Attorney And Former Bank Director Sentenced To 30 Months In Prison For Bank Fraud

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that MENDEL ZILBERBERG was sentenced to 30 months in prison in connection with a scheme to obtain a fraudulent $1.4 million loan from Park Avenue Bank.  The defendant was a member of Park Avenue Bank’s board of directors at the time of the offense.  ZILBERBERG was previously found guilty following a one-week trial before U.S. District Judge George B. Daniels, who imposed this sentence. 

U.S. Attorney Damian Williams said: “Those entrusted with the stewardship of financial institutions must uphold their responsibilities with integrity, not exploit their positions.  Mendel Zilberberg’s manipulation of his roles as a legal practitioner and a director of Park Avenue Bank exemplifies a disturbing breach: one that led to a staggering loss for the institution.  Safeguarding the integrity of our financial systems is imperative, and this Office will not tire in our mission to track down those who pose threats to this vital cornerstone of stability.” 

According to the allegations contained in the Indictment, the evidence offered at trial, and matters included in public filings:

In or about 2009, ZILBERBERG conspired with a co-defendant, Aron Fried, and others to obtain a fraudulent loan from Park Avenue Bank (the “Bank”).  Knowing that the co-conspirators would not be able to obtain the loan directly, the co-conspirators recruited a straw borrower (the “Straw Borrower”) to make the loan application.  The Straw Borrower applied for a $1.4 million loan from the Bank on the basis of numerous lies, as directed by ZILBERBERG and his co-conspirators. 

ZILBERBERG used his privileged position at the Bank to ensure that the loan was processed promptly.  Based on the false representations made to the Bank and ZILBERBERG’s involvement in the loan approval process, the Bank issued a $1.4 million loan to the Straw Borrower, which was quickly disbursed to ZILBERBERG and his co-conspirators through multiple bank accounts and transfers.  In total, ZILBERBERG received more than approximately $500,000 of the loan proceeds.  The Straw Borrower received nothing from the loan and ultimately defaulted, resulting in a loss to the Bank of over $1 million.

On November 15, 2022, Fried pled guilty to conspiracy to commit bank fraud.  On April 10, 2023, Judge Daniels sentenced Fried to one year and one day in prison. 

In addition to the prison term, ZILBERBERG, 65, of Monsey, New York, was sentenced to three years of supervised release and ordered to pay $1,066,853 in restitution and $506,000 in forfeiture.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation’s Office of the Inspector General.

Attorney General James Reaches $175,000 Settlement with Syracuse Landlord for Failing to Address Lead-Based Paint Hazards

 

Todd Hobbs Repeatedly and Persistently Violated Lead Safety Laws at His Rental Properties, Where at Least 11 Children Were Poisoned by Lead

Second Action AG James, County Executive McMahon, and Mayor Walsh Have Delivered This Year Against Landlords With Pervasive Lead Violations

New York Attorney General Letitia James, Onondaga County Executive Ryan McMahon, and Syracuse Mayor Ben Walsh today announced a settlement with Syracuse landlord Todd Hobbs and his companies – TLH Holdings, LLC and TLH Properties, LLC – for repeatedly failing to address lead-based paint hazards at his rental properties, where most tenants were low-income families. As a result of the agreement, Hobbs will pay $175,000, which will be used for a tenant relief fund that will provide payments to families of the children who were lead-poisoned while living at the Hobbs properties. The funds will also be used to identify and resolve potential lead hazards at Hobbs’ properties with a history of lead violations.  

“Todd Hobbs put families’ health and well-being in danger and betrayed their trust,” said Attorney General James. “As a result of his failure to properly address lead-based paint hazards, at least 11 children were poisoned by lead at his properties. In Syracuse, throughout New York, and across the nation, children of color are poisoned by lead paint at vastly disproportionate rates, and more must be done every day to protect them from the preventable dangers of lead. I am grateful to County Executive McMahon and Mayor Walsh for their continued partnership in fighting this public health crisis so all children can grow up in healthy homes.” 

In July 2023, Attorney General James, County Executive McMahon, and Mayor Walsh filed a lawsuit against Hobbs and his companies, alleging that he repeatedly and persistently violated lead safety laws at more than a dozen rental properties around Syracuse. Over the last eight years, there were 413 violations of lead safety laws at 19 different properties owned by Hobbs. At least 11 children were poisoned by lead while living at these properties.

