Rochester City Councilman Adam McFadden has been charged following a federal investigation into a scheme where McFadden allegedly received funds from the Rochester Housing Authority (RHA).

McFadden was charged with wire fraud, money laundering, and conspiracy. He pleaded not guilty to these charges Friday morning. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine. 

“I have faith in God, I’m at peace with God," McFadden said. "They have an opinion of what happened, I have an opinion of what happened. And it will be worked out in court. But right now, I’m not going to be hiding in my community, holding my head down. I have faith my hard work speaks for itself, and I’ll continue that.”

In October, McFadden was named in a criminal complaint filed by the FBI, which accused RHA Chairman of the Board, George Moses, of lying to federal officials who were conducting the investigation.

Moses, 50, now also faces the same charges as McFadden, along with making false statements to special agents of the FBI. That charge carries a maximum sentence of five years in prison and a $250,000 fine.

“There’s a reason combating public corruption remains one of the FBI’s top priorities," FBI Agent Gary Loeffert said. "Public corruption tears at the fabric of our democracy, and undermines the trust the public has in our elected officials.”

The criminal complaint alleged that in 2015 Moses helped appoint McFadden as a board member of the Rochester Housing Charities (RHC) and approved a $300,000 loan from the RHA to the RHC. McFadden previously served as the interim executive director of the RHA in 2014.

FBI officials say Moses misled investigators regarding the contracts and monetary transactions.

They also say the two diverted a majority of money from an $87,500 contract between the RHA and a Washington, D.C. consulting firm to a development project set up by McFadden without the intention of ever providing promised services.

"My caution to politicians in our community, Rochester and throughout the western district of New York, is as follows: You are elected to serve. If you fail to serve and decide to take, you will be charged," said James Kennedy, U.S. Attorney.

The RHA provides housing opportunities and services for the Rochester community and has an annual contract with the United States Department of Housing and Urban Development from which it receives millions of dollars.

Tim Curtin, the city's corporation counsel, said that Moses is taking a leave of absence from his position on the Housing Authority Board of Commissioners as the case is tried. 

McFadden is scheduled to return to court on March 8 for a status conference to discuss his council.

A statement from the Rochester Housing Authority reads, in part:

The Board of Commissioners and Executive Team at Rochester Housing Authority (RHA) will continue to cooperate fully with this ongoing federal investigation regarding Rochester Housing Charities and defers all related questions to the US Attorney’s office or legal counsel for Mr. Moses and Councilman McFadden.

As always, RHA remains focused on our mission of providing quality housing opportunities and related services for our residents and program participants serving more than 25,000 lower-income families, seniors and disabled residents in the five-county Greater Rochester area.  RHA’s Board of Commissioners and Executive Team will continue to ensure that quality services remain uninterrupted.  

Mayor Lovely Warren released a statement, saying in part:

“Protecting the public trust must always come first. No one is above the law and, if found guilty, must be held accountable. My first concern is for the residents served by the Rochester Housing Authority. While the Housing Authority is an independent entity, and is not managed by the City, I remain committed to working with its leadership to ensure RHA’s residents have safe, affordable and quality housing."

Tim Curtain, Rochester Corporate Counsel, also released a statement, saying in part:

"The City provides no funding to RHA, which is fully funded by the federal government. It is also important to note that the City has no role or involvement whatsoever with Rochester Housing Charities.”

Statement from City Council President Loretta Scott:

"Today, I learned of the arrest of my colleague on City Council, Adam C. McFadden, and while I have not had the opportunity to review the allegations in detail, I am obviously saddened by this news. I believe in due process and that everyone is innocent until proven otherwise."

In 2018, McFadden ran for U.S. congress in an attempt to take the NY-25 seat, but ultimately lost the Democratic primary to Joe Morelle.

Corruption from public officials is a story told often in the Empire State. In October State Assemblyman Joe Errigo (R-133) was charged with bribery and wire fraud after admitting to accepting $5,500 to introduce legislation. Just another chapter in a very long story for New York's state government: A public official accused of a crime.

This decade alone has seen dozens of lawmakers and top officials in New York's government arrested and be found guilty of a variety of corruption cases. The list includes a close former aide to Gov. Cuomo, the former legislative leaders in the Assembly and Senate, Sheldon Silver and Dean Skelos, as well as rank-and-file lawmakers disgraced by their convictions.