Alleged Perpetrator Of $100 Million Crypto Market Manipulation Scheme To Make Initial Appearance In The Southern District Of New York

 

 Damian Williams, the United States Attorney for the Southern District of New York, Kenneth A. Polite, Jr., the Assistant Attorney General of the Justice Department’s Criminal Division, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that AVRAHAM EISENBERG will make his initial appearance in the Southern District of New York later today in connection with an Indictment charging him with commodities fraud, commodities market manipulation, and wire fraud in connection with EISENBERG’s manipulation of the Mango Markets decentralized cryptocurrency exchange.  As alleged in the Indictment filed on January 9, 2023, EISENBERG engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from the cryptocurrency exchange Mango Markets and its customers and achieved this objective by artificially manipulating the price of certain perpetual futures contracts.  EISENBERG was previously arrested on December 26, 2022, in San Juan, Puerto Rico, pursuant to a criminal Complaint.  EISENBERG will appear in federal court in Manhattan today and will be presented on the charges before United States Magistrate Judge Jennifer E. Willis.  The case has been assigned to United States District Judge Richard Berman. 

U.S. Attorney Damian Williams said: “As alleged, Avraham Eisenberg manipulated the Mango Markets cryptocurrency exchange in order to obtain over $100 million in illicit profits for himself.  Through his scheme, Eisenberg left others holding the bag.  Market manipulation is illegal in all of its forms, and this Office is committed to prosecuting such schemes wherever they occur – including in the cryptocurrency markets.”

Assistant Attorney General Kenneth A. Polite, Jr. said: “Exploiting decentralized finance platforms is the new frontier of old school financial crimes in which criminals abuse emerging technologies for their own personal gain.  With this prosecution, the Criminal Division is sending the message that no matter the mechanism used to commit market manipulation and fraud, we will work to hold those responsible to account.”

FBI Assistant Director Michael J. Driscoll said: “The defendant is alleged to have executed a scheme through which he fraudulently acquired over $100 million worth of cryptocurrency.  The FBI is dedicated to safeguarding the integrity of all financial markets and will ensure any individual willing to exploit one be held responsible in the criminal justice system.”           

As alleged in the Indictment and the Complaint:[1]

Background on Mango Markets

Mango Markets is a decentralized cryptocurrency exchange that allows investors to, among other things, purchase and borrow cryptocurrencies and cryptocurrency-related financial products.  Mango Markets is run by the Mango Decentralized Autonomous Organization (the “Mango DAO”).  The Mango DAO has its own crypto token called MNGO, which investors could buy and sell.  Holders of the MNGO token are allowed to vote on changes to Mango Markets and issues related to the governance of the Mango DAO.

Investors on Mango Markets can, among other things, buy and sell perpetual futures contracts (“Perpetuals”).  When an investor buys or sells a Perpetual for a particular cryptocurrency, the investor is not buying or selling that cryptocurrency but is, instead, buying or selling exposure to future movements in the value of that cryptocurrency relative to another cryptocurrency.  An investor who buys a Perpetual based on the relative value of the stablecoin USDC and MNGO (a “MNGO Perpetual,” for short) at a price of 0.02 USDC/MNGO is “long” on MNGO, and the value of that position will rise if the value of MNGO rises above 0.02 USDC/MNGO.  Conversely, the investor who sold that Perpetual is “short” on MNGO, and the value of that position will rise if the value of MNGO falls relative to USDC.  Either party to a Perpetual can settle the Perpetual at any time and realize their gain or loss. 

To determine the settlement price of Perpetuals, Mango Markets uses an “oracle,” which is a computer program that calculates the relative value of two cryptocurrencies by looking at the exchange rate of those cryptocurrencies on various cryptocurrency exchanges (the “Oracle”).  When the Oracle price changes for a particular cryptocurrency pairing, the settlement price of Perpetuals based on that cryptocurrency pairing also changes on Mango Markets.  Each party to a Perpetual on Mango Markets also regularly makes or receives payments known as “funding” payments.  Funding payments are calculated based on the midprice of bids and asks for that Perpetual compared to the Oracle price for that Perpetual.  Funding payments are designed to ensure the purchase price for Perpetuals stays close to settlement prices. 

Investors can also engage in “spot” trades on Mango Markets.  In a spot trade, an investor exchanges one cryptocurrency for another, at whatever the prevailing exchange rate between those two cryptocurrencies is at the time of the transaction.

Mango Markets also allows investors to use their deposits and positions as collateral for borrowing and withdrawing cryptocurrency from the Mango Markets exchange.  To borrow through Mango Markets, an investor accesses the Mango Markets website and clicks a button labeled “borrow” that allows the investor to borrow cryptocurrency.  The investor can then withdraw the borrowed cryptocurrency by clicking another button labeled “withdraw.”  The borrowed cryptocurrency comes from cryptocurrency that other investors have deposited in Mango Markets accounts.  The amount that an investor on Mango Markets can withdraw is determined by a formula that looks at, among other things, the value of the cryptocurrency deposited in the investor’s account, the value of the investor’s positions on Mango Markets, and the amount of cryptocurrency that the investor has already borrowed through Mango Markets.  Mango Markets uses a formula to track the relationship between these assets and liabilities, which Mango Markets labels the “health” of the account.  If the “health” of a Mango Markets account falls below a certain threshold, the investor’s positions on Mango Markets can be liquidated

EISENBERG’s Market Manipulation Scheme

EISENBERG engaged in a scheme to steal approximately $110 million by artificially manipulating the price of MNGO Perpetuals on Mango Markets.  To achieve this objective, EISENBERG took a number of steps.  First, EISENBERG used an account that he controlled on Mango Markets to sell a large amount of MNGO Perpetuals and used a separate account on Mango Markets to purchase those same MNGO Perpetuals.  One account that EISENBERG controlled held a “long” position, the value of which would rise if the value of MNGO relative to USDC rose above the threshold of 0.0382 USDC/MNGO (the “Long MNGO Perpetual Position”).  The second account that EISENBERG controlled held a “short” position, the value of which would rise if the value of MNGO relative to USDC fell below 0.0382 USDC/MNGO (the “Short MNGO Perpetual Position”).  EISENBERG was the owner of both positions and had sold to himself, from himself, the MNGO Perpetuals.

