Former Pharma Executive And Cousin Plead Guilty To Insider Trading Of Kodak Stock

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty pleas of JAMES ANDREW STILES and EDWARD GRAY STILES in connection with a scheme to commit insider trading based on misappropriated information about potential government loans to be made to the Eastman Kodak Company to finance the production of COVID-19-related pharmaceutical components. ANDREW STILES and GRAY STILES were arrested in 2023 and pled guilty to securities fraud based on insider trading before U.S. District Judge Ronnie Abrams.

U.S. Attorney Damian Williams said: “Andrew Stiles betrayed the trust and confidence of his employer by stealing confidential business information and using it alongside his cousin, Gray Stiles, to make unlawful trades in Kodak’s stock based on inside information.  Even secret codes and lies to regulators could not stop them from getting caught.  No one is above the law, and this Office’s commitment to protecting the integrity of the financial markets remains a priority.” 

As alleged in the Indictment, other public court documents, and statements made during court proceedings:

Between June and July 2020, ANDREW STILES conducted an insider trading scheme in which he misappropriated material, non-public information (“MNPI”) and used it to trade in the stock of the Eastman Kodak Company (“Kodak”).  He further provided that MNPI to his cousin, GRAY STILES, so that he would likewise trade on the MNPI.

During that time, ANDREW STILES was an executive at a company (“Company-1”) that was working with Kodak to collaborate on the production of chemicals for pharmaceutical manufacturing in connection with the COVID-19 pandemic.  Company-1 was also assisting Kodak in its application for a significant government loan, which ultimately resulted in the news, on July 27, 2020, of a government “letter of interest” to provide Kodak with a loan of $765 million (the “LOI”).  In the following days, Kodak’s stock rose substantially, at one point increasing to more than 2,500% above the closing price prior to the news of the LOI.

During June and July 2020, ANDREW STILES was kept apprised of Kodak’s efforts to obtain the government loan, and he both traded using that non-public information and passed that information to GRAY STILES.  For example, on July 9, 2020, when Kodak had applied for a loan in the amount of $655 million, ANDREW STILES and GRAY STILES exchanged the following coded text messages:

GRAY:           Any update on the film we sent off a few weeks ago to get developed

ANDREW:     600+.  Maybe 2 weeks out

GRAY:            I can live with that hahaha

Between June 2020, after ANDREW STILES learned about the potential loan to Kodak, and July 27, 2020, the date the LOI was first publicized, ANDREW STILES purchased more than 90,000 shares of Kodak stock, including multiple purchases the day before the LOI was scheduled to be announced.  GRAY STILES purchased more than 30,000 shares, more than half of which were purchased the day prior to the scheduled announcement of the LOI.  In fact, on July 27, 2020, ANDREW STILES texted GRAY STILES, “Tmw,” indicating the expected date of the announcement.  Less than one minute later, GRAY STILES responded, “Hot damn.”  Following that exchange, and before the news was announced, ANDREW STILES and GRAY STILES each purchased more than 10,000 additional shares. 

ANDREW STILES and GRAY STILES each sold the entirety of their shares in the days and weeks after the announcement.  ANDREW STILES realized profits of more than $500,000, and GRAY STILES realized profits of more than $700,000.

ANDREW STILES, 38, of Charleston, South Carolina, and GRAY STILES, 39, of Richmond, Virginia, each pled guilty to one count of securities fraud, which carries a maximum sentence of 20 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 defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.

Attorney General James Provides Tips for New Yorkers Ahead of Solar Eclipse

 

AG James Urges New Yorkers to Ensure Their Solar Eclipse Glasses Are Properly Certified and Encourages Consumers to Report Anyone Selling Fake Glasses

Anyone Experiencing Issues with Last-Minute Hotel Cancellations Should File Complaint with OAG

New York Attorney General Letitia James today issued a consumer alert ahead of the total solar eclipse urging New Yorkers to ensure any solar viewing glasses they purchase are properly certified. Large parts of New York state, including Western New York, the Finger Lakes, and Central New York, will be within the total eclipse path on April 8, and other regions, including the Hudson Valley and the New York City metro area, will experience a partial solar eclipse. Legitimate solar eclipse glasses should have an International Organization for Standardization (ISO) certification on the frame. It is important for everyone viewing the eclipse to wear protective solar viewing glasses for their safety. The Office of the Attorney General (OAG) has received complaints of last-minute cancellations by hotels for reservations made months prior. Attorney General James encourages anyone experiencing similar last-minute hotel cancellations to contact her office. 