Lead-based paint in residential housing is a pervasive problem in Syracuse, where 81 percent of the housing stock was built before lead-based paint was banned in New York in 1970. Lead poisoning in Onondaga County is highest among children of color, the majority of whom live in Syracuse. In 2022, 510 children in Onondaga County had elevated levels of lead in their blood, and 90 percent of those children lived in Syracuse. Approximately 11 percent of the Black children tested in Onondaga County in 2022 had elevated blood lead levels, compared to under two percent of white children tested.

Lead is a highly toxic metal that can cause serious and irreversible adverse health effects. Children who have been exposed to even very low levels of lead are at risk for neurological and physical problems during critical stages of early development. Children under the age of six are more likely to be exposed to lead than any other age group, as their normal behaviors have resulted in chewing lead paint chips and breathing in or swallowing dust from old lead paint that gets on floors, windowsills, and hands.

Since 2014, Hobbs has owned and managed at least 62 rental properties with at least 91 individual residential units in the Syracuse area. According to city and county records, all of Hobbs’ rental properties were built prior to 1960, and therefore presumed to contain lead-based paint. Most of these properties are rented by low-income families of color.

As a result of this settlement, Hobbs will pay $175,000, $55,000 of which will go to current and former tenants harmed by lead paint exposure at the properties he owned over the past eight years, and $120,000 of which will go towards addressing lead hazards at the 19 properties that Hobbs owns with lead-related violations. Hobbs will be barred from selling any of these properties without OAG’s approval until all lead hazards are resolved.

Attorney General James thanks Onondaga County and the City of Syracuse for their close collaboration and partnership on this matter. The OAG will continue to work with local partners statewide to combat childhood lead poisoning.

This settlement is the latest in Attorney General James’ efforts to hold landlords and property managers accountable for violating childhood lead poisoning prevention laws in New York. In February 2024, Attorney General James reached a $310,000 settlement-in-principle with Syracuse landlord William D'Angelo for repeated and persistent violations of lead safety laws at 22 rental properties. In June 2022, Attorney General James shut down Syracuse landlord John Kiggins and his company, Endzone Properties, Inc., for repeatedly violating lead paint laws and failing to address lead paint hazards, which resulted in the lead poisoning of 18 children living in Endzone properties in Syracuse. 

In March 2023, Attorney General James sued Buffalo landlord Farhad Raiszadeh for repeated and flagrant violations of lead safety laws at dozens of properties in East Buffalo. In November 2022, Attorney General James secured $5.1 million in restitution and penalties to fund ongoing childhood lead poisoning prevention programs administered by the City of Buffalo and Erie County, as a result of a September 2020 lawsuit against a group of individuals and companies in the Buffalo region for illegally allowing lead paint-related hazards to proliferate in their rental properties. In March 2022, Attorney General James led a multistate coalition in calling on the U.S. Environmental Protection Agency (EPA) to strengthen protections against lead poisoning, particularly for children living in low-income communities and communities of color. In September 2021, Attorney General James announced an agreement in her lawsuit against Chestnut Holdings of New York, Inc., a property management corporation, over its failures to protect children from lead paint hazards in New York City. Also in September 2021, Attorney General James reached a pre-suit agreement with A&E Real Estate Holdings, LLC to ensure that children living in its New York City apartments are protected from dangerous lead-based paint. 

Governor Hochul Celebrates Start of Spring Season With Launch of New York Blooms Report

Weekly Report Will Help New Yorkers Identify the Best Places to See Lilacs, Roses, Tulips, Magnolias and Cherry Blossoms at Over 30 Partner Attractions Statewide – Interactive State Map Available Here

Governor Hochul Also Reminds New Yorkers of Spring-Themed Hikes, Maple Sugar Programs, and Nature Programs at New York State Parks – Calendar of Upcoming Events Available Here

Builds on Governor’s Commitment to Supporting New York’s $123 Billion Tourism Industry

Governor Kathy Hochul today celebrated the start of spring with the launch of the New York Blooms Report, a weekly report to help New Yorkers identify the best places to see roses, lilacs, tulips, cherry blossoms, and magnolias at more than 30 partner attractions across New York State. The reports, managed by I LOVE NY and designed to encourage and help travelers plan a spring getaway, feature on-site information from staff at a variety of botanical and public gardens, farms, State Parks and historic sites across New York. The first reports are online starting today, March 20, and will update every Wednesday afternoon through June, exclusively on iloveny.com/blooms. Governor Hochul’s announcement marks the start of spring tourism in New York and builds on the Governor’s commitment to supporting New York’s $123 billion tourism industry.

