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Wednesday, February 24, 2021
Former Massachusetts State Representative Pleads Guilty to Embezzling Campaign Funds, Bank Fraud and Tax Fraud
Former Massachusetts State Representative David M. Nangle pleaded guilty today to illegally using campaign funds to pay for his personal expenses, defrauding a bank to obtain loans to purchase his home and repay his personal debts, and collecting income that he failed to report to the IRS.
Nangle, 60, of Lowell, pleaded guilty to 10 counts of wire fraud, four counts of bank fraud, four counts of making false statements to a bank and five counts of filing false tax returns. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for June 24, 2021. Nangle was arrested and charged in February 2020.
“Elected representatives are expected to work for the benefit of their constituents, not to line their own pockets,” said United States Attorney Andrew E. Lelling. “Mr. Nangle violated his obligations to the public by siphoning campaign dollars to cover the cost of his personal lifestyle, violating both federal law and the trust placed in him by voters. This office will continue to aggressively investigate and prosecute public corruption in the Commonwealth’s government institutions.”
“David Nangle brokered his powerful position as a Massachusetts state lawmaker to put his own personal, financial, and political interests above the people he was elected to serve, depriving them of the right to honest government,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Corrupt public officials undermine the integrity of our government and inflict lasting damage. Rooting them out is among the most complex and significant work the FBI does for the American people.”
“Elected officials are chosen to serve the people, not themselves,” said Acting Special Agent in Charge Ramsey E. Covington of the Internal Revenue Service-Criminal Investigation Division. “Misusing campaign funds, underreporting income and claiming fraudulent tax deductions on income tax returns are all egregious betrayals of the public’s trust. Corruption of this nature is far too common, and I hope that today’s guilty plea sends a clear message of IRS-CI’s commitment to holding those who commit these dishonorable acts accountable.”
From 1999 to 2020, Nangle was the elected member of the Massachusetts House of Representatives for the 17th Middlesex District. Nangle, who previously served as a House Ethics Committee Chairman, used his campaign committee’s debit card to make personal purchases, including thousands of dollars in gift cards for his personal use, among other things.
During the period of the charged offenses, Nangle was heavily in debt and gambled extensively at area casinos and online, and then used thousands of dollars in campaign funds to pay for various personal expenses such as dues at a local golf club, rental cars to travel to casinos, flowers for his girlfriend, gas, hotels, and restaurants. Nangle knew that using campaign funds for personal use was prohibited and subject to oversight by an independent state agency and concealed his theft by filing false reports that disguised the personal nature of the spending.
In addition, from at least 2015 to 2018, Nangle devised a scheme to fraudulently obtain loans from a bank in order to finance the purchase of his home, fund his gambling activities and repay his personal debts. Nangle did so by making false statements on multiple loan applications, misstating his income and understating his debt.
Separately, Nangle filed false tax returns for tax years 2014 to 2018 by reporting fictitious business deductions for purported “consulting” work that he did for a Billerica company. Nangle also double dipped on deductible expenses arising from his work as a state legislator, fraudulently claiming thousands of dollars in false deductions for alleged charitable donations and misleading his tax preparer. Further, Nangle concealed the income he received through goods and services from business owners and other sources. This included $7,000 in kitchen and bathroom work done in Nangle’s home and $7,000 in check payments from a contractor; gambling income from a Connecticut casino; and thousands of dollars that he stole from his campaign account.
The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charges of bank fraud and making false statements to a bank each provide for a sentence of up to 30 years in prison, five years of supervised release and a fine of $1 million. The charge of filing false tax returns provides for a sentence of up to three years in prison, one year of supervised release and a fine of $100,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorney Dustin Chao, Chief of Lelling’s Public Corruption & Special Prosecutions Unit, and Assistant U.S. Attorney Kunal Pasricha are prosecuting the case.
311 Days and Counting
I have 311 days left as Mayor of New York City. Don't pack our bags yet Charlene.
Tuesday, February 23, 2021
Housing Lottery Launches For 2885 Marion Avenue In Jerome Park, The Bronx
The affordable housing lottery has launched for 2885 Marion Avenue, an eight-story mixed-use development in Jerome Park, The Bronx. Designed by OCV Architects, the 118,000-square-foot building will yield 114 units. Available on NYC Housing Connect are 97 units for residents at 50 to 110 percent of the area median income, ranging in eligible income from $38,743 to $155,100.
