Founder Of $90 Million Cryptocurrency Hedge Fund Sentenced To More Than Seven Years In Prison

 Audrey Strauss, United States Attorney for the Southern District of New York, announced that STEFAN HE QIN, the founder of the Virgil Sigma Fund LP (“Virgil Sigma”) and the VQR Multistrategy Fund LP (“VQR”), a pair of cryptocurrency hedge funds in New York which claimed to have over $100 million dollars in investments, was sentenced today to 90 months in prison.  On February 4, 2021, QIN pled guilty to one count of securities fraud before U.S. District Judge Valerie E. Caproni, who imposed today’s sentence.

U.S. Attorney Audrey Strauss said:  “According to Stefan He Qin, founder of Virgil Sigma and VQR, a pair of cryptocurrency hedge funds in New York, Virgil had a stated market strategy of ‘market neutral,’ safe investments.  Qin’s investors soon discovered that his strategies weren’t much more than a disguised means for him to embezzle and make unauthorized investments with client funds.  When faced with redemption requests he couldn’t fulfill, Qin doubled down on his scheme by attempting to plunder funds from VQR to satisfy his victim investors’ demands.  Qin’s brazen and wide-ranging scheme left his beleaguered investors in the lurch for over $54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison.”  

According to the Information and statements made in open court:

Background

STEFAN HE QIN is a 24-year old Australian national.  Between 2017 through 2020, QIN owned and controlled two cryptocurrency investment funds, Virgil Sigma and VQR, both of which were located in New York, New York.   Since its creation, Virgil Sigma purported to employ a strategy to earn profits from arbitrage opportunities in the cryptocurrency market.   This strategy was touted by QIN to the investing public as “market-neutral,” meaning the fund was not exposed to any risk from the price of cryptocurrency moving up or down and therefore provided a relatively safe and liquid investment. Until recently, Virgil Sigma purported to have over $90 million under management from dozens of investors, including many in the United States.  According to its public marketing materials, Virgil Sigma has been profitable in every month from August 2016 to the present, with the sole exception of March 2017.  QIN also regularly participated in calls with Virgil Sigma investors and other forms of public communication where he touted the growth and success of Virgil Sigma.  For example, in February 2018, QIN and his fund were profiled in the Wall Street Journal.

In or about February 2020, QIN founded VQR. VQR employed a variety of trading strategies and was poised to make or lose money based on the fluctuations in the value of cryptocurrency and was not market neutral.  QIN was the sole owner of VQR’s general partner, but was not involved in VQR’s day-to-day operations.  Instead, VQR had its own trading staff, including a head trader (the “Head Trader”) and other investment professionals.  Until recently, VQR had at least approximately $24 million under management from investors. 

Qin’s Scheme to Steal Assets from Virgil Sigma

Since 2017, QIN engaged in a scheme to steal assets from Virgil Sigma and defraud its investors.  Rather than investing the fund’s assets in a cryptocurrency arbitrage trading strategy as advertised, QIN embezzled investor capital from Virgil Sigma and used the funds for purposes other than the purported arbitrage trading strategy, including: (a) using a substantial portion of investor capital stolen from Virgil Sigma to pay for personal expenses such as food, services, and rent for a penthouse apartment in New York City; (b) using a substantial portion of investor capital from Virgil Sigma to make personal, often illiquid investments in other entities that had nothing to do with cryptocurrencies.  For example, in or about October 2018, QIN invested hundreds of thousands of dollars stolen from Virgil Sigma into a real estate investment; and (c) using a substantial portion of investor capital from Virgil Sigma to invest in crypto-assets that had nothing to do with the fund’s stated arbitrage strategy.  For example, in or about 2018, QIN invested funds from Virgil Sigma into certain initial coin offerings, a speculative form of investing in new issues of cryptocurrency.  As a result of these and other fraudulent activities, QIN dissipated nearly all of the investor capital in Virgil Sigma.  QIN also regularly lied to the fund’s investors about the value, location, and status of their investment capital, including through false account statements that QIN prepared and bogus tax documents that he circulated to his investors. 

Qin Attempts to Steal Assets From VQR to pay Virgil Sigma Investors

In or about December 2020, faced with redemption requests from the Virgil Sigma fund that he could not meet, QIN demanded that the Head Trader at VQR wind down all trading positions at VQR and transfer a portion of the funds to QIN so that QIN could use that money to pay off these redemptions to Virgil Sigma investors.  QIN issued the demand even though the Head Trader advised QIN that closing out VQR’s then-current trading positions, rather than holding those positions in accordance with VQR’s directional trading strategy, would result in losses to VQR’s investors.  At QIN’s direction, the Head Trader accordingly closed out VQR’s positions and turned over access to VQR’s trading accounts to QIN.  QIN subsequently attempted to take control of VQR’s assets in order to enable QIN to meet certain Virgil Sigma investor redemption requests.

