|
|
|
|
Friday, October 11, 2019
South Bronx Unite - Help Stop the $8.7 Billion New Jail Plan!
Senator Rivera and Assembly member Paulin Urge Passage of Bill to Curb Internet Sales of E-Cigarettes
In response to an outbreak of lung injuries among otherwise healthy people who use electronic cigarettes or vaping products that has prompted investigations and public health warnings by the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), Governor Andrew Cuomo, and state and local health departments, Assembly member Amy Paulin (D-Scarsdale) and State Senator Gustavo Rivera (D-Bronx) urged passage of their bill to hold electronic cigarettes to the same standards of distribution and transportation that currently apply to tobacco products.
State Senator Rivera is Chair of the Senate Health Committee while Assembly member Paulin sits on the Assembly Health Committee.
"The alarming public health incidents involving vaping confirm the worst nightmares of parents who were already alarmed by the increased use of Juul and other vape pens by teenagers," said Assembly member Amy Paulin. "I have heard from student activists in my district who tell me that it is far easier to obtain electronic cigarettes and other vaping products from Internet retailers than to go to a physical store, since websites make only a rudimentary attempt to verify age. It simply makes no sense that you're prohibited from buying addictive tobacco cigarettes online, but you can buy addictive electronic cigarettes online."
"E-cigarettes and vaping products are causing New Yorkers to develop serious health issues, and our youth are particularly vulnerable. We have a responsibility to safeguard New Yorkers' health by regulating these products as what they are - public health hazards that are just as damaging as traditional tobacco products, " said State Senator Gustavo Rivera. "The Senate's upcoming hearing to investigate the safety and potential harm of such products will consider important policies such as this."
Public health advocates, parents, educators, and student activists have expressed alarm for many years at the rise in popularity of e-cigarettes and vape pens among teenagers. The products usually contain the addictive substance nicotine. The intended use is to help those addicted to tobacco products to cease smoking by managing their cravings for nicotine. However, the very use of nicotine makes electronic cigarettes addictive as well.
In addition, electronic cigarettes routinely contain flavoring including diacetyl, a chemical linked to a serious lung disease, other cancer-causing chemicals, and heavy metals including nickel, tin, and lead. What could be a comparable health risk for long-term smokers is a clear danger for teenagers and others who never started smoking in the first place but could become addicted to vaping. The FDA has reported that within the past year, use of e-cigarettes has risen by 78% among high school students and 48% for middle school students.
The issue has taken on new urgency with an outbreak of 1,299 lung injury cases reported by the CDC through the end of September in which 100% of those persons injured indicated that they regularly vaped. So far, 80% of these vape-related lung injury cases have been found in people 35 years and younger. Tragically, 26 people nationwide - including a 17 year-old in the Bronx - have died from a vaping-related sickness.
This legislation (A7714 / S3905) would ensure that electronic cigarettes are included, along with cigarettes and other tobacco products, in several important laws and regulations. In particular, it would add electronic cigarettes to the section of law that bans the shipment of cigarettes by businesses to individuals, including by Internet retailers.
"This bill will not impose an appreciable burden on individuals using e-cigarettes to break their addiction to tobacco, since it is the same set of regulations they're already accustomed to following for tobacco products," said Assembly member Paulin. "But it will help close the loopholes that make e-cigarettes, vaping products, and nicotine easier to obtain than tobacco for those under age 21."
"In the wake of a clear public health emergency, New York State has already mobilized to protect our citizens, particularly our young people, and I am hopeful these efforts will educate everyone on the health risks associated with vaping," continued Assembly member Paulin. "We also need to employ the exact same policies and regulations that have helped us dramatically reduce the instances of teenage smoking. That's what our bill does."
Thursday, October 10, 2019
YOUR GUIDE TO THE NEW YORK CITY CHARTER REVISION COMMISSION 2019
The following is a copy of the flyer printed by the Charter Revision Commission 2019.
There is an editorial comment at the bottom.
WHAT IS THE CHARTER?
The New York City Charter is the City's constitution. It creates a framework for our government. The Charter controls how the City spends our tax dollars, how decisions are made about changes to our neighborhoods and the power of our elected officials. Nearly 30 years ago, a Charter Revision Commission overhauled the City's government. We've been taking a fresh look. This fall, New Yorkers will have a chance to amend our Charter by voting on ballot proposals covering a wide variety of issues, from elections to police accountability.
