A.G. Schneiderman Announces $540K Settlement With Retailer For Defrauding Over 250 Soldiers In NYS

Freedom Stores Preyed On Over 250 Service members In New York State; Destroying Credit Ratings

AG’s Settlement Clears Debts & Judgments, Removes Negative Credit Reporting For Service members

   Attorney General Eric T. Schneiderman today announced that his office has secured a $540,000 settlement with Freedom Stores, Inc., and Freedom Acceptance Corp.  (collectively, “Freedom Stores”) a now-defunct retailer and financing firm based in Norfolk, Virginia, after the companies fraudulently charged hundreds of New York servicemembers who purchased consumer goods from Freedom Stores. The Attorney General’s settlement will clear debt and judgments fraudulently charged to hundreds of New York soldiers at various locations across the United States. Over 250 finance accounts, with balances ranging up to $8,600, and averaging $2,100, will all be brought to zero balances; judgments taken against soldiers by the company will be eliminated, and negative trade lines will be removed with credit reporting bureaus for the New York servicemembers.

"Freedom Stores took advantage of servicemembers using deceptive practices, roping them into high interest contracts and ruining their credit -- and sometimes their military careers. These actions are nothing short of unconscionable. I am proud that we were able to wipe out the debts for hundreds of men and women who stand up for us every day," said Attorney General Schneiderman. "We will keep working to root out fraud and protect our soldiers, who sacrifice so much to protect us.”

The settlement is the result of the Attorney General's office’s investigation into Freedom Stores.  The investigation revealed that the practices at Freedom Stores were part of a larger scheme to defraud servicemembers by deceptively selling them consumer goods at wildly inflated prices and locking the soldiers into revolving credit agreements with undisclosed fees and very high interest rates paid directly from military paychecks or personal bank and credit accounts to unlicensed lenders. The debts were aggressively pursued by Freedom, often with no accounting for how or if the payments were being applied to the debt. The collection upon these defective contracts within the state of New York violates state law.

Freedom Stores largely ceased doing business in 2015, but continued to collect on contracts entered into before that date. Debt associated from its business operations continued to impact servicemembers by tainting their credit, and in some instances threatening security clearances or ending military careers.

According to the terms of the settlement, the settling companies will contractually release all of the approximately 257 New York State soldiers from their debt and related judgments. The company will also clear all negative credit reports related to the contracts.

This case is the most recent resolution of a military-related case pursued by Attorney General Schneiderman. Prior work includes:

• Rome Finance Co., Inc. (bankruptcy estate): This settlement released approximately 995 New York soldiers of debt totaling over 3.5 million dollars after they’d been deceptively lured into illegal financing contracts related to consumer goods;

• Integrity Financial of North Carolina/SmartBuy: Attorney General Schneiderman resolved litigation with this finance/retail business, securing over 9.5 million dollars in debt relief for 358 New York State soldiers as well as an additional 3,963 soldiers nationwide, and a $150,000 penalty for the state of New York. Integrity and SmartBuy were part of a larger scheme to defraud servicemembers by deceptively reselling them computers and electronics at wildly inflated prices, and locking soldiers into revolving credit agreements with undisclosed fees, high interest rates, and allotment payments;

• Fort Drum Vehicle Storage: Attorney General Schneiderman intervened to reunite 176 servicemembers with their stored vehicles, discontinued automatic payments, and assisted in compensation for storage fees;

• Rome Finance Company (combined entities): Attorney General Schneiderman led a coalition of states and the federal Consumer Financial Protection Board to a national resolution which shut down Rome Finance, eliminated 92 million dollars of debt relief to over 17,800 affected United States servicemembers worldwide. This settlement included a benefit of over 2.2 million dollars for over 550 New York State consumers;

• LeRay 300, LLC, aka Woodcliff Community: In an ongoing investigation, Attorney General Schneiderman ordered the townhome community to cease and desist collecting fees in violation of the Servicemember Civil Relief Act from servicemembers, violations which are alleged to have occurred when soldiers and their families terminated residential leases early upon receipt of orders for deployment or a permanent change of station; and

• USA Discounters: Participating on the executive committee, Attorney General Schneiderman was part of a multistate effort yielding 40-million dollars in penalties, 95-million dollars in consumer debt relief, of which benefited approximately 759 servicemembers located in New York State, for a benefit of 1.8 million dollars.

