Manhattan Art Consultant Charged In Federal Court For Failing To Disclose Millions In Swiss Bank Accounts And Income

Allegedly Used Sham Trusts in Panama and Liechtenstein to Hide Assets

Preet Bharara, the United States Attorney for the Southern District of New York, and Shantelle P. Kitchen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an indictment against LACY DOYLE for obstructing the administration of the internal revenue laws and subscribing to a false tax return in connection with DOYLE’s establishment and maintenance of at least six secret, undeclared bank accounts in Switzerland and France.  DOYLE was arrested in lower Manhattan this morning and appeared before U.S. Magistrate Judge Ronald L. Ellis earlier today. 

U.S. Attorney Preet Bharara said: “As alleged in the indictment, Lacy Doyle went to extraordinary lengths to hide millions of dollars in assets and income from the IRS in overseas bank accounts.  As today’s charges make clear, my Office, and our partners at the IRS, will follow our investigations of U.S. tax law violations wherever they lead.”

IRS-CI Special Agent in Charge Shantelle P. Kitchen said: “The use of offshore bank accounts to conceal income and assets remains a very high priority for the Internal Revenue Service.  IRS-Criminal Investigation has made great progress in getting access to offshore account information.  We will continue to utilize the resources at our disposal to uncover U.S. taxpayers who willfully evade taxes by hiding their money out of the country.”

As alleged in the Indictment unsealed today in Manhattan federal court:[1]

DOYLE, assisted by others – including Beda Singenberger, a Swiss citizen who ran a financial advisory firm – established and maintained undeclared bank accounts in Switzerland to hide those accounts from the IRS.  DOYLE used a sham entity to conceal from the IRS her ownership of some of the undeclared accounts and deliberately failed to report the accounts and the income generated in the accounts to the IRS.

In 2003, DOYLE’s father died and secretly left an inheritance of over $4 million to DOYLE.  DOYLE, who was appointed the executor of her father’s estate, made court filings falsely stating under penalty of perjury that the total value of her father’s estate was under $1 million when, in truth and fact, it was more than four times that amount.

Thereafter, in 2006, DOYLE, with Singenberger’s assistance, opened an undeclared Swiss bank account for the purpose of depositing the secret inheritance from her father.  The account was opened in the name of a sham foundation formed under the laws of Lichtenstein to conceal DOYLE’s ownership.  As of December 31, 2008, the account held assets valued at approximately $3,548,380.

In 2010, the sham foundation controlled by DOYLE was re-domiciled from Lichtenstein to Panama.  As of May 31, 2010, the sham foundation maintained assets of at least approximately $3,151,961.37.

For each of the calendar years from 2004 through 2009, DOYLE willfully failed to report on her tax returns her interest in the undeclared accounts and the income generated in those accounts.  For each of these years, Doyle also failed to file a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS, as the law required her to do.

Singenberger was charged on July 21, 2011, with conspiring with U.S. taxpayers and others to defraud the United States, evade U.S. income taxes, and file false U.S. tax returns.  He remains at large.

DOYLE, 59, of New York, New York, is charged with one count of obstructing and impeding the due administration of the IRS laws, which carries a maximum sentence of three years in prison, and one count of subscribing to a false and fraudulent U.S. individual income tax return, which also carries maximum sentence of three years in prison.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

U.S. Attorney Bharara praised the outstanding investigative work of IRS-CI and also thanked the U.S. Department of Justice’s Tax Division for their assistance.

The case is being prosecuted by the U.S. Attorney’s Office for the Southern District of New York’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorney Jared Lenow is in charge of the prosecution.

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

A.G. Schneiderman Announces Lawsuit Against Staten Island Auto Dealerships For Alleged Deceptive Practices That Illegally Inflated Car Prices

    Schneiderman:  When Consumers Shop For A Car, They Should Not Be Misled By Deceptive Dealerships Looking To Make Illegal Profits

    Attorney General Eric T. Schneiderman today announced a lawsuit against two Staten Island dealerships owned by SG Hylan Motors Corp. d/b/a Honda of Staten Island, Staten Island Honda, Nissan of Staten Island and Staten Island Nissan (collectively “SG Hylan Motors”).  The lawsuit, filed in New York Supreme Court, alleges that SG Hylan Motors unlawfully sold “after-sale” products and services, including credit repair and identity theft protection services, to over 2,300 consumers. These extra products could sometimes exceed costs of $2,000 per consumer, and the charges were applied without the knowledge of the car buyer.

