Tuesday, January 24, 2023

Former CEO Of Email Security Company Sentenced To Five Years In Prison


 Damian Williams, the United States Attorney for the Southern District of New York, announced today that ROBERT BERNARDI, the founder and former Chief Executive Officer of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), was sentenced to five years in prison by United States District Judge Paul G. Gardephe.  BERNARDI was sentenced for orchestrating a scheme to defraud investors and lenders of millions of dollars through false and misleading misrepresentations, including fabricated bank statements and audit reports, and by impersonating a purported customer, auditor, and GigaTrust lawyer.

U.S. Attorney Damian Williams said: “Robert Bernardi repeatedly lied and impersonated others in order to convince investors and lenders to fund his failing company.  Rather than admit that GigaTrust was underperforming, Bernardi concocted multiple schemes to keep the company afloat, defrauding investors and lenders out of millions.  Today’s sentence is a just consequence of Bernardi’s fraudulent actions”

According to the allegations in the Indictment and other filings and statements made in court:[1]

From in or about 2016 through at least in or about 2019, GigaTrust was a private company headquartered in Virginia that purported to be a market-leading provider of cloud-based content security solutions.  BERNARDI founded GigaTrust and served as its CEO.  BERNARDI, along with two co-defendants, NIHAT CARDAK and SUNIL CHANDRA, devised a scheme to defraud investors and lenders by (i) fabricating and disseminating false and misleading bank account statements that overstated GigaTrust’s cash deposits; (ii) fabricating and disseminating false and misleading audit materials that purported to have been issued by GigaTrust’s auditors and overstated GigaTrust’s performance; (iii) forging and disseminating a false and misleading letter purporting to be from GigaTrust’s New York-based counsel; and (iv) impersonating or causing others to impersonate a purported customer and auditor of GigaTrust on telephone calls with a prospective lender. 

Specifically, BERNARDI sent fabricated audit materials to a New York-based investment firm, and BERNARDI and CARDAK used fabricated bank statements to obtain multiple rounds of loans and investments for GigaTrust worth millions of dollars.  After a New York-based bank (“Bank-1”), which had loaned GigaTrust $25 million, declared that GigaTrust had defaulted on the terms of its loan agreement, BERNARDI and CARDAK induced additional investments in GigaTrust through, among other things, forging a letter purporting to be from GigaTrust’s New-York based counsel.  Shortly thereafter, while negotiating another $25 million deal with a lender (“Lender-1”), BERNARDI and CARDAK devised a scheme to impersonate a GigaTrust customer and auditor on requested diligence calls, which induced Lender-1 to make a $25 million loan to GigaTrust.  BERNARDI recruited CHANDRA to pose as one of GigaTrust’s alleged customers on a call with Lender-1.  BERNARDI and CARDAK also fabricated bank statements and sent them to Lender-1 right before closing the $25 million deal. 

GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.

In addition to his prison term, BERNARDI, 68, of McLean, Virginia, was sentenced to three years of supervised release and ordered to forfeit $3,442,264 and to pay restitution to his victims.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation in this case.  Mr. Williams further thanked the Securities and Exchange Commission, which has separately filed a civil enforcement action against the defendants, for its assistance in the investigation. 

NIHAT CARDAK pled guilty on January 12, 2023, and is scheduled to be sentenced on May 16, 2023.  The charges contained in the Indictment are merely accusations as to SUNIL CHANDRA, and CHANDRA is presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation. 

Governor Hochul Announces Expansion of the Capital Region Crime Analysis Center and Highlights State of the State Proposals to Increase Funding for Local Law Enforcement Agencies

 Governor Hochul speaks at an event at the Capital Region Crime Analysis Center

New Center is $500,000 Upgrade, Four Times the Size of Former Location,and has Space for Twice the Number of Staff

One of 10 Across the State Funded by a Record $15 Million Investment Secured by Governor Hochul

Governor Highlighted Major Public Safety Initiatives as Part of the 2023 State of the State Agenda, Including Expanding Crime Analysis Center Network to New York City, Doubling Funding for the Gun Involved Violence Elimination Initiative, and Tripling Funding to the State's 62 District Attorneys' Offices


 Governor Kathy Hochul today announced the expansion of the Capital Region Crime Analysis Center in Albany, one of 10 centers in a state-supported network providing critical crime analysis, information, and investigative support to help law enforcement agencies more effectively solve, reduce, and prevent crime. Located at the City of Albany's Police Headquarters, the center received a $500,000 upgrade, making it four times the size of its former location with space for twice the number of staff. After touring the center, Governor Hochul highlighted the major public safety initiatives included in the 2023 State of the State agenda, which includes expanding the Crime Analysis Center network to New York City, doubling funding for the state's Gun Involved Violence Elimination initiative, and more than tripling aid to the state's 62 district attorneys' offices.

