NEARLY 1,000 NURSING STUDENTS TO SUPPORT NYC HEALTH + HOSPITALS’ COVID-19 VACCINATION OPERATION IN CUNY PARTNERSHIP

 

Supervised by faculty, CUNY students will support vaccine operations with clerical and workflow responsibilities, appointment logistics, administering vaccines, and observing patients after receiving vaccines

 

CUNY partnership will support the necessary nursing workforce needed to accomplish the public health system’s mission of vaccinating City’s most vulnerable populations while fulfilling meaningful clinical and field experience training for students

 NYC Health + Hospitals today announced its partnership with the City University of New York (CUNY) that will provide 984 nursing students to help support with the system’s COVID-19 vaccination operation. Supervised by CUNY faculty, students will be assigned throughout the system’s 11 hospitals and Gotham Health community-based clinics to support vaccine operations. Their responsibilities will include clerical tasks, management of workflows, appointment logistics, vaccine administration, and monitoring required observation periods after patients receive their injection. The students will begin being deployed across the system this week. Time spent in vaccine clinics throughout the system will contribute to nursing and health professions students’ required clinical hours as part of their education. The number of nursing students might increase depending as eligibility and demand for vaccines increases in the coming weeks.

 

“NYC Health + Hospitals is eternally grateful for the support we’ve received from partners, like CUNY, through this pandemic that have sourced additional hands to help save lives,” said NYC Health + Hospitals Senior Vice President and System Chief Nurse Executive Natalia Cineas, DNP, RN, NEA-BC. “We are confident the support from these students will further facilitate swift and safe workflow as vaccine supply increases and eligibility expands.”

 

“CUNY’s health professional students are proud to support our partner, NYC Health + Hospitals, on local vaccine administration to help stop the pandemic in New York City” said CUNY University Dean for Health and Human Services, Patricia Simino Boyce, PhD, RN. “Our students – and our University – value the opportunity to serve at this important time.”

 

In order to be able to support the vaccine operations within NYC Health + Hospitals, students are required to undergo competency checks and compete specific online training modules that includs “COVID-19 Vaccine: Training for Pfizer & Moderna Vaccine Administration,” and “COVID-19 Vaccination Training for RNs & LPNs.” They will also be required to complete the system’s new employee orientation and review the general compliance/HIPAA regulations. The ability to utilize CUNY students in this capacity came after a State Department of Health Executive Order allowed students to help with operations.

 

CUNY students are scheduled to stay on with the public health system to support vaccine operations through the spring 2021 academic semester.

 

NYC Health + Hospitals continues its commitment to help vaccinate the most vulnerable New Yorkers against the Coronavirus. According to eligibility policy from the State, the public health system is vaccinating New Yorkers over 65 years of age, as well as essential workers, and people with certain co-morbidities.

 

To find a vaccine site near you and make an appointment for a COVID-19 vaccine, visit https://vaccinefinder.nyc.gov/.

 

Attorney General James Delivers for New York Sports Clubs and Lucille Roberts Members

 

Former Parent Company TSI to Give Up a $250,000 Bond for Charging Illegal Dues and Prohibiting Consumers from Cancelling Memberships

 New York Attorney General Letitia James today announced that she has resolved her lawsuit against the parent company of New York Sports Clubs (NYSC) and Lucille Roberts for unlawfully charging monthly dues to members and for partaking in a variety of illegal and fraudulent practices involving consumers’ cancellation rights during the coronavirus disease 2019 (COVID-19) pandemic. If approved by the court, the agreement with Town Sports International (TSI) could make $250,000 available in the future for potential restitution to affected New York gym members who were charged for gym services that were not available to them.

“From the beginning of my office’s investigation, I have made clear to New York Sports Clubs and Lucille Roberts that the COVID-19 pandemic would not give them a free pass to violate the law and take advantage of members,” said Attorney General James. “A public health crisis did not give these gyms license to lift up their finances through unlawful charges. Today’s agreement holds the former parent company for these gyms accountable and brings us one step closer to recovering a $250,000 bond posted by the parent company for potential distribution to members harmed by their unlawful practices.” 

