INVESTOR ALERT: Attorney General James Warns New Yorkers About Cryptocurrency Investment Risks

 

Investors Lost Hundreds of Billions in Cryptocurrency Investments as the Market Reached Record Lows

 New York Attorney General Letitia James today issued an alert to New Yorkers to remind them of the dangerous risks of investing in cryptocurrencies after the market reached record lows last month and investors lost hundreds of billions. Cryptocurrencies are subject to extreme and unpredictably high price swings that make them among the most high-risk investments on the market. Last month, some of those risks materialized as the price of multiple virtual currencies — from the newest coins to the most well-established coins — plunged deeply and wiped away hundreds of billions in investments. This is not the first time the market has plunged. To protect New Yorkers from this extreme volatility, Attorney General James offers New Yorkers guidance on the various risks associated with cryptocurrencies.

“Over and over again, investors are losing billions because of risky cryptocurrency investments,” said Attorney General James. “Even well-known virtual currencies from reputable trading platforms can still crash and investors can lose billions in the blink of an eye. Too often, cryptocurrency investments create more pain than gain for investors. I urge New Yorkers to be cautious before putting their hard-earned money in risky cryptocurrency investments that can yield more anxiety than fortune.”

The virtual currency market exposes investors to dangerous risks, such as wild price swings and potential losses due to hacking, fraud, or theft. Even “legitimate” investments in virtual assets are subject to speculative bubbles and security issues. Investors in virtual assets should beware of the many significant risks of investing in these products including:

• Highly Speculative and Unpredictable Value: Virtual currencies are easy to create and spread in the market quickly. Their underlying value is highly subjective and unpredictable. As a result, prices can swing wildly and crash without warning and without regard to any changes in the real economy. At times, price fluctuations are driven by market hype on various social media platforms.
• Difficulty Cashing Out Investments: There is no guarantee that you will be able to liquidate your investments when you want — such as when the crypto markets begin to crash. During times of crisis, trading platforms may halt trading or purport to experience technical difficulties, preventing you from accessing your assets.
• Higher Transaction Costs: Some trading platforms charge fees on transactions such as transferring funds and withdrawing money. These fees can vary depending on the size of the transaction and overall trading volume. Therefore, it may also cost you more to access your assets when you need them the most.
• Unstable “Stablecoins”: Despite their misleading name, there is no guarantee that your stablecoin investment is protected from decreasing value. The nature and quality of the assets backing stablecoins — if there are any assets backing the stablecoin — can vary greatly and along with that so can the risks associated with holding such coins. 
• Hidden Trading Costs: Value in cryptocurrencies and other virtual assets may be propped up by automated trading, or bots, that are, for example, programmed to spot when another trader is trying to make a purchase and then buy ahead of the trade. This practice can push up the price and cost you more to purchase the same virtual asset.
• Conflicts of Interest: Many operators of virtual currency trading platforms are themselves heavily invested in virtual currencies, and trade on their own platforms without oversight. The financial interests of these operators may conflict with your interests. There have also been recent reports of large investors receiving favorable treatment, such as private cash-outs away from the market.
• Limited Oversight: There are no federally regulated exchanges, like the New York Stock Exchange or Nasdaq, for virtual currencies. Virtual currency trading platforms operate from various places around the world, many of which are not easily accessible to American law enforcement. Many platforms are subject to little or no oversight. If you are the victim of fraud on one of these exchanges, you will likely have no recourse in the United States.  Further, many issuers of virtual currencies are not regulated and therefore are not subject to net capital requirements or examinations. Thus, people who lose money trading a certain virtual currency may have no recourse with respect to the issue of the currency.

Today’s investor alert continues Attorney General’s James efforts to regulate the cryptocurrency industry and protect New York investors. Earlier this year, Attorney General James issued a taxpayer notice to virtual currency investors and their tax advisors to accurately declare and pay taxes on their virtual investments. In October 2021, Attorney General James directed unregistered crypto lending platforms to cease operations for not fulfilling their legal obligations. In March 2021, Attorney General James warned New Yorkers of the risks of cryptocurrency investments and reminded investment platforms of their legal obligations.