On November 5th, you can vote on that.
WHAT ARE THE PROPOSALS ON THE BALLOT?
1 - Elections:
- Use ranked choice voting in primary and special elections for City elected officials such as the Mayor and City Council members.
- Extend the time from 45 to 80 days between when an elected official leaves office during their term and a special election is held.
- Amend the timeline for redistricting to ensure that district lines are drawn in a timely manner for future primary City Council elections.
2 - Civilian Complaint Review Board (CCRB):
- Add two members to the CCRB board, one appointed by the Public Advocate and one jointly appointed by the Mayor and the Speaker of the City Council (who would also serve as Chair).
- Require the Police Commissioner to provide an explanation to the CCRB when they deviate from the CCRB’s disciplinary recommendations.
- Authorize subpoena power for the CCRB Executive Director.
- Allow the CCRB to investigate potentially false official statements made by an officer under investigation and to recommend discipline, if appropriate.
- Guarantee the CCRB budget.
3 - Ethics and Governance:
- Prohibit elected officials and senior appointed officials from lobbying the City government for two years after leaving city service.
- Replace two members of the Conflicts of Interest Board currently appointed by the Mayor with one appointed by the Comptroller and one by the Public Advocate.
- Prohibit COIB board members from participating in campaigns for local elected offices, and reduce the maximum amount of money that they can contribute.
- Require the Citywide Minority/Women-owned Business Enterprises (M/WBE) Director report directly to the Mayor.
- Require advice and consent—a system of checks and balances—by the City Council for the Mayor’s appointment of the Corporation Counsel.
4 - City Budget:
- Allow the City to use a “rainy day fund” to save money for use in future years (state law permitting).
- Guarantee the budgets for the Public Advocate and Borough Presidents.
- Require the Mayor to submit the revenue estimate to the City Council by May 25 (instead of June 5).
- Require the Mayor to submit budget modifications to the City Council within 30 days of updating the city’s financial plan.
5 - Land Use (ULURP):
- Give affected Community Boards, Borough Presidents, and Borough Boards advance notice of ULURP applications by requiring the Department of City Planning to provide a detailed project summary 30 days before the application is certified for public review.
Give Community Boards additional time during the summer to review ULURP applications.
Find out more: charter2019.nyc/finalreport
EDITOR'S OPINION:
It is the opinion of this editor that the nineteen items squeezed into five ballot questions should all be rejected by the voters.
Ranked Choice Voting will not give one candidate a majority of the vote, and can instead have the second, third, or even forth place finisher be declared the winner.
18 Members Of International Fraud And Money Laundering Conspiracy Charged In Manhattan Federal Court
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”), Troy Miller, Director, Field Operations, New York, U.S. Customs and Border Protection (“CBP”), and James P. O’Neill, the Police Commissioner for the City of New York (“NYPD”), today announced the unsealing of an indictment and two superseding indictments charging 18 defendants with participating in an international conspiracy to commit a variety of offenses, including access device fraud, wire fraud, bank fraud, and aggravated identity theft.
Defendants NIKOLAOS LIMBERATOS, a/k/a “Nicu Limberto,” CRISTIAN COSTEA, a/k/a “Momo,” THEOFRASTOS LYMBERATOS, ANDREW ELIOPOULOS, PETER SAMOLIS, KELLY KARKI LAM, and IULIANA MIHAILESCU were arrested this morning and will be presented in federal court in Manhattan before U.S. Magistrate Judge Ona T. Wang later today. Defendants MIRCEA CONSTANTINESCU, a/k/a “Sobo,”ALIN HANES CALUGARU, IONELA CONSTANTINESCU, a/k/a “Pitica,” and GEORGE SERBAN were also arrested this morning and will be presented in federal court in Miami before U.S. Magistrate Judge Lauren F. Louis later today. Defendant FLORIAN CLAUDIU MARTIN, a/k/a “Florin Claudiu,” a/k/a “Johnny Ion,” a/k/a “Jane Hotul,” a/k/a “Petru Andrioaie,” a/k/a “Petru Andrioane,” was arrested this morning in Cabo San Lucas, Mexico, and defendant RAUL IONUT VIDRASAN, a/k/a “Michu,” a/k/a “The Boy,” was arrested this morning in Perugia, Italy. Defendants VALENTIN PETRESCU, a/k/a “Gico Cosmin Giscan,” a/k/a “Zoltan Pruma,” DRAGOS DIACONU, MADLIN ALEXANDRU ANCA, a/k/a “Mateo Fernandez Alejandro,” and CRISTIAN ULMANU, a/k/a “Boris Moravec,” are currently in custody on other charges and will be transferred to federal custody in New York and presented at a later date. The case has been assigned to U.S. District Judge Laura Taylor Swain.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, the defendants participated in a wide-ranging international ATM skimming and money laundering operation, using their technological know-how to steal tens of millions of dollars from financial institutions and individual victims. Thanks to the FBI, CBP, and the NYPD, the defendants are in custody and facing felony charges for their alleged offenses.”
