12 Members Of Crack Cocaine Distribution Ring Operating In Vicinity Of 125th Street And Lexington Avenue In Manhattan Charged With Narcotics And Firearms Offenses

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Dermot Shea, the Commissioner of the Police Department for the City of New York (“NYPD”), announced the unsealing of an Indictment charging 12 individuals with operating a crack cocaine distribution ring in the vicinity of 125th Street and Lexington Avenue in Manhattan.  Six of the 12 defendants charged in the Indictment were arrested yesterday, and are scheduled to appear before U.S. Magistrate Sarah L. Cave in federal court later today.  One of the defendants is already in state custody and will be presented at a later date.  Five defendants remain at large.  The case has been assigned to U.S. District Court Judge Andrew L. Carter, Jr.       

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged, the defendants were members of a Harlem crack distribution crew that peddled its wares in and around the AK Houses, the Metro-North station at 125th Street, and P.S. 30.  Several members are also alleged to have used guns in the plying of their illegal trade.  Our thanks to the NYPD for their continued efforts to rid our neighborhoods of illegal drugs and guns.”

NYPD Police Commissioner Dermot Shea said:  “This case highlights our success in stopping those offenders who sow violence in our city’s neighborhoods. Working together, our mission to eradicate narcotics and illegal guns is clear and I want to commend our NYPD investigators and partners for targeting violent crime and dismantling it with precise effectiveness.”

According to the allegations in the Indictment[1]:

The defendants are members and associates of a drug trafficking organization (the “AK Houses Crew” or “Crew”) that sold crack cocaine in and around the AK Houses apartment complex, located at East 128th Street in the Harlem neighborhood of Manhattan.   During the period 2017 to the present, the AK Houses Crew sold hundreds of grams of crack to customers on the streets of Harlem, and crew members carried and displayed firearms in furtherance of the drug trade.  These crew members routinely sold crack in the vicinity of, among other locations, the area of the AK Houses, the Metro-North commuter rail station at East 125th Street, and Public School 30 at East 128th Street.

The leaders of the AK Houses Crew included defendants VAN WHITMORE, a/k/a “V-High,” RONALD NIXON, a/k/a “Jeter,” and BARRY WILLIAMS, a/k/a “Bistro.”  WHITMORE, NIXON, and WILLIAMS were responsible for, among other things, obtaining supplies of powder cocaine, converting the cocaine into crack, and pushing that crack to customers on the street through the Crew’s network of street-level dealers.  These leaders also maintained order and discipline within the Crew, including by using threats of violence.  Other members of the AK Houses Crew, including defendants RODNEY ROBINSON, a/k/a “Stretch,” KAPRIE LAMBERT, a/k/a “Pri,” SHAROD BELL, a/k/a “Rodo,” and IAN HAYLOCK, a/k/a “E,” served the Crew by, among other things, managing and enforcing order within the Crew’s network of street-level crack dealers, and collecting proceeds from their crack sales to finance the Crew’s operations.

The Crew’s street-level crack dealers included defendants MALIK HAWKINS, a/k/a “Leeky,” ABDOUL HANNE, a/k/a “Buylot,” MALIK BREEDLOVE, a/k/a “LB,” TYRELL MURPHY, a/k/a “Fat Cat,” and ANTHONY MCDADE, a/k/a “Pap,” each of whom obtained crack from other members of the Crew and sold the crack to customers on the street.  In addition, certain members of the AK Houses Crew, including WHITMORE, ROBINSON, HAYLOCK, BELL, and HAWKINS, used and facilitated the use of firearms in furtherance of the Crew’s crack dealing, including for the purposes of enforcing the collection of payment for drugs and to protect members of the Crew.  In the course of the narcotics conspiracy, HAYLOCK and BELL also sold firearms to undercover law enforcement officers in Harlem.

During the execution of a search warrant at NIXON’s house yesterday, law enforcement recovered a firearm, more than 80 grams of heroin belonging to NIXON, and paraphernalia for packaging narcotics for distribution.  During the execution of a search warrant at an apartment where BREEDLOVE was arrested yesterday, law enforcement recovered approximately 50 grams of crack cocaine.

