Pakistani Man Pleads Guilty In Axact Diploma Mill Scam

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that UMAIR HAMID, a/k/a “Shah Khan,” a/k/a the “Shah,” pled guilty yesterday before U.S. District Judge Ronnie Abrams to conspiracy to commit wire fraud in connection with an international “diploma mill” scheme that collected tens of millions of dollars from thousands of customers.  As alleged in the Indictment to which HAMID pled guilty and the related criminal Complaint, HAMID and his co-conspirators made false and fraudulent representations to consumers on websites and over the phone to trick them into enrolling in purported colleges and high schools, and issued fake diplomas upon receipt of upfront fees from consumers.  

Acting U.S. Attorney Joon H. Kim said: “Operating from Pakistan, Umair Hamid helped fraudulently rake in millions of dollars from unwitting American consumers who paid to enroll in, and get degrees from, high schools and colleges that did not exist. As a result of his fraud, people who thought they were investing in an education received nothing more than worthless diplomas and a harsh lesson in the worldwide reach of deceit. Together with our partners at the FBI and the Postal Service, we will continue to work to protect consumers from scams that victimize our citizens.”

According to the allegations contained in the Indictment and the Complaint against HAMID, as well as other court filings in this matter:

The Axact Scheme

HAMID, using the aliases “Shah Khan” and the “Shah,” and others operated a massive education “diploma mill” through the Pakistani company “Axact,” which has described itself as one of the world’s leading information technology (“IT”) providers.  Working on behalf of Axact, HAMID and others made misrepresentations to individuals across the world, including throughout the United States and in the Southern District of New York, in order to dupe these individuals into enrolling in supposed high schools, colleges, and other educational institutions.  Consumers paid upfront fees to HAMID and his co-conspirators, believing that in return they would be enrolled in real educational courses and, eventually, receive legitimate degrees.  Instead, after paying the upfront fees, consumers did not receive any legitimate instruction and were provided fake and worthless diplomas. 

Axact promoted and claimed to have an affiliation with approximately 350 fictitious high schools and universities, which Axact advertised online to consumers as genuine schools.  During certain time periods since 2014, Axact received approximately 5,000 phone calls per day from individuals seeking to purchase Axact products or enroll in educational institutions supposedly affiliated with Axact.  At least some of those consumers appeared to believe that they were calling phone numbers associated with the respective schools.  When consumers asked where the schools were located, sales representatives were instructed to give fictitious addresses. 

Once a consumer paid for a school certificate or diploma that falsely reflected a completed course of study, Axact sales agents were trained to use sales techniques to persuade the consumer to purchase additional “accreditation” or “certifications” for such certificates or diplomas in order to make them appear more legitimate.  Axact, through HAMID and his co-conspirators, falsely “accredited” purported colleges and other educational institutions by arranging to have diplomas from these phony educational institutions affixed with fake stamps supposedly bearing the seal and signature of the U.S. Secretary of State, as well as various state agencies and federal and state officials. 

HAMID’s Role in the Scheme

HAMID served as Axact’s “Assistant Vice President of International Relations.”  Among other things, HAMID made various false and fraudulent representations to consumers in order to sell fake diplomas.  HAMID controlled websites of purported “schools” that (1) falsely represented that consumers who “enrolled” with the schools by paying tuition fees would receive online instruction and coursework, (2) sold bogus academic “accreditations” in exchange for additional fees, (3) falsely represented that the schools had been certified or accredited by various educational organizations, and (4) falsely represented that the schools’ degrees were valid and accepted by employers, including in the United States. 

As a further part of the scheme, HAMID and a co-conspirator (1) opened bank accounts in the United States in the names of shell entities, effectively controlled by HAMID, that received funds transferred by consumers in exchange for fake diplomas, (2) transferred funds from those bank accounts to bank accounts associated with other entities located elsewhere in the United States and abroad, at the direction of HAMID, and (3) opened and operated an account to collect and distribute consumer funds obtained in connection with their fraudulent scheme.

