Thursday, February 22, 2018

A.G. Schneiderman And Comptroller DiNapoli Announce Arrest Of Former New York City Council Candidate Albert Alvarez

Joint Task Force

Felony Complaint Alleges that Alvarez Knowingly Accepted Straw Donations, Stole at Least $4,500 in NYC Public Matching Funds 

  Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced the arrest of former New York City Council candidate Albert Alvarez for allegedly accepting straw donations and stealing thousands of dollars in New York City public matching funds during Alvarez’s unsuccessful 2013 run for Council. The felony complaint filed today in New York County Supreme Court charges Alvarez with Offering a False Instrument for Filing in the First Degree, a class E felony, and Grand Larceny in the Third Degree, a class D felony.

“New York City’s public financing system is not a piggy bank for criminals,” said Attorney General Schneiderman. “As we allege, Mr. Alvarez took advantage of our campaign finance system, using straw donors and false filings to line his campaign’s coffers. We’ll continue to bring to justice those who abuse the law and violate the public trust.”
“Mr. Alvarez allegedly dodged campaign finance laws to illegally obtain matching funds,” said State Comptroller Thomas P. DiNapoli. “Thanks to the work of my investigators and auditors in partnership with Attorney General Schneiderman and Commissioner Peters’ offices, his scheme was exposed and he now faces felony charges.”
Alvarez previously served as Chief of Staff to New York City Council Majority Leader Joel Rivera. In 2013, Alvarez ran for Rivera’s seat in the 15th New York City Council District, which covers the Central Bronx, but was unsuccessful in the Democratic primary.
As alleged in the felony complaint filed today, while running for office Alvarez knowingly accepted straw donations orchestrated by George Gonzalez and Anna Mendez, who were arraigned for their roles in the false filings on a separate felony complaint on January 10, 2018. Mendez and Gonzalez allegedly provided entity funds to six other employees of the New York City-based entity where they worked in order to contribute to Alvarez; employees who contributed by check or money order were reimbursed by Gonzalez.
The complaint alleges that Gonzalez distributed contribution cards to these employees, which he had them falsely fill out in their own names while Alvarez watched. Alvarez then allegedly collected the money and the false contribution cards from the straw donors, and falsely submitted them to the New York City Campaign Finance Board. In addition to accepting and falsely submitting the straw donations, Alvarez allegedly stole at least $4,500 in public matching funds as a result of the straw donations submitted to the NYCCFB; the straw donations were all made at a level that would qualify toward Alvarez’s receipt of public matching funds.
The Attorney General and Comptroller would like to thank the NYC Department of Investigation for its partnership in this investigation.
DOI Commissioner Mark G. Peters said, “This City Council candidate manipulated the campaign finance system, using fake donors and false filings to steal thousands of public dollars in matching funds, according to the charges. New York City’s public campaign finance system is a model for the country and DOI will continue to vigorously police its integrity. We are proud to work with the state Attorney General and state Comptroller to expose this defendant’s charged corruption.”
Since 2011, Attorney General Schneiderman and Comptroller DiNapoli have worked together to fight corruption through their Joint Task Force on Public Integrity. They have brought charges against dozens of individuals implicated in public corruption schemes around the state – resulting in the return of over $11 million in restitution to taxpayers through these convictions.
The Division of Investigations conducted the investigation for the Office of the State Comptroller. 
This case is being prosecuted by Assistant Attorney General Kevin B. Frankel of the Attorney General’s Public Integrity Bureau, under the supervision of Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. The Criminal Justice Division is led by Executive Deputy Attorney General Margaret Garnett. 
The investigation was led by Investigator Steven Broomer of the Attorney General’s Investigations Bureau, under the supervision of Supervising Investigator Mike Leahy and Deputy Chief Investigator John McManus. The Investigations Bureau is led by Chief Dominick Zarrella. Legal Support Analysts Rachel Demma and Katharine Litka of the Public Integrity Bureau also assisted in the investigation. 
The charges against the defendants are merely accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.