Residential amenities include a shared laundry room, a community room, and a rooftop garden terrace. Units include LED light fixtures, low-emissive argon-filled windows, energy-efficient appliances, and low-flow water fixtures. A community facility space in the building will house a childcare center for the surrounding neighborhood.
At 50 percent of the AMI, there are nine two-bedrooms with a $1,045 monthly rent for incomes ranging from $39,018 to $61,400 and three three-bedrooms with a $1,200 monthly rent for incomes ranging from $45,086 to $70,500.
At 60 percent of the AMI, there is one one-bedroom with a $1,058 monthly rent for incomes ranging from $38,743 to $61,400; 24 two-bedrooms with a $1,280 monthly rent for incomes ranging from $47,075 to $73,680; and eight three-bedrooms with a $1,472 monthly rent for incomes ranging from $54,412 to $84,600.
At 90 percent of the AMI, there are eight one-bedrooms with a $1,375 monthly rent for incomes ranging from $49,612 to $92,160; 19 two-bedrooms with a $1,660 monthly rent for incomes ranging from $60,103 to $110,520; and seven three-bedrooms with a $1,911 monthly rent for incomes ranging from $69,463 to $126,900.
At 110 percent of the AMI, there are five one-bedrooms with a $1,554 monthly rent for incomes ranging from $55,749 to $112,640; 13 two-bedrooms with a $1,874 monthly rent for incomes ranging from $67,440 to $135,080; and four three-bedrooms with a $2,159 monthly rent for incomes ranging from $77,966 to $155,100.
Prospective renters must meet income and household size requirements to apply for these apartments. Applications must be postmarked or submitted online no later than April 20, 2021.
NYC TEST & TRACE CORPS TAKE CARE PROGRAM HELPS MORE THAN 10,000 GUESTS SAFELY SEPARATE IN FREE HOTEL ROOMS TO STOP THE SPREAD OF COVID-19
Isolation and quarantine resources help to break the chains of transmission in households
NYC Test & Trace Corps today announced that its Take Care program has helped more than 10,000 guests safely separate in free hotel rooms to prevent the spread of COVID-19. The program reaches the milestone as access to resources for isolation and quarantine remains imperative to break the chains of transmission during the winter months among families and roommates living closely together in the same household.
“Over the past nine months, we have built a strong testing and contact tracing program, but these tools can only succeed if we can support New Yorkers in being able to isolate and quarantine,” said NYC Test & Trace Corps Executive Director Dr. Ted Long. “If you test positive for COVID-19 or have been exposed, we will be with you every step of the way, offering you our free hotel program which has now helped more than 10,000 New Yorkers keep their families and our city safe.”
Launched in June 2020 as an integral part of the NYC Test & Trace Corps, the Take Care program is the nation’s largest isolation and quarantine program. Take Care provides support to anyone who tests positive for COVID-19 and their close contacts, connecting them with the resources needed to safely separate in a hotel, free of charge, or at home to help prevent the spread of the virus.
The Take Care program has served 11,551 guests in free hotel rooms as of the week ending February 20. Metrics for the period also show that the contact tracing program has cumulatively reached 86% of all cases who test positive including through the second wave of COVID, the highest performance of jurisdictions in the country that report the figure. All cases and contacts in New York City who are reached are offered the opportunity to stay in a free hotel room through the Take Care program. For those separating at home, Resource Navigators have completed more than 192,000 referrals to services such as food and medicine delivery, mental health support, and Paid Sick Leave, and more.
“Our work to break the chains of transmission requires that we put quarantine and isolation resources within easy reach of all New Yorkers, especially those who live together in households where safe separation is not possible,” said Take Care Program Director Dr. Amanda Johnson. “This new milestone of more than 10,000 guests served in free hotel rooms is a testament to all those who made the brave decision to protect their loved ones and separate. We encourage anyone who has COVID-19 symptoms or thinks they have been exposed to contact our program for support.”
Cases and contacts who choose to stay in a free and private hotel room have access to a range of services including onsite clinical monitoring and support provided by skilled doctors and nurses, three meals per day including Kosher and Halal options, onsite free Wi-Fi and unlimited local phone calls to stay connected, medication delivery, telepsychiatry resources, and more. Free round-trip transportation is also provided to and from the hotel and any necessary medical appointments.
