Wednesday, May 25, 2022

MAYOR ADAMS ANNOUNCES STEPS TO REFORM AND MODERNIZE VENDING REGULATIONS, EXPANDING LEGAL OPPORTUNITIES FOR STREET VENDORS WHILE REMAINING COMMITTED TO MANAGING PUBLIC SPACE

 

Mayor Adams Supports Business Development by Committing to Reducing Draconian Penalties for General and Mobile Food Vendors and Cutting Red Tape

 

Fulfills Key Recommendations of Consensus-Driven Street Vendor Advisory Board Report

 

New York City Mayor Eric Adams today announced a number of actions to reform and modernize street vending regulations for New Yorkers, cutting red tape and supporting business development for street vendors, while also expanding access to healthy food for consumers. The steps include recommendations put forward by the Street Vendor Advisory Board (SVAB) in a report released today and transmitted to the City Council, which seeks to balance the needs of street vendors, brick-and-mortar businesses, and consumers, while expanding economic opportunity and safety.

 

“Street vendors are an integral part of New York City’s economy and give communities across our city their unique character, which is why I am thankful the Street Vendor Advisory Board has taken a collaborative and inclusive approach to addressing street vending,” said Mayor Adams. “Together, we can balance the needs of street vendors, brick-and-mortar businesses, and residents. These recommendations do just that by cutting red tape, creating new opportunities for street vendors to operate legally, and improving access to healthy food throughout the five boroughs.”

 

Through a collaborative six-month process, SVAB members — comprised of stakeholders representing city agencies, street vendors, retail food stores, property owners, small businesses, and community organizations — unanimously developed 16 recommendations for Mayor Adams and the City Council, ranging from specific amendments to local laws to broad, new conceptual approaches to street vending in New York City. The recommendations — which Mayor Adams will begin to implement — include:

 

  • Introducing business supports tailored to street vendors at New York City’s Department of Small Business Services (SBS);
  • Enhancing the New York City Department of Health and Mental Hygiene’s (DOHMH) Green Cart Program to improve access to fresh produce for NYCHA residents;
  • Cutting red tape to:
    • Simplify requirements about the display of goods,
    • Repeal book keeping requirements, and
    • Allow mobile food vendors to keep goods on top of carts;
  • Repealing criminal liability for general and mobile food vendors;
  • Directing the New York City Department of Transportation (DOT) to study and pilot the feasibility of new opportunities for street vending in pedestrian plazas, municipal parking lots, and metered parking spots; and
  • Repealing and replacing the inactive Street Vendor Review Panel with a new body that would review and amend time, place, and manner restrictions to street vending, which have not been updated for decades.

 

Local Law 18 of 2021 requires the SVAB to review and evaluate all state and city laws and rules that together regulate street vending in New York City, in addition to proposing recommendations for reform, which have been submitted to the City Council.

 

The Adams administration will work alongside the City Council on recommendations where legislation is required, while moving forward immediately with implementing new programs and amending relevant administrative rules. In addition to the reforms that were spurred by the  SVAB process, Mayor Adams is also committed to reducing and aligning penalty schedules for general vendors and mobile food vendors alike — while remaining committed to managing public space and upholding codified time, place, and manner restrictions on vending.

 

“An equitable economic recovery relies on our ability to harness the potential of all of New York City’s entrepreneurs,” said Deputy Mayor for Economic and Workforce Development Maria Torres-Springer. “We thank the Street Vendor Advisory Panel for developing win-win recommendations that support street vendors and brick-and-mortar businesses alike.”

 

“Our streetscapes hold so much potential to spur additional economic opportunity,” said Deputy Mayor for Operations Meera Joshi. “Creating new spaces for street vending in parking lots and plazas, while balancing the needs of both brick-and-mortar businesses and pedestrians, is a win-win-win.”

 

“Streamlining requirements, cutting red tape, and creating new spaces for legal street vending balances safety and opportunity for our city’s residents,” said Deputy Mayor for Public Safety Phil Banks. “I thank the Street Vendor Advisory Board for coming together to collaboratively work toward solutions.”