On March 16, 2020, all health clubs were ordered closed in an effort to stop the further spread of COVID-19. The vast majority of gyms and health clubs in New York responded by committing to freezing memberships at no cost until the clubs reopened, some going even further by promising to automatically credit consumers for days the clubs were closed. However, NYSC and Lucille Roberts refused to do the same, and, instead, continued to charge some members membership dues and refused to honor some cancellation requests — imposing fees and conditions on cancellation and freeze requests even though all clubs were closed. In April, Attorney General James sent a letter to TSI, demanding immediate changes to the unlawful manner in which TSI responded to the mandatory closing of gyms and health clubs.

Despite overtures that the company would change its practices, it did not. As a result, in September 2020, Attorney General James sued TSI, alleging that NYSC and Lucille Roberts clubs violated numerous New York state laws by charging consumers membership dues for services not being offered; failing to issue credits as promised; imposing unlawful fees and advance notice requirements on cancellation requests; misleading consumers about their rights to cancel their memberships; and refusing to honor cancellation requests. As part of her lawsuit, Attorney General James sought to recover a $250,000 bond the company had posted in 2015 pursuant to a provision of the New York Health Club Services Law. The law requires all gyms to post a bond to provide a source of recovery for members if the gym files for bankruptcy or violates the law. The bond is currently being held by a third-party bond company. 

Days before Attorney General James filed her lawsuit TSI filed for bankruptcy. In November 2020, the bankruptcy court approved a transaction that allowed a third-party to purchase TSI’s assets without assuming liability for any of TSI’s conduct prior to the transaction. The bankruptcy court order also required TSI’s remaining assets to be sold and for the company to be shut down. The transaction closed on November 30, 2020, and, since that time, all gyms branded New York Sports Club or Lucille Roberts have been purchased and are now operated by a different company. TSI no longer has any role in owning or managing NYSC or Lucille Roberts gyms. 

TSI’s agreement with the Office of the Attorney General (OAG) requires the company to forfeit all rights to the $250,000 bond and to assist Attorney General James in obtaining the bond from the bond company. Attorney General James plans to use the $250,000 bond to provide potential restitution to affected members. NYSC and Lucille Roberts members who were improperly charged during the pandemic or denied requests for cancellation can still file complaints if they have not already done so on the OAG’s website. Consumers are encouraged to submit any documentation they have along with their complaints. 

TSI no longer owns or operates any health clubs in New York or across the country and will soon cease to exist.

Today’s agreement does not involve the new owner of NYSC or Lucille Roberts and therefore the company remains subject to all New York laws. Attorney General James advises any New Yorker who belongs to one of these gyms and believes they continue to be treated unlawfully to file a complaint with the OAG.

A RECOVERY FOR ALL OF US: MAYOR DE BLASIO ANNOUNCES MAJOR NEXT STEPS TO CLOSE THE DIGITAL DIVIDE IN NYC

 

City releases requesting proposals for modern, innovative, equitable broadband infrastructure for universal broadband and announces reservation process for light poles to be used for 5G installation

Mayor Bill de Blasio today announced next steps on the City’s efforts to achieve affordable and universal broadband. With a historic $157 million capital investment, the City is releasing a Request for Proposals that invites the telecommunications industry to create new affordable broadband service options through a first-ever coordinated system of access of up to 100,000 City assets, prioritizing areas identified by the Task Force on Racial Inclusion and Equity. The Mayor also announced the City will accelerate the buildout of 5G by making an unprecedented 7,500 City street poles available for mobile carriers to build out their networks, mainly in underserved areas. Combined, these initiatives will reach millions of New Yorkers across all five boroughs, expanding access to quality, high-speed, and reliable internet at home or on the go. 

 

“All New Yorkers deserve affordable Internet access, no matter their zip code,” said Mayor Bill de Blasio. “With this historic effort to invest in broadband and 5G infrastructure, we are making tremendous strides toward closing the digital divide once and for all.” 

