Wednesday, August 19, 2020

DEC Environmental Conservation Police Officer Highlights

 

  New York State Department of Environmental Conservation (DEC) Environmental Conservation Police Officers (ECOs) enforce the 71 Chapters of NY Environmental Conservation Law (ECL), protecting fish and wildlife and preserving environmental quality across New York. In 2019, the 288 ECOs across the state responded to 25,704 calls and worked on cases that resulted in 16,855 tickets or arrests for crimes ranging from deer poaching to solid waste dumping, illegal mining, the black market pet trade, and excessive emissions violations.

Two-thousand-and-twenty marks 50 years for DEC and 140 Years for New York’s Conservation Police Officers. In 1880, the first eight Game Protectors proudly began serving to protect the natural resources and people of New York State.

"From Montauk Point and Brooklyn to Buffalo, the ECOs patrolling our state are the first line of defense in protecting New York's environment and our natural resources, ensuring that they exist for future generations of New Yorkers," said DEC Commissioner Basil Seggos. "Our ECOs have worked arduous hours, both deep in our remote wildernesses and in the tight confines of our urban landscapes, for far longer than the 50 years since DEC was created. These officers are critical to achieving DEC's mission to protect and enhance our environment and I am confident they will continue this important mission for the next 50 years and beyond."

If you witness an environmental crime or believe a violation of environmental law occurred, please call the DEC Division of Law Enforcement hotline at 1-844-DEC-ECOS (1-844-332-3267). 

Illegal Turkey Take – Westchester County 

On July 27, a Westchester County man appeared in the Town of Mamaroneck Court to answer charges from the illegal taking of a turkey from a roadway. Back on May 7, ECO Schneider responded to a call for assistance from Mamaroneck Police for reports of a turkey shot from the roadway at approximately 7 p.m. ECO Schneider photographed the scene and spoke to a witness who described a van in the area at the time of the shooting and provided a license plate number. The following day, ECO Schneider turned the case over to ECO Tompkins who is assigned to Westchester County. ECO Tompkins interviewed nearby residents who may have witnessed the incident and reviewed video from a homeowner with surveillance cameras pointed at the road where the turkey was believed to have been shot. The videos showed the turkey dead on the side of the road with the van in question stopped as a passenger exited the vehicle and picked it up. ECO Tompkins tracked down the owner of the van, identified as Mark Luceno of Mamaroneck, and spoke to him about the incident. When presented with the evidence, Luceno gave a full written confession describing how he shot the turkey from the side of the road with his compound bow while his wife drove. He was issued six tickets for illegally taking protected wildlife, taking a turkey during closed hours, use of a motor vehicle to take small game, discharging a bow from across a public highway, discharging a bow within 150 feet of a dwelling, and failure to tag a turkey as required by law. Luceno agreed to civil penalties in court and paid a $500 penalty. 


Tangled Osprey – Suffolk County 

On Aug. 12, a concerned personal watercraft rider contacted ECO Perkins reporting an osprey hanging from its nest with its foot wrapped in fishing line. The nest was in the State Boat Channel near the Cedar Beach Marina in the town of Babylon. With help from Town of Babylon Bay Constables, ECO Perkins boarded a boat to reach the nest and used a pair of shears to cut the fishing line tangled around the osprey’s foot. Once free, the osprey flew away without showing signs of injury. 


Bear in Downtown Monroe – Orange County 

On Aug. 14, ECOs Duchene and Newell responded to Mill Pond in the village of Monroe, Orange County, for reports of a bear in a tree in a busy part of town. When the Officers arrived, they found what appeared to be a yearling bear about 50 feet up a tree. The Monroe Police Department, already on site, assisted with public safety. After a short time, the bear descended the tree and began to run along Mill Pond before climbing another tree along a busy road. DEC wildlife staff members Matt Merchant, Deena Brabant-Oatman, and Jonathan Russell responded, tranquilized the juvenile bear, and removed it from the tree. With help from Monroe Police Chief Guzman and Sergeant Tenaglia, DEC Officers and staff were able to weigh, measure, and tag the juvenile bear before it was transported to nearby State lands and released unharmed.  

Tomhannock Clean-up Day - Rensselaer County 

On Aug. 15, ECOs Canzeri and Crain teamed up with the Rensselaer County Conservation Alliance to help clean up an area around the Tomhannock Reservoir. The reservoir provides drinking water to approximately 135,000 residents in three counties and is open for fishing year-round. The reservoir is notable for its walleye and carp, including a state record carp exceeding 50 pounds, but also contains healthy populations of black bass, yellow perch, bullhead, chain pickerel, and panfish. DEC maintains a fishing access site at the reservoir and has an agreement with the city of Troy to patrol and enforce laws related to hunting, fishing, pollution, and water quality. ECOs respond to complaints and proactively patrol the 5.5-mile-long waterbody all year. Approximately 47 volunteers participated in the cleanup, including New York State Assemblyman Jake Ashby. ECOs Canzeri and Crain provided health and safety compliance checks on top of assisting with the cleanup efforts. The event went well with beautiful weather and more than 50 full contractor garbage bags were collected.

