New York Attorney General Letitia James today released the following statement at the commencement of the trial against multiple opioid manufacturers and distributors in Suffolk County State Supreme Court:
“The eyes of the world are on New York today as we prepare to lay bare the callous and deadly pattern of misconduct these companies perpetrated as they dealt dangerous and addictive opioids across our state. Thousands of New Yorkers have died and hundreds of thousands more have been ensnared by addiction, leaving a trail of destruction in tragedy through countless families and communities in every corner of New York. For more than two decades, the opioid epidemic has wreaked havoc on New Yorkers and Americans across the nation, but, today, the dangerous and deadly actions that led us here will no longer be kept quiet. As we fight to put an end to these companies’ unlawful conduct and hold them accountable for the consequences, we recognize no amount of money will ever compensate for the pain and destruction we have collectively experienced, but we hope to push every dollar possible into preventing any future devastation — by investing in prevention, education, and treatment programs. As always, our goal remains getting funds into communities devastated by opioids as quickly as possible.”
In March 2019, Attorney General James filed the nation’s most extensive lawsuit to hold accountable the various manufacturers and distributors responsible for the opioid epidemic. The defendants in the suit included Purdue Pharma, its affiliates, and the Sackler family; Janssen Pharmaceuticals and its affiliates (including its parent company Johnson & Johnson); Mallinckrodt LLC and its affiliates; Endo Health Solutions and its affiliates; Teva Pharmaceuticals USA, Inc. and its affiliates; and Allergan Finance, LLC and its affiliates. The distributors named in the complaint are McKesson Corporation, Cardinal Health Inc., Amerisource Bergen Drug Corporation, and Rochester Drug Cooperative Inc.
The cases against Purdue Pharma (and subsequently the Sackler family), Mallinckrodt, and Rochester Drug Cooperative are all now moving separately through U.S. Bankruptcy Court.
Audrey Strauss, the United States Attorney for the Southern District of New York, announced today that, following a two-week trial presided over by U.S. District Judge Edgardo Ramos, and approximately one hour of deliberations, DONALD BLAKSTAD, the owner and principal of a California-based investment firm, was found guilty on all counts for committing insider trading and a securities offering fraud scheme. BLAKSTAD’s offenses yielded more than $7 million in criminal profits.
U.S. Attorney Audrey Strauss said: “As a unanimous jury found, Donald Blakstad used his connections to a company insider to gather inside information that he and his associates then traded on, raking in more than $6 million in illegal profits. In addition, Blakstad defrauded investor clients out of more $1 million, funds he purported would be invested but he instead misappropriated, in some cases for personal expenses. Now Donald Blakstad awaits sentencing for his crimes.”
According to the allegations contained in the Indictment and the evidence presented at trial:
BLAKSTAD was a stock trader and the owner and principal of an investment fund known as Midcontinental Petroleum Inc. (“Midcontinental Petroleum”), which purported to be in the business of soliciting investments in the energy industry. Martha Bustos was a former certified public accountant who worked in the finance department at Illumina, Inc. (“Illumina”), a San Diego-based biotechnology company whose securities trade on NASDAQ. By virtue of her employment at Illumina, Bustos had access to material nonpublic information about Illumina’s financial condition, including its earnings.
On several occasions, from 2016 through 2018, BLAKSTAD obtained inside information about Illumina’s financial condition from Bustos before Illumina publicly announced its earnings and financial results. As BLAKSTAD knew, Bustos owed a duty to keep inside information about Illumina confidential.
BLAKSTAD, aware of Bustos’s breach of duty to Illumina, used this inside information to make profitable trades in Illumina securities shortly before Illumina’s earnings announcements. At times, BLAKSTAD tipped his associates so that they could trade Illumina stock and options based on the inside information. At other times, in order to avoid detection, BLAKSTAD arranged for his associates to purchase Illumina securities for BLAKSTAD’s benefit in accounts controlled by his associates.
Following the public announcement of Illumina’s earnings, BLAKSTAD and his associates sold the Illumina securities at a significant profit, sometimes exceeding more than 2,000 percent. In total, BLAKSTAD and his associates made more than $6 million in profits from purchasing and selling Illumina securities.
In addition, from at least in or about 2015 through at least in or about 2019, BLAKSTAD devised and operated a securities offering fraud to fraudulently obtain more than a $1 million from a number of investors. BLAKSTAD fraudulently induced victim investors to make up-front, lump-sum investments for securities issued by Midcontinental Petroleum, which funds BLAKSTAD then misappropriated, in substantial part.