“On April 8, millions of New Yorkers and visitors will have the opportunity to view a magnificent solar eclipse and they should do so safely by using properly certified glasses,” said Attorney General James. “There are serious risks associated with not using proper eyewear when looking directly at an eclipse, which is why everyone should follow guidance to ensure their solar eclipse glasses are legitimate and safe to use. Some areas of New York will see an influx of visitors, and I encourage any consumer who has experienced a last-minute hotel cancellation, price gouging, or any other service disruption to contact my office."

The National Aeronautics and Space Administration (NASA) recommends that anyone viewing the eclipse use certified solar viewing glasses because of the powerful energy emitted by the sun. Only legitimate solar eclipse glasses have special-purpose filters to protect your eyes. Attorney General James urges New Yorkers planning to view the solar eclipse to take the following steps to ensure the solar eclipse glasses they are using are legitimate to protect themselves: 

• Make sure the solar eclipse glasses you purchase are registered as a ‘Solar Viewer Brand’ with the American Astronomical Society. 
• Test the solar eclipse glasses ahead of time. The American Astronomical Society says that when wearing legitimate solar eclipse glasses indoors, objects should be hardly visible, and when worn outdoors, objects except the sun’s reflection on shiny surfaces should still be hard to see.  
• Be sure your glasses are marked with the international safety standard certification number ISO 12312-2. This number will be on the glasses’ frame. 
• If you already own glasses marked with the international safety standard certification, inspect them to make sure the filters aren’t scratched, torn, loose in the frame, or damaged in any way. If any of these conditions are present, replace the glasses with a new, certified pair. 
• Read information on how to safely use handheld viewers on the American Astronomical Society’s website. 
• Ordinary sunglasses cannot be used as a replacement for eclipse viewing glasses or handheld solar viewers.
• If viewing the eclipse through a camera or telescope, be sure your lens has a solar filter. Follow tips provided by NASA on how to safely photograph the solar eclipse.

Attorney General James encourages New Yorkers to report any seller selling fake or solar eclipse glasses to her office by filing a complaint online. 

New York state is giving away free I LOVE NY solar eclipse glasses that meet ISO certification standards at over 30 locations across the state while supplies last. A full list of locations distributing I LOVE NY glasses, as well as other sources for eclipse glasses, are available here. For more health and safety information, including tips for individual safety for those venturing out to view the eclipse, please visit 2024 Solar Eclipse Safety in New York State. 

Governor Hochul Announces Completed Expansion of 70-Unit Senior Housing Development in Westchester County

$38 Million Reconstruction Project Adds 40 Units to 50-Year-Old Manhattan Avenue Senior Apartments in Town of Greenburgh

Transit-Oriented Development Near Bus and Train Stations Will Provide Top-Tier Amenities to Seniors Ages 62 and Older, Including Community Space and Ground-Level Parking

Builds on Governor’s Long-Term Strategy to Increase New York’s Housing Supply – Including Housing for Vulnerable Populations

Governor Kathy Hochul today announced the completion of the 70-unit Manhattan Avenue Senior Apartments in the town of Greenburgh, Westchester County. The new development replaced a deteriorating 30-unit senior federal public housing facility built in 1972 and expanded the complex with an additional 40 apartments.

“The transformation of the Manhattan Avenue Senior Apartments will help seniors access safe, secure, and affordable homes in Westchester County and enable long-time residents to remain in their communities, close to friends and family, ”Governor Hochul said. “By supporting the overhaul of this development, my administration is doubling down on its commitment to using every strategy we can to unlock New York’s housing potential and giving all New Yorkers – including our seniors – the homes they deserve.”

In the last five years, New York State Homes and Community Renewal has created or preserved 1,500 affordable homes in Westchester County. Manhattan Avenue Senior Apartments continues this effort and complements Governor Hochul's$25 billion comprehensive Housing Plan that will build or preserve 100,000 affordable homes across New York, including 10,000 with support services for vulnerable populations, plus the electrification of an additional 50,000 homes.

Manhattan Avenue Senior Apartments is a single three-story building with 70 apartments for adults aged 62 and older. The new building replaced six dilapidated buildings originally constructed as senior housing by the federal Department of Housing and Urban Development in 1972 and operated by the Greenburgh Housing Authority. Existing tenants were relocated during construction and have now returned to live in the new complex.

