MAYOR DE BLASIO ANNOUNCES LOCATIONS FOR EXPANSION OF OUTDOOR DINING OPTIONS

Program will provide more street space for seating on select restaurant corridors throughout the five boroughs

 Mayor de Blasio today revealed the first 22 locations for the expansion of outdoor dining options under an initiative that combines two popular programs, Open Streets and Open Restaurants. The program expands restaurant seating options onto car-free streets for select corridors throughout the five boroughs. Selected corridors will be operational on weekends starting tomorrow evening, Friday, July 3.

Twenty-two locations citywide will be open to pedestrians and have been approved for expanded street dining. Another 10-20 corridors will be approved beginning Friday, July 17. Restaurants on these corridors will be able to place seating farther away from the curb than other Open Restaurants participants, and the remaining street space will be open to pedestrian traffic.

“Combining our popular Open Streets and Open Restaurants programs will give more New Yorkers the space they deserve to enjoy the outdoors safely – and give small businesses the chance to rebuild after facing unprecedented challenges this spring,” said Mayor Bill de Blasio. “I’m excited to enjoy more outdoor meals soon, and we look forward to expanding the program in the coming weeks.”

“As we head into the July 4th weekend, we are excited to be able to start giving restaurants the additional room they need to welcome more customers, so that we can all work together to rebuild this key sector of our local economy in the wake of the Covid-19 crisis,” said DOT Commissioner Polly Trottenberg. “We thank everyone from all the BIDs and other neighborhood organizations who made the case that expanding the vision of our Open Streets program to grow outdoor dining will be good for New Yorkers’ quality of life and the city’s bottom line.”

The locations announced today are focused on streets that are already participating in the Open Streets program, on corridors represented by organizations that have worked with DOT on street closures in the past. The second tranche of locations will include additional applicants, such as ad hoc groups of restaurants that coordinate through a single entity acting as a partner organization.

The hours of operation for this new expanded seating option for restaurants will be from 5 p.m. to 11 p.m. on Friday nights, and noon to 11 p.m. on Saturdays and Sundays. Expanded seating will last until Labor Day.

Organization	Street	From	To	Borough
Belmont BID	Arthur Ave	E 188th St	Crescent Ave	Bronx
DUMBO	Dock St	Front St	Water St	Brooklyn
DUMBO	Main St	Plymouth St	Water St	Brooklyn
DUMBO	Washington St	Water St	Front St	Brooklyn
DUMBO	Anchorage Place	Water St	Front St	Brooklyn
Park Slope 5th Ave BID	5th Ave	Dean St	Park Pl	Brooklyn
Red Hook Business Alliance	Reed St	Conover St	Van Brunt St	Brooklyn
Chinatown BID	Doyers St	Bowery	Pell St	Manhattan
Uptown Grand Central	E 101st St	Lexington Ave	Park Ave	Manhattan
Meatpacking BID	Gansevoort St	Washington St	W 13th St	Manhattan
Meatpacking BID	9th Ave	14th St	15th St	Manhattan
Meatpacking BID	13th St	Hudson St	Washington St	Manhattan
Meatpacking BID	Little W 12th St	9th Ave	Washington St	Manhattan
Flatiron Partnership	Broadway	25th St	28th St	Manhattan
LES Partnership	Orchard St	Delancey St	Grand St	Manhattan
LES Partnership	Broome St	Ludlow St	Allen St	Manhattan
Times Square Alliance	W 46th St	8th Ave	9th Ave	Manhattan
Little Italy Merchants Association	Mulberry St	Hester St	Broome St	Manhattan
Little Italy Merchants Association	Hester St	Mulberry St	Mott St	Manhattan
Bayside Village BID	Bell Blvd	39th Ave	41st Ave	Queens
Bayside Village BID	41st Ave	Bell Blvd	214th Pl	Queens
New Dorp BID	New Dorp Ln	S. Railroad Ave	Hylan Blvd	Staten Island

BIDs and community-based organizations can apply here. The City will quickly review applications and consult with elected officials and Community Boards to ensure optimal safety and appropriate design.

