Three Defendants Charged In Organized Crime Money Laundering Scheme

The Defendants Executed Money Laundering Transactions and Discussed Moving Tens of Millions of Dollars with Undercover Agents 

 Audrey Strauss, United States Attorney for the Southern District of New York, and Aaron C. Rouse, Special Agent in Charge of the Las Vegas Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of an indictment charging YOSEF COHEN, a/k/a “Joe,” VAGUE SHAGENOVICH TERGALSTANYAN, a/k/a “Vahe,” a/k/a “Vic,” and IGAL BEN HANAN with conspiracy to commit money laundering. 

TERGALSTANYAN and COHEN were arrested and presented in California on July 9, 2021, and July 12, 2021, respectively, and will be arraigned in Manhattan federal court at a later date.  BEN HANAN was arrested on July 12, 2021, and will be presented later today in Nevada.  The case is assigned to U.S. District Judge Laura Taylor Swain.

Manhattan U.S. Attorney Audrey Strauss said: “As alleged, the defendants conspired to launder millions of dollars of illicit proceeds.  Thanks to the hard work of the FBI, the defendants face serious federal charges.”

FBI Special Agent-in-Charge Aaron C. Rouse said: “This case is an outstanding example that demonstrates the strength of the FBI’s partnerships with national and international law enforcement.  The FBI takes pride in combating the most dangerous crime organizations in the world.  This should be a wake-up call to criminals that regardless of where they think they can hide, the FBI and our partners will find them and bring them to justice.” 

According to the allegations in the Indictment:[1]

COHEN, TERGALSTANYAN, and BEN HANAN worked on behalf of organized criminal enterprises operating in several countries around the world.  In recorded conversations with undercover law enforcement officers (the “UCs”) who represented themselves to be members of an international organized criminal enterprise that distributed narcotics and laundered money, the defendants planned money laundering transactions of narcotics proceeds and discussed moving tens of millions of dollars of illicit money on behalf of international criminal organizations.  The defendants conspired to execute, and did execute, money laundering transactions with the UCs and others known and unknown.

On several occasions, the defendants arranged for the UCs to pick up narcotics proceeds, in cash, from locations in the United States and then deliver the cash to the defendants, minus a percentage-based fee paid to the UCs for laundering the proceeds.  For example, as arranged by the defendants, the UCs picked up approximately $208,000 in cash in Medford, New York, and delivered the cash, minus an arranged fee, to TERGALSTANYAN in California.  In addition to discussing money laundering transactions with a UC who was in New York, New York, TERGALSTANYAN later proposed that the UCs pick up and launder one to two million dollars of marijuana proceeds in cash every week in Manhattan. 

In another scheme, for example, the defendants conspired to fraudulently obtain a business visa for BEN HANAN so that BEN HANAN could move to the United States.  In order for BEN HANAN to obtain a business visa, BEN HANAN’s purported business needed funds on deposit that appeared to be legitimate investments.  COHEN proposed that the UCs provide COHEN with $150,000 in cash, and COHEN would use COHEN’s purported businesses to provide funds to BEN HANAN’s purported business.  The UCs provided the cash to COHEN, which was represented to be narcotics proceeds that had not yet been laundered.  Subsequent wire transfers sent by the defendants to the UCs as repayment were falsely described by the defendants as accounting for a particular month or time period, so as to appear like legitimate business transactions.

YOSEF COHEN, 58, of Calabasas, California, VAGUE SHAGENOVICH TERGALSTANYAN, 38, of Glendale, California, and IGAL BEN HANAN, 43, of Las Vegas, Nevada, were each charged with one count of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), which carries a maximum sentence of 20 years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants would be determined by a judge.

