Founder Of Purported Snack And Pet Food Companies Sentenced To 7 Years In Prison For Defrauding Investors Of More Than $2.9 Million

Defendant also Sentenced for Aggravated Identity Theft, Money Laundering, a Firearm Offense, and a Narcotics Offense

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that LISA BERSHAN was sentenced to 7 years in prison on Friday, November 22 by U.S. District Judge Jed S. Rakoff for participating in two schemes to defraud more than 50 investors in the Starship Snacks Corporation and the All American Pet Company of more than $2.9 million, by making false and fraudulent representations about, among other things, the status of the companies’ products, guarantees that purportedly backed the investments, and the interest of large multi-national corporations in acquiring the companies.  BERSHAN was also sentenced for using the stolen identities of three individuals to commit the All American Pet Company scheme, money laundering, illegally receiving a firearm in New York without the proper licenses, and conspiracy to distribute and to possess with the intent to distribute cocaine.

U.S. Attorney Geoffrey Berman said:  “Lisa Bershan defrauded more than 50 investors of more than $2.9 million by making materially false representations about the snack and pet food companies she purportedly ran.  As part of her schemes, she and her co-conspirators used other people’s identities and created a slew of falsified documents to lure their victims.  When victims poured money into purported business bank accounts Bershan controlled, she used those bank accounts as her personal piggy bank, spending the money to finance her lavish lifestyle of luxury real estate, jewelry, plastic surgery, and clothing.  But Bershan’s crimes didn’t end with fraud.  She also pled guilty to and was sentenced for serious firearms and narcotics distribution offenses.  Lisa Bershan’s crime spree has come to an end, and she now faces a significant prison term for her crimes.”

According to the allegations contained in the superseding Information filed against LISA BERSHAN and statements made in related court filings and proceedings, including the trial of co-defendant Joel Margulies:

The All American Pet Company Fraud Scheme

From October 2013 through May 2017, BERSHAN, Joel Margulies, and a co-conspirator raised more than $575,000 in purported loans for the All American Pet Company (“AAPT”), a penny-stock company that produced, marketed, and sold food bars and other products for dogs, based on the following misrepresentations, among others: (a) that the Internal Revenue Service (“IRS”) had accepted an “offer in compromise” from AAPT that significantly reduced the back taxes AAPT owed to the IRS; (b) that BERSHAN had paid to the IRS the amount of this offer in compromise and had thus absolved AAPT of its outstanding tax liability; (c) that BERSHAN was the beneficial owner of a bank account containing over $6.9 million; (d) that BERSHAN would personally guarantee some of the loans; and (e) that Nestlé USA had proposed various business deals with AAPT.  BERSHAN held herself out as president and chief executive officer of AAPT at various times. 

Although BERSHAN and her co-conspirators had promised investors that they would use the loans to help improve AAPT’s manufacturing and distribution capacities, the conspirators instead used those funds largely for their personal expenses, including the rental of a luxury villa in the Bel Air neighborhood of Los Angeles where all three of them lived.

In connection with the AAPT fraud scheme, BERSHAN used the stolen identities of three individuals – an IRS employee, a Nestlé Purina employee, and a Manhattan attorney – to create false and fraudulent letters that were sent to AAPT investors to induce them to make loans to AAPT.

The Starship Snack Corporation Fraud Scheme

From approximately August 2015 through August 2017, BERSHAN, Margulies, and a co-conspirator, Barry Schwartz, raised more than $2.3 million from investors in a company originally called the Awake Company and later renamed Starship Snacks Corporation (“Starship”), which purported to be in the business of developing and manufacturing caffeinated snack products, based on the following misrepresentations, among others: (a) that investments in Starship were guaranteed against losses by BERSHAN; (b) that Starship was going to be acquired by Monster Beverage (“Monster”) in a one-for-one stock exchange; (c) that Starship was engaged in actual product development and had procured samples of candies infused with caffeine; (d) that BERSHAN and others at Starship had entered into non-disclosure agreements with Monster that prohibited them from discussing Starship’s purported acquisition by Monster and its purported product development.  BERSHAN held herself out as the chief executive officer, president, and founder of Starship. 

After receiving funds from Starship investors, BERSHAN and her co-conspirators used those funds to maintain their own extravagant lifestyles, spending hundreds of thousands of dollars on things like luxury clothing, plastic surgery, interior decorating, the rental of a high-end apartment in New York City, and the down payment for a multimillion-dollar house in Florida. 

