A.G. Schneiderman Announces Indictment Of Albany Man For Allegedly Running Investment Fraud Scheme To Pay Restitution, Attorney’s Fees For His Other Criminal Cases
David A. Mazzeo Allegedly Stole Nearly $150K To Pay Court-Ordered Restitution To Other Victims, As Well As His Own Attorney’s Fees
Michael C. Caruso Also Charged With Money Laundering And Scheme To Defraud For Allegedly Assisting Mazzeo To Conceal The Stolen Monies
Schneiderman: We Will Fully Prosecute Those Who Defraud Hardworking New Yorkers
Attorney General Eric T. Schneiderman announced the arraignment of David A. Mazzeo, 58, of Guilderland, New York, and Michael C. Caruso, 61, of Schenectady, New York, on a 9-count indictment charging them with fraudulently obtaining nearly $150,000 from multiple individuals to pay attorney’s fees and court-ordered restitution for Mazzeo’s prior crimes. The pair were also charged with allegedly laundering the money through a First Niagara bank account in Caruso’s name, in order to conceal the source of the ill-gotten gains.
“Defrauding consumers in order to pay off one’s prior scam victims shows a blatant disregard for the law, with no remorse,” saidAttorney General Schneiderman. “My office will continue working to root out and prosecute those who defraud hardworking New Yorkers.”
According to statements made by prosecutors and documents filed in court yesterday, Mazzeo was convicted in May 2012 in Fulton County of the crime of Grand Larceny in the Third Degree, and sentenced to five years’ probation. As part of his probation sentence, Mazzeo was required to make restitution payments to the victim of his Fulton County crime.
Also according to prosecutors, shortly after Mazzeo’s first conviction, in June 2012, Mazzeo was again charged with the crime of Grand Larceny in the Third Degree in Montgomery County, for allegedly stealing $25,000 from an individual in an investment scam. Caruso posted bail for Mazzeo on the Montgomery County case, signing a $50,000 bail bond on Mazzeo’s behalf. Shortly thereafter, Caruso opened a personal bank account at First Niagara Bank and allowed Mazzeo exclusive access to the account.
Thereafter, in August 2012, Mazzeo was indicted in Albany County and charged with Grand Larceny in the Second Degree in connection with stealing $150,000 in a real estate investment scam and diverting the money to pay off prior victims.
In early 2013, Mazzeo pleaded guilty to a misdemeanor on the Montgomery County case and paid $25,000 in restitution to his victim. In February 2013, Mazzeo was convicted of felony grand larceny on the Albany County indictment and sentenced in April 2013 to five years’ probation and ordered to pay $150,000 in restitution to his victims.
According to prosecutors, a subsequent investigation by the Attorney General’s Office uncovered evidence that in order to pay his attorney’s fees and restitution for his prior criminal cases, Mazzeo allegedly engaged in an elaborate scheme to defraud unsuspecting investors. Between July 2012 and September 2013, Mazzeo approached numerous individuals, many of whom reside out of state, and told them he was developing coal or natural gas projects and needed money to help him with expenses related to those projects.
Also according to prosecutors, Mazzeo, with Caruso’s assistance, allegedly obtained nearly $150,000 from numerous individuals for these purported energy development projects. However, in reality, Mazzeo instead used the money to pay over $20,000 to his criminal defense attorney, to pay $25,000 restitution to the Montgomery County victim in exchange for the misdemeanor plea bargain, to pay criminal restitution to the Albany County Department of Probation, and to pay other individuals threatening additional criminal charges. Additionally, Mazzeo made nearly $37,000 in cash withdrawals and personal expenditures in the Albany area, such as Victoria’s Secret, liquor, and tobacco products, and payments to Caruso.
Prosecutors also allege that Mazzeo filed a false 2012 New York State personal income tax return in which he failed to report the money he had stolen, and he failed to file a 2013 New York State personal income tax return altogether, thereby evading taxes on the money he wrongfully obtained in his scheme.
The Attorney General’s indictment charges Mazzeo and Caruso jointly with one count of Money Laundering in the Second Degree (a class C felony) and one count of Scheme to Defraud in the First Degree (a class E felony). Mazzeo is separately charged with three counts of Grand Larceny in the Third Degree (a class D felony), one count of Grand Larceny in the Fourth Degree (a class E felony), one count of Securities Fraud under the Martin Act (a class E felony), one count of Offering a False Instrument for Filing in the First Degree (a class E felony), and one count of Criminal Tax Fraud in the Fourth Degree (a class E felony).
Mazzeo and Caruso were arraigned in Albany County Supreme Court before the Honorable Thomas A. Breslin. Caruso is currently being held on $20,000 bond over $10,000 cash bail and Mazzeo is currently being held on $400,000 bond over $200,000 cash bail. Both defendants will be back in court on May 23, 2017 for conference.
The Office of the Attorney General thanks the New York State Tax Department’s Criminal Investigations Division for its invaluable assistance on this case.
The charges against the defendants are merely accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.
The criminal case against Mazzeo and Caruso is being handled by Assistant Attorney General Benjamin S. Clark of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Acting Bureau Chief Stephanie Swenton. The Criminal Division is led by Chief Deputy Attorney General Jason Brown.
The Attorney General’s investigation was conducted by Investigator Mitchell Paurowski and Deputy Chief Antoine Karam. Forensic accounting was performed by Associate Auditor Jason W. Blair. The Investigations Bureau is led by Chief Dominick Zarrella. The Forensic Audit Section is led by Chief Auditor Edward J. Keegan.