Bronx Jewish Community Council - Volunteer Opportunity

 

Volunteers needed on September 13th 
(10-11:30 AM) for a contact-less Rosh 
Hashanah package delivery to the outside 
doorstep of our isolated seniors - 
exclusively  at Amalgamated Housing 
between Riverdale and Moshulu Parkway. 
Thank you!

If you would like to RSVP contact  
Niti, BJCC Director of Volunteers by 
or at 917-693-3084  


 
Like us on Facebook         

MAYOR DE BLASIO ANNOUNCES NEW COMMITMENTS TO FURTHER BLACK ENTREPRENEURSHIP IN NEW YORK CITY

 

Mayor de Blasio today announced new commitments to further invest in Black entrepreneurs in all five boroughs. The BE NYC initiative is a first-of-its-kind model, which aims to increase the number of Black-owned businesses in New York City with a focus on growing businesses in high-growth industries. As part of the City’s commitment to close the racial wealth gap and support Black-owned businesses, the Department of Small Business Services is releasing the landmark Black entrepreneurship report and using its partnerships to launch four new programs for Black business owners. 

 

“Black entrepreneurs built New York City,” said Mayor Bill de Blasio. “This historic public-private partnership will ensure we can come together to support them, and give them the recognition they have deserved for so long.”

 

“Black-owned businesses are certainly struggling, and helping them grow is part of the broader struggle for racial justice,” said J. Phillip Thompson, Deputy Mayor for Strategic Policy Initiatives and Co-Chair of the Racial Inclusion and Equity Taskforce. “The commitments made today will provide significant opportunity for these small business owners to grow in new economies and lay the foundation for a more equitable future.”

 

"NYC-based businesses form the backbone of our city's economy, and I commend SBS for this important initiative," said Deputy Mayor for Housing and Economic Development Vicki Been. "Thank you to Mastercard, Ernst & Young, and Brooklyn Navy Yard for contributing resources that foster Black entrepreneurship and business ownership in our communities."

 

“Black entrepreneurs are an essential part of the fabric of New York City, and equity and opportunity are at the core of the work we do at SBS. These values lay the foundation for BE NYC,” said Jonnel Doris, Commissioner of the Department of Small Business Services. “Working together with business, academic, government and community leaders, we are striving to create a fairer and more equitable city where Black-owned businesses can grow and thrive.”

 

“We look forward to the release of this final report which is a close analysis of the many challenges facing Black Businesses based on an in depth conversation with those very businesses,” said Maggie D. Austin, Senior Advisor and Director of the Mayor’s Office of M/WBEs. “Over the past year our partners at SBS have developed this critical tool for understanding challenges in the market place and some long term solutions that the City can leverage or provide such as access to capital and mentorship opportunities. Although the work began long before the timing of this report is crucial as COVID-19 has wrought new obstacles and deepened longstanding ones. New York wins when black businesses succeed and thrive.”

 

Blueprint for Investing in Black-Owned Businesses

Informed by more than 1,500 current and aspiring Black entrepreneurs, business leaders, community leaders and advocates, SBS is publishing Advancing Black Entrepreneurship in NYC - a blueprint for advancing Black entrepreneurship in all five boroughs. The report highlights the challenges Black entrepreneurs face when starting and growing their businesses and offers recommendations in four key areas:

  • Provide equitable access to financing
  • Strengthen connections within NYC’s Black entrepreneurial community
  • Scale Black businesses for long-term success
  • Meet the challenges of the economy of tomorrow

 

To view the full report and to learn more, visit nyc.gov/benyc.

 

BE NYC’s inaugural partners will work together with the City to address the key challenges and respond to the recommendations in the report. The commitments made today are just the beginning. The City is dedicated to working with partners in the private and philanthropic sectors to deepen our reach into communities of color and make sure our resources are being distributed equitably.

