Bronx Chamber of Commerce honors six distinguished individuals at our Black Heritage Celebration Luncheon

MAYOR DE BLASIO TESTIFIES IN FRONT OF SENATE FINANCE AND ASSEMBLY WAYS AND MEANS COMMITTEES

  Mayor Bill de Blasio: Thank you Chair Weinstein and Chair Young so much. I want to thank also the ranking minority member Senator Krueger and Assemblyman Oaks. And I want to thank the leaders of this legislature, Assembly Speaker Heastie, Senate Majority Leader Flanagan, Senate Democratic Conference Leader Stewart-Cousins, IDC Leader Klein, and Assembly Minority Leader Kolb. My thanks to all the members here as well today and I’m joined by two key members of my time, our new Director of the Office of Management and Budget, Melanie Hartzong, and our new Director for State Legislative Affairs, Simonia Brown.

I want to begin by thanking the legislature on behalf of all 8.5 million New Yorkers. Over the past four years, New Yorkers have seen change happen quickly and that is thanks in large measure to our work with this legislature. Together we have given 70,000 children a strong head start in life through Pre-K for All. Together we’ve helped people throughout the five boroughs stay in the neighborhoods they helped to build. And together we’ve saved lives and prevented tragedies by expanding Vision Zero. Together we have certainly made New York City safer, stronger, and fairer.

Now, I want to turn to the City’s Fiscal Year 19 Preliminary Budget, which I presented last week, and it included some important but modest new investments. And these were undertaken with one singular goal in mind, to make New York City the fairest big city in America. These investments included $200 million for heating upgrades to the 20 New York City Housing Authority developments most in need. $12 million for the rollout of body-worn cameras to all NYPD officers on patrol, one year ahead of schedule. And $7 million for additional staff to implement new tenant harassment prevention laws enacted in partnership with the City Council.

As always, our budget is balanced and based on careful management of our resources, which is particularly important given what we are seeing in Washington. Without further action from Washington, federal policies could have a minimum $700 million negative impact on our Fiscal 19 New York City Budget. This includes the cuts to DSH or Disproportionate Share Hospitals payments that will cost our Health + Hospitals Corporation $400 million annually.

A corporate tax rate cut in the new tax law that will make the Low Income Housing Tax Credit less valuable. That will add $200 million a year in capital dollars to our bottom line, making affordable housing production more expensive. And the new tax law eliminates a form of bond refinancing we use to save money, the estimated cost will be $100 million a year. Those – excuse me – there are also negative consequences for our residents’ bottom line. The new tax law, of course, caps the State and Local Tax deduction and eliminates the personal exemption.

This means hundreds of thousands of New Yorkers – most earning less than $100,000 – will pay more taxes. And I want to commend the Governor for trying to find ways to blunt the effects of the new tax law and I look forward to working with him, and all of you, on solutions. In addition to the tax law, we are also anticipating a new budget proposal from the Trump Administration in the coming weeks and that will likely be as painful as the last one.

Now I want to turn to the Governor’s Executive Budget. Last year I made the point that New York succeeds when New York City succeeds and vice versa. And that is even more important now. There are key items in the Executive Budget that are positive for our state and our city.

I have been speaking for years about the urgent need for election reform. All New Yorkers should be glad that early voting and same-day registration are in the Executive Budget. And I want to applaud the Assembly Democratic Conference’s past work on this issue. Exercising the fundamental right to vote is just too difficult in our state and two million New Yorkers, one million of them in the City, aren’t even registered. I urge the legislature to include early voting and same-day registration in the enacted budget and please also include other critical reforms, no-excuse absentee ballots, electronic poll books, and pre-registration for 16 and 17-year-olds.

It’s also important that the Dream Act is in the Executive Budget, given what is happening in our country and New York State can lead by example by helping all of our students. And I urge you to include the Dream Act in the enacted budget.

On criminal justice, we are pleased that the Governor included Bail Reform and Speedy Trials in his Executive Budget. This will help reduce the population in City Jails and accelerate our efforts to close Rikers Island. For the first time in 85 years, we have made it the City’s policy to close Rikers Island for good. But to do so we need to reduce the number of people incarcerated.

