Saturday, July 1, 2017
Statement Of Acting U.S. Attorney Joon H. Kim On Jury Verdict Finding 650 Fifth Avenue And Other Properties Forfeitable To The United States
“For over a decade, hiding in plain sight, this 36-story Manhattan office tower secretly served as a front for the Iranian government and as a gateway for millions of dollars to be funneled to Iran in clear violation of U.S. sanctions laws. In this trial, 650 Fifth Avenue’s secret was laid bare for all to see, and today’s jury verdict affirms what we have been alleging since 2008: that through all the efforts to sanction and isolate Iran, a state sponsor of terrorism, the owners of 650 Fifth Avenue gave the Iranian government a critical foothold in the very heart of Manhattan through which Iran successfully circumvented U.S. economic sanctions. The jury’s verdict finding forfeitable a building valued at over $500 million dollars, as well as other real estate and funds, represents the largest civil forfeiture jury verdict and the largest terrorism-related civil forfeiture in U.S. history. This verdict not only vindicates the exemplary work of all the career prosecutors and law enforcement partners who have doggedly pursued this case for almost a decade, but importantly, it also allows for substantial recovery for victims of Iran-sponsored terrorism.”
Acting Manhattan U.S. Attorney Announces Historic Jury Verdict Finding Forfeiture Of Midtown Office Building And Other Properties
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that a federal jury today found the 36-story office building at 650 Fifth Avenue (the “Building”), worth at least $500 million, and other real property and bank accounts forfeitable to the United States as proceeds of violations of the Iran sanctions and property involved in laundering the proceeds of those sanctions violations. The jury’s verdict, which represents the largest civil forfeiture jury verdict and the largest terrorism-related civil forfeiture in United States history, came after a five-week trial before the Honorable Katherine B. Forrest.
Acting U.S. Attorney Joon H. Kim said: “For over a decade, hiding in plain sight, this 36-story Manhattan office tower secretly served as a front for the Iranian government and as a gateway for millions of dollars to be funneled to Iran in clear violation of U.S. sanctions laws. In this trial, 650 Fifth Avenue’s secret was laid bare for all to see, and today’s jury verdict affirms what we have been alleging since 2008: that through all the efforts to sanction and isolate Iran, a state sponsor of terrorism, the owners of 650 Fifth Avenue gave the Iranian government a critical foothold in the very heart of Manhattan through which Iran successfully circumvented U.S. economic sanctions. The jury’s verdict finding forfeitable a building valued at over $500 million dollars, as well as other real estate and funds, represents the largest civil forfeiture jury verdict and the largest terrorism-related civil forfeiture in U.S. history. This verdict not only vindicates the exemplary work of all the career prosecutors and law enforcement partners who have doggedly pursued this case for almost a decade, but importantly, it also allows for substantial recovery for victims of Iran-sponsored terrorism.”
According to the allegations contained in the Complaint, Amended Complaint, and other filings in this case, and the evidence presented in Court during the trial:
Overview
The International Emergency Economic Powers Act (AIEEPA@) confers upon the President the authority to take certain actions, defined in 50 U.S.C. Section 1702, in response to declared national emergencies. Since 1995, the President has declared national emergencies with respect to the actions and policies of the Government of Iran through a series of Executive Orders. The Treasury Department’s Iranian Transactions Regulations (“ITR”), and Weapons of Mass Destruction Proliferators Sanctions Regulations, implement these Executive Orders. Pursuant to these Orders, and regulations, the provision of services to the Iranian Government has been illegal since 1995.
From before 1995 until the filing of the Government’s civil forfeiture action in 2008, the Alavi Foundation (“Alavi”), Assa Corp. (“Assa”), and the 650 Fifth Avenue Company, a partnership between Alavi and Assa to own the Building (the “Partnership”) were controlled by and provided numerous services to the Government of Iran, including managing the Building for the Iranian Government, running a charitable organization for the Iranian Government, and transferring rental income funds from the Partnership to Bank Melli, an Iranian owned government bank.
Alavi and the Building
Alavi is a New York non‑profit organization originally created by the Shah of Iran in the 1970s, under the name the Pahlavi Foundation, to pursue Iran’s charitable interests in the United States. The Building was constructed in the 1970s by Alavi, financed by a substantial loan from Bank Melli Iran (“Bank Melli”).