"There is no greater obligation than ensuring every New Yorker can live in safety, and that has always been my number one priority," Governor Hochul said. "We have leveraged local, state, and federal resources to create a one-of-a-kind network that is the backbone of local law enforcement agencies' crime-fighting efforts. We will continue to use state-of-the-art tools and technology to analyze data and share information - allowing investigators to solve murders, robberies, burglaries and gun crimes across the state, and creating a safer New York for all."

Governor Hochul toured the center with Albany Mayor Kathy Sheehan and Albany County Executive Dan McCoy after meeting with the Center Board of Directors to learn more about how the centers assist police agencies and prosecutors' office, particularly with cases involving firearms. Through a unique partnership between the state Division of Criminal Justice Services (DCJS) and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the 10 centers access the ATF's National Integrated Ballistic Information Network (NIBIN) and by this summer, each center will have technology on-site to process shell casings and identify potential matches from different crime scenes in multiple jurisdictions across the state. This identification process previously took up to a month but will now take 24 to 48 hours and has a 99.6 accuracy rating.

In the Governor's 2023 State of the State agenda, Governor Hochul outlined a comprehensive public safety plan and investments to drive down gun violence and violent crime that includes:

  • Expanding the state's Crime Analysis Center Network to New York City.
  • Doubling funding for the Gun Involved Violence Elimination (GIVE) initiative to $36 million. The GIVE initiative supports 20 police departments in 17 counties that account for more than 80 percent of the violent crime that occurs in New York State outside of New York City: Albany, Broome, Chautauqua, Dutchess, Erie, Monroe, Nassau, Niagara, Oneida, Onondaga, Orange, Rensselaer, Rockland, Schenectady, Suffolk, Ulster and Westchester. District attorneys' offices, probation departments, sheriffs' offices, and other partners in those counties also receive funding through the initiative.
    • In 2022, shootings in several GIVE jurisdictions decreased from the year before, including Buffalo (32 percent decrease), Long Island (29 percent decrease), Westchester (17 percent), and Rochester (13 percent).
  • Bolstering State Police support by increasing Community Stabilization Units from 16 to 25 communities, funding an unprecedented four academy classes and expanding presence on federal task forces.
  • More than tripling funding to $52 million, up from $12 million, for the state's 62 district attorney's offices and sustaining discovery and pretrial services funding for costs associated with implementation of recent criminal justice reforms to discovery and pretrial procedures, which took effect January 1, 2020.

Driving Down Gun Violence
Last year, shootings dropped 17 percent in New York City and 15 percent outside of the city. Additionally, 10,093 guns were seized by all law enforcement agencies across New York last year. This marks a 59 percent increase from 2019, during which 6,819 guns were seized, and an 11 percent increase from 2021, during which 9,088 guns seized. Gun seizures by the State Police are also up 160 percent compared to pre-pandemic levels, from 528 seizures in 2019 to 1,376 in 2022. State Police also seized 120 ghost guns in 2022, which is 85 percent more than in 2021.

    Since taking office, Governor Hochul has taken actions to strengthen New York State's gun violence prevention laws by advancing efforts to:
    • Ban ghost guns.
    • Expand bail eligibility for gun crimes.
    • Toughen prosecutions of gun trafficking.
    • Mandate the use of the Red Flag law, leading to more than 5,400 Extreme Risk Protection Orders issued, which was a 300 percent increase from 2021.
    • Raise the age to purchase semi-automatic weapons to 21.
    • Launch the first-in-the-nation Interstate Task Force on Illegal Guns, which will meet again in mid-February.
    • Triple State investments in gun violence interruption programs.

    Albany Mayor Kathy Sheehan said, "Albany is proud to be home to the newest and largest Crime Analysis Center in New York State. The work happening here is helping us take a record number of illegal guns off our streets, apprehend violent individuals, and identify trends to help inform our proactive deployment of police resources. Thank you to Governor Hochul and DCJS Commissioner RossanaRosado for partnering with Chief Hawkins and the Albany Police Department and making this important investment that is enhancing public safety every day."