 

Providing Access to World-Class Business Experts

Less than 40% of Black entrepreneurs reported that they had access to mentors and advisors. As the Covid-19 pandemic continues to disproportionately impact the health and economic welfare of Black communities across the city, time with advisors has become even more scarce—and even more important. To address this need, the City has partnered with Ernst & Young (EY) to connect Black entrepreneurs with world-class resources and guidance. In this new, three-part program, EY has committed to: 

  • Creating a resource hub that will allow Black entrepreneurs to access materials from entrepreneurship experts
  • Hosting interactive online group learning sessions, providing face-to-face interaction and support from experts while promoting peer-to-peer learning and network building among participants
  • Offering 2,000 hours of one-on-one consulting on business planning, operational improvements, and financial planning for Black business owners. 

 

“Black-owned businesses of all sizes are part of the fabric of New York City,” said Kelly Grier, EY US Chair and Managing Partner and Americas Managing Partner. “But Black entrepreneurs have not always had access to the resources, capital and networks to equitably succeed and contribute to economic recovery and resiliency. Our hope is that by collaborating with the City of New York, we will guide Black entrepreneurs and connect them to helpful resources. When every entrepreneur succeeds, we all succeed.”

 

Access to Capital and Business Education
The top challenges identified by Black entrepreneurs were access to capital (40%), lack of preparation and background on how to run a business (15%) and a lack of reliable resources to help (13%). Goldman Sachs 10,000 Small Businesses has a decade long track record of addressing these gaps and providing underserved small businesses with the resources to grow. Goldman Sachs is a crucial partner to BE NYC in delivering the opportunities that Black entrepreneurs need.

 

“Black entrepreneurs face outsized challenges in accessing the resources, network and capital they need to thrive,” said Asahi Pompey, President of the Goldman Sachs Foundation and Global Head of Corporate Engagement. “The pandemic has laid bare the inequities faced by the Black community, and Goldman Sachs 10,000 Small Businesses is proud to support the City’s efforts to create meaningful opportunity for Black-owned businesses.” 

 

Building upon its longstanding partnership with the City, Goldman Sachs 10,000 Small Businesses will support BE NYC by facilitating access to affordable financing and business education. Goldman Sachs 10,000 Small Businesses is committed to advance the solutions outlined in Mayor de Blasio and Commissioner Doris’ blueprint to support Black-owned businesses across New York City.

 

Closing the Digital Divide

More than 70% of Black business owners indicated that they want assistance reaching more customers and growing their sales. In this current moment, where virtual storefronts and e-commerce are more important than ever, Mastercard will join New York City in its efforts, helping to ensure that Black entrepreneurs survive and thrive in a post-COVID economy by providing the resources they need and deserve to launch and maintain their business, as well as expand and improve their online presence. This includes:

 

·         Delivering tailored business education and mentorship designed exclusively with and for the Black business community of NYC to address the challenges they face, including the ability to reach and sell to customers online. 

·         Providing access to the Mastercard Main Street Resource Center including its suite of services and Digital Doors™ initiative, to further provide the digital tools needed to run their business.

·         Helping Black entrepreneurs establish virtual storefronts and providing effective cyber-security safeguards at no cost. 

 

“It’s time to acknowledge that starting and growing a business is hard enough without the additional challenges of a system that feels built to hold you back, ” said Ajay Banga, Chief Executive Officer of Mastercard. “We have to stack the deck in favor of success for everyone. That means doing our part in pulling down the road blocks and giving NYC’s Black-owned businesses the tools and resources they need to take hold of the opportunities before them now and the power to grow and thrive into tomorrow. Joining Mayor de Blasio and Commissioner Doris in this effort is just one way we can help level the playing field and close the digital divide so that the digital economy really can benefit everyone, everywhere.”

 

Launching a BE NYC Accelerator 

Through an initial $3 million investment of capital and operating funds from the City Council, the Brooklyn Navy Yard, The Young Men's Initiative, and SBS will launch a BE NYC accelerator to help cultivate businesses for the economy of tomorrow. This effort will include meeting space and technical assistance focusing on launching and growing local Black-owned businesses. The Brooklyn Navy Yard will identify partners to build out the space, curate an active community and product programming for participants.

 

“The Brooklyn Navy Yard continues to invest in initiatives that address the need for racial equity including expanded access and resources for underserved communities,” said David Ehrenberg, President & CEO of the Brooklyn Navy Yard Development Corporation. “The BE NYC accelerator will directly support Black entrepreneurs as the Yard continues to do its part to rebuild and reshape the City's economy — one that values and celebrates the contributions of women and our Black and Brown neighbors. We thank the de Blasio administration for including us as we re-envision the future of the business community in New York City.”

 

“As Black entrepreneurs, we know firsthand the sacrifice and determination needed to start a business or work in a corporate office and understand the challenges our community faces as they embark on that journey,” said the BE NYC Cabinet. “The BE NYC initiative not only highlights the barriers in a milestone report , but also actively works to dismantle them through innovative, collaborative solutions. We know that eradicating a system built on hate can only be done through partnership and we are delighted with this incredible opportunity to help shape the future of Black business and the future of NYC.”

