Governor Hochul Updates New Yorkers on State's Progress Combating COVID-19 - NOVEMBER 21, 2022

Governor Encourages New Yorkers to Keep Using the Tools to Protect Against and Treat COVID-19: Vaccines, Boosters, Testing and Treatment

17 Statewide Deaths Reported on November 18

 Governor Kathy Hochul today updated New Yorkers on the state's progress combating COVID-19.

"As we approach the holiday weekend, I urge New Yorkers to remain vigilant and to use all available tools to keep themselves, their loved ones, and their communities safe and healthy," Governor Hochul said. "Stay up to date on vaccine doses, and test before gatherings or travel. If you test positive, talk to your doctor about potential treatment options."

Earlier this month, Governor Hochul launched a public awareness campaign featuring New York State Health Commissioner Dr. Mary T. Bassett speaking directly to New Yorkers about three viruses - Respiratory Syncytial Virus (RSV), flu and COVID-19 - now circulating in the state with similar symptoms and the potential to cause serious illness. Produced by the New York State Department of Health, the videos include a short clip and a longer version geared toward parents; and a version aimed specifically at health care providers.

Governor Hochul continues to remind New Yorkers that children ages 5 and older may now receive the bivalent booster shots that are recommended to increase protection against COVID-19.

The Governor also urges New Yorkers to get their bivalent COVID-19 vaccine boosters. To schedule an appointment for a booster, New Yorkers should contact their local pharmacy, county health department, or healthcare provider; visit vaccines.gov; text their ZIP code to 438829, or call 1-800-232-0233 to find nearby locations.

In addition, Governor Hochul encourages New Yorkers to get their annual flu vaccine as flu season is widespread across New York State. The flu virus and the virus that causes COVID-19 are both circulating, so getting vaccinated against both is the best way to stay healthy and to avoid added stress to the health care system.

The State Department of Health is continuing its annual public education campaign, reminding adults and parents to get both flu and COVID-19 shots for themselves and children 6 months and older. Advertisements in both English and Spanish language began running last month.

For information about flu vaccine clinics, contact the local health department or visit vaccines.gov/find-vaccines/.

Today's data is summarized briefly below:

• Cases Per 100k - 13.38
• 7-Day Average Cases Per 100k - 19.00
• Test Results Reported - 38,532
• Total Positive - 2,614
• Percent Positive - 5.97%**
• 7-Day Average Percent Positive - 5.88%**
• Patient Hospitalization - 2,644 (+15)*
• Patients Newly Admitted - 451*
• Patients in ICU - 254 (-7)*
• Patients in ICU with Intubation - 93 (-4)*
• Total Discharges - 363,722 (+394)*
• New deaths reported by healthcare facilities through HERDS - 17*
• Total deaths reported by healthcare facilities through HERDS - 59,220*

** Due to the test reporting policy change by the federal Department of Health and Human Services (HHS) and several other factors, the most reliable metric to measure virus impact on a community is the case per 100,000 data -- not percent positivity.

The Health Electronic Response Data System is a NYS DOH data source that collects confirmed daily death data as reported by hospitals, nursing homes and adult care facilities only.

Important Note: Effective Monday, April 4, the federal Department of Health and Human Services (HHS) is no longer requiring testing facilities that use COVID-19 rapid antigen tests to report negative results. As a result, New York State's percent positive metric will be computed using only lab-reported PCR results. Positive antigen tests will still be reported to New York State and reporting of new daily cases and cases per 100k will continue to include both PCR and antigen tests. Due to this change and other factors, including changes in testing practices, the most reliable metric to measure virus impact on a community is the case per 100,000 data -- not percent positivity.

• Total deaths reported to and compiled by the CDC - 75,618

This daily COVID-19 provisional death certificate data reported by NYS DOH and NYC to the CDC includes those who died in any location, including hospitals, nursing homes, adult care facilities, at home, in hospice and other settings.

