Friday, August 24, 2018

Correctional Officer Pleads Guilty To Conspiring To Take Bribes To Smuggle Contraband Into The Metropolitan Correctional Center


Correctional officer Victor Casado conspired to take bribes from a federal inmate in his custody in exchange for smuggling contraband into the jail

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today the guilty plea of VICTOR CASADO to his role in a scheme to smuggle contraband into the Metropolitan Correctional Center (“MCC”), a Manhattan detention facility that houses federal inmates, in exchange for cash bribes.  CASADO, a former federal correctional officer, pled guilty to one count of conspiracy to commit bribery and to introduce contraband into prison before U.S. District Judge Richard J. Sullivan.
U.S. Attorney Geoffrey S. Berman said:  “As a correctional officer, Victor Casado’s duty was to ensure the security of the Metropolitan Correctional Center and the safety of inmates in his care.  Instead of honoring that duty, he betrayed it, taking bribes to smuggle contraband into a jail that houses federal inmates.  This Office will continue to stop the corruption of our criminal justice system by those entrusted with supervising incarcerated individuals and keeping them safe.”
According to the Information and Complaint filed in this case, other public filings, and statements made during the plea proceeding:
CASADO was employed as a correctional officer at the MCC from 2012 until his resignation in July 2018.
On multiple occasions in 2016 and 2017, CASADO smuggled cellphones, alcohol, over-the-counter medications, and food into the MCC in exchange for bribe payments from inmates.  These bribes were funneled to CASADO by non-incarcerated relatives or associates of the inmates, either in cash or by wire transfer.  For example, on multiple occasions, CASADO received bribes from an inmate (“Inmate-1”), transferred by one of Inmate-1’s attorneys, totaling more than $25,000, in exchange for smuggling alcohol and cellphones, among other contraband, into the MCC for Inmate-1.  Additionally, CASADO also requested and received thousands of dollars in payments from another inmate (“Inmate-5”), which were delivered to CASADO by Inmate-5’s relatives and a paralegal who represented him.  Inmate-5 paid CASADO at CASADO’s insistence, ostensibly to fund travel by CASADO to the Dominican Republic.
CASADO, 35, of the Bronx, New York, pled guilty to one count of conspiracy to commit bribery and to introduce contraband into prison.  The charge carries a maximum term of five years in prison.  CASADO is scheduled to be sentenced by Judge Sullivan on January 11, 2019.  The maximum potential penalty 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. Berman praised the investigative work of the Federal Bureau of Investigation and the Department of Justice, Office of Inspector General.

Correctional Officer Arrested For Accepting A Bribe To Smuggle Cellphones Into The Metropolitan Correctional Center


Correctional Officer Dario Quirumbay Accepted a Bribe from a Family Member of a Federal Inmate in Exchange for Smuggling Cellphones into the Jail

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Guido Modano, Special Agent-in-Charge of the New York Field Office of the Department of Justice Office of the Inspector General (“DOJ OIG”) announced today the unsealing of a criminal Complaint in Manhattan federal court charging federal correctional officer DARIO QUIRUMBAY with taking a bribe in exchange for smuggling contraband into the Metropolitan Correctional Center (“MCC”), a Manhattan detention facility that houses federal inmates. QUIRUMBAY was arrested this morning and will be presented today before Magistrate Judge Robert W. Lehrburger.

U.S. Attorney Geoffrey S. Berman said: “As alleged, Dario Quirumbay abused the trust placed in him by the Department of Justice and used his position to enrich himself by smuggling prohibited contraband inside a correctional facility in exchange for cash. Now he finds himself on the other side of the law.”
DOJ OIG Special Agent-in-Charge Guido Modano said:  “Corruption has no place in our federal correctional system and will not be tolerated.  The OIG is committed to investigating allegations of corrupt employees within the Federal Bureau of Prisons and the Department of Justice.”               
According to the allegations in the Complaint unsealed today in Manhattan federal court[1]:
QUIRUMBAY has been employed as a correctional officer at the MCC since 2016.
QUIRUMBAY, in exchange for approximately $1,000, agreed to smuggle two cellphones into the MCC and also provided an inmate with alcohol.  QUIRUMBAY met with a relative of one of the inmates in his custody to retrieve his cash bribe and two Apple iPhones, which QUIRUMBAY then delivered to an inmate inside the MCC. 
QUIRUMBAY, 29, of Jersey City, New Jersey, has been charged in the Complaint with one count of conspiracy to commit bribery and to provide contraband in a prison, which carries a maximum prison term of five years; one count of bribery, which carries a maximum prison term of 15 years; one count of providing contraband in a prison, which carries a maximum prison term of one year; one count of conspiracy to commit honest services wire fraud, which carries a maximum prison term of 20 years.  The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of the DOJ Office of the Inspector General in this investigation.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
 [1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

