Governor Hochul Announces Highlights of Historic FY 2024 New York State Budget

 

Agreement Reached To Provide Greater Discretion for Judges To Set Bail for the Most Serious Crimes; Includes $772 Million to Address Gun Violence, Reduce Recidivism, and Support Criminal Justice System in Pandemic Recovery

Governor Keeps Promise to New Yorkers: No Income Tax Increases for FY 2024 Budget

$1 Billion Plan Will Fix New York State's Continuum of Mental Health Care

$100.7 Million To Protect Abortion Access and Strengthen New York State's Safe Harbor Access

Major Investments in Education Include $24 Billion To Fully Fund Foundation Aid, $2.4 Billion in New Capital Projects for SUNY and CUNY

Tenants, Including NYCHA and Section 8, Will Receive $391 Million in Emergency Rental Assistance Program Funding

Stabilizes MTA Funding, Avoiding Looming 'Fiscal Cliff' or Service Cuts While Investing in Public Transit Statewide

Transformative Investments To Promote Energy Affordability, Reduce Emissions, and Clean Air and Water

Raises Minimum Wage to $16 in New York City, Long Island, and Westchester and $15 Elsewhere in the State, Which Will Increase by $0.50 for Two Years and Index to Inflation After 2026

$1 Billion in Health Care Capital Funding To Create a Stronger Health Care System for the Future

 Governor Kathy Hochul today announced the highlights of the historic FY 2024 Budget. The Budget reflects Governor Hochul's bold agenda to make New York more affordable, more livable, and safer by making smart, responsible investments in housing, mental health care, public safety, education, climate initiatives, and more. In keeping with the Governor's promise at the outset of budget negotiations, the FY 2024 Budget does not include any new increases in State income tax.

"With this Budget, we are delivering on our promise to make the Empire State a more affordable, more livable, safer place for all New Yorkers," Governor Hochul said. "These bold investments will lift up New Yorkers of today - and tomorrow - while maintaining a solid fiscal footing, and I thank my partners in the Legislature for their collaboration throughout this process."

A Balanced Budget

Governor Hochul's FY 2024 Budget reflects New York's steady finances, even as global economic trends send mixed signals. All funds spending is $229 billion growing at 3.9percent. Deposits to reserves that had been planned for FY 2024 and FY 2025 will be completed by the end of the current year — two years ahead of schedule — for a total of$19.5 billion secured for a rainy day.

In addition, the legislature agreed with the Governor's proposal to further increase the statutory limit on allowable rainy day reserves. This will allow the State to continue to set aside unplanned resources to guard against future economic downturns.

Driving Down Gun Violence and Creating a Safer New York State

As part of efforts to create a safer New York, Governor Hochul and state leaders reached an agreement to give judges greater discretion to set bail for the most serious crime offenses. State investments will also expand programs and services to further drive down gun violence, reduce recidivism, address the flow of deadly fentanyl, and improve the efficacy of the court system, which was disrupted by the pandemic.

• $347 million-a $120 million increase from the FY 2023 Budget- for programs designed to prevent and reduce gun violence, including but not limited to:
  • $84.1 million for youth employment programs, of which $37 million is for programs in Gun Involved Violence Elimination (GIVE) jurisdictions.
  • $70 million for communities to respond to the aftermath of gun violence, of which $50 million is for community capital needs.
  • $36.4 million for the GIVE initiative.
  • $31.1 million for crime reduction, youth justice, and gang prevention programs.
  • $25.9 million for State Police Community Stabilization Units.
  • $25 million for the SNUG Street Outreach program.
  • $7.4 million in additional funding to establish a Supervision Against Violent Engagement program and expand the State's response to gun violence among the parolee population in GIVE jurisdictions.

Improving Effectiveness and Efficiency of the Criminal Justice System

The Budget also includes funding to improve the effectiveness and efficiency of the criminal justice system:

• $170 million to support improvements to the discovery process for prosecutors and defenders, including $50 million in capital for discovery technology improvements in New York City.
• $100 million in aid for prosecution and defense funding across the state.
• $92 million to offset county costs related to increasing rates paid to lawyers assigned to represent low-income New Yorkers. The Budget increases assigned counsel rates to $158 per hour statewide.
• $31.4 million for alternatives to incarceration programs.
• $20 million for pretrial services.
• $11.5 million for reentry services to help individuals reintegrate to their communities after serving prison sentences.

