Recent Reporting on COVID Supply Auctions Included Significant Inaccuracies, Lacked Context

 

Auctions Featured Non-Medical Grade Items Purchased for 80% Less than Reported

The NYC Department of Citywide Administrative Services (DCAS) today issued the following statement on inaccurate reporting by news outlet The City on the City of New York’s auctions of surplus non-medical grade supplies originally purchased for COVID-19 response efforts.    “Recent reporting indicated that $224.5 million worth of COVID supplies were auctioned by the city for pennies on the dollar. After a thorough review, we determined these numbers were inaccurately calculated by a reporter who refused to wait for a proper calculation by DCAS. After the analysis was completed, we took this information to the reporter who refused to make changes to his story. In reality, the items sold at auction were non-medical grade and many items up for auction were nearing expiration dates. To be clear, this distorted reporting did a disservice to the facts and the dedicated public servants who succeeded in obtaining emergency supplies amidst a once-in-a-century pandemic.” - Nick Benson, DCAS Executive Director of Communications and Public Affairs  The Facts: ·     The items sold at auction were originally purchased for $42,421,625, just 18.9% of the $224,504,000 figure the reporter inaccurately claimed.   ·     The items sold at auction were non-medical grade. When medical-grade supplies were difficult to come by amidst collapsing supply chains in early 2020, some non-medical grade supplies were purchased as a stop-gap measure and held in reserves as supply chain issues resolved.   ·     The New York City Department of Health & Mental Hygiene, NYC Health + Hospitals, and others advised that these non-medical grade supplies are no longer needed with medical-grade supplies now widely available.   ·     Some of the items up for auction were nearing expiration dates and the only alternative to donating or auctioning items was to destroy them. Over 17 million items were previously donated to Ukraine, Indonesia, Ghana, Haiti, South Africa, and more than two dozen local community-based organizations/non-profits to support others in need and avoid waste. Some items that haven’t been donated have been placed for auction to recover as much revenue as possible for taxpayers. Because the global COVID supply market is flooded with excess supplies being sold by governments all over the world, sale prices are a fraction of what governments had to pay at the beginning of the pandemic amidst extremely limited supplies and failed leadership at the federal level.    ·     If the City opted not to donate or auction non-expiring items, it would have to pay to warehouse non-medical grade items that medical professionals advised are no longer needed. About the NYC Department of Citywide Administrative Services   The NYC Department of Citywide Administrative Services (DCAS) makes city government work for all New Yorkers. Our commitment to equity, effectiveness, and sustainability guides our work providing City agencies with the resources and support needed to succeed, including:  ·     Recruiting, hiring, and training City employees. ·     Managing 55 public buildings. ·     Acquiring, selling, and leasing City property. ·     Purchasing over $1 billion in goods and services for City agencies. ·     Overseeing the greenest municipal vehicle fleet in the country. ·     Leading the City’s efforts to reduce carbon emissions from government operations.

NYC Comptroller, Public Advocate, Council Members, Advocates Rally for New Vision for Housing

Ahead of City Council oversight hearing, legislation sponsors, NYC Community Land Initiative, Housing Justice For All, and non-profit affordable housing developers made the case for transformative social housing bills

New York City Comptroller Brad Lander, Housing & Buildings Chair Pierina Sanchez, Public Advocate Jumaane Williams, Council legislative sponsors, and Progressive Caucus members rallied with the New York City Community Land Initiative, Housing Justice for All, non-profit affordable housing developers, tenant leaders, and advocates from across the city prior to a NYC Council hearing to support of a transformative package of social housing bills that provide the framework for a new vision for housing in New York City.  

“New market rate development alone will not solve the affordability crisis. With New York City’s median asking rents nearing $3,500 a month, new supply will do little to help homeless families move into affordable homes. Developing a robust social housing sector in New York City, in part through the passage of the bills being heard today, is integral to the future of our city. Social housing centers permanent affordability, community control, and social equity,” said Comptroller Brad Lander. 