Additionally, in 2018, the Office of the Attorney General (OAG) released its “Virtual Markets Integrity Initiative” report, a more detailed overview of the virtual currency markets in New York and around the world. The report gives basic, but important information about how virtual currencies trade, and the risks investors face when they buy and sell, even on “legitimate” trading platforms. 

If you are worried that you or someone you love has been a victim of investment fraud, contact OAG’s Investor Protection Bureau immediately. If you have worked in the virtual assets industry and believe you may have knowledge of wrongdoing, contact OAG’s Investor Protection Bureau immediately or the online whistleblower portal.

Third Former Executive Of Telecommunications Company Charged In Scheme To Defraud Investors

 

 Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an indictment charging ANTHONY SIROTKA, the former chief administrative officer of a FTE Networks, Inc. (“FTE”), along with the company’s former chief executive officer, Michael Palleschi and former chief financial officer, David Lethem, with conspiracy, securities fraud, wire fraud, improperly influencing the conduct of an audit and aggravated identity theft.  These charges stem from a years-long scheme to inflate FTE’s revenue and to conceal liabilities and expenses.  SIROTKA was arrested this morning and was presented today in Manhattan federal court.  Palleschi and Lethem were previously arrested based on an indictment charging them with the same crimes.

U.S. Attorney Damian Williams said:  “As alleged, Anthony Sirotka conspired with his co-defendants to lure investors with false claims about FTE’s financial condition and to make the company appear more profitable than it was.  Sirotka helped to deceive FTE’s auditors and the investing public, and now faces serious criminal charges for his alleged conduct.”

According to the allegations in Indictment unsealed today in Manhattan federal court:[1]

FTE was a telecommunications company based in Naples, Florida and Manhattan.  As of December 2017, its stock traded on the NYSE American market.  SIROTKA served as the company’s Chief Administrative Officer, Senior Vice President of Business Development, and Chief Business Development Officer.  Together with Palleschi and Lethem, among other things, SIROTKA caused FTE to recognize more than $13 million in fraudulent revenue.  This fraudulent revenue included more than $10 million in “unbilled” revenue that the defendants represented FTE had earned from services it had supposedly provided to a large customer that would not yet accept bills for those services.  FTE never provided any such services.  In addition, the defendants caused FTE to recognize approximately $2.6 million as an account receivable for which there was no support.  When FTE’s auditors said that the account receivable should be written off, SIROTKA and his co-conspirators created a fake email from a representative of the customer saying that the customer would “expedite payments” for more than $1.5 million for projects completed by FTE in 2016 and 2017.  The defendants caused this fake email to be sent to FTE’s auditors so that FTE could continue to recognize the receivable. 

As a result of the defendants’ fraudulent recognition of revenue, FTE’s financial statements overstated the company’s accounts receivable by between 18% and 120% for each of the quarters in 2017 and 2018 and by approximately 477% for 2016.

In a separate action, the United States Securities and Exchange Commission (“SEC”) filed civil charges against SIROTKA.  The SEC previously filed civil charges against Palleschi and Lethem.

SIROTKA, 55, of New York, New York, is charged with one count of conspiring to commit securities fraud, wire fraud, making false statements in SEC filings and improperly influencing the conduct of audits, which carries a maximum sentence of five years in prison; one count of securities fraud, which carries a maximum sentence of 20 years in prison; one count of wire fraud, which carries a maximum sentence of 20 years in prison; one count of improperly influencing the conduct of audits, which carries a maximum sentence of 20 years in prison; and one count of aggravated identity theft, which carries a mandatory minimum term of two years in prison. 

The minimum and maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the investigative work of the FBI and thanked the SEC for its assistance.

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

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

Peace Plaza Memorial Day Remembrance 2022

This year the Peace Plaza Memorial Day Remembrance was not only to those soldiers who fought in wars from World War One to present day wars, the United States has been involved in, but to also remember the veteran who started the Peace Plaza remembrance who passed away in December 2021 Silvio Mazzella. Next to the other memorial stones for war veterans, a new memorial stone was unveiled for Silvio Mazzella with the Mazzella family in attendance. 

