NYS Office of the Comptroller DiNapoli: Taxpayers Moving Out of State Spiked in 2020, Led by Those Leaving NYC

 

Net-outmigration Declined Significantly in 2021,

But Still Exceeded Pre-pandemic Levels

A report released today found more than one of every 100 resident personal income tax (PIT) filers left New York state in 2020, according to State Comptroller Thomas P. DiNapoli. The COVID-19 pandemic caused a significant shift in taxpayer movement, with net out-migration quadrupling in 2020 compared to the prior year. While declining in 2021, the net number of taxpayers leaving remained one-third greater than the pre-pandemic average. The report examines PIT filings for the pandemic years of 2020 and 2021 and follows up on DiNapoli’s May 2022 report that looked at pre-pandemic taxpayer migration trends.

“The pandemic upended everyone’s life and caused a big shift in the movement of New York taxpayers in 2020,” DiNapoli said. “While patterns shifted closer to pre-pandemic trends in 2021, net out-migration rates remained higher, particularly for families. Policy makers need to make sure the state remains an attractive, affordable place to work and to live. Doing so will help maintain the state’s largest revenue source to ensure vital services continue in order to provide a high quality of life for all New Yorkers.”

Taxpayer Filings in 2020 and 2021

PIT is New York’s largest revenue source, with $60 billion in tax liability paid by 10.9 million taxpayers in 2021. Despite the recession of 2020, the number of taxpayers grew, likely due to high financial market levels and enhanced unemployment benefits that increased personal income. In 2021, the number of filers declined but was slightly greater than the number in 2019.

The vast majority (87% in 2021) of PIT filers are residents; 10% were non-residents who only pay New York PIT on income received from work, businesses or other income sources located in New York. An additional 3% are part-year residents who file a return if they move into or out of the state.

The 2020 increase in filers was concentrated in full-year resident taxpayers, up by 161,679. The 2021 decrease was also attributable to these taxpayers, down by 235,000 compared to 2020 and 73,500, or 0.8%, lower than 2019. Most of the decline in 2021 was concentrated at incomes less than $100,000, partially offset by an increase in the number of higher income filers.

The number of nonresident taxpayers declined in 2020 but bounced back in 2021, exceeding pre-pandemic levels at all income thresholds.

The number of part-year filers increased in both 2020 and 2021 and was 19% greater in 2021 than in 2019, building on a steady increase in part-year resident PIT returns filed since 2009. This “churn” of taxpayers is important to closely examine and monitor. Nearly two-thirds of filers who moved out in 2021 retained no New York source of income after they left, suggesting a potential loss of economic activity.

Pandemic’s Impact on Taxpayer Movement

From 2015 to 2019, there was a consistently larger number of taxpayers leaving the state than coming in, with an average annual net out-migration of roughly 28,700 taxpayers during this period. In 2020, the number moving out of state increased dramatically, resulting in a net out-migration of nearly 112,500 – almost four times the number in 2019.

In 2021, the number of people moving into the state rebounded and was more than one and half times over the year prior, and was also higher than the average in-migration from 2015 to 2019. Still, the number of taxpayers moving out was greater, resulting in a net out-migration of over 39,200, more than one-third greater than the pre-pandemic average. In the aggregate, out-migration rates declined to just over 4 in every 1,000 taxpayers in 2021 from almost 12 in 1000 in 2020. However, this rate was greater than the 2019 rate of 3 in 1,000.

Single filers comprise the largest share of state PIT taxpayers, and accounted for over half of the net out-migration in 2020. Married and head of household taxpayers (families) also left New York at elevated rates in 2020, nearly double those in 2019. In 2021, families continued to exit New York at higher rates than prior to the pandemic. In 2021, an equivalent of one in every 100 married resident filers left New York. Married filers earning between $100,000 and $500,000 continued to experience the greatest out-migration, a trend that continued from prior to the pandemic.