“In the face of a housing crisis, where 53% of New Yorkers are rent burdened, where eviction rates continue to soar, and where the most vulnerable New Yorkers remain at risk of losing their homes, the call for a new way to produce and govern housing is critical to turning the tide on this crisis. Approaches from our Governor and Mayor prioritize reducing red tape and enabling market rate production to stem the housing crisis but this is not enough. We need a ‘yes and’ approach. Yes to increasing production and making it easier to build, the “and,” however, is missing, and this is where social housing comes in. Today we will hear a number of bills that aim to expand current housing policy in a manner that builds intergenerational wealth for Black and Brown families, includes solutions for our most vulnerable, expands equity within housing and ultimately, prioritizes communities over profit. I am proud to be in coalition with every day New Yorkers, advocates and elected officials to shepherd this highly-anticipated and innovative shift in how we address our housing crisis,” said Council Member Pierina Sanchez, Chair of Housing and Buildings Committee.

“Now is the time to be talking about social housing. As landlords and corporations continue to place profits over people and even their own properties, it is time to move to create alternatives to this private, corporate ownership model. Housing owned by communities of tenants, rather than corporations, is the path forward. While investing to reverse decades of decline in New York’s public housing, the state and city should also be making efforts to acquire, preserve, and develop properties that can be owned and managed through community land trusts, occupied by tenants across the income spectrum. I’m glad that the Council is convening today’s dialogue and look forward to continuing the exploration of how to make these systems a reality in New York,” said Public Advocate Jumaane Williams.

“The New York City Community Land Initiative (NYCCLI) urges the City Council to swiftly pass the Community Land Act to create and expand permanently affordable housing and community control of land,” said Elise Goldin of New Economy Project, which coordinates NYCCLI. “This groundbreaking package of bills will give community groups and residents in Black, brown, and immigrant neighborhoods new tools to keep people in their homes, combat speculation, and collectively ensure the long-term stability of their neighborhoods.” 

The seven bills and resolutions heard by the Council’s Housing and Buildings Committee on Thursday would pave the way for the expansion of social housing in New York City. Int. 0714 sponsored by Council Member Gale Brewer (and previously introduced by Comptroller Lander) would establish a New York City Land Bank, which could acquire under-utilized land and property, rehabilitate and transfer it to Community Land Trusts (CLTs) and non-profit organizations. The Public Disposition bill (Int. 0637 sponsored by Council Member Lincoln Restler and, in previous sessions, by Comptroller Lander) ensures that public land is prioritized for non-profit developers and CLTs, and the Community Opportunity to Purchase Act (Int. 0196 sponsored by Council Member Carlina Rivera) gives qualified entities a first opportunity to purchase certain residential buildings when offered for sale. The hearing will also include a social housing development agency feasibility report by Council Member Sandy Nurse (Int. 0932).  

The coalition also supports the resolutions to pass state legislation to strengthen social housing in New York City. This includes the Tenant Opportunity to Purchase Act (TOPA) to provide tenants with the opportunity to purchase their own buildings at sale, as well as the Housing Access Voucher Program (HAVP) and Good Cause Eviction, which would provide immediate protections and stability to tenants at risk of eviction, either due to an unconscionable rent hike or a loss of income. These measures also create additional opportunities for the expansion of social housing through tenant organizing and additional funding for operational subsidies.  

The advocates at the rally reflect the diversity of the housing movement – representatives from Community Land Trusts, not-for-profit housing developers, shared equity co-ops, public housing, and advocates fighting for stronger tenant protections. The group is calling on the City to fight for a social housing model that centers permanent affordability, prioritizes community ownership and democratic control, and permanently insulates units from the speculative real estate marketplace.  

Following today’s hearing, the group will continue to collaborate across a broad coalition into the budget and legislative session with a vision to fund and expand New York City’s social housing supply.

Video of the livestream will be available on the Comptroller’s YouTube.

Official photos are available on Flickr.

“Social housing is a cheaper, faster, and more effective way of supplying housing for working families than any strategy that leans on private developers. As New Yorkers face a spiraling housing crisis – prompted in part by years of relying on the market to supply affordable housing that never materialized – we need to turn the page and build a real vision for social housing across New York. We stand in solidarity with electeds who are taking a first step toward that vision today by calling for the passage of Good Cause eviction protections this year, and we look forward to a future where all New Yorkers have access to safe, permanent and affordable housing,” said Cea Weaver, Campaign Coordinator for Housing Justice for All. 