 

Governor Cuomo Announces Two Additional States Added to Travel Advisory

 

Eleventh Straight Day with Infection Rate Below 1 Percent

Alaska and Delaware Meet Metrics to Qualify for Travel Advisory 

0.98 Percent of Yesterday's COVID-19 Tests were Positive 

8 COVID-19 Deaths in New York State Yesterday

SLA and State Police Task Force Visits 976 Establishments and Does Not Observe Any Violations of State Requirements

Confirms 655 Additional Coronavirus Cases in New York State - Bringing Statewide Total to 426,571; New Cases in 40 Counties

  Governor Andrew M. Cuomo today announced that two additional states meet the metrics to qualify for the travel advisory requiring individuals who have traveled to New York from those states, all of which have significant community spread, to quarantine for 14 days. The newly-added states are Alaska and Delaware. No areas have been removed.

The governor also announced that for the 11th straight day, New York State's rate of positive tests was below 1 percent. Governor Cuomo also updated New Yorkers on the state's progress during the ongoing COVID-19 pandemic. The number of new cases, percentage of tests that were positive and many other helpful data points are always available at forward.ny.gov.

"New York State is moving forward in the face of a continuing crisis throughout the nation and around the world—we've gone from one of the nation's worst infection rates to one of its best and have an infection rate below 1 percent for the 11th straight day—but that's no excuse for getting complacent as we add two more states to our travel advisory," Governor Cuomo said. "Our success in this fight is determined, more than anything, by the actions each of us takes in daily life—washing our hands, properly social distancing and wearing masks—and by the willingness of local governments to be competent partners and to enforce state guidance. We continue to move in the right direction, but it's up to all of us to slow the spread and stay safe." 

The full, updated list of states on the travel advisory is below:

  • Alaska
  • Alabama
  • Arkansas
  • Arizona
  • California
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Iowa
  • Idaho
  • Illinois
  • Indiana
  • Kansas
  • Kentucky
  • Louisiana
  • Maryland
  • Minnesota
  • Missouri
  • Mississippi
  • Montana
  • North Carolina
  • North Dakota
  • Nebraska
  • Nevada
  • Oklahoma
  • Puerto Rico
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Virgin Islands
  • Wisconsin

Yesterday, the State Liquor Authority and State Police Task Force visited 976 establishments in New York City and Long Island and did not observe any establishments that were not in compliance with state requirements.

Today's data is summarized briefly below:

  • Patient Hospitalization - 537 (+3)
  • Patients Newly Admitted - 52
  • Hospital Counties - 31
  • Number ICU - 126 (-7)
  • Number ICU with Intubation - 60 (-4)
  • Total Discharges - 74,258 (+51)
  • Deaths - 8
  • Total Deaths - 25,264

Governor Cuomo Announces Insurance Fraud Action Against Two International Opioid Manufacturers

 

DFS Files Administrative Charges Against Teva and Allergan in Connection with the Opioid Crisis

DFS Claim Alleges Teva and Allergan Engaged in Fraudulent Marketing and Promotional Campaigns That Misrepresented the Safety and Efficacy of Opioid Drugs to Expand the Opioid Market and to Promote Their Drugs — Perpetuating the Opioid Crisis and Leading to a Dramatic Increase in Insurance Costs for New York Consumers 

Read DFS Statement of Charges for Teva and Allergan on the DFS Website Here


  Governor Andrew M. Cuomo today announced the New York State Department of Financial Services has filed charges and initiated administrative proceedings against Teva Pharmaceutical Industries, Ltd., and its subsidiaries, Teva Pharmaceuticals USA, Inc., Cephalon, Inc., Watson Laboratories, Inc., Actavis Pharma, Inc., Actavis LLC, and Actavis Elizabeth LLC; and against Allergan PLC and its subsidiary Allergan Finance LLC. These charges are the third set to be filed in DFS's ongoing investigation into the entities that created and perpetuated the opioid crisis. 

Teva has been a prolific manufacturer of opioids in the United States, manufacturing approximately 20% of the opioid products that flooded New York from 2006 to 2014. Teva manufactured both its own branded opioids as well as generic opioids through its Actavis subsidiaries. Allergan also manufactured opioid products from 2006 to 2014. 

"New York will continue to aggressively investigate the bad actors that caused the opioid crisis - an American tragedy that has taken too many lives and caused irrevocable harm to communities in our state and across the country," Governor Cuomo said. "Everyone who has been affected by opioids deserves justice and we will make every effort to deliver it to them by pursuing the companies that defraud the public and holding them accountable to the fullest extent of the law." 

