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Wednesday, August 24, 2022
2022 Bronx Chamber of Commerce Gala: The Reveal
Official AOC Campaign - General Election Ttarts Today
It’s official,
After yesterday’s primary, we now have a Republican opponent that Alexandria will face in the general election on November 8, 2022.
Last year, our Republican opponent raised $10 million against us. The entire Republican establishment and their corporate allies put the full weight of their propaganda machine into spreading lies about Alexandria.
Whether or not their candidate had a chance of winning wasn’t the point. They used the campaign as an opportunity to discredit Alexandria and prop up their talking points on Fox News. And this year will be no different.
Just yesterday, their campaign set up a massive #OustAOC sign on a highway overpass in Queens.
We need to be ready to fight back against their mailers, posters, commercials, and digital ads with deep organizing and truth telling, which is why we’ve set a goal of raising $150,000 before the end of August.
No matter what, we’re going to stay focused on the facts and issues that matter to the people of NY-14 — and the work that Alexandria has done to fight for working families.
Thank you for your support,
Team AOC
Former JetBlue Employee Pleads Guilty to COVID-19 Loan Fraud
Defendant is the Last of Seven Conspirators Convicted for Stealing Nearly $1.5 Million in Fraudulently Obtained Small Business Loans
Keily Nunez, a former JetBlue Airways employee, pleaded guilty to conspiracy to commit wire fraud in connection with false statements Nunez made to obtain loans for himself and his coconspirators pursuant to the Economic Injury Disaster Loan (EIDL) program. Nunez and four coconspirators were charged in June 2021. Today’s proceeding was held before United States District Judge Raymond J. Dearie.
In connection with the scheme, five other defendants previously pleaded guilty to conspiracy to commit wire fraud: Orlando Sanay, Michael Pimentel Veloz, Fanny Plasencia, Ramon Osvaldo Pena, and Angel K. Colon. In addition, codefendant Keimi Nunez previously pleaded guilty to wire fraud. When sentenced, all defendants face up to 20 years in prison and have agreed to forfeit the fraudulently obtained loan funds.
Breon Peace, United States Attorney for the Eastern District of New York, and Ricky J. Patel, Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), announced the guilty pleas.
“Each of the defendants admitted to their part in stealing nearly $1.5 million from a government program designed to help struggling small businesses and families survive the pandemic,” stated United States Attorney Peace. “This Office will continue to aggressively prosecute those who seek to enrich themselves by abusing government programs.”
“Nunez and his co-conspirators fleeced the government to the tune of over $1.5 million, taking advantage of programs designed to keep small businesses afloat during a time of unprecedented economic volatility,” said HSI New York Acting Special Agent in Charge Ricky J. Patel. “Since the early days of the COVID-19 global pandemic, HSI has been committed to uncovering pandemic fraud and holding accountable those who take advantage of tragedy to turn a profit.”
The EIDL program provides qualifying small businesses with low-interest loans. The Coronavirus Aid, Relief and Economic Security (CARES) Act expanded EIDL to provide economic support to help offset the temporary loss of revenue experienced by businesses due to the COVID-19 pandemic. As set forth in court filings, between April 2020 and November 2020, the defendants applied for EIDL loans for eleven separate entities. In those applications, the defendants falsely represented the number of employees associated with the entities and misstated the gross revenues for the entities for the 12 months prior to the COVID-19 pandemic.
For example, Nunez submitted a loan application to the Small Business Association (SBA) in April 2020 claiming that Plasencia was the Chief Operating Officer and Nunez was the manager of FI USA Consulting LLC (FI USA). In the application, Nunez falsely claimed that FI USA had 42 employees and gross revenues of $672,137 for the relevant period. The SBA approved FI USA’s application and on July 13, 2020 wired $149,900 to FI USA’s bank account. In contrast to the claims made in the application, New York Department of Labor records showed that FI USA never reported having any employees. Internal Revenue Service records further revealed that FI USA never filed a tax return since its formation in 2017. There is no evidence that the EIDL funds provided to FI USA were used for business purposes.