Improving Public Safety and Protecting New Yorkers

The Budget also includes significant investments designed to protect New Yorkers, including:

• $105 million to upgrade the State Emergency Operations Center.
• $100 million to purchase and renovate a new satellite crime laboratory for the State Police.
• $66.7 million to increase the number of State Police academy classes.
• $25 million to provide capital grants to volunteer fire departments for construction, renovation, or purchase of facilities and equipment.
• $20 million to assist counties in transitioning to Next Generation 911.
• $10 million to provide stipends to volunteer firefighters who complete foundational training.
• $16 million for the state-supported Crime Analysis Center network.
• $7.4 million to allow State Police to keep pace with technology in criminal investigations.
• $7 million to establish an Anti-Fentanyl Innovation Grant.
• $5 million to provide financial assistance to victims and survivors of domestic violence.

Overhauling the Continuum of Mental Health Care

For too long, New York's mental health care system has suffered from underinvestment, and the pandemic only made things harder for New Yorkers with serious mental illness. To address the unmet mental health needs of New Yorkers, Governor Hochul will make a long-term $1 billion investment to transform New York's continuum of mental health care. This comprehensive, multi-year plan includes allocating:

• $890 million in capital to develop new residential units, plus $120 million in annual operating costs.
• $25 million in capital and $7.3 million annually to increase operational capacity for inpatient psychiatric treatment.
• $60 million in capital and $121.6 million annually to expand outpatient services.
• $28 million annually to improve post-discharge connections to services through the creation of 50 new Critical Time Intervention care coordination teams.
• $30 million annually to expand mental health services in schools.

Protecting Abortion Access and Strengthening New York State's Safe Harbor Access

Governor Hochul is committed to protecting abortion access in New York State, solidifying the state's historic standing as the nation's first Safe Harbor State. $100.7 million in State funding will boost New York abortion providers by increasing Medicaid reimbursements and require private insurers to cover medication abortion when prescribed off-label for abortion. Additionally, in light of national efforts to roll-back reproductive health care access, this historic measure will strongly protect the personal data of those seeking abortion care in New York State, regardless of state residency status.

The FY 2024 Budget allocates new funding for abortion providers and reproductive health to include:

• $25 million in recurring support for additional Support Abortion Access Services.
• $10 million in Security Grants for Reproductive Health Centers (one-time).
• $65.8 million in additional Medicaid reimbursement ($14.1 million state share):
  • $14.9 million to increase surgical abortion reimbursement;
  • $35.2 million to increase family planning reimbursement; and
  • $15.6 million for Pharmacist Prescribed Contraceptives.

Supporting Students and Schools

All New York students deserve a high-quality education, from prekindergarten through college. Governor Hochul included a record $34.5 billion in total School Aid for school year 2024, making the highest level of State aid ever, and also secured the reissuance of 22 charter schools. The Budget also includes significant investments for SUNY's Transformation and CUNY's Strategic Needs.

Funding for education includes:

• $24 billion for Foundation Aid - a $2.6 billion increase from last year - to deliver on Governor Hochul's promise to fully fund Foundation Aid for the first time in history.
• $150 million expanding prekindergarten to 20,000 children across the state, bringing the State's annual investment to more than $1.2 billion.
• $134 million to increase access to free school meals.
• $20 million for Early College High School and Pathways in Technology Early College High School funding to allow students to earn college credits in high school, prioritizing students in high-need school districts.
• $2.4billion in new funding for SUNY and CUNY capital projects to upgrade campus facilities and make strategic investments to support innovation and the growth of both systems.
• $381million in new operating support for SUNY and CUNY campuses.
• $500 million to create the first-ever New York State matching fund for contributions made to the endowments of SUNY's four university centers.

Supporting Homeowners, Tenants, and Public Housing Residents

Governor Hochul announced new efforts to support homeowners, tenants, and public housing residents as part of the FY 2024 Budget. The Budget includes historic investments in rental assistance for the most rent-burdened New Yorkers and residents of public and subsidized housing, funding support and assistance for homeowners, the creation of a nation-leading program to combat childhood lead exposure in residential buildings, the first-ever Upstate Tenant Protection Unit, and funding for legal services and representation for eviction cases statewide. Together, these initiatives reflect the Governor's continued effort to combat New York's housing crisis and make the state more affordable and more livable for all New Yorkers.