FBI Assistant Director William F. Sweeney Jr. said: “An extremely frustrating thing to experience, you grab cash from an ATM but then find out your bank information was stolen and your account drained. The scheme detailed here cost victims money, time, and effort to get their finances returned and their identities restored, which can be an infuriating long process. The FBI New York Cyber Crimes Task Force and our law enforcement partners have worked exhaustively to find the members of this criminal organization, and the arrests and charges are a testament to their hard work stopping these thieves from creating more havoc for anyone trying to access their hard-earned money.”
CBP Director of New York Field Operations Troy Miller said: “This case serves as a great example of collaborative law enforcement efforts to combat international debit card schemes. U.S. Customs and Border Protection in coordination with our partners at FBI and the NYPD will continue to work tirelessly to ensure that criminals associated with transnational criminal organizations are brought to justice.”
NYPD Commissioner James P. O’Neill said: “The NYPD and its law enforcement partners are committed to dismantling criminal enterprises that leverage attacks against our cyber infrastructure. We comprehensively confront everything from highly-sophisticated transnational groups, like this one, to those criminals who exploit our citizens with cyber-enabled scams. I want to thank our federal partners and NYPD detectives for their coordination and tireless efforts in bringing this important case.”
According to the allegations in the Indictment and Superseding Indictments[1] unsealed today in Manhattan federal court:
From 2014 until September 2019, FLORIAN CLAUDIU MARTIN, a/k/a “Florin Claudiu,” a/k/a “Johnny Ion,” a/k/a “Jane Hotul,” a/k/a “Petru Andrioaie,” a/k/a “Petru Andrioane,” ALEX DONATI, RAUL IONUT VIDRASAN, a/k/a “Michu,” a/k/a “The Boy,” MIRCEA CONSTANTINESCU, a/k/a “Sobo,” NIKOLAOS LIMBERATOS, a/k/a “Nicu Limberto,” CRISTIAN COSTEA, a/k/a “Momo,” ALIN HANES CALUGARU, IONELA CONSTANTINESCU, a/k/a “Pitica,” THEOFRASTOS LYMBERATOS, ANDREW ELIOPOULOS, VALENTIN PETRESCU, a/k/a “Gico Cosmin Giscan,” a/k/a “Zoltan Pruma,” PETER SAMOLIS, KELLY KARKI LAM, GEORGE SERBAN, DRAGOS DIACONU, MADLIN ALEXANDRU ANCA, a/k/a “Mateo Fernandez Alejandro,” CRISTIAN ULMANU, a/k/a “Boris Moravec,” and IULIANA MIHAILESCU participated in a transnational organization that engaged in what is colloquially referred to as “ATM skimming” (the “Skimming Organization”). The Skimming Organization unlawfully obtained victim accountholders’ debit card account information by using advanced technological devices to surreptitiously record the debit card numbers and personal identification numbers at automatic teller machines (“ATMs”), and then manufacturing counterfeit and fraudulent debit cards that bore the victim accountholders’ account information. The Skimming Organization’s members then used those cards to fraudulently withdraw cash from victims’ bank accounts.
Certain of the defendants directed, or worked in, teams that the Skimming Organization deployed across the United States in order to carry out ATM skimming attacks, casing ideal locations for the attacks, installing skimming devices on ATMs, removing those devices, and cashing out large numbers of fraudulent debit cards manufactured as a result of the skimming operations. Other defendants assisted in receiving packages containing skimming devices or component parts that were shipped from other parts of the U.S. and from abroad. Other defendants assisted in engineering the skimming devices that the Skimming Organization used. Still other defendants laundered the proceeds of the skimming attacks through bank accounts, properties, businesses, and the transportation of bulk cash.
