Wednesday, September 21, 2022

Attorney General James Sues Donald Trump for Years of Financial Fraud

 

Donald Trump Falsely Inflated His Net Worth by Billions of Dollars to Further Enrich Himself and Cheat the System

Trump, Donald Trump Jr., Ivanka Trump, and Eric Trump Used Fraudulent Statements of Financial Condition to Obtain Millions in Economic Benefits

Lawsuit Seeks to Remove Trump and His Children from Their Roles at the Trump Organization; Ban Them from Future Leadership Roles in New York; Repay $250 Million They Illegally Obtained

New York Attorney General Letitia James today filed a lawsuit against Donald Trump, the Trump Organization, senior management, and involved entities for engaging in years of financial fraud to obtain a host of economic benefits. The lawsuit alleges that Donald Trump, with the help of his children Donald Trump, Jr., Ivanka Trump, and Eric Trump, and senior executives at the Trump Organization, falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things. From 2011-2021, Mr. Trump and the Trump Organization knowingly and intentionally created more than 200 false and misleading valuations of assets on his annual Statements of Financial Condition to defraud financial institutions.

This conduct was in violation of New York Executive Law 63(12), which gives the Office of the Attorney General (OAG) special and broad powers to go after persistent and repeated fraud and illegality, which in this case includes violating other state laws prohibiting the submission of false financial statements, the falsification of business records, and the commission of insurance fraud.

As a consequence of these violations, OAG is seeking, among other relief, to: 1) permanently bar Mr. Trump, Donald Trump, Jr., Ivanka Trump, and Eric Trump from serving as an officer or director in any New York corporation or similar business entity registered and/or licensed in New York state; 2) bar Mr. Trump and the Trump Organization from entering into any New York real estate acquisitions for five years; 3) award disgorgement of all financial benefits obtained through the persistent fraudulent practices, estimated to total $250 million.

In conjunction with the lawsuit, OAG has referred the matter to the U.S. Attorney’s Office for the Southern District of New York and the Internal Revenue Service (IRS) for criminal investigation.

“For too long, powerful, wealthy people in this country have operated as if the rules do not apply to them. Donald Trump stands out as among the most egregious examples of this misconduct,” said Attorney General James. “With the help of his children and senior executives at the Trump Organization, Donald Trump falsely inflated his net worth by billions of dollars to unjustly enrich himself and cheat the system. In fact, the very foundation of his purported net worth is rooted in incredible fraud and illegality. Mr. Trump thought he could get away with the art of the steal, but today, that conduct ends. There are not two sets of laws for people in this country; we must hold former presidents to the same standards as everyday Americans. I will continue to ensure that no one is able to evade the law, because no one is above it.”

Statements of Financial Condition

This years-long fraudulent scheme centers on the annual Statements of Financial Condition (statements) for Donald Trump that contain Mr. Trump’s or his trustees’ assertions of his net worth. From 2011-2021, these statements were compiled by Trump Organization executives, and were issued as a compilation report by Mr. Trump’s accounting firm. The statements are explicit that the preparation was the responsibility of Mr. Trump or, starting in 2016, the trustees of his revocable trust, Donald Trump Jr., and Allen Weisselberg. The statements were personally certified as accurate by Mr. Trump or by one of his trustees when being presented to financial institutions with the purpose and intent that the information contained in the statement would be relied upon by those institutions.

Over the course of OAG’s three-year investigation, OAG found that between 2011-2021, Mr. Trump’s statements were fraudulent and misleading in both their composition and their presentation. Mr. Trump made known through Mr. Weisselberg that he wanted his net worth on his statements to increase every year, and the statements were the vehicle by which his net worth was fraudulently inflated by billions of dollars year after year. All told, Mr. Trump, his children, the Trump Organization, and the other defendants as part of a repeated pattern and common scheme, derived more than 200 false and misleading valuations of assets for the 11 statements covering 2011 through 2021.

Each statement represented that the values were prepared by Mr. Trump and others at the Trump Organization in consultation with “professionals,” however, no outside professionals were retained to prepare any of the asset valuations for the statements. To the extent Mr. Trump and the Trump Organization received any advice from outside professionals that had any bearing on how to approach valuing the assets, they routinely ignored or contradicted such advice.

They also issued statements that were in blatant violation of generally accepted accounting principles (GAAP) in the United States, despite representing that the statements were prepared in accordance with these principles. They ignored the most basic rules and standards for financial reporting, including:

  •   Representing that Mr. Trump had cash on hand that he did not;
  •  Ignoring critical restrictions that would significantly lower property values when setting valuations;
  •   Changing the methodology used to value properties from year to year, without reason or notice;
  •   Using vastly different methods to value different properties even in the same year; and
  •   Including intangible items, such as brand premiums, when calculating an asset’s value, despite representing in the statements that such items were not included.

