NYS Office of the Comptroller DiNapoli: Unemployment Taxes on Employers Poised to Increase to Repay $9B Owed to Federal Government

 

The historic surge in unemployment claims at the onset of the COVID-19 pandemic rapidly depleted the New York State Unemployment Insurance (UI) Trust Fund, resulting in the state borrowing from the federal government to pay claims. State UI tax rates have already risen to the highest level permissible under law in 2021. Unless the state or federal government takes significant action, federal UI tax rates on employers will also increase in 2022 and beyond, according to a report issued today by State Comptroller Thomas P. DiNapoli.

“The pandemic put many New Yorkers out of work and forced the state to borrow heavily from the federal government to meet their urgent unemployment claims,” DiNapoli said. “The state currently owes Washington $9 billion and the obligation to pay back this money and rebuild the trust fund balance presents a serious challenge for the state and businesses struggling to recover from the pandemic. Action is needed to avoid hiking costs for New York businesses and slowing the state’s economic recovery.”

The pandemic had a crippling effect on some state businesses and their workforce, causing a historic surge in layoffs and claims for UI benefits. From the fourth quarter of 2019 to the second quarter of 2020, regular state UI benefits paid increased from $530 million to $6.5 billion – a staggering increase of 1,124%.

New York’s UI trust fund account was not well-positioned to weather the crisis. On January 1, 2020, the balance was $2.65 billion, below the standard recommended by the U.S. Department of Labor. When the pandemic hit, the state began to borrow from the federal government to pay claims in May 2020. As of September 2, 2021, the amount owed to the federal government was $9 billion, down from a high of $10.2 billion at the end of March 2021. The current balance is more than double what was owed during the Great Recession.

Rate Increase

UI benefits are paid for with federal and state taxes collected from employers. State UI tax rates are determined for each employer based on their length of time as a liable employer, utilization of UI benefits by former employees and prior UI tax contributions, and the balance of the UI fund. Rates can grow with increased employee UI claims or a low UI fund balance.

Given the current negative balance in the state unemployment trust fund, 2021 UI rates for New York employers increased to a range of 2.1% to 9.9% of taxable payroll, up from 2020 rates that ranged from 0.6% to 7.9%. As a result, employer tax payments grew between 26% and 160% in 2021. Until the balance in the state account returns to a positive level, employers will continue to make state UI contributions between 2.1% and 9.9%.

If New York continues to hold a negative balance on Jan. 1, 2022 and does not meet certain federal rules by Nov. 10 of this year, employers’ federal tax rates will also go up from 0.6 % to 0.9% for 2022.  The federal tax rates will continue to grow by 0.3% each year until the maximum rate of 6% is hit for as long as New York continues to hold an outstanding balance.

DiNapoli recommended state lawmakers advocate for additional federal support that would relieve employers of new costs that could hamper recovery efforts; monitor existing pandemic relief programs to determine if resources may be available to repay federal advances; and avoid the issuance of state debt to repay the outstanding balance.

Report

Unemployment Insurance Trust Fund: Challenges Ahead

119 Days and Counting

 After my morning briefing, I rushed up to the Bronx to be with Assembly Speaker Carl Heastie, Bronx Borough President Ruben Diaz Jr. State Senator Jamaal Bailey, Bronx District Attorney Darcel Clark, Councilwoman and future Bronx Borough President Vanessa Gibson, Councilman Kevin Riley, Community leaders Alonzo de Castro and Shirley Fearon, Sharon Greenberger YMCA of greater NY President & CEO, Meishay Gattis Executive Director of this new Bronx YMCA, and former New York Knick John Starks, to cut this ribbon for this new YMCA that we helped make a dream, come true. 

After all I didn't do for the Bronx while I have been your mayor, it made everyone feel much better that this new YMCA has the hopes as speaker after speaker said will give Northeast Bronx children opportunities they did not have before. 