The defendants carried out hundreds of ATM skimming operations across the U.S., including in New York and at least 17 other states. The scheme defrauded financial institutions and individual victims of more than $20 million.
Each defendant is charged with one count of conspiracy to commit access device fraud, which carries a maximum sentence of 7 ½ years in prison; one count of conspiracy to commit wire and bank fraud, which carries a maximum sentence of 30 years in prison; and one count of aggravated identity theft, which carries a mandatory sentence of two years in prison, consecutive to any other sentence imposed. FLORIAN CLAUDIU MARTIN, a/k/a “Florin Claudiu,” a/k/a “Johnny Ion,” a/k/a “Jane Hotul,” a/k/a “Petru Andrioaie,” a/k/a “Petru Andrioane,” MIRCEA CONSTANTINESCU, a/k/a “Sobo,” NIKOLAOS LIMBERATOS, a/k/a “Nicu Limberto,” CRISTIAN COSTEA, a/k/a “Momo,” ALIN HANES CALUGARU, and KELLY KARKI LAM are also charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. FLORIAN CLAUDIU MARTIN, a/k/a “Florin Claudiu,” a/k/a “Johnny Ion,” a/k/a “Jane Hotul,” a/k/a “Petru Andrioaie,” a/k/a “Petru Andrioane” is also charged with two counts of bank fraud, each of which carry a maximum sentence of 30 years in prison. ALEX DONATI is also charged with one count of access device fraud, which carries a maximum sentence of 10 years in prison.
The statutory maximum and minimum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. A chart with the defendants’ ages, places of residence, and nationalities is below.
Mr. Berman praised the outstanding investigative work of the FBI, CBP, and the NYPD, and thanked the United States Postal Inspection Service, INTERPOL-Rome, INTERPOL-Mexico City, and Mexico’s Agencia de Investigación Criminal and Instituto Nacional de Migración for their assistance.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.
Defendant
|
Age
|
Place of Residence
|
Nationality
|
FLORIAN CLAUDIU MARTIN,
a/k/a “Florin Claudiu,”
a/k/a “Johnny Ion,”
a/k/a “Jane Hotul,”
a/k/a “Petru Andrioaie,”
a/k/a “Petru Andrioane,”
|
44
|
Cabo San Lucas, Mexico
|
Romania
|
ALEX DONATI
|
51
|
Cabo San Lucas, Mexico
|
Romania
|
RAUL IONUT VIDRASAN,
a/k/a “Michu,” a/k/a “The Boy”
|
27
|
Perugia, Italy
|
Romania
|
MIRCEA CONSTANTINESCU, a/k/a “Sobo”
|
44
|
Cooper City, Florida
|
Romania
|
NIKOLAOS LIMBERATOS, a/k/a “Nicu Limberto”
|
53
|
Deer Park, New York
|
Greece
|
CRISTIAN COSTEA, a/k/a “Momo”
|
44
|
Queens, New York
|
Romania
|
ALIN HANES CALUGARU
|
39
|
Sunny Isles, Florida
|
Romania
|
IONELA CONSTANTINESCU, a/k/a “Pitica”
|
35
|
Cooper City, Florida
|
Romania
|
THEOFRASTOS LYMBERATOS
|
36
|
Queens, New York
|
United States
|
ANDREW ELIOPOULOS
|
34
|
Queens, New York
|
United States
|
VALENTIN PETRESCU, a/k/a “Gico Cosmin Giscan,” a/k/a “Zoltan Pruma”
|
32
|
Russellville, Arkansas
|
Romania
|
PETER SAMOLIS
|
30
|
Queens, New York
|
United States
|
KELLY KARKI LAM
|
42
|
New York, New York
|
United States
|
GEORGE SERBAN
|
32
|
Miami, Florida
|
Romania
|
DRAGOS DIACONU
|
41
|
Nashville, Tennessee
|
Romania
|
MADLIN ALEXANDRU ANCA, a/k/a “Mateo Fernandez Alejandro”
|
22
|
Nashville, Tennessee
|
Romania
|
CRISTIAN ULMANU, a/k/a “Boris Moravec”
|
54
|
Russellville, Arkansas
|
Romania
|
IULIANA MIHAILESCU
|
42
|
Queens, New York
|
Romania
|
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and Superseding Indictments, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.