The DFS Statement of Charges alleges that, like other opioid manufacturers, Teva and Allergan each knowingly furthered false narratives to legitimize dangerously powerful opioid products as appropriate for a broad spectrum of pain. In particular, the companies' messaging greatly downplayed the drugs' long-known addictive nature and risks. This strategic effort by the opioid industry caused an increased acceptance of opioids as medically legitimate, necessary, and appropriate painkillers by both patients and medical professionals. As a result, demand for opioids soared to unprecedented levels as did the predictable crisis of addiction and abuse that resulted from this overprescribing. 

The allegations include the following:  

  • Contrary to FDA prescribing guidelines, Teva through its subsidiary Cephalon intentionally marketed its branded fentanyl drugs for off-label use — meaning any use not specified in an application and approved by FDA — and misrepresented their risks while doing so. Fentanyl is an incredibly powerful opioid that is 100 times more potent than morphine. This off-label strategy succeeded. For example, the FDA approved Cephalon's first fentanyl drug, Actiq, only for the treatment of cancer pain. Through the off-label marketing strategy, however, Actiq sales skyrocketed from $16 million in 2000 to an excess of $590 million by 2006, at which time only 8% of patients were taking the drug for cancer pain. After Actiq was retired, Cephalon continued off-label promotional practices with its new fentanyl lozenge, Fentora.  
  • Teva through its Cephalon subsidiary also crafted template "letters of medical necessity" for doctors to send to insurers to justify off-label use and get the prescriptions reimbursed. These letters were used by sales representatives to further entice healthcare providers into prescribing these powerful opioids to patients for increasingly broader use. 
  • Allergan also misrepresented its drugs in marketing materials. In 2010, the FDA sent the company a warning letter concerning brochures the company had released for its drug Kadian. The FDA warned Allergan about the brochures' omission and minimization of risk information, their failure to state the drug's full indication, as well as unsubstantiated claims of efficacy and superiority over other opioid drugs. 
  • Both Teva and Allergan used various third party "front groups" and doctors called "key opinion leaders" to disseminate unbranded and misleading messaging regarding the safety and efficacy of opioids in general. Such communications included medical education courses as well as pamphlets, websites, and books that targeted both patients and prescribers. Among other things, these materials downplayed the risks of addiction of opioids, labelled legitimate concerns by prescribers over those risks as "opiophobia," and dismissed patients' clear signs of addiction as "pseudoaddiction." 

According to DFS's Statement of Charges, Teva and Allergan violated two New York Insurance Laws. Section 403 of the New York Insurance Law prohibits fraudulent insurance acts and carries with it penalties of up to $5,000 plus the amount of the fraudulent claim for each violation; DFS alleges that each fraudulent prescription constitutes a separate violation. Section 408 of the Financial Services Law prohibits intentional fraud or intentional misrepresentation of a material fact with respect to a financial product or service, which includes health insurance and carries with it penalties of up to $5,000 per violation; once again, DFS alleges that each fraudulent prescription constitutes a separate violation. 

Read a copy of the DFS Statement of Charges for Teva and Allergan on the DFS website.

The hearing will be held at the office of the New York State Department of Financial Services, One State Street, New York, New York, beginning on October 26, 2020. 

Acting Manhattan U.S. Attorney Announces Charges In $7 Million Scheme To Defraud Loan Programs Intended To Help Small Businesses During COVID-19 Pandemic

 

Taiwanese National Arrested for Misrepresenting Employee Payroll Figures for Multiple Companies to Receive COVID-19 Loan Funds; Spent Over $275,000 of Loan Proceeds on Personal Luxury Expenses

  Audrey Strauss, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Kevin Kupperbusch, Special Agent-in-Charge of the Eastern Region Office of the Inspector General of the U.S. Small Business Administration (“SBA”), and Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the arrest of SHENG-WEN CHENG, a/k/a “Justin Cheng,” a/k/a “Justin Jung,” a Taiwanese national residing in New York, New York, for a fraudulent scheme to obtain over $7 million in government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic.  In connection with loan applications for relief available from the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan (“EIDL”) Program, CHENG used the identities of other individuals to falsely represent to the SBA and five financial institutions that companies controlled by him had a total of over 200 employees and paid $1.5 million in monthly wages, when, in fact, his companies appear to have a total of no more than 14 employees.  Of the approximately $2.8 million in PPP loan proceeds that CHENG has received to date, CHENG transferred over $880,000 abroad, withdrew approximately $360,000 in cash and/or cashier’s checks, and spent over $275,000 on personal expenses.  CHENG was charged with several counts of fraud, including major fraud against the United States, wire fraud, and bank fraud, as well as one count of aggravated identity theft for forging the electronic signature of a payroll company employee in payroll documents provided to financial institutions.  CHENG was arrested this morning and will be presented later today before U.S. Magistrate Judge Stewart D. Aaron.