Funding for housing includes:

• $391 million for the Emergency Rental Assistance Program to support additional tenants and families, including NYCHA and other public housing residents and recipients of federal Section 8 vouchers.
• $50 million for a Homeowner Stabilization Fund to finance home repairs in 10 communities across the state that have been identified as having high levels of low-income homeowners of color and homeowner distress. The program is modeled on the $10 million Buffalo East Homeowner Improvement Program.
• $40 million for the Homeowner Protection Program, which provides funding to dozens of nonprofit housing counseling and legal services organizations around the state to help homeowners in default and foreclosure.

Expanding Public Transit Access, Affordability, and Safety

Over the past year, Governor Hochul has advanced the completion of the Long Island Rail Road's Third Track project, open the nation's newest rail terminal at Grand Central Madison, broke ground on the Metro-North Penn Station Access project, and pushed other major projects forward, including the Second Avenue Subway and the Interborough Express.

Governor Hochul has worked tirelessly with partners in the MTA, New York City, and the State to strengthen the long-term fiscal stability of the MTA, while ensuring continued progress in rider safety. The FY 2024 Budget calls for:

• Implementing over $400 million in MTA operating efficiencies to reduce expenses and improve service to customers.
• Increasing the top rate of the Payroll Mobility Tax for the largest businesses in New York City, generating an additional $1.1 billion annually.
• Increasing New York City's share of funding for paratransit services for two years, generating nearly $165 million annually.
• $300 million in one-time State aid to address the extraordinary impact of the pandemic on MTA operating revenues.
• $35 million in investment to improve subway service on weekday middays, weekends and weeknights.
• $65 million to reduce the proposed fare increase on the MTA from 5.5 percent to 4 percent.
• $35 million in safety investments to protect riders.
• Dedicating $1.5 billion in licensing fees if three downstate casino licenses are awarded, and a share of an estimated $231 to $413 million in incremental annual tax revenue from the casinos for MTA operations.
• $15 million to fund a pilot program providing five fare-free bus routes in New York City and expand the Automated Bus Lane Enforcement program to increase bus speeds and decrease collisions.

Governor Hochul will build on her record investing in transit by making a new historic contribution to expand public transit access and affordability while improving public safety on trains, buses, and subways, across the state.

• $9.4 billion in mass transit operating support, including $829 million in operating support for non-MTA authorities.
• $1.3 billion for a commuter-first Penn Station, the Western Hemisphere's busiest transit hub.
• $20 million for bus electrification for non-MTA authorities, and $20 million to rehabilitate NFTA's light rail system.

Addressing the Climate Crisis and Investing in Affordable Energy

New York State has one of the nation's most ambitious climate plans focused on creating a cleaner, healthier environment for future generations. Governor Hochul will make transformative investments to combat climate change, promote energy affordability, reduce emissions, and invest in clean air and water, building on more than$30 billion committed to climate action.

The FY 2024 Budget will include:

• Creation of the financial foundation that is required to support an economy-wide "Cap and Invest" program going forward.
• $400 million to provide relief to New Yorkers experiencing high electric bills as well as lowering energy burdens through electrifications and retrofits.
• Requirements for advancing zero emission construction in new buildings and requires NYPA to complete decarbonization action plans for 15 of the highest-emitting state facilities.

In addition to forthcoming investments from the historic Environmental Bond Act passed by voters in 2022, the Enacted Budget includes:

• $500 million in clean water infrastructure funding, bringing New York's total clean water infrastructure investment to $5 billion since 2017.
• $400 million for the Environmental Protection Fund.
• Authorizing Suffolk County to put a ballot referendum to the voters to implement a long-term plan to create a recurring funding source for wastewater infrastructure needs.
• $200 million for the Office of Parks, Recreation and Historic Preservation to invest in enhancing state parks.