Values of Properties and Other Assets Presented in the Statements Were Fraudulent, Misleading, and Not Presented in Accordance with GAAP

In the 214-page complaint, which is the culmination of our investigation that included more than 65 witness interviews and review of millions of pages of documents, OAG lays out dozens of examples of this fraudulent activity and how Mr. Trump and the Trump Organization routinely and intentionally misvalued assets to further enrich Mr. Trump. The complaint includes fraudulent conduct across more than 23 different properties and other assets owned by Mr. Trump and the Trump Organization. Some examples of this misconduct include:

Trump Tower Triplex:

Valuations of this property relied on objectively false numbers to calculate property values. For example, Mr. Trump’s own triplex apartment in Trump Tower was valued as being 30,000 square feet when it was 10,996 square feet. As a result, in 2015 the apartment was valued at $327 million in total, or $29,738 per square foot. That price was absurd given the fact that at that point only one apartment in New York City had ever sold for even $100 million, at a price per square foot of less than $10,000, and that sale was in a newly built, ultra-tall tower. In 30 year-old Trump Tower, the record sale at that time was a mere $16.5 million at a price of less than $4,500 per square foot.

Trump Park Avenue:

This property is included as an asset on Mr. Trump’s Statement of Financial Condition from 2011 to 2021 with values ranging between $90.9 million and $350 million. Unsold residential condominium units owned by Mr. Trump or the Trump Organization represented the lion’s share of reported value for this property (in excess of 95% in some years). Reported values of the unsold residential units of the Trump Park Avenue building were significantly higher than the internal valuations used by the Trump Organization for business planning and failed to account for the fact that many units were rent stabilized. For example, an outside, bank-ordered appraisal in 2010 valued the 12 rent-stabilized at $750,000 total. Yet, in the 2011 and 2012 statements, the rent-stabilized apartments at Trump Park Avenue were valued as market rate for nearly $50 million total. In July 2020, the Trump Organization received an appraisal with a value of $84.5 million but on the 2020 Statement the Trump Organization valued Trump Park Avenue at $135.8 million.

40 Wall Street:

The Trump Organization owns a ground lease at 40 Wall Street, meaning it holds a leasehold interest in the land and buildings on the land, but pays rent to the owner. The Trump Organization received a bank-ordered appraisal for the commercial property at 40 Wall Street that calculated a value for the property of $220 million as of November 1, 2012. Yet in the statement that year and the next year (2013), 40 Wall Street was valued at $527 million and $530 million—more than twice the value calculated by the independent, professional appraisers. Even more egregiously, those increased valuations were attributed to information obtained from the same professional appraiser who valued the building at just over $200 million.

In 2015, the Trump Organization replaced the existing loan on the building with a loan from Ladder Capital Finance (working with Mr. Weisselberg’s son, a director there). The Ladder loan was approved based in part on an inflated appraisal prepared by Cushman & Wakefield. Ultimately, the final appraisal for the loan came to a valuation of $540 million through a number of unreasonable adjustments, including reducing costs and changing the assumptions concerning the ground lease. Even this increase was not enough for Mr. Trump and the Trump Organization. The 2015 statement, which was compiled in June, valued the building at $735.4 million — over 35% higher than the already inflated $540 million Cushman appraisal of that same date which the company knew about.

Vornado Partnership:

Mr. Trump’s statements misrepresented his holdings of cash, cash equivalent, and marketable securities. Most notably, for several years, included in his “cash” were the amounts in the Vornado Partnership Interests in which Mr. Trump had a minority stake and did not control. In some years these restricted funds accounted for almost one-third of all the cash reported by Mr. Trump. For example, they accounted for $24 million of the total $76 million in cash reported for 2018. Mr. Trump was well aware of the restricted and limited nature of his 30% interest because he personally took part in extensive, contentious litigation regarding these partnerships in which control over partnership-held cash and partnership business choices were expressly addressed.

Clubs:

The statements do not list separate values for each of Mr. Trump’s club facilities. Instead, the values for those properties are lumped together into a single figure. This was done intentionally to conceal significant swings in the value attributed to individual clubs and to conceal the methods used to arrive at those values. This lump sum figure was by far the largest asset value on Mr. Trump’s statement of financial condition every year. Mr. Trump and the Trump Organization employed various deceptive schemes in valuing the clubs to inflate their values.

  • Mar-a-Lago:
    This property was valued as high as $739 million based on the false premise that it was unrestricted property and could be developed and sold for residential use, even though Mr. Trump himself signed deeds donating his residential development rights, sharply restricting changes to the property, and limiting the permissible use of the property to a social club. In reality, the club generated annual revenues of less than $25 million and should have been valued at closer to $75 million.
  • Trump Aberdeen:
    The valuation of this golf course in Aberdeen, Scotland assumed 2,500 homes could be developed when the Trump Organization had obtained zoning approval to develop less than 1,500 cottages and apartments, many of which were expressly identified as being only for short-term rental. The $267 million value attributed to those 2,500 homes accounted for more than 80% of the total $327 million valuation for Aberdeen on the 2014 Statement of Financial Condition.
  • Trump National Golf Club, Jupiter:
    Mr. Trump purchased this golf course in Jupiter Florida for $5 million. Less than a year later, Mr. Trump valued the same property at $62 million on the 2013 statement, a markup of 1,100%. For every year from 2013 to 2020, virtually all of the value attributed to Jupiter was fraudulently overstated due to several deceptive methods and assumptions. The golf course was valued using a fixed-asset approach even though that was not an acceptable method for valuing an operating golf course. The bulk of the value in that fixed-asset approach was based on the use of an inflated purchase price from the purported assumption of “refundable” membership liabilities. Mr. Trump claimed to have paid $46 million for the club, consisting of $5 million in cash he actually paid and $41 million in assumed membership liabilities. In the statements, Mr. Trump did not disclose the inclusion of those inflated liabilities in the price of the club and in fact took the opposite position that his potential liability for those membership deposits was zero. Additionally, the Trump Organization overstated the value of this golf course by adding an additional 30% for the Trump brand in 2013 and 2014 and 15% from 2015 through 2020 – even though the statements disclaimed that any of the valuations included a brand premium.

