Former Olympic Figure Skater Arrested For Role In Defrauding U.S. Small Business Administration Of Over $1.5 Million

 

 Audrey Strauss, United States Attorney for the Southern District of New York, and William F. Sweeney, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation, announced today the unsealing of a complaint charging LUKA KLASINC, a former Olympic ice skater, with bank fraud and aggravated identity theft in connection with his use of falsified documents during his attempts to gain access to over $1.5 million in funds disbursed pursuant to fraudulent U.S. Small Business Administration (“SBA”) Economic Injury Disaster Loans. KLASINC, a Slovenian national, was arrested Monday afternoon in Manhattan, and will be presented today before Judge Kevin Nathaniel Fox.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, at a time when U.S. small businesses were struggling because of the COVID-19 pandemic, Klasinc thought he could scam his way to easy money. As alleged, Klasinc used false documents to try and obtain over a million dollars in funds intended to help hard working Americans but, thanks to the diligence of the FBI, his plans have been put on ice.  He will now be held accountable for his alleged brazen lies.”

FBI Assistant Director-in-Charge William F. Sweeney, Jr., said:  “Loans issued on behalf of the SBA were intended to provide relief for businesses struggling during the pandemic. Time and again we see instances of fraud and abuse of this program. We will investigate all instances of alleged SBA loan fraud and hold accountable those who take advantage of this program for personal gain.”  

According to the allegations in the Complaint[1]:

KLASINC is the sole owner of a company named BOB77, LLC. KLASINC claimed that BOB77, LLC (“BOB77”) is an event management company that, in conjunction with its global partners, stages major ice-themed amusement park style events around the world. Beginning in or around 2019, BOB77 opened three business bank accounts (the “BOB77 Accounts”) with an international financial institution (“Bank-1”). Between July 2020 and September 2020, the BOB77 Accounts received a total of $1,595,800 from the SBA, pursuant to eleven Economic Injury Disaster Loans. In the same period, there were numerous wire transfers from the BOB77 Accounts to international beneficiaries.  In late September 2020, after identifying potential fraud, Bank-1 froze all funds in the BOB77 Accounts and contacted KLASINC for additional information regarding the account activity. In response, KLASINC provided documentation — including a falsified document purporting to be a letter from the U.S. Small Business Administration — intended to legitimize the SBA deposits and persuade Bank-1 to release the funds. In or around June 2021, KLASINC traveled to the United States and appeared at in person at a New York branch of Bank-1, where he again attempted to persuade Bank-1 to release the funds by claiming that the SBA deposits were “investments” and not associated with a loan.

KLASINC, 48, of Slovenia, is charged with one count of bank fraud, which carries a maximum sentence of 30 years in prison, and with one count of aggravated identity theft, which carries a mandatory two-year prison term. 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 will be determined by the judge. 

Ms. Strauss praised the outstanding investigative work of the FBI.

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

 

Graffiti clean up by City Council Candidate William Rivera in the18th Council District

 

Sunday was a graffiti clean up afternoon for City Council candidate William Rivera and his anti Graffiti crew as they stood in front of what was to be painted over. A couple of gallons of bright orange paint, rollers, brushes, and gloves were on hand for the volunteers to paint over the graffiti.

In less than one hour their job was done, so they went around the corner to cover some more graffiti until they would run out of paint. 18th City Council candidate William Rivera has quickly jumped into the lead in the 18th City Council District, and he said "I am going all out as if I was the underdog". Early voting begins Saturday June 12th at selected poll sites around the Bronx and city. You can check your early voting site at the Board of Elections website at https://findmypollsite.vote.nyc/

The volunteers working hard at painting.

Candidate William Rivera out on the finishing touches.

The finished Product, a bright clean orange wall.

But the crew went around the corner on Virginia Street to paint over some more graffiti.