“When consumers shop for a car, they should not be misled by deceptive dealerships looking to saddle consumers with hidden costs,” said Attorney General Schneiderman. “Unfortunately, some dealers pad their pockets with fees for products and services that unaware consumers don’t need, and don’t want. We will continue to crackdown against car dealerships that seek to unfairly take advantage of ordinary New Yorkers.” 

According to the lawsuit, the SG Hylan Motors dealerships used deceptive sales tactics, including charging consumers for services while concealing such additional charges from the consumers, or by misrepresenting that the services were free.  In fact, consumers did not receive the credit repair and identity theft protection services for which they were charged. 

The court papers also allege that the SG Hylan Motors dealerships collected more than $2 million from consumers between 2011 and 2014 using these kinds of deceptive tactics.  The suit seeks a court order prohibiting the dealerships from engaging in such practices in the future and directing them to refund all illegally obtained overcharges to consumers.

SG Hylan Motors arranged with an independent company, called Credit Forget It, Inc., to sell credit repair and identity theft protection services beginning at least in 2011. It is a violation of state and federal law to charge upfront fees for services that promise to help consumers restore or improve their credit.  Contracts that violate the credit repair laws are void.

The court papers further allege that the SG Hylan Motors dealerships added on charges for other after-sale items like security systems and special tire protection services without clearly disclosing what they were charging for such services. The costs of these services were often bundled into the vehicle sales price and not separately itemized. As a result, unknown to the consumer, the price of the car stated on purchase and lease documents was inflated by the amount of these after-sale items or services.

This lawsuit is part of the Attorney General’s initiative to end the practice that automobile dealers call “jamming,” or charging consumers for hidden purchases.  In 2015, Attorney General Schneiderman announced a settlement with Credit Forget It, Inc., the company that purported to provide the credit repair and identity theft protection services.  Since 2015, the Attorney General has settled with 9 dealership groups for amounts totaling nearly $16 million in restitution and penalties.  Nearly 20,000 consumers were eligible for restitution under these settlements. 

The settlements include the following dealerships:

•  Paragon Auto Dealership: a group of automobile dealers in Queens and Westchester counties, including Paragon Honda, Paragon Acura, and White Plains Honda
•  Plaza Auto Dealership: a group of dealers located on Nostrand Avenue, Brooklyn, including, Plaza Toyota-Plaza Scion, Plaza Hyundai, Plaza Honda and Acura of Brooklyn
•  Manfredi Auto Dealership: a group of dealers located on Hylan Blvd, Staten Island, including Manfredi Fiat and Fiat of SI, Manfredi Mitsubishi, Manfredi  Kia, Manfredi Hyundai, Manfredi Cadillac, Manfredi Chrysler Jeep & Dodge, Manfredi Fiat Inc., S.I. Toyota, Manfredi Toyota and Manfredi Scion, Manfredi Subaru, Manfredi Mazda and Staten Island Subaru
•  Koeppel Auto Dealership: a group of dealers located in Jackson Heights, Long Island City and Woodside, Queens, including Koeppel Nissan, Inc.; LK Automotive Enterprises, LLC. d/b/a Koeppel Subaru, KL Auto Enterprises LLC. d/b/a Koeppel Mazda and Koeppel Volkswagen, Inc.
•  L.I. Autoworld, Inc. d/b/a Generation Kia: located in Bohemia, Long Island
•  Nissan 112:   located in Patchogue, Long Island
•  Huntington Honda, Honda of New Rochelle and New Rochelle Toyota: located on Long Island and in Westchester counties
•  Westbury Jeep Dodge and Fiat of Westbury: located in Westbury, Long Island
•  Security Auto Sales, Inc. d/b/a Security Dodge: located in Amityville, Long Island

The office is continuing to investigate a number of other New York auto dealers that sold or sell after-sale services without the knowledge and consent of consumers. 

