Former Chief Financial Officer Of Email Security Company Pleads Guilty To $50 Million Scheme To Defraud Investors And Lenders

 

 Damian Williams, the United States Attorney for the Southern District of New York, announced today that NIHAT CARDAK, the former Chief Financial Officer (“CFO”) of the Virginia-based email security company GigaMedia Access Corporation, d/b/a GigaTrust (“GigaTrust”), pled guilty today in Manhattan federal court in connection with a scheme to defraud investors and lenders of millions of dollars through false and misleading misrepresentations, including fabricated bank statements and audit reports, and by impersonating a purported customer, auditor, and GigaTrust lawyer.  U.S. District Judge Paul G. Gardephe accepted the defendant’s guilty plea.

U.S. Attorney Damian Williams said: “Nihat Cardak, along with his co-defendants Robert Bernardi and Sunhil Chandra, chose to lie and mislead investors and lenders in order to keep GigaTrust afloat instead of owning up to the company’s financial reality.  Their scheme came crashing down in 2019 as GigaTrust filed for bankruptcy, and Cardak and Bernardi have now accepted responsibility for their criminal actions.”

According to the allegations in the Indictment and other filings and statements made in court:[1]

From in or about 2016 through at least in or about 2019, GigaTrust was a private company headquartered in Virginia that purported to be a market-leading provider of cloud-based content security solutions.  Robert Bernardi founded GigaTrust and served as its Chief Executive Officer, while CARDAK and Sunil Chandra were GigaTrust’s CFO and Vice President of Business Development, respectively.  The defendants devised a scheme to defraud investors and lenders by (i) fabricating and disseminating false and misleading bank account statements that overstated GigaTrust’s cash deposits; (ii) fabricating and disseminating false and misleading audit materials that purported to have been issued by GigaTrust’s auditors and overstated GigaTrust’s performance; (iii) forging and disseminating a false and misleading letter purporting to be from GigaTrust’s New York-based counsel; and (iv) impersonating or causing others to impersonate a purported customer and auditor of GigaTrust on telephone calls with a prospective lender. 

Specifically, Bernardi sent fabricated audit materials to a New York-based investment firm, and Bernardi and CARDAK used fabricated bank statements to obtain multiple rounds of loans and investments for GigaTrust worth millions of dollars.  After a New York-based bank (“Bank-1”), which had loaned GigaTrust $25 million, declared that GigaTrust had defaulted on the terms of its loan agreement, Bernardi and CARDAK induced additional investments in GigaTrust through, among other things, forging a letter purporting to be from GigaTrust’s New-York based counsel.  Shortly thereafter, while negotiating another $25 million deal with a lender (“Lender-1”), Bernardi and CARDAK devised a scheme to impersonate a GigaTrust customer and auditor on requested diligence calls, which induced Lender-1 to make a $25 million loan to GigaTrust.  Bernardi recruited Chandra to pose as one of GigaTrust’s alleged customers on a call with Lender-1.  Bernardi and CARDAK also fabricated bank statements and sent them to Lender-1 right before closing the $25 million deal. 

GigaTrust filed for Chapter 7 bankruptcy protection in the District of Delaware on or about November 27, 2019.

On August 17, 2022, Bernardi pled guilty to conspiracy to commit securities fraud, bank fraud, and wire fraud before Judge Paul G. Gardephe. 

CARDAK, 52, of Clifton, Virginia, pled guilty to one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  Sentencing for CARDAK is scheduled for May 16, 2023.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation in this case.  Mr. Williams further thanked the Securities and Exchange Commission, which has filed a civil enforcement action against the defendants, for its cooperation and assistance in this investigation. 

