I want to thank all New Yorkers for having the sense to protest peacefully last night after the Guilty, Guilty, Guilty verdicts. That may have come about since Donald Trump is no longer President.
It has taken me almost eight years as Mayor to learn how to police NYC, but we still need to do more. Accountability needs to be seen, but not for me.
Audrey Strauss, United States Attorney for the Southern District of New York, announced today that SHENG-WEN CHENG, a/k/a “Justin Cheng,” a/k/a “Justin Jung,” pled guilty to major fraud against the United States, bank fraud, securities fraud, and wire fraud in connection with multiple fraud schemes he perpetrated. Specifically, CHENG engaged in a scheme to fraudulently obtain over $7 million in Government-guaranteed loans designed to provide relief to small businesses during the novel coronavirus/COVID-19 pandemic. CHENG also solicited and obtained investments in Alchemy Coin Technology Limited and related companies controlled by CHENG through materially false and misleading statements and omissions. Finally, CHENG fraudulently obtained due diligence fees from various start-up companies as part of an advance fee scheme. CHENG pled guilty today before U.S. District Judge Alison J. Nathan and is scheduled to be sentenced on August 3, 2021, at 3:00 p.m.
U.S. Attorney Audrey Strauss said: “As he admitted, Sheng-Wen Cheng fraudulently applied for over $7 million in government-guaranteed loans under programs designed to provide relief for small businesses financially struggling in the COVID pandemic. Cheng lied to the SBA and several banks about ownership of his companies, the number of people employed, and how any loan proceeds would be applied, using forged and fraudulent documents in the process. Cheng spent much of the money on personal luxury items. In addition, Cheng committed securities fraud by lying to investors in his blockchain-based peer-to-peer lending platform, and wire fraud by engaging in an advance fee scheme. Now Cheng awaits sentencing for his multitude of crimes.”
According to the Complaint, Information, and other documents filed in Manhattan federal court:
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses through the SBA’s Paycheck Protection Program (“PPP”). Pursuant to the CARES Act, the amount of PPP funds a business is eligible to receive is determined by the number of employees employed by the business and their average payroll costs. The CARES Act also expanded the separate Economic Injury Disaster Loan (“EIDL”) Program, which provided small businesses with low-interest loans that can provide vital economic support to help overcome the temporary loss of revenue they are experiencing due to COVID-19.
CHENG, a Taiwanese national who entered the United States on a student visa, is a self-proclaimed “serial entrepreneur” who earned a Bachelor’s Degree from Pennsylvania State University (“Penn State”). From at least in or about April 2020 through at least on or about August 13, 2020, CHENG used the identity of other individuals to submit online applications to the SBA and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by CHENG, namely Alchemy Finance, Inc., Alchemy Guarantor LLC d/b/a “Celer Offer,” Celeri Network, Inc., Celeri Treasury LLC, and Wynston York LLC (collectively, the “Cheng Companies”). In connection with these loan applications, CHENG represented, among other things, that other individuals were the sole owners of the Cheng Companies and that the Cheng Companies together had over 200 employees and paid a total of approximately $1.5 million in wages to those employees on a monthly basis. In fact, however, the Cheng Companies appear to have had a total of no more than 14 employees.
In order to support the false representations in the loan applications about the number of employees at and the wages paid by the Cheng Companies, CHENG submitted fraudulent and doctored tax records that were never actually filed with the IRS and payroll records containing the forged electronic signature of a payroll company employee. CHENG also submitted a payroll summary for one of his companies that listed the names of more than 90 purported employees, several of whom are current or former athletes, artists, actors, or public figures. For example, the list of purported employee names included a co-anchor on “Good Morning America,” a former National Football League player, and a prominent former Penn State football coach who is now deceased.
Based on the fraudulent PPP loan applications submitted by CHENG, a total of more than $3.7 million in PPP loans were approved for the Cheng Companies and approximately $2.8 million in PPP loan proceeds were deposited into bank accounts solely controlled by CHENG. Instead of using the PPP loan proceeds for payroll costs, mortgage interest, rent, and/or utilities for the purported Cheng Companies as required by the PPP, CHENG transferred over $1 million abroad, withdrew approximately $360,000 in cash and/or cashier’s checks, and spent at least approximately $279,000 in PPP loan proceeds on personal expenses. These personal expenses included the purchase of an 18-carat gold Rolex watch for approximately $40,000, rent and move-in fees for a $17,000 per month luxury condominium used by CHENG, approximately $50,000 of furnishings for the condominium, a portion of the purchase of a 2020 S560X4 Mercedes, and purchases totaling approximately $37,000 at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin, and Yves Saint Laurent.