NYC Drove 2020 Outmigration

State net out-migration in 2020 was driven by a sharp increase in taxpayers leaving New York City. With the pandemic impacting the city earlier and more severely, net out-migration from the city to places both in and outside the state spiked, with over two in every 100 city residents moving out in 2020. The surge was driven by taxpayers who left the state altogether, and city residents represented 71.5% of the state’s net out-migration in 2020.

In 2021, the migration pattern shifted once again. The city experienced a net gain of 2,221 taxpayers. The gain was mostly attributable to taxpayers from other parts of the state, and would have been greater if not for a total net loss of 761 taxpayers who left New York.

Prior to and during the pandemic, the majority of taxpayers leaving New York City relocated to the two other downstate regions, with the largest number moving to Long Island. However, the number of city taxpayers moving to the other regions of the state more than doubled in 2020 and remained above pre-pandemic levels in 2021.

Report

Taxpayer Movement During the Pandemic

Related Report

Moving In or Out? New York State Personal Income Taxpayer Migration Trends

Community Board 11 Public Hearing on the City of Yes For Economic Development Thurday December 7th 7 PM.

 

Phase Two Of The Peninsula Affordable Housing Complex Breaks Ground In Hunts Point, The Bronx

 

 

Last week, development partners Hudson Companies, Gilbane Development Company, and MHANY Management Inc. celebrated the groundbreaking of Phase Two of The Peninsula in Hunts Point, The Bronx at the site of the former Spofford Juvenile Detention Center. The two-building development will offer 100-percent affordable housing, as well as commercial, community facility, and open space.

The ceremony for the $297 million project was also attended by stakeholders from the New York City Economic Development Corporation, the New York City Department of Housing Preservation and Development, the New York City Housing Development Corporation, and Wells Fargo Bank.

“Breaking ground on Peninsula Buildings 2A and 2B is testament to the development team and the city’s commitment to not only developing housing affordable to the neighborhood, The Bronx, and the city’s low and moderate-income residents, but undertaking the work hand in hand with community and neighborhood partners,” said Ismene Speliotis, executive director of MHANY Management, Inc. “The Peninsula development reflects a true effort in community engagement, and participation that results in beneficial outcomes not only for the individuals, families, businesses, and programs within it, but for all members and stakeholders within the surrounding community.”

“This marks a pivotal moment in transforming what was once a juvenile detention center into a living and thriving community in the heart of the Hunts Point Peninsula,” said Adolfo Carrión Jr, NYC HPD commissioner. “Complete with permanently affordable housing and resources long needed in this corner of The Bronx, this project is a testament to the continued commitment that the city and our development partners share in supporting families and transforming neighborhoods.”

The second phase of The Peninsula will bring 359 affordable units in studio, one-, two-, three-, and four-bedroom layouts. Approximately 73 percent of the units will be available at or below 60 percent of area median income and 15 percent of the units will be set aside for households for the formerly homeless.

Residential amenities will include a gym, a shared laundry room, a children’s playroom, tenant lounge space with access to outdoor terraces, common area and apartment Wi-Fi, and bicycle storage. There will also be a 50,000-square-foot public plaza, a 155-vehicle parking garage, and 20,000 square feet of community facility space. The buildings will also have solar roof panels and sustainable features to harvest rainwater.

The first phase of The Peninsula was completed in 2022 and consists of 183 affordable housing units, a 14,000-square-foot cultural arts center, and a 57,000-square-foot industrial space building.

Once complete in 2029, the entire Peninsula campus will include four mixed-use residential buildings and a light-industrial manufacturing building, 740 affordable homes, 10,720 square feet of retail space targeting a grocery store, 260 parking spaces in two underground garages, 57,000 square feet of open plaza space, and 52,300 square feet of community facility space, including a DOE administered Head Start Facility, Inspiration Point’s cultural arts facility, a Health and Wellness Center operated by Urban Health Plan, and community programs operated by The Point CDC.

Construction completion is expected for summer of 2026.

