Crack Down on Bad Tax Preparers Nets 7 Arrests Across New York State

 

Preparers accused of criminal tax fraud, grand larceny, and filing fraudulent tax returns

 The New York State Department of Taxation and Finance today announced charges against seven individual tax preparers in recent months. The charges include criminal tax fraud, grand larceny, offering a false instrument for filing, and forgery.

“We continue to aggressively pursue unscrupulous tax preparers who betray the trust of clients and deprive communities and the state of revenue needed for vital services,” said New York State Commissioner of Taxation and Finance Michael Schmidt. “Our investigators and experts use a variety of methods and analytics-driven systems to uncover these rogue tax preparers and hold them accountable.”

 

Crack down on bad tax preparers and businesses

 

Yehad Abdelaziz and his corporation, The Five Pillars Financial Services, LTD, located in Brooklyn, NY, pled guilty to Criminal Tax Fraud. A Tax Department investigation determined Abdelaziz received money from business owners and filed Sales Tax returns on their behalf. However, he underreported sales or reported zero gross sales, pocketing the Sales Tax payments his clients entrusted him to remit on their behalf. Abdelaziz is barred from New York State tax preparation activities for an entire year.

 

Claude Bruno of Cambria Heights, NY, is accused of operating without the required registration to legally prepare tax returns in New York. Bruno is also accused of failing to sign the returns he prepared and fraudulently claiming inflated expense amounts for his clients.

 

Raul Martinez of Englewood, N.J., faces seven felony counts, including one count for repeatedly failing to file corporate tax for his business, Apollo Tax, located at 170 Dyckman Street in New York City. He was also charged with third-degree grand larceny for claiming a refund of nearly $7,000 by allegedly providing false information on his 2015 personal income tax return. In addition, Martinez was charged with one count of third-degree criminal tax fraud, one count of fourth-degree criminal tax fraud, and three counts of offering a false instrument for filing.

Emerson Gamory Income Tax Services, located in Brooklyn, NY, pled guilty to Criminal Tax Fraud.  Emerson Gamory submitted tax returns on behalf of his clients between 2015 and 2016 in which he falsely claimed gifts to charity and job expenses as itemized deductions on almost 50% of the returns he filed. Gamory is barred from preparing New York State taxes for an entire year. He was previously sentenced to 15 months in Federal prison and ordered to pay $574,565 in restitution to the Internal Revenue Service.

 

Yachun Lin is accused of filing false 2017 and 2018 New York State tax returns with forged signatures.  She allegedly attempted to steal nearly $4,475 from New York State by suggesting her client use an address of a friend or family member who lives outside of New York City in order to save money. 

Lin then allegedly used that false address to prepare the New York State tax returns.  Lin was charged with Criminal Tax Fraud, Offering a False Instrument for Filing, Attempted Grand Larceny and Forgery.  Lin is not a registered New York State tax preparer despite the fact that she allegedly prepared a tax return out of a commercial space in Flushing Queens, designated as ETS Tax Services.

Nayib Chabur, a registered New York State Tax preparer, and his wife Maria Chabur, who is not a registered tax preparer, were arrested for filing a false 2018 New York State tax return in an attempt to defraud the state. Acting together, they are alleged to have included an IRA deduction that was not true nor discussed with their client while preparing the return. They were both arraigned and charged with Criminal Tax Fraud, Offering a False Instrument for Filing, Attempted Petit Larceny, Conspiracy, and Forgery.

 

Each year, tax return preparers who are not otherwise exempt must register with New York State before providing any commercial tax return preparation services or filing tax returns with the department. Those who fail to comply with New York’s registration program may be subject to steep monetary penalties or other administrative action.

Report fraud 

Taxpayers who believe a tax preparer has engaged in illegal or improper conduct may file a complaint. The department will review the complaint promptly and, if appropriate, take corrective action. For details, please see our Report fraud, scams, and identity theft web page.

Governor Cuomo Updates New Yorkers on State's Progress During COVID-19 Pandemic March 27, 2021

 

4,578 Patient Hospitalizations Statewide

896 Patients in the ICU; 552 Intubated

Statewide Positivity Rate is 3.15%

76 COVID-19 Deaths in New York State Yesterday

 Governor Andrew M. Cuomo today updated New Yorkers on the state's progress during the ongoing COVID-19 pandemic.

"New Yorkers have kept themselves and their families safe and remained vigilant throughout the COVID-19 pandemic, and even as we vaccinate more people every day, everyone should continue practicing the behaviors that keep them safe," Governor Cuomo said. "Our distribution network stands at the ready to accept and administer an increase in vaccine supply, but New Yorkers should remember the positivity rate is a function of what they do to slow the spread. Washing hands, wearing masks and social distancing are critical tools to help us fight the virus, and they work. We're going to get to the light at the end of the tunnel, but there's work to be done before we defeat the COVID beast once and for all."