Acting U.S. Attorney Audrey Strauss said:  “At a time when so many small businesses and their employees are facing dire financial straits, Sheng-Wen Cheng allegedly saw not an emergency lifeline but a gravy train.  As alleged, Cheng fraudulently applied for over $7 million in government-guaranteed loans under programs designed to provide relief for small businesses financially strapped by the COVID-19 pandemic.  Cheng allegedly lied to the Small Business Administration and several financial institutions about ownership of his companies, the number of people the companies employed, and how any loan proceeds would be applied, and he used forged and fraudulent documents in the process.  Of the nearly $3 million he actually received, Cheng allegedly transferred nearly $1 million to overseas accounts, and spent nearly $300,000 on personal luxury items such as an 18-carat gold Rolex, a $17,000-a-month luxury condo, and a Mercedes.  The paid vacation ended with his arrest this morning.”

FBI Assistant Director William F. Sweeney Jr said:  “While small business owners throughout the country sought loans from the Paycheck Protection Program in order to pay employee wages and maintain basic business functions, Justin Cheng, a self-proclaimed ‘serial entrepreneur,’ acquired more than $3 million in financial relief, which he then used for personal benefit, as alleged today. True entrepreneurs who have been trying to keep their businesses afloat during these trying times are directly affected by this type of fraud, while the taxpaying citizens of this country are indirectly impacted by all those who siphon money illegitimately from this multibillion-dollar program. This isn’t the first case of SBA fraud we’ve seen, and it won’t be the last, but rest assured those who try to buck the system will be met with federal criminal charges wherever and whenever possible.”

SBA Special Agent-in-Charge Kevin Kupperbusch, said:  “This is a critical time for our nation’s small businesses.  Our Office will continue to combat fraud schemes that involve SBA’s programs for personal gain and greed.  I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.” 

IRS-CI Special Agent in Charge Jonathan D. Larsen said:  “As alleged in the criminal complaint, Mr. Cheng fraudulently took advantage of programs meant to help those in need during a world-wide pandemic. IRS-CI will continue to prioritize investigations where criminals seek to steal money from well-deserving citizens amidst this ongoing public health crisis.”    

According to the allegations contained in the Complaint[1] unsealed today in Manhattan federal court:

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s PPP.  Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs.  Businesses applying for a PPP loan must provide documentation to confirm that they have previously paid employees the compensation represented in the loan application.  The CARES Act also expanded the separate EIDL Program, which provided small businesses with low-interest loans that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing due to COVID-19.  To qualify for an EIDL Program loan under the CARES Act, the applicant must have suffered “substantial economic injury” from COVID-19.

CHENG, a Taiwanese national who entered the United States on a student visa, is a self-proclaimed “serial entrepreneur” who earned a Bachelor’s Degree from Pennsylvania State University (“Penn State”).  From at least in or about April 2020 through at least on or about August 13, 2020, CHENG appears to have used the identities of other individuals to submit online applications to the SBA and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by CHENG, namely Alchemy Finance, Inc., Alchemy Guarantor LLC d/b/a “Celer Offer,” Celeri Network, Inc., Celeri Treasury LLC, and Wynston York LLC (collectively, the “Cheng Companies”).  In connection with these loan applications, CHENG represented, among other things, that other individuals were the sole owners of the Cheng Companies and that the Cheng Companies together had over 200 employees and paid a total of approximately $1.5 million in wages to those employees on a monthly basis.  In fact, however, the Cheng Companies appear to have a total of no more than 14 employees. 

In order to support the false representations in the loan applications about the number of employees at and the wages paid by the Cheng Companies, CHENG submitted fraudulent and doctored tax records that were never actually filed with the IRS, and payroll records containing the forged electronic signature of a payroll company employee.  CHENG also submitted a payroll summary for one of his companies that listed the names of more than 90 purported employees, several of whom are current and former athletes, artists, actors, and public figures.  For example, the list of purported employee names included a co-anchor on Good Morning America, a former National Football League player, and a prominent Penn State football coach who is now deceased.