New York Attorney Charged With Tax Fraud

Allegedly Did Not Report More Than $3 Million Embezzled From Deceased Client’s Estate

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Tax Division, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS”), announced the arrest of STEVEN M. ETKIND, a New York-licensed attorney and partner at a New York law firm, for conspiring to defraud the United States, corruptly endeavoring to impede the internal revenue laws, and tax evasion.

According to the Indictment unsealed today in Manhattan federal court[1]:
ETKIND was the head of a New York law firm’s tax, trusts, and estates group and a Certified Public Accountant.  The indictment alleges that ETKIND performed legal work for a successful entrepreneur client, who died in 2008, naming ETKIND as the co-executor of his $35 million estate.
The client’s will directed the creation of charitable trusts, funded with assets from the client’s estate, for the sole purpose of donating to charitable organizations, including those aimed at assisting Jewish sponsored organizations.  ETKIND was named co-trustee of these trusts. 
The indictment charges that ETKIND and his co-conspirator set up a phony charitable organization and used it to steal more than $3.5 million from these charitable trusts – by first directing donations from the trusts to legitimate Jewish charitable organizations, then redirecting the funds to the phony charity accounts that ETKIND and his co-conspirator controlled.  ETKIND used part of the money he stole to purchase a 6,300-square-foot home with a swimming pool in Southampton, New York, titling it in a nominee name. 
To conceal his theft, ETKIND filed, and caused to be filed, fraudulent personal, corporate and charitable trust returns with the IRS and made several false and misleading statements to the IRS during the course of an audit and examination of the phony charity. 
If convicted, ETKIND, 57, faces a statutory maximum sentence of five years in prison on the conspiracy charge, five years on each of the tax evasion charges, and three years for obstructing the internal revenue laws.  The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Berman and Mr. Zuckerman praised the outstanding efforts by special agents of IRS Criminal Investigation. 
Mr. Berman also thanked the U.S. Department of Justice’s Tax Division for their significant assistance in the investigation. 
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.

Operator Of Bitcoin Investment Platform Charged With Perjury And Obstruction Of Justice

Jon E. Montroll Allegedly Lied Repeatedly to SEC Staff During Testimony to Conceal Substantial Customer Losses Due to a Software Exploit

