Department of Small Business Services’ COVID-19 Loans and Grants Underserved the Bronx

 

Two audits by NYC Comptroller find loan and grant administrators did not perform adequate due diligence to ensure eligibility and equitable distribution of assistance

Businesses in the Bronx received far fewer loans and grants, while Manhattan businesses received more than their proportionate share of eligible small businesses loans and grants

In two new audits, New York City Comptroller Brad Lander found that the Department of Small Business Services conducted inadequate oversight of two COVID-19 assistance programs – a zero-interest loan and a partial-payroll grant – leaving eligible businesses denied critical assistance and public funds unequally distributed across the city. The Bronx saw the fewest loans and grants relative to their share of potentially eligible small businesses, while Manhattan received far more than their share.  The Comptroller visited small businesses in the Westchester Square Business Improvement District in the Bronx to discuss the impact of the pandemic and how the City can best support their recovery on Friday.

“Small businesses weave the vibrant fabric of our city’s local economies and cultural communities. When the pandemic halted activity in March 2020, the City mobilized swiftly to keep thousands of local businesses afloat, but poor administration of these programs meant our public resources were not distributed equitably. Better oversight and more targeted outreach and eligibility criteria for future programs will help ensure that the Bronx is not left behind again,” said Comptroller Brad Lander.

The audit acknowledges that the Department of Small Business Services rapidly stood up small business assistance programs in the first few days of the Covid-19 pandemic, providing critical assistance before the federal government opened the Paycheck Protection Program. The agency provided 404 loans and 3,411 grants to small businesses through a program that accepted applications between mid-March and early April 2020. SBS awarded the loans and grants on a first-come, first-served basis rather than considering which neighborhoods were most adversely impacted by COVID-19, were historically underserved, or had more precarious economic activity. Auditors reviewed loans and grants by borough compared to both the number of businesses that applied and the share of businesses in the city.

Loans:

• Although Manhattan accounts for 41.3% of City’s small businesses with fewer than 100 employees, Manhattan businesses received 56.9% of the loans and the businesses were highly concentrated in Midtown, its surrounding neighborhoods, as well as downtown.
• On the other hand, the Bronx saw both the smallest number of loans approved and the smallest dollar amount distributed. The Bronx accounts for 7.7% of the City’s small businesses with under 100 employees but received 2.2% of the SBS loans. Just 9 out of 519 Bronx business applicants received loans.

Grants:

• Although Manhattan accounts for 37.7% of the City’s small businesses with fewer than 5 employees, Manhattan businesses received 63.1% of the grant funds and constituted over half of the recipients, mainly located in Chelsea, Midtown, Tribeca, and Downtown
• Even though the Bronx has nearly double the number of businesses under five employees than Staten Island, both boroughs’ businesses had similar number of awarded grant recipients, with Staten Island receiving more total grant money than the Bronx. The Bronx accounts for 7.9% of businesses with under 5 employees but received 3% of SBS grants.

The Comptroller’s auditors focused on SBS’s application criteria and its review process for these criteria, which for both programs included (1) at least a 25% decrease in revenue or sales during the COVID-19 outbreak, (2) location in the five boroughs, and (3) no outstanding tax liens or legal judgements. The loan program additionally required (1) ability to repay the loan, (2) in operations for 2 years, and (3) fewer than 100 employees across all locations; whereas the grant program required (1) operations for at least 6 months and (2) 1-4 employees across all locations.

For the loan program, the Comptroller’s audit team reviewed 76 of the awarded applications and found that 39 applicants did not meet one or more requirements:

• 31 applicants did not provide a completed Loan Program affidavit certifying that they met eligibility;
• 8 applicants did not demonstrate a revenue decrease of at least 25%;
• 4 applicants did not prove that their businesses were in the five-boroughs.

SBS also disqualified 45 applicants.  Of these, 15 met the eligibility requirements and should have been considered.

For the grant program, the audit team reviewed 74 of the awarded applications and found that SBS awarded 16 grant applicants who did not meet one or more requirements:

• 10 applicants did not demonstrate a revenue decrease of at least 25%;
• 8 applicants did not submit adequate payroll documents;
• 3 did not provide a completed affidavit certifying they met eligibility.
• These 16 unqualified grants totaled $96,453.