“I thank the Mayor for his innovative approach of using Open Streets for outdoor dining. This is a much-needed lifeline for restaurants struggling due to the COVID-19 pandemic. I hope to see this program expand in the coming days to areas in Brooklyn that have not historically been prioritized for safe streets and economic development initiatives, like East New York and Canarsie,” said Brooklyn Borough President Eric Adams.

"I'm thrilled to share the news that Bayside's Bell Boulevard was selected to participate in the Open Streets: Restaurants initiative, which gives restaurant owners the power to expand dining on the weekends and offer more diners food service in the open air, giving New Yorkers a safe way to enjoy a meal out while supporting their favorite local eateries," said Council Member Paul Vallone, Chair of the Committee on Economic Development. "I thank the Bayside BID for their partnership and welcome this economic boon for our local restaurants, whose success will be a critical part of a strong economic recovery for New York City."

“Thank you to DOT, SBS, the NYPD, and the Mayor for giving us a fair hearing on this plan and agreeing to implement it so quickly. New Dorp Lane, with almost 30 restaurants, is a true ‘restaurant row,’ and with these closures those restaurants who call it home will have the opportunity to dramatically increase their outdoor capacity. This is a win-win-win since it will help local businesses survive, it will allow for appropriate social distancing, and it will give Staten Islanders a safe outdoor place to enjoy a meal with their families on weekend nights," said Council Member Steven Matteo.

"Between our customers and the business owners, it’s hard to tell who is happier,” said Christine Silletti, Executive Director, Bayside Village BID.

“While Little Italy in the Bronx has been operating during COVID-19 due to our essential businesses including butchers, pharmacies, fish markets, delis, bakeries, pizzerias, and many other specialty stores and services, we have looked forward to reopening our restaurants which make up the other half of our historic, multi-generational neighborhood. Streets will remain open during normal business hours every day while the weekend evenings will be a new opportunity for visitors to experience our own Little Italy in the Bronx piazza-style al fresco dining. The Belmont BID is thankful to the NYPD 48th Precinct, led by Captain Joseph Tompkins and the Department of Transportation for their help, coordination and support of this initiative,” said Peter Madonia, Chairman of the Belmont BID.

Morris Park Rally In Support of Police

  Tuesday evening hundreds of people came out to show support for the police in Loretto Park. The rally opened up with God Bless America, and God Bless the Police Department.

No elected officials were present, but the Republican candidate for the 14th Congressional District John Cummings was on hand to denounce what is going on by the mayor and City Council. He said how can you cutback the police when crime is rising? He added that people want Safe Streets, Good Education, and a better quality of life. 

As this rally was going on several counter protesters gathered trying to disrupt the Pro Police rally. The counter protesters wanted cuts to the police department, and held signs Black Lives Matter. Captain Natiw of the 49th Precinct was on hand with several of his police officers. While order was kept reinforcements came from the 45th, 43rd, and 41st precincts. 

Above - Republican candidate for the 14th Congressional District speaks.
Below - Proud members of the Morris Park Community Association were on hand to support the NYPD.

Above - Counter protesters assembled outside a gate to the park while one makes signs for them to hold.

Below - The counter protesters go at it with the Pro Police rally attendees, with only a chain link fence separating them.

Above - Police officers keep the outnumbered counter protesters safe from community members who have begun to gather outside  the park behind the protesters.
Below - Police escort one suspected agitator away before any trouble can occur. 

This is exactly what the protesters wanted, to disrupt a peaceful rally that is not part of their agenda. 

Governor Cuomo Announces Phase Three Indoor Dining Postponed in New York City

Expands Testing Criteria Statewide to All New Yorkers

Creates State Enforcement Department to Supplement Local Enforcement

Renews Call for President Trump to Wear a Mask

Acknowledges Six Major Retailers Requiring Customers to Wear Face Coverings at All of Their Stores Nationwide

1.1 Percent of Yesterday's COVID-19 Tests were Positive

11 COVID-19 Deaths in New York State Yesterday

Confirms 625 Additional Coronavirus Cases in New York State - Bringing Statewide Total to 394,079; New Cases in 39 Counties

Governor Cuomo: "It's time for the President to actually tell the truth. The first thing he can do: Come clean with the American people, admit the threat of this virus. Admit you were wrong. It's not an admission. Everybody knows you were wrong. It doesn't cost you anything. At least have the courage to admit what everybody else already knows: you were wrong. And send a message to this nation that we have to mobilize our citizens, we have to mobilize our government, and we have to start doing something about this. And you want to take one easy step that will send a powerful message? Put a mask on it."