Attorney General James Delivers More Than $530,000 to New Yorkers Who Lost Power Following Tropical Storm Isaias

 

More Than 2,800 Consumers in New York City and Westchester Have Already or Will Soon Receive Checks to Reimburse for Food Spoilage from Last August’s Storm

Hundreds of Additional New Yorkers Expected to Receive Reimbursements

 New York Attorney General Letitia James today announced that her office has helped deliver more than $530,000 to more than 2,800 New Yorkers who went without power and had food spoilage following Tropical Storm Isaias last August. An agreement with Con Edison of New York (Con Edison) has already provided or will soon provide additional reimbursements to thousands of New York consumers who suffered food losses after power outages in New York City and Westchester County took place, last year, following the storm that ravaged the tri-state area. The agreement resolves an investigation of Con Edison in which the Office of the Attorney General (OAG) found that the power company failed to pay reimbursements in accordance with the instructions it had provided to consumers for food spoilage on its claim forms. 

“When a natural disaster hits, companies should do everything they can to lift up communities and support those suffering,” said Attorney General James. “While simultaneously battling both a public health and an economic crisis last summer, hundreds of thousands of New Yorkers were also subjected to a natural disaster that left them without power for days. The aftermath of these power outages led to hundreds of dollars in food loss for thousands. While Con Edison offered reimbursements to affected consumers, it failed to live up to the commitments it made and left thousands to foot the bills for spoiled food resulting from the power loss. This agreement finally makes things right by putting an average of $185 back into the pockets of more than 2,800 New York consumers.”

The claim forms Con Edison provided to consumers who lost power after Tropical Storm Isaias offered to reimburse consumers up to $235 for spoiled food if they provided just an itemized list of the food without any other proof. But to receive more — up to a maximum of $540 per account — Con Edison instructed consumers to provide a proof of loss, and gave as examples cash register tapes, store receipts, credit card statements, cancelled checks, or photographs of spoiled items. In numerous cases, however, consumers who provided just photographs were sent letters saying that Con Edison required receipts for the spoiled food. In other cases, the company rejected claims for food that was purchased more than 30 days before the storm, notwithstanding that there was no such requirement on the claim form’s instructions. Because the nation was simultaneously battling the coronavirus disease 2019 (COVID-19) pandemic, many consumers had stocked up on groceries that could be frozen and held in their freezers for several months.

Under the terms of this agreement, Con Edison has already paid or will soon pay more than $534,500 to reimburse consumers who claimed more than $235 in spoiled food. The company will review those claims previously submitted and will send checks for remaining balances owed — an average of $185 for 2,874 consumers. Hundreds of additional consumers will likely be eligible for reimbursements in the coming weeks. Consumers eligible for the supplemental reimbursement do not need to do anything to receive their checks, and the vast majority of checks — more than 2,600 — have already been sent out.

Con Edison will also pay the state of New York $20,000 in costs and penalties for violating both New York General Business Law 349 and Executive Law 63(12) law.

Pennsylvania Man Charged With Using Identities Of Then-President’s Family Members To Perpetrate Online Fraud Scheme

 

Joshua Hall Allegedly Used Social Media and a Crowdfunding Website to Defraud Hundreds of Victims

 Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of a Complaint charging JOSHUA HALL with fraud and identity theft offenses for impersonating family members of the then-President of the United States on social media to fraudulently raise funds for a fictitious political organization.

HALL was arrested this morning and will be presented later today in Harrisburg federal court before United States Magistrate Judge Susan E. Schwab.

Manhattan U.S. Attorney Audrey Strauss said:  “Joshua Hall allegedly impersonated family members of the then-President of the United States on social media to fraudulently induce hundreds of victims to donate to a political organization that did not exist, and then pocketed those funds for his own use.  We thank the FBI for their partnership in the investigation of this case, and we remain dedicated to rooting out and prosecuting fraud wherever we find it.”

FBI Assistant Director-in-Charge William F. Sweeney, Jr., said: “Hall led hundreds of people to believe they were donating to an organization that didn’t exist by pretending to be someone he wasn’t, as alleged. As we continue to investigate fraud in all its many forms, we urge the public to remain aware of the prevalence of online scams and exercise due diligence when making donations online.”

According to the allegations in the Complaint[1]:

HALL defrauded hundreds of victims by making false representations in the course of raising funds for a purported political affinity organization (“the Fictitious Political Organization”), for the ostensible purpose of supporting the reelection of the individual who was at that time serving as President of the United States (“the President”).  However, the Fictitious Political Organization did not exist and HALL used the funds for his own personal living expenses.

