Attorney General James, Comptroller DiNapoli, And Department Of Investigation Commissioner Garnett Announce Sentencing In Straw Donation Scheme

Anna Mendez, Formerly of Tremont Crotona Day Care Center, Sentenced to 5 years’ Probation   

 Attorney General Letitia James, State Comptroller Thomas P. DiNapoli, and New York City Department of Investigation Commissioner Margaret Garnett announced the sentencing of non-profit executive Anna Mendez for the misuse of nonprofit funds to fund straw political donations to former New York City Council candidate Albert Alvarez in New York County Supreme Court, Mendez was sentenced to 5 years’ probation.

“Anna Mendez misused thousands of dollars intended to aid our youngest and most vulnerable new Yorkers,” said Attorney General James. “Public corruption in any form will never be tolerated, and my office remains committed to holding bad actors across the state accountable. I thank the offices of the New York State Comptroller and the New York City Department of Investigation for their continued commitment to justice.”

"Our electoral  process is jeopardized when people like Ms. Mendez scheme to undermine laws to fund candidates," said New York State Comptroller DiNapoli. "Thanks to our partnership with Attorney General James and the New York City Department of Investigations, Ms. Mendez now faces justice and has been held accountable for her actions."

“Corrupting the election process is a crime that deserves a serious penalty," said New York City Department of Investigation Commissioner Margaret Garnett. “This defendant exploited New York City’s campaign finance system by misappropriating monies from a City-funded nonprofit and using them to support straw campaign donations. DOI was pleased to work with the state Attorney General and state Comptroller on this important investigation.”

On October 28, 2019, Mendez was convicted of 10 counts of Offering a False Instrument for Filing in the First Degree, a class E felony. Mendez and her co-conspirator, George Gonzalez, were arraigned for their roles in the false filings on January 10, 2018. Mendez and Gonzalez provided funds to other employees of Tremont Crotona Day Care Center to contribute to Alvarez. Gonzalez also distributed contribution cards to these employees, which he had them falsely make out in their own names to conceal the true source of the funds. Alvarez then collected the money and false contribution cards. Even though he knew the contribution cards were false, Alvarez submitted them to the New York City Campaign Finance Board (the “CFB”) to steal at least $4,500 in public matching funds. In total, Alvarez received $92,400 in public matching funds. Alvarez plead guilty to one count of Offering a False Instrument for Filing in the Second Degree, a Class A misdemeanor in connection with the case.

Gonzalez also pleaded guilty to felony counts of Grand Larceny and Offering a False Instrument for filing in connection with his role in the straw donation scheme. Additionally, former Tremont Crotona, Inc., Chairman of the Board, Alexander Pena, pled guilty to Offering a False Instrument for Filing in the First Degree for his role in corruption at the non-profit.

Since 2011, the Office of the Attorney General and the Office of the State Comptroller have worked together to fight corruption through their Joint Task Force on Public Integrity.

The Attorney General would also like to thank the New York City Department of Investigation for their partnership on this investigation. The case was investigated by First Deputy Inspector General Ivette Morales under the supervision of Inspector General Andrew Sein, Deputy Commissioner/Chief of Investigations Dominick Zarrella, and First Deputy Commissioner Daniel Cort.

Attorney General James, Comptroller DiNapoli, And Department Of Investigation Commissioner Garnett Announce Guilty Verdict Of Non-Profit Executive In Corruption Scheme

Anna Mendez, Formerly of Tremont Crotona Day Care Center, Was Convicted of Indirectly Giving Straw Donations to NYC City Council Candidate Albert Alverez    

   Attorney General Letitia James, State Comptroller Thomas P. DiNapoli, and New York City Department of Investigation Commissioner Margaret Garnett today announced that non-profit executive Anna Mendez was convicted of using money stolen from a non-profit to fund straw political contributions to former New York City Council candidate Albert Alvarez.

Mendez’ conviction makes the fifth public disposition in the investigation of wide ranging corruption at Tremont Crotona, Inc., and A&G Early Learn Community Network, the two non-profit day care centers where Mendez worked. Mendez was convicted of 10 counts of Offering a False Instrument for Filing in the First Degree, a class E felony, in the Supreme Court of New York County.

“Public corruption, on any level and in any form, will not be tolerated in New York State,” said Attorney General James. “Anna Mendez took advantage of the democratic process by illegally using non-profit funds for political gain. My office will continue to root out corruption, and hold bad actors responsible for their actions.”