In addition, based on 155 sampled grants, SBS miscalculated grant amounts for 103 applicants and as a result, overpaid $762,890 to 96 applicants and underpaid $17,286 to 7 applicants. SBS had a total of $39 million for the grant program, but did not distribute $6.7 million.

The auditors recommended for both programs:

1. Implement multi-level or secondary reviews to ensure staff are following procedures and determining eligibility correctly when evaluating applications;
2. Require applicants to submit federal tax returns, State withholding forms, NYC business tax returns, accounting records to corroborate revenue, number of employees, and location as well as independently obtain tax records from the IRS and NYS;
3. Conduct independent record searches or obtain tax records to determine whether businesses have outstanding judgements or liens;
4. Communicate changes to documentation requirements to prospective applicant;
5. Increase outreach to underserved areas and distribute public funds equitably.

Table I

Comparison of the Number and Percentage of Small Businesses per Borough to the Number and Percentage of Loan Program Applicants, Recipients, and Funds

	Businesses With Less Than 100 Employees Per Census Bureau		Loan Program Applicants
Borough	#	%	#	%
Bronx	17,807	7.7%	519	4.3%
Brooklyn	59,142	25.6%	2,769	23.2%
Manhattan	95,439	41.3%	6,021	50.4%
Queens	49,240	21.3%	2,218	18.6%
Staten Island	9,220	4.0%	425	3.6%
Total	230,848		11,952

	Loan Program Recipients		Loan Program Funds
Borough	#	%	$	%
Bronx	9	2.2%	518,100.00	2.3%
Brooklyn	87	21.5%	5,003,000.00	21.9%
Manhattan	230	56.9%	13,622,799.34	59.6%
Queens	64	15.8%	2,990,250.00	13.1%
Staten Island	14	3.5%	738,000.00	3.2%
Total	404		22,872,149.34

Table 2

Comparison of the Number and Percentage of Small Businesses per Borough to the Number and Percentage of Grant Program Applicants, Recipients, and Funds*

	Businesses with Less Than 5 Employees Per Census Bureau		Grant Program Applicants
Borough	#	%	#	%
Bronx	11,783	7.9%	366	4.3%
Brooklyn	40,919	27.5%	2,108	24.6%
Manhattan	56,093	37.7%	4,196	48.9%
Queens	33,948	22.8%	1,616	18.8%
Staten Island	5,932	4.0%	291	3.4%
Total	148,675		8,577

	Grant Program Recipients		Grant Program Funds
Borough	#	%	$	%
Bronx	104	3.0%	$491,709.28	2.0%
Brooklyn	802	23.5%	$5,063,562.98	20.3%
Manhattan	1,831	53.7%	$15,720,584.20	63.1%
Queens	578	16.9%	$3,122,043.75	12.5%
Staten Island	96	2.8%	$522,019.60	2.1%
Total	3,411		$24,919,919.81

Thoroughbred Racehorse Trainer Jason Servis Pleads Guilty In Federal Doping Case

Racehorse Trainer Jason Servis Acquired, Distributed, and Directed Others to Administer Prohibited Performance Enhancing Drugs to Racehorses 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that defendant JASON SERVIS pled guilty today for his role in the distribution of adulterated and misbranded drugs intended for administration on racehorses he trained, in connection with the charges filed in United States v. Navarro et al., 20 Cr. 160 (MKV).  SERVIS pled guilty before U.S. District Judge Mary Kay Vyskocil.  SERVIS will be sentenced by Judge Vyskocil on May 18, 2023.

U.S. Attorney Damian Williams said: “Servis’ conduct represents corruption at the highest levels of the racehorse industry.  As a licensed racehorse trainer, Servis was bound to protect the horses under his care and to comply with racing rules designed to ensure the safety and well-being of horses and protect the integrity of the sport.  Servis abdicated his responsibilities to the animals, to regulators, and to the public.  This latest conviction demonstrates the commitment of this Office and of our partners at the FBI to the prosecution and investigation of corruption, fraud, deceit, and endangerment in the racehorse industry.”

According to the allegations contained in the Superseding Indictment, the Superseding Information charging SERVIS, prior charging instruments and other filings in this case, and statements during court proceedings:

The charges in the Navarro case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, performance enhancing drug (“PED”) distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and to secretly administer those PEDs to racehorses competing at all levels of professional horseracing.  By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Kentucky, and Saudi Arabia, all to the detriment and risk of the health and well-being of the racehorses.  Trainers, like SERVIS, who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses’ winnings and by improving their horses’ racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control.