Founder Of Non-Profit Organization Sentenced To 36 Months In Prison For Defrauding Parents Of Abducted Children

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that PETER SENESE, the Founding Director of the I CARE Foundation (“I CARE”), a purported non-profit organization allegedly dedicated to preventing child abduction and trafficking, was sentenced in Manhattan federal court today by U.S. District Naomi R. Buchwald to 36 months in prison for wire fraud and conspiracy to commit wire fraud. In connection with the scheme, SENESE defrauded parents of international abduction victims by falsely representing that he could find and return the children to the United States in exchange for payments to fund his purported international rescue operation. SENESE pled guilty September 8, 2016.

Manhattan Acting U.S. Attorney Joon H. Kim said: “In this most cruel and heartbreaking criminal scheme, Peter Senese preyed on the most vulnerable and desperate victims, anguished parents of abducted children. Senese did more than just steal his victims’ money – he robbed them of hope. For seeking personal profit out of others’ pain and tragedy, Senese has been convicted of federal crimes and will now do time in a federal prison. We hope this prosecution provides some measure of justice to those who were so callously victimized by Senese.”

As alleged in the Superseding Indictment and in other documents filed in federal court:

Between November 2013 and February 2015, on his websites (www.stopchildabduction.org and www.petersenese.com) and elsewhere, SENESE claimed falsely that I CARE was “a self-funded not-for-profit 501-C-3 corporation” that successfully “reunited numerous internationally kidnapped children” with their parents “while protecting an exponentially larger number of children from abduction.” SENESE credited I CARE’s success to the “great efforts, financial, legal, and investigative resources” of individuals associated with I CARE, including a team of former members of the U.S. Army component Delta Force. In one instance, SENESE represented to a parent-victim that he could recover her child from India, appearing on a local radio program with the parent-victim, and sending numerous text messages and emails to the parent-victim stating falsely that he was in a “remote location” in India, was communicating with her child, and that the child would be returned to the United States in a matter of hours or days. Though he never traveled overseas or communicated with the child, SENESE collected over $70,000 from the parent-victim.

In addition to the prison sentence, SENESE, 51, of Brooklyn, New York, was ordered to pay restitution and forfeiture in the amount $85,100.

Mr. Kim praised the outstanding work of the FBI for its investigative efforts and ongoing support and assistance with the case.

Founder And Former CEO Of Technology Firm Charged With Defrauding Investors Out Of $6 Million

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an indictment charging MARYSE LIBURDI with defrauding investors out of more than $6 million through a technology company founded and operated by LIBURDI.  The defendant was arrested by Italian authorities in Rome, Italy, in April 2016, and arrived in the Southern District of New York yesterday following her extradition.  LIBURDI was arraigned this afternoon and the case has been assigned to U.S. District Judge Denise Cote.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “As alleged, Maryse Liburdi repeatedly lied to investors in her tech company, telling them the company was profitable when it was in fact generating no revenue.  Rather than using investor money to operate her company, she was allegedly spending it on herself and her family, paying for personal expenses like spas and salons, wine, luxury clothing, and rental fees on a three-bedroom Manhattan apartment.”    

FBI Assistant Director William F. Sweeney Jr. said:  “We see this behavior time and time again--fraudsters intentionally misrepresenting a company's financials to lure investors down a path from which it's particularly hard to return. Today, Maryse Liburdi is charged with allegedly defrauding investors out of more than $6 million over the course of several years, all the while converting much of the money to her own personal and extravagant use. As long as this type of criminal activity continues to go on, we will continue to go after those responsible for it.”