Today's data is summarized briefly below:

·       Test Results Reported - 259,945

·       Total Positive - 8,201

·       Percent Positive - 3.15%

·       7-Day Average Percent Positive - 3.41%

·       Patient Hospitalization - 4,578 (-25)

·       Patients Newly Admitted - 617

·       Hospital Counties - 48

·       Number ICU - 896 (-17)

·       Number ICU with Intubation - 552 (-6)

·       Total Discharges - 159,846 (+543)

·       Deaths - 76

·       Total Deaths - 40,266

281 Days and Counting

 All the petitions are in for whomever wants to be your next mayor. I now have 281 days left in office to do what I didn't do in seven years, how am I doing?

 

Renderings Revealed For 3013 Barker Avenue In Bronxwood, The Bronx

Exterior rendering of 3013 Barker Avenue - AM Architecture

CSTERN Design has revealed the first architectural renderings of a seven-story rental building at 3013 Barker Avenue in Bronxwood, The Bronx. Designed by Aharon Machlis of AM Architecture, the property will replace a two-story multifamily building and yield 29 apartments.

Chaim Stern’s CSTERN Design will serve as interior planner. SKMF Queens Management is listed as the owner behind the forthcoming development.

Total built-up area will measure 22,744 square feet, with 21,773 square feet designated for residential use. Renderings from the architect appear to reveal a roof terrace, but it is unclear whether this will be reserved for a penthouse unit or for communal use. Permits filed with the city’s Department of Buildings also do not specify plans to construct any residential amenities.

Interior rendering of 3013 Barker Avenue – AM Architecture; CSTERN Design

Interior rendering of 3013 Barker Avenue – AM Architecture; CSTERN Design

The building’s vibrant teal façade is perforated by large arched windows, a combination that some critics say resembles an Art Deco-inspired vertical submarine. Along Barker Avenue, the building’s address will be pinned or painted onto the façade from the ground floor to the roof, making it hard to miss for passersby. At this elevation, the building will also feature a series of private residential balconies.

An estimated completion date has not been revealed.

Undeveloped conditions at 3013 Barker Avenue – Google Maps

Reminder Join our Bronx Progressives March General Virtual Meeting

 

Friendly Reminder Join Fellow Progressives for our March General Virtual Meeting! Join Zoom Meeting https://us02web.zoom.us/j/86513083551 Meeting ID: 865 1308 3551 Greetings Bronx Progressives Members! Hope you're having a great March, and staying healthy and safe.    First, thank you to those that were able to join us on Sunday, March 21, to our Mass Phone Bank to #TaxTheRich, organized by our brothers and sisters at the Democratic Socialist of America (DSA). So many familiar faces that joined, including our very own Samelys Lopez!  We were joined by close to 50 volunteers and made so many calls we burned through the list before the end of the shift. This event was a true success! Together, we were able to spread our call to New Yorkers about the Invest in Our New York campaign, and help patch many New Yorkers to their elected officials.  Second, we also invite you to join us for our March general meeting. Mark your calendar Wednesday, March 31 at 7pm.   We will also be joined by Beverly Solow and James DiGioia both with DSA Bronx/Upper Manhattan Eco-socialists, who will give us an exiting and informative presentation on the Public Power Campaign; a movement that pushes to make our utilities publicly owned and powered by renewable energy. Agenda: Greetings and Welcomes (2 Mins.) Quick review of the agenda (3 Mins.) House Rules (3 Mins.) Introducing Beverly Solow and James DiGioia (3 Mins)  Beverly and James gives presentation (20 Mins.) Q&A (10 Mins.)   Working Group Proposes collaborating with the Public Power Campaign (10 Mins.) New Business/Announcements (20 Mins.)       Tax The Rich Campaign (Rally)                        New York Health Act (Phone Bank) BylawsReminder https://docs.google.com/document/d/1dupzQcNBbEhBbSAZBe5GF24vAIeMMBEdYHLcTwvE_gA/edit?usp=sharing    Adjourn Join Zoom Meeting https://us02web.zoom.us/j/86513083551 Meeting ID: 865 1308 3551 March 31 at 7pm One tap mobile +16465588656,,86513083551# US (New York) +13126266799,,86513083551# US (Chicago)

MAYOR DE BLASIO APPOINTS MARCOS GONZALEZ SOLER TO HEAD MAYOR’S OFFICE OF CRIMINAL JUSTICE

  Mayor Bill de Blasio today announced that Marcos Soler will head the Mayor’s Office of Criminal Justice. As Director, Soler will oversee citywide criminal justice policy and develop and implement strategies across city agencies and partners to enhance public safety. Soler will play a critical role in implementing the City’s police reform plan and also serve as the Mayor’s representative to the courts, district attorneys, and state criminal justice agencies, among others. 

“Throughout my Administration we’ve seen the incredible impact of the Cure Violence Movement and Crisis Management System in neighborhoods across our city,” said Mayor Bill de Blasio. “Now, as we build a recovery for all of us, it’s time to deepen that work. I trust that Marcos will lead the charge to bring us back, all while keeping New York City the safest big city in America.”

 

"For seven years, this administration has shown that it is possible to reduce both crime and imprisonment with fairer, more targeted enforcement and innovative community-based strategies across the entire justice system. MOCJ has played a critical role in advancing the most ambitious and successful changes to operations of the criminal justice the City has seen in decades," said Marcos Gonzalez Soler, Director of the Mayor’s Office of Criminal Justice. "It has been my privilege to work alongside the dedicated, hardworking, and immensely talented staff that make up our office for years as chief of staff. Now as director, it will be my honor to continue to advance the mayor’s agenda of criminal justice reform.”