Second, EISENBERG made a series of large purchases of MNGO using the stablecoins USDC and USDT on multiple cryptocurrency exchanges with the objective of artificially increasing the price of MNGO relative to USDC and, in turn, the price of MNGO Perpetuals on Mango Markets.  EISENBERG’s manipulative trading caused the price of MNGO Perpetuals on Mango Markets to rise approximately 1300% in a period of approximately 20 minutes.

Finally, as the price of MNGO Perpetuals on Mango Markets rose due to the manipulative purchasing by EISENBERG, the apparent value of the MNGO Perpetuals that EISENBERG had purchased for himself also rose.  Because Mango Markets allows investors to borrow and withdraw cryptocurrency based on the value of their assets on the platform, the artificial increase in the value of the MNGO Perpetuals EISENBERG had purchased from himself allowed him to borrow, and then withdraw, approximately $110 million worth of various cryptocurrencies from Mango Markets, which came from deposits of other investors in the Mango Markets exchange.  EISENBERG withdrew nearly all then-available funds from Mango Markets.  When Eisenberg borrowed and withdrew this cryptocurrency, he had no intention of repaying the borrowed funds but rather intended to steal those funds.

After EISENBERG stopped purchasing MNGO with USDC in connection with his fraudulent scheme, the price of MNGO Perpetuals on Mango Markets – which was no longer being artificially propped up by EISENBERG – collapsed.

AVRAHAM EISENBERG, 27, of San Juan, Puerto Rico, is charged with one count of commodities fraud, which carries a maximum sentence of 10 years in prison; one count of commodities manipulation, which carries a maximum sentence of 10 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison.

The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. 

Mr. Williams praised the investigative work of the FBI and further thanked the Department of Homeland Security’s Homeland Security Investigations and the Internal Revenue Service-Criminal Investigation for their assistance with the investigation.  Mr. Williams further thanked the Commodity Futures Trading Commission and the Securities and Exchange Commission, both of which have initiated civil proceedings against EISENBERG, for their cooperation and assistance in the investigation.

This case is being handled by Assistant U.S. Attorneys Thomas Burnett and Noah Solowiejczyk of the Office’s Securities and Commodities Fraud Task Force and Jessica Peck of the National Cryptocurrency Enforcement Team (NCET).

The NCET was created by the Criminal Division to combat the growing illicit use of cryptocurrencies and digital assets.  Under the supervision of the Criminal Division, the NCET conducts and supports investigations into individuals and entities that are enabling the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. 

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

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

WILLIAMS, SANCHEZ TO INTRODUCE CO-OP TRANSPARENCY AND REFORM LEGISLATIVE PACKAGE

 

Public Advocate Jumaane D. Williams and Council Member Pierina Sanchez will put forward a package of legislation today aimed at providing long-overdue transparency and reform to the co-op sales and management process. The lawmakers will introduce three bills at today’s Stated Meeting of the City Council, where Council Member Sanchez chairs the Committee on Housing and Buildings, a role formerly held by the Public Advocate.  

The Public Advocate, who has long worked on the issue of co-op sales, approvals, and denials will re-introduce two bills as part of the package, now with the Chair as co-prime sponsor. The first, Int. 915, would require co-ops to provide prospective purchasers with a written statement of each reason for denying a sale within five days after the decision is made. 

The second, Int. 914, would regulate the application process for cooperative apartments in order to ensure that applicants receive timely approvals or denials. It would require a standardized application and list of requirements for prospective purchasers, and mandate that within ten days of receiving those materials, the co-op would be required to acknowledge receipt to the applicant. They would then have to reply to the application within 45 days.

Chair Sanchez and the Public Advocate will also introduce Int. 917, which would require a co-op to disclose its finances to a prospective purchaser after their offer is accepted. The financial information would have to be provided within 14 days of a request by the prospective purchaser. 

Together, these bills would combat a history of discrimination among some co-op board processes, while enabling boards acting in good faith to continue unimpeded. The length and depth of the co-op application, review, and approval process has made such discrimination both more easy to perpetrate and more difficult to identify and prevent. By providing uniform guidelines and a ‘reason requirement’ for rejected applications, the process with be clarified and the standards codified.  

“For too long, a complicated, nebulous, and opaque co-op process has left open the possibility for discrimination and denial of housing to qualified applicants,” said Public Advocate Jumaane D. Williams. “These bills will go a long way toward reining in that process and providing transparency, and I’m proud to partner with Chair Sanchez to get them passed.”

“A long history of discriminatory practices, both overt and more insidious, have longed served as barriers to homeownership for people of color in the United States,” said Council Member Pierina Sanchez, Chair of the Committee on Housing and Buildings. With this legislation, we take strides toward increasing transparency to the byzantine process of purchasing cooperative units in New York City. Boards and shareholders acting in good faith will have nothing to fear, while boards with secretive practices that serve to perpetuate discrimination will need to revisit their practices. I am proud to partner with Public Advocate Jumaane Williams to pass these bills.”

