WHITE PLAINS – Attorney General Eric T. Schneiderman and State Senate Democratic Conference Leader Andrea Stewart-Cousins today announced that they would propose legislation in Albany that would help to shield New York women from the effect of the U.S. Supreme Court’s decision in Burwell v. Hobby Lobby. That decision limited the scope of the contraceptive mandate under the Patient Protection and Affordable Care Act (ACA), with the result that some women in New York State may lose insurance coverage for prescription contraception. The Reproductive Rights Disclosure Act would require employers both to give current employees 90 days’ notice before changing contraceptive coverage and to notify prospective employees of any contraceptive coverage they offer their employees. A broad coalition of advocates and legislators, including Assembly Member Shelley Mayer, attended the announcement to express their support for the legislation, as well as representatives from WCLA - Choice Matters, NARAL Pro-Choice New York, Planned Parenthood, the National Organization for Women of New York City, the National Organization for Women of New York State, and the New York Civil Liberties Union.

“No woman should have her personal healthcare decisions dictated by the religious beliefs of her boss,” Attorney General Schneiderman said. “As a senator, I fought for a strong law to protect women from discrimination in healthcare coverage because we must have one set of rules for everyone. In the wake of the Supreme Court’s deeply misguided Hobby Lobby decision, we need to go further to empower the women of New York State with the information they need to make their own healthcare choices. That is what the Reproductive Rights Disclosure Act would accomplish.”

Because Hobby Lobby allows a limited category of companies to drop contraceptive coverage from their employee insurance plans, Attorney General Schneiderman’s Reproductive Rights Disclosure Act would create one notice standard for all employers, regardless of the type of company. The Act would require employers to give 90 days’ written notice to employees, as well as the New York State Department of Labor, the Department of Financial Services, and the State Attorney General’s Office. It would also require employers to inform prospective employees of the scope of contraceptive coverage, including by posting on the company website limitations on contraception coverage. The Act also provides for a civil penalty of up to $5,000 for each violation of the new notice provisions.

The Affordable Care Act requires most employer-provided insurance plans to cover preventive care and screenings for women without any cost sharing. The U.S. Department of Health and Human Services (HHS) issued regulations specifying that most employers must cover 20 contraceptive methods approved by the Food and Drug Administration.

In the case of Burwell v. Hobby Lobby, the nationwide retailer Hobby Lobby and its owners challenged the ACA’s mandate to provide health insurance coverage for certain contraception on the grounds that it violated the Religious Freedom Restoration Act of 1993 (RFRA). The RFRA prohibits the federal government from taking an action that substantially burdens the exercise of religion unless it constitutes the least restrictive means of serving a compelling government interest. The Court found that RFRA’s protections applied to closely held corporations, and not just individuals espousing sincerely held religious beliefs. It further found the mandate and penalties for noncompliance were substantial burdens on the exercise of religion. The decision assumed that protecting women’s health was a compelling government interest, but found the ACA’s provisions were not the least restrictive means of fulfilling that interest.
    
Notably, the Hobby Lobby decision was not reached under the First Amendment’s Free Exercise Clause, but solely under RFRA. That means that the effect of the decision is limited to actions taken by federal agencies like HHS. Hobby Lobby does not interfere with state laws. New York’s Women’s Health and Wellness Act (WHWA) still provides strong protections for contraceptive coverage, but the law does not reach all women in New York. For these women, the Hobby Lobby decision threatens their ability to make their own healthcare choices.

“We are united in our call to allow women to make decisions about their own reproductive health, without corporate interference,” said Democratic Conference Leader and State Senator Andrea Stewart-Cousins. “Due to the Supreme Court decision in the Hobby Lobby case, New York State must take decisive action to protect women's rights and health. I applaud Attorney General Schneiderman for his leadership on addressing this issue, and look forward to working with him, and my colleagues in State government, to ensure all New Yorkers have access to the quality healthcare coverage they deserve.”

Assembly Member Shelley Mayer said, “In the wake of the Supreme Court's Hobby Lobby decision, with which I strongly disagree, I believe New York State must make efforts to inform employees about their health care coverage - and what may no longer be covered by some insurance policies. I am committed to working with Attorney General Schneiderman and my colleagues to enact legislation in New York State that informs both current and prospective employees about the details of their insurance coverage, so they can make informed health care choices for themselves.”

Congresswoman Nita Lowey (D-Westchester/Rockland) said, “The Supreme Court’s Hobby Lobby decision marked a shocking step backwards for women’s health. For-profit employers should not be legally allowed to prevent a female employee from making her own health decisions. We need to correct this injustice for the millions of American women who will now be at risk of having to pay out of pocket for basic contraception that helps prevent unwanted pregnancy, disease, and various types of cancer. That’s why I co-sponsored the Protect Women’s Health from Corporate Interference Act of 2014 to provide free contraception in compliance with the ruling, and I applaud Attorney General Schneiderman’s measure that would, given the ruling, provide women advance notice so they can plan ahead. I will continue to do all I can to ensure women’s health choices are where they belong -- between a woman and her doctor.”

State Senator Liz Krueger said, “Hobby Lobby was and is a wrong decision by the Supreme Court, and I believe that it won't last -- sooner or later, it won't be the law of the land. But in the meantime, if businesses are going to claim a special belief-based exemption to deny their employees access to basic care and services that other law-abiding employers must and do offer, then at a bare minimum every employer must be required to honestly explain to employees how their healthcare plan falls short of the national standard set by the Affordable Care Act. This is a commonsense bill and we must pass it.”

Assembly Member Amy Paulin said, “Women have a right to know if their employer intends to change coverage of a significant aspect of their health insurance – with enough notice to make important decisions about their reproductive  health care.  A prospective employee should be armed with the same information.  This is an issue affecting a woman’s pocket book and the ability to make important decisions about her own health.”  

Assembly Member Ellen Jaffee said, “I am deeply disappointed with the ill-advised majority decision of the Supreme Court regarding Hobby Lobby. The majority opinion has entered dangerous territory allowing corporations to force their religious beliefs on their employees. It was because of cases like Hobby Lobby that Senator Krueger and I introduced the Boss Bill. Employers should not have the right to make healthcare decisions for their employees. Denying millions of women access to affordable birth control is denying them fair and equal access to basic preventive health care. Giving employees a 90 day notification if and when their contraceptive coverage changes is the least we can do to protect the millions of New York women. I want to thank Attorney General Schneiderman, Assemblymember Mayer and Senator Stewart-Cousins for introducing this legislation and I will do everything I can to ensure its passage.”

Assembly Member David Buchwald said, “All employees should have the right to know in advance what reproductive health care decisions are being made for them by their employer. Attorney General Schneiderman is demonstrating leadership on this crucial issue, and I stand ready to work with my colleagues in the State Legislature so that the consequences of the Hobby Lobby decision are less harmful here in New York.”

Catherine Lederer-Plaskett, President of WCLA - Choice Matters said, “The Supreme Court’s outrageous Hobby Lobby decision made it clear to me that New York women need to know whether or not their employer or potential employer will provide contraceptive coverage. I’m glad WCLA - Choice Matters was able to work with Attorney General Schneiderman to propose legislation that would incorporate transparency into our employment law. We are incredibly proud that this idea is now the Reproductive Rights Disclosure Act.”

Andrea Miller, President of NARAL Pro-Choice New York said, “As evidenced by the recent Hobby Lobby ruling, this nation’s highest court believes that an employer’s beliefs supersede a woman’s ability to make her own reproductive health care decisions. NARAL Pro-Choice New York is tremendously appreciative of Attorney General Eric Schneiderman’s swift action in the wake of that shocking and disturbing decision to ensure transparency in employers’ health insurance practices. Thanks to the Attorney General’s proposed legislation, employers who impose their narrow beliefs on employees’ health care will not be able to hide in the shadows. This bill is a testament to the importance of taking proactive measures to improve the health, safety and equality of New York women at all levels of government.”

Zenaida Mendez, President of NOW New York State said, “The Supreme Court’s atrocious Hobby Lobby decision is an attack on women, and our right to make our own healthcare choices. NOW New York State is grateful to Attorney General Schneiderman to taking action to protect women from losing their contraceptive coverage without notice, and to ensure that women know when they apply for a job whether the prospective employer provides contraceptive cover.”  

“In the wake of the Supreme Court decision that gives employers the right to refuse birth control coverage to employees, this measure is an important step in holding companies accountable to their workforce by making it impossible to hide their stance and access to contraceptive care,” said Sonia Ossorio, President of the National Organization for Women, New York City. “ It’s leaders like Eric Schneiderman who are leading the response to roll backs in women’s fundamental right to full access to reproductive healthcare.”

“Women have a right to know if they’re going to have access to basic health care when they take a job or not,” said New York Civil Liberties Union Executive Director Donna Lieberman. “That’s why it’s important for New York to stand for women and pass this important legislation. We applaud Attorney General Schneiderman for taking steps to prevent employers like Hobby Lobby from denying women access to basic health care without warning.”

M. Tracey Brooks, President and CEO of Family Planning Advocates of New York State said, “Women hit with unexpected, budget-busting costs for contraception could be forced to make decisions that are bad for their reproductive health. The Reproductive Rights Disclosure Act ensures workers and potential employees will not be surprised by sudden changes to their health care coverage. The New York Senate leadership failed to take the first step with the Boss Bill which would have prevented workplace discrimination based on women's reproductive health care choices.  A healthy, productive New York State work force depends on accessible, affordable reproductive health care.”

Reina Schiffrin, President and CEO of Planned Parenthood Hudson Peconic said, “The Hobby Lobby decision clearly prioritized the desires of bosses over the health care needs of women. Contraception is basic, essential health care, and the most effective forms of contraception can be prohibitively expensive without full insurance coverage. Birth control decisions should be made based on a woman’s needs not her paycheck. I applaud Attorney General Schneiderman’s Reproductive Rights Disclosure Act because it recognizes that contraception is essential health care and  women have the right to know if an employer isn’t providing the insurance coverage they want and need.”

