Friday, January 27, 2017

Website Operator Charged With Defrauding More Than 2,000 Victims In New York City Apartment Search Scam


   Preet Bharara, the United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector-in-Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the filing of a criminal complaint charging ROBERT GUZMAN with mail fraud in connection with a fraudulent apartment rental scheme that claimed more than 2,000 victims. As alleged, GUZMAN posted apartments supposedly available for rent in New York City on websites he operated, amazingapartmentrentals.com and www.equityproject.net[external link] (the “Websites”), that charged a fee to view the apartments on the Website. Between 2013 and 2016, victims paid GUZMAN (who has no real estate licenses) more than $100,000, but were never able to view the apartments purportedly available for rent on the Websites, some of which were not, in fact, in New York City, and others of which were not, in fact, available for rent. GUZMAN was arrested this morning and will be presented before the Honorable James C. Francis IV later today.

Manhattan U.S. Attorney Preet Bharara said: “Robert Guzman allegedly defrauded more than 2,000 victims who were searching for a place to live in New York City. He allegedly created websites that took advantage of these victims’ desire to find affordable housing in New York city, taking fees from victims to view apartments, when in fact some of the apartments were not even in New York or available for rent. Thanks to the work of the U.S. Postal Inspection Service, Guzman’s alleged scam has been put to an end.”

USPIS Inspector-in-Charge Philip R. Bartlett said: “Mr. Guzman took advantage of the need for affordable housing by allegedly devising a scheme to defraud those who could least afford to lose their hard-earned funds to a scam. Today’s arrest by Postal Inspectors, exemplifies our Agency’s commitment to bring individuals to justice whose greed overshadows honesty and decency.”

According to the Complaint[1]:

From 2013 through the present, GUZMAN would post on the Websites apartments supposedly available for rent in New York City, and would charge a fee to view the apartments (the “Application Fee”). The Website included listings for apartments that were not, in fact, in New York City, as well as some that were, in fact, listed for sale, not for rent, by actual real estate companies. After the victims mailed the Application Fee to a P.O. box GUZMAN provided on the Website, the victims would never be able to view the apartments purportedly available for rent. Between 2013 and 2016, GUZMAN defrauded more than 2,000 victims of over $100,000.


GUZMAN, 42, of the Bronx, New York, was arrested this morning in the Bronx. GUZMAN was charged with mail fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the efforts of the USPIS in this investigation.

This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Jacob Warren is in charge of the prosecution.

The charge contained in the Complaint is merely an accusation, 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 forth herein constitute only allegations, and every fact described should be treated as an allegation.

