Thursday, June 23, 2016
Wednesday, June 22, 2016
COMPTROLLER STRINGER AUDITS FIND POOR OVERSIGHT, WEAK FINANCIAL MANAGEMENT AT TWO CITY CHARTER SCHOOLS
Construction and management contracts for millions were never put in writing,
limiting ability to track how taxpayer dollars were spent
Audits released today by New York City Comptroller Scott M. Stringer found poor financial oversight and weak management by the boards of trustees at two New York City charter schools, Bedford Stuyvesant New Beginnings Charter School and Merrick Academy Queens Public Charter School. Each school’s board of trustees oversees the institutions’ finances and management to ensure the resources are available for children to receive a quality education.
The two audits uncovered that both schools spent millions of taxpayer dollars on renovations and the purchase of services and supplies but didn’t keep proper or consistent financial records, including written contracts. The New Beginnings board spent nearly $1.7 million on renovations without written contracts, detailed project plans, or adequate evidence that the board of trustees even signed off on the spending. Merrick Academy substantially altered a $1.3 million contract for educational and administrative services without putting the changes in writing and incurred an additional $4.5 million in expenses to relocate and renovate a new school building without formal approval from the board.
“Ensuring that every dollar we spend on schools goes toward the education of the next generation must be our highest priority,” Comptroller Stringer said. “Verbal agreements and informal arrangements to spend hundreds of thousands of taxpayer dollars are neither good business practice nor the appropriate way to fund our children’s education. There must be accountability to protect these resources from waste, fraud and abuse.”
The separate audits reviewed oversight of financial operations by the board of trustees at the Bedford Stuyvesant New Beginnings Charter School and Merrick Academy Queens Public Charter School from July 1, 2012 through June 30, 2014. New Beginnings is located in Bedford Stuyvesant, Brooklyn, and is authorized by the New York City Board of Education; in Fiscal Year 2013, it served K-5 and K-6 in Fiscal Year 2014. Merrick Academy is a SUNY-authorized charter school in Springfield Gardens, Queens, which served students in grades K-6 but now serves students in grades K-5.
Major findings at New Beginnings:
The New Beginnings Board of Trustees did not responsibly manage the school’s finances
- New Beginnings officials told auditors that they did not solicit competitive proposals for nearly $1.7 million of construction costs, which means the school might have overpaid for the work. Though the board expressly told auditors that there had not been competitive bidding for the construction, after school officials saw the audit’s preliminary findings, they claimed to have received documents from the former executive director that they said showed a competitive bidding process had taken place.
- Auditors also uncovered that there were no written contracts or project plans for $1.5 million of the nearly $1.7 million spent on construction work during the audit period. Because there were no contracts or plans, there is no way to determine if taxpayer dollars were spent, appropriately.
- Auditors found a lack of financial controls over New Beginnings’ handling of tens of thousands of dollars in cash received from families for school lunches, afterschool programs, and general fundraising. The audit found that $8,200 in cash collected during FY 2014 was not deposited into the school’s bank accounts and there was no evidence this money was then spent appropriately.
- New Beginnings was required to have $70,000 in an escrow account to pay for legal and audit expenses in case the school was forced to dissolve. At the end of FY 2013, however, the school only had $2,529 in the account and for nearly three quarters of that year, the account balance fell below the required $70,000 minimum.
School administration made payment requests in multiple small increments in an apparent attempt to skirt oversight requirements
To ensure that spending on large purchases is appropriate, New Beginning’s policies require checks for $5,000 or more to be signed by two school officials. Because of this requirement, auditors examined checks for amounts just below and above $5,000 to see if school officials complied with this financial control.
Auditors identified nearly $60,000 worth of checks – for amounts ranging from $4999.00 to $4,999.99 – which were made out to Antares, LLC, a firm used to pay the school’s former executive director. These twelve checks were signed only by the Vice Chair of the Board, who still holds that position. When questioned by auditors, the Vice Chair admitted the payments should not have been handled this way, but claimed it never occurred to her that the checks were intentionally designed to bypass greater oversight.
Auditors also reviewed a sample of 77 payments of more than $5,000 – which must be approved by two school officials. Of these payments, auditors identified $215,771 in spending – 13% of the sample total – which only had one signature, in direct violation of the school’s rules.
When auditors looked at a larger sample of 192 payments worth $2.2 million – including the 77 for more than $5,000 and 115 for less than that amount – they identified eight transactions, which constituted 12% of the total sample spending, that lacked supporting documentation.
The Board of Trustees did not submit financial disclosure forms or remove board members who violated policies
Despite clear language in the school’s charter stating that failure to submit financial disclosure forms is grounds for removal, 6 of 8 board members did not submit the required Financial Disclosure Reports by the deadline for FY 2013 and 3 of 8 were missing for FY 2014. Although the school’s charter states that a Board member should be removed if they fail to submit a disclosure report, no actions were taken – putting the school at risk of having its Charter revoked or terminated.