Money Laundering, Illegal Receipt of a Firearm, and Distribution of Narcotics

In addition to the fraud and identity theft charges set forth above, BERSHAN was sentenced for money laundering in connection with the AAPT and Starship schemes.  She was also sentenced for illegally receiving a firearm and ammunition in New York that her co-conspirator, Margulies, sent to her from Tennessee via commercial courier.  Neither BERSHAN nor Margulies held federal firearms licenses that would have allowed them to effect such a transfer legally.  Finally, BERSHAN was also sentenced for conspiring to distribute cocaine from October 2015 through August 2017, during which conspiracy BERSHAN caused quantities of cocaine to be sent to her and Margulies via commercial courier in interstate commerce.

In addition to the prison term, BERSHAN, 62, was sentenced to five years of supervised release.  BERSHAN was also ordered to forfeit $2,926,702.54 and to make restitution in the amount of $2,926,702.54. 

Barry Schwartz previously pled guilty and is scheduled to be sentenced before Judge Rakoff on December 12, 2019.  Margulies was convicted following a seven-day jury trial before Judge Rakoff and is scheduled to be sentenced on December 16, 2019. 

Mr. Berman praised the work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance.

Manhattan U.S. Attorney Announces Charges Against Austin Man For Computer Hacking And Fraud Scheme To Steal Unreleased Music From Music Industry Professionals

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Peter C. Fitzhugh, the Special Agent in Charge of the New York Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), announced today the filing of a criminal indictment against CHRISTIAN ERAZO for conspiring with others to commit wire fraud and computer intrusion, as well as committing aggravated identity theft, by hacking a music producer’s social networking account to impersonate the producer in order to solicit and obtain unreleased music from other artists, which he then directed the artists to send to a fake email account in the producer’s name.  In addition, ERAZO hacked the online accounts of two music management companies in order to steal unreleased music of numerous music industry professionals.  ERAZO was arrested today in Austin, Texas.  He will be presented in federal court in the Western District of Texas tomorrow before United States Magistrate Judge Mark Lane.       

    

U.S. Attorney Geoffrey S. Berman said:  “Christian Erazo and his co-conspirators allegedly hacked the accounts of music producers and management companies in order to steal over 50 gigabytes of content – including some music that had yet to be publicly released – and leaked it on the internet.  Not only did this scheme cause the companies, producers, and artists financial harm, Erazo deprived the artists of the ability to release their own exclusive content at their discretion.  Erazo’s conduct is a reminder of the potential destruction hackers can inflict, and the need for all users to practice strong measures against cyber intrusions.”

HSI Special Agent in Charge Peter C. Fitzhugh said:  “Erazo’s alleged involvement in a hacking scheme to commit wire fraud and downloading 50 gigs of music, some unreleased, has affected the finances and reputations of a producer and several recording artists.  Fraud schemes like this don’t just affect the victim, but can also trickle down negative effects to the consumer.  New York’s robust cyber capabilities allow agents to track down criminals hiding behind their computer screen anywhere in the world to face the consequences of their actions.”

According to the Superseding Indictment filed today in Manhattan federal court:

From at least in or about late 2016 through at least in or about April 2017, CHRISTIAN ERAZO, the defendant, and others known and unknown, unlawfully obtained unauthorized access to Internet cloud storage service accounts of two music management companies and a music producer (“Producer Victim-1”) by, among other things, using the credentials, or usernames and passwords, of individuals with authorized access to those accounts.  From those accounts, ERAZO and his co-conspirators stole over approximately 50 gigabytes of music, including music that had not yet been publicly released from over 20 recording artists, as well as usernames and passwords to other online accounts, among other things.  ERAZO and his co-conspirators also leaked on public online forums music that had not yet been publicly released, causing financial and reputational harm to Producer Victim-1 and other recording artists.

In addition, from at least in or about late 2016 through at least in or about late 2017, CHRISTIAN ERAZO, and others known and unknown, unlawfully accessed without authorization a social networking account belonging to Producer Victim-1, from which ERAZO and a co-conspirator (“CC-1”) impersonated Producer Victim-1 and sent private messages to numerous recording artists to solicit music from them that they had not yet released.  ERAZO and CC-1 directed these artists to send their music to a fake email account that ERAZO created that incorporated Producer Victim-1’s professional name, which numerous artists did.

ERAZO, 27, of Austin, Texas, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years; one count of conspiracy to commit computer intrusion, which carries a maximum sentence of five years; and one count of aggravated identity theft, which carries a mandatory minimum term of imprisonment of two years.  The maximum potential sentences in this case 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 HSI.