Each New York City borough's 7-day average percentage of positive test results reported over the last three days is as follows **:

Borough	Friday,   November   18, 2022	Saturday,   November   19, 2022	Sunday,   November   20, 2022
Bronx	6.98%	7.07%	7.06%
Kings	5.69%	5.71%	5.77%
New York	6.20%	6.26%	6.28%
Queens	6.92%	7.00%	6.95%
Richmond	5.17%	5.12%	4.98%

Founder And Former Chief Investment Officer Of Infinity Q Pleads Guilty To Securities Fraud

 

James Velissaris Inflated the Values of Numerous Positions in the Investment Funds Managed by Infinity Q and Falsified Documents to Infinity Q’s Auditors and the SEC in order to Hide the Fraud

 Damian Williams, the United States Attorney for the Southern District of New York, announced that JAMES VELISSARIS, the founder and former chief investment officer of Infinity Q Capital Management (“Infinity Q”), a New York based investment adviser that ran a mutual fund and a hedge fund that purported to have approximately $3 billion in assets under management, pled guilty to securities fraud.  VELISSARIS made false and misleading statements to investors and others concerning Infinity Q’s process for valuing certain over-the-counter (“OTC”) derivative positions that made up a substantial portion of the holdings of the mutual and hedge funds and also fraudulently mismarked those securities in ways that did not reflect their fair value.  VELISSARIS committed the mismarking scheme in order to inflate the value of the investment funds as reported to investors, to attract and retain capital, and to increase his own compensation.  In order to avoid detection of the scheme, VELISSARIS provided both Infinity Q’s auditor and the Securities and Exchange Commission (“SEC”) with falsified or altered documents, including providing the auditor with altered term sheets that served to provide fabricated support for the fraudulently inflated values.  Today’s plea was taken by U.S. District Court Judge Denise Cote.

U.S. Attorney Damian Williams said: “Today’s guilty plea demonstrates this Office’s resolve to pursue even the most sophisticated of financial crimes.  James Velissaris thought he could get away with mismarking some of the most esoteric derivative products on Wall Street by manipulating sophisticated financial models and computer code.  This case has exposed that fraud and shown that Velissaris lied to his investors in order to line his own pockets with inflated fees.  Velissaris will now be held accountable for his actions.”

According to the allegations contained in the Indictment, other publicly available information, and statements made in court:

Background

VELISSARIS was the founder and chief investment officer of Infinity Q, an investment adviser that ran both a mutual fund (the “Mutual Fund”), started in about 2014, and a hedge fund (the “Hedge Fund,” and collectively the “Investment Funds”), started in about 2017.  As of 2021, the two funds purported to have approximately $3 billion in assets under management.  Infinity Q was headquartered in New York, New York, and employed a small staff, including a chief compliance and chief risk officer (“Employee-1”). 

A major component of both the Mutual Fund and the Hedge Fund’s holdings were over-the-counter (“OTC”) derivative positions that involved customized contracts that allowed the counterparties to take positions on the volatility, or price movement, of underlying assets or indices.  VELISSARIS, through Infinity Q, represented to its investors that it valued these OTC derivative positions based on fair value, and that in order to do so, it utilized the services of an independent third-party provider.  In particular, Infinity Q represented to investors and other stakeholders that it used Bloomberg Valuations Service (“BVAL”) to independently calculate the fair value of these positions, in accordance with the terms of the underlying derivative contracts.  These OTC derivative positions comprised hundreds of millions of dollars of the Investment Funds’ portfolios.   

VELISSARIS’ Scheme to Lie to Investors and Inflate Derivative Swap Positions

In fact, however, VELISSARIS defrauded Infinity Q’s investors by taking an active role in the valuation of Infinity Q’s positions and by modeling the positions in ways that were not based on the actual terms of the underlying contracts and were inconsistent with fair value.  VELISSARIS’ input into the BVAL valuation process was inconsistent with Infinity Q’s representations about the independence of the process and allowed VELISSARIS to fraudulently mismark positions in BVAL.  VELISSARIS engaged in the mismarking of positions in BVAL by making false entries in BVAL’s system including by secretly altering the computer code employed by BVAL that caused BVAL to alter and disregard certain critical terms.  Altering and disregarding terms in this fashion caused BVAL to report values that were artificially inflated and, often, much higher than fair value. 

By manipulating OTC derivative positions in BVAL in this way, VELISSARIS caused numerous positions in the Investment Funds to have anomalous and, at times, impossible valuations.  For example, at times, VELISSARIS made manipulations in either the Mutual Fund and/or the Hedge Fund that caused certain identical positions that were held by both the Mutual Fund and the Hedge Fund (namely, a position where all the material terms are the same) to have substantially divergent values.  In other cases, some of VELISSARIS’ manipulations caused certain positions held by the Investment Funds to have impossible values, such as where, under the true terms of the swap, the value adopted by VELISSARIS could only be true if volatility were negative – a condition which is mathematically impossible.