The charges contained in the Indictment against Sunil Chandra are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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

MAYOR ADAMS MAKES EMERGENCY MUTUAL AID REQUEST OF NEW YORK STATE IN RESPONSE TO MASSIVE INFLUX OF ASYLUM SEEKERS

 

NYC Received More Than 3,100 Asylum Seekers in Past Week

 

835 Asylum Seekers Arrived Last Thursday Alone, Largest Single Day Arrival Since Influx of Migrants Began

New York City Mayor Eric Adams today released the following statement after New York City submitted an emergency mutual aid request to New York State for immediate help this weekend to shelter arriving asylum seekers:

 

“Three months ago, I spoke directly to New Yorkers about the crisis of asylum seekers that has driven our shelter system to record levels and strained our city. On that day, I said we would surpass the highest number of people in recorded history in our city’s shelter system and that every day after we would set a new record. We are now seeing more people arrive than we have ever seen — averaging over 400 people each day this last week, with 835 asylum seekers arriving on one single day alone, the largest single day arrival we’ve seen to date. All this is pushing New York City to the brink.

 

“Since last spring, the city has stepped up to welcome approximately 40,000 asylum seekers, providing them with shelter, food, and connections to a host of resources. We have opened 74 emergency shelters and four humanitarian relief centers at breakneck speed, and done this almost entirely on our own.

 

“We are at our breaking point. Based off our projections, we anticipate being unable to continue sheltering arriving asylum seekers on our own and have submitted an emergency mutual aid request to the State of New York beginning this weekend. This type of request, reserved only for dire emergencies, asks the state for support to shelter arriving asylum seekers as the city faces an immediate need for additional capacity. Our initial request is for shelter to accommodate 500 asylum seekers, but, as New York City continues to see numbers balloon, this estimate will increase as well.

 

“The absence of sorely needed federal immigration reform should not mean that this humanitarian crisis falls only on the shoulders of cities. We need support and aid from our federal and state partners and look forward to working together to meet this crisis head-on.”

Council Member James F. Gennaro Calls on Gov. Kathy Hochul to Remove DA Alvin Bragg After He Offered Sweetheart Plea Deal to Perpetuator of Brutal Antisemitic Attack

 

“I am outraged that Manhattan DA Alvin Bragg is offering the perpetrator of a horrific beating of a Jewish man in Midtown a mere six-month sentence in a plea bargain for this despicable hate-based attack, for which he could be released in 60 days after serving a third of the sentence. This is an indefensible slap on the wrist for an assailant who pledged he would ‘do it again’ after his arrest. This deal sends the worst possible message that a prosecutor can send – that it’s open season for antisemitic assaults in New York City. Antisemitic hate crimes have increased by a whopping 41 percent over the past year – and it’s no wonder why. We have a district attorney who essentially condones violence against Jewish New Yorkers. This is an abomination. I call on Gov. Kathy Hochul to remove Alvin Bragg immediately. One year ago, Gov. Hochul publicly called upon New Yorkers calling for the removal of the shockingly soft-on-crime Bragg to ‘cut him some slack,’ and that Bragg ‘deserves a chance.’ Gov. Hochul – Alvin Bragg has had his chance and he has failed to do his job to render justice time and time again. The need for him to be removed is apparent. He is coddling the vicious assailant of a Jewish New Yorker for being Jewish and he has pledged to do it again. You now need to do your job by removing him.” 

Governor Hochul Announces Mobile Sports Wagering Generated $909 Million for New York State in First Year of Operation

 

Tax Revenue Funds Education, Youth Sports Programming and Problem Gambling Prevention Treatment and Recovery Services

More Than $16 Billion Wagered on Sports in New York State in First Year of Operation

 Upon the one-year anniversary of mobile sports wagering in New York State, Governor Kathy Hochul today announced the State has collected more than $709.2 million in taxes on such bets, a figure that leads the nation. An additional $200 million in licensing fees has also been collected, generating a total of more than $909 million in revenue, most of it to be used for education.

"In just one year, New York has become a national leader in providing responsible entertainment for millions while bringing in record-shattering revenue for education, youth sports, and problem gambling prevention," Governor Hochul said. "I look forward to another year of delivering top tier mobile sports wagering experiences that generate revenue to enrich the lives of New Yorkers across the state."