Former Executive Director Of Non-Profit Religious Organization Charged With Two Embezzlement Schemes

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Ruth M. Mendonça, the Assistant Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced the arrest today of JEROME DIMITRIOU, the former executive director of a non-profit religious organization (“Organization-1”), on wire fraud charges.  Specifically, DIMITRIOU is charged with committing two embezzlement schemes:  In one, he allegedly embezzled more than $488,000 from Organization-1 by directing subordinates to issue him unauthorized excess salary payments; in the other, he allegedly charged hundreds of personal expenses to his Organization-1 credit card, without authorization, costing Organization-1 at least tens of thousands of dollars.  DIMITRIOU will be presented today in federal court in the Southern District of New York before United States Magistrate Judge Robert W. Lehrburger.

U.S. Attorney Geoffrey S. Berman stated:  “As the executive director of a non-profit religious organization, Jerome Dimitriou was supposed to serve the organization, not himself.  As alleged, over several years, he abused his leadership position and embezzled over half a million dollars through two different schemes.  This Office is committed to protecting non-profit organizations from those who allegedly steal rather than serve.”

USPIS Assistant Inspector in Charge Ruth M. Mendonça said:  “Mr. Dimitriou allegedly used his position of trust at a religious organization to steal from his employer.  His undoing came when Postal Inspectors used their trusted and sworn law enforcement position to bring him to justice.”

According to the allegations in the Complaint unsealed today[1]:

From in or around 2000 until late 2017, JEROME DIMITRIOU was the executive director of Organization-1.  While serving as executive director, DIMITRIOU engaged in at least two separate, long-running embezzlement schemes.  One of his fraud schemes involved his unauthorized use of an Organization-1 credit card to pay for at least hundreds of personal expenses.  For instance, from in or around May 2011 through in or around September 2017, DIMITRIOU charged the following to his Organization-1 credit card: at least approximately 204 charges for airline travel with his family (who were not employed by Organization-1); at least approximately 552 iTunes charges; at least approximately 71 charges for a gym membership at David Barton Gym; and at least approximately 44 retail charges, including at such stores as Sears, Home Depot, CVS, Duane Reade, Walgreens, and Vitamin Shoppe.  The value of the airline travel with his family, for instance, was at least approximately $61,286.20. 

Another of DIMITRIOU’s fraud schemes involved directing subordinates to issue him excess salary and paychecks, over many years, without the authorization or approval of Organization-1.  During just 2013 through September 2017, for instance, the total value of these excess salary and paychecks was at least approximately $488,290.  During the period of DIMITRIOU’s embezzlement schemes, Organization-1 was enduring financial difficulties, a fact of which DIMITRIOU was well aware.

DIMITRIOU, 55, of Greenlawn, New York, is charged with two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison.  The statutory maximum 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 USPIS for its outstanding work on this case and noted that the investigation is ongoing.

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

AOC Visits Pelham Parkway Houses

Congresswoman Alexandria Ocasio-Cortez (better known as AOC) visited the Pelham Parkway Houses Saturday to talk about her New Green Deal for NYCHA. 

Saying that housing is a human right, and that by Systematic Disinvestment, a state of emergency exists in NYCHA. 83% of NYCHA apartments inspected by New York State experienced at least one severe condition. AOC then said 'That Stops Now.'

AOC has proposed A Green New Deal for NYCHA, which is a plan to invest $48 Billion in comprehensive green retrofits and repairs for all NYCHA housing, creating up to 324,519 jobs in NYC over ten years.. She added that the union jobs could be done by NYCHA residents through an apprentice program. Asthma rates could be reduced by up to 30%, cutting NYCHA's annual Carbon Footprint to zero by 2030, making every NYCHA complex a resilience center for coordinating disaster relief, and reducing NYCHA utility costs by up to $300 million a year.

Daniel Aldana Cohen Ph.D of the University of Pennsylvania gave a power point presentation backing up what the congresswoman said. If it can be done in public housing in other countries it should be able to be done here. 

Three residents of various citywide NYCHA houses gave testimony of their problems with NYCHA management, the third being Cathy McFadden the Tenant Leader of the Pelham Parkway Houses. AOC then said that most NYCHA buildings were built in the 1950's with a lifespan of 50 years. She did not want to use the RAD Program used in Southeast Queens by filling up NYCHA houses with Section 8 residents to receive extra federal funding for repairs. The reason, NYCHA houses in AOC's district have working class people living in them. 

After the meeting everyone went outside for a walk ending up by the temporary boilers placed in the street for many years waiting for the broken boilers to be fixed, since the money to do that was allocated years ago. The group then broke out into smaller groups to canvass the tenants informing them of the benefits of the New Green Deal to them.

I was able to ask AOC  her opinion about the new borough jails passed by the mayor and city council. The congresswoman said that she was opposed to closing Rikers for high rise jails in buildings that would wind up like the high rise NYCHA buildings. When I followed up with a question about Governor Cuomo wanting  LaGuardia Airport runways extended on to Rikers Island, the congresswoman said that is already being done. 

