Justice Department Secures $9 Million Agreement with Washington Trust Company to Resolve Redlining Claims in Rhode Island

 

The Justice Department announced that Washington Trust Company (Washington Trust), the oldest community bank in the nation, has agreed to pay $9 million to resolve allegations that it engaged in a pattern or practice of lending discrimination by redlining majority-Black and Hispanic neighborhoods in Rhode Island.

Redlining is an illegal practice in which lenders avoid providing credit services to individuals living in communities of color because of the race, color or national origin of residents in those communities.

“This settlement should send a strong message to banks regarding the Justice Department’s firm commitment to combat modern-day redlining and ensure that all lenders are providing equal access to home loan opportunities to communities of color,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This resolution will provide critical relief to impacted Black and Hispanic communities, enabling them to buy a home, keep their home or access the equity in their home. Ending redlining and providing relief to communities of color impacted by this unlawful practice is a necessary step in ongoing efforts to reduce racial wealth and homeownership gaps across our country.”

“Everyone who pursues the American dream has the right to expect to be treated equally and with dignity, regardless of their race, their background, or zip code. When communities are denied access to fair lending, families are denied the opportunity to build stability and financial success,” said U.S. Attorney Zachary A. Cunha for the District of Rhode Island. “I am pleased that, as a result of the hard work of attorneys in my office and the department’s Civil Rights Division, Washington Trust has agreed to take targeted and extensive measures to make meaningful lending services available for all Rhode Islanders, regardless of race or background.”

The complaint alleges, from 2016 through at least 2021, Washington Trust failed to provide mortgage lending services to majority-Black and Hispanic neighborhoods in Rhode Island. The complaint alleges that despite expansion across the state of Rhode Island, Washington Trust has never opened a branch in a majority-Black and Hispanic neighborhood. The complaint alleges that Washington Trust relied on mortgage loan officers working out of only majority-white areas as the primary source for generating loan applications, and Washington Trust failed to train or incentivize its lending staff or conduct outreach, marketing and advertising of its mortgage services to compensate for its lack of branches and presence in majority-Black and Hispanic areas. The complaint further alleges that, compared to Washington Trust, over the same six-year period, other banks received nearly four times as many loan applications each year in majority-Black and Hispanic neighborhoods in Rhode Island. The complaint also alleges that, even when Washington Trust generated loan applications from majority-Black and Hispanic areas, the applicants themselves were disproportionately white.  

Under the proposed consent order, which is subject to court approval, Washington Trust has agreed to do the following:

• Invest at least $7 million in a loan subsidy fund to increase access to home mortgage, home improvement, home refinance and home equity loans and lines of credit for residents of majority-Black and Hispanic neighborhoods in Rhode Island;
• Spend $1 million on community partnerships to provide services that increase residential mortgage credit access for residents of those neighborhoods;
• Spend $1 million for advertising, outreach, consumer financial education and credit counseling focused on majority-Black and Hispanic neighborhoods;
• Open two new branches in majority-Black and Hispanic neighborhoods in Rhode Island; and ensure at least two mortgage loan officers are dedicated to serving these neighborhoods; and
• Employ a Director of Community Lending who will oversee the continued development of lending in communities of color.

Washington Trust also agreed to complete a community credit needs assessment, to assess and report on its fair lending program; and to train staff on the bank’s obligations under the consent order. Washington Trust worked cooperatively with the department to resolve and remedy the redlining concerns that were identified and agreed to settle this matter without contested litigation.

In October 2021, Attorney General Merrick B. Garland and Assistant Attorney General Kristen Clarke launched the Justice Department’s Combating Redlining Initiative, a coordinated enforcement effort to address this persistent form of discrimination against communities of color. Since 2021, the department has announced nine redlining cases and secured $98 million in relief for communities of color that have been the victims of lending discrimination across the country.

A copy of the complaint and information about the department’s fair lending enforcement can be found at www.justice.gov/fairhousing. Individuals may report lending discrimination by calling the Justice Department’s housing discrimination tip line at 1-833-591-0291 or submitting a report online.

CEO Of Cryptocurrency Ponzi Scheme “IcomTech” Pleads Guilty

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced  the guilty plea of MARCO RUIZ OCHOA for his role in promoting a large-scale cryptocurrency Ponzi scheme known as IcomTech.  OCHOA pled guilty today before U.S. District Judge Jennifer L. Rochon to one count of conspiracy to commit wire fraud.  