MAYOR ADAMS LAUNCHES LITHIUM-ION BATTERY-CHARGING PILOT FOR DELIVERY WORKERS TO SAFELY CHARGE IN PUBLIC

 

Pilot Will Allow Select Group of Delivery Workers to Safely Charge Lithium-Ion Batteries Outside of Residences

 

Effort Part of Administration’s “Charge Safe, Ride Safe” Plan to Support Safe E-Bike Use, Prevent Deadly Lithium-Ion Battery Fires

New York City Mayor Eric Adams announced plans to launch a new, lithium-ion battery-charging pilot program early next year that will allow an initial group of delivery workers to safely charge their bikes in public. The pilot will test a variety of technologies to charge e-bike batteries at multiple locations across the city, developed as part of the administration’s “Charge Safe, Ride Safe” plan to protect New Yorkers from fires caused by lithium-ion batteries and promote safe electric-micromobility usage. Those technologies will include battery-swapping networks, as well as secure bike parking docks that supply fast charging to delivery workers’ e-bikes.

 

“New Yorkers rely on delivery workers for so much, and this innovative pilot program will test different technologies to make this technology safer as we continue to do all we can to help protect workers from the dangers that lithium-ion batteries can pose,” said Mayor Adams. “By investing in battery-swapping networks and fast-charging e-bike docks, we’re building e-bike-friendly infrastructure and preparing our city’s streets for a new generation of users. Today’s announcement builds on our holistic strategy to ensure that we safely harness the transformative potential of e-bikes in our city.”

 

“Delivery workers are under enormous economic pressure. When time is money, it's no wonder when unsafe practices become the norm,” said Deputy Mayor for Operations Meera Joshi. “Delivery workers deserve a safe and sustainable way to make a living, as we all do. This pilot will not only protect them, but the families who share their homes. It is a crucial step in helping to create order and safety in the e-micromobility space."

 

“The tremendous growth in electric bikes and other legal, two-wheeled devices provides an exciting glimpse into a future where New Yorkers are less dependent on large, more dangerous vehicles to get around,” said New York City Department of Transportation (DOT) Commissioner Ydanis Rodriguez. “Supporting this ridership boom with safe, public infrastructure can help make our city safer and more sustainable — while providing vital infrastructure for our delivery workers, who have one of the toughest jobs in New York City. We thank Mayor Adams for his support through the ‘Charge Safe, Ride Safe’ action plan to develop this pilot.” 

 

“Spreading education about safe practices for lithium-ion batteries is one of the FDNY’s top priorities,” said Fire Department of the City of New York (FDNY) Commissioner Laura Kavanagh. “We know these fires can cause serious injury, and even death. We are grateful to our partners in city government for their out-of-the-box thinking on how we can embrace this new technology while also protecting lives.”

 

Charging technologies participating in the city’s pilot, produced by (from left to right) Swobbee, Swiftmile, and Popwheels.

 

Developed as part of “Charge Safe, Ride Safe,” the pilot being announced today will test out different implementation paths to inform future citywide efforts for public e-bike charging, as well as collect feedback from delivery workers. The DOT developed the pilot through the agency’s DOT Studio, a research and development partnership with the New York City Economic Development Corporation (EDC) and Newlab, the urban tech growth hub. Over the last six months, DOT has worked closely with its Studio partners, as well as with the FDNY and delivery workers, to identify several companies to produce unique potential safe and convenient e-battery charging options.

 

This pilot builds upon several other initiatives to develop more outside-of-home charging options for New Yorkers, including establishing “deliverista hubs” in vacant newsstands in partnership with Los Deliveristas Unidos and U.S. Senate Majority Leader Schumer, and winning a $25 million U.S. Department of Transportation grant to install 173 outdoor electric-micromobility charging and storage stations at 53 New York City Housing Authority developments.