 

Marcos Gonzalez Soler has served as Chief of Staff at the Mayor’s Office of Criminal Justice since 2015. Before that, Soler was the deputy executive director for policy and strategic initiatives at the Civilian Complaint Review Board. He worked closely with the board in conceptualizing and implementing major initiatives at the CCRB, including the implementation of the administrative prosecution unit and the drafting of several policy reports and recommendations. He served as acting executive director from February to April of 2013.

 

Soler also served as deputy federal monitor in the agreement for the sustainable reform of the Puerto Rico Police Department, the largest reform agreement in the United States. Between 2009 and 2011, he was a board member and treasurer of the National Association for Civilian Oversight of Law Enforcement (NACOLE).

 

Soler serves as an adjunct faculty member in the political science department at John Jay College of Criminal Justice. At John Jay, Soler developed the first of its kind graduate level course in public oversight of law enforcement in coordination with National Association for Civilian Oversight of Law Enforcement. He had also taught in the NYPD executive master program in criminal justice at John Jay.

 

Soler holds a Master’s in public policy and management and a Ph.D. in politics from The New School University, where he was the recipient of the Hannah Arendt Award for the best dissertation in politics. He was a doctoral research fellow in jurisprudence at the University of Valencia School of Law and a research fellow at the Spanish Center for Constitutional Studies. He holds several graduate and law degrees from several European universities, including University of Valencia Law School & University of Valencia, the European Academy of Legal theory, the International Institute for the Sociology of Law, and the Spanish National Center for Constitutional Studies. Additionally, he is a graduate of the New York City Leadership Institute and a recipient of the Mayor’s Graduate Scholarship program. A native of Spain, Soler moved to New York City in 1998. He lives with his wife, a public-school teacher, and children on Staten Island.

 

“Over the last seven years the Mayor's Office of Criminal Justice has played a critical role conceptualizing, implementing, and coordinating significant change in our justice system—from developing the historic plan to close Rikers to creative gun violence prevention and community-led safety initiatives,” Susan Herman, Director of ThriveNYC, said. “We have seen dramatic changes in every part of the criminal justice system largely due to MOCJ's efforts and Marcos Soler has been a valuable member of the leadership team that has made it happen. As he takes the helm, I congratulate him and look forward to continuing to work together to make New York a safer, fairer, and healthier city.”

 

“Marcos’ expertise on the issues is matched by his commitment to making New York City a more just and equitable place. He is absolutely the right person to lead the Mayor’s Office of Criminal Justice,” said CCRB Executive Director Jonathan Darche. “The CCRB looks forward to working with Marcos and MOCJ on implementing police reforms and empowering civilian oversight in our City.”

 

"I look forward to working with Marcos in building a fairer criminal justice system," said Community Affairs Unit Commissioner Roberto Perez. "I am confident that Marcos will successfully advance this administration's community-focused policies like the Mayor's Action Plan for Neighborhood Safety, borough-based jails, and NYPD reform." 

 

Attorney General James and Tax Commissioner Schmidt Announce Convictions of Long Island Auto Repair Shops for Tax Evasion

 

Broadway Towing and Broadway Auto & Towing Failed to Pay Over $700,000 in Sales Tax

Businesses Underreported More Than $8 Million in Taxable Sales Over a Decade

  New York Attorney General Letitia James and New York Commissioner of Taxation and Finance Michael Schmidt today announced the guilty pleas of two Long Island auto repair shops and their owner for tax evasion. Broadway Towing, Inc. and Broadway Auto & Towing, Inc. pleaded guilty to Criminal Tax Fraud for underreporting more than $8 million in taxable sales over a 10-year period. The owner of both shops — Luis Crespo, 53 of Freeport —  additionally pleaded guilty to Petit Larceny. As part of their pleas, the defendants agreed to repay the state of New York more than $900,000 in restitution, interest, and penalties.

“There’s no award presented to those who partake in tax evasion, but Broadway Towing’s performance has ensured the company finally pays New York state more than $900,000 in restitution, interest, and penalties,” said Attorney General James. “Today’s convictions should serve as a clear reminder that we will never tolerate those who seek to defraud our state out of its owed tax revenue, especially as we continue to face budget shortfalls. The lights have finally dimmed on Broadway Towing’s fraud. I thank Commissioner Schmidt and the Department of Taxation and Finance for their partnership in bringing accountability and justice to our communities.”

“Business owners who tilt the playing field for their own personal gain not only violate the trust of their community, they rob it of critical funding for public programs and services,” said Commissioner Schmidt. “This is hundreds of thousands of dollars that would have helped improve lives in local neighborhoods, but instead they were siphoned off for personal profit. We’ll continue to work with the attorney general and all levels of law enforcement to ensure those committing tax fraud are held accountable.”

A joint investigation by the Office of the Attorney General’s (OAG) Auto Insurance Fraud Unit and the New York state Department of Taxation and Finance’s (Tax Department) Criminal Investigations Division revealed that — between 2009 and 2018 — Crespo collectively underreported a total of more than $8 million in taxable sales, and failed to remit more than $700,000 in sales tax collected from his two auto body repair shops — both located at 25 Broadway in Freeport. 