Following the Iranian revolution of 1979, the Islamic Republic of Iran established the Bonyad Mostazafan, also known as the Bonyad Mostazafan va Janbazan (“Bonyad Mostazafan”), to centralize, take possession of, and manage property expropriated by the revolutionary government. The Bonyad Mostazafan was created in or about March 1979 by order of the Ayatollah Khomeini and approved by the Revolutionary Council of the Islamic Republic of Iran, and is controlled by the government of Iran. The Bonyad Mostazafan sought to take control of the Shah’s property, including the assets of the Pahlavi Foundation. The Bonyad Mostazafan reports directly to the Ayatollah. The Bonyad Mostazafan assumed control of Alavi shortly after the revolution.
The Creation of Assa and the Partnership
In 1989, Alavi and Bank Melli formed the Partnership in order to avoid paying federal taxes on rental income from the Building. Bank Melli’s ownership interest in the Partnership, however, was disguised through the creation of two shell companies. Alavi transferred 35 percent of the Partnership to Assa, an entity wholly owned by Assa Co. Ltd. Assa Co. Ltd. is a Jersey, Channel Islands, United Kingdom, entity owned by Iranian citizens who represent the interests of Bank Melli. In conjunction with the transfer of the 35 percent interest in the Partnership to Assa, Bank Melli cancelled its loan on the Building. Several years later Assa received an additional 5 percent, leaving Alavi owning 60 percent of the Partnership, and Bank Melli owning 40 percent of the Partnership, through Assa and Assa Co. Ltd.
The decision to convert Bank Melli’s mortgage on the Building into a partnership interest in the Partnership was discussed and approved by high-level Iranian government officials. Among others, the head of the Bonyad Mostazafan (also the Deputy Prime Minister of Iran), the Office of the Prime Minister of Iran, the director of the Central Bank of Iran, and the general director of Bank Melli, as well as other Bonyad Mostazafan and Bank Melli officials, discussed and approved the partnership between Alavi and Bank Melli. After Alavi and Assa Corp. entered into the partnership agreement, a Bonyad Mostazafan official forwarded the agreement to the head of the Bonyad Mostazafan, noting that “the partnership is based on prior agreements between the Ministry of Finance, Bank Melli Iran, and the Bonyad Mostazafan, with the only change being the building will be valued at two million dollars less than as previously agreed. . . .”
The Partnership continued to distribute rental income from the Building to Bank Melli, concealed by the use of Assa as an intermediary, after it became illegal with the imposition of Iranian sanctions in 1995.
The Government of Iran’s Continued Control over Alavi
The Iranian Government’s control of Alavi continued after the creation of the Partnership and the imposition of the sanctions against Iran.
In 1991, the Supreme Leader of Iran, the Ayatollah Ruhollah Khomeini ordered that control of Alavi be transferred from the Bonyad Mostazafan to the Iranian Ambassador to the United Nations. According to the minutes of a May 16, 1991, board meeting held in Zurich, Switzerland, the head of the Bonyad Mostazafan explained that, as directed by the Supreme Leader, several board members were to resign. In a letter, Alavi’s president described how, a few days later, Ambassador Kamal Kharrazi called the president and another board member to his office. The Ambassador said that “the Foundation from here on out is under the oversight of Haj Agha, not Mr. Rafighdoost [then the head of the Bonyad Mostazafan]. . . . [F]rom now on, the role of the Managing Director and the role of the Board of Directors will be just a formality and he [the Ambassador] will be conducting all of its [the Foundation’s] affairs.” The president of Alavi then wrote a letter to the Ayatollah cautioning that although the Ambassador’s “appointment to a position of responsibility connected to the Foundation’s affairs presents enormous political, security, and economic dangers, we feel assured that the Supreme Leader has made this decision with discernment, unique insight, and a thorough knowledge of all pertaining aspects.” In July 1991, the president resigned his position and he was replaced that August by an individual who served as president until the summer of 2007.
In 1992, Alavi’s new president met in New York and in Tehran with Bank Melli officials concerning $1.7 million in real estate taxes owed by the Partnership and $2.2 million in unpaid distributions owed by the partnership to Assa. The Tehran meeting was attended by a Bank Melli board member, the head of Bank Melli’s Overseas Network Supervisory Department, the head of Bank Melli’s New York branch, and the head of Bank Melli’s Foreign Affairs. The head of the board of directors and managing director of Bank Melli forwarded the minutes of the Tehran meeting to the head of the Bonyad Mostazafan along with a cover letter stating, among other things, that “It is hoped that your firm instructions and the extra attention of the brothers from that esteemed Foundation, who are responsible for the Alavi Foundation of New York, will resolve the partnership’s mutual problems quickly . . . .”
