Defendants Allegedly Conspired to Use Straw Donors to Bilk Taxpayers, Obtain More New York City Matching Funds
Manhattan District Attorney Alvin L. Bragg, Jr., today announced the indictments of DWAYNE MONTGOMERY, 64, SHAMSUDDIN RIZA, 70, MILLICENT REDICK, 77, RONALD PEEK, 65, YAHYA MUSHTAQ, 28, SHAHID MUSHTAQ, 29, and ECOSAFETY CONSULTANTS INC. for conspiring to use a straw donor scheme to illegally generate matching funds from the New York City Campaign Finance Board during the 2021 mayoral election.
The defendants are charged in a New York State Supreme Court indictment with Conspiracy in the Fifth Degree, Attempted Grand Larceny in the Third Degree, Offering a False Instrument for Filing in the First Degree, and Attempted Offering A False Instrument for Filing in the First Degree for their roles in this campaign finance scheme.[1]
“We allege a deliberate scheme to game the system in a blatant attempt to gain power. The indictment charges the defendants with subverting campaign finance laws by improperly structuring campaign contributions,” said District Attorney Bragg. “The New York City Campaign Finance Board program is meant to support our democracy and amplify the voices of New York City voters. When the integrity of that program is corrupted, all New Yorkers suffer.”
“By using U.S. Postal Money Orders in a scheme to commit violations of campaign finance law, these individuals compromised the public’s trust in a fair election process. Postal Inspectors will not tolerate individuals using postal products in the furtherance of their crimes. We will work tirelessly with our law enforcement partners to ensure criminals who use the U.S. Mail and postal products to break campaign finance and election related laws are brought to justice,” said Daniel B. Brubaker, New York Division Inspector in Charge for the U.S. Postal Inspection Service.
“New York City’s public matching funds program makes our local elections more open, transparent, and equitable. The work that the Manhattan District Attorney’s Office is doing to protect the matching funds program from fraud and abuse is fundamental to its continued success,” said Tim Hunter, Press Secretary for the NYC Campaign Finance Board. “Today’s announcement is a reminder that rigorous audit and oversight processes like we have in New York City safeguard the integrity of our local democracy by helping ensure that criminal schemes like the one alleged today are uncovered.”
According to court documents and statements made on the record, the defendants’ scheme consisted of illegally structuring campaign contributions to maximize the amount of additional money gained through the New York City Matching Funds Program for the Eric Adams campaign for Mayor.
During the 2021 mayoral race, the first $250 any New York City resident contributed to candidates participating in the Matching Funds Program were matched eight-to-one. That meant that a $250 individual contribution to the campaign could be matched with an additional $2,000 in public funds from the New York City Campaign Finance Board.
The maximum contribution allowed by an individual was $2,000. For those who own a business that vies for city contracts, the maximum was $400.
MONTGOMERY and RIZA, who are relatives, sought influence for themselves and their associates — several of whom owned companies that hoped to do business with the city. They organized fundraisers and facilitated a straw donor scheme for unlawful campaign contributions by using multiple donors to disguise individual campaign contributions above the limit. Straw donors — people who receive money from another entity to contribute to a campaign in their own name — were recruited for this scheme.
On August 20, 2020, MONTGOMERY held a virtual fundraiser for the Adams campaign via Zoom. In the weeks leading up to the fundraiser, from August 6 to August 20, 2020, MONTGOMERY recruited straw donors to make contributions in their names. He then reimbursed the donors. Each straw donor falsely certified that they were the source of the contributed funds and that they were not reimbursed.
MONTGOMERY and an associate regularly updated a spreadsheet with all of the contributions associated with the fundraiser and the amount of matching funds they believed they had generated for the campaign. They planned to use the contributions as leverage in potential future requests of the Mayor’s Office.
MONTGOMERY and RIZA organized a fundraiser at a restaurant in Sunnyside, Queens on August 25, 2021. Throughout July and August 2021, in the lead-up to the fundraiser, RIZA approached donors and shared information about getting around contribution limits by using the straw donor scheme. RIZA contributed beyond the $2,000 personal limit by purchasing money orders and having friends and family members falsify campaign contribution cards on which they identified themselves as the source of the funds.
On July 30, 2021, RIZA, who had already contributed $250 during the virtual fundraiser in August 2020, purchased eight money orders at four post office locations. Each of the $250 money orders was submitted, along with a falsified campaign contribution card, in the names of friends and family members. RIZA told the donors that he would make contributions in their names and that they need only sign the contribution cards. MONTGOMERY and PEEK helped RIZA with this scheme.
RIZA and PEEK counseled YAHYA MUSHTAQ and SHAHID MUSHTAQ, the owners of Queens-based site safety management company ECOSAFETY CONSULTANTS, INC. about using a straw donor scheme.
