NEW YORK – Attorney General Eric Schneiderman today announced a settlement with Alstate Maintenance LLC, a contractor operating at Terminal One of John F. Kennedy International Airport, for paying nearly 40 skycaps at an hourly rate far below minimum wage. The $925,000 settlement consists of about $625,000 in restitution and another $300,000 in damages, all of which will be distributed to workers. In addition to the restitution and damages, Alstate has agreed to a number of reforms moving forward to ensure that its workers are properly compensated.

“I am committed to combating wage theft wherever and whenever we see it,” said Attorney General Schneiderman. “I will fight the tough fights to ensure there is one set of rules for everyone, and that everyone who works hard and plays by the rules gets a fair shake. Airlines and the companies that operate our airports should make certain that the contractors they hire act responsibly. Together, we can send a strong message to anyone that would take advantage of low-wage workers: we won’t stand for it.”  

Skycaps play a critical role in helping airport operations run smoothly. Whether it’s curbside check-in for departing passengers or helping arriving passengers get their luggage from baggage carousels to their cars, they also make travel easier for customers, particularly those who may need extra assistance.

The investigation began after several workers notified the  Service Employees International Union Local 32BJ, which has been organizing airport workers, that they were not earning at least a minimum wage and the union contacted the Attorney General’s Office. In fact, between 2008 and 2014, Alstate paid the skycaps as little as $3.90 per hour , which fell far below the minimum wage (ranging from $7.15 to $8.00 per hour during the six years covered by this investigation). The rates paid by Alstate during most of this time period were even lower than New York minimum wage in 1991, which was $4.25/hour

"I was proud to lend my support last week to John F. Kennedy Airport Terminal One workers in their efforts to organize, and I am equally proud today to join Attorney General Eric Schneiderman in announcing this successful settlement with Alstate Maintenance,” said New York City Public Advocate Letitia James.  “Many airport employees continue to be grossly underpaid, and it is particularly egregious that this contractor paid skycaps below the legal minimum wage. I join Attorney General Schneiderman in calling for change."

Hector Figueroa, president of 32BJ SEIU, said, “We are glad to see this group of airport workers getting justice, and thank Attorney General Schneiderman and his team for their dedication and hard work on this case and others. While today we celebrate a big victory, we know that too many other airport workers continue to be exploited by contractors who feel they are able to get away with cheating and short-changing their employees. That’s why we’ve been working with the Port Authority for a longer-term, permanent solution in which employers are bound by a contract and workers are protected by a union of their choice. We know justice for airport workers and jobs with dignity and respect are within our reach, and today is a big step forward.”

Although most skycaps receive tips, Alstate failed to qualify  for a tip credit which would have allowed the company to pay workers at a lower hourly rate. Furthermore, even if Alstate had qualified, the meager rates paid to these airport workers were even lower than the legal tipped minimum wage would have been. (Allowable tipped minimum wage rates for skycaps during these years ranged from $5.40 to $6.05 per hour.)

In addition, Alstate did not reimburse these skycaps for the costs of laundering and maintaining their mandatory uniforms, as required by law.  For skycaps, if the cost of laundering uniforms reduces their wages below the minimum wage, employers are required either to provide laundry facilities or to pay a weekly set amount to cover the cost of cleaning uniforms.

Along with payment of restitution and damages, the settlement requires Alstate to implement a number of reforms to come into compliance with New York’s labor laws.

Alstate has agreed not to claim a tip credit for its workers going forward, even though it has a legal right to do so. Should Alstate wish to claim a tip credit in the future, it must notify the Attorney General’s office and hire an Independent Monitor at the company’s expense to ensure compliance. Alstate also must designate a compliance officer who will be responsible for ensuring that wages are calculated and paid properly and will keep the Attorney General’s office apprised as to ongoing compliance.

The case was handled for the Attorney General’s Office by the Labor Bureau’s Assistant Attorney General Kevin M. Lynch, Assistant Attorney General Benjamin Holt, and Bureau Chief Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg. 

NEW YORK – Attorney General Eric T. Schneiderman released the following statement today in honor of the Rosh Hashanah holiday.

“Tonight at sundown, I will join families across our state and around the world to gather for Rosh Hashanah in celebration of the Jewish new year. As we celebrate this joyous holiday, let us also take this time to reflect upon the past year, revisiting both our accomplishments and our failings, so that we may all move forward as better sons, daughters, parents and friends.

May you and your families be blessed with a sweet and happy New Year. L’Shanah Tovah.”

NEW YORK – Attorney General Eric T. Schneiderman today announced an agreement between New York State and Correctional Medical Care, Inc. (CMC), a Pennsylvania-based, for-profit prison health care contractor that provides medical services in jails in 13 upstate counties. The agreement comes on the heels of an investigation by the Attorney General’s office that found CMC, which holds over $32 million in contracts with the New York counties, violated key provisions of its contracts with two of the counties, Monroe and Tioga.  CMC understaffed facilities and shifted work hours from physicians and dentists to less qualified and lower-wage staff, including, in one case, a nurse with a felony conviction. The settlement agreement requires that an independent monitor oversee that CMC meets its obligations to provide medical care in jails in all the counties where CMC is contracted to with for a period of three years, and requires the company to pay restitution and penalties.