    Albany County Executive Daniel P. McCoy said, "New Yorkers deserve the peace of mind that comes with living in safe communities, and this $500,000 investment for an expanded crime analysis center in Albany is another demonstration of Governor Hochul's commitment to public safety. Today I was happy to tour the new facility with the Governor and Mayor Sheehan to see firsthand the important work being done to assist local law enforcement in getting guns off the street and preventing violent crime in the future."

    The Division of Criminal Justice Services is a multi-function criminal justice support agency and has a variety of responsibilities, including law enforcement training; collection and analysis of statewide crime data; maintenance of criminal history information and fingerprint files; administrative oversight of the state's DNA databank, in partnership with the New York State Police; funding and oversight of probation and community correction programs; administration of federal and state criminal justice funds; support of criminal justice-related agencies across the state; and administration of the state's Sex Offender Registry. Follow the agency on Twitter and Facebook.

    NYC Comptroller Lander and City Pension Funds Call on Major U.S. and Canadian Banks to Set Absolute GHG Emissions Targets for High Emitting Sectors

     

    Shareholder proposals at Bank of America, Goldman Sachs, JPMorgan Chase and Royal Bank of Canada call for banks to set and publish interim science-based reduction targets for 2030.

    Pension funds say these steps are necessary for the banks to meet net zero goals.

    Greenhouse gas emissions from the oil and gas industry are responsible for over 40% of global emissions.

     Today, New York City Comptroller Brad Lander and three of the New York City Retirement Systems (the New York City Employees’ Retirement System, Teachers’ Retirement System, and Board of Education Retirement System) announced shareholder proposals at Bank of AmericaGoldman SachsJPMorgan Chase, and Royal Bank of Canada calling for the banks to disclose absolute greenhouse gas (GHG) emissions targets for 2030.

    The shareholder proposals call for an absolute reduction target aligned with a science-based net zero emissions pathway – a widely-recognized standard for evaluating whether companies are genuinely on a path to meet net zero commitments.

    “Shareholders applauded these banks when they set net zero goals – but it can’t be all talk. We expect them to take the steps needed now to reduce emissions on the timeline to which they have committed. We are asking Bank of America, JPMorgan Chase, Goldman Sachs, and Royal Bank of Canada to follow the lead of their peers by setting and disclosing absolute, science-based targets for 2030, to show investors they are serious about reaching those goals. Absent a concrete plan to reduce absolute emissions in the real world in the near term, any net zero plan rings hollow,” said New York City Comptroller Brad Lander.

    The proposals filed at Goldman Sachs, JPMorgan Chase and Royal Bank of Canada specifically request that the absolute GHG emissions targets cover lending and underwriting for oil and gas and power generation sectors. The proposal at Bank of America, co-filed with the New York State Common Retirement Fund, requests that the GHG emissions reduction targets cover lending and underwriting in the Company’s energy sector.

    As members of the Net-Zero Banking Alliance, these banks have committed to publish progress against absolute emissions and/or emissions intensity targets. Unfortunately, while some other major U.S. and foreign banks have set absolute emissions reduction targets, these four banks have only set targets to reduce the intensity of their emissions. Intensity reduction targets do not capture whether the Company’s total financed emissions have decreased in the real world. As a result, while these four banks have set net zero emissions goals for 2050, they are not taking a basic step of setting interim reduction targets that account for total portfolio emissions. The proposals encourage the banks to demonstrate to shareholders that they are taking a critical step towards achieving their net zero goals.

    The shareholder proposals are in line with recommendations outlined in Integrity Matters: Net Zero Commitments by Businesses, Financial Institutions, Cities, and Regions, developed by the UN High-Level Expert Group to establish credible standards for net zero plans. There is global agreement that failing to limit greenhouse gas (GHG) emissions will have serious ramifications on our planet and make limiting global warming impossible. The Intergovernmental Panel on Climate Change (IPCC) has advised that GHG emissions must be halved by 2030 and reach net zero by 2050 to limit global warming to 1.5°C. Any increase above 1.5°C will bring heightened physical, transition, and systemic risks to companies, investors, the markets, and the economy as a whole. Climate change mitigation is therefore critical to address investment risks in order to avert the large economic losses projected to occur if insufficient action is taken.