Manhattan U.S. Attorney Charges Two Individuals In $17 Million Real Estate Scam


   Preet Bharara, the United States Attorney for the Southern District of New York, and Patricia Tarasca, the Special Agent-in-Charge of the New York Region for the Federal Deposit Insurance Corporation Office of Inspector General (“FDIC-OIG”), announced the unsealing today of an indictment charging ISSAK ALMALEH, a/k/a “Issak Izrael,” and ANTOANETA IOTOVA with conspiracy to commit bank fraud, bank fraud, wire fraud, and making false statements to the FDIC, in connection with a wide-ranging scheme to falsely claim ownership of more than $17 million worth of property in New York and Florida. As alleged, ALMALEH and IOTOVA used forged documents to claim ownership of real estate in New York and Florida, and then used those real estate documents to victimize individuals and tenants. ALMALEH and IOTOVA were arrested today in Hollywood, Florida, and will be presented later today in federal court in Fort Lauderdale, Florida. The case is assigned to Chief U.S. District Judge Colleen McMahon.
Manhattan U.S. Attorney Preet Bharara said: “Issak Almaleh and Antoaneta Iotova allegedly forged documents to falsely claim ownership over $17 million of property in New York and Florida. As alleged, the defendants’ brazen scheme led to at least one victim being wrongfully evicted from the victim’s own home and others signing leases and paying deposits to the defendants for homes the defendants did not actually own. Thanks to the work of the FDIC Office of Inspector General, the defendants’ alleged frauds have now been foreclosed.”
FDIC Special Agent-in-Charge Patricia Tarasca said: “The FDIC Office of Inspector General is committed to investigating allegations of fraudulent activity that threatens to harm FDIC-insured financial institutions. Our office worked vigorously to uncover the details of this alleged real estate foreclosure scam to ensure integrity in the banking industry and hold guilty parties accountable.”
According to the allegations contained in the Indictment unsealed today in Manhattan federal court[1]:
The Scheme to Defraud Banks
From at least 2012, ALMALEH and IOTOVA have filed fraudulent and forged property deeds purporting to transfer ownership of more than 40 real properties located in New York City and the greater Miami, Florida, area, with a combined estimated market value in excess of $17 million, to entities controlled by ALMALEH and IOTOVA, specifically, New York Sport Foundation, New York Mortgage Corporation, and Women in International Relations, Inc.
ALMALEH and IOTOVA identified properties that had been subject to foreclosure, and were owned by financial institutions insured by the FDIC. ALMALEH and IOTOVA then filed fraudulent and forged warranty deeds that supposedly reflected the transfer of these properties from the financial institutions to entities controlled by ALMALEH and IOTOVA for a nominal sum. ALMALEH, who was a commissioned notary, would notarize the documents as genuinely signed by representatives of the financial institutions. IOTOVA would sign the documents on behalf of the entities controlled by the defendants.
In furtherance of their scheme, in 2015, ALMALEH and IOTOVA also submitted a false application for FDIC insurance and certification, seeking to have the FDIC certification of an FDIC-insured bank (“Bank-1”) transferred to their control.
The Scheme to Defraud Individuals
After ALMALEH and IOTOVA filed deeds purporting to transfer ownership of the properties, ALMALEH and IOTOVA used the deeds to victimize other individuals. On at least one occasion, in 2015, ALMALEH and IOTOVA evicted a bona fide purchaser (“Victim-1”) from a property in Hollywood, Florida (“Property-1”), that had been falsely claimed by ALMALEH and IOTOVA. Using a fraudulent deed indicating that Victim-1’s property belonged to New York Mortgage Corporation, ALMALEH, using the name “Issak Izrael,” and IOTOVA obtained the assistance of the local police in temporarily evicting Victim-1 from Victim-1’s residence. ALMALEH and IOTOVA proceeded to change the locks to the doors on Property-1, until an emergency court hearing permitted Victim-1 to remain in residence at Property-1.
On another occasion, in 2016, ALMALEH and IOTOVA used documents falsely claiming ownership of a property in Hallandale Beach, Florida (“Property-2”), in order to defraud consumers into falsely entering into lease agreements for Property-2. Two victims (“Victim-2” and “Victim-3”) separately responded to an online advertisement indicating that the units in Property-2 were available for rent. Victim-2 and Victim-3 met with IOTOVA and entered into lease agreements for the units in Property-2. The lease agreements were signed by ALMALEH. In addition to signing a lease agreement, Victim-2 provided IOTOVA with $2,000 in cash, and Victim-3 provided IOTOVA with $900 in cash. A few days later, however, the locks on the doors at Property-2 were changed, and Victim-2 and Victim-3 were notified by the financial institution that was the true owner of Property-2 (“Bank-2”) that their lease agreements were invalid and that they would have to vacate Property-2.
ALMALEH, 63, and IOTOVA, 51, of Hollywood, Florida, are each charged with one count of conspiracy to commit bank fraud, one count of bank fraud, and one count of making false statements to the FDIC, each of which carries a maximum sentence of 30 years in prison; and one count of wire fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Bharara praised the investigative work of the FDIC Office of Inspector General. Mr. Bharara also thanked the New York City Sheriff’s Office, the Hollywood, Florida, Police Department, the Broward County Sheriff’s Department, and the Broward County Property Appraiser’s Office for their assistance in the investigation. Mr. Bharara noted that the investigation remains ongoing.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys David W. Denton Jr. and Robert Sobelman are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
 

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described should be treated as an allegation.