“Co-op disclosure is a long overdue addition to the City Human Rights Law," said Craig Gurian, veteran civil rights lawyer. "The values of civil rights and transparency must trump the secrecy, privilege, and unaccountability that the co-op industry has relied on for so long.”

Governor Hochul Urges New Yorkers to Prepare for Dangerously Cold Temperatures and Extreme Wind Chill this Weekend

Temperatures As Low as -15 Degrees and Wind Chills as Low as -25 to -50 Degrees Expected Late Friday Night Through Saturday for Most Regions Across the State

Extreme Cold Weather Brings Increased Risk of Hypothermia, Frostbite in Minutes; New Yorkers in Impacted Areas Urged to Limit Time Outdoors

Governor Hochul Encourages New Yorkers to Use Caution When Using Portable Space Heaters Indoors and Other Alternate Heating Sources 

 Governor Kathy Hochul today urged New Yorkers to prepare for dangerously cold temperatures and wind chills beginning Friday and continuing through Saturday. Most regions across the state, including Western and Central NY, Finger Lakes, Southern Tier, Mohawk Valley, North Country, Capital Region and Mid-Hudson, are expected to see temperatures as low as -15 degrees and wind chills as low as -25 to -50 degrees for a period lasting almost 48 hours. These extreme cold weather conditions bring an increased risk of hypothermia and frostbite, and fire and carbon monoxide poisoning from alternative heating sources, such as portable space heaters and fuel-burning appliances.

"New Yorkers across the state will experience dangerously cold temperatures and life-threatening wind chills this weekend," Governor Hochul said. "Now is the time to prepare: plan to limit your time outdoors this weekend and know where to take shelter. Take all necessary precautions to ensure your residence is safely heated and use caution if you plan to use an alternative heat source, such as a space heater."

Safety Tips

Frostbite

• To avoid frostbite, stay inside during severe cold.
• If you must go out, try to cover every part of your body: ears, nose, toes and fingers, etc. Mittens are better than gloves. Keep your skin dry and stay out of the wind when possible.
• Drink plenty of fluids since hydration increases the blood's volume, which helps prevent frostbite. Avoid caffeine, alcohol and cigarettes - caffeine constricts blood vessels and prevents warming of extremities, alcohol reduces shivering, which helps keep you warm, and cigarette use shuts off blood flow to your hands.
• If you suspect frostbite, until you can get indoors, don't rub or massage cold body parts. Drink warm liquids, put on extra layers of clothes and blankets, and remove rings, watches, and anything tight.
• Once indoors, don't walk on a frostbitten foot - you could cause more damage. Get in a warm (NOT hot) bath and wrap face and ears in a moist, warm (NOT hot) towel.
• Don't get near a hot stove or heater or use a heating pad, hot water bottle, or a hair dryer. You may burn yourself before feeling returns.
• Frostbitten skin will become red and swollen and feel like it's on fire. You may develop blisters. Don't break the blisters. It could cause scarring.
• If your skin turns blue or gray, is very swollen, blistered or feels hard and numb even under the surface, go to a hospital immediately.

Hypothermia

• Hypothermia is caused by prolonged exposure to cold temperatures, especially in children and the elderly.
• Watch for the following symptoms: inability to concentrate, poor coordination, slurred speech, drowsiness, exhaustion, and/or uncontrollable shivering, following by a sudden lack of shivering.
• If a person's body temperature drops below 95 degrees Fahrenheit, get emergency medical assistance immediately.
• Remove wet clothing, wrap the victim in warm blankets, and give warm, non-alcoholic, non-caffeinated liquids until help arrives.

Protecting Water Pipes

Prevent the mess and aggravation of frozen water pipes, protect your home, apartment, or business by following these steps:

• When it's cold, let cold and hot water trickle at night from a faucet on an outside wall. Open cabinet doors to allow more heat to get to un-insulated pipes under a sink or appliance near an outer wall. Make sure heat is left on and set no lower than 55 degrees.
• If you plan to be away, have someone check your house daily to make sure the heat is still on to prevent freezing, or drain and shut off the water system (except indoor sprinkler systems).
• If pipes freeze, make sure you and your family know how to shut off the water in case pipes burst. Stopping the water flow minimizes damage to your home.
• Never try to thaw a pipe with an open flame or torch.
• Always be careful of the potential for electric shock in and around standing water.
• Call a plumber and contact your insurance agent.

Be "Fire Safe"

Heating equipment is among the leading causes of home fires nationally and in New York State. Take a few simple steps to significantly reduce the possibility of experiencing a heating related fire. No matter how careful you are with home heating, you and your family should be prepared in case fire strikes:

• Buy and carefully maintain a quality smoke and carbon monoxide detector.
• Inspect your home to eliminate or control fire hazards.
• Install at least 5-pound A-B-C type fire extinguishers in the home and teach family members how to use them.
• Establish a well-planned escape route with the entire family.
• Hold practice fire drills until all family members are thoroughly familiar with plan.
• If you have an older home, have the wiring checked by a qualified electrician to make sure it meets current building codes.
• Have your chimney and fireplace cleaned and inspected yearly for creosote build-up, cracks, crumbling bricks or mortar and any obstructions.
• Keep storage areas clean and tidy.
• Keep curtains, towels and potholders away from hot surfaces.
• Store solvents and flammable cleaners away from heat sources. NEVER keep gasoline in the house.
• Inspect extension cords for frayed or exposed wires or loose plugs.