Boosting New York's Economy and Supporting Working Families

The FY 2024 Budget will strengthen the state's economy and accelerate Governor Hochul's vision of making New York the most business-friendly and worker-friendly state in the nation. The Budget will invest in local economies, raise minimum wage for three years and then tie future increases to inflation, and modernize New York's public workforce.

The Budget includes:

• $1 billion to invest in local economies, including:
  • $225 million in grant funding and tax credits for the Regional Economic Development Councils.
  • $100 million each to fund an additional year of the Downtown Revitalization Initiative and NY Forward.
  • $50 million for the RESTORE New York Communities Initiative.
  • $400 million for the NYWORKS Economic Development Fund.
  • Almost $200 million for projects that support community growth and enhancement.
• $45 million to be made available to GO-SEMI - the Governor's Office of Semiconductor Expansion, Management, and Integration to lead the growth of the state's semiconductor industry.
• Civil service exam fee waivers to rebuild New York State's government workforce through critical initiatives to be administered through the Department of Civil Service and Office of General Services.
• Expansion of the New York Film Tax Credit to $700 million.
• Creation of a Youth Jobs Connector program to provide educational support and job training to unemployed and underemployed people ages 16 to 24.

The Budget also includes actions to invest in child care and support working families:

• Expanding the Empire State Child Credit to include children under four years of age.
• Provide $179 million in total support for over 525,000 low and middle-income taxpayers thanks to the inclusion of nearly 630,000 additional children.
• $500 million in underutilized federal funds to create a state Workforce Retention Grant Program to support New York's child care workforce.
• $4.8 million investment in a new Employer-Sponsored Child Care Pilot Program.
• Establishes 'Employer Child Care Tax Credit' for businesses that create new child care options and expand existing programs for their workers.

Creating a Stronger Health Care System

Building off last year's historic multi-year health care system investments, the Budget provides an additional $22 billion multi-year investment to support the State's health care system, including:

• Substantial Medicaid reimbursement rate increases - a 7.5 percent increase for inpatient hospital services, an up to 7.5 percent increase for nursing homes, and a 6.5 percent increase for outpatient hospital services and assisted living providers.
  • This transformational change will provide a $1.2 billion annual gross benefit to health care providers, on top of a State investment of $500 million to support financially distressed hospitals.
• $1.7 billion to fully fund the consolidation of Wadsworth Laboratories' five unconnected sites to one site on the W. Averell Harriman Campus in Albany by 2030.
• $1 billion multi-year health care capital program to drive transformative health care investments, including $500 million to support investments in technology and cybersecurity.
• $419 million gross investment to improve coverage and expand access to preventive and primary care services for Medicaid beneficiaries.
• $120 million gross investment to expand the Medicaid buy-in program.
• $39 million to reduce the risk of lead exposure in rental properties.
• $36 million gross investment to increase Medicaid reimbursement rates for medical transportation.
• $28 million to support the creation of a new nation-leading health monitoring and surveillance system to inform targeted and appropriate responses to public health crises and to drive broader health care insight.
• $8 million to revitalize the State's Emergency Medical Services system.
• Increase the cigarette tax by $1.00 - establishing the strongest cigarette tax in the nation.

NYC PUBLIC ADVOCATE'S STATEMENT ON THE STATE BUDGET

 

"The second budget of this governor’s tenure is over a month late – a disregard for deadline that is disconnected from the needs of New Yorkers – like much of the budget it produced.

"It took a month to roll back bail reform yet again, ultimately imprisoning more Black and Brown New Yorkers pre-trial rather than doing the hard work to actually produce lasting public safety. 

"It took a month to remove all housing support from the budget – whether the production of deeply affordable housing in collaboration with communities, or the essential counterpart of tenant protections to keep New Yorkers in those homes, even as extreme rent hikes are still being considered.

"It took a month to convince the governor not to lift the cap on charter schools, which would pull vital funds from the traditional public school system, and even a month later, the governor insisted on reviving zombie charters.

"There are some positives in this budget, including climate and transportation investments. I’m grateful to the advocates and legislators who fought this past month and throughout the past year to try and not only protect the state’s progress but move forward. 

"At the same time, I fear that until our executives govern not simply by headline, as the governor admitted, or by donors, but by the need to invest in what working families truly need, we will remain stuck in a status quo that has never worked for most New Yorkers."