“Spring is an exciting time in New York as the temperatures get warmer, the birds return from their winter migration, and the flowers bud and bloom in both our own gardens and in the many parks and botanical gardens throughout the state," Governor Hochul said. "I encourage residents and visitors to stop and smell the roses – and a host of other flowers— while also discovering all that our parks, farms, historic sites and gardens have to offer.”

The New York Blooms Reports will be compiled weekly using the on-location field observations from the arborists, gardeners and caretakers at over 30 sites throughout the state's 11 vacation regions. The reports track the stages of bloom for each of this year's five selected blooms, ranging from "no activity yet" to "full bloom" to "past peak/done blooming." Partner sites will also share photos to be featured in the report, and information about any unique or exciting flowers in their given locations. Additionally, reports will provide news about springtime flower events to encourage travel, from renowned celebrations like the Rochester Lilac Festival and Albany Tulip Festival, to smaller garden shows and exhibitions. A full listing of Blooms Report partner sites is available here.

The New York Blooms Report will also be supported by digital and social media advertising efforts, featuring examples of the picturesque spring flowers. Travelers are invited to share their best New York State flower photos on social media using the #NYBloomsReport hashtag for a chance to be featured on the I LOVE NY website and official social media accounts, reaching more than two million followers on Instagram, Facebook, X (formerly Twitter), and Threads.

Additionally, New York State Parks and Historic Sites will offer an array of opportunities to enjoy the changing season in the Empire State. From spring-themed hikes and bird walks to maple sugaring demonstrations to hidden egg hunts, State parks and historic sites offer a variety of family-friendly activities and unique ways to enjoy the great outdoors. Visit the State Parks calendar of events for more information and registration details: parks.ny.gov/events

In 2024, New York State Parks is celebrating its Centennial, and visitors are encouraged to take in the Centennial Challenge. The challenge includes a list of 100 activities to get outdoors and discover state parks. Visitors who complete 24 out of 100 activities earn a commemorative Centennial prize, as well as an entry into a random drawing for additional prizes. For more information, visit parks.ny.gov/100/challenge.

Governor Hochul recently announced that New York State welcomed a record 291.5 million visitors in 2022, the largest number of visitors in New York State’s history, generating more than $78.6 billion in direct spending and $123 billion in total economic impact. The Governor has continued to support state tourism through I LOVE NY marketing efforts to encourage travel throughout New York and tens of millions of dollars in direct support to tourism organizations and venues for tourism-related marketing efforts and capital projects.

NYC PUBLIC ADVOCATE CALLS FOR INVESTMENT IN PUBLIC SAFETY INFRASTRUCTURE BEYOND LAW ENFORCEMENT

 

New York City Public Advocate Jumaane D. Williams today called for deeper investment in public safety services and infrastructure, beyond simply law enforcement solutions. At a hearing of the City Council’s Committee on Public Safety, he urged the city to fund non-police infrastructure, and emphasized the broad agreement among New Yorkers in recent surveys on public safety priorities, and how police resources should be utilized. 

“The NYPD is often called to address issues of homelessness and mental health crises,” noted the Public Advocate. “We know that dispatching police to remove people perceived as being homeless or experiencing symptoms of mental health and acute mental illness hasn’t worked long-term in the past, and that we must invest in non-police responses to people in mental health crisis to address those in crisis and to help address substance abuse.”

Public Advocate Williams also emphasized the overreliance on law enforcement in subway stations, including the recent addition of the National Guard, and said of the previous surge in subway policing “... Crime decreased outside of the subway during that time period more than it did inside of the subway. Despite the recent deployment of New York State Troopers and the terrible deployment of the National Guard to the city’s subways, a recent shooting occurred on the A train as it pulled into the Hoyt-Schermerhorn station, which houses a police station currently. This says to me that police alone can’t solve this, and I think everybody here agrees with that.”