DE BLASIO ADMINISTRATION ANNOUNCES NEXT STEP IN TRANSFORMATION OF GOVERNORS ISLAND INTO YEAR-ROUND HUB FOR EDUCATION, INNOVATION AND RECREATION


  Today, the de Blasio Administration officially initiated the public review process for a rezoning of the southern half of Governors Island. This effort has the potential to unlock up to 4.5 million square feet of commercial, academic, cultural and institutional development that would complement and financially sustain the Island’s popular park, public programming, and cultural amenities. This rezoning will draw on the City’s work to repurpose historic buildings with a focus on new development areas to support the job producing industries that represent the future of the City.

“Governors Island’s 43-acre park has made it the jewel of New York Harbor,” said Mayor de Blasio. “The Island is now set to dramatically expand its role in our city’s economy as we turn its southern half into a center of innovation and education.”

"Thanks to almost a decade’s worth of substantial city and philanthropic investment, Governors Island is already a destination for recreation, relaxation and culture for nearly a million visitors annually. This rezoning represents the next step in marrying the Island’s rich history with its future role as a global hub for convening, the arts, tech, and education," said Alicia Glen, Deputy Mayor for Housing and Economic Development.

The proposed rezoning covers 33 acres on the southern half of Governors Island, across two zones previously established for new development as part of a 2010 Park and Public Space Master Plan. The sites include a 7 acre parcel on the western side of the Island with sweeping views of the Statue of Liberty and an expansive 26 acre parcel on the Island’s eastern shore that together have 4.5 million square feet of development potential.

The process outlined today paves the way for new development to be integrated into the southern half of Governors Island that is targeted to support the City’s efforts to further diversify its growing economy. Each development has the potential to allow unique and flexible floorplates to support new industries that represent the City’s future, such as life sciences, media and technology companies. New structures will be predominantly low and mid-rise.

While a federal deed restriction established as part of the 2003 transfer of the Island to New York precludes any full-time residential uses on the Island, this plan will make way for more academic and institutional uses that will complement the Island’s existing character as a popular recreational and cultural destination. All revenue streams from future development will support park operations, maintenance and expanded access to the Island’s open spaces.

Governors Island has grown in popularity among New Yorkers, with a 65% increase in visitorship since 2014. Since the new park was completed in 2016, the Island has expanded from a four month season to a six month season, and late nights on Friday and Saturdays were introduced this year. With over 50 historic buildings on the northern section of Governors Island, the Island currently is home to two year-round tenants: the New York Harbor School and the Lower Manhattan Cultural Council’s Art Center. Several new tenants are also preparing to move into buildings on the Island year-round, including Spaceworks and the Billion Oyster Project.

With input from Manhattan Community Board 1 and the Governors Island Community Advisory Committee, guiding principles for future development were established:

·         Complement and enhance the park and public spaces and respond to environmental conditions
·         Connect and establish a harmonious relationship with the park, esplanade and Historic District
·         Retain and frame views within the Island, and towards New York Harbor, Lower Manhattan and the Brooklyn waterfront
·         Activate building edges along public spaces
·         Promote innovative design approaches to achieve a high level of resiliency and environmental sustainability
·         Encourage flexibility to accommodate a wide range of building types and a mix of uses

Environmental review and scoping for the South Island rezoning will begin this September. A public hearing will be held on September 26, 2018 at 6:00 PM at the Battery Maritime Building located at 10 South Street in Lower Manhattan.

Bronx Democratic Party - ONE WEEK AWAY: Bronx Dems Annual BBQ & Softball Game




Wednesday, August 22, 2018

Michael Cohen Pleads Guilty In Manhattan Federal Court To Eight Counts, Including Criminal Tax Evasion And Campaign Finance Violations


Plea Follows Filing of Eight Count Criminal Information Alleging Concealment of More Than $4 Million in Unreported Income, $280,000 in Unlawful Campaign Contributions

  Robert Khuzami, Attorney for the United States, Acting Under Authority Conferred by 28 U.S.C. § 515, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and James D. Robnett, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the guilty plea of MICHAEL COHEN to charges of tax evasion, making false statements to a federally-insured bank, and campaign finance violations.  The plea was entered followed the filing of an eight-count criminal information, which alleged that COHEN concealed more than $4 million in personal income from the IRS, made false statements to a federally-insured financial institution in connection with a $500,000 home equity loan, and, in 2016, caused $280,000 in payments to be made to silence two women who otherwise planned to speak publicly about their alleged affairs with a presidential candidate, thereby intending to influence the 2016 presidential election.  COHEN pled guilty today before U.S. District Judge William H. Pauley III.

