100 PERCENT

100 PERCENT

By Robert Press

Parkchester 87th A.D. Debate

  Before I begin about the debate, I must relay what Ms. Jill Furillo the head of the NY Nurses Union said to me at an announcement that Nurse Karines Reyes was running for the 87th Assembly seat. Ms. Furillo told me of the problems that nurses are having in hospitals as to staffing, work loads, patient care, and other items related to nursing in hospitals. She then told me that Karines Reyes will go to Albany to push the agenda of the NY State Nurses Union. There were no other topics mentioned, just the agenda of the NY State Nurses Union to get more nurses hired, reducing work loads, and getting a fair contract from the hospitals. The Nurses union contract expires in December of this year. 

  This was evident as the small crowd who came to view the Parkchester Times 87th A.D. debate was mostly either nurses or people who were on the Reyes slate as they put on her t-shirts when they arrived. This was also evident by the questions from the audience with one of the first questions having to do with Montefiore Hospital where Nurse Reyes works. Then more questions about the Healthcare industry, and I noticed that candidate Reyes was not talking to the audience every time a healthcare question came up like candidates John Perez or Farah Despeignes, but instead Ms. Reyes was looking down as if she was reading her answer giving the impression that she knew what questions were going to be asked when it came to certain questions that would be handed in by her supporters. 

  Sergeant John Perez answered each question no matter what the topic was, and really took command of the debate when he said to a question on public safety that he had warned certain trouble makers in his neighborhood that he had better be next or he would come after thoise troublemakers after a young lady was shot and killed. He also stated that since then there has been much less trouble in his area of the district. 

  Farah Despeignes spoke mostly of how good her experience on a CEC was, but could not describe what her duties were. When a question of Mayoral Control of the public schools came up she said she was against Mayoral Control however as the other two candidates did. 

 What may have been the downfall for candidate Reyes came in what appeared to be a question from one of her supporters aimed at Sergeant John Perez who was in in Army uniform. The question asked why Army recruiting are needed Ms. Reyes appeared to say that the Army is not needed. Sergeant Perez said as a former recruiter he found the educational weaknesses of the public school system. 

  When ever it came to a question that was not about the healthcare industry Ms. Reyes seemed puzzled as she did not have her answer written down. To a question of education Ms. Reyes said that education is not a part of the Assembly, while both her opponents contradicted her saying that education is an important part of the Assembly. Ms. Reyes later in another question said that her children go to a charter school. 

  The hands down winner of this debate was Sergeant John Perez who answered all the questions as he was very knowledgeable on all different subjects that were asked. Ms. Reyes was a one topic candidate that being the nursing and healthcare area, and Ms. Despeignes also was a one topic candidate continuously bringing up that she was a member of CEC 8. 

  I had moderated the very successful Parkchester Times debate for the 14th Congressional District, and was told by more than one supporter of Ms. Reyes that they did not want me to be the moderator of this debate. One said to one person, was that because I found numerous instances of fraud on the Karines Reyes petition. It had to be that I testified in court that I had seen the Reyes petition on line one week before the first legal day to collect signatures. That I had taken a photo of a man collecting undated signatures and the page on June 15th, only to find the page given in with the date of June 25th, and not signed by a man, but by a woman. I then said even if Ms. Reyes was to win the U.S. Attorney's office would take over due to that and all the other fraud that was proven in court. 

This column is the opinion of the writer and not necessary that of this newspaper. If you have any comments about this column you can e-mail the writer at 100percentbronxnews@gmail.com . You may also want to check the writers blog at www.100percentbronx.blogspot.com . 

WHAT YOU NEED TO KNOW - WHAT IS GOING ON AT THE NEW YORK STATE BOARD OF ELECTIONS?