In May 2015, Axact was shut down by Pakistani law enforcement, and certain individuals associated with Axact were prosecuted in Pakistan.  Nevertheless, after May 2015, HAMID resumed his fraudulent business of selling fake diplomas to consumers in the United States for upfront fees based upon false and fraudulent representations.  Most recently, HAMID traveled to the United States in 2016 in order to open a bank account used to collect money from defrauded consumers.

HAMID, 31, of Karachi, Pakistan, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  HAMID is scheduled to be sentenced by Judge Abrams on July 21, 2017, at 3:00 p.m. 

Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Postal Inspection Service.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900.  For additional information, go to http://www.usdoj.gov/usao/nys/victimwitness.html.

Peruvian National Pleads Guilty In Manhattan Federal Court To Commodities And Wire Fraud For Running Million-Dollar Ponzi Scheme

   Joon H Kim, the Acting United States Attorney for the Southern District of New York, announced that PEDRO JARAMILLO, a/k/a “Enrique Jaramillo,” pled guilty in Manhattan federal court yesterday to commodities fraud and wire fraud stemming from his scheme to defraud more than two dozen investors, mostly retirees and professionals from Peru and countries in Latin America, of more than $1.2 million through a fraud scheme in which JARAMILLO solicited investments largely for the purported purpose of short-term commodity futures contracts but instead diverted the funds for his own purposes.  As a result of their investments with JARAMILLO, investors have lost their life savings, retirement funds, and their homes.

Among other false and misleading statements, JARAMILLO represented to clients that he was an accomplished Wall Street commodities trader who partnered with a certain well-known international investment bank (the “Global Investment Bank”) to earn returns of 25 percent every 90 days for his investors.  In fact, JARAMILLO utterly failed to invest monies as promised, had no partnership with the Global Investment Bank, and instead diverted the majority of investor funds to his own use through cash withdrawals, debit purchases, and by wiring funds offshore.  The investor funds not diverted offshore or directly to JARAMILLO were used to repay earlier investors whose redemption requests could not be forestalled, in a Ponzi-like fashion. 

JARAMILLO was arrested on December 2, 2016, and pled guilty yesterday before United States District Judge Laura Taylor Swain. 

Acting U.S. Attorney Joon H. Kim said:  “As he admitted, Pedro Jaramillo lured investors with the promise of guaranteed high returns, but the only one who profited was Jaramillo.  He failed to invest funds as promised, and paid back early investors with funds from later investors.  Many of the victims of his frauds lost their life savings.  I want to thank the FBI for working with us to protect investors.”

According to the Complaint, the Indictment, and other statements made in open court:

From at least January 2014 to in or about December 2016, JARAMILLO solicited more than $1.2 million in investments from more than two dozen investors, primarily for the purported purpose of investing in commodity futures contracts, by falsely representing, orally and in writing, that investor monies would be invested in short-term commodities contracts with a guaranteed rate of return.

To help attract investors, JARAMILLO maintained an office on Wall Street (the “Wall Street Office”) where he met with prospective investors to tout his prior success and relationship with the Global Investment Bank.  JARAMILLO also starred in a youtube.com video (the “Video”) set to the soundtrack of Frank Sinatra’s “New York, New York.”  The Video featured a series of images of Wall Street, the New York Stock Exchange, and JARAMILLO in front of the Wall Street Office.  In the video, JARAMILLO told prospective investors that he was a “proven winner” and “trusted partner” who would maintain individually managed and federally insured accounts for each client.  JARAMILLO told prospective investors that these safeguards would ensure that prospective investors would “be protected against fraud and brokerage failure.” 

In truth and in fact, JARAMILLO not only failed to create individual investment accounts, he also failed to use investor funds to make any legitimate investments, instead diverting the majority of funds to his own use, out of the country, or to repay earlier investors whose redemption requests could not be forestalled.  In total, JARAMILLO diverted more than $700,000 to his own use in the form of cash withdrawals and debit card purchases used to fund his lifestyle, including thousands of dollars on three vacations to Disney World for JARAMILLO, family, and guests. 