Central to the scheme was the impersonation by HALL of members of the President’s family, including the President’s minor child, among others, through his creation and use of social media accounts bearing those family members’ names and photographs.  HALL used those accounts to amass more than 100,000 followers on social media and obtain media coverage, a public platform he then exploited to confer on himself and the Fictitious Political Organization a false imprimatur of close ties with the President’s family and to encourage victims to make monetary contributions to the Fictitious Political Organization.

In total, the scheme devised and executed by HALL yielded thousands of dollars from hundreds of victims located throughout the United States, including in the Southern District of New York. 

HALL, 22, of Mechanicsburg, Pennsylvania, is charged with wire fraud, which carries a maximum sentence of 20 years of imprisonment, and aggravated identity theft, which carries a mandatory consecutive sentence of 2 years of imprisonment.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  

Ms. Strauss praised the outstanding investigative work of the FBI. 

The charge contained in the Complaint is merely an accusation, 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 herein, constitute only allegations, and every fact described should be treated as an allegation.

Governor Cuomo Announces New Record-Low Statewide COVID Positivity

 

Statewide 7-Day Average Positivity is 0.51% -- Has Declined for 64 Consecutive Days - Lowest in the Country per Johns Hopkins University

75,883 Vaccine Doses Administered Over Last 24 Hours - Statewide Vaccination Rate is 68.9%

796 Patient Hospitalizations Statewide

14 COVID-19 Deaths Statewide Yesterday

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

"COVID positivity rates keep falling every day and it's a direct result of the hard work and commitment New Yorkers have displayed throughout this entire pandemic," Governor Cuomo said. "We have never been closer to the light at the end of the tunnel, but to fully return to normal, we must continue to do all we can to get New Yorkers vaccinated. Over 9 million New Yorkers have already done their part and gotten their shot -- now is the time for the rest of the state to follow suit. The vaccine has never been easier to access and with a multitude of incentives now in place, there are truly no excuses left. So, if you still haven't been vaccinated, please, do the right thing to protect your community and get vaccinated today."

Today's data is summarized briefly below:

• Test Results Reported - 71,953
• Total Positive - 442
• Percent Positive - 0.61%
• 7-Day Average Percent Positive - 0.51%
• Patient Hospitalization - 796 (-3)
• Patients Newly Admitted - 72
• Patients in ICU - 206 (0)
• Patients in ICU with Intubation - 120 (0)
• Total Discharges - 183,157 (+66)
• Deaths - 14
• Total Deaths - 42,813
• Total vaccine doses administered - 19,614,673
• Total vaccine doses administered over past 24 hours - 75,883
• Total vaccine doses administered over past 7 days - 533,489
• Percent of New Yorkers ages 18 and older with at least one vaccine dose - 66.4%
• Percent of New Yorkers ages 18 and older with completed vaccine series - 58.7%
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) - 68.9%
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) - 59.8%
• Percent of all New Yorkers with at least one vaccine dose - 54.8%
• Percent of all New Yorkers with completed vaccine series - 47.5%
• Percent of all New Yorkers with at least one vaccine dose (CDC) - 56.9%
• Percent of all New Yorkers with completed vaccine series (CDC) - 48.4%

New Ad from 13th City Council candidate Monique Johmson

We received this AD for Monique Johnson from the  Friends of Monique Johnson 

1:40NOW PLAYING

NYC BOARD OF CORRECTION VOTES TO END SOLITARY CONFINEMENT IN CITY'S JAILS

 

 Today, the New York City Board of Correction, an independent oversight board for the City’s jail system, voted unanimously to end solitary confinement in the City’s jails. With the new proposed disciplinary model, New York City will go further than any major jail system in the country in banning solitary confinement. The new rule is available here.

 "New York City is going further than any jail system in America to ban solitary confinement once and for all,” said Mayor Bill de Blasio. “Through our work with our Board of Correction, we have found a plan that will provide a safe and humane environment for those who are incarcerated and officers alike.”