Anne Davis, MD, MPH, Consulting Medical Director for Physicians for Reproductive Health said, “I support all forms of contraception being covered as preventive care and the decision about which method of contraception to use should be made by a woman and her doctor, not a woman and her boss. If companies are going to deny that essential health care for their employees, a notification period will allow a woman and her doctor to come up with an alternate plan for contraceptive care.” 

Op-Ed Published on The Huffington Post

By Eric T. Schneiderman

New York State has long been a leader in advancing women’s equality, stretching back to the Seneca Falls Convention 166 years ago this weekend. Sadly, as we mark this important anniversary, hard-won victories by the women’s rights movement are being threatened by a radical right wing that seeks to roll back the progress we’ve made.

Last month, the Supreme Court issued an outrageous decision in Burwell v. Hobby Lobby that empowered the owners of corporations to use their religious beliefs to deny female employees access to key reproductive health coverage.

No woman should have her personal health care decisions dictated by the religious beliefs of her boss. That’s why I joined with some of my colleagues to propose the Reproductive Rights Disclosure Act, which will bolster the ability of all women in New York to make their own health care choices.

My commitment to gender equality is rooted in the quintessentially American principle of equal justice under law. I believe that in New York, we must have one set of rules for everyone – and that means women cannot be unfairly denied health coverage.

When I was in the Senate, I worked to pass Women’s Health and Wellness Act, which bars insurance companies from discriminating against the health care needs of women. I worked with my Senate colleagues, and with advocates in the pro-choice movement, for years to overcome Republican opposition to that bill, and I firmly believe that by requiring equitable insurance coverage for procedures like mammograms and cervical cancer screenings, the law has saved lives. Women’s Health and Wellness also requires insurance plans in New York that offer prescription coverage to cover prescription contraceptives. That part of the law became the model for the nationwide contraceptive mandate in President Obama’s Patient Protection and Affordable Care Act.

The ACA’s contraceptive mandate was a major victory for women’s equality. Insurance plans were no longer allowed to pay for Viagra, but not cover contraception. Then, on June 30, in a radical and out-of-touch decision, the United States Supreme Court undercut this common-sense provision by ruling in Burwell v. Hobby Lobby that closely held corporations espousing sincerely held religious beliefs could not be bound by the ACA’s contraceptive mandate.

While the Women’s Health and Wellness Act remains in effect, it does not reach all women in New York. For them, the Hobby Lobby decision poses a grave threat to their ability to make their own health care choices.

Because the legal landscape under the Hobby Lobby decision and the Women’s Health and Wellness Act may confuse both employers and employees, my proposed legislation would create one notice standard for all employers, regardless of the type of company they run or the type of insurance plan they offer. 

The Reproductive Rights Disclosure Act would require employers to give 90 days’ written notice to employees, as well as to the state, if they are changing their contraception coverage. It would also require employers to inform prospective employees of the scope of any contraceptive coverage they offer, so workers can make an informed choice before accepting an offer of employment.

The Supreme Court’s Hobby Lobby decision was both factually and legally flawed. It accepted false assertions about the science of how contraception works, and it expanded the absurd legal principle that corporations are people by essentially finding that corporations can hold religious beliefs. 

While state law cannot undo all the damage of that misguided decision, we can go a long way to empower women in New York State with the information they need to make their own health care choices. And that is what the Reproductive Rights Disclosure Act will do.

NEW YORK – Attorney General Eric T. Schneiderman today announced that thousands of victims who were defrauded by two immigration services organizations, the International Immigrants Foundation, Inc. (IIF) and the International Professional Association, Inc. (IPA), could begin applying for compensation from a $2.2 million restitution fund. The fund was created by the Attorney General as part of a settlement of claims that the two organizations held out fraudulent promises of citizenship while engaging in the unauthorized practice of law. The process for distributing compensation, which will be administered by the New York Legal Assistance Group (NYLAG), will allow former IIF and IPA clients to submit claims for restitution for fees they paid to the organizations for immigration services that were never lawfully rendered. IIF and IPA have also been prohibited from providing immigration-related legal services in the future.

“Thousands of immigrants who had their trust abused and their money stolen by these organizations deserve to receive compensation, and now they can,” Attorney General Schneiderman said. “By making more than two million dollars in restitution available for the victims of these unscrupulous organizations, we are taking an important step toward justice in this case. I urge all eligible individuals to participate in the claims process, without fear of reprisal. Today’s announcement should send the message that my office enforces one set of rules for everyone, and we will continue to fight immigration services fraud whenever and wherever it occurs.”

Victims of IIF’s and IPA’s misconduct suffered both financial and legal consequences. In one instance, an individual was eligible to obtain a Green Card, but lost his opportunity due to the organizations’ delay and negligence, despite paying more than $18,000 in fees and costs to them. Other clients were subject to deportation. Still others overpaid for services by thousands of dollars.

The claims process is the final phase of a settlement agreement that resolved a lawsuit by the Attorney General against IIF and IPA for misleading clients about their legal credentials and ability to obtain guaranteed immigration results, and for charging excessive fees inconsistent with the charitable purpose for which they were formed.

To be considered for restitution, former clients who paid for and received legal services from IIF and/or IPA must submit a claim form by October 23, 2014. Copies of the claim form, instructions for completion, and submission information are available at the claims administrator’s website, www.nylag.org/IPA. Questions relating to the completion and submission of a claim form should be directed to the claims administrator via email to restitution@nylag.org or the fund hotline at 212-514-4265. The amount of each individual restitution payment shall be determined after receipt and review of all eligible claims forms.

“As an organization who routinely sees the devastating impact that fraudulent immigration services providers inflict upon immigrants, we applaud Attorney General Eric T. Schneiderman for ensuring that those who were victimized by the International Immigrants Foundation and the International Professional Association will be able to seek restitution.  The creation of the restitution fund sends the message loud and clear that those who engage in the unauthorized practice of law will not be tolerated and will be compelled to indemnify those they defrauded,” said Angela Fernandez, Esq. Executive Director of Northern Manhattan Coalition for Immigrant Rights.

“Immigration fraud is a stain on the inclusive values that have made New York home to more immigrants than any other city in the nation – individuals and families who have contributed so much to our culture and our prosperity,” said Yisroel Schulman, of the New York Legal Assistance Group (NYLAG), Administrator of the Restitution Fund.“NYLAG is proud to be able to continue to play a role in bringing at least a small measure of justice to those who have been harmed – and shining the light on the continuing travesty of immigration fraud.”

This matter is being handled by Steven Shiffman and Anjana Samant, Civil Rights Bureau Chief Kristen Clarke, Charities Bureau Chief James Sheehan and Senior Enforcement Counsel Chief David Nachman. The Executive Deputy Attorney General for Social Justice is Alvin Bragg.

The Attorney General’s Office is committed to protecting the civil rights of all New Yorkers and combatting fraud faced by immigrant communities. To file a complaint, contact the Civil Rights Bureau at 212-416-8250 or civil.rights@ag.ny.gov.

BUFFALO – Attorney General Eric T. Schneiderman today announced that at the request of his office and the Federal Trade Commission, Federal District Court Judge Richard J. Arcara issued a preliminary injunction halting a debt collection operation charged with violating New York State and Federal law, including New York’s consumer protection and debt collection statutes. The debt collectors falsely accused consumers of committing check fraud, then threatened consumers with arrest, imprisonment, wage garnishments, and civil suits. The court order stops the illegal conduct, freezes the operation’s assets, and appoints a temporary receiver to take over the defendants’ businesses.

“All too often, innocent New Yorkers are relentlessly harassed by predatory, abusive debt collectors,” Attorney General Schneiderman said. “My office, along with partners like the Federal Trade Commission, will keep fighting to protect hardworking consumers and put a stop to unfair financial bullying once and for all.”

As part of Attorney General Schneiderman’s continuing crackdown on rogue debt collectors that target consumers in financial distress, the lawsuit charged three individuals – Joseph C. Bella III and Luis Shaw, both of Buffalo, New York, and Diane Bella, who resides in Florida, and 9 interrelated companies. The defendants allegedly bought debts and collected them, most often debts that had originated from payday loans.  Going by various names including National Check Registry, according to the complaint, the operation began using another name – eCapital Services, LLC – to evade detection and continue its illegal behavior after Joseph Bella signed an agreement with New York State authorities in October 2013 that prohibited him and his debt collection companies from violating Federal and State debt collection laws.

Operating the scheme since at least February 2010, the defendants misrepresent that consumers had committed check fraud or some other unlawful act related to the purported debt. Defendants then threatened consumers with dire consequences – such as lawsuits, arrest and imprisonment, or seizure of assets – unless they paid the debt immediately. The defendants repeated these deceptive claims to consumers’ family members, friends, coworkers, and employers, and revealed the consumers’ debts to these third parties as well, the complaint stated.

Also, according to the complaint, the defendants:

• told one consumer in Washington State that they would have the “Washington County Police” issue a warrant for her arrest, and another serving in the military that they would bring an action against him under the Uniform Code of Military Justice;
• said the only way to avoid arrest, imprisonment, lawsuits, wage garnishments, and seized assets would be to make an immediate payment over the phone;
• continued to accuse consumers of check fraud and other crimes even after they produced evidence showing they didn’t owe the debts in question;
• contacted friends, family members, and co-workers of consumers whom they claimed owed a debt, and in some cases, not only revealed the supposed debt but also said the consumers had committed check fraud and would be arrested or imprisoned if the debt was not paid;
• added an illegal $8 “processing fee” when consumers made payments on supposed debts over the phone;
• failed to provide consumers with debt collection notices and disclosures that are required under State and Federal law, making it difficult for consumers to determine whether they owed the debt and how they could dispute its validity; and
• continued trying to collect a debt from a consumer who had discharged the debt in bankruptcy.

“These debt collectors continued to harass consumers and violate the law after the validity of the debt was called into question, and after the New York Attorney General’s office ordered them to stop,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “By working together with our state partners, we can leverage our resources to stop these illegal tactics.”

According to consumers interviewed by Attorney General Schneiderman and the FTC, the defendants routinely refused to provide information about the debts, as required by federal law, or to investigate the debts’ legitimacy – even after some consumers explained that they did not owe the debts, the debts had been paid in full, or the defendants did not have the authority to collect on the debts. The defendants allegedly collected millions of dollars from consumers using these unlawful tactics.