    Other consumer banks have already set interim targets to reduce absolute emissions. Citigroup has committed to reducing its absolute emissions for the energy sector by 29% by 2030 and Wells Fargo has set a target to reduce absolute emissions for the oil and gas sector by 26% by 2030. Other banks with absolute reduction goals for the oil and gas sector include HSBC (34%), Société Generale (30%), BBVA (30%), and Deutsche Bank (23%).

    Each proposal requests the issuance of a report within one year.

    As of November 2022, the three New York City Retirement Systems combined have a total holding of:

    • 7.74 million shares of Bank of America stock valued at $239.04 million.
    • 437 thousand shares of Goldman Sachs stock valued at $168.82 million.
    • 2.99 million shares of JPMorgan Chase stock valued at $412.91 million, and
    • 293 thousand shares of Royal Bank of Canada stock valued at $28.92 million.

    These proposals are a part of the pension funds’ overall approach to achieving net zero emissions in their investment portfolio by 2040.

    “These proposals are an essential step towards achieving a net-zero future,” said Bryan Berge, representative of Mayor Eric Adams, chair of the Board of Trustees of the New York City Employees’ Retirement System and trustee of the New York City Teachers’ Retirement System. “We are proud to lead this shareholder effort to secure a better tomorrow.”

    In addition to Comptroller Lander, the trustees of the aforementioned systems are as follows:

    New York City Employees’ Retirement System (NYCERS): Mayor Eric Adams’ Appointee Bryan Berge, Director, Mayor’s Office of Pension and Investments; New York City Public Advocate Jumaane Williams; Borough Presidents: Mark Levine (Manhattan), Donovan Richards (Queens), Antonio Reynoso (Brooklyn), Vito Fossella (Staten Island), and Vanessa L. Gibson (Bronx); Henry Garrido, Executive Director, District Council 37, AFSCME; Richard Davis, President Transport Workers Union Local 100; and Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

    Teachers’ Retirement System (TRS): Mayor Eric Adams’ Appointee Bryan Berge, Director, Mayor’s Office of Pension and Investments; Chancellor’s Representative, Seritta Scott, New York City Department of Education; and Debra Penny (Chair), Thomas Brown, and David Kazansky, all of the United Federation of Teachers.

    Board of Education Retirement System (BERS): Schools Chancellor David C. Banks, Represented by Seritta Scott; New York City Comptroller Brad Lander’s Representative Alison Hirsh; Mayoral appointees Lilly Chan, Marjorie Dienstag, Khari Edwards. Gregory Faulkner, Anita Garcia, Anthony Giordano, Dr. Angela Green, Maria Kenley, Michelle Joseph, Alan Ong, Phoebe Sade-Arnold, Maisha Sapp, Gladys Ward; CEC appointees Naveed Hasan, Jessamyn Lee, Thomas Sheppard, and Ephraim Zakry; Borough President Appointees Geneal Chacon (Bronx); Tazin Azad (Brooklyn); Kaliris Salas-Ramirez (Manhattan); Sheree Gibson (Queens); Aaron Bogad (Staten Island); and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372.

    MAYOR ADAMS LAUNCHES ‘BREAKING BREAD, BUILDING BONDS’ CITYWIDE TO COMBAT RISING HATE AND FOSTER MUTUAL UNDERSTANDING

     

    Building on Program Initially Launched at Brooklyn Borough Hall, B4 Aims to Organize 1,000 Meals with Diverse Group of New Yorkers Across NYC

    New York City Mayor Eric Adams today announced the launch of ‘Breaking Bread, Building Bonds’ (B4), a citywide initiative to combat the rise in hate crimes in many communities across the city, and foster mutual understanding between New York’s diverse neighborhoods. The program, which builds on an initiative that was launched when Mayor Adams served as Brooklyn borough president, aims to organize 1,000 meals citywide with a group of 10-12 diverse New Yorkers at each meal.

     

    “Hate is a virus, fueled by the failure to see our common bonds, but we are going to do something revolutionary to eradicate this hate: Break bread and talk to each other,” said Mayor Adams.” This year, we are going to organize 1,000 meals and conversations across the city, bringing everyday New Yorkers from different backgrounds together to listen and learn from each other. No matter where we are from, who we love, what religion we worship, or what language we speak, we are all bound together by one thing: We are all New Yorkers, and together, we are going to defeat the pipeline of hate.”