Based on the fraudulent PPP loan applications submitted by CHENG, a total of more than $3.7 million in PPP loans were approved for the Cheng Companies and approximately $2.8 million in PPP loan proceeds were deposited into bank accounts solely controlled by CHENG as of on or about August 13, 2020.  Based on bank records received to date, instead of using the PPP loan proceeds for payroll costs, mortgage interest, rent, and/or utilities for the purported Cheng Companies as required by the PPP, CHENG used a portion of the $2.8 million in loan proceeds he received as follows: 

  • A total of at least approximately $881,000 in PPP loan proceeds was transferred to accounts of different individuals and entities located at banks based in Taiwan, the United Kingdom, South Korea, and Singapore.
  • A total of at least approximately $360,000 in PPP loan proceeds appears to have been withdrawn in cash and/or cashier’s checks.
     
  • A total of at least approximately $279,000 in PPP loan proceeds was spent on personal expenses, including the purchase of an 18-carat gold Rolex watch for approximately $40,000, rent and move-in fees for a $17,000 per month luxury condominium for CHENG, approximately $50,000 of furnishings for CHENG’s condominium, at least approximately $80,000 toward the purchase of a 2020 S560X4 Mercedes, and purchases totaling approximately $37,000 at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin, and Yves Saint Laurent.
     
  • A total of at least approximately $160,000 in PPP loan proceeds was transferred to Alchemy Marketplace, another company owned and controlled by CHENG, in international accounts.

CHENG, 24 of New York, New York, is charged with one count of bank fraud, one count of wire fraud, and one count of making false statements to a bank, each of which carries a maximum sentence of 30 years in prison; one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison; one count of making false statements, which carries a maximum sentence of five years in prison; one count of making false statements to the SBA, which carries a maximum sentence of two years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison to be served consecutively to any other sentence imposed.  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 the judge.

Any businesses or individuals who believe they may have been a victim in this investigation or have information regarding this investigation should call the FBI at 1-800-CALL-FBI (225-5324).

Ms. Strauss praised the investigative work of the FBI, SBA-OIG, and IRS-CI, and noted that the investigation remains ongoing.  Ms. Strauss also thanked U. S. Customs and Border Protection and the New York State Department of Labor for their assistance with the investigation.

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

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

Operators Of Global Cryptocurrency Ponzi Scheme And Attorney Charged With Fraud And Money Laundering

 

Defendants Defrauded Victims of Tens of Millions of Dollars

  Audrey Strauss, Acting United States Attorney for the Southern District of New York,  and Peter C. Fitzhugh, Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the unsealing of an indictment charging PABLO RENATO RODRIGUEZ, GUTEMBERG DOS SANTOS, SCOTT HUGHES, CECILIA MILLAN, and JACKIE AGUILAR for their roles in an internationally coordinated fraud and money laundering ring involved in defrauding individuals through investments in AirBit Club, a purported cryptocurrency mining and trading company.

The case has been assigned to U.S. District Judge George B. Daniels.  RODRIGUEZ and HUGHES are expected to be presented today before U.S. Magistrate Judge John Early of the Central District of California, MILLAN is expected to be presented today before U.S. Magistrate Judge L. Patrick Auld of the Middle District of North Carolina, and AGUILAR is expected to be presented today before U.S. Magistrate Judge Christine A. Nowak of the Eastern District of Texas.  DOS SANTOS was arrested in Panama City, Panama, and is pending extradition to the United States. 

Acting United States Attorney Audrey Strauss said:  “As alleged, the defendants put a modern-day spin on an age-old investment scam, promising extraordinary rates of guaranteed return on phantom investments in cryptocurrencies.  Thanks to HSI, the defendants are in custody and facing serious criminal charges.”

HSI Special Agent-in-Charge Peter C. Fitzhugh said:  “Those arrested today have not only been charged with running a multimillion-dollar cryptocurrency investment fraud and money laundering ring, but also for allegedly spending their victim’s money on luxury cars, jewelry, and homes. These alleged fraudsters pulled out all the stops to sell their scheme to their victims with enticing recruitment events, then shamelessly used proceeds of their scheme to recruit additional victims through even more aggressive and lavish marketing pitches. As today’s arrests show, HSI New York’s El Dorado Task Force investigates financial crimes of every type, and will stop those who prey on unsuspecting investors who entrust their hard-earned savings to so-called financial advisors.  Those who violate this trust for their personal gain will face consequences for their actions.”

According to the allegations in the Superseding Indictment unsealed today:[1]   

RODRIGUEZ, DOS SANTOS, HUGHES, MILLAN, and AGUILAR participated in a coordinated scheme in which victim-investors (the “Victims”) were induced to invest in AirBit Club based on the promise of guaranteed profits in exchange for cash investments in club “memberships” (the “AirBit Club Scheme” or the “Scheme”).  Beginning in late 2015, AirBit Club, through its founders, RODRIGUEZ and DOS SANTOS, as well as its promoters (the “Promoters”), including MILLAN and AGUILAR, marketed AirBit Club as a multilevel marketing club in the cryptocurrency industry.  Promoters falsely promised Victims that AirBit Club earned returns on cryptocurrency mining and trading and that Victims would earn passive, guaranteed daily returns on any membership purchased.