Attorney for the United States Robert Khuzami said:  “Michael Cohen is a lawyer who, rather than setting an example of respect for the law, instead chose to break the law, repeatedly over many years and in a variety of ways.  His day of reckoning serves as a reminder that we are a nation of laws, with one set of rules that applies equally to everyone.”   
FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “This investigation uncovered crimes of fraud, deception and evasion, conducted through a string of financial transactions that were carefully constructed and concealed to protect a variety of interests.  But as we all know, the truth can only remain hidden for so long before the FBI brings it to light.  We are all expected to follow the rule of law, and the public expects us - the FBI - to enforce the law equally.  Today, Mr. Cohen has been reminded of this important lesson, as he acknowledged with his guilty plea.”
IRS-CI Special Agent-in-Charge James D. Robnett said:  “Today’s guilty plea exemplifies IRS Special Agents' rigorous pursuit of tax evasion and sends the clear message that the tax laws apply to everybody. Mr. Cohen’s greed to hide his income from the IRS cheats all the honest taxpayers, and we should not expect law abiding citizens to foot the bill for those who circumvent the system to evade paying their fair share.”
According to the allegations in the Information unsealed today as well as statements made in Manhattan federal court:
From 2007 through January 2017, COHEN was an attorney and employee of a Manhattan-based real estate company (the “Company”).  COHEN held the title of “Executive Vice President” and “Special Counsel” to the owner of the Company (“Individual-1”).  In January 2017, COHEN left the Company and began holding himself out as the “personal attorney” to Individual-1, who by that time had become the President of the United States.
In addition to working for and earning income from the Organization, at all times relevant to this Information, COHEN owned taxi medallions in New York City and Chicago worth millions of dollars.  COHEN owned these taxi medallions as investments and leased the medallions to operators who paid COHEN a portion of the operating income.
The Tax Evasion Scheme
In late 2013, COHEN retained an accountant (“Accountant-1”) for the purpose of handling COHEN’s personal and entity tax returns.  After being retained, Accountant-1 filed amended 2011 and 2012 Form 1040 tax returns with the Internal Revenue Service (“IRS”).  For tax years 2013 through 2016, Accountant-1 prepared individual returns for COHEN and returns for COHEN’s medallion and real estate entities.  To confirm he had reviewed and approved these returns, both COHEN and his wife signed a Form 8879 for tax years 2013 through 2016, and filed manually for tax year 2012.  Between 2012 and the end of 2016, COHEN earned more than $2.4 million in income from a series of personal loans made by COHEN to a taxi operator to whom COHEN leased certain of his Chicago taxi medallions (“Taxi Operator-1”), none of which he disclosed to the IRS. 
As a further part of the scheme to evade paying income taxes, COHEN also concealed more than $1.3 million in income he received from another taxi operator to whom COHEN leased certain of his New York medallions (“Taxi Operator-2”).  This income took two forms.  First, COHEN did not report the substantial majority of a bonus payment of at least $870,000, which was made by Taxi Operator-2 in 2012 to induce COHEN to allow Taxi Operator-2 to operate certain of COHEN’s medallions.  Second, between 2012 and 2016, COHEN concealed nearly $1 million in taxable income he received from Taxi Operator-2’s operation of certain of COHEN’s taxi medallions.
To ensure the concealment of this additional operator income, COHEN arranged to receive a portion of the medallion income personally, as opposed to having the income paid to COHEN’s medallion entities.  Paying the medallion entities would have alerted Accountant-1, who prepared the returns for those entities, to the existence of the income such that it would have been included on COHEN’s tax returns.  
As a further part of his scheme to evade taxes, COHEN also hid the following additional sources of income from Accountant-1 and the IRS:
  • A $100,000 payment received, in 2014, for brokering the sale of a piece of property in a private aviation community in Ocala, Florida.
