Con Ed Contractor Sentenced to 48 Months’ Imprisonment for Bribery and Tax Evasion Charges

Defendant Concealed and Then Deducted Bribe Payments to Con Ed Supervisors as Business Deductions on His Companies’ Tax Returns

  Yesterday, in federal court in Brooklyn, Rodolfo Quiambao, the former President and Chief Executive Officer of the engineering and electrical design firm Rudell & Associates, Inc. (Rudell), was sentenced to 48 months’ imprisonment for federal programs bribery and tax evasion in connection with his scheme to pay bribes and kickbacks to supervisors at Consolidated Edison of New York (Con Ed) in exchange for receiving lucrative contracts and other benefits from the public utility services provider.  Quiambao was also sentenced to pay a $125,000 fine and more than $4.5 million in restitution to the IRS.  At the time of his guilty plea in March 2016, Quiambao agreed to forfeit $1 million in criminal proceeds.  Yesterday’s sentencing took place before United States District Judge Allyne R. Ross. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York; James D. Robnett, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), New York; Michael Nestor, Inspector General, The Port Authority of New York and New Jersey, Office of the Inspector General; and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Custom Enforcement (ICE), Homeland Security Investigations (HSI), in New York, announced the sentence.  

According to court filings and facts presented during court proceedings, starting in approximately 2000, Quiambao surreptitiously and regularly gave Con Ed supervisors hundreds of thousands of dollars in cash and checks in exchange for securing work, including lucrative “sole source” contracts, for his company.  Quiambao also engaged in tax evasion by first concealing and then deducting the bribe payments he paid to the Con Ed supervisors as business deductions on his companies’ tax returns.   

Quiambao’s sentencing was the latest step in the government’s investigation of bribery and kickback schemes involving employees and contractors of Con Ed.  Since 2008, 13 Con Ed supervisors and employees and three Con Ed contractors have been convicted.

The government’s case is being prosecuted by the Office’s Public Integrity Section.  Assistant United States Attorneys Paul Tuchmann and Claire S. Kedeshian are in charge of the prosecution.

The Defendant:

RODOLFO QUIAMBAO

Age:  73

Residence: Queens, New York

Statement by The Bronx Democratic Party on the Reunification of the Senate Democrats

Today, Senate Democrats have reached a deal to reunify in order to take control of the Senate Chamber. The fact of the matter is that Senator Jeff Klein has always been a dedicated partner in passing progressive legislation in Albany and in bringing needed resources to the Bronx. 

This move further solidifies his dedication to the Democratic Party and to doing what is best for the communities we serve. As such, we're happy that one our very own Bronx Legislators will remain in Senate leadership as Deputy Democratic Leader. 

We thank Governor Cuomo and the Senate Democrats for making this happen. Now, more than ever, it's necessary for us as a Party to have a united front as we head into the mid-term congressional elections. More importantly, now that the leaders of the Senate Democrats have agreed to unify, the rest of us have to follow suit and also unify behind them - all of them - heading into the upcoming New York State Democratic primaries. 

If we demanded that they come together for the sake of the Party, then we must also come together to support them for the sake of the Party.

DE BLASIO ADMINISTRATION LAUNCHES NYC NATIONAL SERVICE SUPPORT CENTER

New York Mets and the NYC National Service Leadership Council hosted “National Service Night” at Citi Field to recognize impact of service year members in NYC

  Today, NYC Service announced the launch of the NYC National Service Support Center, which provides training, technical assistance, capacity building resources, and consultations to nearly 40 service year programs across the City. The National Service Support Center is also working with the NYC National Service Leadership Council to support the goals of the NYC National Service Growth (+Sustainability) Plan. The plan aims to double the number of service year members in NYC from 4,000 to 8,000, serving one million New Yorkers by 2020.  

This announcement comes as communities across the country celebrated the Corporation for National and Community Service’s (CNCS) National Service Recognition Day. Yesterday, NYC Service and the NYC National Service Leadership Council partnered with the New York Mets to host a “National Service Night” at Citi Field to celebrate the work of over 7,000 AmeriCorps and Senior Corps members in NYC.