 

“The digital divide affects how New Yorkers live, work, go to school, and connect with their communities,” said Deputy Mayor for Operations Laura Anglin. “We applaud the multi-agency effort to change the playing field to ensure that all New Yorkers, regardless of where they live, have access to quality, high-speed, affordable internet service.”

 

"Internet connectivity is a means to address inequity, combat digital redlining, and create new economic opportunities for hundreds of thousands of New Yorkers who have been historically sidelined from the benefits of digital life," said  J. Phillip Thompson, Deputy Mayor for Strategic Policy Initiatives and co-chair of the Taskforce on Racial Inclusion and Equity. "These initiatives will bring 21st century life to underserved and low-income neighborhoods and it will provide Internet connection in a way that protects user privacy, ensures affordable rates, and delivers reliable access."

 

"High-speed internet facilitates online learning, career advancement, and increased employment opportunities. It is a requirement to fully participate in today's economy," said Deputy Mayor for Housing and Economic Development Vicki Been. “Building out access to the Internet democratizes a critical economic development tool, especially by providing our public housing residents the same opportunities as other New York City residents and is an important milestone in our fair recovery agenda." 

 

“New Yorkers need internet connectivity to continue to live, work, and learn,” said John Paul Farmer, Chief Technology Officer of the City of New York. “With this RFP, we are opening the door for industry to step up and propose a range of technologies that will modernize broadband infrastructure and bring 4G and 5G connectivity to those New Yorkers who need it most. There is no one solution -- we welcome any and all ideas and the opportunity to work with all those who share our goal of closing the digital divide in New York City.”

 

“Over the past year, we worked closely with our partners in the telecom industry and we are now poised to make New York City a leader in 5G technology,” said Department of Information Technology and Telecommunications Commissioner and Citywide Chief Information Officer Jessica Tisch. “The 5G networks we are building out across all five boroughs will serve as an engine of economic growth and recovery for years to come.”

 

"COVID-19 has rapidly shifted the way we work, learn, socialize and access critical services. For communities hardest-hit, the digital divide only compounds longstanding racial and socioeconomic disparities," said Sideya Sherman, Executive Director, Taskforce on Racial Inclusion and Equity and EVP, Community Engagement & Partnerships, NYCHA. "This multi-agency effort will benefit all New Yorkers through greater competition while accelerating access for the communities that need it the most."

 

REQUEST FOR PROPOSALS 

 

The RFP represents a first in the nation approach to closing the digital divide and changing the broadband market, incentivizing companies of every size, and M/WBEs, to provide new high-performing and affordable broadband service options. The RFP is being released as a partnership between the Mayor’s Office of the Chief Technology Officer (MOCTO), the Department of Small Business Services (SBS), and the New York City Economic Development Corporation (NYCEDC). Through the RFP, the City expects to engage multiple internet service providers using a range of technologies that will lower connectivity costs for New Yorkers and increase competition amongst companies while incentivizing them to reach and serve more customers with broadband starting with more than 30 target neighborhoods identified by the Task Force on Racial Inclusion and Equity as most impacted by COVID-19. The RFP will reach 600,000 New Yorkers, including 200,000 public housing residents.

 

The NYC Internet Master Plan indicates that 18% of New Yorkers, or 1.5 million people, have neither a home nor a mobile internet connection. New Yorkers without internet connectivity are more negatively impacted during COVID-19 without the ability to access jobs, training, education, and mental health and healthcare resources from home. 

 

18 agencies and entities have made up to 100,000 assets available for the RFP, including: Department of Social Services (DSS), Human Resources Administration (HRA); Department of Homeless Services (DHS); New York City Economic Development Corporation (NYCEDC); Department of Transportation (DOT); Department of Environmental Protection (DEP); Parks Department (Parks); Department of Sanitation (DSNY); Department of Citywide Administrative Services (DCAS); Department of Education (DOE); Health + Hospitals (H+H); New York City Housing Authority (NYCHA); Department of Correction (DOC); New York Public Library (NYPL); Queens Public Library (QPL); Brooklyn Public Library (BPL); the Fire Department (FDNY); and the Brooklyn Navy Yard. 