The City has taken prudent steps to reduce our jail population by 21 percent already in the last four years, bringing the number of incarcerated people to under 9,000. We have achieved this by driving crime to historic lows, reducing arrests for low-level infractions, and making a $20 million annual investment in supervised release and case-delay mitigations. And we are now able to close the first of the nine jails on Rikers Island. That will happen in June.

I also support ending money bail and I think we should go further. Letting judges factor risk to public safety into bail decisions for all cases, while providing them the tools to minimize racial biases. I would urge you to pass another helpful legislative change that is not in the executive budget, this would allow City prisoners serving less than a year to earn reduce sentences for good behavior, like they can in state jails.

In addition I would urge the State to move State supervised parolees in City jails who violate parole into available space in state correctional facilities. The changes I just outlined would help reduce our jail population by another 18,000 people per day, bringing us closer to our stated goal of 5,000. Another key element in the closure plan is the construction of necessary borough-based jails. Design Build authority, the construction of local correctional facilities, would help speed up the construction timeline.

We are also improving the culture inside the jails. Our corrections officers are receiving new professional development and support. And all inmates in our jails now receive five hours a day of therapeutic, vocational, and educational programming. We have reduced the number of people in punitive segregation by 80 percent and ended it for women and those under 21-years-old. And this spring, through our Jails to Jobs program, everyone who leaves jail following a City sentence will be offered a transitional job.

Now I would like to talk another critical step in closing Rikers Island which is removing 16 and 17-year-olds. And I want to thank you all for your historic vote to enact Raise the Age. But I’m concerned that the Fiscal 19 Executive Budget makes this an unfunded mandate by providing zero guaranteed funding. This will cost the City at least $200 million per year.

The City is working hard to comply with this mandate. We’re renovating two facilities, Crossroads in Brownsville, Brooklyn, and Horizon, in Mott Haven, in the Bronx. For additional capacity, we need the Ella McQueen Juvenile Reception Center in Ocean Hill, Brooklyn, transferred to the City.

I urge you to help make this happen, We cannot meet the October 1^st deadline without this center serving as our intake facility. The executive budget also defunds the City’s juvenile justice facilities under the Close to Home program. This cut undermines the signature reform designed to keep kids closer to their families. And it will cost the City $15.3 million in Fiscal 18 and $31 million in Fiscal 19.

Now I would like to discuss a number of areas of concern in the Governor’s Executive Budget. I made it clear that the City should not be required to pay half of the MTA’s Subway Action Plan. Our current contribution to the MTA is one big reason why. New York City residents, workers, businesses, and government contribute nearly 70 percent of the MTA’s total revenues, more than $10 billion annually.

City government alone makes an enormous investment in the MTA already. This is comprised of $900 million annually in direct funding and a further $900 million in in-kind contributions including services by the NYPD Homeless Outreach efforts and debt service. This represents a $200 million increase from last year. And in 2015 the City committed $2.5 billion to the MTA capital plan, the largest general capital contribution in history.

But it’s clear the MTA needs a long-term dedicated revenue source. I have proposed a millionaire’s tax to pay for infrastructure and for the Fair Fare initiative, half price MetroCards for lower income New Yorkers. I urge that this proposal be included in the enacted budget.

A recent panel report commissioned by the Governor proposed a form of congestion pricing that would serve as a dedicated revenue source. I was pleased to see East River bridge tolls removed and to see the inclusion of block-the-box automated enforcement. I also support the panel’s focus on commercial and for-hire vehicles.

I urge the legislature to consider expediting a surcharge on for-hire vehicles and an added surcharge on taxis for the MTA. This would even the levels of surcharge on both types of vehicles and address the MTA’s immediate budget request.

If there were a congestion pricing plan there are several measures critical for New York City residents. One – a requirement that all proceeds are invested in mass transit projects in the five boroughs only. And two – the City of New York needs the ability to sign off on transit projects and priorities. Also, any pricing scheme for passenger vehicles should take the needs of New Yorkers with hardships into account including low income New Yorkers and those with disabilities.

