Acting Manhattan U.S. Attorney Announces Criminal And Civil Charges Against Prominent Researcher For Theft Of Government Funds And Other Offenses

  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Scott J. Lampert, the Special Agent in Charge of the New York Office of the U.S. Department of Health and Human Services’ Office of Inspector General (“HHS-OIG”), announced today the filing of criminal and civil charges against ALEXANDER NEUMEISTER (“NEUMEISTER”), a prominent researcher into neurological disorders who, at all times relevant to the charges, was a professor of psychology at a New York City medical school (the “School”).  NEUMEISTER was charged with using his position at the School to convert tens of thousands of dollars of federal grant funds, as well as funds belonging to the School, to his personal use by spending them on, among other things, trips for family members and trips and meals for himself and a social friend (the “Friend”).  Among other expenses, NEUMEISTER used approximately $9,000 in government funds to pay for eight roundtrip flights from New York City to Salt Lake City to visit the Friend, as well as more than $4,300 in School funds to pay for the Friend to enjoy a nine-day, all-expense paid trip to a resort hotel in Miami Beach.  In addition, NEUMEISTER falsely claimed that the Friend was a research study participant in studies that NEUMEISTER was overseeing for the School, and caused the School to pay over $10,000 of the School’s own funds directly to the Friend.  To date, NEUMEISTER has not repaid any of the misappropriated funds.

NEUMEISTER was arrested on November 21, 2017, in Ogdensberg, New York, and appeared before a U.S. magistrate judge in the Northern District of New York on November 22, 2017.  He will be presented before Chief U.S. Magistrate Judge Debra Freeman in Manhattan federal court today.  In addition, a civil case was brought against NEUMEISTER in Manhattan federal court earlier today.

Acting U.S. Attorney Joon H. Kim said:  “As alleged, Alexander Neumeister, fraudulently charged tens of thousands of dollars in personal expenses as research or school-related expenses.  For allegedly betraying the trust of the medical school that employed him and the government institute that funded his research, Neumeister now faces serious federal charges.”  

Special Agent in Charge Scott J. Lampert said:  “The defendant allegedly stole thousands of dollars from grants that were meant for important mental health research.  We will continue to hold individuals accountable for blatant misuse of federal funds.”

According to the allegations in the Government’s criminal and civil complaints[1]:

From 2012 through 2014 (“Covered Period”), NEUMEISTER was employed by the School and served as the principal investigator for a variety of research studies, many of which were funded by grants issued by the National Institute of Mental Health (“NIMH”).  As the principal investigator of these studies, NEUMEISTER was responsible for overseeing all aspects of the studies.  NEUMEISTER was provided a credit card by the School, referred to as a procurement card (“P-Card”), and was authorized to charge study-related expenses to the P-Card, but in doing so he was required to identify to which specific funding source (i.e., which grant or other source) each such expense should be allocated.  To the extent NEUMEISTER allocated expenses to NIMH grants or School expense accounts, the School would pay the expenses using funds it received from NIMH or its own funds, respectively. 

During the Covered Period, NEUMEISTER used his P-Card to charge tens of thousands of dollars of expenses that were personal in nature and unrelated to his research studies or employment at the School.  Nevertheless, NEUMEISTER falsely classified, or caused others to classify falsely, these expenses as related to his research or for business purposes related to his position at the School, which resulted in the expenses being paid for using NIMH funds or the School’s own funds.  For example, during the Covered Period, NEUMEISTER used his P-Card to charge the following personal expenses, all of which were ultimately paid for with NIMH or School funds:   

• airline tickets so that the Friend could travel from Charlotte, North Carolina, or Salt Lake City, Utah, depending on where the Friend was then living, to New York City, where NEUMEISTER was then living;
   
• airline tickets so that NEUMEISTER could travel from New York City to Charlotte and Salt Lake City to visit the Friend, as well as lodging, bar tabs, meals and other travel-related expenses associated with this travel;
   

• an all-expense paid trip to Miami Beach for the Friend, during which the Friend was given authorization by NEUMEISTER to use NEUMEISTER’s P-Card to pay for food, beverages, and beach facilities; 

• an iPhone for the friend; and 

• airline tickets so that NEUMEISTER’s spouse could travel from Newark, New Jersey, to Vienna, Austria, to attend a family event.
   