 

Proposals for the RFP will be accepted from March 3rd, 2021 through April 19th, 2021. Details and submission information can be found online at http://nyc.gov/broadbandrfp. 

 

POLE-TOP RESERVATION PLAN FOR 5G

To make New York City a leader in municipal 5G deployments, the Department of Information Technology and Telecommunications (DoITT) and the Department of Transportation (DOT) will make 7,500 street poles available to mobile telecommunications franchisees through the City's new online reservation portal, which streamlines the process. About 1,500 poles will be released each quarter over the next 15 months, with the first reservation phase starting this month. 

 

This doubles the number of City street poles currently reserved and will ensure that 5G is built out equitably by making 75 percent of the poles available in the outer boroughs or above 96th Street in Manhattan. This strategic approach will make sure that historically underserved and under-connected neighborhoods can benefit from 5G and its promise of broadband-like speeds for cellular data connections.

 

Wireless companies that hold one of twelve mobile telecommunications franchise agreements with DoITT will install and operate mobile equipment on City-owned light poles and privately-owned utility poles. The 5G equipment can be housed and concealed in a box that also supports 4G equipment. The Public Design Commission has approved a uniform single-tenant design, which represents an unprecedented collaboration between the City and the mobile telecommunications industry and takes the public's input into account. Additionally, after an extensive review, the Department of Buildings will issue guidance to clarify standards for siting and placement of antennas on buildings.

 

STATE LEGISLATION 

 

These efforts to bridge the digital divide will be accelerated through the enactment of legislation (S. 3141 Parker) which will level the internet service provider playing field and increase competition to lower prices. The City currently administers franchises for providers of cable companies that provide internet service but is prevented by state law from similarly engaging broadband-only companies. 

 

Providing the City with the authority to issue franchises to a broader set of companies, not just cable internet franchisees, will increase consumer choice and drive down prices of in-home broadband, enabling more lower-income households to subscribe. With this legislation, New York City can improve upon important consumer protections to advance high-quality service standards and safeguard the rights of consumers.

 

"We are excited to join our agency partners to kick off an RFP process that will take us one step closer to closing the digital divide for all those New Yorkers who lack effective access to broadband" said Department of Transportation Commissioner Hank Gutman. "Now more than ever, New Yorkers need reliable internet to connect them to essential resources, and DOT is proud to be a part of this innovative new plan. We look forward to seeing how DOT’s light poles will be creatively used to expand broadband more widely to communities across the five boroughs."

 

“COVID-19 has profoundly changed the way we live and work, emphasizing a greater need for internet access,” said Jonnel Doris, Commissioner of the NYC Department of Small Business Services. “These initiatives are a big step forward in providing internet connectivity across the City, particularly in underserved communities. We look forward to the industry’s proposals for broadband infrastructure assets, that will ultimately help our small businesses and job seekers access the resources they need.” 

 

“As our city’s economy recovers, helping more New Yorkers access broadband connections makes our city stronger and fairer,” said James Patchett, President and CEO of the New York City Economic Development Corporation. “These innovative solutions for low-cost internet service are essential to closing the city’s digital divide and strengthening the communities most impacted by COVID-19.

 

“Inclusivity and equity are central to our Agency’s work, as demonstrated by our consistent and comprehensive efforts to level the playing field for low-income communities through a range of reforms and initiatives, strengthening services for families in need while they are in shelter so that they can get back on their feet,” said Department of Homeless Services Administrator Joslyn Carter. “The NYC Internet Master Plan takes this commitment even further, with the critical goal of continuing to bridge the digital divide for all New Yorkers, including the young New Yorkers who we serve. Helping our clients access opportunity has been our top priority from day one — and in these extraordinary times, this mission is more important than ever, which is why we have redoubled our efforts to preserve as much stability as possible while ensuring that the school-aged children we serve have the same access to education as all other New York City children. This plan will bring us closer to realizing a future where every New Yorker has equal access to opportunity and an equal chance at achieving success.”