According to complaints filed in Nassau County Court and a Tax Department audit of sales tax returns, for the period between December 1, 2009 and February 28, 2018, Broadway Towing underreported its taxable sales by $5,414,789 — resulting in a failure to remit $467,025 in sales tax due to New York state. The Tax Department’s audit further revealed that, between December 1, 2009 and November 30, 2016, Broadway Auto & Towing underreported its taxable sales by $3,150,930 — resulting in a failure to remit $271,767 in sales tax due to New York state.

This morning — before the Honorable Terence P. Murphy in Nassau County First District Court — Broadway Towing and Broadway Auto & Towing each pleaded guilty to one count of Criminal Tax Fraud in the Third Degree (a Class D felony). Crespo — who has already paid $160,000 in restitution to the Tax Department to date — pleaded guilty to Petit Larceny (a Class A misdemeanor), and was sentenced to a three-year conditional discharge. As part of his sentence, Crespo must pay an additional $750,000 in restitution to the Tax Department. 

The OAG wishes to thank the Tax Department’s Criminal Investigations Division, as well as the New York state Department of Financial Services and the National Insurance Crime Bureau, for their valuable assistance in this investigation.

This case was investigated by Detective John Roman and Senior Auditor Dmitry Temis of the Auto Insurance Fraud Unit, under the direction of Supervising Detectives Edward Keegan and Natalie Shifrin and Deputy Chief Leonard D'Alessandro. The Investigations Bureau is led by Chief Oliver Pu-Folkes.

281 Days and Counting

 

Any time now Dr. Choskhi, you can give me the COVID-19 vaccination. I gave it to you last week Mayor de Blasio. I am just checking the injection site.

CEO Of NYC Non-Profit Charged In Bribery And Kickbacks Scheme Involving Publicly Funded Housing And Social Services

 

 Audrey Strauss, the United States Attorney for the Southern District of New York, and Margaret Garnett, the Commissioner of the New York City Department of Investigation (“DOI”), announced today the arrest of VICTOR RIVERA on charges of honest services fraud and money laundering. As alleged in an Information filed today in Manhattan federal court, RIVERA, while leading a non-profit organization (“Organization-1”) that operated soup kitchens, homeless shelters, and affordable-housing facilities in New York City, schemed to enrich himself through bribes and kickbacks from Organization-1’s contractors. RIVERA will be presented and arraigned later today before United States District Judge Sidney H. Stein. 

Manhattan U.S. Attorney Audrey Strauss said:  “Many of the over 8.4 million residents of New York City rely on government-assisted non-profits to provide food, affordable housing, and other essential services for their well-being. As alleged in today’s charges, by accepting bribes and kickbacks, Victor Rivera sought to leverage his position as the CEO of a non-profit into a very much for-profit situation for himself.  The vast majority of organizations in New York City’s non-profit networks honorably provide assistance to those in need, but when any individual selfishly exploits one of those organizations for their own personal gain, they will find themselves facing criminal charges for corruption.”

DOI Commissioner Margaret Garnett said:  “As CEO of a City-funded nonprofit, this defendant should have been serving the underprivileged, including the homeless;  instead, according to the criminal information, he schemed to enrich himself and his relatives, taking bribes and kickbacks from those doing business with his organization. New York City provides billions of dollars to support nonprofits, many of which run organizations with integrity and provide valuable, essential services. But corruption at nonprofit social services contractors remains an investigative priority for DOI, and today's arrest should serve as notice to any individual who sees the City's coffers as a path to personal profit. DOI thanks the U.S. Attorney's Office for the Southern District of New York for its partnership and commitment to this important corruption investigation.”

As alleged in the Information:[1]

RIVERA was the President and Chief Executive Officer of Organization-1, which annually spent millions of dollars in public funds on real estate, security, cleaning, construction, and food expenses, among other costs related to the housing and social services Organization-1 provided. From at least in or about 2013 until in or about 2020, RIVERA engaged in a scheme to enrich himself and his relatives by soliciting and accepting bribes and kickbacks from contractors doing work related to or for Organization-1. The scheme yielded RIVERA at least hundreds of thousands of dollars in illicit gains. RIVERA laundered some of the corrupt payments through intermediary entities he controlled, including through a purported consulting company nominally owned by one of RIVERA’s relatives. 

RIVERA, 61, of Stony Point, New York, is charged with one count of honest services wire fraud conspiracy, one count of honest services wire fraud, and one count of money laundering. Each count carries a maximum potential prison sentence of 20 years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only; any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the outstanding investigative work of Special Agents of the United States Attorney’s Office for the Southern District of New York and of DOI, and thanked the Internal Revenue Service for its participation in the investigation.

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

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

RAY McGUIRE CAMPAIGN FILES 18K PETITION SIGNATURES TO QUALIFY FOR THE DEMOCRATIC MAYORAL PRIMARY

Democrat Ray McGuire today filed more than 18,000 petition signatures to the Board of Elections to qualify for the June primary election ballot.