In addition to the COVID-19 pandemic loan fraud described above, from at least in or about 2017 through at least in or about 2019, CHENG committed securities fraud by soliciting and obtaining investments in Alchemy Coin Technology Limited and related companies (“Alchemy Coin”) controlled by CHENG. These investments were obtained through materially false and misleading statements and omissions regarding Alchemy Coin’s access to capital, use of investor proceeds, the product readiness of its purported blockchain-based peer-to-peer lending platform, and the registration of its tokens as part of an initial coin offering.
Finally, from at least in or about 2018 through at least in or about 2019, CHENG committed wire fraud by fraudulently obtaining due diligence fees from various start-up companies as part of an advance fee scheme through materially false and misleading statements regarding the purpose and refundability of the fees and his interest and ability to make investments in the start-up companies.
CHENG, 24 of New York, New York, pled guilty to one count of bank fraud, which carries a maximum sentence of 30 years in prison; one count of securities fraud and one count of wire fraud, which each carry a maximum sentence of 20 years in prison; and one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Ms. Strauss praised the investigative work of the Federal Bureau of Investigation, the Office of the Inspector General of the U.S. Small Business Administration, and the Internal Revenue Service Criminal Investigation. Ms. Strauss also thanked the United States Securities and Exchange Commission, U.S. Customs and Border Protection, and the New York State Department of Labor for their assistance.
Mayor Bill de Blasio today updated New Yorkers on the City’s new guidance for protests. The changes, made in the wake of last summer’s protests following the killing of George Floyd, build on the recommendations made by Department of Investigation to protect the first amendment rights of protestors and legal observers.
“There were clear lessons to be learned from the protest response last year and a desire to see real, on the ground changes,” said Mayor Bill de Blasio. “We’ve taken these recommendations seriously and our message to New Yorkers is clear: your City is here to uplift your voice and protect your right to protest peacefully while maintaining a safe community.”
‘’The NYPD remains committed to facilitating lawful, non-violent protests. Protest, freedom of speech and assembly are guaranteed by the Constitution that we are all sworn to uphold. We feel that the constructive recommendations of the City’s Department of Investigation and the Law Department have been helpful in developing an improved approach to organized protest. We have made significant strides in implementing the most practical aspects of those recommendations so that they are already in effect in the field. We continue to develop and implement others.” said Police Commissioner Dermot Shea.
The NYPD has made a number of reforms and improvements in their approach to handling protests, drawing from recommendations made by the Department of Investigation, Law Department, and their own internal review.
These changes include, but are not limited to:
Since last summer, the NYPD has also completed new field trainings for approximately 10,000 of its officers. This training is ongoing and outlines how officers should protect the first amendment rights of protestors, including appropriate crowd-control tactics and de-escalation involving large-scale incidents. Kettling is not an acceptable tactic and will not be used by the Department. Additionally, a new training program—Constitutional Policing at Community Events—will also launch this month in response to the specific protest recommendations set forth by the Department of Investigation, the City Law Department, and the NYPD’s own internal review.
New Yorkers can also track the progress of the NYPD’s implementation of the Department of Investigation’s recommendations through the City’s online tracker.
This action is tied to DiNapoli’s comprehensive Climate Action Plan to lower investment risks from climate change and transition the portfolio to net zero greenhouse gas emissions.
“While climate change poses investment risks, it also creates opportunities for the state pension fund to invest in the companies and funds that are best positioned for the low-carbon future,” DiNapoli said. “The commitments we announced today aim to take advantage of the growth in climate investing and to strengthen our portfolio for the long-term.”
The Fund committed approximately $300 million to Copenhagen Infrastructure Partners IV, a European investment fund that will focus on investments in renewable assets including onshore and offshore wind and solar, as well as climate infrastructure assets that support renewable power.
Additionally, the Fund committed $100 million to Excelsior Renewable Energy Investment Fund I, a North American-focused investment fund that will target investments in renewable power assets such as solar and wind.
Background on Climate Investment Actions
Since taking office in 2007, DiNapoli has been recognized as a global leader for his efforts to protect the Fund’s assets, address material risks from climate change, and pursue sustainable investment opportunities. In 2019, DiNapoli released a Climate Action Plan, a multifaceted strategy that includes a goal of committing $20 billion to sustainable investments, dedicated staff to pursue climate solution investments, and minimum standards for portfolio companies that will inform engagements, investments, and potential divestment decisions.