The Virgil Sigma fund and VQR have ceased operations and the liquidation and distribution of assets is being handled by a court-appointed receiver in the matter of S.E.C. v. Qin, 20 Civ. 10849. 

QIN, 24, was also sentenced to three years of supervised release, and ordered to forfeit $54,793,532. 

Ms. Strauss praised the work of the Department of Homeland Security, Homeland Security Investigations.  She further thanked the Securities and Exchange Commission for its cooperation and assistance in this investigation.    

MAYOR DE BLASIO DELIVERS REMARKS AND CRUSHES ILLEGAL DIRT BIKES AND ATVs

 

 Mayor Bill de Blasio: Thanks so much, Chief. I want to thank Chief McEvoy, Commissioner Martinez for the great work they are doing. Everyone, look, we mean business. I want to be very clear to anyone out there that has an illegal dirt bike, don't even think about it, because the NYPD will find it and we'll crush it. It’s as simple as that. We're not playing games.   

We want to send a message here today that these dirt bikes do not belong in New York City. It’s against the law, period. And instead of just talking about the fact it's against the law or giving a summons or anything like that, we're doing the most aggressive thing possible – we're taking the dirt bike away and you're never going to see it again. And we've got to send a message. Why? Because these dirt bikes are dangerous, because they can endanger the lives of the people around – anyone in the neighborhood, a kid, a senior citizen could be in danger, let alone the person riding.  

 

We need to make clear that we're just not going to tolerate this kind of illegality, and here's a very visual way to get our point across. We also see a high correlation between those who have these illegal dirt bikes and crimes being committed, including shootings. So, we're going to make clear this is not acceptable in New York City. Already, as you heard from the Chief, the Commissioner, hundreds of these dirt bikes have been confiscated. There's going to be more coming, and you know why? Because the community is helping us. And I want to emphasize this, we need the good people of the city to give us the information, we need people to call in those reports, because that's the best way for us to act on. When we know where these bikes are being stored, that's how we get them off the streets.  

 

So, everyone, we take this really, really seriously. And there are some problems that are tough to overcome, but there are other problems you can smash, and you can crush, and this is one of them. So, I want now to give a moment for everyone to get ready, you guys, to get into positions. And then I will give the order of the day to the guys in the bulldozers who are about to do a great work of justice, and we want to thank you guys for that. Everyone, get into position so you can get the shots you need to get.  

[Bulldozer crushes illegal dirt bikes and ATVs] 

 

Question: What do you think, Mayor? 

 

Mayor: I think we put an exclamation point on it here. Look, these guys are doing a great job. We were just talking about, hundreds and hundreds of calls from the community. People hate these things. They're loud, they're obnoxious, they're dangerous. Here's our message – we're going to get them, we're going to crush them. 

 

It's beautiful. It's actually quite a beautiful sight in its own way. So, well done. Well done. Keep them coming. Thanks, everybody. 

 

DCP Seeks Public Input for Urban Design Resource Being Created for and with Communities

 

New website offers opportunities for New Yorkers to share ideas and feedback for updated “Principles of Good Urban Design;” English-Spanish video offers overview

 Department of City Planning (DCP) Executive Director Anita Laremont today announced the launch of an interactive urban design website for the public to collaborate on updating the Principles of Good Urban Design, a resource that helps New Yorkers advocate for their communities and shape their urban environment.

“An inclusive approach to urban design is essential to making our neighborhoods the best they can be. As we continue to build a public realm that’s healthier, more welcoming and more equitable for everyone to use and enjoy, we want more New Yorkers to get involved,” said DCP Executive Director Anita Laremont. “To that end, we’re going to the experts, New Yorkers themselves! Please visit our new website to share your ideas on good urban design and help us create a vision for a more vibrant city for decades to come.”

The new website is intended as a collaborative discussion and education forum, and supplements ongoing discussions with communities across New York City around planning and urban design. It breaks down technical concepts and provides guidance on how the public can get more involved in public planning processes and urban design. The site will help more New Yorkers get involved in shaping the building blocks of the city we share. This is even more important at a time when New York City is re-envisioning the way we use public streets, sidewalks and open spaces.