Statement from NYGOP Chair Ed Cox on the 2024 budget

 

NYGOP Chair Ed Cox this evening released the following statement following the latest agreed budget in 14 years:

“If we needed further proof that Kathy Hochul and Democrats in the legislature can’t be trusted to manage New York’s finances, here it is: this budget - negotiated behind closed doors - raises taxes and increases spending. New York’s budget, at over a quarter of a trillion dollars, remains larger than Texas’ and Florida’s combined – and spends 50% more per capita than California.

“Hochul and the Democrats are also raising property taxes on overtaxed homeowners with their Medicaid cost-shift. This policy gives taxpayers yet another reason to flee the Empire State. Failure to repeal the disastrous bail and discovery laws and the ludicrous ban on gas stoves mark Hochul’s complete capitulation to the radical left of her party.

“Democrats’ crushing taxation and regulatory regime will make New York less safe, less affordable and less free. Our population decline will continue, as businesses and citizens alike seek out friendlier, freer climates.”

Housing Lottery Launches For Casa Celina Senior At 1810 Watson Avenue In Soundview, The Bronx

 

The affordable housing lottery has launched for Casa Celina, 16-story senior housing development at 1001 Thieriot Avenue in Soundview, The Bronx. Designed by Magnusson Architecture and Planning and developed by Xenolith Partners, The Kretchmer Companies, Jewish Association Serving the Aging (JASA), ELH Mgmt. LLC, New York City Public Housing Authority (NYCHA), the NYC Department of Housing Preservation and Development (HPD), and the NYC Housing Development Corporation (HDC), the structure also addressed as 1810 Watson Avenue yields 205 residences. Available on NYC Housing Connect are 106 units for residents at 50 percent of the area median income (AMI), ranging in eligible income from $0 to $60,050

Amenities include a community center, gym, media room, elevator, package lockers, rooftop terrace, 24-hour attended lobby, and an on-site resident manager. Tenants pay 30 percent of their income and applicants will need to qualify for Section 8.

At 50 percent of the AMI, there are 80 studios with a monthly rent of $0 for incomes ranging from $0 to $53,400, and 26 one-bedrooms with a monthly rent of $0 for incomes ranging from $0 to $60,050.

Prospective renters must meet income and household size requirements to apply for these apartments. Applications must be postmarked or submitted online no later than June 30, 2023.

MAYOR ADAMS’ STATEMENT ON RENT GUIDELINES BOARD PRELIMINARY VOTE

 

New York City Mayor Eric Adams tonight released the following statement after the Rent Guidelines Board took a preliminary vote presenting a range for rent-stabilized lease adjustments of two to five percent for one-year leases and four to seven percent for two-year leases:

 

“While we are reviewing the preliminary ranges put forward by the Rent Guidelines Board this evening, I want to be clear that a seven-percent rent increase is clearly beyond what renters can afford and what I feel is appropriate this year. I recognize that property owners face growing challenges maintaining their buildings and accessing financing to make repairs; at the same time, we simply cannot put tenants in a position where they can’t afford to make rent. Members of the RGB are tasked with making independent decisions based on all available data. However, I hope they will look at options below the top of these preliminary ranges to strike the right balance to keep New Yorkers in their homes while providing building owners with the resources they need to provide safe, high-quality homes.”

 

Joint Statement from Speaker Adrienne Adams and Housing & Buildings Chair Pierina Sanchez on the Upcoming Rent Guidelines Board Vote

 

“Tonight’s Rent Guidelines Board vote on a preliminary range of rent increases takes place against the backdrop of a citywide housing and affordability crisis, where median rents have skyrocketed to their highest levels. Just last week, a report found that over three quarters of renting households cannot meet the true cost of living, underscoring the urgency and severity of this crisis. We urge the board to account for these economic realities, avoiding proposed increases that are counterproductive to New Yorkers persevering beyond our housing challenges.

“Our city’s nearly one million rent-stabilized units are a significant part of New York City’s housing stock and must be preserved as affordable. Continuing to erode their affordability will only exacerbate our housing crisis and disproportionately harm working people and families in communities of color. This would undermine our goals of keeping New Yorkers safely in their homes to improve the health and safety of our neighborhoods. Our path out of this crisis requires a multi-pronged approach from all levels of government, including prudent decisions from the Rent Guidelines Board, to support stability for tenants and homeowners. For New Yorkers to succeed, we must ensure our city keeps New Yorkers in their homes and provides sufficient access to affordable and sustainable housing.”