Governor Cuomo Announces $25 Million in Additional Funding for Nourish NY to Deliver New York-Produced Agricultural Products to Families in Need Through July

 

21 Million Pounds of Surplus Agricultural Products Have Been Delivered to More Than 1.3 Million Households Across New York State Since Nourish NY Was Launched 

 Governor Andrew M. Cuomo today announced an additional $25 million has been directed to New York's network of food banks and emergency food providers to support the Nourish New York program through July 2021. Since the Governor launched Nourish NY at the height of the COVID-19 pandemic in April 2020, 21 million pounds of surplus agricultural products have been purchased from New York farmers and delivered to more than 1.3 million households in need across New York State. Purchasing and food distribution using this third round of funding - which was first announced during the Governor's 2021 State of the State Address - are currently underway. Since the launch of Nourish NY, a total of $60 million has been invested in the program. 

"New York is on the path to recovery from the pandemic, but there is a continued need to assist families and our farmers across the state who are still struggling," Governor Cuomo said. "Since its launch last spring, the Nourish New York initiative has had incredible success in connecting our agricultural producers with food banks in every corner of the state to bring fresh local foods to families in need. This third round of funding will help ensure that no New Yorker goes hungry and households have access to nutritious foods - while also supporting New York's agricultural economy."

The Nourish New York program provides funds to New York's food banks and emergency food providers, who then purchase agricultural products from New York farmers and dairy manufacturers and deliver the food to families in need. Emergency food providers can use Nourish New York funds to:

• Set up food-drive through events/giveaways;
• Distribute dairy vouchers that can be redeemed in grocery stores for products like cheese, yogurt, milk, sour cream, and butter, throughout the state, and/or;
• Purchase products directly from New York dairy/food manufacturers for their feeding programs.

Due to the COVID-19 pandemic, farmers experienced a drastic supply chain shift, which resulted in the loss of markets and income and in the waste of fresh surplus foods, particularly fluid milk. Simultaneously, the demand for food through emergency food providers escalated across the state. Seeing the opportunity to feed residents and aid farmers, the Governor launched the Nourish New York initiative. This initiative provided $25 million in funding for the first round and $10 million in the second round of the program for the purchase of foods grown, raised, or processed in New York State and has served as an important alternative revenue stream for farmers and dairy processors during the pandemic.  More than 4,150 farms have been impacted through the program. 

State Agriculture Commissioner Richard A. Ball said, "Over the last 10 months, the Nourish New York program has helped feed more than one million families with nutritious dairy, fruits and vegetables, and so much more, and helped make sure our farmers had a market for their products. We are proud of the connections that have been made and thank the Governor for the continued commitment to purchase goods from New York State farmers and ensure that all New Yorkers have access to healthy foods." 

New York State Health Commissioner Dr. Howard Zucker said, "Throughout the pandemic, resources for many have been stretched due to job loss and other hardship.  Nourish New York, an example of the Health Across All Policies initiative, allows food banks and farmers to fill a vital public health need by ensuring that the nutritious foods that keep us healthy are reaching the tables of families who need it the most." 

Licensed Pharmacist Pleads Guilty To Making False Statements To The DEA About Controlled Substances

 

 Audrey Strauss, the United States Attorney for the Southern District of New York, announced that RICHARD SCHIRRIPA pled guilty to making materially false statements to officers of the Drug Enforcement Administration (“DEA”).  On two occasions in 2020, SCHIRRIPA falsely represented that, as part of the recent closure of his pharmacy in Manhattan, he had sold, transferred, or destroyed all controlled substances.  In fact, he remained in possession of thousands of controlled substance pills/patches in his home, including fentanyl and oxycodone, which had been prescribed to others.  SCHIRRIPA pled guilty before U.S. District Judge George B. Daniels, to whom his case is assigned.

Manhattan U.S. Attorney Audrey Strauss said:  “When a pharmacy closes, powerful controlled substances frequently change hands – a potentially fraught moment.  As Richard Schirripa admitted today, he lied to the DEA twice about what he had done with large quantities of dangerous controlled substances, including potentially lethal fentanyl, when he closed his pharmacy.  Schirripa now awaits sentencing for his crime.”

