Queens Man Charged For Defrauding Government Rental Assistance Programs By Renting Out Dilapidated Apartments He Did Not Own To Families In Need

 

 Audrey Strauss, United States Attorney for the Southern District of New York, and Margaret Garnett, Commissioner of the New York City Department of Investigation (“DOI”), announced today the unsealing of a Complaint charging PAUL FISHBEIN, the defendant, with theft of government funds, wire fraud, and mail fraud for defrauding rental assistance programs administered by New York City’s Human Resources Administration (“HRA”), New York City’s Housing Preservation & Development (“HPD”), and the New York City Housing Authority (“NYCHA”), by falsely claiming to be the owner and landlord of 20 properties (the “Properties”) in New York City, renting out the Properties to families in need through the rental assistance programs, and collecting money – including federal funds – from HRA, HPD, and NYCHA as the purported owner and landlord of the Properties.  The defendant is also charged with Medicaid fraud.  The defendant was arrested today and will be presented later today in Manhattan federal court before United States Magistrate Judge Stewart D. Aaron.

U.S. Attorney Audrey Strauss said:  “As alleged, Paul Fishbein not only took advantage of New Yorkers in need, he also defrauded city and federal government programs designed to help those very people.  Fishbein allegedly lied about ownership of residential properties, fraudulently took rent subsidies and other benefits from those government housing programs, and often evicted tenants without cause from housing that was substandard in any event.  Now Paul Fishbein is in custody and facing serious federal charges for his alleged fraud and exploitation.”

DOI Commissioner Margaret Garnett said:  “This defendant’s alleged conduct wove a web of lies that allowed him to illegally profit from government programs meant to help those in desperate need of housing, and he further exploited them by providing squalid apartments in properties he did not rightly own, often evicting them shortly after they moved in, according to the charges.  Homeless New Yorkers, and others in critical need of housing, not only have a need but a right to homes that are clean, safe, and secure, especially when they are offered through public assistance programs.  DOI will continue to work in partnership with the U.S. Attorney’s Office for the Southern District of New York to root out and stop the corruption and fraud that undermines basic needs such as housing.”

As alleged in the Complaint unsealed today in Manhattan federal court[1]:

The Rental Assistance Program Fraud 

The Rental Assistance Programs

HRA, HPD, and NYCHA (collectively, the “Agencies”) each offer a rental subsidy program that helps provide critical affordable housing to New Yorkers in need.  Landlords who participate in these programs receive guaranteed monthly rent payments, among other benefits.  Rental units must meet federal “Housing Quality Standards,” which are based on the minimum criteria for safe housing, and otherwise meet basic safety and living conditions.

Specifically, HRA administers a rental assistance program (the “Rental Assistance Program”) that helps homeless families move out of the shelter system and into stable housing.  Landlords who participate in the Rental Assistance Program rent housing to homeless families, and in turn, HRA pays participating landlords, among other things, (i) the first month’s rent; (ii) a landlord bonus at signing, which is currently $4,300; and (iii) a rent supplement for either the first three or 11 months’ rent, which is paid in a lump sum at the time of the lease.  In addition, if a landlord uses the services of a broker in renting out the property, HRA will pay the broker a broker’s fee equal to 15 percent of the annual rent.  These and other program-related payments from HRA to participating landlords and brokers include funds from the federal government.  

HPD offers a Housing Choice Voucher program, which is also known as Section 8 (“HPD’s Section 8 Housing Program”).  This program provides federal funding to local housing agencies to assist eligible low-income families with rental subsidies toward decent, safe, and affordable housing.  Participating families pay a certain percentage of their income toward rent and HPD pays the difference directly to the landlord.

NYCHA also operates a Section 8 program (“NYCHA’s Section 8 Housing Program”), which provides assistance to eligible low- and moderate-income families to rent housing in the private market.  NYCHA’s Section 8 Housing Program works as a rental subsidy that allows families to pay a reasonable amount of their income toward their rent.  In general, families pay no more than 40 percent of their adjusted monthly income toward their rent share.  NYCHA pays the remaining amount to the property owner on the family’s behalf.