False and Misleading Statements of Financial Condition Were Used to Secure and Maintain Financial Benefits on Favorable Terms

The statements were used to obtain and maintain favorable loans over at least an 11-year period. All told, the financial benefit realized from this scheme was approximately $250 million, including interest savings and transaction profits, because of the favorable loan terms they were able to obtain using his false and misleading statements.

Trump National Doral:

The Trump Organization executed a $150 million purchase and sale agreement for this property in 2011. Mr. Trump’s statements were used to secure a $125 million loan from Deutsche Bank and were regularly submitted to the bank to fulfill the financial reporting requirements of Mr. Trump as guarantor on the loan. In multiple instances, the loan agreement required that Mr. Trump certify the truth and accuracy of his statements as a condition of the guaranty and the continuing loan covenants.

Trump International Hotel & Tower, Chicago:

Since 2009, this property’s value has been excluded from the statements because, according to sworn testimony, Mr. Trump did not want to take a position that would conflict with his contention to tax authorities that the property had become worthless, and thus formed the basis of a substantial loss under the federal tax code. However, in 2012, using the building or its components as collateral, Mr. Trump and the Trump Organization obtained a $107 million loan on the building from Deutsche Bank. The loan received a $45 million expansion in 2014. Mr. Trump’s supposed net worth of $4 billion reflected on his statement was used to personally guarantee the initial loan at an interest rate approximately four percentage points lower than it would have been without his guaranty.

Trump Old Post Office, Washington, D.C.:

In 2013, the Trump Organization obtained a ground lease from the federal General Services Administration to redevelop this property into a luxury hotel. This project was captained by Ivanka Trump, and Mr. Trump’s statements were central to their effort to win the bid to redevelop this site. They were able to obtain a $170 million loan for construction from Deutsche Bank on much more favorable terms by personally guaranteeing the loans using Mr. Trump’s statements. The loan agreement required that Mr. Trump certify the accuracy of his statements annually and included a provision that made him guarantee that the materials provided to the bank to obtain the loan did not include any misleading information. Any misrepresentation on those statements would constitute a default under the terms of the loan. In May 2022, the Trump Organization sold the Old Post Office property for $375 million. As a result, Mr. Trump obtained more than $100 million in net profit, which was the result of the loan he was able to obtain by using his false and misleading statements.

Here is the link to the full addendum

Defendants

The 16 defendants in this case include: Donald Trump, Donald Trump, Jr., Ivanka Trump, Eric Trump, the Trump Organization Inc., the Trump Organization LLC, the Donald J. Trump Revocable Trust, DJT Holdings LLC, DJT Holdings Managing Member, Allen Weisselberg, Jeffrey McConney, as well as the entities that received the loans that are the subject of the action, including: Trump Endeavor 12 LLC, 401 North Wabash Venture LLC, Trump Old Post Office LLC, 40 Wall Street LLC, and Seven Springs LLC.

Causes of Action

The OAG alleges fraud and illegality under 63(12) in connection with the defendants’ conduct in preparing the statements and submitting those statements to financial institutions to obtain financial benefits. As part of demonstrating illegality under 63(12), OAG alleges that Mr. Trump and the other defendants violated state laws, including:

  • Falsification of business records in violation of Penal Law § 175.10;
  • Issuing a false financial statement in violation of Penal Law § 175.45;
  • Engaging in insurance fraud by submitting false and misleading information in a written application for insurance and to obtain other insurance benefits in violation of Penal Law § 176.05;
  • Engaging in a conspiracy to commit each of aforementioned state law violations.

The conduct alleged in this complaint also violates federal criminal law, including issuing false statements to financial institutions and bank fraud.

Relief

As a consequence of this persistent and repeated fraud and illegality, OAG is asking the court to:

  • Permanently bar Mr. Trump, Donald Trump, Jr., Ivanka Trump, and Eric Trump from serving as an officer or director in any New York Corporation or similar business entity registered and/or licensed in New York state;
  • Bar Mr. Trump and the Trump Organization from entering into any New York state commercial real estate acquisitions for a period of five years;
  • Bar Mr. Trump and the Trump Organization from applying for loans from any financial institution registered with the New York Department of Financial Services for a period of five years;
  • Award disgorgement of all financial benefits obtained through the persistent fraudulent practices of an amount to be determined at trial and estimated to total at least two hundred and fifty million dollars ($250 million).
  • Permanently bar Allen Weisselberg and Jeffrey McConney from serving in the financial control function of any New York Corporation or similar business entity registered and/or licensed in New York state;
  • Appoint an independent monitor to oversee compliance, financial reporting, valuations, and disclosures to lenders, insurers, and tax authorities at the Trump Organization for a period of no less than five years;
  • Replace the current trustees of the Donald Trump Revocable Trust with new independent trustees, and require independent governance in any newly formed trust should the Revocable Trust be revoked and replaced with another trust structure;
  • Require the Trump Organization to prepare, on an annual basis for the next five years, a GAAP-compliant, audited statement of financial condition showing Mr. Trump’s net worth, to be distributed to all recipients of his prior Statements of Financial Condition; and,
  • Cancel any certificate filed under and by virtue of the provisions of section 130 of the General Business Law for the corporate entities named as defendants and any other entity controlled by or beneficially owned by Donald Trump which participated in or benefitted from the foregoing fraudulent scheme.