Ms. Strauss praised the outstanding investigative work of the FBI.  This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation.  OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

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

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

 

Statewide 7-Day Average Positivity is 0.95%

36,255 Vaccine Doses Administered Over Last 24 Hours

349 Patient Hospitalizations Statewide

2 COVID-19 Deaths Statewide Yesterday

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

"New York continues to fight COVID-19 with every available resource, but to beat this virus for good, we need New Yorkers to take advantage of our most effective one—the vaccine," Governor Cuomo said. "More New Yorkers continue to get vaccinated each and every day and it's critical those who haven't gotten their shot yet do so immediately. There are no more excuses—vaccination sites remain open across the state and the supply is there, so I am urging all those who have yet to receive the vaccine to take advantage of these resources and get your shot today."

Today's data is summarized briefly below:

• Test Results Reported - 75,015
• Total Positive - 812
• Percent Positive - 1.08%
• 7-Day Average Percent Positive - 0.95%
• Patient Hospitalization - 349 (+0)
• Patients Newly Admitted - 52
• Patients in ICU - 79 (-1)
• Patients in ICU with Intubation - 33 (+2)
• Total Discharges - 185,559 (+51)
• Deaths - 2
• Total Deaths - 43,020
• Total vaccine doses administered - 21,647,440
• Total vaccine doses administered over past 24 hours - 36,255
• Total vaccine doses administered over past 7 days - 248,194
• Percent of New Yorkers ages 18 and older with at least one vaccine dose - 70.6%
• Percent of New Yorkers ages 18 and older with completed vaccine series - 65.3%
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) - 73.4%
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) - 66.9%
• Percent of all New Yorkers with at least one vaccine dose - 58.9%
• Percent of all New Yorkers with completed vaccine series - 54.2%
• Percent of all New Yorkers with at least one vaccine dose (CDC) - 61.2%
• Percent of all New Yorkers with completed vaccine series (CDC) - 55.5%

MAYOR DE BLASIO, COMMISSIONER CAMPION ANNOUNCE NEW AND IMPROVED HEALTH BENEFITS PROGRAM FOR CITY RETIREES

 

The NYC Medicare Advantage Plus Program will provide new and better benefits for retirees while controlling costs and strengthening the system into the future 

 Mayor Bill de Blasio and Labor Relations Commissioner Renee Campion today announced an agreement with the Municipal Labor Committee to implement the NYC Medicare Advantage Plus Program, a custom program for City retirees, beginning January 1, 2022. The agreement stems from the June 2018 Health Savings Agreement which established a Tripartite Labor Management Task Force to study ways to implement health care cost savings. Implementing the NYC Medicare Advantage Plus Program will produce approximately $600 million annually in health care cost savings for the system.   

"The City’s commitment to our retirees is unwavering, and our new plan increases both quality and benefits for retirees while also lowering costs for the City and its taxpayers," said Mayor Bill de Blasio.  

  

“We know that change can be difficult, but we are confident that this will be implemented with little disruption and that the City will continue to provide high quality healthcare to its over 1.2 million active employees, retirees, and dependents,” said Commissioner of Labor Relations Renee Campion.   

   

After careful consideration, the City and the Municipal Labor Committee selected an alliance between Anthem Blue Cross and Emblem Health to provide the NYC Medicare Advantage Plus Program. This provides continuity for the majority of employees and retirees who are currently enrolled in the City’s CBP and Senior Care programs. The program is rated four stars by Medicare.  

The NYC Medicare Advantage Plus Program replaces the current Senior Care program, which is a supplement to traditional Medicare, as the program that is free to all retirees. Other buy up options, including the Senior Care plan and the HIP VIP program will remain available to retirees.   

  

The NYC Medicare Advantage Plus Program replaces both traditional Medicare and a Medicare Supplement plan with a single integrated program administered by an insurer approved by Medicare. The plan must follow Medicare rules and provide all benefits provided by Medicare. The plan will not only cover all the traditional Medicare benefits as well as the benefits covered by the Senior Care supplemental plan, but will also add some important new benefits including 24 trips to doctors’ offices, home meals delivery for patients after they are discharged from the hospital, a fitness program, a wellness rewards program and telemedicine.  