Maintain and Inspect Home Heating Appliances

Proper maintenance and an annual inspection of heat pumps, furnaces, space heaters, wood and coal stoves, fireplaces, chimneys, and chimney connections by qualified specialists can prevent fires and save lives. Follow the manufacturer's instructions for installation, venting, fueling, maintenance and repair. Review the owner's manual to make sure you remember the operating and safety features.

• Space Heaters - Keep space heaters at least 3 feet away from furniture, window treatments, bedding, clothing, rugs, and other combustibles. Avoid the use of extension cords with electric heaters. Always turn off space heaters before leaving the room or going to bed.
• Fuel Burning Appliances - Inspect the shut off mechanism and wick for proper operation. Fill the tank with fresh fuel. Let the heater cool down before refueling. Adding fuel to a hot heater can start a dangerous fire.
• Wood Burning Appliances and Fireplaces - Do not burn trash in the wood stove or fireplace. Burn only well-seasoned hardwoods. Be sure the fire you build fits your fireplace or stove, don't overload it. Be sure wood stoves are installed at least 36 inches away from the wall. Keep combustible materials well away from the fireplace, stove and chimney. Keep the area around them clean. Always use a fireplace screen to prevent sparks from leaving the fireplace and starting a fire. Never leave a fire unattended.
• Chimneys - Creosote accumulation is the leading cause of chimney fires. A chimney that is dirty, blocked or is in disrepair can inhibit proper venting of smoke up the flue and can also cause a chimney fire. Nearly all residential fires originating in the chimney are preventable. An annual chimney inspection by a qualified chimney sweep can prevent fire or carbon monoxide poisoning.
• Ashes - Keep wood stoves and fireplaces free of excess ash buildup. Excessive ash buildup prevents good circulation of air needed for combustion. When removing ashes, use a metal container with a tight-fitting cover. Always place ashes in an outside location away from structures. Ashes that seem cool may contain a smoldering charcoal that can start a fire.

Carbon Monoxide

• Carbon monoxide is produced anywhere that fuel is burned and is the leading cause of accidental poisoning deaths in the United States.
• Carbon monoxide is an odorless, tasteless and invisible killer, and the ONLY safe way to detect it is with a carbon monoxide alarm.
• Carbon monoxide alarms range in price from $20 to $50 depending on additional features.
• Symptoms of carbon monoxide poisoning include sleepiness, headaches and dizziness.
• If you suspect carbon monoxide poisoning, ventilate the area and get to a hospital.

Other Heating Safety Tips

• Make sure chimneys and vents are checked for blockages, corrosion, and loose connections.
• Open flues completely when fireplaces are in use.
• Use proper fuel in space heaters.
• Never burn charcoal or a barbecue grill inside a home or enclosed space.
• Never use portable fuel-burning camping equipment inside a home, garage, or vehicle
• Never leave a car running in an attached garage, even with the garage door open.
• Never operate unvented fuel-burning appliances in any room where people are sleeping.
• Never use the kitchen stove for heating a house.
• Never run a gas-powered generator in a garage, basement, or near any overhang on the home. Keep it at a distance.

The New York Office of State Parks, Recreation and Historic Preservation cautions patrons to check the status of the site they intend to visit and to dress accordingly for extreme conditions. In cold temperatures, your body begins to lose heat faster than it can be produced, which can lead to serious health problems.

Whether hiking, snowmobiling, snowshoeing, cross country skiing or simply taking a walk, dress in layers to protect your body. Frostbite can be drastically reduced when wearing the proper outdoor apparel. OPRHP strongly cautions against wearing any cotton layer since it does not wick moisture created by perspiration and freezes once it is wet. We recommend polyester blends, silk, or other synthetic fabrics to wick moisture away from the skin. Fleece, wool or polyester are the best choices. Several thin, loose layers are better than one thick layer. Wear a hat. Mittens are better than gloves.

For snowmobilers, your outside shell should be windproof and waterproof. Acrylic or synthetic materials are the most popular fabrics. If you plan to travel near or on ice, get a suit that comes equipped with approved floatation. Wear approved helmets, facemasks, goggles, balaclavas and gloves.

For your feet, again, never wear cotton socks and bring an extra pair just in case. Good boots will keep your feet warm, comfortable and protected from water. The best material is a combination of a rubber, waterproof bottom with a good sole for traction and a nylon or synthetic upper high enough to repel snow. Choose boots that fit well and are comfortable for a long day. If they are too tight, it can cut off circulation and your feet will get cold. More information on safe snowmobile safety is available here.

Statement from Speaker Adrienne Adams on Governor Kathy Hochul’s Fiscal Year 2024 Executive Budget

 

“Governor Hochul’s FY24 Executive Budget proposal lays out encouraging investments in housing, education, and healthcare that are critical to New York’s recovery and success. The inclusion of significant funding for our city to provide services for people seeking asylum in our country is desperately needed and appreciated. We look forward to further examining Governor Hochul’s proposed budget and working with her Administration and the State Legislature on key shared priorities, including housing, mental health, and community safety.”

Owner Of Home Health Agency Sentenced To 54 Months In Prison For Over $100 Million Health Care Fraud

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that MARIANNA LEVIN was sentenced to 54 months in prison for her leadership role in a broad fraud scheme that defrauded Medicaid for home health and personal care services that were not actually rendered, resulting in the loss of more than $100 million.  United States District Judge John P. Cronan imposed the sentence.  LEVIN pled guilty to wire fraud on June 1, 2022.

