Disbarred Attorney Arrested For Involvement In Multi-Million-Dollar Fraud Scheme

 

Gerald Shaw, a Disbarred Attorney and Convicted Felon, was the Purported “Chief Compliance Officer” of Dominion Bank and Trust Company Limited, Which Defrauded 60 Victims out of $4 Million Through an Advance Fee Scheme

 Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the arrest today of GERALD SHAW, a convicted felon and disbarred attorney, in connection with his involvement in a multi-million-dollar fraud scheme.  SHAW is accused of serving as the purported “Chief Compliance Officer” for a purported financial institution, Dominion Bank and Trust Company Limited (“Dominion Bank”), which claimed to be able to extend financing for small businesses but, in fact, operated an advance fee fraud scheme.  SHAW was arrested this morning in Claremont, California, and will be presented later today in the United States District Court for the Central District of California.

U.S. Attorney Damian Williams said: “As alleged, Gerald Shaw served as the supposed ‘Chief Compliance Officer’ for Dominion Bank, which held itself out as a legitimate financial institution that could extend or facilitate millions of dollars in financing for small businesses.  But in fact, Dominion Bank was also a fraud.  In his role, Shaw, a disbarred attorney and convicted felon, drafted financial instruments that were worthless.  Shaw knew that Dominion Bank was a fraud, but he continued to draft these financial instruments anyway.  Shaw now faces serious charges for his alleged crimes.” 

FBI Assistant Director in Charge Michael J. Driscoll said: “The defendant is alleged to have participated in a scheme which defrauded clients of millions of dollars through the promise of financing in exchange for an advance fee.  Complex financial frauds of this nature damage faith in our financial systems and institutions, and they can cause untold harm to the victims of the fraud.   The FBI is dedicated to investigating individuals who operate unscrupulous businesses and ensuring that their crimes are answered for in the criminal justice system.”

HSI Special Agent in Charge Ivan J. Arvelo said: “As Dominion Bank and Trust’s purported Chief Compliance Officer, Gerald Shaw is alleged to have participated in a conspiracy that defrauded investors of millions of dollars through the issuance of fraudulent financial instruments.  These types of crimes have devastating effects on the victims and can erode trust in the financial system.  HSI will aggressively pursue individuals and organizations that perpetrate these fraudulent schemes to bring justice to the victims and restore faith in our financial institutions.  I am especially grateful for the dedication and investigative acumen of HSI New York’s El Dorado Task Force and HSI Los Angeles for their support in this investigation.”

According to the allegations in the Complaint:[1]

From its formation in or about late 2015 until in or about July 2020, Dominion Bank (along with its affiliates) was a purported financial institution that claimed to be able to extend and facilitate financing for small businesses in exchange for an advanced fee or deposit.  In fact, Dominion Bank operated an advance fee fraud scheme (the “Scheme”).  As part of the fraud, Scheme members instructed victims to wire tens or hundreds of thousands of dollars to Dominion Bank as a deposit or servicing fee for future financing or credit based on representations that Dominion Bank could provide such services.  Those representations were false.  In fact, no financing existed; the victims did not receive the promised credit; and the victims were generally unable to get their money back, as Dominion Bank typically did not return funds to victims but, instead, kept victims’ money and, in some instances, even responded to refund requests by sending invoices for additional amounts.  Dominion Bank defrauded at least approximately 60 victims in total (individual and corporate) out of more than approximately $4 million. 

One way that Dominion Bank defrauded victims was by issuing them worthless financial instruments — such as a standby letter of credit (“SBLC”) — in exchange for large upfront payments.  An SBLC is a legal document between a bank and its client, in which the bank vouches for the client’s creditworthiness and also becomes the guarantor, i.e., the bank promises that, if its client cannot meet its obligations, the bank will do so.  Among other things, Dominion Bank lacked the assets necessary to issue such financial instruments.  According to several victims of the Scheme, other financial institutions have described SBLCs issued by Dominion Bank as being worthless.  As one victim explained, a potential counterparty described Dominion Bank’s SBLC as a “worthless piece of paper.”  Another individual explained that a potential counterparty described Dominion Bank’s $4 million SBLC as not “worth the paper it’s printed on.”