To hide his misappropriations and continue to fund his personal lifestyle, JARAMILLO also used new investor funds to pay back other investors in a Ponzi-like fashion.  In total, since January 2014, JARAMILLO distributed more than $200,000 back to investors from funds deposited by new investors.  During that time, JARAMILLO also diverted more than $100,000 of investor funds out of bank accounts he controlled in the United States to foreign bank accounts, including in Peru, where JARAMILLO is a citizen.

JARAMILLO, 48, a Peruvian National who was residing in Queens, New York, before his arrest, pled guilty to one count of commodities fraud and one count of wire fraud. The commodities fraud count carries a maximum sentence of 10 years in prison and a maximum fine of $1 million, or twice the gross gain or loss from the offense.   The wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense.  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.  The defendant, who has been detained since his arrest, will be sentenced at a future date by Judge Swain.

Mr. Kim praised the work of the Federal Bureau of Investigation.  He also noted that the investigation is continuing.

Former CUNY School Of Professional Services Budget Director Charged With Embezzlement And Fraud

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Catherine Leahy Scott, New York State Inspector General, and Brian M. Hickey, the Special Agent-in-Charge of the Northeast Regional Office of the U.S. Department of Education Office of Inspector General (“ED-OIG”), announced today that CARMINE MARINO, the former budget and finance director of City University of New York’s School of Professional Services (“CUNY SPS”) was arrested this morning and charged in Manhattan federal court with embezzling funds from CUNY SPS.  MARINO voluntarily surrendered to federal authorities this morning and will be presented this afternoon in Manhattan federal court.    

Acting U.S. Attorney Joon H. Kim said:  “As alleged, the former budget and finance director at CUNY SPS abused his position of trust, taking money that belonged to New York City college students for his own benefit.  I want to thank our partners at the New York State Inspector General and Department of Education Office of Inspector General for their work to root out corruption at federally assisted New York schools.”

New York State Inspector General Catherine Leahy Scott said:  “This arrest involving federal fraud and embezzlement charges against a former top university official underscores CUNY’s lack of supervision and appropriate controls, which unfortunately has been a consistent theme in my investigation of the CUNY system.  I thank Acting U.S. Attorney Kim for prosecuting the case, and I will continue to work with current CUNY leadership and use all of the resources of my office to restore the trust among the student and taxpayers at large and to protect the integrity of the institution.”

ED-OIG Special Agent-in-Charge Brian M. Hickey said:  “Today’s charges allege that Mr. Marino knowingly and willfully abused his positions of trust for personal gain. That is completely unacceptable.  OIG Special Agents will continue to aggressively pursue those who seek to enrich themselves at the expense of our nation’s students. America’s students, their families, and taxpayers deserve nothing less.”

According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court and publicly available documents:

CARMINE MARNIO was in charge of finance and fiscal operations at CUNY SPS between 2007 and 2012, first as its Manager of Fiscal Operations, and then as its Director of Fiscal and Business Operations.  In those roles, he controlled and oversaw CUNY SPS’s finances and bank accounts.  In two separate but similar schemes, MARINO used his power over CUNY SPS’s finances to set up unauthorized bank accounts in CUNY SPS’s name, and to fund those accounts with money from CUNY SPS’s tuition account, among others.  MARINO then used those unauthorized accounts, which only he knew about, to embezzle tens of thousands of dollars for his personal use.    

MARINO, 43, of Los Angeles, California, is charged with one count of embezzlement and misappropriation from a program receiving federal funds, which carries a maximum penalty of 10 years in prison, and two counts of bank fraud, each of which carries a maximum penalty of 30 years in prison.

The maximum potential sentences in these cases are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Kim praised the investigative work of the New York State Inspector General’s Office, ED-OIG, and the Criminal Investigators of the United States Attorney’s Office for the Southern District of New York, and noted that the investigation is continuing. 

The charges contained in the Complaint 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 the description of the Complaint set forth below constitutes only allegations, and every fact described should be treated as an allegation.