U.S. Attorney Damian Williams said: “Again and again, we see perpetrators taking advantage of the hype around cryptocurrency to con unsuspecting victims into investing in pyramid schemes.  IcomTech was one of these large-scale copycat cryptocurrency scams and Ochoa, as the purported CEO, played an important role taking IcomTech to scale and ultimately harming more victims.  Today’s guilty plea sends a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud.”

According to the Indictment and statements made in court:

DAVID CARMONA started IcomTech in 2018, and OCHOA was represented to be IcomTech’s CEO until 2019, when a new CEO replaced him.  IcomTech was a purported cryptocurrency mining and trading company that promised to earn its victim-investors (“Victims”) profits in exchange for their purchase of purported cryptocurrency-related investment products.  OCHOA and the other promoters of IcomTech, including his co-defendants CARMONA, JUAN ARELLANO, MOSES VALDEZ, and DAVID BREND, falsely promised their respective Victims, among other things, that profits from the companies’ cryptocurrency trading and mining would result in guaranteed daily returns on Victims’ investments.  In reality, IcomTech did not engage in cryptocurrency trading or mining for its Investors, and OCHOA and IcomTech’s other promoters used Victim funds to pay other Victims to further promote the schemes and to enrich themselves.

IcomTech promoters, including OCHOA, traveled throughout the United States and internationally, where they hosted lavish expos and small community presentations aimed at luring Victims to invest in the schemes, including in the Southern District of New York.  During larger-scale events, IcomTech promoters presented on purported investment products and the compensation plan, encouraged Victims to invest as a means of achieving financial freedom, and boasted about the amount of money they were earning.  IcomTech promoters often showed up at larger-scale events in expensive cars and wearing luxury clothing as a way of exhibiting their purportedly legitimate success from IcomTech.  The atmosphere of these events was festive and designed to generate excitement about the schemes.

Victims invested in IcomTech by purchasing investment products from promoters using cash, checks, wire transfers, and actual cryptocurrency.  Following a Victim’s investment, a Victim would be provided with access to an online portal where the Victim could monitor the purported returns.  While Victims saw “profits” accumulate on the online portal, most Victims were unable to withdraw any of these so-called profits and ultimately lost their entire investments.  By contrast, IcomTech’s promoters, including OCHOA, siphoned off, in some cases, hundreds of thousands of dollars in Victim funds, which they withdrew as cash, spent on IcomTech promotional expenses, and used for personal expenditures such as luxury goods and real estate.

At least as early as August 2018, Victims who attempted to withdraw money from their online portal accounts had difficulty doing so and, when they complained to promoters, they were met with excuses, delays, and hidden fees, if they were able to make any withdrawals at all.  Despite these complaints, IcomTech promoters, including OCHOA, continued to promote IcomTech and accept Victims’ investments.  As complaints mounted, IcomTech began offering proprietary crypto tokens for sale as a means of injecting liquidity into IcomTech.  Promoters of the schemes claimed that these tokens, known as “Icoms,” would eventually be worth a significant amount of money when they were accepted by companies for payment for goods and services.  This was false.  In reality, “Icoms” were essentially worthless and resulted in further financial loss to Victims.  By in or about the end of 2019, IcomTech stopped making payments to Victims and IcomTech collapsed.

OCHOA, 35, of Nashua, New Hampshire, pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum term of 20 years in prison.

The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as the sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ El Dorado Task Force.  Mr. Williams also thanked the Securities and Exchange Commission and the Commodity Futures Trading Commission for their assistance.

If you believe you are a victim of the IcomTech fraud, updated information regarding the case and victims’ rights, as well as contact information for the victim witness coordinator is available here.

Governor Hochul Signs Legislative Package to Extend Protections Against Human Trafficking in New York State

FY 2024 Budget Included $2.3 Million That Was Recently Awarded to Human Trafficking Victim Service Providers

Legislation S.4263/A.3227, S.5527/A.3720, S.6213/A.4264, S.6214/A.4265, S.5827/A.4586, S.4267/A.4669 Relate to Posting Information Regarding Human Trafficking Victim Services in Transportation Hubs Across the State

Legislation S.7451/A.7360 Extends the Interagency Task Force on Human Trafficking for Four Years

Legislation S.395/A.5505 Directs the Interagency Task Force on Human Trafficking to Investigate Connections Between Trafficking and Social Media

 Governor Kathy Hochul today signed into law a legislative package that expands the New York State Interagency Task Force on Human Trafficking in members and length of duty to ensure the work the task force does can continue uninhibited. The Governor also signed legislation that ensures transportation hubs across the state are displaying information that may be of use to victims of human trafficking, providing them information on services available. Additionally, Governor Hochul highlighted $2.3 million that was recently awarded to contractors that provide services to survivors and victims of human trafficking across the state.