According to the allegations in the Information, court filings, and statements made in court:

In or around January 2020, Madison Avenue Pharmacy (“MAP”) – which SCHIRRIPA had owned for many years – closed.  Under federal regulations, before a pharmacy discontinues business activities, it must notify the DEA at least 14 days in advance.  SCHIRRIPA did not comply with this requirement.  The DEA learned that MAP had closed when DEA officers attempted to conduct a routine audit of MAP and saw a piece of paper on the storefront that announced MAP’s closure and noted that MAP’s controlled substances had been transferred to a specified local pharmacy.  The DEA officers then went, in person, to that specified local pharmacy.  Shortly thereafter, SCHIRRIPA wrote the DEA (in January 2020) and met with the DEA (in February 2020). 

On both occasions, SCHIRRIPA made material false statements to the DEA.  On both occasions, SCHIRRIPA falsely represented that as part of the recent closure of MAP, he had transferred to others, sold, or destroyed all controlled substances.  In fact, SCHIRRIPA remained in possession of thousands of controlled substance pills/patches, including fentanyl, oxycodone, and oxymorphone.  These substances were all recovered from a safe in SCHIRRIPA’s home on Long Island.  When agents executed a search warrant at SCHIRRIPA’s home in April 2020, SCHIRRIPA acknowledged that these controlled substances were from his pharmacy and that he needed to destroy them.  There were nearly 4,000 pills/patches in total, many of which contained labels indicating that they had been prescribed to others.

Under the terms of his plea agreement, SCHIRRIPA also admitted to various regulatory violations, including regarding controlled substances.  SCHIRRIPA also agreed to:  Surrender of his pharmacy and pharmacist licenses; a three-year ban before he can reapply for such licenses; and a three-year ban on any employment that involves his possessing, controlling, or distributing controlled substances.

SCHIRRIPA, 67, of Fort Salonga, New York, pled guilty to one count of making false statements, which carries a maximum sentence of five years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  SCHIRRIPA is scheduled to be sentenced by Judge Daniels on July 13, 2021, at 10:30 a.m.

Ms. Strauss praised the outstanding investigative work of the New York Office of Homeland Security Investigations (“HSI”), the U.S. Postal Inspection Service, the DEA, the New York City Police Department, U.S. Customs and Border Protection, the Internal Revenue Service, and the Port Authority Police Department.  She also expressed gratitude to the U.S. Department of Health and Human Services, the New York State Department of Corrections and Community Supervision, and the Northvale, New Jersey, Police Department.

304 Days and Counting

 

Andrew Cuomo should be gone after the state budget is finalized. 

Bowman, de Blasio Announce New Vaccine Site in Co-Op City

 

 Rep. Jamaal Bowman and Mayor Bill de Blasio on Tuesday announced that a mass vaccination site will soon open in Co-op City, which has been devastated by the impacts of COVID-19 and has seen a below average vaccination rate. 

 

“This progress is cause for celebration, and I am grateful that our office was able to work with our federal, state, and local partners to bring more vaccines to Co-op City residents and neighboring communities in the Northern Bronx,” Bowman said. “In an area where one in four residents are elderly and thousands live with a disability, we cannot accept a vaccine rollout that is less than expedient and equitable. We’re doing everything we can to bring more sites to our district in the near future.”

 

On Sunday, Bowman and Senate Majority Leader Chuck Schumer sent a letter to President Biden calling on him to increase the number of vaccines available to residents of Co-op City, Edenwald, and Wakefield. One out of every 13 residents in the Co-op City/Edenwald/Wakefield area had been diagnosed with COVID-19 over the last year, and a staggering 411 people living there have lost their lives to this deadly virus, yet only 4 percent of Wakefield residents and 7 percent of Co-op City/Edenwald residents have received a vaccine, compared to 13 percent statewide.

 

Less than two weeks ago, Bowman also announced the opening of another mass vaccination center in Yonkers as part of an initiative to bring vaccines to underserved communities. The Yonkers site is now taking appointments and will vaccinate approximately 1,000 people per day.

 

The Co-op City site is currently under development and information on registration will be available soon.