 

“I thank the board for their dedication to evaluating this complex array of state and city laws related to street vending,” said New York City Department of Consumer and Worker Protection (DCWP) Commissioner Vilda Vera Mayuga. “These recommendations cut red tape while creating additional opportunities for legal street vending and a more equitable system for street vendors and brick-and-mortar stores alike.”

 

“Our city’s street food vendors provide so much for our city — including access to affordable foods and cultural delicacies,” said DOHMH Commissioner Dr. Ashwin Vasan. “Thank you to Mayor Adams and to the members of the advisory board for their continued partnership in creating a fairer environment for our vendors to thrive in.”

 

“Thanks to Mayor Adams’ leadership, we look forward to taking a fresh look at how our public space and facilities could efficiently host some of New York City’s hard-working vendors and boost economic development,” said DOT Commissioner Ydanis Rodriguez. “Vendors from our immigrant communities play a vital role in our entrepreneurial economy — we must find ways to advance their needs while also balancing those of pedestrians and local businesses.”

 

“New York City’s economic recovery has to include support for our city’s street vendors, many of whom are immigrants working toward their American dream,” said SBS Commissioner Kevin D. Kim. “The Street Vendor Advisory Board’s report is clear — if we want to help these diverse entrepreneurs succeed, New York City must simplify requirements, bring clarity to the legal street vending market, and invest deeply in our commercial corridors to support street vendors, pedestrians, and brick-and-mortar storeowners alike.”

 

“Street vendors — like their brick-and-mortar counterparts — are integral parts of the economic life of our city,” said New York City Police Department (NYPD) Commissioner Keechant L. Sewell. “Members of the NYPD are fully committed to working with our partner agencies to always ensure fair and adequate services, while maintaining the quality of life New Yorkers expect and deserve.”

 

Board members include:

 

Designees from five city agencies: DCWP, DOHMH, DOT, NYPD, and SBS;

Mohamed Attia, executive director, Street Vendor Project (street vendor representative);

Murad Awawdeh, executive director, New York Immigration Coalition (NYIC) (community organization representative);

Cheikh Boubacar Fall, U.S. military veteran and street vendor (street vendor representative);

David Estrada, executive director, Sunset Park Business Improvement District (BID) (small business representative);

Regina Myer, president, Downtown Brooklyn Partnership (small business representative);

Randy Peers, president and CEO, Brooklyn Chamber of Commerce (small business representative);

Sonia Perez, street vendor and member, Street Vendor Project Leadership Board (street vendor representative;

Matthew Shapiro, legal director, Street Vendor Project (street vendor representative);

Reggie Thomas, senior vice president, Real Estate Board of New York (REBNY) (property owner representative); 

and Aly Waddy, secretary-treasurer, UFCW Local 1500 (food retail worker representative).

 

“For centuries, street vendors have been an essential part of the fabric of New York City. From the Bronx to Queens, street vendors ensure under-resourced communities have access to fresh, affordable food, commercial corridors have diversity of business, and tourists get the iconic New York City experience. And now, for the first time ever, street vendors are stakeholders in deciding the future of the industry,” said Mohamed Attia, managing director, Urban Justice Center’s Street Vendor Project. “We look forward to continuing to work with Mayor Adams and the City Council to modernize the vending system, ensuring all street vendors are permitted, and cutting the red tape so our city’s smallest business can truly thrive.”

 

“Street vendors are an iconic part of New York’s landscape and an indelible part of New York City’s economy and recovery,” said Murad Awawdeh, executive director, NYIC. “We’re thrilled to see the city adopt and implement much-needed protections for our smallest businesses to ensure that our vendors are better able to serve New York communities with less red tape, reduced penalties, and increased opportunities to thrive.”

 

“Street vending is an important part of our city’s culture,” said Regina Myer, president, Downtown Brooklyn Partnership; and David Estrada, executive director, Sunset Park BID. “Mayor Adams’ swift response to the Street Vendor Advisory Board’s report is a good step toward fully re-envisioning private commerce in public places. We can honor the needs of residents, businesses, and everyone’s quality of life if we manage our shared spaces with fair rules and consistent enforcement.”