Based on the defendants’ false representations, the Small Business Administration approved approximately $1.5 million in loans that were deposited into the defendants’ bank accounts.
In addition to making false statements to obtain the loans, the defendants did not use the relief funding for ongoing business expenses as the EIDL program requires. Instead, they withdrew hundreds of thousands of dollars in cash from bank accounts that had received EIDL loan funds.
When sentenced, all defendants face up to 20 years in prison and have agreed to forfeit the fraudulently obtained loan funds.
Leadership Of Yoga To The People Arrested For Tax Fraud
The Three Defendants Together Earned Millions of Dollars from Nationwide Yoga Business But Did Not File Tax Returns – or Pay Taxes – from at least 2013 to 2020
Damian Williams, the United States Attorney for the Southern District of New York, Thomas Fattorusso, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, New York Field Office (“IRS-CI”), and Jonathan Mellone, Special Agent-in-Charge of the New York Regional Office of the U.S. Department of Labor – Office of Inspector General (“DOL-OIG”), announced charges against GREGORY GUMUCIO, MICHAEL ANDERSON, and HAVEN SOLIMAN for participating in a conspiracy to commit tax fraud for at least seven years. The three defendants were longtime leaders at a prominent nationwide yoga business, Yoga to the People (“YTTP”), from which they all received a substantial amount of income, yet none of the three defendants filed individual or business tax returns – or paid any income taxes – from at least 2013 through 2020. GUMUCIO, ANDERSON, and SOLIMAN were arrested today in Washington State. GUMUCIO and SOLIMAN will be presented before Magistrate Judge David W. Christel in the Western District of Washington (Tacoma Division), and ANDERSON will be presented before Magistrate Judge Mary Alice Theiler in the Western District of Washington (Seattle Division).
U.S. Attorney Damian Williams said: “As alleged, the defendants operated a lucrative nationwide yoga business, which brought in over $20 million and netted them each substantial sums, permitting them to live lavish lifestyles. Yet the defendants chose not to file tax returns, or pay income taxes, for at least seven consecutive years. The defendants perpetrated their scheme in various ways, including paying employees in cash and off the books, refusing to provide employees with tax documentation, not maintaining books and records, paying personal expenses from business accounts, and using nominees to disguise their connection to various entities. At least two of the defendants even submitted fabricated tax returns to third parties when seeking a loan or an apartment, despite not filing any tax returns with the IRS. Thanks to dogged investigative work, the defendants now face serious charges for their alleged crimes.”
IRS-CI Special Agent in Charge Fattorusso said: “The defendants purported to create a donation-based exercise community to make yoga more accessible for their clients, when in reality, they allegedly ran a more than decade-long cash cow that relied on a sophisticated network of tens of millions of dollars in unreported income and free labor to fund the leaders’ lavish lifestyles. Today’s arrests and charges are the opening salvo against this years-long scam and the first step to holding these defendants accountable for their alleged crimes.”
DOL-OIG Special Agent-in-Charge Jonathan Mellone said: “An important part of the mission of the Office of Inspector General is ensuring that workers receive the wages that they are entitled to and that appropriate unemployment insurance taxes are withheld from their pay and remitted to the relevant tax authority. We will continue to work with our law enforcement partners to investigate these types of allegations."
According to the allegations contained in the Complaint:[1]
In or around 2006, GUMUCIO founded YTTP in New York, New York. YTTP was originally donation-based: YTTP requested, but did not require, payment from its yoga students. YTTP started with one yoga studio on the Lower East Side of Manhattan, and it became extremely popular. Over the ensuing years, YTTP opened at least approximately 20 yoga studios or affiliated entities throughout New York City and in various other places, including California, Colorado, Arizona, Florida, and Washington State. YTTP also had a teacher training program, which earned substantial income from aspiring yoga teachers. YTTP operated from at least approximately 2006 until 2020. From 2010 to 2020, YTTP and its affiliates generated gross receipts of more than $20 million. Yet YTTP never filed a corporate tax return with the IRS.
