Comptroller Stringer Audit: NYPD Lacks Adequate Controls in its Management of Seized Property

 

The NYPD holds cash, jewelry, weapons, vehicles, and other general property as evidence, contraband, assets subject to possible forfeiture, and lost property; audit found NYPD lacks adequate controls over the collection, recording, and reporting of seized property and related revenue it obtains following arrests and other activities

Missing documentation; cash receipts records that did not match the supporting documentation; late and absent reconciliations of revenues collected from vehicle auction sales

Significant weaknesses affecting NYPD’s Property Evidence Tracking System (PETS)—the computer system used by the NYPD to track seized property—including the NYPD’s inability to use it to track seized property on an aggregate level

Comptroller Stringer recommended 16 measures to ensure proper accountability and transparency regarding seized items, revenue, and other property the NYPD holds

 Today, New York City Comptroller Scott M. Stringer released an audit that revealed weak management and controls over the New York City Police Department’s (NYPD) collection, recording, and reporting of property brought to police precincts following arrests, property seized in investigations and other law enforcement activities, including for potential forfeiture, and property retained for safekeeping. The audit found significant deficiencies in the Property Evidence Tracking System (PETS), the NYPD’s computerized system meant to track this inventory, which compromise the NYPD’s ability to track and account for it on a centralized, aggregate level.

The audit findings included unaccounted-for gaps in PETS invoice numbers and discrepancies in the NYPD’s records concerning seized and retained property, asset forfeitures, and related revenues the NYPD reported to the public for Calendar Years 2017 and 2018, pursuant to the requirements of Local Law 131.

The revenue-reporting discrepancies in the NYPD’s records involved missing documentation; cash receipts records that did not match the supporting documentation; late and absent reconciliations of revenues collected from vehicle auction sales, owing in part to the NYPD’s delays in billing a vendor for the City’s share of the proceeds of such sales; and mismatches between the NYPD’s recording of revenue it received from two federal agencies, the U.S. Treasury Department and the U.S. Department of Justice (DOJ), and documents it received from those agencies.

“The NYPD has a responsibility to the public to safeguard, track, properly dispose of, and account for all the property and revenue it receives on behalf of the City,” said Comptroller Stringer. “Our audit found that the NYPD’s system for tracking and accounting for property and revenue is inadequate — resulting in inaccuracies and gaps in its legally required public reports and the records that should support them. New Yorkers deserve to know that their police department is appropriately and accurately tracking seized property, the public revenue it generates, and the items that are supposed to be returned to their rightful owners when legal proceedings are resolved.”

When the NYPD makes an arrest, any property seized is brought to the precinct where an invoice for the property is created in PETS, the agency’s computerized system of record for inventorying and tracking the movement of property that comes into its possession. The precincts transfer the property to one of the police department’s borough offices, auto pounds, or warehouses, depending on the size and type of the property. The NYPD returns property that is not subject to forfeiture proceedings and can be legally returned to its rightful owner; destroys contraband, including weapons no longer needed for a criminal case; and disposes of unclaimed physical items, including jewelry and vehicles, through online public auctions, once the applicable retention period for that property expires.

The NYPD also deposits unclaimed cash and revenue derived from auctions into the City’s general fund. During the period the audit covered, the NYPD worked with two private companies that conduct auctions for the NYPD — PropertyRoom for general property and IAA for vehicles.

Comptroller Stringer’s audit found the following inadequacies regarding the NYPD’s management of seized property and related revenue:

• The NYPD lacked adequate controls over the collection, recording, and reporting of seized property and related revenue.
• Significant weaknesses affected the NYPD’s Property Evidence Tracking System (PETS) — the computer system the NYPD used to track seized property during the Comptroller’s audit scope period. Among other things, the NYPD could not use the system to track seized property centrally on an aggregate level.
• PETS lacked adequate data input controls, which weakened its reliability and affected the accuracy and usefulness of the records it contains and the reports it generates.
• Unaccounted-for gaps in the invoice numbers PETS assigned could signify that transactions that should have been recorded were not or that transactions were inappropriately deleted.
• As a result of the above-mentioned deficiencies and limitations, the NYPD could not efficiently and effectively determine at a central management level whether the property that came into its custody was being properly maintained and disposed of.
• Discrepancies were identified in the data concerning seized property and retained property that the NYPD reported to the public for Calendar Years 2017 and 2018 pursuant to the requirements of Local Law 131. For example, the information the NYPD reported for four of the eight mandated categories for one or both years was not supported by its backup documentation. In addition, the NYPD did not timely report the data that Local Law 131 required regarding seized and returned property.
• The NYPD did not maintain adequate supporting documentation for the amounts it recorded in the City’s Financial Management System (FMS) as revenue received from the State’s District Attorneys’ Offices.
• The audit also found that the cash receipts the NYPD recorded in FMS as revenue for Fiscal Years 2017, 2018, and 2019 did not match the supporting documentation for DOJ and Treasury receipts.
• NYPD incorrectly classified some entries in FMS.
• NYPD did not perform a timely reconciliation of the vehicle auction sales and did not timely bill its vendors for its share of vehicle auction sales proceeds.

To address these findings, Comptroller Stringer recommended 16 measures to improve the NYPD’s collection, recording, and reporting of seized property and related revenue to help ensure full accountability for the proper disposition of all property and related revenue. They include the following:

• Ensure that the system the NYPD reports it is deploying to replace PETS — known as PETS 2.0 — is designed with adequate reporting capabilities so that it can track and report on the location and disposition of seized property on an aggregate basis and utilize that capability to ensure that the property is being properly maintained and promptly disposed of.
• Ensure that PETS 2.0 is designed with appropriate input controls relating to edit checks and data validation.
• Ensure that any unaccounted-for invoice numbers are appropriately investigated, documented, and approved and that adequate documentation is maintained for skipped invoices.
• Ensure that adequate reconciliations of revenues received are performed and that the required information concerning those revenues is checked for accuracy before the NYPD posts the Local Law 131 report on its website.
• Maintain a cash receipts record of the revenues it receives from the State that includes all relevant information required to adequately track the receipts.
• Post the annual Local Law 131 report on its website timely and comply with all the reporting requirements.
• Ensure adequate supervisory review of the NYPD’s tracking of seized and forfeited revenue to ensure that proper reconciliations, including follow-ups on discrepancies, are timely performed.
• Ensure adequate supervisory review over the NYPD’s entries in FMS to ensure they are correctly classified and applied to the correct fiscal year.
• Develop a process for reconciling reviews of auction vendor revenues and monitor its implementation.

174 Days and Counting

 

People call me everything under the sun, and I have only 174 days left to change their thoughts of me as your Mayor. What do I have to do to get people to like me and say good things about my administration. 

I didn't create the Pandemic, but I will be blamed for what it did to New York City. At least Charlene and I can THRIVE after I leave office. I am going to other states to find a place to retire, but it looks like I may return to Boston, where I can root for my favorite Baseball team, the Boston Red Sox. 

Relay For Life Annual Kick Off Event to Fight the Ongoing Battle Against Cancer

 

Thwaites Place Block Party - The first of 2021

 

Now that the COVID-19 Pandemic is winding down New York City is reopening, after one year of no events the Annual Thwaites Place Block Party took place Saturday. The last Block Party here was in 2019, and the local residents were happy to have it back. Ralph, Kenny, and Diane were among those who were running this year's event. 

Elected officials who came to say hello were Assemblywoman Nathalia Fernandez, and new Councilman Oswald Feliz. Congresswoman Alexandria Ocassio-Cortez may have been in Washington, but she had a table with two representatives, and plenty of information. 

Ralph and Kenny judged the pizza eating contest, there was local entertainment, a face painter for the children, and even a pony ride also for the children. All who attended were happy, with some saying that they couldn't wait for the next block party.

While she couldn't attend due to being in Washington, a life sized poster of Congresswoman Ocassio-Cortez stood next to the AOC table. 