“A jury heard the overwhelming evidence and reached the conclusion that Ms. Mendez was guilty,” said New York State Comptroller Thomas P. DiNapoli. ”The message is clear, if you break the law, you’re going to get caught and you’re going pay the price. My thanks and gratitude go to State Attorney General James and NYC Department of Investigation Commissioner Margaret Garnett for their efforts to ensure justice was served in this case.”

“Today’s conviction sends the important message that individuals who submit false documents in order to defraud the City of New York will be held accountable,” said New York City Department of Investigation Commissioner Margaret Garnett. “This defendant’s actions corrupted the City’s campaign finance and contracting systems, both of which are vital to the public’s trust in government. DOI will continue to work with the state Attorney General’s Office and fellow law enforcement agencies to uncover and stop this type of corruption.”

Mendez and her co-conspirator, George Gonzalez, were arraigned for their roles in the false filings on January 10, 2018. Mendez and Gonzalez provided funds to other employees of Tremont Crotona Day Care Center to contribute to Alvarez. Gonzalez also distributed contribution cards to these employees, which he had them falsely make out in their own names to conceal the true source of the funds. The money was, in reality, stolen from Tremont Crotona Day Care Center. Alvarez then collected the money and false contribution cards. Even though he knew the contribution cards were false, Alvarez submitted them to the New York City Campaign Finance Board (the “CFB”) to steal at least $4,500 in public matching funds. In total, Alvarez received $92,400 in public matching funds. Alvarez plead guilty to one count of Offering a False Instrument for Filing in the Second Degree, a Class A misdemeanor in connection with the case. 

Gonzalez also pleaded guilty to felony counts of Grand Larceny and Offering a False Instrument for filing in connection with his role in the straw donation scheme. Additionally, former Tremont Crotona, Inc., Chairman of the Board, Alexander Pena, pled guilty to Offering a False Instrument for Filing in the First Degree for his role in corruption at the non-profit. 

Since 2011, the Attorney General and State Comptroller have worked together to fight corruption through their Joint Task Force on Public Integrity. They have brought charges against dozens of individuals implicated in public corruption schemes around the state – resulting in the return of over $11 million in restitution to taxpayers through these convictions.

The Attorney General would also like to thank the New York City Department of Investigation for their partnership on this investigation. The case was investigated by First Deputy Inspector General Ivette Morales under the supervision of Inspector General Andrew Sein, Deputy Commissioner/Chief of Investigations Dominick Zarrella, and First Deputy Commissioner Daniel Cort.

Attorney General James, HCR, And HPD Intervene In Federal Court To Stop Eviction Of NYC Rent-Stabilized Tenants

NY AG, NYS HCR, and NYC HPD seek to join U.S. Bankruptcy Court action to oppose a landlord-initiated motion to push out rent-stabilized tenants 

   Today, Attorney General Letitia James, New York State Division of Housing and Community Renewal (NYSHCR) Commissioner RuthAnne Visnauskas, and New York City Department of Housing Preservation and Development (HPD) Commissioner Maria Torres-Springer announced that the City and State sought to join in an action in the United States Bankruptcy Court for the Southern District of New York on behalf of tenants at 444 East 13th Street in Manhattan. Both the City and State are opposing the building owner’s application to reject tenants’ leases, an application that is a thinly-veiled attempt to flout rent regulation laws and displace tenants.  

“Bankruptcy Court should not be used as a tool to unjustly oust rent-stabilized New Yorkers from their homes,” said Attorney General Letitia James. “In filing this motion, my office is working to ensure that the tenants are not displaced. Housing is a right, and we will continue to use every legal tool available to stand up for tenants and to enforce their rights.”  

“New Yorkers have a right to live in safe homes free from harassment. We are proud to join our partners in standing up for these tenants against a landlord who is trying to take advantage of bankruptcy proceedings to cancel their regulated, affordable leases and dodge State law in the process,” said New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas. “We cannot allow these proceedings to set a precedent that would undermine the rights of millions of New Yorkers.”  

“This administration remains unwavering in its commitment to stop tenant harassment in its tracks, and today we’re letting bad landlords know that we will not tolerate any attempt to displace our city's hard-working families. This alarming and blatant end-run on the protections of our rent stabilization laws will not stand,” said HPD Commissioner Maria Torres-Springer. “I thank the New York State Attorney General and our colleagues at the City and State for standing strong against bad landlords and supporting this city’s tenants.” 

Tenants in the building have been withholding rent for months on the grounds that the landlord has failed to make necessary repairs. The building’s current violations include inadequate heat, broken or defective plumbing, an accumulation of garbage in the hall, and rodents. The building’s owner earlier filed for bankruptcy, and is trying to get the Court to permit it to reject the rent stabilized leases of the tenants. The City and State, in a joint motion, argue that the landlord is seeking to avoid state protections given to rent-stabilized tenants, who have a right to withhold rent if an apartment is uninhabitable.   

