Monday, April 11, 2016
COMUNILIFE OPENS NEW 65 UNIT AFFORDABLE HOUSING BUILDING IN THE BRONX
New state-of-the-art facility will serve New Yorkers with special needs and low income residents
Comunilife, one of New York City's premier health and human service not-for-profit organizations, today inaugurated its newest supportive and affordable housing building in The Bronx.
El Rio Residence, located at 1041 East 179th Street in West Farms, includes 65 units (39 studio apartments for New Yorkers living with special needs and 26 studio apartments for low-income residents). Amenities include community room, laundry, back garden, staff offices, and 24/7 security.
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"We remain strong in our commitment to increase the number of supportive housing units available for the most vulnerable populations," said Dr. Rosa M. Gil, President and CEO of Comunilife. "El Rio Residence is a major step as we continue to provide new, safe and affordable housing options for the people who need it the most, a midst the city's housing crisis."
El Rio is NYSERDA certified and follows the Enterprise Green Communities guidelines. The building incorporates energy efficient features including low-flow fixtures, bi-level lights in hallways, low VOC paint, FSC certified wood, energy star appliances, native vegetation in the recreational areas, erosion control during construction and construction materials with high recycled content.
The project was developed with Capital Financing received through NYS's Office of Temporary and Disability Assistance, Homeless Housing and Assistance Program, NYC's Department of Housing Preservation and Development Supportive Housing Loan Program, the Bronx Borough President's Office, and with low-income housing tax credit equity from Red Stone Equity Partners. The building was designed by Gran Kriegel Architects, with Fazio Construction serving as the general contractor.
Today's ribbon cutting ceremony was attended by local leaders and community partners, including Deputy Bronx Borough President Aurelia Greene, Assembly Member Luis R. Sepulveda, Samuel B. Roberts (Commissioner, NYS Office of Temporary and Disability Assistance), Mirza Orrios (HUD's Deputy Regional Administrator for New York and New Jersey), Jessica Katz (Assistant Commissioner, NYC HPD), Moira Tashjian (Associate Commissioner, NYS Office of Mental Health),Rebecca Sievers (Program Manager, NYC Department of Health and Mental Hygiene), Carlos R. Piñeiro (Chairperson, Comunilife's Board of Directors), Richard Roberts (Red Stone Equity Partners), and Kristin Miller (CSH). The 65 residents of the new building were welcomed to the community and the Comunilife family during today's ceremony.
"Ending homelessness and housing insecurity in New York depends on building supportive and affordable housing like the El Rio project we're celebrating today. With over $7 million invested from HUD's HOME Program, this development will provide long-term stability for both its residents and the neighborhood," Orrios said.
"Creating affordable housing is very important not just in The Bronx but the entire New York City," said Bronx Borough President Ruben Diaz, Jr. "Projects like El Rio are steps in the right direction towards greater affordability. Finding affordable housing in New York City is a challenge under any circumstances, and it was with great pleasure that I have allocated $744,000 of my capital budget for this 65-unit studio apartment building, created to support permanent housing for low-income individuals and former homeless adults living with special needs. This project will help improve the lives of many of our must vulnerable residents."
"For many vulnerable populations, stability simply means a safe place to call home. El Rio offers a holistic housing approach for households in need that includes not only affordable housing but also onsite services and support through the Comunilife network," said HPD Commissioner Vicki Been. " I would like to thank Comunilife and all of their development partners for their investment in this project and dedication to improving the lives of those in need. Developments like these are proof positive that New Yorkers take care of their own."
El Rio is part of Comunilife's housing portfolio which now includes 1,607 units of housing in nine transitional and permanent congregate residences for homeless New Yorkers living with special needs; three low-income apartment buildings and 993 units of supportive scatter site apartments.
ABOUT COMUNILIFE:
Founded in 1989, Comunilife is a health and human service agency whose mission is to improve the quality of life and create a healthier tomorrow for children, adolescents, adults, families and seniors living with mental illness and/or HIV/AIDS in New York City's underserved, diverse communities. Comunilife provides culturally-competent, community-based services to 3,500 New Yorkers annually.
