Today, a federal jury in Brooklyn returned guilty verdicts on all counts of a superseding indictment against Eric Goldstein, the former Chief Executive Officer of the New York City Department of Education’s (NYC DOE) Office of School Support Services, and Blaine Iler, Michael Turley and Brian Twomey, operators of a food services company, with conspiring to commit extortion under color of official right and solicitation and giving of bribes relating to programs receiving federal funds. The verdict followed a 4-week, trial before Visiting U.S. Circuit Judge Denny Chin. When sentenced for Conspiracy to Commit Hobbs Act Extortion, Hobbs Act Extortion, Conspiracy to Commit Federal Program Bribery, Federal Program Bribery, Conspiracy to Commit Honest Services Wire Fraud, and Honest Services Wire Fraud, the defendants each face up to 20 years in prison as well as forfeiture and restitution penalties.
Breon Peace, United States Attorney for the Eastern District of New York, announced the verdict.
“The defendants’ criminal conduct is a textbook example of choosing greed over the needs of our schools and the well-being of our children. Our children depended on nutritious meals served in schools and instead, got substandard food products containing pieces of plastic, metal, and bones, which is unacceptable,” stated United States Attorney Peace. “Today’s verdict demonstrates the consequences of corruptly placing personal profit over the public interests.”
Mr. Peace expressed his thanks to the Federal Bureau of Investigation, New York Field Office, for their outstanding investigative work on the case.
As proven at trial and contained in court filings, between 2008 and September 2018, Goldstein oversaw the management, budget, and operations of several NYC DOE departments, including the Office of Food and Nutrition Services (SchoolFood), which was responsible for managing the overall food service operation for all New York City public schools. In early 2015, Iler, Turley, and Twomey created a food services company called SOMMA Food Group (SOMMA), to provide food products to retail and food service markets, including to K-12 schools across the United States. SOMMA promoted and sold yogurt, hamburgers, and antibiotic-free chicken products marketed under the brand name Chickentopia.
At or about the same time SOMMA was founded, Goldstein, Iler, Turley, and Twomey co-founded Range Meats Supply Company (RMSCO), to purchase grass-fed beef products that SOMMA, in turn, would then promote and sell under the brand name Range Meats to retail markets and New York City schools. At the same time, Iler, Turley, and Twomey partnered with Goldstein in RMSCO, Iler, Turley and Twomey began to promote SOMMA’s products to SchoolFood officials and employees, all of whom reported to Goldstein in his role as OSS Chief Executive. During a meeting with Iler in New York in July 2015, Goldstein told him, “I’m going to buy a lot of f---ing chicken from you guys, let’s do the beef.”
Between 2015 and December 2016, defendants Iler, Turley, and Twomey provided numerous benefits to Goldstein, including enticing Goldstein with potentially lucrative business opportunities and monetary payments to RMSCO for Goldstein’s benefit. In exchange, Goldstein used his influence as head of SchoolFood to help Iler, Turley, and Twomey in SOMMA’s business dealings before SchoolFood. Goldstein helped ensure that SchoolFood accepted SOMMA’s products for purchase, expedited the approval process and resolved disagreements between SOMMA and SchoolFood officials in SOMMA’s favor. The defendants purposefully concealed Goldstein’s ownership interest in RMSCO from the NYC DOE while Goldstein was using his influence and public position at NYC DOE to benefit SOMMA.
In the fall of 2016, SchoolFood stopped serving SOMMA’s chicken tenders after a NYC DOE employee choked on a bone that had not been removed from a chicken tender supplied by SOMMA. Goldstein, who had final approval as to whether and when the chicken tenders would be allowed back in schools, delayed approving the reintroduction of the tenders until Iler, Turley, and Twomey agreed to transfer SOMMA’s ownership interest in RMSCO to Goldstein as well as to transfer $66,670 to a bank account in RMSCO’s name that Goldstein had opened and controlled. Following weeks of negotiations, on November 29, 2016, Iler, Turley and Twomey agreed to pay the bribe Goldstein was soliciting and one day later, on November 30, 2016, Goldstein approved reintroduction of SOMMA’s chicken products in schools. The products were served in schools until April 2017 when, following repeated complaints from students and staff that the chicken tenders continued to contain foreign objects. SchoolFood decided to remove all of SOMMA’s food products from New York City public schools.
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