This investigation has been conducted by Senior Enforcement Counsel Kevin Wallace, Special Counsel Andrew Amer, Assistant Attorney General Colleen K. Faherty, Assistant Attorney General Alex Finkelstein, Assistant Attorney General Wil Handley, Assistant Attorney General Stephanie Torre, Assistant Attorney General Austin Thompson, Special Counsel to the Solicitor General Eric R. Haren, Enforcement Section Chief Louis M. Solomon and Legal Support Analyst Samantha Stern. Additional support was provided by Data Analyst Anushua Choudhury, Senior Data Analyst Akram Hasanov, Data Scientist Chansoo Song, Deputy Director of Research and Analytics Megan Thorsfeldt, and Director of Research and Analytics Jonathan Werberg; as well as Information Technology Specialist Hewson Chen, Information Technology Specialist Paige Podolny, and Information Technology Specialist John Roach. Appellate support was provided by Deputy Solicitor General Judith Vale and Assistant Solicitor General Eric Del Pozo. The investigation was overseen by First Deputy Attorney General Jennifer


Virginia Man Arrested on Felony and Misdemeanor Charges for Actions During Jan. 6 Capitol Breach

 

Four Others Also Arrested on Charges in Case

 A Virginia man has been arrested on felony and misdemeanor charges for assaulting law enforcement officers and other actions during the breach of the U.S. Capitol on Jan. 6, 2021. His actions and the actions of others disrupted a joint session of the U.S. Congress convened to ascertain and count the electoral votes related to the presidential election.

Joseph Brody, 23, of Springfield, Virginia, is charged in a criminal complaint with assaulting, resisting, or impeding law enforcement officers, causing bodily injury, interfering with a law enforcement officer during a civil disorder, and obstruction of an official proceeding, all felony offenses. He also is charged with two misdemeanor offenses. Brody was arrested on Sept. 15, 2022, in Springfield. He made his initial appearance in the District of Columbia later that day and was released pending further court proceedings.

Four other defendants also face misdemeanor charges. They include Thomas Carey, 21, of Pittsburgh, Pennsylvania; Gabriel Chase, 22, of Gainesville, Florida; Jon Lizak, 21, of Cold Spring Harbor, New York, and Paul Ewald Lovley, 23, of Halethorpe, Maryland. Carey and Lizak were arrested on Sept. 15, 2022, Lovley was arrested Sept. 19, 2022, and Chase was arrested today.

According to court documents, all five defendants communicated with one another in advance of Jan. 6, 2021, and eventually illegally entered the Capitol as a group, at approximately 2:16 p.m. They moved throughout multiple levels, corridors, and rooms of the building, including the office and conference room of House Speaker Nancy Pelosi. Brody also entered the floor of the U.S. Senate Chamber, where he filmed or photographed the desks of U.S. Senators.

After about 35 minutes, the group exited the building and moved to the north end of the Capitol, witnessing the breach of the North Door. Brody assisted another person in the mob in using a metal barricade against a U.S. Capitol Police officer, knocking the officers back as he attempted to secure the North Door. Brody and Chase also participated in the destruction of media equipment.

The case is being investigated by the FBI’s Washington, Albany, Baltimore, Jacksonville, New York, and Pittsburgh Field Offices. Valuable assistance was provided by the U.S. Capitol Police and the Metropolitan Police Department.

In the 20 months since Jan. 6, 2021, more than 870 individuals have been arrested in nearly all 50 states for crimes related to the breach of the U.S. Capitol, including over 265 individuals charged with assaulting or impeding law enforcement. The investigation remains ongoing. 

Anyone with tips can call 1-800-CALL-FBI (800-225-5324) or visit tips.fbi.gov.

A complaint is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Governor Hochul Announces New Competitive Solicitation Calling for 2,000 Megawatts Or More of New Large-scale Renewable Energy Projects

 

Once Completed, Awarded Projects Will Be Able To Power at Least 600,000 New York Homes

Total Statewide Renewable Energy Projects Now Underway to Power 5.5 Million New York Homes

Development Expected To Spur Nearly $3 Billion in Clean Energy Investments and Create Over 2,000 Family-Sustaining Jobs in the Green Economy

Accelerates Progress To Achieve New York's Goal to Obtain 70 Percent of Electricity Statewide from Renewable Sources by 2030 on Path to a Zero-Emission Grid

 

Governor Kathy Hochul today announced the release of New York's sixth competitive solicitation calling for 2,000 megawatts or more of new large-scale renewable energy projects. The projects will have the capacity to power at least 600,000 New York homes and maintain the predictable pace of state-contracted opportunities for private renewable energy developers. Once selected, the development of these projects is expected to spur nearly $3 billion in clean energy investments and create over 2,000 family-sustaining jobs in the green economy. Bringing more clean energy onto the grid accelerates progress toward achieving New York's goal to obtain 70 percent of electricity statewide from renewable sources by 2030. 