Saturday, April 9, 2016
100 PERCENT Saturday April 9, 2016
100 PERCENT
By Robert Press
New York Counts This Year
Tuesday April 19th is the presidential primary date for New York, and this is a year where both the Democratic and Republican races in New York could impact on just who gets nominated. That is why all of the candidates in both parties are criss-crossing New York State looking for votes. On the Republican side it seems as though all congressional districts matter since a candidate can pick up New York delegates even in a almost Republican free district such as is the case here in the Bronx. That could be the reason that Republican Presidential candidate Ted Cruz came to the South Bronx to meet with State Senator Ruben Diaz Sr. who claims to be a Conservative like Cruz. The only problem candidate Cruz is that State Senator Diaz Sr. (at last look) is a Democrat, and as for being a Conservative I checked with the Chair of the Bronx Conservative Party Bill Newmark on that. Mr. Newmark wanted to know why Senator Diaz has not come to the Bronx Conservative Party for an endorsement so far this year, and Mr. Newmark also wanted to know why Senator Diaz did not ask for the Bronx Conservative Party endorsement in the last election in 2014.
Speaking of the Bronx, it seems that the Bronx Democratic County organization seems to be pulled in different directions also. State Senator Ruben Diaz Sr. who is no stranger to the Republican Party, entertained Republican Presidential candidate Ted Cruz this past week. The next day his son Bronx Borough President Ruben Diaz Jr. had a visit from Democratic Presidential candidate Hillary Clinton in front of Yankee Stadium. The two then hopped on the subway after Clinton had a little trouble getting through the turnstile. It took her five swipes of the Metro Card she had to get a good swipe which let her on to the platform. Unlike Democratic Presidential candidate Bernie Sanders who grew up in Brooklyn and thought tokens were still in use on the NYC subway system Clinton at least was told that tokens were no longer in use. However when Sanders came to the South Bronx over 18,000 people came to see him, and Bronx Assemblyman Luis Sepulveda who has been called a twin to Bronx Democratic County Leader Marcos Crespo is supporting Sanders.
Back on the Republican side John Kasich did his best impression of Bill de Blasio when eating pizza in New York, using a fork to eat the pizza. My predictions on the presidential race will appear in Wednesday's 100 PERCENT column in the new Bronx newspaper that will premier on Wednesday April 13th.
As for the race to replace Charlie Rangel in congress petitioning ended today. Since the primary election for congress is on June 28th there is time to see just how many of the seven candidates make it on to the ballot. Sometime in late June I will put out my prediction, but it now appears to be a two person race between Manhattan Democratic County Leader Assemblyman Keith Weight and State Senator Adriano Espaillat who is running for the third time, but first time for an open congressional seat.
Don't forget that on Wednesday April 13th you will find this column in a new Bronxwide newspaper. You can also continue to check this blog for updates, and the listing of events and reports of them.
If you have any comments about this column or would like to have an event listed in this column or on my blog you can e-mail us at 100percentbronxnews@gmail.com or call 718-644-4199 Mr. Robert Press.
Congresswoman Carolyn Maloney Endorses Keith Wright for Congress in NY’s 13th Congressional District
Says she needs Wright in Washington to help fight for funding for Second Avenue Subway and Mass Transit
Congresswoman Carolyn Maloney announced her support of Keith Wright today, in the 13th Congressional District Race to succeed retiring U.S. Rep. Charlie Rangel.
“Keith Wright is the right choice and the partner I need in Congress. He is a proven leader with a strong record of getting results in Albany for our communities and can be counted on to fight for quality education for all our children, for affordable healthcare, to create and protect tenant's rights and affordable housing, and to advocate for needed funds to build out the Second Avenue Subway. Under his leadership, the State legislature just restored nearly $1 billion to build phase 2 of the Second Avenue Subway which will run from 99th to 125th Street and will be a vital transportation and infrastructure investment for both my constituents and the constituents of the 13th Congressional District."
“Congresswoman Maloney is a true champion and fighter for the people of New York. I am honored and humbled to have her support in this race and look forward to the opportunity to work with her to build the Second Avenue Subway line and advocate for needed dollars for mass transit from Washington ,” said Assembly member Wright.