“It’s exciting that all New Yorkers are invited to share their thoughts and ideas on how to make this city a better place to live, work and play. This new Department of City Planning website translates complicated concepts into an easily accessible and informative resource that every New Yorker can engage with,” said New York City Economic Development Corporation President (EDC) & CEO Rachel Loeb. “The interactive features on the website allow residents to share stories about their neighborhoods, which will help guide those who are working to improve urban design and quality of life in our city.”

“Reimagining NYCHA’s public spaces for the 21st century requires multiple touchpoints for our residents to weigh-in and provide feedback on the design features they would like to see in their communities,” said New York City Housing Authority (NYCHA) Chair & CEO Greg Russ. “We applaud the Department of City Planning for creating this valuable tool and look forward to seeing its implementation across New York City.”

“Engaging residents in planning for the future of their neighborhoods is at the heart of our efforts to create an equitable and inclusive New York City,” said New York City Housing Preservation and Development (HPD) Commissioner Louise Carroll. “Under this Administration, HPD has partnered with DCP to put communities in the driver’s seat on decisions about the affordable housing, community resources and elements of urban design that will strengthen communities and help ensure everyone’s needs are met. I want to congratulate DCP on this new interactive urban design website that makes it simpler for people to participate in and contribute to neighborhood planning.” 

“For years, DOT has been a leader in delivering quality streetscapes and public spaces, and City Planning’s new website will help us work with New Yorkers across the City to continue those efforts,” said New York City Department of Transportation (DOT) Assistant Commissioner for Cityscapes & Franchises Michelle Craven. “This website will allow New Yorkers to actively engage with the street design process and we look forward to working with our partners at City Planning as street design elements evolve in the coming months.”

As an introduction, an animated video in English and Spanish illustrates how urban design affects our experience of the city. Educational materials on the site empower New Yorkers to take action on urban design and planning priorities, including an infographic with tips and resources to help citizens develop their ideas and navigate government.

Feedback received through the Principles of Good Urban Design website, and at related events over the next several months, will inform DCP’s coming and updated “Principles of Good Urban Design,” which was first released in 2017. The updated guide is expected to be finalized and released next year.

Besides the website, DCP will seek feedback at events starting this Friday, Sept. 17, on the annual Park(ing) Day NYC, which seeks to spur dialogue about the activation, design and use of public spaces in New York City. This year, DCP urban designers will join teachers and students from the Washington Heights Expeditionary Learning School (WHEELS) and representatives of the American Society of Landscape Architects, New York chapter, and speak to New Yorkers about the design of our shared public realm.

On the Principles of Urban Design website, New Yorkers can, on their own time, share ideas, feedback and neighborhood perspectives by completing three activities.

The activities include: a photo board where New Yorkers can describe the look and feel of their neighborhoods and what improvements they would like to see; a survey for New Yorkers to give neighborhood perspectives on the Principles; and a discussion forum about the Principles. Feedback will be collected from the public until November 2021.

This digital platform is one of many DCP has produced over the past several years as part of its commitment toward increased accessibility and transparency for the public through well-designed, open source, web-based tools, including:

• Community District Profiles, which provide a robust, intuitive graphical overview of each of our 59 Community Districts, and handy comparison charts
• Facilities Explorer, which provides an intuitive interface to explore where all City or State facilities lie within New York City, and who they serve
• Population Factfinder, which provides any New Yorker the ability to quickly understand the demographics of any part of the five boroughs, and a range of deeper research options
• ZAP, which makes details and status of all land use applications directly available to the public through an intuitive, searchable map-based interface.
• ZoLa, which provide zoning districts and associated information for any lot in the City

Department of City Planning

The Department of City Planning (DCP) plans for the strategic growth and development of the City through ground-up planning with communities, the development of land use policies and zoning regulations applicable citywide, and its contribution to the preparation of the City’s 10-year Capital Strategy. DCP promotes housing production and affordability, fosters economic development and coordinated investments in infrastructure and services, and supports resilient, sustainable communities across the five boroughs for a more equitable New York City.

In addition, DCP supports the City Planning Commission in its annual review of approximately 450 land use applications for a variety of discretionary approvals. The Department also assists both government agencies and the public by advising on strategic and capital planning and providing policy analysis, technical assistance and data relating to housing, transportation, community facilities, demography, zoning, urban design, waterfront areas and public open space.