“What I’m hoping is that we have the courage in leadership to not just put money where it needs to go, but to build out an infrastructure of non-police responses that New York City’s actually asking for,”argued the Public Advocate in closing. “... I think if we really want to support our law enforcement partners, the one thing we can stop asking them to do is “everything,” because they can’t do everything, and that's harmful.”

USTP Protects Vulnerable Consumer Debtors by Obtaining Injunctions and Monetary Relief Against Two Bankruptcy Petition Preparers

 

Two bankruptcy petition preparers that lacked legal credentials yet provided legal advice and disregarded disclosure requirements were barred from providing bankruptcy-related services, thanks to enforcement actions by the Justice Department’s U.S. Trustee Program (USTP).

On January 18, the Bankruptcy Court for the District of Maryland entered an order permanently enjoining CA Enterprises, doing business as Premier Services and Premier Legal Services, from operating in the district. The order resolved a complaint filed by the U.S. Trustee’s office in Greenbelt, Maryland, and required Premier to refund $2,000 to the debtor in the case.

And on January 26, the Bankruptcy Court for the Eastern District of Virginia permanently enjoined Malynda Perez-Combs from operating in that jurisdiction. Perez-Combs – who did not defend against a complaint filed by the U.S. Trustee’s office in Norfolk, Virginia – was also fined $15,000, ordered to return $300 in fees and pay $2,000 in statutory damages to the debtor.

“Unscrupulous bankruptcy petition preparers prey on vulnerable debtors,” said Director Tara Twomey of the Executive Office for U.S. Trustees. “To protect consumer debtors, the Program stands firm in its commitment to keep fraudsters and scammers out of the bankruptcy system.”

The Bankruptcy Code strictly regulates the services of bankruptcy petition preparers, commonly known as BPPs. BPPs are not attorneys, cannot give legal advice or practice law and generally are limited to typing information provided by debtors into bankruptcy forms for the debtors to file. The Code requires BPPs to disclose information about their fees and their services to the debtors and to the bankruptcy court.

In the Maryland case, the debtor retained Premier and provided financial documents, believing the company would help her apply for a loan modification or other loan workout to stop a foreclosure on her home. Instead of working with the debtor’s mortgage lender, Premier emailed the debtor a completed chapter 13 bankruptcy petition and Social Security verification form and instructed her to file them with the bankruptcy court.

The debtor in the Virginia case hired Perez-Combs to prepare her bankruptcy documents. Perez-Combs recommended filing a case under chapter 7 and repeatedly provided other impermissible legal advice and engaged in the unauthorized practice of law. For example, Perez-Combs determined how the debtor’s assets and liabilities should be characterized on the bankruptcy schedules and selected exemptions that were legally inapplicable. Perez-Combs, who has repeatedly engaged in similar conduct in other cases in other jurisdictions, did not respond to or otherwise defend against the U.S. Trustee’s complaint.

The USTP’s mission is to promote the integrity and efficiency of the bankruptcy system for the benefit of all stakeholders – debtors, creditors and the public. The USTP consists of 21 regions with 89 field offices nationwide and an Executive Office in Washington, D.C. Learn more about the Program at www.justice.gov/ust.

THE NEW YORK DEPARTMENT OF STATE AND MAYOR'S OFFICE OF SPECIAL ENFORCEMENT ANNOUNCE $845,000 SETTLEMENT ENDING ILLEGAL SHORT-TERM RENTAL OPERATION RUN BY A LICENSED REAL ESTATE BROKER

 

Suit Alleges That Real Estate Firm Mega Home, Inc. and Licensed Real Estate Broker 

Katherine Cartagena Illegally Converted Four Permanent Housing Units to Generate $2 Million in Payouts from Airbnb

New York Secretary of State Robert J. Rodriguez and New York City Mayor’s Office of Special Enforcement (OSE) Executive Director Christian J. Klossner and today announced a global resolution of an $845,000 settlement that shuts down an illegal short-term rental operation at two Manhattan buildings.

