Founder of International Cryptocurrency Companies Indicted in Multi-Million Dollar Securities Fraud Scheme

 

 An indictment was unsealed charging Krstijan Krstic with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering for his alleged participation in a cryptocurrency scheme in which he solicited U.S. investors using two fraudulent online investment platforms.   

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, Nicholas L. McQuaid, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Kristi K. Johnson, Assistant Director-in-Charge, Federal Bureau of Investigation, Los Angeles Field Office (FBI), and Ryan L. Korner, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, Los Angeles Field Office (IRS-CI), announced the indictment.

“As alleged, Krstic convinced U.S. investors to pour millions of dollars into fraudulent cryptocurrency schemes through misrepresentations and false statements, and then ran off with their money,” stated Acting U.S. Attorney DuCharme. “This Office is committed to vigorously prosecuting those who cheat investors."  Mr. DuCharme expressed his grateful appreciation to the U.S. Securities and Exchange Commission, New York Regional Office, for its assistance with the case.

“Mr. Krstic and others devised fraudulent platforms which purported to offer sophisticated options appealing to bitcoin investors, then fabricated positive reports about the company in an attempt to add legitimacy to the scheme,” stated FBI Assistant Director-in-Charge Johnson. “Cryptocurrency scams are on the rise. The charges against Mr. Krstic should send a message that the FBI and our partners take securities fraud very seriously and will hold accountable individuals who steal from American investors.”

“This indictment of Kristijan Krstic highlights just how seriously IRS Criminal Investigation and the federal law enforcement community are taking criminal activity related to cryptocurrency and online fraud schemes,” stated Special Agent-in-Charge Korner. “Under the cloak of an international online digital currency exchange, $7 million in investor funds from B2G and Start Options were allegedly funneled from unwitting investors directly to Krstic’s pocket. Whether online or on the streets, financial crime never pays, and IRS Criminal Investigation will continue to work tirelessly to ensure those who are involved are brought to justice.

As alleged in the indictment, Krstic was the founder of two digital-asset investment platforms, “Start Options” and “B2G,” and also served as the chief financial officer of Start Options.  Between approximately 2017 and 2018, Krstic and others fraudulently induced U.S.-based investors to purchase securities in the form of investment contracts in Start Options and B2G.  To perpetuate the fraud, Krstic used the alias “Felix Logan” and created the Twitter handle “@felixlogan_cfo” to communicate with investors in Start Options and B2G. 

Start Options purported to be an online investment platform that provided cryptocurrency mining and digital-asset trading services, including trading in cryptocurrencies, commodities, stocks and indices.  Start Options also claimed that it was “the largest Bitcoin exchange in euro volume and liquidity” and that it was “consistently rated the best and most secure Bitcoin exchange by independent news media.”  B2G purported to be an “ecosystem” that would allow users to trade B2G tokens, as well as digital and fiat currencies, “on a secure, comprehensive platform.”  Krstic and others represented that once investors opened a B2G account, a deposit of B2G “open[ed] a door to all the curtains inside Aladdin’s cave. Dollars buy B2G; B2G tokens can be exchanged back into dollars, or for Euros, or for other national fiat currencies. B2G holdings can be traded for original bitcoin or other altcoins.”

In reality, the money sent by investors in Start Options and B2G was never invested as promised, and instead was funneled to a Philippines-based financial account and digital-currency wallet, and to a U.S.-based promoter of the fraud.  Subsequently, the U.S.-based promoter transferred approximately $7 million in investor funds from B2G and Start Options to Krstic, and Krstic thereafter stopped responding to all communications and absconded with those investors’ funds.  A press release issued by Start Options falsely claimed that the company had been sold to Russian venture capitalists.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.  

If convicted, Kristic faces up to 20 years’ imprisonment.

This case was investigated by the FBI and IRS-CI.  The prosecution is being handled by the Business & Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section.  Assistant U.S. Attorneys Kaitlin T. Farrell, Hiral D. Mehta and David C. Pitluck of the Eastern District of New York, assisted by a Special Agent of the Eastern District of New York’s Business & Securities Fraud Section and Trial Attorney Kevin Lowell of the Criminal Division are prosecuting the case.  Assistant U.S. Attorney Laura D. Mantell of the Eastern District of New York’s Civil Division is handling forfeiture matters.  

THE BRONX DEMOCRATIC PARTY MAKES AN ENDORSEMENT FOR NYC COMPTROLLER

 

The Bronx Democratic Party announced today its endorsement of  Brian Benjamin for New York City Comptroller. This office is currently held by Scott Stringer, who is term-limited. The NYC Comptroller serves as the City’s Chief Financial Officer, who safeguards the City’s fiscal health and ensures that municipal agencies serve all New Yorkers’ needs.