Iranian Ambassadors to the U.N. continued to direct the affairs of Alavi and to attend meetings of Alavi’s board. In the late 1990s, two Bank Melli employees sought Ambassador Kharrazi’s permission for Assa to sell its interest in the Partnership. The Ambassador informed Bank Melli that the Building would be sold when the real estate market improved. In 2004, Ambassador Javad Zarif directed Alavi to settle a lawsuit that threatened to expose Assa’s ownership by Bank Melli and Alavi’s relationship with the Government of Iran for $4 million, and then caused these settlement proceeds to be distributed through other New York real estate companies to officials at Iranian Embassies in Europe.
In October 2007, Alavi Foundation board members met with Ambassador Mohammad Khazaee and a former Iranian government official to address issues relating to the Building’s management and Alavi’s charitable services. According to notes taken by a board member, the Ambassador stated, among other things, that it was necessary to increase the profit from the Building; the Ambassador was worried about Assa’s 40 percent share; the Foundation should only allocate to Shiites; and that the Ambassador would determine the composition of the board. The Ambassador ordered a study about the possibility of increasing the Foundation’s revenue and profit, stating that a business plan and comparative analysis had to be done. The Ambassador instructed: “I have to definitely see the proposed allocations before a final decision is reached. I have to be kept informed and I have to be able to state my opinion in order for you to make a decision.” The Ambassador told the board members that “[i]f there is an issue that needs to be conveyed to Tehran, let me know, I will convey it.”
On December 19, 2008, Farshid Jahedi, who at the time was the president of Alavi, was arrested for obstruction of justice for allegedly destroying documents required to be produced under a grand jury subpoena concerning Alavi’s relationship with Bank Melli Iran and the ownership of the Building. Jahedi pled guilty to obstruction of justice on December 30, 2009.
The Complaints and the Jury Verdict
On December 17, 2008, this Office filed a civil Complaint seeking forfeiture of the 40 percent interest held by Assa in the Partnership. In the Amended Complaint, filed on November 12, 2009, the United States sought to forfeit all right, title and interest in the Partnership, including Alavi’s 60 percent interest in the company. The United States also sought to forfeit the contents of bank accounts held by the Partnership, Alavi, and Assa, as well as other real properties owned by Alavi.
After a five-week trial, the jury found that both IEEPA violations and money laundering had been committed, and that all but one of the defendant properties were fully or partially forfeitable as result. Specifically, the jury found the Building and Alavi’s share in the 650 Fifth Avenue Partnership, along with the contents of bank accounts containing in excess of a million dollars, forfeitable in their entirety as a result of their involvement in money laundering. The jury also found certain portions of properties owned by Alavi in Queens, New York; Houston, Texas; Carmichael, California; and Rockville, Maryland partially forfeitable to the United States as proceeds of IEEPA violations and properties traceable to properties involved in money laundering, in the following amounts:
Alavi Foundation Property
|
Percentage
Found
Forfeitable
|
Queens, NY
|
44%
|
Houston, TX
|
15%
|
Rockville, MD (two properties)
|
17%
|
Carmichael, CA
|
7%
|
The jury also found Alavi’s share in the 650 Fifth Avenue Partnership entirely forfeitable, and the Building partially forfeitable, as the proceeds of an IEEPA violation in addition to both being entirely forfeitable as property involved in money laundering.
Judge Forrest had previously ruled, on September 11, 2013, that Assa was a front company for Bank Melli Iran and that Assa’s interests in the Partnership and the Building also subject to forfeiture.
Claims against the defendant properties brought by private parties holding terrorism-related judgments against the Government of Iran were also resolved against Alavi and the 650 Fifth Avenue Partnership in a separate ruling issued by Judge Forrest today.
Mr. Kim praised the investigative work of the Federal Bureau of Investigation (“FBI”), the Internal Revenue Service - Criminal Investigation Division, the New York FBI Joint Terrorism Task Force, and the Police Department of the City of New York. He also thanked the Counterterrorism Section of the Department of Justice National Security Division and the Manhattan District Attorney’s Office for their assistance in this case.