  

In conjunction with the insurer, the City plans to have an extensive education program in the summer and early Fall that will include virtual and in person meetings, mailings and outreach calls to every one of our 250,000 retirees. Retirees will still be eligible for the reimbursement of the Medicare Part B benefit that they receive today.  

  

A major concern for retirees is whether they can keep their current doctors and hospitals in a NYC Medicare Advantage Plus Program. In the City’s Medicare Advantage Plus Program, a retiree can go to any doctor or hospital that accepts Medicare. It doesn't make a difference if that provider is in the insurer's network or not. As long as the provider takes payment from Medicare, they are obligated to accept the NYC Medicare Advantage Plus Program payment. That includes all the hospitals in the NYC area, including those at Memorial Sloan-Kettering and The Hospital for Special Surgery (HSS), and almost all hospitals nationally and 99.5% of all doctors. The program is a national program so it covers retirees in any State in which they work or reside and when they travel.

The City spends over $1 billion a year on retiree benefits, including the Part B Medicare reimbursement, and this will help the City control those costs while improving the quality of care for retirees. Nationally, Medicare Advantage plans have grown quickly in popularity and about four in ten retirees are now covered by a Medicare Advantage plan in lieu of traditional Medicare.  

  

Materials about the NYC Medicare Advantage Plus Program will be distributed to all retirees in early August and there will be a call center established by the Retiree Alliance to handle inquiries at that time. 

Attorney General James Takes Down Major Multistate Drug Trafficking Operation

 

16 Individuals Indicted for Roles in Trafficking Cocaine and Opioids Throughout New York, Massachusetts, and Pennsylvania

Latest Action in AG James’ Efforts to Combat Opioid Crisis and Keep Streets Clean from Dangerous Drugs

 New York Attorney General Letitia James today announced the indictment of 16 individuals for their roles in trafficking prescription opioids and cocaine in Brooklyn, Staten Island, Massachusetts, and Pennsylvania. As alleged in two indictments — unsealed in Kings County Supreme Court today — the individuals sold tens of thousands of prescription oxycodone pills, worth approximately $500,000, and more than 500 grams of cocaine. The investigation led to the recovery of more than 2,600 oxycodone pills, 300 grams of cocaine, and thousands of dollars in illicit narcotics proceeds.

“Dangerous drugs have long ravaged our communities and devastated the lives of many individuals throughout our state and nation,” said Attorney General James. “From going after the manufacturers and distributors fueling the opioid crisis, to cracking down on those who are illegally trafficking and distributing opioids and other drugs throughout our state, we are tackling this crisis from every angle to prevent death and destruction. Today’s takedown is yet another major action to keep our streets clean from these drugs and hold accountable those who put New Yorkers in harm’s way just to line their pockets. We are grateful to our partners in law enforcement for their invaluable support and shared committed in protecting our communities.”

Today’s takedown was the result of a 20-month investigation led by the Office of the Attorney General’s (OAG) Organized Crime Task Force (OCTF) with support from the Warwick Police Department and the Waterfront Commission of New York Harbor. The investigation — dubbed “Operation Dirty Laundry” due to the frequent reference to illegal prescription pills for sale as “shirts” — included hundreds of hours of physical and covert surveillance, court-authorized wiretapping of phones, and review of subpoena compliance including phone and Bureau of Narcotics Enforcement records.

During the electronic surveillance, the defendants and their co-conspirators frequently utilized coded and cryptic terminology in an attempt to disguise their illicit activities, such as referring to oxycodone pills by colors or size (“big ones,” “white shirts,” “blue shirts,” and “3-0s”) and cocaine as “the girl” or “the Pablo.” Over the course of the investigation, authorities seized approximately 2,600 oxycodone pills, 300 grams of cocaine, digital scales, a money counter, and more than $12,000 in cash.