Lev Parnas And Igor Fruman Charged With Conspiring To Violate Straw And Foreign Donor Bans
Defendants Orchestrated Scheme to Advance Their Business Interests and the Political Interests of At Least One Ukrainian Government Official Through Contributions and Donations to Multiple Candidates and Campaign Committees in Violation of Campaign Financ
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 that LEV PARNAS, IGOR FRUMAN, DAVID CORREIA and ANDREY KUKUSHKIN were charged in a four-count indictment alleging that each of the defendants conspired to violate the ban on foreign donations and contributions in connection with federal and state elections. In addition, PARNAS and FRUMAN were charged with conspiring to make contributions in connection with federal elections in the names of others, and with making false statements to and falsifying records to obstruct the administration of a matter within the jurisdiction of the Federal Election Commission (“FEC”). PARNAS and FRUMAN were arrested yesterday evening at Washington Dulles International Airport and will be presented at 2:00 p.m. this afternoon before U.S. Magistrate Judge Michael S. Nachmanoff in the Eastern District of Virginia. KUKUSHKIN was arrested yesterday in California and will be presented at 10:30 a.m. Pacific Time before U.S. Magistrate Judge Jacqueline Scott Corley in the Northern District of California. CORREIA remains at large. The case is assigned to U.S. District Judge J. Paul Oetken in the Southern District of New York.
U.S. Attorney Geoffrey S. Berman said: “As alleged in the Indictment, the defendants broke the law to gain political influence while avoiding disclosure of who was actually making the donations and where the money was coming from. They sought political influence not only to advance their own financial interests but to advance the political interests of at least one foreign official – a Ukrainian government official who sought the dismissal of the U.S. ambassador to Ukraine. Protecting the integrity of our elections – and protecting our elections from unlawful foreign influence – are core functions of our campaign finance laws. And as this Office has made clear, we will not hesitate to investigate and prosecute those who engage in criminal conduct that draws into question the integrity of our political process.”
FBI Assistant Director William F. Sweeney Jr. said: “Campaign finance laws exist for a reason. The American people expect and deserve an election process that hasn’t been corrupted by the influence of foreign interests, and the public has the right to know the true source of campaign contributions. These allegations aren’t about some technicality, a civil violation, or an error on a form. This investigation is about corrupt behavior and deliberate law breaking. The FBI takes the obligation to tackle corruption seriously – there are no exceptions to this rule.”
According to the Indictment[1] unsealed today in Manhattan federal court:
Through its election laws, Congress prohibits foreign nationals from making contributions, donations, and certain expenditures in connection with federal, state, and local elections. The election laws also prohibit individuals from using straw donors to make legal contributions in their own names, rather than in the name of the true source of the funds. The purpose of these laws is to prevent the electoral system from illegal foreign influence, and to further inform candidates, their campaign committees, federal regulators and the public of the true sources of contributions. In or about 2018, the defendants violated these laws by, among other things, agreeing to facilitate foreign donations to federal and state candidates, and agreeing to make straw donations to federal candidates in an effort to conceal true sources of the funds.
The Straw Donor Scheme
In or about March 2018, PARNAS and FRUMAN began attending political fundraising events in connection with federal elections and making substantial contributions to candidates, joint fundraising committees, and independent expenditure committees with the purpose of enhancing their influence in political circles and gaining access to politicians. PARNAS and FRUMAN, who had no significant prior history of political donations, sought to advance their personal financial interests and the political interests of at least one Ukrainian government official with whom they were working.
In or about May 2018, to obtain access to exclusive political events and gain influence with politicians, PARNAS and FRUMAN made a $325,000 contribution to an independent expenditure committee (“Committee-1”) and a $15,000 contribution to a second independent expenditure committee (“Committee-2”). Despite the fact that the FEC forms for these contributions required PARNAS and FRUMAN to disclose the true donor of the funds, they falsely reported that the contributions came from Global Energy Producers (“GEP”), a purported liquefied natural gas (“LNG”) import-export business that was incorporated by FRUMAN and PARNAS around the time the contributions were made. In truth and in fact, the donations to Committee-1 and Committee-2 did not come from GEP funds. Rather, the donations came from a private lending transaction between FRUMAN and third parties, and never passed through a GEP account. PARNAS and FRUMAN deliberately made the contributions in GEP’s name in order to evade federal reporting requirements and to conceal that they were the true source of the contributions, including so as to hide from creditors the fact that they had access to funding. When media reports about the GEP contributions first surfaced, an individual working with PARNAS remarked, “[t]his is what happens when you become visible . . . the buzzards descend,” to which PARNAS responded, “[t]hat’s why we need to stay under the radar. . . .”
