Wednesday, May 4, 2016
Senator Klein & District Attorney Vance take aim at Gun Kingpins through new legislation
Bill would create new gun trafficking offense on the heels of Manhattan DA/NYPD takedown of ring that sold more than 80 firearms in Manhattan
State Senator Jeff Klein and Manhattan District Attorney Cyrus R. Vance, Jr., announced on Wednesday the introduction of a new Gun Kingpin bill to establish the crime of “Operating as a Major Firearms Trafficker.”
The announcement comes days after District Attorney Vance and New York City Police Commissioner William Bratton announced the indictment of six interstate firearms traffickers for selling 82 pistols, assault weapons, and shotguns, as well as corresponding ammunition, in Northern Manhattan. The proposed bill would create a new class A-1 felony offense, which would subject major firearms traffickers to a minimum sentence of 15-years-to-life in prison.
“The fact that those who are pumping more than 80 illegal guns into the hands of criminals while operating trafficking rings throughout our state can only be charged with a class B felony is an injustice to everyone that our laws protect. I am proud to introduce my legislation, along with D.A. Vance, to create a new class A-1 felony that will elevate existing penalties for gun kingpins. These necessary protections will ensure that major firearms traffickers, who put all New Yorkers at risk, will face up to a lifetime in prison. We must be vigilant against the trafficking of illegal firearms throughout our state, and this legislation will do just that,” said Senator Jeff Klein.
“It defies logic that in a state with such strong, sensible gun laws, the penalty for selling 10, 100, or 10,000 guns is the same: a minimum of just 5 years in prison. I thank Senator Klein for his leadership and collaboration on this legislation, which will deter those who would profit off of the wholesale dealing of illegal firearms, and keep New York communities safe. This A-1 felony will be a powerful tool for combatting gun violence across New York State,” said District Attorney Vance.
Under current law, the highest criminal charge gun traffickers can face is Criminal Sale of a Firearm or Criminal Possession of a Firearm, both in the first degree. These class B felony charges, which apply to the illegal sale or illegal possession of ten or more firearms, carry a maximum sentence of 25 years in prison, but a minimum sentence of just 5 years in prison.
However, under Senator Klein and DA Vance’s proposed legislation, those who are caught unlawfully selling, or possessing with intent to sell, at least 20 firearms could be charged with “Operating as a Major Firearms Trafficker.” Those convicted of this A-1 felony would face a minimum sentence of 15-years-to-life, and a maximum sentence of 25-years-to-life.
“I join Senator Klein and District Attorney Vance in calling for the same strong sentences for major gun traffickers that we currently assign to drug kingpins. In the last two years, my Organized Crime Task Force has seized over 300 firearms from gun traffickers, many of whom would have faced the tougher penalties proposed by this legislation. With this bill, those who believe New York is an attractive market for wholesale illegal gun distribution will be forced to think again,” said Attorney General Eric Schneiderman.
Tuesday, May 3, 2016
Former New York State Assembly Speaker Sheldon Silver Sentenced In Manhattan Federal Court To 12 Years In Prison
Silver Also To Pay a $1.75 Million Fine To Take Into Account Taxpayer Funded Pension
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that former New York State Assembly Speaker SHELDON SILVER was sentenced this afternoon to 12 years in prison after having been found guilty by a federal jury of using his official position to obtain nearly $4 million in bribes and kickbacks in exchange for his official acts and obtaining another $1 million through laundering the proceeds of his crimes. SILVER was sentenced in Manhattan federal court by U.S. District Judge Valerie E. Caproni who also presided over the five-week jury trial.
U.S. Attorney Preet Bharara said: “Today’s stiff sentence is a just and fitting end to Sheldon Silver’s long career of corruption.”
According to the evidence introduced at trial, court filings, and statements made in Manhattan federal court:
For more than two decades, SHELDON SILVER served as Speaker of the New York State Assembly, a position that gave him significant power over the operation of state government. SILVER used this immense power – including, in particular, his power over the real estate industry and his control over certain health care funding – to unlawfully and corruptly enrich himself. Among other things, he unlawfully solicited and obtained client referrals worth millions of dollars in exchange for SILVER’s official acts, and attempting to disguise this money as legitimate outside income earned from his work as a private lawyer. In particular, SILVER claimed on financial disclosure forms required to be filed with New York State and in public statements that the millions of dollars he received in outside income while also serving as Speaker of the Assembly came from a Manhattan-based law firm, Weitz & Luxenberg P.C., where SILVER claimed to work representing individual clients in personal injury actions. These claims were materially false and misleading – and made to cover up unlawful payments SILVER received solely due to his official power and influence as an elected legislator and the Speaker of the Assembly.