Assemblyman Luis Sepulveda Easter Egg Hunt

  It was billed as the Assemblyman Luis Sepulveda/State Senator Ruben Diaz Sr. Easter Egg Hunt, but do to reasons beyond both the assemblyman and senator's control both missed the event. Staffers from Assemblyman Sepulveda's office bravely faced the onslaught of the children who went hunting for Easter Eggs with prizes inside them. The Easter Bunny showed up to take photos with the children, but the bunny seemed to be the sane size as Assemblyman Sepulveda. 

Above and Below - There was a video call from Assemblyman Luis Sepulveda that he was stuck in Albany due to the budget crisis. The Easter Bunny came to the event, and in the below photo in the background is the staffer who was suppose to be the Easter Bunny. 

Above - The Easter Bunny welcomed the children to his home wgere he had placed special eggs with prizes inside them for the children. 

Below - The children look and find the eggs that were hidden by the Easter Bunny.

Senator Klein Hosts 22nd Annual Bunny Breakfast

  Senator Jeff Klein hosted his 22nd Annual Bunny Breakfast Easter celebration at Villa Barone Manor this morning. Hundreds of Bronx children and their families enjoyed a healthy complimentary breakfast followed by a magic show.

The children also had the opportunity to have their face painted, to build their own stuffed animals and pose for photos with the Easter Bunny, who made a special appearance during the event. See the photos below.

Above and Below - Senator Klein met with parents and their children.

Above - Another photo with parents, and a face painted child.

Below - A photo of Senator Klein, the Easter Bunny, and many children.

Above - Damien the Magician wanted to know if the children believed in magic.

Below - He performs the old rope trick with an assistant.

Wave Hill Events Apr 21–Apr 28 Earth Day Weekend!

   This weekend, Wave Hill joins in the global celebration of Earth Day. Whether it’s a free session of meditation, a nature program that focuses on some of the smallest (at least to the naked eye) denizens of the globe or a session of family art-making, we hope you will claim Wave Hill as your place of choice to appreciate and enjoy our first mother, Mother Earth.

This Sunday is also the last concert in the 2016-2017 concert season in historic Armor Hall. It will pair well with a visit to Glyndor Gallery to look at the dynamic show that just opened there. Concert and exhibition both focus on giving voices to women—in this case, women artists.

SAT, APRIL 22    FAMILY ART PROJECT: EARTH DAY FOR PROTECTING POLLINATORS

Celebrate Earth Day by learning about how we can protect and support our environment and essential pollinators, like the honeybees who live at Wave Hill. Sunroom Project Space Artist Borinquen Gallo uses yellow caution tape in large-scale installations to stand as metaphors for sustainability and environmental care. Raise awareness of how pesticides impact pollinators through individual art projects or by contributing small projects to be included in Gallo’s dynamic installation in Glyndor Gallery! Free, and admission to the grounds is free until noon. Earth Day Weekend event.

WAVE HILL HOUSE, 10AM‒1PM

 SAT, APRIL 22    IN THE SHOP: REUSABLE WAVE HILL TOTE

In celebration of Earth Day, spend at least $50 in The Shop today and receive a reusable Wave Hill Tote Bag as our gift to you.

PERKINS VISITOR CENTER, 10AM–4:30PM

SAT, APRIL 22    GARDEN HIGHLIGHTS WALK

Join us for an hour-long tour of seasonal garden highlights. Free, and admission to the grounds is free until noon.

MEET AT PERKINS VISITOR CENTER, 11AM

SAT, APRIL 22    WELLNESS WORKSHOP: EARTH DAY MEDITATION

Use the garden landscape as inspiration this Earth Day weekend with healer, artist and yogi Sara Hart from iHart Lens. With an emphasis on the art of meditation and the healing arts, practice simple techniques that you can use to bring light to any occasion, anywhere, any day. Bring your own cushion or blanket; art materials will be provided. Registration not required. Free, and admission to the grounds is free until noon. Earth Day Weekend event.