SERVIS ordered hundreds of bottles of the drug “SGF-1000,” which was compounded and manufactured in unregistered facilities and contained growth factors that the defendant believed to be undetectable through regular drug screens.  Virtually all the horses in SERVIS’ barn received that drug, including the thoroughbred racehorse “Maximum Security,” who crossed the finish line first at the 2019 Kentucky Derby.  SGF-1000 was an intravenous drug promoted as, among other things, a vasodilator capable of promoting stamina, endurance, and lower heart rates in horses through the purported action of “growth factors.”  SERVIS approved veterinary bills to racehorse owners that contained concealed charges for SGF-1000, which were falsely billed under the line item “Acupuncture & Chiropractic.”  In September 2019, the New York State Gaming Commission released an advisory stating that SGF-1000 was prohibited under the racing rules and had been prohibited since 2012.  SERVIS continued to allow the administration of that drug on the horses he trained up until his arrest in March 2020.

Horses trained by SERVIS were regularly administered the prescription drug “Clenbuterol” with no valid prescription, which was part of a deliberate effort to conceal that conduct from racing regulators and avoid mandatory reporting requirements.

SERVIS further obtained and transported a misbranded version of “Clenbuterol,” which he obtained from convicted co-defendant JORGE NAVARRO.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation New York Office’s Eurasian Organized Crime Task Force and its support of the Bureau’s Integrity in Sports and Gaming Initiative.  Mr. Williams also thanked the Food and Drug Administration for their assistance.

MAYOR ADAMS, GOVERNOR HOCHUL ANNOUNCE START OF CONSTRUCTION OF $72 MILLION, MIXED-USE AFFORDABLE, SUPPORTIVE HOUSING DEVELOPMENT IN THE BRONX

 

Bedford Green House II Will Deliver 116 Affordable Apartments to Fordham Heights, Including 70 With Supportive Services and a Medical Clinic

New York City Mayor Eric Adams and New York Governor Kathy Hochul today announced that construction has begun on a $72.1 million affordable housing development in the Fordham Heights section of the Bronx. Bedford Green House II will create 46 affordable apartments for families and seniors and 70 supportive apartments for families, individuals, and seniors experiencing homelessness. The development will also house a 2,410-square-foot medical clinic offering services to residents and the wider community.

“Our administration has never wavered in our commitment to creating new housing, and that’s why we are working every day to build 15,000 units of supportive housing with onsite social services to help families who are struggling,” said Mayor Adams. “The combination of supportive homes and a medical clinic here will deliver residents and the entire community access to care they may not otherwise be able to access. I was proud to be there to celebrate the opening of 118 new homes at Bedford Green House I, and I’m excited to celebrate the kickoff of construction on the next 116 at Bedford Green House II.”

“With this milestone, we are one step closer to delivering hundreds of units of affordable and supportive housing to Bronx families, seniors, and individuals experiencing homelessness,” said Governor Hochul. “As our state faces a severe housing shortage, essential projects, like this Bedford Green development, are critical to ensuring that all New Yorkers have a safe, stable, and affordable place to call home. My administration remains laser-focused on addressing New York’s housing crisis, and I look forward to working with Mayor Adams and other local and state partners to make affordable housing available to all.”

Bedford Green House II will consist of a newly constructed, 17-story building located at 2880 Jerome Avenue. Bedford Green House I, the first phase of this two-part development, was completed in December 2021.

All of Bedford Green House II’s apartments will be affordable to households with incomes at or below 60 percent of the area median income. Of the 116 units, 80 will be studios, 24 will have one bedroom, and 12 will have two bedrooms.

Seventy apartments will be reserved for households in need of supportive services. These residents will have access to rental subsidies and on-site services funded through the Empire State Supportive Housing Initiative (ESSHI) and administered by the New York State Office of Mental Health.

Supportive services provided by Project Renewal will include coordination of medical services, occupational therapy, crisis management, and assistance with access to public benefits.

Fifty-five apartments will be set aside for seniors aged 62 or older through New York City’s Zoning for Quality and Affordability amendment and Affordable Independent Residences for Seniors provision. Of these 55 apartments, 14 will house seniors who will also benefit from the above-mentioned supportive services through ESSHI.