 

On First Ever NYS Opioid Overdose Awareness Day, Governor Hochul Announces Receipt of $4.25 Million for the Prevention of Prescription Drug and Opioid Overdose-Related Deaths HEALTH

 

Funding Will be Used to Promote Prevention, Increase Education and Awareness, and to Purchase and Distribute Naloxone to Help Save Lives

 

 Governor Kathy Hochul today announced the receipt of grant of $4.25 million over a five-year period from the Substance Abuse and Mental Health Services Administration to help prevent prescription drug and opioid overdose-related deaths and adverse events. The grant will fund training for first responders, overdose prevention and other community-based service providers and partners, as well as individuals and families. 

The announcement of this award coincides with the first ever NYS Opioid Overdose Awareness Day. This observance, organized by the NYS Department of Health, honors people who have died of overdoses and celebrates families and frontline workers who are dedicated to saving lives.

"The opioid epidemic is personal for me, having lost a family member to an overdose," Governor Hochul said. "In New York, we are expanding our efforts to combat the crisis by increasing education and awareness and promoting prevention and treatment services. On New York State's first Opioid Overdose Awareness Day, I encourage those struggling with substance abuse to not be discouraged to reach out for help and support. We will continue to work together to end this crisis and help save lives."

The NYS Office of Addiction Services and Supports will focus on expanding the knowledge of overdose prevention strategies to "Key Community Sectors" that work with pregnant and postpartum persons and their families, and individuals and families impacted by intimate partner violence. The agency will also work closely with the Native American/Indigenous community and with the LGBT+ community. 

Providers identified will be eligible to receive up to $20,000 to provide overdose prevention trainings to individuals and families and other community-based services providers, and to train others to become overdose prevention providers. Specific providers receiving funding will be identified at a later date.

OASAS will also partner with the New York State Department of Health and the New York State Office of Children and Family Services to provide training and naloxone kits to their frontline staff in programs such as OCFS managed domestic violence shelters, the Healthy Families New York home visiting program, and the Maternal and Infant Community Health Collaboratives. Additionally, these funds will be used to distribute overdose prevention kits and naloxone to individuals and families receiving training either from OASAS or one of the selected community-based partners.

OASAS Commissioner Arlene González-Sánchez said, "We know that fatal overdoses increased last year during the pandemic and we recognize the tremendous stress that people continue to experience. We are very pleased that we were awarded this grant because it will bring resources to the state and add to our efforts to prevent overdoses. Together with our partner agencies, we are developing innovative approaches to reaching vulnerable populations that we may not be able to reach otherwise." 

State Health Commissioner Dr. Howard Zucker said, "The Department of Health and OASAS have always worked together to combat the devastation of addiction and help prevent overdoses. With this funding, we can continue our commitment to keeping families and loved ones from experiencing loss, while empowering all New Yorkers with the tools necessary to help others and themselves live healthy lives."

A total of 750 individuals will be trained in overdose prevention in the first year of the funding. In year two, this number will increase to 3,000, and thereafter 4,000 people will be trained per year for a total of 15,750 individuals trained by the end of the fifth year.

New Yorkers struggling with an addiction, or whose loved ones are struggling, can find help and hope by calling the state's toll-free, 24-hour, 7-day-a-week HOPE line at 1-877-8-HOPENY, 1-877-846-7369, or by texting HOPENY, Short Code 467369.  

Available addiction treatment including crisis/detox, inpatient, community residence, or outpatient care can be found using the NYS OASAS Treatment Availability Dashboard here or through the NYS OASAS website.

If you, or a loved one, have experienced insurance obstacles related to treatment or need help filing an appeal for a denied claim, contact the CHAMP helpline by phone at 888-614-5400 or e-mail.

U.S. Army Reservist Sentenced To 46 Months For Fraud And Money Laundering Scheme Involving Theft Of Millions Of Dollars From Elderly Victims And Businesses

 

 Audrey Strauss, the United States Attorney for the Southern District of New York, announced that JOSEPH IORHEMBA ASAN JR. was sentenced to 46 months in connection with a scheme to commit romance fraud scams and business email compromises against dozens of victims across the United States, defraud banks, and launder millions of dollars in fraud proceeds to co-conspirators based in Nigeria.  ASAN was arrested on October 31, 2019, and pled guilty on December 23, 2020, to conspiracy to commit bank fraud and wire fraud.  Today’s sentence was imposed by U.S. District Judge Kimba Wood.