“We are honored to endorse Brian Benjamin for New York City Comptroller. In the midst of an unprecedented fiscal crisis, Brian is exactly the experienced, forward-thinking leader we need to oversee our City’s economic recovery – a plan that must center a bold vision for the future of the Bronx. Whether it’s fighting to bring accountability to policing, maximizing pension returns for New York's retirees, investing in M/WBEs, rooting out waste in city agencies, or delivering the resources our communities deserve, Brian has the proven experience to manage our City’s finances and make government work for all New Yorkers. 

 

As Chair of the Senate Budget and Revenues Committee, he successfully fought to protect affordable housing, strengthen tenant protections, and expand criminal justice reforms. Prior to serving in the State Senate, Brian put his financial management background to work for his community – building affordable housing, helping young people develop work skills, and serving as Chair of his Community Board. I have no doubt Brian is prepared to tackle the tough challenges ahead as our next Comptroller and I’m proud to work alongside him for a more just and equitable New York City,” said Chairman Jamaal T. Bailey.

 

“I’m honored to have the endorsement of the Bronx County Democratic Party,” said Senator Brian Benjamin. “My campaign has quickly gained the support of the Bronx, and I look forward to working with this influential group and all the Bronx legislators that have already endorsed my candidacy in building a stronger New York City as your next Comptroller.

District 34 Budget Forum with Senator Biaggi on Feb 26th

 

UPCOMING BUDGET FORUM

*Baja hacia abajo para ver este mensaje en Español.

Dear Community, 

I am writing to you with an important announcement regarding the 2021-2022 Budget. My office will be hosting a Budget Forum on Friday, February 26th from 12:00PM-1:30PM. I encourage all constituents of Senate District 34 to make their voices heard on the 2021-2022 Executive Budget proposal! Each person will have two minutes to virtually testify. 

To testify virtually or submit written testimony prior to the event, please complete this form. You may also submit written testimony ahead of or after the event, by emailing biaggi@nysenate.gov, with the subject line: SD34 Budget Testimony 2021. 

The link to sign-up and receive a zoom link is here: https://bit.ly/3koPJwi. 

I look forward to hearing from you all! 

Attorney General James Fights to Protect New Yorkers from Out-of-State Lawbreaker Seeking to Flood Streets with Dangerous Ghost Guns

 

Multistate Coalition Contests Power of Out-of-State Courts Hearing Suits That Stop Critical State Law Enforcement Actions

AG James Leads Coalition of 21 Attorneys General in Filing Supreme Court Amicus Brief Seeking to Stop Defense Distributed

  New York Attorney General Letitia James has led a coalition of 21 attorneys general from around the nation in fighting a lawsuit that seeks to stop states from enforcing their laws against a company disseminating dangerous 3D-printed gun files on the internet. In an amicus brief supporting the petitioner in the case Grewal v. Defense Distributed before the U.S. Supreme Court, Attorney General James leads the coalition in seeking to protect states’ efforts to stop Defense Distributed from unlawfully publishing easily-downloadable files on the internet that provide the instructions to build dangerous 3D-printed firearms, including assault weapons. Untraceable firearms are sometimes called “ghost guns” because they lack a serial number or other identifying features.

“For years, we’ve been fighting Defense Distributed’s illegal efforts to make dangerous assault weapons more easily accessible to anyone with an internet connection,” said Attorney General James. “Despite the lawsuits we filed and the cease and desist letters we’ve sent, Defense Distributed has repeatedly taken steps to make it easier for criminals and terrorists to get their hands on guns and for anyone to print unregistered, untraceable, and, in many cases, undetectable firearms. We are fighting back to enforce our states’ laws and protect our schools, our workplaces, and our places of worship from turning into killing fields.”

For years, Defense Distributed has attempted to widely disseminate dangerous internet files that give individuals the ability to manufacture unregistered and untraceable 3D-printed firearms that can be extremely difficult to detect, even with a metal detector. A number of state and local officials, including from New York state, sent the company cease and desist letters ordering the company to stop breaking state laws. Defense Distributed then sued the officials in federal court in Texas, but ultimately only pursued its case against New Jersey’s attorney general. After the U.S. Court of Appeals for the Fifth Circuit found that Texas courts had personal jurisdiction over New Jersey’s attorney general, the state attorney general petitioned the Supreme Court to take up the case.