When one of NEUMEISTER’s supervisors at the School questioned him in connection with an audit of his P-Card charges, NEUMEISTER, among other things: (1) asked that the audit findings not be disclosed to others because it would jeopardize his job and his children’s ability to attend the School without having to pay tuition; and (2) offered to pay back certain of the expenses that he had charged to the P-Card.  Yet, Neumeister never repaid any of the misappropriated funds and later denied much of the improper conduct. 

           

NEUMEISTER, 51, of Hamden, Connecticut, is charged with one count of theft of government funds, which carries a maximum sentence of 10 years in prison, and one count of wire fraud, which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the Judge.  NEUMEISTER is also charged with civil claims under the False Claims Act, through which the Government may recover damages and civil penalties arising from his conduct.

Mr. Kim thanked HHS-OIG for their efforts and ongoing support and assistance with the case.

The criminal case is being handled by the Office’s Complex Frauds Unit, and Assistant U.S. Attorneys Dina McLeod and Christopher B. Harwood are in charge of the prosecution.

The civil case is being handled by the Office’s Civil Frauds Unit, and Assistant U.S. Attorneys Christopher B. Harwood and Anthony J. Sun are in charge of the matter.

The charges contained in the criminal 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 criminal and civil complaints, and the description of the complaints set forth herein, constitute only allegations, and every fact described should be treated as an allegation. 

A.G. Schneiderman Announces Settlement With Brooklyn Hospital To Ensure Rape Survivors Are No Longer Illegally Billed For Forensic Rape Examinations

Hospital Will Pay Restitution To Patients & Change Billing Procedures

A.G. Sends Letters To Additional NY Hospitals Seeking Info On Policies

Schneiderman: Survivors Are Entitled To Cost-Free Emergency Care Under New York Law  

  Attorney General Eric T. Schneiderman announced an agreement with The Brooklyn Hospital Medical Center (“Brooklyn Hospital”) after an investigation that revealed the hospital illegally billed sexual assault survivors for forensic rape examinations. As part of the settlement, Brooklyn Hospital will maintain a Sexual Assault Victim Policy that prevents such improper billing, and will provide full restitution to improperly billed sexual assault survivors.

Attorney General Schneiderman has also sent letters to 10 additional hospitals across New York State seeking information on their policies. Attorney General Schneiderman reminded New Yorkers that survivors of sexual assault are entitled to cost-free emergency care under New York law, which requires those services to be provided free of charge through the state’s Office of Victim Services.

“It’s hard to imagine the heartache and anxiety a survivor must feel having to fight a collection agency over an unlawful bill for a rape kit. It’s unacceptable, and we will not allow it to continue,” said Attorney General Schneiderman. “I want to be clear: survivors of sexual assault are entitled to cost-free emergency care under New York law – and we will do everything possible to ensure they get the respect and care they deserve.”

Attorney General Schneiderman initiated an investigation after receiving a complaint that a survivor of sexual assault was billed seven separate times by Brooklyn Hospital for a forensic rape exam administered in Brooklyn Hospital’s emergency room.

The Attorney General’s investigation further revealed that between January 2015 and February 2017, Brooklyn Hospital conducted 86 forensic rape exams – and in 85 out of those 86 cases, the hospital either improperly billed the patient directly, or billed the patient’s insurance plan without advising the patient of their payment options as required by law. Brooklyn Hospital had sent some of these improper bills to collection. Click here to read the settlement agreement.