The scheme provided SILVER with two different streams of unlawful income: (i) approximately $700,000 in kickbacks SILVER received by steering two real estate developers with business before the state legislature to a law firm with which he was associated, and (ii) more than $3 million in asbestos client referral fees SILVER received by, among other official acts, awarding $500,000 in state grants to a university research center of a physician who referred patients made ill by asbestos to SILVER at Weitz & Luxenberg.
Unlawful Income From the Real Estate Law Firm
SILVER entered into a corrupt relationship with Goldberg & Iryami, which specialized in making applications to New York City to reduce taxes assessed on properties. Beginning in at least 2000, SILVER approached two prominent developers of properties in Manhattan, Glenwood Management Corp. and The Witkoff Group, Inc., and asked them to hire Goldberg & Iryami. The developers – both of whom lobbied SILVER on real estate issues because their businesses depended heavily on favorable state legislation – agreed to use Goldberg & Iryami as SILVER had requested. Over the years, Witkoff and Glenwood Management, in particular, paid millions of dollars in legal fees to Goldberg & Iryami. SILVER received a cut from the legal fees amounting to nearly $700,000. SILVER had no public affiliation with Goldberg & Iryami and performed no legal work at all to earn those fees, which were simply payments for SILVER having arranged the business through his official power and influence.
While continuing to receive the fees and in furtherance of the scheme, SILVER took official action beneficial to Glenwood Management and Witkoff. For example, while SILVER was publicly associated with advocating for tenants, a proposal that benefitted Glenwood Management was in substantial part enacted in real estate legislation in 2011 with SILVER’s support.
Unlawful Income From Asbestos Client Referrals
SILVER also entered into a corrupt arrangement with Dr. Robert Taub, who was a leading physician specializing in the treatment of asbestos-related diseases, through which SILVER issued state grants and otherwise used his official position to provide favors to Dr. Taub so that Dr. Taub would refer and continue to refer his patients to SILVER at Weitz & Luxenberg, a firm with which SILVER was affiliated as counsel. Specifically, SILVER arranged for New York State to fund two grants – each for $250,000, and paid out of a secret and un-itemized pool of funds controlled entirely by SILVER – for a research center Dr. Taub had established. SILVER used his official position to provide Dr. Taub with other benefits as well, including helping to direct $25,000 in state funds to a not-for-profit organization for which one of Dr. Taub’s family members served on the board, and asking the CEO of a second not-for-profit to hire a second family member of Dr. Taub’s.
From 2002 to the present, SILVER received more than $3 million from legal fees Weitz & Luxenberg received from patients Dr. Taub had referred to SILVER at the firm while SILVER was taking official actions to benefit Dr. Taub. SILVER did no legal work whatsoever on these asbestos cases, his sole role having been to use his official position and access to state funds to induce Dr. Taub to provide him with these lucrative referrals.
Silver’s Efforts to Cover Up the Scheme
SILVER took various efforts to disguise his unlawful outside income and prevent the detection of his criminal scheme. SILVER listed on his official public disclosure forms that his outside income consisted of “limited practice of law in the principal subject area of personal injury claims on behalf of individual clients,” which was false and misleading. Beginning in 2010, SILVER’s disclosures changed to state that the source of his legal income was a “Law Practice” that “includ[ed]” being of counsel to Weitz & Luxenberg. SILVER never disclosed his relationship with Goldberg & Iryami or any work beyond what he claimed was a “personal injury” practice.
SILVER also repeatedly made false statements about his outside income in his public statements, including the following:
- SILVER claimed he performed legal work consisting of spending several hours each week evaluating legal matters brought to him by potential clients and then referring cases that appeared to have merit to lawyers at Weitz & Luxenberg.In fact, SILVER did no such work on the asbestos cases and obtained those referrals to Weitz & Luxenberg based on his corrupt arrangement with Dr. Taub.
- SILVER claimed his law practice involved the representation of “plain, ordinary simple people.”In fact, SILVER represented some of the largest real estate developers in the state, for whom favorable state legislation was critical to their business interests.
- SILVER claimed through his spokesperson that SILVER found clients by virtue of his having been a “lawyer for more than 40 years,” in a manner that was “not unlike any other attorney in this state, anywhere.” In fact, SILVER found his lucrative asbestos and real estate developer clients solely by virtue of his official position.
- SILVER stated through his spokesperson that “[n]one of his clients have any business before the state.” In fact, SILVER’s outside income included millions of dollars of fees obtained through Glenwood and Witkoff, both of which had significant business before the state, and Dr. Taub, to whose benefit SILVER provided state funding and other benefits related to SILVER’s official position.
In addition, SILVER thwarted the Moreland Commission to Investigate Public Corruption so that it would not learn of his illegal outside income, first by filing legal motions on behalf of the Assembly and taking other action to block the Moreland Commission’s investigation into legislators’ outside income.
Finally, SILVER laundered part of crime proceeds through private investment vehicles that yielded him another $1 million in ill-gotten gains.