Bronx Jewish Community Council - Looking for Volunteers for Father's Day Program

 

Looking for volunteers for a 2-3 hour program on Father's Day Afternoon
at the Pelham Parkway NORC.

If you are interested, please contact Niti Minkove at
nminkove@bjcconline.org or 917-693-3084.

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Bronx Jewish Community Council  
2930 WallaceBronx, NY 10467 7137285297


Godfather Of Black Stone Gorilla Gang Sentenced To Over 32 Years In Prison

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that ALEXANDER ARGUEDAS, a/k/a “Reckless,” was sentenced today to 32 years and 6 months in prison in connection with his leadership of the Black Stone Gorilla Gang, a violent street gang that operated in New York City and elsewhere, including for his participation in the December 9, 2012 murder of Gary Rodriguez, narcotics trafficking, firearms offenses, and other acts of violence.  On February 8, 2022, ARGUEDAS pled guilty to racketeering conspiracy, narcotics conspiracy, and a firearms offense.  U.S. District Judge Jesse M. Furman imposed today’s sentence.

U.S. Attorney Damian Williams said:  “Alexander Arguedas was one of the Godfathers of the Black Stone Gorilla Gang, a violent Bloods gang that flooded New York City neighborhoods with drugs, assaults, slashings, and shootings.  He groomed young men to become drug dealers, shooters, and gang members.  He murdered Gary Rodriguez in cold blood in December 2012, and he went on to commit a multitude of other heinous acts of violence.  Today’s lengthy sentence sends an important message to gang members who commit crimes that they will be apprehended and prosecuted to the fullest extent of the law.”

As alleged in the Indictment and based on statements made in open court:

ALEXANDER ARGUEDAS, a/k/a “Reckless,” was previously one of the Godfathers of the Black Stone Gorilla Gang (“BSGG”), a racketeering enterprise that operated principally in the New York City metropolitan area and in the jails and prisons of New York City and the State of New York.  In order to enrich the enterprise, preserve and protect the power of the enterprise, and enhance its criminal operations, BSGG members and associates committed, conspired, attempted, and threatened to commit acts of violence, including murder and assaults; distributed and possessed with intent to distribute narcotics; committed robberies; engaged in bank fraud and wire fraud; and obtained, possessed, and used firearms.  BSGG members also attempted to evade prosecution by law enforcement authorities through acts of intimidation and violence against potential witnesses to crimes committed by the gang.  ARGUEDAS accepted responsibility for participating in a conspiracy to distribute quantities of cocaine, heroin, and cocaine base, and for using and carrying firearms in furtherance of drug trafficking.  ARGUEDAS also participated in the following acts of violence, among others:

On December 9, 2012, ARGUEDAS shot and killed Gary Rodriguez, 46, in the vicinity of 3089 Decatur Avenue in the Bronx.

On September 5, 2015, ARGUEDAS assaulted another inmate while in the custody of the New York State Department of Corrections, causing the victim to lose consciousness.

Between 2017 and 2018, ARGUEDAS got into a violent dispute with another BSGG member (“Victim-1”) about who would serve as a Godfather of the gang.  As a result of this conflict, in or around the Summer of 2018, ARGUEDAS ordered another BSGG member to fire shots at Victim-1 during a BSGG meeting in a public park in the vicinity of Olinville Avenue and East Gun Hill Road in the Bronx, New York.

On August 27, 2018, ARGUEDAS ordered co-defendant JAHVONNE CHAMBERS, a/k/a “JV”, who was incarcerated in the New York City Department of Corrections, to use a scalpel to slash a rival gang member housed in the same facility (“Victim-2”).

On November 12, 2019, ARGUEDAS and co-defendant TYERANCE MICKEY, a/k/a “Hoodlum,” participated in a brutal assault of a disfavored BSGG member (“Victim-3”).  During the assault, ARGUEDAS placed a plastic bag over Victim-3’s head in an attempt to suffocate Victim-3, and MICKEY hit Victim-3 over the head with a chair.  As a result of the assault, Victim-3 suffered a broken arm and substantial bruising to Victim-3’s face and body.