“Chhaya CDC has been organizing South Asian and Indo Caribbean tenants for over two decades and we are excited to finally see legislation that will pave a new path for the housing movement in NYC. This is a feat that has been a challenge in a city overloaded with predatory speculation and everyday New Yorkers deserve access to deeply affordable housing. We hope and trust that the city council will support and pass the Community Land Act as an important step towards resolving the current housing crisis,” said Farzana Linda, Chhaya CDC, Associate Director of Advocacy & Organizing.  

“New York City needs every tool available to promote social housing, public and community stewardship, and tenants’ rights,” said David R. Jones, President and CEO of the Community Service Society of New York. “The Community Land Act and all of the bills being heard by the City Council today deserve the full and enthusiastic support of all New York elected officials. Social housing is the way out of our city’s perpetual housing crisis.” 

 

“ANHD’s members have a long history of developing deeply, permanently affordable housing. We are glad to see the council move legislation forward that supports and enables responsible community stewardship of land. These bills will help to expand the development and preservation of the kind of affordable housing New York City really needs,” said Will Depoo, Senior Campaign Organizer at the Association for Neighborhood and Housing Development (ANHD).  

“The transformative proposed legislation including Public Land for Public Good (Int 637), COPA (Int 196), and TOPA (Reso 38) would provide non-profit organizations like Brooklyn Level Up (BKLVLUP) more tools in our toolbox for fighting displacement and building more affordable spaces for our neighbors to thrive. BKLVLUP stands alongside our powerful, civically engaged neighbors who have uplifted our communities despite decades of public and private divestment and threats posed by unregulated speculative development. The legislation heard on Thursday will help combat the negative impacts of speculative development in Black communities by nourishing more equitable development. Community Land Trusts like BKLVLUP are ready and able to receive properties and stabilize them while keeping families in their homes and businesses for the long term,” said Rachel Goodfriend of Brooklyn Level Up.   

Nigerian Man Sentenced To Five Years In Prison For Multimillion Dollar Fraud Scheme In Which He Impersonated Procurement Officials Of U.S. State And Local Governments And Educational Institutions

 Damian Williams, the United States Attorney for the Southern District of New York, announced that FATADE IDOWU OLAMILEKAN, a/k/a “Fatade Olamilekan Idowu,” a/k/a “Olamilekan Idowu Fatade,” a/k/a “Idowu Fatade,” a citizen of Nigeria, was sentenced to five years in prison in connection with a scheme to fraudulently obtain and attempt to obtain millions of dollars of medical equipment, laboratory products, computer equipment and hardware, and other merchandise from suppliers of such merchandise across the United States by impersonating, among other individuals, procurement officials of U.S. state and local governments and educational institutions.  OLAMILEKAN was arrested in Nigeria on October 1, 2021, and extradited from Nigeria to the United States on July 14, 2022, and he has been detained since his arrest.  The defendant previously pled guilty to wire fraud before U.S. District Judge Valerie E. Caproni, who imposed the sentence.

U.S. Attorney Damian Williams said:  “Fatade Idowu Olamilekan carried out a sprawling criminal scheme from Nigeria to fraudulently obtain medical equipment and other merchandise by impersonating government officials, including the Chief Procurement Officer for New York.  Olamilekan will now face substantial prison time for his criminal conduct.  This case demonstrates that we will go to great lengths to pursue defendants located abroad who seek to defraud American businesses and individuals.”

According to the allegations in the Indictment and other court documents:

From at least in or about 2018 through at least on or about September 14, 2020, OLAMILEKAN engaged in a scheme to fraudulently obtain and attempt to obtain millions of dollars of medical equipment, laboratory products, computer equipment and hardware, and other merchandise from suppliers of such merchandise across the United States by impersonating, among other individuals, procurement officials of U.S. state and local governments and educational institutions.  In particular, during the COVID-19 pandemic, OLAMILEKAN impersonated the Chief Procurement Officer of New York State in an effort to fraudulently obtain medical equipment, including defibrillators.  OLAMILEKAN engaged in the following conduct to carry out his criminal scheme:

First, OLAMILEKAN engaged in extensive research to identify specific procurement officials of U.S. state and local governments and educational institutions to impersonate and U.S. suppliers of medical, laboratory, and computer equipment to target as part of the scheme.  This research included obtaining information about the current suppliers to the state and local governments and educational institutions OLAMILEKAN sought to impersonate and targeting those suppliers in order to avoid arousing suspicion.  For example, OLAMILEKAN appears to have specifically targeted a medical supplier that was already providing medical equipment to New York State in or to avoid suspicion when OLAMILEKAN, who was impersonating the Chief Procurement Officer of New York State, contacted the supplier to obtain medical equipment.