New York State Executive Law Section 631(13) provides that when a hospital furnishes services -- including a forensic rape examination (FRE) – to any sexual assault survivor, it shall provide such services to the patient without charge and shall bill the Office of Victim Services (OVS) directly, or alternatively, the sexual assault survivor may voluntarily opt to assign the costs to private insurance. The purpose of Executive Law 631(13) is to ease payment of FREs by providing for submission of bills to OVS; provide quality exams; and give survivors of sexual assault the ability to choose a means of payment for their FREs, either through the OVS program or their own insurance. Allowing sexual assault survivors to choose to have OVS directly pay for services helps ensure privacy and confidentiality. This increased privacy increases the likelihood that a survivor will submit to the FRE, which in turn increases the ability of law enforcement agencies to identify offenders.

“It is unconscionable that a survivor who undergoes an intensive rape kit collection process would then receive a bill in the mail to pay for her own rape kit. What other crime victims must cover the costs of their own crime investigations? This goes to the very heart of blaming the victim, and we commend A.G. Schneiderman for stopping this illegal practice in its tracks,” said Sonia Ossorio President NOW-NY.

Hon. Judy Harris Kluger, executive director of Sanctuary for Families, said, “At Sanctuary for Families, we assist survivors of many forms of gender violence, including domestic  violence, sex trafficking, and sexual assault. We applaud Attorney General Schneiderman for uncovering the untenable practice of charging sexual assault survivors for forensic rape examinations. Institutions like hospitals should be places of refuge and healing for gender violence survivors. Victims should not be re-traumatized by receiving a bill for the collection of evidence used to find and prosecute the person who assaulted them.”

“Survivors of sexual assault should not have to pay for an evidence gathering medical exam. New York State law provides for direct payment through its Office of Victim Service for all sexual assault medical exams,” said Mary Haviland,Esq., Executive Director, NYC Alliance Against Sexual Assault. “A hospital may not charge the patient for that exam. We applaud Attorney General Eric Schneiderman for taking the initiative to make sure that charging survivors of sexual assault for medical exams does not take place in New York State.”

“No survivor of sexual assault who consents to a Forensic Rape Exam should ever receive a bill for medical services that NYS hospitals are obligated to provide. Receiving an underserved notice from a collections agency is a traumatizing reminder of a devastating event, and completely unnecessary. As NYS's oldest Rape Crisis program, CVTC praises the actions of the Attorney General's Office in ensuring that every survivor of sexual assault has access to the free medical exam promised by New York State,” said Christopher E. Bromson, Executive Director, Crime Victims Treatment Center.

Safe Horizon CEO Ariel Zwang said, “Rape survivors deserve expert and immediate medical care after an assault, including access to a rape kit. The Violence Against Women Act requires states to pay for these sexual assault forensic exams—there should be no cost to survivors. For so long, survivors and victim advocates fought to change the law so that survivors would not incur the cost of these important exams. We applaud the Attorney General’s office for ensuring enforcement of this law, holding hospitals accountable who have unnecessarily charged for this exam, and standing up for survivors.”

"The Downstate Coalition for Crime Victims thanks the Attorney General for ensuring state mandated free forensic rape exams for survivors of sexual assault. This law is of the utmost importance for survivors, and no medical facility should consider itself exempt,” said Kimberly Sanchez, Co-chair, Legislative Committee, Downstate Coalition for Crime Victims.

New Yorkers with complaints regarding hospital billing or other health-care related issues may contact the Attorney General’s Health Care Helpline at 1-800-428-9071.

Bronx Borough President Ruben Diaz Jr - Join Santa & Mrs. Claus Thursday December 7th

Senator Rev. Rubén Díaz - OPEN LETER TO GOVERNOR ANDEW M. CUOMO

What You Should Know 
By Senator Rev. Rubén Díaz 
32nd Senatorial District 

Governor Cuomo Should Act to Protect Medicaid Patients who need Topical Oxygen Wound Therapy 

SENATOR RUBEN DIAZ 

You should know that I have written to you before about the importance of Topical Oxygen Wound Therapy to New Yorkers who are on Medicaid. 

Topical Oxygen Wound Therapy is a safe and effective treatment for patients suffering from chronic, open wounds that come from diseases like diabetes and have not responded to other treatments.  It is only used after other treatments fail. Patients use it in the convenience and comfort of their own homes. It literally saves people from having limbs amputated. 