In addition to his prison term, ARGUEDAS, 32, of the Bronx, New York, was sentenced to five years of supervised release.

Mr. Williams praised the outstanding investigative work of the Drug Enforcement Administration, Homeland Security Investigations, the Special Agents of the U.S. Attorney’s Office for the Southern District of New York, the New York City Police Department, and the New York City Department of Corrections.

Extell Development Begins Construction At Hudson Piers, A $585M Mixed-Use Development In Yonkers

Aerial rendering of Hudson Piers

Extell Development has broken ground on Hudson Piers, a $585 million project that will rank among the largest mixed-use developments in Westchester. Located on the Hudson River waterfront in Yonkers, Hudson Piers will yield a mix of market-rate housing, affordable apartments, and retail space, and will be completed in multiple phases over a six-year period.

The 17.4-acre development will improve a large swath of land along the Hudson riverfront facing Alexander Street, Water Grant Street, and Babcock Place. The property is located close to the Yonkers Metro-North station with direct access to Grand Central Terminal in Manhattan.

“Extell’s Hudson Piers will be one of the most transformative developments along the Yonkers waterfront,” said Yonkers mayor Mike Spano. “It will cap off the extraordinary momentum seen in recent years that’s spurred unprecedented investment in our city. I look forward to welcoming more families, businesses, and jobs to Yonkers on the River and fulfilling our truest potential.”

Street-level rendering of Hudson Piers

Street-level rendering of Hudson Piers

Designed by Perkins Eastman, Hudson Piers will comprise 870,000 square feet of residential space spread across six seven-story buildings. Available homes will range from studios up to three-bedroom floor plans, all equipped with washer and dryers, designer fixtures and appliances, and private terraces for select units.

Outdoor amenities include waterfront recreation terraces with hammocks, fire pits, grilling stations, sundecks, billiard tables, putting greens, bocce courts, and an open-air swimming pool. Indoor amenities will include multiple fitness centers, lounges, playrooms, a catering kitchen, a basketball gym, a screening room, a game room, recreational rooms for teenagers, and a business and conference center. Each building will also have its own package, storage, and bicycle room.

Residents will have access to shuttle services going to and from the Yonkers Metro-North train station, 1,028 covered parking spaces on the first two floors of the main buildings, and an additional 212 surface-level spaces. In total, there will be 1,240 parking spaces.

Additional components will include 37,000 square feet of ground-floor retail space.

“We are proud to be a part of the incredible redevelopment which has turned Yonkers into the fastest growing big city in New York State under mayor Mike Spano,” said Gary Barnett, founder and chairman of Extell Development Company. “Hudson Piers will introduce a significant supply of new luxury and affordable housing to Yonkers and will bring the Extell quality of construction complemented by an unmatched array of lifestyle amenities to the city’s waterfront.”

As part of the Hudson Piers project, 1.5 acres of new public parkland will be created, as well as a 1.5-mile-long esplanade extension that will adjoin to the existing public waterfront promenade.

Extell worked closely with the City of Yonkers and the Yonkers Industrial Development Agency to provide the Hudson Piers project with a 20-year PILOT and a 100-percent abatement on taxes for improvements. The development is expected to create roughly 200 permanent jobs and 450 to 500 construction jobs.

To date, it is the largest residential project to receive financial incentives from the Yonkers IDA.

Governor Hochul Announces Start of Construction on $49 Million Affordable Housing Development in the Bronx


Rendering of 4519 White Plains

The Plains Will Provide 98 Energy-Efficient Affordable Homes in Wakefield  

Development Will Offer On-Site Supportive Services from the Doe Fund for 49 Adults Experiencing Homelessness 

Part of Governor's $25 Billion, Five-Year, Comprehensive Housing Plan


 Governor Kathy Hochul today announced the start of construction on a $49 million affordable and supportive housing development in the Wakefield section of the North Bronx. The Plains will provide 98 affordable homes with supportive services, with 49 units reserved for adults experiencing homelessness and living with HIV/AIDS, and another 20 apartments set aside for seniors aged 62 and older.  