Second, after OLAMILEKAN identified procurement officials to impersonate, he used aliases and a Lithuanian web hosting company to register email accounts with domains that had slight variations from the legitimate email accounts used by procurement officials in order to “spoof” or impersonate those officials’ email accounts (the “spoofed emailed accounts”).  The spoofed email accounts used by OLAMILEKAN usually had the same username as the procurement official’s email account but added an extra letter or common domain name to the domain of the email account.  These spoofed email accounts were therefore specifically designed to trick suppliers to impersonated procurement officials into thinking the spoofed email accounts were authentic.  In total, OLAMILEKAN registered and used spoofed email accounts impersonating at least (i) eight different procurement officials of state and local governments in California, Illinois, Minnesota, New York, North Carolina, Pennsylvania, Texas, and Vermont; and (ii) three procurement officials of educational institutions located in Georgia and New York.

Third, OLAMILEKAN used the spoofed email accounts to send emails impersonating the procurement official and seeking quotes for medical, laboratory, and computer equipment from targeted suppliers.  These emails typically indicated that the payment terms would be “net 30 days,” which is a standard term of trade credit for government and educational entities that only requires payment for the goods within 30 days of delivery.  OLAMILEKAN therefore impersonated the identities of procurement officials of government entities and educational institutions in order to exploit this industry standard and fraudulently obtain equipment without providing any advance payment information or deposit prior to delivery of the equipment.

Finally, once OLAMILEKAN received a response from a targeted supplier, he provided the supplier with a purchase order containing the forged signature of the impersonated procurement official and an address for a warehouse located in the United States for delivery and storage of the equipment purchased.  Once the purchased items shipped to the warehouse provided by OLAMILEKAN, he typically had the warehouse re-ship the items to another warehouse and, ultimately, from the United States to locations in Australia, the United Kingdom, and/or Nigeria.  OLAMILEKAN also coordinated with the warehouses receiving the shipments from the targeted suppliers using the stolen identity of at least one U.S. resident, thereby further concealing his own identity and avoiding detection of his criminal activity.  Because payment was not due to the suppliers until 30 days after delivery of the equipment, OLAMILEKAN was able to take possession of the equipment prior to detection of the fraud, which typically occurred after payment was not received by the supplier within the 30-day period.

In addition to the prison sentence, OLAMILEKAN, 41, of Lagos, Nigeria, was sentenced to three years of supervised release and ordered to pay restitution and forfeiture of $306,852.18.

Mr. Williams praised the investigative work of the Federal Bureau of Investigation.  Mr. Williams also thanked Nigeria’s Federal Ministry of Justice, Nigeria’s Economic and Financial Crimes Commission (“EFCC”), the Central Authority Unit of Nigeria’s Ministry of Justice, and the Attorney General of the Federal Republic of Nigeria for their assistance in the investigation.  The U.S. Department of Justice’s Office of International Affairs of the Department’s Criminal Division provided significant assistance in securing the defendant’s extradition from Nigeria. 

Governor Hochul Urges Freight Rail Industry, Congress, and Federal Regulators to Take Additional Actions to Prevent Freight Rail Hazmat Disasters in the Wake of East Palestine Toxic Train Derailment

 

Actions Include Expediting the Implementation of Safer Tank Cars for Hazardous Materials

Modernizing Braking Regulations and Systems to Prevent Potential Collisions

Requiring Rail Roads to Provide Advance Notice to State Emergency Response Teams of Hazard Cars Moving Through States

Expanding Access and Funding to Training and Preparedness Planning for Freight Rail Hazmat Events

 Governor Kathy Hochul today urged the freight rail industry, Congress, and federal regulators to take additional actions to prevent freight rail hazmat disasters in the wake of the toxic train derailment in East Palestine, Ohio that has threatened the health and safety of residents. The comprehensive actions outlined by the Governor will help create a safer hazardous material transportation industry, while increasing state emergency response capabilities through improved federal oversight.