Auditors recommended that New Beginnings’ Board:
- Ensure all contracts are approved, signed and dated by the Head of School. Further, all such contracts should be approved by the Board and evidence of such approval should be maintained;
- Make certain that it has proper estimates, plans and costs for any alterations done on premises;
- Implement adequate cash controls and financial management for school-related activities; and
- Maintain the minimum required balance of no less than $70,000 in its escrow account in accordance with its charter agreement.
Major findings at Merrick Academy include:
Merrick Academy substantially altered the terms of a million-dollar contract for management and educational services without putting those changes in writing or documenting what services the payments they did make were for. As a result, it is impossible to determine if funds paid went toward work that was actually performed.
In 2010, Merrick Academy entered into a five-year contract with Victory Schools, Inc. to provide management and educational services, create student assessments, and manage administrative and financial operations. Originally, Victory was supposed to be paid $1.3 million per year, but was paid only $600,000 in FY2013 and $624,000 in FY 2014, based on a “verbal agreement,” which both the school and contractor claimed reduced the scope of Victory’s involvement.
The changes to the original contract were neither documented by Victory nor approved by the SUNY Institute, as required by the school’s charter agreement. As a result, there is no way for auditors or the public to know what services Victory was paid millions of taxpayer dollars to perform, or if they were received.
Merrick’s Board of Trustees failed to oversee financial decisions or approve $4.5 million in costs associated with the school’s move to a new location, neglecting its duty to manage the school’s finances
- There was no evidence that the Merrick board formally considered and approved relocation and renovation plans that moved the school from its previous location in Queens Village to a new site in Springfield Gardens, Queens. This means that there is no public document explaining why the school chose to spend millions of taxpayer dollars on the move.
- Despite spending over $431,000 in renovation expenses at the new location, $534,000 in costs to break the old location’s lease, $81,000 in moving expenses and incurring $3.5 million in additional rental expenses at the new site, board minutes show almost no discussion of the financial implications of moving and no evidence a vote was ever taken to approve the move.
School officials consistently failed to follow operating procedures, increasing the possibility the school overpaid for goods and services
- Auditors found no evidence of contracts, purchase orders, or work orders for 16 of the 54 vendors that received $10,000 or more in payments from the school.
- These 16 vendors received $907,198, or 38% of the total $2.4 million paid to the vendors.
- One contractor, Everlast Solutions Corp., was paid $302,000 to work on renovations at the school’s new location, but auditors were unable obtain a copy of the contract from the school.
- Of 119 payments totaling $1,437,541 which auditors reviewed, 13 payments worth $311,338 – 22% of the sample total – weren’t authorized by the appropriate staff member, increasing the risk that inappropriate payments were made.
Merrick Academy could not show that it consistently performed required criminal background checks for all employees, increasing the risk that inappropriate individuals could have had contact with school children
- Auditors examined a sample of 29 employees and determined that Merrick did not have evidence that background checks took place prior to their start date for 23 (79%) of them.
- Five of those employees worked for the school without proper clearance for between six months and four and a half years.
Auditors recommended that Merrick’s board:
- Ensure that any changes to its agreement to provide management and educational services are formalized in writing and approved by the SUNY Institute;
- Take steps to ensure that all contracts, purchase orders, or work orders are approved and documented;
- Review, consider, and vote on all significant financial matters and keep proper minutes; and
- Ensure that criminal background checks are obtained for employees before allowing them to work at the school.
“If you’re going to spend taxpayer dollars, you better be able to show what you paid for. When public money is spent without accountability, it raises serious questions about whether our children are getting the services they need to succeed. We can’t compromise on the education of our kids. These boards need to make immediate changes and ensure not another penny is spent without oversight and accountability,” Stringer said.
To read the full audit of the Bedford Stuyvesant New Beginnings Charter School, please click here.
To read the full audit of Merrick Academy Queens Public Charter School, please click here.
limiting ability to track how taxpayer dollars were spent
Audits released today by New York City Comptroller Scott M. Stringer found poor financial oversight and weak management by the boards of trustees at two New York City charter schools, Bedford Stuyvesant New Beginnings Charter School and Merrick Academy Queens Public Charter School. Each school’s board of trustees oversees the institutions’ finances and management to ensure the resources are available for children to receive a quality education.
The two audits uncovered that both schools spent millions of taxpayer dollars on renovations and the purchase of services and supplies but didn’t keep proper or consistent financial records, including written contracts. The New Beginnings board spent nearly $1.7 million on renovations without written contracts, detailed project plans, or adequate evidence that the board of trustees even signed off on the spending. Merrick Academy substantially altered a $1.3 million contract for educational and administrative services without putting the changes in writing and incurred an additional $4.5 million in expenses to relocate and renovate a new school building without formal approval from the board.