A.G. Schneiderman Moves To Intervene In Lawsuit Against NYC Board Of Elections Regarding Voter Registration Purges


A.G.'s Complaint Follows His Investigation Into Brooklyn Voter Purge After the 2016 Presidential Primary, Showing Widespread Violations By NYCBOE
Schneiderman: The Right To Vote Is Sacred -- Yet NYCBOE Knowingly Disenfranchised Over 200,000 New Yorkers, Violating Federal And State Laws
   Attorney General Eric T. Schneiderman today announced that his office would seek to intervene in a federal lawsuit against the New York City Board of Elections (“NYCBOE”), alleging that widespread policies and practices used by the NYCBOE to cancel voter registrations violate federal and state laws. Specifically, Attorney General Schneiderman’s lawsuit alleges that since 2014 the NYCBOE improperly purged over 200,000 voters’ registrations and, as a result, disenfranchised many voters during the 2016 Presidential Primary. 
“The right to vote is sacred, protecting all other rights. Yet the NYC Board of Elections’ practices were directly responsible for disenfranchising over 200,000 voters – violating federal and state laws, and undermining New Yorkers’ trust in the institutions meant to protect their rights,” said Attorney General Schneiderman. “That’s why we’re moving to join this lawsuit – and I won’t stop fighting for the reforms we need to protect and expand voting rights across New York.”
The Attorney General filed papers in federal court – including a proposed complaint– to request that the Attorney General be allowed to join in a pending lawsuit against the NYCBOE, brought by the organization Common Cause on behalf of purged voters.  The Obama Administration’s U.S. Department of Justice recently entered the lawsuit as well. 
Read the motion to intervene here. Read the proposed complaint here.
The Attorney General’s complaint makes new allegations that go beyond the prior two complaints, detailing three separate voter purges that removed 200,000 people from the rolls (one purge in 2014 related to changes of addresses, one in 2015 related to changes of addresses, and one in 2015 related to the “Brooklyn Project,” all detailed below) and new evidence that shows both explicit violations of the law and that high-level officials at NYCBOE had knowledge of these violations.
The Attorney General’s action stems from its ongoing nine-month investigation into policies and practices for purging voter registrations. During the Presidential Primary on April 19, 2016, the Attorney General’s Office operated a hotline to troubleshoot problems voters encountered at their polling place. That day, the Attorney General’s Office received more than 1,500 complaints from citizens across New York State, including many regarding cancelled registrations in Brooklyn. 
Last month, the Attorney General released a comprehensive report on the unprecedented number of statewide voter complaints the hotline received during the April Presidential Primary and General Election. The Attorney General proposed a series of comprehensive legislative and administrative reforms to simplify the voting process, boost voter registration, and expand voter turnout.
In April, the Attorney General also opened a separate investigation into the policies and practices of the NYCBOE after reports that the Brooklyn Board of Elections improperly purged over one hundred thousand of voters from its registration roll. The Attorney General’s investigation involved interviewing over a dozen current and former NYCBOE officials, reviewing tens of thousands of pages of documents, and examining over one hundred individual voter files. Based on this investigation, the Attorney General’s complaint alleges, in great detail, that the NYCBOE violated federal and state election laws in two clear ways:
  • First, the NYCBOE violated clear federal and state law prohibitions against canceling a voter solely for not voting. Beginning in early 2014, officials in the Brooklyn Office of the NYCBOE put together a plan to cancel the registrations of voters who had not voted since 2008, and who had not made themselves known to the NYCBOE in any other way, such as by submitting a change of address, name, or party affiliation.  This plan, known in the NYCBOE as the “Brooklyn Project,” was developed in response to a report by the New York City Department of Investigation, which criticized the NYCBOE’s voter roll maintenance practices and alleged that ineligible voters remained on the NYCBOE’s registration roll. 
The Brooklyn Project was illegal under both the National Voter Registration Act (“NVRA”), 52 U.S.C. § 20507(b)(2), and the New York Election Law, N.Y. Elec. Law § 5-400, which prohibit cancellations of voters’ registration solely because they have not voted.  In spite of this clear prohibition, the NYCBOE proceeded with the Brooklyn Project, and for several months in 2014, more than 20 employees worked diligently to flag voters for cancellation based on the illegal criterion of not having voted.  Ultimately, in 2015, NYCBOE sent intent to cancel ("ITC") notices and then purged nearly 117,000 voters.  A timeline for the Brooklyn Project is provided below. 