Consumers who believe they have been jammed with unwanted products or services in connection with a vehicle lease or purchase or who were sold Credit Forget It’s credit repair or identity theft protection services are urged to file complaints online or call 1-800-771-7755.

A.G. Schneiderman Reaches Agreement With Zipcar For Charging Thousands Of Consumers Damage Fees In Violation Of Law

Zipcar Failed To Provide Consumers With Opportunity To Dispute Damage Fees Before Charging Customers’ Accounts; Impacted Customers To Receive Full Restitution 

   Attorney General Eric T. Schneiderman today announced that his office has reached a settlement with the membership-based rental car company Zipcar, Inc. for routinely charging New York consumers damage fees for rental vehicles in violation of New York law. The law requires that consumers have an opportunity to dispute damage fees before they are assessed, but an investigation by the Attorney General’s Office found that, in some cases, Zipcar charged consumers damage fees before notifying consumers of suspected damage.

“Consumers should never learn that they have been accused of damaging a rental car when they see a surprise charge on their credit card statement,” said Attorney General Schneiderman. “New Yorkers have a right to contest damage fees before any penalties are assessed and my office will continue to enforce the law to ensure that customers are treated fairly.”

Zipcar’s membership contracts provide that consumers are liable for any damage to the rental vehicle that occurs while the car is in their possession – whether they cause the damage or not.  Zipcar failed to provide consumers with notice of the damage and the amount of liability, and an opportunity to inspect the damaged vehicle before charging for damage to the vehicle, as required by New York law.  Instead, when damage to a vehicle occurred, Zipcar conducted an investigation to determine which Zipcar member had the car reserved at the time the damage occurred.  It then notified the consumer it deemed responsible for the damage, and charged the consumer’s account for the damage – up to a limit of $1,000 – before the consumer had the opportunity to dispute the charge. Under this policy, Zipcar charged 5,000 New York consumers for damage to its vehicles from 2011 through 2015.

In one instance, Zipcar charged a consumer $750 for scratches on a car before it even notified the consumer of the damage.  When the consumer complained that the damage had not occurred at the time of his reservation, Zipcar reviewed the file but refused to refund the money it had charged.

Under the settlement with the Attorney General, Zipcar has agreed to refund any damage charges that were assessed against consumers who contested their responsibility for the vehicle damage.  Zipcar has also agreed to pay $35,000 in fees and costs to the Attorney General’s office.  In addition, Zipcar has agreed to comply with New York law, and not to charge consumers for damage to its vehicles unless they affirmatively agree that they are liable or Zipcar obtains a legal determination of liability.

Unlike the traditional rental car industry, which requires consumers to visit a centralized rental car location every time they want to rent a vehicle, Zipcar permits pre-approved consumers who sign a membership agreement and pay a membership fee to rent Zipcar cars on an hourly or daily basis without having to pick up the car at a rental car agency.  Zipcar members can pick up rental vehicles at a variety of locations, including street parking spots and commercial parking garages.  Zipcar charges consumers for each rental using the credit or debit card information maintained by the consumer on file.   

Consumers who were charged a damage fee in connection with their rental of a Zipcar vehicle may be eligible for a refund if they objected to liability at the time the damage fee was assessed.  Consumers can submit a claim online at www.ag.NY.gov/zipcar-inc-refund-program, or call the Attorney General’s office at 212-416-6045 to have a claim form sent to them or they can submit a request by mail.

CM COHEN CALLS FOR KOSSUTH PLAYGROUND TO BE INCLUDED IN COMMUNITY PARKS INITIATIVE, COHEN AND BP DIAZ ALLOCATE $1.16 MILLION TO PLAYGROUND

   Council Member Andrew Cohen has called for Kossuth Playground in Norwood to be included in the City’s Community Parks Initiative (CPI) when the program is expanded next year.  In a letter to Parks Commissioner Mitchell Silver, Cohen requested that the playground be considered as a potential CPI site due to its dire need for improvements and the passion of local park advocates.