Manhattan U.S. Attorney Audrey Strauss said:  “Among the many victims of the internet scamwere engaging online with potential romantic interests. This former serviceman and his co-defendant even laundered money stolen from a U.S. Marine Corps veteran’s organization in one of the conspiracy’s email spoofing schemes. Asan’s crimes have indeed led to his own reversal of his fortune, as this former defender of this country now becomes a federal prisoner.”

According to allegations in documents filed in Manhattan federal court:

From at least in or about February 2018 through at least in or about October 2019, ASAN and his co-defendant CHARLES IFEANYI OGOZY were members of the U.S. Army Reserves who participated in a scheme to commit fraud against dozens of victims across the United States, defraud banks, and launder millions of dollars in fraud proceeds in bank accounts that they controlled.  The funds laundered by ASAN and OGOZY were obtained primarily through: (a) romance scams, in which members of the scheme deluded unsuspecting older women and men into believing they were in a romantic relationship with a fas facilitated by Joseph Asan Jr. were elderly women and men who were callously fooled into believing they ke identity assumed by members of the scheme, and used false pretenses to cause the victims to transfer money to bank accounts under the control of members of the scheme, including ASAN and OGOZY; and (b) business email compromises, in which members of the scheme gained unauthorized access to or spoofed email accounts and impersonated employees of a company or third parties engaged in business with the company in order to fraudulently induce the victims to transfer money to bank accounts under the control of members of the scheme, including ASAN and OGOZY.  Notably, one of the victims of the defendants’ business email compromise scheme included a U.S. Marine Corps veteran’s organization.

In order to launder proceeds from those fraud schemes, ASAN and OGOZY opened several bank accounts in the names of fake businesses called Uxbridge Capital LLC, Renegade Logistics LLC, and Eldadoc Consulting LLC.  In total, ASAN opened at least 10 business bank accounts at eight different banks in the names of these fake businesses, and he used those accounts to receive and transfer to co-conspirators overseas over $1.8 million in fraud proceeds from at least 69 identified victims.  In connection with the opening of the business bank accounts, ASAN made multiple false statements to banks about the purported business of his companies, including misrepresentations that the companies were involved in shipping, real estate, and public relations.  In addition, a significant portion of the laundered funds was deposited and withdrawn in cash that was not able to be traced by law enforcement.

ASAN, 24, of Daytona Beach, Florida, was also sentenced to three years of supervised release.  In addition, ASAN was ordered to forfeit $184,723, and to pay restitution of $1,792,015 to victims.

Ms. Strauss praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit.  Ms. Strauss also thanked the U.S. Customs and Border Protection for their assistance in the investigation.  

Attorney General James Ends Harmful Labor Practices at One of Nation’s Largest Title Insurance Companies, Puts in Place Policies to Protect Workers

Old Republic Agrees to End Illegal Tactics Constraining Worker Mobility

AG James Continues to Expand Investigation of No-Poach Agreements, Other Anticompetitive Tactics in Various Industries, Protecting New York Workers 

 New York Attorney General Letitia James today announced an agreement with the Old Republic National Title Insurance Company that ends the company’s practice of using no-poach agreements to thwart labor competition. Under the agreement, Old Republic — one of the nation’s four largest title insurance companies — has agreed to a monetary payment of $1 million, to terminate any existing no-poach agreements, and to cooperate with Attorney General James’ ongoing investigations in this area.

“Workers are the lifeblood of New York, and New Yorkers are entitled to free and fair labor markets,” said Attorney General James. “For years, Old Republic stifled competition in the labor market, but this agreement ends the company’s illegal conduct, while putting all businesses on notice that no-poach agreements will not be tolerated in New York state. My office will continue to investigate no-poach agreements that potentially harm New York workers, and fight to end these anticompetitive practices once and for all.”

Old Republic issues title insurance policies either through agencies it owns or controls (directs) or through independent title insurance agencies that it appoints (agencies). Directs and agencies are competitors in the labor market, and compete for employees on the basis of salaries, benefits, and career opportunities.