Permits Filed For 1777 And 1779 Monroe Avenue In Tremont, The Bronx

 

Permits have been filed for construction on two two-story buildings at 1777 and 1779 Monroe Avenue in Tremont, The Bronx, with vertical additions to create adjacent seven-story structures. Located between 175th Street and the feeder road for the Cross Bronx Expressway, the interior lots are four blocks east of the 174-175th Streets subway station, serviced by the B and D trains. Mendy Tessler is listed as the owner behind the applications.

The proposed 74-foot-tall developments will yield 7,722 square feet designated for residential space. The buildings will each have 18 residences. The masonry-based structures will also have cellars, penthouses, and 23-foot-long rear yards.

Nikolai Katz Architect is listed as the architect of record.

Demolition permits will not be needed as the current two-story buildings will be part of the new construction. An estimated completion date has not been announced.

DEC CONFIRMS SPREAD OF EPIZOOTIC HEMORRHAGIC DISEASE TO COLUMBIA, DUTCHESS, GREENE, NASSAU, OSWEGO, SUFFOLK, AND ULSTER COUNTIES

 

Disease Is Not Transmissible to Humans; New Yorkers Encouraged to Report Sick or Dead Deer to DEC

 The New York State Department of Environmental Conservation (DEC) today confirmed Epizootic Hemorrhagic Disease (EHD) in Columbia, Dutchess, Greene, Nassau, Oswego, Suffolk, and Ulster counties. DEC is tracking suspected cases in Albany, Jefferson, Oneida, Orange, Putnam, Rensselaer, Rockland, Sullivan, and Westchester counties and new reports of dead deer to track the spread and estimate the number of deer succumbing to this disease. To date, DEC has received reports of approximately 700 dead deer. 

 

In New York, EHD virus is typically a fatal disease for deer that is transmitted by biting midges, small insects sometimes called no-see-ums or 'punkies.' The disease is not spread from deer to deer and humans cannot be infected by deer or bites from midges.

 

EHD virus was first confirmed in New York deer in 2007, with relatively small outbreaks in Albany, Rensselaer, and Niagara counties, and in Rockland County in 2011. From early September to late October 2020, a large EHD outbreak occurred in the lower Hudson Valley, centered in Putnam and Orange counties, with an estimated 1,500 deer mortalities. 

 

Once infected with EHD virus, deer usually die within 36 hours. EHD outbreaks are most common in the late summer and early fall when midges are abundant, although initial cases this year were detected in late July. Signs of the EHD virus include fever, hemorrhage in muscles or organs, and swelling of the head, neck, tongue, and lips. A deer infected with EHD may appear lame or dehydrated. Frequently, infected deer will seek out water sources and many succumb near a water source. There is no treatment or means to prevent EHD. Dead deer do not serve as a source of infection for other animals. EHD has been in New York since July, and has had time to circulate and spread prior to the first killing frosts. Consequently, it has been more widespread this year than during previous outbreaks.

 

EHD outbreaks do not have a significant long-term impact on regional deer populations, but deer mortality can be significant in small geographic areas. EHD is endemic in the southern states, which report annual outbreaks, so some southern deer have developed immunity. In the northeast, EHD outbreaks occur sporadically and deer in New York have no immunity to this virus. Consequently, most EHD-infected deer in New York are expected to die. The first hard frost is expected to kill the midges that transmit the disease, ending the EHD outbreak.

 

Sightings of sick or dead deer suspected of having EHD can be reported to DEC via a new online EHD reporting form (available at https://www.dec.ny.gov/animals/123773.html) or by contacting the nearest DEC Regional Wildlife Office. DEC will continue to collect samples from deer and analyze data from deer reports to determine the extent of the outbreak. In addition, DEC has alerted Department of Agriculture and Markets veterinarians in the region to be aware of the disease and to report suspicious cases among captive deer.

 

For more information, visit DEC’s EHD webpage at https://www.dec.ny.gov/animals/123773.html or Cornell University’s Wildlife Health Lab website at https://cwhl.vet.cornell.edu/disease/epizootic-hemorrhagic-disease.

112 Days and Counting - Give Them Basketball, Right Senator Bailey

 

Let's see, which piece of paper is this one on, here it is. This is the famous dunk by New York Knick John Starks over Michael Jordan, and John is going to join us in a NYCHA Youth Basketball League with the New York Knicks. We will set up 144 team and the NYPD has refurbished 24 NYCHA basketball courts. 

I want to bring in someone I met last week at the new Edenwald YMCA ribbon cutting, a rising star, State Senator Jamaal Bailey. Jamaal I heard that you did very well in your hoop shooting from John Starks, and I want to see you Senator Bailey in action in this new program. (Senator Jamaal Bailey speaking) Mr. Mayor I was on the Bronx Science basketball team called the Bronx Science Basketball Nerds, and we almost made it to the city championship round.  