Among other donations alleged to have been made in furtherance of the scheme, in or about May and June 2018, PARNAS and FRUMAN committed to raise $20,000 or more for a then-sitting U.S. Congressman (“Congressman-1”). At and around the same time PARNAS and FRUMAN committed to raising those funds for Congressman-1, PARNAS met with Congressman-1 and sought Congressman-1’s assistance in causing the U.S. Government to remove or recall the then-U.S. Ambassador to Ukraine (the “Ambassador”). PARNAS’s efforts to remove the Ambassador were conducted, at least in part, at the request of one or more Ukrainian government officials. Moreover, in an effort to reach their contribution commitment to Congressman-1 and further their political goals, in or about June 2018, after FRUMAN had already made a maximum $2,700 contribution to Congressman-1, FRUMAN paid for another maximum $2,700 contribution to Congressman-1 that was made and reported in PARNAS’s name.
In response to a complaint filed with the FEC regarding the $325,000 contribution to Committee-1, and to further conceal the true source of the funds used to make certain of their donations, in or about October 2018, PARNAS and FRUMAN submitted sworn affidavits to the FEC that contained false statements, including that the contribution to Committee-1 “was made with GEP funds for GEP purposes” and that “GEP is a real business enterprise funded with substantial bona fide capital investment; its major purpose is energy trading, not political activity.”
The Foreign Donor Scheme
Beginning in or around July 2018, PARNAS, FRUMAN, CORREIA, and KUKUSHKIN made plans to form a recreational marijuana business (the “Business Venture”) that would be funded by Foreign National-1, a Russian national, and required gaining access to retail marijuana licenses in particular states, including Nevada (the “Business Venture”). To further the Business Venture, PARNAS, FRUMAN, CORREIA, and KUKUSHKIN planned to use Foreign National-1 as a source of funding for donations and contributions to state and federal candidates and politicians in Nevada, New York, and other states to facilitate acquisitions of retail marijuana licenses.
In or about September and October 2018, CORREIA drafted a table of political donations and contributions, which was subsequently circulated to the defendants and Foreign National-1. The table described a “multi-state license strategy” to make between $1million and $2 million in political contributions to federal and state political committees. The table also included a “funding” schedule of two $500,000 transfers. Foreign National-1 then arranged for two $500,000 wires on or about September 18, 2018, and October 16, 2018, to be sent from overseas accounts to a U.S. corporate bank account controlled by FRUMAN and another individual.
PARNAS, FRUMAN, CORREIA, and KUKUSHKIN then used those funds transferred by Foreign National-1, in part, to attempt to gain influence and the appearance of influence with politicians and candidates. For example, on or about October 20, 2018, PARNAS, FRUMAN, and KUKUSHKIN attended a campaign rally for a candidate for a statewide office in Nevada (“Candidate-1”), at which a different Nevada state candidate was present (“Candidate-2”). Following that event, on or about November 1, 2018, a donation in the amount of $10,000 was made to Candidate-2 in FRUMAN’s name, but it was funded with funds from Foreign National-1. On or about November 1, 2018, a donation in the amount of $10,000 was made to Candidate-1 in FRUMAN’s name, but it was funded with funds from Foreign National-1. On or about November 4, 2018, PARNAS asked KUKUSHKIN to arrange for additional funding from Foreign National-1 to make an additional donation to Candidate-1, to which KUKUSHKIN responded that the $1 million Foreign National-1 had already provided to GEP was “in order to cover all the donations whatsoever.” Further communications confirm the defendants’ use of foreign funds – and, in particular, funds from Foreign National-1 – to make the donations described above. For example, on or about October 30, 2018, Foreign National-1 wrote to PARNAS, FRUMAN, and KUKUSHKIN that he had “fulfilled all my obligations completely,” including “500 [for] Nevada” in order to “work on obtaining licenses [in] these states.” KUKUSHKIN similarly noted in response that “Money transferred by [Foreign National-1] to [GEP] was to support the very specific people & states (per [FRUMAN’s] table) in order to obtain green light for licensing.”
Although PARNAS, FRUMAN, CORREIA, and Foreign National-1 continued to meet into the spring of 2019, the Business Venture did not come to fruition.
