Subsidiary of Chinese State-Owned Entity to Pay $14.2M to Resolve False Claims Act Allegations Relating to Paycheck Protection Program Loan

 

YAPP USA Automotive Systems Inc., a corporation with its principal place of business in Michigan, has agreed to pay $14,208,496 to resolve allegations that it violated the False Claims Act by submitting false claims to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible.

Congress created the PPP in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible businesses could receive forgivable loans guaranteed by the Small Business Administration (SBA). Regulations provide various eligibility requirements for the PPP, including limitations on the number of employees and exclusions for certain types of businesses, like those that are owned by government entities. In their loan applications, borrowers were required to certify that they were eligible for the PPP and that the information they provided was accurate.

YAPP USA’s ultimate parent company is State Development and Investment Corp. Ltd, a company owned and controlled by the People’s Republic of China. Through common ownership and management, YAPP USA is affiliated with dozens of other companies worldwide. In applying for a first-draw PPP loan, YAPP USA represented that it was eligible for the PPP, and it received a first-draw PPP loan in the amount of $9,598,462, which the SBA later forgave. The United States alleged that YAPP USA was not eligible under the SBA rules for a PPP loan because YAPP USA, singly and together with its affiliates, employed more individuals than permitted by SBA’s size standard for its industry. The United States also contended that YAPP USA was not eligible because it is owned by a government entity. YAPP USA will pay $14,208,496 to the United States to resolve these allegations.

YAPP USA cooperated with the United States’ investigation by identifying individuals involved in or responsible for the conduct and disclosing facts and documents gathered during YAPP USA’s own investigation. As a result, YAPP USA received credit under the department’s guidelines for taking disclosure, cooperation and remediation into account in False Claims Act cases.

“PPP loans were intended to help small businesses in the United States,” said Deputy Assistant Attorney General Michael D. Granston of the Justice Department’s Civil Division. “The Department remains committed to pursuing those who violated the requirements of this taxpayer funded program.”

“Congress and the SBA designed the PPP to help small businesses and their employees during the pandemic, not large companies owned by foreign governments,” said Acting U.S. Attorney Richard G. Frohling for the Eastern District of Wisconsin. “This settlement demonstrates that our office will continue to hold accountable those businesses and individuals who abused this vital program.”

“The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the SBA working with the Department of Justice, SBA’s Office of Inspector General, and other Federal law enforcement agencies, as well as private individuals who uncover fraudulent conduct to recover the product of this fraud as well as penalties,” said SBA General Counsel Wendell Davis.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file an action on behalf of the United States and receive a portion of any recovery. The qui tam lawsuit was filed by GNGH2 Inc; GNGH2 Inc. will receive $1,420,849 in connection with this settlement.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Wisconsin, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General.

Trial Attorney Lindsey Roberts of the Justice Department’s Civil Division and Assistant U.S. Attorney Michael Carter for the Eastern District of Wisconsin handled the matter, with assistance from Christopher J. McClintock of the SBA.

The claims resolved by the settlement are allegations only. There has been no determination of liability.

Attorney General James and HCR Commissioner Visnauskas Return 21 New York City Apartments to Rent Stabilization

New York Attorney General Letitia James and New York State Homes and Community Renewal (HCR) Commissioner RuthAnne Visnauskas announced the re-regulation of 21 New York City apartments owned by Emerald Equity Group, LLC (Emerald), a real estate company with a number of buildings in East Harlem, Manhattan. An Office of the Attorney General (OAG) and HCR investigation found that Emerald had improperly and illegally deregulated rent-stabilized units, overcharged tenants, and failed to keep tenants’ security deposits in separate accounts as required by law. In addition to returning the illegally deregulated apartments to rent stabilization, Attorney General James is requiring Emerald to repay $54,799.66 to the tenants who were overcharged for their rent.

“Emerald blatantly ignored rent stabilization laws, denying many New Yorkers access to affordable, reliable housing,” said Attorney General James. “By returning these units to rent stabilization and ensuring tenants are reimbursed for overcharges, we are bringing justice to the families that Emerald harmed and ensuring more fair and equitable housing for future renters. Every New Yorker deserves a fair, stable, and secure place to live.”