A “no-poach” is an agreement among two or more companies not to solicit, recruit, or hire each other’s employees. In a well-functioning labor market, employers don’t need no-poach agreements and, instead, compete by offering higher wages or enhanced benefits to attract the most valuable talent for their needs. No-poach agreements reduce competition for employees and disrupt the normal compensation-setting mechanisms, to the detriment of the affected employees.

Attorney General James’ investigation concluded that Old Republic entered into no-poach agreements with agencies, and that these agreements effectively ended competition for employees between Old Republic and the agencies, potentially impacting New York workers. The investigation did not identify any procompetitive justifications for these agreements.

The agreement increases competition in the labor market and protects workers by:

• Ending Old Republic’s no-poach agreements with competitors: Old Republic has agreed to end all existing no-poach agreements, and discontinue the practice of entering into no-poach agreements.

• Cooperating with Attorney General James’ ongoing no-poach investigations: Old Republic has committed to substantial cooperation with the Office of the Attorney General’s efforts to investigate no-poach agreements in the title insurance industry.

Additionally, Old Republic is required to pay New York state a $1 million monetary payment.

State Senator Gustavo Rivera Hosts Back to School Event at Devoe Park With Congressman Espaillat

 

State Senator Gustavo Rivera brought with him three hundred book bags, and notebooks to give out for his back to school event. All were handed out before he left. Congressman Adriano Espaillat was also on hand as well as over a dozen various service providers, or entertainment for the children that were included in a circle of tables.

On hand were the Public Library, Legal help during the pandemic, Live On NY where you were able to sign up to donate your organs, a Dental Wellness table that gave out free checkups, the fire department with CPR training, A Girl Scout Troop, and several others. 

A view of the Devoe Park area, with the Fordham Hill Houses in the background. A line waiting to get a backpack, and also some of the other participants placed in a circle.  

Senator Rivera, with not quite the ambiance of Congresswoman Ocasio-Cortez asks these children which color backpack they wanted. 

Dental Wellness is important, and children were getting free dental screenings, with the approval of their parent. The Girl Scouts are in the background.

Congressman Adriano Espaillat was on hand to take photos with the children.

The congressman also posed with the bigger kids as State Senator Rivera waves as he gets his photo with Congressman Espaillat. 

Governor Hochul Announces Administration Appointments

 

Governor Kathy Hochul announced new appointments to her administration. 

"To build New York back better than it was before and deliver real change for New Yorkers, we need the best and brightest minds working together to solve the most important issues we face as a state," Governor Hochul said. "These talented individuals from diverse backgrounds have the skills, knowledge and experience that we need to move this state forward, and I look forward to working with them."

Jeff Lewis has been appointed Chief of Staff to the Governor. Prior to joining the Governor's Office, Mr. Lewis served in the Office of then-Lieutenant Governor Hochul for more than six years, first as Director of External Affairs and then as Chief of Staff. Mr. Lewis has also served as Finance Director at Recchia for Congress (NY-11) and in staff roles on the Democratic Congressional Campaign Committee and in the U.S. House of Representatives, where he worked for then-Representative Hochul (NY-26). His political career began with an internship in the Office of then-Erie County Clerk Hochul. He holds a Bachelor's degree in politics from New York University.

Linda Sun has been appointed Deputy Chief of Staff. Ms. Sun previously served as Deputy Superintendent for Intergovernmental Affairs & Chief Diversity Officer at the NYS Department of Financial Services. She has also served as Deputy Chief Diversity Officer and Director of Asian American Affairs for the NYS Executive Chamber, Director of External Affairs for Global NY at Empire State Development and Chief of Staff to NYS Assemblymember Grace Meng. Ms. Sun is the highest appointed Asian American in the administration and a first generation immigrant. She holds a Master's degree from Teachers College at Columbia University and a B.A. from Barnard College at Columbia University.