"Sustained investment in creating and preserving safe, affordable homes for New Yorkers is a cornerstone of my administration," Governor Hochul said. "This new development demonstrates our commitment to increasing the supply of quality homes across the Bronx and to keeping our most vulnerable residents active, engaged, and living healthier, more independent lives."

The Plains is part of Governor Hochul's sweeping plans to make housing more affordable, equitable, and stable. In the recently enacted State Budget, the Governor introduced and successfully secured a new $25 billion, five-year, comprehensive housing plan that will increase housing supply by creating or preserving 100,000 affordable homes across New York including 10,000 with support services for vulnerable populations, plus the electrification of an additional 50,000 homes. 

The Plains will consist of a single nine-story building with 98 apartments at 4519 White Plains Road. All apartments will be affordable to households earning at or below 80 percent of the Area Median Income.  

Forty-nine apartments will be reserved for adults experiencing homelessness who will have access to on-site supportive services funded through the Empire State Supportive Housing Initiative and administered by The AIDS Institute. The Doe Fund will deliver housing and clinical case management services to residents, including coordination of mental health and medical care. 

The project is designed to meet the New York State Energy Research and Development Authority's Multifamily New Construction Program Tier 2 and LEED for Homes Gold energy efficiency standards. The building will have a green roof and solar photovoltaic array. Additional energy-efficient features will include high-efficiency, electric, Variable-Rate-Flow HVAC systems; Energy-Star, bi-level, LED lighting with motion sensors; Energy-Star appliances; and low-flow plumbing fixtures. 

Residential amenities will include tenant storage, offices for program staff and a multi-purpose room for program and tenant uses alike, as well as 24/7 security and a live-in superintendent. The residence will also feature on-site laundry units, a fitness center and private outdoor recreation space. The Plains is conveniently located near subway, bus, and commuter rail stations.  

The development is a joint venture between The Doe Fund and Robert Sanborn Development.  

State financing for The Plains includes Federal Low-Income Housing Tax Credits that will generate $25 million in equity and $9.7 million in subsidy from New York State Homes and Community Renewal. The New York State Office of Temporary and Disability Assistance will provide $4.9 million through the Homeless Housing Assistance Program. NYSERDA will provide $78,800 in support.  

The Doe Fund obtained private sector construction and permanent loans through Merchant's Bank of Indiana and Freddie Mac, and tax-credit equity was syndicated by Richman Housing. The Corporation for Supportive Housing also provided a $4 million acquisition loan that included funds for pre-development. 

Executive Vice President of Housing of the Doe Fund John McDonald said, "New York is at a crossroads. Our city's recovery is held back by two things. First is the convergence of eroding public safety and filthy streets, both symptoms of rising homelessness that The Doe Fund's Ready, Willing & Able program is proven and prepared to address. Second is the city's lack of affordable and supportive housing. I'm proud to have overseen the growth of The Doe Fund's transitional, affordable, and supportive housing portfolio to over one million square feet. When completed, the Plains will join this essential continuum of care, providing high quality homes to 90 of our fellow New Yorkers most in need, as well as their families." 

Bronx Borough President Vanessa L. Gibson said, "It is a sad reality that we are in a housing crisis in New York City, which has only been further exacerbated by the COVID-19 pandemic. The need for affordable, quality, safe and supportive housing is at an all-time high and is essential in our fight to reduce homelessness. I want to thank the New York State Homes & Community Renewal and New York State Office of Temporary and Disability Assistance for their support of this important project that will provide amenities and wrap-around services to our residents living with HIV/AIDS, our older adults and other vulnerable New Yorkers in the North Bronx."

Assemblymember Jeffrey Dinowitz said, "There is no question that our city is in desperate need of truly affordable housing, especially for older adults and people who need additional support structures to help maintain housing stability. I am glad that HCR is continuing the effort to promote affordable housing development in the Bronx, and I look forward to this project's completion."