 Earlier today, Governor Andrew M. Cuomo today announced that the reopening of New York City indoor dining, originally part of the city's expected entry into Phase Three on July 6, will be postponed as states across the country that previously reopened indoor dining are experiencing upticks in COVID-19 cases.

The governor also announced that New York State will expand its testing criteria to all New Yorkers statewide. New York conducts more tests per capita than any big country in the world and now has the capacity to expand the testing criteria.

Governor Cuomo also announced that New York State will create an enforcement department to supplement the local enforcement of COVID-19 guidance and restrictions.

The governor also renewed his call on President Trump to wear a mask.

The governor also said six major retailers are requiring customers to wear face coverings while shopping at their stores nationwide, including: Costco, C-Town, Gristedes and D'Agostino, Stop & Shop, Tops and Whole Foods.

Speaker Corey Johnson, Announces Agreement on FY 2021 Budget

The $88.19 billion budget reduces spending and restructures the NYPD while restoring $700 million in programs and initiatives that the de Blasio Administration had cut in the Executive Budget

  Speaker Corey Johnson, Finance Committee Chair Daniel Dromm, and Capital Budget Subcommittee Chair Vanessa Gibson on Tuesday announced an agreement on the Fiscal Year (FY) 2021 budget. The Fiscal Year 2021 Adopted Budget includes $837 million in cuts and transfers to the New York Police Department (NYPD) expense budget. When combined with associated costs, these cuts remove $1 billion from the NYPD’s spending. This was a hard-fought battle, which marks the beginning of the Council’s efforts to not only limit the size and scope of the NYPD, but also reimagine how we structure criminal justice and public safety in this city.  

The $88.19 billion budget, which is on time and balanced, was negotiated with a focus on achieving equity, particularly for low-income communities of color. Despite unprecedented challenges due to a $9 billion revenue shortfall from the COVID-19 pandemic, the Council fought for and won $700 million for programs and initiatives left out of the FY 2021 Executive Budget. These programs and initiatives will go towards helping our young people, schools, seniors, and low-income communities of color, to name a few. More details below.  

The restorations of the Executive Budget cuts and the Council’s initiative package were made possible in part due to more than $300 million in agency savings that the Council identified for the de Blasio Administration. In addition, the FY 2021 Budget was balanced with budget reserves the City had at its disposal because of the Council’s advocacy in past budget negotiations. Under Speaker Johnson, the Council negotiated an additional $500 million for the City’s reserves last year, which has softened the blow of the recession. The Council hopes and continues to advocate for our federal leaders to deliver a robust aid package to New York, as well as more state aid.  

“The Council came into this year’s budget negotiations laser-focused on preserving the social safety net while grappling with unprecedented revenue shortfalls. We are proud of the work we did to save the types of programs and initiatives we need to rebuild post-COVID, including the Summer Youth Employment Program, community food pantries, domestic violence programs, money that will go directly into school budgets, senior services, and alternatives to incarceration. We also heard the calls for reimagining the NYPD, and pushed for and won spending reductions to the Department. That work is not over, and while we have made progress, we are also vowing to keep fighting for fundamental changes to how we approach safety in schools, mental health and homelessness. Over the coming weeks, the Council will be working on hearings and legislation to make sure that these changes are real. Our City faces many challenges ahead, but the Council will work together to keep fighting on behalf of all New Yorkers,” said Speaker Corey Johnson. 

The FY2021 budget will:  

·       Save Summer – The Council has secured $115.8 million to bring back the Summer Youth Employment Program (SYEP) and the COMPASS, Beacon, and Cornerstone summer camp programs.  Thanks to this restoration more than 35,000 youth will participate in a job training programs and at least 70,000 children will enjoy a summer camp experience. The Work, Learn, Grow program that offers students paid work experiences during the school year will provide up to 2,000 jobs next school year. 