MEET AT PERKINS VISITOR CENTER, 11AM–1PM

SAT, APRIL 22    GALLERY TOUR

Wave Hill’s Curatorial Fellow will lead a tour of the spring exhibitions in Glyndor Gallery. The group show, Outcasts: Women in the Wilderness, explores how women have been treated and portrayed as outcasts in history, myth and biblical legend. In the Sunroom Project Space, Borinquen Gallo’s imaginary hive interior is informed by Wave Hill’s beehives. Free with admission to the grounds.

GLYNDOR GALLERY, 2PM

SUN, APRIL 23    FAMILY ART PROJECT: EARTH DAY FOR PROTECTING POLLINATORS

Celebrate Earth Day by learning about how we can protect and support our environment and essential pollinators, like the honeybees who live at Wave Hill. Sunroom Project Space Artist Borinquen Gallo uses yellow caution tape in large-scale installations to stand as metaphors for sustainability and environmental care. Raise awareness of how pesticides impact pollinators through individual art projects or by contributing small projects to be included in Gallo’s dynamic installation in Glyndor Gallery! Free with admission to the grounds. Earth Day Weekend event.

WAVE HILL HOUSE, 10AM‒1PM

SUN, APRIL 23    IN THE SHOP: REUSABLE WAVE HILL TOTE

In celebration of Earth Day, spend at least $50 in The Shop today and receive a reusable Wave Hill Tote Bag as our gift to you. Earth Day Weekend event.

PERKINS VISITOR CENTER, 10AM–4:30PM

SUN, APRIL 23    EARTH DAY INSECT EXPEDITION

Get up-close and personal with insects and other critters that creep, crawl and cruise around the Hudson River Valley in springtime. Check out live and preserved insects on display, then explore Wave Hill with insect guru Lawrence Forcella to hunt for native creatures in their garden habitats. Ages eight and up welcome with an adult. Free with admission to the grounds. Earth Day Weekend event. 

ON THE GROUNDS, NOON & 1PM

SUN, APRIL 23    PRE-CONCERT TEA

Enjoy Afternoon Tea in the Mark Twain Room prior to today’s concert in Armor Hall. The Café at Wave Hill pairs a classic menu with an assortment of green, black and herbal teas. This traditional tea service includes the four classic elements of savory, scones, sweets and tea. The menu, presented by Great Performances, includes an array of tea sandwiches, scones and bite-sized desserts. Afternoon Tea also includes a glass of sparkling wine. Afternoon Tea Service is $36. Wave Hill Members receive a 10% discount. Advanced registration is required, online at wavehill.org. We will take reservations until5PM, Thursday, April 20.

WAVE HILL HOUSE, NOON

SUN, APRIL 23    CONCERT: WOMEN COMPOSERS IN THE SPOTLIGHT

This concert brings women composers and their work to the forefront and is presented in conjunction with the Glyndor Gallery exhibition Outcasts: Women in the Wilderness. Curated by American composer and educator Suzanne Farrin, her insightful commentaries guide the audience through performances that showcase a landscape of music from the Baroque period to today. The performers are soprano Tony Arnold and harpist Bridget Kibbey. The afternoon begins with music by Barbara Strozzi, a 17th-century Venetian composer and singer of opera who performed her own music and that of such contemporaries as Vivaldi. It concludes with works from current leading women composers, including Farrin’s Suono, which received its world premiere as part of the 2016 Mostly Mozart Festival, and Kaija Saariaho’s Fall. The program will be followed by a conversation with the artists. Ms. Farrin is professor and chair of the music department at Hunter College, and has hosted a show for WQXR’s Q2. Her work La Dolce Morte enjoyed its world premiere performances at the Metropolitan Museum of Art in the spring of 2016. Performances begin at 2PM and last approximately one hour with no intermission. Ticket prices: Adults $28/$22 Wave Hill Member, Children (ages 8-18) $15/$12. Order tickets online at wavehill.org or onsite at the Perkins Visitors Center. For additional information, please call 718.549.3200 x251.

WAVE HILL HOUSE, 2PM

SUN, APRIL 23    GARDEN HIGHLIGHTS WALK

Join us for an hour-long tour of seasonal garden highlights. Free with admission to the grounds.

MEET AT PERKINS VISITOR CENTER, 2PM

MON, APRIL 24    

Closed to the public.