The building’s medical clinic will offer services including primary care, podiatry, gynecology, and substance abuse treatment. Operated by Project Renewal, Inc., the clinic will serve clients with or without insurance.

Bedford Green House II will be highly energy-efficient and is expected to meet Energy Star Multifamily High Rise performance requirements and LEED Gold certification under LEED for Enterprise Green Communities. Energy-efficiency measures will include a high-performance building envelope and windows as well as motion-sensor lighting.

Residential amenities will include a library and learning center, free Wi-Fi in each apartment, and a backyard shared with Bedford Green House I. Residents will also have access to amenity areas at Bedford Green House I, including its playground and rooftop greenhouse garden.

The New York City Department of Housing Preservation and Development (HPD) provided $9.77 million through the Supportive Housing Loan Program, the New York State Office of Temporary and Disability Assistance contributed $6 million through the Homeless Housing and Prevention Program, the New York City Council provided a $1.2 million grant, and the Office of the Bronx Borough President provided a $300,000 grant. State financing for the Bedford Green House II includes $5.7 million in permanent tax-exempt bonds, federal low-income housing tax credits that generated $34.6 million in equity, and $9.77 million in subsidy from New York State Homes and Community Renewal (HCR). The remainder of the funding comes from private partners.

Bedford Green House II reflects the goals of Mayor Adams’ “Housing Our Neighbors” blueprint for getting New Yorkers into safe, high-quality, affordable homes. The first city housing plan to cover the entire spectrum of New Yorkers’ housing needs and options, the blueprint includes a commitment to accelerate the creation of supportive housing and complete the 15,000 supportive homes promised by 2030, two years ahead of schedule.

In the last five years, HCR has invested more than $1 billion to create or preserve nearly 7,500 affordable apartments in multifamily buildings in the Bronx.

“We’re thrilled to break ground on Phase II of Bedford Green House, which will bring the same level of attention to energy efficiency, supportive services, and resident amenities as Phase I of the project which we celebrated earlier this year,” said HPD Commissioner Adolfo Carrión Jr. “Thanks to Project Renewal and our partners at the state for sharing our commitment to expanding the supply of high-quality affordable housing, particularly for the most vulnerable among us.”

“The Bedford Green House II in Fordham Heights is an exemplary supportive housing development that will offer affordable housing to the Bronx and amenities to benefit the surrounding neighborhood,” said New York State Senator Gustavo Rivera. “This 116-unit development will give low-income families, seniors, and unhoused New Yorkers a place to call home, support residents with serious mental illness or substance use disorder, and offer beautiful community spaces for Bronxites to enjoy. I commend the state and Project Renewal for working together to invest in critical housing projects for the Bronx.”

“Bedford Green House II is the culmination of the addition of a superb new community asset for the Jerome Park neighborhood of the Bronx,” said Andrew Knox, FAIA, partner, ESKW/Architects. “By building two structures with a common shared park between them, an oasis is created which will bring the residents together. This space will foster community for the development as well as provide an easy way to offer residents services that Project Renewal offers and that they need. The expression of the building reinforces the common height brick façades of the neighboring Jerome Avenue residential buildings. There is a change of material as the building rises above that height looking to the north across the Bronx all the way to the Hudson Highlands.”

“Bedford Green House will provide individuals and families with permanent housing and easy access to the services they need to stabilize their lives and thrive in their community — all within an innovative and therapeutic setting,” said New York State Office of Temporary and Disability Assistance Commissioner Daniel W. Tietz. “We are proud to once again be collaborating with Project Renewal and our state and local partners on such an innovative project that promises to be transformative for the entire Bronx community.”

“Bedford Green House has become a community of renewal and stability for individuals and families overcoming homelessness, mental health concerns, and other challenges,” said Eric Rosenbaum, president and CEO, Project Renewal. “With this second phase of the development, we are excited to bring not only more critically needed affordable homes to the Bronx, but also a medical clinic providing health care to our tenants and our neighbors in the community. We are grateful to our funders and partners who have helped make our vision for Bedford Green House a reality.”