In addition to Joseph Bella, Diane Bella, and Luis Shaw, the complaint names as defendants National Check Registry, LLC; Check Systems, LLC; American Mutual Holdings, Inc.; Goldberg Maxwell, LLC; Morgan Jackson, LLC; Mullins & Kane, LLC; Buffalo Staffing, Inc., and eCapital, LLC.

Attorney General Schneiderman has been tough on abusive debt collectors, sending a clear message that harassing hardworking consumers will not be tolerated. Since January 1, 2011, his office has led the charge on investigations that have yielded $722,345.20 in penalties and $281,867.34 in restitution. As a result of his no-nonsense approach, at least 11 individuals and their companies have been permanently barred from the debt collection business, two companies have been shut down, three have been barred from attempting to collect on payday loans from New Yorkers, and 12 companies have agreed to refuse requests to repossess the vehicles of New Yorkers when the underlying loan is a payday loan.

The Attorney General thanks Colin Hector, Nikhil Singhvi, and Thomas Widor of the Federal Trade Commission for their assistance with this case.

This case was handled by Assistant Attorney General James Morrissey and Karen Davis, Senior Consumer Fraud Representative in the Buffalo Regional Office, which is led by Michael Russo, Assistant Attorney General In Charge. The Buffalo Regional Office is part of the Division of Regional Offices, led by Marty Mack, Executive Deputy Attorney General for Regional Offices.

NEW YORK — Attorney General Eric T. Schneiderman issued the following statement in response to the Governor’s signing of a bill authorizing ten new land banks in the State of New York:  

“I commend the Governor and the State Legislature for enacting my bill to increase the maximum number of land banks in New York State from 10 to 20. Land banks are a critical tool for helping communities that are plagued by vacant and abandoned properties recover from the housing crisis. My office has already disbursed $13 million of the $20 million we initially committed to land banks, funding eight in communities from Long Island to the Hudson Valley to Central and Western New York. But the need is so significant, and the program has been so successful, that we committed an additional $13 million, bringing the program total to $33 million. Now that this bill to expand the number of land banks has been signed into law, even more communities will reap the benefits of this powerful tool for urban revitalization. By funding and expanding land banks, we are empowering local communities to rebuild their own neighborhoods, house by house, block by block.” 

The Attorney General’s program bill, which was sponsored in the Assembly by the Chairman of the Committee on Local Governments, William Magnarelli, and in the Senate by Senator David Valesky, changes state law to increase the maximum allowable number of land banks from 10 to 20. Many cities do not have land banks, but there is a critical need for the kind of community redevelopment that land banks can make possible. 

Senator Dave Valesky said, “Expanding the successful land banks program will give more municipalities a great tool for neighborhood revitalization and economic development. I commend Attorney General Schneiderman for his leadership in this effort and look forward to seeing positive results in communities across New York State."

“Land banks are one of the most useful tools for jump-starting community renewal projects,” said Assemblyman William Magnarelli. “Expanding the number of land banks throughout New York can provide job opportunities, raise property values and truly improve the overall quality of life for both business owners and homeowners. I have seen the benefits of land banks first-hand in Syracuse. Passing this legislation will help give localities greater opportunities to rebuild dilapidated and forgotten properties in a way that better serves the needs of community members, and I applaud Attorney General Eric Schneiderman for his leadership on this important issue.”

Following the collapse of the housing market, the New York State Legislature passed a law in 2011 establishing land banks — nonprofit organizations that can acquire vacant, abandoned, or foreclosed properties and choose to rebuild, demolish, or redesign them. By restoring vacant or abandoned properties, land banks lower costs for local governments, benefit public schools, reduce crime and boost local economies. However, the legislation that authorized land banks in New York did not provide funding for them. Attorney General Schneiderman launched a Land Bank Community Revitalization Initiative to fill that gap and allow the land banks to fulfill their purpose. He has dedicated $33 million to fund that initiative. In February of this year, the Attorney General proposed his program bill to expand the number of land banks from 10 to 20.

Following are the first round of awards through the program, which were announced on October 29, 2013:

• The Buffalo Erie Niagara Land Bank Corporation was awarded $2.087 million;    
• The Rochester Land Bank Corporation was awarded $2.78 million;   
• The Greater Syracuse Property Development Corporation was awarded $3 million;    
• The Chautauqua County Land Bank Corporation was awarded $1.5 million;    
• The Newburgh Community Land Bank was awarded $2.45 million;    
• The Suffolk County Land Bank Corporation was awarded $675,000;    
• The Capital Region Land Bank was awarded $150,000; and   
• The Broome County Land Bank was awarded $150,000.

Attorney General Schneiderman first announced last June that he would dedicate National Mortgage Settlement funds to support land banks. In July, he opened the first round of the competitive Request for Applications (RFA) process. 

The projects selected for funding will carry out a range of vital community development activities, including demolition of blighted, vacant, and abandoned homes; acquisition and renovation of vacant homes, including remediation of environmental hazards; resale of renovated properties as affordable housing for low- and moderate-income families; acquisition of vacant land that will be transferred to existing community residents who will maintain and repurpose the underutilized open space; and environmental pre-development studies and analyses that will eventually lead to remediation and redevelopment of brownfield sites. Proceeds from the resale of renovated properties will go back to the land banks and allow them to continue their work.

Attorney General Schneiderman’s Land Bank Community Revitalization Initiative will particularly benefit cities and counties that have struggled to maintain local services despite significant declines in tax revenue as a result of the foreclosure crisis and the subsequent epidemic of vacant and abandoned properties. The eight land banks funded have committed to return hundreds of properties to productive use and to get those lots back on the local and county tax rolls over the next 24 months.

The land banks are also using Attorney General Schneiderman’s funding to leverage additional resources from both private and public sources in order to expand their community revitalization efforts. A conservative estimate suggests that the land banks will be able to access a combined total of more than $21 million in other public and private funding over the next two years.

Finally, the Attorney General is providing most grantees with funds to hire full-time staff, which will allow the land banks to expand operations and seek long-term, sustainable sources of funding.

A request for a second round of proposals will be issued this summer.

NEW YORK –Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced that William Rapfogel, former executive director and chief executive officer of the Metropolitan Council on Jewish Poverty (Met Council), has been sentenced to 3 1/3 to 10 years in prison and ordered to pay $3 million in restitution to Met Council. The Attorney General’s investigation revealed that Rapfogel and his co-conspirators stole approximately $9 million from the taxpayer-funded nonprofit organization in a 20-year grand larceny and kickback scheme. Rapfogel personally stole $3 million and used the money to fund a lavish lifestyle. 

“This sentence sends the message that there has to be one set of rules for everyone, no matter how rich or powerful, and that those who rip off the neediest New Yorkers will be prosecuted,” said Attorney General Schneiderman. “New York has the greatest nonprofit sector in the country, and this case reminds us that we must vigilantly protect it. I am committed to using every tool at my disposal to prevent people from abusing the public trust and cheating charities out of the funds they need to perform vital services.”

"The fraud that occurred over two decades by the people at the top of the Metropolitan Council on Jewish Poverty was shocking and very damaging to an organization that has literally helped countless people," New York State Comptroller Thomas P. DiNapoli said. "Those involved in this scam have been held accountable for their wrongdoing and this should serve as an example of what happens when individuals lose their way and become more focused on filling their own pockets than doing good works. Attorney General Schneiderman and his team deserve credit for aggressively and thoroughly pursuing this case. Through our Joint Task Force on Public Integrity, the Comptroller's office and the Attorney General's office will continue to fight corruption and find those individuals misusing the public's money."

From 1993 to 2013, Rapfogel served as the head of Met Council, a New York State not-for-profit organization that provides the poor and elderly in the New York City area with social, economic, housing, food and emergency financial assistance. Met Council receives funding through New York State and New York City grants, legislative member items and contracts. Before Rapfogel, David Cohen was Met Council’s executive director, and after Rapfogel took over in 1993, Cohen served as a consultant to the nonprofit. 

The conspiracy began in 1992, when Cohen devised a scheme with Joseph Ross of Century Coverage Corporation in which the company would submit inflated invoices for insurance coverage to the nonprofit. Met Council knowingly paid the inflated premiums, and then Ross gave cash kickbacks to Cohen and Herb Friedman, Met Council's chief financial officer. 

About six months after Rapfogel took over as executive director in 1993, he joined the conspiracy and began receiving kickbacks, either in envelopes of cash or through payments of personal expenses. Initially, Ross paid both Rapfogel and Cohen $20,000 to $30,000 annually, but the inflated amount on the insurance policies increased over time and so did the kickbacks, with Rapfogel ultimately receiving approximately $30,000 per month. 

As part of the scheme, Rapfogel and Cohen also directed Ross to make political donations to various candidates for elected office from Century’s accounts or from straw donors, using money obtained from the inflated insurance payments. These campaign contributions were made to politicians who Rapfogel and Cohen believed could help Met Council. Rapfogel obtained the largest share of the kickbacks. In August 2013, investigators from the Attorney General’s Office recovered more than $400,000 in cash that was hidden in Rapfogel’s various homes.

Rapfogel, 59, pleaded guilty on April 23, 2014, to Grand Larceny in the First Degree (a class B felony), Money Laundering in the Second Degree (a class C felony), Criminal Tax Fraud in the Third Degree (a class D felony) and Offering a False Instrument for Filing in the First Degree (a class E felony). As part of his guilty plea, Rapfogel admitted that, while working with co-defendants David Cohen, Herb Friedman and Joseph Ross and with others, he stole from Met Council. Cohen, Friedman and Ross have all pleaded guilty in connection with the scheme. 

This conviction and sentence  are  the  results of an ongoing investigation by the Attorney General’s Office in conjunction with New York State Comptroller DiNapoli, as part of the Joint Task Force on Public Integrity. Attorney General Schneiderman and Comptroller DiNapoli would like to thank the New York City Department of Investigation, the New York State Department of Financial Services and the New York State Department of Taxation and Finance for their assistance with the investigation.