The Indictment charges 12 defendants and contains two counts.  A chart containing the names, ages, residences, and charges for the defendants is set forth below.  The maximum term of imprisonment for both counts is life imprisonment.  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.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

This case is being handled by the Office’s Narcotics Unit.   Assistant United States Attorneys Juliana Murray and Louis Pellegrino are in charge of the prosecution.

Defendant	Age	Hometown	Charges
VAN WHITMORE, a/k/a “V High”	49	Harlem, New York	Narcotics Conspiracy; Firearms Offense
RONALD NIXON, a/k/a “Jeter”	42	New Rochelle, New York	Narcotics Conspiracy
BARRY WILLIAMS, a/k/a “Bistro”	42	Bronx, New York	Narcotics Conspiracy
RODNEY ROBINSON, a/k/a “Stretch”	44	Harlem, New York	Narcotics Conspiracy; Firearms Offense
KAPRIE LAMBERT, a/k/a “Pri”	22	Harlem, New York	Narcotics Conspiracy
IAN HAYLOCK, a/k/a “E”	24	Harlem, New York	Narcotics Conspiracy; Firearms Offense
SHAROD BELL, a/k/a “Rodo”	23	Harlem, New York	Narcotics Conspiracy; Firearms Offense
MALIK HAWKINS, a/k/a “Leeky”	26	Harlem, New York	Narcotics Conspiracy; Firearms Offense
ABDOUL HANNE a/k/a “Buylot”	27	Harlem, New York	Narcotics Conspiracy
MALIK BREEDLOVE, a/k/a “LB”	23	Harlem, New York	Narcotics Conspiracy
TYRELL MURPHY, a/k/a “Fat Cat”	21	Harlem, New York	Narcotics Conspiracy
ANTHONY MCDADE, a/k/a “Pap”	28	Bronx, New York	Narco

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

Executive Of Purported Caffeinated Snack Company Sentenced To 4 Years In Prison For Defrauding Investors Of More Than $2.3 Million

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that BARRY SCHWARTZ was sentenced to four years in prison today by U.S. District Judge Jed S. Rakoff for participating in a conspiracy to defraud more than 50 investors in the Starship Snacks Corporation of more than $2.3 million, by making false and fraudulent representations about, among other things, the status of the company’s products, guarantees that purportedly backed the investments, and the interest of large multi-national corporations in acquiring the companies.

U.S. Attorney Geoffrey Berman said:  “Barry Schwartz participated in a conspiracy to defraud investors, telling them their investments were safe and guaranteed when, in fact, he and his co-conspirators had misappropriated investor funds to support their lavish lifestyles.  Schwartz lied about the readiness of his company’s products and about the claim that two large multi-national companies were vying to buy the company.  Schwartz’s house of lies eventually collapsed, bringing financial devastation to many of its victims.  Today Schwartz was held accountable for the criminal conduct that defrauded more than 50 investors of more than $2.3 million.”

According to the allegations contained in the Indictment filed against SCHWARTZ and statements made in related court filings and proceedings, including the trial of co-defendant Joel Margulies:

The Starship Snack Corporation Fraud Scheme

From approximately August 2015 through August 2017, SCHWARTZ, Margulies, and a co-conspirator, Lisa Bershan, raised more than $2.3 million from investors in a company originally called the Awake Company and later renamed Starship Snacks Corporation (“Starship”), which purported to be in the business of developing and manufacturing caffeinated snack products, based on the following misrepresentations, among others: (a) that investments in Starship were guaranteed against losses by Bershan; (b) that Starship was going to be acquired by Monster Beverage (“Monster”) in a one-for-one stock exchange; (c) that Starship was engaged in actual product development and had procured samples of candies infused with caffeine; (d) that SCHWARTZ and others at Starship had entered into non-disclosure agreements with Monster that prohibited them from discussing Starship’s purported acquisition by Monster and its purported product development.  SCHWARTZ held himself out as Starship’s corporate secretary.   

After receiving funds from Starship investors, SCHWARTZ and his co-conspirators used those funds to maintain their own extravagant lifestyles, spending hundreds of thousands of dollars on things like luxury clothing, plastic surgery, interior decorating, the rental of a high-end apartment in New York City, and the down payment for a multimillion-dollar house in Florida. 