·       Reduce and Reform the NYPD – The budget reduces police spending and shrinks NYPD’s footprint.  The reduction includes nearly $484 million in cuts, $354 million in shifts to other agencies best positioned to carry out the duties that have previously been assigned to the NYPD, such as DOE, DOHMH and DHS, and $162 million shifts in associated costs, as well as a movement of $500 million in capital costs from the NYPD capital budget which allows investment in other badly needed infrastructure. The Council will be moving forward with hearings and legislation in July to ensure a just transition away from law enforcement in schools, homelessness and mental health, so that we can make certain that this is not just a budget shift.

o   Eliminating two of the four NYPD classes this year, reducing headcount by 1,163 uniform officers and creating ongoing savings without laying off our newest officers under the city’s last in, first out rule.  

o   Returning control of School Safety to the Department of Education, ending a harmful zero-tolerance plan implemented by former Mayor Rudy Giuliani to put the police department in charge of school safety. The new agreement includes a commitment to working with stakeholders, school administrators, advocates and school safety officers to move toward a community model and away from a punitive, enforcement-focused model.  

o   Removing NYPD from homeless outreach. Police often merely moved these individuals from one unsafe spot to another, continuing the cycle of injustice. The new model will focus on meaningful outreach by individuals trained to deal with this vulnerable population.  

o   Reducing overtime spending by $352 million and instituting strict oversight on overtime limits.  

o   Removing crossing guards from NYPD. 

·       Protect Public Schools – The Council recognized the need to shield our public schools and students from drastic budget cuts that would have, not only pared school budgets to the bones, but also would have stripped students of access to the social and emotional supports they need to thrive academically. The Council restored $100 million in Fair Student Funding, $11.6 million for the Single Shepherd guidance counselors, $4.8 million for 38 social workers, and $1.8 million for other social-emotional supports for students. This budget also funds school health programs so that there is a school nurse for every public school building. 

·       Help College Students Graduate – Because of the Council’s Advocacy, the CUNY Accelerated Study in Associate Programs (ASAP) will be maintained with $34.3 million to help students stay on track and graduate. The Council also restored $1.7 million for the CUNY Remediation Program that helps students prepared for college course work. 

·       Preserve Youth Initiatives – The Fair Futures campaign for foster youth will receive $2.7 million, childcare vouchers will get $4 million, and discretionary childcare contracts will receive $8.7 million.  

·       Prevent Food Insecurity – In addition to the $25 million that the Council had previously negotiated to prevent food insecurity, the adopted budget will include $8.6 million in food initiatives to ensure that New Yorkers do not go hungry. 

·       Promote LGBTQIA Rights – Particularly during Pride, the Council is proud that the budget will include $1.8 million for the LGBTQ curriculum at the DOE and $1 million at the City University of New York (CUNY), as well as $1.4 million for LGBTQ senior services in every borough and $1.9 million for Trans Equity Programs. 

·       Maintain Culture and the Arts – Culture and the arts drive tourism and will contribute significantly to our economy and our recovery. The Adopted Budget will include $20.2 million for cultural programs and Cultural Institutions Groups, $14.3 million and $1 million for the CASA and SU-CASA initiatives, respectively, and $3.7 million for the Coalition Theaters of Color initiative. 

·       Support Libraries – The Adopted Budget will include $11.9 million to support the City’s three library systems.  With this funding, the libraries will be able to maintain in programming and circulation, cover critical operating expenses, including repairs and upkeep that are not eligible for capital funds. 

·       Protect Survivors of Domestic Violence – The budget will include $12.2 million in services to help survivors of domestic violence, a full budget restoration of the Council initiative. The Council launched a social media campaign, #BeingSafeCANTWait, this spring to amplify the message that help was available to survivors during the pandemic. Sheltering in place has been incredibly dangerous for those facing domestic violence. Some countries saw a 30% increase in domestic violence reports after COVID-19 restrictions were relaxed. We should prepare for the same.  

·       Strengthen Small Businesses and Workers – In this economic climate, it is imperative that we do all we can to support the small businesses and workers who will help New York City recover. The budget will provide $1.6 million to Chamber on the Go, $3 million for Worker Coop Business Development, $1 million for Construction Site Safety Training, and $2.8 million for the Day Laborer Workforce Initiative. 