 “Yesterday we celebrated the thousands of NYC AmeriCorps and Senior Corps members across the five boroughs who dedicate their time to serving others,” said Mayor Bill de Blasio. “Their contributions are helping us work towards a stronger, more sustainable, and more equitable New York City and I hope more will join their ranks.”

“NYC Service is thrilled to partner with the Mets and formally recognize the thousands of AmeriCorps and Senior Members in our City who deliver measurable change on critical priorities like education, economic opportunity, health, and the environment,” said NYC Chief Service Officer Paula Gavin. “One year after announcing our plan to double the number of service year members in NYC by 2020, we are excited to launch the NYC National Service Support Center to sustain and expand the impact of service year programs in our City and remain committed to this effort. I want to thank the New York Mets for celebrating with us yesterday and the NYC National Service Leadership Council for their ongoing partnership to strengthen national service in NYC.”

“The Mets are honored to participate in National Service Recognition Night,” said New York Mets COO Jeff Wilpon. “We’ve partnered with the NYC Service Leadership Council to help recognize and reward over 7,000 AmeriCorps and Senior Corps members for their service to our great city. Tonight also provides a chance for others to learn about national service programming opportunities available in New York.”

The Bronx Democratic Party - Join Governor Cuomo as he Endorses Assemblyman Luis Sepulveda for New York State Senate

Leader Of “Bmb” Street Gang Sentenced To 150 Months In Prison On Racketeering Charges

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that NICO BURRELL, a/k/a “Zico Nico,” a leader of a violent street gang in the Bronx called the “Big Money Bosses” (“BMB”) was sentenced yesterday to 150 months in prison on racketeering charges.  BURRELL was sentenced by United States District Judge Alison J. Nathan.

U.S. Attorney Geoffrey S. Berman said: “Burrell played a leadership role in the violent BMB street gang, and himself participated in the gang’s violence and drug dealing.  This violence included a shooting in February 2009 in which Burrell shot a rival gang member and an innocent bystander.  In addition, Burrell was responsible for BMB’s extensive distribution of oxycodone.  Yesterday’s sentence serves as a reminder that, together with our law enforcement partners, we will continue to aggressively prosecute all those who engage in these senseless acts of violence and drug dealing in our communities.”

According to the Indictment and other documents filed in the case, as well as statements made during the public proceedings in this case:

BMB is a subset of the “Young Bosses,” or “YBz” street gang, which operates throughout New York City.  Between 2007 and 2016, members and associates of BMB committed numerous acts of violence against rival gang members in the Bronx—including murders, attempted murders, and armed robberies—and sold crack cocaine, marijuana, and oxycodone.   

BURRELL was a leader of BMB.  On February 11, 2009, he attempted to murder a rival gang member by shooting him in the back.  One of BURRELL’s bullets also struck a woman waiting at a bus stop.  Both victims survived.  BURRELL was also responsible for the distribution of significant quantities of oxycodone by BMB.

BURRELL, 25, was arrested in this case as a result of a multi-year investigation by the New York City Police Department’s Bronx Gang Squad (the “Bronx Gang Squad”), the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Violent Gang Unit (“HSI”), the New York Field Division of the Drug Enforcement Administration (“DEA”), and the Joint Firearms Task Force of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) into gang violence in the Northern Bronx.  On April 27, 2016, Indictment 15 Cr. 95 (AJN) was unsealed, charging 63 members and associates of BMB with racketeering conspiracy, narcotics conspiracy, narcotics distribution, and firearms charges.  One defendant remains in the case, scheduled for trial in May 2018.

Mr. Berman praised the outstanding work of NYPD’s Bronx Gang Squad, HSI, DEA, and ATF.  He also thanked the Bronx County District Attorney’s Office, the Department of Investigation, NYCHA Inspector General’s Office, and the New York State Department of Parole for their ongoing support in this investigation.