New York State Gaming Commission Chairman Brian O'Dwyer said, "Thanks to Governor Hochul's leadership and the enactment of smart and responsible gaming policies, New York continues to break revenue and wagering records. As we enter the second year of mobile sports wagering in New York State, the Gaming Commission will continue to ensure that such betting is conducted in a safe and responsible manner."

New York State Office of Addiction Services and Supports Commissioner Chinazo Cunningham said, "OASAS appreciates the ongoing partnership with the Gaming Commission to educate the public about responsible gambling and to provide resources for those who need them. The additional revenue generated will help to ensure that we have a robust system of programs and services to address the needs of individuals, families, and communities across the state."

According to GeoComply, a software firm used by sports books to ensure geolocation requirements, more than 3.8 million unique player accounts have been created since launch in January of 2022, conducting over 1.2 billion transactions.

The one-year anniversary of mobile sports wagering in New York State was last Sunday, January 8, 2023. Through January 7, the total mobile sports wagering handle reached $16,595,732,482 and generated a total net revenue to education of $709,247,358.

For Fiscal Year 2023 (April 1, 2022 through March 31, 2023) and annually thereafter, revenues from mobile sports wagering are distributed as follows: $5 million to fund sports programs for underserved youths, $6 million to fund problem gambling education and treatment, with the remaining majority to fund education aid.

Every Friday, the NYS Gaming Commission publishes weekly mobile sports wagering reports from all of its operators online here.

The Commission's regulations require operators to prevent underage gaming, provide bettors the availability to impose spending limits, and share information on gambling risks and signs of problem gambling. New Yorkers who are struggling with a gambling problem or know someone with a gambling problem can call the state's toll-free, confidential HOPEline at 1-877-8-HOPENY (1-877-846-7369) or text HOPENY (467369). New Yorkers can also contact the Regional Problem Gambling Resource Center at: https://nyproblemgamblinghelp.org/.

EDITOR'S NOTE:

So all 909 million did not go to education, 200 million for licensing fees, 5 million for sports programs, and 6 million for problem gamblers. 

We wonder how much money is being taken out of the education budget and is being replaced by this gambling money as was done with the  lottery money that went to education.

DEC Urges New Yorkers to Avoid Close Encounters with Marine Mammals

 

Public Advised to Remain at a Safe Distance

Report Sightings of Distressed Whales, Dolphins, and Seals to New York Stranding Hotline

New York State Department of Environmental Conservation (DEC) Commissioner Basil Seggos today reminded New Yorkers along coastal shores to always keep a safe distance from marine mammals and resist the urge to intervene when an animal comes ashore. Marine mammals, which include whales, dolphins, porpoises, and seals, are protected by federal and state laws to ensure they are not harmed and to keep people at a safe distance.

"New York’s marine waters provide vital nursery and foraging grounds for whales, dolphins, and seals that migrate across the Atlantic Coast," Commissioner Seggos said. “Observing these animals in the wild can be an exciting and unforgettable experience. However, DEC urges New Yorkers to keep their distance and refrain from attempting to intervene during stranding events. Stranded animals will need professional medical care and the best way to help is to immediately contact the Stranding Hotline.”

The public can best help injured or distressed marine mammals by reporting sightings immediately to the New York Marine Mammal and Sea Turtle Stranding Hotline at (631) 369-9829 so that trained responders can properly assess and care for these animals.

Whales and Dolphins

New York’s marine waters are visited by many species of whales and dolphins. The federal Marine Mammal Protection Act (MMPA) administered by the National Ocean and Atmospheric Association (NOAA) requires people to maintain a safe and legal distance from marine mammals on water and land. Check NOAA’s Marine Life Viewing Guidelines for specific viewing distance laws and regulations for various marine mammals species. It is illegal to touch, feed, disturb, or harass marine mammal species, including whales and dolphins. A violation of the MMPA may result in up to one year of jail time and/or fines up to $20,000. If a distressed animal or carcass washes ashore, do not attempt to intervene or touch the animal. Instead, immediately call the 24-hour New York Marine Mammal and Sea Turtle Stranding Hotline at (631) 369-9829 to report the animal and its location.  