Governor Hochul Announces Groundbreaking for Metro-North Penn Station Access Project to Bring Four New Stations to the Bronx

 Senator Schumer, Congressman Torres and Congresswoman Ocasio-Cortez Join Governor and the Metropolitan Transportation Authority to Commence Construction

Largest Expansion of Metro-North Railroad Will Bring Train Service Within One Mile of 500,000 Residents and Dramatically Cut Travel Times

Provide Metro-North Service to Penn Station via New Haven Line, Connecting Manhattan, East Bronx, Westchester and Connecticut

New Rail Service Will Save Residents 50 Minutes a Day in Commute Times to Manhattan and Open Reverse Commute Opportunities

 Governor Kathy Hochul today announced the groundbreaking for the Metro-North Penn Station Access project alongside leaders from the Metropolitan Transportation Authority during a ceremony in the Bronx this morning. With four new stations in the Bronx, this project will bring rail service within one mile of 500,000 residents and will be the largest expansion of Metro-North Railroad since it was founded in 1983. By offering rail service to and from Manhattan, Westchester and Connecticut, this will expand access to jobs, education and entertainment for East Bronx communities. Additionally, the project will greatly reduce travel times, provide reverse commuting opportunities and offer a critical second route into Manhattan for the first time ever through Metro-North.

"We are bringing modern, safe, and reliable public transportation to East Bronx communities and with it, more economic opportunity for New Yorkers," Governor Hochul said. "In partnership with Senator Schumer, Representatives Torres, Ocasio-Cortez, and Bowman, and Amtrak, Penn Station Access will not only drastically reduce commute times, but it will also help connect hundreds of thousands of residents and boost local economies. I'm thankful for MTA's partnership to get this project off the ground, and I look forward to seeing the completed project to help ensure all New Yorkers have access to the modern public transportation that they deserve."

The four new stations will be in Hunts Point, Parkchester/Van Nest, Morris Park, and Co-Op City and will be accessible to all in accordance with the Americans with Disabilities Act.

The expansion will use Amtrak's Hell Gate Line to access Penn Station, optimizing existing infrastructure and minimizing the construction impact on surrounding communities. Metro-North trains stopping at the four new Bronx stations will serve as an extension of the New Haven Line from the New Rochelle Station, offering transit options in the East Bronx to Midtown Manhattan as well as points in Westchester, Connecticut and inversely.

MTA Chair and CEO Janno Lieber said, "Penn Station Access is a game changer for a huge and transit-deprived swath of the Bronx. 500,000 residents live within just a mile of the four new Metro-North stations, and many more when you look at the entire service area. This project means dramatically shorter commutes and life-changing access to jobs, education, health care and everything else New York has to offer."

The infrastructure improvements along the Hell Gate Line will also improve service reliability and on-time performance for Amtrak, who is contributing $500 million toward the project, thanks to the efforts of Senate Majority Leader Charles Schumer. Amtrak has also agreed to pay the costs of delay if they fail to meet commitments to provide outages or workforce. The total cost of the project is projected at $3.18 billion, following a Capital Plan amendment announced in July to include additional funding for expansion of the New Rochelle Yard.

Project Benefits

• Significantly cuts down travel time. East Bronx passengers traveling to Penn Station can save up to 50 minutes each way, and those traveling to Connecticut can save up to 75 minutes. As an example, from the proposed Co-Op City station to Penn Station it takes about 75 minutes to reach Penn Station, with completion of Penn Station Access, the travel time is expected to be only about 25 minutes. Current New Haven Line riders with destinations on the west side can save up to 40 minutes per day.
• Increase in reverse commuting opportunities. Reverse commuters will be able to more easily travel from Penn Station to Hunts Point, Parkchester/Van Nest, Morris Park, Co-op City, Westchester and southern Connecticut.
• Local economy benefits and improved sustainability. Improving access to the East Bronx, Westchester and Connecticut will benefit local educational campuses, medical institutions, and retail centers. By greatly reducing travel times, Penn Station Access will make public transit a viable, attractive travel alternative, encouraging drivers to switch to mass transit, reducing traffic congestion and emissions.
• Improved regional connections. With the additional options, Bronx residents and also those coming from the greater New York City area, Westchester, Connecticut, and the Northeast region, will be able to more easily reach destinations throughout the Northeast with connections to NJ Transit, LIRR, PATH, Amtrak, and NYCT subways.

Project Details

In addition to four new ADA stations, the project will turn the existing 2-track railroad into a largely 4-track railroad, with over 19 miles of new and rehabilitated track work. This expansion to a 4-track railroad will provide service flexibility to support the increase in Metro-North and Amtrak trains expected to operate through the area and allow for workarounds in the event of a service disruption.