According to the allegations contained in the criminal Complaint and Indictment filed against LIBURDI:[1]

Since at least in or about 2008, LIBURDI perpetrated a multi-year scheme to defraud individuals into investing more than $6 million in a technology company (the “Company”) founded and run by LIBURDI.  LIBURDI repeatedly made misrepresentations to investors about the Company’s revenue and assets, manipulated Company bank accounts to hide the Company’s true financial condition and, contrary to LIBURDI’s express promises to the investors, converted hundreds of thousands of dollars of investor funds to LIBURDI’s own use, including rent for LIBURDI’s Manhattan apartment and to purchase luxury clothing and other personal items.

While LIBURDI repeatedly told investors that the Company had millions of dollars in revenue, a review of the Company’s bank records shows that, from at least 2008 until the Company ceased operating in January 2015, the Company earned little or no revenue.  Moreover, as reflected in the Company’s bank records, LIBURDI misappropriated investor funds, transferring over $1 million to her and her former husband’s bank accounts and to pay LIBURDI’s personal expenses, including luxury clothing.  For example, LIBURDI used funds from one victim investor for, among other things, transfers to a personal bank account in the name of LIBURDI and her former husband; rental payments for LIBURDI’s three-bedroom Manhattan apartment; payments for personal credit cards; and substantial personal expenditures on corporate credit cards, including, among other things, expenditures at various retail clothing, accessories, and cosmetics stores, salons and spas, and wine and liquor stores. 

In order to hide her scheme, LIBURDI manipulated the Company’s bank accounts by, on at least three occasions, writing checks for hundreds of thousands of dollars drawn on accounts with insufficient funds in order to fraudulently inflate the balance of a Company bank account and thereby hide the Company’s true cash balance from the investors.  For example, in October 2013, LIBURDI wrote and deposited into the Company’s bank account a $700,000 check drawn on a different account that had a balance of only about $2,000.  LIBURDI then falsely represented to the victims that the Company’s bank account held approximately $700,000 and showed investors a bank statement for the Company account listing the inflated balance.

LIBURDI, 45, formerly of Victoria, Minnesota, and New York, New York, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the FBI.  He also thanked Italian law enforcement authorities, including Interpol Rome, for their assistance in the arrests, as well as the Department of Justice’s Attaché at the U.S. Embassy in Rome and the DOJ Office of International Affairs.        

The charges contained in the Complaint and the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, the entirety of the text of the Complaint and Indictment and the description of the Complaint and Indictment set forth below constitute only allegations and every fact described should be treated as an allegation.

Lithuanian Man Arrested For Theft Of Over $100 Million In Fraudulent Email Compromise Scheme Against Multinational Internet Companies

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced criminal charges against EVALDAS RIMASAUSKAS for orchestrating a fraudulent business email compromise scheme that induced two U.S.-based internet companies (the “Victim Companies”) to wire a total of over $100 million to bank accounts controlled by RIMASAUSKAS. RIMASAUSKAS was arrested late last week by authorities in Lithuania on the basis of a provisional arrest warrant.  The case has been assigned to U.S. District George B. Daniels. 

Acting U.S. Attorney Joon H. Kim said:  “From half a world away, Evaldas Rimasauskas allegedly targeted multinational internet companies and tricked their agents and employees into wiring over $100 million to overseas bank accounts under his control. This case should serve as a wake-up call to all companies – even the most sophisticated – that they too can be victims of phishing attacks by cyber criminals. And this arrest should serve as a warning to all cyber criminals that we will work to track them down, wherever they are, to hold them accountable. The charges and arrest in this case were made possible thanks to the terrific work of the FBI and the cooperation of the victim companies and their financial institutions. We thank the companies and their banks for acting quickly, coming forward promptly, and cooperating with law enforcement; it led not only to the charges announced today, but also the recovery of much of the stolen funds.”