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that JON E. MONTROLL, a/k/a “Ukyo” was taken into federal custody today for giving false sworn testimony and false documentation to the staff of the New York Regional Office of the Securities Exchange Commission (“SEC”).  The defendant is expected to be presented this afternoon in U.S. District Court for the Northern District of Texas, before U.S. Magistrate Judge Jeffrey L. Cureton.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “SEC investigations rely on learning the full and accurate facts concerning financial markets and products.  As alleged, the defendant repeatedly lied during sworn testimony and misled SEC staff to avoid taking personal responsibility for the loss of thousands of his customers’ bitcoins.  These charges signify that we will use the full force of the federal criminal law to protect the integrity of the SEC’s investigative process.”
FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “As alleged, Montroll committed a serious crime when he lied to the SEC during sworn testimony.  In an attempt to cover up the results of a hack that exploited weaknesses in the programming code of his company, he allegedly went to great lengths to prove the balance of bitcoins available to BitFunder users in the WeExchange Wallet was sufficient to cover the money owed to investors.  It’s said that honesty is always the best policy – this is yet another case in which this virtue holds true.”
According to the allegations in the Complaint filed today in Manhattan federal court:[1]
JON E. MONTROLL operated two online bitcoin services: WeExchange Australia, Pty. Ltd. (“WeExchange”) and (“BitFunder”).  WeExchange functioned as a bitcoin depository and currency exchange service.  BitFunder facilitated the purchase and trading of virtual shares of business entities that listed their virtual shares on the BitFunder platform.
During the summer of 2013, one or more individuals (the “Hackers”) exploited a weakness in the BitFunder programming code to cause BitFunder to credit the Hackers with profits they did not, in fact, earn (the “Exploit”).  As a result, the Hackers were able to wrongfully withdraw from WeExchange approximately 6,000 bitcoins, with the majority of those coins being wrongfully withdrawn between July 28, 2013, and July 31, 2013.  In today’s value, the wrongfully withdrawn bitcoin were worth more than $60 million.  As a result of the Exploit, BitFunder and WeExchange lacked the bitcoins necessary to cover what MONTROLL owed to users.
In November 2013, MONTROLL provided sworn testimony to the SEC’s New York Regional Office in connection with their investigation into the Exploit and BitFunder’s activities. In that testimony, MONTROLL denied that the Exploit had been successful, testifying that, “When [the Hackers] went to withdraw, the system stopped them because the amount was obviously causing issues with the system.”  MONTROLL later added that the software issue “was corrected immediately, whenever the system started having the problems, and I caught on to what was happening I’d say within a few hours.”
MONTROLL also produced to the SEC a screenshot purportedly documenting, among other things, the total number of bitcoins available to BitFunder users in the WeExchange Wallet as of October 13, 2013 (the “Balance Statement”).  The Balance Statement reflected “6,679.78 BTC” on hand as of that date.  In discussing the Balance Statement in his sworn testimony, MONTROLL explained that it represented “the collective pool of funds held for users on BitFunder. The collective pool of BTC held for users on BitFunder – users who transfer bitcoins to BitFunder, this is the total amount that’s being held by BitFunder of those users.”
Contemporaneous digital evidence, including chat logs and transaction data, revealed that the Balance Statement was a misleading fabrication.  Three days into the Exploit, MONTROLL had participated in an internet relay chat with another person (“Person-1”) in which he sought help in tracking down “Stolen coins.”  When that did not work, MONTROLL transferred some of his own bitcoin holdings into WeExchange to conceal the losses.  The Exploit, however, continued.  By the time of the Balance Statement, WeExchange actually held thousands of bitcoins less than MONTROLL had asserted through the false Balance Statement.
When confronted with that evidence during subsequent testimony, MONTROLL lied to SEC staff again.  While MONTROLL admitted that the Balance Statement was the product of his manual intervention in the WeExchange system, he claimed to have discovered the success of the Exploit only after the SEC had asked him about it during his first day of testimony and to have no knowledge of the chat with Person-1.
MONTROLL, 37, of Saginaw, Texas, is charged with two counts of perjury and one count of obstruction of justice. The perjury counts each carry a maximum penalty of five years in prison.  The obstruction of justice count carries a maximum penalty of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding work of the FBI.  He also thanked the SEC, which has filed civil charges against MONTROLL in a separate action.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Bronx Man Pleads Guilty To Attempting To Provide Material Support To ISIS And Passport Fraud In Furtherance Of Terrorism

Sajmir Alimehmeti, a/k/a “Abdul Qawii,” Adorned His Apartment with an ISIS Flag, Purchased Combat Knives and Other Military-Type Equipment, Provided Advice and Assistance to an Individual He Believed to be Traveling to Syria to Fight with ISIS

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Edward C. O’Callaghan, Acting Assistant Attorney General for National Security, announced that SAJMIR ALIMEHMETI, a/k/a “Abdul Qawii,” pled guilty to attempting to provide material support to the Islamic State of Iraq and al-Sham (“ISIS”), and to committing passport fraud in order to facilitate an act of international terrorism.  ALIMEHMETI pled guilty today to a Superseding Indictment in Manhattan federal court before U.S. District Judge Paul A. Engelmayer.   