“Human trafficking is a nightmare no one should have to experience - even one victim is too many,” Governor Hochul said. “I am proud to sign this legislation to protect the thousands of individuals who fall victim to human trafficking, and I want thank my partners in the legislature for their work in getting these bills through to the finish line.”

Human Trafficking Services Awareness

To expand on New York State’s commitment to support and protect victims of trafficking, Legislation S.4263/A.3227 requires Port Authority airports to provide information that may be useful for human trafficking victims in lactation rooms. Legislation S.5527/A.3720 requires MTA facilities to post information that may be of use to victims of human trafficking. Legislation S.6213/A.4264 requires truck stops to post information that may be useful to victims of human trafficking in lactation rooms. Legislation S.6214/A.4265 requires commercial service airports to post information for human trafficking services in lactation rooms. Legislation S.5827/A.4586 requires service areas maintained and operated by the New York State Thruway Authority provide information regarding services available to human trafficking victims in lactation rooms. Legislation S.4267/A.4669 requires Port Authority bus terminals to provide information regarding services available to human trafficking victims in lactation rooms.

Expanding the Interagency Task Force on Human Trafficking

Legislation S.7451/A.7360 adds the New York Secretary of State to the members of the Interagency Task Force on Human Trafficking. Currently, the State agency members of the task force are the commissioner of the Division of Criminal Justice Services, the commissioner of the Office of Temporary and Disability Assistance, the Commissioner of the Department of Health, the commissioner of the Office of Mental Health, the commissioner of the Department of Labor, the commissioner of the Office of Children and Family Services, the commissioner of the Office of Addiction Services and Supports, the director of the Office of Victim Services, the executive director of the Office for the Prevention of Domestic Violence, and the superintendent of the New York State Police.

This legislation also extends the task force for an additional four years to ensure the work done by the task force to prevent, reduce and assist human trafficking survivors continues uninterrupted.

Legislation S.395/A.5505 directs the Interagency Task Force on Human Trafficking to investigate connections between social media and human trafficking.

The Office of Temporary and Disability Assistance operates the Response to Human Trafficking Program (RTHP), which supports service providers throughout the state to provide case management and services to confirmed victims of trafficking. Today, RHTP supports 11 service providers throughout New York State. Services are responsive to individual needs and goals, and can include emergency services such as shelter, transportation, food assistance and phone access, medical services, clothing, etc. Providers also work with trafficking survivors to identify and support longer-term goals, such as health care and mental health services, employment services, and transitional to longer-term housing.

Through RHTP, $2.3 Million has recently been awarded to the following providers statewide serving survivors of human trafficking:

Contractor	Region	Award
Safe Horizon, Inc.	NYC	$500,000.00
Sanctuary for Families	NYC	$379,000.00
Restore NYC	NYC	$319,500.00
My Sister's Place, Inc.	Westchester	$275,000.00
Empowerment Collaborative of Long Island Inc.	Suffolk	$200,000.00
Catholic Charities of Long Island	Nassau	$124,250.00
International Institute of Buffalo	Erie	$167,208.00
Safe Inc of Schenectady	Schenectady	$197,099.00
People Against Trafficking Humans Incorporated	Erie	$49,581.00
Unity House of Troy Inc.	Rensselaer	$113,000.00
Safe Harbors of the Finger Lakes Inc.	Ontario	$72,362.00

The Division of Criminal Justice Services (DCJS) works with law enforcement to ensure that all recruits receive human trafficking training as part of their basic training. In 2022, about 2,500 recruits received training on human trafficking as part of their basic course instruction, including training on how to make a referral for New York State confirmation. Since the beginning of 2023, DCJS, in consultation OTDA, has confirmed 240 trafficked persons in New York State, connecting them with essential services and resources. The state confirmed 249 trafficked persons in 2022, and 295 in 2021.

As of July 20, 2023, lodging facilities in New York State are required to provide training on identifying and reporting human trafficking to all staff who are likely to interact or come into contact with guests. DCJS has been in contact with important players in the hospitality industry—including Marriott, Hilton, and the New York State Hospitality and Tourism Association—and has worked with our OTDA partners to draft appropriate state training materials.

The state Municipal Police Training Council, to which DCJS provides staff, was required by law to develop and issue a Human Trafficking Model Policy that law enforcement could use as a framework for their own policy. The policy was first adopted in 2016 and updated in 2021.