Well over one hundred people were on hand for this year's Peace Plaza Memorial Day Remembrance including Bronx Borough President Vanessa Gibson. As he did last year, and will now do each year U.S. Marine Veteran Joseph Ronda emceed the event where various veterans from the different armed forces spoke about what Memorial Day means to them. When Veteran Joe Thompson was introduced as being an Army Veteran, his response was I was in the Air Force not the Army. Candidate for Supreme Court Yadhira Gonzalez-Taylor however was a veteran of the U.S. Army who mentioned almost all of her family who served in the various armed forces. 

Even though Councilwoman Velazquez and Assemblywoman Fernandez were present, the only elected official to speak was Bronx Borough President Vanesa Gibson. She said that we are here today to remember those who fought in wars so we could be here today. We must honor each and every veteran, and we must not close down any of the VA Hospitals. She added that her relative Roger Gibson, who is a veteran, tells the family stories about what it was like to serve the country as a soldier. 

Former Marine Joe Ronda invited the Mazzella family to come forward for the unveiling of the stone to memorize Silvio Mazzella at Peace Plaza. Taps were then played, Rabbi Saadia Pewzner of the Bronx Jewish Center gave the final prayer, and Cpl. Ronda thanked everyone for coming out to honor the local veterans like Silvio Mazzella who gave of themselves. 

Army veteran Joseph Ronda has taken over the duties of running the Peace Plaza Memorial Day Remembrance, and is assisted by Navy veteran Gene De Francis. 

Ms. Grace Lovag sings the Nation Anthem as the U.S. flag is raised.

U.S. Army Veteran Yadhira Gonzalez-Taylor talks about her entire family's service in the Armed Forces, which led her to serve.

Veteran Joe Thompson who was introduced as an Army Veteran, let everyone know that he served in the Air Force and not the Army.

Bronx Borough President Vanessa Gibson spoke of her relative Roger Gibson who tells the family stories of when he served. She added that Veteran Hospitals must be kept open to serve those who were in the Armed Forces.

It was then time to unveil the stone in memory of the founder of the Peace Plaza Memorial Remembrance who is no longer with us, Mr. Silvio Mazzella. Members of the Mazzella Family stand by the stone honoring Silvio for his service in the Armed Forces, and in his community. 

Rabbi Saadia Pewzner gives the closing prayer.

U.S. Attorney Charges Bronx Attorney With Attempted Sexual Exploitation Of A Minor And Attempted Enticement Of A Minor

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced today the arrest of TONG HYON SUH, a/k/a “Jason Suh.”  SUH is charged with communicating online with an individual he believed to be a 14-year-old girl and attempting to meet the girl to engage in sexual activities and record the activities.  SUH was presented today before U.S. Magistrate Judge Andrew E. Krause in White Plains federal court and detained.

U.S. Attorney Damian Williams said:  “Suh’s behavior is the nightmare of every parent. He attempted to exploit the most vulnerable in our society. This case underlines the urgent need for law enforcement to continue its efforts to protect children from those who prey on them.”

According to the allegations in the Complaint[1] filed yesterday in White Plains federal court:

Beginning on April 24, 2022, a detective with the Greenwich Police Department (“Detective-1”), who was posing as a 14-year-old girl named “Megan,” communicated via the social platform, Kik, with TONG HYON SUH, a/k/a “Jason Suh.” During the communications, SUH, who was using the Kik user name “suhjason,” identified himself as a 45-year-old Korean male living in New York City and indicated that he wanted to meet with “Megan” for the purpose of having sex.  Detective-1 told SUH that she was a 14-year-old female from Connecticut. During the communications, SUH sent various photos of himself showing his face.

During their communications, which occurred from April 24, 2022 to May 27, 2022, among other things, SUH told Detective-1 that he “find[s] the age gap hot tbh” and “tbh on the down low I want a young submissive sl*t.” SUH requested pictures from “Megan.” For example, he told her, “So sneak in a bathroom break pic. I love a good sl*t.”