“Ensuring that every dollar we spend on schools goes toward the education of the next generation must be our highest priority,” Comptroller Stringer said. “Verbal agreements and informal arrangements to spend hundreds of thousands of taxpayer dollars are neither good business practice nor the appropriate way to fund our children’s education. There must be accountability to protect these resources from waste, fraud and abuse.”
The separate audits reviewed oversight of financial operations by the board of trustees at the Bedford Stuyvesant New Beginnings Charter School and Merrick Academy Queens Public Charter School from July 1, 2012 through June 30, 2014. New Beginnings is located in Bedford Stuyvesant, Brooklyn, and is authorized by the New York City Board of Education; in Fiscal Year 2013, it served K-5 and K-6 in Fiscal Year 2014. Merrick Academy is a SUNY-authorized charter school in Springfield Gardens, Queens, which served students in grades K-6 but now serves students in grades K-5.
Major findings at New Beginnings:
The New Beginnings Board of Trustees did not responsibly manage the school’s finances
- New Beginnings officials told auditors that they did not solicit competitive proposals for nearly $1.7 million of construction costs, which means the school might have overpaid for the work. Though the board expressly told auditors that there had not been competitive bidding for the construction, after school officials saw the audit’s preliminary findings, they claimed to have received documents from the former executive director that they said showed a competitive bidding process had taken place.
- Auditors also uncovered that there were no written contracts or project plans for $1.5 million of the nearly $1.7 million spent on construction work during the audit period. Because there were no contracts or plans, there is no way to determine if taxpayer dollars were spent, appropriately.
- Auditors found a lack of financial controls over New Beginnings’ handling of tens of thousands of dollars in cash received from families for school lunches, afterschool programs, and general fundraising. The audit found that $8,200 in cash collected during FY 2014 was not deposited into the school’s bank accounts and there was no evidence this money was then spent appropriately.
- New Beginnings was required to have $70,000 in an escrow account to pay for legal and audit expenses in case the school was forced to dissolve. At the end of FY 2013, however, the school only had $2,529 in the account and for nearly three quarters of that year, the account balance fell below the required $70,000 minimum.
School administration made payment requests in multiple small increments in an apparent attempt to skirt oversight requirements
To ensure that spending on large purchases is appropriate, New Beginning’s policies require checks for $5,000 or more to be signed by two school officials. Because of this requirement, auditors examined checks for amounts just below and above $5,000 to see if school officials complied with this financial control.
Auditors identified nearly $60,000 worth of checks – for amounts ranging from $4999.00 to $4,999.99 – which were made out to Antares, LLC, a firm used to pay the school’s former executive director. These twelve checks were signed only by the Vice Chair of the Board, who still holds that position. When questioned by auditors, the Vice Chair admitted the payments should not have been handled this way, but claimed it never occurred to her that the checks were intentionally designed to bypass greater oversight.
Auditors also reviewed a sample of 77 payments of more than $5,000 – which must be approved by two school officials. Of these payments, auditors identified $215,771 in spending – 13% of the sample total – which only had one signature, in direct violation of the school’s rules.
When auditors looked at a larger sample of 192 payments worth $2.2 million – including the 77 for more than $5,000 and 115 for less than that amount – they identified eight transactions, which constituted 12% of the total sample spending, that lacked supporting documentation.
The Board of Trustees did not submit financial disclosure forms or remove board members who violated policies
Despite clear language in the school’s charter stating that failure to submit financial disclosure forms is grounds for removal, 6 of 8 board members did not submit the required Financial Disclosure Reports by the deadline for FY 2013 and 3 of 8 were missing for FY 2014. Although the school’s charter states that a Board member should be removed if they fail to submit a disclosure report, no actions were taken – putting the school at risk of having its Charter revoked or terminated.
Auditors recommended that New Beginnings’ Board:
- Ensure all contracts are approved, signed and dated by the Head of School. Further, all such contracts should be approved by the Board and evidence of such approval should be maintained;
- Make certain that it has proper estimates, plans and costs for any alterations done on premises;
- Implement adequate cash controls and financial management for school-related activities; and
- Maintain the minimum required balance of no less than $70,000 in its escrow account in accordance with its charter agreement.
Major findings at Merrick Academy include:
Merrick Academy substantially altered the terms of a million-dollar contract for management and educational services without putting those changes in writing or documenting what services the payments they did make were for. As a result, it is impossible to determine if funds paid went toward work that was actually performed.
In 2010, Merrick Academy entered into a five-year contract with Victory Schools, Inc. to provide management and educational services, create student assessments, and manage administrative and financial operations. Originally, Victory was supposed to be paid $1.3 million per year, but was paid only $600,000 in FY2013 and $624,000 in FY 2014, based on a “verbal agreement,” which both the school and contractor claimed reduced the scope of Victory’s involvement.