Above _ AOC with Daniel Cohen go over some of the New Green Deal for NYCHA.

Below - AOC points to what public housing looks like in other countries, and wants to know why not here.

Above - AOC and attendees gather in front of the community center at 975 N. Pelham Parkway for a tour of the public houses.
Below - All meet across from the long term temporary boilers in the street (top photo).

AOC answering questions from the media present.

VCJC Carnival/Bazaar - Sunday December 8th

 The Van Cortlandt Jewish Center (VCJC) is having its annual Bazaar & Carnival, on Sunday, December 8, 2019 from 11 AM to 3 PM with something for people of all ages and free admission.

This is an indoor event held at VCJC, at 3880 Sedgwick Avenue; Bronx, NY 10463.

There will be vendors, with various types of merchandise and art, carnival games with prizes for kids, raffles, bric-a-brac, public service information booths and more. This is a great place to purchase presents for Christmas and Chanukah – or if you’re lucky you could win a prize.  

Raffle prizes include: 1^st prize: TCL 50” 4K Smart TV ($480 value); 2^nd prize: Dyson Cordless Handheld Stick Vac ($300 value); 3^rd prize: BOSE Neck Band headphone ($300 value); and 4^th Prize: pair of TempurPedic Pro-Mid Plus Cooling Pillows ($300 value) and many more, including Gift cards from Amazon, Bed Bath and Beyond, Food Dynasty and others.

There is no admission charge to the event and everyone is invited.

There is an Online Auction running from now thru December 7, 2019 at www.BiddingForGood.com/vcjc.

For additional information go to www.vcjewishcenter.org/2019bazaar/ online or call 718-884-6105.

NEW YORK CITY KICKS OFF ‘16 DAYS OF ACTIVISM’ AGAINST GENDER-BASED VIOLENCE

New Yorkers urged to join in the fight against gender-based violence 

 The Mayor’s Office to End Domestic and Gender-Based Violence, Commission on Gender Equity, and other City agencies today began New York City’s 16 Days of Activism Against Gender-Based Violence, an annual global campaign to raise awareness about the far reaching consequences of gender-based violence and to urge government, community, corporate, and philanthropic sectors to develop strategies that eliminate gender-based violence. From November 25 (International Day to End Violence against Women) to December 10 (International Human Rights Day), New Yorkers are encouraged to participate in the campaign by using the Action Kit and attending events around the city.

“Every day, we witness people bravely sharing their stories of persistence and survival in the face of misogyny, sexual violence, and harassment. Their courage is contagious and it powers a movement for lasting change,” said First Lady Chirlane McCray. “In New York City, we are meeting this historic moment with our own action and leadership by uplifting survivors, connecting them to support, and working to prevent violence. But we cannot do this work alone – we want all New Yorkers to be part of the solution and take action against gender-based violence in our city.”

“We must work to end all gender-based violence in New York City, and the de Blasio administration stands with survivors here and around the world,” said Deputy Mayor for Health and Human Services Dr. Raul Perea-Henze. “We are proud to join this global campaign to focus attention on gender-based violence and acknowledge survivors for their strength and resilience. All New Yorkers can help to end gender-based violence, and we encourage everyone to get involved and take action during these next 16 days and throughout the year.”

Since 2014, New York City has brought this critical international campaign to the local level as part of its work to address gender-based violence. In 2018, over 12,000 New Yorkers took action against gender-based violence across the five boroughs through dozens of outreach events and programs. A recap of last year’s campaign can be viewed here.

“New Yorkers can make a meaningful difference in the lives of domestic-based violence survivors in a matter of days,” said Cecil Noel, Commissioner for the Mayor’s Office to End Domestic and Gender-Based Violence. “Our campaign action kit provides an effective strategy to create awareness about this human rights issue. We challenge the citizens of this great city to lead the way in eradicating gender-based violence from our communities and from all future generations.”

“All New Yorkers, regardless of their gender identity, gender expression, or background, have the right to live safely in their homes, schools, workplaces, and communities. Safety is inextricably linked with one’s health, economic mobility, and overall well-being,” says Jacqueline Ebanks, Executive Director, NYC Commission on Gender Equity. “CGE is proud to work with the Mayor’s Office to End Domestic and Gender-Based Violence in leading the 16 Days of Activism against Gender-Based Violence campaign in New York City, alongside our other City agency and community partners, to mobilize New Yorkers to prevent, reduce, and eliminate all forms of gender-based violence.”