YTTP’s leadership included GUMUCIO, ANDERSON, and SOLIMAN. GUMUCIO was YTTP’s founder, principal owner, and functional chief executive officer, as he directed and made decisions for the YTTP enterprise. ANDERSON was an owner of YTTP and the functional chief financial officer; he was involved in, among other things, negotiating leases for YTTP entities, obtaining Employer Identification Numbers from the IRS, opening bank accounts, and working with GUMUCIO to expand YTTP. SOLIMAN was an owner of YTTP, its Chief Communications Officer, the Director of Education for YTTP’s Teacher Training (“TT”) Program, and was actively involved in YTTP’s efforts to expand internationally.
GUMUCIO, ANDERSON, and SOLIMAN each received a large volume of income from YTTP, yet none of the three defendants filed a personal tax return with the IRS for any calendar year from 2013 to 2020, inclusive. Using conservative figures, for calendar years 2015 to 2020, GUMUCIO had unreported income directly from YTTP exceeding $1.6 million and a tax due and owing to the IRS exceeding an estimated $431,000; ANDERSON had unreported income directly from YTTP exceeding $2.1 million and a tax due and owing to the IRS exceeding an estimated $603,000; and SOLIMAN had unreported income directly from YTTP exceeding $961,000 and a tax due and owing to the IRS exceeding an estimated $196,000. During the charged period, GUMUCIO, ANDERSON, and SOLIMAN each represented their annual income to be six figures to third parties not associated with the Government (e.g., in loan applications, rental applications, and/or bank documents), yet none of them filed an individual tax return.
During the charged period, despite not filing any tax returns and not paying any income taxes, GUMUCIO, ANDERSON, and SOLIMAN enjoyed extravagant lifestyles, which included frequent foreign travel; expensive meals and clothing; NFL season tickets; and horse lodging and horseback riding.
YTTP and its leaders, including GUMUCIO, ANDERSON, and SOLIMAN, used various methods to evade taxes, including, among others:
- Accepting yoga students’ payments in cash (e.g., which was collected in tissue boxes that were passed around during yoga classes) and paying yoga teachers in cash and “off the books”;
- Using nominees to disguise the defendants’ connection to various entities which, in fact, were part of the YTTP enterprise and from which GUMUCIO, ANDERSON, and SOLIMAN all received income; to that end, GUMUCIO targeted and groomed typically young women and others to become nominee “owners” of studios, luring them with the title of studio owner when, in fact, he generally controlled business decisions, took a cut of their proceeds, and the nominees generally took on meaningful financial risk;
- Generally forbidding YTTP teachers from counting incoming cash that yoga students paid and requiring yoga studio managers to transport cash proceeds to GUMUCIO’s apartment on St. Marks Place in Manhattan, where those proceeds were “stacked” and counted during so-called “stacking parties”;
- Failing to maintain a corporate headquarters or keep corporate books and records;
- Using YTTP business accounts to pay the defendants’ personal expenses; and
- Maximizing unreported income, as GUMUCIO manipulated subordinates into providing free labor (e.g., teaching unpaid classes, stacking cash, cleaning yoga studios, depositing cash into bank accounts, etc.).
GUMUCIO, 61, of Cathlamet, Washington; ANDERSON, 51, of Bellevue, Washington; and SOLIMAN, 33, of Cathlamet, Washington, are each charged with (i) one count of conspiracy to defraud the IRS, which carries a maximum penalty of five years in prison; and (ii) five counts of tax evasion, each of which carries a maximum penalty of five years in prison.
The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding efforts of IRS-CI, DOL-OIG, and the Special Agents of the U.S. Attorney’s Office for the Southern District of New York. Mr. Williams also thanked the U.S. Attorney’s Office for the Western District of Washington for its assistance.