* * *
In addition to the prison sentence, Judge Caproni ordered SHELDON SILVER, 72, of New York, New York, to pay a $1.75 million fine, forfeit $5.3 million, and pay a $700 special assessment fee. SILVER also was sentenced to two years of supervised release. The Government had sought a fine above the Sentencing Guidelines level in light of the taxpayer-funded pension that Silver will received for the rest of his life, despite having been convicted of federal corruption offenses. In imposing the fine, Judge Caproni took into account Silver’s pension.
SILVER was found guilty by a unanimous jury on November 30, 2015, of two counts of honest services wire fraud, two counts of honest services mail fraud, two counts of extortion under color of official right, and one count of engaging in illegal monetary transactions.
U.S. Attorney Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office and the Federal Bureau of Investigation, who jointly conducted this investigation.
Statement Of U.S. Attorney Preet Bharara On Sentencing Of Former New York State Assembly Speaker Sheldon Silver
“Today’s stiff sentence is a just and fitting end to Sheldon Silver’s long career of corruption.”
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Monday, May 2, 2016
A.G. Schneiderman Announces $306 Million National Settlement With Olympus Corporation
New York Medicaid Program To Receive Over $7.7 Million Dollars
Attorney General Schneiderman announced today a joint settlement with the federal government and a coalition of states to resolve allegations that Olympus Corporation of the Americas paid illegal kickbacks to healthcare providers, in violation of federal and state False Claims Acts, including New York’s statute. The national settlement is $306 million, with the New York Medicaid Program receiving over $7.7 million dollars in damages.
Between January 1, 2006 and December 31, 2011, Olympus, a subsidiary of Olympus Corporation of Japan located in Center Valley, PA, used improper financial incentives to induce doctors and hospital executives to buy a wide ranging array of endoscopes and other surgical equipment manufactured by Olympus. It was alleged that these improper financial inducements took the form of grants, fellowships, consulting payments, free trips, no charge loans for equipment along with other incentives.
“If you are a company that prioritizes profits over patients, we will hold you accountable,”Attorney General Schneiderman said. “Healthcare providers cannot make decision that are swayed by illegal kickbacks, and we are committed to ensuring that Medicaid recipients are receiving the best care possible.”
The matter was brought to the attention of the government through the filing of a qui tam lawsuit in the District of New Jersey. (US ex. rel. John Slowik v. Olympus America, Inc. et al. 10-cv-5994 DNJ). The Attorney General would like to thank Mr. Slowik for the information that he provided to the government. The group representing all the states consisted of members from New York, California, Virginia, Indiana, Delaware and the District of Columbia.
Meghan Collins, Associate Special Auditor Investigator, of the Medicaid Fraud Control Unit’s Civil Enforcement Unit, represented New York on the team. Stacey Millis is the Chief Auditor for the Civil Enforcement Division of the New York Medicaid Fraud Control Unit. The New York Medicaid Fraud Control Unit is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney. The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.
FOLLOWING PRESSURE, AMAZON EXPANDS SAME-DAY DELIVERY TO THE BRONX
Bronx Borough President Ruben Diaz Jr. and Assembly Member Jeffrey Dinowitz are praising an announcement by online retailer Amazon that it would expand same-day delivery service to The Bronx. The announcement comes following criticism from both officials regarding the borough’s previous exclusion from these services.
Last week, it was revealed that Amazon was providing same-day delivery services to nearly the entirety of New York City except for The Bronx. Following the news, Borough President Diaz issued a letter to Amazon Founder & CEO demanding an end to his borough’s exclusion from these services. In a separate letter, Assembly Member Dinowitz urged New York State Attorney General Eric Schneiderman to investigate Amazon’s inequitable business practices.
In letters to both elected officials issued late Friday, Amazon stated that they would reverse this practice of excluding The Bronx, adding that the company was “actively working to enable service to the Bronx in the coming weeks.”
"The over 1.4 million residents of The Bronx deserve the same level of service and amenities as their neighbors. Amazon's reversal of their previous policy, which excluded my borough from the same-day delivery services offered to the rest of the city, is a welcome one. I appreciate that Amazon heard our concerns and have made this change, and will provide The Bronx with service equity in the coming weeks. I will continue to hold businesses and entities of all kinds accountable when they slight my constituents," said Bronx Borough President Ruben Diaz Jr.
“I am very grateful that Amazon has listened to our concerns regarding the exclusion of The Bronx from their Prime same-day delivery service," said Assembly Member Jeffrey Dinowitz. "I am pleased they will be working to expand access to their services to a borough that has seen one of the fastest economic expansions in several decades – The Bronx. Providing equal services to all New Yorkers, including the 1.4 million Bronxites and countless of businesses that call our borough home is not just good for The Bronx, but Amazon as well. Moreover, I am hopeful that this decision means Amazon will take a second look at the several other cities with excluded neighborhoods.”