“This case exemplifies how the longstanding enforcement partnership between HCR’s Tenant Protection Unit and Attorney General James continues to protect New Yorkers from unlawful schemes to deregulate apartments and overcharge tenants,” said New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas. “By systematically rooting out fraudulent deregulation and restoring legal rents, we are securing the rights of millions of rent-regulated tenants and building on Governor Hochul’s efforts to strengthen tenant protections and improve enforcement of the rent laws.”

In March 2020, OAG and HCR separately opened investigations into the rent stabilization status of Emerald’s properties and the enforcement of legal rents at certain rent-stabilized units. Both OAG and HCR found that Emerald had illegally deregulated units and overcharged tenants for rent, in clear violation of New York’s Rent Stabilization Law. When investigating the illegal deregulation and improper rents, OAG and HCR also discovered that Emerald had failed to keep tenants’ security deposits in separate security deposit savings accounts, as is required by New York law. These individual accounts are necessary to protect tenants’ funds from being mixed with their landlord’s general business funds and can shield security deposits from being used for improper purposes. It also ensures that security deposits accrue the appropriate interest while being held by the landlord.

Emerald must return 21 improperly deregulated units to rent stabilization within 60 days and correct the rent price for any apartments whose rents were improperly inflated. Emerald has 30 days to notify all impacted tenants of the changes and, for any tenants that were overcharged, return the excess rent money they illegally collected directly to the renters. It must also establish segregated accounts for all tenant security deposits and ensure all of its units are brought into compliance with rent regulation laws moving forward. If Emerald fails to execute any aspect of this agreement, they must pay a $500 daily penalty for each violation until resolved.

Emerald has filed for bankruptcy for several of its rent-stabilized properties, including those re-regulated as part of this settlement. As part of bankruptcy proceedings, the company was required to conduct an audit of its portfolio, which uncovered at least 20 units whose registered rents differed from the legal regulated rent. Those units’ legal rents are being adjusted accordingly.

Emerald owns and manages several rent-stabilized properties in New York, including:

• 203 West 107th Street;
• 210 West 107th Street;
• 220 West 107th Street;
• 230 West 107th Street;
• 124 - 136 East 117th Street;
• 215 East 117th Street;
• 231 East 117th Street;
• 235 East 117th Street;
• 244 East 117th Street;
• 316 East 117th Street;
• 322 East 117th Street;
• 326 East 117th Street; and
• 1661 Park Avenue.

These 13 buildings are currently the subject of Emerald’s bankruptcy proceeding and will soon be transferred to Emerald’s lender. The OAG and HCR have also secured an agreement with the lender ensuring that new owners will be bound to the settlement as well in the event that Emerald is not able to comply with the rent regulation and security deposit measures before the transfer of the buildings.

This settlement is the latest action in Attorney General James’ ongoing efforts to protect tenants and enforce New York’s rent regulation laws. In September 2024, Attorney General James, in partnership with HCR, re-regulated 263 illegally deregulated apartments and reduced rents in 43 additional units. In August 2022, Attorney General James secured $4 million from a group of 29 New York City landlords after uncovering an illegal kickback scheme to deregulate hundreds of rent-stabilized apartments in New York City. In January 2022, Attorney General James banned Raphael Toledano from real estate business in New York, after he failed to uphold his 2019 $3 million agreement with Attorney General James for harassing tenants and violating rent stabilization laws. In December 2020, Attorney General James also won more than $1 million in rent credits from Madison Realty Capital for aiding and abetting Toledano’s harassment and illegal deregulation.

NYC DEPARTMENT OF CORRECTION CAPTAIN ORDERED TO PAY FINES, RESTITUTION AND HIS PENSION REDUCED FOR STEALING $14,000 IN PAY

 

Bronx District Attorney Darcel D. Clark announced that a NYC Department of Correction Captain was sentenced to a fine of $30,000, restitution of $15,000 and a pension reduction after pleading guilty to collecting at least $14,000 in pay for hours he did not work. 

