United States Attorney’s Office Recovers Over $88,000,000 In Fiscal Year 2015; Record Amount Shared With Local Police Departments

CONTACT:      Barbara Burns
PHONE:         (716) 843-5817
FAX:            (716) 551-3051
 
BUFFALO, N.Y. - U.S. Attorney William J. Hochul, Jr. announced today that the Western District of New York Office recovered in Fiscal Year 2015, $88,246,428.15 as a result of wide-ranging efforts in criminal, civil and asset forfeiture cases. As a result, $9,089,436 was distributed to victims of crime in the past year and a record amount of the recovered monies were provided as aid to law enforcement agencies, and in large part, provided to taxpayers as a result of being transmitted to the United States Treasury.  

In making the announcement, U.S. Attorney Hochul praised the hard work and dedication of Office attorneys and support staff that sought not only to put convicted defendants in jail, but took the profit out of crime in a more literal sense. “This Office strives mightily to protect the public by prosecuting those who would cause our residents harm.  At the same time, we believe in the well-known saying “crime doesn’t pay.” To help make this phrase a reality for Western New Yorkers, our Office uses asset forfeiture laws and civil lawsuits to recover money for taxpayers, victims of crime, and local police departments.  In other words, we don’t just take the profit out of crime, we use it for the public good. 

The $88,246,428.15 represents more than 8 ½ times the amount of money it took to operate the entire United States Attorney’s Office for the year. “Because our budget is approximately $10 million, the recovered money in reality means taxpayers spent nothing for the protection and safety provided by this Office, and while also obtaining an additional $78,000,000 million in money it did not budget receiving through other means,” said U.S. Attorney Hochul.  

Specifically, the Office collected $76,130,788 in criminal and civil actions. Criminal actions, which include fines and restitution, totaled $9,809,269.57, most of which was returned to victims of crime. The Office collected $66,321,518.58 in civil actions, which include proceedings involving health care fraud, government fraud, foreclosures and more.
 
In addition, the Office collected $12,115,640 in criminal and civil forfeitures.  Forfeitures generally involve proceeds of crime, as well as property used to commit crime. Of that amount, a record amount of $3,768,043 was shared with state and local law enforcement partners who work with the U.S. Attorney’s Office and the Department of Justice.

Since Mr. Hochul became U.S. Attorney, the Office has recovered and returned to victims, taxpayers and police agencies more than $322,000,000:

Fiscal Year 2010: $31,800,000;
Fiscal Year 2011: $29,300,000;
Fiscal Year 2012: $53,600,000;
Fiscal Year 2013: $94,220,000;
Fiscal Year 2014: $25,000,000. 

In addition to recovering funds, in September 2015, Asset Forfeiture monies were used to demolish six forfeited drug houses on Buffalo’s East Side.  This represented the first time such an undertaking was ever accomplished in the United States. A total of 98 dangerous firearms, along with ammunition, and 79 computers and media devices were also forfeited in FY 2015 as instrumentalities of criminal conduct, mostly related to child exploitation cases.

The following cases are an example of a successful forfeiture and affirmative civil enforcement cases concluded this past year in the Western District of New York:

United States v. Doran Feldman, et al.

Doran Feldman was an anesthesiologist for CGF Anesthesia Associates, P.C. in Buffalo. Co-defendant Debra Bulter, who worked in the Department of Anesthesiology for the University of Rochester, started DJA Solutions, LLC to provide administrative consulting services to CGF. In 2001, CGF contracted with the Department of Anesthesiology at the University of Rochester to provide anesthesiologists at medical facilities served by the Department of Anesthesiology. The 2001 Contract was renewed six times by addenda during the fiscal years 2004 through 2009. In September 2007, in the sixth addendum to the 2001 Contract, CGF agreed to provide the Department of Anesthesiology with five anesthesiologists and up to four additional anesthesiologists if requested by the Department of Anesthesiology. The defendant and Bulter fraudulently used the term in the addendum regarding the four additional anesthesiologists to fraudulently cause the Department of Anesthesiology to pay an annual fee to themselves under the terms of a purported option agreement. As a result of the offense, the Department of Anesthesiology at the University of Rochester sustained a loss of $1,460,000.00. Feldman was sentenced to 24 months in prison and ordered to pay $1,460,000.00 in restitution to the Department of Anesthesiology at the University of Rochester and forfeit a number of bank accounts.

