Richard Muto's federal trial delayed for medical reasons

Courts

September 8, 2010

By Rick Pfeiffer Niagara Gazette The Niagara Gazette Wed Sep 08, 2010, 10:54 PM EDT

BUFFALO — Former Lewiston financial advisor Richard Muto has had his day in New York state court and served a state prison sentence.

When he will finally have his day in federal court on a grand jury indictment, first handed up in December 2005, is anybody’s guess.

Jury selection was scheduled to begin late last month for Muto’s trial in U.S. District Court in Buffalo on charges of attempting to obstruct the administration of the internal revenue laws and filing a false federal income tax return for 1998. However, the trial was delayed when Muto’s defense team told U.S. District Court Judge Richard Arcara their client was in need of emergency back surgery.

“The defendant’s health precludes him from being in attendance at the trial,” Muto’s defense attorney E. Carey Cantwell said in a court filing. “(Muto) believes that surgery is necessary which will result in a 4 to 6 month recuperation period before he is able to sit up and perform normal activity.”

The filing was made public over Cantwell’s objections. He had asked the court to seal the document and only provide it to federal prosecutors.

In a case with 163 separate filings over the last five years, Muto’s attorneys apparently made additional sealed submissions to the judge to support their medical claim.

Arcara granted the request for a continuance of the case and set a status conference for Dec. 17 to set a new trial date. Muto has posted a $250,000 bail bond and is free pending his trial.

Federal prosecutors have accused Muto of being involved in a tax fraud scheme that cost the United States Treasury at least $1.9 million in taxes.

The indictment claims Muto promoted and sold schemes that “fraudulently reduced or eliminated clients’ federal income tax liabilities.” Prosecutors also charge that Muto personally used the scheme to fraudulently reduce his own income tax liability.

Each count of the indictment carries a maximum penalty of three years imprisonment and a $250,000 fine.

Muto served four years in state prison on a two- to six-year sentence handed down after he pleaded guilty in New York State Supreme Court to charges of fourth-degree grand larceny and scheme to defraud. The plea was part of a deal with prosecutors from the New York Attorney General’s office.

From 1996 to late 2001, approximately 200 Western New Yorkers lost more than $15 million through the purchase of promissory notes, sold by Muto, in a company called Sweetwater Development Corporation. Most of the victims were seniors who invested their life -savings in the notes.

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