Former Chief Financial Officer Of Osiris Therapeutics, Inc., Pleads Guilty To Lying To Auditors

   Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced that PHILIP JACOBY, the former chief financial officer of Osiris Therapeutics, Inc. (“Osiris”), a developer and producer of regenerative medicine products, was charged by criminal information (the “Information”) and pled guilty today to lying to Osiris’s auditors in connection with the auditors’ review of Osiris’s 2014 10-K and Third Quarter 2015 10-Q filings.  JACOBY pled guilty before U.S. District Judge Denise Cote.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Philip Jacoby, the former CFO of a pharmaceutical company, admitted today to lying to auditors conducting an examination of the financial well-being of his company.  Jacoby fabricated documents, made false statements, and asked others to backdate critical transactions in furtherance of his scheme to mislead auditors. For his criminal conduct, which ultimately misled those looking to invest in his publicly traded company, Jacoby faces time in federal prison.”

Inspector-in-Charge Philip R. Bartlett said:  “In a misguided effort to avoid a restatement of Osiris’s fourth quarter revenue numbers, Philip Jacoby lied about the conversion of $1.1 million dollars of consignment inventory to a final sale.  He wasn’t so clever when he left a paper trail of evidence Postal Inspectors followed right back to him.”

According to allegations contained in the Information and statements made in public Court proceedings:

Osiris, headquartered in Columbia, Maryland, is a publicly traded company specializing in the research, development, and marketing of regenerative medicine products.  Osiris sold its products either through its direct sales force, or, more typically, through numerous distributors.  Osiris’s securities traded under the symbol “OSIR” on the NASDAQ stock exchange. 

From in or about 2008 up to and including in or about September 2015, JACOBY held the position of chief financial officer (“CFO”) of Osiris.  From in or about September 2015 through in or about January 2016, JACOBY held the position of principal accounting officer.  During the period that JACOBY was the CFO of Osiris, he signed Osiris’s quarterly and yearly financial reports.  These reports were required to be filed with the United States Securities and Exchange Commission (“SEC”) and provided the investing public with information regarding Osiris’s financial performance.

Although Osiris was initially a research and development company, by at least in or about 2014, Osiris’s management was focused on the company’s “top line,” or gross revenue growth.  Osiris was especially focused on being able to demonstrate quarter-over-quarter revenue growth, that is, reporting revenue for each quarter that was greater than the previous quarter’s.  For example, a former CEO of Osiris (the “CEO”) regularly prepared internal presentations emphasizing the company’s historical quarter-over-quarter revenue growth and emphasizing the need to achieve future growth.  Similarly, in public earnings calls run by the CEO and in its earnings press releases, Osiris touted its revenue performance and quarter-over-quarter revenue growth. 

Improper Accounting at Osiris With Respect to Distributor-1

Between approximately 2010 and approximately 2015, Distributor-1 was a distributor for Osiris’s Ovation product, among other products.  Distributor-1 was owned in its entirety by a sole principal (“Owner-1”).

In or about September 2013, the Food and Drug Administration (“FDA”) informed Osiris that Ovation failed to meet certain regulatory requirements and thus required pre-marketing approval from the FDA, which Ovation did not have.  Thereafter, Osiris agreed with the FDA that it would not sell Ovation after December 31, 2014. 

In order to maintain access to Ovation following December 31, 2014, Distributor-1 agreed to take possession of a significant quantity of Ovation prior to December 31, 2014, and by December 2014 was in possession of approximately $1.8 million worth of Ovation.  Because Distributor-1 lacked the ability to pay for such a large purchase, the Ovation was shipped to Distributor-1 on consignment.  Because the product was on consignment, under governing accounting rules Osiris could not properly recognize revenue until Distributor-1 had sold the product to an end user or Distributor-1 otherwise agreed to purchase the product.

In or about December 2014, JACOBY requested that Owner-1 convert some or all of the consigned inventory to inventory owned by Distributor-1 by December 31, 2014.  To the extent other revenue recognition criteria were satisfied, completion of the actual sale of the inventory to Distributor-1 by December 31, 2014, would have allowed Osiris to recognize revenue for that product in 2014 and reference that revenue in the 2014 10-K it would subsequently file.