The additional service necessitates an expansion of Metro-North's New Rochelle Yard in Westchester, along with modernization of signal, power and communication infrastructure. This will consist of four new interlockings, five new substations, reconfiguration of the Pelham Bay interlocking and upgrade of two existing substations.

The project also includes rehabilitation work to repair and strengthen the following four bridges to carry additional train traffic: Bronx River Bridge, Eastchester Road Bridge, Bronxdale Avenue Bridge and Pelham Lane Bridge.

Project Timeline

In September 2021, the Federal Transit Administration issued a Finding of No Significant Impact, allowing the project to proceed. On December 29, 2021, the MTA awarded the Design-Build contract to the joint venture of HalmarInternational, LLC and RailWorks.

One of the first project elements to take place will be the construction of the Leggett interlocking, one of the four new interlockings. The Leggett interlocking will be located south of the proposed Hunts Point Station. Construction of actual passenger rail stations is expected to begin 2024. The anticipated completion date for the Penn Station Access Project is 2027.

Team AOC - Stand with NYT Guild workers

 

Fans of the New York Times end up accessing several of their products a day, from Wordle to podcasts, recipes and, of course, breaking news. But the New York Times Guild has announced a 24-hour walk out until 11:59pm TONIGHT, Thursday, December 8th, and we don’t cross picket lines — not even digital ones.

Newsroom employees and other Guild members — such as assistants, building security guards, ad sales workers, comment moderators, and virtual producers, among others — are striking in response to the protracted bargaining process that began in March 2021 when their last union contract expired. Management and Guild members have not come to an agreement after nearly 40 contract negotiation meetings, and yesterday the union announced today's one-day work stoppage via Twitter.¹

NYT Guild members, part of the NewsGuild of New York, are bargaining for better health and retirement benefits, clear remote-work policies, salary floors, and wage increases amidst rising inflation across the country.² The union has also asked for improvements to the rating system used by management to assess employee performance — which workers have pointed out tends to discriminate against Black and Latinx New York Times employees.³

A digital picket line is just as important as a physical one. Just as Team AOC has stood with workers at Hunts Point Produce Market, union railway workers, and baristas organizing for a better workplace at Starbucks, we’ll be avoiding all New York Times products until 11:59pm tonight to stand with NewsGuild workers in their fight to secure better working conditions — stand with us!

Labor solidarity is crucial to our movement. We wish the Guild workers luck with their negotiations!

In solidarity,

Team AOC

VCJC News & Notes 12/9/22

 

Van Cortlandt Jewish Center
News and Notes

Here's this week's edition of the VCJC News and Notes email. We hope you enjoy it and find it useful! Reminders Shabbos Shabbos information is, as always, available on our website, both in the information sidebar and the events calendar. Here are the times you need:   Shabbos Candles Friday 12/9/22 @ 4:10 pm Shabbos morning services at 8:45 am.  Please join the services if you can do so safely.  Shabbos Ends Saturday 12/10/22 @ 5:13 pm Kiddush given by Ceil & Larry Hartstein in honor of their grandson Marvin Ziggy.  He is the son of Brett Hartstein & Rachel Kohn.   Mazel Tov also to uncles, Matthew, Jeremy & aunt Dina. Board Meeting Tuesday 12/13

Attorney General James Announces Arrests in New York City Deed Theft Ring

 

Five Individuals Stole Homes Owned by Elderly and Vulnerable Residents in Southeast Queens

 New York Attorney General Letitia James today announced the indictment of five members of a deed theft ring for allegedly stealing three homes worth more than $1 million in total from elderly, vulnerable homeowners in the Queens neighborhoods of Jamaica and St. Albans. The defendants impersonated the real homeowners of these properties by using forged driver's licenses and social security cards. They then used that forged information at contract signings and closings on the properties and forged the real owners’ signatures on deeds and real estate contracts.

“No one should face the nightmare of having their home stolen from them without any warning, knowledge, or reason,” said Attorney General James. “Deed theft is a merciless crime that targets seniors, and often people of color, who are asset rich but cash poor, and reliant on their homes as a stabilizing force for their families and loved ones. My office will continue our work to combat deed theft until we can ensure no other New Yorker is forced to endure this heartbreaking, life-altering loss.”

