Bernard Joseph Tully, a Former Massachusetts State Senator, Pleads Guilty to Wire Fraud

September 1, 2011

The Federal Bureau of Investigation (FBI) on August 31, 2011 released the following:

“WASHINGTON— Bernard Joseph Tully, a former Massachusetts state senator, has pleaded guilty for devising a scheme to defraud a Boston-area businessman out of approximately $18,000 by falsely representing that Tully and his co-conspirator were using the funds to bribe public officials. Unbeknownst to Tully, the businessman reported Tully’s overtures to the FBI.

The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz for the District of Massachusetts and Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office.

Tully, 84, of Dracut, Mass., pleaded guilty yesterday before U.S. District Judge Patti B. Saris to one count of wire fraud. According to court documents, Tully formerly served as the city manager for Lowell, Mass., from approximately 1979 to 1987. Prior to serving as city manager, Tully was a state senator representing Lowell and other areas.

According to information presented at the plea hearing and in court documents, the Massachusetts Registry of Motor Vehicles (RMV) determined in early 2009 that it needed to discontinue its lease for the Lowell RMV, due to lack of funds. According to court documents, Tully became aware of the possible closure of the Lowell RMV and contacted the Boston-area businessman who owned the space where the Lowell RMV was housed. Tully told the businessman that if he paid Tully, Tully would ensure a state senator would find money in order to keep the RMV in the space owned by the businessman. Later, according to court documents, Tully again contacted the businessman and told him that he need to pay Tully so that Tully could pay the public official, otherwise the RMV would have to move out of the space.

On July 3, 2009, the RMV announced it was closing the Lowell office as well as other RMV offices on July 23, 2009. Tully and a co-conspirator subsequently visited the businessman and told him that he would need to pay $20,000 to keep the RMV in Lowell. The businessman agreed that he wanted the RMV to stay, and Tully said he would start making telephone calls while his co-conspirator said he would talk to the public official.

On July 15, 2009, the businessman gave the co-conspirator a $5,000 check, which the co-conspirator cashed and gave a portion of the funds to Tully. On July 17, 2009, the businessman received a 90-day extension on the lease from the RMV to Oct. 31, 2009.

Thereafter, according to court documents, the businessman had a series of meetings and telephone conversations with Tully and his co-conspirator about securing another lease extension from the RMV. During these conversations, Tully and his co-conspirator falsely represented to the businessman that they needed additional money to make payments to various public officials in exchange for their official acts to secure the RMV’s continued presence in the businessman’s building. Between November 2009 and March 2010, the businessman, while cooperating with the FBI, paid Tully and the co-conspirator approximately $18,000 as bribe payments designed to secure the official assistance of various public officials.

In fact, Tully and his co-conspirator never paid any money to any public officials. According to court documents, Tully admitted in a May 2010 interview with FBI agents that he received approximately $12,000 in cash and checks from the businessman, and that he split the money with his co-conspirator. Tully also admitted that he had heard about the RMV’s plan to move the Lowell office out of the businessman’s office building from people who worked in the office, and that the businessman had contacted him for assistance. Tully admitted that he spoke with friends of friends of the Lowell legislative delegation about obtaining a lease extension and preventing the move of the Lowell RMV.

Tully admitted that he told the businessman that he was “throwing money around” at elected officials, but in actuality he did not. He admitted that he did this to give the businessman the impression that he, Tully, was influencing the legislative delegation.

Sentencing is scheduled for Dec. 1, 2011, at 3:00 p.m. According to the plea agreement, the government has agreed not to seek punishment beyond home confinement, 36 months of supervised release, a fine to be calculated under the U.S. Sentencing Guidelines and restitution of $18,000.