Cohen and Borough President Ruben Diaz Jr. have allocated a combined $1.16 million in capital funds for improvements to Kossuth Playground.  Those funds will allow for renovations to be made to the basketball courts which are utilized on a daily basis.  While the local elected officials are dedicated to enhancing the playground, a larger financial commitment than either of them can provide needs to be made.

The CPI was created to make unprecedented investments and needed improvements in small, neighborhood parks all across New York City.  Additionally, the initiative seeks to engage communities and build partnerships with local residents and advocacy groups to improve usage of these parks. Mr. Cohen believes by including Kossuth Playground in the CPI the park will then receive more resources and expanded programming.

“Community advocates, the Borough President and I are committed to enhancing Kossuth Playground.  I urge the Parks Department to join us by adding Kossuth to the Community Parks Initiative, said Council Member Andrew Cohen.  “The CPI has built up neighborhood parks all throughout New York City and this designation will ensure that this playground will receive the necessary resources and expanded programming that the community deserves.”

“I’m excited to partner with Council Member Andrew Cohen to help with the renovations for Kossuth Playground, investing $500,000 in capital funds from this year’s budget to help jumpstart the project,” said Bronx Borough President Ruben Diaz Jr. “I am a huge proponent of finding space for kids to play and have fun, in a safe environment that would allow for them to get exercise, run around and get some outdoor exercise like I used to when I was a kid. Improving our playgrounds is a priority, especially as we continue to push our ‘#Not62’ project that promotes a healthy lifestyle in The Bronx.”

Three Brooklyn Men Charged in Manhattan Federal Court for Two Bank Burglaries

Thefts Yielded About $5 Million in Cash and Valuables

Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriquez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced that MICHAEL MAZZARA, CHARLES KERRIGAN, and ANTHONY MASCUZZIO were arrested this morning for their roles in bank burglaries in Brooklyn and Queens, New York, earlier this year.  MAZZARA, KERRIGAN, and MASCUZZIO will be presented later today in Manhattan federal court before United States Magistrate Judge Ronald L. Ellis.

            Manhattan U.S. Attorney Preet Bharara said:  “In the dark of the night, these defendants allegedly blowtorched their way through the roofs and into the vaults of two different banks, stealing over $5 million in cash and customer valuables kept in safe deposit boxes.  Through their brazen bank heists, the defendants allegedly stole not just people’s money, but their memories too, leaving in their destructive wake gaping holes and looted vaults.  But these bank jobs also left enough of a trace for the FBI and NYPD, whose good old-fashioned police work led to the charges and arrests announced today.”     

            FBI Assistant Director-in-Charge Diego Rodriquez said:  “The Mazzara bank robbery crew did more than just allegedly steal money from banks, they took irreplaceable mementos from people who believed those items were far too valuable to be kept at home.  These men were allegedly after the money, but they also took heirlooms, jewelry, documents and family photos and tossed them aside.  Those items held little value to the men accused in this case, but we hope the community finds some solace in the fact that they will no longer be able to commit these thefts.”

            NYPD Commissioner William J. Bratton said:  “These heists resembled scenes from the movie Heat– the work of a crew that was well organized, meticulous, and elusive to law enforcement.  This investigation was conducted with painstaking persistence.  Left with few clues after the heists, our crime scene teams hunted for every shred of evidence.  From the plywood purchased at a nearby Home Depot, to the torches from a Brooklyn welder used to muscle into the vault, the picture slowly came into focus, resulting in today’s arrests and charges.”

            According to the Complaint[1]:

            Between April 2016 and the present, MAZZARA, KERRIGAN, and MASCUZZIO were part of a crew that burglarized banks in Brooklyn and Queens, New York, by cutting into the banks’ vaults, and stealing a total of approximately $5 million in cash, jewelry, diamonds, stock certificates, and other valuables.  Specifically, from about April 8 to April 10, 2016, MAZZARA, KERRIGAN, and others burglarized an HSBC Bank branch in Brooklyn, and from about May 19 to May 22, 2016, MAZZARA, KERRIGAN, MASCUZZIO, and others burglarized a Maspeth Federal Savings Bank branch in Queens.  On both occasions, the burglars used acetylene blowtorches to cut into the top of the banks’ vaults from the roof of the building.  At the Maspeth Federal Savings Bank branch, they shielded their activities from view by constructing a plywood shed on the roof of the bank.  The burglars then entered the vaults from above, broke open safe deposit boxes, and took both cash belonging to the bank and customers’ valuables from the safe deposit boxes.  The crew obtained approximately $330,000 in cash and an unknown amount in valuables from the HSBC branch, and approximately $296,000 in cash and $4.3 million in valuables from the Maspeth bank.  Surveillance footage captured some of MAZZARA, KERRIGAN, and MASCUZZIO’s activities as they prepared for and executed the burglaries.  Financial records and video surveillance also showed MAZZARA and MASCUZZIO purchasing some of the supplies that appear to have been used in the Maspeth burglary.

            MAZZARA, 44, KERRIGAN, 40, and MASCUZZIO, 36, all of Brooklyn, New York, are each charged with one count of conspiracy to commit bank burglary, which carries a maximum sentence of five years in prison; and one count of bank burglary, which carries a maximum sentence of 20 years in prison.  MAZZARA and KERRIGAN have also been charged with a second count of bank burglary, which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case 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. Bharara praised the efforts of the FBI, the NYPD, and the Drug Enforcement Administration in this investigation.  He also thanked the U.S. Probation Office, the New York State Police, and the New York National Guard Counter Drug Task Force for their assistance.  He added that the investigation is continuing.

            This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorneys Benet J. Kearney and David W. Denton, Jr., are in charge of the prosecution.

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

Mount Vernon Tax Preparer Convicted Of Obstructing The IRS And 38 Counts Of Aiding And Assisting Preparation Of False And Fraudulent Tax Returns

    Preet Bharara, the United States Attorney for the Southern District of New York, announced that tax preparer SAMUEL GENTLE, the owner of a tax preparation business named GenGen, Inc., in Mount Vernon, New York, was found guilty on charges of obstructing the IRS and aiding and assisting the preparation of false and fraudulent individual income tax returns for his clients.  GENTLE was convicted yesterday after a five-day jury trial before U.S. District Judge Cathy Seibel. 

Manhattan U.S. Attorney Preet Bharara said:  “As a jury found after trial, Samuel Gentle abused his position of trust as a tax preparer by systematically violating the nation’s income tax laws.  The investigation that led to this conviction underscores our commitment, as well as that of our partners at the IRS, in pursuing and prosecuting people who circumvent our tax laws.”    

As established by the evidence at trial:

From 2010 through 2014, GENTLE’s tax preparation business prepared and submitted to the IRS, on average, 3,200 tax returns each year.  Some of these tax returns were false and fraudulent in that they contained various inflated deductions for unreimbursed employee business expenses, gifts to charity, and Schedule C business expenses.

As part of the investigation of this matter, an undercover IRS agent posed as a client of GENTLE’s.  During the operation, the agent provided GENTLE with a Form W-2 showing income from wages.  Despite being provided no records to support any other deductions, GENTLE included false and fraudulent deductions for unreimbursed employee business expenses and gifts to charity on the tax return he prepared for the undercover agent.  GENTLE’s inclusion of these false and fraudulent deductions caused the return to fraudulently claim a refund.

GENTLE also failed to report on his own tax returns nearly half of the $1 million in receipts that he received for his tax preparation services from 2010 through 2014.  He spread the receipts across eight bank accounts at five banks.  In addition, he failed to issue W-2’s or Forms 1099 to himself or his employees, further concealing from the IRS the amount of receipts he and his business received.

GENTLE, 59, of Mount Vernon, New York, was found guilty on all 39 counts submitted to the jury, including one count of interfering with the administration of the internal revenue laws and 38 counts of aiding and assisting the preparation of false and fraudulent U.S. tax returns, each of which carries a maximum sentence of three years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

GENTLE’s sentencing is scheduled for October 25, 2016.

Mr. Bharara praised the IRS for their outstanding work in the investigation. 