TUE, APRIL 25    GARDEN HIGHLIGHTS WALK

Join us for an hour-long tour of seasonal garden highlights. Free, and admission to the grounds is free until noon.

MEET AT PERKINS VISITOR CENTER, 11AM

TUE, APRIL 25    GALLERY TOUR

Wave Hill’s Curatorial Fellow will lead a tour of the spring exhibitions in Glyndor Gallery. The group show, Outcasts: Women in the Wilderness, explores how women have been treated and portrayed as outcasts in history, myth and biblical legend. In the Sunroom Project Space, Borinquen Gallo’s imaginary hive interior is informed by Wave Hill’s beehives. Free with admission to the grounds. GLYNDOR GALLERY, 2PM

FRI, APRIL 28    GARDEN WALK: NOTABLE TREES OF WAVE HILL

Wave Hill’s landscape includes magnificent old trees, rare species and native beauties. Wander through the gardens on this special walk with Director of Horticulture Louis Bauer to see some of his favorites from the living collection. Free with admission to the grounds. Arbor Weekend event. 

MEET AT PERKINS VISITOR CENTER, 1PM

A 28-acre public garden and cultural center overlooking the Hudson River  and Palisades, Wave Hill’s mission is to celebrate the artistry and legacy of its gardens and landscape, to preserve its magnificent views, and to explore human connections to the natural world through programs in horticulture, education and the arts.

HOURS  Open all year, Tuesday through Sunday and many major holidays: 9AM–5:30PM, starting March 15.  Closes 4:30PM, November 1–March 14.

ADMISSION  $8 adults, $4 students and seniors 65+, $2 children 6–18. Free Saturday and Tuesday mornings until noon. Free to Wave Hill Members and children under 6.

PROGRAM FEES  Programs are free with admission to the grounds unless otherwise noted.

Visitors to Wave Hill can take advantage of Metro-North’s one-day getaway offer. Purchase a discount round-trip rail far and discount admission to the gardens. More at http://mta.info/mnr/html/getaways/outbound_wavehill.htm

DIRECTIONS – Getting here is easy! Located only 30 minutes from midtown Manhattan, Wave Hill’s free shuttle van transports you to and from our front gate and Metro-North’s Riverdale station, as well as the W. 242nd Street stop on the #1 subway line. Limited onsite parking is available for $8 per vehicle. Free offsite parking is available nearby with continuous, complimentary shuttle service to and from the offsite lot and our front gate. Complete directions and shuttle bus schedule at www.wavehill.org/visit/.

Information at 718.549.3200. On the web at www.wavehill.org. 

NEWS FROM ASSEMBLYMAN SEPULVEDA

   State Assemblyman Luis Sepulveda today called the final budget numbers hammered out for school funding in the city and across the state "Good news for our children."

The $25.6 billion funding agreement, which came in the final hours of extended budget talks in Albany, will see statewide education spending grow by $1.1 billion, while taxpayers will continue to see their support for schools capped at 2 percent.

"This new budget will mean an additional $386 million for schools in the Bronx and the rest of the city," said Assembly Sepulveda. "That's good news for our children, especially in the Bronx where many of our schools in poorer districts are struggling to provide decent education."

Sepulveda noted that the delay in finalizing a state budget has also put pressure on school districts to put together their own spending plans, not knowing what funding will be coming from Albany.

"We can now get on with the business of giving our children the education they deserve," said Sepulveda.
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Assemblyman Luis Sepulveda, a member of the Assembly Committee on Correction, hailed the breakthrough in Albany budget negotiations that will bar 16- and 17-year olds from being tried as adults.

     "This is an historic reform in the criminal justice system," Sepulveda said of the legislation, known as the Raise the Age bill.

     Once signed into law by Governor Cuomo, as expected, it will leave North Carolina as the only state in the nation that tries 16- and 17-year olds as adults.

    "And that state is now working to change the law, hopefully by the end of this year," the Assemblyman noted.

    "We've been arguing with a host of other legislators that medical and psychological evidence overwhelmingly points to adolescents in this age range lacking the judgmental and other skills when it comes to criminal behavior," said Sepulveda.