Former Candidates for the 15th City Council seat Kenny Agosto and Councilman Oswald Feliz stand together for the community. Ischia Bravo, a third candidate in the 15th City Council race, was also among those who attended the block party.

Clown Zee blew up balloons for the children, and made animals out of them.

The pony for the rides had a rainbow mane and tail.

Governor Cuomo Updates New Yorkers on State's Progress Combating COVID-19

 

1 COVID-19 Death Statewide Yesterday — Matches Lowest State Has Seen Since Pandemic Began

2/3 of Adult New Yorkers Have Completed Vaccine Series — 31,484 Vaccine Doses Administered Over Last 24 Hours  

339 Patient Hospitalizations Statewide  

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

"Our metrics continue to show steady progress toward slaying this COVID beast, and we have our health care heroes and everyday New Yorker who made sacrifices throughout the course of the pandemic to thank for it," Governor Cuomo said. "The vaccine remains our most effective weapon in this ongoing fight, which is why we continue to target areas that have a lower vaccination rate and focus our resources there. If you still need to get your shot, I urge you to do so quickly at a vaccination site near you."   

   

Today's data is summarized briefly below:  

• Test Results Reported - 65,049
• Total Positive - 666
• Percent Positive - 1.02%
• 7-Day Average Percent Positive - 0.84%
• Patient Hospitalization - 339 (-3)
• Patients Newly Admitted - 55
• Patients in ICU - 74 (+1)
• Patients in ICU with Intubation - 34 (-3)
• Total Discharges - 185,414 (+63)
• Deaths - 1
• Total Deaths - 43,010
• Total vaccine doses administered - 21,556,403
• Total vaccine doses administered over past 24 hours - 31,484
• Total vaccine doses administered over past 7 days - 237,297
• Percent of New Yorkers ages 18 and older with at least one vaccine dose - 70.4%
• Percent of New Yorkers ages 18 and older with completed vaccine series - 65.1%
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) - 73.1%
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) - 66.6%
• Percent of all New Yorkers with at least one vaccine dose - 58.6%
• Percent of all New Yorkers with completed vaccine series - 53.9%
• Percent of all New Yorkers with at least one vaccine dose (CDC) - 60.9%
• Percent of all New Yorkers with completed vaccine series (CDC) - 55.2% 

Dark Web User Known As “The Bull” Charged In Insider Trading Scheme

 

Apostolos Trovias, a/k/a “The Bull,” Used the Dark Web and Encrypted Messaging Services to Solicit, Offer, and Sell Inside Information

 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 Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a criminal indictment and a criminal complaint charging APOSTOLOS TROVIAS, a/k/a “The Bull,” with securities fraud and money laundering in connection with his scheme to solicit and sell stock trading tips and pre-release earnings and deal information regarding public companies.

Manhattan U.S. Attorney Audrey Strauss said: “Today’s charges demonstrate our Office’s continuing commitment to stopping those who pursue and use inside information to gain an illegal edge in the stock market. As alleged, Apostolos Trovias attempted to hide his insider trading scheme behind anonymizing software, screennames, and bitcoin payments. The Indictment and Complaint unsealed today show that committing insider trading using new technologies still produces a decidedly traditional outcome: a criminal indictment.”

FBI Assistant Director William F. Sweeney Jr. said:  “Behind the veil of the Dark Web, using encrypted messaging applications and emails, Trovias created a business model in which he sold—for profit—proprietary information from other companies, stock trading tips, pre-release earnings, and other inside information, as we allege. The FBI operates within the Dark Web too, and as Trovias learned today, we don't stop enforcing the law just because you commit federal crimes from behind a router with your keyboard.”

According to the allegations in the Indictment and Complaint unsealed today in Manhattan federal court:[1]

Since at least in or about December 2016, APOSTOLOS TROVIAS, who identifies himself by the pseudonym “The Bull,” has used websites on the Dark Web and encrypted messaging services to solicit and sell confidential, non-public information about publicly traded companies (“Inside Information”) to enrich himself. TROVIAS’s scheme consisted of multiple related efforts to obtain and monetize confidential nonpublic business information, including (1) the sale of misappropriated stock tips based on confidential customer trading information; (2) the sale of pre-release earnings reports and deal information misappropriated from publicly-traded companies; and (3) the attempted creation of an online marketplace to connect, for a commission, individuals misappropriating Inside Information to individuals willing to pay for and trade on Inside Information.