As for other business, today is Restaurant Vaccination Day. We will be vaccinating people outside many of your favorite restaurants. Eighty percent of the adults in the city have received at least one vaccine shot, and I will be introducing the criteria for a third booster shot program very soon.

As far as Rikers Island, I am working on many items with the state to improve the site, and I will visit Rikers when these upgrades and changes are done. As you see I am stalling, and they could be finished on the last day I am in office. 

Pelham Parkway Neighborhood Association Meeting

Pelham Parkway Neighborhood Association Meeting 

By Robert Press

Tuesday night was the first in person meeting of the Pelham Parkway Neighborhood Association in over a year, and a crowd of over sixty people came out to hear Bronx Department of Transportation Commissioner Nivardo Lopez address neighborhood complaints of the new E-scooter program in Pelham Parkway. 

PPNA President Edith Blitzer opened the meeting by welcoming the large crowd to the first in person meeting of the organization in over a year. She asked if anyone knew who was putting out bread in the street and park that was creating a rat problem as they were the ones eating the bread. She then introduced Assemblywoman Nathalia Fernandez who said her office was up and running, and handling flood problems for the community. She added that she was participating in an event by the Friends of Pelham Parkway, and all were invited to join in. 

Next up was Bronx DOT commissioner Nivardo Lopez. who went over the E-scoter program, saying NYC waited, because in other cities E-scooter companies went bankrupt, and those cities were left with the E-scooter's. NYC chose three companies they thought were the best, and went into a pilot program in the east side of the Bronx that had natural boundaries such as the Mount Vernon City line, the water, and Bronx River parkway. He added when asked about the liability of the E-scooter, that it was the company that was responsible, even if someone tripped over one in front of a person's property. 

Commissioner Lopez was asked if the more people ride the E-scooter the less they will be walking or getting exercise, to which he replied that would have to be looked at. One person then said they took an E-scooter from the subway about five blocks away rather than walking to the meeting. There were plenty of complaints of the E-scooters being left anywhere and everywhere. Commissioner Lopez said that there is a maximum of forty-eight hours that one can be left outside a marked coral. He added that it must be picked up, and has a GPS so it can easily be found if it is out of bounds. He mentioned that the next phase is to bring 3,000 more E-scooters to Community Boards 9 and 10, as there are 3,000 currently in boards 11 and 12. The meeting ended with a question about an outside dining structure on Lydig Avenue that Commissioner Lopez said he would check into, but there are to be changes made to the program by 2023.

PPNA President Edith Blitzer welcomes everyone to the meeting.

Assemblywoman Fernandez addresses the audience.

Bronx DOT Commissioner Nivardo Lopez answers a question about the E-Scooters.

Bronx County Democrats Annual Barbecue and Softball Game

 

Sunday was the Annual Bronx Democratic County Barbecue and softball game at the Coop-City Field. Delicious food was set out for those who came, along with the traditional hot dogs and hamburgers that were grilled. Then it was off to the usually hard played softball game. Teams were decided on and it was Play ball. The game ended with the Stanley Schlein team beating the Jamaal Bailey/Carl Heastie team with a home run over the wall for a one run victory as it was the second and last ball that was brought. All then gathered by the clubhouse area where Bronx Democratic Party Leader State Senator Jamaal Bailey thanked all who came. Just about every Bronx elected official and most Bronx Democratic Party officials were in attendance. 

Stanley Schlein, the King of Bronx County organization, was almost unhittable when he was on the mound.

Assembly Speaker Carl Heastie, who only a few days earlier went one on one with former Knick star John Stark, plays the hot corner. He scooped up a ground ball, stepped on third, and threw to second to complete a double play. 

State Senator Jamaal Bailey would snag this fly ball.

Councilman Oswald Feliz would catch this long flyball to the outfield.

Not everyone would catch the ball, as this ball gets by this player.

Presumed Councilwoman Amanda Frias advanced to third base after getting a hit. 

Public School Chancellor Porter stopped by to see how the event was going.

State senator Luis Sepulveda also stopped in to say hello during his bike ride around the Bronx.

This home run over the wall ended the game, as Jamaal Bailey's Mets lost by one run to Stanley Schleins Bombers.

A group photo of both teams. 

After the game, Bronx Democratic Party Leader Senator Jamaal Bailey thanked all who came, Bronx DA Darcel Clark and Assemblyman Jeffrey Dinowitz are behind Senator Bailey.