  • Approximately $30,000 in profit made, in 2014, for brokering the sale of a Birkin Bag, a highly coveted French handbag that retails for between $11,900 to $300,000, depending on the type of leather or animal skin used. 
  • More than $200,000 in consulting income earned in 2016 from an assisted living company purportedly for COHEN’s “consulting” on real estate and other projects.
 In total, COHEN failed to report more than $4 million in income, resulting in the avoidance of taxes of more than $1.4 million due to the IRS.
False Statements to a Bank
In 2010, COHEN, through companies he controlled, executed a $6.4 million promissory note with a bank (“Bank-1”), collateralized by COHEN’s taxi medallions and personally guaranteed by COHEN.  A year later, in 2011, COHEN personally obtained a $6 million line of credit from Bank-1 (the “Line of Credit”), also collateralized by his taxi medallions.  By February 2013, COHEN had increased the Line of Credit from $6 million to $14 million, thereby increasing COHEN’s personal medallion liabilities at Bank-1 to more than $20 million. 
In November 2014, COHEN refinanced his medallion debt at Bank-1 with another bank (“Bank-2”), who shared the debt with a New York-based credit union (the “Credit Union”).  The transaction was structured as a package of individual loans to the entities that owned COHEN’s New York medallions.  Following the loans’ closing, COHEN’s medallion debt at Bank-1 was paid off with funds from Bank-2 and the Credit Union, and the Line of Credit with Bank-1 was closed.
In 2013, in connection with a successful application for a mortgage from another Bank (“Bank-3”) for his Park Avenue condominium (the “2013 Application”), COHEN disclosed only the $6.4 million medallion loan he had with Bank-1 at the time.  As noted above, COHEN also had a larger, $14 million Line of Credit with Bank-1 secured by his medallions, which COHEN did not disclose in the 2013 Application.  
In February 2015, COHEN, in an attempt to secure financing from Bank-3 to purchase a summer home for approximately $8.5 million, again concealed the $14 million Line of Credit.  Specifically, in connection with this proposed transaction, Bank-3 obtained a 2014 personal financial statement COHEN had provided to Bank-2 while refinancing his medallion debt.  Bank-3 questioned COHEN about the $14 million Line of Credit reflected on that personal financial statement, because COHEN had omitted that debt from the 2013 Application to Bank-3.  COHEN misled Bank-3, stating, in writing, that the $14 million Line of Credit was undrawn and that he would close it.  In truth and in fact, COHEN had effectively overdrawn the Line of Credit, having swapped it out for a fully drawn, larger loan shared by Bank-2 and the Credit Union upon refinancing his medallion debt.  When Bank-3 informed COHEN that it would only provide financing if COHEN closed the Line of Credit, COHEN lied again, misleadingly stating in an email: “The medallion line was closed in the middle of November 2014.” 
In December 2015, COHEN contacted Bank-3 to apply for a home equity line of credit (“HELOC”).  In so doing, COHEN again significantly understated his medallion debt.  Specifically, in the HELOC application, COHEN, together with his wife, represented a positive net worth of more than $40 million, again omitting the $14 million in medallion debt with Bank-2 and the Credit Union.  Because COHEN had previously confirmed in writing to Bank-3 that the $14 million Line of Credit had been closed, Bank-3 had no reason to question COHEN about the omission of this liability on the HELOC application.  In addition, in seeking the HELOC, COHEN substantially and materially understated his monthly expenses to Bank-3 by omitting at least $70,000 in monthly interest payments due to Bank-2 on the true amount of his medallion debt. 
In April 2016, Bank-3 approved COHEN for a $500,000 HELOC.  By fraudulently concealing truthful information about his financial condition, COHEN obtained a HELOC that Bank-3 would otherwise not have approved. 
Campaign Finance Violations