"The health and safety of New York residents remains my administration's top priority. The train derailment that took place in East Palestine, Ohio emphasizes the need for preventative regulations and the adequate prepositioning of emergency response resources," Governor Hochul said. "New York remains committed to leading on freight rail hazard preparedness and response, and I'm calling on our partners in the freight rail industry, Congress, and federal regulators to curb future disasters by modernizing transportation methods for hazardous materials and strengthening resources for hazard preparedness planning and response."

Specifically, Governor Hochul called on the freight rail industry, Congress, and federal regulators to take the following actions:

• Expedite the phase-in of safer tank cars (DOT 117's) for hazardous materials in advance of the Congressionally mandated 2029 deadline.
• Modernize braking regulations and increase the use of electronically controlled pneumatic brakes (ECP) to prevent potential rail derailments.
• Require rail roads to provide advance notification to State emergency response teams of hazardous cars moving through their state.
• Expand state and local grants specifically for hazmat preparedness and response planning.

New York State Department of Environmental Conservation Commissioner Basil Seggos said, "Through Governor Hochul's leadership, New Yorkers should know that the State is ready to respond whenever emergencies occur. The actions outlined by the Governor today will ensure the federal government is prioritizing rail safety improvements that will better protect our residents and ensure the nation has the most stringent rail transportation oversight. DEC looks forward to working with our federal, state, and local partners as we review and build upon our nation-leading response capabilities."

New York State remains a leader in freight rail hazard preparedness and response. In the aftermath of the Lac-Megantic crash in 2013, New York State initiated a comprehensive response planning and prepositioned response assets to prepare for a freight rail hazmat disaster, focusing specifically on crude oil. Through a multi-agency effort, with the Department of Environmental Conservation in the lead, New York State created Geographic Response Plans (GRPs) that guide local, county, state, federal and industry response operations in the event of an emergency - serving as a model for the rest of the nation. While New York continues to lead the nation in freight rail hazard preparedness, these additional measures the federal government and the rail industry can take to prevent disasters like the one in Ohio and ensure our response capabilities are sound.

Permits Filed For 115 W 190th Street In Fordham Manor, The Bronx

 

Permits have been filed for a four-story mixed-use building at 115 W 190th Street in Fordham Manor, The Bronx. Located between Webb Avenue and University Avenue, the lot is near the Fordham Road subway station, serviced by the 4 train. Israel Frankel of Isra Holdings is listed as the owner behind the applications.

The proposed 54-foot-tall development will yield 26,241 square feet, with 25,346 square feet designated for residential space and 895 square feet for community facility space. The building will have 37 residences, most likely rentals based on the average unit scope of 685 square feet. The steel-based structure will also have a cellar, a 32-foot-long rear yard, 13 open parking spaces, and six enclosed parking spaces.

Boaz M. Golani Architect is listed as the architect of record.

Bronx Gang Leader Sentenced To 35 Years In Prison For 2020 Murder And Other Crimes

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that ANDREW DONE, a/k/a “Caballo,” the leader of the “Shooting Boys” gang, was sentenced today to 35 years in prison for the November 5, 2020, murder of Angel Barreiro in the Bronx and other racketeering offenses.  DONE previously pled guilty before United States District Judge Jed S. Rakoff, who imposed the sentence.

U.S. Attorney Damian Williams said: “Andrew Done, dissatisfied with his membership in the Trinitarios gang, decided to perpetuate gang violence in New York City by breaking off from the Trinitarios and starting his own gang.  His decision created a rivalry between his new gang and the Trinitarios, which led to increased acts of violence, multiple shootings, and the tragic murder of Angel Barreiro.  Done’s sentence should highlight that anyone who exacerbates violent crime in our community will face a lengthy prison sentence.”

According to the Indictment, other documents filed in federal court, and statements made in public court proceedings:

The “Shooting Boys” is a criminal organization based in the University Heights section of the Bronx.  DONE founded the Shooting Boys in or about 2017.  DONE and his followers were originally associated with the “Sunset” chapter of the Trinitarios gang, but DONE decided to break off from the Trinitarios and form his own gang.  DONE then convinced other disaffected Trinitarios to join the Shooting Boys as well.  