From at least in or about October 2016 through in or about April 2020, Dominion Bank’s Chief Compliance Officer was SHAW.  In that role, SHAW’s responsibilities included drafting various documents, including SBLCs, that were sent to victims in exchange for payments from the victims.  In June 2018, SHAW sent an email to two Dominion Bank officers in which SHAW acknowledged that Dominion Bank lacked funds.  SHAW wrote that Dominion Bank was “20 weeks behind” in paying SHAW’s “$500 a week salary,” and SHAW added that, “On several occasions, I have indicated to you that I know Dominion does not have the money to pay my $500 a week [salary].”  Nonetheless, SHAW continued his involvement in the Scheme thereafter, despite his awareness that Dominion Bank was selling worthless financial instruments because it lacked the assets and ability to back up its representations.  For instance, in December 2018, SHAW was involved in Dominion Bank’s issuance or sale of an approximately $50 million financial instrument and an approximately $25 million financial instrument.  In each instance, Dominion Bank represented, as guarantor, that it had assets sufficient to cover each financial instrument when it did not.

SHAW, 75, of Claremont, California, is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carry a maximum potential prison sentence of 20 years. 

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

Mr. Williams praised the outstanding investigative work of the FBI and HSI.  He also thanked FBI Los Angeles, HSI Los Angeles, and the U.S. Attorney’s Office for the Central District of California for their assistance.

Mr. Williams also noted that the investigation is ongoing.  If you believe you have information about the defendant, this case, or if you believe you are a victim of any crimes related to Dominion Bank, please email: USANYS.DominionBankCase@usdoj.gov.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Michael D. Neff and Sheb Swett are in charge of the prosecution.

The charges in 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 Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

Statement from NYGOP Chair Ed Cox on New York's Late Budget

 

NYGOP Chair Ed Cox released the following statement in response to New York State's late budget:

"Today, New York’s late budget will extend into its third week after Governor Hochul and the Democrat leadership in the State Legislature pass yet another budget extender and send their members home for the weekend.  

"This failure of leadership clearly demonstrates that government by Three Democrats in the Room is not working for the people of New York State.  Even worse, the Democrats’ refusal to recognize the impact of their dangerous cashless bail law on the safety of our communities and their plans to supersede local control over zoning, raise property taxes by $1 billion and increase the MTA Payroll Tax are opposed by an overwhelming majority of New Yorkers.  

"Despite the Governor’s rhetoric, the Democrats’ agenda will not make our state safer, more affordable or more livable and their inability to pass an on-time state budget is further evidence of the need to restore commonsense Republican leadership to state government."

AOC Organizing Team - Join us for Earth Day in Jackson Heights!

 

Do you have plans for Earth Day? Volunteer with Team AOC this Saturday at the Open Streets: Car-Free Earth Day in Queens – an annual event to promote activism and education around climate change and more sustainable modes of transportation!

Car-Free Earth Day in Queens with Team AOC!
Saturday, April 22 from 11:30 AM - 3 PMGet more info or RSVP

We will be talking to neighbors about the Green New Deal which is a resolution Alexandria just reintroduced in Congress to create millions of high-wage, union jobs transitioning our infrastructure and economy to net-zero carbon emissions within 10 years. 

The GND also centers just, equitable systems to ensure that working-class and marginalized communities who have historically been most impacted by the climate crisis and pollution from fossil fuels are not left behind in this transition.

At the event, volunteers will also be registering voters and recruiting new volunteers for future Team AOC events. There will be environmental art activities, bike lessons, and much more!

Please RSVP now to join Team AOC at the Car-Free Earth Day in Queens to help us grow our movement!

We hope to see you there!

AOC Organizing Team

DEC AND OGS ANNOUNCE FIRST-EVER PARTICIPANTS OF NEW YORK STATE’S GREEN PURCHASING COMMUNITIES PROGRAM

 

Local Governments Commit to Purchasing More Sustainable Products and Accelerate Shift to A Green Economy

All Local Governments are Encouraged to Participate

 The New York State Department of Environmental Conservation (DEC) and Office of General Services (OGS) today announced the first members of the State’s newly launched Green Purchasing Communities program. This announcement, made during New York State's Earth Week celebration, acknowledges the city of White Plains and village of Croton-on-Hudson in Westchester County and the village of Pulaski in Oswego County for making commitments to purchase more sustainable products and support a more sustainable economy.

“Governor Kathy Hochul’s ambitious green procurement initiatives are advancing a more sustainable future for New York by involving local governments through the State’s new Green Purchasing Communities program,” said DEC Commissioner Basil Seggos. “I encourage communities across the state to follow the lead of White Plains, Croton-on-Hudson, and Pulaski and become members of the program for the benefit of our environment and to support New York’s ongoing green economic growth.”