Statement from Cynthia Nixon on IDC/GOP and Cuomo

  ANDREW CUOMO THE REPUBLICAN

"Look at the way we've managed this state, we've managed it in a way that any Republican would be proud." -- Andrew M. Cuomo [NY State of Politics, 10/1/14]

POLITICS

 

Cuomo Has Routinely Worked to Empower Republicans in New York, While Actively Assailing Democrats 

Cuomo Supported A Republican State Senate 

Cuomo “Actively Encouraged” A Group of Democratic State Senators To Caucus With Republicans to Give Them the Majority. Cuomo was “deeply involved” in the formation of the Independent Democratic Caucus (IDC), a group that formed “almost precisely” at the beginning of his first term, and has caucused with Republicans since 2012, preventing Democrats from controlling the chamber in spite of their numerical majority. [Politico, 9/2/14; New York Times, 8/9/17; New York Times, 11/15/17; Politico, 12/2/16]

 

Cuomo Refused To Call Two Special Elections, Allowing "GOP [To Keep] Control In NY Budget Talks." Democrats “urged Cuomo to quickly call the elections to give their party a chance at regaining control of the Legislature's upper chamber before the state decides on a spending plan that will exceed $160 billion." Cuomo refused those calls, which meant "Republicans will maintain control of the Senate during state budget negotiations... If Democrats take both open seats, there would be a numerical majority of elected Democrats in the chamber." [Democrat & Chronicle, 1/22/18]

 

Cuomo Led “Backroom Deal” to “Bolster Power” of the GOP Senate Majority By Approving Its Partisan Redistricting Maps. In what observers called a “total cave,” a “huge flip” and and a “horrible process,” Cuomo made a deal to approve election lines drawn by the Republican senate majority that “government watchdog groups say are gerrymandered to protect incumbents and that some minorities say are unfair to black and Latino New Yorkers.” [New York Times, 3/15/12; Associated Press, 3/15/12]

 

The GOP-Controlled Senate Has “Prevented [Cuomo] From Facing The Politically Precarious Choice Of Vetoing Or Signing More Liberal Legislation” [NY Times, 8/9/17]

• The Republican-IDC Senate Prevented The DREAM Act From Passing On Several Occasions. In 2017, Assembly Democrats passed the Dream Act “for the sixth year in a row. But it has stalled in the Senate, which is controlled by Republicans in a coalition with the Independent Democratic Conference.” [Daily News, 4/10/17; New York Times, 3/24/14; Politico, 4/15/17]
• The IDC Has Blocked The Passage Of Abortion Protections. The president of Naral Pro-Choice New York stated, “The IDC has failed to use its power to move progressive legislation” and faulted the coalition for not pushing to pass the Women’s Equality Act, which would have codified federal abortion protections into state law. [New York Times, 3/24/14]

 

Cuomo Has Actively Fought Against Democrats Winning Elections

 

Cuomo Often Aids Republicans In Races Against Democrats. In 2016, Cuomo declined to endorse two Democrats in “competitive” races with Republicans, including a Buffalo Democrat involved in a competitive race for an open state Senate seat that “would [have given] the GOP absolute control of the chamber”; both lost. In 2015, Cuomo endorsed Republican Joanie Mahoney for Onondaga County Executive. The same year he declined to endorse a Hudson Valley Democrat in a “hotly contested” race that could “determine if Republicans retain their tenuous control of the state Senate.” In 2012, Cuomo refused to assist Democrat Cecilia Tkaczyc win a competitive Senate district, and even remained quiet while her opponent used his image in campaign materials to bolster his case against the Democrat.  [Politico, 12/2/16; New York Times, 10/9/14; Syracuse Post-Standard, 10/28/15; Daily News 11/6/16; City & State, 10/11/16; Times Herald-Record, 10/29/16; Times Union, 11/4/12]

 

Cuomo Boasted To Republicans About How Little He Campaigned For A Democratic State Senate & Never Headlined A Fundraiser For Democratic Senators In His First 6 Years In Office. The New York Times reported that during his first six years in office, Cuomo “never headlined a fund-raiser for the campaign committee for the Senate Democrats.” In 2017, Cuomo told Senate Republicans “he could have done a lot more to help his own party gain control of the chamber [in 2016], but didn’t,” and even pointed to how little of his $19 million war chest was spent in the effort. The New York Times described Cuomo’s campaigning for Democrats in 2014 as “scant.” [New York State Of Politics, 1/17/17; New Republic, 7/17/17; New York Times, 10/24/16]

 

...And His Top Staff Positions are Loaded with GOP Operatives

 