THIS IS WHAT WE POSTED ON AUGUST 26th 2018

AUG-24-18 07:26 PM FRIENDS OF KARINES REYES Page 1

NYS BOARD OF ELECTIONS FINANCIAL DISCLOSURE REPORT

Filer ID: A22224 2018 32 DAY PRE PRIMARY (A) SCHEDULE: F EXPENDITURES/PAYMENTS

07/14/18 AMANDA FARIAS 769 ARNOW AVENUE BRONX NY 10467 CHK1004 $11.00 REIMB AUG-13-18 03:24 PM

07/14/18 H & H HARDWARE 1171 CASTLE HILL AVENUE BRONX NY 10462 1004R $0.00 R-DET MEMO: $11 AUG-13-18 03:24 PM

THIS IS WHAT WE FOUND TODAY SEPTEMBER 1, 2018

SEP-01-18 07:49 PM FRIENDS OF KARINES REYES Page 1

NYS BOARD OF ELECTIONS FINANCIAL DISCLOSURE REPORT

Filer ID: A22224 2018 32 DAY PRE PRIMARY (A) SCHEDULE: F EXPENDITURES/PAYMENTS

07/14/18  AMANDA FARIAS  1500 THIERIOT AVENUE, APT. A5 BRONX  NY 10460

CHK1004  $11.00 REIMB              AUG-27-18 12:37 PM

WE ALSO FOUND THIS WHEN WE WENT TO THE ORIGINAL PAGE AT THE NEW YORK STATE BOARD OF ELECTIONS FOR KARINES REYES'S FINANCIAL STATEMENT.

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Vendors, Consultants, And School Administrator Charged In Wide-Ranging Scheme To Defraud Federal “E Rate” Subsidy Program

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney, Assistant Director in Charge, Federal Bureau of Investigation (the “FBI”), David L. Hunt, Inspector General of the Federal Communications Commission (the “FCC-OIG”), and Thomas P. Zugibe, the District Attorney for Rockland County, announced today the return of an Indictment charging SIMON GOLDBRENER, a/k/a “Simon Goldbrenner,” a/k/a “Shimon Goldbrenner,” PERETZ KLEIN, SUSAN KLEIN, a/k/a “Suri Klein,” BEN KLEIN, a/k/a “Benzion Klein,” a/k/a “Benzi Klein,” MOSHE SCHWARTZ, SHOLEM STEINBERG, and ARON MELBER, a/k/a “Aharon Melber,” with conspiracy to commit wire fraud and wire fraud charges in connection with the federal program known as “E‑rate,” which provides subsidies for affordable telecommunications equipment and related services to qualified schools This case has been assigned to United States District Judge Kenneth M. Karas. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, for years, these defendants stole money from the E‑rate program, billing the E-rate program for equipment and services which were not in fact provided. The defendants allegedly fraudulently obtained millions of dollars in E rate funds to which they were not entitled, and which should lawfully have been spent to help provide access to technology to educate underprivileged children. This indictment is important not only because fraudsters should be held to account for their crimes, but also because the next generation of students should have access to telecommunication services, internet access, and related equipment, irrespective of their means and in spite of the fact that people like the defendants seek to line their own pockets at the expense of underprivileged children.”

FBI Assistant Director in Charge William F. Sweeney said:  “Schools have to fight for every dollar these days to supply their students with the high-tech, expensive equipment and technology they need in this day and age to succeed in life. The suspects in this investigation allegedly used funding from a program designed to give underprivileged schools internet access to pad their own bank accounts.  To add insult to injury, school officials, who see the day-to-day struggle to even find money for pencils and paper, were allegedly involved in the scheme.  The FBI and our law enforcement partners will hold these criminals accountable, and stop others from defrauding not only the government and tax payers, but students who depend on these programs to get a better education.”

Rockland County District Attorney Thomas P. Zugibe said:  “These individuals concocted a scheme that not only defrauded taxpayers, but also deprived local students of access to affordable technology equipment and Internet service. In short, the defendants are accused of shamelessly stealing millions of federal dollars earmarked to broaden young minds. The Rockland County District Attorney's Office will continue to work collaboratively with the U.S. Attorney and FBI to root out fraud and abuse - especially misconduct that impacts children. Offenders must be dealt with swiftly to prevent further fraud of this magnitude from occurring.”

According to the allegations made in the Indictment[1]:

The E‑rate distributes funds to schools and libraries mostly serving economically disadvantaged children, so that those institutions can afford needed telecommunication services, internet access, and related equipment. Over 30,000 applications from schools and libraries seeking funds to serve economically disadvantaged children were received each year during the relevant time period; every year, requests for E‑rate funds have exceeded funds available. In order to obtain those funds, educational institutions certify that they are purchasing equipment and services from a private vendor; if approved, the program defrays the cost by up to 90%. The educational institution is supposed to enter into an open bidding process in order to select a vendor, and the educational institution and vendor submit a series of certifications that they comply with a number of requirements of the E‑rate program. A school applying for E‑rate funds may employ a consultant, but that consultant must be independent of the vendors competing to sell E‑rate funded equipment and services.