"Renewable energy is the backbone of New York's sweeping approach to cleaning our electric grid and offers the industry a reliable path to join in our clean energy transition for the benefit of all New Yorkers," Governor Hochul said. "The strong public-private partnerships formed to build these projects will allow us not only to drastically lower emissions in our fight against climate change but will result in thousands of new green jobs, billions of dollars in economic growth, and an injection of private investment into local communities." 

With today's action, New York is accelerating the most ambitious state-led clean energy agenda in the United States, contracting with over 120 new large-scale land-based renewable energy facilities including solar farms, onshore wind farms, and hydroelectric facilities - some of which have been paired with energy storage. The projects selected through this solicitation are expected to generate approximately 4.5 million megawatt hours of renewable electricity per year, enough renewable energy to reduce carbon emissions by 2 million metric tons - the equivalent of removing a half-million cars from the road annually. 

NYSERDA expects to notify the awarded developers in the spring of 2023. Payments under these awards will not commence until projects have obtained all required permits and approvals and become operational to power New York.   

New York State Energy Research and Development Authority Doreen M. Harris, President and CEO said, "Coming off a historic award group earlier this year, New York is moving ahead with full force as we look to build more large-scale renewable energy projects across the state in our march towards the State's renewable energy goal and beyond. Governor Hochul is committed to ensuring local communities have a voice in the development of these projects, and NYSERDA looks forward to working with the selected developers and host municipalities to ensure these projects are advanced responsibly and bring forward substantial community and economic benefits." 

Notable provisions in this solicitation include but are not limited to: 

  • Delivering job creation and benefits to disadvantaged communities by favorably evaluating projects that can tangibly advance benefits for these historically underserved communities, and strongly encouraging workforce development commitments and partnerships with labor and trade organizations. 
  • Setting a minimum U.S. iron and steel purchase requirement to encourage the utilization of domestic steel in the construction of solar and wind facilities and requiring developers to provide opportunities for U.S.-based steel suppliers to participate in the renewable energy industry, in keeping with the intent of the New York Buy American Act. 
  • Requiring that workers associated with the construction of any awarded facility be paid the applicable prevailing wage to ensure construction quality and ensure family-sustaining jobs for New Yorkers. 
  • Encouraging and preferentially evaluating developers that commit to utilizing New York State Minority- and Women-Owned Business Enterprises (MWBEs) and Service-Disabled Veteran-Owned Businesses (SDVOBs). 
  • Incentivizing proposers to avoid development on the highest quality agricultural lands, and commit to co-utilization measures to support continued agricultural operations as well as funding to support regional agricultural operations. 
  • Ensuring that communities that will host successfully awarded projects are fully involved in the development process, and that proposers demonstrate a commitment to frequent and active community engagement. 
  • Continuing to encourage proposals that cost-effectively pair renewable energy with energy storage technologies, including preferential evaluation of proposals that site storage facilities in primarily fossil-served regions of the state to combat the acute impacts of pollution that disadvantaged communities have disproportionately borne.  

Eligible projects include any large-scale renewable project that can be certified as a Tier 1 renewable technology and entered operation after January 1, 2015. Participating projects not yet in operation must show evidence that they are capable of reaching commercial operation May 2025, with the option to extend to May 2028. 

Interested proposers can apply on NYSERDA's Tier 1 Solicitations webpage. Step One Eligibility Applications are due on November 16, 2022, by 3:00 p.m. ET. A webinar will be held on October 6, 2022, at 1:00 p.m. ET to provide more information on this solicitation. Those interested in the webinar can sign up on the webinar registration page and are encouraged to register and submit questions in advance to RES@nyserda.ny.gov

NYSOFA Partners with National Association of Home Builders on Innovative Aging-in-Place Initiative

 

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During falls-prevention week, NYSOFA, NAHB and AgingNY announce statewide effort to train case managers and provide Certified Aging-in-Place Specialist (CAPS) credentialing


In a pioneering new initiative to further support aging-in-place, the New York State Office for the Aging (NYSOFA) has partnered with the National Association of Home Builders (NAHB) and the Association on Aging in New York (AgingNY) to launch an innovative home-modification credentialing initiative aimed at bringing safety and security to older adults at home.

Through NAHB’s existing Certified Aging-in-Place Specialist (CAPS) accreditation program, NYSOFA, NAHB, and AgingNY are equipping New York’s aging services providers with training and CAPS certification to work with older adults in assessing and arranging for necessary home improvements so that individuals can remain in their own homes safely as they age, reducing/preventing falls, and preventing injury as well as unnecessary or premature institutionalization.

NYSOFA, NAHB and AgingNY announced the partnership during falls-prevention week, from September 18 to 24, 2022, a nationwide effort to raise awareness that falls are preventable.