The Housing Fraud

In this case, from at least in or about 2013 through at least in or about the present, the defendant defrauded the Agencies’ rental assistance programs by falsely claiming to be the owner and landlord of 20 different Properties in New York City based on forged deeds that purported to transfer the Properties from legitimate owners to the defendant.  The defendant rented out the Properties to homeless and low/moderate-income families through the Agencies’ programs, and collected payments from the Agencies as the purported owner and landlord of the Properties.  In addition, the defendant falsely represented to HRA that he used a broker to rent out the Properties, and collected and kept for himself certain broker’s fees that HRA issued for the Properties.  The defendant also took advantage of the homeless and in-need families who were placed in the Properties.  For example, most of the Properties that Fishbein rented out were dilapidated and uninhabitable.  Moreover, even though he was not the lawful owner of the Properties, the defendant often evicted families shortly after they were placed in the Properties.  Through this scheme, the defendant fraudulently obtained more than $1.5 million from HRA, HPD, and NYCHA, including more than $270,000 in federal funds.

The Medicaid Fraud

The defendant also committed Medicaid fraud.  Medicaid is a health insurance program for low-income adults, children, pregnant women, elderly adults, and people with disabilities, which is funded jointly by states and the federal government.   

From at least in or about 2014 through at least in or about the present, the defendant received Medicaid benefits based on his false representations to HRA that he was financially eligible for Medicaid.  During that time, the defendant represented to HRA that he worked at a company where his total income was approximately $150 a week – that is, approximately $600 a month or approximately $7,200 a year.  In reality, the defendant made hundreds of thousands of dollars each year, thus, far exceeding the income and asset limitations for Medicaid eligibility.  By lying about his income and assets, the defendant received at least approximately $47,621 in Medicaid benefits to which he was not entitled.

FISHBEIN, 47, of Far Rockaway, New York, is charged with two counts of theft of government funds, in violation of Title 18, United States Code, Section 641, each of which carries a maximum sentence of 10 years in prison, one count of mail fraud, in violation of Title 18, United States Code, Section 1341, and one count of wire fraud, in violation of Title 18, United States Code, Section 1343, each of which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Ms. Strauss praised the outstanding investigative work of DOI. 

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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

RECOVERY FOR ALL OF US: NEW YORK CITY LAUNCHES NEW DEAL-INSPIRED CITY CLEANUP CORPS

 

Mayor Bill de Blasio today announced the launch of the City Cleanup Corps (CCC), a New Deal-inspired economic recovery program to directly create 10,000 jobs and make New York City the cleanest, greenest city in the United States.

 

“In 1933, President Franklin Delano Roosevelt built the nation’s economic recovery by improving infrastructure, putting Americans back to work, and restoring civic pride in our public spaces. Today, New York City is leading the way in doing it again,” said Mayor Bill de Blasio. “Building a recovery for all of us means creating thousands and thousands of jobs that will make our city a safer and more beautiful place to live, work, and play. That mission has never been more important. Together, we will deliver the kind of recovery that New Yorkers deserve.”

 

“Building an equitable recovery means investing in what makes New York City great: our people, our neighborhoods, and our open spaces,” said Senior Advisor for Recovery Lorraine Grillo. “The CCC will supercharge our recovery and help us rebuild a fairer and better city for New Yorkers in every community.”

 

Announced in the Mayor’s Recovery For All of Us plan, the New York City CCC is modeled after the New Deal’s U.S. Civilian Conservation Corps (CCC), which hired thousands of unemployed Americans from across the country to improve public lands, forests and parks during the Great Depression. The federal stimulus passed by President Biden and Democratic majorities in the U.S. House and U.S. Senate will be used to fund the program.

 

Hiring will begin in April, with 1,000 New Yorkers hired this month. More than 7,700 positions will be posted in July and build to 10,000. Hiring will take place across 10 different City agencies, including Department of Parks & Recreation (Parks), Department of Transportation (DOT), New York City Housing Authority (NYCHA) and Department of Environmental Protection (DEP).

 

The CCC will immediately get to work revitalizing New York City’s public spaces and neighborhoods, beautifying parks and green spaces, and bringing art to the city’s open spaces. This will include a citywide graffiti removal campaign, pressure washing sidewalks, designing murals, tending to community gardens, and maintaining Open Streets.

 

The CCC’s work will focus on key areas identified by local communities and elected officials, business districts, and the 33 neighborhoods hit hardest by the COVID-19 pandemic as identified by the City’s Taskforce on Racial Equity and Inclusion.