City Councilmember Eric Dinowitz said, "Affordable housing for vulnerable populations, including low-income, formerly homeless people and older adults, needs to come with support systems in place. That is exactly what The Plains is doing, and the wraparound services they will provide ensures that new tenants will not just have a roof over their heads, but all of their needs are met. The housing crisis is affecting New Yorkers all over the city, which is why I am so grateful and encouraged that this development will serve my constituents in Wakefield."

EDITOR'S NOTE:

If both Assemblyman and Councilman Dinowitz are in favor of this project in the Wakefield section of their districts, why are they opposed to a similar project in the Riverdale section of their districts?

BOROUGH PRESIDENT GIBSON ON PASSAGE OF FIRE SAFETY LEGISLATION INSPIRED BY TRAGIC TWIN PARKS FIRE

 The Office of The Bronx Borough President | Vanessa L. Gibson

“After the horrific fire at Twin Parks North West where we lost 17 people, among them eight children, I joined my colleague Council Member Oswald Feliz to discuss steps to prevent a tragedy of this magnitude from happening again. The result was a legislative package dedicated to strengthening fire safety laws to protect our residents and families. Last week, those bills were passed by the New York City Council.

That package makes amendments to existing local laws and introduces new legislation:

  •   The time that property owners have to correct self-closing door violations will be lowered.
  •   NYC Department of Housing will re-inspect all self-closing door violations.
  •   Fines and penalties for self-closing door violations will be increased.
  •   The definition of self-closing will include doors that fully shut and latch.

I am grateful to Council Member Feliz, the Members of the Twin Parks Citywide Task Force, NYC Housing, Preservation and Development (HPD) and the New York City Council for their collaboration and partnership to ensure there are protections for our tenants. We will honor those we have lost by working to prevent another horrific tragedy from happening again.”

Tuesday, May 24, 2022

Former United Nations Employee Pleads Guilty To Assault And False Statements Charges, Admits To Sexually Assaulting Thirteen Victims And Drugging Six More Victims

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced today that KARIM ELKORANY, a former communications specialist with the United Nations (“UN”) in Iraq, pled guilty before United States District Judge Naomi Reice Buchwald to sexually assaulting an internationally protected person and making false statements to cover up another sexual assault.  In connection with the plea, ELKORANY also admitted that he drugged and/or sexually assaulted seventeen additional victims. 

U.S. Attorney Damian Williams said:  “Karim Elkorany admitted today to drugging at least 19 victims, and sexually assaulting at least 13 of them while they were unconscious after he drugged them.  He committed many of his heinous crimes while employed by the United Nations.  Nothing can reclaim what Elkorany stole from his victims, but we hope the victims will take some measure of comfort in knowing that Elkorany has admitted to and been convicted of his abominable crimes.   We again urge anyone who thinks they may be victim of Elkorany to please contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.”

According to the Indictment, public court filings, and statements during court proceedings:

Since at least in or about 2005 up to at least in or about April 2018, ELKORANY worked in international aid, development and/or foreign relations.  From in or about October 2013 up to in or about April 2016, ELKORANY worked for the UN Children’s Fund in Iraq.  From in or about July 2016 up to in or about April 2018, ELKORANY worked as a Communications Specialist for the UN in Iraq. 

In or about November 2016, ELKORANY drugged and sexually assaulted a woman (“Victim-1”) in Iraq, where he was stationed while working for the UN.  ELKORANY drugged Victim-1 and brought Victim-1 to his apartment.  While at ELKORANY’s apartment, ELKORANY sexually assaulted Victim-1 while she was unconscious.  In or around December 2016, Victim-1 reported the sexual assault to the UN.  The UN initiated an investigation, through which ELKORANY was notified of the substance of Victim-1’s allegations against him.

On or about November 3, 2017, special agents working with the New York Field Office of the Federal Bureau of Investigation (“FBI”) conducted a voluntary interview of ELKORANY outside of his residence in New Jersey.  During that interview, ELKORANY expressed familiarity with the nature and substance of the allegations made by Victim-1 to the UN, but falsely stated that the drugging and sexual assault by ELKORANY that Victim-1 had reported to the UN did not occur. 