Rep. Maloney's endorsement follows an impressive list of individuals and leaders who are supporting Keith Wright for Congress including: Gov. David Paterson, Mayor David Dinkins, Assembly Member Denny Farrell, Council Member Inez Dickens, Assembly Speaker Carl Heastie, Assembly Member Daniel O'Donnell, 32BJ, the United Firefighters Association, Teamsters Joint Council 16, Teamsters Local 237, New York City District Council of Carpenters, International Union of Elevator Constructors Local 1 and numerous community leaders and clergy in the Bronx and Manhattan.
Assembly member Keith Wright represents the 70th District in the NYS Assembly and is the Chair of the Assembly Committee on Housing.
Congresswoman Carolyn Maloney represents the 12th congressional district. She is a senior member of both the House Financial Services Committee (where she serves as Ranking Member of the Subcommittee on Capital Markets) and the House Oversight and Government Reform Committee, and the Ranking House member of the Joint Economic Committee.
ADRIANO ESPAILLAT OPENS BRONX CAMPAIGN OFFICE
Adriano Espaillat held a rally today to mark the opening of his Bronx office. At the event Espaillat reiterated his pledge to bring a new focus to the borough when elected to Congress by opening up a Bronx district office on day one. Adriano Espaillat and Bronx leaders addressed an enthusiastic crowd, discussing key issues impacting Bronx families.
"Today, I'm glad to join my colleague Adriano Espaillat at the grand opening of his Bronx's campaign office," said State Senator Gustavo Rivera. "In doing so, Adriano is demonstrating with actions that his campaign is strongly committed to hear directly from Bronxites about the issues that affect their everyday lives. If elected, I have no doubt that, from day one, Adriano will proudly represent our borough and be the dedicated advocate that the Bronx needs in Congress."
"Adriano Espaillat is a proven progressive leader with 18 years in the State Legislature that will bring change to a district that hasn’t seen change in more than 40 years," said District Leader Yudelka Tapia.
"A new focus must be brought to the Bronx," said Adriano Espaillat. "When I am elected to Congress, I will open up a district office in the Bronx on day one and work tirelessly to make the Bronx a better place to live, work and raise a family."
The 13th congressional district stretches from East Harlem to Inwood in Northern Manhattan and covers parts of the Bronx. This race currently has seven candidates with the petitioning period ending today. it is widely felt to be a two person race however between State Senator Espaillat and Manhattan Democratic County Leader Assemblyman Keith Wright.
Above - Congressional candidate Adriano Espaillat greets some of the many volunteers in attendance as he enters the room.
Below - A group photo of many of the volunteers, Senator Espaillat, and others including State Senator Gustavo Rivera (back right).
Above - Female District Leader Yudelka Tapia introduces congressional candidate State Senator Adriano Espaillat.
Below - State Senator Gustavo Rivera holds up the V for Victory, and shows how this time Congressional candidate Adriano Espaillat is going to dance around the competition to win the soon to be vacant congressional seat currently held by retiring Charlie Rangel.
SENATOR JEFF KLEIN HONORS LOCAL CHEERLEADERS FOR NATIONAL CHAMPIONSHIP WIN
State Senator Jeff Klein honored the Junior Varsity cheerleading squad of St. Catherine Academy today. The students ranked first in the non-tumbling division, making history at the 2016 Universal Cheerleading Association National High School Cheerleading championship. Senator Klein presented the team with a proclamation honoring their achievement and dedication, and the cheerleaders all received congratulatory certificates.
“Today we recognize the hard work and perseverance of St. Catherine Academy’s Junior Varsity cheerleaders. Their sportsmanship, coupled with the outstanding academic program at St. Catherine's, will keep our national champions on a path for success,” said Senator Jeff Klein. “Congratulations to our talented students!”
“St. Catherine Academy is so proud of our cheerleaders and coaches for their hard work and dedication keeping with the tradition of our school for excellence. We are thrilled that Senator Klein came to visit our school as soon as I contacted him. Having our state senator present is now a reality bestowed on us,” said Sister Patricia Wolf, president of St. Catherine Academy.