1
Additionally, officials at the Queens Borough Office illegally used the genealogy website Ancestry.com in an attempt to determine whether voters had died, and had notified senior NYCBOE officials about the practice, which still continued.
The Attorney General alleges that senior officials at the NYCBOE had sufficient opportunity to recognize the illegal criteria and reinstate the illegally cancelled voters prior to the April 2016 Presidential Primary.  For instance, in August 2015, in response to a complaint received from a voter cancelled by this illegal purge, senior level officials at the NYCBOE were informed that the Brooklyn Borough Office of the NYCBOE had flagged voters for cancellation based on a history of not voting. Despite this notice, the NYCBOE failed to take immediate steps to reinstate the voters. Instead, the voters purged as part of the Brooklyn Project remained cancelled up to and during the 2016 Presidential Primary.
  • Second, the complaint filed by the Attorney General alleges that the NYCBOE violated federal and state laws by not following proper procedures for cancelling voters based on a change of address. The NYCBOE regularly receives information from the United States Postal Service’s National Change of Address (“NCOA”) database regarding individuals who may have changed their address.  If that information suggests that a voter moved outside New York City, the NYCBOE can initiate a cancellation process described in federal and state law.  Specifically, under the NVRA, 52 U.S.C. § 20507(c)-(d), and New York State Election Law § 5-708(5)(c), the NYCBOE must send that voter a notice stating that it suspects the voter has moved and that it is seeking confirmation of the voter’s address.  If the voter does not respond to the notice, and does not vote or confirm his or her address in any other way over a timeframe consisting of two federal general elections, the NYCBOE can only then cancel that voter’s registration.
In contrast to this multiyear cancellation process mandated by law, in 2014 and 2015 the NYCBOE waited just 14 days after providing such notice to voters before purging them from the registration roll.  The illegal shortcut, devised and implemented at the Central Office of the NYCBOE, resulted in the cancellation of over 100,000 voter registrations throughout New York City.  Moreover, many voters, including several that contacted the Attorney General’s Office during the 2016 Presidential Primary, were disenfranchised by this illegal project.  Timelines for the purges are provided below. 
2
The Attorney General further alleges that inadequate oversight failed to prevent these purges. Staff at the Borough Offices received almost no training to prepare them for the task of handling voter registrations, and several former officials from the Brooklyn Office reported that they were not aware that the NYCBOE had written policies regarding voter registration, even when given a copy of those policies. Moreover, in interviews with the Attorney General’s Office, several former officials at the Brooklyn Office incorrectly maintained that they had the authority to cancel voter’s registrations based on a failure to vote. 
The lawsuit alleges violations of the National Voter Registration Act (“NVRA”), 52 U.S.C. § 20507(b)(2), and 52 U.S.C. § 20507(d), as well as violations of New York State Election Law § 5-400, and §§ 5-708(5)(c). 
Among other relief requested in the complaint, the Attorney General asks the court to order NYCBOE to:
  • audit the cancellation of every New York City voter sent an ITC letter since January 1, 2014 and require reinstatement of any person removed in violation of federal or state election law;
  • ensure that a process for cancelling voters is implemented in compliance with federal and state election law;
  • create a training program, with the approval of the Attorney General’s Office, regarding the maintenance of registration rolls and the removal of voters from the rolls;
  • create oversight policies to ensure Borough Offices’ compliance with federal and state law regarding cancellations;
  • appoint a new head of Voter Registration to provide oversight of cancellation processes and ensure that those processes comply with federal and state law;
  • and no longer use cancellation letters to cancel registrations without documentation or evidence that a voter is ineligible.
This matter is being handled by Assistant Attorneys General Ajay Saini, Diane Lucas, and Sania Khan of the Attorney General’s Civil Rights Bureau, which is led by Bureau Chief Lourdes Rosado. The Civil Rights Bureau is part of the Social Justice Division, which is led by Executive Deputy Attorney General for Social Justice Alvin Bragg. 
The Attorney General’s Office thanks the New York City Board of Elections for its cooperation with the investigation.
The Attorney General's Office is committed to the voting rights protecting all eligible New Yorkers. To file a civil rights complaint, contact the Attorney General’s Office at (212) 416-8250civil.rights@ag.NY.gov or visit www.ag.NY.gov.