GOP Operatives Are Among His Top Advisors & Have Held Positions Like Chief of Staff, Deputy Chief of Staff, Budget Director, & Senior Advisor. In 2017, Cuomo hired Maria Comella, a top aide to Chris Christie and other Republicans, to be his chief of staff responsible for “helping to formulate the governor’s 2017 agenda.” Cuomo has also hired former top aides for the Republican state Senate including Robert Mujica as his budget director and Kelly Cummings as deputy chief of staff and senior advisor. Cuomo has also hired the national Republican political consultant Susan Del Percio to be a taxpayer-funded special advisor in his administration. In late 2016, he also brought in longtime aide to Gov. Pataki, Scott Sandman. [New York Times,4/25/17; New York Times, 3/11/14; Daily News, 12/12/16, Cuomo Press Release, Cuomo Press Release, Daily News 1/12/15]

 

 

Cuomo’s Embrace Of Conservatives Has Alienated Many New York Progressives

 

Cuomo Has Teamed With Controversial Republicans & Protected Them (Even Trump)...

 

2017: Cuomo Gushed About Republican Nassau County Executive Ed Mangano While He Was “Under Indictment On Federal Corruption Charges,” Praising Him As A “Great County [Executive].” [Daily News, 9/11/17]

 

Following Trump’s Election, Cuomo Went “Out Of His Way To Avoid” Criticizing Or Discussing Trump. [New York Times, 7/27/17]

 

Cuomo Forged Political Pact With Chris Christie, Protecting Him on Bridgegate, as Christie Dismissed Cuomo’s GOP Opponent as a “Lost Cause.” While Christie’s political career effectively ended over a traffic scandal that sent two aides to prison, Cuomo (who oversaw the George Washington Bridge with Christie) publicly backed Christie throughout the matter, saying, “I’m sure it is as Governor Christie says it is.” The New York Times reported that Cuomo “carefully avoided criticizing Mr. Christie” over the bridge scandal. Meanwhile Christie, the head of the Republican Governors Association during Cuomo’s reelection, dismissed Cuomo’s GOP opponent as a “lost cause” and refused to send money to his campaign. [Star-Ledger, 12/2/13,New York Times, 1/14/14]

 

The pair also ganged up to undermine the Obama White House’s plan to contain the Ebola virus, unveiling their own alternative plan in an attempt to nab headlines. According to reports, the Cuomo-Christie plan was criticized by federal officials as “not sensible” and bad for New Yorkers’ health. The plan was also seen as upstaging and blind-siding New York City’s Democratic administration. [New Yorker, 10/28/14; New York Post, 10/26/14; Daily News, 10/25/14]

 

At the Same Time, He Routinely Personally Attacks Democrats…

 

Cuomo Mocked Democratic Attorney General Eric Schneiderman, Claiming He Appeared To Wear Eyeliner, A Result Of His Glaucoma Medication. [New York Times, 1/16/14]

 

Cuomo Mocked Democratic Comptroller DiNapoli’s Courage By Calling Him “Chipmunk Balls.” [New York Post, 8/15/11]

 

Wall Street Journal Headline: “Gov. Andrew Cuomo Answers Criticism With Personal Attacks.” The Wall Street Journal reported that Cuomo had developed a “reputation for…searing personal attacks” that were “unusually personal.” [Wall Street Journal, 8/15/16]

 

Facing Criticism Of His Homelessness Policies, Cuomo Lashed Out At A Democratic Assemblyman By Attacking The Lawmaker’s Father. [Wall Street Journal, 8/15/16]

 

…Leading Progressives to Revolt Against Him…

 

In The 2014 Democratic Primary, Cuomo Performed “Far Below Normal” Against A Progressive Candidate “With Little Electoral Experience [Or] Campaign Funds.” Cuomo’s primary performance suggested voters who knew him best “[had] major reservations.” He won just under 63 percent of the vote, winning only half of his state’s 62 counties. [FiveThirtyEight, 9/10/14; Politico, 11/19/14, Politico, 9/10/14]

 

New York Times: Democrats Supported Cuomo’s Primary Opponent Because On “Nuts-and-Bolts Issues Like Budgets And Taxes [He] Has Leaned More Toward The Right” And They Were Frustrated By His “Carefully Calibrated Way Of Governing” [New York Times, 9/10/14]

 