You should know that New York State’s Medicaid patients who need this treatment are overwhelmingly low-income Black and Hispanic people, and more of these patients live in the 32nd Senatorial District in the Bronx than in any other part of the State of New York. 

You should know the state decided to cover this treatment nearly 10 years ago but that the state Department of Health more recently has tried – repeatedly – to end coverage for this important treatment. 

That prompted my colleagues and me in the Legislature to pass a bill making sure that New Yorkers on Medicaid continue to have access to Topical Oxygen Wound Therapy. The bill passed unanimously in the Assembly and passed the Senate 60-3. If you total the votes in the Legislature, the bill passed 205-3! 

You should know that just last month, the state Health Department’s own panel of health care experts -- whose job it is to oversee what benefits the state offers under Medicaid -- voted unanimously to continue covering Topical Oxygen Wound Therapy indefinitely. 

You should know that Governor Cuomo should sign this bill into law. 

New York State was a leader when it decided to cover Topical Oxygen Wound Therapy in 2008. The federal government, the Veteran’s Administration and other programs have followed New York’s lead.   

Our state should continue to be a leader now. 

Dear Governor Cuomo, as we enter the holiday season, I can think of no better or more compassionate gift to New Yorkers who suffer from these painful and debilitating wounds than ensuring they can receive a treatment that helps them heal and helps fortify their dignity. 

Please sign the Topical Oxygen Wound Treatment bill. 

I am State Senator Rubén Díaz and this is what you should know.

A.G. Schneiderman Announces Guilty Plea Of Brooklyn Real Estate Developer Daniel Melamed

Defendant Created Shell Corporations, Forged Letters To Defraud HUD And Financial Institutions From 2011 To 2014

Facing Trial, Daniel Melamed Pleads Guilty To 13-Count Indictment

Melamed Previously Found Guilty Of Unlawful Eviction Of Rent Stabilized Tenants Following A Separate Prosecution By A.G. Schneiderman

  Attorney General Eric T. Schneiderman announced that Brooklyn real estate developer Daniel Melamed pleaded guilty today in Kings County Supreme Court to a 13-count indictment, including Residential Mortgage Fraud in the Second Degree and two counts of Grand Larceny in the Second Degree, class C felonies; as well as four counts of Forgery in the Second Degree, four counts of Criminal Possession of a Forged Instrument in the Second Degree, and two counts of Attempted Grand Larceny in the Second Degree, all class D felonies. Melamed admitted under oath to engaging in various real estate schemes that defrauded banks and the United States Department of Housing and Urban Development (“HUD”) by creating shell corporations and forged letters to illegally purchase and/or sell multiple Brooklyn properties between 2011 and 2014. Today’s guilty plea follows charges brought by Attorney General Schneiderman in November 2016.

“Daniel Melamed stole money from taxpayers and cheated the public in order to boost his bottom line,” said Attorney General Schneiderman. “We have zero tolerance for landlords who try to game the system to line their own pockets — and we will use every tool at our disposal to bring them to justice.”

Specifically, in one scheme, Melamed, together with former co-defendants Carmen Morales and Abraham Perez, created and submitted false documents that purported to bolster Perez’s income and create the appearance that he intended to occupy 185 Hale Avenue in Brooklyn, which was a requirement of HUD in order to receive a loan from the federal agency. Perez was approved for his loan on the basis of those false submissions and, in less than two years, he defaulted. HUD, which is taxpayer funded, paid over $480,000 to cover the loss.

In a second scheme, Melamed and former co-defendant David Soufeh recruited individuals who were in foreclosure with the promise of relief from mortgage debt and cash under the table. To facilitate this illegal transaction, Melamed and Soufeh, together with former co-defendant’s Curt Joseph and Denise Morales, created and submitted numerous false documents. Melamed admitted that he and Denise Morales created multiple forgeries by cutting and pasting the signatures of bank employees and letterhead from certain banks onto false proof of funds letters. Melamed, through a fraudulent corporation, purportedly owned by Denise Morales, illegally purchased one of these properties for $250,000 in 2013 and sold it a year later for $1,250,000.