Head Of Telemarketing Operation Sentenced To 78 Months In Prison For $19 Million Credit Card Laundering Scheme

 

Defendant Used Phony Merchant Accounts to Obtain Credit Card Processing for His Fraud Scheme

 Damian Williams, the United States Attorney for the Southern District of New York, announced that STEVEN SHORT, the former head of Florida-based E.M. Systems & Services LLC and affiliated companies (collectively, “E.M. Systems”), was sentenced today to 78 months in prison for conspiracy to commit wire fraud and bank fraud in connection with his participation in a fraudulent scheme to obtain credit card processing services for his deceptive Florida-based telemarketing operation through a California-based company called CardReady LLC (“CardReady”).  SHORT previously pled guilty to the conspiracy charge and was sentenced today before United States District Judge Loretta A. Preska. 

U.S. Attorney Damian Williams said: “Over a two-year period, Steven Short and his co-conspirators used shell companies to deceive credit card payment processors into processing more than $19 million obtained from more than 19,000 victims nationwide.  Short preyed on vulnerable people in credit card debt, charging fees up to $1,495 in exchange for guaranteeing to reduce their debt and lower their interest rates, but instead generally sent them cookie-cutter booklets with ordinary budgeting advice.”

According to the Superseding Indictment, court filings, and statements made in Court:

SHORT controlled E.M. Systems.  From approximately 2012 through 2015, SHORT and E.M. Systems carried out a telemarketing fraud scheme in which they used telemarketers to cold-call consumers, targeting consumers with outstanding credit card debt.  In exchange for fees up to $1,495, the cold-callers offered the customers services, including debt consolidation and interest-rate reduction on their debts, which were prohibited by the applicable guidelines from a bank used by SHORT (“Bank-1”) and associated processing entities (the “Guidelines”), and which — as SHORT knew — would produce chargebacks from dissatisfied customers far in excess of the number and rate of chargebacks permitted under the Guidelines.  SHORT and E.M. Systems generated over $19 million in fraud proceeds from more than 19,000 customers through this scheme, resulting in thousands of complaints by customers of fraud and deceptive tactics and requests for millions of dollars in refunds and chargebacks.

In order to charge for E.M. Systems’ purported services via credit cards, SHORT sought access to the credit card processing market through CardReady, a Los Angeles-based company acting as a sales agent in the credit card processing industry.  As part of its business as a sales agent, CardReady found merchants who wanted credit card processing services, such as SHORT, and submitted merchant applications on behalf of those merchants to a Manhattan-based Independent Sales Organization (the “New York ISO”).  The New York ISO then evaluated the merchant applications and referred acceptable merchant accounts up the chain to a payment processor (“Payment Processor-1”) and Bank-1.  Bank-1 and Payment Processor-1, in turn, processed payments to merchants for purchases by customers who had used credit cards.  Under E.M. Systems’ deal with CardReady, CardReady kept approximately one-third of the credit card sale transactions of SHORT and E.M. Systems in exchange for providing them access to the credit card processing network.  

In securing credit card processing for E.M. Systems to process the fees paid by its customers, SHORT and CardReady concealed that E.M. Systems was the true underlying merchant.  Instead, SHORT and his co-conspirators, over a period of more than 20 months, created approximately 26 sham merchant companies, each headed by a “signer” (the “Sham Merchants” and the “Sham Merchant Accounts”).  The 26 signers for the 26 Sham Merchants typically had no business of their own and knew little or nothing about E.M. Systems’ business.  In return for signing paperwork, the signers were paid a nominal fee by CardReady.  These false merchant applications also concealed the Sham Merchant’s true association with E.M. Systems.