Building on the Climate Action Plan’s solid foundation, in December 2020, DiNapoli announced that the Fund has adopted a goal to transition its portfolio to net zero greenhouse gas emissions by 2040.
Through the SICS Program, the Fund has made commitments across asset classes including private equity, actively managed public equity, fixed income (green loans and bonds), real assets (sustainable infrastructure), and real estate.
New York State Common Retirement Fund
The New York State Common Retirement Fund is the third-largest public pension fund in the United States with assets of approximately $247.7 billion as of Dec. 31, 2020. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. It has consistently been ranked as one of the best managed and best funded plans in the nation.
Statewide 7-Day Average Positivity Rate Drops to 2.80%
3,873 Patient Hospitalizations Statewide
ICU Patients Drop to 823—Lowest Since December 3
Intubations Drop to 504—Lowest Since December 7
Statewide Positivity Rate is 3.37%
45 COVID-19 Deaths in New York State Yesterday
Governor Andrew M. Cuomo today announced that the statewide 7-day average COVID-19 positivity rate dropped to 2.80 percent, the lowest since November 12. ICU patients dropped to 823, the lowest since December 3, and intubations dropped to 504, the lowest since December 7.
"New York State is making progress in the fight against COVID-19, but we have to remember not to get cocky —this pandemic isn't over yet and it's important to continue practicing safe behaviors so we don't lose the hard-earned gains we've made," Governor Cuomo said. "Wash your hands, wear a mask and stay socially distanced not just for your own safety, but to protect your fellow New Yorkers. We're working 24/7 to vaccinate residents and their families across the state, including opening new vaccination sites and expanding eligibility. We can get to the light at the end of the tunnel together, but it's going to take more effort on New Yorkers' part to defeat the COVID beast for good."
Today's data is summarized briefly below:
American Axle & Manufacturing to Reimburse Costs of Cleanup at former Tonawanda Forge Site
New York Attorney General Letitia James and New York State Department of Environmental Conservation (DEC) Commissioner Basil Seggos today announced a $4 million agreement that resolves years of hazardous waste disposal and oil spill contamination at the former Tonawanda Forge site in Tonawanda, New York. The agreement stipulates that American Axle & Manufacturing will compensate the state of New York for costs associated with the state’s cleanup of contamination at the site.
“Too many of New York’s communities still struggle with pollution resulting from a legacy of environmental abuse, neglect, and injustice,” said Attorney General James. “Through our action here, we are recouping $4 million, which will be essential to eliminating a long-standing site of contamination in the greater Buffalo community. My office is committed to holding polluters accountable and protecting the health and safety of all New Yorkers, including our environment.”
“This agreement ensures the company responsible for contaminating the Tonawanda Forge site will pay their share of the cleanup costs,” said DEC Commissioner Seggos. “I thank Governor Cuomo for his sustained commitment to ensuring the clean-up of former industrial sites like this one, and the Attorney General, her team, and my staff who worked to recoup New York state's costs to remediate the former Tonawanda Forge site. Working together, we are sending a strong message to polluters that they will be held to account for the damage they cause to the environment and our communities.”
Over the years, a number of soil, sediment, groundwater, and surface water sampling investigations of the Tonawanda Forge site have found the presence of asbestos, petroleum, and other hazardous substances — including polychlorinated biphenyls (PCBs), pesticides, heavy metals (such as lead and arsenic), volatile organic compounds, and semi-volatile organic compounds. Some of this contamination was found at levels exceeding state cleanup standards designed to protect public health and the environment.
General Motors (GM) began manufacturing axles, tie-rods, and other automobile parts at the approximately 33-acre Tonawanda Forge site in the 1950s. In 1994, GM sold the site to American Axle, which operated the site until 2008. American Axle used the same production processes as GM, producing similar parts and generating similar by-products. Logs show that — at least since the early 1990s and into the mid-2000s — the processes GM and American Axle utilized involved use of the hazardous substances found through sampling investigations at the site. An investigation conducted by the Office of the Attorney General (OAG) uncovered evidence that both GM and American Axle had mishandled hazardous wastes and allowed spilled chemicals to leak into the ground through cracks in concrete floors.
In 2008, American Axle sold the Tonawanda Forge site to Lewis Brothers, a scrapper that partially dismantled the site. American Axle also removed some of its equipment after 2008, as part of an agreement with Lewis Brothers. During the removal of the equipment at the site, Lewis Brothers caused petroleum contamination and a PCB oil spill.