Melissa Bochenski has been appointed as Deputy Chief of Staff. She previously served as then-Lieutenant Governor Hochul's Deputy Chief of Staff. Prior to joining New York State, she worked as a Strategic Relations Analyst at M&T Bank. From 2011-2013, she served as an Executive Assistant and Office Manager to then-Representative Hochul (NY-26). Ms. Bochenski holds a Bachelor's degree in political science from Canisius College.

Julissa Gutierrez was appointed in early 2020 as Chief Diversity Officer for the State of New York and will continue to serve in this role under the Hochul administration. As Chief Diversity Officer, Ms. Gutierrez supports the Governor's programs and initiatives to increase diversity within the State's workforce and has already increased civic, economic and social empowerment in a variety of communities. In May 2021, Ms. Gutierrez was recognized by City & State New York where she was named #1 on their first MWBE Power 50 List. Ms. Gutierrez previously served as Deputy Director of Constituency Affairs in the Governor's office, in a number of roles at the National Association of Latino Elected and Appointed Officials Educational Fund and as Special Assistant to the Commissioner at the New York City Department of Youth and Community Development. Ms. Gutierrez is a Board Member of the New Immigrants Community Empowerment, a Trustee for the Queens Public Library and a Board Member of the Queens Public Library Foundation. She holds a Master's degree in Social Service Administration from the University of Chicago and a B.A. in International Relations with a Minor in Women's Studies from the University of Delaware.

Shirley Paul has been appointed Senior Advisor to the Governor. Prior to joining the Governor's office, she served as Assistant Director for Legislative Affairs at SUNY Systems Administration. Ms. Paul has worked in state government in various roles, including working with then-Lieutenant Governor Hochul as Senior Advisor and Counsel and as a Law Clerk in the NYS Court System. Ms. Paul started her career in public service in then Senator Joseph R. Biden's office. She is a member of several civic associations and professional organizations and was featured by City & State in their 2019 Class of Albany 40 Under 40 as a rising star in state government. Ms. Paul is a first generation Brooklynite of Haitian decent. She holds a Bachelor's degree in Political Science from Delaware State University, a Master's degree in Urban Planning and Administration from Brooklyn College and a Juris Doctorate from New York Law School.

Sinéad Doherty has been appointed Deputy Secretary for Executive Operations. Prior to joining the Governor's office, she served as Director of Operations for the California based children's non-profit, Good Tidings Foundation. Ms. Doherty worked on the Biden for America presidential campaign, supporting surrogate scheduling and advance in Iowa, after serving as the National Trips Director for the Amy For America campaign. She previously worked for then-Lieutenant Governor Hochul as Director of Operations, served as Confidential Assistant to then US Department of Health & Human Services Secretary Sylvia Mathews Burwell, and was Deputy Director of Advance for then House Democratic Leader Nancy Pelosi. She holds a bachelor's degree in international relations from Boston University.  

Padma Seemangal has been appointed Deputy Secretary for Policy Operations. Ms. Seemangal previously served as Director of Communications and Public Affairs at Global Strategy Group and as a Senior Advisor for then-Lieutenant Governor Hochul through the Empire State Fellows Program. She also served as Program and Communications Manager for Women Creating Change and Acting Executive Director of the Indo-Caribbean Alliance, Inc. She has served as a policy consultant for the Public Advocate for the City of New York and a team consultant for New York City Council Member Ritchie Torres and the New York City Department of Cultural Affairs. She holds a B.A. in English Literature Studies and Government from St. Lawrence University and a Master's degree in Urban Policy Analysis and Management from The Milano School for International Affairs at the New School.

Hazel Crampton-Hays has been appointed Press Secretary. Ms. Crampton-Hays most recently served as Press Secretary to New York City Comptroller Scott Stringer. Previously, she served in the Governor's Press Office, including as First Deputy Press Secretary. She holds a Bachelor's degree in Politics and Religion from Oberlin College.

Jelanie DeShong has been appointed Assistant Secretary for Intergovernmental Affairs. Mr. DeShong most recently served as Director of Government Relations for State University of New York Downstate Health Sciences University and previously as Director of Community Engagement for then-Lieutenant Governor Hochul. Mr. DeShong has spent almost a decade in senior roles at the state and local levels of government. Mr. DeShong is a first-generation Brooklynite of Grenadian heritage. He is a product of the City's public school system. Mr. DeShong is an active member of his community and lives in Flatbush, Brooklyn where he grew up.