The changes to the original contract were neither documented by Victory nor approved by the SUNY Institute, as required by the school’s charter agreement. As a result, there is no way for auditors or the public to know what services Victory was paid millions of taxpayer dollars to perform, or if they were received.
Merrick’s Board of Trustees failed to oversee financial decisions or approve $4.5 million in costs associated with the school’s move to a new location, neglecting its duty to manage the school’s finances
- There was no evidence that the Merrick board formally considered and approved relocation and renovation plans that moved the school from its previous location in Queens Village to a new site in Springfield Gardens, Queens. This means that there is no public document explaining why the school chose to spend millions of taxpayer dollars on the move.
- Despite spending over $431,000 in renovation expenses at the new location, $534,000 in costs to break the old location’s lease, $81,000 in moving expenses and incurring $3.5 million in additional rental expenses at the new site, board minutes show almost no discussion of the financial implications of moving and no evidence a vote was ever taken to approve the move.
School officials consistently failed to follow operating procedures, increasing the possibility the school overpaid for goods and services
- Auditors found no evidence of contracts, purchase orders, or work orders for 16 of the 54 vendors that received $10,000 or more in payments from the school.
- These 16 vendors received $907,198, or 38% of the total $2.4 million paid to the vendors.
- One contractor, Everlast Solutions Corp., was paid $302,000 to work on renovations at the school’s new location, but auditors were unable obtain a copy of the contract from the school.
- Of 119 payments totaling $1,437,541 which auditors reviewed, 13 payments worth $311,338 – 22% of the sample total – weren’t authorized by the appropriate staff member, increasing the risk that inappropriate payments were made.
Merrick Academy could not show that it consistently performed required criminal background checks for all employees, increasing the risk that inappropriate individuals could have had contact with school children
- Auditors examined a sample of 29 employees and determined that Merrick did not have evidence that background checks took place prior to their start date for 23 (79%) of them.
- Five of those employees worked for the school without proper clearance for between six months and four and a half years.
Auditors recommended that Merrick’s board:
- Ensure that any changes to its agreement to provide management and educational services are formalized in writing and approved by the SUNY Institute;
- Take steps to ensure that all contracts, purchase orders, or work orders are approved and documented;
- Review, consider, and vote on all significant financial matters and keep proper minutes; and
- Ensure that criminal background checks are obtained for employees before allowing them to work at the school.
“If you’re going to spend taxpayer dollars, you better be able to show what you paid for. When public money is spent without accountability, it raises serious questions about whether our children are getting the services they need to succeed. We can’t compromise on the education of our kids. These boards need to make immediate changes and ensure not another penny is spent without oversight and accountability,” Stringer said.
To read the full audit of the Bedford Stuyvesant New Beginnings Charter School, please click here.
To read the full audit of Merrick Academy Queens Public Charter School, please click here.
BRONX UNEMPLOYMENT DROPS TO 6.1%
The Bronx’s unemployment rate has fallen to one of its lowest numbers ever, according to newly released statistics from the New York State Department of Labor.
The unemployment rate in The Bronx dropped to 6.1 percent in May 2016, down from 6.6 percent in April 2016 and 7.8 percent in May 2015. This is the lowest unemployment rate the borough has seen since Bronx Borough President Ruben Diaz Jr. first took office in May 2009, topping last month’s previous all-time low.
The total number of Bronxites employed also remains high, 567,500, with nearly 100,000 more Bronx residents employed today than when Borough President Diaz took office seven years ago. In addition, just 37,000 Bronx residents are currently unemployed, the lowest number of Borough President Diaz’s tenure.
“We are always looking to continue to build on the results that have helped decrease unemployment in our borough to record lows,” said Bronx Borough President Ruben Diaz Jr. “We will refuse to stay complacent as we seek to lower the unemployment rate even further, create new jobs, strengthen our existing businesses and grow our local economy. I want to thank all of our elected officials, community boards, business community, non-profits, neighborhood leaders and our more than 1.4 million residents. Everyone can be proud of these efforts.”
The Department of Labor’s statistics can be found at http://labor.ny.gov/stats/
Since Borough President Diaz took office in 2009, The Bronx has seen more than $9.4 billion in total development, which has led to the creation of thousands of new jobs. In addition, a partnership announced by Governor Andrew Cuomo announced in August 2014 between the New York State Department of Labor and the Bronx Overall Economic Development Corporation, as part of the “NY Works,” program is placing Bronx residents in these jobs, helping to ensure that new development here benefits everyone, especially Bronxites.
Espaillat Unveils Plan to Strengthen Local Schools
Today, State Senator Adriano Espaillat unveiled a new policy paper, putting forward his priorities for federal investment in local schools. Senator Espaillat has already released policy proposals outlining his ideas to prevent displacement in gentrifying neighborhoods, address the epidemic of gun violence, and reduce the exploding costs of child care.