“We are now really at the start of this campaign and today's filing shows that New Yorkers are beginning to be engaged,” said Ray McGuire. “People from every borough and every neighborhood are responding to our message for the most inclusive comeback in New York City history. New Yorkers want a change from politics as usual and deserve a mayor who can truly lead our economic recovery; I will be that mayor.”

The campaign's 18,000+ signatures were collected from neighborhoods across all five boroughs without institutional support from clubs, unions or elected officials. Powered by a robust volunteer network with over 1000 volunteers and growing, #TeamRay petitioned from the South Bronx to South Jamaica, Queens and everywhere in between.

 

"Our team has been working diligently and safely to not only qualify for the ballot, but also to share Ray's message with New Yorkers, and it is resonating. We are building a true grassroots apparatus with New Yorkers who are eager for change. We're proud of what we've accomplished so far and look forward to moving into the next phase of our campaign," said Rasheida Smith, field director for Ray McGuire for Mayor.

A RECOVERY FOR ALL OF US: MAYOR DE BLASIO, DOT ANNOUNCE NEW APPLICATION FOR 2021 EXPANSION OF OPEN STREETS

 

 Mayor Bill de Blasio today announced that the Department of Transportation (DOT) has released the 2021 application for New York City’s nation-leading Open Streets program, which allows communities to dedicate roadway space to pedestrians and cyclists. Interested businesses and community partners can learn more and apply now at www.nyc.gov/openstreets. 

“Last year, New York City seized an unprecedented crisis to totally reimagine our city streets. Open Streets was a runaway success – and now, I’m proud to deliver the framework we need to make it permanent,” said Mayor Bill de Blasio. “With better signage, new barriers, and more support for community partners, this program will be sustainable for the long term – and better position New York City to break free of car culture and build a recovery for all of us.”

 

DOT will work with community partners to develop operational plans for multiple uses, including outdoor dining and programming, while maintaining loading, deliveries, and emergency access.

 

“Under Mayor de Blasio’s leadership and in partnership with the Council and other City agencies, DOT launched multiple new programs to reimagine our streets in response to the pandemic, creating the nation’s largest Open Streets program, with outdoor dining corridors, play streets and open-air learning spaces,” said DOT Commissioner Hank Gutman. “Open Streets in communities across the five boroughs provided a true bright spot in a difficult year, and we are confident this new application will help us bring in more partners to make the initiative even better as the city continues to recover in 2021.”

 

This application will be open for groups interested in managing either of two distinct types of Open Streets:

 

• Temporary Limited Local Access – street designated for pedestrian and cyclist use, during a specified set of hours and days each week, where local vehicle access for parking and loading is permitted, and drivers are advised to drive 5 MPH.
• Temporary Full Closure – temporarily closed to vehicles for pedestrian and cyclist use, to support local businesses, and for community programming (formerly including Open Streets: Restaurants).

 

The Open Streets program will now replace DOT’s Weekend Walks and Seasonal Streets programs. Groups of three or more eligible businesses along a corridor may also submit an application for Open Streets, but must identify one business entity to apply for and represent the group. Both new and returning partners must apply to manage an Open Street in their communities.

 

Open Streets applicants submitting a proposal agree to help manage all aspects of the program, which may include but are not limited to the following:

• Managing street closure barricades (setup, oversight, breakdown)
• Coordinating operations and any programming executed on Open Streets
• Regularly notifying local stakeholders and the community about hours and guidelines using social media, digital outreach, and print media outlets, and/or other forms of communication
• Facilitating Open Streets certification for all restaurants and retail/service establishments included in the temporary full street closure, and coordinating operations and any programming executed on Open Streets.

 

Jury Convicts Architects Of Scheme To Fraudulently Process Over $150 Million Through U.S. Financial Institutions

 

 Audrey Strauss, the United States Attorney for the Southern District of New York, announced the conviction today of HAMID “Ray” AKHAVAN and RUBEN WEIGAND, following a four-week trial before the Honorable Jed S. Rakoff.  AKHAVAN and WEIGAND devised a complex scheme involving fake companies, false websites, and fake “customer service centers,” to deceive U.S. issuing banks and credit unions into effectuating more than $150 million of credit and debit card purchases of marijuana by disguising those purchases as being for other kinds of goods, such as face creams and dog products.  The defendants were each convicted of one count of conspiracy to commit bank fraud, in violation of Title 18, United States Code, Section 1349. 

Manhattan U.S. Attorney Audrey Strauss said:  “As a jury has now found, Ray Akhavan and Ruben Weigand were in the business of selling lies.  Under the radar of U.S. banks and credit card companies screening for suspicious and illegal activity, these men offered their services: creating fake companies and fake websites, and ginning up fake web traffic to those fake websites, all in the service of fraudulently moving money through the United States financial system.  Today, a jury has seen through those lies and convicted Akhavan and Weigand of bank fraud.” 

As reflected in the Indictment, public filings, and the evidence presented at trial:

From in or around 2016 through in or around 2019, AKHAVAN and WEIGAND, working with others, including principals from one of the leading on-demand marijuana delivery companies in the United States (the “Company”) planned and executed a scheme to deceive United States banks and other financial institutions into processing over $150 million in credit and debit card payments for the purchase and delivery of marijuana products (the “Scheme”).