Since taking office, Attorney General Schneiderman has prosecuted more than 40 nonprofit officials, politicians and government employees who abused the public trust. In recent months, the office announced the indictment of a New York City Councilmember for allegedly stealing $30,000 from a publicly funded charity; obtained the sentencing of a state employee for receiving free home improvement projects from a government contractor; and secured the guilty plea of a town supervisor who used government workers for his personal benefit. 

Supervising Investigator Gerard Matheson from the Attorney General’s office is the lead investigator assigned to this case. The Investigations Bureau is led by Chief Investigator Dominick Zarella. Also assisting in the investigation are Supervising Auditor Edward J. Keegan, Associate Auditor Matthew Croghan, Supervising Analyst Paul Strocko of the Criminal Enforcement and Financial Crimes Bureau, and Legal Support Analyst KerryAnn Rodriguez of the Public Integrity Bureau.

This case is being prosecuted by Gary T. Fishman, Chief of the Criminal Enforcement and Financial Crimes Bureau, with Assistant Attorney General Jihee Suh of the Public Integrity Bureau. The Attorney General's Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

NEW YORK — Attorney General Eric T. Schneiderman announced that he has served a notice of intent to bring litigation against Home Affordable Direct, Inc., JR Holding Group Corp and Javier Gutierrez for operating a fraudulent mortgage rescue and loan modification scheme that scammed consumers into paying large upfront fees but failed to fulfill promises to help homeowners stay in their homes and avoid foreclosure. This case is part of a joint federal-state sweep by the Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states targeting scam operations that prey on financially struggling homeowners and those facing foreclosure. 

“As many New Yorkers continue to recover from the housing crisis, our office will hold those accountable who prey on families struggling to stay in their homes,” said Attorney General Schneiderman. “The law applies to everyone equally, no matter how rich or powerful, and this joint effort will help protect vulnerable New York homeowners from unscrupulous scammers and predatory businesses.”

Mortgage rescue scams target vulnerable homeowners and, for an upfront fee, promise to save their homes by negotiating lower mortgage payments or principal reductions with the homeowners’ mortgage servicers or lenders.  After collecting upfront fees, these scam operations fail to provide the services promised, placing their victims at even greater risk of foreclosure.

Attorney General Schneiderman served Home Affordable Direct, Inc., JR Holding Group Corp and Javier Gutierrez with a notice of intent to bring litigation for engaging in widespread fraud and illegality in the marketing and operation of their foreclosure rescue and loan modification business.  Through radio advertisements, atheir website and live sales pitches, Gutierrez and his two companies deceptively induced consumers to pay substantial illegal upfront fees by making multiple misrepresentations and then failed to deliver on those promises.

In addition to holding accountable those who precipitated and preyed upon victims of the housing crisis, Attorney General Schneiderman’s Office also launched the Homeowner Protection Program (HOPP), which funds roughly 90 organizations across the state to assist at-risk homeowners. These organizations have served a combined total of nearly 30,000 families since HOPP launched in October 2012 by providing counseling and support for those at risk of foreclosure. Consumers can call 855-HOME-456 to obtain assistance through HOPP.

This case is being handled by Assistant Attorney General Adam H. Cohen, Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia in the Bureau of Consumers Frauds and Protection, and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez. 

Along with the FTC and CFPB, attorneys general from the following states participated in today’s sweep: Arizona, Delaware, Florida, Indiana, Illinois, Kansas, Louisiana, Maryland, Michigan, New Mexico, New York, North Carolina, Ohio, Washington and Wisconsin. Also participating is the Maryland Commissioner of Financial Regulation and the Washington State Department of Financial Institutions.

NEW YORK – Attorney General Eric T. Schneiderman today announced the felony tax fraud conviction of Yaakov Weingarten and a more than $520,000 civil judgment lodged against him and his wife for activities related to the Brooklyn-based charitable fundraising ring he operated, which solicited donations from thousands of donors for phony not-for-profit organizations. The judgment, signed by Kings County Supreme Court Justice Carolyn Demarest on Wednesday, resolves a civil lawsuit filed by Attorney General Schneiderman’s office last year against Weingarten and his wife, Rivka, who are alleged to have been the biggest beneficiaries of the scheme and are, under the judgment, required to pay $522,315. Approximately $360,000 of those funds will go to two Israeli charitable organizations that carry out genuine programs similar to the causes for which Weingarten’s fraudulent solicitations raised donations from the public. 

The judgment also permanently bars Weingarten and his associates, Simon Weiss and David Yifat, from any fundraising activities or other charitable activities in the State of New York.

“We are committed to fighting to protect everyday New Yorkers, particularly those who want to use some of their hard-earned money to support charitable causes, because there has to be one set of rules for everyone,” Attorney General Schneiderman said. “My office will use all the tools at our disposal to protect New Yorkers from unscrupulous fundraisers for sham charities.” 

Weingarten pleaded guilty May 19 in Brooklyn Supreme Court before Judge Matthew A. Sciarrino to Criminal Tax Fraud in the Third Degree, a Class D felony. He paid $90,685 in restitution to the state Department of Taxation and Finance, and on June 23, he was sentenced to five years’ probation. As a condition of his felony probation, Weingarten is forbidden from engaging in any charitable fundraising activities for five years.

New York State Commissioner of Taxation and Finance Thomas H. Mattox said, “The defendant not only stole donations for charitable organizations, he also committed criminal tax fraud by failing to report income on his tax returns. Tax theft is a crime against all New Yorkers, and we will continue to work with the Attorney General and other levels of law enforcement to investigate and prosecute such perpetrators.”

In June 2013, the Attorney General’s Charities Bureau filed a civil lawsuit and obtained a temporary restraining order closing Weingarten’s fundraising operation, which Weingarten, together with associates Weiss and Yifat, ran out of a Brooklyn storefront at 1493 Coney Island Avenue. According to the suit, Weingarten, Weiss and Yifat raised donations for 19 sham charities from Jewish donors throughout North America, ostensibly for Israeli charitable causes such as emergency medical services and programs for sick children, terror attack survivors, cancer victims, and the poor. Large amounts of the money raised -- an estimated $2 million -- was then withdrawn from charity bank accounts. Some of that money was used to pay workers operating Weingarten’s Brooklyn telemarketing boiler room. Other funds were used by Weingarten and his family to pay for personal expenses, such as mortgages, dentist bills, car loans, and home improvements. The complaint also detailed gross mismanagement of charitable assets by Weingarten, including extensive mixing of charitable and personal funds and of funds raised for one charitable cause with those raised for another, which is barred by law. More information on the lawsuit is available here. 

Under the order, Weiss, 29, and Yifat, 68, are also permanently barred from charitable fundraising in New York.

As part of his guilty plea, Weingarten, 53, admitted that between approximately June 2007 and June 2012, he solicited charitable donations for multiple entities, many of which did not exist, and obtained donations from thousands of donors. He further admitted that from January 2009 through December 2011, he paid over $270,000 in personal expenses from bank accounts set up in the names of the purported charities, including mortgages on his two homes, various home improvements, and Cablevision and Con Edison bills. Weingarten admitted that with intent to evade New York State taxes, he failed to report this money as income on his 2009, 2010 and 2011 tax returns.

On Wednesday, Justice Carolyn Demarest signed the Attorney General’s civil judgment. It permanently shuts down Weingarten’s operation and requires Weingarten and his wife, also 53, to pay a total of $522,315. Of that, $360,000 will go to the United Jewish Appeal/Federation of New York, to be distributed equally to Schneider Children’s Medical Center of Israel, the preeminent pediatric hospital in Israel, and United Hatzalah of Israel, a leading Israeli volunteer emergency medical services organization. The remaining portion of the judgment payment is for penalties and costs to New York State.

The judgment also requires the dissolution of 11 incorporated entities Mr. Weingarten used to implement his fraudulent fundraising scheme. These entities include four “religious corporations” that on paper purported to be synagogues but in reality were mere shells that helped hide much of his activity behind a cloak of religious freedom. Weingarten also made up names of eight other entities, which were never incorporated, and used those names in his scheme. The 19 Brooklyn entities are permanently barred from operating under the order. They are: Hatzalah Rescue of Israel, Inc.; Shearim, Inc.; Bnei Torah, Inc.; Chesed L’Yisrael V’Chasdei Yosef, Inc.; Yad L’Shabbat, Inc.; Hatzalah Shomron, Inc.; Pulse Foundation, Inc.; Agudath Chesed Bikur Cholim Israel, Inc.; Kupat Reb Meir Baal Haness Bnei Torah Eretz Yisrael, Inc.; Congregation Yad L’Shabbat, Inc.; Shearim Hayad L’Torah Center for Hatzalah L’Shabbat and Chesed L’Yisrael, Inc.; Israel Emergency Center; Magen Israel; Hayad Victim Assistance Fund; Lmaan Hatorah; Our Children; Zaka Israel; Yaldel Simcha Yisrael; and Yad Yisrael. 

The Attorney General thanks the New York State Department of Taxation and Finance for its assistance in this matter.

Attorney General Investigators who worked on these cases are Luis Carter, Bradford Farrell, Edward Ortiz, Kenneth Morgan, Elsa Rojas, Sixto Santiago, Andrew Scala, Vito Spano and Sal Ventola. The Investigations Bureau is led by Chief Dominick Zarrella. 

The civil matter was handled by Assistant Attorney General Michael Torrisi of the Attorney General’s Charities Bureau and Senior Enforcement Counsel David Nachman of the Executive Division, together with Charities Bureau Associate Accountant Joseph Stoffel and Research Analyst Liam Arbetman. The Charities Bureau is led by Bureau Chief James Sheehan, and the Executive Deputy Attorney General for Social Justice is Alvin Bragg.

The criminal matter was handled by Assistant Attorney General Joseph G. D’Arrigo of the Attorney General’s Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Chief Gary T. Fishman and Deputy Chief Stephanie Swenton. The Criminal Enforcement and Financial Crimes Bureau is part of the Criminal Justice Division, led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan.