PARNAS, 47, FRUMAN, 53, CORREIA, 44, all Florida residents, and KUKUSHKIN, 46, a California resident, are each charged with one count of conspiring to violate the ban on foreign donations and contributions in connection with federal and state elections, which carries a maximum sentence of five years in prison. PARNAS and FRUMAN are also each charged with one count of conspiring to make contributions in connection with federal elections in the names of others, which carries a maximum sentence of five years in prison; one count of making false statements, which carries a maximum sentence of five years in prison; and one count of falsifying records to obstruct the administration of a matter within the jurisdiction of the FEC, which carries a maximum sentence of 20 years in prison.
The statutory maximum and mandatory penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.
Mr. Berman praised the outstanding investigative work of the FBI.
The charges contained in the Indictment are merely accusations. The defendants are 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 therein should be treated as an allegation.
Tech Start-Up Busted By AG James For Swindling Investors Out Tens Of Millions Of Dollars
Cardis Enterprises Falsely Claimed it Could Cut Costs for Small Businesses
New York Attorney General Letitia James today announced she has secured default judgments in a securities fraud lawsuit against a host of entities and individuals associated with Cardis Enterprises International, Inc. for defrauding investors out of at least $30 million.
“Individuals who sell false promises and commit fraud will be held responsible for their misdeeds,” said Attorney General Letitia James. “We will continue to seek justice for small business proprietors who fall victim to the greed of those intent on breaking the law. New Yorkers can rest assured that my office will always fight to hold companies that aim to defraud investors and tarnish the name of honest businesses accountable for their lies and deceitful actions.”
Cardis, a now defunct Long Island-based technology startup, claimed to possess patented and proprietary technology that would make low-value credit card transactions less expensive for merchants. Historically, low-value credit card transactions have posed a problem for merchants because they include a fixed fee — regardless of the size of the transaction — which has had the effect of severely depressing margins. But Cardis raised tens of millions of dollars from investors in stock sales and loans through a steady drumbeat of false representations, including: 1) that it was on the verge of monetizing its technology through partnerships with prominent companies and 2) an initial public offering (IPO) or buyout of Cardis was on the horizon.
In fact, many of Cardis’ purported partnerships did not advance beyond preliminary discussions, and there was never an IPO or buyout ever actually on the horizon. Cardis even failed to maintain basic books and records, making the notion of an IPO or buyout impossible.
In December 2018, the New York Attorney General’s Office filed suit against Cardis and company personnel Aaron Fischman, Stephen Brown, Steven Hoffman, and Seth Rosenblatt for participating in the fraudulent marketing of Cardis to investors. The complaint further alleged that, while Cardis was raising significant investor funds, Fischman was fraudulently diverting much of the proceeds to enrich himself, family members, and his favored charities. Additionally, the complaint alleged that Lawrence Katz — Cardis’ in-house attorney — aided in Fischman’s theft and diversion of investor funds from the company’s principal bank account, which was an Interest on Lawyer Account (IOLA) in the name of his law firm.
Last week, Attorney General James secured default judgments against Cardis and a number of Cardis-related entities, including Choshen Israel LLC, a company controlled by Fischman. Attorney General James also secured default judgments against a number of Fischman’s relatives, including Nina Fischman, Rafaela Fischman, Alexander Fischman, Anne Shimanovich, and Ethel Weissman — all of whom were personally enriched through Fischman’s fraud.
Prior to filing the lawsuit, the New York Attorney General’s Office entered into an assurance of discontinuance with Cardis’ then-current Chief Executive Officer Jonathan Nierenberg. Under the assurance of discontinuance, Nierenberg agreed to cease working for Cardis (or any affiliated entity) and to refrain from participating in any business activities related to Cardis, except for the winding down of the company. As part of his settlement with the New York Attorney General’s Office, Nierenberg incurred a monetary penalty of $100,000 and was barred from participating in the securities industry for five years.
The case remains ongoing with several motions pending, including a motion for leave to amend the complaint to re-plead claims against Brown (who was previously dismissed from the case) and the remaining defendants.
The investigation of Cardis was prompted by investor complaints to the Investor Protection Bureau in the Office of the New York Attorney General. Those with information about possible investment fraud are encouraged to submit a complaint online. Additionally, for those who wish to report fraudulent conduct without compromising their identity, the Office of the New York Attorney General launched a secure whistleblowing system — the N.Y.A.G. Whistleblower Portal — that allows for the simple and secure transmission of information and two-way anonymous communication.