Acting Manhattan U.S. Attorney Sues To Shut Down Mamaroneck Fish Smokehouse After Findings Of Listeria
Court Approves Consent Decree Requiring Shut Down of Operations Until Violations Are Redressed
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Melinda K. Plaisier, Associate Commissioner for Regulatory Affairs of the Food and Drug Administration (“FDA”), announced today the filing of a Complaint and the entry of a Consent Decree against defendants SMOKEHOUSE OF NEW YORK, LLC (“Smokehouse”), its director of operations, BRETT H. PORTIER (“Portier”), and its president and owner, PANAGIOTA SOUBLIS (“Soublis”), for violations of the Food, Drug, and Cosmetic Act and related food-safety regulations at Smokehouse’s Mamaroneck facility, where the defendants prepare and sell fish products and other specialty foods to consumers across the country.
Acting U.S. Attorney Joon H. Kim stated: “We will not let businesses put profits over public health. Smokehouse, Portier, and Soublis have repeatedly put their customers at risk of severe illness. Our Complaint and today’s Consent Decree hold them accountable and require them to clean up their operations and protect the public.”
FDA Associate Commissioner for Regulatory Affairs Melinda K. Plaisier said: “The Smokehouse of NY has had several opportunities to come into compliance with the law. Through the use of modern technology, the FDA was able to establish that the company has resident strains of Listeria in its facility that it has consistently failed to eradicate. Conditions like these are unacceptable and the FDA took action to protect Americans.”
According to the Complaint filed Monday in White Plains federal court:
Listeria monocytogenes (“Listeria”) is a bacterium that can be very harmful to human health. In the general population, it can cause severe flu-like symptoms and, in extreme cases, confusion, loss of balance, and convulsions. For pregnant women, it can cause miscarriage, stillbirth, premature delivery, or life-threatening infection of the newborn.
The defendants have repeatedly failed to operate their packaged fish business in compliance with food and safety standards set by FDA. As a result, the FDA has repeatedly found Listeria in their facility. Although the defendants previously have proposed to undertake corrective measures to address the Listeria problems at their facility, they have failed to fix the problem: An FDA inspection conducted between March 8 and April 5, 2017, again found Listeria at various locations within the facility, including on direct food-contact surfaces.
In the Consent Decree entered today, Smokehouse, Portier, and Soublis admit, acknowledge, and accept responsibility for the following:
The defendants failed to manufacture, package, and store food under conditions and controls necessary to minimize the potential for microorganism growth and contamination.
- At each of five inspections conducted by FDA between 2011 and 2015, FDA found Listeria in the facility, including on a food-contact surface and in packaged, ready-to-eat food.
- Following the 2011-2015 inspections, the defendants took a number of corrective actions that they stated would address the conditions found by investigators.
- However, during an FDA inspection between March 8 and April 5, 2017, FDA again found Listeria at the facility, including on food-contact surfaces, including a stainless steel table where food is processed and on a plastic tray used interchangeably to hold raw and finished products.
Pursuant to the Consent Decree, Smokehouse, Portier, and Soublis are enjoined from receiving, preparing, processing, packing, labeling, holding, and/or distributing articles of food until they (1) clean and sanitize their facility; (2) implement appropriate pathogen control and other food safety plans; and (3) implement training programs on proper food hygiene and sanitation for all its employees. Additionally, the Consent Decree requires Smokehouse, Portier, and Soublis to destroy their current stock of processed food and recall certain food previously sold by them. The defendants are subject to additional actions by the FDA, including mandated future recalls and shut downs, as well as liquidated damages and costs to cover future necessary inspections and other monitoring actions, if they violate the provisions of the Consent Decree.
Mr. Kim thanked the FDA for its work leading to the Complaint.
Leader Of Violent Drug Crew Pleads Guilty To 2016 Murder Of Nelson Dubon
Kenneth Rudge Oversaw Activities of “YNR” Members on Webster Avenue, Including Heroin and Crack Sales, Shootings, and the Murder of a Robbery Victim in January 2016
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Ashan M. Benedict, the Special Agent in Charge of the New York Field Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the plea by KENNETH RUDGE, of the Bronx, New York, to firearms charges including RUDGE’s use of a firearm in the murder of Nelson Dubon on January 21, 2016.