Notwithstanding internal pressure to make sales, however, JACOBY and Owner-1 did not reach a final agreement regarding the conversion of the consigned inventory until at least in or about January 2015.  Despite the fact that no agreement was reached in 2014, Osiris, at the direction of JACOBY, booked approximately $1.1 million in revenue related to the conversion of consignment product in the fourth quarter of 2014 (the “Distributor-1 Transaction”).

Jacoby Conveys False Information to Auditors After Improper Accounting Is Questioned

In or about October 2015, the Company’s auditors (the “Auditors”), in connection with an inspection by the Public Company Accounting Oversight Board (the “PCAOB”), requested additional documentation and information supporting Osiris’s recognition of revenue in December 2014 relating to the Distributor-1 Transaction.  In an effort to deceive the Auditors and the PCAOB, JACOBY provided or caused to be provided false, inaccurate, and misleading information to the Auditors. 

For example, in or about October 2015, JACOBY and others prepared a memorandum from Osiris to its Auditors attempting to justify the recognition of $1.1 million of revenue from the Distributor-1 Transaction in the fourth quarter of 2014.  In the memorandum, JACOBY falsely represented that on December 31, 2014, JACOBY had “discussed the sale terms with [Owner-1] via a conference call, and [Owner-1] agreed to purchase 933 units of Ovation for $1,072,950.”  As JACOBY well knew, no telephone call had taken place on December 31, 2014. 

Similarly, on or about November 5, 2015, JACOBY created a letter, backdated to December 29, 2014, purporting to memorialize an agreement between Osiris and Distributor-1 (the “Backdated Letter”).  That same day, JACOBY used his personal email account to send the Backdated Letter by email to Owner-1 stating:

“attached is something that I think you should find and send to me in an email saying you had this in your file from late last year, and just came across it – and that it does memorialize our several phone conversations . . . . . Call me if necessary, but write a wonderfully warm and convincing email, please – send it to my Osiris email.”

Owner-1 complied and sent the Backdated Letter to Jacoby’s Osiris email account.  JACOBY then forwarded Owner-1’s email containing the fraudulent Backdated Letter to the CEO and the then-CFO of Osiris, who forwarded the document to the Auditors. 

           

PHILIP JACOBY, 65, pled guilty to one count of making fraudulent statements to Osiris’s auditors, which carries a maximum sentence of 20 years in prison.  The defendant also faces a maximum fine of $5 million.  Sentencing before Judge Cote has been scheduled for February 2, 2018, at 11:00 a.m.    

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.    

           

Mr. Kim praised the investigative work of the United States Postal Inspection Service and also thanked the SEC, which filed a parallel civil case today.

A.G. Schneiderman Announces $132K Settlement With Bushwick Landlords For Harassing Tenants With Illegal Buyout Offers

Brooklyn Landlords Harassed Rent-Stabilized Tenants By Failing To Comply With NYC’s Buyout Law; Will Pay $132,000 to Fund Affordable Housing

Settlement Is First-Of-Its-Kind Under The Buyout Law

A.G. Schneiderman Continues To Fight For Stronger State Laws To Criminally Crack Down On Tenant Harassment

  Attorney General Eric T. Schneiderman  announced a settlement reached with real estate developers and landlords Graham Jones, Greg Jones, and their related companies for violating anti-harassment law at their three rent-stabilized buildings in Bushwick, Brooklyn. After purchasing the buildings in 2016, the landlords immediately began approaching rent-stabilized tenants to try to convince them to move out of their apartments in exchange for money. These efforts are more commonly known as “buyout offers.” Between June 2016 and July 2017, a total of 33 tenants (more than one-third of the tenants living in the buildings) accepted buyout offers; however the landlords failed to provide these tenants with the required written notice explaining their rights under local law.

“Tenants should never feel harassed into vacating their homes,” said Attorney General Schneiderman. “This settlement makes clear that we will aggressively enforce the law to protect tenants from those who seek to put profit before New Yorkers’ rights — and we’ll continue to fight for the tougher state laws we need to criminally crack down on tenant harassment.”