The investigation leading to the lawsuit brought by OSE was based on data obtained through the city’s Booking Service Data Reporting law before the city’s short-term rental registration law went into effect. The settlement acknowledges a separate investigation by the Department of State, Division of Licensing Services (DOS), which also completed its investigation of licensed brokerage and broker Mega Home and Katherine Cartagena. The settlements were negotiated by OSE and DOS as part of a collaborative and innovative enforcement effort by the City and State.

According to the OSE lawsuit, the defendants converted multiple permanent residential dwelling units at 311 East 51^st Street and 207 West 75^th Street in Manhattan to advertise and operate illegal short-term rentals. Between 2019 and 2022, records show that Airbnb disbursed more than $2 million to the defendants for more than 550 short-term rentals involving over 2,000 guests at the two buildings. In response to OSE’s enforcement, the defendants removed all illegal listings and will now settle for a citywide permanent injunction and $845,000 in restitution. Ms. Cartagena also agreed separately with DOS that she advertised illegal transient rentals in violation of the law and that should she do so again, her real estate license would be revoked.

 “New York is in the middle of a housing shortage crisis which makes returning a long-term rental units to the housing market crucial,” said Secretary of State Robert J. Rodriguez. “The Department of State’s Division of Licensing Services will continue to collaborate with our city partners to ensure the laws are being followed and that violators are held accountable.”

“Safe, stable, and affordable housing is fundamental to a prosperous city, and with our short-term rental reporting and registration laws we are stopping illegal operators from impeding our housing goals,” said New York City Mayor Eric Adams. “Today’s settlement sends a clear message that we will not allow anyone to use our valuable housing stock for unlawful personal gain.”

“Ms. Cartagena and her corporate entities deceived and endangered guests while profiting from her short-term rentals, but she ultimately ceased the illegal activity and accepted responsibility after being contacted by the Office of Special Enforcement,” said Christian Klossner, Executive Director of the Mayor’s Office of Special Enforcement. “This settlement highlights the importance of robust reporting requirements for booking platforms and short-term rental registration in combatting illegal short-term rentals and the attendant loss of housing.” 

“The Office of Special Enforcement is rigorously implementing measures to combat unethical and exploitative practices in the city’s housing market,” said Mayor’s Office of Criminal Justice Director Deanna Logan. “We commend Executive Director Klossner and the Department of State for their leadership in investigative efforts that enforce the long-standing laws on short-term rentals and promote housing equity for all New Yorkers.” 

“This settlement highlights the City’s commitment to ensuring people are safe and our housing stock is protected,” said New York City Corporation Counsel Sylvia O. Hinds-Radix. “The use of short-term rental registration laws combined with the strategic legal and investigative efforts of the Law Department and the Mayor’s Office of Special Enforcement have brought another violator into compliance.”

New York City’s booking service data reporting law requires online short-term rental platforms to periodically provide OSE with information about transactions for certain listings.  These reports include the physical address of the short-term rental as reported to the booking service by the host, the URL of the short-term rental listing, details pertaining to the scope of the short-term rental transaction, and information relating to the identity of the host, including contact information and associated bank accounts to which payouts were made.

New York City’s short-term rental registration law, which went into effect in January 2023, requires rental hosts in New York City to register with the city and prevents platforms like Airbnb from processing transactions unless the registration information matches a city database.

The NYC Law Department authorizes and reviews all lawsuits brought by OSE to enforce the city’s laws.

MAYOR ADAMS DEMANDS WATER BILL DODGERS TO PAY DEBT OR RISK LOSING WATER ACCESS

 

City to Issue 2,400 Water Shutoff Notices to Chronically-Delinquent Customers Who Owe Total of $102 Million in Unpaid Water Bills

 

Customers Failed to Take Advantage of Water Bill Amnesty Program, Which Brought In $105 Million and Saved More Than 100,000 New Yorkers $22 Million in Interest

New York City Mayor Eric Adams and New York City Department of Environmental Protection (DEP) Commissioner Rohit T. Aggarwala today announced that the city has initiated the next phase of its expanded collection enforcement actions against approximately 2,400 chronically-delinquent water service accounts that owe the city a total of $102 million. As part of the effort, DEP will send out ‘Water Shutoff Notices’ to these customers, informing them that water service to their property could be shut off unless the entire owed amount is paid or they enter into a payment agreement within the next 15 days. This enforcement action is targeted towards commercial properties, including hotels, office buildings, and retail spaces, as well as one-to-three family homes that have not responded to any of DEP’s extensive outreach efforts over the past year. Earlier this year, DEP sent out ‘Water Shutoff Warning’ letters, which resulted in the agency recouping more than $3 million dollars from more than 400 overdue accounts.