9 Charged In Manhattan Federal Court With Trafficking Kilograms Of Cocaine Through The U.S. Mail System

Law Enforcement Has Seized Over 25 Kilograms of Cocaine

Preet Bharara, the United States Attorney for the Southern District of New York, Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), and James J. Hunt, Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), announced the unsealing of an indictment charging nine defendants with conspiring to distribute kilogram quantities of cocaine, and in particular, shipping the cocaine from Puerto Rico to New York City through the United States Postal Service (“USPS”) mail system.  Seven of the defendants were taken into federal custody this morning and will be presented this afternoon in Manhattan federal court before U.S. Magistrate Judge Ronald L. Ellis.  Two defendants remain at large. 

Manhattan U.S. Attorney Preet Bharara stated: “As alleged, the defendants engaged in a brazen scheme to turn the U.S. Postal Service into their own drug delivery service.  The defendants, which includes an employee of the U.S. Postal Service, allegedly schemed to ship multiple kilograms of cocaine through the mail, going so far as to claim, in one instance, that a lost package contained the ashes of a cremated relative, when in fact, it contained cocaine.”

USPIS Inspector in Charge Philip R. Bartlett stated:  “Drug Trafficking Organizations have been moving large quantities of cocaine through Puerto Rico to the New York metropolitan area for many years, destroying the lives of many through addiction and despair. Today’s arrests should send a strong message to drug traffickers that the United States Postal Inspection Service will spare no resource or expense to protect the sanctity of the mail.”

DEA Special Agent in Charge James J. Hunt said:  “Drug dealers’ desperation for product is just as desperate as an addict’s; however the dealer’s ‘fix’ is the profit made off the sale of poison.  This investigation underscores the extent drug traffickers will go to in order to smuggle illegal drugs into the United States.  The DEA Strike Force, USPIS, and U.S. Attorney’s Office Southern District of New York collaborated resources that uncovered a cocaine trafficking organization responsible for pumping millions of dollars-worth of  drugs onto New York City streets.”    

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

Between May 2015 and July 2016, the defendants JUSTIN ACOSTA, ELEELIN DIAZ, JOSE DIAZ, a/k/a “Gordo,” CRISTIAN GARCIA, KELVING HERNANDEZ, FELIX JIMENEZ, a/k/a “Daddy,” ROBERT RODRIGUEZ, a/k/a “Smiley,” MIGUEL TORRES, a/k/a “Ant,” and BRITNEY WORTHY conspired to distribute and possess with intent to distribute five kilograms and more of cocaine. 

The defendants operated the drug-trafficking scheme by arranging for the shipment of cocaine from Puerto Rico to various locations in New York City through the USPS, retrieving cocaine from various delivery locations, transporting cocaine to residences and a storage facility, and repackaging and selling the cocaine to individual customers.  Since February 2016, law enforcement officers have seized more than 25 kilograms of cocaine from shipments associated with the defendants.

Defendant HERNANDEZ is an employee of the USPS, and assisted co-conspirators by agreeing to track parcels and identifying locations to which narcotics could be sent.

Defendant RODRIGUEZ was involved in facilitating, receiving, and distributing the shipment of cocaine through USPS parcels, and contacted the USPS multiple times for information on the status and location of certain parcels that contained cocaine.  In communications with the USPS, including in an email RODRIGUEZ sent directly to the U.S. Postmaster General, RODRIGUEZ falsely asserted that one of the parcels, which he believed had been lost, contained the cremated ashes of his purportedly deceased father.  In fact, that parcel had been seized and found to contain approximately two kilograms of cocaine.

ACOSTA, 26, JOSE DIAZ, 36, GARCIA, 31, JIMENEZ, 28, RODRIGUEZ, 36, TORRES, 34, and WORTHY, 24, were arrested this morning.  ELEELIN DIAZ, 27, and HERNANDEZ, 42, remain at large.  Each is charged with one count of conspiring to distribute and possess with the intent to distribute narcotics, which carries a maximum sentence of life in prison and mandatory minimum sentence of 10 years in prison.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendants will be determined by the Court.