Now, I want to focus on some areas of concerns when it comes to the MTA in the executive budget. The first is a “value capture proposal” that would grant the MTA the power to raid our property taxes on properties within a one mile radius of certain projects. This proposal would cost billions and blow a hole in the City’s budget forcing us to cut back on essential services like police, sanitation, and education. This should be a concern for every local government. I was encouraged by the Governor’s recent comments that portrayed this as a choice for the city, not a mandate. I would urge you to remove this provision from the enacted budget altogether.

Another MTA proposal in the executive budget that would devastate City finances is the mandate that the City pay all capital costs for the New York City Transit Authority. That means of tens of billions of dollars in new capital obligations and is based on the false premise that the City is legally responsible for paying New York City Transit’s capital costs. Sixty-five years of statutory provisions, lease agreements, and funding history prove otherwise. I respectfully request that you reject this proposal.

Now, I’d like to turn to the topic of education. Bringing Equity and Excellence to the city’s school system has been the core mission of my administration. With your help, we’re making sweeping reforms designed to ensure that every child in every grade in every neighborhood fulfills their potential.

These include giving our kids a great start with pre-K, working to bring all students to reading level by third grade, and offering Advanced Placement courses to all high school students. The proposed $248 million increase in education aid in the executive budget falls short of the increases in previous years and short of what the City needs to continue to bring Equity and Excellence to our schools.

Since 2008, the City’s share of education spending has increased to 56 percent from 49 percent while the State’s share has declined to 36 percent from 41 percent. Over two years with your help we increased the Fair Student Funding average from 88 percent to 91 percent by raising it for 787 schools. Today all Community and all Renewal Schools are at 100 percent.

And I want to note, any school that leaves Renewal status remains a Community school at the 100 percent level. But the State Campaign for Fiscal Equity obligation still has not been fulfilled.

If the State fulfills its CFE commitment we will use that funding to get every school to 100 percent by Fiscal ‘22. Especially problematic in the executive budget is a provision that gives the State division a budget – a virtual veto on school district spending. This could lead to arbitrary decisions and could jeopardize the Equity and Excellence vision that we know is working.

We join the State Education Department and school districts statewide who are concerned about this measure, and we ask that you do not tie up much-needed resources for our students through added layers of bureaucracy.

The executive budget also shifts a variety of charter school costs to New York City alone. In Fiscal ‘19 these costs amount to more than $144 million currently borne by the State. The costs are comprised of $120 million from the elimination of State reimbursement for supplemental basic tuition to charter schools and $24 million from a proposed cap in reimbursement for the rental costs paid to charter schools.

The State made a commitment to fund the additional tuition and a portion of the rental support in the past. The State should continue to pay those costs rather than placing unfunded mandate on the City.

The Governor’s executive budget would also make an arbitrary funding cut of $65 million in Fiscal ‘19 to special education. Last year this funding supported 200,000 special-ed students. And at a time when the City is making significant investments in our child welfare system, the State proposes to cap reimbursements for State Child Welfare funding.

The cap is aimed just at New York City and has a potential impact of $64 million in Fiscal ‘18 and $129 million in Fiscal ‘19. And this would harm our efforts to keep kids with their families and out of foster care.

Now, I’d like to turn to the homelessness crisis. We’ve made unprecedented efforts to address homelessness including access to counsel for all New Yorkers in housing court; outreach to street homeless through HOME-STAT, the most comprehensive outreach program of any major city in the country; and working toward a smaller borough-based shelter system.

And we are seeing progress. We have moved 60,000 New Yorkers from shelter to permanent housing and we know HOME-STAT working. Since 2015, we have moved nearly 1,500 people off the streets who have not returned to the streets.

Rather than proposing to withhold City shelter funding, the State should support our outreach efforts. The State’s executive budget also cuts $9 million from the City’s rental assistance program for working families – LINC 1. This will literally make it harder for 1,800 New Yorkers in shelter to find permanent housing. And I urge the legislature to restore this cut.

Before I conclude, there are just a few issues not in the budget that I think – we think deserve your attention. One – Design Build has accelerated dozens of state infrastructure projects and saved taxpayers billions. New York City’s taxpayers deserve the same advantage. Here are two examples of projects that could – that we could complete more quickly and efficiently if we had this Design Build tool.

One – the major rehabilitation of the BQE Triple Cantilever that 15,000 large trucks passover on a typical day. And two – the installation of crucially needed new boilers in public housing developments.

