenced to 24 months imprisonment, and ordered to participate in substance abuse and mental health programs. LaVALLEE will also serve three years of supervised release following his release from incarceration.

MICHAEL LaVALLEE pled guilty on April 1, 2013 to unlawfully possessing an unregistered firearm, specifically, a pipe bomb wrapped with shrapnel. LaVALLEE admitted that on or about August 12, 2012, he possessed and stored in his apartment in Camillus a pipe bomb he had built. The pipe bomb was composed of a length of metal pipe sealed at each end, with one end containing a hole for a fuse and loaded with explosive material. The pipe bomb was surrounded by metal nails acting as shrapnel, which were wrapped around the device with duct tape. LaVALLEE further admitted that the device was not registered to him in the National Firearms Registration and Transfer Record.

The pipe bomb was discovered and rendered safe by law enforcement officers and bomb squad technicians.

The case was investigated by the Camillus Police Department and the Bureau of Alcohol, Tobacco, Firearms & Explosives. The case was prosecuted by Assistant United States Attorney Stephen C. Green.

Instructed Restaurant Employees to Make False Statements to Federal Agents

ALBANY, NEW YORK – Former Rennselaer County Jail Corrections Officer Mark A. Piche, 44, of Poestenkill, New York, pled guilty yesterday before Chief United States District Judge Gary L. Sharpe to corruptly endeavoring to obstruct the due administration of the internal revenue laws announced United States Attorney Richard S. Hartunian; Special Agent-in-Charge Toni M. Weirauch, Internal Revenue Service, Criminal Investigation, New York Field Office; and Lieutenant John D. Durling, Special Investigations Unit Albany, New York State Police. Sentencing is scheduled for January 6, 2014 at 11:00 a.m. Piche faces up to three years in prison, a $5,000 fine, one year of supervised release, and a $100 special assessment.

According to the plea agreement, between 2007 and 2011, Piche caused his restaurant, Red Front LLC in Troy, New York, to file false quarterly returns with the Internal Revenue Service. Those false returns underreported the Federal Insurance Contributions Act taxes owed by Red Front as follows: $4,460.64 in 2007, $4,469.28 in 2008, $5,704.07 in 2009, $7,873.80 in 2010, and $6,777.75 in 2011. In addition, after learning that he was a target of a federal investigation, from December 15, 2011 through June 20, 2012, Piche instructed Red Front employees to make false statements to Internal Revenue Service (“IRS”) Criminal Investigation Division special agents conducting the criminal investigation. Specifically, Piche instructed Red Front employees to state falsely that Red Front had accurately reported and withheld taxes due on its employees’ wages, when as he knew, Red Front had fraudulently underreported employee wages from 2007 through 2011. When Piche instructed Red Front employees to make these false statements, he was trying to prevent the IRS from obtaining evidence that Red Front had fraudulently underreported its employees’ wages on its quarterly returns.

This case was investigated by the Internal Revenue Service, Criminal Investigation and the Albany Special Investigations Unit of the New York State Police. This case is being prosecuted by Assistant United States Attorney Jeffrey C. Coffman.

Investigation Yields Seizures of Cocaine, Crack, Heroin, and Weapons

MASSENA, NEW YORK - United States Attorney Richard S. Hartunian announced that law enforcement officers have arrested twelve individuals on federal drug trafficking charges. A superseding indictment charges the following people with conspiracy to distribute over 500 grams of cocaine, over 28 grams of cocaine base (crack), and heroin, in Franklin, St. Lawrence, and Clinton Counties:

 Patrick Lloyd, aka “Problem,” 25, of New York City
 Jessica Monaghan, 26, of Massena, New York
 Codi Burke, 21, of Massena, New York
 Michael Spencer, aka “Don,” 25, of New York City
 Bernie Russo, 35, of Massena, New York
 Kimberly Jandrew, 27, of Massena, New York
 Justin Brailsford, 25, of Massena, New York
 Jon Garcia, 22, of New York City
 Zachary Huto, 21, of Massena, New York
 Leslie Moore, 27, of Massena, New York
 Paul Williams, aka “Cash,” 30, of Massena, New York

Lloyd, Garcia, and Williams are in custody on state charges. Monaghan, Burke, Spencer, Russo, Jandrew, Brailsford, Huto, and Moore were arrested this morning. A twelfth person is charged in the indictment but has not yet been arrested. Two others were arrested this morning and are being charged by federal criminal complaints with participating in the drug conspiracy. Four search warrants were executed in Massena today, resulting in seizures of handguns, cocaine, and heroin.