“Tax dollars meant to cover medical care of our county prisoners must not be wasted-- and substandard care and mismanagement are not an option,” Attorney General Schneiderman said. “Shortchanging medical services provided to jail populations can lead to direct harm to individuals and misses a public health opportunity to provide care to individuals who often have undiagnosed, untreated medical needs. We will bring to justice contractors who line their pockets while failing to uphold their obligations to the people of New York.”

New York State Assembly Health Committee Chairman Richard N. Gottfriedsaid, “This is a clear example of the dangers of business corporations providing health care. Attorney General Schneiderman has won an important victory that matters not only to jail inmates but to all New Yorkers.”

Commissioner Phyllis Harrison-Ross, M.D., chair of the Commission's Medical Review Board,said, "The Commission of Correction and its Medical Review Board have consistently raised serious concerns about the medical care provided by Correctional Medical Care and has documented those concerns in reports issued a result of its investigations into deaths at CMC-served facilities. Incarceration should not prevent an individual from receiving competent care and all medical care providers in New York must conform to the state’s laws, rules and regulations governing medical care delivery. The Commission will continue to monitor CMC, other private health care providers and locally-provided jail health services to ensure a standard of quality care."

New York State Education Commissioner John B. King, Jr.said, "Every tax dollar must be spent the right way to provide the best services. When unqualified personnel make important medical decisions, public safety is compromised and tax dollars are wasted. Attorney General Schneiderman's investigation will make sure qualified medical personnel are on the job, providing the appropriate medical services and protecting the public health and safety."

The Attorney General’s investigation of CMC began as a result of a referral from the New York State Commission of Correction and the New York State Education Department. The Commission of Correction found significant lapses in medical care provided to six prisoners who died in custody between 2009 and 2012 at five county jails contracted with CMC. The board also found that medical records lacked evidence of physician or psychiatrist oversight and did not include required information. In addition, CMC staff dispensed medications without medical orders.  

An ensuing investigation by the Office of the Attorney General found that CMC was understaffing facilities and shifting work hours from physicians and dentists to less qualified and lower-wage staff.  CMC also hired several unlicensed and inexperienced staff members, including one nurse with a felony conviction. Despite CMC’s contract violations, it continued to charge New York counties more for its services. Its contract with Tioga County nearly doubled, to approximately $331,000 in 2013, from about $193,000 in 2008.  

Quality correctional health services are critical to inmate safety and health, and to safeguard the health of communities that inmates return to.  Medical services provided at jails and prison also offer a chance to track -- and forestall -- the spread of infectious disease and to stop chronic health problems faced by inmates from becoming debilitating conditions.

Soffiyah Elijah, executive director of the Correctional Association of New York,said, “Given the extensive health needs of people incarcerated in New York county jails, it is crucial for them to receive quality medical and mental health services. This would be in the best interests of overall public health. We commend the Attorney General, the State Commission of Correction and the Education Department for working together to identify, make public and hold CMC accountable for the improper care being provided to its patients.”

Attorney General Schneiderman’s investigation also found that CMC violated New York’s prohibition of the corporate practice of medicine, which bars corporations from practicing medicine or employing physicians to provide medical services.  The law aims to ensure that a licensed medical provider is ultimately responsible for health care and that profits never override sound medical opinion.  CMC’s owner is not a licensed medical provider – nor is the owner’s husband, who is an officer of the company.

The agreement provides for the restructuring of CMC contracts, oversight of CMC by the independent monitor, restitution to Tioga County, and civil penalties. Monroe County has already received restitution for staffing shortages in January 2011 through June 2013, totaling $340,017.  Tioga is receiving restitution for CMC’s failure to meet its contractual obligation to hire a licensed social worker from 2009 to 2012. Provisions include:

• CMC will pay for an independent monitor for a period of three years to ensure compliance with its contracts.
• CMC will submit all 13 county contracts to an initial audit and then annual audits by the independent monitor.  
• CMC will pay $100,000 in restitution to Tioga County and $100,000 in civil penalties to New York State.
• CMC will provide only administrative services to bring operations into compliance with New York law prohibiting the corporate practice of medicine, and will create a separate professional medical corporation to provide medical care.

The agreement does not prohibit Tioga, Monroe or any other county from seeking additional restitution from CMC.

The case was investigated by Assistant Attorney General Dorothea Caldwell-Brown of the Attorney General’s Health Care Bureau, which is led by Bureau Chief Lisa Landau. Executive Deputy Attorney General for Social Justice is Alvin Bragg. 

BINGHAMTON – Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced the indictment of Roger Burlew, former Highway Superintendent for the Town of Erin, in a public corruption case involving the alleged theft of more than $50,000 in goods and services from the town. The indictment charges that Burlew stole the money by submitting fraudulent vouchers for payment to the Town of Erin.