Under DONE’s leadership, the Shooting Boys sold crack, cocaine, heroin, and marijuana throughout the Bronx and engaged in a back-and-forth series of shootings with the Trinitarios and other associated gangs.  The rivalry between the Shooting Boys and the Trinitarios led to multiple non-fatal shootings and other acts of violence against rival gang members and innocent bystanders.  It culminated in the murder of Angel Barreiro on November 5, 2020.

On that date, Barreiro was sitting in the driver’s seat of his parked car opposite 1365 Cromwell Avenue in the Bronx.  DONE approached Barreiro, removed a firearm from his jacket, and shot Barreiro multiple times through the car’s passenger side window.  DONE then walked over to the driver’s side of the car and shot Barreiro again.  DONE fled to the Dominican Republic shortly after the murder and was apprehended by the United States Marshals Service in April 2022.

In addition to his prison term, DONE, 24, of the Bronx, New York, was sentenced to five years of supervised release. 

DONE was initially charged by indictment in March 2022 with nine other individuals who were members or associates of the Shooting Boys gang.  The other nine defendants have all pled guilty to various racketeering related charges and have either been sentenced to prison terms or are awaiting sentencing.

Mr. Williams praised the outstanding investigative work of the New York City Police Department and Homeland Security Investigations.    

Attorney General James Sues Cryptocurrency Platform for Failing to Register in New York

 

CoinEx Allowed Investors in New York to Buy and Sell Crypto without Registering with the State

New York Attorney General Letitia James sued a cryptocurrency platform, COINEX (CoinEx), for failing to register as a securities and commodities broker-dealer and for falsely representing itself as a crypto exchange. The Office of the Attorney General (OAG) was able to buy and sell cryptocurrencies on CoinEx in New York, although the company is unregistered in the state, which is a violation of New York’s Martin Act. Through this enforcement action, Attorney General James seeks to permanently stop CoinEx from operating in New York through its website and mobile apps.

“Our laws are designed to protect New Yorkers, and when companies ignore them, they put residents, investors, and businesses at risk,” said Attorney General James. “The days of crypto companies like CoinEx acting like the rules do not apply to them are over. My office will continue to protect New York investors and ensure our state’s laws are followed.”

CoinEx is a virtual currency trading platform that allows investors to buy and sell cryptocurrency through its website and app. On its platform, CoinEx investors can buy and sell popular virtual currencies, including AMP, LUNA, LBC, and $RLY, which are securities and commodities. New York law requires securities and commodities brokers to register with the state, which CoinEx failed to do. The OAG was able to create an account with CoinEx using a computer with a New York based IP address to buy and sell digital tokens, which CoinEx charged a fee for.

In addition, CoinEx claimed to be an exchange, but is not registered with the Securities and Exchange Commission (SEC) as a national securities exchange or appropriately designated by the Commodity Futures Trading Commission (CFTC) as is required under New York law. CoinEx also failed to comply with a subpoena issued by OAG to provide more information about its digital asset trading activities in the state.

Through her lawsuit, Attorney General James seeks a court order that stops CoinEx from misrepresenting that it is an exchange, prevents the company from operating in New York, and directs CoinEx to implement geo-blocking based on IP addresses and GPS location to prevent access to CoinEx’s mobile app, website, and services from New York.

This action continues Attorney General James’ efforts to enforce New York laws in the cryptocurrency industry and protect New York investors. Last month, Attorney General James and a multistate coalition recovered $24 million from the cryptocurrency platform Nexo for operating illegally. Also in January, Attorney General James sued the former CEO of Celsius for defrauding investors and concealing the company’s dire financial condition. In June 2022, Attorney General James warned New Yorkers of the dangerous risks of investing in cryptocurrencies after the market reached then-record lows. Also in June, Attorney General James reached a nearly $1 million settlement with crypto platform BlockFi Lending LLC for offering unregistered securities. Last March, Attorney General James issued a taxpayer notice to virtual currency investors and their tax advisors to accurately declare and pay taxes on their virtual investments. In October 2021, Attorney General James directed unregistered crypto lending platforms to cease operations for not fulfilling their legal obligations.

Attorney General James once again urges New Yorkers who have been affected by deceptive conduct in the virtual assets market to report these issues to OAG. Attorney General James also encourages workers in the cryptocurrency industry who may have witnessed misconduct or fraud to file a whistleblower complaint with her office, which can be done anonymously.