ELKORANY also engaged in a pattern of similar conduct involving many other women.  Between in or around 2014 and in or around 2019, ELKORANY drugged and sexually assaulted a woman (“Victim-2”), who was a contractor for a UN organization at relevant times, in the United States and Iraq, among other locations, on multiple occasions.  In addition to Victim-1 and Victim‑2, ELKORANY drugged and sexually assaulted eleven additional victims between in or around 2002 and in or around 2016, and drugged six additional victims between in or around 2007 and 2016.

ELKORANY, 38, of West Orange, New Jersey, pled guilty to one count of making false statements to special agents of the FBI, and one count of assault of an internationally protected person.  The total maximum term of prison on these two counts is 15 years.  

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as sentencing of the defendant will be determined by the court.  ELKORANY is scheduled to be sentenced by Judge Buchwald on September 29, 2022.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation.  Mr. Williams also thanked the United States Department of State and the UN for their assistance.  Any individuals who believe they have information concerning ELKORANY or any similar conduct should contact the FBI at 1-800-CALL-FBI or tips.fbi.gov.

California Executive Compensation Consultant Charged In Insider Trading Scheme

 

Defendant Allegedly Misappropriated Information He Obtained While Advising Kadmon Holdings, Inc. in Connection with Its Sale to Sanofi

 Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a complaint charging FRANK GLASSNER, a principal of an executive compensation consulting firm based in Novato, California (the “Consulting Firm”), with securities fraud in connection with a scheme to commit insider trading based on material, nonpublic information regarding the upcoming public announcement that Kadmon Holdings, Inc. (“Kadmon”) – which GLASSNER and the consulting firm were advising – would be acquired by Sanofi, S.A. (“Sanofi”).  GLASSNER was arrested this morning in Novato, California and will be presented today in the United States District Court for the District of Northern California.

U.S. Attorney Damian Williams said:  “As an advisor to Kadmon Holdings, Frank Glassner is alleged to have illegally taken advantage of his access to nonpublic information regarding the company’s acquisition to front run trades for himself.  Glassner’s alleged attempts to illegally game the markets may have given him a profitable edge, but they also exposed him to a much riskier downside — criminal liability for insider trading.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:  “We allege Glassner used confidential information he was privy to as a consultant to trade in advance of a company’s acquisition and then to cash in after the deal was publicly announced. This type of illicit action makes markets unfair and creates an atmosphere of distrust. Our work investigating insider trading hopefully restores faith for investors who need to believe in the process.”

As alleged in the Complaint unsealed today in Manhattan federal court:[1]

Prior to its acquisition by Sanofi, Kadmon was a publicly-traded biopharmaceutical company that engaged in the discovery, development, and commercialization of small molecules and biologics with a focus on inflammatory and fibrotic diseases. Kadmon’s stock was traded under the ticker symbol “KDMN” on the NASDAQ.

Between July 2021 and September 2021, Kadmon engaged GLASSNER and the Consulting Firm to provide executive compensation consulting services related to the potential acquisition of Kadmon. In connection with this engagement, GLASSNER had access to material, non-public information, which he misappropriated and, in violation of the duties that he owed to Kadmon, used to trade Kadmon stock and call options. 

GLASSNER engaged in this trading between on or about August 3, 2021 and on or about August 23, 2021 – at the same time he was advising Kadmon about its potential acquisition. On September 8, 2021, Kadmon publicly announced that it had agreed to be acquired by Sanofi for a per-share price significantly above the share price at which Kadmon was trading. That day, Kadmon’s share price increased by approximately 71% and GLASSNER earned approximately $405,000 of realized and unrealized profits on the Kadmon stock and call options he had previously purchased. 

GLASSNER, 68, of Novato, California is charged with two counts of securities fraud, one of which carries a maximum sentence of 20 years in prison and one of which carries a maximum sentence of 25 years in prison. 

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

Mr. Williams praised the outstanding work of the FBI. Mr. Williams also thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action. 

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth in this release constitute only allegations, and every fact described should be treated as an allegation.