   "Throwing them in - and that's what it is - with adult offenders can damage them almost irreparably, and turn many into hardened criminals," said Sepulveda.

    "It can also leave a stigma on those convicted of non-violent crimes who will find themselves struggling to get ahead in life, for a job, for school or an apartment when they have a criminal record. This bill allows them, at some point, to apply to the courts to have their criminal record sealed," he noted.

   "This legislation will go a long way to curb a number of serious issues and hopefully save young lives."

William T. “Billy” Walters Convicted In Manhattan Federal Court Of Insider Trading

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that WILLIAM T. WALTERS, a/k/a “Billy,” was found guilty on all 10 counts of conspiracy, securities fraud, and wire fraud charges after a four-week trial before U.S. District Judge P. Kevin Castel relating to his scheme to commit insider trading from 2008 through 2014, principally relating to securities of Dean Foods Company (“Dean Foods” or the “Company”). 

Acting U.S. Attorney Joon H. Kim said: “Today, Billy Walters lost his bet that he could cheat the securities markets on a massive scale and get away with it scot-free. As a unanimous jury swiftly found, Walters received inside information about Dean Foods for years – directly from one its board members – and illegally traded on it, netting over $43 million. Armed with his illegal edge, Walters made huge, perfectly-timed trades, at times accounting for over a third of the trading volume in Dean Foods stock. In engaging in his years-long stock fraud scheme, Walters underestimated law enforcement’s resolve to pursue and catch those who cheat the market. The integrity of the American financial markets is a bedrock principle upon which our economy and justice system relies, and this Office and our partners at the FBI are as committed as ever to protecting it.”

According to the allegations in the charging documents and statements made in court proceedings:

From 2008 through 2014, WALTERS and Thomas C. Davis, among others, participated in a scheme to commit insider trading principally related to securities of Dean Foods, a Fortune 500 company that is the largest processor and distributor of fresh milk in the United States.  Davis pled guilty to insider trading, perjury, and obstruction of justice charges on May 16, 2016 and has been cooperating with the investigation.

From 2001 until August 7, 2015, Davis served as a member of the Board of Directors of Dean Foods (the “Board”), and regularly possessed material, nonpublic information about Dean Foods, including about the Company’s financial performance and results, comprising quarterly earnings results; contemplated and actual corporate transactions; and other significant corporate and strategic developments (the “Inside Information”).  In furtherance of the scheme, Davis violated his duties of trust and confidence to Dean Foods by providing Inside Information to WALTERS in advance of public announcements.  WALTERS, knowing that Davis owed duties of trust and confidence to the Company, used the Inside Information to execute profitable trades in Dean Foods stock.  In total, WALTERS’ trading on the basis of Inside Information netted realized and unrealized profits of approximately $32 million and avoided additional losses of approximately $11 million.  In return for Davis providing the Inside Information to WALTERS, WALTERS, among other things, provided capital to Davis for joint business ventures and made two loans to Davis for approximately $1 million in total, which Davis largely did not repay.

In furtherance of the scheme, and to avoid detection by law enforcement, WALTERS provided Davis with a prepaid cellular phone to use when passing Inside Information to WALTERS.  Moreover, WALTERS further instructed Davis to use code words when discussing the Inside Information, including by referring to Dean Foods as the “Dallas Cowboys.”

WALTERS, 70, of Las Vegas, Nevada, was convicted of one count of conspiracy to commit securities fraud, four counts of securities fraud, one count of conspiracy to commit wire fraud, and four counts of wire fraud.  Count One carries a maximum sentence of five years in prison.  Counts Two through 10 each carry a maximum sentence of 20 years in prison.  The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentence for WALTERS will be determined by the judge.  WALTERS will be sentenced by Judge Castel on July 14, 2017.

Mr. Kim praised the work of the FBI and the Postal Inspection Service, and thanked the SEC and the Financial Industry Regulatory Authority (“FINRA”) for their assistance.  He also thanked the Las Vegas offices of the FBI and the Internal Revenue Service, Criminal Investigation Division.