 

“Charge Safe, Ride Safe” focuses on four key areas: promoting and incentivizing safe battery use, increasing education and outreach to electric micromobility users, advocating for additional federal regulation of these devices, and expanding enforcement against high-risk situations. Additionally, this year, Mayor Adams has also signed several bills to further regulate lithium-ion batteries sold in New York City and strengthen fire safety related to battery fires, including bills that prohibit the sale of unsafe, uncertified lithium-ion batteries or dangerously refurbished batteries.

 

In June, Mayor Adams, FDNY Commissioner Kavanagh, and New York City Small Business Services Commissioner Kevin Kim launched a new action plan to expedite investigations into potentially hazardous conditions involving lithium-ion batteries, as well as launch a comprehensive outreach and education campaign to educate bike shop and bike repair shop owners about the dangers of lithium-ion batteries and best practices to avoid fires. As part of the plan, 311 calls regarding questionable activity at bike repair shops or any other location where batteries are being charged will get a response from the local fire station within 12 hours. 

 

E-bikes and e-scooters are an affordable and convenient alternative to cars and are essential for delivery workers and other New Yorkers who rely on this mode of transportation for their livelihoods. However, these new transportation options have also brought serious fire risks. Fires caused by batteries that power electric micromobility devices are a significant problem in New York City, growing from 30 in 2019 to 253 in 2023. These fires are particularly severe and difficult to extinguish, spreading quickly and producing noxious fumes. From 2019 to 2022, these fires resulted in an average of approximately three deaths and 66 injuries per year. So far in 2023, these batteries have already resulted in 18 deaths and 133 injuries.

 

“The Department of Consumer and Worker Protection is committed to supporting our city’s delivery workers and we’re proud that the administration is leading the way to provide safe charging options for them,” said New York City Department of Consumer and Worker Protection Commissioner Vilda Vera Mayuga. “We strive to build a culture of compliance with our city’s laws, but we won’t hesitate to take action to protect the safety of our neighbors. So far, we’ve issued nearly 100 violations to businesses for selling uncertified devices and batteries and we continue to work with local brick-and-mortar and online retailers to make sure they understand and follow the law.”

 

“Delivery workers play a critical role in New York City’s economy, and it is important they have access to safe charging conditions,” said New York City Economic Development Corporation (NYCEDC) President & CEO Andrew Kimball. “This new program amplifies NYCEDC's vision to shaping policy and expanding climate tech solutions throughout New York City.”

“Newlab is excited to continue working with DOT, this time on the immediate and urgent crisis of providing safe outdoor e-micromobility charging for the city's delivery workers,” said Meera Kumar, program manager, Newlab. “Deploying these novel climate technologies in the public realm, gathering critical user feedback, and ultimately helping to make charging safer will bring solutions to the real world faster.”

“We thank Mayor Adams and DOT Commissioner Rodriguez for their commitment to investing in infrastructure that would enable New York City’s hard-working deliveristas to safely charge their bikes,” said Ligia Guallpa, executive director, Worker’s Justice Project. “This program signifies a crucial step towards e-bike and e-battery safety across New York City, empowering delivery workers with the tools they need to charge safely, while simultaneously recognizing and valuing the dignity of all those who navigate our streets. We look forward to continuing our partnership with the mayor and his administration, which has delivered major wins for delivery workers, such as the minimum pay rate for workers, and this expansion of much-needed infrastructure.”

“We want to express our deepest gratitude to the New York City Department of Transportation for involving our group and other fellow delivery workers in the development of this timely pilot program,” said Sergio Solano, representative, NYC Food Delivery Movement. “This e-bike charging program is the result of an extensive community engagement process to ensure it serves the needs of New York City food delivery workers.”

"This pilot could be a great step forward in addressing the risk of fires from charging unregulated batteries," said Corey Hannigan, active transportation program manager, Tri-State Transportation Campaign. "We need to encourage mobility options that are cheaper, pollute less, and take up less space and energy than cars. But without safely accommodating e-bike charging, delivery workers may switch to noisy, polluting, gas-powered mopeds. Combining these new public charging stations with secure bike storage seems like a win-win as well. Many New Yorkers lack the space to store bikes in their apartments in the first place."