RODRIGUEZ, DOS SANTOS, HUGHES, MILLAN, and AGUILAR traveled throughout the United States, and around the world to places in Latin America, Asia, and Eastern Europe, where they hosted lavish expos and small community presentations aimed at convincing Victims to purchase AirBit Club memberships.  In furtherance of the AirBit Club Scheme, the Victims were induced to buy memberships in cash, including in the Southern District of New York.  Following a Victim’s investment, a Promoter provided the Victim with access to an online AirBit Club portal to view the purported returns on memberships (the “Online Portal”).  While Victims saw “profits” accumulate on their Online Portal, those representations were false: no Bitcoin mining or trading on behalf of Victims in fact took place.  Instead, RODRIGUEZ, DOS SANTOS, MILLAN, and AGUILAR enriched themselves, and spent Victim money on cars, jewelry, and luxury homes, and financed more extravagant expos to recruit more Victims. 

HUGHES, an attorney licensed to practice law in California, had previously represented RODRIGUEZ and DOS SANTOS in a Securities and Exchange Commission investigation related to another investment scheme known as Vizinova before aiding RODRIGUEZ and DOS SANTOS in perpetrating the AirBit Club Scheme by, among other things, helping to remove negative information about AirBit Club and Vizinova from the internet. 

In many instances, as early as 2016, Victims who attempted to withdraw money from the AirBit Club Online Portal and complained to a Promoter were met with excuses, delays, and hidden fees amounting to more than 50% of the Victim’s requested withdrawal, if they were able to make any withdrawal at all.  In one instance, AGUILAR told one Victim of the AirBit Club Scheme who was complaining about her inability to withdraw AirBit Club returns that she should “bring new blood” into the AirBit Club Scheme in order to receive her returns.

In April 2020, another victim received a notice on the AirBit Club Online Portal that his account was closed – and principal investment lost – due to “execution of financial sustainability Reserve, policy #34 of the Airbit Club Terms and Conditions, due to the economic and financial crisis caused by (Covid-19).”

RODRIGUEZ, DOS SANTOS, HUGHES, and MILLAN sought to conceal the AirBit Club Scheme, as well as their respective control of the proceeds of that Scheme, by requesting that Victims purchase memberships in cash, using third-party cryptocurrency brokers, and by laundering the Scheme’s proceeds through several domestic and foreign bank accounts, including an attorney trust account managed by HUGHES (the “Hughes Trust Account”).  The Hughes Trust Account was ostensibly intended to maintain custody of HUGHES’s law practice’s client funds.  Instead, the Hughes Trust Account was used by RODRIGUEZ, DOS SANTOS, HUGHES, and MILLAN to conceal the nature and origin of the AirBit Club Scheme’s illicit proceeds.  Through that account, HUGHES directed Victim funds to the personal expenses of RODRIGUEZ, DOS SANTOS, MILLAN, and himself, and funded promotional events and sponsorships designed to further promote the AirBit Club Scheme.  In total, the defendants laundered at least $20 million in proceeds of the Scheme through these various methods.

RODRIGUEZ, 37, of Irvine, California, DOS SANTOS, 45, of Panama City, Panama, and MILLAN, 37, of Greensboro, North Carolina, are each charged with one count of conspiracy to commit wire fraud, one count of conspiracy to commit bank fraud, and one count of conspiracy to commit money laundering.   HUGHES, 44, of Newport Beach, California, is charged with one count of conspiracy to commit bank fraud and one count of conspiracy to commit money laundering.  AGUILAR, 55, of Plano, Texas, is charged with one count of conspiracy to commit wire fraud.

The wire fraud conspiracy and money laundering conspiracy charges each carry a maximum term of 20 years in prison, and the bank fraud conspiracy charge carries a maximum term of 30 years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants would be determined by the judge. 

Ms. Strauss praised the outstanding investigative work of Special Agents from Homeland Security Investigations’ El Dorado Task Force, HSI Panama, the HSI Panama City Transnational Criminal Investigative Unit, and HSI New Orleans.  Ms. Strauss further thanked the attorneys and investigators at the Securities and Exchange Commission whose expertise and diligence were integral to the development of this investigation.

The charges contained in the Indictment 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 Superseding Indictment and the description of the Superseding Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.