The school proudly displayed the Universal Cheerleading Association first place banner and the cheerleaders wore the prestigious white jackets and gold medals. Members of the JV Cheerleading team include: Abbygayle Clark, Angelena Cancel, Kasandra Padua, Cindy Mejia, Alexis Daniels, Kristin Markgraf, Amanda Turner, Alene Ortiz, Grace Rios, Serna Colon, Briana Colon, Brianna Franco, and Keyana Brown.
“This championship is proof of how far hard work, dedication, and commitment can take you,” said JV coaches Danielle Pennacchia and Janeen Dorsey. “Nine months ago, they were a new, inexperienced team, mostly freshmen. Today, they call themselves National Champions. Speaking for all of the coaches, we couldn’t be more proud of them, not just for the win, but for the climb they took to become the national champions.”
St. Catherine Academy also achieved a seventh place rank at the national competition in Small Varsity, Division II. The Varsity and JV teams are the only nationally ranked cheerleading teams in the Bronx.
Above - Senator Klein congratulates the cheerleaders from St. Catherine Academy on their great feat.
Below - The banner for being the 2016 National Champs.
Above - The trophy that the cheerleaders received, and the trophy behind was for another victory in the competition.
Below - Senator Klein with the winning team, as usual.
Friday, April 8, 2016
Manhattan U.S. Attorney Announces $1.2 Billion Settlement Of Its Claims Against Wells Fargo Bank, N.A., For Improper Mortgage Lending Practices
Wells Fargo Bank Admits That It Certified That Loans Were Eligible for FHA Mortgage Insurance When They Were Not, and That It Did Not Report Thousands of Faulty Mortgage Loans to HUD
Preet Bharara, the United States Attorney for the Southern District of New York, Julián Castro, Secretary of the U.S. Department of Housing and Urban Development (“HUD”), Benjamin C. Mizer, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division, Brian J. Stretch, United States Attorney for the Northern District of California, and David A. Montoya, Inspector General of HUD (“HUD-OIG”), announced today that the United States has settled civil mortgage fraud claims against WELLS FARGO BANK, N.A. (“WELLS FARGO” or the “Bank”), and WELLS FARGO executive KURT LOFRANO (“LOFRANO”), stemming from WELLS FARGO’s participation in the Federal Housing Administration (“FHA”) Direct Endorsement Lender Program. In the settlement, WELLS FARGO agreed to pay $1.2 billion and admitted, acknowledged, and accepted responsibility for, among other things, certifying to HUD, during the period from May 2001 through December 2008, that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when certain of those loans defaulted. The agreement resolves the United States’ civil claims in its lawsuit in the Southern District of New York, as well as an investigation conducted by the U.S. Attorney’s Office for the Southern District of New York regarding WELLS FARGO’s FHA origination and underwriting practices subsequent to the claims in its lawsuit, and an investigation conducted by the U.S. Attorney’s Office for the Northern District of California into whether American Mortgage Network, LLC (“AMNET”), a mortgage lender acquired by WELLS FARGO in 2009, falsely certified and submitted ineligible residential mortgage loans for FHA insurance.
The settlement was approved today by U.S. District Judge Jesse M. Furman.
Manhattan U.S. Attorney Preet Bharara said: “Today, Wells Fargo, one of the biggest mortgage lenders in the world, has been held responsible for years of reckless underwriting, while relying on government insurance to deal with the damage. Wells Fargo has long taken advantage of the FHA mortgage insurance program, designed to help millions of Americans realize the dream of home ownership, to write thousands and thousands of faulty loans. Driven to maximize profits, Wells Fargo employed shoddy underwriting practices to drive up loan volume, at the expense of loan quality. Even though Wells Fargo identified through internal quality assurance reviews thousands of problematic loans, the Bank decided not to report them to HUD. As a result, while Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust. With today’s settlement, Wells Fargo has finally resolved the years-long litigation, adding to the list of large financial institutions against which this Office has successfully pursued civil fraud prosecutions.”
HUD Secretary Julián Castro said: “This Administration remains committed to holding lenders accountable for their lending practices. The $1.2 billion settlement with Wells Fargo is the largest recovery for loan origination violations in FHA’s history. Yet, this monetary figure can never truly make up for the countless families that lost homes as a result of poor lending practices.”