In 2015, NYC Intro. 700 became law, amending the Housing Maintenance Code’s definition of “harassment” to make it illegal for a landlord to make a buyout offer to a tenant without providing a written notice. The written notice must explain the following: (1) the purpose of the landlord’s contact with the tenant; (2) that the tenant can reject the buyout offer and continue to occupy their unit; (3) that the tenant can seek the guidance of an attorney regarding the buyout offer and can refer to the HPD guide entitled, “The ABCs of Housing”; (4) that the contact is made by or on behalf of the owner; and (5) that the tenant can, in writing, refuse the contact and such refusal would bar contact for 180 days. The law was passed to address intimidation tactics employed by some landlords to pressure tenants to vacate rent-stabilized apartments.

The buildings in this settlement are located in Bushwick, Brooklyn at 920 Bushwick Avenue, 946 Bushwick Avenue, and 1075 Greene Avenue and have 105 apartment units among them. When Graham Jones and Greg Jones bought the buildings in 2016, all apartments were protected by rent stabilization. The landlords immediately began to offer buyouts to tenants without the required written notice, resulting in 33 vacancies within one year. In this rapidly changing neighborhood, newly renovated apartments can demand high rents – unaffordable to the majority of long-term Bushwick tenants.

The Attorney General learned of these practices after remaining tenants complained of the landlords’ aggressive tactics.

Under the settlement obtained by Attorney General Schneiderman, the landlords will pay $132,000 in restitution to the New York City Department of Finance, which will be used by the Department of Housing Preservation and Development to finance housing projects for low-income New Yorkers. The landlords also agreed not to engage in any form of tenant harassment in violation of Section 27-2005(d) of the New York City Municipal Code, including engaging in buyout offers without providing the required written notice. 

Click here to read the settlement.

In May 2017, the Attorney General introduced the Tenant Protection Act of 2017to criminally crack down on tenant harassment.  Attorney General Schneiderman’s efforts against tenant harassment have also included forming a Tenant Harassment Prevention Task Force with city and state officials; launching a team to enhance and streamline the office’s resources to combat tenant harassment, deceptive lending practices, and other housing issues facing constituents; and charging landlords and management companies for alleged illegal practices to harass and endanger rent-regulated tenants.

Senator Jeff Klein announces $1 million in funding for Albert Einstein College of Medicine

Grant will be used for upgrades to The Rose F. Kennedy Center to support new Brain Sciences Initiative

Senator Jeff Klein announced $1 million in state funding for the Albert Einstein College of Medicine that will be used for upgrades to The Rose F. Kennedy Center to support the college’s new Brain Sciences Initiative. The announcement was made on Thursday, November 2 during a luncheon celebrating the 50 year anniversary of The Rose F. Kennedy Center.

“The Albert Einstein College of Medicine is a top-notch institution for medical education and research. I’m extremely proud to secure $1 million in funding for Einstein, which will be used to modernize the 50-year-old Rose F. Kennedy Building to support the college’s new Brain Sciences Initiative. I look forward to these upcoming improvements that will enable a team of medical experts to research and address critical brain disorders such as Alzheimer’s disease,” said Senator Jeff Klein.

“Senator Klein has been a long-time and steadfast supporter of medical research and this new gift is further evidence of his commitment to improve the health of people in the Bronx and around the state,” said Dr. Allen M. Spiegel, the Marilyn and Stanley M. Katz Dean at Albert Einstein College of Medicine and Executive Vice President and Chief Academic Officer at Montefiore. “We are working to achieve major breakthroughs in the brain sciences and this gift helps strengthen Einstein’s ability to advance the field.”

Senator Klein’s $1 million funding allocation will be used to modernize a portion of the The Rose F. Kennedy Center, including improvements to the 9th floor and the expansion of existing labs.

(From left to right: Dr. Tim Shriver, chair of the Special Olympics; Dr. Allen M. Spiegel, dean at Albert Einstein College of Medicine; Dr. Kamran Khodakhah, chair of neuroscience at Albert Einstein College of Medicine; Senator Jeff Klein; Assemblyman Mark Gjonaj; Salvatore Ciampo, senior director of facilities management at Albert Einstein College of Medicine.)