 

The CCC’s official logo and poster, designed in-house, were inspired by Roosevelt-era New Deal imagery and the original U.S. CCC logo.

DEC LAUNCHES ANNUAL 'LOOK FOR THE ZERO' CAMPAIGN URGING HOMEOWNERS TO PURCHASE PHOSPHORUS-FREE LAWN FERTILIZER

 

Homeowners Encouraged to Practice Sustainable Lawn Care to Protect State Waterbodies

 New York State Department of Environmental Conservation (DEC) Commissioner Basil Seggos today announced the launch of the annual "Look for the Zero" public awareness campaign to encourage homeowners to go phosphorus-free when using lawn fertilizer. DEC is encouraging consumers to review bag labels for phosphorus content when shopping for fertilizer. Fertilizer labels have three numbers and the number in the middle is the percentage of phosphorus in the product, such as: 22-0-15. More than 100 water bodies in New York State cannot be used or enjoyed because of phosphorus overuse.

 

"Despite some recent winter-like weather, spring is here and property owners are outside working to make sure their lawns look good,” said Commissioner Seggos. “But there’s more to it than just green grass. We want New Yorkers to look for the zero on the fertilizer bag before bringing it home. Excess phosphorus is a threat to many New York waterbodies, triggering algae blooms and sometimes rendering waters un-swimmable and un-fishable. If New Yorkers implement sustainable lawn care methods, we can help dramatically reduce phosphorus and pesticide use on lawns, which will protect water quality and public health while maintaining healthy backyards."

 

DEC introduced the Look for the Zero campaign in 2017, with a public service announcement that shows the effects of fertilizer runoff on New York's waterbodies.

 

New York's nutrient runoff law prohibits the use of phosphorus lawn fertilizers unless a new lawn is being established or a soil test shows the lawn does not have enough phosphorus. Generally, only newly established lawns or those with poor soil need phosphorus. Regardless of the location, excess phosphorus from lawns can wash off and pollute lakes and streams, harming fish, pets, or people that use these waters for recreating and a source of revenue for towns that must close beaches or boating areas. New York State law requires retailers to post signs notifying customers of the terms of the law and to display phosphorus fertilizer separately from phosphorus-free fertilizer.

 

DEC is encouraging homeowners to practice more sustainable lawn care and choose native plants and grasses, which are adapted to the local climate and soil conditions. These plant species provide nectar, pollen, and seeds that serve as food for native butterflies, insects, birds, and other animals. Organic lawn care can easily be implemented on any lawn, and safe and effective alternatives exist for most chemical pesticides and fertilizers. Organic lawn care treatments promote deep root systems, natural photosynthesis, and longer grass growth. Visit DEC's Sustainable Landscaping webpage to learn more.

 

Additional recommendations for sustainable lawn care include spreading a quarter inch of compost on the lawn to improve moisture retention and soil texture and add beneficial microorganisms and nutrients. Another suggestion is to allow grass to grow to three inches and then cut no more than one inch off the top. The "one-third" rule helps develop a deeper root system, which is a natural defense against weeds, disease, and drought. Visit DEC's Lawn Care webpage for more information.

 

DEC also encourages homeowners to leave lawn clippings after mowing to improve the health of the lawn. Grass clippings are 80 percent water and contain two to four percent nitrogen, phosphorus, potassium, and other nutrients. Leaving clippings saves homeowners time after mowing and reduces the amount of garbage. Grass clippings can account for as much as 10 percent of garbage.

 

For more information, visit DEC's Lawn Fertilizer webpage. New York's nutrient runoff law does not affect agricultural fertilizer or fertilizer for gardens.

271 Days and Counting

 

I finally realized that Dr. Chokchi gave me my vaccination. We are now going out into the street with our Vaccination Bus to vaccinate people who may not be citizens, but are a vital part of our ciyt business sector.

Dr. Ted Long Vice-President of the NYCHHC, and executive director of the NYC Test & Trace Corps, stands in front of the new Mobile Vaccine Center HHC Bus.

Dr. Long shows off the inside of the Mobile Vaccine HHC Bus, which has six examination rooms to distribute up to two hundred vaccines a day to people who may not be able to be vaccinated.