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As he admitted in court today, Sajmir Alimehmeti took steps to travel overseas to support ISIS’s terror campaign.  He also bought military-type weapons and assisted another to get travel documents, equipment, and encryption technology to fight with ISIS in Syria.  Thanks to the FBI-NYPD Joint Terrorism Task Force, Alimehmeti now awaits sentencing for his admitted crimes in support of a terrorist organization.”
According to the allegations in the Superseding Indictment and the Complaint filed in this case, statements made during the plea proceeding, and other documents filed in the public record:
In October 2014, ALIMEHMETI attempted to enter the United Kingdom but was denied entry after U.K. authorities found camouflage clothing and nunchucks in his luggage.  About two months later, in December 2014, ALIMEHMETI was again denied entry into the United Kingdom, this time after U.K. authorities found that his cellphone contained images of ISIS flags.  Further forensic examination of the contents of the cellphone and ALIMEHMETI’s laptop computer showed numerous indicia of ALIMEHMETI’s support for ISIS, including a photograph of ALIMEHMETI with an ISIS flag in the background, images of ISIS fighters in the Middle East, a photograph of ALIMEHMETI making a gesture of support for ISIS, various files relating to jihad and martyrdom, and electronic communications in which ALIMEHMETI assisted another ISIS supporter in efforts to travel to Syria to join ISIS by providing contact information for an ISIS affiliate who could facilitate the travel.
After returning to the United States, ALIMEHMETI continued to support ISIS.  Among other things, ALIMEHMETI displayed an ISIS flag in his apartment in the Bronx and, in the course of recorded meetings with undercover law enforcement employees, ALIMEHMETI played multiple pro-ISIS propaganda videos on his computer and cellphone, including videos of ISIS fighters decapitating prisoners, and also indicated that he was interested in radicalizing other individuals in the Bronx area.  ALIMEHMETI also made repeated purchases of combat knives and other military-type equipment, including masks, handcuffs, a pocket chainsaw, a wire pocket saw, and a rucksack designed for tactical combat, which he stockpiled at his apartment in the Bronx.
In October 2015, ALIMEHMETI applied for a U.S. passport, falsely claiming in the application that his previous passport had been lost.  ALIMEHMETI later told an undercover law enforcement employee that his prior passport – which ALIMEHMETI showed to the undercover law enforcement officer – had not been lost and, instead, that he was applying for a new passport because he believed the rejection stamps in his existing passport resulting from his attempted entries into the United Kingdom would make it difficult to travel.  ALIMEHMETI further conveyed to undercover law enforcement personnel that he was seeking the new passport, without rejection stamps, to facilitate his travel overseas to join and fight for ISIS.
In May 2016, ALIMEHMETI attempted to assist an individual who was purportedly traveling from New York to Syria to train and fight with ISIS but who was actually an undercover law enforcement employee (the “UC”).  On May 17, 2016, ALIMEHMETI met with the UC in Manhattan.  The UC had purportedly arrived in New York earlier that day on a bus and was en route to John F. Kennedy International Airport (“JFK Airport”) to take an overseas flight later that night. 
ALIMEHMETI agreed to help the UC with several tasks prior to the UC’s purported travel.  ALIMEHMETI assisted the UC by locating stores so the UC could purchase supplies to use while traveling to, and fighting with, ISIS, including a cellphone, boots, a compass, a bag, and a flashlight, among other items.  ALIMEHMETI also gave the UC advice on which items to purchase and on the use of different kinds of encrypted communications services, including the service that ALIMEHMETI stated was currently being used by fellow ISIS supporters, whom ALIMEHMETI referred to as “the brothers.”  ALIMEHMETI also downloaded three encrypted communications applications on the UC’s newly purchased cellphone for use by the UC.   
Further, ALIMEHMETI assisted the UC in traveling from Manhattan to a hotel in Queens, so the UC could purportedly meet with an individual who was preparing travel documents that the UC would use to travel to Syria to join ISIS.  ALIMEHMETI gave the UC a piece of paper with his name and contact information, so the UC could provide that information to the purported document facilitator.  ALIMEHETI explained that he also wanted to travel to Syria and join ISIS, stating “I’m ready to . . . go with you man . . . you know I would.  I’m done with this place.”  After leaving the hotel in Queens, ALIMEHETI brought the UC to JFK Airport, via public transportation, so the UC could begin the purported journey to ISIS.  Within days of seeking to facilitate the UC’s travel to join ISIS, ALIMEHMETI indicated during a call to his brother in Albania that that he had learned of a new way to obtain a passport for his own travel (referring to the UC’s purported document facilitator), and that a “friend of mine” (referring to the UC) had “just [done] it two days ago.”
Following ALIMEHMETI’s arrest on the charges in this case in May 2016, the FBI executed a search of ALIMEHMETI’s Bronx apartment pursuant to a judicially authorized search warrant.  The FBI’s search of ALIMEHMETI’s apartment resulted in the seizure of, among other evidence, the following: (i) a laptop computer and a cellphone belonging to ALIMEHMETI that contain an array of materials further demonstrating his allegiance to ISIS and terrorist ideology, including images of the ISIS flag, photographs of ALIMEHMETI with an ISIS flag and making gestures supportive of ISIS, images of ISIS fighters overseas, and propaganda videos promoting and glorifying ISIS, including videos depicting ISIS fighters engaging in combat and beheading prisoners; (ii) a collection of combat knives and other military-type equipment that ALIMEHMETI had purchased and stored at his apartment, as discussed above; and (iii) an ISIS flag that was displayed on a wall in the apartment.
ALIMEHMETI, 24, of the Bronx, pled guilty to one count of attempting to provide material support or resources to a designated foreign terrorist organization, namely, ISIS, which carries a maximum sentence of 20 years in prison, and one count of making a false statement in an application for a U.S. passport with the intent to induce the issuance of a passport to facilitate an act of international terrorism, namely, traveling abroad to join, train with, and fight for ISIS, which carries a maximum sentence of 25 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  Sentencing is scheduled for June 7, 2018, before Judge Engelmayer.   
Mr. Berman and Mr. O’Callaghan praised the outstanding efforts of the FBI’s New York Joint Terrorism Task Force, which principally consists of agents from the FBI and detectives from the NYPD, and the NYPD’s Intelligence Division.  Mr. Berman also thanked the Counterterrorism Section of the Department of Justice’s National Security Division, the Department of Justice’s Office of International Affairs, the Albania State Police, and the Metropolitan Police Service’s Counter Terrorism Command of London, United Kingdom.