Mr. Bharara praised the outstanding investigative work of the USPIS and of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the New York City Police Department, Immigration and Customs Enforcement – Homeland Security Investigations (HSI), the New York State Police, the U. S. Internal Revenue Service, Criminal Investigation Division, the Federal Bureau of Investigation, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, the New York Department of Taxation and Finance, the Rockland County Sheriff’s Office, the Clarkstown Police Department, the Port Washington Police Department, and the New York State Department of Corrections and Community Supervision.  The Strike Force is partially funded by the New York/New Jersey High Intensity Drug Trafficking Area (HIDTA), which is a federally funded crime fighting initiative.

The prosecution is being handled by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Alex Rossmiller and David Abramowicz are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

COMPTROLLER SCOTT M. STRINGER RELEASES ANALYSIS OF NEW YORK CITY’S FISCAL YEAR 2017 ADOPTED BUDGET

Comptroller Projects a $3.6 Billion Gap in Fiscal Year 2018  

Tax revenues are still growing – but slower than the average growth over the last four years

 City-funded expenditures in New York City’s $84.6 billion FY 2017 Adopted Budget will increase by 5.4 percent in the coming year, above the projected 1.6 percent growth in tax revenues, according to an analysis released today by New York City Comptroller Scott M. Stringer. The Comptroller’s report also found that while the City has added to its budgetary cushion, it remains more than $750 million short of the minimum amount to be fully prepared for an economic downturn.

“Tax revenues have grown for seven years in a row, but the rate of growth is slowing,” Comptroller Stringer said. “With our budget cushion still below optimal levels, now is the time to act and build up our reserves. We must do more to find agency efficiencies while revenue growth is still moving in the right direction.”

Over the past year, causes for concern about the national economy have grown, with falling corporate profits, slowing job growth, and a deterioration of global economic conditions. While the threat of a near-term recession remains low, these uncertainties underscore the importance of boosting the budget cushion to safeguard against a possible downturn.

While the City has been adding to its budgetary cushion, it is still $762 million short of the bottom of the optimal range of 12 percent of adjusted expenditures and $5.8 billion below the top of the optimal range of 18 percent. The City will begin FY17 with a cushion of $9.4 billion, equal to just 11.1 percent of adjusted FY17 expenditures.

The analysis also found that the City’s budget savings program relies heavily on spending reductions which would have formerly been labeled as budget adjustments. This list includes expenditure re-estimates, debt service savings, and hiring delays. Agency efficiency initiatives account for only 7.4 percent of the savings over FY16 and FY17.

Findings include:

• The Comptroller’s Office’s projects larger out-year gaps than forecast by the Administration. Projected gaps are $3.6 billion in FY 2018, $4.0 billion in FY 2019, and $3.4 billion in FY 2020.

• The greatest risk to the City’s finances remains Health + Hospitals, which faces significant roadblocks to achieving its deficit reduction goals. Additional risks include under-budgeted overtime costs, increased homeless shelter spending, and low federal Medicaid reimbursements for special education services.

• Preliminary pension investment returns, after fees, are estimated to be 1.46 percent in FY 2016. The shortfall will result in an estimated increase in City contributions of approximately $122 million in FY 2018, $244 million in FY 2019, and $366 million in FY 2020. The Comptroller’s Office will release final audited returns for FY 2016 this fall.

• Offsetting some of the risks is the Comptroller’s Office’s higher revenue forecast. The Comptroller’s Office projects that revenues will be more than the Plan’s by $601 million in FY 2017 and $1.0 billion over the Plan period. However, tax revenues in FY16 grew by only 3.6 percent, significantly less than average growth of 6.5 percent over the last four years.

• Since the proposed Executive Budget in April, expenditures in FY17 have increased by $543 million, including $473 million for City Council initiatives.

• The Adopted Budget Plan includes an additional $21 million in each year of the Plan to improve access to libraries. The City also baselined an additional $38.5 million in each year of the Financial Plan to fund Summer Youth Employment Program.

• Eleven months into FY16, the City only achieved 52 percent of its planned headcount growth, adding only 8,791 staff of the planned 16,845 increase. The June Plan counts this shortfall as part of its savings program for FY17.

“Given increased uncertainties in the global economy and signs of potential economic weakness at home, the City must take advantage of strong tax revenues before our window of opportunity to save and prepare for less robust times closes,” Stringer said.