As part of his guilty plea, RUDGE admitted to shooting and killing Nelson Dubon, a victim of RUDGE’s robbery plot, on Park Avenue near 187th Street at an underground billiards hall, in the course of a narcotics-related robbery. RUDGE further admitted using other firearms in the course of his criminal activities with the YNR drug crew between 2012 and January 2016. RUDGE faces a maximum term of life in prison and a mandatory minimum term of 35 years in prison. RUDGE is scheduled to be sentenced later this year by the Honorable Kimba M. Wood, U.S. District Judge.
Acting Manhattan U.S. Attorney Joon H. Kim said: “As he admitted in court today, Kenneth Rudge repeatedly engaged in gun violence in furtherance of his drug trafficking, including the murder of Nelson Dubon. Four days after the murder, Rudge pistol-whipped a livery driver in a robbery attempt. And even after his arrest, Rudge tried to have fellow gang members find and silence a witness to the murder. Now, thanks to the work of the NYPD and the ATF, Rudge awaits sentencing for his murderous conduct.”
ATF Special Agent in Charge Ashan M. Benedict said: “The defendant engaged in a gratuitous spree of violent crimes including multiple armed robberies and a homicide. is committed to targeting the most violent offenders and their co-conspirators for federal prosecution. I commend the outstanding work of the Special Agents, NYPD Detectives, and Assistant United States Attorneys in securing today’s plea and the prosecution of the defendant’s criminal associates. The residents of New York City are safer today because of their efforts.”
NYPD Commissioner James P. O’Neill said: “We remain deeply focused on those who commit violence and carry firearms in New York City. That focus is no more evident than today’s guilty plea in a 2016 murder of Nelson Dubon in Washington Heights. Thanks to the detectives, agents, and prosecutors who have worked on this case and whose work has resulted in the unprecedented reduction in violence in New York City so far this year.”
According to the charging documents filed in the case, as well as statements made during the plea proceedings and earlier court appearances:
Since at least 2012, a group of young men and women living in the vicinity of 188th Street and Webster Avenue, and referring to itself as “YNR,” engaged in a conspiracy to distribute crack cocaine and heroin to addicts in that area. YNR managed to bring large quantities of crack cocaine and heroin into its neighborhood and to inflict mindless and, ultimately, deadly violence on its community.
RUDGE personally participated in multiple acts of drug-related violence, including:: 1) a robbery in or about 2015, of a marijuana dealer in that marijuana dealer’s apartment, during which a victim was pistol-whipped by one of RUDGE’s co-conspirators; 2) a robbery, in or about 2015, of a marijuana dealer, resulting in a shooting by RUDGE and others to thwart the victim’s attempt to retaliate for that robbery; 3) an attempted armed robbery, on or about January 21, 2016, of a marijuana stash apartment; and 4) a robbery, on or about January 21, 2016, of a narcotics dealer and others located inside a billiards club, during which RUDGE shot and killed Nelson Dubon.
Following his arrest by the NYPD in connection with the murder of Dubon, RUDGE attempted to influence and silence witnesses against him, including by attempting to have other YNR members find and silence an eyewitness to the murder. RUDGE also continued his firearms use and violence in the days after the murder of Dubon, including through the pistol-whipping of a livery cab driver in a failed attempt to rob that person of his fares on or about January 25, 2016, in the Bronx.
Mr. Kim praised the outstanding work of the NYPD and ATF for their investigative efforts and ongoing support and assistance with the case.
Five Charged In $28 Million Nutraceuticals Credit Card Fraud Affecting Thousands Of Consumers
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and David E. Beach, Special Agent-in-Charge of the New York Field Office of the U.S. Secret Service (“USSS”), announced today the unsealing of charges against JAMES BECKISH, RICHARD WITCHER, JAMES TONER, PETER O’BRIEN, and JOSEPH ANTHONY DEMARIA for their respective roles in operating a series of companies between 2013 and 2016 that were used as a cover to place approximately $28 million of unauthorized charges on thousands of consumers’ credit cards. The websites of the defendants’ companies purported to sell products like dietary supplements but, in reality, were primarily used to repeatedly bill consumers who never ordered their products, or even if they did, almost never received them. All of the defendants were arrested today and presented before Magistrate Judges in the District of New Jersey, the Middle District of Florida, and the Southern District of Florida.