“Under Governor Hochul’s leadership, New York State is providing our partners in local government with an easy and effective way to adopt sustainable purchasing practices,” OGS Commissioner Jeanette Moy said. “OGS applauds the communities that have become members of the Green Purchasing Communities program, and we urge others to join them and the State in supporting the green economy and creating a healthier environment for all.”

Created in 2008 and continued in 2022 by Governor Hochul’s Executive Order 22, New York State’s green procurement program features 89 green procurement specifications that agencies and authorities follow to ensure that State dollars are invested in products that have a lower environmental impact. These specifications are helping New York to meet its greenhouse gas reduction and other environmental goals by ensuring products purchased use less energy, generate less waste, and reduce exposure to hazardous substances. To build on these actions, the Governor launched the Green Purchasing Communities Program in December 2022. Administered by DEC and OGS, Green Purchasing Communities simplifies the green purchasing process for local governments and recognizes municipalities for committing to following the State’s GreenNY purchasing specifications.

To become members of the program, governing boards of participating local governments add language to municipal purchasing policies stating that they will follow the State’s 89 GreenNY Procurement Specifications. This makes it easier for participants to identify and purchase more sustainable products and services. The three initial members announced today represent an annual $24.1 million in spending on goods and services that will now be more sustainable by following the GreenNY specifications.

Any local government in New York State is eligible to participate in the program and can do so by taking two steps:

• Update their purchasing policy to require purchasers to follow the State’s GreenNY procurement specifications; and
• Submit a copy of the updated purchasing policy along with the one-page application.

More information on eligibility and the application can be found on the Green Purchasing Communities webpage.

New Yorkers can learn more about the program on the Green Purchasing Communities webpage.

Attorney General James Releases Data Security Guide to Help Businesses Better Protect Consumers' Personal Information

 

Guide Based on OAG Experience Prosecuting Data Breaches, Tips Will Help Businesses Strengthen Data Protection

 New York Attorney General Letitia James today released a guide to help businesses adopt effective data security measures to better protect New Yorkers’ personal information. The guide is drawn from the Office of the Attorney General’s (OAG) experience investigating and prosecuting businesses following cybersecurity breaches. The guide offers a series of recommendations intended to help companies prevent breaches and secure their data.

“When businesses are entrusted with sensitive customer information, they carry both a legal and moral responsibility to protect it against data breaches,” said Attorney General James. “In today’s digital world, companies cannot afford to take risks with consumers’ personal information. Businesses can and must do more to protect New Yorkers from identity theft and fraud. The security guide created by my office has recommendations to help keep New York businesses ahead of cybercriminals and better able to protect consumers’ personal and financial information.”

Cybercriminals target consumers’ personal information to make money, either through identity theft or by coercing the company to pay a ransom. One of the most sensitive pieces of information is a consumer’s social security number. With a social security number, an attacker can open financial accounts in the victim’s name and collect federal and state benefits. Last year, there were 1,876 data breach incidents reported to OAG that involved the exposure of social security numbers, affecting over 3.2 million New Yorkers.

The guide discusses some data security failures found in recent data security investigations and recommends practices business should adopt to better secure their systems, fortify their networks, and strengthen their data security measures. Some important tips from OAG's guide include:

• Maintain controls for secure authentication. For businesses that store customer information, strong authentication procedures can help ensure that only authorized individuals can access the data. Strong authentication procedures can include multi-factor authentication and password policies that require passwords to be unique and complex.
• Encrypt sensitive customer information. Encrypting sensitive information, such as social security numbers, can help protect the information from hackers who are able to overcome other defenses.
• Ensure your service providers use reasonable security measures. Businesses that allow third-party vendors to access customer information should ensure that these vendors use appropriate data security measures to safeguard the information. In most cases, this would include diligence in selecting vendors with appropriate data security programs, building security expectations into contracts, and monitoring vendors’ work to ensure compliance.
• Know where you keep consumer information. A business cannot properly protect customer information if it does not know where that information is kept. Business should maintain an asset inventory that tracks where customer information is stored.
• Guard against automated attacks. “Credential stuffing” continues to be one of the most common forms of attack on customer accounts. This type of attack typically involves repeated attempts to log in to online accounts using usernames and passwords stolen from other online services. That’s why businesses that maintain online accounts for their customers should have a data security program in place that includes effective safeguards for protecting customers from credential stuffing attacks. In January 2022, OAG released a business guide for credential stuffing attacks that detailed four areas in which safeguards should be maintained, and specific safeguards that have been found to be effective.
• Notify consumers quickly and accurately of a data breach. If a business experiences a data breach, it is crucial that customers are informed in a timely and accurate way so they can take steps to protect themselves. When businesses instead issue misleading statements downplaying the scope or severity of an attack, it can give customers a false sense of security and violate New York law.