To facilitate the scheme, BLAKSTAD made false and misleading representations to investor victims regarding how their investment funds would be utilized. During the scheme, at BLAKSTAD’s direction, victims transmitted their funds, including by wire transfer, into bank accounts that were controlled by BLAKSTAD. Once he obtained these investor funds, BLAKSTAD did not use them for the purposes he had represented to investors. Instead, BLAKSTAD diverted a substantial portion of victims’ funds to himself and to co-conspirators. For example, BLAKSTAD used the funds to pay for a variety of personal expenses and for purposes that were unrelated to the business of Midcontinental Petroleum.
BLAKSTAD also made a series of false and misleading statements to victims designed to avoid detection, perpetuate the scheme, and keep the victim funds he received as a result of the fraud.
BLAKSTAD, 62, of San Diego, California, was convicted on all counts of the Indictment. He was convicted of one count of conspiracy to commit securities fraud, two counts of securities fraud, one count of conspiracy to commit wire fraud, and one count of wire fraud for his participation in the insider trading scheme. He was also convicted of one count of conspiracy to commit securities fraud and wire fraud and one count of wire fraud for his participation in the securities offering fraud scheme. The securities fraud counts and the conspiracy to commit wire fraud count each carry a maximum sentence of 20 years in prison. The conspiracy to commit securities fraud and the conspiracy to commit securities fraud and wire fraud counts each carry a maximum term of five years in prison. 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 would be determined by the Court.
BLAKSTAD is scheduled to be sentenced before Judge Ramos, who presided over the trial, on October 28, 2021, at 11:00 a.m.
Bustos pled guilty in June 2019 for her participation in the insider trading scheme. Bustos, who is cooperating with the Government, has yet to be sentenced.
Ms. Strauss praised the outstanding investigative work of the Federal Bureau of Investigation. Ms. Strauss also thanked the Securities and Exchange Commission, which brought a separate civil action.
Funding to Help Support Continued Small Business Recovery in the District
Representative Adriano Espaillat announced a combined $2.48 million to the Upper Manhattan Empowerment Zone - UMEZ ($1.826 million) and Business Resource & Investment Service Center ($658k) through the New York Public Library allocated through the U.S. Treasury CDFI Fund.
UMEZ received the maximum award amount under the Rapid Response program, which was part of a $1.25 billion award to more than 800 CDFIs. These funds will help provide flexible support to small businesses in throughout New York’s 13th congressional district to assist with ongoing recovery efforts following the COVID-19 pandemic.
"Over the course of the pandemic, my office worked with hundreds of small businesses from my district, helping owners apply and access funding allocated through federal legislation to help keep businesses open during this time of great need,” said Rep. Adriano Espaillat. “The Upper Manhattan Empowerment Zone (UMEZ) is a true partner to small businesses in New York City and has been instrumental in the community as a whole helping businesses run and thrive and this funding will help provide a critical investment in the program to continue its efforts to help businesses re-build better and stronger from this pandemic. I am delighted that UMEZ has been recognized as such a valuable community partner and look forward to working with President and CEO Duncan and the entire UMEZ team to continue to support small businesses in the district and help them recover.”
“These federal economic relief funds, a combined $2.48 million—UMEZ $1,826,265 and BRISC $658,000—from the U.S. Treasury’s CDFI Rapid Response Program, will enable UMEZ and BRISC to continue to develop the types of programs that further strengthen small businesses in our Upper Manhattan communities,” said Blair M. Duncan, president and CEO of UMEZ. “We thank Congressman Espaillat and his team for quickly assisting us to navigate the U.S. General Services Administration’s registration process, so UMEZ and BRISC could apply for these federal funds designed for communities like ours. His office’s responsiveness enabled us to submit under a tight deadline.”
UMEZ works to sustain the economic revitalization of all communities in Upper Manhattan through job creation, corporate alliances, strategic investments, and small business assistance. Through its programs, UMEZ has facilitated economic support and development in the neighborhoods of Central, West, and East Harlem; Washington Heights; and Inwood.
Homeless Housing and Assistance Program Funding to Create 127 Units of Supportive Housing
Funding Will Also Help Three Homeless Shelters to Perform Necessary Repairs
Governor Andrew M. Cuomo today announced that $11.2 million in state funding has been awarded to six projects that will provide supportive housing or emergency shelter to New Yorkers experiencing homelessness. Supported through New York State's Homeless Housing and Assistance Program, these projects will create 127 units of permanent supportive housing and assist three emergency shelters in performing needed repairs.