The Federal Election Campaign Act of 1971, as amended, Title 52, United States Code, Section 30101, et seq., (the “Election Act”), regulates the influence of money on politics.  At all relevant times, the Election Act set certain limitations and prohibitions, among them: (a) individual contributions to any presidential candidate, including expenditures coordinated with a candidate or his political committee, were limited to $2,700 per election, and presidential candidates and their committees were prohibited from accepting contributions from individuals in excess of this limit; and (b) Corporations were prohibited from making contributions directly to presidential candidates, including expenditures coordinated with candidates or their committees, and candidates were prohibited from accepting corporate contributions.
On June 16, 2015, Individual-1 began his presidential campaign.  While COHEN continued to work at the Company and did not have a formal title with the campaign, he had a campaign email address and, at various times, advised the campaign, including on matters of interest to the press, and made televised and media appearances on behalf of the campaign. 
In August 2015, the Chairman and Chief Executive of Corporation-1, a media company that  owns, among other things, a popular tabloid magazine  (“Chairman-1” and “Magazine-1,” respectively”), in coordination with COHEN and one or more members of the campaign, offered to help deal with negative stories about Individual-1’s relationships with women by, among other things, assisting the campaign in identifying such stories so they could be purchased and their publication avoided.  Chairman-1 agreed to keep COHEN apprised of any such negative stories.
Consistent with the agreement described above, Corporation-1 advised COHEN of negative stories during the course of the campaign, and COHEN, with the assistance of Corporation-1, was able to arrange for the purchase of two stories so as to suppress them and prevent them from influencing the election.
First, in June 2016, a model and actress (“Woman-1”) began attempting to sell her story of her alleged extramarital affair with Individual-1 that had taken place in 2006 and 2007, knowing the story would be of considerable value because of the election.  Woman-1 retained an attorney (“Attorney-1”), who in turn contacted the editor-in-chief of Magazine-1 (“Editor-1”), and offered to sell Woman-1’s story to Magazine-1.  Chairman-1 and Editor-1 informed COHEN of the story. At COHEN’s urging and subject to COHEN’s promise that Corporation-1 would be reimbursed, Editor-1 ultimately began negotiating for the purchase of the story.
On August 5, 2016, Corporation-1 entered into an agreement with Woman-1 to acquire her “limited life rights” to the story of her relationship with “any then-married man,” in exchange for $150,000 and a commitment to feature her on two magazine covers and publish more than 100 magazine articles authored by her.  Despite the cover and article features to the agreement, its principal purpose, as understood by those involved, including COHEN, was to suppress Woman-1’s story so as to prevent it from influencing the election.       
Between late August 2016 and September 2016, COHEN agreed with Chairman-1 to assign the rights to the non-disclosure portion of Corporation-1’s agreement with Woman-1 to COHEN for $125,000.  COHEN incorporated a shell entity called “Resolution Consultants LLC” for use in the transaction.  Both Chairman-1 and COHEN ultimately signed the agreement, and a consultant for Corporation-1, using his own shell entity, provided COHEN with an invoice for the payment of $125,000.  However, in early October 2016, after the assignment agreement was signed but before COHEN had paid the $125,000, Chairman-1 contacted COHEN and told him, in substance, that the deal was off and that COHEN should tear up the assignment agreement.   
Second, on October 8, 2016, an agent for an adult film actress (“Woman-2”) informed Editor-1 that Woman-2 was willing to make public statements and confirm on the record her alleged past affair with Individual-1.  Chairman-1 and Editor-1 then contacted COHEN and put him in touch with Attorney-1, who was also representing Woman-2.  Over the course of the next few days, COHEN negotiated a $130,000 agreement with Attorney-1 to himself purchase Woman-2’s silence, and received a signed confidential settlement agreement and a separate side letter agreement from Attorney-1. 