     

    “We fight racism and prejudice through opportunities like this to listen and learn from one another, and there is no better way to do that than by sharing a meal,” said Deputy Mayor for Public Safety Philip Banks III. “This program invites New Yorkers to challenge their biases by stepping out of their comfort zones and echo chambers and stepping into someone else's shoes.”

     

    Organized in partnership with The People’s Supper (TPS), UJA-Federation of New York, and several community-based organizations, 'Breaking Bread, Building Bonds’ will empower everyday New Yorkers to host dinners and break down silos between communities. Working with the Mayor’s Office to Prevent Hate Crimes (OPHC), alongside the Mayor’s Community Affairs Unit (CAU), and Office of Faith-Based and Community Partnership (OFCP), TPS will coordinate large-scale trainings, provide support and coaching to dinner hosts, and develop a toolkit and resource guide, and assist with matching participants to hosts. UJA-Federation of New York will provide reimbursements of up to $150 for those who host dinners of 10-12 people.

     

    In January 2020, then-Brooklyn Borough President Eric Adams and U.S. Representative Hakeem Jeffries announced the creation of the ‘Breaking Bread, Building Bonds’ initiative, following a significant rise in anti-Semitic hate crimes. The inaugural dinner of the initiative was held later that month in Jackson Heights, and took place during Peace Week, which features a series of events throughout the city dedicated to promoting peace and unity across cultures. The initiative was put on hold due to the disruption of in-person gatherings during the COVID-19 pandemic.

     

    “This administration continues to commit itself to pursue holistic and effective ways to combat hate crime, bias, and discrimination,” said Mayor’s Office of Criminal Justice Director Deanna Logan. “New York is one of the world’s most diverse cities. This initiative will continue to bring together the mosaic of New Yorkers to harness the talents, expertise, and diversity that cultivates communities and builds solidarity.”

     

    “Community empowerment is one of the core tenets of our office’s mission and we are excited to lead the ‘Breaking Bread, Building Bonds’ initiative citywide,” said OPHC Executive Director Hassan Naveed. “These meals and shared conversations breakdown silos and give New Yorkers an opportunity to get to know each other and foster unity among communities vulnerable to hate, bias, and discrimination.”

     

    “The Mayor's Community Affairs Unit is eager to work with communities across the five boroughs to bring different voices together for ‘Breaking Bread, Building Bonds’ meals. In these conversations, we will find that our diversity is our strength and that we have more in common than we realize,” said CAU Commissioner Fred Kreizman. “New York City is a family of unique communities, and we will work together in a meaningful way to combat hate one meal at a time.”

     

    “‘Breaking Bread, Building Bonds’ is an opportunity for New Yorkers of diverse faiths and ethnic groups to gather, engage in conversations, and better understand each other — bringing us all closer in our city,” said Office of Faith Based and Community Partnerships Executive Director Pastor Gil Monrose. “Meals have traditionally been a gathering place for people of different cultures and world views to understand each other further and create a healthy community. The Office of Faith Based and Community Partnerships will continue encouraging communities to build meaningful, healthy relationships across the boroughs through ‘Breaking Bread, Building Bonds.’”

     

    “What better way to bring New Yorkers together than over food and conversation? The ‘Breaking Bread, Building Bonds’ initiative gives us all a chance to get to know our neighbors, talk through some of the most pressing issues of our time, and learn from each other,” said New York City Chief Engagement Officer Betsy MacLean. “In a time of growing division across the country, New Yorkers know that the more we connect to each other, the more we can rely on Dr. King's ‘inescapable network of mutuality’ and strengthen our ‘single garment of destiny.’ Hats off to our agency and community partners for leading the charge in this important effort.”

     

    “Our country has watched New York City model solidarity and connection in moments of real need in the past,” said K. Scarry, partnerships director, Dinner Party Labs; and lead, People’s Supper. “We see this as an opportunity for New York City to model once more what it means to actively respond to isolation and fragmentation in our communities, and to tell a different story. We're excited to help New Yorkers pull up a chair for their neighbors, go deep with one another, and imagine a future together that works for all.”