Attorney General James and NYC Corporation Counsel Johnson Announce Recovery of $105 Million from Hedge Fund Manager Who Evaded Taxes

 

AG James and Corporation Counsel Johnson Deliver Largest New York False Claims Act Recovery Against an Individual Defendant in NYS History

 New York Attorney General Letitia James and New York City Corporation Counsel James E. Johnson today announced the recovery of $105 million in back taxes and damages from a hedge fund manager who defrauded New York state and New York City out of taxes on deferred-compensation income in 2017. Thomas E. Sandell through his firm, Sandell Asset Management Corporation (SAMC), recognized over $450 million in management and performance fees in 2017 from investment management services performed in New York City, but instead of paying the state and city proper taxes on those fees, Sandell tried to dodge liability for tens of millions of dollars in taxes.

“The greed that allowed one man to try to avoid paying his fair share of taxes is astonishing,” said Attorney General James. “Thomas Sandell and his company bilked New York taxpayers out of tens of millions of dollars in a single year — placing a tremendous burden on our system and forcing ordinary New Yorkers to bear that cost. My office remains committed to ensuring that those who knowingly commit tax fraud — and those who facilitate their misconduct — pay a steep price for doing so.”

“Tax revenues pay for vital city services. When a deadly pandemic has eviscerated the economy and severely strained our city’s budget, every dollar counts,” said Corporation Counsel Johnson. “Hedge funds are obligated to pay taxes just like everybody else, and when they don’t, we’ll use our legal tools and strategies to hold them accountable. Period.”

As the result of a 2008 change in deferred fee income recognition rules, Sandell was required to recognize approximately $450 million in deferred fee income in 2017 and pay taxes on that income in New York state and New York City. But, to avoid this liability, Sandell left New York to live in London from August 2016 until mid-2019, and, even though SAMC continued operating in New York City, Sandell and SAMC took steps to make it appear as though SAMC’s operations were no longer in New York City, often with the assistance of an international accounting firm (Accounting Firm A).

As part of this deception, Sandell opened a shell office with three back-office employees in Boca Raton, Florida, which Sandell and SAMC held out to New York’s tax authorities as SAMC’s sole U.S. operation — even after agreeing to a finding by the U.S. Securities and Exchange Commission (SEC) that SAMC’s principal place of business continued to be in New York City. To further conceal SAMC’s New York presence, Sandell also funneled SAMC’s payroll and property expenses through a third-party entity — which he owned — even though SAMC had incurred, remained responsible for, and, in fact, continued paying those expenses.

Despite being put on notice that his tax position was problematic by multiple advisors, including his long-time tax preparer (Accounting Firm B), Sandell nonetheless claimed that he owed no New York taxes on the fee income he recognized in 2017. Accounting Firm B made clear to Sandell that he could not claim to owe no New York taxes on his deferred-fee income — particularly in light of the SEC’s conclusion that SAMC’s principal place of business continued to be in New York City. In response, Sandell replaced Accounting Firm B with Accounting Firm A without conducting any further diligence into Accounting Firm A’s tax position, and wrongfully claimed no New York tax was due on returns filed for the 2017 year, depriving the state and city of tens of millions of dollars in tax revenues.

Sandell has already transmitted the full $105 million agreed upon in back taxes and damages.

Sandell and SAMC neither admit nor deny the allegations made by the Office of the Attorney General (OAG) and by the New York City Department of Law.

The investigation leading to today’s agreement began with a whistleblower lawsuit filed in October 2018 under the New York False Claims Act. The investigation found that Sandell performed the investment services that generated the deferred fees at issue exclusively in New York City and that his deferred fees were therefore taxable in New York state and New York City. 

The OAG expresses its appreciation to the whistleblower, without whose information the misconduct might not have been discovered, and to the whistleblower’s attorneys. Under the New York False Claims Act, whistleblowers are entitled to receive a percentage of settlement proceeds for bringing this misconduct to light. 

New Yorkers can learn more about filing a New York False Claims Act on the OAG website and can file an anonymous, secure transmission through the OAG’s whistleblower portal.

The OAG also thanks the New York state Department of Taxation and Finance and the New York City Department of Finance for their invaluable assistance in this matter.