Bronx Community Board 11 Full Board Meeting

 

The November 30th meeting began late due to technical problems and with a large number of members online, but there were still enough members in person so a quorum was in order. During the gallery session the majority of speakers spoke in favor of the Vice-Chair because later in the meeting  there was an agenda item for a discussion to remove him and the Chair of CB 11. 

After the Gallery session Bronx Borough President Vanessa L. Gibson spoke to the board. She spoke for twenty- five minutes first talking of where the Bronx has come from to where it is today. She then chastised board members of the emails and phone calls she had received concerning the behavior and lack of professionalism of some of them, which was a part of her Code of Conduct. The BP continued by saying how disappointed, frustrated, angry, and pissed off she was at the kaos and dysfunction of CB 11. There is no respect for one another and it is a distraction to the goal she needs everyone to be a part of which will move forward whether the board is dysfunctional or not. She continued with projects that are happening, handing out copies of her 2022 Strategic plan for the Bronx. She said that if you are in violation of her Code of Conduct, there will be changes, and nothing is personal and that it would not be the last time she will be at CB 11, as well as her other eleven community boards. 

After the borough president finished and left, the meeting continued and unfortunately during the course of the meeting the dysfunction of the board came out. At the Old Business part now almost three hours into the meeting Demotion of Board officers discussion, the district manager asked, "Does anybody have any Old Business." Board member Cynthia Rodriguez began to speak and was told by the DM to use the microphone. She made a motion to go into executive session to discuss the agenda item regarding the board officers. The DM then asked for the record, what about the officers? She said demotion of the board officers. The DM then said thank you, a motion made by Cynthia, seconded by Miguel, discussion, O.K. no discussion, Bernedette err Cynthia you made the motion do you want to call for the vote, abstentions, objections. Cynthia said doesn't that fall under the leadership, the chair then said we have to call for a vote. After a roll call vote was taken the DM just announced that the motion passed without giving any numbers. The DM was also heard calling one member who appeared to be leaving the room to stop and come back. The DM told members of the public they would have to leave and would be called back in when the executive session was over.  

The executive session lasted for almost an hour when the public was let back in with board members already leaving. According to video of the meeting shot by a member of the public, as the board chair spoke the Sergeant of Arms raises his hand and what looks like a finger appears to be seen. Other members of the public who witnessed the gesture said it was the middle finger. There were also calls to adjourn the almost four hour meeting without giving the results of a vote that was taken in the executive session. It looks like Bronx Borough President Gibson has continued dysfunction on CB 11 after talking to the board for twenty-five minutes. What is she going to do to get rid of the dysfunction? Who is she going to remove from CB 11, and how many board members will it be or will it have to be the entire community board? There is also a question of whether the executive session was legal, since removal of CB 11 members has been discussed in public in the past. According to the minutes of the June 2023 Executive Board meeting there was discussion of removing a board member that was done in public and not executive session, and it has happened to other current and former CB 11 members also in public, not in executive session. It seems there is plenty to hide when it comes to CB 11 since Bronx Borough President Vanessa Gibson came into office. 

Bronx Borough President Vanessa Gibson looks at the television cameras as she scolds Community Board 11 on the dysfunction of the board. 

A photo from before the CB 11 meeting where Mr. Malcolm Gray's hands can be clearly seen from his coat. 

A photo during the meeting where District Manager Jeremy Warneke points to a board member to speak.

FOUR INMATES INDICTED FOR BRUTAL SLASHING IN RIKERS ISLAND

 

Defendants--Members of Folk Nation Gang--Allegedly Attacked Inmate to Get Moved to Another Block with Fewer Trinitarios Gang Members

 Bronx District Attorney Darcel D. Clark announced that two current and two former inmates on Rikers Island have been indicted for Attempted Murder, first-degree Assault and other charges for stabbing and slashing an inmate, leaving him seriously injured.