“This indictment shows that nobody is above the law – a principle that has guided my office in aggressively prosecuting over 50 individuals in corruption cases since 2011, including a sitting state senator, a current member of the New York City Council, and elected officials from both parties across New York State,” said Attorney General Schneiderman. “Corruption undermines faith in government and wastes taxpayer dollars, and that is why I will continue to pursue those who betray the public trust.”

"Cases such as these remind us why constant scrutiny of public spending is needed," said State Comptroller DiNapoli. "New Yorkers can rest assured that auditors and investigators from my office will continue to partner with Attorney General Schneiderman and law enforcement to detect fraud and hold those who would rip off taxpayers accountable. The message is clear – unethical behavior will be investigated and prosecuted, and stolen public money will be recouped."

According to papers filed in the Town of Erin Court, Burlew, who was appointed Highway Superintendent in 1998, submitted numerous fraudulent vouchers to the Town of Erin since 2007.  Burlew allegedly submitted vouchers for parts for equipment the Town does not own. One such voucher referenced the purchase of forklift tires when the Highway Department does not have a forklift. Further, according to court papers, Burlew submitted a voucher requesting payment for a 2-cylinder gas engine for the Highway Department’s 4-cylinder diesel Cat Loader. It is believed the parts and services expensed were instead purchased for Burlew’s personal use.

Burlew is charged with one count of Grand Larceny in the Second Degree, a Class C Felony, three counts of Offering a False Instrument for Filing in the First Degree, a Class E Felony, and Defrauding the Government, a Class E felony.  He faces a maximum of 5 to 15 years in state prison if convicted of the highest charge filed against him.

The Joint Task Force on Public Integrity is a cooperative effort between Attorney General Schneiderman's and Comptroller DiNapoli's offices to root out public corruption and maximize the resources of each office.  Attorney General Schneiderman thanks the staff at Comptroller DiNapoli’s Office for their invaluable cooperation and assistance in this investigation.

Assistant Attorney General Colleen Glavin of the Public Integrity Bureau is prosecuting the case, with support from Deputy Bureau Chief Stacy Aronowitz, Bureau Chief Daniel Cort, and Executive Deputy Attorney General for Criminal Justice Kelly Donovan. The prosecutors were assisted by Investigations Bureau Investigator Joel Cordone, with support from Supervising Investigator Richard Doyle, Deputy Bureau Chief Antoine Karam, and Bureau Chief Dominick Zarrella.

The charges are accusations and the defendant is presumed innocent unless and until proven guilty in court.

NEW YORK– Attorney General Eric T. Schneiderman today announced that his office is committing up to $40 million in additional funding to organizations that provide free, high quality housing counseling and legal services to struggling homeowners around New York State through his Homeowner Protection Program (HOPP). The new funding, which will extend the program for an additional two years, brings the total commitment of funds by the Attorney General’s Office to $100 million over five years to help New York families stay in their homes. The HOPP program is designed to provide free housing counseling and legal services to homeowners facing foreclosure – and particularly to ensure that no New Yorkers has to navigate the treacherous loan modification or foreclosure process alone. Of the 34,000 families helped by HOPP since 2012, thousands of families have been able to stay in their homes.

Since it was established in 2012, HOPP has allocated funding to 89 legal services and housing counseling agencies working in every county in New York. Today at the Center for Housing Solutions Regional Summit in New Windsor, and the annual conference of the New York State Coalition for Excellence in Homeownership Education in Albany, Attorney General Schneiderman announced the additional funds and discussed findings in his new report, “Staying Home: A Report on the Second Year of New York Attorney General Eric T. Schneiderman’s Homeowner Protection Program.” In the program’s first two years, more than 9,303 homeowners, close to one third of those helped, found the program by calling the HOPP hotline, at 855-HOME-456.

“After just two years, our Homeowner Protection Program has helped tens of thousands of New Yorkers in danger of losing their homes. This additional $40 million dollars extends my commitment to help homeowners and communities across New York recover from the devastating impact of the housing crisis,” Attorney General Schneiderman said. “No individual or family should have to navigate the foreclosure process alone. By funding housing counseling and legal services, we are keeping families in their homes and stabilizing struggling communities across the state of New York.”

“This is a multi-million dollar investment that affords homeowners in the Hudson Valley who have been badly hit by the mortgage crisis the opportunity to stay in their homes,” saidRep. Sean Patrick Maloney (NY-18).“I thank Attorney General Schneiderman for dedicating these necessary funds to help undo the lasting damage done by the financial crisis to New York homeowners."

Albany County Executive Daniel P. McCoysaid, “I commend Attorney General Schneiderman for his tireless efforts to assist New Yorkers through this initiative. Even today we are seeing the effects of the foreclosure crisis in the Capital District. Programs like HOPP provide the necessary resources for those residents who are desperately trying to hold on to their homes and it is worthy of our support.”