PERETZ KLEIN, SUSAN KLEIN, BEN KLEIN, and SHOLEM STEINBERG (collectively, the “Vendor Defendants”) held themselves out as vendors to schools participating in the E‑rate program. Corporations controlled by the Vendor Defendants requested over $35 million in E‑rate funds, and received over $14 million in E‑rate funds, from in or about 2010 to in or about 2016.

SIMON GOLDBRENER and MOSHE SCHWARTZ (collectively, the “Consultant Defendants”) held themselves out as consultants who assisted educational institutions that desired to participate in the E rate program. The Consultant Defendants, and individuals acting at their direction, completed and filed E‑rate documents that resulted in the payment of millions of dollars in E‑rate funds to the Vendor Defendants.

ARON MELBER is an official at a private religious school in Rockland County, New York. MELBER and his school have participated in the E‑rate program with certain of the Vendor Defendants and Consultant Defendants, and filed certifications purporting to have obtained authorized E‑rate funded equipment and services from Vendor Defendants selected through a fair and open bidding process. From in or about 2009 through in or about 2015, MELBER’s school received over one million dollars in E‑rate funds.

From at least 2009 up to and including 2016, certain private religious schools, including MELBER’s school, sought and received E‑rate funds for the purpose of paying the Vendor Defendants for equipment and services that the schools, the Vendor Defendants, and the Consultant Defendants falsely claimed the Vendor Defendants had provided to the schools.

However, the schools never received millions of dollars’ worth of these items and services. In other cases, the schools, Vendor Defendants, and Consultant Defendants requested hundreds of thousands of dollars of sophisticated technology that served no real purpose for the student population. For example, from 2009 through 2015, one day care center that served toddlers from the ages of 2 through 4 requested over $700,000—nearly $500,000 of which was ultimately funded—for equipment and services—including video conferencing and distance learning, a “media master system,” sophisticated telecommunications systems supporting at least 23 lines, and high-speed internet—from companies controlled by PERETZ KLEIN and SUSAN KLEIN, using the Consultant Defendants as their consultants. In still other instances the schools received equipment and services that fulfilled the functions for which the schools had requested E‑rate funds (such as providing the school with internet access), but the schools, Vendor Defendants, and Consultant Defendants materially overbilled the E‑rate program for the items provided, in order to enrich themselves at the expense of the underprivileged children the program was designed to serve.

As alleged, the defendants also perverted the fair and open bidding process required by the E‑rate program. The Consultant Defendants—who held themselves out in filings as independent consultants working for the schools, but, in truth, worked with and for the Vendor Defendants—and the Vendor Defendants presented the schools with forms to sign or certify, awarding E‑rate funded contracts to the Vendor Defendants. As a result of false and misleading E‑rate filings, the Vendor Defendants received millions of dollars in E‑rate funds for equipment and services that the Vendor Defendants did not in fact provide and which the schools did not use, and the Consultant Defendants accepted payments totaling hundreds of thousands of dollars from the Vendor Defendants, despite falsely presenting themselves as independent of the Vendor Defendants.

In return for their participation in the scheme to defraud the E‑rate program, certain schools and school officials received a variety of improper benefits from the Vendor Defendants, including: a percentage of the funds fraudulently obtained from E‑rate for equipment and services that were not in fact provided to the schools; free items paid for with E‑rate funds but not authorized by the program, such as cellphones for school employees’ personal use and alarm systems and security equipment (which the E‑rate program does not authorize) installed at the schools; and free services for which the E‑rate program authorizes partial reimbursement (such as internet access) but for which the Schools did not—contrary to their statements in filings—make any payment at all.

The defendants and the counts with which they are charged in the Superseding Indictment are set forth in the attached list.

Mr. Berman thanked the FBI, the FCC-OIG, and the Rockland County District Attorney’s Office for their outstanding work on the investigation. 

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.                                                                                                                                                                                                      United States v. Simon Goldbrener, et al. 