District Attorney Clark said, “This was a violation of the public trust that defrauded New York City taxpayers. The defendant’s dereliction of duty came at a time when Rikers Island was short staffed and experiencing a period of what can only be described as chaos. The defendant will retire with a reduced pension and must pay fines and provide restitution.” 

NYC Department of Investigation Commissioner Jocelyn E. Strauber said, “Defrauding City government is a serious offense with serious consequences. This Department of Correction Captain manipulated time records and falsely claimed overtime – a blatant abuse of City resources. We are committed to ensuring that City employees who engage in misconduct are held accountable, and this defendant will now pay fines and restitution, and retire with a reduced pension. I thank the Bronx County District Attorney’s Office for its partnership in protecting taxpayer funds and the DOC for reporting this matter to DOI.” 

NYC Department of Correction Commissioner Lynelle Maginley-Liddie said, "Public employees who abuse positions of trust to line their own pockets at the expense of hard-working taxpayers must be held accountable. This individual not only violated the public's trust, he also violated the sacred oath taken by every member of this department. I commend our Investigations Division for presenting this case to the Bronx District Attorney's Office, and the prosecutors for ensuring justice is served." 

District Attorney Clark said Brice Williams, 42, was sentenced to a fine of $30,000, restitution of $15,000 and a pension reduction on one count of Defrauding the Government by Bronx Supreme Court Justice Joseph McCormack. He pleaded guilty to that charge on December 16, 2024.

According to the investigation, between May 31, 2021, through September 3, 2021, Williams, who was stationed at the Anna M. Kross Center on Rikers Island, altered logbook and timekeeping entries, and submitted fraudulent overtime requests. On some occasions, he either arrived late or didn’t show up to work. One incident in which he claimed to work overtime, the defendant was instead at a sushi restaurant in New Jersey. From May 31, 2021, through July 18, 2021, Williams requested and was paid at least $14,000 in taxpayer funds for regular and overtime for hours when he was not actually on Rikers Island and was not working.

District Attorney Clark thanked confidential NYC Department of Correction and Department of Investigation investigators under the supervision of Assistant Inspector General Alexandra Caruana, former Inspector General Whitney Ferguson, Deputy Commissioner of Strategic Initiatives Christopher Ryan, and Deputy Commissioner/Chief of Investigations Dominick Zarrella.

Recidivist Drug Trafficker Sentenced To 12 Years In Prison For Causing Fatal Fentanyl Poisoning Of 66-Year-Old Victim

 

Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced that RAUL SILVA was sentenced yesterday by U.S. District Judge P. Kevin Castel to 12 years in prison for selling thousands of doses of deadly narcotics, including fentanyl, acetyl fentanyl, and heroin, the use of which resulted in the July 2019 death of a 66-year-old woman (the “Victim”), to whom SILVA had sold drugs for years.  

Acting U.S. Attorney Matthew Podolsky said: “Raul Silva made a career of endangering lives by distributing illegal narcotics, some of which were laced with deadly fentanyl and acetyl.  Silva’s disregard for others eventually caused the tragic and untimely death of a 66-year-old woman, who overdosed on a laced dose supplied by Silva. I thank our career prosecutors and agency partners for their determination and vigilance in holding Silva, and dealers like him, accountable.”    

As reflected in the Indictment, court filings, the evidence presented in court, and the Court’s determinations at the sentencing hearing:

Between February 2019 and July 2019, SILVA and his co-defendant conspired to sell to an undercover New York City Police Department (“NYPD”) officer, on eight separate occasions, more than 4,000 glassines containing varying combinations of fentanyl, acetyl fentanyl, heroin, and other drugs.  These repeated drug sales followed years of narcotics trafficking and other criminal activity by SILVA, which resulted in 14 prior criminal convictions, including 10 prior narcotics convictions dating back to 1987.

In addition, SILVA was the longtime drug supplier of the Victim, a 66-year-old woman residing in the Chelsea area of Manhattan.  On July 11, 2019, SILVA met the Victim near her residence to sell her several glassines containing fentanyl, acetyl fentanyl, and heroin.  The Victim died in her apartment shortly thereafter, after consuming the narcotics sold to her by SILVA.  The Victim’s body was discovered two days later by her daughter, who was completing her medical residency in Virginia at the time, and who traveled to the Victim’s apartment on the evening of July 13, 2019, after being repeatedly unable to reach her mother.