“I thank Attorney General Letitia James as well as our agency and law enforcement partners for their diligent efforts on behalf of New Yorkers,” said Queens District Attorney Melinda Katz. “Deed fraud is an increasingly pervasive crime that robs homeowners of their single most valuable asset. Though it is a growing challenge throughout Queens County, those who choose to victimize others for their own financial gain will be held to account in this borough.”

“Deed Fraud continues to be a priority of our office that victimizes the most vulnerable homeowners of New York City,” said New York City Sheriff Anthony Miranda. “Perpetrators prey upon the elderly, the financially disadvantaged, and the medically infirmed through deception and a variety of nefarious schemes. The Sheriff’s Bureau of Criminal Investigation will continue to coordinate our effort to protect homeowners and investigate these horrific thefts along with all of our law enforcement partners in the city. We commend the actions of the New York Attorney General’s Office Real Estate Enforcement Unit for their investigation which resulted in today’s arrests and thank them for their continued efforts in this area.”

The five individuals indicted are:

•    Marcus Wilcher, 47
•    Stacie Saunders, 51
•    Anyekache Hercules, 47
•    Jerry Currin, 66
•    Dean Lloyd, 61

Beginning in September 2019, Wilcher located homes in Jamaica and St. Albans, Queens in poor or run-down condition with absentee owners. Saunders then marketed the homes to investors at prices significantly below market rate for quick sales. After an investor expressed interest in purchasing a home, Wilcher would secure personal information about the real owners, including social security numbers and birth dates, to create falsified drivers’ licenses, social security cards, and bank cards. Wilcher and Saunders then found people to impersonate the true owners of the properties at contract signings and closings.

Hercules created certain forged legal documents used in the theft of the homes. As she was disbarred and could not practice law in New York, Hercules fraudulently used a practicing attorney’s email and name on legal correspondence. Lloyd or one of three other individuals that have yet to be apprehended would appear at the closings with forged deeds and contracts. Currin appeared at the closing on his family home with an individual who pretended to be his sister, the executor of the family estate. This person has not yet been apprehended. Currin also submitted a false affidavit in support of a second estate sale for a different stolen property, written as a long-time family friend.

After the sales were finalized, the defendants opened bank accounts in the names of the homes’ real owners using the impostor sellers’ forged drivers’ licenses and social security cards. He and his co-conspirators then used these bank accounts and other entities and LLCs they controlled to funnel more than $1 million in proceeds to themselves.

The stolen properties are:

•   161-14 121 Avenue, Queens, New York
•   112-39 176 Street, Queens, New York
•   168-11 119 Avenue, Queens, New York

Saunders, Hercules, and Currin were arraigned yesterday before Supreme Court Judge Evelyn Braun in Queens County. The defendants, as detailed in the indictment, have been charged with the following crimes: Money Laundering in the Second Degree, a class C felony; Grand Larceny in the Second Degree, a class C felony; Attempted Grand Larceny in the Second Degree, a class D felony; Conspiracy in the Fourth Degree, a class E felony; Scheme to Defraud in the First Degree, a class E felony; Practice of Law by an Attorney Who Has Been Disbarred, Suspended or Convicted of a Felony, a class E felony; Offering a False Instrument for Filing in the First Degree, a class E felony; Forgery in the Second Degree, a class E felony; Criminal Possession of a Forged Instrument in the Second Degree, a class E felony; and Criminal Impersonation in the Second Degree, a class A misdemeanor. The maximum sentence on the top count is 15 years.

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

While three members of the deed theft ring have been arraigned, another five remain at large: Wilcher, Lloyd, and three individuals that have yet to be identified. The Office of the Attorney General (OAG) is now seeking the public’s help in bringing them to justice.

The above three individuals impersonated homeowners and have yet to be found. Images have been taken from falsified identification cards.

The OAG encourages anyone familiar with one or more of the co-conspirators at-large to contact OAG’s Public Integrity Bureau confidentially by calling (212) 416-8090 or emailing public.integrity@ag.ny.gov.

The OAG thanks the New York Department of State for the criminal referral and its assistance with this investigation and prosecution. The OAG also thanks the New York City Department of Finance for its help. The OAG also thanks the Yeadon Pennsylvania Police Department, the Georgia Bureau of Investigation, the Office of the Inspector General of the Social Security Administration, and the New York City Police Department. 