A.G. Schneiderman Announces Indictment Of NYC Landlord Dean Galasso For Mortgage Fraud

Arrest Follows Investigation By Joint State-City Tenant Harassment Prevention Task Force

 Attorney General Eric T. Schneiderman announced today that Dean Galasso, a New York City landlord with multiple properties in Manhattan and Queens, was indicted on six felony charges stemming from an alleged scheme to fraudulently obtain a multi-million-dollar mortgage to finance the purchase of a rental building. This indictment results from an investigation led by the Tenant Harassment Prevention Task Force (“Task Force”), the multi-agency task force, which was announced by Attorney General Schneiderman, Mayor de Blasio, and Governor Cuomo in February 2015.

According to the indictment and papers filed in court Galasso allegedly submitted false mortgage documents to Investors Bank, including a falsified rent roll, to obtain a $5,025,000 mortgage to finance the purchase of 43 Essex Street, a 10-unit rental building in Manhattan. Galasso also allegedly forged certain leases for units in his building in an effort to support the false information contained in the rent roll, which Investors Bank relied upon to approve of its mortgage.

“Bad landlords are now on notice: if you attempt to break the law, we will find you and prosecute you to the fullest extent of the law,” Attorney General Schneiderman said. “Our task force will continue to identify, investigate, and prosecute those who try to game the system.”

Governor Cuomo said: “Today's actions send a strong message that any form of tenant harassment would not be tolerated in New York.  Our state’s Tenant Protection Unit will continue to use every legal means necessary to pursue and prosecute any landlord that blatantly violates our laws to ensure every tenant is protected.  

“We will use every tool at our disposal, including the criminal courts, to go after bad landlords who abuse their authority and hurt tenants,” Mayor Bill de Blasio said. “I thank Attorney General Schneiderman, DOB and HPD and our agency task force partners as we move to clean up the fraud and greed that hurts New York families.”

NYS Homes and Community Renewal Commissioner RuthAnne Visnauskas said; “Once again, our Governor’s Tenant Protection Unit has exposed egregious wrong doing on the part of a bad landlord. TPU continues to operate on the forefront of proactive enforcement to protect the rights of rent regulated tenants. Thanks to our initial investigation, the help of Asian Americans for Equality and Manhattan Legal Services, and the hard work of the state and city Tenant Harassment Task Force, the residents at 43 Essex Street can rest assured that justice will be done on their behalf.”

“DOB is proud to work with Attorney General Schneiderman and all our Task Force partners to fight tenant abuses aggressively. Last year alone, the Task Force inspected 2,179 properties with complaints of tenant harassment, and we issued 2,163 violations and 276 stop-work orders. Where possible, we also make immediate repairs to keep tenants in their homes,” said NYC Buildings Commissioner Rick D. Chandler, PE.

“This latest Task Force arrest shows that when we say bad landlords won’t be tolerated, we mean business,” said HPD Commissioner Maria Torres-Springer. “The joint City and State Task Force was created to aggressively target any building owner who attempts to skirt the law. I want to thank the Attorney General’s Office, New York State Homes and Community Renewal, and the New York City Department of Buildings for their continued partnership as we work to prevent harassment and ensure the safety of New York City residents.”

According to the unsealed indictment, Galasso, 49, faces one count of Grand Larceny in the First Degree, a Class B Felony, two counts of Forgery in the Second Degree, Class D Felonies, two counts of Criminal Possession of a Forged Instrument in the Second Degree, Class D Felonies, and one count of Falsifying Business Records in the First Degree, a Class E Felony. If convicted, Galasso faces up to 25 years in prison.

The arrest is the result of a joint investigation into 43 Essex Street by the Task Force that resulted from tenant complaints of harassment and unsafe conditions. The Task Force inspections resulted in a referral of the criminal case to the Attorney General’s Office from the New York State Division of Homes and Community Renewal, via its Tenant Protection Unit (“TPU”).

The charges are merely accusations, and the defendants are presumed innocent unless and until proven guilty in a court of law.