Since its launch, the Take Care program has continued to evolve and expand its offerings to serve patients with resources tailored to their needs. Innovations include free Take Care packages with supplies – such as masks and digital thermometers – delivered to cases and contacts safely separating at home, connections to Paid Sick Leave resources, free books and literacy resources for families staying in a hotel room through a partnership with Reach Out and Read of Greater New York, and free dog-walking and pet care services through a partnership with Wag!.
Anyone who has tested positive for COVID-19 or is a close contact of a case is eligible to receive services through the Take Care program. New Yorkers who have COVID-19 symptoms or think they have been exposed are urged to call the Test & Trace Corps hotline at 212-COVID19 for support, or visit nyc.gov/takecare to learn more.
THENEWBXCC - Black History Month Business Panel Discussion
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Governor Cuomo Updates New Yorkers on State's Progress During COVID-19 Pandemic -
5,977 Patient Hospitalizations Statewide
1,176 Patients in the ICU; 799 Intubated
Statewide Positivity Rate is 4.23%
86 COVID-19 Deaths in New York State Yesterday
1 South African Strain Case Identified in Nassau County
18 New UK Strain Cases in New York State
Governor Andrew M. Cuomo today updated New Yorkers on the state's progress during the ongoing COVID-19 pandemic. 18 new cases of the UK variant were identified in New York. To date, there are 154 known cases of the UK variant in New York State. A second South African variant has been identified In Nassau County.
"The decline in our hospitalization and infection rates is all thanks to the dedication New Yorkers have time and again shown to defeating this invisible enemy,” Governor Cuomo said. “As our rates continue to decline, we are opening back up our economy and proving that vaccine distribution can be fair and equitable. The light at the end of the tunnel is brighter and brighter each day, but we’re not there yet. I encourage New Yorkers to remain vigilant until the war is won: Wear a mask, socially distance and wash your hands.”
Today's data is summarized briefly below:
- Test Results Reported – 157,333
- Total Positive – 6,654
- Percent Positive – 4.23%
- 7-Day Average Percent Positive – 3.46%
- Patient Hospitalization – 5,977 (+173)
- Net Change Patient Hospitalization Past Week – -643
- Patients Newly Admitted – 592
- Hospital Counties – 55
- Number ICU – 1,176 (+28)
- Number ICU with Intubation – 799 (+19)
- Total Discharges – 143,071 (+347)
- Deaths – 86
- Total Deaths – 38,031
Attorney General James Ends Virtual Currency Trading Platform Bitfinex’s Illegal Activities in New York
Bitfinex and Tether Must Submit to Mandatory Reporting on Efforts to Stop New York Trading
Bitfinex and Tether Deceived Clients and Market by Overstating Reserves, Hiding Approximately $850 Million in Losses Around the Globe
New York Attorney General Letitia James today continued her efforts to protect investors from fraudulent and deceptive virtual or “crypto” currency trading platforms by requiring Bitfinex and Tether to end all trading activity with New Yorkers. Millions around the country and the world today use virtual currencies as decentralized digital currencies — unlike real, regulated government currencies, including the U.S. dollar — to buy goods and services, often times anonymously, through secure online transactions. Stablecoins, specifically, are virtual currencies that are always supposed to have the same real-dollar value. In the case of Tether, the company represented that each of its stablecoins were backed one-to-one by U.S. dollars in reserve. However, an investigation by the Office of the Attorney General (OAG) found that iFinex — the operator of Bitfinex — and Tether made false statements about the backing of the “tether” stablecoin, and about the movement of hundreds of millions of dollars between the two companies to cover up the truth about massive losses by Bitfinex. An agreement with iFinex, Tether, and their related entities will require them to cease any further trading activity with New Yorkers, as well as force the companies to pay $18.5 million in penalties, in addition to requiring a number of steps to increase transparency.
“Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines,” said Attorney General James. “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system. This resolution makes clear that those trading virtual currencies in New York state who think they can avoid our laws cannot and will not. Last week, we sued to shut down Coinseed for its fraudulent conduct. This week, we’re taking action to end Bitfinex and Tether’s illegal activities in New York. These legal actions send a clear message that we will stand up to corporate greed whether it comes out of a traditional bank, a virtual currency trading platform, or any other type of financial institution.”