Senator Espaillat has led the race in putting forward specific policy ideas to address the biggest issues of the day. No other campaign in the race has put forward detailed policy papers to solve problems impacting residents in the 13th District.
Espaillat’s latest policy paper, Opportunity for All: Tapping the Potential of Every Child, lays out his vision for supporting education at the federal level, which includes an expansion of foreign language learning, access to AP and technology courses, and support for afterschool programs.
In the Legislature, Espaillat spearheaded the Ladder program, which allocated funding for school construction to the tune of $300 million dollars, creating 16 new schools in the 13th District, and helped fight overcrowding in our classrooms. Espaillat also filed an Amicus Brief on behalf of the Campaign for Fiscal Equity and has been an outspoken voice for New York City schools to receive full and fair funding. Espaillat was a vocal supporter of universal pre-k when it was debated and ultimately enacted in 2014. The program now serves almost 70,000 New York City children.
“To build a strong foundation for our future, we need a quality public education system that taps the potential of every child,” said Senator Adriano Espaillat. “Every parent who wants to send their child to a dual language program should have that option, every student who is capable should be able to enroll in AP courses, and to prepare all of our children for the jobs of the future, they need to receive a dedicated national curriculum on technology. To do this, not only is more investment required but bolder thinking. In Congress, I will provide that leadership to expand access to opportunity to every child.”
In Congress, Senator Espaillat will fight for a series of reforms to help local schools.
- Increase federal funding for innovative dual language programs, and support initiatives like the Bilingual Family Literacy Breakfast Program: Our world is more interconnected than ever before, and this trend will only continue. Teaching our young students another language at an early age will catalyze cognitive development and promote academic achievement. But today, most public school students in New York City receive no foreign language instruction until high school, when it becomes exponentially more difficult to develop language proficiency. Congress must make bold investments toward a multilingual future and create a language learning system for the 21st Century that serves our children from an early age.
- National Curriculum on Technology: A fully implemented national curriculum on technology would help harness the full potential of the digital revolution. In order to prepare our children for the jobs of the future, they need to receive instruction in coding, robotics, virtualization, and all science applications.
- Expand AP courses through the federal Advanced Placement Incentive Program grant: This grant increases the participation of low-income students in pre-AP and AP courses and tests. Grants can be awarded to local school districts or to nonprofit organizations in the community to make AP courses more accessible, particularly to students of color. In order to unleash the full academic talent of our young students, they must have the opportunity to showcase their skills.
- Title I Schools: Title I schools should be allowed to extend after school programs to 6pm and provide our students with additional opportunities and resources to succeed.
EDITOR'S NOTE:
It does not take an election for congress for a State Senator to say what he will do to improve a lacking educational system. Why has this not been already proposed by this State Senator in Albany?
Yes I know it is federal monies, but it could have been applied for all these years, and Senator Espaillat ran two times before for this congressional seat. Why all of a sudden in this election does he say it?
Where was he the two previous elections - SILENT?
A.G. Schneiderman Announces Arrest Of Bronx Clinic Owner For Alleged Five Million Dollar Medicaid Fraud
Joseph Wright Allegedly Duped Innocent New Yorkers Into Receiving Unnecessary Medical Treatment By Luring Them To His Clinic “Assistance By Improv, Inc.” With False Promises Of Affordable Housing
Attorney General Eric T. Schneiderman today announced the arrest of Joseph Wright, 52, of Middletown NY, for allegedly stealing over $5 million dollars from Medicaid. Prosecutors allege that Wright, as owner of a purportedly not-for-profit organization “Assistance By Improv II, Inc.” (ABI), located at 953 Southern Boulevard in the Bronx, lured thousands of low-income New Yorkers to ABI with the promise of affordable housing, arranged to have them subjected to unnecessary medical tests and then filed false claims for reimbursement with the State Medicaid program.
“This defendant allegedly took advantage of the hopes and needs of the most vulnerable of our neighbors to line his pockets with millions of taxpayer dollars,” Attorney General Schneiderman said. “This elaborate scheme drained Medicaid of important resources that should have been used on medical patients in need, and my office won’t stand for those who seek to use the program as a personal piggy bank.”
NYS Medicaid Inspector General Dennis Rosensaid, “This joint investigation and today's arrests serve notice to those who attempt to exploit New York's Medicaid program for their personal gain. My office and our partner agencies will continue to work together to root out fraud, waste and abuse and hold wrongdoers fully accountable.”
Prosecutors alleged in papers filed in court that Wright unlawfully owns and operates ABI as a medical mill that masquerades as a charitable housing organization. ABI claims in newspapers, on television and on city bus advertisements to be dedicated to providing affordable housing for developmental disabled New Yorkers. Prosecutors allege that Wright ignored ABI’s professed charitable mission and duped potential clients, most of whom were Medicaid recipients, into surrendering their personal health care information and undergoing purported medical screening to qualify for housing.