On April 26, 2022, SUH discussed meeting in person. He asked “Megan” for some “sl*tty pics” that she could “delete after taking.” During the communications, SUH referenced other teenage girls with whom he had engaged in sexual activity.  On or about May 2, 2022, SUH told “Megan” that he wanted to film them engaging in sexual acts and he continued to request pictures. 

On or about May 20, 2022, an FBI Special Agent acting in an undercover capacity as “Megan,” spoke to SUH by phone.  During the call, SUH identified himself as “Daddy” and “Jason.”  SUH stated that he was born in 1977, is a New York attorney with an office in the Bronx, and has been a lawyer since he was 26 years old.

SUH and “Megan” spoke again on May 24, 2022.  SUH and “Megan” discussed meeting and SUH said he would rent a residence and take the train to Greenwich, Connecticut. He said that he would use a ride service to pick “Megan” up at her house, and then they would travel together to the rented residence, where they would engage in sexual activity and smoke marihuana. During the conversation, “Megan” requested that SUH bring condoms, lollipops and marijuana, and wear a suit. “Megan” gave SUH an address in Greenwich, Connecticut and told him that she lived in an apartment located at that address.

After the May 24, 2022 phone call, SUH told “Megan” that they should meet on Friday, May 27, 2022. SUH said that he and “Megan” would use a ride service to go to the residence he rented in Stamford, Connecticut.

A public database for New York attorney registration information indicates that a “TONG-HYON SUH” is registered as an active attorney in New York with a business address in the Bronx. Additionally, the database indicates that “TONG-HYON SUH” was admitted to the New York bar on or about November 19, 2003.

On May 27, 2022, at approximately 3:31 p.m., TONG HYON SUH, a/k/a “Jason Suh,”  arrived at the Metro North train station in Greenwich, Connecticut on a northbound Metro North train after passing through Westchester County.  SUH was wearing a suit and carrying a black briefcase and a red and white shopping bag. Law enforcement observed SUH enter the rear passenger seat of a black Toyota Highlander and depart the train station.

At approximately 3:50 p.m., TONG HYON SUH, a/k/a “Jason Suh,” the defendant, arrived at the address provided by “Megan.”  When SUH entered the building located at that address, detectives with the Greenwich Police Department arrested him. After SUH’s arrest, the defectives retrieved a black briefcase and a red and white shopping bag from the vehicle in which SUH was riding.  An inventory search of the briefcase and bag revealed that they contained, among other things, a laptop computer, a thumb drive, sneakers, matches, marijuana, toiletries, clothing, an unopened package of lollipops, and six condoms.

Following his arrest, TONG HYON SUH, a/k/a “Jason Suh,” was charged in Stamford Superior Court.

There may be other victims of this alleged conduct.  If you have information to report, contact the Federal Bureau of Investigation through its toll-free Tip Line at 1-800-CALL-FBI

SUH, 45 of Bronx, New York, is charged with one count of attempted sexual exploitation of a minor, which carries a minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, and one count of attempted enticement of a minor, which carries a minimum sentence of 10 years in prison and a maximum sentence of life in prison. 

The statutory minimum and maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Following today’s presentment, Judge Krause ordered that SUH be detained.

Mr. Williams praised the efforts of the Federal Bureau of Investigation, Connecticut State’s Attorneys Office, Greenwich Police Department, and the Westchester County Safe Streets Task Force, which is comprised of special agents and task force officers from the FBI, U.S. Probation, New York State Police, New York State Department of Corrections and Community Supervision, Putnam County Sheriff's Office, Westchester County DAs Office, Rockland County DAs Office, NYPD, Westchester County PD, and the Yonkers, New Rochelle, Mount Vernon, Greenburgh, White Plains, Peekskill, Ramapo, and Clarkstown Police Department. He added 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 herein constitute only allegations, and every fact described should be treated as an allegation.

Governor Hochul Updates New Yorkers on State's Progress Combating COVID-19 - JUNE 1, 2022

 

Statewide 7-Day Average Case Rate Has Consecutively Dropped For Past 15 Days  Lowest Level Since April 27

Cases Continue to Decline Across All Regions

49 Statewide Deaths Reported, from 5/28 to 5/31

 Governor Kathy Hochul today updated New Yorkers on the state's progress combating COVID-19.