 District Attorney Clark said, “These defendants allegedly converged on the victim, and one slashed the victim’s neck and face, then all of them repeatedly slashed and stabbed him as he fell to the floor. This case is part of my Rikers Island Violence Reduction Initiative, which prosecutes violence in the jail with a focus on evidence-based cases when victims do not cooperate in the case. We are doing everything we can with our partners to hold people accountable, but more has to be done to prevent such brutal crimes.”

 New York City Department of Correction Commissioner Louis A. Molina said, “Violence inside our jails will not be tolerated and the Department of Correction will continue to assist the Bronx District Attorney’s Office to ensure that these individuals are prosecuted to the fullest extent of the law. This alleged attack could have been deadly, but our Correction Officers jumped into action to save the individual’s life. I want to thank them for their bravery as well as our Correction Intelligence Bureau for their work on this matter.”

 District Attorney Clark said the defendants, Corey Henry, 21, Ahmed Morrison, 21, Travis Laroc, 21 and Angel Lopez, 20, were indicted for Attempted Murder in the Second Degree, two counts of first-degree Assault, two counts of second-degree Assault, first-degree Promoting Prison Contraband and fourth-degree Criminal Possession of a Weapon. Henry and Morrison were arraigned on Tuesday, November 27, 2023 and Wednesday, November 28, 2023, respectively, before Bronx Supreme Court Justice Kim Parker and were remanded. Lopez was arrested in Brooklyn and was arraigned November 30, 2023. Bail was set at $250,000 cash and $750,000 bond. Laroc, who is in an upstate prison, was arraigned December 4, 2023 by Judge Parker and was remanded.

 According to the investigation, on August 3, 2023, in a dayroom of the Robert N. Davoren Center, the defendants, acting in concert, attacked a fellow inmate stabbing and slashing him repeatedly, inflicting Serious Physical Injury, using makeshift weapons. The defendants were seen on video surveillance watching as the victim was distracted playing games. Morrison is seen signaling to the other defendants and they surround the victim, and Corey Henry allegedly slashed the victim’s neck and face. The victim attempted to flee but he is stabbed and slashed by the defendants until Department of Correction staff intervened and removed the victim, placing him behind a locked vestibule door. The victim was taken to Bellevue Hospital in Manhattan where he was treated for multiple slash and stab wounds. He required numerous stitches for his wounds.

 According to the investigation, the defendants are members of the “Folk Nation,” and allegedly committed the assault on a Trinitarios member for the purpose of manipulating a transfer from Robert N. Davoren Center as they felt they were outnumbered by Trinitarios in their current block.

 District Attorney Clark thanked New York City Department of Correction Central Intelligence Bureau Investigator James Ruiz, Investigator Juan Rivera, Investigator Jeffrey Rios and Investigator Walter Holmes for their diligent work in the investigation.

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

Former FBI Agent Trainee Pleads Guilty To Insider Trading Scheme

 

Damian Williams, the United States Attorney for the Southern District of New York, announced the guilty plea of SETH MARKIN in connection with his participation in a scheme to trade in stock of Pandion Therapeutics (“Pandion”) based on inside information that he misappropriated from his then-girlfriend, who was an attorney at a major law firm assigned to work on the acquisition of Pandion by Merck & Co. (“Merck”).  MARKIN was arrested in July 2022 and pled guilty to securities fraud based on insider trading before U.S. District Judge Edgardo Ramos.  

 

U.S. Attorney Damian Williams said: “Seth Markin, who had been accepted into the Federal Bureau of Investigation as a new agent trainee, chose to act as if the law did not apply to him when he misappropriated confidential information, traded based on that information, and tipped several friends and family members, resulting in millions of dollars of illegally obtained trading profits.  Markin knew his actions were wrong, deleted evidence of his crimes, and lied to try to cover up his scheme.  No one is above the law, and this Office’s commitment to protecting the integrity of the financial markets remains a priority.” 