Shared building amenities include a first-floor laundry room, computer room, community room, large lobby area, and a commercial kitchen. There are 43 ground-level parking spaces reserved for the tenants.

The development was designed to meet Enterprise Green Communities 2015 Standards. The development includes energy-efficient features such as Energy Star appliances and water conserving low-flow fixtures.

The development team is Georgica Green Ventures, LLC in partnership with the Greenburgh Housing Authority.

Manhattan Avenue Senior Apartments is located near both a local bus line and a Metro North train station. Within walking distance are convenience stores, a large shopping center, health care, and a municipal park. In addition, Manhattan Avenue Senior Apartments is adjacent to the Theodore H. Young community center that provides educational, cultural, and recreational events including swimming, shopping trips, social clubs, events, and a food pantry.

State financing for the $37.7 million development includes $5.3 million in tax exempt bonds, $14.3 million in Low Income Housing Tax Credits, and $14.7 million in subsidy from HCR.

Join Assemblymember John Zaccaro, Jr. For a FREE Ramadan Food Giveaway

 

Friends,

Each year, we join in celebration and observance alongside our Muslim community in the 80th Assembly District and beyond. 

I am so excited to announce our partnership with ICNARelief and Muslim American Society to host a Ramadan Observance Food Distribution at 2pm on Friday, April 5th at The Bronx Muslim Center in Little Yemen. 

This is a Free event, open to the public, while supplies last 

Please see our flyer for more detail and information. 

In solidarity,

John Zaccaro, Jr.

New York State Assembly

MAYOR ADAMS LAUNCHES FIVE-BOROUGH MULTIFAITH TOUR, BRINGING TOGETHER MULTIDENOMINATIONAL LEADERS TO DISCUSS ISSUES FACING THEIR COMMUNITIES

Mayor Adams Kicks Off Multifaith Tour Across NYC on Staten Island Today 

New York City Mayor Eric Adams today announced the city’s first “Five-Borough Multifaith Tour,” a series of conversations with clergy and faith leaders from across New York City to hear directly from them and discuss solutions to the serious issues facing their communities. The tour will begin today with a meeting of approximately 100 faith leaders from across Staten Island and continue with meetings in each borough over the coming weeks. This is the second series of multidenominational meetings convened by the Adams administration and builds on the city’s work to engage with and meet the needs of all faith communities.

“No matter the issue, New York City’s faith community is there for New Yorkers in need, working tirelessly to keep people fed, safe, and healthy, both mentally and physically,” said Mayor Adams. “Faith leaders are on the frontlines of countless issues and our administration is committed to supporting them however we can. I’m grateful to our faith communities for all they do, and I look forward to sitting down with leaders from across the city, as we embark on our Five-Borough Multifaith Tour, starting on Staten Island today.”

 

“I am delighted to kick off our second round of gatherings with multifaith leaders across the five boroughs,” said Mayor’s Office of Faith-Based and Community Partnerships Executive Director Pastor Gilford T. Monrose. “These meetings will be held for leaders of churches, temples, synagogues, mosques, and all the places of worship that play a critical role in all our communities. Today’s first meeting is an opportunity for faith leaders to discuss their work in the community and the issues and concerns facing their organizations on Staten Island.”

 

The Adams administration has engaged faith leaders on a number of issues, ranging from housing and homelessness to public safety and the asylum seeker humanitarian crisis. Last month, Mayor Adams announced additional details of his plan to help faith-based organizations and other mission-based nonprofits build critically-needed affordable housing across the five boroughs. As a key proposal in the Adams administration’s historic “City of Yes for Housing Opportunity” plan — a proposed set of zoning changes that aims to combat the city’s housing crisis by adding “a little more housing in every neighborhood” — the plan will unlock the ability for faith-based organizations to add new housing on their properties and generate income by updating zoning laws so they can more easily create much-needed new housing on their properties or convert older buildings to housing.

 

In January 2024, Mayor Adams and a coalition of multifaith leaders from across the city launched the Citywide Clergy Collective, a group of 272 faith leaders committed to preventing gun violence in New York City, at the administration’s annual interfaith breakfast. Using a $1.5 million grant from the New York State Department of Criminal Justice, Citywide Clergy Collective members deliver resources, direct services, and community-building programs to all New Yorkers across the five boroughs as they respond to the needs and traumas that gun violence creates. The programs and services are run by local faith leaders across the city with assistance from the New York City Department of Youth and Community Development, the Office of Neighborhood Safety, the Office of Faith-Based and Community Partnerships, and the New York City Police Department.