Erie County Executive Mark C. Poloncarzsaid, "Thanks to Attorney General Schneiderman, homeowners across New York State have a friend who can help them with much-needed counseling and advice when they are threatened with the loss of their home, and will work with them if they are struggling with the foreclosure process. Preventing homes from being foreclosed on also prevents those buildings from becoming potential zombie homes, which blight neighborhoods and diminish property values for all. With Attorney General Schneiderman's help, more New York homeowners have been able to successfully remain in their homes and avoid foreclosure."     

Ulster County Executive Mike Heinsaid, “I want to commend Attorney General Eric Schneiderman for extending his Homeowner Protection Program and helping those families who are in danger of losing their homes. A stable, welcoming home provides families with a sense of security and this program has helped those who were facing foreclosure or unjust eviction by ensuring that their voices were heard and their loved ones were protected.”

City of Newburgh Mayor Judy Kennedy said, “I thank Attorney General Schneiderman for continuing to protect homeowners throughout New York State, and particularly in the City of Newburgh, through the Homeowner Protection Program. This program ensures that struggling homeowners are able to receive crucial services during stressful times, and will continue to assist families throughout New York to stay in their homes.”

“We appreciate Attorney General Schneiderman’s leadership in ensuring that funds from the bank settlements were used to fight foreclosures, especially in lower income neighborhoods and communities of color that have been hard hit by abusive lending and servicing practices,” said Josh Zinner, Co-Director of New Economy Project.“As a result, New York has one of the strongest networks of non-profit foreclosure prevention advocates in the nation.”

Today’s report shows that the areas hardest-hit by the mortgage crisis were low- and moderate-income neighborhoods in major population centers, including New York City, Long Island, the Hudson Valley and several upstate cities, including Troy and Buffalo. It also found that the majority of those who sought assistance from the HOPP network came from households with children – including almost 5,800 single-parent households – underscoring the deep impact the mortgage crisis has had on families across New York State.

In October 2012, the Attorney General’s Office launched HOPP, with a three-year commitment of $60 million, to fund housing counseling and legal services for struggling New York homeowners. HOPP counselors provide at-risk mortgage holders with a range of services, including direct advocacy with lenders, financial counseling and assistance in preparing the complex documentation that homeowners need to submit applications for loan modifications. This process often results in lower monthly mortgage payments and prevents foreclosures from going forward – but the process can take more than a year to negotiate.

The report, which covers HOPP services provided between October 2012 and September 2014, shows that families across the state have benefited from the HOPP program. Regional break downs of families served are as follows:

• Hudson Valley: More than 5,000 families served.
• New York City: More than 12,000 families served.
• Monroe County and its surrounding areas: More than 2,000 families served.
• Mid Central New York:  More than 1,700 families served.
• Capital and Northern New York: More than 1,400 families served.
• Long Island: More than 8,800 families served.
• Buffalo and its surrounding areas: More than 2,100 families served.

The Office of the Attorney General has made it a priority to ensure that HOPP funding and servicers are specifically targeted to the communities where the foreclosure crisis has been the most devastating. For instance, the Attorney General’s research indicates that Long Island has some of the highest rates of mortgage distress in New York State. Roughly 24% of the mortgages in the towns of Hempstead and Brentwood are 90 days or more delinquent. In response the Attorney General’s office has increased funding to HOPP groups serving Long Island by more than $1 million, from about $3.4 million last year up to $4.4 million in 2014-15.

The report also highlights some of the families who have been able to stay in their homes as a result of the program. Among them are:

• After losing her father in 2008,  Shari Roufberg, who lives in Westchester County, became bogged down in a protracted legal battle which ultimately caused her to lose her family business. By 2011, Ms. Roufberg had exhausted her savings and was having difficulty making mortgage payments on her home. Initially, Ms. Roufberg attempted to negotiate with her mortgage company on her own. She got nowhere. Then she heard about Westchester Residential Opportunities (WRO), a housing counseling agency and HOPP grantee that serves Westchester County. A housing counselor at WRO spent almost three years working to get Ms. Roufberg a mortgage modification. In May, she was granted a permanent loan modification, which significantly lowered her monthly mortgage payments.
  
  “I could not have gotten through this without the help of WRO,” said Shari Roufberg. “It was such a stressful time for me and every day I feared I’d find the Sheriff at my door, ready to evict me. The assistance I received provided tremendous relief and made it easier for me to sleep at night.”

In addition to providing legal assistance to New York homeowners recovering from the foreclosure crisis, Attorney General Schneiderman proposed new legislation earlier this year to help communities across New York that are burdened by vacant and abandoned properties. Attorney General Schneiderman proposed legislation, which was passed and signed into law this year, to increase the maximum allowable number of land banks from 10 to 20. Land banks are local non-profit organizations charged with rehabilitating or tearing down vacant and abandoned properties. Many cities do not have land banks but have a critical need for the kind of community redevelopment that land banks can make possible. With the passage of Attorney General Schneiderman’s legislation authorizing 10 new land banks, this valuable resource will reach even more communities in need.