Defendant	Age	Residence	Charges and Maximum Penalties
Simon Goldbrener	55	Monsey, New York	Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (three counts): 20 years in prison per count
Peretz Klein	64	Spring Valley, New York	Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison
Susan Klein	57	Spring Valley, New York	Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison
Ben Klein	39	Monsey, New York	Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison
Moshe Schwartz	45	Monroe, New York	Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison
Sholem Steinberg	39	Monsey, New York	Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (two counts): 20 years in prison per count
Aron Melber	42	Monsey, New York	Conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (one count): 20 years in prison Wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (one count): 20 years in prison

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

A.G. Underwood Announces Arrest Of WWJ Construction, Inc. Owner For Failure To Pay Workers Over $29K In Wages

WWJ Construction & Owner Shing Tung Wong Repeatedly Failed To Pay at Least Five Employees Thousands of Dollars In Back Wages

Since 2011, NY AG Has Recovered Over $30 Million in Stolen Wages for 21,000 Workers

  Attorney General Barbara D. Underwood announced the arrest and arraignment of Shing Tung Wong, 63, of Queens, owner of WWJ Construction, Inc. for allegedly failing to pay five construction workers for hourly work. Wong and WWJ Construction are charged with collectively stealing over $29,000 from their employees by repeatedly lying to the workers about eventually receiving full compensation.

“To repeatedly promise employees their rightfully owed wages and then never follow through with payment is exploitative – and illegal,” said Attorney General Underwood. “Employees deserve fair compensation for their labor, and my office will continue to combat wage theft across New York.” 

Since 2011, the New York Attorney General's office has recovered over $30 million in stolen wages for 21,000 workers across New York.

The felony complaint and statements made during today’s arraignment reveal that between January 1, 2014 and June 22, 2017, Wong allegedly personally hired five workers and promised a specific rate of pay ranging from $130 to $160 per day for five to six days of work each week. Wong ran the day-to-day operations of his construction company and arranged for most employees to meet at a predetermined location in Queens, where he or other workers would drive them all to various construction projects in the New York region – including Brooklyn, Bronx, Queens, Long Island, and Westchester. Workers performed carpentry, demolition, renovations, and electrical work, primarily for residential homes.

After the first few weeks of a worker’s employment, Wong allegedly stopped making weekly wage payments to workers. When workers asked about their earned wages, Wong repeatedly promised that payment was imminent and asked them to continue to work based on this promise. Workers waited for full compensation week after week, but Wong only allegedly paid them sporadically or not at all. Workers continually asked Wong for their wages, and Wong would allegedly promise them that payment was coming when he received payment from the client. Eventually, workers quit after not receiving their earned and legally owed wages. Even after workers quit, they still attempted to contact Wong to demand owed wages – but Wong allegedly ignored their requests for payment.

The six-count felony complaint filed in Queens County charges both defendants, Wong and WWJ Construction, with three counts of Grand Larceny in the Third Degree, a Class D felony; two counts of Grand Larceny in the Fourth Degree, a Class E felony; and one count of Scheme to Defraud in the First Degree, a Class E Felony.

The charges are merely accusations and the defendants are presumed innocent unless and until they are proven guilty in a court of law. 

Comptroller Stringer Launches Public Hearings and Family Complaint Hotline as Lead Crisis Continues

Investigative hearings and hotline are part of Comptroller's ongoing investigation into City's handling of lead poisoning in children

  As part of his ongoing investigation into the City’s response to lead poisoning in children citywide, Comptroller Scott M. Stringer announced today the first in a series of borough-focused “We the People” public hearings as well as a family support hotline to get firsthand feedback from families affected by this crisis. The first hearing, which will be held in Harlem on Monday, September 17th, will allow families to let their voices be heard and will guide the Comptroller’s office investigation.

“Everyday the crisis at NYCHA worsens, but the City still has no real plan to overhaul the authority and protect the countless vulnerable children living in our City’s crumbling public housing. Meanwhile, thousands of children are testing positive for elevated lead in private housing – enough is enough,” said Comptroller Stringer. “We, the people, have had enough with hollow rhetoric. We, the people, have had enough with a second-class public housing system. It is time to give a voice to the families and children who are living this nightmare every day.”

Following changing data on the number of children with elevated levels of lead in NYCHA buildings, this past July, Comptroller Stringer launched an investigation into the citywide response to lead poisoning in both public and private housing. The information collected at the “We the People” hearings and through the lead hotline will provide additional guidance for the ongoing investigation.