For example, between in or about December 2016, when he registered for a Dark Web site known as AlphaBay Market, and in or about July 2017, when AlphaBay ceased operations, TROVIAS offered for sale and sold stock tips that were based on non-public inside information about certain securities issuers and which could be purchased individually, or as weekly or monthly subscriptions.

At various times between in or about June 2017 and February 2020, TROVIAS sold Inside Information directly to purchasers, using encrypted messaging and email services to communicate about the sale, rather than exclusively through the marketplace features of the Dark Web forums. For instance, TROVIAS offered for sale and did sell, among other confidential information belonging to various securities issuers, for approximately $5,000 in Bitcoin, at least one pre-release earnings report misappropriated from a publicly-traded company.

In or about 2020, TROVIAS also took steps to design and build a website to facilitate the purchase and sale of material, non-public information for use in stock trading (the “Inside Information Auction Site”). TROVIAS planned to use the Inside Information Auction Site to enrich himself by charging membership fees and commissions from individuals using the Inside Information Auction Site to engage in the unlawful trade of Inside Information.

TROVIAS, 30, of Athens, Greece, is charged with one count of securities fraud and one count of money laundering.  The securities fraud count carries a maximum penalty of 25 years in prison. The money laundering count carries a maximum penalty 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 will be determined by the judge.

Ms. Strauss praised the outstanding work of the FBI. Ms. Strauss further thanked the U.S. Securities and Exchange Commission, which today filed a parallel civil action, and the Internal Revenue Service for their cooperation and assistance in this investigation.

The charges contained in the Indictment and 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 Indictment and Complaint, and the description of the Indictment and Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation. 

"Saturday Night Lights” Gyms Opening Across New York City

 

NYPD and city partners announce at the Boys Club of New York the opening of 100 gyms in all five boroughs of the city

 The NYPD, the Department of Youth and Community Development, the city’s five district attorney’s offices and several city agency partners, community based organizations and foundations today announced the opening of 100 gyms across the city for free, high-quality sports programs for kids on Saturday nights.

The expansion of the “Saturday Night Lights” program is supported by a commitment of $5 million in baseline funding Mayor de Blasio included in the Fiscal Year 2022 “recovery budget.” It ensures that no indoor gyms will be closed on Saturday nights – the time that they are needed most by kids in city communities.

“This program, centered on enhancing youth development, is an exciting step forward for the NYPD and our partners in continuing to build trust and create opportunities for kids in neighborhoods throughout New York City,” said Police Commissioner Dermot Shea, who announced the expansion today at the Boys Club of New York at 321 E. 111th Street, in East Harlem.

“This has always been important – but it has never been more important than at this moment,” Commissioner Shea said.

The Saturday Night Lights program kicks off tomorrow, July 10 – and continues all year long. It features the opening of 100 sites across the city. Each Saturday, from 5 p.m. to 9 p.m., children from 11- to 18-years-of-age will be able to enjoy an array of indoor sports, including basketball, soccer, volleyball, dance, martial arts and more.

A key component of the program is bringing cops and kids together. Teams of Youth Coordination Officers from NYPD precincts will be at each of the 100 gymnasiums every Saturday night, helping to coach and participating with members of various Community Based Organizations to interact with young people and help make a lasting and positive impact in their lives.

Saturday Night Lights is a prime component of NYPD Kids First – a recently announced philosophy that builds on the Police Commissioner’s mission to take Neighborhood Policing to the next level through initiatives to protect and serve all New York City kids, prevent violence and connect with kids before any potential entanglements with the criminal justice system can occur or take root.