U.S. Attorney Damian Williams said: “For years, Marianna Levin, the owner of a Brooklyn-based home health agency, defrauded taxpayers through a massive, fraudulent home health scheme.  As part of the scheme, Levin billed tens of millions of dollars to Medicaid for home health services that were not actually rendered.  As a result, the scheme diverted much-needed resources meant to support services for vulnerable individuals.  This sentence sends a message that those who engage in health care fraud schemes will face stiff penalties.”

According to statements and filings in federal court:

Since in or about 2015, LEVIN engaged in a widespread fraud scheme through which she and her co-conspirators defrauded Medicaid for home health and personal care services that were not actually rendered.  During the course of the scheme, LEVIN served in a senior, executive role at a licensed home care service agency based in Brooklyn, New York (“Agency-1”).  In or about 2016, LEVIN and her co-conspirators opened a second licensed home care service agency based in Brooklyn (“Agency-2” and, together with Agency-1, the “Agencies”).  LEVIN served as the owner of Agency-2 and also continued in her leadership role at Agency-1.

The Agencies purported to provide home health and personal care services to patients residing in all five boroughs of New York City and Nassau County.  Combined, the Agencies employed approximately 3,000 home health and personal care aides (the “Aides”).  Most of the Aides were licensed to provide home health aide services and personal care services.

Home care is a health service provided in the patient’s home to promote, maintain, or restore health or to lessen the effects of illness and disability.  Home care includes personal care services, administered by Aides, including housekeeping, meal preparation, bathing, toileting, and grooming.

From in or about 2015 to in or about December 2020, Medicaid reimbursed the Agencies hundreds of millions of dollars for home health and personal care services.  A significant portion of the Agencies’ billings were fraudulent.  In particular, the Agencies billed Medicaid for “no-show” cases in which Aides claimed to be performing home health or personal care services when they were not.  At times when Aides falsely claimed to be performing home health or personal care services, they, in fact, stayed home, ran personal errands, vacationed, and socialized with family and friends.  The fraud at the Agencies coincided with ballooning costs on home care in New York State.  In or about January 2020, New York’s State budget director announced, in substance and in part, that spending in the home health space tripled between the 2013 and 2019 fiscal years, representing a $4.8 billion increase. 

With no-show cases at the Agencies, an Aide’s fraudulently obtained wages were often split between the no-show Aide and the no-show patient.  In addition to paying kickbacks to no-show patients, no-show Aides sometimes paid kickbacks to conspirators who referred no-show cases to Aides at the Agencies. 

LEVIN and her co-conspirators also engaged in other fraudulent activity to boost the Agencies’ billing and increase the amount of money paid out to the Agencies. 

Over the course of the scheme, LEVIN received more than $5 million in compensation from the Agencies.

In imposing the sentence, Judge Cronan emphasized the seriousness of LEVIN’s involvement in the fraud, the losses it caused, and the need to deter other home care businesses and workers from engaging in similar crimes.

In addition to her prison term, MARIANNA LEVIN, 49, of Brooklyn, New York, was ordered to forfeit $1,496,000 and pay restitution of $36,328,183. 

Mr. Williams praised the investigative work of the Federal Bureau of Investigation. 

Acting Budget Director Beattie Holds FY 2024 Executive Budget Technical Briefing

 

I am Sandra Beattie, the Acting Budget Director for the New York State Division of Budget. Prior to becoming the state's Acting Budget Director, I have had the great honor of serving as New York's first Deputy Director at the division for over three years. 

Our team at the Division of Budget has a long history working across party lines to ensure sustainability, results driven outcomes for over 200 million New Yorkers, which we serve. I am proud to continue this legacy under Governor Hochul's bold leadership and work in collaboration with our partners across the state agencies to formulate and deliver a budget that will make our state stronger, safer and more accessible for the years to come.

To begin, I want to acknowledge New York's impressive record of fiscal discipline and operational efficiency, keeping spending affordable for over a decade, achieving the highest credit rating since 1972 and ensuring that New Yorkers receive the benefit for every dollar invested.

Before we look at the year ahead, I want to take a few minutes to review where we've been. This time last year, this state was experiencing a winter surge in COVID-19 cases, strong growth in U.S. output, continuing upward trend in tax collections, a second year of emergency COVID-19 spending for rent relief, utility arrears and aid to small businesses, balanced operations over the multi-year financial plan for the first time in history and an influx of federal recovery aid. 

In contrast, we now find ourselves facing recession fears, weakening economic activity, which is expected to become apparent in our tax collections. Tax collections are a lagging indicator of changing economic activity. Continued COVID recovery, but with less federal funding as the public health emergency ends, pressing issues facing the state such as MTA solvency, assistance to thousands of asylum seekers coming to the state, barriers to mental health access and public safety concerns to name a few. And inflationary increases that are particularly burdensome for minimum wage earners. 

Looking ahead, now I'll discuss the nation and the state's economic outlook. Following a volatile 2022, the division forecasts a mild downturn in 2023. U.S. real GDP is expected to decline in the first half of the year, and slowly recovering in the second half, posting an annual average GDP growth of 0.5 percent.

The economy is already showing signs of weakness with two months of declines in real consumption in November and December. Weakening real business investment coupled with an already weak housing market. However, the recession is expected to be shorter and less severe than historical averages. As we all know, we have been experiencing record high prices, but inflation is projected to ease in 2023.

As of December 2022, New York State's economy had regained 87.8 percent of private sector jobs that we lost in March and April of 2020. In Fiscal Year 2022, the state's total wages grew at a strong 12.4 percent as jobs recovered and due to inflation in strong equity market performance. However, the division estimates a slowdown in wage growth due to a decrease in hiring and a decline in bonuses.