A.G. Schneiderman Announces Settlement With Computer Manufacturer After Data Breach Exposed More Than 35,000 Credit Card Numbers


Acer Service Corporation Must Pay $115,000 In Penalties And Reform Data Security Practices
    Attorney General Eric T. Schneiderman today announced a settlement with Acer Service Corporation (“Acer”), a computer manufacturer based in Taiwan, after a data breach of its website exposed over 35,000 credit card numbers.  An investigation by the A.G.’s office  revealed that sensitive Acer customer information was not protected by Acer for almost a full calendar year. Acer has agreed to pay $115,000 in penalties and to shore up its data security practices.
“Businesses have a duty to protect their customers’ personal information as securely as possible,” said Attorney General Schneiderman. “Lax security practices like those we uncovered at Acer put New Yorkers’ credit card information and other personal data at serious risk. That’s unacceptable, and will change under the terms of our settlement today. My office will continue to hold businesses accountable for protecting their customers’ private information.”
Acer manufactures computers and other electronics and sells them through various channels including through its website http://us-store.acer.com (“acer.com”).  In January 2016, Discover Card analyzed hundreds of fraudulent credit card transactions on the website and determined that Acer was the last merchant where a legitimate transaction took place.  This is known as a “common point of purchase” and indicates that Acer was the target of a cyber-attack resulting in a compromise of credit card information. 
The subsequent investigation revealed that at least one attacker exploited Acer website vulnerabilities to view and ex-filtrate sensitive customer data. Between November 11, 2015 and April 28, 2016, the attacker(s) made hundreds of electronic requests for customer data.  In all, sensitive data related to 35,071 people, including 2,250 New York residents, was stolen. 
Acer’s website contained numerous vulnerabilities. For example, between July 4, 2015 and April 28, 2016, an Acer employee enabled debugging mode on Acer’s e-commerce platform.  Debugging mode is a setting that stores all data transferred through a website into a log file in plain text format to troubleshoot the website prior to launch, or otherwise when it is offline and not processing customer transactions.
During this time, the website saved all the information provided by the customers in unencrypted plain text form to a log file.  This information included first and last name; credit card number, expiration date and verification number (CVN); website user name and password; email address; and street address including city, state and zip code.
Additionally, Acer misconfigured its website to allow directory browsing by unauthorized users.  This misconfiguration allowed the attacker(s) to view and access subdirectories on the website using a simple web browser.
As a result of the security vulnerabilities described above, significant amounts of sensitive Acer customer information was not protected for almost a full calendar year.
The settlement requires Acer to maintain reasonable security policies designed to protect consumer personal information including:
  1. Designation of an employee(s) to coordinate and supervise its program designed to protect the privacy and security of personal information;
  2. Designation of an employee(s) to be notified whenever any personal information is saved to, or stored on, Acer’s file system in unencrypted form;
  3. Annual employee training to at a minimum inform employees who are responsible for handling personal information about data security, the importance of consumer privacy and their duty to help maintain its integrity;
  4. Responding to events involving unauthorized acquisition, access, use or disclosure of personal information including training all staff who are responsible for inputting, entering, maintaining, storing or transferring personal information on data breach notification law;
  5. Identifying material risks to the security and confidentiality of personal information that are reasonably likely to result in the unauthorized disclosure, misuse, copying, alteration, destruction, or other compromise of such information, including through the regular review of security industry news sources for newly identified security vulnerabilities;
  6. Designing and implementing reasonable safeguards to control the risks identified through risk assessment, including use of multi-factor authentication for remote access to Acer computer systems; implementation of an intrusion detection system; and penetration testing (at least annually) and vulnerability assessments (at least quarterly);
  7. Regular testing of the effectiveness of the safeguards’ key controls, systems, and procedures; and
  8. Developing and using reasonable steps to select and retain service providers capable of maintaining security practices consistent with the agreement and requiring service providers by contract to implement and maintain appropriate safeguards.
Acer has also agreed to maintain the data security standards required by the credit card industry.