Today, Bronx Borough President Ruben Diaz Jr. delivered his ninth annual “State of the Borough” address to a crowded auditorium at the Bronx High School of Science.

In his speech, Borough President Diaz outlined the successes of his administration, noting that the borough had seen dramatic decreases in unemployment and crime concurrent with a historic influx of private development and new housing units.

“Look at how different things are in this borough today than just a decade ago. We have set the bar for the entire nation on transformative urban renewal and redevelopment. We are the new standard for revitalization,” said Bronx Borough President Ruben Diaz Jr. “The Bronx is rising.”

Since the borough president took office in May 2009 unemployment has been cut by more than half, down to 5.5 percent, and nearly 110,000 more Bronx resident have jobs. Additionally, the borough has seen more than 21,000 new units of affordable housing constructed during that timeframe.

“We’re keeping people in their homes, building new housing units for a diverse population, and setting the standard for tenant protection for the city,” said Borough President Diaz.

The borough president also discussed a wide variety of issues facing The Bronx and New York City during his speech, including the future of the New York City Housing Authority, criminal justice reform and the opioid crisis, among others.

On NYCHA, Borough President Diaz stated that the agency had not done enough to ensure the safety and well-being its 400,000 residents.

“The New York City Housing Authority is also facing a crisis of confidence. Crime persists. Buildings are dirty. Repairs are late, if they are made at all. And, of course, residents are being left out in the cold. Just when you think it couldn’t get worse, you find out the city has failed to properly inspect apartments for lead paint, putting children at serious risk,” said Borough President Diaz.

The borough president specifically noted NYCHA’s ongoing heat crisis and the agency’s failure to move on an emergency declaration to cut red tape in the procurement process and replace broken boilers faster, and urged Governor Andrew Cuomo to act on behalf of NYCHA’s residents if the city would not.