The Scheme involved the deception of virtually all of the participants in the payment processing network, including issuing banks in the United States (the “Issuing Banks”) and Visa and MasterCard.  The primary method used by AKHAVAN, WEIGAND, and other coconspirators to deceive the Issuing Banks involved the purchase and use of shell companies that were used to disguise the marijuana transactions through the use of phony merchants (the “Phony Merchants”).  The shell companies were used to open offshore bank accounts with merchant acquiring banks and to initiate credit card charges for marijuana purchases made through the Company.  AKHAVAN and WEIGAND worked with other co-conspirators to create these phony merchant accounts – including phony online merchants purportedly selling dog products, diving gear, carbonated drinks, green tea, and face creams – and established Visa and MasterCard merchant processing accounts with one or more offshore acquiring banks.  They then arranged for more than a dozen Phony Merchants to be used by the Company to process debit and credit card purchases of marijuana products.  Many of the Phony Merchants purported to be based in the United Kingdom, but, despite being based outside the United States, claimed to maintain U.S.-based customer service numbers.

To facilitate the Scheme, webpages were created and deployed to lend legitimacy to the Phony Merchants.  The Phony Merchants typically had web pages suggesting that they were involved in selling legitimate goods, such as carbonated drinks, face cream, dog products, and diving gear.  Yet these companies were actually being used to facilitate the approval and processing of marijuana transactions.  The defendants’ scheme even involved fake visits to those websites to make it appear as though the websites had real customers and were operating legitimate online businesses.

The defendants’ scheme also involved the use of online tracking pixels.  Because the descriptors listed on Company customers’ credit card statements often were the URLs for the Phony Merchant websites, Company customers were sometimes confused and did not recognize the transactions on their credit card statements.  The defendants and their coconspirators were concerned that confused customers would call their Issuing Banks and inadvertently reveal the Scheme by indicating that they had purchased marijuana products and/or that they had made a purchase through the Company.  To lessen the risk that customers would be confused, the defendants used a number of techniques, including online tracking pixels to track which users had visited the Company’s website.  If a Company customer had visited the Company’s website and went to the URL listed on their credit card statement, they would automatically be re-routed to a webpage connected to the Company so that the customer would understand what the real purchase had been for (i.e., from the Company).  However, in order to hide the Scheme, the defendants ensured that if a third party such as a bank or credit card company investigator visited a URL of a Phony Merchant, they would not be re-routed, and would therefore be unable to discern any connection between the Phony Merchant website and the Company and/or the sale of marijuana products. 

Over $150 million in marijuana credit and debit card transactions were processed using the Phony Merchants.  Some of the merchant websites listed for those transactions included: diverkingdom.com, desirescent.com, outdoormaxx.com, and happypuppybox.com.  Moreover, none of the Phony Merchant website names listed for those transactions referred to the Company or to marijuana.  AKHAVAN, WEIGAND, and others also worked with and directed others to apply incorrect merchant category codes (“MCCs”) to the marijuana transactions in order to disguise the nature of those transactions and create the false appearance that the transactions were completely unrelated to marijuana.  Some of the MCCs/categories listed for the transactions included freight carrier, trucking; clock, jewelry, watch, and silverware; stenographic services; department stores; music stores/pianos; and cosmetic stores.            

AKHAVAN was the leader of the transaction laundering scheme and WEIGAND was responsible for overseeing the acquiring bank accounts used by the Phony Merchants and sending the proceeds from the marijuana transactions back to bank accounts in the United States.

AKHAVAN, 43, of, California, and WEIGAND, 38, of Germany, were each convicted of one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.  Sentencing before Judge Rakoff is scheduled for June 25, 2021.

Ms. Strauss praised the work of the Federal Bureau of Investigation.

Attorney General James Helps to Ensure Delivery of Approximately $76 Million in Rebates to 4 Million New Yorkers Charged Fees for Sports Programming Never Provided During COVID-19 Pandemic

 

Tens of Millions of Dollars More in Relief Expected for New York Consumers This Year

AG James Sent Letters to Seven Major Cable and Satellite Providers in New York Last April Demanding a Refund of Fees Until Live Sports Returned

 New York Attorney General Letitia James today announced that nearly 4 million cable and satellite television subscribers across New York state have received approximately $76 million in rebates after they were charged for live sports programming last year during the peak of the coronavirus disease 2019 (COVID-19) pandemic even though all live sports events had been cancelled. In response to news reports highlighting the problem, last April, Attorney General James sent seven major cable and satellite television providers in New York letters, demanding they provide financial relief to consumers by reducing or eliminating fees attributable to live sports programming. After discussions with the Office of the Attorney General (OAG), the seven companies — Altice USA, AT&T Inc., Charter Communications, Comcast Cable, DISH Network, RCN Corporation, and Verizon Communications — committed to passing on to their customers rebates being sought from regional sports networks, which in turn were negotiating rebates from leagues and teams that were not partaking in live sporting events.