In addition to the prison term, SILVA, 55, of New York, New York, was sentenced to five years of supervised release. 

Mr. Podolsky praised the outstanding investigative work of the NYPD.

Fourteen Members and Associates of Violent Transnational Motorcycle Gang Indicted on RICO and Murder Charges

 

An indictment was unsealed yesterday in the Southern District of Texas charging 14 members and associates of the Bandidos Outlaw Motorcycle Gang for their alleged roles in a criminal enterprise engaged in murder, robbery, arson, narcotics distribution, and witness intimidation in and around Houston.

The indictment accuses the defendants of various crimes, including engaging in a conspiracy to commit racketeering (RICO) activity and committing violent crimes in furtherance of the gang such as murder, attempted murder, and assault. The indictment alleges that the Bandidos are a self-identified “outlaw” motorcycle organization with a membership of approximately 1,500 to 2,000 in the United States and an additional 1,000 to 1,500 members internationally, including in Mexico.

“This indictment is an important step in eliminating the Bandidos Outlaw Motorcycle Gang,” said Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division. “The Bandidos declare war on rivals — and they wage that war on our streets. Criminal behavior like this has no place in America, and the Department of Justice is fully committed to bringing peace back to our communities.”

“Ensuring the safety of the public is Southern District of Texas’ paramount concern,” said U.S. Attorney Nicholas J. Ganjei for the Southern District of Texas. “The indictment here not only alleges shocking crimes of violence, but also alleges that these offenses were committed openly and wantonly, where any innocent member of the public could have been hurt or killed.”

According to court documents and statements in court, beginning in 2019, a violent turf war erupted between the Bandidos and B*EAST, a rival outlaw motorcycle gang in the Houston area. As part of this turf war, Bandidos national leadership allegedly put out a “smash on site” order to commit physical assaults, including murder, against B*EAST members. The turf war has resulted in gunfire exchanged on public roadways and in public establishments with innocent civilians present, according to the charges.

John M. Pfeffer, also known as Big John, 32, Darvi Hinojosa, also known as 10 Round, 35, and Bradley Rickenbacker, also known as Dolla Bill, 37, all of Katy, Texas; Michael H. Dunphy, also known as Money Mike, 57, of Cleveland, Texas; Christopher Sanchez, also known as Monster, 40, of Tomball, Texas; and Brandon K. Hantz, also known as Loco and Gun Drop, 33, of Crosby, Texas, are charged with conspiracy to commit racketeering activity. Pfeffer, Dunphy, Hinojosa, Rickenbacker, and Sanchez are further charged with multiple counts of assault in aid of racketeering. Pfeffer, Hinojosa, Rickenbacker, and Sanchez are also charged with using a firearm during and in relation to a crime of violence, while Sanchez faces charges of being a felon in possession of a firearm. Hantz is also charged with arson.

If convicted, Pfeffer, Hinojosa, Rickenbacker, and Sanchez each face a maximum penalty of life in prison, while Dunphy and Hantz each face a maximum penalty of 20 years in prison on each of their counts.

The indictment also charges David Vargas, also known as Brake Check and First Time, 33, of Houston, with murder in aid of racketeering; using a firearm during and in relation to a crime of violence resulting in death; attempted murder in aid of racketeering; and using a firearm during and in relation to the attempted murders. All those charges relate to the killing of a rival and the shooting of two others. If convicted, Vargas faces a mandatory penalty of life in prison or the death penalty.

Further, Marky Baker, also known as Pinche Guero and Guero, 40; Ronnie McCabe, also known as Meathead, 56; and Jeremy Cox, also known as JD, 37, all of Houston; Roy Gomez, also known as Repo, 50, of Richmond, Texas; and Marcel Lett, 56, of Pearland, Texas, are charged along with Pfeffer and Rickenbacker with assault in aid of racketeering and using a firearm during and in relation to a crime of violence. These charges are in relation to an alleged assault and robbery that resulted in the death of a rival. If convicted, they each face a maximum penalty of life in prison.