NAHB’s existing CAPS credentialing program supports a variety of professionals responsible for helping individuals age-in-place – from builders, architects and remodelers to occupational therapists and physical therapists. Working with NYSOFA and AgingNY, NAHB is providing CAPS training to case managers who serve hundreds of thousands of older New Yorkers annually through county-based Area Agencies on Aging (AAA).

One hundred case managers have registered for this first round of CAPS training, which is being held in three sessions from August through October. NYSOFA filled all of these registration slots within 12 hours, due to overwhelming interest in the CAPS certification. Two hundred more case managers will be certified in the next two years for a total of 300 CAPS-trained staff.

CAPS specialists are trained to assess for and recommend individualized home modifications or updates to help people live independently in their own homes by meeting safety or functional needs, often coordinating with licensed contractors on a plan to make home improvements. CAPS specialists are also trained to provide information about building codes and standards, useful products, and other resources to help.

According to AARP, the vast majority of older adults – approximately 77 percent – report that they prefer to age in place. Aging in place is also more cost-effective. According to Genworth’s 2021 Cost of Care study, the average cost of assisted-living facility care in New York State is $54,960 annually. For nursing home care, it’s over $158,000 for a private room. Compare that with $14,600, which is what homeowners are expected to spend on average on home improvements in 2022, according to NAHB. Costs for specific projects can range from hundreds to thousands of dollars, and can include outdoor and indoor lighting upgrades, installation of grab-bars or curbless showers, single-story living modifications, smart technology, and so much more. A CAPS-trained case manager can help individuals assess their options.

NYSOFA Director Greg Olsen said: “When most people buy a home, they don’t think about whether it’s equipped to meet their changing needs as they age. And most homes, especially older ones, are not designed with longevity in mind. Yet ask any New Yorker, and they’ll tell you that they overwhelmingly prefer to age in place and will do anything to make this option possible. NYSOFA is thrilled at the overwhelming response to this certification program among New York’s aging services case managers. Because case managers are in older adults’ homes, they are naturally positioned to identify and recommend appropriate changes to the built environment that promote independence and help reduce the risk of falls or injuries related to falls.”

STATEMENT BY BRONX DISTRICT ATTORNEY DARCEL D. CLARK ON JOSE GONZALEZ FOUND FIT TO STAND TRIAL FOR MURDER OF EMT YADIRA ARROYO

 

Defendant Had Been Found Unfit for Trial on May 26, 2022

“When Jose Gonzalez was deemed unfit for trial, we said this was by no means the end of this prosecution. Now, approximately four months later, health professionals at Mid-Hudson Forensic Psychiatric Center have determined him to be no longer an incapacitated person. 

“Jose Gonzalez is due to appear in Bronx Supreme Court on September 29, 2022. He faces charges of first and second-degree Murder, first degree Manslaughter, Robbery, Vehicular Manslaughter and Operating a Motor Vehicle Under the Influence, for allegedly running over Yadira Arroyo, an FDNY Emergency Medical Technician, with her ambulance on March 16, 2017. 

“We thank her family and FDNY colleagues for their patience and support, as we continue to obtain justice for Yadi.”


Manhattan Real Estate Fund Manager Sentenced To Prison For Securities Fraud

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that JOSHUA BURRELL was sentenced to 48 months in prison for committing securities fraud in connection with the operation of a New York-based investment firm, Activated Capital, LLC (“Activated Capital”).  BURRELL previously pled guilty for raising millions of dollars for Activated Capital’s “Opportunity Zone Funds” using fraudulent misrepresentations.  U.S. District Judge Lewis A. Kaplan imposed the sentence in Manhattan federal court.

According to statements in the Indictment, and other public filings and statements in court:

From in or about 2019 through in or about 2021, BURRELL obtained millions of dollars of investments for the Activated Tax Advantaged Opportunity Fund, LLC and Activated Capital Opportunity Zone Fund II, LLC (collectively, the “Activated OZ Funds” or the “Funds”) based on fraudulent representations.  BURRELL represented, in substance, that the money invested in the Activated OZ Funds would be used to purchase real estate properties in Opportunity Zones and that investors would receive distribution payments out of the Funds’ net real estate investment income.  Contrary to those representations, BURRELL caused the Activated OZ Funds to pay putative distributions in amounts greater than the Funds’ net income.  From the inception of the Funds in 2019 through approximately February 2021, BURRELL used investor money to help pay distributions totaling approximately $470,000 in a manner akin to a Ponzi scheme.  BURRELL also falsely inflated Activate Capital’s assets under management in communications with prospective investors.

To attract additional investment capital for the Activated OZ Funds, BURRELL sought to establish a partnership with an investment bank headquartered in Manhattan (“Company-1”).  As part of Company-1’s diligence process, Company-1 asked BURRELL for “[b]acking to show current fund proceeds/acquisitions made.”  In response to these requests, BURRELL fabricated documents to make it appear that the Activated OZ Funds were more successful, owned more properties, and were in better financial condition than was actually the case.  For example, BURRELL sent Company-1 fake bank statements making it appear that, for the period July 2019 through October 2019, one of the Activated OZ Funds had ending monthly account balances of between approximately $2,094,450 and $2,463,100 when the real account statements for that period showed ending monthly balances of between only $116,369 and $154,399.  BURRELL fabricated additional documents to make it falsely appear to Company-1 that an Activated Capital affiliate owned nine properties in Detroit, Michigan, that it had not, in fact, acquired.