 

The Five-Borough Multifaith Tour also builds on the work of the Adams administration’s “Breaking Bread, Building Bonds,” a citywide initiative to combat the rise in hate crimes in many communities, and foster mutual understanding between New York’s diverse neighborhoods. Since launching in January 2023, the program has organized over 1,100 meals citywide and had over 11,000 participants.

Intercontinental Terminals Company to Pay Over $6.6 Million for Injuries to Natural Resources Resulting from a Fire at Its Facility Near Houston

 

The Justice Department announced that Intercontinental Terminals Company LLC (ITC) has agreed to pay over $6.6 million to federal and state natural resource trustees to resolve claims for natural resource damages resulting from a 2019 fire at ITC’s Deer Park terminal facility near Houston that released hazardous chemicals.

A complaint filed concurrently with the proposed consent decree seeks money damages and costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The fire resulted in the release of hundreds of thousands of barrels-worth of petrochemical products and firefighting water and foam into Tucker Bayou and surrounding waterways, including the Houston Ship Channel.

Designated federal and state trustees determined that the hazardous substances released from ITC’s facility caused significant injuries to ecological resources and services, including birds and marsh and riparian habitat areas. In addition, the hazardous chemicals released into air and water resulted in lost recreational opportunities in the Deer Park area, including temporary closures of multiple state, county and city parks and the Lynchburg Ferry, as well as the cancelation of an annual historical reenactment at San Jacinto State Park.

The settlement will be used to compensate the public for natural resource injuries, reimburse trustee agencies for the costs of assessment and fund the restoration planning and oversight process that will guide how restoration will be conducted. After a process that will include an opportunity for public comment, the trustees will use the cash payment to implement natural resource restoration projects to address ecological injuries and enhance recreational use to address lost human use of the injured resources. ITC previously paid about $1 million to reimburse federal and state trustees for their prior assessment costs.

“The 2019 fire at ITC’s Deer Park facility released a significant amount of hazardous substances that injured the Houston Ship Channel,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “Today’s settlement will enable restoration work to improve the environment in the channel and other affected waterways in the area and to enhance recreational opportunities for Texas residents and visitors.” 

“This settlement will help repair, in part, the devastating environmental damage caused by the release of hazardous substances from ITC’s Deer Park facility,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas. “I am committed to the restoration of clean waterways and a diverse ecosystem to benefit the residents of Deer Park.”

“NOAA is pleased to have worked cooperatively with industry and our co-trustees to reach an agreement to restore coastal waterways and communities impacted by this catastrophic event,” said Assistant Administrator Nicole LeBoeuf of the National Oceanic and Atmospheric Administration’s (NOAA) National Ocean Service. “Clean and resilient waterways are vital to coastal communities and this restoration will especially benefit those who have been disproportionately impacted by pollution.”

“I’m pleased we were able to secure this natural resource damages settlement after the serious destruction caused by the fire at Deer Park,” said Texas Attorney General Ken Paxton. “This fire burned for three days, spewing hazardous chemicals into our air, water, and land. Texas’s environmental enforcement suit against ITC is still pending. All companies operating in our state must take the utmost precaution to prevent any such disaster from harming our citizens and our environment.”

The designated federal trustees are NOAA and the Department of the Interior through the Fish and Wildlife Service. The state trustees are the Texas Commission on Environmental Quality, the Texas Parks and Wildlife Department and Texas General Land Office.

The federal and state trustees worked with ITC to perform the injury assessment. The Trustees will continue working together to develop and adopt a restoration plan that will be published for public comment.

In an earlier related CERCLA enforcement action, the Environmental Protection Agency (EPA) through the Justice Department secured an administrative settlement with ITC for $5.25 million to reimburse the United States for costs in responding to the releases from the fire at ITC’s facility.

For more information about the ITC tank fire, see darrp.noaa.gov/oil-spills/itc-tank-fir.

Attorneys from the Justice Department’s Environmental Enforcement Section and the Texas Office of the Attorney General are handling the case on behalf of the federal and state trustees.

The proposed consent decree was lodged in the U.S. District Court for the Southern District of Texas and is subject to a 30-day public comment period and final court approval. The consent decree and information on how to submit a public comment is available on the Justice Department’s website: www.justice.gov/enrd/consent-decrees.