VISION ZERO: MAYOR DE BLASIO ISSUES DRIVER ALERT FOR SEASONAL DANGERS OF DUSK, DEER AND DAYLIGHT SAVINGS

As part of Vision Zero Dusk and Darkness initiative, stepped up NYPD enforcement against dangerous driving will be concentrated in evenings; in the Bronx and on Staten Island, drivers should be especially alert for mating deer during dusk hours; clocks “fall back” this Sunday, November 5 at 2:00 AM, creating earlier sunsets

  Leading up to this weekend’s clock change, Mayor Bill de Blasio today issued an alert to New York City drivers about the increased dangers of driving this time of year, when drivers and pedestrians are at increased risk during dusk and evening hours. The de Blasio Administration last week announced the return of its Vision Zero Dusk and Darkness initiative that includes stepped-up NYPD enforcement against unsafe driving during fall and winter dusk hours, which have traditionally been the most dangerous time of year for pedestrians.  Those same hours have also been highly correlated to deer-mating activity and deer-related crashes on New York City roadways, especially in the Bronx and on Staten Island.

“While we all can be grateful for an extra hour’s sleep this coming weekend, at the same time we all need to stay mindful of the driving dangers of the darker fall and winter months,” said Mayor Bill de Blasio. “As part of our Dusk and Darkness initiative, NYPD will be out during those darker afternoons and evenings, making a big difference on our streets for the safety of pedestrians.  On other roads, deer pose a special danger to drivers during those same dusk hours.  For everyone’s protection, the best choice for drivers is to take turns slowly and obey the speed limit – on both our streets and our highways.”

“As Daylight Saving Time ends, a dangerous time period on our roads – especially for pedestrians – begins,” said NYPD Commissioner James P. O’Neill. “Sunset coincides with the evening commute, and people may not be as alert or able to see as clearly. So the NYPD and its Vision Zero partners are calling on people – especially motorists – to slow down and make safe turns. Officers will be out looking for hazardous moving violations. So, please look out for one another, and if you’re in an area with deer, look out for them too.”

“Our research shows that rush-hour driving in newly dark evenings of the fall can be a perilous combination for pedestrians, and with deer also out in greater numbers, drivers need to be especially vigilant during this season” said DOT Commissioner Polly Trottenberg. “We know from our Dusk and Darkness efforts that vision is compromised enormously as the sun sets, which now happens during the busiest evening rush hours.  As part of Vision Zero, we are reminding New Yorkers that in the colder, darker months ahead, they need to exercise extra caution and slow down.”

“Deer are a relatively new traffic danger that New Yorkers should watch out for,” said NYC Parks Commissioner Mitchell J. Silver, FAICP. “Fall is mating season, which means deer will be most active – especially during dawn and dusk, and especially in Staten Island and the Bronx, where deer are most prevalent.”

The NYPD, DOT and NYCParks detailed the three dangers of the season:

Dusk

DOT has conducted extensive analysis of year-over-year crash trends, noting that:

·    Vision experts note that visual acuity can decrease by as much as 90% during the dusk hours, making driving especially perilous.

·  The earlier onset of darkness in the fall and winter is highly correlated to a 40 percent increase in traffic injuries and fatalities among pedestrians.

·  Lower visibility during the dark hours of the colder months leads to twice as many crashes involving turns.

Deer Activity

·  Deer can appear without warning on roadways, so be alert. The animals are most active in the evening and early morning, especially during the mating season -- going on now.

· To avoid collisions, drive the posted speed limit. Scan the road ahead and avoid distractions.

· If a deer runs in front of your vehicle, brake firmly but do not swerve. Swerving can take a motorist into oncoming traffic or off the road.

· If you strike a deer, call 911 immediately. Do not touch or get close to the animal. it may be injured and could behave frantically, causing further safety risks.

· Learn more about living alongside deer in New York City at www.nyc.gov/wildlife

Daylight Savings

·  Daylight Saving Time ends this Sunday, November 5 at 2am, when clocks “fall back” one hour.  Sunsets happening this week just before 6pm will be before 5pm next week, at the height of the evening rush hour.

