Federal Judge OK's FBI Secreting NY Rampant Corruption- For Now

State corruption case kept sealed

The Albany Times Union by Brendan J. Lyons - March 11, 2011
FBI actions still secret four years after plea deal in $111,500 theft

ALBANY, NY -- A judge has ruled that federal prosecutors may keep secret details of their dealings with J. Felix Strevell, a former barber who pleaded guilty to looting a high-paying state job that he had landed through political connections. A recent ruling by U.S. District Court Judge Gary L. Sharpe allows federal prosecutors to keep sealed, for at least another year, court records containing information about Strevell's cooperation with the FBI and Internal Revenue Service. Two years ago, prior to sentencing Strevell to six months home confinement and five years probation, Sharpe granted a request by attorneys for the Hearst Corp., which owns the Times Union, to unseal court records related to Strevell's cooperation. But the judge's ruling had a caveat that key details of the court records would remain sealed for one year -- at the government's request -- in part because it could jeopardize ongoing investigations. No one has been prosecuted as a result of Strevell's cooperation, which helped him avoid a prison sentence. Last week, the judge approved a second, one-year extension that could keep the records sealed until March 2012. The records sought by the newspaper relate to seven debriefings Strevell gave federal agents after his guilty plea in April 2007, two years after he was indicted. Strevell, 49, of Castleton, pleaded guilty to a felony count of honest services wire fraud. He admitted using his politically appointed position as the former head of the Institute for Entrepreneurship in Albany to fleece the now-defunct agency of $111,500. Federal prosecutors said Strevell also set up jobs for friends and relatives and that the actual losses may have topped $200,000. Strevell's sentence included repaying $111,500 in restitution to the state of New York. Court officials this week said Strevell has paid back just $4,100. Federal prosecutors recently obtained authorization to garnish Strevell's estimated $12,800-a-year state pension, payable monthly when he reaches age 55 in about six years. The debriefings with Strevell took place six years after he quit his $263,000-a-year state job as revelations of financial abuse surfaced. People familiar with the debriefings said Strevell, who had strong ties to top state Republicans, provided information about alleged corruption within the ranks of local and state government, and also about mortgage fraud. "He provided names, incidents, locations, relationships, things that were said to him and that he observed,'' Strevell's sentencing memorandum states. However, the next four lines of the document were redacted by the judge before the narrative continues: "The high-level nature of many of the persons against whom Mr. Strevell provided information is a cause for anxiety beyond ... the run-of-the-mill white collar case." Federal prosecutors have sought the continued sealing of Strevell's cooperation details while acknowledging the information was not very useful, in part, because so much time has passed. It's not unusual in New York's Northern District for investigations involving public officials and white-collar crimes to languish for years, records show. Rex Smith, vice president and editor of the Times Union, said the newspaper intends to challenge the latest sealing order. "Felix Strevell's crime was misuse of New York taxpayers' dollars, and there's every reason to believe that he avoided prison by cooperating in the investigation of some other misuse of taxpayer dollars," Smith said. "But that has so far been concealed from the citizens who were victimized by that corruption. Our argument is simply that the people have a right to know." Assistant U.S. Attorney William Pericak declined to say why federal prosecutors have taken extraordinary steps to prevent public disclosure of the details of Strevell's cooperation. "We are acutely aware of our responsibility under the First Amendment to make public everything that can and should be made public and we take that responsibility seriously," he said. "There are countervailing considerations which have been recognized by the court. ... We will look at this every year to see whether circumstances have changed." The murky Institute for Entrepreneurship, Inc., a quasi-public agency, was developed by the State University of New York to support small business efforts in New York state. Strevell, a high school graduate, joined state government in 1990 as a state Senate employee and later became deputy secretary of state for business and licensing. He had strong political ties to former Republican Chairman William Powers as well as former U.S. Rep. John Sweeney, R-Clifton Park. Strong supporters of the institute also included the Pataki administration and former Senate Majority Leader Joseph L. Bruno, a Brunswick Republican convicted of honest services fraud in an unrelated case. Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.

Strevell highlights

The case of J. Felix Strevell:

• Used the institute's credit card to pay $7,500 in personal expenses, including a family vacation at Disney World.
• Fraudulently gave himself a $95,000 salary increase on top of his $124,000-a-year salary.
• Improperly had the institute pay $9,000 for his father, a Florida resident, to take two trips to China as part of a "delegation" to foster New York business.
• Sold his used recreational vehicle to the institute for $64,000; did not disclose his interest to the board of directors.

Strevell, 49, is in line to receive a $12,800-a-year state pension beginning Aug. 24, 2016.