Another piece of legislation proposed by Attorney General Schneiderman addresses the problem of so-called zombie properties. Too often, when a homeowner falls behind on mortgage payments and receives a notice of arrears or a foreclosure notice, the homeowner abandons the property. Many families may not understand that they have the right to remain in their home until a judge declares the foreclosure complete, which can take years. At the same time, there is evidence that lenders are actually slowing down the foreclosure process, and in some cases, seeking court orders to cancel the foreclosure action in the middle of the process. With no one maintaining these derelict properties, they become vulnerable to crime, decay, vandalism and arson. Furthermore, these zombie homes decrease the property value of neighboring homes and become an enormous burden for local code enforcement and emergency service providers.

An epidemic of zombie homes has impacted communities statewide, including in Erie and Niagara counties. Across the state, RealtyTrac estimates more than 15,000 properties to be zombie foreclosures. And according to U.S. Census data, 50,000 housing units in Erie and Niagara counties – about 10 percent of the entire housing stock -- are vacant.

Attorney General Schneiderman proposed legislation to close the current loophole, changing state law to make lenders responsible for delinquent properties soon after they are abandoned – not at the end of a lengthy foreclosure process. It would also create a statewide registry for zombie properties, so municipalities will be able to track abandoned homes and enforce local property maintenance codes.

Homeowners who are in need of assistance are encouraged to call the Attorney General’s statewide foreclosure hotline at 855-HOME-456 and visit www.AGHomeHelp.com to connect with organizations and agencies in their area that can provide foreclosure prevention services.

NEW YORK – Attorney General Eric T. Schneiderman today issued a consumer alert about a scam targeting school districts across New York and at least 21 other states. The scam involves a bogus company named Scholastic School Supply mailing phony invoices to school districts in the hope of receiving payments without rendering goods or services. One Rochester-area school district contacted the Attorney General’s Office to report receiving an invoice in the amount of $657.50 for an English Language Arts Practice Book that was never purchased or supplied. The scammer even included a self-addressed stamped envelope along with the fraudulent invoice. At least four other school districts in New York State have also reported receiving these invoices.  

“Schools across New York State should be on the lookout for fraudulent invoices from scammers seeking to rip off our children to make a buck,” said Attorney General Schneiderman. “From the big banks that precipitated the housing crisis to the scam artists who defraud consumers, the law applies to everyone equally, and it is our mission to hold fraudsters accountable.”

Scholastic School Supply has mailed invoices with a return address listed as 1350 E. Flamingo Rd. Suite 820, Las Vegas, NV 89110. There have also been reports of the scam in other states across the country. Invoices include book details such as the book format (i.e. paperback workbook), publication date, the number of pages, the weight, and even the ISBN.

The Better Business Bureau has reported that, as of earlier this month, it has received at least 51 complaints from school districts in 22 states and over 2,300 inquiries regarding this scam.

School districts that have been targeted are encouraged to file a complaint with the Consumer Frauds Bureau in Attorney General Eric Schneiderman’s Office by calling the Attorney General’s Consumer Hotline at (800) 771-7755 or visiting the Attorney General’s website, www.ag.ny.gov.

NEW YORK – Attorney General Eric T. Schneiderman today filed a lawsuit in New York County Supreme Court against two law firms and their lead attorney accusing them of participating in a fraudulent mortgage rescue scheme. The lawsuit targets Litvin Law Firm; Litvin, Torrens & Associates, PLLC; and the firms’ principal attorney Gennady Litvin. Litvin and the two firms allegedly preyed upon financially vulnerable consumers by claiming they would provide them with a comprehensive legal services plan that would allow consumers to avoid foreclosure or obtain a mortgage modification. The firms, directly and through their marketers, collected hundreds of dollars in monthly fees from consumers and routinely failed to deliver on their promises. The lawsuit seeks to halt the illegal business practices, provide restitution to consumers, and seeks penalties and costs.

“Consumers facing foreclosure place a special trust in attorneys hired to help them navigate the myriad of legal issues they are facing, and our office will hold those accountable who perpetrate scams that prey upon families at risk of losing their home,” said Attorney General Schneiderman. “Coupled with our Homeowner Protection Program that has served over 30,000 New York families seeking help with their mortgage, we will continue to fight for those still struggling in the aftermath of the housing crisis.”

The lawsuit alleges that the firms and Gennady Litvin engaged in fraudulent and illegal practices in offering legal services and other foreclosure assistance to consumers in New York and other states. Through repeated television and radio ads, the Litvin Law Firm induced consumers to call its offices by falsely implying that they had a connection to “State Attorneys Generals and the Federal Government” and that homeowners could have their mortgages satisfied in full, a most unlikely result.

Through the use of third-party marketers, many of which used the term “legal” in their names, the firms solicited homeowners nationwide, representing that the homeowners would have a “custom made attorney defense team” that provided “a level of service that usually is only enjoyed by large corporate clients.”  The marketers also purported to provide homeowners with “forensic loan audits” that were “vitally important” to identify errors in their mortgage loan documents, defend against foreclosure, and win concessions from lenders.  On its website, the Litvin Law Firm led consumers to believe that it was a law firm with a nationwide presence, located in 31 states, and that the firm had the ability to provide foreclosure defense nationwide.