Politico Headline: “Cuomo Drew Less Support Than Any Governor In The U.S.” According to Politico, in the 2014 general election, Cuomo won “with the support of a smaller percentage of his state’s residents than any other governor in the country. [Politico, 11/19/14]

 

New York Times: “Democrats Have Begun A Season Of Open Dissent” Against Cuomo.” [New York Times, 7/1/15]

 

POLICY

 

 “It’s very clear he’s governing as a center-right moderate Republican”  [Politico, 7/1/11]

 

Cuomo Budgets Have Cut Services, Lowered Taxes For The Rich & Reduced Workers’ Benefits

 

Cuomo “Drastically [Cut] Funds To Schools And Communities – Cuts That Were Far Deeper Than Needed To Balance The Budget.” [New York Times, Column, 5/31/11]

 

New York Times Headline: “Despite Protests, Cuomo Says He Will Not Extend A Tax Surcharge On Top Earners.” [New York Times, 10/17/11]

 

New York Times Headline: “Cuomo Vows Offensive Against Labor Unions.” Before taking office, Cuomo planned to “transform the state’s weak business lobby into a more formidable ally” and then went on to spend millions to support “his strategy to isolate, destabilize, and ultimately defeat” labor unions and pass a business-friendly budget. [New York Times, 10/24/10; New York Post,11/23/10]

 

Cuomo Pushed To “Broadly Limit Retirement Benefits” And Restrict Pension Benefits. According to the New York Times, “Cuomo’s proposal would still cause significant changes to worker retirement plans” and “benefits for law enforcement officers and firefighters…would also be scaled back.” [New York Times, 6/8/11]

 

Cuomo Pursued Tax Cap The New York Times Called “A Cheap Political Tool…That Would Only Further Devastate Communities Around The State.” [New York Times, Editorial, 5/25/11]

 

Republicans Have Praised Cuomo’s Conservative Policies

 

Former Republican U.S. Senator Al D’Amato: “I think Gov. Cuomo has done a good job…He said he wouldn’t raise taxes on millionaires. I like that.” [New York Post, 11/26/17]

 

Republican Lee Zeldin Celebrated That Cuomo’s Tax And Budget Cuts “Far Exceeded Expectations.” [New York Times, 10/14/12]

 “BUT WHAT ABOUT...” 

Cuomo Claims He Has Major Progressive Achievements...

 

Wall Street Journal: In 2016, Cuomo Pursued “Several High-Profile Proposals...That Months Ago He Opposed Or Dismissed As Unworkable.” For instance, Cuomo claimed victory for pushing a paid family leave bill that he previously refused to pursue by claiming the legislature lacked the “appetite” to pass. [Wall Street Journal, 2/28/16]

 

…But If You Read The Fine Print, They’re Often Not As Advertised

 

Cuomo’s “Free” College Tuition Policy “[Left] A Lot Of People Out,” Was “Not For Poor Families,” And Did Not Cover The Expenses That Were “Keeping Many Poor Students Out Of College.” [New York Times, Editorial,4/14/17; New York Times, Column, 4/14/17]

 

Cuomo’s Minimum Wage Increase Was The “Result Of Several Compromises,” Did Not Apply To The Entire State, And Would Not Reach $15 In Some Areas For Six Years. And Cuomo only pursued his watered-down minimum wage policy months after dismissing “a proposal for a $13 minimum wage in New York City as a ‘non-starter.” [North Country Public Radio, 4/4/16;Wall Street Journal, 2/28/16]

 

While Cuomo Celebrated Passing “Raise The Age” Policy, His Allies Blocked It For Years, And Democrats Said The Reform Was Watered-Down And Did Not Go “Far Enough.” [Daily News, Column, 3/29/17; New York Times, 4/10/17]

 

Cuomo Made “Bold Statements” About Curbing Negative Effects Of Hydro-Fracking, Then Invested Millions In Developing Fracking Infrastructure. After he refused to weigh in on the controversial gas-drilling procedure, the state finally announced a ban after tremendous political pressure (and a surprisingly close 2014 primary). But the Center for Public Integrity reported that Cuomo’s fracking “ban is less than absolute” and that New York has started to process massive amounts of fracked natural gas. Of Cuomo’s move to claim victory on a fracking ban only to proceed with a massive gas processing program, a Cornell University engineer said, “I’m using the polite word ‘irony...I could also use the impolite word ‘hypocrisy.’” [Center for Public Integrity, 12/11/17]