Principal Deputy Assistant Attorney General Benjamin C. Mizer said: “This settlement is another step in the Department of Justice’s continuing efforts to hold accountable FHA approved lenders that unlawfully submitted false claims at the expense of American homeowners and taxpayers. In addition to today’s resolution with Wells Fargo, the department has pursued similar misconduct by numerous other lenders, returning more than $4 billion to the FHA fund and the Treasury and filing suit where appropriate. We remain committed to protecting the public fisc from all who seek to abuse it, whether they do business on Wall Street or Main Street.”
Northern District of California U.S. Attorney Brian Stretch said: “Misconduct in the mortgage industry helped lead to a destructive financial crisis that spanned the globe. American Mortgage Network’s origination of FHA-insured loans that did not comply with Government requirements also caused major losses to the public fisc. Today’s settlement demonstrates the Department of Justice’s resolve to pursue remedies against those who engaged in this type of misconduct.”
HUD Inspector General David A. Montoya said: “This matter is not just a failure by Wells Fargo to comply with federal requirements in FHA’s Direct Endorsement Lender program – it’s a failure by one of our trusted participants in the FHA program to demonstrate a commitment to integrity and to ordinary Americans who are trying to fulfill their dreams of homeownership.”
According to the Second Amended Complaint filed in Manhattan federal court:
WELLS FARGO has been a participant in the Direct Endorsement Lender program, a federal program administered by FHA.As a Direct Endorsement Lender, WELLS FARGO has the authority to originate, underwrite, and certify mortgages for FHA insurance.If a Direct Endorsement Lender approves a mortgage loan for FHA insurance and the loan later defaults, the holder or servicer of the loan may submit an insurance claim to HUD for the outstanding balance of the defaulted loan, along with any associated costs, which HUD must then pay.Under the Direct Endorsement Lender program, neither FHA nor HUD reviews a loan for compliance with FHA requirements before it is endorsed for FHA insurance.Direct Endorsement Lenders are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and maintaining a quality control program that can prevent and correct any deficiencies in their underwriting.The quality control program requirements include conducting a full review of all loans that go 60 days into default within the first six payments, known as “early payment defaults”; taking prompt and adequate corrective action upon discovery of fraud or serious underwriting problems; and disclosing to HUD in writing all loans containing evidence of fraud or other serious underwriting deficiencies.WELLS FARGO failed to comply with these basic requirements.
First, between at least May 2001 and October 2005, WELLS FARGO, the largest HUD-approved residential mortgage lender, engaged in a practice of reckless underwriting of its retail FHA loans, all the while knowing that it would not be responsible when the defective loans went into default.To maximize its loan volume (and profits), WELLS FARGO elected to hire temporary staff to churn out and approve an ever increasing quantity of FHA loans, but neglected to provide this inexperienced staff with proper training.At the same time, WELLS FARGO’s management applied pressure on its underwriters to approve more and more FHA loans.The Bank also imposed short turnaround times for deciding whether to approve the loans, employed lax underwriting standards and controls, and paid bonuses to underwriters and other staff based on the number of loans approved.Predictably, as a result, WELLS FARGO’s loan volume and profits soared, but the quality of its loans declined significantly. Yet, when WELLS FARGO’s senior management was repeatedly advised by its own quality assurance reviews of serious problems with the quality of the retail FHA loans that the Bank was originating, management failed to implement proper and effective corrective measures, leaving HUD to pay hundreds of millions of dollars in claims for defaulted loans.
Second, WELLS FARGO failed to self-report to HUD the bad loans that it was originating, in violation of FHA program reporting requirements.During the period 2002 through 2010, HUD required Direct Endorsement Lenders to perform post-closing reviews of the loans that they originated and to report to HUD in writing loans that contained fraud or other serious deficiencies.This requirement provided HUD with an opportunity to investigate the defective loans and request reimbursement for any claim that HUD had paid or request indemnification for any future claim, as appropriate.During this nine-year period, WELLS FARGO, through its post-closing reviews, internally identified thousands of defective FHA loans that it was required to self-report to HUD, including a substantial number of loans that had gone into “early payment default.”However, instead of reporting these loans to HUD as required, WELLS FARGO engaged in virtually no self-reporting during the four-year period from 2002 through 2005, and only minimal self-reporting after 2005.