“This case is a perfect example of the cooperation required between local departments, the Attorney General's Office, and the Waterfront Commission's personnel to fight the trafficking of illegal opioids and cocaine across jurisdictional boundaries,” said Warwick Police Chief Thomas McGovern.

“The Waterfront Commission of New York Harbor remains committed to working with all its law enforcement partners to eliminate the scourge of illegal narcotics in the Port District and elsewhere in the metropolitan area,” said Waterfront Commission of New York Harbor New York Commissioner Paul Weinstein. “We thank Attorney General Letitia James for her work on this case and her continued partnership in keeping the public safe.”

Indictment One

As outlined in the first indictment, 15 defendants are charged for their roles in three conspiracies in which the defendants sold and possessed oxycodone pills and cocaine throughout New York, Massachusetts, and Pennsylvania. As alleged in the first conspiracy, Neil Garone a/k/a “Beanz” (a New York City Department of Sanitation employee) and Alex Calatozzo a/k/a “Houdin” operated an oxycodone pill distribution network in and around Brooklyn and Staten Island. They sold a large quantity of the oxycodone pills to Ben Butler, who then resold them in Massachusetts, where traffickers can sell oxycodone pills for a higher profit. Garone and Calatozzo bought oxycodone pills from various individuals, including Rosario Caruso a/k/a “The Italian Kid” and John McAvoy a/k/a “Henry.” McAvoy, on several occasions, acquired the oxycodone pills from Pennsylvania and then trafficked the pills back to Calatozzo for resale.

In the second conspiracy, Joseph Mignano conspired with Vincent Posa, Frederick Zittel, and Birol Kagitcioglu to sell oxycodone pills in Brooklyn and Staten Island. Mignano sourced the oxycodone pills from suppliers such as Posa, Zittel, and Kagitcioglu for resale to Garone, Anthony Romano, and Joseph Romano. Garone also sold the pills to Andrew Mason.

In the third conspiracy, Garone and Calatozzo sold cocaine to Millan Ceneus, who traveled from Massachusetts to purchase the cocaine. Calatozzo would store, package, and prepare the cocaine before Garone would meet Ceneus at Calatozzo’s residence in Brooklyn to complete the sale. 

This indictment contains 473 counts of various felony narcotics offenses, including charges against Neil Garone, Alex Calatozzo, and Ben Butler for Operating as a Major Trafficker, which carries a mandatory life sentence in state prison, and various counts of Criminal Sale and Criminal Possession of a Controlled Substance (class A and B felonies), as well as Conspiracy to commit those crimes.

Indictment Two

In the second Indictment, Andrew Mason is charged with conspiring with Garone and Thomas Schillizzi to purchase oxycodone pills for resale in Brooklyn. This second indictment contains 43 counts of felony narcotics offenses, including various counts of Criminal Sale and Criminal Possession of a Controlled Substance (class A and B felonies).

Those charged in today’s two indictments include:

NEIL GARONE a/k/a “Beanz,” 34 years old, Staten Island, New York  

ALEX CALATOZZO a/k/a “Houdin,” 38 years old, Brooklyn, New York  

BEN BUTLER, 32 years old, Randolph, Massachusetts  

JOSEPH MIGNANO a/k/a “Migs,” 61 years old, Brooklyn, New York  

VINCENT POSA, 51 years old, Brooklyn, New York  

JOSEPH ROMANO, 28 years old, Staten Island, New York  

ANTHONY ROMANO, 32 years old, Staten Island, New York  

FREDERICK ZITTEL, 53 years old, Brooklyn, New York

BIROL KAGITCIOGLU, 72 years old, Brooklyn, New York

JOHN MCAVOY a/k/a “Henry,” 39 years old, Brooklyn, New York

ROSARIO CARUSO a/k/a “The Italian Kid,” 38 years old, Staten Island, New York

MIA CHAMBERS a/k/a “Mimi,” 37 years old, Brooklyn, New York

ANDREW MASON a/k/a “Roberto,” 24 years old, Brooklyn, New York

PAUL EKERLING, 39 years old, Toms River, New Jersey

MILLAN CENEUS a/k/a “Millz,” 36 years old, Brockton, Massachusetts

THOMAS SCHILLIZZI, 45 years old, Staten Island, New York

Today’s takedown marks the latest major drug bust in the OAG’s Suburban and Upstate Response to the Growing Epidemic (SURGE) Initiative, a law enforcement effort that brings together state and local law enforcement to target New York’s growing — and often violent — heroin, opioid, and narcotics trafficking networks. Since launching in 2017, SURGE has taken 738 alleged traffickers off the streets.

The charges against the defendants are merely accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.

Attorney General James would also like to thank the Randolph, Massachusetts Police Department, the New York State Department of Health’s Bureau of Narcotics Enforcement, the New York City Department of Investigation, the United States Department of Health and Human Services – Office of the Inspector General, and the DEA Diversion Task Force for their assistance with the investigation. 

BOROUGH PRESIDENT DIAZ ALLOCATES OVER $35M IN FUNDING TOWARDS BRONX INSTITUTIONS REPRESENTING A SUM TOTAL OF OVER $356 MILLION IN COMMUNITY REINVESTMENT

 

 Bronx Borough President Ruben Diaz Jr. announced that his office is providing more than $35 million to institutions all across the borough through his Fiscal Year 2022 capital funding allocations. 

This year, Borough President Diaz will allocate $35,880,000 to 130 total projects. This includes funding for nearly 100 education projects across the borough, park upgrades, healthcare technology, improvements to cultural facilities, the creation of over 900 units of new housing, as well as the redesign and redevelopment of Orchard Beach and the design of the Universal Hip Hop Museum.

 

"Through these funding allocations, my office will be able to provide technology upgrades to public schools, new state-of-the-art equipment to healthcare facilities, park renovations and hundreds of units of new housing, which will play a critical role in our borough's recovery from the COVID-19 pandemic,” said Bronx Borough President Ruben Diaz Jr. “I am proud to have been able to provide this funding to so many worthy institutions in this year's capital budget."

 

This year, Borough President Diaz’s largest allocation went to education, $9.9 million, representing 28 percent of his total capital budget. This money will go towards laptop distributions, technology upgrades and other physical improvements in public schools in different areas around The Bronx.

“The COVID-19 pandemic has further revealed the deep education inequities faced by students in our borough. Through these new funding allocations, my office will be able to take an important step towards leveling the playing field and bringing digital equity to our Bronx students," said Bronx Borough President Ruben Diaz Jr.

 

Several notable projects Borough President Diaz is funding this year include $7 million towards the next phase of the renovation of Orchard Beach; these capital funds are in addition to over $23.9 million that has been allocated in previous fiscal years, $3.7 million towards the Universal Hip Hop Museum, and $3 million towards the construction of a sensory playground. The Daniel Boone Sensory Playground will take into account the unique needs of youth with autism and special health needs.

 

Since taking office in 2009, Borough President Diaz has provided $356,253,000 in total capital funding to 1086 projects. 

“Each of these projects will contribute to the continued progress of our borough that we saw prior to the pandemic. In my final year as Borough President, I am proud to have helped fund so many important projects that have changed the lives of Bronx residents in every corner of our borough,” said Bronx Borough President Ruben Diaz Jr.

