United States Files Lawsuit Against Former NYS Deputy Secretary of State and his Daughter for Engaging in Conduct Designed to Avoid a Criminal Restitution Obligation
Fraudulent Conveyance Suit Alleges that Convicted Felon Joseph Felix Strevell Funneled Money to his Daughter Rather than Repay Victim of his Crime
ALBANY, NEW YORK – U.S. Attorney Richard S. Hartunian announced today that the United States has filed a civil lawsuit against Joseph Felix Strevell (Strevell), age 54, and his adult daughter, Nicole Strevell Childrose (Childrose), age 30, alleging that Strevell engaged in a series of transactions that were made with the purpose and effect of rendering Strevell unable to pay restitution to New York State (NYS) following his 2009 fraud conviction. The lawsuit filed today seeks to recover those funds, together with penalties and interest.
U.S. Attorney Hartunian said: “Instead of satisfying his Court ordered restitution obligation, Joseph Strevell decided to financially enrich his grown daughter by fraudulently transferring assets to her. Restitution is a mandatory obligation and no felon should be allowed to evade that obligation. Through this civil action, we seek to void the transfers and make the victim of his crime whole.”
From 1997 to 1999, Strevell served as a Deputy Secretary of State for the State of New York. He left that position to serve as the head of the Institute for Entrepreneurship, a state sponsored nonprofit agency. In 2007, Strevell was convicted in federal court of defrauding NYS while leading the Institute. In March 2009, the United States District Court for the Northern District of New York entered judgment against Strevell on this conviction, ordering him to pay $111,500 in restitution to his victim, NYS. The judgment required Strevell to pay restitution at a minimum rate of $100 per month or 10 percent of his gross monthly earnings, whichever was greater, and to pay full restitution immediately if at any time he had the resources to do so.
According to the Complaint that was filed, Strevell still owes NYS $102,337.44 on his restitution judgment. In an effort to determine Strevell’s ability to satisfy this judgment, the United States undertook an investigation into Strevell’s assets during which Strevell maintained that he did not have the financial ability to satisfy the judgment. However, the investigation revealed that from 2012 through 2014, Strevell transferred a total of $157,646.00 to his adult daughter, for her personal benefit, while only paying $6,750.00 in restitution during that same time period. The Complaint alleges that Strevell is now unable to pay his restitution obligation because of the fraudulent transfers to his daughter, who works full-time as a college professor. The transfers Strevell made to his daughter were made in incremental amounts and from various business accounts that Strevell hid from the government. The Complaint also alleges that in order to fund his daughter’s wedding in May 2014, Strevell transferred approximately $28,000 to her personal checking account in the two months before her wedding. Additionally, he bought her three wedding gowns (ranging in cost from $1,400 – $2,500 each); paid in cash for the wedding tent, tables, linens and place settings ($10,435.25); hired her a professional photographer ($2,246); and funded her honeymoon at the Four Seasons Hotel, in Santa Fe, New Mexico. These transactions were made in such a way so as to avoid detection by the government. Additionally, in November 2015, Strevell paid $13,871.80 in cash to the Rensselaer County Bureau of Finance to satisfy his daughter’s unpaid property tax obligations when a property she and her husband owned was scheduled to be sold at an auction. The Complaint further alleges that Strevell made these transfers with the intent to defraud the United States and, as a result of the transfers to his daughter, he is no longer able to meet his restitution obligation. In its Complaint, the United States seeks entry of an order that would void these fraudulent transfers that unfairly enriched Childrose at the expense of the taxpayers.
This case was investigated by the Financial Litigation Unit of the U.S. Attorney’s Office’s Civil Division. The lawsuit is being handled by Assistant U.S. Attorney Cathleen B. Clark.