Finally, in a third scheme, Daniel Melamed, together with former co-defendants Denise Morales and Christopher Magliocca, attempted to deceive JP Morgan Chase into approving a short sale of a property owned by Melamed’s mother to a corporation controlled by Melamed. 

Melamed entered his guilty plea before State Supreme Court Justice Danny Chun. He is scheduled to be sentenced by Justice Chun on January 25, 2018.

Melamed was previously found guilty in June 2017 of three counts of Unlawful Eviction of rent-stabilized tenants following a bench trial before Justice Chun. The June 2015 arrest of Melamed in that case was the first resulting from the Tenant Harassment Prevention Task Force. Sentencing in that case is also scheduled for January 25, 2018.

Senator Jeff Klein submits over 1,000 signatures to city to save Columbus Statue

Signatures were presented to the city’s commision reviewing public art at Monday’s public hearing in The Bronx

Over 1,000 signatures from a petition drive led by Senator Jeff Klein to save the Columbus Statue were submitted to city’s commission reviewing public art at their Bronx public hearing Monday morning. A host of elected officials, including Senator Diane Savino, and Assemblyman Mark Gjonaj, kicked off the petition drive last month at the Morris Park Columbus Day Parade.

Community leader Joanne Rubino handed in the signatures on behalf of the elected officials while testifying in favor of saving the Columbus Statue at the public hearing at Bronx Borough Hall. The final public hearing will take place tomorrow in Staten Island.

“It is offensive to tear down an important part of Italian-American history in New York City and we will not stand for it. The statue of Christopher Columbus represents the Italian immigrants’ voyage to New York City at a time when the group faced rampant discrimination. Today we sent a strong message to the city that the Columbus Statue must stay,” said Senator Klein.

"The statue does not represent the explorer, it represents the experience of the Italian immigrant. Italians stretch from every corner of New York State, and I applaud the countless individuals who have also stepped up to voice their opposition to potentially removing the Columbus Statue,” said Senator Savino.

“The Columbus Statue represents the many Italian-American immigrants who came to this country for a better life. I am proud to stand in opposition to the potential removal of the statue with so many other New York City residents. We will continue to fight so that this symbol stays standing for generations to come,” said Assemblyman Gjonaj.

Bronx Dems Annual Holiday Party!

BOROUGH PRESIDENT DIAZ ISSUES AFFIRMATIVE RECOMMENDATION ON JEROME AVE. ULURP

  Today, Bronx Borough President Ruben Diaz Jr. issued an affirmative recommendation with conditions for the proposed rezoning of Jerome Avenue, as part of his charter-mandated responsibilities in the Uniform Land Use Review Process (ULURP).

“The plan for the future of Jerome Avenue represents tremendous transformative potential for the entire Bronx. Whatever we do, we must ensure that this rezoning works for everyone, especially the tenants who currently call the affected neighborhoods home,” said Bronx Borough President Ruben Diaz Jr. “The commitments my office has negotiated with the administration will help do just that.”

The affirmative recommendation comes following negotiations between Borough President Diaz and the de Blasio Administration on several key items that will lead to greater tenant protections and affordability options within the Jerome Avenue corridor following its rezoning.

“The people of The Bronx are not opposed to improvements. In fact, we expect our fair share of community benefits. The residents who testified at my hearing last month asked for greater affordability, more significant tenant protections and assurances that this rezoning would work for everyone, including them. These commitments from the City are important steps towards those goals,” said Borough President Diaz.

The borough president added, “Now that this process is in the hands of the City Planning Commission and the City Council, I urge Council Members Vanessa Gibson and Fernando Cabrera to ensure that both the best possible agreement is negotiated with the administration and that the city keeps all of its commitments.”

The complete ULURP recommendation with list of commitments can be viewed at http://on.nyc.gov/2jsi7yb.