· In addition to the increased NYPD enforcement during these hours, the Dusk and Darkness campaign will employ afternoon and evening drive-time radio advertising, reminding drivers to obey the speed limit, watch for pedestrians and turn slowly. 

In 2017, as part of Vision Zero, DOT has implemented its most aggressive street redesign safety program, with increased investment in street redesign and traffic-calming measures citywide. DOT has improved the safety at a record number of dangerous intersections and thoroughfares, expecting to install more than 25 miles of protected bike lanes this year along key high-traffic corridors like Queens Boulevard and 111th Street in Queens, as well as 5th Avenue, 7th Avenue and Park Row in Manhattan.  DOT will this year also install a record number of leading pedestrian intervals (LPIs) – more than 800 – to give pedestrians a head start while crossing the street.

For more information about the de Blasio Administration’s Vision Zero initiative, please see www.nyc.gov/visionzero.

Bronx Dems Hosts "Bronx for Bill de Blasio" GOTV Rally & Canvass Kick - Off

Bronx Chamber of Commerce - 2018 Business Directory Printer's Deadline extended to November 10, 2017

GREAT NEWS!

    2018 Business Directory Printer's Deadline extended to November 10, 2017

DON'T MISS OUT on business referrals by being listed in the 2018 Bronx Business Directory & Resource Guide. The 2018 Directory includes a BONUS Digital Edition with hyperlinks to websites and email to generate more leads and business referrals!

 

Current and new members must confirm their contact information for the 2018 Bronx Business Directory & Resource Guide before November 10, 2017. Email your updated and complete contact information today to Sashee Rivera at: sashee@bronxChamber.org.

 

Hurry! >>>>>Affordable Advertising Rates in the 2018 Bronx Business Directory

 

DON'T MISS OUT on reserving your company ad in the 2018 Directory. Call today! Allan Kolstein (914) 345-0601, ext. 162, or email; akolstein@todaymediainc.com or Beth Ann Martinelli (914) 325-8593 or email: bmartinelli@todaymediainc.com.

Helping you grow your Bronx Business is our Goal!

The Bronx Chamber of Commerce is one of the most influential, professional and successful organizations and voice for businesses in Bronx County. Professionals and companies are drawn to the successful companies and active members affiliated with The Bronx Chamber of Commerce. Membership includes businesses ranging from large corporations, Cultural Institutions, Universities and Colleges, Hospitals and Medical Centers, non-profits, and mid-sized to small companies.

 

Nunzio Del Greco
President and CEO
Bronx Chamber of Commerce

"The Network for Business Success"
1200 Waters Place, Suite 106
Bronx, NY 10461
718-828-3900
Nunzio@bronxchamber.org

 

"You never know where your next big deal is going to come from"!

Complaint in U.S. v. SAYFULLO HABIBULLASVIC SAPOV

  A Two Count Indictment totaling ten pages with testimony from Special Agent Amber Tyree of the FBI Joint Terrorism Task Force testimony about how SAYFULLO HABIBULLASVIC SAPOV rented the truck and used it for the October 31st terror attack can be found at https://www.justice.gov/usao-sdny/press release/file/1008081/download. 

 This ten page indictment was given to U.S. Magistrate Judge for the Southern District of New York Hon. Barbara C. Moses by Assistant U.S. Attorneys Andrew D. Beaty, Amanda Houle, and Mathew Laroche.  

 Count One is titled - Provision of Material Support and resources to a Designated Foreign Terrorist Organization.

  Count Two is titled - Violence and Destruction of Motor Vehicles. 

 It makes for some interesting reading of how the attack was planned, what the intended target was to be, and just how the attack was enacted. There is also a brief history of ISIS, and how they attempt to recruit terrorist such as this. 

 Cement barriers have been placed on this bike/walkway passage as of today to prevent another event such as the October 31st terrorist attack. 