Attorney General James Delivers More Than 4,600 Cans of Baby Formula in New York City

 

AG James Secured Formula from Walgreens for Price Gouging During 2022 Shortage

Second Delivery of Baby Formula by AG James Following Agreement with Walgreens for Price Gouging

New York Attorney General Letitia James delivered 4,668 cans of baby formula to New Yorkers in New York City as a result of her investigation into Walgreens Co. (Walgreens) for illegally raising prices of baby formula during the 2022 shortage. The Office of the Attorney General (OAG) began an investigation into Walgreens’ price gouging of baby formula following reports and consumer complaints about unreasonably high costs of the product. Attorney General James secured over 9,500 cans of baby formula from Walgreens, of which 4,668 were already delivered to New Yorkers in Western New York. In addition, Walgreens will pay a $50,000 penalty to resolve the OAG investigation. The 4,668 cans of baby formula distributed today have a wholesale value of approximately $150,000 and will go to the Met Council, which will help distribute them throughout New York City. 

“Price gouging of baby formula when parents are desperate to feed their children amid a national baby food shortage is illegal and unconscionable,” said Attorney General James. “Parents should never have to worry about feeding their babies because companies are taking advantage of a national emergency to raise prices. Today, hundreds of families will be able to get free baby formula from an agreement my office reached with Walgreens for price gouging. I am proud to deliver this baby formula to the Met Council which works day in and day out to help those who need it most.”

AG James, Met Council CEO David Greenfield, and volunteers assemble baby supply care packages with baby formula for low-income parents.

Millions of infants throughout the country are reliant on formula as their primary or supplemental food source, and a 2022 shortage caused by a plant closure and recall created significant hardship for families across New York state. In May 2022, Attorney General James issued warnings to more than 30 retailers across the state to stop overcharging for baby formula after consumers reported unreasonably high prices. An OAG investigation triggered by consumer reports found that Walgreens engaged in price gouging on at least 20 infant formula products. Walgreens raised retail prices by over 10 percent on those products. For some products, Walgreens’ price increase was over 20 percent, and in one case, it was over 70 percent. The OAG’s investigation found that Walgreens made over 2,400 individual formula sales at these inflated prices, selling over 3,400 cans or bottles of formula and bringing in over $150,000 in revenue. 

Met Council is a cornerstone nonprofit in New York City, offering various services to uplift vulnerable New Yorkers. Beyond its network of over 200 food pantries, Met Council provides comprehensive housing support, domestic violence victims services, career development programs, and much more to hundreds of thousands in need. These services are designed not only to meet immediate needs, like the upcoming distribution of 4,668 cans of baby formula, but also to empower individuals and families for the long term.

“We are so grateful to Attorney General Letitia James for the opportunity to give out more than 4,600 containers of baby formula to the neediest New Yorkers,” Met Council CEO David G. Greenfield said. “Having a baby is wonderful, but it’s also incredibly expensive, and baby formula is one of the most expensive items that babies need. This event will go a long way towards helping babies and families who need it. At Met Council, our goal is to always assist those in need, no matter who they are or where they’ve come from. We are fortunate to have a friend and ally in Attorney General James, who is always fighting for justice.”

Attorney General James has been a leader in the fight to protect New York consumers and guard against price gouging. In May 2023, Attorney General James secured a $100,000 settlement with Quality King Distributors, Inc. due to unconscionable price increases for Lysol products during the early days of the COVID-19 pandemic. In March 2023, Attorney General James announced price gouging rules to protect consumers and small businesses from corporate profiteering. The rules would strengthen enforcement of New York’s price gouging law. In April 2021, Attorney General James delivered 1.2 million eggs to food pantries throughout the state which were secured as part of an agreement with the nation’s largest egg producers for price gouging in the early months of the pandemic. Throughout the pandemic, during major disruptions, and ahead of declared disasters, Attorney General James has issued consumer warnings against price gouging on essential supplies.

New Yorkers should report potential concerns about price gouging to the OAG by filing a complaint online or calling 800-771-7755.

NYC Comptroller Audit Exposes 47th St BID’s Fiscal Mismanagement; Calls for City to Withhold Funds to Compel Changes in Leadership & By-Laws

 

47th St BID spent $391K for NYPD security for the Board Chair’s out-of-district office, paid Executive Director $33K for time not worked, repeatedly flouted laws & policies.

In a blistering new audit, New York City Comptroller Brad Lander unveiled ongoing fiscal mismanagement by the 47th Street Business Improvement District (BID), the non-profit chartered by the City’s Department of Small Business Services (SBS) and provided with City property tax assessments to maintain, develop, and promote the commercial activities of the Diamond District (West 47th Street between 5th and 6th Avenues).  