WHAT

“We the People” Investigatory Public Hearing on the Ongoing Lead Crisis

WHEN
Monday, September 17, 2018
Doors open at 6:30 PM
Hearing starts at 7:00 PM

WHERE
Frederick Samuel Community Center
669 Lenox Avenue
Between West 143rd and 144th Streets
New York, NY 10030

HOTLINE
212-669-4088

Hotline will be active on Tuesday, September 3, 2018 at 9:00 AM

Future hearing information will be released at a later date.

EDITOR'S NOTE:

It is hard to believe that this situation has gone on for so long as it has. Where were the elected officials when complaints began to pour in years ago. 

This reporter went on several occasions with legislators who were bringing replacement stoves and refrigerators to NYCHA residents who were waiting over five years for said replacement appliances. 

At the first opportunity over a year ago, I asked Mayor de Blasio why is it that NYCHA residents are waiting over five years for replacement appliances? Mayor de Blasio did not answer me, he just said that it would take $18 Billion dollars  to bring NYCHA up to par. he added that he expected the state and federal governments to kick in $7.5 Billion each. One year later figure is now almost double, because of all the other problems that are being found due to the neglect of the city, and those elected officials who were elected to serve and protect the people.

87th Assembly District debate by the Parkchester Times Tuesday September 4th

Photo from Bronxtalk debate

  The Parkchester Times announces that it will be hosting a Democratic Party debate for the 87th Assembly District on  Tuesday September 4th at St. Helena's Church located at 2050 Benedict Avenue (off Olmstead Avenue). All three candidates Ms. Farah Despeignes, Sergeant John Perez, and Ms. Karines Reyes have confirmed their attendance to the Parkchester Times. Doors will open at 6 PM, with the debate starting at 6:30 PM, and the debate will run for one hour. After the debate people in the audience will be able to speak directly to the candidates. 

  The Parkchester Times held a very successful Democratic Party debate for the 14th Congressional in June to inform the voters of the Parkchester Times readership, and hopes to do the same with this debate for the 87th Assembly District.

The 87th Assembly District covers the communities of Parkchester, Castle Hill, West Farms, Van Nest, and Park Stranton areas of the Bronx. 

Real Estate Developer Charged In Manhattan Federal Court For Operating Years-Long Real Estate Investment Scheme In And Around New York City

  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 Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an Indictment in Manhattan federal court charging MICHAEL D’ALESSIO with wire fraud in connection with his years-long scheme to defraud investors in luxury real estate development projects in Manhattan, the Hamptons, Westchester, and elsewhere. D’ALESSIO was arrested this morning in New York, New York, and will be presented this afternoon before Magistrate Judge Barbara C. Moses in Manhattan federal court.  The case is assigned to U.S. District Judge Jessie M. Furman.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Michael D’Alessio, former president and CEO of a real estate development firm, allegedly sought investments to develop specific real estate projects. In reality, D’Alessio allegedly co-mingled investor funds and used them to pay his own debt, fund his own gambling, and pay personal expenses. Michael D’Alessio has lost his alleged gamble to swindle his investors, as he now faces significant time in federal prison.” 

Assistant Director-in-Charge Sweeney said: “Investors believed they would get a return on their money, so they put their faith in Mr. D’Alessio.  Instead of growing those investments, he allegedly used the money for his gambling problem and to pay off his debts.  Even though he attempted to use money from one project to pay monthly installments to investors in another project, investor funds were not used for their stated purpose. Now he will face justice, and the FBI New York will work tirelessly to get investors’ money back.”

According to the Indictment unsealed today in Manhattan federal court:[1]

A career real estate developer and general contractor, D’ALESSIO served as the president and Chief Executive Officer of a real estate investment and development firm specializing in the design, construction, and management of both residential and commercial real estate properties (“Company-1”). D’ALESSIO and Company-1 developed, and purported to develop, luxury residential real estate properties in Manhattan, the Hamptons, Westchester, and elsewhere. 

D’ALESSIO typically followed the same pattern in each real estate investment project:  he sought investments by offering for sale shares in a newly formed limited liability company (“LLC”) named after the location of the parcel of real estate to be developed and sold (the “Target Property”).  In exchange for a purchase of shares in the LLC, D’ALESSIO promised a guaranteed monthly interest payment and a share in the profits from the sale of the Target Property.  In soliciting investors, D’ALESSIO made numerous representations to potential investors, including that investor funds would be used only to develop the relevant Target Property and to cover related business expenses of the relevant LLC. 