The building at 444 East 13th Street contains sixteen residential units, all of which were registered as rent-stabilized as of 2016, the last time the landlord registered rents with HCR. The landlord claims that it should be entitled to reject these tenants’ leases without going through the standard state procedures to address the tenants’ demands, seek rent or resolve these issues. The Attorney General and her partners are concerned that the use of the Bankruptcy Court to bypass state protections for tenants would set a bad precedent and would encourage other landlords to file bankruptcy solely to avoid state law and its protections.  

Attorney General James, NYC Corp. Counsel Announce $35 Million Settlement With Fedex Over Shipping Of Illegal Cigarettes

  Attorney General Letitia James and City Corporation Counsel Zachary W. Carter announced a $35.3 million settlement today with FedEx Ground Package System, Inc. (“FedEx”) to resolve claims over illegal cigarette deliveries to residents throughout New York City and State made by FedEx over a ten-year period. This settlement resolves three lawsuits against FedEx alleging that it partnered with cigarette trafficking businesses to illegally ship hundreds of thousands of untaxed cigarettes to New Yorkers. In addition to the payment, FedEx will implement internal reforms and hire an independent consultant that will oversee FedEx’s compliance with the law and provide compliance reports to the City and State.

The settlement follows the October 2018 ruling by federal district judge for the Southern District of New York, Edgardo Ramos, finding that FedEx’s conduct over many years for customers with such names as “Cigarettes Direct To You” established without the need for a trial that FedEx had knowingly violated a federal anti-cigarette trafficking statute and a 2006 Assurance of Compliance with the New York Attorney General’s Office in which, to avoid prosecution, FedEx expressly agreed to cease residential cigarette deliveries and comply with a New York law prohibiting those deliveries.

“For years, FedEx knowingly engaged in illegal and harmful behavior at the expense of New Yorkers’ health,” said Attorney General Letitia James. “Not only did FedEx violate laws created to protect the public from the serious health risks associated with cigarettes, but they also swindled New York City and State out of millions of dollars in tax revenue. Let this serve as a message that we will never allow companies - however large or small - to cheat or harm New Yorkers.”

“This settlement forces FedEx into compliance with State and City laws enacted to discourage smoking through the imposition of cigarette taxes. For the worst of reasons – profit – FedEx shipped millions of untaxed cigarettes to residents throughout the State, cheating the City out of millions of dollars in tax revenue and with apparent indifference to the impact on public health,” said Zachary W. Carter, City Corporation Counsel. “The illegal deliveries cheated the City out of millions of dollars in tax revenue in addition to violating public health laws intended to deter access to cigarettes by young people.”

The evidence is clear that cigarette taxes are the most effective means of deterring smoking. As New York has increased the tax rate on cigarettes, the number of smokers in New York has sharply declined. According to the World Health Organization, maintaining high taxes on cigarettes is the most effective anti-smoking policy intervention, particularly among youth.  By enabling cigarette traffickers to sell and ship untaxed cigarettes to New Yorkers, FedEx caused damages to New York State and City in lost tax revenue. In addition to the monetary tax loss, FedEx’s conduct frustrated the public health purpose underlying such taxes – to reduce cigarette smoking.  Under this settlement, New York State and New York City recovered substantially more than the amount of the tax loss. This additional amount represents, in large part, a penalty based on the fact, among others, that FedEx was previously investigated for this same conduct, the conduct was longstanding and pervasive throughout the company, and the conduct had the potential to negatively impact public health.

Under the terms of the settlement, FedEx agreed to implement reforms to ensure compliance with various laws.  FedEx agreed to:

• Cease domestic shipments of tobacco products, including cigarettes (with limited exceptions set forth in the Settlement Agreement);
• Implement company-wide communications and annual training concerning tobacco shipments, including mandatory notices by employees to company officials if tobacco shipments are discovered;
• Take disciplinary action against any employee or contractor who knowingly facilitates tobacco shipments; and
• Retain an independent consultant recommended by the City and State to both advise and monitor the company’s compliance with the settlement agreement and with federal, state, and local laws and regulations governing the shipment of tobacco. The consultant will immediately report violations to the City and State and provide quarterly reports.

The terms of the settlement agreement will be extended by one year for each year in which there is a material breach of the agreement upon a court, or special master determination. 

The Attorney General’s Office thanks the New York State Department of Taxation and Finance for their invaluable assistance on this case.