 

APPLY NOW: GRANT AWARDS INCREASED TO $3000 The NYC Green Relief & Recovery Fund (NYC Green Fund) was launched by a coalition of foundations shortly after COVID-19 hit our city to address the financial impacts of the pandemic on parks and green spaces. The Fund is intended to support organizations of any size that care for New York City’s green spaces in order to keep our parks, gardens, and open spaces green, clean, and safe. We are excited to announce that thanks to additional contributions to the NYC Green Fund, the maximum grant amount has been increased! We are now offering grants of up to $3,000 to groups with annual operating budgets of less than $15,000 and demonstrated experience working in NYC’s open spaces and supporting community health and wellness. The deadline to apply is Wednesday, July 21, 2021 at 12 noon. Check out our info session webinar and learn everything you need to know about applying for funding. APPLY MONDAY MORNING PITCH-INS Parks across the city are being used more than ever before as a result of the pandemic, which often means more litter. Show your park some love and join a Monday Morning Pitch-In! We're looking for volunteers to join clean-up projects to help pick up trash after a busy summer weekend. Your invaluable help will make parks cleaner, safer, and greener for our families, pets, friends, and neighbors. Projects typically last three to four hours and we provide all supplies. As an added incentive, Chameleon Cold Brew, in partnership with NYC Parks, is thanking volunteers with a special offer. After participating in a pitch-in project, volunteers will be eligible for a chance to win a year's supply of Chameleon Cold Brew! *some restrictions apply.  *Pitch-Ins will be held on the Tuesday following holiday Mondays. SIGN UP WATCH PAST WEBINARS ON-DEMAND  We’re excited to announce that previously recorded webinars are now available to view on our website. Check out Get Involved with Your Park for an overview of Partnerships for Parks and how to support your local green space, Spring Into Action: Planning Safe Park Events During COVID-19 to learn the necessary steps to plan safe programs in your park, or Finding Your Group Structure to learn which structure is best for your community group. Enjoy! WATCH Partnerships for Parks is a joint program of City Parks Foundation and NYC Parks that supports and champions a growing network of leaders caring and advocating for neighborhood parks and green spaces. We equip people and organizations with the skills and tools needed to transform these spaces into dynamic community assets.

AIR QUALITY HEALTH ADVISORY ISSUED FOR NEW YORK CITY METRO In Effect for Thursday, July 15, 2021

 

New York State Department of Environmental Conservation (DEC) Commissioner Basil Seggos and State Department of Health (DOH) Commissioner Dr. Howard Zucker issued an Air Quality Health Advisory for the New York City Metro region for Thursday, July 15, 2021.  

   

The pollutant of concern is: Ozone  

   

The advisory will be in effect 11 a.m. through 11 p.m.  

   

DEC and DOH issue Air Quality Health Advisories when DEC meteorologists predict levels of pollution, either ozone or fine particulate matter are expected to exceed an Air Quality Index (AQI) value of 100. The AQI was created as an easy way to correlate levels of different pollutants to one scale, with a higher AQI value indicating a greater health concern.  

   

OZONE  

   

Summer heat can lead to the formation of ground-level ozone, a major component of photochemical smog. Automobile exhaust and out-of-state emission sources are the primary sources of ground-level ozone and are the most serious air pollution problems in the northeast. This surface pollutant should not be confused with the protective layer of ozone in the upper atmosphere.  

   

People, especially young children, those who exercise outdoors, those involved in vigorous outdoor work and those who have respiratory disease (such as asthma) should consider limiting strenuous outdoor physical activity when ozone levels are the highest (generally afternoon to early evening). When outdoor levels of ozone are elevated, going indoors will usually reduce your exposure. Individuals experiencing symptoms such as shortness of breath, chest pain or coughing should consider consulting their doctor.  

   

Ozone levels generally decrease at night and can be minimized during daylight hours by curtailment of automobile travel and the use of public transportation where available.  