Hinojosa is also charged along with John Sblendorio, also known as Tech9, 54, of Houston, with conspiracy to commit murder in aid of racketeering, attempted murder in aid of racketeering, assault in aid of racketeering, and using a firearm during and in relation to a crime of violence in connection with the shooting of a rival gang member. Hinojosa is also charged with conspiracy to distribute cocaine and three counts of possession with intent to distribute cocaine. If convicted, Sblendorio and Hinojosa each face a maximum penalty of life in prison.

In addition, Sean G. Christison, also known as Skinman, 30, of Katy, is charged with possession with intent to distribute cocaine and possession of a firearm in furtherance of a drug trafficking crime. He faces a maximum penalty of life in prison.

For all defendants, a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI, Texas Board of Criminal Justice — Office of Inspector General, Texas Department of Public Safety, and Montgomery County Sheriff’s Office conducted the investigation, with assistance from the Harris County Sheriff’s Office; Houston and Pasadena Police Departments; Texas Alcoholic Beverage Commission; LaMarque and Katy Police Departments; U.S. Marshals Service; Bureau of Alcohol, Tobacco, Firearms and Explosives; and Cypress-Fairbanks Independent School District Police Department.

Trial Attorneys Grace H. Bowen and Christopher Taylor of the Criminal Division’s Violent Crime and Racketeering Section and Assistant U.S. Attorneys Byron H. Black and Kelly Zenón-Matos for the Southern District of Texas are prosecuting the case.

This investigation was part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts and dismantles the highest-level drug traffickers, money launderers, gangs and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found on the Justice Department’s OCDETF webpage.

This case is being prosecuted as part of the joint federal, state and local Project Safe Neighborhoods (PSN) Program, the centerpiece of the Justice Department’s violent crime reduction efforts. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime. For more information about PSN, please visit www.justice.gov/psn.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This Week at KRVC - Celebrating Black History Month, Networking Events and More!

 

COMING UP AT KRVC

Riverdale Valentine's Event  Twenty Riverdale businesses along Johnson Ave and Riverdale Ave participated in a special children's Valentine's event. Despite the snow, the kids had an absolute blast! A huge thank you to our amazing businesses for making it such a memorable day.

KRVC Hosts Paint Nights  Thank you Angie, our instructor, for all your hard work  and dedication! Our First Charcuterie Class Was a Hit!  Thank you to Arlene from Bella Nina Charcuterie  for facilitating.  February's Book Club was a Huge Success Thank you Cara for facilitating! In Other News..... There was a lot of love at our Valentine's  pop-up market

NYC Green Fund Grassroots Grant Deadline 2/28

 

NYC Green Fund Grassroots Grant Program in Action

El Grito is a longtime grassroots organization using the arts and social justice to advocate for police accountability and youth empowerment in New York City. Awardees of our fall 2024 NYC Green Fund Grassroots grant, the organization received critical funding to help continue their work, providing music and dance workshops in Sunset Park this year and sharing Puerto Rican folkloric traditions for all ages. 

 

"As the organizers of the Sunset Park Puerto Rican Day Parade and Festival, having the funds to support regular programming in the lead up to the parade was so helpful in building public interest around the summer's major event…the grant made it possible for us to fairly compensate musicians and dancers for their teaching, which is a way of preserving the culture and supporting its practitioners. We are incredibly grateful for the…NYC Green Fund's support." 

 

There’s still time to apply for $1,000 to $40,000 and one or two-year funding through the NYC Green Fund Grassroots grant program. Don’t miss the chance to attend an info session. The last session is approaching, so register now!  

 

Monday, February 24, 6:00 pm - 7:30 pm — Register Here 

 

The application deadline is February 28, 2025 at 11:59pm.

LEARN MORE/APPLY NOW

Partnerships for Parks is a joint program of City Parks Foundation and NYC Parks that supports and champions a growing network of leaders caring and advocating for neighborhood parks and green spaces. We equip people and organizations with the skills and tools needed to ensure these spaces are dynamic community assets.