While attempts by the public to push animals back toward the water may be well-intended, there are serious safety concerns for both the animals and the people who intervene. Entering the water with live distressed animals, and even large carcasses, is extremely hazardous. Unpredictable movement by the animal, the force of the ocean surf, and harsh weather conditions can lead to serious human injury or death. The physical effort of pushing, rolling, or dragging the animal by the tail puts additional strain on their bodies and can cause further injury or delay professional care. To provide the best assistance possible for the animal, contact the Stranding Hotline and a trained responder will guide callers through possible next steps. However, it’s important to remember that in the majority of cases, simply remaining at the site until help arrives is the only action you may take.

Seal Season is Coming

Harbor, grey, and harp seals are regularly seen on many of New York’s saltwater beaches and in bays during the winter. The height of the season in New York is typically March through May, but they can be observed as early as November and December in some areas of New York. Seals can commonly be seen hauled out (laying) on rocks and sandbars. This behavior is essential for seals to rest, socialize, and regulate body temperature. DEC reminds New Yorkers that most seals on land are not in distress and that interfering with their natural resting behavior can cause illness, injury, or even death for these animals. Please help keep seals safe by allowing them the space and time they require on the beach.

Remember that while they may appear friendly and adorable, seals are wild animals with sharp teeth, capable of biting and sharing disease, so always keep people and pets at least 50 yards away from seals. While viewing seals from this legally safe distance, if the seal’s behavior changes and/or they notice your presence, that is a sign to move further away. Signs of stress in seals include raising their flippers, showing their teeth, yawning, and eating sand and rocks.

Report Distressed Marine Life to the New York Stranding Hotline

If you see a marine mammal in distress or wash ashore, contact the 24-hour New York State Marine Mammal and Sea Turtle Stranding Hotline immediately at (631) 369-9829 and relay as much information about the animal and its location as possible. The hotline is monitored by the Atlantic Marine Conservation Society (AMSEAS) and New York Marine Rescue Center (NYMRC) which are federally permitted and trained to handle marine mammals and administer professional medical care. Response teams work collaboratively with DEC, NOAA Fisheries, and numerous other partners to develop and implement a response to successfully provide the most effective and efficient aid to the animal.

You can report general sightings of marine mammals to DEC's Flipper Files digital survey to help DEC better understand marine mammal distribution in New York. For more information on whales, dolphins, and seals, visit DEC’s Marine Mammals of New York and Marine Protected Resources webpages.

If you observe an individual harassing or endangering New York’s marine life, contact DEC Environmental Conservation Police Officers (ECOs) to report the incident by calling 1-844-DEC-ECOS for 24-hour dispatch or email central.dispatch@dec.ny.gov (for non-urgent violations).

Council Member Marjorie Velázquez - What's Happening in District 13

 

Dear Neighbor,

This week, hundreds of retirees and municipal workers joined us at City Hall to testify about Admin Code 12-126. We heard from people from all walks of life with varying needs, many with families or chronic illnesses that need specialized care. Healthcare is a human right, and we must ensure that our current and retired city workers have continued access to care.

We also heard the voices of thousands of nurses across the City on the picket line fighting for safer staff-to-patient ratios, fair wages, and better working conditions. I joined the nurses at Montefiore and listened to their stories and lived experiences. On Thursday, I was overjoyed when I learned that within three days of this historic strike, nurses at Montefiore reached an agreement that benefits everyone.