   

New Yorkers also are urged to take the following energy-saving and pollution-reducing steps:   

• use mass transit or carpool instead of driving, as automobile emissions account for about 60 percent of pollution in our cities; 
• conserve fuel and reduce exhaust emissions by combining necessary motor vehicle trips; 
• turn off all lights and electrical appliances in unoccupied areas; 
• use fans to circulate air. If air conditioning is necessary, set thermostats at 78 degrees; 
• close the blinds and shades to limit heat build-up and to preserve cooled air; 
• limit use of household appliances. If necessary, run the appliances at off-peak (after 7 p.m.) hours. These would include dishwashers, dryers, pool pumps and water heaters; 
• set refrigerators and freezers at more efficient temperatures; 
• purchase and install energy efficient lighting and appliances with the Energy Star label; and 
• reduce or eliminate outdoor burning and attempt to minimize indoor sources of PM 2.5 such as smoking. A toll-free Air Quality Hotline (1-800-535-1345) has been established by DEC to keep New Yorkers informed of the latest Air Quality situation.    

Additional information on ozone and PM 2.5 is available on DEC's website and http://www.health.ny.gov/environmental/outdoors/air/ozone.htm on DOH's website.  

   

The Thursday, July 15, Air Quality Health Advisory regions consist of the following: Region 2 New York City Metro, which includes New York City, Rockland, and Westchester counties. 

A RECOVERY FOR ALL OF US: KROLL BOND RATING AGENCY ASSIGNS AA+ RATING TO NEW YORK CITY'S GENERAL OBLIGATION BOND CREDIT OUTLOOK

First time rating confirms the City’s sound fiscal recovery strategy and strong economic outlook 

 Mayor Bill de Blasio today announced the Kroll Bond Rating Agency (KBRA) has assigned an AA+ rating with a Stable Outlook to New York City’s General Obligation bonds. This is KBRA’s second highest rating, the same that it has assigned to New York State, and the first time the agency has reviewed and rated the City’s bond offerings.  Like recent upward revisions in outlook from Moody’s Investor Services and Standard & Poor’s Global Ratings, this rating reflects confidence in the city’s economic outlook along with strong financial planning and management in the face of severe budgetary stress. 

 

“This is even more proof that New York City is resilient and on the path to recovery,” said Mayor Bill de Blasio. “A recovery for all of us means investing in our people, staying fiscally responsible, and building the right foundation for a post-COVID economy.”  

 

In assigning the new rating KBRA praised the New York City as a center of business and culture with a diverse and resilient economy, manageable debt obligations, strong budget controls, and plans for near-term financial challenges, all which have allowed the city to navigate through the pandemic-driven financial crisis towards recovery. 

 

KBRA also expressed support for city’s long term financial and capital planning, and highlighted that pension funded ratios and unfunded liabilities have trended positively, while debt service is maintained below 15% of City tax revenues, a hallmark of responsible debt finance. 

 

On May 19 S&P revised its outlook to stable on New York City’s general obligation (GO) bonds and affirmed the AA rating assigned to its outstanding GO debt.  S&P based its revision on the city’s successful vaccination efforts, receipt of more than $15 billion in stimulus that is invested in the current financial plan, and budget actions including the restoration of $1.6 billion in budget reserves through the Retiree Health Benefits Trust 

 

The S&P revision came shortly after Moody’s Investor Services May 14 action to raise the city’s GO bond credit outlook to stable and affirmed actions the City has taken to maintain fiscal stability in response to the crisis brought on by COVID-19, the greatest budgetary stress test the city has faced in generations. Moody’s highlighted the role of City’s vaccination program, stressed that high vaccination rates as compared with the US overall will drive confidence in the local economy, and noted the positive effect that the city’s accelerating reopening will have on employment and tax revenues. 

 

In June, Mayor de Blasio and the City Council announced an agreement on the Recovery Budget, an on-time balanced City budget for Fiscal Year 2022 (FY22). The foundation for the $98.7 billion Recovery Budget is the strategic investment of stimulus funds that will drive New York City’s economic comeback and build a recovery for all of us. The Budget is fiscally responsible with $5.1 billion in budget reserves. The Adopted Budget also includes almost $4.0 billion in savings over Fiscal Years 2021 and 2022 since last June – the second largest two-year savings total at Budget Adoption of this administration.