Mr. Williams also noted that the investigation is ongoing. If you believe you have information about the defendants, this case, or if you believe you are a victim of any crimes related to YTTP, please email USANYS.YTTPcase@usdoj.gov.
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 below constitute only allegations, and every fact described should be treated as an allegation.
Speaker Adrienne E. Adams, Council Members, and Department for the Aging Announce Over $3 Million in Funding for Specialized Vehicles to Deliver Meals to Homebound Older New Yorkers
Funds from City Council will support home delivered meals program across the city
Department for the Aging’s community-based partners will be able to use the funds to replace 44 hotshot vans used for meal deliveries
New York City Council Speaker Adrienne E. Adams and Council Members have announced a $3.08 million allocation to the Department for the Aging’s (DFTA) community-based partners for repair and replacement of an estimated 44 hotshot vans for the City’s home delivered meals program. The program serves millions of meals annually to older adults, who are homebound due to health or physical challenges. The meals are reviewed by registered dietitians to ensure they are nutritionally balanced.
“Our seniors are the jewels of our communities who deserve to be supported with nutritious home-delivered meals,” said Speaker Adrienne Adams. “The City Council prioritized investing $3 million of its funds to help community-based partners continue delivering meals in a safe and timely manner. It is critical that our city meets the needs of older adults, and this funding will contribute to the vital services for homebound New Yorkers. I am proud to join my colleagues in celebrating this important allocation by the City Council in the city budget.”
“For over 30 years, the home delivered meals program has provided hot, nutritious meals to our most vulnerable older adults across the five boroughs. Even at the height of the pandemic, program staff and volunteers never stopped delivering meals,” said Mayor Eric Adams. “I’m pleased that the funding we are announcing today will provide the vehicles necessary for this program to continue serving older New Yorkers for years to come. This is another step in creating a more equitable city we can all be proud to live in, and age together in.”
“Our local partners throughout the city have been doing an incredible job making sure homebound older adults receive the meals they need, and this allocation from the City Council will ensure they have the equipment necessary to continue their services,” said Commissioner Lorraine Cortés-Vázquez. “The home delivered meals program has been essential to making sure residents can age in dignity, and this allocation helps ensure we can continue our mission.”
Attorney General James Secures $4 Million from Landlords After Uncovering an Illegal Kickback Scheme to Deregulate Rent-Stabilized Apartments
Employees of Property Management Companies Newcastle Realty Services and Highcastle Management Solicited and Accepted More Than $1 Million from Contractors Hired to Perform Renovations
$4 Million Will Be Used to Preserve and Expand Affordable Housing in NYC
New York Attorney General Letitia James today announced she has secured $4 million from a group of 29 New York City landlords after uncovering an illegal kickback scheme by the management companies they employed to deregulate hundreds of rent-stabilized apartments in New York City. The Office of the Attorney General (OAG) reached a settlement with 29 LLCs (the owners) affiliated with Sentinel Real Estate Corporation for wrongdoing committed by employees at the now-defunct property management firms the owners used: Newcastle Realty Services, LLC (Newcastle) and Highcastle Management, LLC (Highcastle). Newcastle and Highcastle inflated and falsely stated renovation costs for rent-stabilized apartments in an attempt to deregulate them and their employees accepted more than $1 million in kickbacks from contractors in exchange for hiring them on renovation jobs. The owners failed to provide sufficient oversight of Newcastle’s and Highcastle’s practices.
“Our rent stabilization laws exist to protect the rights and homes of New York tenants, and this deregulation scheme proves they exist for good reason,” said Attorney General James. “Newcastle and Highcastle made themselves millionaires while kicking hundreds of rent-stabilized apartments off the market, all while under the lax oversight of these property owners. We’re making sure they pay their fair share, and I’m proud to have secured $4 million to preserve affordable housing in New York City.”