Recidivist Fraudster Pleads Guilty To Fraud, Identity Theft, And Making False Statements In Connection With Andrews Air Force Base Construction Contract

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced that RAYMOND WHITE, a/k/a “John Raymond Anthony White,” a/k/a “Raymond Alexander White,” pled guilty yesterday to a scheme in which he defrauded the government by submitting fraudulent documents and false information about himself, his company’s business, and his company’s finances in order to obtain a $4.8 million contract to build a munitions load crew training facility at Joint Base Andrews, Maryland (“Andrews Air Force Base”), and to obtain a bond guarantee from the United States Small Business Administration (“SBA”) in connection with the contract.  WHITE also committed aggravated identity theft by using another person’s signature and Social Security number.  WHITE pled guilty before United States District Judge Edgardo Ramos. 

U.S. Attorney Damian Williams said: “Despite a prior conviction by this Office, Raymond White continued to lie and fabricate information in order to line his own pockets.  This time, White defrauded the government, submitting fraudulent documents and false information to obtain a nearly $5 million construction contract and to obtain a bond guarantee from the SBA in connection with the contract.  This Office will continue to prosecute recidivist fraudsters until the message is clear and they have learned their lesson: committing financial fraud will lead to significant penalties.” 

According to the Complaint, Superseding Indictment, public court filings, and statements made in court:

From in or about May 2019 through in or about September 2020, WHITE submitted a bid and related documents to the District of Columbia Army National Guard (“National Guard”) on a contract (the “Contract”) to build a munitions load crew training facility at Andrews Air Force Base.  Prior to obtaining the Contract, WHITE provided the National Guard with fraudulent documents about himself and his company, Kochendorfer Group USA Inc., (“Kochendorfer”).  WHITE submitted similar information to the SBA to obtain a guarantee from the SBA that was a requirement for obtaining the Contract.

The fraudulent documents that WHITE submitted to the National Guard and the SBA included a doctored bank account statement, fake reports from an accounting firm that WHITE had invented, and falsified financials.  These documents purported to show that Kochendorfer had significant cash assets.  In fact, Kochendorfer had virtually no money.  WHITE also submitted a false resume and firm dossier, which described fictitious construction jobs and provided fake references.  WHITE claimed, among other things, that he had overseen the construction of a World Cup soccer stadium in Brazil from 2012 to 2014 when in fact, WHITE was in federal prison during that time frame, serving a prison term on a prior fraud conviction.  WHITE also lied to the SBA by denying that he had any prior criminal convictions.  In furtherance of this fraud on the National Guard and the SBA, WHITE forged the signature of an attorney on a Kochendorfer letter and used another individual’s Social Security number on his SBA guarantee application. 

Based on WHITE’s misrepresentations, the National Guard awarded the Contract to Kochendorfer and the SBA issued a guarantee.  The National Guard terminated the Contract after discovering WHITE’s fraud, and no construction work was ever performed on the site.  As a result of the Contract’s termination, the SBA has fulfilled multiple claims pursuant to the guarantee provided by the SBA.

In 2011, WHITE was convicted following a jury trial in the U.S. District Court for the Southern District of New York under the name “John Raymond Anthony White” for engaging in major fraud, mail fraud, false statements, and witness tampering.  United States v. John Raymond Anthony White, S1 10 Cr. 516 (SHS).  WHITE’s prior conviction arose out of his fraud in the procurement of four government contracts, for a scheme in which he falsely represented that he was a disabled veteran.  As a result of his 2011 federal conviction, WHITE and his prior construction company, Mitsubishi Construction Corporation, were excluded from government contracting for a period of five years.  The name that WHITE used in connection with the Contract — Raymond White — was different from the name he had used in connection with the government contracts at issue in his prior federal conviction. 

WHITE, 58, of New York, New York, pled guilty to one count of major fraud against the United States, which carries a maximum sentence of 10 years in prison; two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison; two counts of false statements and false writings, each of which carries a maximum sentence of five years in prison; and one count of aggravated identity theft, which carries a consecutive mandatory minimum sentence of two years in prison. 

The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.  Sentencing is scheduled for May 23, 2023, at 11:00 a.m.

Mr. Williams praised the work of the Air Force Office of Procurement Fraud Investigations and Office of Special Investigations and the Army Major Procurement Fraud Unit in this investigation.