Brailsford and Garcia are also charged with possessing with intent to distribute cocaine and heroin on or about July 6, 2013, in Clinton County (Count 2). Williams is also charged with possessing with intent to distribute over 28 grams of cocaine base (crack) on or about August 8, 2013, in Clinton County (Count 3).

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

If convicted, each defendant except Lloyd could face a mandatory minimum sentence of five (5) years imprisonment and a maximum sentence that includes imprisonment for forty (40) years and a $5,000,000 fine. The superseding indictment alleges that Lloyd has a prior drug felony conviction, so Lloyd faces a mandatory minimum sentence of imprisonment for ten (10) years and a maximum sentence that includes imprisonment for life and a $10,000,000 fine.

U.S. Attorney Hartunian said: “The St. Lawrence River Valley is the intersection of the front line for border security and the outer reach of big city drug suppliers who travel north seeking new and expanded markets. This case illustrates how vigilance and collaboration can combat threats to our communities, as a multitude of federal, state, local, and tribal agencies worked together to dismantle a ring that brought in and distributed cocaine, crack, and heroin, and employed firearms and violence. The success of our effort to preserve public safety and the idyllic charm of the area depends on our shared commitment to robust enforcement, deterrence, and prevention.”

“While the violence and street-level dealing that comes with drug trafficking are local crimes, the criminal networks behind them stretch to other cities, other states and other countries,” said James C. Spero, Special Agent-in-Charge of ICE Homeland Security Investigations (HSI) in Buffalo. “To effectively attack these networks takes a team effort. An outstanding team investigation by our Border Enforcement Security Task Force is what led to today’s arrests and is what will lead to the complete dismantling of these criminal organizations.”

St. Lawrence County District Attorney Nicole Duvé said: “Today is another important step in addressing the increasing presence of urban heroin and cocaine supply networks in northern St. Lawrence and Franklin Counties. The cooperative efforts of federal, state and local law enforcement agencies, together with assistance from local citizens are the key to reclaiming our communities. I encourage the public be vigilant and to continue to help law enforcement keep our neighborhoods and our children safe and drug free.”

Massena Police Chief Timmy J. Currier said: “Enforcement – specifically arresting and holding those responsible for trafficking and conspiring to provide their product – is important, but the truth is, there is a market for that product. There is a reason drug sales occur: we have people buying illegal drugs. We must continue to work hard to find ways to prevent our teenagers and young adults from becoming drug users, from improving parenting skills, increasing the life skills and decision-making of our children, and developing the economy in our area. Tackling this issue from every angle is our best chance at success.”

Franklin County District Attorney Derek Champagne said: “As District Attorney Duve and I discussed two weeks ago in Franklin County, these criminal groups have no boundaries and it is only through local, state and federal cooperation that we can make a difference and keep organized drug distribution networks out of the North Country. I cannot thank the US Attorney’s Office enough for their leadership in dismantling this group today.”

The investigation revealed that this organization obtained large quantities of cocaine, heroin, and crack from suppliers in New York City and used couriers to transport the drugs to Massena, where the organization’s distribution network sold ounce and gram quantities of the drugs to wholesale drug dealers and drug users in the area. Members of the organization engaged in acts of intimidation and violence.

Seizures by law enforcement officers during this investigation total about 380 grams of cocaine, about 377 grams of heroin, nearly 100 grams of crack, 5 handguns, and over $11,000 in cash.

The superseding indictment is the result of a year-long Organized Crime Drug Enforcement Task Force (OCDETF) investigation led by Homeland Security Investigations (HSI), the Massena Police Department (MPD), the Saint Lawrence County Sheriff’s Office, and the New York State Police (NYSP). The District Attorneys of Clinton, Franklin, and St. Lawrence Counties, the Saint Regis Mohawk Tribal Police Department, the United States Customs and Border Protection Office of Air and Marine, the United States Customs and Border Protection Office of Field Operations, the Drug Enforcement Administration, the Potsdam Police Department, the Royal Canadian Mounted Police, the New York Attorney General’s Office, the Oneida Indian Nation Police, and the United States Border Patrol assisted in the investigation.