 

“We gave these delinquent customers a chance to clear their water debts and save millions on interest through our water amnesty program, and while more than 100,000 took us up on our reasonable offer, a small percentage of customers incorrectly made the mistake of thinking they could get away with stiffing their fellow New Yorkers without any accountability,” said Mayor Adams. “We’re not going to allow big commercial properties and others leave the rest of us holding their water bills. DEP is sending ‘Water Shutoff Notices’ to 2,400 chronically-delinquent customers who owe over $102 million in unpaid bills. While we aim to work with these customers one last time, we will not look away while landlords and property owners ignore their obligations to their neighbors and their city.”

 

“DEP is serious about collecting the outstanding money owed from delinquent accounts and we will be shutting off water service for customers that don’t resolve their overdue bills,” said DEP Commissioner Aggarwala. “Delinquent customers who refuse to pay their water bills force everyone else to pay higher rates. That is simply not right, and it must stop. Everyone must pay their fair share to support our critical water system.”

 

During the pandemic, DEP saw a significant increase in the number and balance of delinquent accounts. The total of delinquent payments nearly doubled to $1.2 billion, which threatened the operations and capital needs of a service the city could not survive without. In 2023, DEP initiated a successful amnesty program that helped more than 100,000 New Yorkers reduce their water bill debts, while saving them more than $22 million in interest. Of the nearly 200,000 customers who owed money on late water bills when the program started, more than 50 percent participated in the popular program — bringing in nearly $105 million in payments from substantially past due accounts. To help low-income customers, during the amnesty program, DEP granted $8 million in additional billing credits to those accounts that had participated in New York state’s Low Income Homeowner Water Assistance Program.

 

Shutting off water service can have serious consequences and may subject property owners to code violations by the New York City Department of Buildings, the New York City Department of Health and Mental Hygiene, and the Fire Department of the City of New York, as well as the potential for an Order to Vacate the Premises. Water service shutoffs may also affect a property owner’s insurance policy and/or mortgage. Additionally, a loss of water could impact a property’s heating system; owners should consult whoever maintains the property’s boiler or furnace as to whether any special actions must be taken if there is a loss of water.

 

Money recouped through enforcement actions will be used by DEP to keep water rates low for all customers, and all bill payments are used to fund maintenance, upgrades, and repairs to almost 15,000 miles of water and sewer mains, 19 reservoirs, 12,000 rain gardens, and 14 wastewater resource recovery facilities. Nearly half the population of New York state enjoys New York City’s tap water.

 

Customers with chronically delinquent water bills who previously received a ‘Water Shutoff Warning’ letter in the mail are now receiving a ‘Water Shutoff Notice’ instructing them to resolve their outstanding balances or enter into a payment agreement with DEP within 15 days.

 

If balances are not resolved within that timeframe, DEP will begin the process of shutting off water service. Outstanding accounts will have a ‘Water Shutoff Notice’ posted on their property’s front door and the street or sidewalk in front of the property will be spray painted to indicate where the service line will be disconnected from the DEP water main. If water service is shut off, affected customers will be required to pay a $1,000 restoration fee and pay the past due balance in full, or enter into a payment agreement with a 25 percent down payment, in order to have their service restored.

 

Customers can make payments or enter into a payment agreement online, by calling 866-622-8292, paying in-person at a borough office, or by mailing in payment to the New York City Water Board. Convenience fees apply to credit/debit card payments, but no fee is charged by the Water Board if payment is made by a checking or savings account. DEP also offers a number of financial assistance programs to assist property owners in paying their water bills, including a leak forgiveness program and a multi-family water assistance program.

Bronx Borough President Vanessa L. Gibson - DON`T FORGET TO RSVP: 2024 STATE OF THE BOROUGH

 

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