Ultimately, after VELISSARIS’ mismarking scheme was uncovered in or about February 2021, Infinity Q liquidated the Investment Funds and sold its OTC derivative positions.  These positions were sold for hundreds of millions of dollars less than their purported market values in BVAL, thereby resulting in substantial losses to the investors in the Investment Funds.

VELISSARIS Lies to Auditors and Obstructs the SEC’s Investigation

In order to hide this scheme and prevent its detection, VELISSARIS lied to numerous outside stakeholders and regulators.  First, in order to prevent Infinity Q’s outside auditor (the “Auditor”) from discovering the fraud, VELISSARIS provided the Auditor with falsified term sheets from counterparties that he had altered to change the true terms of certain OTC derivative positions.  In particular, in connection with a number of audits, the Auditor selected certain OTC positions that it would independently value in order to confirm the reasonableness of Infinity Q’s values from BVAL.  In order to ensure that the Auditor would not arrive at materially different results when independently valuing positions that VELISSARIS had manipulated in BVAL, VELISSARIS altered the terms of certain deal documents and provided them to the Auditor.  After receiving these falsified documents and relying on them in its independent evaluation, the Auditor confirmed the reasonableness of VELISSARIS’ valuations in BVAL.

Furthermore, beginning in May 2020, the SEC opened an inquiry and later an investigation into Infinity Q’s valuation practices.  In connection with that investigation, VELISSARIS provided false and misleading information to the SEC.  For example, when the SEC asked for original documents that had been provided to investors, VELISSARIS altered the documents before providing them to the SEC, including certain alterations that would help hide his mismarking scheme.  For example, Infinity Q’s original investor materials stated that “[o]nce a price is established for a portfolio security, it shall be used for all Funds that hold the security.”  As explained above, this was untrue, and on numerous occasions, manipulations in BVAL made by VELISSARIS caused the same positions in the Mutual Fund and the Hedge Fund to have substantially different values.  To conceal the falsity of Infinity Q’s disclosures, VELISSARIS, along with Employee-1, removed this line from investor documents that were provided to the SEC.

In June 2020, the SEC requested that Infinity Q provide additional materials, including documents regarding Infinity Q’s valuation committee and all of its meeting minutes.  Infinity Q’s investor materials had represented that Infinity Q had a valuation committee, including VELISSARIS, that the committee would meet monthly or more often, and that VELISSARIS would be responsible for preparing minutes of such meetings.  In fact, however, VELISSARIS had not kept notes of any such meetings.  Accordingly, days before responding to the SEC, VELISSARIS made up notes purporting to be from valuation committee meetings in 2019 and 2020 and submitted them to the SEC.

VELISSARIS, 38, of Atlanta, Georgia, pled guilty to one count of securities fraud, which carries a maximum sentence of 20 years in prison. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only.  Sentencing has been scheduled for March 3, 2023, in front of Judge Cote.

Mr. Williams praised the work of the Federal Bureau of Investigation.  He further thanked the SEC and the Commodity Futures Trading Commission for their cooperation and assistance in this investigation.  

NYC PUBLIC ADVOCATE'S STATEMENT ON THE 'INNOVATION QNS' PROPOSAL

 

"Affordability – in both the immediate and long term – are critical goals as our city grows and changes. The affordability commitments in this final version of the Innovation QNS proposal are a testament to and validation of the strategic, consistent push by residents, community leaders and elected officials for responsible development that meets both neighborhood and citywide needs. 

"The new level of income targeted affordable units proposed for Innovation QNS was hard fought, and now sets a minimum benchmark to consider moving forward, particularly for this type of development of private land. As we work to meet the current housing and homelessness crisis, we must ensure that we do not exacerbate it by displacing and pricing people from their neighborhoods.

"Under Mandatory Inclusionary Housing, which my office has detailed the failures of and which I voted against as a Council Member, we have to do better than the best of the current bad options, and the work of the last several weeks has led to a better deal. I want to congratulate Council Member Julie Won, and all who continued efforts to get here, for their leadership in helping ensure that Innovation QNS offered this level of affordable, income-targeted housing for a city in desperate need. I hope that the full Council votes to approve the project."