As we look at the historic view of U.S. real GDP and the US unemployment rate, note the sharp decline and the sharp rebound following 2020. Given the potential for a mild economic downturn and subsequent recovery, the unemployment rate is expected to slowly rise from its current level of 3.5 percent, peaking at 5 percent in mid-2024.

The consumer price index has hit its highest levels in over 40 years, peaking at 9.1 percent growth in June 2022 since June sharply declining energy prices and the Federal Reserves continued monetary tightening, pulled the year over year change in inflation down to 6.5 percent as of December. Inflation is projected to ease significantly to 3.9 percent in 2023, and to normalize further to 2.8 percent in 2024.

The state's labor market continued its recovery from the global pandemic, regaining 86.5 percent of its job losses as of December 2022. While many of the state's major economic sectors have not fully recovered from pandemic related job losses, the New York sectors that have fully recovered include but are not limited to transportation, warehousing and utilities, financial activities, and health care and social assistance. However, the state's labor market still lags the nation, which fully recovered its pandemic related job losses by August 2022. 

The state's unemployment rate of 4.3 percent was the sixth highest in the nation in December 2022. The division projects unemployment to go up over the course of 2023 and part of 2024 with the weaker economy. Since the fall of 2020, New York State Worker Adjustment and Retraining Notifications, otherwise known as WARN notices, have registered several high profile layoff announcements, including Humana, Goldman Sachs, Google, Meta, and others. We expect to see these ramifications in our data beginning later this month and into the Spring. 

Since the start of the labor market's pandemic recovery, the state's unemployment rate has been pushed up by New York City, which posted a 5.9 percent unemployment rate in December 2022.

The rest of the state has performed better than New York City with an unemployment rate of 3.2 percent in December 2022, a 0.3 percentage point below the national average of 3.5 percent. 

The state's finance and insurance sector bonuses for a given fiscal year are usually highly correlated with the stock market performance of the prior calendar year. The Division estimates a decline of 25.2 percent in finance and insurance bonuses in fiscal year 2023, following strong growth of 14.6 percent in fiscal year 2020. Finance and insurance sector bonuses are projected to decline further by 5.1 percent in fiscal year 2024, as the Federal Reserve completes its monetary tightening cycle.

The disruptive forces of the pandemic led to the largest spread on record between personal income and wage growth in fiscal year 2021 due to the federal pandemic related stimulus. This state's personal income is projected to increase moderately by 0.8 percent with the lapse of most federal pandemic related stimulus. Given the previously discussed prospect of an economic downturn, we expect a modest growth rate of 3.5 percent in fiscal year 2024. 

As we look beyond the economic outlook, state finances have feared better than expected since Covid-19 began. In fiscal year 2021, during the acute phase of the pandemic, tax collections declined by just 0.6 percent from fiscal year 2020, bolstered by federal economic stimulus and have since soared. In fiscal year 2022, collections grew by 27 percent,  equal to about seven years worth of typical tax receipts in any one given year.

In fiscal year 2023, collections are expected to increase by an additional 11 percent  to a total of $115 billion or $34 billion higher than fiscal year 2021 results. The current year is on track to record a large surplus, but tax collections are expected to peak in the current year in fall in fiscal year 2024, as a mild recession begins.  We are therefore harvesting the gains of the last two years to prepare for the uncertainties ahead. 

Consistent with state law, staff from the executive, legislature, and the State Comptroller met in the middle of November to jumpstart the state's process towards a timely enacted budget, otherwise known as the quick start process. By jumpstarting the formal exchange of information and analysis, quick start is intended to stimulate timely discussion and analysis of economic and fiscal factors likely to shape the fiscal year 2024 budget deliberations.

Additionally, a joint report was publicly issued that discusses in detail the current state of fiscal affairs, as well as projections for the upcoming fiscal year. Though there are differences between the respective estimates, representatives from all the parties agreed that the state's economic recovery has slowed and remains vulnerable to a range of risks.

Higher than expected tax receipts have contributed to a general fund surplus of $8.7 billion. Building on the Governor's pledge to honor the state's current commitments through good and bad times, the surplus will be used to strengthen the state's capacity to weather the economic downturn on the horizon.

More than half of the surplus will be used to accelerate deposits to principal reserves that have been planned for fiscal year 24 and 25, bringing the balance held in principle reserves to more than 15 percent of spending by the end of March. This will put us at two years ahead of schedule. A further $600 million will be used to fund deposits to the Retiree Health Trust Fund that were scheduled in later years, bringing the balance to $1.2 billion.

Additionally, to ensure the state can abide by the limits imposed by the Debt Reform Act, $1 billion will be used to recapitalize the debt reduction reserve. By the end of fiscal year 2023, the state will have boosted its reserves by over $20 billion since fiscal year 2020. Consistent with the Governor's agenda, the fiscal year 2024 executive budget, we are supporting several high priority initiatives for the state, including advancing the MTA's funding plan, investing in health care operations, and helping New York City meet asylum seeker needs. In addition, we will introduce a variety of other initiatives that will have a positive impact on New Yorkers.

To improve the lives of all New Yorkers, we have made historic investments in the State's two largest programs, School Aid to educate the next generation and Medicaid for a healthier New York. Agency operations funding is increased for essential services. State operating funds, spending, and all fund spending are growing less than inflation. 

The state is increasing all fund spending by 2.4 percent. This equates to $227 billion as the new all fund spending for fiscal year 2024. State operating funds spending will total $125 billion. This is an increase of $2.5 billion or 2 percent from the current fiscal year. 