By steering E.M. System’s payment processing through these Sham Merchant Accounts, SHORT and CardReady accomplished a number of fraudulent purposes.  First, the use of these Sham Merchant Accounts made it possible for E.M. Systems to conceal its identity from Payment Processor-1 and Bank-1 and to maintain payment card processing.  This was particularly relevant as Payment Processor-1 repeatedly required CardReady to close individual Sham Merchant Accounts because of excessive chargebacks and reports of sales of prohibited services.  SHORT and CardReady then quickly replaced the closed Sham Merchant Accounts with new Sham Merchant Accounts, precluding Payment Processor-1 from shutting down its processing of high-risk merchants.  Second, the fraudulent processing scheme enabled E.M. Systems to spread out its charges, refunds, and chargebacks across multiple Sham Merchant Accounts.  SHORT and CardReady thus enabled E.M. Systems to evade chargeback monitoring programs operated by Bank-1, Payment Processor-1, and the New York ISO.

SHORT, 46, of Tampa, Florida, pled guilty on August 16, 2022, to one count of conspiracy to commit wire fraud and bank fraud.  In addition to the prison sentence, SHORT was sentenced to three years of supervised release and ordered to pay restitution of $1,912,090.05 and forfeiture of $8,833,889.69.

Also charged in this case is Brandon Becker, 51, of Los Angeles, California, whose trial is scheduled to begin on December 4, 2023, before Judge Preska.  Becker is presumed innocent unless and until proven guilty.

Mr. Williams praised the work of the Federal Bureau of Investigation and thanked the Federal Trade Commission for its assistance.

Attorney General James Secures Agreement with Insulin Manufacturers to Cap Insulin Prices for Uninsured New Yorkers

 

Eli Lilly and Sanofi-Aventis U.S. LLC Agree to Cap Insulin Prices at $35 Per Monthly Prescription for Uninsured New Yorkers for Five Years

New York Attorney General Letitia James today secured agreements from the nation’s largest insulin manufacturers, Eli Lilly and Company (Lilly), and Sanofi-Aventis U.S. LLC (Sanofi), to cap the price of insulin at $35 per monthly prescription for uninsured New Yorkers for five years. An investigation by the Office of the Attorney General (OAG) found that the list prices set by insulin manufacturers for patients resulted in significant out-of-pocket costs for certain insulin users, causing some to ration their insulin or forgo it altogether. Under today’s agreements, any uninsured New Yorker who uses Lilly or Sanofi insulin products will not be charged more than $35 for a monthly supply of insulin for the next five years, and both companies also committed to offering free insulin for the neediest patients.

“Lifesaving medication should be affordable and accessible for all New Yorkers regardless of their income or insurance status,” said Attorney General James. “Today, uninsured New Yorkers who rely on insulin to manage their diabetes can breathe a sigh of relief that they no longer have to choose between their health or putting food on the table. I will always use the powers of my office to protect vulnerable New Yorkers, and to ensure no company takes advantage of them.” 

Over the past two decades, the list prices for insulin have increased dramatically. From 2002 to 2013, the average list prices for insulin products from all manufacturers nearly tripled. For a person with Type 1 diabetes, annual spending on insulin averaged $2,864 in 2012, and that spending increased to an average of $5,705 in 2016. These dramatic cost increases were not driven by insulin manufacturing costs, which by one estimate would be no more than $133 per person per year. 

More than 10 percent of New Yorkers have diabetes, and it is estimated that 464,000 of them rely on insulin every day. New Yorkers who live in the state’s poorest neighborhoods are 70 percent more likely to have diabetes. In fact, more than 16 percent of New York adults with diabetes have an annual household income of less than $25,000, while only six percent have an annual household income of more than $50,000. 

As part of these agreements, Lilly and Sanofi have committed to offering affordable programs that ensure that no patient walks away from a pharmacy empty-handed because they could not afford their insulin. Both Lilly and Sanofi have agreed to implement a streamlined process at the pharmacy counter that would allow pharmacies to automatically advise cash-paying consumers of their ability to fill their monthly prescription for $35, before leaving the pharmacy counter.  

In addition to the $35 monthly cap for any uninsured New Yorker, Lilly has also agreed to continue working with national relief agencies to identify high-need geographical locations throughout New York and to offer insulin products free of charge, through national relief agencies, to more eligible non-profit clinics in those locations. Those clinics can then offer insulin products for free in those areas that are the most in need. Sanofi has also agreed to offer free insulin to the neediest consumers who meet income thresholds tied to the federal poverty line.