"As we build back our state better than it was before, we must focus on helping our most vulnerable New Yorkers who have suffered so much during this pandemic," Governor Cuomo said. "These projects, like many others supported by this critical program, will provide New Yorkers experiencing homelessness or housing instability with the safe shelter, supportive services and stable housing they need, furthering our efforts to create a stronger, more inclusive New York."
Administered by the state Office of Temporary and Disability Assistance, the Homeless Housing and Assistance Program will provide $6.9 million to the Bridge, Inc. to construct Bishop House Apartments, a nine-story 88-unit building in Central Harlem that will offer 71 units of supportive housing to serve individuals with severe mental illness or who are reentering the community after incarceration. The Bridge will provide case management, daily living skill and vocational training, substance use treatment, and physical and mental health care services.
The program will provide $4 million to construct Jericho House, a 56-unit supportive housing development in New York City serving adults with substance use disorder who are experiencing homelessness. Services provided by the Jericho Project include case management, crisis intervention, relapse prevention, career counseling, job readiness and substance use treatment.
In addition, the approved funding will provide a total of $255,000 to four emergency shelters to conduct repairs. These shelters include Caring for the Hungry & Homeless in the Westchester County town of Peekskill; St. Catherine's Center for Children's Marillac Family Shelter in the city of Albany; and two awards to the Soul Savings Station for Every Nation's Mother Anderson, one for their family shelter, and one for single individuals, both in the city of Saratoga Springs.
OTDA Commissioner Mike Hein said, "Emergency shelters and permanent supportive housing both play a critical role in helping New Yorkers who experience homelessness on the path to achieving lasting stability. Likewise, these projects each play an important role in ensuring their respective communities have the necessary resources to provide safe shelter to individuals experiencing homelessness as they address the root causes of their housing instability. I commend Governor Cuomo for redoubling the support for this program and our efforts to end homelessness in New York once and for all."
The Homeless Housing and Assistance Program made available $128 million in capital funding for projects proposing to build supportive housing units or to repair emergency shelters. Already during this funding cycle, the program has allocated nearly $12 million to six projects that will add 127 units of supportive housing and repair emergency shelters throughout the state. Last year, the program provided funding to 30 projects that will add 881 units of supportive housing and repair emergency shelters.
The awards reflect Governor Cuomo's continued efforts to provide all New Yorkers with access to safe, affordable housing, which is reflected in the state's unprecedented $20 billion housing plan. So far, the plan has helped to build or preserve 7,000 units of supportive housing across the state, putting the state well on the way to achieving the goal of 15,000 created or preserved over 15 years.
Building on his commitment, the Governor's 2021 state budget increased the available capital for the Homeless Housing and Assistance Program from $64 million to $128 million - a funding level that was maintained in the enacted 2022 budget. This funding includes $5 million earmarked for supportive housing for homeless veterans; $5 million for supportive housing for individuals with AIDS who are experiencing homelessness; and $1 million for necessary repairs to emergency shelters.
The Homeless Housing Assistance Program provides capital grants and loans to not-for-profit corporations, charitable and religious organizations, and municipalities to acquire, construct, or rehabilitate housing for persons who are unable to secure adequate housing without special assistance. The grants are awarded through a competitive process by the New York State Homeless Housing and Assistance Corporation, a public benefit corporation staffed by OTDA.
Through this program, New York State has appropriated more than $1.2 billion toward the development of supportive housing. In total, the program has created more than 22,000 units of housing to support individuals and families experiencing homelessness.
School is out, but we want your child to come to 'Summer Learning', and this year we did not just make it for failing, I mean struggling students. We made it for all students, since we know some students are behind in their studies, especially those children in Bronx public schools whose student performance level is mush lower than the other four boroughs. so sign your child up for our 'Summer Learning' program, again especially if your child goes to a Bronx public school.
I've heard grumblings about sending extra police to protect the tourist in Times Square. They will be cracking down on street vendors who are not licensed, those squeegee guys who have come back from the Giuliani days, and the aggressive pan handlers who are harassing the tourists. We need to make Times Square safe for the tourist who come to visit New York City. Isn't that right Commissioner Harrison, I mean Chief Harrison?
Statewide 7-Day Average Positivity is 0.39%
24,746 Vaccine Doses Administered Over Last 24 Hours
3 COVID-19 Deaths Statewide Yesterday—Fewest Since September 28, 2020
Governor Andrew M. Cuomo today updated New Yorkers on the state's progress combating COVID-19.