The United States is represented in this prosecution by Assistant U.S. Attorney Daniel C. Gardner and Assistant U.S. Attorney Katherine Kopita.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced the imposition of sentence in United States District Court in Syracuse on Andria March for the offense of bankruptcy fraud.

Andria March, 33, of North Tonawanda, NY pled guilty in April, 2013, to a single count of bankruptcy fraud, relating to a bankruptcy petition she had filed in the federal courts in Syracuse in 2009. Today in Syracuse, Senior District Judge Frederick J. Scullin sentenced the defendant to a term of probation of two years, and required her to perform 50 hours of community service as a condition of that probation.

As part of her plea, the defendant acknowledged that, in 2009 when she filed a bankruptcy petition in Syracuse, NY, she had intentionally failed to disclose money that she had used to purchase a pre-paid lease on a 2010 Mercedes Benz 300. Prior to sentencing, the defendant had paid into the bankruptcy court the money that she had previously failed to disclose.

This case is the result of an investigation by the Federal Bureau of Investigation in Syracuse, NY. Further questions or inquiries may be directed to Executive Assistant United States Attorney John Duncan, at (315) 448-0672.

SYRACUSE, NEW YORK - United States Attorney Richard S. Hartunian announced the imposition of sentence in United States District Court in Utica on Donna Schneeberger for the offense of filing a false tax return.

Donna Schneeberger, 53, of Clayton, NY pled guilty in April, 2013, to a single count of subscribing and filing a false tax return, relating to income earned by her husband’s dental business. On September 4, 2013, District Judge David N. Hurd sentenced the defendant to a term of probation of three years and a fine of $25,000. Ms. Schneeberger admitted that the joint income tax return that she had signed and filed for tax year 2007 had failed to include income earned by the dental practice, for which she maintained the books and records. She admitted that between 2005 and 2007, she had failed to report over $700,000 in income, and the District Court found that she had deprived the United States of taxes in excess of $230,000.

The Court imposed a sentence of a fine and probation, stating its reliance, in part, upon its recognition of the defendant’s extensive civic contributions in Watertown and Clayton. The defendant, who prior to sentencing had paid the unreported taxes, was ordered by Judge Hurd to pay all interest and penalties resulting from the criminal behavior as part of her probation.

This case is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division in Syracuse, NY. Further questions or inquiries may be directed to Executive Assistant United States Attorney John Duncan, at (315) 448-0672.

PLATTSBURGH, NEW YORK - United States Attorney Richard S. Hartunian, the District Attorneys of Clinton, Franklin and St. Lawrence Counties, the Massena Police Department, the St. Lawrence County Sheriff’s Department, the Department of Homeland Security, the Saint Regis Mohawk Tribal Police Department, the New York State Police, the United States Customs and Border Protection Office of Air and Marine, the United States Customs and Border Protection Office of Field Operations, the Drug Enforcement Administration, the Royal Canadian Mounted Police, the New York Attorney General’s Office, the Oneida Indian Nation Police and the Customs and Border Protection United States Border Patrol will hold a press conference Thursday, September 5, 2013 at 2:00 p.m. at the Massena Town Hall, 60 Main Street, Room #30, Massena, New York to announce a significant north country law enforcement operation.

No further information will be available in advance of the press conference.

Performed MRI Scans Without Doctor Supervision

ALBANY, NEW YORK - United States Attorney Richard S. Hartunian announced that New York-based 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, will pay $3.57 million to resolve allegations that they submitted to federal healthcare programs false claims for magnetic resonance imaging (MRI) services. Imagimed owns and operates fifteen MRI facilities, located primarily in New York State, under the name “Open MRI.”

Allegedly, 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. Also, allegedly, 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 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.

“The Department of Justice is committed to guarding against abuse of federal healthcare programs,” said Stuart F. Delery, Assistant Attorney General for the Civil Division. “We will help protect patients’ health by ensuring doctors who submit claims to federal healthcare programs follow proper safety precautions at all times.”