A Stablecoin Without Stability – Tethers Weren’t Fully Backed At All Times
The OAG’s investigation found that, starting no later than mid-2017, Tether had no access to banking, anywhere in the world, and so for periods of time held no reserves to back tethers in circulation at the rate of one dollar for every tether, contrary to its representations. In the face of persistent questions about whether the company actually held sufficient funds, Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a good faith effort on our behalf to provide an interim analysis of our cash position.” In reality, however, the cash ostensibly backing tethers had only been placed in Tether’s account as of the very morning of the company’s ‘verification.’
On November 1, 2018, Tether publicized another self-proclaimed ‘verification’ of its cash reserve; this time at Deltec Bank & Trust Ltd. of the Bahamas. The announcement linked to a letter dated November 1, 2018, which stated that tethers were fully backed by cash, at one dollar for every one tether. However, the very next day, on November 2, 2018, Tether began to transfer funds out of its account, ultimately moving hundreds of millions of dollars from Tether’s bank accounts to Bitfinex’s accounts. And so, as of November 2, 2018 — one day after their latest ‘verification’ — tethers were again no longer backed one-to-one by U.S. dollars in a Tether bank account.
As of today, Tether represents that over 34 billion tethers have been issued and are outstanding and traded in the market.
When No Bank Backs You, Turn to Shady Entities — Bitfinex Hid Massive Losses
In 2017 and 2018, Bitfinex began to increasingly rely on third-party “payment processors” to handle customer deposits and withdrawals from the Bitfinex trading platform. In 2018, while attempting to “move money [more] efficiently,” Bitfinex suffered a massive and undisclosed loss of funds because of its relationship with a purportedly Panama-based entity known as “Crypto Capital Corp.” Bitfinex responded to pervasive public reports of liquidity problems by misleading the market and its own clients. On October 7, 2018, Bitfinex claimed to “not entirely understand the arguments that purport to show us insolvent,” when, for months, its executives had been pleading with Crypto Capital to return almost a billion dollars in assets.
On April 26, 2019 — after the OAG revealed in court documents that approximately $850 million had gone missing and that Bitfinex and Tether had been misleading their clients — the company issued a false statement that “we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded.” The reality, however, was that Bitfinex did not, in fact, know the whereabouts of all of the customer funds held by Crypto Capital, and so had no such assurance to make.
The OAG Investigation Shines a Light on Unlawful Trading in New York State
From the beginning of its interaction with the OAG, iFinex and Tether falsely claimed that they did not allow trading activity by New Yorkers. The OAG investigation determined that to be untrue and that the companies have operated for years as unlicensed and unregulated entities, illegally trading virtual currencies in the state of New York.
In April 2019, the OAG sought and obtained an injunction against further transfers of assets between and among Bitfinex and Tether, which are owned and controlled by the same small group of individuals. That action — under Section 354 of New York’s Martin Act — ultimately led to a July 2020 decision by the New York State Appellate Division of the Supreme Court, First Department, holding that:
- Bitfinex and Tether — and other virtual currency trading platforms and cryptocurrencies operating from various locations around the world — are still subject to OAG jurisdiction if doing business in New York;
- The stablecoin “tether” and other virtual currencies were “commodities” under section 352 of the Martin Act, and noted that virtual currencies may also constitute securities under the act; and
- The OAG had established the factual predicate necessary to uphold the injunction and require production of documents and information relevant to its investigation in advance of the filing of a formal suit.
Bitfinex and Tether Banned from Continuing Illegal Activities in New York
Today’s agreement requires Bitfinex and Tether to discontinue any trading activity with New Yorkers. In addition, these companies must submit regular reports to the OAG to ensure compliance with this prohibition.
Further, the companies must submit to mandatory reporting on core business functions. Specifically, both Bitfinex and Tether will need to report, on a quarterly basis, that they are properly segregating corporate and client accounts, including segregation of government-issued and virtual currency trading accounts by company executives, as well as submit to mandatory reporting regarding transfers of assets between and among Bitfinex and Tether entities. Additionally, Tether must offer public disclosures, by category, of the assets backing tethers, including disclosure of any loans or receivables to or from affiliated entities. The companies will also provide greater transparency and mandatory reporting regarding the use of non-bank “payment processors” or other entities used to transmit client funds.
Finally, Bitfinex and Tether will be required to pay $18.5 million in penalties to the state of New York.
In September 2018, the OAG issued its Virtual Markets Integrity Initiative Report, which highlighted the “substantial potential for conflicts between the interests” of virtual currency trading platforms, insiders, and issuers. Bitfinex was one of the trading platforms examined in the report.