“After a year where so many have suffered the devastating economic impacts of COVID-19, my office is proud to announce approximately $76 million that has been delivered directly to New Yorkers,” said Attorney General James. “No one should be forced to pay for something they aren’t receiving, especially during a pandemic that has impacted the finances of millions across our state. I’m glad that these seven cable and satellite companies are doing the right thing by delivering substantial relief to consumers. New Yorkers can trust that I will always fight to protect their wallets.”

Last March, almost overnight, live sporting events ceased to take place. At the same time, millions of cable and satellite television consumers were signed up for costly television packages that were supposed to include coverage of live sports. Despite complaints from consumers, many of these companies continued to charge and collect high fees for live sports programming and refused to reduce the cost of packages that normally included live sports.

After Attorney General James expressed her concerns to these seven providers, the OAG engaged in discussions with the different cable and satellite companies in an effort to secure substantial financial relief for New Yorkers. The discussions revealed a complex chain of contracts between the cable and satellite companies and various leagues, teams, and regional sports networks. While any rebates provided by the leagues and teams were supposed to eventually be passed to networks, including to regional sports networks, and then to distributors and, finally, to the public, the initial rebates and flow-through were slow to materialize, resulting in substantial delays to consumers.

Attorney General James has now confirmed, at least, a first round of refunds for lost live sports programming, totaling approximately $76 million for nearly 4 million New York subscribers at the seven cable and satellite television companies.

The approximately $76 million in relief has already been delivered to consumers in the form of refunds, rebates, and credits.

While Attorney General James continues to press for prompt additional relief for customers, her discussions have resulted in additional commitments from the companies, totaling tens of millions of dollars more in relief that will be delivered later this year.

CITY COUNCIL PASSES COMPREHENSIVE POLICE REFORM RESOLUTION TO CONFRONT LEGACY OF RACIALIZED POLICING AND DEEPEN ACCOUNTABILITY, TRUST BETWEEN POLICE AND COMMUNITIES

 

Major initiatives to restore accountability and trust between communities and police through five central goals

 The New York City Council today passed the Council Resolution on Police Reform, an initiative that builds on the proposals outlined in the New York City Police Reform and Reinvention Collaborative draft plan. Following seven years of consecutive police reform under the de Blasio Administration, the Resolution confronts the painful legacy of racialized policing and deepens accountability and the bonds between police and the communities they serve.  

“These reforms will confront centuries of overpolicing in communities of color and strengthen the bonds between police and community,” said Mayor Bill de Blasio. “I’m grateful to our co-sponsors—Jennifer Jones Austin, Wes Moore, and Arva Rice—for their vision and leadership throughout this process, as well as Speaker Johnson and Chair Adams. Together, we’ll make our city safer and fairer for generations to come.”

“We believe the plan ratified today by the City Council reflects the themes brought forward with reforms that center squarely on bringing an end to such policing, the criminalization of poverty, and the lack of transparency and accountability in the NYPD. We know there is more to be done,” said Police Reform and Reinvention Collaboration Co-Sponsors Jennifer Jones Austin, Wes Moore, and Arva Rice. “Now the work begins to implement this plan without delay, and ensure that the City’s budget is fully aligned.”

 

The Resolution is the product of a months-long engagement process through the New York City Police Reform and Reinvention Collaborative. Spanning nearly 100 meetings and town halls, including nine public listening sessions, the Collaborative sought testimony and feedback from a broad range of New Yorkers, including  CBOs, advocacy groups, members of clergy, racial justice advocates, cure violence providers, youth groups and youth voices, ethnic and religious organizations, BIDs and small business owners, non-profits, LGBTQIA+ community leaders, the deaf and hard-of-hearing community, people with disabilities, tenants’ associations, shelter-based and affordable housing communities and providers, people involved in the justice system, crime victims, policy experts, prosecutors and  oversight bodies. 

The Resolution focuses on five goals: 

1. The Decriminalization of Poverty.
2. Recognition and Continual Examination of Historical and Modern-Day Racialized Policing in New York City.
3. Transparency and Accountability to the People of New York City.
4. Community Representation and Partnership.
5. A Diverse, Resilient, and Supported NYPD.

All initiatives will be launched, and many fully implemented, in 2021. By May 1, 2021, the City will publish a commitments tracker that includes implementation timelines, implementation status, and metrics for all the following proposals. 

Goal 1: The Decriminalization of Poverty  

This plan prioritizes the concept of budget justice, in recognizing that we must reduce the likelihood of justice involvement by investing in services and supports for low-income communities. For far too many New Yorkers, there is an inescapable cycle of disadvantage and criminal justice involvement.

 

This pattern is particularly true in low-income and communities of color, which had experienced decades of under-investment in critical services. 

This plan addresses these issues in fundamental ways:

• Creating an Ending Poverty to Prison Pipeline initiative in June 2021 to prevent and reduce justice system contact and connect low-income and justice-involved clients and their families with streamlined services 

• Issuing an Executive Order requiring City agencies to establish service plans to ensure access to health and human services for individuals and families affected by the criminal justice system

• Expanding the Summer Youth Employment Program by adding 5,000 new spots this summer for high-need CUNY Students 

 

• Funding  a pilot program for families with children who are at risk of homelessness, with the goal of reaching them before their housing situation reaches the point of a crisis.  