Statement from Comptroller Scott M. Stringer on the Department of Investigation’s ACS Report


“We, as a city, are defined by how we treat our kids. We aren’t living in a fair city when my kids come home to a safe household every night while thousands of others, in the greatest city on the planet, are living in some of the most deplorable, dangerous conditions imaginable.
“Through our audits and investigations, we have uncovered ACS has repeatedly violated its own requirements on how it investigates allegations of abuse and neglect. In even the most serious “high priority” cases, we have found that ACS hasn’t completed the necessary number of supervisor or manager reviews required by its own rules.  We’ve discovered poor oversight and ineffective management. Yet, the agency has vehemently resisted calls for change.
“At ACS, tragic failures are known; major successes are not. Let there be no doubt that this is likely the toughest job in government. But report after report shows there are persistent problems at this agency. Today’s DOI investigation, once again, validates the concerns voiced by many regarding ACS. This should be — and must be — a wake-up call. It’s time to face the facts. ACS and City government must come to the realization that the agency needs a dramatic overhaul. There are systemic challenges placing children at risk, and we have a moral obligation not just as government officials, but as New Yorkers, to fix them. The stakes are simply too high.”

Statement from City Comptroller Scott M. Stringer on the Mayor’s Preliminary Budget


“The uncertainty surrounding future policy decisions by the Trump administration and the Republican Congress presents real risks to our City budget. My office conducted an analysis outlining potential Federal cuts—and I’m concerned many critical areas could be affected. From affordable housing to programs that support at-risk children, our social safety net could be fundamentally changed by backwards policies from Washington. We believe that whatever the White House and the Republican Congress do, our City must protect its most vulnerable residents.
“Over the coming months, we must enact a budget that secures the safety net, prepares our children for the future, and helps our city compete in a 21st century economy.  We also must be smart about spending in good times so we are prepared for when tougher times arrive. I look forward to working with the Mayor and the City Council to ensure we have a budget that accomplishes these goals and gives every New Yorker a fair shot to make it here. My office is currently reviewing the preliminary budget and will release a comprehensive analysis in the coming weeks.”
Comptroller Stringer previously released an analysis of how federal aid to New York City, which often impacts New Yorkers who need support most, could be at risk under the Trump Administration and the Republican Congress.

It's Not Every Day You Get to See This - Remnants of the Old Drive Ins



  This 1961 Cadillac Sedan De Ville Complete with its famous tail fins in excellent shape is a vision from the 1960's, especially since it is parked in front of 'Yo Burger" a well known Burger place just like the old drive ins.  The owner went in for a delicious burger, fries, and soda. The only thing missing is the waitress on roller skates.

Another Television Shoot in Riverdale


   Last week scenes the television show Madame Secretary were filmed in the North Riverdale area around the Skyview Towers. This week in the Skyview Shopping Center the television shoe the Blacklist was filming as you see in the photos below, The Riverdale area of the Bronx has been a favorite place to film with its scenic views and historic estates. Past shows which have filmed in Riverdale include Law and Order, Law and Order SVU, Smash, and many others. 


Above - Several parking spaces are taken up by film equipment.
Below - The Riverdale Pharmacy in the Skyview Shopping Center was a closed set as filming took place. One woman watching what was going on remarked 'That is my pharmacy".




When filming was done the curtain came down and the pharmacy returned to regular business.