In this week’s email, you will find critical information regarding women’s health, Medicare rights, and next week’s public hearing regarding the Proliferation of Unlicensed Smoke Shops. Information about this hearing can be found in the ‘Legislative Corner,’ along with a link to register or submit personal testimony. The New York City Council also launched its FY 2024 Discretionary Funding Expense Application; to learn more, please scroll to the ‘Budget Corner’ section below. If you need assistance registering, a member of my staff will be happy to help you.

In the meantime, if you have any questions or would like to request an appointment with one of our Constituent Services Liaisons, please call us at (718) 931-1721 or email us at District13@council.nyc.gov.

Sincerely,

Council Member Marjorie Velázquez

Construction Advisories

On Tuesday, January 17 from 11 PM to 5 AM, the NYCDOT Division of Bridges will conduct electrical work on the Shore Road Bridge over the Hutchinson River, resulting in a full-bridge closure. A rain date is set for Wednesday, January 18.

The New York City Department of Design and Construction (NYCDDC), has also announced the below construction, which will take place through February 2023. Updates will be provided when made available by NYCDDC.

• Complete roadway restoration on Boston Road between Pelham Parkway Eastbound Main Road and North Service Road- work includes: instillation of new curbs, sidewalks, pedestrian ramps and islands, roadbase, and final pavement.

• Begin roadway restoration on Pelham Parkway North Service Road between Boston Road and Bronx Park East - work includes instillation of new curbs, sidewalks, pedestrian ramps, roadbase, and roadway.

Sanitation Advisories

In honor of Dr. Martin Luther King Jr. Day, on Monday, January 16, the New York City Department of Sanitation has announced there will be no trash, composting, or recycling collection. Residents who normally receive Monday trash, composting, or recycling collection should place their material curbside between 4 PM and midnight for collection beginning Tuesday, January 17. Residents should anticipate a delay in service, due to the holiday weekend.

New York State Opens First Adult-Use Cannabis Dispensary

On December 28, 2022, New York State opened its first official, adult-use cannabis dispensary in Manhattan, with more to follow later this year. Under the purview of the NYS Office of Cannabis Management, cannabis and cannabis-based products are now available. While the roll out continues, we need to make sure there is regulation and enforcement that holds bad actors accountable.

The legalization of cannabis in different states and cities across our country has invigorated economies and economic development, and now it's New Yorks's time to reap the same benefits. As Chair of the Committee on Consumer and Worker Protection, I will co-host a joint hearing on January 18, 2023; please refer to ‘Legislative Updates’ for additional information. I look forward to working with our city, state, and federal partners to ensure cannabis retailers are held to the highest standard.

If you see a cannabis dispensary, please check for a decal or poster indicating they are a ‘New York State Licensed Cannabis Dispensary.’ There is a scannable QR code on the decal, which can verify their CAURD status; when scanned, their business information will appear on the official cannabis.ny.gov website. If the QR code does not take you to this site or if a business is selling cannabis without the proper license, you may file a report by emailing OCM at licensing@ocm.ny.gov and our office at District13@council.nyc.gov with the subject line: Illegal Cannabis Sales. Please include the name and address of the business in the body of your email.

Committee on Consumer and Worker Protection

On Wednesday, January 18, 2023 at 10 AM, Council Member Velázquez, Chair of the Committee on Consumer and Worker Protection, will co-host a joint-oversight hearing with the Committee on Health and Committee on Oversight and Investigations on the proliferation of unlicensed smoke shops in New York City.

Not long ago our community experienced the K2 (synthetic marijuana) epidemic, and lawmakers held businesses accountable and supported those impacted by K2. We must ensure our communities do not relive those heartbreaking moments.

If you know of a smoke shop selling cannabis without the proper license, we ask that you submit a report by emailing us at District13@council.nyc.gov with the subject line: Smoke Shop and the name and address of the business in the body of your email.

If you would like to testify or submit a written testimony, click below.