Acting Manhattan U.S. Attorney Joon H. Kim said: “These defendants allegedly created and operated more than 100 companies that specialized in one service: ripping off consumers and credit card companies. By allegedly billing consumers for dietary supplements they didn’t order or receive, the defendants reaped millions of dollars, affecting thousands of consumers and leaving credit companies holding the bag. Thanks to the U.S. Secret Service, this scheme is over.”
Secret Service Special Agent-in-Charge David E. Beach said: “The Secret Service is committed to aggressively investigating these offenses. Emerging technologies and cyber capabilities enable criminal networks to evolve and significantly impact financial markets. This case is another example of the transnational investigative capabilities of the United States Secret Service. Our developed partnerships with other federal, state and local law enforcement agencies as well as private sector stakeholders, enables us to focus our resources to uncover, investigate and prevent these crimes more effectively.”
According to the Complaint unsealed today in Manhattan federal court:[1]
Between 2013 and 2016, BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA and others, created and operated more than 100 companies that purported to sell dietary supplements and similar products called “nutraceuticals.” Although the companies were purportedly distinct, they nonetheless marketed similar products on websites that contained similar photographs, were hosted by the same entity, had similar typographical errors, and used the same or nearly identical JavaScript coding. These websites were used by the defendants and others to serve as justification for unauthorized and recurring charges that were placed on tens of thousands of credit card numbers that the defendants had illicitly purchased or obtained, or had acquired from consumers who had attempted to order the products in question. For example, in one email between TONER and BECKISH in October 2013, TONER stated that they could simply charge unsuspecting customers by falsely “say[ing] they opted in online for something.” In total, more than $28 million in fraudulent charges were placed during the duration of the scheme.
BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA, and others created these different companies and websites, moreover, because they knew that credit card processors would stop doing business with them over time as consumers noticed the unauthorized charges and sought refunds. These refunds, called “chargebacks” by credit card processors, are generally low for legitimate businesses but reached extremely high percentages for many of the companies associated with the defendants’ scheme. In certain instances, the chargeback rates quickly approached or even exceeded 20 percent – that is, consumers were seeking refunds of more than 20 percent of the charges placed by certain of the defendants’ companies. Credit card processors, in turn, paid millions of dollars in refunds for fraudulent charges associated with the defendants’ companies between 2013 and 2016 in attempts to refund affected consumers.
BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA are each charged with one count of conspiring to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison. In addition, they each are charged with one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. The charges also carry a maximum fine of $250,000, or twice the gross gain or loss from the offenses. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.
Mr. Kim praised the investigative work of the USSS and expressed his gratitude for the assistance of the Offices of the United States Attorney in the District of New Jersey, the Southern District of Florida, and the Middle District of Florida.
The allegations contained in the Complaint are merely accusations, and the defendants are 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 below constitute only allegations, and every fact described should be treated as an allegation.
A.G. Schneiderman Announces Convictions Of Sheep Farmer And Overseers For Unlawful Use Of Hazardous Pesticide – Causing Death Of Bald Eagles And Red-Tailed Hawk
Sheep Farmer William Wentling And Overseers Illegally Dispersed Carbofuran, Which Killed Three Protected Birds
Attorney General Eric T. Schneiderman today announced the convictions of Tuscarora sheep farmer William Wentling, 67, and his overseers Eli Byler, 41, and Jonathan Byler, 19, for illegally using an acutely hazardous pesticide and causing the deaths of two bald eagles and a red-tailed hawk. Wentling was convicted today of one count of Endangering Public Health, Safety, or the Environment in the Fourth Degree and two counts of Unlawful Use of a Restricted Use Pesticide, all unclassified misdemeanors. The Bylers were previously convicted of Endangering Public Health, Safety or the Environment in the Fourth Degree.
Wentling appeared before the Honorable Peter C. Broadstreet in Stuben County Court, where he was arraigned on an indictment. Immediately thereafter, he pleaded guilty to the charges above, and was sentenced to a one-year conditional discharge.
“Ensuring the safety of our state’s protected species is critical to New York’s environment,” Attorney General Schneiderman said. “The illegal use of hazardous pesticides not only killed three protected animals – but it also jeopardized the safety of nearby residents. I will continue working to protect our communities and all who inhabit them.”
In prior proceedings in the Town of Tuscarora Court on September 26, 2016, the Bylers pleaded guilty to Endangering Public Health, Safety, or the Environment in the Fourth Degree and were sentenced to a one-year conditional discharge.