Attorney General James has taken several actions to hold companies accountable for having poor cybersecurity. In December 2022, Attorney General James secured $200,000 from a student cap and gown producer, Herff Jones, for failing to protect consumers’ personal information. In October 2022, Attorney General James announced a $1.2 million agreement with the owner of SHEIN and Zoetop for failing to properly handle a data breach that compromised the personal information of millions of consumers nationwide. In June 2022, Attorney General James secured $400,000 from Wegmans and required the retailer to improve data storage security after a data breach exposed consumers’ personal information. In March 2022, Attorney General James issued a consumer alert advising T-Mobile customers to take appropriate steps to protect their personal information following a data breach. 

This guide was issued by, and the investigations cited were conducted by, the Bureau of Internet and Technology.

NYPD DETECTIVE INDICTED FOR ASSAULTING SUSPECT DURING APPREHENSION ON BRONX STREET

 

 Bronx District Attorney Darcel D. Clark today announced that an NYPD Detective has been indicted for Assault and Official Misconduct for allegedly punching a suspect and slamming his head into the ground as the suspect was being handcuffed by police.

 District Attorney Clark said, “The defendant allegedly used excessive force after the suspect was handcuffed and on the ground. The incident was captured on video by a surveillance camera.”

 District Attorney Clark said the defendant, Jorge Mergeche, 39, who is assigned to Bronx Homicide, was arraigned today on an indictment charging second-degree Assault, third-degree Assault and Official Misconduct before Bronx Supreme Court Justice Guy Mitchell. He is due back in court on July 11, 2023.

 According to the investigation, on April 2, 2022, at approximately 1:35 P.M., NYPD Police Officers from the 43rd Precinct were pursuing a vehicle. Detective Mergeche and another detective were in the vicinity on an unrelated matter and joined the pursuit. The driver of the vehicle, Rafael Saavedra, ultimately crashed into a truck on College Avenue, exited the vehicle with his hands in the air and was taken to the ground by a police officer. During and after the handcuffing of Saavedra, the defendant allegedly slammed Saavedra’s head into the pavement multiple times and punched him in the head and face multiple times, and then kicked Saavedra in the back of the head using a knee. Saavedra suffered swelling and abrasions to his face and broken teeth, and received medical treatment at a local hospital.

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

Governor Hochul Announces Completion of First Municipal Solar-Plus-Storage Project on Long Island

 

Clean Renewable Solar Energy Generation to Make Town of East Hampton’s Parks Department Building the First Net Zero Building for Electricity, Providing Energy Cost Savings

Project Offsets Carbon Emissions Helping New York State and East Hampton Town Advance Aggressive Solar and Energy Storage Goals

View Drone Photos Here and Here

  Governor Kathy Hochul today announced the completion of the first solar-plus-storage project by a municipality on Long Island, now operating in the Town of East Hampton. The rooftop array makes the Parks Department building at the Town Hall campus the first building in the town to achieve the goal of net zero carbon emissions from electricity generation. The project, developed with the New York Power Authority, supports New York State’s goal to procure 70 percent of its electricity from renewable energy by 2030, and the Town of East Hampton’s goal of community-wide renewable energy only in all sectors, also by 2030.

“Solar power is a key element in New York's push to achieve a zero-emissions electricity system and achieve our nation-leading climate goals,” Governor Hochul said. “With the completion of this solar-plus-storage project, the Town of East Hampton is the first municipality on Long Island to commit to a solution that integrates solar into government operations. We will continue to make bold investments in clean energy that create jobs, save taxpayer money, and build a greener future for all New Yorkers."

The 165-panel system is tied directly into LIPA's distribution grid and will provide about 90 megawatt hours of energy annually. In the first year, it will offset nearly 110,000 pounds of carbon dioxide, which is equivalent to the carbon dioxide emissions from more than 125,000 miles driven by an average passenger vehicle. The 75-kilowatt solar PV (photovoltaic) system will generate clean, renewable power and charge a 137-kilowatt hour battery. It is expected that 100 percent of the energy costs of the building will be offset with credits from the energy produced by the solar PV system. Any additional energy credits will be allocated to another building on the Town Hall campus.