“You could use a straw man,” RIZA told YAHYA MUSHTAQ during a phone call. “Whoever’s on the LLC or the incorporation, those are the people that do business with the City. Anybody else is an employee, the employees don’t fall under that criteria.” At the direction of RIZA and PEEK, YAHYA MUSHTAQ and SHAHID MUSHTAQ purchased money orders and made campaign contributions in the names of ECOSAFETY CONSULTANTS, INC. employees without their knowledge.
After the Queens fundraiser, MONTGOMERY and RIZA continued this unlawful contribution scheme.
In September 2021, RIZA enlisted REDICK, his accountant, to obtain straw donors in Harlem after MONTGOMERY needed ten more donors to facilitate another contribution.
REDICK obtained signed campaign contribution cards for at least a dozen $200 contributions, which were paired with money orders she purchased or later-reimbursed contributions. This set of campaign contributions was not submitted to the Campaign Finance Board for matching funds because the campaign was no longer accepting individual donations.
Ties to Previous Manhattan D.A. Indictments
RIZA and his company, UNITED CONSTRUCTION BROTHERS SERVICES, LLC, (“UCBS”) are also charged in a separate New York State Supreme Court indictment for conspiring to falsify business records and offer false instruments for filing in connection with the use of UCBS as a Minority Business Enterprise (“MBE”) subcontractor to Lawrence Wecker’s company, JM3 Construction LLC. RIZA and Wecker had a longstanding relationship. RIZA, Wecker, and others, conspired to use UCBS as an MBE pass-through on future bids to gain business. Wecker, his company JM3 Construction LLC, and his associates were arraigned in New York Supreme Court on May 2, 2023, for their wide-ranging construction fraud scheme.
The indictments were the result of a long-term investigation by the Manhattan D.A.’s Office’s Rackets Bureau, which began when investigators observed suspicious check-cashing activity. In turn, this led to investigations into multiple construction industry fraud schemes that uncovered widespread fraud:
Assistant D.A.s James J. Hanley and Zachary Weintraub are handling the prosecution of these cases under the supervision of Assistant D.A.s Michael Ohm (Deputy Chief of the Rackets Bureau), Judy Salwen (Principal Deputy Chief of the Rackets Bureau) and Jodie Kane (Chief of the Rackets Bureau and Acting Chief of the Investigation Division).
Investigations were conducted by former Rackets Senior Investigator Amanda Bauza, Rackets Senior Investigator Samuel Morales, Investigators Genesis Cornielle, Danielle Diaz and May Dempsey, and Sgt. Daniel Clark-El. Trial Preparation Assistants Yanisa Campusano, Samantha Kritzer, and Carla Gemelli assisted with the investigation. Investigative support also came from the High Technology Analysis Unit (Director Steven Moran, Supervising Computer Forensic Analyst Douglas Daus, and Cyber Response Investigator Laurence Hayes) and Forensic Accounting & Financial Investigations Bureau (Senior Financial Investigator Nicholas Cangro and Forensic Accountant Investigator Edward Keegan). The Manhattan District Attorney’s Office’s Language Services Unit provided valuable support. Former Principal Financial Investigator Robert Ryan, former Investigative Analyst Philetus Holt, and former Trial Preparation Assistant Nicholas Quinn also assisted.
D.A. Bragg thanks the New York City Campaign Finance Board and the United States Postal Inspection Service.
[1] The charges contained in indictments are merely allegations, and the defendants are presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.
[2] Escobar pleaded guilty to one count of Insurance Fraud in the Third Degree, a class D felony. He will be sentenced to 6 months in jail on September 19, 2023, having forfeited $100,000 at the time of his plea. He will also be required to pay an additional $300,000 over a 3-year period to the New York State Insurance Fund. Additionally, Infinity Drywall Corp., Infinity Quality Services, Inc., JMC Drywall Corp., and JJM Builders, Inc. each pleaded guilty to one count of Conspiracy in the Fourth Degree, a class E felony, and were sentenced to 3-year conditional discharges.
[3] Malky Horowitz pleaded guilty to one count of Offering a False Instrument for Filing in the Second Degree, a class A misdemeanor, and was sentenced to an unconditional discharge.
[4] Wiesenfeld pleaded guilty to one count of Offering a False Instrument for Filing in the First Degree, a class E felony, and was sentenced to a 3-year conditional discharge and 150 hours of community service. Guttman pleaded guilty to one count of Offering a False Instrument for Filing in the First Degree, a class E felony, and was sentenced to 100 hours of community service. Neustadt pleaded guilty to Offering a False Instrument for Filing in the Second Degree, a class A misdemeanor, and was sentenced to a one-year conditional discharge and 50 hours of community service. TS Supplies, Inc. pleaded guilty at arraignment to one count of Conspiracy in the Fifth Degree, a class A misdemeanor and was sentenced to a one-year conditional discharge and $1,000 fine. Tri-State Lumber, Ltd. entered into a Deferred Prosecution Agreement requiring them to implement new protocols concerning certain business practices, retain an integrity monitor to report findings to the Manhattan District Attorney’s Office, and disgorge $750,000.