Earlier this month, OAG filed an action in U.S. District Court for the Western District of New York against American Axle under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The action sought recovery of past and future costs associated with hazardous waste cleanup of the former Tonawanda Forge site. In 2017, OAG filed a lawsuit in New York State Supreme Court, Albany County against American Axle and Lewis Brothers seeking recovery of costs incurred by the state in cleaning up and removing the petroleum contamination at the site.
Today’s agreement, and the federal district court consent decree with American Axle address the company’s liability under CERCLA for the hazardous waste cleanup and damages to natural resources at the former Tonawanda Forge site. The company has agreed to pay the state $3.6 million to resolve this matter, which will be directed to DEC’s Hazardous Waste Remedial fund to support the cleanup of this and other hazardous waste sites in the state. The agreement also references the settlement of the oil spill cost recovery action taken against American Axle for $425,000 — funds that will be deposited in the state’s Environmental Protection and Spill Compensation (Oil Spill) Fund. The OAG and American Axle expect to discontinue the lawsuit over the oil spill upon OAG’s receipt of this payment. Additionally, American Axle has agreed to pay $25,000 for damages to natural resources, which will be deposited in DEC’s Natural Resources Damages fund.
Mayor Bill de Blasio today announced Safe Summer NYC, a comprehensive plan to end gun violence and bring New York City back from the COVID-19 crisis. Safe Summer NYC will deter gun violence with real consequences for picking up a firearm and create disincentives to turning to a life of crime by providing real, positive alternatives for young people. With a focus on the Community, Cops, and Courts & Justice System, the plan has three distinct components: increased investment in communities, strategic police presence in targeted areas, and greater coordination across the justice system.
"A recovery for all of us means every New Yorker is safe and feels safe in their neighborhood,” said Mayor Bill de Blasio. "Safe Summer NYC is the comprehensive roadmap to end gun violence and bring our city back stronger than ever.”
COMMUNITY: Investing in Neighborhoods
COPS: Strategic, Precise Deployments to Targeted Areas
COURTS: Coordinate Across the Justice System
“Our plan involves precision policing, the application of technology, partnerships with other City agencies, and a focus on youth. But the core of it is in the neighborhood policing philosophy: cops and community working together to curb violence,” said Chief Rodney Harrison.
“My strategy as District Attorney has always been to focus our resources on the drivers of crime, which are the small number of individuals who are responsible for the shootings and killings on our streets. Those are exactly the cases that will be prioritized to go to trial under this initiative – people who we believe have demonstrated a willingness to harm others, and who continue to pose an active risk to public safety. I commend Mayor de Blasio for adopting a comprehensive strategy to addressing the violence. His initiative, coupled with my Office’s multi-faceted approach, which relies on going after the shooters, cutting off the supply by targeting firearm traffickers and working with Cure Violence groups, hosting gun buybacks and participating in other programs that get our communities involved, will help us stamp out the recent rise in shootings and return to the historic levels of public safety we enjoyed before the past year,” said Brooklyn District Attorney Eric Gonzalez.
Defendant Pleaded Guilty to First-Degree Manslaughter
Bronx District Attorney Darcel D. Clark today announced that a Bronx man has been sentenced to 18 years in prison after pleading guilty to first-degree Manslaughter in the 2011 death of his cousin.
District Attorney Clark said, “The defendant cold-heartedly killed his own cousin, shooting and stabbing him multiple times. Almost a decade has passed since he ended his cousin’s life in such a horrifying way, but we never gave up on getting justice for the victim and his family.”
District Attorney Clark said the defendant, Alexander Arriola, 40, last of 1243 Boynton Avenue, was sentenced today to 18 years in prison and five years’ post-release supervision by Bronx Supreme Court Justice James McCarty. The defendant pleaded guilty to first-degree Manslaughter on March 4, 2021.
According to the investigation, on the evening of July 3, 2011, at 676 St. Mary’s Street, the defendant went to the home of Brian Arriola, 31, and both exchanged words. The defendant shot the victim in the chest and arm and stabbed him 10 times in the neck, head and torso. The defendant fled the scene and the victim was discovered dead on the floor by his mother minutes after.
Arriola was arrested on July 4, 2011, however the trial was delayed for years because he was found mentally unfit numerous times. He was found fit to proceed in this matter and was returned on April 22, 2020 for trial.