In truth and in fact, and contrary to the representations that he made to investors, from at least in or about 2015 through in or about April 2018, D’ALESSIO misappropriated investor funds for his own use and benefit.  Upon receiving investor funds, D’ALESSIO channeled those funds through a series of bank accounts held in the name of shell companies owned and controlled by D’ALESSIO.  D’ALESSIO then used those investor funds for his own benefit, including to pay off debts, and to fund significant gambling and other personal expenses.  D’ALESSIO took additional steps to conceal his fraud, including deceiving investors regarding the progress of development on real estate projects and raising money from new investors to make monthly payments to investors in different projects in the manner of a Ponzi scheme. 

D’ALESSIO, 52, of New York, New York, is charged with committing wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the investigative work of the Federal Bureau of Investigation.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Amanda Kramer and Daniel G. Nessim are in charge of the prosecution.

The charge contained in the Indictment is 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 Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Four Individuals Charged In Widespread Scheme To Defraud Medicare And Other Heatlh Insurance Providers Through Fraudulent Medical Corporations

False Billing Resulting In Tens Of Millions Of Dollars In Losses

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney, Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Scott J. Lampert, 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”), and Thomas P. DiNapoli, the New York State Comptroller, announced the unsealing today of an indictment charging JAMES SPINA, JEFFREY SPINA, ANDREA GROSSMAN, and KIMBERLY SPINA with participating in a widespread health care fraud scheme through their fraudulent operation of Dolson Avenue Medical (“DAM” or the “Practice”), a multi-disciplinary medical clinic located in Middletown, New York.  The defendants were all arrested today, and presented in federal district court in White Plains.  This case has been assigned to U.S. District Court Judge Kenneth M. Karas.

Berman also today announced the guilty plea of CHARLES BAGLEY, a licensed medical doctor formerly affiliated with DAM and other businesses, to conspiracy to commit health care fraud, charged in a separate Information unsealed today. 

U.S. Attorney Geoffrey S. Berman said:  “As alleged, these four defendants purported to run a legitimate medical clinic that provides care and rehabilitation to patients.  Instead, the defendants allegedly put aside their medical and fiduciary obligations for greed, attempting to bilk insurance companies and federally-funded Medicare out of more than $80 million.  Thanks to the coordinated efforts of federal and state investigative agencies, the defendants will have to answer for their alleged crimes.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “Patients go to a doctor hoping they will help them get better.  The subjects in this investigation allegedly performed treatments patients didn’t need, double billed for procedures and up-coded. The FBI New York agents and our law enforcement partners uncovered tens of millions of dollars in losses.  This type of fraud eventually ends up costing all patients more money when they seek medical attention.  We will continue to work tirelessly to stop health care fraudsters hoping to make millions while the patients they should be treating continue to suffer.”

HHS-OIG Special Agent in Charge Scott J. Lampert said:  “This indictment should serve as a warning to any health care provider that dares to put personal profit ahead of proper patient care.  HHS-OIG, along with our law enforcement partners, will continue to aggressively pursue those who seek to undermine the federally funded health care programs intended for our most vulnerable Americans.”

New York State Comptroller Thomas P. DiNapoli said:  “The Spinas and their associates allegedly swindled tens of millions of dollars by fraudulently billing health insurers including the NYS Health Insurance Program and the State Insurance Fund.  An alleged theft of this magnitude is appalling when so many hard-working people experience rising health care costs.  Now, their alleged scams have been exposed, thanks to my partnership with U.S. Attorney Berman, the FBI, the U.S. Department of Health and Human Services Inspector General and the Orange County Sheriff's Office.”

According to the allegations in the Indictment unsealed today in White Plains federal court:[1]

From 2011 through September 2017, DAM was a registered medical service corporation in New York State that purported to provide a variety of pain management and rehabilitation services including physical medicine and rehabilitation, chiropractic services, physical therapy, diagnostic testing, and acupuncture.  DAM primarily provided treatment services from its clinic located at 201 Dolson Avenue, Middletown, New York.

In addition to DAM, at least eight other corporations, including four other medical corporations, billed Medicare and other health insurance providers (the “Insurance Providers”) from 201 Dolson Avenue (the “Associated Businesses”).  On paper, DAM and the Associated Businesses appeared to be separate entities owned by multiple different qualified individuals.  But in reality, JAMES SPINA and JEFFREY SPINA, who are doctors of chiropractic - not medical doctors - were the true owners and operators of the different medical service corporations.