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, Evaldas Rimasauskas carried out a business email compromise scheme creatively targeting two very specific victim companies. He was initially successful, acquiring over $100 million in proceeds that he wired to various bank accounts worldwide. But his footprint would eventually lead investigators to the truth, and today we expose his lies. Criminals continue to commit a wide variety of crimes online, and significant cyber data breaches have had a negative impact across a variety of industries. The FBI will continue to work with our domestic and international partners to pursue criminals who engage in this type of activity, wherever they may be hiding.”

According to the allegations contained in the Indictment unsealed today[1]:

From at least in or around 2013 through in or about 2015, RIMASAUSKAS orchestrated a fraudulent scheme designed to deceive the Victim Companies, including a multinational technology company and a multinational online social media company, into wiring funds to bank accounts controlled by RIMASAUSKAS.  Specifically, RIMASAUSKAS registered and incorporated a company in Latvia (“Company-2”) which bore the same name as an Asian-based computer hardware manufacturer (“Company-1”), and opened, maintained, and controlled various accounts at banks located in Latvia and Cyprus in the name of Company-2.  Thereafter, fraudulent phishing emails were sent to employees and agents of the Victim Companies, which regularly conducted multimillion-dollar transactions with Company-1, directing that money the Victim Companies owed Company-1 for legitimate goods and services be sent to Company-2’s bank accounts in Latvia and Cyprus, which were controlled by RIMASAUSKAS.  These emails purported to be from employees and agents of Company-1, and were sent from email accounts that were designed to create the false appearance that they were sent by employees and agents of Company-1, but in truth and in fact, were neither sent nor authorized by Company-1.  This scheme succeeded in deceiving the Victim Companies into complying with the fraudulent wiring instructions.

After the Victim Companies wired funds intended for Company-1 to Company-2’s bank accounts in Latvia and Cyprus, RIMASAUSKAS caused the stolen funds to be quickly wired into different bank accounts in various locations throughout the world, including Latvia, Cyprus, Slovakia, Lithuania, Hungary, and Hong Kong.  RIMASAUSKAS also caused forged invoices, contracts, and letters that falsely appeared to have been executed and signed by executives and agents of the Victim Companies, and which bore false corporate stamps embossed with the Victim Companies’ names, to be submitted to banks in support of the large volume of funds that were fraudulently transmitted via wire transfer. 

Through these false and deceptive representations over the course of the scheme, RIMASAUSKAS, the defendant, caused the Victim Companies to transfer a total of over $100,000,000 in U.S. currency from the Victim Companies’ bank accounts to Company-2’s bank accounts.

RIMASAUSKAS, 48, of Vilnius, Lithuania, is charged with one count of wire fraud and three counts of money laundering, each of which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison. 

The maximum potential sentences 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. Kim praised the outstanding investigative work of the FBI, and thanked the Prosecutor General’s Office of the Republic of Lithuania, the Lithuanian Criminal Police Bureau, the Vilnius District Prosecutor’s Office and the Economic Crime Investigation Board of Vilnius County Police Headquarters for their assistance in the investigation and arrests, as well as the Department of Justice’s Office of International Affairs.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Eun Young Choi is in charge of the prosecution.  Assistant U.S. Attorney Edward Diskant is handling the forfeiture aspects of the prosecution. 

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Man Who Moved Drug Overdose Victim’s Unresponsive Body To Cover Up Drug Crime Pleads Guilty To Being Accessory After The Fact

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that MARC HENRY JOHNSON pled guilty today before U.S. District Judge Jesse M. Furman to acting as an accessory after the fact to a narcotics offense.  As alleged in the Indictment to which JOHNSON pled guilty and the related criminal Complaint, JOHNSON helped move an unresponsive woman’s body out of a Manhattan apartment where the woman had overdosed on cocaine. 