     

    “UJA-Federation and our non-profit partners work each day to support tens of thousands of New Yorkers from diverse backgrounds across the city,” said Eric Goldstein, CEO, UJA Federation of New York. It is crucial to the fabric of our community to create opportunities to learn more about our neighbors, and the mayor's new initiative bringing together people who would not otherwise know each other to share a meal is a wonderful endeavor, which we're delighted to support.”

     

    “The Marlene Meyerson JCC Manhattan and our board of directors are proud to host the inaugural meal of Mayor Adams' Breaking Bread, Building Bonds initiative,” said Rabbi Joanna Samuels, CEO, Marlene Meyerson JCC Manhattan. “We are deeply committed to the well-being of our New York City community, and we know that coming together, centering each individual's humanity, is the best way to unite against hate. Our tradition, like so many others that thrive in this great city, finds holiness in breaking bread with both those whom we know and those who are guests at our tables.”

     

    “New York City is one of the most diverse cities on the planet. At the Arab American Association of New York, we seek to celebrate and find strength in our differences  and we are excited for the Breaking Bread, Building Bonds Initiative, and the space it will create for New Yorkers to come together to learn more about each other and build solidarity across the five boroughs,” said Marwa Janini, executive director, Arab American Association of New York. “Public safety is a community practice, and AAANY will continue to advocate for programs and initiatives that invest in the health and wellbeing of our most vulnerable communities, including all targeted religious groups, immigrant and AAPI communities, people of color, the unhoused, and the LGBTQ+ community.”

     

    “Breaking bread with our brothers and sisters from all communities is essential to rebuilding safety in a city that has seen more than its fair share of hate violence during the pandemic,” said Jo-Ann Yoo, executive director, Asian American Federation. “The Asian American Federation is proud to sit alongside Mayor Adams, the Office for the Prevention of Hate Crimes, and the many partner organizations that have stepped up to address the hate violence impacting so many of our vulnerable communities. May this be the first of many important conversations to ensure our communities build the bonds that will lead to a safer, more just city that we all deserve.”

     

    “The mayor’s new initiative Breaking Bread, Building Bonds will allow communities that don’t often have opportunity to share space, the chance to get to know each other over a meal,” said Sean Ebony Coleman, executive director, Destination Tomorrow. “It will begin to build a bridge towards a united New York, that will only serve to strengthen its residents. Destination Tomorrow is honored to be a part of this groundbreaking project.”

     

    "Only the sheer demonstration of our actions of love, will allow our communities to rise above the broken pieces of hate; We are indeed better together,” said Dr. David K. Allen, executive director, Epic Village Community Development Inc.

     

    “The strength of our city is found in our diversity. New Yorkers must cultivate and respect this feature that makes us the most unique city in the world,” said Frankie Miranda, president and CEO, Hispanic Federation. “With ‘Breaking Bread, Building Bonds,’ the Adams administration is doing its part to not only combat hate, but build meaningful relationships in our community that celebrate our great diversity. Together, through this initiative, we are creating stronger and safer communities across the five boroughs.”

     

    “Breaking Bread is an excellent initiative to bring together in dialogue, understanding and spirit the many diverse communities that make up our city. We urge all New Yorkers to participate in these healing and uplifting opportunities,” said Rabbi Bob Kaplan, executive director, Center for a Shared Society at the JCRC-NY.

     

    Those interested in hosting a dinner or learning more about the initiative can visit www.nyc.gov/breakingbread.

     

    Attorney General James Sues Google for Monopolies in Digital Advertising

     

    AG James, U.S. Department of Justice, and Bipartisan Coalition of States Sue Google To Break Up Monopolies that Harm Website Publishers, Businesses, and New York Consumers

    New York Attorney General Letitia James today sued Google LLC (Google), for monopolizing the digital advertising industry. Together with the United States Department of Justice (DOJ), a bipartisan coalition of eight states allege that Google has engaged in a 15-year, organized campaign so it could obtain outsized influence at all levels of the ad tech industry, and has used its power to reduce competition and innovation, harming website publishers, advertisers, and consumers. Through this lawsuit, Attorney General James, DOJ, and the coalition of states are seeking to stop Google’s anticompetitive practices and order it to sell off various ad tech tools to restore a competitive balance in digital advertising and end Google’s unfair advantage in the industry.