Prosecutors allege that potential clients were directed to see various doctors and counselors at ABI, and were often subjected to unnecessary purported medical tests and procedures. Thereafter, staff at ABI under the direction of Wright, and at the behest of various doctors and counselors employed by ABI, submitted false claims for reimbursement to Medicaid for services allegedly rendered to the Medicaid recipients who provided Wright, his staff and ABI with their client identification numbers.
Wright, prosecutors allege, used the doctors’ and patients’ Medicaid identification numbers to submit a staggering volume of claims for services allegedly rendered to Medicaid recipients. In an eight-month span, eight Medicaid providers employed by Wright and ABI submitted over 125,000 claims for medical services allegedly rendered to Medicaid recipients. The value of these claims totaled in excess of $1o million dollars, for which Medicaid reimbursed these eight doctors over $5 million dollars, and they in turn paid Wright millions of dollars.
Prosecutors allege that Medicaid paid these claims based upon each doctor’s representation as to the accuracy and veracity of each claim submitted. An overwhelming number of these claims though were for treatment in connection with a primary diagnosis of “counseling and advice on contraception” or “other contraceptive/sex counseling” and bore no resemblance to the purported treatment actually provided, if any. Often these claims were completely fictitious and factually impossible. According to claims records maintained by the Medicaid program, prosecutors allege, these doctors saw hundreds of patients a day and each patient received the same medical diagnosis. Many of the doctors practiced outside their field of specialty according to their claims data and the claimed medical diagnosis and treatment was often one each doctor was unqualified to give. Furthermore, given the number of claims filed each day by each doctor, the doctors could not have physically rendered the treatment they claimed to have provided.
To date, the Attorney General’s investigation uncovered no evidence that any of ABI’s patients ever received any housing despite being subjected to unnecessary medical examinations, medical tests, and multiple visits to ABI.
Wright, arrested today by the Attorney General’s Medicaid Fraud Control Unit (MFCU), is charged with Grand Larceny in the First Degree, Health Care Fraud in the First Degree and Insurance Fraud in the Second Degree. Grand Larceny in the First Degree and Health Care Fraud in the First Degree are both class B felonies with a maximum term of incarceration of 8 1/3 to 25 years in State prison.
Insurance Fraud in the Second Degree is a class C felony with a maximum term of incarceration of 5 to 15 years in State prison.
Wright was arrested and is expected to be arraigned later today in New York City Criminal Court, Bronx County.
Today, in addition to Wright’s arrest, the Attorney General’s Medicaid Fraud Control Unit executed a search warrant at the premises of ABI at 953 Southern Boulevard, Bronx, New York.
The Attorney General’s Office thanks the New York State Office of the Medicaid Inspector General (“OMIG”), Computer Services Corporation, the New York City Human Resources Administration (“HRA”) and the New York Office of the United States Department of Health and Human Services, Office of the Inspector General, Office of Investigations for their valuable contributions to this investigation.
The case was investigated by Special Investigators Denitor Guerra and Thomas Dowd with assistance from Supervising Investigator Dominick DiGennaro, all under the supervision of Deputy Chief Investigator Kenneth Morgan. OMIG Investigator Nigill Johnson also assisted in the investigation. The audit investigation was conducted by MFCU Auditor Investigator Lisandra Defex under the supervision of Principal Auditor Investigator Emmanuel Archer and Regional Chief Auditor Thomasina Smith. Also assisting in the audit investigation were Stephanie Paton and Margaret Tsui of OMIG and Leslie Dykeman from Computer Services Corporation.
The charges against the defendant are merely accusations, and the defendant is presumed innocent until and unless proven guilty.
Senior NYPD Officials And Others Charged With Federal Public Corruption Offenses
NYPD Deputy Chief Michael Harrington and Deputy Inspector James Grant Charged With Accepting Bribes In Exchange for Official Acts
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 Deputy Chief MICHAEL HARRINGTON, Deputy Inspector JAMES GRANT, and Sergeant DAVID VILLANUEVA of the NYPD were arrested this morning, along with a Brooklyn-based man, JEREMY REICHBERG, on bribery charges. HARRINGTON, GRANT, and REICHBERG were charged in Manhattan federal court with conspiring to commit honest services wire fraud for a bribery scheme involving the receipt of tens of thousands of dollars in meals, trips, home renovations, and other benefits in exchange for an array of official NYPD actions, including private police escorts, ticket fixing, and assistance in settling private disputes. VILLANUEVA, formerly a supervisor in the NYPD’s gun licensing division, was charged in Manhattan federal court with bribery offenses in connection with his receipt of cash bribes to expedite and approve gun licenses. In addition, the guilty plea of Police Officer RICHARD OCHETAL, who formerly worked in the gun licensing division, was unsealed today. OCHETAL pled guilty to accepting bribes in exchange for the approval of gun license applications, and is cooperating with the Government in the investigation.