In his capacity as Vice President of Credit-Risk – Quality Assurance at WELLS FARGO, LOFRANO executed on WELLS FARGO’s behalf the annual certifications required by HUD for the Bank’s participation in the Direct Endorsement Lender program for certain years. LOFRANO also organized and participated in the working group responsible for creating and implementing WELLS FARGO’s self-reporting policies and procedures. In contravention of HUD’s requirements, that group failed to report to HUD loans that WELLS FARGO had internally identified as containing material underwriting findings. Moreover, LOFRANO received WELLS FARGO quality assurance reports identifying thousands of FHA loans with material findings – very few of which WELLS FARGO reported to HUD.
As part of the settlement, WELLS FARGO has admitted, acknowledged, and accepted responsibility for, among other things, the following conduct:During the period from May 2001 through on or about December 31, 2008, WELLS FARGO submitted to HUD certifications stating that certain residential home mortgage loans were eligible for FHA insurance when in fact they were not, resulting in the Government having to pay FHA insurance claims when certain of those loans defaulted.From May 2001 through January 2003, WELLS FARGO’s quality assurance group conducted monthly internal reviews of random samples of the retail FHA mortgage loans that the Bank had already originated, underwritten, and closed which identified for most of the months that in excess of 25 percent of the loans, and in several consecutive months, more than 40 percent of the loans, had a material finding.For a number of the months during the period from February 2003 through September 2004, the material finding rate was in excess of 20 percent. A “material” finding was defined by WELLS FARGO generally as a loan file that did not conform to internal parameters and/or specific FHA parameters, contained significant risk factors affecting the underwriting decision, and/or evidenced misrepresentation.
WELLS FARGO also admitted, acknowledged, and accepted responsibility for the following additional conduct:Between 2002 and October 2005, WELLS FARGO made only one self-report to HUD, involving multiple loans.During that same period, the Bank identified through its internal quality assurance reviews approximately 3,000 FHA loans with material findings.Further, during the period between October 2005 and December 2010, WELLS FARGO only self-reported approximately 300 loans to HUD.During that same period, WELLS FARGO’s internal quality assurance reviews identified more than 2,900 additional FHA loans containing material findings.The Government was required to pay FHA insurance claims when certain of these loans that WELLS FARGO identified with material findings defaulted.
LOFRANO admitted, acknowledged, accepted responsibility for, among other things, the following matters in which he participated:From January 1, 2002, until December 31, 2010, he held the position of Vice President of Credit Risk – Quality Assurance at WELLS FARGO; in that capacity, he supervised the Decision Quality Management group; in 2004, he was asked to organize a working sub-group to address reporting to HUD; in or about October 2005, he organized a working group that drafted WELLS FARGO’s new self-reporting policy and procedures; and during the period October 2005 through December 31, 2010, based on application of the Bank’s new self-reporting policy and by committee decision, WELLS FARGO did not report to HUD the majority of the FHA loans that the Bank’s internal quality assurance reviews had identified as having material findings.
Mr. Bharara and Mr. Stretch thanked HUD’s Office of General Counsel, HUD-OIG, and the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division for their extraordinary assistance with the prosecution and settlement of this case.
This case against WELLS FARGO is the latest in a string of civil fraud lawsuits brought by this Office since May 2011 alleging fraudulent lending practices by residential mortgage lenders. In addition to WELLS FARGO, this Office has pursued claims against Citi Mortgage (a subsidiary of Citibank), Flagstar Bank, Deutsche Bank (and a number of its subsidiaries), Countrywide, Bank Of America (“BOA”), former BOA executive Rebecca Mairone, Golden First Mortgage Corp. (“Golden First”), former Golden First owner David Movtady, Allied Home Mortgage Corp. (“Allied”), and former Allied executives Jim Hodge and Jeanne Stell.
Assistant U.S. Attorneys Jeffrey S. Oestericher, Christopher B. Harwood, Rebecca S. Tinio, Caleb Hayes-Deats, and Dominika Tarczynska are in charge of the case.