·       Engage Our Seniors – The budget will include $8.4 million for senior centers, $6.5 million for Naturally Occurring Retirement Communities, and $4 million to support Holocaust survivors. 

·       Provide Housing – Because the eviction moratorium put in place as a result of COVID-19 will soon be lifted, securing housing is imperative. Due to the Council’s advocacy, the budget will include $3.2 million for Foreclosure Prevention Programs, $3.1 million for Community Housing Preservation Strategies, $1.7 million for the Home Loan Program, and $637,500 for the Community Land Trust Initiative. 

·       Assist Immigrants – COVID-19 had a disproportionate impact on many of the City’s immigrant residents, made worse by an inability to access many federal programs intended to help. The Council fought to include $9.8 million for adult literacy, $2 million for the Immigrant Health Initiative, $4 million for unaccompanied minors and families, and $16.6 million for the New York Immigrant Family Unity Project to be included in the budget. 

·       Promote Criminal Justice – In continuation of the Council’s longstanding push for criminal justice, the budget will include $11.9 million for Alternatives to Incarceration, $2.2 million for diversion programs, $4.1 million to support people involved in the sex trade, $3.2 million for the Initiative to Combat Sexual Assault, and $2.9 million for the Crisis Management System

Acting Manhattan U.S. Attorney Announces $678 Million Settlement Of Fraud Lawsuit Against Novartis Pharmaceuticals Corporation For Operating Sham Speaker Programs

Novartis Pharmaceuticals Paid Over $100 Million To Doctors To Unlawfully Induce Them To Prescribe No

Novartis Admits to Certain Conduct Alleged in the Lawsuit and Agrees to Strict Limitations on Its Ability to Conduct Future Speaker Programs

  Audrey Strauss, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Gregory E. Demske, Chief Counsel to the Inspector General of the United States Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), Scott J. Lampert, Special Agent in Charge of HHS-OIG’s New York Regional Office, Leigh-Alistair Barzey, Special Agent in Charge of the Northeast Field Office of the U.S. Department of Defense - Office of Inspector General’s Defense Criminal Investigative Service (“DCIS”), and Christopher Algieri, Special Agent in Charge the Department of Veterans Affairs, Office of Inspector General, Northeast Field Office (“VA OIG”), announced today that the United States has settled a civil fraud lawsuit against NOVARTIS PHARMACEUTICALS CORPORATION (“NOVARTIS”), part of Swiss drug manufacturer Novartis International AG, alleging that NOVARTIS violated the federal False Claims Act and Anti-Kickback Statute by providing doctors with cash payments, recreational outings, lavish meals, and expensive alcohol to induce them to prescribe NOVARTIS cardiovascular and diabetes drugs reimbursed by federal healthcare programs.  Specifically, the Government alleged that NOVARTIS organized tens of thousands of sham educational events at high-end restaurants and other venues, paid exorbitant speaker fees to doctors who gave no meaningful presentations, and provided expensive meals and alcohol to doctor attendees and their guests.  When those doctors then prescribed NOVARTIS’s cardiovascular and diabetes drugs, federal healthcare programs paid hundreds of millions of dollars in reimbursements for these tainted prescriptions.  As part of the settlement, approved today by U.S. District Judge Paul G. Gardephe, NOVARTIS will pay the United States and various States a total of $678 million.  NOVARTIS also made extensive factual admissions in the settlement and agreed to strict limitations on any future speaker programs, including reductions to the amount it may spend on such programs. 

Acting U.S. Attorney Audrey Strauss said:  “For more than a decade, Novartis spent hundreds of millions of dollars on so-called speaker programs, including speaking fees, exorbitant meals, and top-shelf alcohol that were nothing more than bribes to get doctors across the country to prescribe Novartis’s drugs.  Giving these cash payments and other lavish goodies interferes with the duty of doctors to choose the best treatment for their patients and increases drug costs for everyone.  This Office will continue to be vigilant in cracking down on kickbacks, however they may be dressed up, throughout the pharmaceutical industry.”

FBI Assistant Director-in-Charge said:  “Not only did Novartis incentivize doctors to host these speaking events, reps bribed the doctors to write more prescriptions of the company’s drugs to give Novartis an advantage over competitors within their field.  Greed replaced the responsibility the public expects from those who practice medicine, not to mention the potential for an erosion of trust in the pharmaceutical industry as a whole.  This conduct was reprehensible and dishonest.  Patients and consumers deserve better, and our office will continue to pursue any similar allegations of this kind.”