 “This rule ends solitary confinement in the New York City jail system once and for all, replacing it with a system that balances the need for safety in the jail and the need to provide the care and support to address behaviors for all concerned. These reforms are necessary for a safer and more humane jail system, for people in custody and staff,” said Board of Correction Chair and CEO and Executive Director of FPWA, Jennifer Jones Austin.

 The new disciplinary system fundamentally changes the way the Department of Correction responds to violence committed by people in custody, ensuring accountability and safety in a more humane and effective manner. The rules ends solitary confinement – a long-practiced form of restrictive housing where people are locked in their cells for 20-24 hours each day – and replaces it with a new alternative disciplinary model, the Risk Management Accountability System (RMAS). RMAS is a two-level progression model that includes: 

·         Attorney Representation at the infraction hearing and throughout the process

·         Minimum 10 hours out of cell, socializing with at least one other person

·         A strong presumption of progression from Level 1 to Level 2 in 15 days, and out of Level 2 in 15 days

·         The ability for the Department to extend placement in RMA only when necessary; extension must be documented with a clear threat to safety; person in custody has ability to appeal with attorney representation

·         Individualized behavioral support plans

·         Steady, experienced case managers

·         hours of daily programming, including required therapeutic programming in space outside the dayroom space; and

·         Daily rounding by health and mental health staff

·         Post-RMAS, step-down Restorative Rehabilitation Unit with 14 hours of lock out, full access to Minimum Standards, and intensive programming.

 This new model will go into effect in the fall of 2021.The new disciplinary model is the product of an extensive public engagement process that included extensive discussions with and feedback from people with lived experience, families, staff, advocates, researchers, practitioners, and other experts locally and around the country.

 The rule builds on groundbreaking reforms in 2015, which ended solitary confinement for 16 to 21 year olds and people with serious mental illness – and set strict limits on its use for everyone else. These reforms contributed to an 81% decrease in the use of solitary confinement. In October 2019, the Board proposed rules to further restrict solitary confinement however, the vast majority of community members who testified and/or submitted written comments on the proposal — solitary survivors and their loved ones; mental health, criminal justice, legal, and human rights experts; elected officials; faith leaders; and community members – said that new, proposed limits were not enough and called for the immediate end to solitary confinement. The Board’s new rule recognizes that solitary confinement creates significant risks of psychological and physical harm to people in custody.

 “In approving this rule, the Board has created as system that ends the harms of solitary confinement while keeping officers, staff, and people detained safe. In the end the Board sought to address all stakeholders concerns and implement a model that centers on accountability, transparency, and support that we know will change behavior,” said Board of Correction Vice Chair and Executive Vice President, Fortune Society, Stanley Richards.

 "The RMAS model is all about increasing safety without sacrificing accountability, and aimed at returning people to as normalized an environment as quickly as safely possible. Through this new approach, we intend to provide the tools people need to return to general population, and this model will only improve as we move towards more program-rich and humane facilities,” said Department of Correction Commissioner Vincent Schiraldi.

 “The Board’s action today to end solitary confinement is the culmination of four years of work with experts, including individuals with lived experience, practitioners, families, officers and advocates. In developing this final rule, the Board was able to develop a model that ends the harms of solitary confinement and prioritizes safety and support. Our hope is that this work can inform and encourage the nation to safely end solitary confinement by ending it in New York City,” said Board of Correction Executive Director Meg Egan.

 In addition to ending solitary confinement, the rule: 

·         Fully ends the use of routine restraint desks.

·         Requires the Department to use cells for de-escalation confinement after incidents, rather than intake areas.

·         Limits scope of lockdowns to only housing areas that must be locked down.

·         Requires regular and public reporting by the Department.