Newcastle and Highcastle illegally deregulated rent-stabilized units in the owners’ buildings located in Brooklyn and Manhattan. Prior to June of 2019, if owners made improvements to rent-stabilized units, they could increase the rent of those units by a fraction of the cost of the improvements that were made, through a system known as Individual Apartment Improvements (IAIs). Some property owners and landlords used IAIs to increase rents enough to bring them over the deregulation threshold established by those laws, thereby converting them to market-rate units and maximizing the buildings’ market values.
The owners involved in this settlement utilized a similar investment strategy, and Newcastle and Highcastle helped them carry it out by falsifying the costs of IAIs. Newcastle and Highcastle allocated construction expenses among units to achieve deregulation, inflated costs for renovation jobs, and included the kickbacks they received from contractors in the charges reported for certain units.
As part of their scheme, Newcastle and Highcastle would intentionally set the cost of labor for a renovation project to be equivalent to the amount necessary to deregulate that particular unit, regardless of the quote provided by the contractor. For example, an apartment in one building required $38,000 in IAIs to get over the deregulation threshold, while another apartment in the same building required $52,500 to deregulate. Both units received nearly identical renovations, but Newcastle and Highcastle reported the renovation expenses at $52,500 and $38,000, respectively, so they could deregulate the units and rent them at the market rate.
Newcastle and Highcastle often assigned falsely inflated costs to apartment renovations and would inconsistently allocate costs from lump sum renovations impacting an entire building to different units, all to aid in reaching the units’ respective deregulation thresholds. Newcastle and Highcastle once hired a contractor to renovate nine apartments, all with identical scopes of work. Rather than split the cost evenly among the apartments, Newcastle and Highcastle reported $14,500 in labor costs for a gut renovation to a high-rent one-bedroom apartment, and $95,000 in labor costs for a gut renovation to a low-rent studio apartment, when in reality, the labor costs were basically equivalent. Further evidence shows these false allocations were not limited to multiple apartments in a single building, but also in multiple apartments across multiple buildings.
In multiple instances where labor costs were not sufficient to deregulate a unit through the IAI system, Newcastle and Highcastle would create false orders on a contractor’s letterhead stating more work was required for an additional cost. The contractors in these scenarios did not actually have more work to do, nor did they request more money, but Newcastle and Highcastle needed to report that a higher amount had been spent to deregulate the unit.
In exchange for awarding repeated renovations jobs to certain contractors, Newcastle and Highcastle employees received more than $1 million in kickbacks from contractors in exchange for being awarded jobs at the owners’ buildings. They hid these bribes by reporting the amount as included in the amount spent on IAIs: if labor costs for a job were $45,000 and the employees received $5,000 as a kickback, they reported the renovation investment in the unit as $50,000.
In May 2019, the Office of the Attorney General (OAG) filed a lawsuit against former longtime Newcastle employee David Drumheller for his role in this scheme. Through investigations pertaining to the lawsuit, OAG determined the owners failed to detect or stop Newcastle and Highcastle’s illegal scheme, resulting in this settlement announced today.
As part of the settlement, the owners paid $4 million to Attorney General James’ Affordable Housing Fund with the New York City Department of Housing Preservation and Development (HPD), which preserves and expands affordable housing in New York City. They have also engaged an independent auditor to evaluate the regulated status and legal regulated rents of the apartments previously managed by Newcastle and Highcastle. Following completion of the auditor’s evaluation, the owners will follow protocols set forth by OAG to reset legal rents, offer rent stabilized leases, and refund current tenants for overcharges, as necessary. Finally, the owners must implement new institutional practices to ensure legally compliant ownership and management of rent-regulated apartments.