Acting U.S. Attorney Joon H. Kim said:  “Marc Henry Johnson’s immediate response to seeing a dying overdose victim should have been to summon help.  Instead, Johnson helped his cocaine dealer cover up the drug crime by moving the victim’s body.  In this time of a growing overdose epidemic, today’s guilty plea should serve as a reminder that the proper response to a potential drug overdose is to immediately call 911, not to delay to help cover for the drug dealer.”

According to the allegations contained in the Indictment and the Complaint against JOHNSON and codefendant James Holder:

JOHNSON regularly bought cocaine from Holder, who lived in and sold cocaine from a third-floor apartment in Chelsea.  During the night of October 3, 2015, and the early morning hours of October 4, 2015, JOHNSON met with a 38-year-old woman (“Individual-1”) and others at a bar in Manhattan.  Individual-1 had been using cocaine before JOHNSON arrived.  Later, JOHNSON and Individual-1 left the bar together in a taxi.  They arrived at Holder’s apartment building at approximately 4:25 a.m., and walked upstairs to Holder’s apartment.  Hours later, JOHNSON and Holder dragged Individual-1’s apparently unconscious body into the building’s first-floor vestibule.  Holder then left the building, and JOHNSON called 911 to summon an ambulance.  JOHNSON declined to provide his name to the 911 operator, and he did not identify Individual-1, or describe his relationship to her, or explain what had happened to her and why she needed medical assistance.  Emergency Medical Technicians (“EMTs”) responded and found Individual-1 unresponsive in the Chelsea building’s vestibule.  JOHNSON left the building soon after the EMTs arrived. 

Individual-1 was taken to a hospital and pronounced dead later on October 4, 2015.  Her death was caused by, among other things, cocaine use.

JOHNSON pled guilty to one count of acting as an accessory after the fact to the offense of maintaining a drug-involved premises.  The accessory-after-the-fact offense carries a maximum sentence of 10 years in prison.  JOHNSON is scheduled to be sentenced by Judge Furman on June 26, 2016.

Holder pled guilty before Judge Furman on December 12, 2016, to maintaining a drug-involved premises, which carries a maximum sentence of 20 years in prison.  Holder is scheduled to be sentenced by Judge Furman on May 4, 2017, at 3:00 p.m.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Kim praised the outstanding investigative work of the U.S. Drug Enforcement Administration’s (DEA) New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Rockland County Sheriff’s Office, the Clarkstown Police Department, Port Washington Police Department, and New York State Department of Corrections and Community Supervision.  The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.

Bronx Jewish Community Council - Project HOPE Passover 2017 is March 26

REMINDER!! Project HOPE Passover Package Delivery  IS THIS SUNDAY!!! March 26, 2017 - 9am-11:30am

Share the joy of the holidays by  bringing along  friends and family to deliver  3-5 Passover packages to lonely,  home-bound or needy Jewish elderly!   Whether or not you are able to come, you can always help by sponsoring a package for only $25      For groups, questions or to deliver  to a particular senior contact  Niti Minkove, Director of Volunteers at  nminkove@bjcconline.org or Cell: (917) 693-3084 Learn more about Bronx Jewish Community Council's  volunteer opportunities and how to get involved at  www.bjcconline.org  Bronx Jewish Community Council,  2930 Wallace Avenue, Bronx, NY 10467

STATEMENT FROM MAYOR DE BLASIO ON THE MURDER OF TIMOTHY CAUGHMAN AND THE ARREST OF JAMES HARRIS JACKSON

   “On Monday evening an innocent man was stabbed to death in what appears to be an unprovoked attacked prompted by the victim’s race. More than an unspeakable human tragedy, this is an assault on what makes this the greatest city in the world: our inclusiveness and our diversity. The NYPD has put the alleged perpetrator behind bars where he belongs. Now it’s our collective responsibility to speak clearly and forcefully in the face of intolerance and violence – here or across the country. We are a safe city because we are inclusive. We are a nation of unrivaled strength because we are diverse. No act of violence can undermine who we are.”