Former Manhattan Restaurant Owner Arrested For Running A $12 Million Ponzi Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, 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 today that HAMLET PERALTA, the former owner of a restaurant in Manhattan, was charged in Manhattan federal court with committing wire fraud through a scheme in which he obtained more than $12 million from investors on false pretenses and used that money to repay other investors and for personal expenses. PERALTA was arrested by FBI agents in Macon, Georgia, yesterday and will be presented before U.S. Magistrate Judge Charles Weigle in Macon this afternoon.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Hamlet Peralta solicited investors for his fictitious wholesale liquor business by peddling wholesale lies. Peralta’s Ponzi scheme allegedly fleeced his victims out of more than $12 million, virtually all of which he spent on himself or to repay other investors. Thanks to the work of the FBI and NYPD in this investigation, Peralta will not be able to victimize any other investors.”
FBI Assistant Director-in-Charge Diego Rodriquez said: “Fraud cases remain a priority for the FBI as we continue to identify and investigate those who commit financial crimes against unwitting victims. Peralta, who allegedly engaged in a multimillion-dollar enrichment scheme, will ultimately be brought to justice for his actions. We are appreciative of the support and cooperation we continue to receive from our law enforcement partners in this and so many cases.”
NYPD Commissioner William J. Bratton said: “As alleged, Hamlet Peralta violated the trust that investors placed in his fictitious wholesale liquor business venture by spending millions of his victim’s investments on clothes, food, and to continue the scheme. Thanks to the NYPD investigators and our federal law enforcement partners, Peralta will be held accountable for his actions.”
According to the allegations in the Complaint unsealed today in Manhattan federal court[1]:
From at least in or about July 2013, up to and including at least in or about 2014, PERALTA solicited more than $12 million from various investors by falsely representing that the investors’ money would be used to engage in wholesale liquor distribution for a profit. PERALTA promised investors high rates of return in the form of regular interest payments on their investments, which he represented were based on the profits to be generated by what he claimed would be his successful wholesale liquor business.
In truth and in fact, however, PERALTA misappropriated the millions of dollars in investments he received, and used those funds to repay other investors or for his own purposes. Of the more than $12 million provided to him by investors based on the representation that their money would be used to purchase wholesale liquor for resale, PERALTA in fact purchased no more than $700,000 in wholesale liquor. He used nearly all of the remaining money – more than $11 million – to repay other investors, wire money to himself, take out large cash withdrawals, and pay for personal expenses other than liquor.
As one example, in or about 2013, PERALTA told a prospective investor (“Investor-1”) who was a frequent customer at PERALTA’s restaurant and who had become friendly with PERALTA that he (PERALTA) owned a separate business called West 125th Street Liquors and that he had been approved as an exclusive wine distributor to a major national restaurant supply company (the “Restaurant Supply Company”) that was beginning a wholesale wine business. PERALTA told the investor that he would receive four percent interest on his investments, based on profits from the wholesale liquor distribution business. In truth and in fact, however, PERALTA did not own West 125th Street Liquors, and he had not been approved to be a distributor for the Restaurant Supply Company.
Over the course of the next year, based on PERALTA’s representations, the investor provided PERALTA with more than $3.5 million. Of that amount, none, or at most only a minimal amount, was spent on wholesale liquor purchases. Rather, Investor-1’s money was used to pay back other investors; was used to pay for expenses such as restaurant bills and high-end clothing purchases; and was wired to PERALTA’s personal accounts and/or withdrawn in cash. In or about June 2014, PERALTA provided Investor-1 with a document that purported to be on the letterhead of the Restaurant Supply Company indicating that the Restaurant Supply Company would be electronically transferring PERALTA $1,826,350 within seven days. In truth and in fact, however, neither PERALTA nor West 125th Street Liquors has ever been a supplier to the Restaurant Supply Company.
PERALTA, 36, of the Bronx, New York, has been charged with one count of wire fraud, which carries a maximum term of 20 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and the NYPD Internal Affairs Bureau, and noted that the investigation is continuing.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Martin Bell, Russell Capone, and Kan M. Nawaday are in charge of the prosecution.
The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.