United States v. Magness, et al.

A total of over $600,000 was forfeited from defendants Gregory Magness, Eldon Bott, Charles Wright and William Nehill in a case which involved the smuggling of magnesium into the United States from China that was used to produce counter measure flares for the U.S. Department of Defense. The defendants were also ordered to pay restitution totaling $6,246,605 to the U.S. Customs and Border Protection for the loss of duty to the United States. At the time of the importations, the U.S. had a 305.56% antidumping duty in place with respect to magnesium imported from China.  In order to avoid the antidumping duty, the defendants falsely mislabeled the magnesium as a magnesium product only subject to a 5% duty, thereby defrauding the United States out of lawful duties.  In addition to the over $600,000 forfeited, over $2,000,000 in restitution has already been collected from the defendants towards the restitution. 

United States v. Cusimano

Eric Cusimano and other individuals participated in a scheme to commit securities fraud by registering internet websites to tout and promote publically traded stocks of companies with penny stock prices. Cusimano promoted the stocks on his  websites and newsletters to boost the stock value and then sell their shares at the highest value. This is known as a “pump and dump” scheme. Cusimano, along with his wife, fled the United States for Panama upon learning of the investigation. The defendant was eventually arrested and brought back to the United States to face charges. Cusimano was convicted of conspiracy and tax evasion and sentenced to 46 months in prison and ordered to pay restitution to the Internal Revenue Service totaling $657,005.00 and a forfeiture money judgment in the sum of $1,218,783.00. In addition, the defendant forfeited an additional $336,522.86 that he had concealed in a number of bank accounts in Belize, various gold and silver jewelry items valued at $42,000.00 that he was found with in Panama, and a 30 foot pontoon boat that was forfeited early on in the investigation. 

United States v. Aquilla
 
Frank Aquila served as the chief negotiator for the Buffalo Educational Support Team ("BEST"), a labor organization comprised of approximately nine hundred (900) City of Buffalo teacher's aides during 2008 collective bargaining negotiations with the City of Buffalo School District. Aquila refused to reach final agreement with the district on a collective bargaining agreement until and unless the district agreed to allow BEST to (1) select its own insurance broker; (2) make commission payments totaling $135,000 per year for four years to an insurance broker selected by BEST; and (3) agreed to make four payments to BEST of $65,000 each for costs and expenses associated with administering health insurance benefits for its members. The defendant failed to disclose to the district or BEST that he would share in commissions paid to the insurance broker selected by BEST, and in payments made to BEST to administer health insurance benefits for its members. Aquila was convicted and required to pay restitution in the amount of $332,500 to the City of Buffalo School District. The defendant also forfeited an additional $33,000 to the government. 

United States v. Fitzgerald

Charles Darwin Fitzgerald was convicted of possession with intent to distribute various synthetic controlled substances and synthetic controlled substance analogues at both his residence in Rochester and at one of his stores that he owned, the 420 Emporium located in Batavia, NY.  The defendant was Fitzgerald was sentenced to 30 months in prison and ordered to forfeit $771,109 in U.S. currency that was seized during the execution of a search warrant at his residence.  

United States v. Amedisys

Between 2008 and 2010, certain Amedisys offices improperly billed Medicare for ineligible patients and services. Amedisys allegedly billed Medicare for nursing and therapy services that were medically unnecessary or provided to patients who were not homebound, and otherwise misrepresented patients’ conditions to increase its Medicare payments. These billing violations were the alleged result of management pressure on nurses and therapists to provide care based on the financial benefits to Amedisys, rather than the needs of patients. The settlement was for $150 million dollars.  The majority was paid up from and $35 million paid this year.

For further information, the United States Attorneys’ Annual Statistical Reports can be found on the internet at:

http://www.justice.gov/usao/reading_room/foiamanuals.html.\