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© New York Post
Federal prosecutors have joined a state investigation into possible fraud by Charles J. Hynes, the former Brooklyn district attorney, signaling that he could now be facing federal charges with longer prison terms.

Assistant United States attorneys from New York's Eastern District are coordinating with an investigation by the state attorney general, Eric T. Schneiderman, who began his inquiry after a city report suggested Mr. Hynes had used more than $200,000 in public funds for a consultant to his re-election campaign. The report, by the Department of Investigation, said the misuse of funds could amount to larceny.

But the involvement of federal prosecutors exposes Mr. Hynes to an increased range of potential charges, including federal program fraud, a felony in which someone at an agency commits fraud, embezzlement or bribery, and the agency receives over $10,000 of federal money in a year. In 2013, Mr. Hynes's last year as district attorney, the office estimated it would receive $1.3 million in federal funds. The felony carries a prison sentence of up to 10 years.

Federal prosecutors also have more ways to pursue corruption cases than state prosecutors do. For instance, if someone conducting fraud uses email or calls someone in another state as part of the scheme, federal prosecutors can bring a wire fraud charge, which can carry a prison term of up to 20 years.

In a report made public this month, the Investigation Department examined about 6,000 emails sent between Mr. Hynes and his associates in the 18 months before the primary election for district attorney last fall. Mr. Hynes lost that election, and the general election, to Kenneth P. Thompson, who took office in January.

The department focused on the working relationship between Mr. Hynes and Mortimer Matz, a longtime press agent and consultant. Mr. Hynes's office paid Mr. Matz from funds seized from criminals, but the report concluded that Mr. Matz was acting as a campaign adviser to Mr. Hynes during those months and not on behalf of the office.

A lawyer for Mr. Hynes, Robert Hill Schwartz, argued otherwise on Tuesday. "Mr. Matz was hired and paid as a consultant to the district attorney's office of public information, and not for advising the D.A. on political strategies," he said.

The report also said Mr. Hynes, by using his official email account for campaigning and by asking staff members to campaign on his behalf, may have violated the City Charter and Conflicts of Interest Board rules, along with the state penal code section governing official misconduct. City Charter violations can be charged as misdemeanors.

The payments to Mr. Matz may have also violated the larceny provisions in the penal code. Under the code, any larceny of more than $1,000 is a felony.

The Investigation Department referred the report's findings to the state attorney general and other agencies in part because the funds Mr. Hynes is implicated in misusing are state funds, said a person involved in the investigation, who asked not to be named because the inquiry is continuing. The attorney general could bring charges of official misconduct and violation of the public officers' law, along with larceny.

The attorney general has issued interview requests to former employees of the district attorney's office, said a former employee who has been called. Mr. Hynes has not been charged with any crimes, and the investigations are in a preliminary stage. The federal prosecutors' involvement was reported by The New York Post on Monday.

The Investigation Department began looking into Mr. Hynes's potential misconduct in November, after a government entity's request.

In January, Mr. Thompson's staff members noticed payments to Mr. Matz during an audit. Around the same time, they received a call from the Investigation Department, alerting them to the investigation and telling them that it would send a subpoena for emails related to political activity, according to a high-ranking official within the district attorney's office who spoke on the condition of anonymity because the investigation is continuing.

The officials looked for emails with search terms such as "fund-raiser" and "voting," and noticed an unusual number of campaign-related emails sent between Mr. Hynes and Mr. Matz, this person said.

Joel B. Rudin, who is suing the city on behalf of Jabbar Collins, a man wrongfully convicted under Mr. Hynes, has asked a federal judge to reopen a deposition of Mr. Hynes so he can question Mr. Hynes about the report's accusations; the judge has not ruled on the request.