Using asset forfeiture funds, the NYPD has worked closely with NYCHA and community leaders to refurbish 15 broken down, outdoor basketball courts and to launch a new soccer pitch at the Colonel Charles Young Park in Harlem. The Saturday Night Lights expansion activates underutilized spaces by bringing exceptional athletic programs and activities – free of charge -- to more neighborhoods where kids live and connecting them with high quality coaches and mentors.

The expansion builds on an initiative begun a decade ago by Manhattan District Attorney Cy Vance, Jr., with one gym in one neighborhood in Upper Manhattan. Under District Attorney Vance’s leadership, Saturday Night Lights grew to 20 gyms -- 12 of them in Manhattan and eight spread throughout the city. Now, due to the expanding partnership behind this new initiative, Saturday Night Lights has blossomed to 100 gyms citywide.

The expanded program will be administered by the Department of Youth and Community Development and operated by various Community Based Organizations. In addition to the DYCD, the NYPD and the five district attorney’s offices, Saturday Night Lights features the involvement of key agency partners including the city’s Department of Education, the Parks Department, the New York City Housing Authority, the federal Drug Enforcement Administration, Homeland Security Investigations and the NY/NJ HIDTA as well as foundation partners including the New York City Police Foundation, the First Responders Children’s Foundation, the Mandela Foundation, Toys for Tots, Good 360, and Franklin Toys.

eller Of Forged Basquiats And Harings Arrested On Fraud Charges

Angel Pereda Attempted to Sell a Series of Fake Artworks Attributed to Jean- Michel Basquiat and Keith Haring, Among Others, For Millions of Dollars 

 Audrey Strauss, 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 today the arrest of ANGEL PEREDA for his role in a scheme to sell forged artworks purportedly created by renowned artists, including Jean-Michel Basquiat and Keith Haring.  PEREDA was arrested in New York on July 9, 2021.

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Angel Pereda attempted to sell forgeries of artworks by Jean-Michel Basquiat and Keith Haring, among others, as genuine.  If real, such works would be worth millions.  The alleged fakes have little or no value, except potentially as evidence of the alleged crime.  Angel Pereda now faces the prospect of a jury’s appraisal of his alleged conduct.”

FBI Assistant Director William F. Sweeney Jr. said: "As we allege, Mr. Pereda conned art buyers, hoping his victims wouldn’t see the difference between real art and a forgery. He used their trust to his advantage by passing off worthless pieces as priceless works of art. Hopefully, this case provides a lesson to any others hoping to engage in similar behavior – the FBI's Art Crime Team has the resources to distinguish the real from the fake, and its members will ensure you face the consequences of your actions."

According to the allegations contained in the complaint unsealed today in Manhattan federal court[1]:

In or about 2020 and 2021, ANGEL PEREDA engaged in a scheme to sell paintings and other artwork that he marketed for sale as having been painted or created by world-famous artists, including Jean-Michel Basquiat and Keith Haring, among others.  By knowingly and falsely claiming that these fake works were painted by these famous artists, PEREDA tried to trick purchasers into paying millions of dollars for the fake works, which, as the defendant well knew, were essentially worthless.

To deceive his victims, PEREDA falsified the provenance – that is, the ownership history – of the forged artworks.  On one occasion, PEREDA attempted to facilitate the sale of a painting purportedly by Basquiat, which PEREDA referred to as “Glory Boys Kingdom.”  When told by another individual that a particular false provenance had been detected as fraudulent, PEREDA created and sent to an individual in New York new fraudulent provenances, so that the painting could be sold for millions of dollars.  A photograph of “Glory Boys Kingdom” is below:

PEREDA is also connected to at least three other works of art purportedly by Basquiat and Haring, which have been determined to be fraudulent.  Photographs of the pieces are below:

If you believe you have additional information regarding ANGEL PEREDA, also known as “Angel Luis Pereda Eguiluz,” please contact the FBI at 1-800-CALL FBI or NYArtCrime@fbi.gov, and reference this case.

PEREDA, 49, of Mexico, is charged with one count of wire fraud, which carries a maximum sentence of 20 years in prison.

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Ms. Strauss praised the outstanding efforts of the FBI Art Crime Team in the investigation, which she noted is ongoing.

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