    “New York consumers and small businesses are paying the price of Google’s actions,” said Attorney General James. “When website publishers get less ad revenue because of Google’s monopolies, they have to either lower the quality of their website, or pass on costs to consumers. I am proud to partner with the Department of Justice and fellow attorneys general in pushing back against Google’s illegal actions. I will not allow companies, no matter how large or powerful, to take advantage of New York consumers or small businesses.”

    While Google is best known for its search engine, it has expanded its products to include online advertising technologies that allow website publishers to sell their available space on digital ad exchanges. Google has used its market power to dictate the terms on which publishers and advertisers may do business, prioritizing its own financial gain ahead of the quality of its products and its customers’ best interests. The ads at issue are called “display ads,” the banners and sidebars that appear at the top and margins of websites. Google built itself monopolies in three ad tech markets and is able to control nearly every aspect of these sales, extracting higher-than competitive fees at multiple stages of the transactions it handles.  

    By monopolizing the components of ad tech, Google has raised advertising costs for businesses while simultaneously lowering the revenues website publishers receive for their ad space, keeping unfairly high fees for itself. This conduct hurts consumers because as publishers make less money on advertising inventory, fewer publishers are able to offer internet users content for free, without subscriptions, paywalls, or alternative forms of monetization. The components of the ad tech market, and Google’s actions to monopolize each one, include:

    • The Publisher Ad Server Market: Website publishers — the content creators or owners — use a tool called a “publisher ad server” to handle the process of selecting ads to fill available ad slots when a user opens a web page. The tool rapidly evaluates potential ads from different sources and applies a set of rules to decide which ad will be displayed, considering data about the user viewing the page and bids from ad exchanges. Publishers cannot reasonably integrate with more than one such tool, and switching is cost- and resource-prohibitive. Since 2008, Google has owned the industry’s leading publisher ad server, Google Ad Manager (aka DoubleClick for Publishers, or DFP). Google restricts publishers’ power to transact with rival exchanges on their preferred terms.
    • The Ad Exchange Market: An ad exchange is a software platform that receives requests to fill ad space on publishers’ web pages, and solicits bids on each impression from advertiser buying tools like ad networks. It chooses the winning bid and transmits that information to the publisher ad server. Google owns the industry’s leading ad exchange, called AdX, now packaged as part of Google Ad Manager. Google provides advantageous bidding techniques exclusively to AdX, and restricts real-time access to AdX to DFP, as part of Google Ad Manager.
    • The Advertiser Ad Network Market: Advertisers receive and respond to bid requests from ad exchanges using advertiser buying tools, which include ad networks. These tools assist advertisers in connecting to ad exchanges, selecting impressions to bid on, submitting bids, and tracking campaign goals. Ad networks are tools typically used by smaller advertisers, or advertisers that must rely on the network’s targeting data to make ad buying effective. The ad network is a “black box” to advertisers, giving them little or no control over or visibility into the process by which it bids for impressions. Google offers the industry’s leading ad network, Google Ads, and makes its demand available only through AdX.

    Through this lawsuit, Attorney General James, DOJ, and the coalition of states seek to restore a competitive, innovative marketplace and benefit consumers by asking the court to require Google to sell off certain key ad tech assets that it has amassed as part of its monopolization efforts. The coalition also asks the court to counter any unfair advantages that Google gained as a result of its anticompetitive conduct.

    BRONX MAN INDICTED FOR SEXUALLY ABUSING CHILD AND ATTEMPTING TO RAPE HER


    Defendant “Catfished” and Groomed Girl; Met Her on Snapchat When She Was 11 Years Old 

     Bronx District Attorney Darcel D. Clark today announced a Bronx man has been indicted on Attempted Rape, Criminal Sexual Act, Coercion and additional charges for coercing a girl for three years, starting when she was 11 years old, culminating in sex abuse.

     District Attorney Clark said, “The defendant, who was 23 at the time, befriended an 11- year-old girl on social media by posing as a girl her age. He acted as her friend for a year through daily messages. When they met in person and the child realized he was a man, he went on to groom her, and allegedly continued to pressure her, until he sexually abused her and attempted to rape her. His alleged predatory actions are sickening.”

     District Attorney Clark said the defendant Yves Phillipe, AKA Drew, 26, was arraigned on Endangering the Welfare of a Child, Attempted Rape in the first, second and third degree, Attempted Sexual Misconduct, second and third-degree Criminal Sexual Act, and two counts of second-degree Coercion on January 20, 2023 before Bronx Supreme Court Justice George Villegas. The defendant, who is a Level 1 sex offender after a sexual misconduct conviction in upstate New York, was remanded and is due back in court on April 17, 2023.