While we’re on the topic of public housing, my administration came into office dedicated to reversing decades-long disinvestment and we have made unprecedented investments including $1.9 billion in capital spending for roof replacement, benefitting 179,000 residents; facade repair at 365 buildings; and security improvements at the 15 most dangerous developments that have yielded a much safer environment.

This winter we added $200 million in capital to upgrade heating systems at the 20 developments with the most severe heating problems. This will add up to a total capital investment by the City of New York of $2.1 billion which is unprecedented in the history of the city.

Now, I’m asking for your support in matching the City’s $200 million investment in heating systems. We’re also investing $9 million in capital and $4 million in expense for rapid response teams and mobile boilers to address the immediate heating crisis and to keep our residents warm.

In addition to our capital investment in NYCHA, the City has made $1.6 billion in investments in operating expenses.

One other important issue that is not in the executive budget – Civil Rights Law Section 50-a which prohibits the disclosure of personnel records of law enforcement and other uniformed personnel without a court order or an employee’s written consent. We have introduced a bill that would allow the NYPD to post all pertinent disciplinary information, a summary of the judge’s decision, and the Police Commissioner’s final determination on the NYPD website at the conclusion of an administrative disciplinary process. I urge you to support this bill.

Finally, I want to mention that the City’s critical life-saving speed camera program that you worked so hard to pass expires this year. Let’s not just extend it, let’s expand it, and loosen location restrictions to cover all the streets surrounding our schools.

I want to thank you all for what we have done together, for the great work that you have done in support of the people of New York City. I want to thank you for the partnership. And as I begin a new term, I want to say I look forward to four more years of working together. Thank you Madams Chair. 

EDITOR'S NOTE:

Staten Island Assemblywoman Nichole Malliotakis asked the mayor why her home in Staten Island valued at half the value of the mayor's house in Brooklyn is taxed higher than the mayors.

Assemblymember Pichardo passes DREAM Act to help undocumented students attend college

      Assemblymember Victor M. Pichardo announced that he helped pass the New York State Development, Relief and Education for Alien Minors (DREAM) Act to allow eligible undocumented students to apply for financial aid when pursuing higher education (A.9605).

“As the son of immigrants, I’ve seen firsthand how tirelessly immigrant families work to achieve the American Dream,” said Pichardo. “The DREAM Act is a commitment to New York students who want nothing more than to learn and thrive in the place they called home.”

Under the DREAM Act, undocumented college-bound students would be able to access state-based financial aid, including the Tuition Assistance Program (TAP). Eligibility would be based on a number of factors – such as attending a New York high school. The DREAM Act also establishes a scholarship fund with private donations and allows children of undocumented immigrant parents with a valid taxpayer identification number to create a tuition savings account.

Pichardo stressed that these students are attending public schools from pre-K through high school in the state. They should be eligible for in-state tuition to pursue their higher education.

“If a student works hard and earns the grades, financial means or where they were born shouldn’t stand in their way,” said Pichardo. “I strongly encourage my colleagues in the Senate to do the right thing and pass the DREAM Act. It’s up to us to ensure New York State remains a beacon of hope and equality.”

EDITOR'S NOTE:

  While this may be good news, this must be passed by the state senate also, and then signed into law by Governor Cuomo.

The Bronx Stands With Puerto Rico

  As one of the six 'New York Stands With Puerto Rico' events that were held statewide, the Bronx event was the major event which featured not only Bronx Puerto Rican elected officials, New York Governor Andrew Cuomo, but also The Governor of Puerto Rico Richardo Rossello. Hundreds of supporters of Puerto Rico jammed the Casita Maria Center for the Arts and Education on Simpson Street to also show their support. The photos below will tell the rest of the story.

Above - A photo of the packed room with supporters of Puerto Rico.

Below  - Assemblyman Jose Rivera tried to sit next to the Governor of Puerto Rico, but was placed with the Bronx Assembly delegation.

Above - Former State Senator Efrain Gonzalez Jr., current State Senate Democratic Conference Leader Andrea Stewart-Cousins, A business supporter of Puerto Rico, Congressman Eliot Engel, Assembly members Victor Pichardo and Jose Rivera.