A.G. Schneiderman Announces Felony Conviction And $2 Million Settlement In Bribery Investigation Of JFK Airport Executive

Edward J. Paquette, Executive Director Of Terminal One Group, Stole And Took Bribes Totaling Over $1.3 Million, Meant To Influence Contracts He Oversaw At JFK Airport

Settlement Is The Second In Ongoing AG Investigation “Operation Greased Runway,” Examining Contracting Practices At JFK

Since Launching Investigation, AG Has Secured $15 Million In Penalties And Restitution

  Attorney General Eric T. Schneiderman today announced the conviction of Edward J. Paquette, former Executive Director of the Terminal One Group Association L.P. (“TOGA”), on felony charges related to stealing from his employer and accepting bribes totaling over $1.3 million, intended to influence contracts he oversaw at JFK Airport. TOGA, a partnership between Air France, Japan Airlines, Korean Air, and Lufthansa, was established to lease Terminal One at JFK Airport from the Port Authority of New York and New Jersey. The Attorney General’s ongoing investigation into the contracting and procurement process at JFK Airport—an investigation dubbed “Operation Greased Runway”—revealed that Paquette accepted personal payments in exchange for awarding business opportunities and favorable treatment to catering, transportation, and aircraft servicing companies operating in the terminal. In addition to his felony convictions, Paquette agreed to pay $2 million to settle civil claims pursuant to the New York False Claims Act and Executive Law Section 63(12). 

This plea and civil settlement mark the second resolution in Operation Greased Runway. The first conviction and settlement, involving the airport food company Yankee Clipper Food Services I, was announced on October 19, 2017. Operation Greased Runway has now netted an aggregate $15 million in penalties and restitution. 

Click here to read the settlement agreement.

“Accepting bribes is a crime that undermines legitimate businesses and prevents access to equal opportunity for hard working New Yorkers,” said Attorney General Schneiderman. “My office is committed to rooting out corruption in contracting and we will use every tool available to stop those in positions of power from taking advantage of their authority.”

The Attorney General’s investigation uncovered that Paquette compromised the integrity of business operations at JFK Airport by accepting payments from airport businesses in return for exercising his influence as TOGA’s Executive Director. In one instance, Paquette recommended that TOGA change ground handling companies that service aircrafts at Terminal One. Paquette then solicited bids for the contract, which were the largest at the terminal. After conducting a bidding process, Paquette recommended awarding Ground Services International (“GSI”) the contract. GSI received the contract, and shortly thereafter began making secret monthly payments to a company that Paquette established specifically to receive the payments. GSI paid Paquette a total of $640,000 from 2015 through 2017.

The investigation further revealed that Paquette engaged in a scheme with Yankee Clipper Food Services I, previously convicted of Grand Larceny and a Scheme to Defraud as part of this investigation, to divert TOGA money to himself. Paquette falsified invoices for a purported “Employee Appreciation Day” for the workers at Terminal One that never took place. Nonetheless, Paquette instructed the catering company to issue invoices for the non-existent event to TOGA. Paquette later approved payment of the fraudulent invoices and the catering company returned large portions of the TOGA payment in cash to Paquette personally. Finally, Paquette received additional payments totaling over $572,000 from Yankee Clipper and related entities, and over $108,000 from Golden Touch Transportation of New York, a transportation company that conducts business at Terminal One, among several other locations in New York.

Michael Nestor, Inspector General for the Port Authority of New York and New Jersey said, “The Port Authority requires that all business partners adhere to the highest standards of integrity and ethical conduct. In this case, the defendant chose to enrich himself through an insidious pattern of corruption that allowed him to siphon millions of dollars at the expense of his employer and the other airline carriers they served. Individuals who willingly participate in a pay-to-play system subvert the process for those who try to compete fairly and ultimately undermine the public’s trust in government. My office will continue to work vigorously with the New York State Attorney General’s Office and its law enforcement partners to identify, investigate and prosecute those who attempt to corrupt the integrity of the aviation industry.”

Today, Paquette pleaded guilty to one count of Grand Larceny in the Second Degree, a class C felony, and one count of Commercial Bribe Receiving in the First Degree, a class E felony. The pleas were entered today in Queens Supreme Court. 

Attorney General Schneiderman thanks the Office of the Inspector General of the Port Authority of New York and New Jersey, particularly Investigator Mia Chang, Supervising Forensic Investigator Fred Ferrone, Assistant Director of Investigations Salvatore Dalessandro, and Director of Investigations Steven Pasichow.