The case was investigated by the FBI, with assistance from the Massachusetts Inspector General’s Office and the Lowell Police Department. It is being prosecuted by Senior Litigation Counsel William M. Welch II and Kevin Driscoll of the Criminal Division’s Public Integrity Section, with assistance from the U.S. Attorney’s Office, Public Corruption Unit.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Ephram Pascall Pleads Guilty in Manhattan Federal Court to Embezzlement

July 7, 2011

The U.S. Attorney’s Office Southern District of New York on July 6, 2011 released the following:

“FORMER HOTEL PAINTERS’ UNION PRESIDENT PLEADS GUILTY IN MANHATTAN FEDERAL COURT TO EMBEZZLEMENT

PREET BHARARA, the United States Attorney for the Southern District of New York, and RALPH E. GERCHAK, the New York District Director of the U.S. Department of Labor’s Office of Labor-Management Standards (“DOL-OLMS”), announced the guilty plea of EPHRAM PASCALL, the former President/Business Manager of the International Union of Painters and Allied Trades, Local 1422 (the “Union”). PASCALL pled guilty today before U.S. District Judge NAOMI REICE BUCHWALD to one count of embezzling funds from the Union.

Manhattan U.S. Attorney PREET BHARARA said: “Ephram Pascall, a corrupt union boss, treated the union’s coffers like his personal piggy bank. Today’s guilty plea underscores this Office’s ongoing commitment to working with DOL-OLMS to root out corruption in our nation’s unions.”

DOL-OLMS New York District Director RALPH E. GERCHAK said: “This arrest is part of the ongoing effort of the United States Department of Labor, Office of Labor-Management Standards to accomplish its mission of protecting union assets by removing unscrupulous, corrupt union officials and thereby strengthening the American labor movement.”

According to the Information, the Complaint, and statements made today in Manhattan federal court:

While PASCALL served as President/Business Manager of the Union, from February 2007 through April 2009, he wrote approximately 92 checks, totaling approximately $34,199, to himself from the Union’s checking account. Almost all of the checks were cashed at a check cashing store.

PASCALL listed in the Union’s records that the purpose of 66 of the checks was payment to various Union members who purportedly attended training with him, and thus had foregone their normal wages for that day. In truth and in fact, however, union members neither attended nor received any reimbursement for such training. The other 26 checks were for alleged union expenses, such as dinners, union member funeral expenses, office supplies, and meeting expenses. None of those expenses actually were incurred by the Union.

PASCALL, 48, of Brooklyn, New York, faces a maximum penalty of five years in prison and a maximum fine of $250,000, or twice the gain or loss from the offense. He will be sentenced by Judge BUCHWALD on October 12, 2011, at 4:45 p.m.

Mr. BHARARA praised the investigative work of the DOL­OLMS and thanked the United States Marshal’s Service for its assistance with PASCALL’s arrest.

This case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorney CARRIE H. COHEN is in charge of the prosecution.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Manhattan U.S. Attorney Charges Five Former New York City Public School Employees with Allegedly Defrauding the City Out of More Than $500,000

June 29, 2011

U.S. Attorney’s Office Southern District of New York on June 29, 2011 released the following press release:

“PREET BHARARA, the United States Attorney for the Southern District of New York, ROSE GILL HEARN, the Commissioner of the New York City Department of Investigation (“DOI”), and RICHARD J. CONDON, Special Commissioner of Investigation for the New York City School District (“SCI”), announced today the unsealing of federal fraud charges against five former New York City public school employees for defrauding the New York City Department of Education (“DOE”) out of more than $500,000.

Manhattan U.S. Attorney PREET BHARARA stated: “As charged, the defendants were City employees who lined their pockets with hundreds of thousands of dollars that were supposed to be used to keep New York City public schools clean and safe for students. The defendants were allegedly paid by the Department of Education for work they did not do, and despite their alleged efforts to conceal the scheme, their fraud was ultimately uncovered. This Office is committed to working with our partners at the DOI and SCI to identify those who steal scarce public funds and bring them to justice.”

DOI Commissioner ROSE GILL HEARN stated: “These defendants abused their City positions and showed contempt for the City’s taxpayers and school children, according to the criminal charges, and they now face justice. City employees who see public funds as personal entitlements should heed these arrests and the substantial penalties that may follow. DOI, through the Special Commissioner, and the U.S. Attorney for the Southern District of New York are committed to protecting the City’s school system and precious education dollars from fraud and corruption.”

NYC School District Special Commissioner of Investigation RICHARD J. CONDON stated: “We hope that the charges brought by the U.S. Attorney for the Southern District as a result of SCI’s investigation will return wrongfully diverted public funds to the City’s school children.”