In addition to the prison term, SCHWARTZ, 73, was sentenced to two years of supervised release.  SCHWARTZ was also ordered to forfeit $2,163,214.  A restitution order will be entered within 90 days.

Lisa Bershan was convicted upon a guilty plea, and sentenced by Judge Rakoff on November 22, 2019, principally to a term of seven years in prison.  Joel Margulies was convicted following a seven-day jury trial before Judge Rakoff and is scheduled to be sentenced on December 16, 2019. 

Mr. Berman praised the work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance.

Former Vice President Of Teamsters Labor Union Pleads Guilty To Bribery

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOHN ULRICH, who previously served as the vice president of the International Brotherhood of Teamsters Local 812 (the “Union”) and as a trustee of the Union’s employee health benefit plan (the “Plan”), pled guilty today to soliciting tens of thousands of dollars in bribe payments from an executive with the Plan’s Third Party Administrator (the “TPA-1”), in exchange for using his influence to ensure the Union’s continued retention of TPA-1 as its Plan administrator.  ULRICH pled guilty before United States District Judge Analisa Torres.

U.S. Attorney Geoffrey S. Berman said:  “As he admitted in court today, John Ulrich betrayed the trust of the Union members who elected him in order to line his pockets with bribe money.  This Office is committed to prosecuting corrupt union officials who abuse their positions of trust for their own financial benefit.”

According to the allegations in the Indictment, other public filings, and statements made during the plea proceeding:

The Union has more than approximately 3,000 members, and represents workers in the beverage industry throughout the New York metropolitan area.  The Union’s members are covered by the Plan, which provides, among other things, life insurance, health insurance, dental, vision, and disability benefits to Union members and their families.  As the Plan’s third-party administrator, TPA-1 processed health insurance claims for participants in the Plan.  At all times relevant to the Indictment, ULRICH was a member and officer of the Union and a trustee of the Plan.

In or about 2013, ULRICH  solicited bribe payments from an executive with TPA-1 (“Executive-1”) of $5,000 per quarter in exchange for using his influence to maintain TPA-1 as the Plan’s third-party administrator.  Before ULRICH solicited these bribes, the Plan had issued a request for proposals for a new third-party administrator, and TPA-1 was at risk of losing the Plan’s business.  ULRICH told Executive-1 that ULRICH would use his influence with the Union to ensure that the Plan continued to use TPA-1 to administer the Union’s health care plan.  Executive-1 agreed to make $5,000 quarterly payments to ULRICH, and began doing so.  Subsequently, despite receiving multiple bids from other third-party administrators, the Plan then continued to work with TPA-1.   

In or about 2014, ULRICH demanded increased bribe payments from Executive-1.  In part, ULRICH told Executive-1 that these increased bribe payments were needed for another trustee of the Plan, and Executive-1 began making such increased payments.  On or about September 19, 2015, ULRICH again solicited additional bribe payments for this trustee.

After a special board meeting convened by the Plan in February 2016, ULRICH was terminated as vice president and trustee of the Union and Plan, respectively.  In total, ULRICH demanded, and Executive-1 paid, tens of thousands in bribes before ULRICH was removed from office.

ULRICH, 48, of Newburgh, New York, pled guilty to one count of conspiracy to solicit and receive bribe payments to influence the operation of an employee benefit plan, which carries a maximum penalty of five 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. 

ULRICH is scheduled to be sentenced by Judge Torres on April 23, 2020, at 2:00 p.m. 

This matter is being handled by the Office’s Public Corruption Unit.  Assistant United States Attorneys Eli J. Mark and Louis A. Pellegrino are in charge of the prosecution.

AG James Wins More Than $16 Million In Magazine And Newspaper Subscription Scam Lawsuit

Ring of Companies Permanently Prohibited from Mailing Unauthorized and Deceptive Magazine and Newspaper Subscription Solicitations

  New York Attorney General Letitia James today announced a victory for more than 68,000 New Yorkers who were victims of deceptive and illicit solicitations from the operators of an illegal and fraudulent magazine and newspaper subscription scam. A decision by the New York State Supreme Court awarded more than $16 million to New York State in restitution and penalties, as well as permanently enjoined a ring of New York and Oregon companies and one individual from further conducting their illegal operation that could have affected millions of additional New Yorkers in the future.