 

As alleged in the Indictment, other public court documents, and statements made during court proceedings:

In early 2021, SETH MARKIN and BRANDON WONG together made more than $1.4 million in illegal profits by trading in stock based on inside information that MARKIN stole from his then-girlfriend, who was at the time an attorney at a major law firm in Washington D.C. (the “Law Firm Associate”).  At the time, MARKIN had been accepted into the Federal Bureau of Investigation (“FBI”) as a new agent trainee, and WONG was a systems analyst at an education company.  In February 2021, MARKIN secretly looked through the Law Firm Associate’s confidential work documents, without her permission, and learned that, in a matter of weeks, Merck, a publicly traded pharmaceutical company, was going to acquire Pandion, a publicly traded biotechnology company, for approximately three times the value of Pandion’s share price.  MARKIN immediately purchased Pandion stock on the basis of this material non-public information and also told several family members and friends to purchase Pandion’s stock, causing WONG, another friend, and several family members to do so, including Family Member-1, Family Member-2, Family Member-3, Family Member-4, and Friend-1.  In text messages, MARKIN assured WONG that he was “not uncertain” that when the “news drop[ped]” about Pandion, the price would “EXPLODE” and they would earn “triple gains.”  

WONG purchased hundreds of thousands of dollars’ worth of Pandion shares based on the material non-public information he received from MARKIN.  In addition to his purchases of Pandion stock, WONG told at least seven other people to purchase Pandion shares, causing some of the people he tipped to purchase tens or hundreds of thousands of dollars’ worth of Pandion stock, including Family Member-5, Friend-2, Friend-3, Friend-4, Friend-5, Friend-6, and Friend-7.

In total, MARKIN and WONG together caused at least 20 people to trade in Pandion stock based on the material non-public information that MARKIN misappropriated from his girlfriend, resulting in millions of dollars of illegally obtained trading profits.  To conceal their illegal insider trading scheme, MARKIN and WONG used an encrypted messaging application and deleted many of their text messages with each other.  They also agreed on a cover story that they could provide to law enforcement, namely, that if they were asked how they anticipated Pandion’s stock price increase, they could say they “read it on Stocktwit,” in reference to a social media platform for sharing stock ideas, and falsely say that the news was “publicly being announced there.”

After Merck’s acquisition of Pandion was announced publicly, and the Pandion stockholdings of MARKIN and WONG, and those whom they tipped, significantly increased in value, the defendants sold their shares of Pandion for significant profits.  With their illegal profits, the defendants and their tippees purchased luxury items and bought gifts for each other.  For example, WONG purchased for MARKIN a Rolex watch valued at approximately $40,000, a trip to Hawaii, and a meal at a three-Michelin-starred restaurant in New York that cost more than $1,000.  WONG also purchased a home in Florida.

Thereafter, MARKIN lied in order to hide his illegal insider trading.  In or about June 2021, after MARKIN and the Law Firm Associate had ended their relationship, and as MARKIN was preparing to begin training as a new agent at the FBI Academy in Quantico, Virginia, the Law Firm Associate called MARKIN to ask why MARKIN’s name had come up in an inquiry by the Financial Industry Regulatory Authority into trading in Pandion stock.  In response, MARKIN lied to the Law Firm Associate and falsely claimed that he did not trade in Pandion stock.

MARKIN subsequently took steps to further conceal his criminal activity.  On November 18, 2021, Markin lied to FBI agents when he was interviewed about his Pandion trading.  That day, Special Agents from the FBI interviewed MARKIN in connection with an investigation they told him was being conducted by law enforcement in the Southern District of New York relating to insider trading in Pandion stock.  During the interview, MARKIN adhered to the fake cover story he and WONG had concocted and falsely told the agents (i) that he learned about Pandion on StockTwits, (ii) that he purchased the stock because of a recent earnings report and a new board member addition, and (iii) that he did not know that his former girlfriend worked on the Pandion transaction.