Register Here

Laborers Recruit Apprentices

 

The Joint Apprenticeship and Training Committee (JATC) for Construction and General Building Laborers, Local Union #79, will conduct a limited recruitment February 10, 2023 through February 27, 2023 for 200 Skilled Construction Craft Laborer apprentices, the New York State Department of Labor announced today.

The recruitment for JATC for Construction and General Building Laborers, Local Union #79 will be offered online from 9:00 a.m. to 11:00 a.m., during the February 2023 recruitment period (2/10, 2/13, 2/14, 2/15, 2/16, 2/21, 2/22, 2/23, 2/24, 2/27), excluding legal holidays. This is a limited-application recruitment. Only 2,000 applications will be distributed, on a first-come, first-serve basis. The recruitment will be offered for 10 business days or until 2,000 applications have been issued, whichever comes first. Applicants who do not have internet access may visit their local library or visit local New York State Department of Labor Career Center (see: dol.ny.gov/career-centers).

All applications must be received no later than February 28, 2023.

The Committee requires that applicants:

• Must be at least 18 years old (at the start of the program).
• Must have a high school diploma or a high school equivalency diploma (such as TASC or GED).
• Must attest that they are physically able to perform the work required of a skilled construction craft laborer, which may include:
• Working at heights.
• Working in confined spaces.
• Working in extreme temperatures, both indoors and outdoors.
• Lifting and carrying 94 pounds of material for a distance of 30 feet and stacking it to a height of approximately 54 inches.
• Using a shovel to load approximately half of a cubic yard of sand into a wheelbarrow, wheeling it 100 feet, and depositing it into a sand container.
• Must pass a drug screening, at the applicant’s expense, after acceptance into the apprenticeship program.

Application Instructions:

• Go to http://www.mttf.org.
• Follow the links for Local Union #79.
• You will see directions on how to complete your request for an application.
• Fill out the required fields. Do not add any information outside of the fields.
• Applicants may only apply once during the recruitment period.
• Once your request has been completed and accepted, you will receive a confirmation email.
• Applicants who received a confirmation email will receive an application in a separate email.
• The first 2,000 applicants, who are placed into the pool of applicants, will receive an application in a separate email.
• Download, print, complete, sign and return the application.
• Applications must be returned, in person, within 10 business days from the date the application was requested to Construction & Building Laborers Local #79, 42-53 21st Street, Long Island City, NY 11101, Monday through Friday from 9:00 a.m. to 3:00 p.m. (excluding lunch hour 12:00 PM-1:00 PM), excluding legal holidays, on the following dates: February 13, 14, 15,16, 21, 22, 23, 24, 27, 28. All applications must be received no later than February 28, 2023.
• Applicants who do not come in with a competed application will be considered to have voluntarily removed themselves from the pool of applicants.
• Everyone who successfully applies will receive a date and time for an interview on the day they drop off their completed application.

Please understand that if a greater number of applicants apply than Local #79 can accept into their pool of candidates, some applicants may not get through this time. However, Local #79 hopes that work will be plentiful, and another recruitment can be held in the near future.

For further information, applicants should contact JATC for Construction and General Building Laborers, Local Union #79 at (718) 383-6863. Additional job search assistance can be obtained at your local New York State Department of Labor Career Center (see: dol.ny.gov/career-centers).

Apprentice programs registered with the Department of Labor must meet standards established by the Commissioner. Under state law, sponsors of programs cannot discriminate against applicants because of race, creed, color, national origin, age, sex, disability, or marital status. Women and minorities are encouraged to submit applications for apprenticeship programs. Sponsors of programs are required to adopt affirmative action plans for the recruitment of women and minorities.

Is this What the East Bronx Could be looking at by the New Metro North Stations Under the Adams/Huchul Plan?

 

Under the Adams/Huchul plan will buildings like this spring up by the new Metro North Stations in Morris Park and Parkchester/Van Nest?

850 rental units across the two structures, the taller of which will stand 36 stories and 445 feet tall.