Tax revenue supports the majority of state spending. Other receipts include tuition, patient income, and fees, most of which are dedicated for specified purposes. Approximately two-thirds of state spending is for local assistance - that includes payments to local governments, school districts, health care providers, managed care organizations, and other entities, as well as financial assistance to or on behalf of individuals, families, and not-for-profit organizations. As mentioned, School Aid and Medicaid account for more than half of local assistance spending. The remaining spending supports operational expenses, fringe benefits, and other fixed costs. 

Aid from the federal government helps to pay for a variety of programs, including Medicaid, Public Assistance, Mental Hygiene, School Aid, Public Health, Transportation and other activities. 

The Division will work with our partners across government on both sides of the aisle to control spending. Legislative adds to the executive budget may include restorations of proposed savings measures and new funding for programs. Prior to COVID, adds were relatively modest. Excluding School Aid, table adds were roughly $180 million to $400 million between fiscal years 2015 to 2021. 

In fiscal year 2022, substantial sums were added in negotiations for pandemic assistance and restorations of proposed cuts, made possible in large part by the American Rescue Plan. As we engage with the legislature in the next phase of the budget cycle, we remain focused on returning to pre-COVID spending levels and adhering to our guiding principles of fiscal discipline and operational efficiency. 

The executive budget includes a number of initiatives that do not have recurring costs and do not add to the state's out-year budget gaps. A sampling of these include: $1.5 billion over two years to advance New York City with migrant assistance and services, $200 million for monthly electric and gas bill credits for income eligible consumers, $75 million for SUNY to support innovation and help meet future workforce needs. 

The executive budget financial plan projects a $5.7 billion out-year budget gap in fiscal year 2025. Since the enacted budget, general fund tax receipts before proposed actions in the fiscal year 2024 executive budget have been reduced by $7.5 billion in fiscal year 2025, $8 billion in fiscal year 2026, and $5.3 billion in fiscal year 2027. 

The reductions, which are based on the weakening economic activity, are the main drivers of the projected out-year budget gaps. If the fiscal year 2025 budget is balanced with recurring savings, the budget gap for fiscal year 2026 would be $3.3 billion. The projected budget gaps shown here do not reflect the use of any reserves to balance operations. 

Before discussing the road ahead, I'll now spend a few minutes reviewing the state's debt metrics. The state has been responsible in managing its debt burden over the past decade and remains committed to maintaining an affordable level of debt. Rating agencies and investors have shown confidence in the state's record for prudently managing debt and ensuring it remains affordable. 

The state's outstanding debt has grown at less than one percent since 2014, despite increasing capital investments in commitments for housing, transportation, higher education, and the environment, among others. In the fiscal year 2023 enacted budget, the state included $6 billion of cash resources over a multi-year period to fund capital expenses that would have otherwise been funded with debt. 

These resources remain in the fiscal year 2024 executive budget and demonstrate the state's commitment to debt affordability.  Debt affordability - It's calculated by debt outstanding, divided by personal income of the state. The lower the measure, the better the state's debt affordability. There has been a dramatic improvement in this measure over the past 60 years. The state's debt burden peaked in the 1970s when the state assisted New York City in responding to their financial crisis. Since then, the debt burden has steadily declined. As of March 31st, 2020, the state is projected to have a debt to personal income ratio of 3.8 percent, the lowest level since we started keeping track in 1969.

Given the context I just outlined, the Division of Budget is committed to taking steps required to prepare and help New Yorkers navigate the uncertain times ahead under the Governor's leadership. Economic turning points create heightened risk to the financial plan. In the two recessions prior to COVID-19, tax receipts fell steeply and for a longer period of time than originally expected. 

While the Division's forecast is based on reasonable assumptions, the impact of an economic slowdown is highly unpredictable. The surplus will be used to strengthen the state's capacity to weather the economic downturn on the horizon. More than half of the surplus will be used to accelerate the deposits to the principle reserves that had been planned for fiscal year 2024 and fiscal year 2025. This will bring the balance held in principle reserves to more than 15 percent of spending by March 31st, 2023, two years ahead of our planned schedule.

The financial plan maintains principle reserves and other reserves for specific purposes such as future labor agreements. Last year, the state deposited $5 billion, and we plan to deposit another $10.5 billion by the end of March 2023 to achieve a total of $19.5 billion, equal to the 15 percent of spending the Governor committed to in October 2021.

Beyond the unpredictable nature of economic downturns, specific risks include the depth and impact of a recession, upward spending pressure for existing programs, new commitments from the legislature without new funding sources, and the state's dependence on a range of federal approvals to implement savings measures and receive reimbursement for costs and spending pressures that it has incurred. 

The Division looks to execute on the Governor's commitments to serve all New Yorkers regardless of political party. Like in prior years, this year's executive budget will help New Yorkers at every stage of life to include strengthening the state's commitment to helping New Yorkers safe with historic investments to eliminate gun violence and improve the criminal justice system. Recognizing the connection between safety and the mental health system, this budget contains a long-term, $1 billion investment in mental health services and creating 800,000 new homes over the next decade, on top of last year's, $10 billion investment to make affordable housing more accessible. 

The fiscal year 2024 executive budget is an investment in our diverse set of residents. Key investments include funding, energy, affordability, and the Empower Plus Low-Income Home Retrofit program. This will include $200 million to provide relief to New Yorkers experiencing high electric bills, enhancing the SUNY and CUNY campuses for over 1.1 million higher education students. Furthering school aid investment with a $3.1 billion increase. The largest increase in history. 