In the amicus brief, Attorney General James leads the coalition in arguing that cease and desist letters are critical and cost-effective tools for enforcing state law, and, in the internet age, state and local officials increasingly must direct such cease and desist letters out of state. Because out-of-state entities, like Defense Distributed, operate online and, therefore, operate across state lines, state officials cannot protect their residents from violations of their own state’s laws by such entities without being able to send cease and desist letters out of state. For example, since last year, Attorney General James has sent more than 100 cease and desist letters to businesses based outside of New York that have attempted to exploit the coronavirus disease 2019 (COVID-19) public health crisis by gouging prices on critical products in high demand in the state.

Additionally, the coalition argues that the Fifth Circuit failed to account for critical state sovereignty and federalism considerations when it found that the Texas courts had personal jurisdiction over New Jersey — in violation of longstanding Supreme Court precedent set out in cases, such as World-Wide Volkswagen Corp. v. Woodson. Specifically, the federalism principles underpinning that precedent do not permit the recipient of a cease and desist letter from an out-of-state official to sue the official in the recipient’s home state when the letter was sent from the official’s home state, and the official is simply enforcing his or her own state’s laws as applied to the recipient’s activities in the official’s home state. The coalition makes clear that permitting suits in such circumstances — as the Fifth Circuit did here — forces a state official to risk burdensome and expensive lawsuits in a foreign forum as the cost of protecting state residents from an entity that is reaching into the official’s state and violating that state’s laws. Putting a state official to that choice undermines state sovereignty and harms the public interests of the official’s state by chilling legitimate law enforcement efforts or else dramatically increasing the costs of those efforts, including by encouraging premature lawsuits against states in courts that lack expertise and a stake in the relevant state’s law.

The coalition asks the Supreme Court to review the Fifth Circuit’s decision, and ultimately to order the dismissal of Defense Distributed’s case in Texas for lack of personal jurisdiction.

Separately, but related to Defense Distributed’s past actions, a multistate coalition of attorneys general filed a lawsuit, in July 2018, to stop the Trump Administration from an abrupt reversal of past Obama-era efforts to stop the dissemination of files online that would violate firearm export laws and pose a serious threat to national security and public safety. A federal judge ruled against the Trump Administration, but despite its loss, the former Administration tried again to allow unlimited public distribution of these files.

In January 2020, Attorney General James and a coalition of attorneys general led another lawsuit against the Trump Administration, asserting that the former administration’s efforts to allow for the release of files again was unlawful. In March 2020, another federal judge granted a request for a preliminary injunction, blocking the Trump Administration from allowing 3D-printed gun files to be released on the internet.

Additionally, in April 2020, Attorney General James and a multistate coalition of attorneys general called on the Trump Administration’s U.S. Department of Justice and U.S. Department of State to enforce federal laws and stop the dissemination of dangerous 3D-printed gun files on the internet.

Joining Attorney General James in filing this amicus brief are the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia.

Governor Cuomo Announces 12 Community-Based Pop-Up Vaccination Sites Coming Online This Week to Vaccinate More Than 3,700 New Yorkers

 

Sites Will Vaccinate More Than 3,700 People This Week and Bolster State's Commitment to Ensuring Fairness and Equity in Vaccine Distribution Process

Community-Based 'Pop Up' Vaccination Sites Have Enabled Over 46,000 New Yorkers to Receive First Dosage of Vaccine 

Host Sites and Partner Providers Conduct Outreach Within Their Communities and Work with Community Leaders and Organizations to Identify Eligible New Yorkers and Schedule Vaccination Appointments

 Governor Andrew M. Cuomo today announced 12 community-based pop-up vaccination sites coming online this week at community centers, public housing complexes and cultural centers. These sites are expected to vaccinate more than 3,700 people throughout the week, with more sites coming online every week. Since January 15, more than 100 community-based pop-up sites administered over 46,000 first doses of the COVID-19 vaccine dose. As has been the case with previous pop-up sites, these sites will be re-established in three weeks to administer second doses.

Moving forward as the federal vaccine supply increases, New York will continue to establish these sites at all 33 NYCHA Senior Housing Developments, which house more than 7,600 seniors. Pop-up locations will also continue to be established at other public housing complexes statewide, as well as at more than 300 churches and cultural centers which have volunteered to house these sites through Governor Cuomo's Vaccine Equity Task Force.

"Community-based vaccination sites are a key component of New York's effort to ensure all eligible New Yorkers have a chance to get the vaccine quickly and fairly, right in their community," Governor Cuomo said. "Social equity and fairness has been at the center of our response, but this isn't purely an access issue. We need New Yorkers to trust the vaccine and actually take it. We're tackling skepticism and distrust head-on through our local partnerships and pop-up sites and bringing the vaccine directly in the communities that have been hit hardest by this pandemic."