NEW YORK – Attorney General Eric T. Schneiderman announced that he is leading a coalition of more than 25 states in filing a friend-of-the-court brief urging the U.S. Supreme Court to uphold consumer rescission rights under the federal Truth in Lending Act (TILA). TILA requires creditors to clearly and accurately disclose the terms of loans to consumers and to inform consumers about their statutory rights. When creditors fail to take these steps, consumers have three years from the date of a covered home loan, to rescind the loan. Rescission is a powerful consumer remedy and protects consumers from losing their homes in foreclosure proceedings.  

“Homeownership stands at the heart of the social and economic well-being of our country,” said Attorney General Schneiderman. “As we work to make New York more affordable for the middle class, we must protect families fighting to avoid foreclosure and stay in their homes. That includes not only holding accountable those who prey on struggling homeowners, but also preserving the Truth in Lending Act’s important safeguards to help ensure that consumers can make informed decisions. TILA’s readily accessible right of rescission can help prevent more foreclosures and keep our country on the path towards financial recovery.”

New York’s amicus brief, filed in the case of Jesinoski v. Countrywide Home Loans, argues that consumers exercise TILA rescission rights by giving written notice to creditors and that TILA does not compel consumers to also file a lawsuit seeking rescission within three years of a covered loan. A lawsuit requirement would place rescission out of reach for many consumers because consumers frequently do not discover TILA violations until several years after taking out a loan—often, when they are facing foreclosure and cannot obtain legal representation to file a rescission suit. 

TILA contains no express provision directing consumers to file a lawsuit to enforce rescission rights. While some federal courts have held that TILA authorizes consumers to rescind loans by giving written notice, other courts, including the Court of Appeals for the Eighth Circuit, have required consumers to sue creditors within three years of taking out a home loan to rescind the loan. In the states’ brief, Attorney General Schneiderman urges the Supreme Court to reverse the Eighth Circuit and to confirm that written notice alone is sufficient for consumers to exercise TILA rescission rights in a timely manner.  

Argument in Jesinoski v. Countrywide has not yet been scheduled.

Attorney General Schneiderman’s brief is joined by 25 other states: Arizona, Arkansas, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Hampshire, New Mexico, North Carolina, Oregon, Rhode Island, Tennessee, Vermont, Washington, and West Virginia. The coalition is also joined by the District of Columbia. 

The brief in the case was prepared by New York Solicitor General Barbara D. Underwood, Deputy Solicitor General Steven C. Wu and Special Counsel to the Solicitor General Cecelia C. Chang with the assistance of Jane Azia, Chief of the Consumer Frauds Bureau, Kristen Clarke, Chief of the Civil Rights Bureau, and Jessica Attie, Special Counsel for the Civil Rights Bureau.

The Attorney General’s Office is committed to protecting consumers in lending transactions. To file a complaint, contact the Office’s Consumer Frauds Bureau at 1-800-771-7755 or fill out the complaint form here. Consumers can also contact the Civil Rights Bureau at Civil.Rights@ag.ny.gov or 212-416-8250. 

In addition to taking legal action to protect New York families, Attorney General Schneiderman’s Office launched the Homeowner Protection Program (HOPP), which funds roughly 90 organizations across the state that assist at-risk homeowners. These organizations have served a total of nearly 30,000 families since HOPP was launched in October 2012 by providing counseling and support for those at risk of foreclosure. Consumers can call 855-HOME-456 to obtain assistance through HOPP or visit www.aghomehelp.com.

A copy of the brief can be viewed here.

NEW YORK – The following statement was issued today by Damien LaVera, Communications Director for Attorney General Eric T. Schneiderman:

“The complaint filed last month by Attorney General Schneiderman clearly details the allegations that Barclays engaged in a persistent pattern of fraud and deceit, lying to its investors in order to grow its own dark pool. The Attorney General is committed to ensuring there is one set of rules for everyone in the markets, and will crack down on abuses wherever he sees them. We are confident that a judge will reject this motion and allow us to prove these disturbing allegations in Court.” 

Attorney General Schneiderman’s complaint, filed last month, alleges that Barclays falsified marketing material purporting to show the extent and type of high frequency trading in its dark pool. For example, Barclays removed from a marketing document intended for institutional investors references to the dark pool’s then-largest participant – a high frequency trading firm Barclays knew engaged in predatory behavior in the dark pool.  In response, one employee stated: “I had always liked the idea that we were being transparent, but happy to take liberties if we can all agree.”

Barclays heavily promoted a service called Liquidity Profiling, which the bank claimed was a “surveillance” system that tracked every trade in Barclays’ dark pool in order to identify predatory traders, rate them based on objective characteristics of their trading behavior, and hold them accountable for engaging in predatory practices.

Contrary to those promises, the complaint alleges that:

• Barclays has never prohibited any trader from participating in its dark pool, regardless of how predatory its activity was determined to be;
   
• Barclays did not regularly update the ratings of high-frequency trading firms monitored by Liquidity Profiling;
   
• Barclays “overrode” certain Liquidity Profiling ratings – including for some of its own internal trading desks that engaged in high-frequency trading – by assigning safe ratings to traders that were determined to be toxic.

The complaint further alleges that, contrary to Barclays’ representations that it protects clients from aggressive or predatory high-frequency trading in its dark pool, Barclays in fact operates its dark pool to favor high-frequency traders and has actively sought to attract them by giving them systemic advantages over others trading in the pool. As alleged in the complaint, this included:

• Falsely underrepresenting the concentration of aggressive high-frequency trading in its dark pool;
   
• Misrepresenting its Liquidity Profiling service – which Barclays claimed protected investors from predatory behavior – by failing to provide many of the benefits marketed with the service; and
   
• Claiming that Barclays does not favor its own dark pool when routing client orders to trading venues, while in fact doing just that. As alleged in our Complaint, Barclays falsified an analysis of how it routed a major client’s orders.

A copy of the complaint can be viewed here.

ROCHESTER – Attorney General Eric T. Schneiderman today announced the arrest of Deborah Cleveland, 42, a medication technician formerly employed by Heather Heights Assisted Living and Memory Care Facility in the Town of Pittsford. Cleveland is facing 17 charges for allegedly stealing a total of 650 narcotic pills for personal use from eight  patients ranging in age from 66 to 98 years old.  Cleveland allegedly substituted non-narcotic medications, including allergy, diuretic, bi-polar, and blood pressure medications that were not prescribed for the patients in question.

“Families entrust nursing facilities with providing proper care to their loved ones, including administering appropriate medications, and our office will hold individuals accountable when they violate that trust,” said Attorney General Eric Schneiderman. “Our office will continue to protect everyday New Yorkers by ensuring that there is one set of rules for everyone, including those entrusted with caring for our most vulnerable citizens.”

Charges filed against Cleveland in Pittsford Town Court include one count of Scheme to Defraud in the First Degree (a class E Felony); eight counts of  Endangering the Welfare of an Incompetent or Physically Disabled Person in the First Degree (a class E Felony), and eight counts of Petit Larceny (a class A Misdemeanor).  Class E felonies carry a maximum penalty of four years in prison, while class A misdemeanors carry a maximum penalty of one year in jail. Cleveland was arraigned last night and the case has been adjourned until August 21st.

The investigation was conducted by the New York State Attorney General’s Medicaid Fraud Control Unit, in conjunction with the New York State Department of Health’s Bureau of Narcotics Enforcement. In the case of one victim, identified in court documents as resident “A.G.,” Cleveland allegedly stole 230 Oxycodone pills from the victim’s narcotic packs and replaced those pills with similar-looking non-narcotic medications. 

The case was investigated by Investigator Debra Clementi, with assistance from Deputy Chief Investigator William Falk and Bureau of Narcotics Enforcement Investigator Kristine Wiant-Sherman.  The case is being prosecuted by Special Assistant Attorney Generals Jennifer Sommers.  Catherine Wagner is Director of the Rochester Regional Medicaid Fraud Control Unit Office and the Upstate Chief of Criminal Investigations.  The Medicaid Fraud Control Unit is led by Director Amy Held. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

The charges against Ms. Cleveland are merely accusations and she is presumed innocent until proven guilty.  

NEW YORK – Attorney General Eric T. Schneiderman today announced that he obtained a court order halting sales of timeshare interests at the Manhattan Club, a luxury hotel in Midtown Manhattan. The order by a Manhattan Supreme Court Justice requires that the club’s principals, Ian Bruce Eichner, Leslie H. Eichner, and Stuart P. Eichner, testify in court about the club’s practices and produce documents to the Attorney General’s Real Estate Finance Bureau about allegedly fraudulent sales tactics. The order also bars the corporations through which the club and the developers act from draining bank accounts connected to the hotel during the investigation. The Manhattan Club is further barred from foreclosing on timeshare purchasers, who the Attorney General alleges were lured into investing with false promises.

The Attorney General’s investigation was spurred by complaints from people who paid tens of thousands of dollars to become Manhattan Club “owners” but have been unable to make reservations due to a claimed lack of available rooms by the hotel’s operators. At the same time, rooms in the Manhattan Club are being rented over the internet to the general public. About 14,000 people currently own timeshares in the hotel’s 286 suites.

“When sellers use high-pressure tactics to sell timeshares, consumers should be wary that they may not be getting what they were promised. We allege that the Manhattan Club, near New York City’s iconic Carnegie Hall, is a particularly stark example of such a bait-and-switch timeshare scheme,” Attorney General Schneiderman said. “We will use all the tools at our disposal to protect customers from unscrupulous scammers and predatory businesses and hold New York developers to the promises they make, whether orally, in their sales pitches or in their formal offering plans.”

The Manhattan Club’s website bills the 200 West 56th Street accommodation as a “unique” “residence-style boutique hotel” that blends “a vacation ownership retreat with a luxury suite hotel” and that offers “a hard-to-find haven in the midst of this active city.” The website appeals to people who “frequently visit New York City to enjoy Broadway theatre, fine dining and shopping, [and] classical performances.” 

In April and May, the Attorney General sent undercover investigators to record the Manhattan Club’s “Vacation Ownership Experience” sales presentation, held at the club. As alleged in court papers filed by the Attorney General’s office, investigators found evidence indicating that the Manhattan Club’s sales tactics amounted to a bait-and-switch scheme. Prospective purchasers were baited by a relentless sales pitch that includes a number of misleading promises, including that ownership in the Manhattan Club is “better than money in the bank.” Prospective buyers were also allegedly told that the club does not rent rooms to the general public, that reservations are easy to make, and that few restrictions apply to reservations by owners. 