U.S. Attorney for the Northern District of New York, Richard S. Hartunian said: “This case is an example of our commitment to using all of the remedies available, including civil actions under the False Claims Act, to ensure patient safety and combat health care fraud. Stripping away the profit motive for circumventing physician supervision requirements has both a remedial and a deterrent effect. The settlement announced today advances our critical interest in both the integrity of our health care system and the safe delivery of medical services.”

The allegations resolved by the settlement were brought in a lawsuit filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. The whistleblower in this case, Dr. Patrick Lynch, was a local radiologist and will receive $565,500.

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 Health and Human Services Secretary 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 $14.8 billion through False Claims Act cases, with more than $10.8 billion of that amount recovered in cases involving fraud against federal health care programs.

The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of New York; the Justice Department’s Civil Division, Commercial Litigation Branch and the Department of Health and Human Services’ Office of Inspector General.

The case is United States of America ex rel. Lynch v. Imagimed LLC, et al. (N.D. N.Y.). The claims released by the settlement are allegations only, and there has been no determination of liability.

Richard S. Hartunian, United States Attorney for the Northern District of New York, announced today that Olivia Terrance, 28, of Hogansburg, New York, pled guilty to participating in a conspiracy in 2009 and 2010 to smuggle over 18,000 endangered and threatened reptiles from the United States into Canada, in violation of Title 18 United States Code section 371. The Honorable Judge Norman A. Mordue sentenced Terrance to 18 months in jail to be followed by 3 years of supervised release.

Terrance smuggled turtles and reptiles worth hundreds of thousands of dollars into Canada where they were sold to retailers and collectors. She was caught when law enforcement followed her by car and helicopter after she received a shipment of wildlife and transported it by boat into Canada.

This case was investigated by Special Agents of the United States Fish & Wildlife Service, with assistance from the Department of Homeland Security, the Canadian Wildlife Service, the Royal Canadian Mounted Police, the Canada Border Services Agency, and the Mohawk Nation Tribal Police. The case was prosecuted by Assistant United States Attorney Craig A. Benedict. Questions may be directed to AUSA Benedict at 315-448-0726 or cell phone at 315-391-1110.

Defendant Moved from Elk City, Oklahoma to Saratoga Springs, New York without Properly Registering as a Sex Offender

ALBANY, NEW YORK — EUGENE PERIARD, age 34, of Saratoga Springs, New York, pled guilty today in Albany before Chief United States District Court Judge Gary L. Sharpe to one count of failing to update his sex offender registration information, announced United States Attorney Richard S. Hartunian and David McNulty, U.S. Marshal for the Northern District of New York. PERIARD faces a maximum sentence of ten years of imprisonment. PERIARD was detained pending his sentencing.

During the plea proceeding, PERIARD admitted that in 2007 he was convicted of a sex offense in the State of Oklahoma. PERIARD also admitted that in early April 2013 he 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.

Sentencing is scheduled for December 9, 2013, at 11 a.m. in Albany, New York. This case was investigated by the Saratoga Springs Police Department and the U.S. Marshals Service.

Albany, New York – David A. Ehrlich, 38, of Cohoes, was sentenced today to be imprisoned for 12 months and 1 day upon his conviction for obstruction of justice, announced United States Attorney Richard S. Hartunian and Special Agent-in-Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. Ehrlich, a former lawyer, pled guilty in March to obstructing justice in United States v. Joseph P. Brown, a criminal appeal before the United States Court of Appeals for the Second Circuit. Ehrlich admitted that he was paid $7500 to handle the Brown appeal, but prepared and provided to Brown’s wife a brief Ehrlich falsely represented had been filed, and later prepared and provided to Brown’s wife a document, dated May 13, 2008, that Ehrlich falsely represented to be the written decision of the Second Circuit Court of Appeals denying Brown's appeal.

Because no brief was filed, the Court of Appeals dismissed the appeal. When Brown found out he had been denied his right to pursue an appeal by Ehrlich's conduct, Brown prepared and filed motions for relief. There was litigation in both the U.S. District Court for the Northern District of New York and the Court of Appeals, and Brown was permitted to pursue his appeal. On January 12, 2010, the Court of Appeals actually decided Brown’s appeal, ordering a limited remand to the District Court to strike a special condition of Brown's supervised release, but otherwise affirming Brown's sentence. Meanwhile, the Albany Division of the Federal Bureau of Investigation conducted a thorough investigation into what had happened, revealing that Ehrlich had falsified the Court of Appeals decision and resulting in the charges in this case.