The establishment of many of these vaccination sites was made possible by the deployment of these vaccination kits and through partnerships with multiple public and private health care providers. Host sites and partner providers conduct outreach within their communities and work with community leaders and organizations to identify eligible New Yorkers and schedule vaccination appointments. The 12 sites being established this week are located at the addresses below:

NEW YORK CITY
Middletown Plaza NYCHA
3033 Middletown Road
Bronx, NY 10461
Open: February 25, 2021; 9:00 AM-5:00 PM 

Wayside Baptist Church
1746 Broadway
Brooklyn, NY 11207
Open: February 25, 2021-February 26, 2021; 9:00 AM-6:00 PM 

Convent Avenue Baptist Church
420 W 145th St
New York, NY 10031
Open: February 26, 2021; 9:00 AM-5:00 PM 

LONG ISLAND
Freeport Recreation Center
130 East Merrick Road
Freeport, NY11520
Open: February 25, 2021; 8:00 AM-12:00 PM 

La Espiguita Soccer
1795 Brentwood Road
Brentwood, NY 11717
Open: February 26, 2021; 8:00 AM-12:00 PM 

CENTRAL NEW YORK
Boys & Girls Club - East
2100 E Fayette Street
Syracuse, NY 13224
Open: February 26, 2021; 9:00 AM-5:00 PM 

HUDSON VALLEY
Mulberry House Senior Center
62-70 West Main Street
Middletown, NY 10940
Open: February 27, 2021; 9:00 AM-4:00 PM
**all appointments already filled**

Newburgh Armory Unity Center
321 S William Street
Newburgh, NY 12550
Open: February 26, 2021; 9:00 AM-3:00 PM
**all appointments already filled** 

Mt. Kisco Senior Center
198 Carpenter Avenue
Mt. Kisco, NY 10549
Open: February 27, 2021; 9:00 AM-5:00 PM
**all appointments already filled** 

SOUTHERN TIER
American Civic Association
131 Front St
Binghamton, NY 13905
Open: February 26, 2021; 9:00 AM-4:30 PM 

FINGER LAKES
Livingston County Department of Social Services
1 Murray Hill Campus
Mt. Morris, NY 14510
Open: February 27, 2021; 9:00 AM-12:00 PM
**all appointments already filled** 

MOHAWK VALLEY
Riverfront Center
1290 Riverfront Center
Amsterdam, NY 12010
Open: February 27, 2021;10:00 AM-2:00 PM 

This continued development of community-based 'pop up' vaccination sites furthers Governor Cuomo's mandate of ensuring the fair and equitable distribution of the COVID-19 vaccine. In late 2020, the Governor announced the launch of New York's Vaccine Equity Task Force chaired by Secretary of State Rossana Rosado, Attorney General Letitia James, National Urban League President & CEO Marc Morial, and Healthfirst President & CEO Pat Wang. Since its establishment, the Task Force has continued work to ensure vulnerable and underserved communities are not left behind by breaking down the barriers to vaccination and ensuring there is equitable distribution of the vaccine across the state.

New York City to Install Rooftop Solar Arrays on 47 Public Schools, Wards Island Wastewater Resource Recovery Facility, and Mid-Hudson Locations

 

Two Developers Selected; Design Underway 

 

Installations to Generate 22 Megawatts of Solar Power and Energy Storage, Projects Help Accelerate City and State Clean Energy Goals

 The NYC Department of Citywide Administrative Services (DCAS) and the New York Power Authority (NYPA) today announced the selection of two firms to install rooftop solar arrays on nearly 50 public schools across the five boroughs, the Wards Island Wastewater Resource Recovery Facility in Manhattan, and three other water treatment facilities in Westchester, Delaware, and Ulster counties. The solar arrays will generate as much as 22 megawatts of solar power, enough to power 5,600 NYC residences, and reduce nearly 7,000 metric tons of CO₂ equivalent each year, which equates to removing more than 1,500 cars from city streets. Several of these facilities are expected to include energy storage systems that will store energy for use during periods of peak electricity demand. During peak demand, prices increase and dirtier energy sources are activated to meet the additional demand. Ameresco, a Framingham, Mass. headquartered clean technology integrator, and ENGIE North America with national headquarters in Houston, have been selected as the project developers.