BURRELL, 39, of New York, New York, was also sentenced to a one-year term of supervised release.  He was further ordered to pay restitution to his victims in the amount of $5,763,420 and to pay forfeiture in the amount of $107,688.  

Mr. Williams praised the investigative work of the United States Postal Inspection Service and thanked the U.S. Securities and Exchange Commission for its assistance.

Governor Hochul Issues New Executive Order During Climate Week Announcing Nation-Leading Sustainability Operations

 EV charging stations

Sustainable Goals Will Fight Climate Change, Accelerate New York's Transition to a Green Economy, and Prioritize Disadvantaged Communities

Commits New York State to 100 Percent Renewable Energy in State Operations by 2030

State Agencies, Representing an Estimated $50 Billion in Investments, Have Committed To Achieving Net Zero Investment Portfolios by 2040

Supports New York's Ambitious Climate Goals To Achieve 40 Percent Reduction in Greenhouse Gas Emissions by 2030, and 85 Percent Reduction by 2050

Read the Executive Order Here


 Governor Kathy Hochul today signed a nation-leading Executive Order to accelerate efforts to make State operations more sustainable. As New York commemorates Climate Week, Executive Order 22 builds upon progress made by the GreenNY Council to continue streamlining the administration of the State's lead-by-example sustainability and climate directives and sets new goals for the environmental performance of State agencies. Governor Hochul also announced that State agencies and authorities, representing an estimated $50 billion in investments, have committed to achieve net zero in their investment portfolios by 2040. This bold action ensures New York State's financial resources are aligned with its clean energy and decarbonization obligations as enacted in the 2019 Climate Leadership and Community Protection Act.

"New York is already leading the nation on climate action, and with this Order, we are creating the roadmap to help other states follow suit," Governor Hochul said. "With these new commitments, we are stepping up our approach to environmental stewardship with new and ambitious goals to shift toward renewable energy, invest in electric vehicles, and drastically reduce waste and toxic substance use - all while protecting our state's most disadvantaged communities. As a global financial capital, New York is in a unique position to combat climate change, and my administration remains committed to leading the fight by aligning our investments and operations with New York State values."

Through the Executive Order, the GreenNY Council will ensure that State agencies follow best practices in green purchasing and in their operations by issuing new green purchasing specifications and operational directives. The Order will be administered by the GreenNY Council, a multi-agency working group co-chaired by the Department of Environmental Conservation, the Division of the Budget, the Office of General Services, the New York State Energy Research and Development Authority, and the New York Power Authority. Required annual reporting from agencies and authorities will help ensure that the goals of the Order are achieved.

The Order covers the following targets and goals:

  • 100 percent of the electricity used in State operations will come from renewable energy (as defined by the Clean Energy Standard) by 2030.
  • 100 percent of light-duty non-emergency vehicle fleets will be Zero Emission Vehicles (ZEVs) by 2035 and 100 percent of medium and heavy-duty vehicle fleets will be ZEVs by 2040.
  • 11 trillion BTUs of energy savings will be achieved by 2025 through the BuildSmart 2025 program.
  • Restricting new State facilities that enter design and permitting starting in 2024 from using infrastructure that can be used for the combustion of fossil fuels.
  • Waste disposal will be reduced 10 percent every five years until reaching a goal of 75 percent lower than a 2018-19 Fiscal Year baseline, which will include a combination of strategies to divert materials from landfills, increase recycling, and enhance composting and other reuse of organic materials.
  • The use of single use plastics will be eliminated in State operations.
  • The use of toxic substances will be reduced in State operations.
  • Habitats maintained by State agencies and authorities will be enhanced, including support for native pollinators.
  • Climate resiliency at State facilities will be increased.

The Executive Order takes action to ensure that State operations do not have a disproportionate burden on disadvantaged communities by directing the GreenNY Council to determine what State facilities are located within disadvantaged communities and directing agencies and authorities to then prioritize facilities that are located within these communities for sustainability upgrades to reduce the potential impacts on the communities in which they are located.

The Executive Order will also ensure that State operations do not have a disproportionate burden on disadvantaged communities by prioritizing sustainability upgrades for State facilities in these communities.

In addition to the Executive Order, agencies and authorities submitted action plans this month outlining their path to a net zero investment portfolio. The action plans include frameworks and strategies for evolving portfolio construction, including plans to increase investment in sustainable solutions. This fulfills the Governor's directive in her 2022 State of the State address. Further detail on agency and authority net-zero investment portfolio action plans can be found on their websites.

New Yorkers can read the Executive Order here and other ways that State government is leading by example on the GreenNY website.