“New York State has been a leader in the restoration and recovery of the bald eagle in the United States,” Department of Environmental Conservation (DEC) Commissioner Basil Seggos said. “This crime stands in stark contrast to DEC’s bald eagle efforts over the last several decades and shows blatant disregard for the environment and wildlife. I commend the work of our Environmental Conservation Officers (ECOs) and the Attorney General’s office in bringing this case to fruition.”
Today’s convictions are the result of a joint investigation conducted by the New York State Attorney General’s Office and the New York State Department of Environmental Conservation (“DEC”), in conjunction with the United States Fish and Wildlife Service. Today’s convictions are the result of a joint investigation conducted by the New York State Attorney General’s Office and the New York State Department of Environmental Conservation (“DEC”), in conjunction with the United States Fish and Wildlife Service. In addition to the charges filed by the Attorney General’s Office in this matter, charges were also filed by the United States Attorney’s Office for the Western District of New York. Earlier today, Wentling pleaded guilty in United States District Court, Western District of New York, to violating 16 United States Code 668(a) of the Protection of Bald and Golden Eagles act, a misdemeanor, and was sentenced to two years’ probation and fined $3,500.
According to the felony complaint filed by the Attorney General’s Office and statements made by the prosecutor in court, Wentling operated a sheep farm located in Tuscarora, New York, at which the Bylers were the overseers. In the late winter and spring of 2015, the Wentling farm had been having problems with hawks killing lambs on the farm. Wentling instructed the Bylers to stay on top of the bird problems with the sheep, directing them to a jug marked “poison” with a drawing of a skull and cross bones on it. The Bylers then poured the contents of the jug onto sheep carcasses located on the farm.
In March 2015, DEC investigators executed a search warrant at Wentling’s farm and recovered the jug. Laboratory analysis determined that the jug contained carbofuran. Pursuant to New York Codes, Rules and Regulations and the Environmental Conservation Law, carbofuran is an acutely hazardous substance and a restricted use pesticide. It is illegal to knowingly release a substance acutely hazardous to public health, safety, or the environment and to possess or use any restricted use pesticide without a permit.
According to the Attorney General’s complaint, in March and May of 2015, two dead bald eagles were found on a property adjacent to Wentling’s sheep farm. In addition, in April of 2015, one dead red-tailed hawk was found on Wentling’s sheep farm near a sheep carcass. Laboratory analysis determined that the cause of death for the bald eagles and the hawk was carbofuran poisoning. Also, laboratory analysis of soil under the sheep carcass demonstrated the presence of carbofuran.
Bald eagles and red-tailed hawks are protected by the Bald and Golden Eagle Protection Act and the Migratory Bird Treaty Act.
Attorney General Schneiderman remains committed to protecting all who reside in New York, including animals. To that end, in May of 2013, he announced his office’s Animal Protection Initiative, which is aimed at shutting down criminal animal fighting rings, ensuring compliance with New York State's Pet Lemon Law, charging those who abuse or neglect animals, and cracking down on the abuses of so-called “puppy mills” in order to protect the welfare of the animals being sold and the consumers. Just last week, he announced the arrests of 43 individuals after the bust of a Herkimer County-based cockfighting ring. The raid resulted in the seizure of over 50 birds, which were then turned over to the local Humane Society.
Attorney General Schneiderman thanks the New York State Department of Environment and Conservation and the United States Fish and Wildlife Service for their valuable work on this investigation.
Comptroller Stringer Audit: Major Breakdowns in DCAS Oversight of Auto Parts ContractComptroller Stringer Audit: Major Breakdowns in DCAS Oversight of Auto Parts Contract
DCAS allows late delivery of parts and leaves the City vulnerable to over-billing
With tens of thousands of vehicles in use across all New York City government agencies, a new audit from Comptroller Scott M. Stringer found that the Department of Citywide Administrative Services (DCAS) has failed to ensure auto parts are delivered on-time and at the right price, potentially leading to delayed repairs, overpayments and an inefficient use of taxpayer dollars. This new audit of DCAS comes on the heels of a February report showing hundreds of recalled vehicles still in daily use by the Department of Sanitation. These audits highlight the need for the City to improve its contract oversight and management of its vital, heavily used vehicle fleet.