“We are turning up the heat on NYCHA to act as a responsible landlord, and if they refuse to do so I call on the governor to do it for them,” said Borough President Diaz.

Borough President Diaz also discussed last week’s surprise announcement by the de Blasio administration that they would look to build a new jail on a site in Mott Haven. The borough president decried the lack of community input in the site selection, adding that a failure to consult with local elected officials and other stakeholders could put the entire process in jeopardy.

“Reform efforts to fix our City's jails are needed,” said Borough President Diaz. “However, any new site for a jail in this borough must be thoroughly vetted, and the people of The Bronx must have a meaningful say in the selection of any site.”

Borough President Diaz also discussed the opioid crisis that has gripped the nation, as well as its impact on The Bronx.

“Here in The Bronx, addiction is not a novel issue. We should not accept a national failure to solve urban problems,” said Borough President Diaz. “When they speak of this crisis, are Republicans talking about helping the folks in our communities? This is the gentrification of the opioid epidemic.”

The borough president added that addicts should be connected to treatment programs rather than be dealt with as criminals. He also called for the end of cash bail in New York State, and greater mental health services for those caught up in the system.

“The system should rehabilitate, not debilitate,” said Borough President Diaz.

The borough president also called for greater synergy between the City University of New York and employers. In particular, Borough President Diaz called for the creation of incentive programs such as tax breaks and preferences on city contracts for those companies that hire recent CUNY graduates.

“We will continue to support our CUNY system, as well, as we marry our students’ job skills with the needs of this city. We can create incentive programs that directly link CUNY graduates with jobs,” said Borough President Diaz. “We must build the bridges to success through synergy.”

In closing, Borough President Diaz noted the progress his borough has made since he took office, and promised that The Bronx would continue to set the agenda and lead the way for all of New York City.

“Together, we will ensure our continued success and preserve all the freedoms that make New York City a beacon for the world,” said Borough President Diaz. “The State of the Bronx is strong, and we will continue lead the way for our great City.”

The full speech can be read at

Some photos from the event. Click on any photo to make it larger.

Above - The packed audience in the large school auditorium stands for the singing of the National Anthem.
Below - Bronx Science High School student Eden Augustine sings the National Anthem.

Above Left - Bronx District Attorney Darcel Clark sits next to Public Advocate Letitia James.
Above Right - City Councilman Ruben Diaz Sr. with Congressman Adriano Espaillat.
Below Left - Assembly Speaker Carl Heastie with State Senator Jamaal Bailey.
Below Right - Former City Council Speaker Peter Valone with Current City Council Speaker Cory Johnson.

Above - Councilwoman Vanessa Gibson, Former Bronx Deputy BP Aurilia Greene, Councilman Ruben Diaz Sr., City Council Speaker Cory Johnson, and Former Councilwoman Annabele Palma.
Below - State Senate IDC Conference Leader Jeff Klein, Assemblyman Jeffrey Dinowitz, and Assemblyman Michael Benedetto.

Join Speaker Johnson and Councilman Gjonaj in celebrating the 10th Anniversary of the Independence of Kosova


MONDAY, Feb. 26: Dominican Heritage Celebration Honoring Fausto Pichardo, Milady Baez, & Wendy Garcia

Please join NYC Council Speaker Corey Johnson and my colleagues Council Members Rafael Espinal, Antonio Reynoso, Fernando Cabrera as we celebrate Dominican Independence Day 2018 at our annual Dominican Heritage Month Celebration at the Council Chambers in City Hall on Monday, February 26, 2018 at 6:00pm.


Fausto B. Pichardo
Assistant Chief, New York City Police Department
& Executive Officer of the Patrol Services Bureau

Milady C. Baez
Deputy Chancellor, NYC Department of Education
Division of English Language Learners & Student Support

Wendy Garcia
Chief Diversity Officer
Office of NYC Comptroller Scott M. Stringer


Monday, February 26, 2018
(Doors open at 5:30pm)

City Hall, Council Chambers
New York, NY 10007

RSVP by Friday February 23 or 212-482-4121