Ehrlich was directed to report on October 1st to the facility designated by the Bureau of Prisons to begin serving his term of imprisonment. When that is completed, Ehrlich will be on supervised release for 1 year. The sentence included restitution in the total amount of $8900, which Ehrlich had provided in advance of sentencing (comprised of the $7500 paid by the Browns and $1400 paid by two other clients whose cases were encompassed by Count 2 of the Indictment). In imposing the sentence, Chief U.S. District Judge Gary L. Sharpe cited the need for deterrence and the importance of maintaining public respect for our system of justice.

On April 22, 2010, Ehrlich was disbarred in New York by the Supreme Court, Appellate Division, Third Department, for professional misconduct, including “attempting to mislead and deceive his clients about the status of their cases and falsifying court documents.” Ehrlich also was disbarred by Florida, Massachusetts, and the U.S. Supreme Court.

First Assistant United States Attorney Grant Jaquith prosecuted the federal criminal case, and said: “The proper functioning of the system of laws that is the cornerstone of our democracy depends on the candor and ethics of our lawyers. Every lawyer knows that no case, client, or fee, no advantage in litigation, and no escape from a mistake or predicament justifies compromising your integrity. David Ehrlich’s falsification of a decision of the Court of Appeals victimized his clients and struck at the heart of the process for the fair administration of justice.” United States Attorney Hartunian thanked the Albany Division of the Federal Bureau of Investigation, the Committee on Professional Standards for the Third Judicial Department of the Appellate Division of the Supreme Court for the State of New York, and The Lawyers’ Fund for Client Protection of the State of New York for their vigilance and outstanding work to address Ehrlich’s conduct and restore fairness for his clients.

FBI Albany Special Agent in Charge Andrew W. Vale said "The FBI will continue to work with the United States Attorney's Office and our local partners to bring justice to those who seek to disregard and disrespect the very system to which they are pledged to honor and advance. Today's sentencing demonstrates that such disrespect of the judicial system will not be tolerated."

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

According to the complaints:

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

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

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

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

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

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

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

U.S. Attorney Hartunian said:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ALBANY, NEW YORK - United States Attorney Richard S. Hartunian announced that, following a jury trial, WILLIAM KEITH JAMIESON, (52, of Lancaster, PA) was found guilty in U.S. District Court in Albany, N.Y. of the felony offense of Attempted Enticement of a Minor, in violation of Title 18, United States Code, Section 2422(b). JAMIESON is facing a statutory mandatory minimum sentence of 10 years and a maximum sentence of up to life imprisonment, a term of supervised release of at least five years and up to lifetime supervision, a maximum fine of $250,000.00 and mandatory registration as a sex offender. JAMIESON is scheduled to be sentenced on November 26, 2013, before Chief Judge Gary L. Sharpe, in Albany, New York.

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

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

Former New York State Senate Majority Leader Will Face Retrial

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

In December of 2009, a jury convicted the former majority leader of the New York State Senate of two counts of honest services fraud. Then, in 2010, the United States Supreme Court decided United States v. Skilling, holding that the honest services statute criminalizes only fraudulent schemes involving bribes or kickbacks. In light of Skilling, Bruno’s conviction was vacated, but (on November 16, 2011) the Court of Appeals held that the Double Jeopardy Clause of the Fifth Amendment did not bar retrial of Bruno on an indictment that charged honest services fraud based a bribery or kickback theory because the evidence presented at trial was sufficient for a reasonable jury to find that Bruno accepted “payments that were intended to and did influence his conduct as a public official,” and that “Bruno’s actions deprived New York citizens of his honest services as a New York senator under the standard announced in Skilling.” After a federal grand jury returned a superseding indictment on May 3, 2013, Bruno filed a motion to dismiss the indictment on double jeopardy grounds. Chief Judge Sharpe denied the motion, and Bruno filed the interlocutory appeal denied today.

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

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

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

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

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