As described in court papers, based on these representations, struggling homeowners paid the firm and its marketers a monthly fee, typically $595 or $750, to obtain legal services.  However, many consumers did not receive the legal representation they were promised.  The Litvin Law Firm and Litvin, Torrens & Associates, which have offices only in New York and Florida, cannot provide nationwide foreclosure defense.  Moreover, the forensic audits typically had very little value in saving consumers’ homes.  In many cases, homeowners never spoke to an attorney in their state, never obtained a loan modification or other foreclosure relief, and wound up having to negotiate with lenders on their own.    

The Federal Trade Commission (FTC) recently reached a settlement with the marketers in which they agreed to, among other things, a permanent ban from the mortgage and debt relief services field and to pay close to $3.6 million in consumer redress.  Information about the FTC’s action is available here.

If you believe you were a victim of the Litvin Law Firm; Litvin, Torrens & Associates; or any of its affiliated marketers, or if you believe you were a victim of another mortgage fraud, please file a complaint with the Attorney General’s Office.  Complaint forms are available here.  You may also call the Attorney General’s Consumer Hotline at 1-800-771-7755.

Free help to homeowners is available through the Home Owner Protection Program (HOPP), which uses funds from the National Mortgage Settlement to fund legal services and housing counseling across New York to provide foreclosure prevention services.  Consumers can call 855-HOME-456 for help. Attorney General Schneiderman’s program funds roughly 90 organizations across the state, and HOPP has served a combined total of nearly 30,000 families since its launch in October of 2012.

This case is being handled by Special Counsel Mary Alestra, 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.

NEW YORK – Attorney General Eric Schneiderman, Comptroller Thomas P. DiNapoli and United States Attorney for the Northern District Richard Hartunian today announced the arrest and indictment of New York State Assemblyman William Scarborough for allegedly stealing campaign funds and falsely collecting travel reimbursements. The 23-count state indictment accuses the Southeast Queens Assemblyman of withdrawing and diverting over $40,000 from the bank account of the “Friends of Bill Scarborough” campaign committee and then using those funds for personal expenses. The 11-count federal indictment charges Scarborough with improperly claiming “per diem” expenses in excess of $40,000 for travel that didn’t take place. If convicted on all charges, he faces up to 37 years in prison. 

“The crimes Mr. Scarborough is accused of committing would represent a shameful breach of the trust his constituents placed in him,” said Attorney General Schneiderman. “New Yorkers are repeatedly asked to have faith in our leaders, and every allegation of political corruption shatters that trust. Each time my office arrests a corrupt public official, it sends the message that there must be one set of rules for everyone and no one is above the law, no matter how powerful or well-connected. I also want to thank Comptroller DiNapoli and U.S. Attorney Hartunian – cases like that are made possible only through the great collaboration of our law-enforcement partners.”

"Elected officials cannot use taxpayer money or campaign funds as their personal piggy banks. Assemblyman Scarborough tried to game the system, thinking he could get away with it,” New York State Comptroller Thomas P. DiNapoli said. "Through our joint investigation, we revealed that Assemblyman Scarborough allegedly submitted fraudulent travel vouchers and filed false reports on his use of campaign funds. I will continue to partner with Attorney General Eric Schneiderman, U.S. Attorney Richard Hartunian, the Federal Bureau of Investigation and prosecutors across the state to root out corruption and bring corrupt officials to justice." 

U.S. Attorney Richard S. Hartunian said, “Today’s indictments demonstrate the commitment of state and federal authorities to combat the fraud and corruption that have plagued our political system. Our elected officials are expected to safeguard the integrity of their office and follow all the rules. When they fail to do so, law enforcement will respond. I heartily commend Attorney General Schneiderman and Comptroller DiNapoli for their vigorous pursuit of this case. The collaboration between state and federal investigators that has brought about these indictments has proven to be an effective tool in identifying and rooting out corruption in our state government.”

State Indictment

According to documents made public today in connection with the state investigation, part of an ongoing effort between Schneiderman and DiNapoli known as “Operation Integrity” and conducted with the assistance of the FBI, Scarborough engaged in a pattern of illegal activity over the last seven years. Bank records obtained as part of the investigation show that between January 2007 and March 2014, Scarborough made numerous withdrawals and transfers from his campaign committee’s account totaling approximately $38,000. Some of that money was taken out directly as cash withdrawals; some was transferred into his personal account, according to the indictment and court papers. Additionally, Scarborough deposited five checks made payable to “Friends of Bill Scarborough,” totaling $3,450, directly into his personal bank account. 

The state indictment, filed in New York State Supreme Court in Albany, accuses Mr. Scarborough of then spending that cash for his own personal use, in violation of New York State Election Law, which says that “[c]ontributions received by a candidate or a political committee … shall not be converted by any person to a personal use.” 

Mr. Scarborough also allegedly attempted to conceal his illegal conduct by not reporting the withdrawals to the state Board of Elections, as legally required. Between 2007 and 2014, there were 21 separate filings made with the Board of Elections that did not account for the withdrawals. Additionally, the money has never been accounted for in the campaign committee’s financial records. 