Manhattan U.S. Attorney Preet Bharara said: “The alleged conduct violates the basic principle that public servants are to serve the public, not help themselves to cash and benefits just for doing their jobs. Jeremy Reichberg allegedly showered senior police officials, Commanding Officers Michael Harrington and James Grant, with bribes, and in exchange, got ‘cops on call,’ a private police force for themselves and their friends. As alleged, Sergeant David Villanueva and Officer Richard Ochetal in the NYPD’s gun licensing division were also on the take, issuing gun licenses in exchange for cash, liquor, and limo rides. It is heartbreaking to see police officers who have taken the oath to serve and protect allegedly bring dishonor to an institution and profession deserving of the greatest honor. I thank the FBI for their work on this important investigation and the NYPD for its commitment and courage to police itself.”
FBI Assistant Director-in-Charge Diego Rodriquez said: “The abuses of power alleged in this case are not victimless crimes. The victims are the citizens of New York, who rely on officers to fulfill their sworn duty. The victims are the upstanding police officers who do everything in their power to uphold the law and protect the public. The victims are public trust and confidence in law enforcement, both critical to ensuring public safety. The FBI, along with our partners, will continue to root out this kind of decay at every level in order to protect our citizens from the devastating consequences of corruption that undermines safety, and erodes the trust between law enforcement and the public.”
NYPD Commissioner William J. Bratton said: “These charges and today's arrests are a culmination of the joint investigative efforts of the NYPD's Internal Affairs Bureau along with the FBI and the US Attorney’s Office for the Southern District of New York. During the past three years, NYPD Internal Affairs and FBI investigators worked diligently in pursuing leads into alleged corrupt activity involving uniformed members of this department. Two separate investigations, by the NYPD and the FBI, merged seamlessly and resulted in today’s arrests of four members of the department as well as another individual. This investigation is not over and we will continue to work together with our law enforcement partners to go where the facts of these cases lead us.”
According to the allegations in the Complaint against GRANT, HARRINGTON, and REICHBERG; the Indictment against VILLANUEVA and Brooklyn-based gun license “expeditor” ALEX LICHTENSTEIN, a/k/a “SHAYA,” who had been previously charged; and the Information to which OCHETAL pled guilty, all unsealed today in Manhattan federal court[1]:
United States v. GRANT, HARRINGTON, and REICHBERG
For several years from approximately 2012 through 2015, REICHBERG, who described himself as a “community liaison” for the NYPD, along with another individual who had pled guilty and is now cooperating with the Government (“CW-1”), engineered a scheme to provide lavish benefits to high-ranking members of the NYPD, including GRANT and HARRINGTON, so as to be able to call upon those members for police-related assistance for themselves and their communities over time. GRANT and HARRINGTON, for their part, accepted numerous benefits and, in return, took several official police actions for REICHBERG and CW-1. GRANT was, throughout this time period, a high-ranking police official and commanding officer of a precinct in Brooklyn, before becoming a Deputy Inspector and the Commanding Officer of the 19th Precinct on the Upper East Side of Manhattan. HARRINGTON was an Inspector in Brooklyn North and, beginning around November 2013, the Executive Officer in the NYPD Chief of Department’s Office, which is responsible for overseeing all of the NYPD’s uniformed operations.
As alleged in the Complaint, among the benefits accepted by GRANT were a private jet trip to Las Vegas for the Super Bowl, costing $57,000 for the plane alone; a two-night stay in a hotel in Rome, worth more than $1,000; contracting work on his home worth approximately $12,000; and jewelry. Among the benefits accepted by HARRINGTON were private security work worth tens of thousands of dollars for a company he unofficially helped manage; hotel rooms for a trip to Chicago for his family worth in excess of $6,000; and thousands of dollars in dinners.
GRANT and HARRINGTON helped REICHBERG and CW-1 with numerous police-related requests. For example, both performed and arranged for police-related escorts for REICHBERG, CW-1, and their associates, at REICHBERG and/or CW-1’s request. Both diverted police resources to investigate private, civil matters. Both assisted with VIP access to parades and other New York City events. GRANT provided cards that enabled REICHBERG, CW-1, and their associates to avoid tickets when pulled over by police. GRANT also helped REICHBERG obtain a gun license from the NYPD, and attempted to help CW-1 obtain a gun license from the NYPD. HARRINGTON sent police resources to religious sites upon request.