     According to the investigation, in 2018, the defendant sent a friend request to the victim on Snapchat, posing as a girl her age. The defendant, under that guise, continued to speak to the victim for a year on Snapchat daily and asked her about her home and school life. The child confided in the defendant and in 2019 he asked to meet in person. When they met, the victim realized she had been talking to a man; she and the defendant continued to speak daily and met in-person once a week. The defendant bought the girl food, clothes and makeup.

     According to the investigation, on February 2, 2022, the victim ran away from home and stayed with the defendant for three months. They stayed in hotel rooms, slept in his car, or snuck into his parents’ house. Phillipe allegedly consistently pressured the child to pay him back by having sex with him. He threatened to alert the police of her whereabouts. During one of their stays at a Bronx motel, the defendant attempted to rape her. The victim, who was 14 years old at the time, was able to kick him off and ran away. Shortly after, the defendant allegedly sexually abused her in the parking lot. The victim contacted a family member and returned home in April 2022.

     District Attorney Clark also thanked retired NYPD Detective Judith Moreno, NYPD Detective Joannie Colon, and NYPD Lieutenant Amy Capogna. 

    An indictment is an accusatory instrument and not proof of a defendant’s guilt.

    Vitaly Borker Pleads Guilty To Defrauding Customers Of His Eyewear Websites For The Third Time

     

     Damian Williams, the United States Attorney for the Southern District of New York, announced that VITALY BORKER, the operator of “EyeglassesDepot.com” and other online retailers of purported designer eyewear, pled guilty today to one count of wire fraud in connection with a scheme to defraud customers of his websites.  BORKER pled guilty before United States District Judge Jed S. Rakoff.

    U.S. Attorney Damian Williams said: “Once again, Vitaly Borker has pled guilty to crimes relating to his fraudulent operation of eyewear websites.  Borker’s plea today demonstrates this Office’s intolerance for recidivism, and we can only hope that the third time is the charm and that Borker finally learns his lesson.”

    According to the previously filed Complaint and Indictment in this case and statements made in court:

    Beginning in at least June 2020, after being released from federal custody and entering a Residential Reentry Center, VITALY BORKER operated an eyewear sales and repair services website called EyeglassesDepot.com.  EyeglassesDepot.com claimed, among other things, that it sold “brand new and 100% authentic designer eyeglasses and sunglasses” and that it had “thousands of pairs of glasses in stock…ready for shipping as early as TODAY.”  In truth, however, the eyewear sold to customers of EyeglassesDepot.com was often used or counterfeit.  Rather than carrying a large inventory of “brand new and 100% authentic eyewear,” EyeglassesDepot.com filled its customers’ orders by purchasing comparable items on a third-party online marketplace (the “Marketplace”).  The eyewear purchased by EyeglassesDepot.com from the Marketplace was often used or counterfeit, but EyeglassesDepot.com passed off the glasses as new and authentic.  In addition, while EyeglassesDepot.com claimed to be a “leader in the repair of sunglasses and eyeglasses” and able to “fit any eyeglasses or sunglasses with your custom prescriptions,” customers who sent eyewear to EyeglassesDepot.com either did not have their eyewear repaired at all or otherwise received unsatisfactory work.

    In order to conceal his role in operating EyeglassesDepot.com, BORKER – who has twice previously been convicted in this District of crimes relating to his operation of eyewear websites – used the identities of other individuals in connection with the operation of EyeglassesDepot.com.

    BORKER, 46, of Brooklyn, New York, pled guilty to 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.  BORKER is scheduled to be sentenced at 10:00 a.m. on April 21, 2023, by U.S. District Judge Jed S. Rakoff.

    Mr. Williams praised the outstanding investigative work of the U.S. Postal Inspection Service.

    Statement Of U.S. Attorney Damian Williams On The Conviction Of Robert Hadden

     

     “Robert Hadden was a predator in a white coat.  For years, he cruelly lured women who sought professional medical care to his offices in order to gratify himself.   Hadden’s victims trusted him as a physician, only to instead become victims of his heinous predilection.   We thank and commend the brave women who came forward to tell their stories, many of whom testified at trial, to end his years-long cycle of abuse.”