Below - Bronx Democratic County Leader Assemblyman Marcos Crespo showed off his Puerto Rican Pride.

Above - Assemblyman Crespo speaks, and then introduced Bronx Borough President Ruben Diaz Jr. 

Below - Bronx Borough President  Ruben Diaz Jr. spoke of not who you are or who you like, but the need for help in Puerto Rico.

Above - New York Governor Andrew Cuomo is welcomed to the microphone by Congressman Jose Serrano who emceed the event. While Governor Cuomo spoke there were chants of Cuomo for President.

Below - The Governor of Puerto Rico Richardo Rossello spoke of the need for more help in his country, and he thanked New York State and the Bronx for their help. He called on Puerto Ricans nationwide to register to vote so they could have a say in what happens. 

Above - While it was the former Dancing District Leader now Crutch holding State Committeeman Kenny Agosto dancing with one of Councilman Cabrera's aides, there was another story outside.

Below - There were a few people demonstrating outside the event who said that several hundred people were missing and still unaccounted for. Some of the names are listed on their banner.

DOI INVESTIGATION LEADS TO RE-ARREST OF A CITY DEPARTMENT OF HOMELESS SERVICES EMPLOYEE ON SEXUAL MISCONDUCT CHARGES

  Mark G. Peters, Commissioner of the New York City Department of Investigation (“DOI”), announced the re-arrest of a New York City Department of Homeless Services (“DHS”) Housing Specialist on charges that he engaged in sexual misconduct with a shelter resident at the Auburn Family Shelter in Brooklyn. The DHS employee was previously arrested in December 2017 for similar conduct against two female shelter residents. Those cases are pending before the New York City Criminal Court. The office of the Brooklyn District Attorney Eric Gonzalez is prosecuting each of these cases, including the additional charges.

 DOI Commissioner Mark G. Peters said, “This City Homeless Services employee abused his power and authority on multiple occasions and violated the safety and security of vulnerable shelter residents, according to the charges. For a second time DOI is arresting this individual for his alleged behavior, and we will continue to make arrests where City employees engage in this kind of indefensible misconduct.” 

 Brooklyn District Attorney Eric Gonzalez said, “The victims in these cases had a right to feel safe and secure at the homeless shelter where this defendant was employed. Instead, he allegedly used his position to prey upon them. We stand committed to obtaining justice for all of the women who were allegedly targeted by him.”

 CLYDE JOHNSON, 54, of Queens, N.Y., was re-arrested and charged on Friday, February 2, 2018, with Forcible Touching, a class A misdemeanor; Sexual Abuse in the Third Degree, a class B misdemeanor; and Harassment in the Second Degree, a violation. Upon conviction, a class A misdemeanor is punishable by up to one year’s incarceration, a class B misdemeanor is punishable by up to three months’ incarceration, and a violation is punishable by up to fifteen days’ incarceration.

 JOHNSON was previously arrested by DOI on December 4, 2017, for similar conduct against two shelter residents, with two instances also taking place at the Auburn Family Shelter. 

 JOHNSON has worked for DHS as a Community Coordinator and Housing Specialist since July 2015 and earns an annual salary of approximately $57,916. DHS has suspended JOHNSON.

 According to the criminal complaint and DOI’s investigation, the charged incident took place in August 2017 inside of the Auburn Family Shelter, 39 Auburn Place. In this incident, JOHNSON allegedly touched a female shelter resident inappropriately. This woman is the third Auburn Place shelter resident to accuse Johnson of sexual misconduct. 

 DOI Commissioner Peters thanked Commissioner of the Department of Homeless Services Steven Banks and Brooklyn District Attorney Eric Gonzalez, and their staffs, for their cooperation and assistance in this investigation.

 A criminal complaint is an accusation. A defendant is presumed innocent until proven guilty.

Security Guard At The 9/11 Memorial And A Conspirator Charged In Manhattan Federal Court With Firearms Trafficking

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Ashan M. Benedict, the Special Agent-in-Charge of the New York Field Division 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 arrest of MAQUAN MOORE, a 9/11 Memorial security guard, and MORRIS WILSON, for the trafficking of more than 25 firearms from locations outside of New York into Manhattan.  MOORE and WILSON were arrested last night by the ATF and NYPD, and presented today on separate complaints before U.S. Magistrate Judge Kevin Nathaniel Fox in Manhattan federal court. 