Expanding access to affordable child care, including a four-year $7 billion commitment to improving the child care assistance program, improving outdoor areas with a $200 million investment in our state park system, funding $34 billion to improve high-quality health care. This is the largest Medicaid investment in our state's history. Nearly double the fiscal year 2011 value. 

Making public assistance more accessible for millions of New York families, expanding access to job opportunities through continuous recruitment and in new centers for careers in goverment. With a $7.8 million investment to meet the changing workforce demands of state agencies and indexing the minimum wage to inflation for the Northeast region to ensure that no single year's increase would threaten employment. 

Like this budget, the Division's focus remains on serving all New Yorkers.

MAYOR ADAMS’ STATEMENT IN RESPONSE TO GOVERNOR HOCHUL’S FISCAL YEAR 2024 EXECUTIVE BUDGET

 

New York City Mayor Eric Adams today released the following statement in response to the release of New York Governor Kathy Hochul’s Fiscal Year 2024 Executive Budget:

 

“While we are reviewing the details of the Governor Hochul’s budget proposal, it is clear that there are many victories worth celebrating, particularly in the areas of serious mental illnesses, addressing our housing crisis, and strengthening the entire ecosystem of public safety. There are also areas of uncertainty that will require deeper review.

 

“First, the governor has proposed putting substantial resources behind efforts to ensure that those in need get the mental health care they deserve, which will do a great deal to advance the plan I laid out towards the end of last year. This budget also advances key components of our shared housing agenda, helping New York City build more new homes and convert existing offices and basements for residential use, while providing much-needed tax incentives to increase our supply of affordable housing.

 

“The governor also laid out a robust public safety agenda that would protect New Yorkers by investing in upstream solutions, helping to address the problem of recidivism, and making commendable investments to hire more lawyers to reduce case backlogs, and the city is committed to fighting for additional resources to ensure we can address the ongoing bottlenecks in our criminal justice system.

 

“At the same time, our city continues to face significant fiscal and economic challenges that will require additional support from the state. I commend Governor Hochul for recognizing the need to provide state resources to assist with the ongoing asylum seeker crisis, and we look forward to reviewing her proposal in greater detail to ensure New York City gets its fair share of resources. As I’ve said previously, a national crisis requires a national response. We will continue to need our federal and state partners to do their part, and we look forward to working in partnership with them.

 

“The governor has also proposed having the city increase its contribution to the MTA by at least $500 million annually. The city annually contributes approximately $2 billion to the MTA in direct and in-kind contributions and, while we recognize the significant fiscal challenges the MTA faces, we are concerned that this increased commitment could further strain our already-limited resources.

 

“Finally, there are a whole host of important policy improvements in this budget, including community hiring provisions and proven alternative project delivery methods, which will allow us to build large projects faster and smarter.

 

“Governor Hochul has been, and continues to be, a strong partner for the city, and we look forward to working with her and the Legislature in the months ahead to ensure New York City has the resources it deserves.”

 

Statement from NYC Comptroller Brad Lander on Governor Hochul’s FY 2024 State Budget

 

Following the release of Governor Hochul’s proposed Fiscal Year 2024 budget for the State of New York, New York City Comptroller Brad Lander issued the following statement:

“With state revenues higher than expected, economic uncertainty on the horizon, and so many families facing affordability pressures, the state must invest in programs that will shore up working families and share prosperity among New Yorkers. While the Governor’s executive budget prioritizes important new investments in childcare and mental health services, and includes much-needed funding to support asylum seekers, in several other key ways this budget does not yet provide a solid foundation for the challenges we face ahead.

“As New York City welcomes thousands of asylum seekers, Governor Hochul is stepping up significantly to assist the City of New York’s efforts to provide shelter and services to our newest residents. I joined with a majority of New York City elected officials in urging the state to budget aid for the City of New York and am pleased to see this commitment. As in past generations, immigrants have been at the center of New York’s economic and cultural success, and the State is delivering much needed help as our latest newcomers find their footing.

“At the same time, however, the Governor’s budget would require the City of New York to chip in nearly half a billion dollars more for the Metropolitan Transit Authority. Just as the shift to remote and hybrid work hit the MTA’s farebox revenues, so too it hit the City’s commercial property tax revenues and redistributed them to the rest of the region. Rather than fare hikes, an increased share of payroll taxes, revenue from new casinos, and the implementation of congestion pricing are the right ways to replace farebox revenue and make long-overdue upgrades to ancient signal technology and repairs. The State should not stick the City with the bill to sustain our regional public transit system.

“Governor Hochul rightly put confronting our housing affordability crisis front-and-center. All communities across the state must do their part in meeting this urgent challenge – especially in Long Island, Westchester, and in plenty of parts of New York City that have long resisted doing their fair share. But market production alone will not help families facing eviction in the Bronx, where eviction rates are the highest by far, or give young working-class families a path to affordable homeownership and stability that Mitchell-Lama gave their grandparents. A comprehensive effort to alleviate the housing issues facing must include good cause eviction protections, rental assistance vouchers for low-income and homeless families, target subsidies to the level of actual affordability, and dramatically expand pathways to affordable cooperative homeownership.

“The Governor proposed a four-year extension to access the excessive 421-a tax giveaway for developers who applied before last year’s deadline. If anyone needs a property tax break, it is overtaxed outer-borough homeowners. New Yorkers deserve property tax reform that brings fairness for homeowners, simplifies our opaque tax code, and targets relief to actual affordability.

“I look forward to reviewing the Governor’s budget in detail and advocating for the investments New York City needs to flourish.”