 

“Our schools are not only tackling climate change in the classroom, but also on the rooftop,” said Lisette Camilo, Commissioner of the NYC Department of Citywide Administrative Services. “New solar installations on schools and other public facilities will generate green energy that will help achieve Mayor de Blasio’s goal of reducing citywide emissions 80% by 2050.” 

 

“Solar plus storage projects, especially on such a scale as these projects, will help both New York State and New York City work in lockstep to boost the availability of renewable power and achieve our mutual green energy goals,” said NYPA President and CEO Gil C. Quiniones. “Bringing solar energy to New York City facilities in diverse neighborhoods will help supply affordable, clean and reliable electricity throughout the five boroughs and support the state mandate for a 100 percent carbon-free electricity sector by 2040.”

 

The solar installations are currently planned for 47 NYC Department of Education (DOE) buildings spanning all five boroughs. Carbon emissions from public schools account for nearly one-third of emissions from the City’s building portfolio. Adding solar to schools provides carbon emissions reduction potential as well as opportunities for students to learn about the importance of sustainability and climate action. This project will incorporate a new clean power source into the school district’s infrastructure and allow the City to purchase power generated on-site as opposed to purchasing power from a utility company that may not use a renewable source. 

 

At the Department of Environmental Protection’s (DEP) Wards Island facility, a combination of ground-mounted, carport, rooftop and elevated canopy solar PV systems will be installed throughout the eight-facility complex, totaling over seven megawatts of solar PV capacity. Solar power generated will serve the loads of the plant, and a battery energy storage system will reduce peak energy demand. An additional 1.5 megawatts of capacity is expected to be installed at three City-owned facilities in the watershed, including the Catskill-Delaware Ultraviolet Light Disinfection Facility in Valhalla.

 

ENGIE will design, construct, own and operate the solar PV systems at the DOE sites while Ameresco will perform the same tasks at Wards Island and the other DEP sites. NYPA, acting as the clean energy advisor, will manage the projects to ensure they progress on budget and on time. The developers were selected through a competitive bidding process announced last June.

 

The City and NYPA conducted site assessments to identify the most feasible and appropriate locations to install solar PV systems to help the City achieve its renewable energy goals. Selected locations, amounting to nearly 70% of the total capacity, also support the State and City’s efforts to advance environmental justice as many of the sites are in areas with poorer air quality and lower median incomes. The project sites are anticipated to be interconnected behind the meter to buildings’ electrical systems. 

 

This initiative will help achieve Mayor Bill de Blasio’s goal of installing 100 MW of solar power on public buildings by 2025 and reducing citywide emissions 80 percent by 2050. The initiative will also help achieve Governor Andrew M. Cuomo’s statewide goal of having 70 percent of New York’s electricity come from renewable sources by 2030 and an 85 percent reduction in greenhouse gas emissions by 2050. NYPA will administer 20-year power purchase agreements for the City to buy the electricity output from each of the projects being managed by Ameresco and ENGIE.  

 

Kevin Moran, Chief School Operations Officer for the NYC Department of Education, said, “Student activism, lessons in our classrooms, and now solar panels on roofs are all evidence of our commitment to combating the effects of global warming. The young people of today are the inheritors of our planet and it is our obligation to do everything in our power to leave them with a livable, vibrant world and we are proud to join with our partner agencies to take this step in building on our commitment.”

Assemblyman Ron Kim - More on Cuomo's Corporate Legal Immunity

 

Why did Governor Cuomo give nursing homes immunity from Covid deaths?

Ron Kim

Was the corporate immunity linked to $1.5m in political contributions from lobbyists? Only a full investigation can help us find out

‘There is more than a good chance that he continued to listen to lobbyists after the budget – and the immunity clause – passed.’ Photograph: Johannes Eisele/AFP/Getty Images

Tue 23 Feb 2021 06.20 EST

342

Imagine fielding hundreds of calls from worried constituents at the peak of the first Covid-19 wave, trying to help scared families protect loved ones in nursing homes.

Imagine being stonewalled by those nursing homes and the department of health as you sought answers to life-and-death questions, knowing that Governor Andrew Cuomo’s directive forced these unprepared facilities to take in thousands of Covid-positive patients.

This was what I was going through as a New York state assemblyman when I received a call from a New York Times reporter about a corporate legal immunity provision that gave for-profit nursing homes and hospitals get-out-of-jail-free cards.

‘Meet the governor we’ve known all along’: how Cuomo fell from grace

Read more

My heart sank as I read it. I did not need a PhD or law degree to understand the repercussions of handing out legal immunity to for-profit nursing homes, which now had legal and criminal shields to disincentivize them from saving lives.