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Maquan Moore and Morris Wilson are responsible for illegally introducing into Manhattan scores of illegal firearms – including assault-style weapons capable of inflicting mass casualties – and knowingly doing so in the neighborhood of a nearby school.  Their alleged disregard for public safety could have had catastrophic consequences.  The danger of selling unlicensed firearms cannot be overstated.  I commend our NYPD and ATF partners for keeping these guns out of the hands of unlicensed owners.”

ATF Special Agent-in-Charge Ashan M. Benedict said:  “ATF is committed to making the streets safe by ridding neighborhoods of individuals that seek to distribute illegal firearms. Maquan Moore and Morris Wilson are alleged to have trafficked numerous firearms into New York City endangering the lives of its citizens. Thanks to the efforts of the Special Agents and Detectives assigned to the ATF/NYPD Joint Firearms Task Force, this interstate firearms trafficking network will be disbanded and all of its tentacles prosecuted to the full extent of the law. I would like to extend my gratitude to the United States Attorney’s Office for their work in prosecuting the case.”

NYPD Commissioner James P. O’Neill said:  “As charged, these defendants engaged in several transactions involving the sale of multiple illegal firearms on the streets of New York City.  Their actions could have jeopardized the lives of an untold number of citizens as we have seen far too often. It was only through the well-coordinated efforts of the Joint Firearms Task Force that this gun-trafficking operation was successfully curtailed.”

According to the allegations in the Complaints[1]:

Beginning in December 2017, an ATF/NYPD Task Force made multiple undercover purchases of firearms from MOORE, who at the time was working as a security guard at the 9/11 Memorial.  These firearms included several assault-styled weapons, such as a MAC-10 machine pistol, and various other handguns and rifles.  On the evening of February 1, 2018, an undercover officer purchased from MOORE additional firearms, many of which had been brought by WILSON from Florida to New York.  In connection with MOORE and WILSON’s arrest, the ATF/NYPD Task Force seized 21 additional firearms.

MOORE, 29, of Manhattan, is charged with conspiracy to traffic in firearms, firearms trafficking, interstate transportation and receipt of firearms, and possession of a firearm near a school zone, each of which carries a maximum statutory penalty of five years in prison; and receiving a firearm with intent to commit an offense, which carries a maximum statutory penalty of 10 years in prison. 

WILSON, 32, of Orlando, Florida, is charged with conspiracy to traffic firearms, firearms trafficking, and interstate transportation and receipt of firearms, each of which carries a maximum statutory penalty of five 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 defendants will be determined by the judge.

Mr. Berman praised the efforts of the ATF and NYPD in this case.

The charges contained in the Complaints are merely an accusation, and the defendant is presumed innocent unless and until proven guilty.

 [1] As the introductory phrase signifies, the entirety of the text of the Complaints and the description of the Complaints forth herein constitute only allegations, and every fact described should be treated as an allegation.

Hedge Fund Manager Charged In Manhattan Federal Court With Scheme To Defraud Investors

   Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the arrest and unsealing of a complaint charging NICHOLAS JOSEPH GENOVESE with securities and wire fraud in connection with a scheme to induce investments in a hedge fund by misrepresenting his qualifications and professional background.  From 2015 through January 2018, GENOVESE fraudulently solicited investments in a hedge fund that he had founded, Willow Creek Investments LP (“Willow Creek”), by claiming that he had impressive credentials and a long history serving in significant roles at major Wall Street financial institutions.  Victims invested at least $4 million with GENOVESE based on these representations.  The claims that GENOVESE made to help secure these investments, however, were false.  GENOVESE did not possess the credentials he claimed and had never worked at the financial institutions he referenced.  In addition, GENOVESE failed to inform his investors that he had multiple felony convictions for grand larceny, forgery, and related offenses.  GENOVESE was arrested today and will be presented in the Southern District of Florida.

In a separate action, the Securities and Exchange Commission (“SEC”) filed civil charges against GENOVESE.  