The 29 owners involved in the settlement are:
- Gotham City Residential Manager I, LLC
- Gotham City Residential Manager II, LLC
- Gotham City Residential Advisors II, LLC
- Gotham Segregated Account GP I, LLC
- Gotham Segregated Account Manager I, LLC
- Hygrocybe 1115 Union GP V, LLC
- Hygrocybe Manager V, LLC
- Tarzetta Catinus, LP
- 5008 Broadway, LLC
- 658 West 188th Street, LLC
- 80 Clarkson, LLC
- 92 Pinehurst Avenue, LLC
- 3100 Brighton 2nd Street, LLC
- Brightwater 219, LLC
- Brightwater 231, LLC
- 66 St. Nicholas Place, LLC
- 75 St. Nicholas Place, LLC
- 76 St. Nicholas Place, LLC
- 853 St. Nicholas Avenue, LLC
- 79 Brighton 11th Street, LLC
- 125 Brighton 11th Street, LLC
- 1511-1521 Brightwater Avenue, LLC
- 120 East 19th Street GSA I, LLC
- 146 East 19th Street, LLC
- 165 East 19th Street GSA I, LLC
- 287 East 18th Street, LLC
- 1803 Beverly Road, LLC
- Broadway Towers NYC, LLC
- 1115 Union Apartments, LP
The OAG would like to thank the New York State Department of Homes and Community Renewal (HCR) for their assistance.
NYS Office of the Comptroller DiNapoli: Despite Challenges, Agriculture Among the Most Resilient State Industries During the Pandemic
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MAYOR ADAMS SIGNS LEGISLATION TO PROVIDE PROPERTY TAX REBATE FOR NYC HOMEOWNERS
Intro 600 Will Provide Financial Relief to Hundreds of Thousands of Eligible Homeowners Throughout Five Boroughs
New York City Mayor Eric Adams today signed legislation to provide a one-time property tax rebate of up to $150 to hundreds of thousands of eligible New York homeowners. The bill was passed by the New York City Council earlier this month.
“I grew up on the edge of homelessness, so I know the worry and fear that too many low- and middle-income homeowners across the five boroughs experience about whether they can keep their homes and pay their bills,” said Mayor Adams. “We want to remove some of the burden that New Yorkers are feeling, which is why we are putting money back into their pockets with a property tax rebate of up to $150 to low- and middle-income homeowners. This is about delivering direct relief to homeowners in New York who are struggling to get by.”
“The Adams administration understands the financial struggles many homeowners are facing and is deploying new and innovative approaches to meet their needs,” said First Deputy Mayor Lorraine Grillo. “Through this rebate, qualifying homeowners will receive assistance that they can use to pay their mortgage, pay their utility bills, or plan for their future.”
“Thanks to this legislation, eligible homeowners can receive a check of up to $150,” said New York City Department of Finance (DOF) Commissioner Preston Niblack. “We encourage any homeowner who believes they qualify for this rebate to check their eligibility status.”
Intro 600 — co-sponsored by New York City Council Speaker Adrienne Adams, New York City Councilmember and Finance Committee Chair Justin Brannan, and New York City Councilmember Kalman Yeger, and long championed by New York City Council Minority Leader Joe Borelli — will implement a state authorizing law, allowing the city to provide a rebate of real property taxes for eligible properties on Fiscal Year 2022 property taxes. The rebate would be the lesser of $150 or the amount of the property’s FY 2022 real estate tax liability.
To be eligible for the rebate, the property must be a one, two or three family residence or a dwelling unit in a cooperative or condominium; and the property must be the primary residence of the owner. In addition, the annual income of all the owners of the property must have been less than or equal to $250,000 in tax year 2020.
Checks will be issued by the DOF to eligible homeowners. Fiscal Year 2023 recipients of a School Tax Relief (STAR) exemption or credit for whom DOF can verify eligibility will automatically receive checks, which will be sent out at the end of August.
DOF will notify — by letter — STAR recipients for whom DOF has incomplete income information. These property owners will be required to certify their eligibility to receive a check. An application process is being created for other property owners who do not receive the STAR exemption, but who may be eligible for the rebate. The additional information or application will be due in September, and checks will be sent out to owners that DOF determines to be eligible in the fall.