“The subscription to New Yorkers’ hard-earned money is cancelled for these deceptive magazine and newspaper companies,” said Attorney General James. “This decision sends a message that, as the nation’s media headquarters, New York will not serve as a safe haven for those who aim to cheat, scam, and defraud our consumers. This is an important victory for the millions of New York consumers, who could of have been victims in the future.”

The Office of the New York Attorney General filed a legal proceeding against Orbital Publishing Group, Inc., and its interrelated New York and Oregon companies, in 2015, for mailing millions of unauthorized and misleading magazine and newspaper subscription notices to consumers nationwide over a three-year period. While the solicitations appeared to come directly from such leading publications as Consumer Reports, The Economist, Entertainment Weekly, Forbes, The Nation, National Geographic, The New York Times, The New Yorker, Newsweek, Smithsonian, Time, The Wall Street Journal, and The Washington Post, Orbital Publishing and its related companies were really the ones sending the mailings. These solicitations — sent without the permission of the publishers — prompted many of the publishers to send cease and desist letters, which Orbital Publishing and its affiliate companies ignored. 

The companies conveyed the misleading impression that they were offering one of the lowest rates available for subscriptions to the named publications, but, in reality, they were charging many consumers more than double the subscription rate charged directly by the publications. In many cases, Orbital Publishing pocketed the difference between the amount they received and the actual subscription price. Additionally, the companies also failed to “clearly, conspicuously, understandably and readably” indicate subscription expiration dates on their renewal solicitations — as required by New York law — causing many consumers to renew subscriptions that had not yet expired.

In a decision earlier this year, the New York Appellate Division, First Department held that respondents’ solicitations were materially misleading as a matter of law. 

Based on the First Department’s decision, the New York State Supreme Court this week permanently enjoined Orbital Publishing and its affiliated companies from further violating New York State law and engaging in the fraudulent and illegal practices originally noted in the lawsuit brought forth by the Office of the New York Attorney General. The court also directed respondents to pay more than $16 million in penalties, restitution, and costs. 

The Federal Trade Commission also brought an enforcement proceeding against the same ring of related entities and individuals in the United States District Court for the District of Oregon in 2016. In 2019, the District of Oregon permanently banned the defendants in the FTC’s case from direct mail marketing and imposed an $8.9 million judgment against the corporate defendants and three individual defendants. 

The other related companies that were the subject of the lawsuit brought by the Office of the New York Attorney General included Liberty Publishers Service, Inc.; Express Publishers Service, Inc.; Associated Publishers Network, Inc.; Adept Management, Inc.; Publishers Payment Processing, Inc.; Customer Access Services, Inc.; Consolidated Publishers Exchange, Inc.; Magazine Clearing Exchange, Inc.; and Henry Cricket Group, LLC. Lydia Pugsley — who owned Adept Management, Inc. and performed consulting services for a number of other related companies — was also named in the lawsuit and found by the court to be individually liable. 

BRONX MAN SENTENCED TO 25 YEARS TO LIFE IN PRISON FOR FATALLY STABBING GIRLFRIEND

Jury Found Defendant Guilty of Second-Degree Murder

  Bronx District Attorney Darcel D. Clark today announced that a Bronx man has been sentenced to 25 years to life in prison for killing his girlfriend. 

 District Attorney Clark said, “The defendant viciously stabbed his girlfriend of two years more than a dozen times with an ice pick. The defendant had attacked her with an ice pick a year before the fatal incident. A jury convicted him of second-degree Murder and he has received many years in prison, sending a clear message that Domestic Violence will not be tolerated in the Bronx.”

 District Attorney Clark said the defendant, Brandi Simmons, 46, of 2444 Devoe Terrace, was sentenced today to 25 years to life in prison by Bronx Supreme Court Justice Judith Lieb. A jury found the defendant guilty of second-degree Murder on October 31, 2019. 