Governor Cuomo Updates New Yorkers On State's Progress During COVID-19 Pandemic April 5, 2021

 

11 PM Curfew Lifted for Casinos, Movie Theaters, Bowling Alleys, Billiard Halls, Gyms and Fitness Centers Beginning Today

4,434 Patient Hospitalizations Statewide

906 Patients in the ICU; 577 Intubated

Statewide Positivity Rate is 4.38%

57 COVID-19 Deaths in New York State Yesterday

 Governor Andrew M. Cuomo today updated New Yorkers on the state's progress during the ongoing COVID-19 pandemic.

Beginning today, the 11 p.m. curfew currently in place for casinos, movie theaters, bowling alleys, billiards halls, gyms and fitness centers will be lifted. The 11 p.m. curfew for food and beverage establishments and the 12 a.m. curfew for catered events remains in effect. Both curfews will be evaluated later this month.

"When it comes to COVID, it's undeniable that the behavior of a community makes the difference, and that means wearing masks, social distancing, and washing hands. Some people will say they're tired of COVID, the weather's warm and the death numbers are down, but the community that accepts that philosophy first will have a higher transmission rate. We all understand COVID fatigue, but the pandemic is not over," Governor Cuomo said. "There are still variants and you can still get sick, and yes people are vaccinated, but not enough of them. You're seeing communities where we did have problems and implemented significant public education to address them, but more importantly, the people knew in their community they had an issue. They saw people going to the hospital, and they responded. But people are now relaxing, and as people relax with COVID it's a problem. This is a formidable enemy. You put your hands down at your side, you think it's over, the enemy attacks. And that literally is community by community."

It is important to note that data, including test results and hospital rates, reported early in the week are often not completely reflective of the current situation due to lower discharges and testing volume over the weekend. Data trends over a period of time, such as using 7-day averages, are a preferred metric.

Today's data is summarized briefly below:

• Test Results Reported - 150,225
• Total Positive - 6,583
• Percent Positive - 4.38%
• Patient Hospitalization - 4,434 (+61)
• 7-Day Average Percent Positive - 3.57%
• Patients Newly Admitted - 474
• Hospital Counties - 50
• Number ICU - 906 (+24)
• Number ICU with Intubation - 577 (+15)
• Total Discharges - 164,496 (+410)
• Deaths - 57
• Total Deaths - 40,813

Attorney General James Secures $4.25 Million After Provider of Air Inflation Services and Owner Admit to Tired Scheme Evading Taxes

 

Company and Owner Failed to Pay Over $2.4 Million in Sales Tax

SSVE and Owner Also Underpaid Income Tax and Employee Withholding Tax

 New York Attorney General Letitia James today announced she has secured $4.25 million from a provider of air inflation services operating throughout New York, as well as its owner, after they were caught evading taxes. The agreement resolves claims that the Nassau County-based company Service Station Vending Equipment, Inc. (SSVE) — a provider of self-service, coin-operated air machines used to inflate automobile tires — and its owner, William McCabe, knowingly failed to pay sales tax due on sales of air inflation services, as well as engaged in fraudulent tax avoidance schemes by underreporting sales and paying workers off the books.

“As New York continues to suffer budget shortfalls, we won’t allow any company to further deflate our state’s finances and avoid millions in tax payments,” said Attorney General James. “While a few quarters may not seem like a lot at once, over nearly a decade, SSVE and its owner pocketed $2.4 million through their tired scheme. If New Yorkers need to pay for their air, we’re going to ensure those selling it pay their taxes. Those who aim to cheat the system should know that their fraud will blow up in their faces because my office will continue to aggressively pursue those who defraud taxpayers and the state.”

In 1997, SSVE requested an advisory opinion from the New York state Department of Taxation and Finance (DTF) on whether sales from its coin-operated air machines were exempt from sales tax. In response, the DTF issued an advisory opinion that explicitly stated that receipts from sales of services rendered by air inflation machines are subject to sales tax.

Two decades later, in January 2016, SSVE’s newly-hired accounting firm discussed several tax and accounting issues with McCabe, including SSVE’s failure to collect the appropriate amount of sales tax. Despite that discussion, McCabe continued his behavior and refused to change his sales tax collection practices with respect to air inflation services.