Despite a 2019 audit by the Comptroller’s office documenting extensive weaknesses in its finances and operations and detailing correction action, the BID failed to correct its practices. Comptroller Lander’s newly-released follow-up audit revealed that the BID spent nearly $400,000 improperly providing security for the offices of the Board Chair, which are outside of the district, paid its Executive Director over $30,000 for time not worked, and repeatedly flouted laws and policies in order to keep control in the hands of its leadership. Meanwhile, fewer than 3% of the businesses within the Diamond District participate as members in the BID’s work.  

Given the BID’s repeated non-compliance, the Comptroller recommends that the City place the 47th Street BID’s tax assessment funding in escrow until the BID makes changes in its leadership, by-laws, and policies to address ongoing mismanagement.    

“The leadership of the 47th Street BID is misusing City property tax assessment for its own benefit, and repeatedly violating laws and policies to improperly maintain its control. Meanwhile, fewer than 3% of the businesses in the district are participating members,” said Comptroller Brad Lander. “Given the board’s repeated refusal to address ongoing fiscal mismanagement of City funds, the Department of Small Business Services must take the serious step of withholding the BID’s assessments until there are changes in leadership, by-laws, and practices.” 

The Comptroller Office’s prior audit from 2019 had found that the BID: 

1. Spent $210,835 on security services for the Board Chair’s office outside of the district; 
2. Did not get board approval for budget modifications;  
3. Paid its executive director $25,242 to $38,664 more than other BID directors in FY2017;
4. Did not monitor payroll transactions or have employees submit timesheets; 
5. Did not follow rules around competitive contracting and purchasing, including disclosures for conflict of interest. 

Comptroller Lander’s new audit found that the 47th Street BID did not clean up its act and instead: 

1. Continued to pay for security services for the Board Chair’s office outside of the district— $390,968 in FY2022 alone; 
2. Paid its executive director $32,846 for time not worked on unauthorized leave, and additional gave him an unauthorized raise of $4,000; 
3. Continued to fail to monitor payroll or have submitted timesheets; 
4. Did not obtain board approvals before making payments to vendors nor have the bookkeeper review vendor contract pricing and terms. The BID did not competitively procure 5-out-of-6 procurements exceeding $20,000 (total procurement of $438,962) for maintenance, lobbying, and insurance. In addition, the BID did not maintain written agreements for 7 out of its 9 smaller vendors, totaling $151,293; 
5. Repeatedly violated state law by only having a small handful of directors vote on executive, nominating, and audit committee appointments. The Board Chair appointed all of his own audit and website committee members and a non-ex-officio finance committee member, but the board did not approve these appointments. In addition, the BID improperly allowed people who do not own property or a business in the district to vote to elect officers and conduct business; 
6. Charged Netflix at least $104,536 for the filming the TV series Kaleidoscope without approval by the City Council, Mayor’s Office of Media and Entertainment, and SBS; 
7. Failed to submit contractor background checks to SBS, potentially violating conflict of interest rules; 
8. Meanwhile, the audit found that only 2.9% of the 3,000 businesses within the Diamond District are members of the BID. 

BIDs are chartered by the City to deliver services to commercial districts to help keep them vibrant, clean, and safe, through street cleaning and sanitation, security, beautification, marketing and events, and other services. Each BID is run by a not-for-profit organization with a Board of Directors elected by its members.  

The NYC Department of Finance (DOF) levies a special assessment, billed to property owners, to fund BID services, which are then voted on by property owners in the area. The City of New York collects the special assessment and then turns it over to the BID. 

The Comptroller, who holds a Class D position on each of NYC’s 76 BID boards of directors (along with SBS, the borough president, and the local councilmember), analyzed all 76 BIDs in 2023, which showed that the vast majority of BIDs follow applicable governance and fiscal guidelines.   

For the first time, the Comptroller has recommended that SBS instruct DOF to place the BID’s special assessment collections in escrow until the BID changes its by-laws, re-elects or appoints leadership, and agrees to implement the audit’s recommendations.  

Lander continued, “The 47th Street BID’s funds are collected by the City and delivered to the BID to enhance safety, security, and vibrancy for the 3,000 businesses, workers, and customers of the district – not for the benefit of its Board Chair and Executive Director. The City should withhold future funds until fundamental changes are made.”