·         Maintains the prohibition on placing people with serious mental illness in restrictive housing (including RMAS)

Australian National Pleads Guilty To Multimillion-Dollar Text-Messaging Consumer Fraud Scheme

 

 Audrey Strauss, United States Attorney for the Southern District of New York, announced that MICHAEL PEARSE, an Australian national who was extradited to the United States from Australia in January 2021, pled guilty today to conspiracy to commit wire fraud stemming from his participation in a fraudulent scheme to charge hundreds of thousands of mobile phone customers millions of dollars in monthly fees for unsolicited, recurring text messages about topics such as horoscopes, celebrity gossip, and trivia facts, without the customers’ knowledge or consent – a practice to which the conspirators referred as “auto-subscribing.”  PEARSE played a key role in the scheme as CEO of a company that created the computer program that was used to enroll victims into the text message services without their knowledge or consent.  PEARSE pled guilty before United States District Judge Analisa Torres. 

U.S. Attorney Audrey Strauss said:  “As he admitted in court today, Michael Pearse played a vital role in an international consumer fraud conspiracy that swindled hundreds of thousands of mobile phone customers out of more than $50 million.  Thanks to IRS Criminal Investigation and the FBI, as well as our international partners, Pearse now awaits sentencing for his crime.”

According to the allegations contained in the Indictment, evidence presented at the trial of co-conspirator Darcy Wedd, court filings, and statements made during plea proceedings:

From in or about 2011 through in or about 2013, PEARSE and his co-conspirators engaged in a multimillion-dollar scheme to defraud consumers by placing unauthorized charges for premium text messaging services on consumers’ cellular phone bills.  To carry out the scheme, PEARSE and others caused unsolicited and recurring text messages to be sent to mobile phone users containing content such as horoscopes, celebrity gossip, or trivia facts.  The victims of the fraud scheme never ordered these services, which were known in the industry as premium text messaging (“PSMS”) services, but were fraudulently “auto-subscribed” and billed for them at a rate of $9.99 per month.  The $9.99 charge recurred each month unless and until consumers noticed the charges and took action to unsubscribe.  Even then, consumers’ attempts to dispute the charges and obtain refunds were often unsuccessful.

During the relevant period, co-conspirator Lin Miao operated a company called Tatto Inc., a/k/a “Tatto Media” (“Tatto”), which offered PSMS services to mobile phone customers.  PEARSE was the CEO of a company called Bullroarer, which was affiliated with Tatto.  To enable Tatto to auto-subscribe consumers to unwanted PSMS services, PEARSE and co-defendant Yongchao Liu, a/k/a “Kevin Liu,” who worked as a Java Development Engineer for Bullroarer, agreed to build a computer program that could spoof the required consumer authorizations – i.e., a program that could generate the text message correspondence that one would ordinarily see with genuine PSMS subscriptions.  PEARSE and Liu agreed to build the program (the “Auto-Subscription Platform”), which was operational by in or about the middle of 2011.  PEARSE, Liu, and Miao then used the Auto-Subscription Platform to fraudulently auto-subscribe hundreds of thousands of mobile phone customers, using phone numbers provided by co-conspirators at Mobile Messenger, a U.S. aggregation company operated by Darcy Wedd that served as a middleman between content providers such as Tatto and mobile phone carriers.  Through their successful orchestration of the fraudulent scheme, PEARSE and his co-conspirators generated more than $50 million in fraud proceeds for themselves.    

PEARSE, 52, of Australia, pled guilty to one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, which carries a maximum penalty of 20 years in prison.  As part of his plea agreement, PEARSE agreed to forfeit $10,162,937.96, as well as his interest in three real properties in Australia and other assets, representing proceeds traceable to the fraud that PEARSE personally obtained.

The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentence of PEARSE will be determined by the Court.

To date, nine defendants, Liu, Miao, Andrew Bachman, Michael Pajaczkowski, Erdolo Eromo, Jonathan Murad, Francis Assifuah, Jason Lee, and Christopher Goff have pled guilty in connection with their participation in the fraud.  Two additional defendants, Darcy Wedd and Fraser Thompson, were convicted in 2017 following jury trials.

Ms. Strauss praised the outstanding investigative work of the Internal Revenue Service, Criminal Investigation and the Federal Bureau of Investigation.  In addition, Ms. Strauss thanked law enforcement partners in Australia, as well as the U.S. Department of Justice’s Office of International Affairs, for their support and assistance with the extradition of PEARSE and co-defendant Liu.