Devan Cayea has been appointed Director of Strategic Planning and Scheduling. Prior to joining the administration, Mr. Cayea recently served on the transition team and in the office of Senator Alex Padilla (D-CA), is a former senior advisor and Director of National Strategic Planning for the Amy for America presidential campaign, and was the Director of Operations in Senator Klobuchar's Capitol Hill office. He also served on the Biden for America presidential campaign, coordinating national travel for Second Gentleman Doug Emhoff during the 2020 cycle. Mr. Cayeabegan his career as the Deputy Director of Scheduling and Advance for House Democratic Leader Nancy Pelosi (D-CA). Mr. Cayea holds a Bachelor's degree from American University.

Fohat Aird-Bombo has been appointed Director of Advance. Mr. Aird-Bombo previously served in the Office of then-Lieutenant Governor Hochul where he was the Director of Advance and Special Events. Mr. Aird-Bombo worked on the 2020 presidential campaign for Mike Bloomberg as the New York Regional Operations Director. His previous positions also included serving as Senior Advance Lead for the Speakers of the New York City Council, Melissa Mark-Viverito and Corey Johnson.Prior to that, he spent time working in the New York Public School system as the Director of Operations. Mr. Aird-Bombo, who was born in the Bronx and raised in Brooklyn returned to the Bronx in 2018 to purchase his first home with his husband, Andy.

Bank Insider Sentenced For Fraudulent Loan Scheme

 

 Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that HERODE CHANCY, who at the time of the offense was employed as a manager at a Manhattan branch of a national bank (“Bank-1”), was sentenced today to 30 months in prison for his role in a commercial loan fraud scheme for loans totaling over $1 million.  CHANCY’s sentence was imposed by United States District Judge Lewis J. Liman. 

U.S. Attorney Audrey Strauss said: “Bank employee Herode Chancy used fake businesses, doctored bank statements, and stolen identities in an effort to obtain over $1 million in commercial loans.  Now Chancy has rightly been sentenced to prison for his crime.  Prosecutions like this one should serve as notice to individuals in positions of trust at financial institutions that engaging in corrupt criminal conduct will lead to prosecution and prison.”

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

From at least in or about March 2019 up to and including at least in or about March 2020, CHANCY and codefendant Adedayo Ilori conspired to fraudulently obtain business loans from a third-party commercial lender with the intent not to repay the loans – i.e., with the intent to “bust out” the loans.  CHANCY and Ilori together submitted eight fraudulent business loan applications for a total of $1,025,000 in business loans.  The business loan applications submitted by CHANCY and Ilori included doctored bank statements and listed the identities of other persons as the loan applicants, including stolen identities.  CHANCY and Ilori also opened bank accounts using the identities of those other persons in order to receive the loan payments from the third-party commercial lender.  CHANCY and Ilori subsequently conspired with codefendant Michael Albarella, another bank manager at Bank-1, to open a bank account using a stolen identity to launder approximately $200,000 of the expected proceeds of the loan scheme.  Albarella opened the bank account at Bank-1 using the stolen identity provided by CHANCY and Ilori, and Albarella accepted a $10,000 bribe to open the bank account.        

CHANCY and Ilori believed that the underwriter for the third-party commercial lender was participating in the scheme and agreed to pay the underwriter a “commission” for the underwriter’s role in the scheme.  In reality, however, the underwriter was an undercover law enforcement officer. 

In addition to the prison term, CHANCY, 41, of Bellerose, New York, was sentenced to two years of supervised release and ordered to forfeit $10,000 in fraudulent proceeds.

On August 5, 2021, Albarella was sentenced to six months in prison and three years of supervised release by Judge Liman.  Ilori is scheduled to be sentenced on October 13, 2021.

Ms. Strauss praised the outstanding investigative work of the New York FBI’s Eurasian Organized Crime Task Force and Homeland Security Investigation’s El Dorado Task Force.