COHEN did not immediately execute the agreement, nor did he pay Woman-2.  On the evening of October 25, 2016, with no deal with Woman-2 finalized, Attorney-1 told Editor-1 that Woman-2 was close to completing a deal with another outlet to make her story public.  Editor-1, in turn, texted COHEN that “[w]e have to coordinate something on the matter [Attorney-1 is] calling you about or it could look awfully bad for everyone.”  Chairman-1 and Editor-1 then called COHEN through an encrypted telephone application.  COHEN agreed to make the payment, and then called Attorney-1 to finalize the deal.
The next day, on October 26, 2016, COHEN emailed an incorporating service to obtain the corporate formation documents for another shell corporation, Essential Consultants LLC, which COHEN had incorporated a few days prior.  Later that afternoon, COHEN drew down $131,000 from the fraudulently obtained HELOC and requested that it be deposited into a bank account COHEN had just opened in the name of Essential Consultants.  The next morning, on October 27, 2016, COHEN went to Bank-3 and wired approximately $130,000 from Essential Consultants to Attorney-1.  On the bank form to complete the wire, COHEN falsely indicated that the “purpose of wire being sent” was “retainer.”  On November 1, 2016, COHEN received from Attorney-1 copies of the final, signed confidential settlement agreement and side letter agreement.
COHEN caused and made the payments described herein in order to influence the 2016 presidential election.  In so doing, he coordinated with one or more members of the campaign, including through meetings and phone calls, about the fact, nature, and timing of the payments.  As a result of the payments solicited and made by COHEN, neither Woman-1 nor Woman-2 spoke to the press prior to the election.
In January 2017, COHEN in seeking reimbursement for election-related expenses, presented executives of the Company with a copy of a bank statement from the Essential Consultants bank account, which reflected the $130,000 payment COHEN had made to the bank account of Attorney-1 in order to keep Woman-2 silent in advance of the election, plus a $35 wire fee, adding, in handwriting, an additional “$50,000.”  The $50,000 represented a claimed payment for “tech services,” which in fact related to work COHEN had solicited from a technology company during and in connection with the campaign.  COHEN added these amounts to a sum of $180,035.  After receiving this document, executives of the Company “grossed up” for tax purposes COHEN’s requested reimbursement of $180,000 to $360,000, and then added a bonus of $60,000 so that COHEN would be paid $420,000 in total.  Executives of the Company also determined that the $420,000 would be paid to COHEN in monthly amounts of $35,000 over the course of 12 months, and that COHEN should send invoices for these payments.        
On February 14, 2017, COHEN sent an executive of the Company (“Executive-1”) the first of his monthly invoices, requesting “[p]ursuant to [a] retainer agreement, . . . payment for services rendered for the months of January and February, 2017.”  The invoice listed $35,000 for each of those two months.  Executive-1 forwarded the invoice to another executive of the Company (“Executive-2”) the same day by email, and it was approved.  Executive-1 forwarded that email to another employee at the Company, stating: “Please pay from the Trust. Post to legal expenses. Put ‘retainer for the months of January and February 2017’ in the description.”
Throughout 2017, COHEN sent to one or more representatives of the Company monthly invoices, which stated, “Pursuant to the retainer agreement, kindly remit payment for services rendered for” the relevant month in 2017, and sought $35,000 per month.  The Company accounted for these payments as legal expenses.  In truth and in fact, there was no such retainer agreement, and the monthly invoices COHEN submitted were not in connection with any legal services he had provided in 2017.
During 2017, pursuant to the invoices described above, COHEN received monthly $35,000 reimbursement checks, totaling $420,000.   
COHEN, 51, of NEW YORK, NEW YORK, pleaded guilty to five counts of willful tax evasion; one count of making false statements to a bank; one count of causing an unlawful campaign contribution; and one count of making an excessive campaign contribution.
COHEN’S sentencing is scheduled for December 12 at 11 a.m.
A chart identifying the charges and the maximum penalties applicable to COHEN is below.
Count
Charge
Maximum Penalty
1-5
Tax Evasion