 

One Thing Is Consistent With His “Progressive” Policies: They Are “Engineered” For Headlines

 

Empire Center For Public Policy: Cuomo’s Free College Tuition Plan Was “Hastily Reverse-Engineered” To “Get The Headline He Wanted.” [New York Times, Editorial, 4/14/17]

 

City & State Headline: “Critics Charge Cuomo With Rushing Gun Bill To Beat Obama.” Editorials pounced on Cuomo for bending procedural rules and bypassing hearings to quickly pass a gun control bill so he could get one done before President Obama, and trumpet himself as the national leader on the issue -- but the hastily drafted bill contained several “basic flaws” that Cuomo acknowledged needed to be fixed. [City & State, 1/16/13; Daily News, Opinion, 1/2313]

 

Cuomo Supported Gay Marriage When Wealthy GOP Donors In His State Were Pushing the Issue, And Then Used The Policy As A Platform For National Publicity. [New York Times, 5/13/11; New York Times, 10/27/11]

THE BOTTOM LINE? 

Remember His Own Words...

 

"Look at the way we've managed this state, we've managed it in a way that any Republican would be proud." -- Andrew M. Cuomo [NY State of Politics, 10/1/14]

NEWS FROM CONGRESSMAN ELIOT ENGEL

Congressman Engel Reintroduces the Gestational Diabetes Act

  Congressman Eliot L. Engel, a member of the House Congressional Diabetes Caucus, has reintroduced H.R. 5423, the Gestational Diabetes (GEDI) Act, a bill that aims to reduce incidences of gestational diabetes and the development of type 2 diabetes in women and children. This bill is supported by the American Diabetes Association and the American College of Obstetricians and Gynecologists.

Gestational diabetes occurs in pregnant women who have never had diabetes, but have high blood glucose (sugar) levels during their pregnancies and cannot make and use the insulin they need. Gestational diabetes can lead to health problems for affected babies, and increases the risk of developing type 2 diabetes for both mother and child.

“Congress can and should do more to address gestational diabetes, which affects as many as 9.2% of all pregnancies in the U.S.,”said Congressman Engel. “This bill will help us better understand gestational diabetes and, in turn, allow us to better treat this condition and improve health outcomes for both moms and babies.”

Congressman Engel’s bill seeks to enhance awareness of gestational diabetes and improve outcomes for both mothers and their babies by:

• Developing a multi-site gestational diabetes research project with the CDC to enhance surveillance and public health research on gestational diabetes;
• Providing grants to reduce the incidence of gestational diabetes; and
• Expanding research focused on investigating gestational diabetes and available treatments and therapies.    

“On behalf of the 114 million Americans with diabetes or prediabetes, I am grateful to Congressman Engel’s leadership in introducing the Gestational Diabetes Act (H.R. 5423). Gestational diabetes impacts more than nine percent of pregnancies in the Unites States, and yet we are not doing enough to address this issue. By harnessing CDC's expertise in research and translational science, we can better work towards reducing the number of women with gestational diabetes and the number of women and children who develop type 2 diabetes later in life, creating a healthier future,” said LaShawn McIver, MD, MPH, Senior Vice President, Government Affairs & Advocacy, American Diabetes Association.

“Gestational diabetes mellitus (GDM), one of the most common clinical issues facing our pregnant patients, and can have serious consequences for both mother and baby. ACOG is thrilled to support the GEDI Act, which would provide crucial funding for both public health research and community education to ensure women affected by this condition are getting the care and follow up that they need. Thank you, Representative Engel, for shedding light on this important public health issue,” said Haywood L. Brown, M.D., President of the American College of Obstetricians and Gynecologists.

The GEDI Act was reintroduced with four original cosponsors: Congressman Raúl M. Grijalva (D-AZ), Congresswoman Betty McCollum (D-MN), Congresswoman Lucille Roybal-Allard (D-CA) and Congressman Mark Pocan (D-WI).

Engel Statement on the 50^th Anniversary of Dr. Martin Luther King Jr.’s Assassination

  “Fifty years ago today we lost one of the most remarkable figures in our nation’s history.

