CANTON - Attorney General Eric T. Schneiderman today announced that a former Pitcairn Town Supervisor has pleaded guilty to stealing more than $34,000 from the town's bank accounts.
"Whether serving as town supervisor or in the state legislature, no public official is above the law, least of all one who treated a town's bank accounts like her own personal ATM," said Attorney General Schneiderman. "Today's plea sends the message that those who abuse their office to line their own pockets will face the full legal consequences of their crimes."
Smith pleaded guilty in St. Lawrence County Court before Judge Jerome Richards, to one count of Grand Larceny in the Third Degree, a class D felony. Smith will be sentenced in August and will be ordered to pay over $34,000 in restitution. Smith was the Pitcairn Town Supervisor, an elected official. In this role, she managed the town's finances, maintained its expense records and administered its bank accounts. Smith was also employed as branch manager at Community Bank, N.A (CBNA). According to the charges, Smith prepared and executed approximately $35,000 in unauthorized payments to herself and others from Pitcairn's accounts at CBNA between December 2008 and December 2009. Smith issued checks associated with these unauthorized payments and cashed them for her personal benefit at the CBNA branch where she worked. According to the charges, when the Office of the New York State Comptroller (OSC) questioned some of these payments during a risk assessment, Smith prepared and submitted false documentation, including a forged bank memo, which falsely indicated that she had credited funds back to the town. Smith prepared and executed approximately $35,000 in unauthorized checks to herself or third parties from town accounts held at CBNA.
"Taxpayers should never have to question if their money is being misused," said New York State Comptroller Thomas P. DiNapoli."Unfortunately, this case proves what can happen when proper financial controls aren't in place. I want to thank Attorney General Schneiderman and his staff for working closely with my auditors to ensure this former official was held accountable for stealing from her constituents."
Assistant Attorneys General Bridget Holohan Scally and Colleen Glavin, of the Public Integrity Bureau, are prosecuting the case under the supervision of Deputy Bureau Chief Stacy Aronowitz, Chief William Schaeffer and Executive Deputy Attorney General for Criminal Justice Kelly Donovan.
The case was referred by the OSC following an audit that uncovered the fraudulent conduct.
Investigator Peter T. Kraengel of the New York State Police assisted with the investigation of the case.
Anyone with additional information on this matter or any other public corruption is encouraged to contact the Attorney General’s Office at (800) 996-4630.
i"�fs�WpTrants last fall, investigators found two women who were the victims of human trafficking by two of the ringleaders of the operation. Investigators from the Attorney General’s office and the NYPD rescued the two trafficking victims from locations in Manhattan and, in coordination with Sanctuary for Families, brought them to a safe haven. The investigation is ongoing.
Through the use of electronic surveillance, physical surveillance and the review and analysis of a voluminous number of bank records and tax related documents, in conjunction with other investigative tools, the Attorney General’s investigation identified Somad Enterprises Inc., which promoted prostitution for pimps and for which Somad and its employees, as well as the prostitution business clients, profited handsomely.
According to a review of Somad's financial documents, between January 1, 2010, and October 2012, prostitution businesses bought in excess of $3 million in advertising.
This enterprise utilized numerous shell corporations, created with false information, which were used to process millions of dollars in credit card transactions to hide the true nature of the charges by claiming the corporations services were for cleaning, acupuncture, antiques and party planning rather than for sex and/or drugs.
Each prostitution prong of the enterprise utilized the income derived from their illegal prostitution and drug related businesses to pay Somad for their advertising services, effectively laundering money through Somad and disguising the origin of the proceeds as legitimate advertisement payments. These payments to Somad were used to both pay Somad employees who ran the advertising business and to place additional ads which promoted their prostitution businesses.
The prostitution groups relied on Somad’s well-established relationships with media to secure discounts for the criminal enterprise's clients. The prostitution managers controlled the flow of money from johns, bookers, drivers, house mothers and Somad.
The charges are the result of a joint investigation by the New York State Attorney General’s Organized Crime Task Force and the New York City Police Department’s Organized Crime Control Bureau Vice Enforcement Major Case Team, with the assistance of the New York State Police, New York State Department of Taxation and Finance, U.S. Homeland Security and the Westchester County District Attorney's Office.
The case is being prosecuted by OCTF Assistant Deputy Attorneys General Diego Hernandez and Brandi Kligman under the supervision of Deputy Attorney General Peri Alyse Kadanoff and Executive Deputy Attorney General for Criminal Justice Kelly Donovan.