Judge tosses one count, upholds another against William Stehl

SARANAC LAKE – A federal judge has dismissed one of the charges filed against a Saranac Lake native accused of defrauding investors out of millions of dollars, but the judge upheld another count against him.

William Stehl is scheduled to stand trial next year in U.S. District Court in central California, where his case was moved in 2012 to allow him to recover from serious injuries he suffered in an explosion. He was originally facing trial in U.S. District Court in Binghamton.

Stehl, a 1962 graduate of Saranac Lake High School, and his business partner Richard Rossignol were arrested in 2010 in the Los Angeles area. They are accused of a decade-long fraud scheme, bilking investors out of more than $6 million by convincing them to invest in companies Stehl was affiliated with that were purportedly developing an alternative energy source.

Two of those companies, Rainbow Technologies and BGX Technologies, were formed in New York and operated out of the town of Harrietstown’s airport business park in Lake Clear when Stehl lived in Saranac Lake from 2000 to 2005. In 2005, he moved to California.

Stehl and Rossignol were indicted in March 2010 by a federal grand jury on charges of conspiracy to commit mail and wire fraud. Stehl was also charged with making false statements to a federal agent and several years’ worth of income tax evasion.

In a ruling issued in late November, U.S. District Judge Audrey Collins granted Stehl’s motion to dismiss the third count of the indictment, which charged him with attempting to evade federal income taxes in 2002. He allegedly didn’t pay $74,674 in income tax owed to the federal government.

Stehl had argued, and the judge ultimately agreed, that the charge should be dismissed because it wasn’t filed within the six-year statute of limitations after he allegedly failed to file his taxes, April 15, 2003.

Judge Collins rejected, however, a motion to dismiss the first count of the indictment, conspiracy to commit mail and wire fraud. Stehl argued that the charge is duplicitous because it alleges multiple conspiracies in a single count, but the judge said the allegations are part of one conspiracy to defraud investors and are not duplicitous.

“Count 1 alleges a single overall agreement between defendants to carry out the objectives of the conspiracy – to obtain money from investors by making false representations concerning investments in a new process to create energy from water,” the judge wrote in her Nov. 27 decision. “That defendants are alleged to have executed their scheme to defraud through various companies over the course of the conspiracy does not detract from the single overarching agreement.”

The judge also dismissed claims from Stehl that the mail and wire fraud conspiracy charge alleges conduct that took place before an applicable statute was enacted and is based on conduct outside of a five-year statute of limitations.

As part of the same order, Judge Collins granted Stehl’s motion to split the case into two trials, one for Stehl and one for Rossignol. She ruled that the risk of one defendant making a confession during a joint trial that could violate the other defendant’s constitutional rights and the “delay in trial and inefficiencies occasioned by pursuing a joint trial in this case warrant severance.”

In an October decision, the judge had rejected a request from the three federal public defenders representing Stehl to order the Administrative office of the United States Courts to fund experts and other expenses necessary “to provide constitutional and effective assistance of counsel to Mr. Stehl.”

Stehl’s lawyers then asked the judge to reconsider, citing the lack of the necessary funding to represent Stehl in the budget of the Federal Public Defender’s office. If the court wouldn’t reconsider, Stehl’s lawyers asked the indictment to be dismissed or for the Jan. 14, 2014, trial date to be pushed back in the hope that Congress would appropriate more money to the Federal Public Defender’s budget in 2014. A continuance would also give them more time to appeal the ruling, Stehl’s attorneys said.

The judge said in her Nov. 27 decision that she wouldn’t reconsider, but she ultimately agreed to move Stehl’s trial date back to June. Rossignol’s trial is set to begin Jan. 14. It could last up to nine weeks.

Stehl’s trial was moved to California after he and a potential witness in the trial, Timothy B. Larson, suffered gruesome injuries when a tank containing volatile hydrogen exploded at the alternative fuel business they were working at in Sylmar, Calif., on Aug. 9, 2011. The force of the blast ripped the roof off the building, and the two men were thrown into an alley.

The accident severed Stehl’s left arm below his elbow, and he suffered burns to 40 percent of his torso, two broken legs and other injuries. He was in a medically induced coma for four weeks. Larson had both his right arm and right leg severed in the blast.

Stehl’s attorneys pushed for the trial to be moved to California so their client could be closer to his medical providers there.

Contact Chris Knight at 518-891-2600 ext. 24 or cknight@adirondackdailyenterprise.com.