“On April 4th, 1968, Dr. Martin Luther King Jr. was assassinated in Memphis, Tennessee. Dr. King was in Memphis to lead a march protesting the working conditions and low wages of the city’s sanitation workers, and in his final speech, he spoke of how racial and economic injustice are inextricably linked. His words were prescient then and remain vitally important today.

“It’s important for us to reflect on Dr. King’s legacy and rededicate ourselves to the fight against inequality. While the Civil Rights Movement made great strides, our country has not overcome many of the injustices that Dr. King witnessed. In Congress, I remain committed to ending these injustices. I am fighting for true equality for all; for equal pay and fair treatment at work, expanded voting rights, educational equity, criminal justice reform, freedom from gun violence in our schools and on our streets, and health care for all Americans.

“Dr. King argued that only by sticking together in a determined way, can we make America what it ought to be. I am inspired by the young people of today who are following in Dr. King’s footsteps by launching their own movements for equality and justice. Together we can move our country forward and live up to the ideals of equality that Dr. King inspired.”

Two Co-Founders Of Cryptocurrency Company Charged In Manhattan Federal Court With Scheme To Defraud Investors

  Robert Khuzami, the Deputy 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 arrests of, and unsealing of a criminal complaint charging, SOHRAB SHARMA, a/k/a “Sam Sharma,” and ROBERT FARKAS, a/k/a “Bob,” two co-founders of a startup company called Centra Tech, Inc. (“Centra Tech”), with conspiring to commit, and the commission of, securities and wire fraud in connection with a scheme to induce victims to invest more than $25 million in investments through material misrepresentations and omissions.

SHARMA and FARKAS were arrested Sunday evening in the Southern District of Florida and were presented yesterday in that District.

Manhattan Deputy U.S. Attorney Robert Khuzami said:  “As alleged, Sohrab Sharma and Robert Farkas took advantage of widespread investor interest in the rapidly growing cryptocurrrency market to raise millions of dollars in investments in a startup company based on a false sales pitch.  While the cryptocurrency industry may be a new frontier, it is subject to the same laws against investor fraud as any other type of company.” 

FBI Assistant Director William F. Sweeney Jr. said:  “As alleged, Sharma and Farkas created a false sense of security for investors of Centra Tech ICO by misrepresenting their product and lying about relationships they had with credible financial institutions. While they’re not backed by physical commodities, trading in virtual currencies is perfectly legal. But, as today’s charges prove, investors must exercise the same degree of due diligence when making an investment in an ICO as they would with any traditional security.” 

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

From July 2017 through March 2018, SHARMA and FARKAS, two co-founders of Centra Tech, began soliciting investors to purchase Centra Tech tokens, a bespoke cryptocurrency that functions as an unregistered security in Centra Tech, through a so-called “initial coin offering” or “ICO.”  As part of this effort, SHARMA and FARKAS, in oral and written offering materials that were disseminated via the internet, represented that Centra Tech had developed a debit card, the “Centra Card,” that allowed users to load the Centra Card with the cryptocurrency of their choice and then use the Centra Card to make purchases at any establishment that accepts Visa or Mastercard.  As part of their sales pitch, SHARMA and FARKAS represented that Centra Tech had formed a partnership with Bancorp to have Bancorp issue Centra Cards licensed by Visa or Mastercard, and that Centra Tech held the requisite financial servicing licenses in 38 states, among other claims.  Based in part on these claims, victims provided more than $25 million in investments for the purchase of Centra Tech tokens. 

The claims that SHARMA and FARKAS made to help secure these investments, however, were false.  In fact, Centra Tech had no relationships with Bancorp, Visa, or Mastercard, and at least seven of those 38 states have no record of any such licenses being issued to Centra Tech. 

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

SHARMA, 26, and FARKAS, 31, are residents of Florida.  SHARMA and FARKAS are each charged in a four-count criminal complaint with one count of conspiracy to commit securities fraud, which carries a maximum potential sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of 20 years in prison; one count of securities fraud, which carries a maximum potential sentence of 20 years in prison; and one count of wire fraud, which carries a maximum potential 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 defendants will be determined by the judge.          

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

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 herein constitute only allegations, and every fact described should be treated as an allegation.