ROCHESTER, N.Y. — (RealEstateRama) — U.S. Attorney James P. Kennedy, Jr. announced today that Adam C. McFadden, and George H. Moses, both of Rochester, NY, were charged by criminal complaint with wire fraud; conspiracy to commit wire fraud; money laundering; and conspiracy to commit money laundering. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that according to the complaint, McFadden is a member of the Rochester City Council, and Moses is the former Chairman of the Board of Commissioners of the Rochester Housing Authority (RHA), which provides housing opportunities and services for the Rochester community and a board member of the Rochester Housing Charities (RHC). The RHA has an annual contract with the United States Department of Housing and Urban Development from which it receives millions of dollars.
As alleged in the criminal complaint, on March 25, 2015, Moses, as Chairperson of the Board of RHA, caused that Board: (a) to appoint him as one of the three new board members of the RHC, and (b) to approve a loan by the RHA to the RHC in the amount of $300,000.
On July 7, 2015, the RHC entered into an $87,500 one year contract with Capital Connection Partners LLC (CCP) in Washington, D.C. for various services including: (a) advocating at the local, state and federal level of government for policy and legislation, reviewing best practices, and issuing presentations to elected officials; and (b) finding self-sufficient resources to include creating entrepreneurial opportunities and workforce development, developing revenue streams for residents, and applying for federal home loan bank grants.
The following day, on July 8, 2105, McFadden, on behalf of his company, Caesar Development LLC, executed a contract with CCP entitled the Pass Through Funding and Services Agreement, which provided that CCP would pass through 75% of the funds it received from the RHC to Caesar Development LLC.
The defendants caused the RHC to enter into the RHC/CCP contract knowing that CCP and McFadden would not be providing the majority of the services required under the terms of the contract. The defendants also concealed that CCP would be diverting most of the funds received from the contract to McFadden.
On August 3, 2015, the RHA on behalf of the RHC paid CCP $43,750, which represented the first installment payment under the terms of the RHC and CCP Contract. Thereafter, on August 8, 2015, CCP paid $32,812.50 to Caesar Development LLC, which represented 75% of the funds CCP had just received from the RHA.
Subsequently, on December 23, 2015, the RHC paid $43,750 to CCP, which represented the second installment payment under the terms of the RHC and CCP Contract. On the following day, December 24, 2015, CCP paid $32,812.50 to Caesar Development LLC, which represented 75% of the funds CCP had just received from the RHC.
To deceive the RHA and the RHC into making the payments to CCP, the defendants caused fraudulent invoices from CCP to be submitted to the RHC that falsely stated that CCP had provided various services required under the terms of the RHC/CCP contract, when in fact, such services had not been performed.
In October 2018, Moses was also charged with making false statements to Special Agents of the FBI in connection with the investigation, those charges remain pending.
In announcing the charges, U.S. Attorney Kennedy noted that, “the charges contained in the criminal complaint filed today should serve as a reminder to all public officials and holders of public office—you are elected to serve, not to take. If you put your own financial interests above the public trust, then your payback may well be the filing of federal criminal charges.”
The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, the Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent-in-Charge Brad Geary, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Jonathan D. Larsen, Acting Special Agent-in-Charge, New York Field Office.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
# # # #
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051