HHS-OIG Chief Counsel Gregory Demske said:  “OIG will continue to work closely with the Department of Justice to investigate and pursue kickbacks regardless of the form they take.  To address Novartis’s conduct and the widely-recognized compliance risks associated with paid speaker programs, the CIA requires Novartis to make fundamental changes to its speaker program practices.  Under the CIA, Novartis must significantly reduce the number of programs and the number of paid physicians, and can no longer pay for inherently-risky in-person programs.” 

HHS-OIG Special Agent in Charge Scott J. Lampert said:  “The various kickback schemes employed by Novartis threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid.  Greed must never play a part in patient care.  Along with our law enforcement partners, HHS-OIG will continue to hold pharmaceutical companies accountable when they step over the line to maximize their market share at the expense of taxpayer-funded federal health care programs.”

DCIS Special Agent in Charge Leigh-Alistair Barzey said:  “Protecting the integrity of TRICARE, the healthcare system for military members and their dependents, is a top priority for the DCIS.  When pharmaceutical corporations offer kickbacks and engage in other fraudulent activity to induce medical professionals to prescribe their products, they undermine the integrity of TRICARE and other healthcare plans.  The settlement agreement announced today is the result of a joint effort and demonstrates the DCIS’s ongoing commitment to work with its law enforcement partners and the U.S. Attorney’s Office, to investigate and prosecute companies that seek to profit by engaging in schemes such as those identified in this case.”

VA-OIG Special Agent in Charge Christopher Algieri said:  “Kickback schemes undermine our federal healthcare programs, including healthcare benefits administered by the U.S. Department of Veterans Affairs.  We will continue to work collaboratively with our law enforcement partners and the U.S. Attorney’s Office to protect the quality of veterans’ healthcare and integrity of VA’s programs.”  

In its Complaint in this lawsuit, the Government alleged that between 2002 and 2011 (the “Relevant Period”), NOVARTIS hosted tens of thousands of speaker programs and related events under the guise of providing educational content, when in fact the events served as nothing more than a means to provide bribes to doctors.  NOVARTIS paid physicians honoraria, purportedly as compensation for delivering a lecture regarding a NOVARTIS medication, but, as NOVARTIS knew, many of these programs were nothing more than social events held at expensive restaurants, with little or no discussion about the NOVARTIS drugs.  Indeed, some of the so-called speaker events never even took place; the speaker was simply paid a fee in order to induce the speaker to prescribe NOVARTIS drugs. 

The Government’s complaint further alleged that NOVARTIS sales representatives, on the instruction of their managers, selected high-volume prescribers to serve as the paid “speakers” at these events with the intent to induce them to write more – or keep writing many – NOVARTIS prescriptions.  The sales representatives then pressured the speakers to increase their prescriptions of NOVARTIS drugs, and often dropped doctors from the program if they failed to do so.  Further, the Government alleged that this widespread kickback scheme was the result of decisions made by top management at NOVARTIS’s North American headquarters in New Jersey.   

As part of the settlement, NOVARTIS admitted and accepted responsibility for certain conduct alleged by the Government including the following:

• Some NOVARTIS sales representatives intended the honoraria paid to doctors to be an inducement to these doctors to prescribe more NOVARTIS drugs.
• NOVARTIS paid many high-prescribing doctors tens or hundreds of thousands of dollars in honoraria. 
• In thousands of instances, NOVARTIS paid for the same group of doctors, often colleagues or friends, to have dinners together repeatedly.  Doctors in these groups would sometimes rotate being the speaker and receiving the honorarium payment.
• NOVARTIS sales representatives hosted programs at some of the most expensive restaurants in the United States, intending to induce the doctors in attendance to continue to write NOVARTIS prescriptions.  These restaurants included some of the most high-end restaurants in the country, such as Masa, Daniel, Gramercy Tavern, Il Mulino, Babbo, Peter Luger, Le Bernardin, and Eleven Madison Park in New York City; Charlie Palmer’s in Washington, D.C.; Morton’s Steakhouse and the Four Seasons in Chicago; Joe’s Stone Crab in Miami; Abacus, Nobu, and the Four Seasons in Dallas; Gary Danko in San Francisco; Patina and Matsuhisa in Los Angeles; Grill 225 in South Carolina; and Commander’s Palace in New Orleans.
• Throughout the Relevant Period, more than 12,000 speaker programs and roundtables had meal spends that were considerably in excess of the $125 per person limit set by NOVARTIS’s compliance policies. 
• For example, in 2008, at a speaker program held at Ruth’s Chris Steakhouse in Pikesville, Maryland, NOVARTIS held an event with only one doctor in the audience for the speaker’s presentation, at which it spent $448 per person on food and alcohol, in addition to the $1,000 honorarium payment provided to the speaker.
• During the Relevant Period, some NOVARTIS sales representatives conducted programs at venues where the focus was on entertainment, including fishing trips, sporting events, wine tastings, and hibachi tables.  NOVARTIS conducted hundreds of events at wineries and golf clubs.
• Sales representatives also conducted events at Hooters.
• At many of NOVARTIS’s speaker programs, the sales representative hosting the event did not require the speaker, who was being paid an honorarium, to deliver a presentation at all, or allowed the speaker to click through the power point presentation in a matter of minutes.  In those instances, the majority of the time was spent socializing and enjoying dinner.
• NOVARTIS in a number of instances paid doctors honoraria for purportedly speaking at events that never took place.
• On Long Island, at least one NOVARTIS sales representative organized fraudulent speaker programs by arranging for a restaurant to create fake receipts to make it appear that a dinner had taken place, and then using the budgeted funds to purchase gift cards that were distributed to high-prescribing doctors.  Doctors were then also paid honoraria for “speaking” at these sham events.
• NOVARTIS’s compliance training materials suggested that emails advocating illegal kickbacks were improper in part because they “reflect[] ignorance of the import of written communications, and put[] the Company at risk.” NOVARTIS’s Chief Compliance Officer also stated in training presentations:  “If you don't have to write it, don’t.  Consider using the phone.”

Under the settlement, NOVARTIS will pay a total of $678,000,000, of which (i) $591,442,008.92 will be paid to the United States as False Claims Act damages, (ii) $38,406,717.42 will be forfeited to the United States as proceeds of violations of the Anti-Kickback Statute; and (iii) $48,151,273.66 will be paid to various States.

The settlement also requires NOVARTIS to reform its business practices. Contemporaneously with this settlement, NOVARTIS has entered into a corporate integrity agreement (“CIA”) with HHS-OIG that will significantly curtail the company’s ability to conduct speaker programs going forward, and will dramatically reduce the amount of money that NOVARTIS may spend on such programs.  Under the five-year CIA, NOVARTIS speaker programs are only permitted under limited circumstances and must be conducted in a virtual format such as a webinar.  The CIA also requires multi-faceted monitoring of NOVARTIS’s operations and obligates company executives and Board members to certify compliance annually with the terms of the CIA.  The strict limitations on speaker programs imposed by the CIA are also incorporated into the settlement.  The settlement provides procedures for the Government to raise violations of these requirements with the district court.

This matter was initially brought to the Government’s attention by a whistleblower who filed a complaint pursuant to the False Claims Act.

Ms. Strauss praised the investigative work of the FBI, HHS-OIG, and DCIS.  She also thanked the Commercial Litigation Branch of the U.S. Department of Justice’s Civil Division in Washington, D.C., and the Office of Counsel to the Inspector General of HHS for their critical assistance in this case.

Acting Manhattan U.S. Attorney Announces Consent Decree With Chestnut Petroleum Distributors, Inc., And Affiliates Resolving Violations Of The Resource Conservation And Recovery Act

Defendants Admit to Failing to Follow Environmental Regulations Governing Underground Storage Tanks at Gas Stations; Agree to Injunction and $187,500 Civil Penalty

  Audrey Strauss, Acting United States Attorney for the Southern District of New York, and Peter D. Lopez, Regional Administrator of the U.S. Environmental Protection Agency (“EPA”), announced today that the United States has entered into a Consent Decree settling a civil lawsuit against Chestnut Petroleum Distributors, Inc., and its affiliates CPD Energy Corp., CPD NY Energy Corp., Chestnut Mart of Gardiner, Inc., Chestnut Marts, Inc., Greenburgh Food Mart, Inc., Middletown Food Mart, Inc., and NJ Energy Corp. (collectively, “Defendants”), for violating the Resource Conservation and Recovery Act (“RCRA”) in connection with their ownership or operation of underground storage tanks at 20 separate gas stations within the Southern District of New York and adjoining districts. 