U.S. Attorney Berman said:  “Nicholas Genovese allegedly touted fictitious credentials when luring victims to invest over $4 million into his hedge fund, Willow Creek, falsely claiming to have an Ivy League MBA and to have held senior roles at Wall Street firms.  In reality, as alleged, Genovese had a criminal history and lost millions in stock trades.  We thank our law enforcement and regulatory partners for their continued efforts to eliminate fraud from our equity markets.” 

Assistant Director-in-Charge Sweeney said:  “Through a series of gross misrepresentations, about himself and his supposed credentials, Genovese solicited millions of dollars from victims who invested in the hedge fund he founded. But he was no master of illusion, as proven by the nearly $8 million he lost throughout the course of this smoke-and-mirrors scheme. While this money may have seemingly vanished into thin air, his intentions have been clearly interpreted. Today we hold him accountable for his crime.”

According to the allegations in the Complaint unsealed in Manhattan federal court:[1]

In or about September 2015, GENOVESE began soliciting individuals to invest in the hedge fund that became Willow Creek.  In multiple conversations and later in written offering materials, GENOVESE represented, among other things, that he had graduated from the University of Kentucky and Dartmouth College’s Tuck School of Business, and that he had extensive Wall Street experience.  In particular, GENOVESE claimed that he had been a Goldman Sachs partner and a Bear Sterns portfolio manager before forming Willow Creek.  Based in part on these claims, victims invested at least $4 million with GENOVESE.    

These representations were false.  Records indicate that GENOVESE did not attend the University of Kentucky or the Tuck School of Business and had never worked for Goldman Sachs or Bear Stearns.  GENOVESE also did not tell his investors that he had multiple prior felony convictions. 

When investors began to ask for their money back, GENOVESE put them off.  He told one investor that he would only return that investor’s funds after “the stars have aligned,” or else there would be a risk that almost all the money would be lost as a result of the purported impracticalities of unwinding unspecified trading positions.  Records indicate that GENOVESE lost approximately $8 million trading in TD Ameritrade accounts between January 2015 and December 2017. 

GENOVESE, 52, is a resident of New York, New York.  GENOVESE is charged with one count of securities fraud and one count of wire fraud.  Each charge carries a maximum term of 20 years in prison.  The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.  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.           

Mr. Berman praised the work of the FBI and thanked the SEC for its assistance. 

The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

 [1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

Statements by Council Speaker Corey Johnson, Council Finance Chair Daniel Dromm, and Chair of the Subcomittee on the Capital Budget Vanessa L. Gibson Re: FY 2019 Preliminary Budget

Council Speaker Corey Johnson:

“Even as we experience sustained economic growth, our city is facing challenges and we need a city budget that adequately responds to those challenges. More than ever, federal and state cuts are threatening the City’s fabric as we know it. In this current climate, agencies and the administration as a whole must be held to a higher standard to ensure we are doing all we can to protect our most vital social safety net programs by boosting our reserves and streamlining resources for the long term. I look forward to working with Chairs Dromm and Gibson and all of my colleagues as we ensure that the Council is an equal partner throughout the budget process.”

Council Finance Chair, Council Member Daniel Dromm:

“With the release of the Mayor’s $88.7 billion preliminary budget, the Finance Committee will lead a thorough oversight process that will put our most vulnerable New Yorkers first. Safeguarding our critical city-funded programs against looming federal and state cuts requires us to take a serious look at dramatically expanding reserves for the all but certain rainy day ahead and that means identifying savings and strengthening citywide reserves. I look forward to working with the Speaker and my colleagues to ensure that we arrive at a budget that works for all New Yorkers.

Chair of the Subcommittee on the Capital Budget, Council Member Vanessa L. Gibson:

“From investments in our crumbling public housing stock and transit system, to renovations of our schools and parks, ensuring that our city’s capital dollars are spent efficiently is more critical than ever.”

“Too often, however, these projects are overpriced and take too long to complete. While we applaud investments in new boilers at NYCHA developments around the city, these residents simply cannot afford to wait four long winters to have heat fully restored to their buildings. In the coming months, the Subcommitee on the Capital Budget looks forward to a deep dive into the capital budget of the City of New York to help deliver much needed improvements to city infrastructure more quickly and effectively.”