In an effort to further avoid the payment of sales tax, in 2016 and 2017, SSVE and McCabe hired a lobbying firm to lobby state legislators on two pieces of proposed legislation that would have provided an exemption for sales tax on sales from coin-operated air inflation machines. Neither bill was ever enacted.

Despite their actual knowledge that sales from SSVE’s air inflation machines were subject to sales tax, an investigation by the Office of the Attorney General (OAG) found that SSVE and McCabe evaded more than $2.4 million in sales taxes for services for the period from 2010 through 2018. SSVE and McCabe also evaded income taxes, employee withholding taxes, and workers’ compensation payments to the New York state Insurance Fund by underreporting sales and paying workers off the books.

The OAG investigation commenced when whistleblowers filed a lawsuit under the qui tam provisions of the New York False Claims Act, which allows people to file civil actions on behalf of the government and share in any recovery.

In connection with this agreement, SSVE and McCabe admitted and accepted responsibility for their failure to collect and remit the full amount of sales tax for air inflation services and admitted that such conduct violated both the New York False Claims Act and the New York Tax Law. They will pay more than $4.25 million in damages and penalties.

New Yorkers can learn more about filing a claim under the New York False Claims Act on the OAG's website.

Governor Cuomo Updates New Yorkers on State Vaccination Program

 

117,418 Doses Administered in the Last 24 Hours     

More than 1.4 Million Doses Administered Over Past Seven Days   

1 in 3 New Yorkers Have Received at Least One Dose   

1 in 5 Are Now Fully Vaccinated    

Vaccine Dashboard Will Update Daily to Provide Updates on the State's Vaccine Program; Go to ny.gov/vaccinetracker     

 Governor Andrew M. Cuomo today updated New Yorkers on the state's vaccination program. 117,418 doses have been administered across the state's vast distribution network in the last 24 hours, and more than 1.4 million doses have been administered over the past seven days.

"As we prepare to expand eligibility to all New Yorkers over the age of 16, New York's vaccination program is moving full steam ahead to defeat the COVID-19 pandemic once and for all. We're opening new vaccination sites around the state and preparing for a future increase in supply," Governor Cuomo said. "It's important that residents and their families continue to practice safe behaviors in the interim as more and more people take the vaccine. More than 10 million New Yorkers have received a first dose and we're not stopping now, but there's a long way to go until we've reached a comfortable level of safety for all New Yorkers."

New York's vast distribution network and large population of eligible individuals still far exceed the supply coming from the federal government. Due to limited supply, New Yorkers are encouraged to remain patient and are advised not to show up at vaccination sites without an appointment.                                     

The 'Am I Eligible' screening tool has been updated for individuals with comorbidities and underlying conditions with new appointments released on a rolling basis over the next weeks. New Yorkers can use the following to show they are eligible:

• Doctor's letter, or
• Medical information evidencing comorbidity, or
• Signed certification          

Vaccination program numbers below are for doses distributed and delivered to New York for the state's vaccination program, and do not include those reserved for the federal government's Long Term Care Facility program. A breakdown of the data based on numbers reported to New York State as of 11 AM today is as follows.                                   

STATEWIDE BREAKDOWN

Total doses administered - 10,480,155

Total doses administered over past 24 hours - 117,418

Total doses administered over past 7 days - 1,423,185

Percent of New Yorkers with at least one vaccine dose - 33.3%

Percent of New Yorkers with completed vaccine series - 20.7%

272 Days and Counting

 

What on earth is going on in the Democratic Primary for Bronx Borough President? One candidate is questioned for a very revealing photo. She comes out with an Op-Ed in my friend Assemblyman Jeffrey Dinowitz's local newspaper, going after an opponent for what he said in a country on the other side of the earth many years ago. The other female candidate did what to a police officer who gave her a ticket, and had to pay a $5,000.00 fine to the COIB, and then there is a State Senator (whom I have no connection to) who gave himself up to police for allegedly doing what to his wife. Let me not forget the former police officer who is not being supported by a powerful police union. Do you wonder why I don't want to go to the Bronx unless I have to?

Charlene I pity the taxes that are going to be imposed on the people of New York. Let's find a state with no income tax at all where we can THRIVE. Then I can write a book like the soon to be former governor whose world is collapsing around him, but let's hope the bridge he named after his father does not collapse like his career has.