Date: 08-02-2018

Case Style:

Case Number: 1:16-cv-00669-MAD-DJS

Judge: Mae A. D'Agostino

Court: United States District Court for the Northern District of New York (Albany County)

Plaintiff's Attorney: Cathleen B. Clark

Defendant's Attorney: J. Felix Strevell, pro se

Matt Kelley for Nicole Strevell Childrose

Description: Albany, NY - Federal Judge Finds That Felix Strevell Fraudulently Transferred $85,000 to His Daughter to Avoid Paying Federal Restitution

Former New York State Deputy Secretary of State Illegally Transferred Funds to Adult Daughter

On July 6, 2018, a Federal District Court judge entered a judgment in the amount of $85,706.61 against J. Felix Strevell (“Strevell”) and his adult daughter Nicole Childrose (“Childrose”) after the judge found that Strevell fraudulently transferred over $100,000.00 to Childrose to avoid his obligation to pay restitution to the State of New York (“NYS”) following a 2009 criminal fraud conviction, announced United States Attorney Grant C. Jaquith.

From 1997 to 1999, Strevell served as the NYS Deputy Secretary of State. In 1999, he left that position to serve as the head of the Institute for Entrepreneurship, a state-sponsored nonprofit agency. In 2007, Strevell was indicted by a federal grand jury and charged with defrauding NYS by fraudulently using the Institute’s funds for his own personal use and that of his family. He eventually pled guilty and on March 27, 2009, a judgment was entered against him that, among other things, required him to pay $111,500 in restitution to NYS.

After an investigation by the United States Attorney’s Office, on June 14, 2016, the government filed a civil Complaint against Strevell and Childrose, a full-time college professor, alleging that instead of paying his court-ordered restitution, between September 2012 and June 2014, Strevell diverted a total of $159,046.00 to Childrose. The Complaint also alleged that in May 2014, Strevell paid for substantially all of Childrose’s wedding expenses, including three wedding gowns, and her honeymoon. Additionally, in November 2015, Strevell paid $13,871.80 in cash to satisfy Childrose’s unpaid property tax obligations to avoid the property being sold at auction. During this same time period, Strevell paid only $6,750.00 in restitution. The Complaint alleged that the significant monetary transfers to Childrose rendered Strevell incapable of paying off the remainder of his restitution obligation.

United States Attorney Grant C. Jaquith said: “Strevell cheated New York State taxpayers a second time by shirking his restitution obligation, hiding his assets and income, and funneling money to his adult daughter. As this case demonstrates, we will use every appropriate avenue to enforce restitution judgments and fight fraudulent efforts to forestall fulfillment of them.”

In a written decision, the Court found that the United States had proven, through 159 separate exhibits, that Strevell had withdrawn cash from various business accounts and then deposited the cash into his daughter’s personal bank account. In concluding that the transfers to Childrose were fraudulent, the Court noted that the transactions were made from bank accounts Strevell hid from the government. Additionally, when prosecutors deposed Strevell in 2014 to inquire into his financial resources and failure to pay his restitution obligation, he lied under oath about the financial support he provided to Childrose and the significant financial contributions he made to her 2014 wedding. As a result of this false testimony, Strevell was ultimately indicted by a federal grand jury and charged with five counts of perjury. Strevell eventually pled guilty to all five counts and admitted that he had in fact given his daughter more than $30,000.00 for wedding expenses and paid for substantially all of her wedding expenses. He is currently serving a 30-month prison term. In its decision in the civil case, the Court noted that neither Strevell nor Childrose presented any evidence to contradict the overwhelming evidence that Strevell had unjustly enriched his grown daughter instead of complying with his restitution obligation.

In October 2016, the government began garnishing Strevell’s monthly NYS state pension and applied those monies to Strevell’s restitution obligation. Therefore, by the time the United States moved for summary judgment against the defendants in February 2018, Strevell owed $85,706.61.00 in restitution. In its decision, the Court noted that credit toward the judgment amount would be given for any restitution payments made after the United States filed its summary judgment motion and before the date of the court’s decision. After accounting for the monies collected from Strevell’s pension, as of the date of the Court’s decision on July 6, 2018, Strevell owed NYS over $80,000.00.

This case was investigated by the Financial Litigation Unit of the U.S. Attorney’s Office’s Civil Division.

Outcome: Judgment in the aount of $85,000.

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Defendant's Experts:

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