• Expanding Mobile Treatment Teams and eliminate existing disparities in access to mental health care

• Examining and end policies that perpetuate the cycle of impoverishment and incarceration in communities of color 

• Committing $15 million to fund critical anti-violence programs and social services programs

• Pushing to adopt new public health approaches to reduce overdoses, including the approval of Overdose Prevention Centers at the State level 

• Developing new strategies to combat trafficking while working to eliminate arrests for selling sex

 

•  The Council will also vote on legislation to establish a crash investigation and analysis unit within the Department of Transportation

 

Goal 2: Recognition and Continual Examination of Historical and Modern-Day Racialized Policing in New York City  

Racialized policing in New York City has existed since the Department’s inception and persists through contemporary police policies and practices.  Addressing the legacy and harm of racialized policing in New York required a recognition and public acknowledgement of the Department’s troubled history and current challenges with race  .

 

We must conduct a critical examination of the policies and practices that perpetuate structural and institutional racism, and act urgently to address them: 

• Creating a dedicated process, including a comprehensive report, to acknowledge, address, and repair past and present injustices and trauma caused by the practice of racialized policing 

• Conducting a comprehensive, independent review to identify and assess persistent structures of racism within the NYPD 

• Requiring supervisors to proactively monitor discretionary officer activity for indications of biased-based policing and take corrective measures immediately within the NYPD

• Augmenting racial bias training for NYPD leadership 

• Comprehensive restorative justice training for NYPD leadership and NCOs to repair relationships with communities  

• Requiring the reporting of traffic stops to address disparate enforcement  

Goal 3: Transparency and Accountability to the People of New York City 

To earn the trust of all the City’s communities, the NYPD must be transparent while holding members accountable. The City will strengthen police oversight at the individual and systemic level by:

• Holding police officers accountable for misconduct through internal NYPD disciplinary decisions that are transparent, consistent, and fair  

• Strengthening the CCRB by expanding their authority to investigate biased based policing and initiate their own investigations 

• Supporting a change in State law to give CCRB access to sealed PD records for purposes of investigations, especially biased-policing investigations 

• Supporting a change in State law changes to increase the 30-day cap for suspensions and create a pension forfeiture remedy for the most egregious misconduct cases  

• Monitoring implementation of the Discipline Matrix and enhance transparency regarding its use 

• Creating a Citywide policy to strengthen transparency and accountability in the use of biometric technology 

• Equipping New York City Sheriff’s Deputies with body-worn cameras

Goal 4: Community Representation and Partnership 

Meaningful partnership must be central to the Department’s strategies, and can be bolstered through the focused recruitment, hiring, retention, and promotion of those from the communities most impacted by policing.

 

Officers must feel like genuine engagement and thoughtful problem-solving is their job, and not a distraction or an add-on. The City will commit to: 

• Ensuring the composition  of the NYPD’s workforce is reflective of the community it serves at all levels of the organization and focus hiring outreach on underrepresented communities in the force  

• Piloting the Advance Peace Model, a new approach to helping youth who are at risk for involvement with gun violence  

• Tripling the City’s Cure Violence workforce by Summer 2022  

• Incorporating direct community participation in the selection of Precinct Commanders  

• Codifying and strengthen the Mayor’s Office to Prevent Gun Violence 

• Expanding the Community Solutions Program from the initial Brownsville pilot 

• Elevating the feedback of the community through CompStat and Enhanced Neighborhood Policing 

• Ensuring the Special Victims Division is a model for national best practice through an independent review  

• Improving support for victims of domestic, gender-based and family violence through access to community-based resources  

• Involving the community in training and education by expanding the People’s Police Academy  

• Expanding the Precinct Commander’s Advisory Councils 

Goal 5: A Diverse, Resilient, and Supported NYPD 

The City aims to develop the most diverse and resilient law enforcement agency in the nation.

The City is committed to building upon the Department’s evolving culture by increasing supports and opportunities and promoting professionalism and excellence:

•  Recruiting officers who reflect the communities they serve, with a commitment to recruit and retain more people of color and women  

• Reforming the promotions process to focus on transparency, including complaint and disciplinary history  

• Ensuring that a diverse candidate pool is considered for top NYPD promotions by Mayoral Executive Order

• Making residence in New York City a more significant factor in hiring police officers   

• Expanding mental health support for officers  

• Supporting professional development through the Commander’s Course and leadership development programs 

• Updating the patrol guide so it is more user friendly and less complex for officer and transparent to the public 

Since Mayor de Blasio took office on January 1, 2014, the de Blasio administration has implemented a sweeping set of wholesale reforms to address over-policing and reduce the overall impact of the criminal justice system, while making the city safer and fairer. The hallmark of the current administration has been a reduced enforcement footprint coupled with a sustained decrease in crime. While many criminal justice systems in the United States continued policies that drive mass incarceration, New York City led an effort to reduce law enforcement focused intervention and incarceration. The results of these efforts have been historic. Comparing 2020 to 2013, the year before the de Blasio Administration took office, there were approximately:

• 182,000 fewer stop and frisk incidents, a 95% reduction 
• 253,000 fewer arrests, a 64% reduction 
• 29,000 fewer marijuana arrests, a 98% reduction 
• 5,900 fewer people in jail on average per day, a 52% reduction