Acting U.S. Attorney Audrey Strauss said:  “Today’s settlement holds Chestnut Petroleum Distributors, Inc., and its affiliates accountable for repeatedly failing to comply with regulations designed to prevent gasoline leaks from injuring public health and the environment, and ensures ongoing oversight of the defendants’ operations to protect the public in the future.”    

EPA Regional Administrator Peter D. Lopez said:  “Failure to regularly monitor underground storage tanks and address possible leaks risks contaminating groundwater, which is one of our most valuable natural resources. This settlement requires the companies to follow laws in place to mitigate safety threats and protect the environment.”                  

Petroleum products such as gasoline contain chemical compounds that pose substantial threats to human health.  Service stations typically store gasoline in underground storage tanks.  When operated conscientiously and monitored closely, underground storage tanks are a safe and effective means to store gasoline.  But when those tanks are not subjected to basic operational safeguards, they can endanger the public and the environment, for example by leaking petroleum into the water supply, discharging toxic vapors into the air, or even triggering fires or explosions.  EPA’s regulations under RCRA are designed to protect the public by requiring underground storage tank operators to reduce the likelihood of leaks, monitor for leaks so they can promptly be addressed, and maintain adequate insurance to conduct corrective action and compensate injured third parties should a leak occur.

The Consent Decree, which is subject to public comment and approval by the district court, resolves a lawsuit filed by the United States in May 2019, which alleges that Defendants repeatedly violated RCRA and related regulations at various times between 2011 and 2014 with respect to their ownership and/or operation of underground storage tanks at 20 gas stations. 

In the Consent Decree filed today, Defendants admit, acknowledge, and accept responsibility for failing to perform required actions at one or more facilities on various specified dates between 2011 and 2014.  This includes:

• failing to perform release (i.e., leak or spill) detection;
• failing to maintain and provide records of release detection monitoring;
• failing to operate corrosion protection systems (including inspecting and testing) for steel underground storage tank systems and failing to maintain and provide records of corrosion protection monitoring;
• failing to cap and secure underground storage tanks that were temporarily closed;
• failing to perform release detection for underground storage tanks that were temporarily closed;
• failing to report suspected releases or unusual operating conditions for underground storage tanks;
• failing to conduct release investigations and confirm suspected releases or unusual operating conditions; and
• failing to maintain insurance policies sufficient to take corrective action and compensate third parties for bodily injury and property damage caused by accidental releases arising from the operation of the underground storage tanks.  

Pursuant to the Consent Decree, Defendants are required to comply with the regulations applicable to underground storage tanks for all underground storage tanks at the facilities at issue, and to take various measures to ensure such compliance, including undertaking inspections, maintaining and operating an electronic environmental management system providing centralized electronic monitoring of release detection at all underground storage tanks at the facilities, monitoring the under-dispenser containment systems at all underground storage tanks at the facilities, and providing semi-annual reports to EPA.  Defendants also agree to undertake certain measures with respect to newly acquired facilities containing underground storage tanks, including providing notice to EPA of the planned acquisition, conducting a pre-acquisition assessment, and ensuring that all underground storage tanks at newly acquired facilities are promptly brought into compliance with all applicable regulations.

In addition to this injunctive relief, Defendants will pay a civil penalty of $187,500.  Defendants will also be subject to substantial penalties if they fail to comply with the terms of the Consent Decree.

The Consent Decree will be lodged with the District Court for a period of at least 30 days, and notice of the Consent Decree will be published in the Federal Register before the Consent Decree is submitted for the Court’s approval.  This will afford members of the public the opportunity to submit comments on the Consent Decree to the Department of Justice.

Acting U.S. Attorney Strauss thanked EPA’s attorneys and staff for their critical work on this matter.