New York State's Nation-Leading Climate Plan
New York State's nation-leading climate agenda is the most aggressive climate and clean energy initiative in the nation, calling for an orderly and just transition to clean energy that creates jobs and continues fostering a green economy as New York State recovers from the COVID-19 pandemic. Enshrined into law through the Climate Leadership and Community Protection Act, New York is on a path to achieve its mandated goal of a zero-emission electricity sector by 2040, including 70 percent renewable energy generation by 2030, and to reach economy wide carbon neutrality. It builds on New York's unprecedented investments to ramp-up clean energy including over $35 billion in 120 large-scale renewable and transmission projects across the state, $6.8 billion to reduce buildings emissions, $1.8 billion to scale up solar, more than $1 billion for clean transportation initiatives, and over $1.6 billion in NY Green Bank commitments. Combined, these investments are supporting nearly 158,000 jobs in New York's clean energy sector in 2020, a 2,100 percent growth in the distributed solar sector since 2011 and a commitment to develop 9,000 megawatts of offshore wind by 2035. Under the Climate Act, New York will build on this progress and reduce greenhouse gas emissions by 85 percent from 1990 levels by 2050, while ensuring that at least 35 percent with a goal of 40 percent of the benefits of clean energy investments are directed to disadvantaged communities, and advance progress towards the state's 2025 energy efficiency target of reducing on-site energy consumption by 185 trillion BTUs of end-use energy savings.

Tuesday, September 20, 2022

Two New York City Correction Officers Plead Guilty to Accepting Bribes in Exchange for Smuggling Contraband Into Rikers Island for Gang Members

 

Defendants Smuggled Cell Phones and Narcotics to Members of the Bloods Gang

 New York City correction officer Krystle Burrell pleaded guilty to bribery, admitting that she accepted nearly $10,000 in bribe payments in exchange for smuggling contraband into Rikers Island.  On August 16, 2022, New York City correction officer Katrina Patterson pleaded guilty to bribery, admitting that she accepted more than $34,000 in bribe payments in exchange for smuggling contraband into Rikers Island.  Burrell and Patterson are employed by the New York City Department of Corrections (DOC).  Burrell’s proceeding was held before United States District Judge Kiyo A. Matsumoto, and Patterson’s proceeding was held before United States District Judge Carol Bagley Amon.

Breon Peace, United States Attorney for the Eastern District of New York, Ricky J. Patel, Acting Special Agent-in-Charge, Homeland Security Investigations, New York (HSI), Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI), and Keechant L. Sewell, Commissioner, New York City Police Department (NYPD), announced the guilty pleas.

“The defendants threw in their lot with Bloods gang members and betrayed their sworn duty to maintain the safety of incarcerated individuals and other correction officers at Rikers Island by smuggling cell phones and drugs into the jail,” stated United States Attorney Peace.  “This Office and our law enforcement partners are committed to rooting out corruption at Rikers Island.” 

DOI Commissioner Jocelyn E. Strauber said, "These two Correction Officers took bribes in return for smuggling contraband to inmates, crimes that risked the safety and security of the jails and willfully circumvented Correction Department regulations.  These violations of their duty carry serious consequences, including termination from their City employment.  DOI and our law enforcement partners will continue to target contraband smuggling and other misconduct that destabilizes the City’s jails.”

“When correction officers betray their oath to serve and protect, the public is put at risk and the entire law enforcement community is tarnished,” stated NYPD Commissioner Sewell. “We have zero tolerance for such misconduct. With today’s guilty plea, Ms. Burrell joins Ms. Patterson in publicly acknowledging that their actions were immoral, unethical, and without integrity – diametrically opposed to the core requirements of our profession. I commend all of our partners for their dedication to uncovering and eradicating corruption in all of its forms.”

“These officers were tempted by greed to betray their duty.  By taking bribes to smuggle prohibited contraband to incarcerated known gang members, they violated the oath they swore and became criminals themselves,” said HSI New York Acting Special Agent in Charge Patel.  “HSI is committed to making our communities safer by disrupting gang activity wherever it occurs, whether on the streets or in prisons.”

According to court documents and facts presented at the guilty plea proceedings, Patterson accepted at least $34,090 in bribes from co-conspirators on behalf of co-defendant Michael Ross in exchange for Patterson smuggling contraband into the Robert N. Davoren Center on Rikers Island for Ross.  Ross, who was incarcerated on unrelated offenses, arranged for the bribes to be sent to Patterson.  DOC personnel subsequently located narcotics and cell phones in Ross’s cell.  Law enforcement also recovered Patterson’s text messages, including messages where a co-conspirator told Patterson that some of the contraband would be “4 black joints in 1 paper,” and Patterson responded, “it better be wrapped so many times I don’t want to smell it.” 

Burrell accepted bribes in exchange for smuggling contraband into the Anna M. Kross Center on Rikers Island for co-defendant Terrae Hinds, facilitating Hinds’ contraband smuggling business and permitting Hinds and others to violate DOC regulations.  Hinds, who was incarcerated on unrelated offenses, arranged for approximately $9,780 in bribe payments to be sent to Burrell.  In exchange, Burrell smuggled at least two unauthorized cell phones to Hinds, and also facilitated Hinds’ sale of narcotics and other contraband items at the Anna M. Kross Center.

When sentenced, Burrell faces up to 10 years’ imprisonment and Patterson faces up to five years’ imprisonment.  Ross, who is a Bloods gang member, has also pleaded guilty to a bribery offense and is awaiting sentencing. Charges against Hinds remain pending.