 According to the investigation, at about 3 p.m. on February 19, 2015 at 20 West 190th Street, the defendant stabbed Delores Scott, 52, his girlfriend, 13 times with an ice pick. Video surveillance shows the defendant hiding the murder weapon near a window. The mortally wounded victim was able to identify the defendant to responding NYPD Police Officers and told them Simmons had stabbed her. The defendant lied to cops that two other men had stabbed her and that they had attacked him too.

 Two wounds, one in the heart and another in the lung, contributed to the victim’s death. She was pronounced dead at St. Barnabas Hospital the following day.

Statement from New York City Comptroller Scott M. Stringer on Proposed Con Edison Rate Hikes

“I urge the Public Service Commission to reject Con Edison’s proposal to raise utility rates so they can funnel more cash into fossil fuel infrastructure that will dig us deeper into the climate crisis. I am disappointed that the City would support any deal which allows Con Edison to spend hundreds of millions of ratepayer dollars to bolster the city’s natural gas network, instead of meaningfully investing in renewable and electric alternatives.

“New Yorkers deserve an energy system that is sustainable, reliable, and affordable, not just more of the status quo which lines the pockets of the utilities at their expense. I have called for a moratorium on major gas infrastructure because we know the infrastructure we install today only puts our climate goals further out of reach.

“Doubling down on fossil fuels is tantamount to climate denial. If our utilities can’t think past their bottom lines and consider the future of our planet, we need to explore the feasibility of a public takeover of New York’s natural gas system.”

MAYOR DE BLASIO ANNOUNCES CONTRACT AGREEMENTS WITH TRAFFIC ENFORCEMENT AGENTS

Almost 70 percent of city workforce now under contract during 2017-2021 round of bargaining

  Mayor Bill de Blasio announced today that the City of New York has reached contract agreements with the Communication Workers of America (CWA) Locals 1181 and 1182, which together represent approximately 2,700 Traffic Enforcement Agents and Associate Traffic Enforcement Agents. The ratified agreements contain pattern wage increases of 2.00%, 2.25% and 3.00% through November 2021.

“This agreement provides the hard-working men and women who keep our roads moving and our pedestrians, bikers and drivers safe with the wages they deserve,” said Mayor Bill de Blasio. “Seventy percent of city workers are now under contract during this round of negotiations, continuing our commitment to bring workers to the bargaining table.”

CWA Local 1181

CWA Local 1181 represents approximately 400 Associate Traffic Enforcement Agents. The contract term is just over 53 months, is retroactive to June 6, 2017, and expires in November 2021. The agreement includes pattern wage increases of 2.00%, 2.25%, and 3.00%.

The City and CWA Local 1181 have also agreed to use available funding and a contract extension to fund an annuity along with an additional general wage increase of 1.63%.  

  

The total cost of the agreement through Fiscal Year 2023 is $11.5 million and is covered by the labor reserve.

This agreement has been ratified by the local’s membership.

CWA Local 1182

CWA Local 1182 represents approximately 2,300 Traffic Enforcement Agents Levels 1 and 2.

The contract term is just over 46 months, is retroactive to December 31, 2017, and expires in November 2021. The agreement includes pattern wage increases of 2.00%, 2.25%, and 3.00%.

The City and CWA Local 1182 have also agreed to use available funding and a contract extension to fund an annuity increase along with adding an additional salary step to the TEA Level 2 step plan at the beginning of an employee’s 11^th year of service.

The total cost of the agreement through Fiscal Year 2023 is $40.8 million and is covered by the labor reserve.

This agreement has been ratified by the local’s membership.

NYC CARE: 10,000 NEW YORKERS RECEIVING ACCESSIBLE AND AFFORDABLE HEALTH CARE

  NYC Health + Hospitals today announced that NYC Care, a health care access program that is a key component of Mayor Bill de Blasio’s commitment to guarantee accessible and affordable health care for all New Yorkers, has enrolled more than 10,000 New Yorkers in the Bronx since its launch in August, two months ahead of projected schedule. To date, all new members were offered a primary care appointment within the first two weeks of enrolling. After its successful implementation in the Bronx, NYC Care will launch in Brooklyn and Staten Island in January 2020, and will be available citywide by the end of next year.