"As we continue to monitor the numbers, it is important that we don't let our guard down and keep using the tools we have available to us to stay safe and healthy," Governor Hochul said. "The best way to protect yourself and your loved ones from serious illness is to get vaccinated and keep up to date with your booster doses. If you are experiencing symptoms, get tested, and if you test positive talk to your doctor about available treatments."  

Today's data is summarized briefly below:   

Important Note: Due to the holiday, HERDS data collection from health care facilities was paused from 5/28/2022-5/30/2022. Data from those days were submitted in Tuesday's report. Where noted, totals include four days of cumulative data from 5/28/2022-6/1/2022. As a result, some data may appear higher than recent trends. Data affected is marked with an asterisk.

• Cases Per 100k - 29.07
• 7-Day Average Cases Per 100k - 32.78
• Test Results Reported - 54,078
• Total Positive - 5,681
• Percent Positive - 10.42%**  
• 7-Day Average Percent Positive - 6.85%**
• Patient Hospitalization -  2,459
• Patients Newly Admitted - 1,135*
• Patients in ICU - 238
• Patients in ICU with Intubation - 85*
• Total Discharges - 307,600 (+900)*
• New deaths reported by healthcare facilities through HERDS - 49*
• Total deaths reported by healthcare facilities through HERDS - 56,106*

** Due to the test reporting policy change by the federal Department of Health and Human Services (HHS) and several other factors, the most reliable metric to measure virus impact on a community is the case per 100,000 data -- not percent positivity.  

The Health Electronic Response Data System is a NYS DOH data source that collects confirmed daily death data as reported by hospitals, nursing homes and adult care facilities only.    

Important Note: Effective Monday, April 4, the federal Department of Health and Human Services (HHS) is no longer requiring testing facilities that use COVID-19 rapid antigen tests to report negative results. As a result, New York State's percent positive metric will be computed using only lab-reported PCR results. Positive antigen tests will still be reported to New York State and reporting of new daily cases and cases per 100k will continue to include both PCR and antigen tests. Due to this change and other factors, including changes in testing practices, the most reliable metric to measure virus impact on a community is the case per 100,000 data -- not percent positivity.  

• Total deaths reported to and compiled by the CDC - 71,570

This daily COVID-19 provisional death certificate data reported by NYS DOH and NYC to the CDC includes those who died in any location, including hospitals, nursing homes, adult care facilities, at home, in hospice and other settings.      

• Total vaccine doses administered - 38,940,477
• Total vaccine doses administered over past 24 hours - 8,064
• Total vaccine doses administered over past 7 days - 122,668
• Percent of New Yorkers ages 18 and older with at least one vaccine dose - 92.6%  
• Percent of New Yorkers ages 18 and older with completed vaccine series - 84.0%  
• Percent of New Yorkers ages 18 and older with at least one vaccine dose (CDC) - 95.0%  
• Percent of New Yorkers ages 18 and older with completed vaccine series (CDC) - 87.4%  
• Percent of New Yorkers ages 12-17 with at least one vaccine dose (CDC) - 83.7%  
• Percent of New Yorkers ages 12-17 with completed vaccine series (CDC) - 73.6%  
• Percent of all New Yorkers with at least one vaccine dose - 82.1%  
• Percent of all New Yorkers with completed vaccine series - 74.5%  
• Percent of all New Yorkers with at least one vaccine dose (CDC) - 90.6%  
• Percent of all New Yorkers with completed vaccine series (CDC) - 77.4%                                                                                                             

Each New York City borough's 7-day average percentage of positive test results reported over the last three days is as follows **:   

Borough	Sunday, May 29, 2022	Monday, May 30, 2022	Tuesday, May 31, 2022
Bronx	4.07%	4.01%	4.15%
Kings	5.66%	5.59%	5.80%
New York	6.48%	6.46%	6.49%
Queens	6.09%	6.03%	6.09%
Richmond	6.69%	6.43%	6.36%