The papers alleged that the switch comes after a purchase agreement is signed, when a new owner learns from an offering plan -- which was illegally withheld prior to the purchase -- about the difference between what they were promised in the sales presentation and what they actually bought.  For example, contrary to the club’s explicit promises, room availability to owners is limited by the renting of rooms to the general public. That means that all reservations are subject to availability and owners, in some cases, have not been able to use any of the time they purchased. Further, the owners’ annual common charges have jumped approximately 200% in the last ten years-- to about $2,000 per ownership interest per year. Some frustrated owners have sold their ownership interests back for a mere $1, just to escape the burdens of paying these charges. 

Issued pursuant to General Business Law section 354, a provision of New York’s Martin Act that confers broad powers on the Attorney General to investigate and halt fraud, the court order bars the Manhattan Club from selling timeshare interests, prevents them from withdrawing money from certain bank accounts, and stops them from foreclosing on Manhattan Club purchasers during the pendency of the investigation. The order also compels the Manhattan Club’s principals, Ian Bruce Eichner, Leslie H. Eichner, Stuart P. Eichner to testify about the club’s practices. 

Other respondents named in the order, agents and corporations involved in the club’s operations, are Scott L. Lager, T. Park Central LLC, O. Park Central LLC, Manhattan Club Marketing Group LLC, and New York Urban Ownership Management LLC. 

A copy of the court order can be viewed here.

For information about timeshare, home improvement and vacation scams and how to protect yourself, click here for the Attorney General’s brochure “Don’t Get Burned: Attorney General’s Guide To Protecting New Yorkers From Summer Scams.” 

Deputy Chief Investigator John McManus from the Attorney General’s office is the lead investigator assigned to this case. The Investigations Bureau is led by Chief Investigator Dominick Zarella. Sylvia Rivera, Karon Richardson, Louis Carter, Richard Friedman and John Serrapica, all of the Investigations Bureau, also assisted in the investigation. 

This case is being handled by Assistant Attorney General Serwat Farooq, Deputy Chief Andrew H. Meier, and Bureau Chief Erica F. Buckley, all of the Real Estate Finance Bureau, as well as Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.  Law Interns Jessica Eng and Robert Volynsky also assisted in the investigation.

SYRACUSE – Attorney General Eric T. Schneiderman and Commissioner of Taxation and Finance Thomas H. Mattox today announced that John Tebbetts, the former owner and operator of Tebb’s Head Shops, located throughout Central New York, pleaded guilty to felony charges related to a five-year scheme to avoid paying New York sales and income tax. Tebbetts, the sole owner of head shops in Onondaga, Oneida, Herkimer, Madison, and Jefferson counties, admitted that he failed to remit sales tax collected between March 2007 and September 2012 on the sale of herbal incense, pipes, hookahs, body jewelry, dart supplies and other items sold in his stores. Tebbetts has already admitted to selling dangerous synthetic drugs, known as bath salts, at his stores. 

“Tebbetts jeopardized the health and well-being of Central New Yorkers by using his head shops to sell bath salts – synthetic drugs that have wreaked havoc on our communities in recent years – and added insult to injury by defrauding taxpayers in the process,” said Attorney General Schneiderman. “I am committed to continuing our tough, smart approach to crime, using every tool at our disposal to prevent dishonest individuals from skirting the law and threatening the safety of our communities.”

“Tebbetts brazenly pilfered sales tax monies from his customers, the State, and the local communities where his stores were located, even after the Tax Department revoked his authority to collect tax,” said Commissioner Mattox. “In so doing, he deprived those communities of sales tax revenues desperately needed to combat the public safety and health crisis he created with his sale of synthetic drugs.”  

Tebbetts, 34, of Rome, pleaded guilty in Onondaga County Court to charges of Grand Larceny in the Third Degree, a class D felony, for which he will be sentenced to 3 to 6 years in prison, and Criminal Tax Fraud in the Fourth Degree, a class E felony, for which he will be sentenced to 1 1/3 to 4 years in prison. As part of his plea, Tebbetts also agreed that he owes New York State in excess of $616,000 in unpaid sales tax and personal income tax. 

Sales tax money collected by businesses from their customers belongs to state and local governments, and businesses are responsible for ensuring that these funds are remitted to the State when due, typically on a quarterly basis.  The State then returns a portion of the funds to local governments to fund government operations.  

In August 2012, the Attorney General filed a lawsuit against Tebb's Head Shops for the sale of bath salts and synthetic drugs in violation of the state's labeling laws. In January 2013, a state Supreme Court justice ruled in OAG’s favor, permanently banning Tebb’s from selling any mislabeled, misbranded or unapproved drugs or intoxicants.

In December 2012, Tebbetts pleaded guilty in United States District Court, Northern District of New York, to numerous federal criminal charges, including possession with intent to distribute a controlled substance. On July 8, 2014, Tebbetts was sentenced to 87 months in federal prison on those charges. 

Tebbetts will be sentenced on today’s tax evasion counts on August 15 in Onondaga County Court. 

The tax evasion case was investigated by Associate Attorney Carla DiMarco and the Syracuse Criminal Investigations Division office of the New York State Department of Taxation and Finance. Investigators Joel Cordone and David Buske, Supervising Investigator Richard Doyle and Deputy Bureau Chief Tony Karam of the Office of the Attorney General also assisted in the investigation.

The case was prosecuted by Assistant Attorney General Nicholas J. DeMartino of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary Fishman, Deputy Bureau Chief Stephen Maher and Deputy Bureau Chief Stephanie Swenton. The Criminal Enforcement and Financial Crimes Bureau is part of the Criminal Justice Division, led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan. 

NEW YORK – Attorney General Eric T. Schneiderman and New York State Superintendent of Financial Services Benjamin M. Lawsky today released the following statement on their agreement with Lyft. In the agreement entered into today, Lyft has agreed to operate in New York State in full compliance with existing laws and regulations. The company will launch in New York City with commercial drivers only and will operate in a manner that is consistent with existing laws and regulations. In addition, the company will suspend its current operations in Buffalo and Rochester by August 1, 2014, and has committed that it will work with the State so that any future business it undertakes in New York is in full compliance with the law.

"We are pleased that our offices have reached an agreement today with Lyft. We are firmly committed to the notion that regulators can work constructively with companies so that new ideas can come to the market -- and that smart regulation should create an environment where innovators can compete.  Lyft's launch in New York City -- in full compliance with laws and regulations -- is proof positive of this principle. We will continue to work with Lyft so that any future business it undertakes meets that standard and protects consumer safety. We look forward to exploring solutions that enable companies in the sharing economy to operate and thrive throughout New York State."

A copy of today's agreement can be viewed here.

ALBANY – Attorney General Eric T. Schneiderman, together with Joseph D’Amico, Superintendent of the New York State Police, and Benjamin M. Lawsky, Superintendent of the New York State Department of Financial Services, announced the sentencing of Robert Decker, 60, a contractor who stole thousands of dollars from homeowners by taking their money but failing to complete work on their homes.

“This case sends a clear message that contractors who defraud unsuspecting homeowners by failing to complete work or performing shoddy work will be held accountable,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and our office is committed to standing up for consumers against economic predators like unscrupulous home contractors.”

“The sentencing today of Robert Decker sends a strong message and a reminder that dishonest business practices will not be tolerated in New York State,” said Joseph D’Amico, Superintendent of the New York State Police. “The State Police will continue to work with Attorney General Schneiderman to protect homeowners from these types of criminals and to hold accountable those who mistakenly think they can get away with these schemes.”

From April 2011 through December 2013, Decker engaged in a scheme to defraud dozens of unsuspecting homeowners throughout the Capital Region and Mohawk Valley. Despite being permanently banned from working as a home improvement contractor in 2003, Decker represented himself and his company, A+ Rated Contracting, as being duly authorized and insured.  Based on his false representations, homeowners hired Decker to do home improvements.  However, after taking thousands of dollars in deposits from homeowners, Decker failed to complete the agreed-upon work or did no work at all, and then failed to refund the deposits.

In several instances, Decker took money, performed only demolition work and then walked away from the jobs, leaving homes exposed to the elements. Decker also filed a form with the Town of Clifton Park falsely claiming an exemption from workers’ compensation coverage and presented forged certificates of liability insurance to several homeowners.  

Yesterday, the Honorable Felix J. Catena  of the Montgomery County Court sentenced Decker to one to three years in prison. On April 17, 2014, Decker had pleaded guilty to Criminal Possession of a Forged Instrument in the Second Degree.

Today, the Honorable Jerry J. Scarano sentenced Decker in Saratoga County Court to prison terms of one to three years each for his crimes of Grand Larceny in the Third Degree and Offering a False Instrument for Filing in the First Degree, with each term to run consecutively to each other and to the prison sentence imposed in Montgomery County. Judge Scarano also sentenced Decker to 1 1/3  to four years in prison for the crime of Scheme to Defraud in the First Degree, with that sentence to run concurrently with the other prison sentences. Decker was also sentenced to one year in jail for  Petit Larceny, though that sentence will be fulfilled by serving his prison sentences. In addition to his jail sentences, Judge Scarano ordered a restitution hearing on October 9, 2014 to determine the amount that Decker must repay his victims. Decker, 60 years old, pleaded guilty in Saratoga County Court on May 5, 2014.

In 2003, following numerous complaints from homeowners, the Attorney General’s Office obtained a consent order that permanently enjoined Decker from operating as a home improvement contractor in the State of New York unless he filed  a $100,000 performance bond with the Attorney General. Decker has never filed such a bond but continued his business operations.

Attorney General Schneiderman thanks the New York State Police, the State Department of Financial Services, and local law enforcement agencies for their assistance with this investigation.