To support and expedite vehicle-repair and maintenance at six City agencies – including the New York City Police Department and the New York City Fire Department – DCAS contracts with the Genuine Parts Company to operate on-site auto parts supply rooms at City agency garages throughout the five boroughs. That five-year contract, executed in January 2013, provides the City with price protections and sets unequivocal deadlines for parts-deliveries, to ensure that the City’s vehicles can be repaired promptly and that taxpayer dollars are used efficiently. However, Comptroller Stringer’s audit found that DCAS never tracked the vendor’s delivery times even though the vendor repeatedly missed contract deadlines. Auto parts arrived late an extraordinarily high percentage of the time, with no discernible action taken by DCAS to enforce the contract. And there was limited evidence that DCAS made sure that the City got the best possible prices.
“It’s not just the City’s fleet that needs fixing. The bureaucracy needs a tune-up, because there seems to be high levels of indifference here. DCAS has an obligation to make sure the vendor delivers the right parts at the right time, and that it gets the parts we need at the best price. But our audit shows that DCAS doesn’t even check. It is simply not doing its job. ” New York
City Comptroller Scott M. Stringer said. “Government employees work day-in and day-out to keep New York running, and to do that they need vehicles that are reliable and well-maintained, and that spend minimal time in the shop. This is about much more than paperwork and contracts — it’s about competently supporting our workforce so they can deliver much needed services to all New Yorkers.”
Auto Parts Were Routinely Delivered Late
Under DCAS’s contract with Genuine Parts Company, the company was obligated to provide most parts to agency personnel within ten minutes of a request. The contract grouped parts into four categories:
- “A-mover” parts — these parts, which are typically ordered by agency employees on a weekly basis, must be delivered within 10 minutes 100 percent of the time;
- “B-mover” parts — which are used biweekly to quarterly, and must be delivered within 10 minutes 90 percent of the time;
- “C-mover” parts — those that are requested quarterly to yearly, and must be delivered within 10 minutes 80 percent of the time; and
- Remaining parts, with the exception of customized parts, which are ordered by agencies less than once a year, and are supposed to be delivered in 24 hours.
The audit, however, uncovered that DCAS failed to track whether parts were delivered on time. When auditors sampled 641 parts ordered by the Department of Sanitation in June 2016, they found that parts among all categories were routinely delivered to agency staff late — increasing the risk that vehicle repairs could be delayed and the City employees who use those vehicles could be left unable to do their jobs.
Specific findings include the following percentages of late deliveries:
- 96 percent of “A-mover” parts — those that are most-commonly ordered;
- 77 percent of “B-mover” parts;
- 62 percent of “C-mover” parts; and
- Of all the parts ordered, 25 percent took more than an hour to be delivered.
DCAS Needs to Improve Its Price-checking
To ensure that City resources are spent efficiently, the auto part supply contract includes price protections which require the Genuine Parts Company to charge the City no more than the wholesale cost the company pays for an item plus a fixed markup. If the City finds the company’s prices to exceed prior prices it has paid, the City can require the company to seek bids from multiple vendors and purchase parts that provide the best value for the City.
Auditors, however, found only limited evidence that DCAS checked to ensure that Genuine Parts Company was charging no more than the contract allowed or how its prices compared with those of other vendors. When auditors surveyed the five City agencies that procure parts from Genuine Parts Company, the agencies complained that the vendor’s prices were unclear and sometimes higher than those of other vendors. Those responses suggest that the City — and, by extension, taxpayers — may be paying more for parts than necessary.
Previous Audit
In February, Comptroller Stringer’s office found that the Department of Sanitation had kept hundreds of federally-recalled, defective cars in use, putting the safety of sanitation workers, drivers, and the public at risk. Despite federal recall orders from the National Highway Traffic Safety Administration as recently as January 2017 the DSNY was using 509 cars that may have had dangerous flaws. After discovering these hundreds of recalled vehicles with Sanitation alone, Comptroller Stringer called for an immediate top-to-bottom review of the City’s entire fleet of cars to ensure other departments are not utilizing vehicles that have been federally recalled.
Taken together, the two audits show that the City’s overall fleet management system needs an overhaul.
Recommendations to DCAS
The Comptroller’s Office made fourteen recommendations, including that DCAS:
- Require Genuine Parts Company to prepare and submit reports based on delivery times as it is required to do under the contract;
- Conduct periodic audits of Genuine Parts Company’s wholesale invoices to ensure parts are being billed to agencies at the correct rate; and
- Perform routine price comparisons to make sure the City is getting the best prices for parts ordered.
To view a full copy of the audit report, click here.