“In the world’s wealthiest nation, no person should ever have to choose between taking their child to the doctor and putting food on the table, said Mayor Bill de Blasio. “In New York City, we are making this right a reality, and providing low-cost affordable, healthcare to all those who need it. With over 10,000 Bronxites now enrolled in NYC Care, we are showing firsthand what it means to be a City that puts working people first.”

NYC Care is the new no- or low-cost health care access program of NYC Health + Hospitals for New Yorkers who are not eligible for insurance or who cannot afford it. The program, which is now operating in the Bronx and will be available citywide by the end of 2020, is expected to dramatically change the way the City’s public health system connects people to personalized, coordinated primary and preventive care at its 70-plus patient care locations throughout the five boroughs, including 11 hospitals and its Gotham Health Federally-Qualified Health Center (FQHC) network. NYC Care offers affordable medications day or night, culturally responsive care, extensive language access and interpretation services, and provides new 24/7 customer service support.

Through the program’s extended pharmacy hours, members have filled over 14,000 prescriptions in the program’s extended pharmacy hours in just the first four months, most commonly for prescriptions to treat diabetes and hypertension, conditions that require timely medication management and adherence.  Through a partnership between the Mayor’s Office of Immigrant Affairs (MOIA) and the Mayor’s Fund to Advance New York City to contract with five Bronx community based organizations to conduct culturally appropriate outreach to prospective NYC Care members. To maintain the enrollment momentum, NYC Health + Hospitals and MOIA will extend funding to these five organizations for an additional six months

The five Bronx community based organizations, Bronx Works, Emerald Isle Immigration Center, Mekong NYC, Northwest Bronx Community and Clergy Coalition, and Sauti Yetu Center for African Women, will receive additional funding for six months to help connect more New Yorkers in the Bronx to primary and preventive care.  As part of outreach efforts, CBOs conduct culturally appropriate outreach to prospective NYC Care members in the Bronx. The five CBOS were selected through a request for proposal process.

In addition, NYC Health + Hospital is running a borough-wide multilingual public awareness campaign including advertisements in public transportation, social media, neighborhood stores, ethnic and community media and LinkNYC terminals as well as street marketing outreach and special  ethnic media partnerships.

Eligible New Yorkers can enroll by calling 646-NYC-CARE to meet with a financial counselor at a health system patient care site. Members will receive a personalized membership card in the mail to star enjoying NYC Care services.

“Health care is a human right, and NYC Care is fundamental to Mayor de Blasio’s vision of guaranteed and affordable health care for every New Yorker,” said Deputy Mayor for Health and Human Services Dr. Raul Perea-Henze. “The swift achievement of our 10,000-member enrollment goal in the Bronx shows the urgent need for regular access to high-quality primary care, especially within our immigrant and lower-income communities. We look forward to changing more lives with the upcoming expansion of NYC Care to Brooklyn and Staten Island.”

“We are proud to say that over 10,000 members in the Bronx now have enhanced access to high-quality, affordable healthcare,” said Mitchell Katz, MD, President and CEO of NYC Health + Hospitals. “Meeting this enrollment milestone in a short period time confirms what we already knew, that this program is a necessity for many New Yorkers to receive care to live their healthiest lives.”

“Thanks to the tremendous efforts of our Bronx community-based partner organizations, we have met our goal and have connected over 10,000 Bronx residents to NYC Care two months ahead of schedule,” said Bitta Mostofi, Commissioner of the Mayor’s Office of Immigrant Affairs. “We are thrilled that these partnerships will be extended, and even more Bronxites will be connected to quality, affordable health care. As the program expands to Brooklyn and Staten Island in 2020, we look forward to continuing our work with NYC Health + Hospitals, and connecting more New Yorkers to the care they need, regardless of immigration status or ability to pay.”

“We’ve been working hard on the ground to connect New Yorkers to much-needed services such as primary and preventive care, low-cost prescriptions, and a new member experience,” said NYC Care Executive Director Marielle Kress. “This 10,000-member milestone is significant as we prepare to engage with additional community partners to connect even more New Yorkers in Brooklyn and Staten Island to the care they need.”