The indictment charges Scarborough with two felony counts of Grand Larceny and 21 felony counts of Offering a False Instrument for Filing.

Federal Indictment

The federal investigation, conducted by the United States Attorney’s Office and the Albany Division of the Federal Bureau of Investigation, focused on the alleged improper claiming of “per diem” payments and other travel-related expenses from 2009 to 2012.

In a federal indictment, filed today in United States District Court in Albany, Assemblyman Scarborough has been charged with four (4) counts of Theft Concerning a Program Receiving Federal Funds for allegedly submitting 174 false reimbursement vouchers for per diem expenses, mileage and tolls in excess of $40,000 between January 2009 and December 2012. If convicted, Scarborough faces a maximum term of imprisonment of not more than 10 years and a $250,000 fine.  Scarborough was also charged with seven (7) counts of Wire Fraud relating to communications directing payment of specific false New York State Travel Vouchers to his bank account. If convicted, these counts carry a maximum term of imprisonment of not more than 20 years and fine up to $250,000. 

Prosecuting the state case is Senior Counsel Darren Miller of the Attorney General’s Public Integrity Bureau, which is led by Deputy Bureau Chief Stacy Aronowitz and Bureau Chief Daniel Cort. Kelly Donovan is the Executive Deputy Attorney General for Criminal Justice. The state’s investigation was handled by Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam of the Investigation Bureau, which is led by Chief Dominick Zarrella. Forensic auditor Jason Blair and legal analyst Sara Pogorzelski provided additional assistance. 

The federal investigation was handled by the FBI, Albany Division. The federal case is being prosecuted by Assistant U.S. Attorney Jeffrey Coffman. 

The State Comptroller’s Division of Investigations assisted with both investigations.

All charges are merely accusations and all defendants are presumed innocent unless and until proven guilty in a court of law.

ROCHESTER – Attorney General Eric T. Schneiderman today announced that his office obtained a judgment against the chief executive officer of Rochester-based electronics company CandelTronics for intentionally defrauding investors. CEO Salvatore Candeloro repeatedly made fraudulent misrepresentations and omissions to promote the sale of securities to local investors. Monroe County Supreme Court Justice J. Scott Odorisi issued a consent order and judgment that holds Candeloro responsible for more than $365,000 in restitution to defrauded investors and $35,000 in penalties.

“This judgment sends a clear message that those who commit fraud will face consequences when they rip off New Yorkers,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and that includes those who would peddle a product or idea by misrepresenting the facts to investors.”

CandelTronics Corporation, founded in 1998 by Candeloro, developed a product called ExtendIt, an electrical device that allows consumers to pull power from an outlet in a room without having to use an extension cord. Over the course of nearly 17 years, Candelboro raised over $1.8 million from approximately 18 investors in the form of loans and from another 20 shareholders, promising that the money would help get the product to market. These investors began to complain to Attorney General Schneiderman’s Office in 2013 that they had not seen any return on their investment. 

The Attorney General’s office launched an investigation and revealing that Candeloro made false and misleading statements to investors and did not disclose that the company lost its corporate status in 2001 for failing to file and pay New York State taxes. Despite losing its incorporation, the company continued to raise money from investors. Candeloro also made misrepresentations that the product had obtained Underwriters Laboratory (UL) listing, which would be required to market the product to large-scale distributors.

In March 2014, the Attorney General’s Office filed a lawsuit against CandelTronics Corporation and Candeloro for fraud and deceptive acts and practices in connection with the investment scheme. As a result of the lawsuit, the Monroe County Supreme Court issued an order permanently enjoining Candeloro from owning, operating, or managing a business in New York State and from engaging in any business relating to the purchase or sale of, or offer to purchase or sell -- as principal, broker or agent, or otherwise -- any securities issued within New York State.  In addition, Candeloro must pay more than $365,000 in restitution and damages to compensate defrauded investors, and he will be divested of his shares of ownership in Candeltronics. Those shares will also be redistributed to the defrauded investors as restitution.  Additionally, the court imposed a $35,000 civil penalty against Candeloro.

As part of the investigation, the Attorney General’s Office obtained CandelTronics business records. However, due to poor recordkeeping by the company, some investors may not have been properly documented.  Any investors who believe they are eligible for restitution and damages may submit a claim with the Attorney General’s Office, postmarked or received by December 22, 2014.

The case is being handled by Assistant Attorney General Benjamin Bruce and Volunteer Assistant Attorney General Shannon O. Pozzuolo. The investigation is being handed by Senior Investigator Christopher Holland. All staff work in the Rochester Regional Office is led by Debra Martin, Assistant Attorney General-in-Charge. The Rochester Regional Office is a part of the Division of Regional Offices, led by Marty Mack, Executive Deputy Attorney General for Regional Offices.

WESTCHESTER – Attorney General Eric T. Schneiderman today announced the arrest of Elisa Parto, owner of the restaurant Elisa’s Food & Plus, Inc., in Port Chester, NY.  The owner and company are charged with failing to pay more than $35,000 in legally required minimum wages and overtime to five former employees.  If convicted, Ms. Parto faces up to a year in jail.