The case was prosecuted by Assistant Attorney General Nancy Snyder of the Criminal Enforcement and Financial Crimes Bureau of the Attorney General’s Office. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary Fishman, Deputy Bureau Chief Stephanie Swenton, and Deputy Bureau Chief Stephen Maher. The Criminal Enforcement and Financial Crimes Bureau is part of the Criminal Justice Division, led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan. The case was investigated by OAG Investigator Barbara Butler and Deputy Chief Investigator Anthony Karam. 

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement in honor of the 24th anniversary of the passage of the Americans with Disabilities Act: 

“Twenty-four years ago today, President George H. W. Bush signed into law the Americans with Disabilities Act, which for the first time established wide-ranging civil rights protections for people with disabilities. It was a historic step toward fulfilling our national commitment to equal justice under law for all. The ADA has since proven to be a powerful tool for defending  the rights of people with disabilities, and its protections remain essential today. Too often, New Yorkers with disabilities encounter barriers to access at housing complexes, retail stores, hospitals and clinics, office buildings, theaters and stadiums, schools, universities, and at the ballot box. The ADA has proven crucial to dismantling these barriers, thereby protecting each person’s right to lead a full and independent life.  

“My office is deeply committed to fulfilling the ADA’s promise of one set of rules for everyone, regardless of ability, by dismantling barriers to access for individuals with disabilities across the state. We recognize that 24 years after enactment of the ADA, we still have important work to do to remedy ongoing discrimination against individuals with disabilities. My office will continue to vigorously enforce the ADA against businesses, landlords and other entities that fall short in eliminating barriers to accessibility. We will continue to be a resource for the advocates, affected individuals, and families who are seeking the equality of access and opportunity promised by the ADA.” 

The office’s ADA enforcement work is coordinated through the Attorney General’s Civil Rights Bureau, which is focused on comprehensive enforcement of the ADA. Recently, the Bureau announced agreements with Vornado Realty and Kimco Realty, two large landowners that operate shopping centers across the state. The agreements called for both landowners to address accessibility issues in the parking facilities and common areas of those shopping centers. Besides upgrading those facilities, Kimco will encourage its largest tenants to take steps to address accessibility issues inside their stores. Further information about these agreements is available here and here. 

The bureau also reached agreements with several theaters across New York City to address hearing accessibility and ticket sales access. Responding to complaints from advocacy groups, the office investigated the availability of assisted listening devices at several theaters in New York City. After finding that three theaters did not provide the appropriate auxiliary aids, the office secured agreements with those theaters to ensure that such aids will be available to patrons. In addition, the bureau has been working to ensure that theaters provide equal access to ticket sales for individuals with disabilities. Further information is available here and here.              

In addition to these recent agreements, the bureau continues to enforce the ADA against businesses that fail to accommodate service animals of individuals with disabilities. The bureau has also taken action against transportation service providers that do not provide access to vehicles, such as buses and taxi providers, in accordance with ADA regulations, and against municipalities that fail to ensure access to polling sites on Election Day. Information on some of these cases are available here, here and here. 

The bureau’s ADA enforcement work is being handled by Assistant Attorneys General Dariely Rodriguez, Ajay Saini, Mayur Saxena, Anjana Samant, and Sandra Pullman, and Civil Rights Bureau Chief Kristen Clarke. The Executive Deputy Attorney General for the Social Justice Division is Alvin Bragg. 

Attorney General Schneiderman is committed to protecting the disability rights of all New Yorkers. If you believe that you have experienced disability discrimination, contact the Civil Rights Bureau of the Attorney General’s Office at (212) 416-8250, civil.rights@ag.ny.gov or visit www.ag.ny.gov.

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has won a State Supreme Court ruling holding a landowner and his contractor liable for illegally operating a landfill and discharging pollution into a New York City drinking water source that has historically provided water to 1 million New Yorkers daily.  Putnam County Supreme Court Justice Victor G. Grossman found that Gary Prato, the owner of an estate on the shores of the City’s Croton Falls Reservoir, and his contractor, Anthony Adinolfi (aka Dirtman), violated several state environmental laws in creating and operating the landfill on Prato’s property.   The ruling orders  Prato to conduct a full cleanup of the landfill. A hearing will be held August 15th to determine the specific cleanup activities to be required and the amount of any civil penalties.
“Clean drinking water is not only a necessity, it is a basic right,” said Attorney General Schneiderman.  “The defendants in this case thumbed their noses at the law and, as a result, they threatened a vital source of drinking water for  1 million people.  New York’s environmental protection laws apply to everyone, even those who are rich and powerful, and I will continue to fight to ensure that those who choose to ignore these laws are held fully accountable.”  
In 2009, Prato decided to add a pool house and garage to his 27-acre estate on Croton Falls Road in the Town of Carmel in Putnam County.  Prato arranged with Adinolfi and his company, Dirtman Enterprises, Inc., to provide material necessary to fill in and grade steeply sloped areas as part of the project.   For most of 2010, Adinolfi dumped more than 40,000 cubic acres of fill on the site under Prato’s direction.   Adinolfi provided the fill at no cost – saving Prato up to $560,000 – and did the grading for free.    
The fill dumped at the site consisted of construction and demolition debris containing waste materials, including coal ash and slag.   Sampling of the debris by defendants’ own consultants showed that it contained a variety of likely carcinogens called “polycyclic aromatic hydrocarbons” at levels exceeding State standards for protecting public health and the environment.   Some of the fill material eroded and was discharged into the Croton Falls Reservoir.   Although currently off-line awaiting the next year’s projected completion of a filtration plant under Van Cortlandt Park in the Bronx, the Croton Falls Reservoir is part of a drinking water system that historically provided 10% of the drinking water consumed daily in New York City.
Justice Grossman agreed with Attorney General Schneiderman and ruled that Prato and Adinolfi violated multiple state laws and underlying regulations through their activities at the site, including the constructing or operation of a solid waste management facility without obtaining a permit from the New York State Department of Environmental Conservation (DEC).   Solid waste management facilities are also subject to strict operational and closure requirements to avoid adverse impacts to public health and the environment.   Justice Grossman also ruled that discharges from the site into the Croton Falls Reservoir violated water pollution laws that require permitting and control of pollutants discharged into state waters.
The Attorney General’s Office thanks the DEC and the City of New York for its participation in this case.
In 2012, Attorney General Eric T. Schneiderman obtained a guilty plea in a criminal case brought against Adinolfi in Putnam County Supreme Court.  That case involved, in part, Adinolfi’s operation of an illegal solid waste management facility at the Prato property.  As a result, Adinolfi was sentenced to four months behind bars and five years of probation.  
This matter was handled by Assistant Attorney General and New York City Watershed Inspector General Philip Bein and Environmental Scientist Mauricio Roma, with support from Environmental Protection Bureau Chief Lemuel M. Srolovic, Executive Deputy Attorney General for Social Justice Alvin Bragg and First Deputy for Affirmative Litigation Janet Sabel.   DEC Regional Solid Waste Geologist Steven Parisio and Assistant Regional Counsel Carol Krebs, and 

WATERTOWN – Attorney General Eric T. Schneiderman, leading a partnership of the federal Consumer Financial Protection Bureau and 12 other states, today announced a global settlement with a military consumer lender commonly known as Rome Finance Company, based in California and Georgia. The settlement liquidates Rome Finance and its successor corporations, provides nearly $92 million in debt relief to over 17,800 affected United States servicemembers worldwide, marks all outstanding debt “paid in full” with consumer finance reporting agencies, and bans new business by the company and its principals. Servicemembers will keep all merchandise purchased, but debts associated therewith have been erased and judgments will be vacated on request, including approximately 5,400 judgments located to date. Over 550 New York State servicemembers, with a combined total of over $2.2 million in Rome Consumer debt, will benefit directly from this settlement and ancillary resolutions.

“The brave men and women of our military, who are already sacrificing so much, shouldn’t also have to worry about being exploited by predatory and abusive lenders,” Attorney General Eric T. Schneiderman said. “By holding Rome Finance accountable for these egregious acts, we are sending the message that those who prey upon our nation’s heroes will be held accountable.”

Rome Finance, which did business most recently as Colfax Capital Corporation and Culver Capital, LLC, financed consumer debts exclusively to servicemembers, typically for computers, gaming systems, and other goods and services from retailers online or at malls near military bases. Payments were extracted from the military member’s paycheck and were secured by access to a bank account. 

Attorney General Schneiderman and the other governmental representatives alleged multiple illegalities, including failing to accurately disclose finance charges and interest rates, knowingly or recklessly assisting in the practice of financing contracts with inflated prices of goods sold, failing to provide required periodic disclosures, violations of State and CFPA’s unfair, deceptive, or abusive acts and practices prohibitions by financing consumer loans and/or collecting on consumer loans, and violation of the Military Lending Act for excessive interest, onerous provisions, and for requiring allotment payment backed by access to a bank account.

Participating in this national effort with Attorney General Schneiderman were the federal Consumer Financial Protection Bureau, and the states Attorneys General of Colorado, Delaware, Florida, Georgia (participating through the Georgia Governor’s Office), Kentucky, Indiana, Iowa, Massachusetts, Michigan, North Carolina, Tennessee and Vermont.

Attorney General Schneiderman earlier permanently banned a related retailer, “SmartBuy” from peddling consumer goods and contracts to servicemembers in the state of New York in 2012. Earlier settlements in related litigation yielded $12.9 million in debt relief nationwide, bringing the combined amount of erased debt to well over $100 million as a result of the effort. 

Along with representatives from the Attorney General’s Consumer Protection Bureau, the New York investigation was conducted by Investigator Chad Shelmidine. 

The matter is being handled by Assistant Attorney General In Charge Deanna R. Nelson, in the Watertown Regional Office, together with Marty Mack, Executive Deputy Attorney General for Regional Offices.  

MASTIC --  Attorney General Eric T. Schneiderman, along with the U.S. Department of Agriculture Office of Inspector General, today announced a 25-count indictment against two Suffolk County convenience store owners/operators and one store employee, along with seven Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) recipients for illegally trading cash for hundreds of thousands of dollars in SNAP benefits. 

“It’s unconscionable that anyone would steal from a program designed to provide nutritional assistance to New Yorkers in need, especially those harmed by Hurricane Sandy,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and that is why my office will hold these individuals accountable and attempt to recover the nearly $1 million stolen from this crucial program.” 