MARKIN, 32, of Washington Crossing, Pennsylvania, pled guilty to one count of securities fraud, which carries a maximum term of 20 years in prison. 

WONG, 40, of New York, New York, pled guilty on April 10, 2023, to one count of securities fraud, which carries a maximum term of 20 years in prison.

BRIAN WONG, 45, of Secaucus, New Jersey, pled guilty on November 10, 2022, to being an accessory after the fact to conspiracy to commit securities fraud and tender offer fraud, which carries a maximum term of two and a half years in prison, and was sentenced on April 12, 2023, to three years’ probation with three months’ home confinement and forfeiture in the amount of $403,375.75. 

JONATHAN BECKER, 34, of Weehawken, New Jersey, pled guilty on September 20, 2023, to one count of securities fraud, which carries a maximum term of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.  MARKIN will be sentenced by Judge Ramos on March 13, 2024; WONG will be sentenced by Judge Ramos on January 26, 2024; and BECKER will be sentenced by Judge Ramos on December 19, 2023. 

Mr. Williams praised the outstanding investigative work of the FBI and the Department of Justice’s Office of the Inspector General.  Mr. Williams also thanked the U.S. Securities and Exchange Commission, which has filed parallel civil actions.

Three Military Contractors Sentenced in Procurement Fraud Scheme

 

A federal judge in the Northern District of Georgia has sentenced three military contractors for their roles in a multi-year procurement fraud scheme related to more than $7 million in federal government contracts.

Former Envistacom LLC president and co-founder Alan Carson was sentenced on Nov. 30 to six months in prison and two years of supervised release and was ordered to pay a criminal fine of $250,000. The owner of another company, Philip Flores, was sentenced on Oct 30 to four months in prison and two years of supervised release and was ordered to pay a criminal fine of $50,000; and former Envistacom vice president Valerie Hayes was sentenced on Dec. 1 to 12 months of home confinement with three years of probation, and ordered to complete 100 hours of community service.

A federal jury previously convicted the three individuals of conspiring to defraud the United States and committing major fraud. According to court documents and evidence presented at trial, the three military contractors prepared and procured sham quotes and fraudulently prepared procurement documents.

“When contractors defraud the federal government, they undermine the integrity of the federal contracting system,” said Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division. “These sentencings send a clear message that the Antitrust Division and its law enforcement partners will not tolerate procurement fraud.”   

“The defendants served as federal contractors with a duty to lawfully act on behalf of the government,” said U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia. “Instead, these executives chose to defraud the United States and are now being held accountable for their actions by serving prison sentences and paying substantial fines.”

“These sentencings should serve as a deterrent to any company or individual seeking to subvert the government procurement system to obtain contracts,” said Special Agent in Charge Darrin K. Jones of the Department of Defense (DoD) Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS, along with our law enforcement partners, remain committed to protecting the integrity of the DoD contracting process that supports our nation’s warfighters.”

“These sentencings should serve as a stark reminder that our agents, and those of our partner law enforcement agencies, are relentless in their pursuit of those who choose to defraud the government,” said Special Agent in Charge Andrew Johnson of the Department of the Army Criminal Investigation Division’s (Army CID) Fraud Field Office.

The Justice Department’s Antitrust Division’s Washington Criminal II Section, the U.S. Attorney’s Office for the Northern District of Georgia, Army CID and DCIS investigated the case.

Trial Attorney Brittany E. McClure of the Justice Department’s Antitrust Division and Assistant U.S. Attorney Christopher J. Huber for the Northern District of Georgia prosecuted the case.

Anyone with information about this investigation or other procurement fraud schemes should notify the Procurement Collusion Strike Force (PCSF) at www.justice.gov/atr/webform/pcsf-citizen-complaint. The Justice Department created the PCSF in November 2019. It is a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government – federal, state and local. For more information, visit www.justice.gov/procurement-collusion-strike-force.