“Deed theft is a shocking and highly lucrative criminal scheme that preys on some of New York’s most vulnerable communities,” said K. Scott Kohanowski, Director of Homeowner Stability Project, City Bar Justice Center. “It can have a devastating effect on New Yorkers resulting in the loss of hundreds of thousands and even millions of dollars, often of inter-generational family wealth in a way that worsens the racial wealth gap. We applaud the Attorney General’s efforts to hold perpetrators of these crimes accountable and put their like-minded copycats on notice.”

Former Government Official Pleads Guilty To Conspiracy To Defraud Government Program For Disadvantaged Small Business Owners

 

 The United States Attorney’s Office for the Middle District of Pennsylvania announced that on December 8, 2022, James A. Coccagna, age 67, of Chambersburg, Pennsylvania, pleaded guilty before United States Magistrate Judge Martin C. Carlson to a criminal information charging him with one count of conspiracy to commit violations of the Major Fraud Act.

According to United States Attorney Gerard M. Karam, between 2003 and 2014, Coccagna, then Chief of the Engineering and Planning Division in the Directorate of Public Works at Letterkenny Army Depot, in Chambersburg, worked with a number of unnamed coconspirators to defeat the rules and purpose of the U.S. Small Business Administration’s 8(a) Business Development Program. Coccagna admitted to steering federal government contracts to certain participants in the 8(a) Program, knowing that those companies and their existing employees, if any, were not playing any meaningful role in performing contracts awarded to them.

The 8(a) Program requires socially and economically disadvantaged individuals to exercise unconditional control over their own companies. It also requires these companies to commit to performing at least 15% of the cost of any contract with their own employees. When companies meet these criteria, they can enter the 8(a) Program for a period of up to nine years and then bid on contracts reserved for companies in the 8(a) Program. These reserved contracting opportunities are often referred to as “set-aside” contracts.

Coccagna admitted to conspiring with three individuals who worked in the field of construction—known in the information as coconspirator 1, coconspirator 2, and coconspirator 3—to get set-aside contracts at Letterkenny awarded to a series of 8(a) Program participants controlled by the three unnamed individuals. These 8(a) Program participants included a company known as 8(A) company 1, which was affiliated with another unnamed individual known as coconspirator 4 in the information.

Starting around 2007, Coccagna and coconspirators 1, 2, 3, and 4 began conspiring to obtain 8(a) Program set-aside construction contracts at Letterkenny Army Depot, a facility under the command structure of the U.S. Army Aviation and Missile Command. Coccagna recommended that the Letterkenny contracting office select 8(A) company 1 for a series of contracts because he knew of 8(a) company 1’s affiliation with coconspirator 1, coconspirator 2, and coconspirator 3. Coccagna made similar recommendations for several other 8(a) Program participants, likewise on the basis of their affiliation with coconspirator 1, coconspirator 2, and coconspirator 3.

In order to make it appear falsely that 8(A) company 1 was meeting the 15% self-performance requirement, coconspirators 1, 2, 3, and 4 moved actual laborers who were on site at Letterkenny Army Depot onto the 8(A) company 1 payroll. This same practice was also carried out with the other unnamed 8(a) Program participants dating back to 2003. Coccagna was aware of this practice and, more generally, was aware that coconspirator 4 and her existing employees, if any, were not performing on-site work. Furthermore, coconspirator 4 was rarely, if ever, present at Letterkenny Army Depot following an initial meeting with Coccagna and the other unnamed conspirators in 2007.

For several years starting around 2007, coconspirators 1, 2, and 3 were simultaneously affiliated with both 8(A) company 1 and one of the other 8(a) Program companies. Their representations about which company they were affiliated with depended on which contract a job fell under. From Coccagna’s perspective, however, the day-to-day performance of the work was unaffected by which company’s name coconspirators 1, 2, and 3 were operating under.

Coccagna also admitted that coconspirator 1 solicited, and Coccagna unlawfully provided to coconspirator 1, confidential information in order to help coconspirators 1, 2, 3, and 4 win a $60 million construction contract in 2009.

The total value of the contracts associated with this conspiracy exceeded $100 million. Coccagna understood that there was a financial benefit to the individuals who were, on paper, the heads of the various 8(a) Program participants to which he steered maintenance and construction contracts, such as coconspirator 4.  

The maximum penalty under federal law for conspiracy is 5 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.