REICHBERG and CW-1’s influence in certain spheres of the NYPD was, at a certain point, so significant as to have people believing that they had a say in promotions. REICHBERG and CW-1, for example, advocated for GRANT to become the Commanding Officer of the 19th Precinct, which GRANT ultimately did, and which led to them being permitted to make the call informing him of the news. REICHBERG also advocated for HARRINGTON to become a senior police official in Brooklyn after HARRINGTON left the Chief of Department’s office, which was unsuccessful. A judicially authorized wiretap on REICHBERG’s phone in early 2015 revealed numerous conversations in which REICHBERG was dispensing advice on promotions to members of the NYPD and taking steps to facilitate promotions.
United States v. VILLANUEVA and LICHTENSTEIN; United States v. OCHETAL
VILLANUEVA was, for many years, a Sergeant assigned to the NYPD’s Licensing Division, which is responsible for reviewing all applications for gun licenses submitted by residents of New York City. The Licensing Division receives approximately 5,000 applications for gun licenses per year. Licensing Division personnel review those applications both for disqualifying characteristics, such as prior felony convictions, and for other characteristics that lead to discretionary denials.
From at least 2012 through 2016, VILLLANUEVA was given cash bribes and other benefits by LICHTENSTEIN, who ran a business charging clients thousands of dollars to expedite their gun license applications. LICHTENSTEIN used some of the money paid by his clients to pay VILLANUEVA for his work in expediting and approving the applications for LICHTENSTEIN’s clients. OCHETAL, a Police Officer who worked under VILLANUEVA, did first-level reviews of many of these applications and was instructed to approve them. OCHETAL was compensated in the form of some of the cash that LICHTENSTEIN gave to VILLANUEVA.
In reviewing and approving applications for LICHTENSTEIN’s clients, VILLANUEVA and OCHETAL omitted some of the required checks, such as criminal history checks, and in other instances ran checks only after they approved licenses. They also approved applications despite red flags that, had they not been bribed, may have led those applications to be rejected. For example, they approved applications of individuals with prior arrests and previous allegations of domestic violence. In addition, VILLANUEVA and OCHETAL approved applications for licenses to carry firearms, which require certain business-related justifications, in scenarios were there was no real business justification for the request. A review of the applications of LICHTENSTEIN’s clients reveals that VILLANUEVA and OCHETAL were able to secure licenses for those clients often within weeks, whereas the process normally takes months to, in some instances, over a year. VILLANUEVA and OCHETAL did this for LICHTENSTEIN’s clients because of the cash payments coming from LICHTENSTEIN, as well as other benefits, such as limousine rides, bottles of liquor, and a wine tour.
GRANT, 43, of Staten Island, New York, HARRINGTON, 50, of the Staten Island, New York, and REICHBERG, 42, of Brooklyn, New York, have been charged with one count of conspiracy to commit honest services wire fraud, which carries a maximum term of 20 years in prison. VILLANUEVA, 42, of Valley Stream, New York, was charged with one count of bribery, which carries a maximum term of 10 years in prison, and one count of conspiracy to commit bribery, which carries a maximum term of five years in prison. LICHTENSTEIN, 44, of Pomona, New York, is charged with two counts of bribery, each of which carries a maximum term of 10 years in prison, and one count of conspiracy to commit bribery, which carries a maximum term of five years in prison. OCHETAL, 37, previously pled guilty to one count of bribery, which carries a maximum term of 10 years in prison, and one count of conspiracy to commit bribery, which carries a maximum term of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI, the NYPD Internal Affairs Bureau, and the Internal Revenue Service’s Criminal Investigations Division, and noted that the investigation is continuing.
These cases are 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 and the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
Bronx District Attorney Darcel Clark Attends C B 7 Meeting
The June full board Meeting of Community Board 7 was graced by the presence of Bronx District Attorney Darcel Clark. DA Clark spoke about some of the changes she has already made to the office. The meeting was held at the Bronx Botanical Garden.
DA Clark is in the background standing next to current CB 7 Chairwoman Adaline Walker-Santiago. Board members and CB 7 District Manager Andrew andler are seated at the table.
Rep. Engel Announces 2016 Title I Funding for Bronx Schools
Congressman Eliot Engel, a senior member of the House Energy and Commerce Committee, announced today that the U.S. Department of Education has allocated $224,714,082 in federal funds to schools in Bronx County as part of the Fiscal Year 2016 Title I allocations.
Part of the Elementary and Secondary Education Act of 1965, the Title I program provides financial assistance to school districts so that they can afford services to students at risk of not meeting state academic achievement standards, especially in areas with high concentrations of low-income families.
“For more than 50 years, the Title I program has provided critical resources to help local school districts modernize infrastructure, improve staffing, and offer students the tools they need to succeed academically,” Congressman Engel said. “In addition, Title I funds support preschool, after-school, and summer programming that reinforces regular schooling and helps prepare children for the next phase of their academic journey. These funds are critical to our Bronx schools, which is why I will continue to champion the Title I program in Congress.”
These allocations are subject to potential adjustments by the Department of Education at the end of FY 2016.