“Gender-based violence does not discriminate and so we must all do our part to stop it in its tracks,” said Mayor’s Office for International Affairs Commissioner Penny Abeywardena. “Our office works to exchange best practices with the global community and the United Nations and to showcase the connections between NYC’s progressive policies and the Sustainable Development Goals (SDGs). Among them is SDG 5: Gender Equality which, among other goals, seeks to end violence against women and girls. This work is universal but not insurmountable. Let’s recommit ourselves over the next 16 days — and beyond — to help our fellow New Yorkers. No one should have to live in fear.”

Four Steps to Join the Campaign

Step I: Get Informed Learn more about gender-based violence and how it affects girls, women, transgender and gender non-conforming individuals in their homes, schools, workplaces, and communities.

Step II: Listen/Believe/Support Listen to survivors' stories without judgement. Believe their experiences and encourage survivors to believe their own voices. Support survivors when they speak up. Let all survivors know: We see you. We hear you. We believe you.

Step III: Take Action Use the resources you have to mobilize your community to end gender-based violence. If you find yourself or someone else in a vulnerable situation and in need of assistance, seek help. Throughout this guide you will find resources to support survivors of gender-based violence. Remember, you can always call 911 or the City's 24-Hour Hotline at 800-621-HOPE (4673).

Step IV: Join the Campaign View the 2019 events calendar here. If you have questions about the Campaign, you can email: genderequity@cityhall.nyc.gov

CONSTRUCTION INJURIES DOWN MORE THAN 26 PERCENT IN 2019 AS CITY ENFORCEMENT EFFORTS INCREASE

Year-to-date decline in injuries comes even as building boom continues

   Mayor Bill de Blasio, Deputy Mayor Laura Anglin, and New York City Department of Buildings (DOB) Commissioner Melanie E. La Rocca announced that injuries during the construction of buildings declined more than 26 percent in January through October 2019 compared to the same period last year. The injury decline comes even as the city’s construction boom shows no signs of abating: permits for major construction projects actually increased slightly over the same timeframe.

“The backbone of New York City’s construction industry are hard-working people in the building trades hoping to earn a good day’s pay and make it home safely,” said Mayor Bill de Blasio. “Taking care of those workers' safety is our top priority, so it's great to see that while scaffolding continues to go up across all five boroughs, construction injuries continue to decline. And thanks to continued proactive inspections and new training requirements, I’m hopeful construction-related injuries will become as rare as a vacant lot in Midtown.”

“Ensuring workers on construction sites are operating in a safe environment is a citywide commitment,” said Deputy Mayor Laura Anglin. “Since the DOB launched its new Construction Safety Compliance Unit, we’ve seen significant decreases in injuries while maintaining continued growth in construction across the city. We must continue to build off this year’s success so that all construction workers can get home safely to their families.”

“Injuries are down even as the city’s construction boom continues, which is welcome news for workers and their families -- and a sign that our focus on proactive enforcement and safety training requirements are having a real impact. Our commitment to workers is simple: everyone who leaves for the job site in the morning deserves to come home safely at night. We are going to keep up the pressure to drive these numbers down further and make safety the highest priority on every construction site,” said Buildings Commissioner Melanie E. La Rocca.

Injuries on construction sites decreased from 657 in the first ten months of 2018 to 483 through October of this year, a decline of 26.5 percent. DOB issued 16,322 permits for major construction projects from January through October 2018, versus 16,291 such projects permitted in the same period of time in 2019. (Major projects are new buildings, major alterations of existing buildings, and demolitions.)

The decrease in injuries comes after the launch of DOB’s Construction Safety Compliance (CSC) Unit, dedicated to conducting proactive, unannounced inspections of major construction sites citywide. The improvement also coincides with the implementation of Local Law 196 of 2017, which requires safety training for workers at New York City’s larger construction sites. CSC is in the process of inspecting roughly 6,000 sites to enforce the law and check whether construction workers have the required training.

In September 2018, DOB dissolved its longtime Buildings Enforcement Safety Team (BEST) and divided BEST’s responsibilities between two new units: the Construction Safety Enforcement Unit, which focuses on emergency response and other functions; and CSC, which focuses on proactive inspections of major construction sites, where workers are at the highest risk of injury. The latter unit also specializes in approving and inspecting site-safety plans and demolition applications.

CSC currently has 38 inspectors and 10 trainees and will have as many as 53 inspectors.

Since the unit’s inception in September 2018, CSC personnel have conducted 20,166 proactive inspections at 10,256 construction sites, issuing 2,523 stop-work orders and 11,484 OATH summonses, which carry penalties of nearly $15 million for safety lapses on job sites in the five boroughs.