Manjeet Chadha, 48, of North Bellmore and Sajjad Rashid, 43, of Rocky Point, co-owners and operators of Mastic Supermarket Corp. in Mastic, and Haricharan Malhotra, 41, of Mastic, an employee of the store, are charged with felony Grand Larceny, Misuse of Food Stamps, and Falsifying Business Records for orchestrating a scheme to steal nearly $1 million from the government program. The seven SNAP recipients also face significant Grand Larceny and Misuse charges. 

If convicted, Rashid and Malhotra each face up to 15 years in prison. Chadha faces up to 7 years behind bars.  Three of the seven recipients also face up to 7 years in prison, while the remaining four recipients, charged with lesser counts of felony Grand Larceny and Misuse, each face up to 4 years behind bars. 

“The Supplemental Nutrition Assistance Program was created to provide food and nutrition to those who truly need this assistance,” said USDA OIG Special Agent-in-Charge William G. Squires, Jr. “Those who are involved in fraud and abuse of SNAP and other USDA programs will be aggressively pursued by our office. Our joint investigation with the Attorney General’s Office and New York law enforcement partners has brought to justice several individuals who obtained approximately $1 million from the SNAP program through illegal schemes. The USDA Office of Inspector General will continue to dedicate resources and work with our state and local  law enforcement partners in order to protect the integrity of these programs and to prosecute those who commit fraud.” 

“This type of crime is particularly egregious because it takes advantage of a government program aimed at providing nutrition for our most needy recipients,” said Suffolk County Police Commissioner Edward Webber. “We will continue to work in conjunction with the U.S. Department of Agriculture to ensure that those who are fraudulently using SNAP will be brought to justice.” 

Suffolk County Executive Steven Bellone said, “SNAP is a vital social program for the most vulnerable families, children and the elderly,  in Suffolk County who are at risk of going hungry, and it must be protected from waste, fraud and abuse. I commend Attorney General Schneiderman for shutting down a scheme that drained resources from New Yorkers who truly need them.”

In addition to the criminal charges, Attorney General Schneiderman filed a civil suit Monday seeking restitution in an amount of $973,000 against Sajjad Rashid, Manjeet Chadha, Haricharan Malhotra and the corporation, Mastic Supermarket Corp., which was also criminally charged. 

In the wake of Hurricane Sandy, the USDA allocated an additional 50% in benefits to all SNAP recipients in affected areas, without regard to need. The seven recipients charged in the indictment received this Sandy benefit and illegally exchanged their SNAP benefits for cash at Mastic Supermarket Corp. shortly after the storm. 

SNAP recipients are issued a benefit card for purchasing specified food items. But, according to the indictment unsealed today, Rashid, Chadha and Malhotra processed phantom SNAP transactions in cooperation with the seven SNAP cardholders. Instead of using their SNAP benefits for food, the cardholders received cash equaling half of the amount of these fake purchases, and Rashid, Chadha and Malhotra kept the remainder of the money for themselves. 

The investigation revealed that in just the 10 months from March to December 2012, Mastic Supermarket Corp., rang up over $564,000 in SNAP benefits. That is significantly higher than redemptions in comparable stores located nearby, where the totals ranged from $14,000 to $24,000.  In fact, in November 2012, after all SNAP cardholders in Suffolk County received the emergency Hurricane Sandy SNAP award equal to 50% of their monthly benefit, SNAP redemptions at Mastic Supermarket Corp. exceeded $75,000. 

The individuals indicted today are: 

Sajjad Rashid, 43, Secretary Treasurer and Manager of Mastic Supermarket Corp., 1088 Mastic Road, Mastic, is charged with Grand Larceny in the Second Degree, a "C" Felony; Misuse of Food Stamps (over $50,000), a "C" Felony; and 2 counts of Falsifying Business Records in the First Degree, an "E" Felony. 

Haricharan Malhotra, 41, an employee of Mastic Supermarket Corp., 1088 Mastic Road, Mastic, is charged with Grand Larceny in the Second Degree, a "C" Felony; Misuse of Food Stamps (over $50,000), a "C" Felony; and 2 counts of Falsifying Business Records in the First Degree, an "E" Felony. 

Manjeet Chadha, 48, Vice President of Mastic Supermarket Corp., 1088 Mastic Road, Mastic, is charged with Grand Larceny in the Third Degree, a "D" Felony; Misuse of Food Stamps (over $3,000), a “D” Felony; and Falsifying Business Records in the First Degree, an "E" Felony. 

Mastic Supermarket Corp., the corporation located at 1088 Mastic Road, Mastic, is charged with 2 counts of Grand Larceny in the Second Degree, a "C" Felony; 2 counts of Misuse of Food Stamps (over $50,000), a “C” Felony; 4 counts of Grand Larceny in the Third Degree, a “D” Felony; 4 counts of Misuse of Food Stamps (over $3,000), a “D” Felony;  4 counts of Grand Larceny in the Fourth Degree, an "E" Felony; 4 counts of Misuse of Food Stamps (over $1,000), an “E” Felony; and 5 counts of Falsifying Business Records in the First Degree, an “E” Felony. 

Three of the SNAP cardholders, Romie Harris, 45, of Mastic; Kristine Hensley Austin, 25, of Mastic Beach, and Dawn Murphy, 33, of Mastic Beach are each charged with Grand Larceny in the Third Degree, a "D" Felony, and Misuse of Food Stamps (over $3,000), a "D" Felony.  

Four of the SNAP cardholders, Brittany Sardella, 26, of Hampton Bays; David Cantwell, 46, of Southhold; Carolyn Gray, 25, of Mastic, and Theresa Hubbard, 51, of Mastic Beach are each charged with Grand Larceny in the Fourth Degree, an "E" Felony, and Misuse of Food Stamps (over $1,000), an "E" Felony. 

The charges are accusations and the defendants are presumed innocent unless and until proven guilty. 

If see or know of waste, fraud or abuse in a social services program in New York State, please contact the Office of the Attorney General's helpline at (800) 771-7755.

Attorney General Schneiderman thanks the United States Department of Agriculture, Office of Inspector General, Northeast Region; United States Department of Agriculture, Food and Nutrition Service; the Suffolk County District Attorney's Office; the Suffolk County Department of Social Services; the Suffolk County Police Department, and the Nassau County Police Department for their assistance. 

The case is being handled by Assistant Attorneys General Tyler Reynolds and Rhonda Greenstein of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary T. Fishman. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan. The investigation was conducted by Legal Support Analyst Theo Davidson, Investigator Ryan Fannon, Supervising Investigator John Sullivan and Deputy Chief Investigator John McManus.  The Investigations Division is led by Chief Investigator Dominick Zarrella.

NEW YORK – Attorney General Eric T. Schneiderman today announced the guilty pleas of two individuals who were charged in connection with a cocaine pipeline allegedly operating between New York City and the Dutchess County town of Wappingers Falls. Profits from the ring were funneled to the Dominican Republic, according to a grand jury indictment unsealed on May 28. Michael Novick and Richard Bernal, both of Wappingers Falls, pleaded guilty today to drug charges, and both face prison time. The two men were arrested as part of an investigation known as “Operation Snowfall.” Three other defendants who were arrested in the operation had their cases adjourned until September 16.

“My office is committed to keeping New Yorkers safe by being both tough and smart on crime,” said Attorney General Schneiderman. “That’s why we conducted Operation Snowfall – to take down a massive criminal enterprise that trafficked large volumes of cocaine across New York State. And today, two of the individuals who endangered New Yorkers by polluting our communities with dangerous and illegal drugs are facing prison for their crimes.”

Michael Novick pled guilty before Dutchess County Court Judge Peter M. Forman to Criminal Possession of a Controlled Substance in the Second Degree (PL 220.18), and was promised 5 years’ imprisonment with 5 years of post-release supervision. He will be sentenced by Judge Forman on September 16, 2014. Novick will remain out on $100,000 bail until sentencing. Novick is a well-connected member of the Wappingers Falls community, where his sister sits on the village’s Board of Trustees and his brother is a police officer.

Richard Bernal pled guilty before Dutchess County Court Judge Peter M. Forman to Criminal Sale of a Controlled Substance in the Third Degree (PL 220.39) and was promised 2 years’ imprisonment with 2 years of post-release supervision. He will be sentenced by Judge Forman on September 16, 2014. Bernal remains held in lieu of $50,000 bail.

Three other individuals who were arrested in the case, Robert Garcia, Adalgisa Hernandez, and Francisco Garcia, all of New York City, had their cases adjourned  until September 16.

According to papers filed in Dutchess County Court on May 28, the drug ring was run by a husband-wife duo, Robert Garcia and Adalgisa Hernandez, from their Washington Heights apartment building at 111 Wadsworth Avenue, just two blocks from the George Washington Bridge. The couple also allegedly used rented apartments in a building around the corner, at 1365 St. Nicholas Avenue, to stash the cocaine, even using a trapdoor hidden within an apartment kitchen, and conduct in-person transactions using the apartment’s stairwells like an office.

As outlined in the indictment, wiretaps and leads from informants  revealed a surprisingly business-likebusinesslike operation: Hernandez took orders by phone, at least 100 per day, and sometimes more, from her Wadsworth Avenue apartment. The orders were then relayed to employees at the St. Nicholas Ave. building, where the ringleaders maintained a storage facility on the 12th floor and a weighing/packaging operation on the fifth5th floor, and where a revolving door of customers picked up their purchases.

Evidence obtained during the investigation indicated that the Washington Heights-based ring transported their profits to the Dominican Republic.

The investigation was conducted by OCTF Investigators Edwin Margenat and Brad Farrell, Supervising Investigator Artie Schwartz and Deputy Chief Christopher Vasta. The case is being prosecuted by Assistant Deputy Attorney General Jonathan Sennett, Deputy Attorney General Peri Alyse Kadanoff and Executive Deputy Attorney General for Criminal Prosecutions Kelly Donovan.

The charges against the remaining defendants in the case are accusations, and those defendants are presumed innocent until and unless proven guilty in a court of law.