5 years in prison
6
Making false statements to a federally insured bank

30 years in prison
7
Causing an unlawful corporate contribution

5 years in prison
8
Making an excessive campaign contribution

5 years in prison
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencings of the defendant will be determined by the judge.
Mr. Khuzami praised the work of the FBI, the IRS, and the Special Agents of the U.S. Attorney’s Office. 

Doctor Sentenced For Participating In $30 Million Scheme To Defraud Medicare And Medicaid


  Geoffrey S.  Berman, the United States Attorney for the Southern District of New York, announced that physician EWALD J. ANTOINE was sentenced today by U.S. District Judge Lorna G. Schofield to one year and one day in prison for his participation in a $30 million scheme to defraud Medicare and the New York State Medicaid Program.  ANTOINE falsely posed as the owner of two medical clinics, which were actually owned by a corrupt businessman, and falsely claimed that he had examined and treated hundreds of patients whom he had not in fact seen.  ANTOINE pled guilty on January 11, 2018, to health care fraud and conspiracy to commit health care fraud, mail fraud, and wire fraud.   

U.S. Attorney Geoffrey S. Berman said:  “The Medicare and Medicaid programs are intended to provide essential medical services to the elderly and the needy, not to enrich corrupt doctors and other fraudsters.  The real victims in this case are U.S. taxpayers and needy patients with legitimate medical needs.  Today’s sentence sends a strong message that those who cheat Medicare and Medicaid, including physicians who abuse their licenses and professional oaths, will be held accountable.”
According to the Indictment and other documents filed in federal court, as well as statements made during ANTOINE’s plea proceeding and sentencing:
Between 2007 and 2013, Aleksandr Burman owned and operated six medical clinics in Brooklyn (the “Clinics”) that fraudulently billed Medicare and Medicaid approximately $30 million for medical services and supplies that were not provided, were provided without regard to medical necessity, or were otherwise fraudulently billed.  Under New York State law, medical clinics must be owned and operated by a medical professional.  To circumvent this requirement, Burman, who was not a medical professional, hired doctors to pose as the nominal owners of each of the Clinics.  ANTOINE was one of those doctors, agreeing to sign a variety of fraudulent documents that falsely represented to banks, Medicare, Medicaid, and others that ANTOINE was the sole owner of Sunlight Medical and Psychiatric Services, P.C., and Coney Island Medical Services, P.C., two of the six Clinics.  ANTOINE and his co-conspirators also helped prepare false medical records to support fraudulent reimbursement claims submitted to Medicare and Medicaid.  ANTOINE signed medical charts falsely stating that he had examined patients, and wrote prescriptions and referrals for medically unnecessary and/or non-existent tests and supplies.
In addition to the prison term, ANTOINE, 67, of Valley Stream, New York, was sentenced to three years of supervised release.  Judge Schofield also ordered ANTOINE to pay restitution of $1,825,544 and to forfeit $269,412 in ill-gotten gains.
ANTOINE is the eighth defendant, and the second physician, who has been sentenced after pleading guilty in this case and a related case. The other defendants include:  Aleksandr Burman, the leader of the scheme, who was sentenced in a related case on May 8, 2017, to 10 years in prison; Marina Burman, the former wife of Aleksandr Burman and the owner of a related medical supply company, sentenced on May 17, 2018, to three years in prison; Mustak Y. Vaid, a physician sentenced on August 1, 2018, to 18 months in prison; Asher Oleg Kataev, a Burman business partner, sentenced on May 31, 2018, to three years in prison; Alla Tsirlin, a Clinic office manager, sentenced on June 5, 2018, to one year and one day in prison; and Edward Miselevich and Ivan Voychak, Burman’s partners who jointly ran a related ambulette company, sentenced on June 12 and July 19, 2018, respectively, to three years in prison each.
Three additional defendants – a doctor (Paul J. Mathieu), a physical therapist (Hatem Behiry), and an occupational therapist (Lina Zhitnik) – are scheduled to go to trial before Judge Schofield on November 26, 2018.  These three remaining defendants are presumed innocent unless and until proven guilty.
Mr. Berman praised the outstanding investigative work of the Federal Bureau of Investigation, the Office of the Inspector General of the U.S. Department of Health and Human Services, and the New York State Office of the Medicaid Inspector General (“OMIG”).

A.G. Underwood Announces $190K Settlement With Sham Coop For Operating As A Rental Building


For Decades, 417 E 60 Owners Corp Operated as a Rental Building in Violation of Business Corporation and Rent Stabilization Laws
Corporation Must Pay $190,000 to New York City – Will Help Finance Affordable Housing Projects in NYC 
  Attorney General Barbara D. Underwood announced a settlement with 417 E 60 Owners Corp, a former cooperative corporation on the Upper East Side of New York City, for violating state law by using a cooperative as a rental building for decades and depriving tenants of protections they’re entitled to under rent stabilization laws.
The settlement agreement requires 417 East 60 Street to operate exclusively as a rental building and abandon the cooperative plan so that it can no longer claim cooperative exemption under the Rent Stabilization Law. In addition, the corporation must pay $190,000 to the New York City Department of Finance – which will be used by the Department of Housing Preservation and Development to finance housing projects for low-income New Yorkers.
“Sham cooperatives acting as rental properties diminish opportunities for homeownership and fail to provide rent stabilized protections for New York tenants,” said Attorney General Underwood. “At a time when affordable housing is so scarce, my office will continue working to preserve critical protections for tenants and ensure more housing is made available to New Yorkers.”
Prior to 1982, 417 East 60 Street in Manhattan was an occupied rental apartment building containing rent regulated units. In 1984, the building converted to a cooperative and transferred ownership to 417 E 60 Owners Corp. The Owners Corp was formed in order “to make apartments, space and facilities located in [417 East 60th Street] available to the shareholders of the Corporation for residential purposes under leases commonly known as proprietary leases.” Prior to October 2015, one individual acquired all shares to become the sole shareholder and sublet certain apartments so the building operated as a for-profit rental building – in violation of New York Executive and Business Corporation Law. No shareholders resided in the building and tenants that sublet the units were not treated as rent regulated tenants.