    The charged defendants are:

  • TRIFON RADEF, 75, who was the Custodian at Roosevelt High School in the Bronx from 2005 through 2011;
  • NICANOR FERNANDEZ, 72, who was the Custodian at Truman High School in the Bronx from 2002 through 2010;
  • JAMES COPPOLA, 54, who was a handy man at Intermediate School 25 in Queens from 2005 through 2011;
  • FRANK CHAMBERS, 66, who was a senior lunch helper at Public School 158 in Queens from 1996 through 2011; and
  • MICHAEL CUNNINGHAM, 58, who was a custodial fireman at Public School 158 in Queens from 1990 through 2011.

RADEF, FERNANDEZ, COPPOLA, and CHAMBERS, were arrested this morning and are expected to be presented in Manhattan Federal Court this afternoon. CUNNINGHAM is still being sought.

According to the Complaint unsealed today in Manhattan federal court, the DOE was defrauded in two separate but related schemes. In the first scheme, RADEF and FERNANDEZ allegedly authorized the payment of hundreds of thousands of dollars to CUNNINGHAM, COPPOLA, and CHAMBERS from custodial payroll accounts for Roosevelt High School (“Roosevelt”) and Truman High School (“Truman”) for work that they did not perform. More specifically, CUNNINGHAM was on the payroll of Truman from September 2007 through October 2010, even though he was also on the payroll of Public School 158 (“P.S. 158″) during this time period. CUNNINGHAM was fraudulently issued approximately 78 checks from the Truman custodial payroll account totaling over $110,000.

COPPOLA was on the payroll of Roosevelt from September 2007 through October 2008, and the payroll of Truman from January 2008 through September 2010, even though he was also on the payroll of Intermediate School 25 during these same time periods. COPPOLA was fraudulently issued approximately 58 checks from the Truman custodial payroll account totaling over $99,000, and approximately 14 checks from the Roosevelt custodial payroll account totaling over $21,000.

CHAMBERS was on the payroll of Roosevelt from September 2007 through April 2010, even though he was employed at P.S. 158 during this time period. CHAMBERS was fraudulently issued approximately 74 checks from the Roosevelt custodial payroll account totaling over $137,000.

All of these fraudulent payments made to CUNNINGHAM, COPPOLA, and CHAMBERS were approved by RADEF and FERNANDEZ, who controlled the custodial payroll accounts at Roosevelt and Truman, respectively.

In addition, as part of this scheme, FERNANDEZ allegedly authorized the payment of additional custodial payroll funds to RADEF for work RADEF did not perform. According to E-Z Pass records of the account for RADEF’s vehicle and law enforcement surveillance of him, RADEF was paid for well over 3,000 hours of work at Truman that he did not actually perform. In fact, many times when RADEF was supposed to be at Truman working, he was either at his home in Queens or at various restaurants and social clubs.

In the second scheme, RADEF recruited various employees of the DOE who were working in the New York City public schools to perform construction, painting, landscaping, and maintenance work at one or more of nine different residential properties located in Queens that he owned. RADEF then arranged for these employees to be fraudulently paid for this work from DOE funds, specifically from custodial payroll accounts from either Roosevelt or Truman, which were controlled by him and FERNANDEZ. In order to conceal this scheme, RADEF had these DOE employees sign fraudulent time cards and endorse checks from these custodial payroll accounts.

RADEF, FERNANDEZ, and CUNNINGHAM are each charged with two counts of conspiracy to commit theft concerning a program receiving federal funds and two substantive counts of theft concerning a program receiving federal funds. COPPOLA and CHAMBERS are each charged with one count of conspiracy to commit theft concerning a program receiving federal funds and one substantive count of theft concerning a program receiving federal funds. If convicted of all counts, RADEF, FERNANDEZ, and CUNNINGHAM face a maximum of 30 years in prison and COPPOLA and CHAMBERS face a maximum of 15 years in prison.

Mr. BHARARA praised the investigative work of the DOI and SCI.

This case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorney STEVE C. LEE is in charge of the prosecution.”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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