According to the indictment, JAMES SPINA and JEFFREY SPINA, together with GROSSMAN, made all corporate decisions for DAM and the Associated Businesses.  In particular, JAMES SPINA and JEFFREY SPINA ran the day-to-day operations of the businesses.  They controlled payroll, the hiring and firing of employees, corporate expenses, like employee compensation and rent, and billing to Insurance Providers.  Further, JAMES SPINA and JEFFREY SPINA were the financial beneficiaries of DAM and its Associated Businesses. 

JAMES SPINA and JEFFREY SPINA, however, went to great lengths to conceal their control and ownership of DAM and the Associated Businesses.  In particular, JAMES SPINA and JEFFREY SPINA recruited medical doctors and other professionals to serve as the nominee owners of DAM and the Associated Businesses.  JAMES SPINA and JEFFREY SPINA further concealed their ownership of DAM and the Associated Businesses by transferring revenues of these companies into other companies they owned.  To further disguise these transfers, JAMES SPINA and JEFFREY SPINA drafted fake lease and marketing agreements between DAM and the Associated Businesses and purported real estate and marketing companies they owned and referred to the payments as “rent” or “marketing fees.”  The defendants also used phony and non-existent addresses for the corporations so that it would appear that DAM and the Associated Businesses were operating out of separate locations.

As alleged, in operating the multiple fraudulent businesses, JAMES SPINA and JEFFREY SPINA, routinely showed little, if any, regard for which medical services or treatments were medically necessary, or even whether the services were actually provided to patients, and instead operated DAM and billed Insurance Providers to maximize DAM’s reimbursements and ultimately, their own profits.  In particular, JAMES SPINA and JEFFREY SPINA, with assistance from GROSSMAN, the bookkeeper for DAM and its Associated Businesses, and KIMBERLY SPINA, an administrator at the Practice: (a) submitted and caused to be submitted claims to Insurance Providers for medically unnecessary services and procedures; (b) submitted and caused to be submitted claims to Insurance Providers for medical services that were not rendered; (c) double billed, i.e., submitted and caused to be submitted multiple claims for the same service to two different Insurance Providers; (d) altered and fabricated medical records; and (e) obstructed and impeded audits by Medicare and other Insurance Providers to conceal their fraud.

As a consequence of the above-described scheme, the majority of the claims submitted by DAM and the Associated Businesses to Medicare and other Insurance Providers were false and fraudulent.  The submitted claims during the relevant time period totaled more than $80,000,000, resulting in losses of tens of millions of dollars. 

As alleged in a separate Information filed today in White Plains federal court:

CHARLES BAGLEY, a licensed medical doctor affiliated with DAM and the Associated

Businesses, participated in the health care fraud scheme, whereby BAGLEY, a licensed medical doctor, agreed with others to submit, and cause to be submitted, false claims to Medicare and other health care benefit programs to obtain reimbursement to which he and his co-conspirators were not entitled. 

BAGLEY, 69, of Great Neck, New York, pled guilty today to one count of conspiracy to commit health care fraud, which carries a maximum sentence of 10 years in prison.  The defendant will be sentenced at a future date.  The case is assigned to United States District Judge Nelson S. Román.

JAMES SPINA, 59, of Middletown, New York, JEFFREY SPINA, 56, of Middletown, New York, ANDREA GROSSMAN, 59, of Loch Sheldrake, New York, and KIMBERLY SPINA, 54, of Woodbourne, New York, are each charged with one count of conspiring to commit health care fraud and one count of health care fraud, each of which carries a maximum sentence of 10 years in prison.   In addition, JAMES SPINA and JEFFREY SPINA are charged with one count of obstructing and impeding a federal audit, with carries a maximum sentence of five years in prison.

The statutory maximum sentence is prescribed by Congress and provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge

Manhattan U.S. Attorney Geoffrey S. Berman praised the outstanding investigative work of the FBI, HHS-OIG, the New York State Office of the State Comptroller, and the Orange County Sheriff’s Office.  He also thanked the Orange County District Attorney’s Office, the Sullivan County District Attorney’s Office, the National Insurance Crime Bureau, Liberty Mutual Insurance, and USAA Insurance for their assistance.

The charges contained in the indictment 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.