MAYOR DE BLASIO AND DOT COMMISSIONER TROTTENBERG APPOINT FORMER COUNCIL SPEAKER MELISSA MARK-VIVERITO AND STATE SENATOR MICHAEL GIANARIS TO

THE METROPOLITAN TRANSPORTATION SUSTAINABILITY ADVISORY WORKGROUP

Mayor Bill de Blasio and Department of Transportation Commissioner Polly Trottenberg appointed former Council Speaker Melissa Mark-Viverito and State Senator Michael Gianaris to the Metropolitan Transportation Sustainability Advisory Workgroup. The two appointees have extensive experience working on behalf of New Yorkers to improve New York City’s transit system. The workgroup was established in the enacted 2018-19 New York State budget. The 10-member workgroup will study the regional public transit system and recommend ways in which the system can be improved to provide safe, adequate, efficient and reliable transportation for New Yorkers.

“Former Speaker Mark-Viverito and State Senator Gianaris have a proven track record advocating on behalf of New Yorkers for a fair and reliable transportation system,” said Mayor Bill de Blasio. “I’m confident that their valuable insights – informed by their many years of public service – will help the workgroup conduct a thorough analysis of our transit system’s ailments and potential solutions.”

"Mass transit in New York City faces enormous challenges, and former Speaker Mark-Viverito and State Senator Gianaris both have the kind of experience and expertise to ably represent the City on this workgroup," said NYC DOT Commissioner Polly Trottenberg. "I look forward to supporting them as they study the MTA – and give the City substantial opportunity to make positive changes for the City and the entire region's transportation future."

"I am honored to join the Metropolitan Transportation Sustainability Advisory Workgroup which will examine ways to make the critical upgrades needed to provide the kind of safe and reliable transit service that New Yorkers need and deserve," said former Council Speaker Melissa Mark-Viverito. "I look forward to working with my colleagues on the Workgroup to carefully study the challenges facing our transit system and ensure that we bring our subways and buses into the 21st Century."

“New York deserves a world-class transit system that is reliable, affordable and 100 percent accessible – right now, we have none of these,” said State Senator Michael Gianaris. “There is much work to do to get our mass transit where it needs to be, and I am honored to be trusted with the responsibility to help make that happen.”

About Former Speaker Melissa Mark-Viverito:
Melissa Mark-Viverito is Vice President for Strategic Engagement at the Latino Victory Fund (LVF). Mark-Viverito previously served as Speaker of the New York City Council, the first Puerto Rican and Latina to hold citywide office, and represented the 8th District, which includes El Barrio/East Harlem and the South Bronx. Born and raised in Puerto Rico, she worked for over a decade in local activism, nonprofit organizations and grassroots labor organizing before being elected to the City Council in 2005. As Speaker, she focused on transparency in government and policies that generate socioeconomic opportunity and combat systemic inequality, including groundbreaking work on immigration and criminal justice reform.

Under her leadership, the Council supported increasing access to transportation for all New Yorkers, including Select Bus Service, the city's ferries and protected bike lanes. She has been a longtime and consistent advocate for the creation of a dedicated revenue stream for critical transit upgrades. In her district, she was also a strong advocate for improved public transit options, such as Phase II of the Second Avenue Subway, which will extend the Q line into El Barrio/East Harlem, and the Select Bus Service line on 125th Street.

About State Senator Michael Gianaris:

State Senator Michael Gianaris is the Chair of the Senate Democratic Conference and a leading voice for better transit policy in New York, authoring the Millionaire’s Tax legislation to create a dedicated revenue stream for the MTA. He has played an active role providing oversight of the MTA and calling for needed reforms. Most recently, he wrote a major report highlighting the transit system’s dubious distinction of being the least accessible in the nation. 

State Senator Gianaris has also been a leader in efforts to reform the criminal justice system, authoring legislation to eliminate cash bail in New York. The son of Greek immigrants, he staunchly defended New York’s immigrant communities during recent policy attacks from the federal government. State Senator Gianaris is a graduate of New York City public schools, Fordham University and Harvard Law School

About the Metropolitan Transportation Sustainability Advisory Workgroup:
The Metropolitan Transportation Sustainability Advisory Workgroup will review the regional transportation network within the Metropolitan Commuter Transportation District, including subways and buses, the Metro-North commuter railroad, the Long Island Rail Road, etc. The workgroup will study issues related to the sustainability of the network such as funding, motor vehicle traffic, congestion, fares and for-hire vehicle services, among other things. The workgroup will issue a report with recommendations by end of year. The workgroup will consist of 10 members – two appointed by the City of New York, including the NYC DOT; four by the State, including NYS DOT and the MTA; two by the state Senate, and two by the state Assembly. The Governor will appoint the chair of the workgroup.