“My office will take aggressive action, including criminal charges, where appropriate, against business owners who fail to properly compensate their employees for hours worked,” Attorney General Schneiderman said.  “Protecting the livelihoods of hardworking New Yorkers is a priority for my office.”

Elisa’s Food & Plus, Inc., located at 73 Poningo St. in Port Chester, NY, opened for business in 2010.  Over the last several years, Elisa Parto hired cooks, cleaners and cashiers who were all owed the minimum wage for hours worked, as well as overtime at one and one half times their regular rate of pay for all hours worked in excess of 40 hours aweek.

New York Labor Law also requires employers to pay wages no later than seven days after the end of the week when the wages were earned.  The defendant allegedly failed to pay the legally required minimum wage and overtime to at least five former employees who sometimes worked more than 70 hours a week between 2010 and 2014.  According to court papers, the defendant owes workers a total of more than $35,000.

Parto and Elisa’s Food & Plus, Inc. were arraigned in Port Chester Village Court today.  Each faces multiple counts of Failure to Pay Wages under Labor Law Section 198-a(1), an unclassified misdemeanor.  Elisa Parto faces a maximum jail term of one year, and both she and her company face maximum fines, in addition to restitution,  of $5,000 for each count.

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

The case was investigated by Attorney General Investigator Edward Ortiz , Supervising Investigator Luis Carter, Deputy Chief Vito Spano and Chief of Investigations Dominic Zarella.

The case is being prosecuted by Assistant Attorney General Matthew Ross. The Labor Bureau Criminal Section Chief is Richard Balletta.  The Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg.

NEW YORK – Attorney General Eric Schneiderman today announced the arrest and indictment of Jose E. Urena, a New York City police officer assigned to the NYPD’s 25th Precinct, for an alleged scheme to defraud insurance companies. Officer Urena is accused of making a series of fraudulent automobile insurance claims designed to free himself from financial responsibility for high-end vehicles he couldn’t afford, to pocket insurance money for personal use, to pay for repairs of pre-existing damage and to add expensive features to various vehicles. If convicted, he faces up to seven years in prison.

The indictment, filed today in New York County Supreme Court, accuses Officer Urena of submitting four fraudulent auto insurance claims in two years:  

• A May 2012 fraudulent vandalism claim for a 2009 Mercedes-Benz ML350;
• A January 2013 fraudulent theft claim for the same 2009 Mercedes-Benz ML350;
• A March 2013 fraudulent accident claim for a 2007 Mercedes-Benz S550; and
• A July 2014 fraudulent accident claim for a 2011 Dodge Charger.

“Today’s arrest sends a clear message: there must be one set of rules for everyone, particularly those sworn to uphold the law,” said Attorney General Schneiderman. “Gaming the system, whether to steal money or to avoid financial responsibility, is both unethical and illegal.”

According to the indictment and statements made by prosecutors at arraignment, in May 2012, Officer Urena falsely reported a claim to Nationwide Insurance Company that his leased 2009 Mercedes-Benz ML350 had been vandalized.   After Nationwide paid $9,289.39 for the vandalism claim, Urena allegedly used the money to repair pre-existing damage to the car.

In January 2013, Officer Urena filed another fraudulent claim for the same Mercedes-Benz, according to today’s allegations.  Just one day before his lease on the Mercedes was due to expire, when the car was almost $2,000 over the allowable mileage limit, and one week after cashing a $6,242.03 insurance check for repairs that were never made, Urena reported the car stolen. Just hours after the alleged theft took place, the Mercedes was found burned out in a warehouse district in the Bronx.

Just two months later, in March 2013, Urena was having trouble making payments on a financed 2007 Mercedes Benz S550.  To free himself from financial responsibility for that car, Urena allegedly staged an accident by rear-ending a U-Haul truck, after which his insurance company, GEICO, wrote off the Mercedes as a total loss.

Urena’s fourth false claim occurred in July 2014, when he submitted a claim to GEICO after his 2011 Dodge Charger was involved in an accident.  Urena inflated the amount of the claim to cover the cost of repairing pre-existing damage to the car and to make cosmetic improvements, according to documents made public in court today.  Urena used the part of the resulting $7,503.97 insurance payout to add features to the car including a new grille, expensive tires and a painted roof.

Urena was arrested today by investigators from the Attorney General’s Office and officers from the NYPD’s Internal Affairs Bureau. The 11-count indictment charges Insurance Fraud, Grand Larceny, Attempted Grand Larceny, Scheme to Defraud, Criminal Mischief and Falsifying Business Records, all of which are felonies. He was arraigned this morning in New York County Supreme Court before the Honorable Neil Ross.

The charges against the defendant are allegations and he is presumed innocent until proven guilty in a court of law.

The Attorney General's Office thanks the NYPD’s Internal Affairs Bureau, the National Insurance Crime Bureau, Nationwide Insurance Company, GEICO Insurance Company, Mercedes Benz, and the New York State Department of Financial Services for their valuable assistance in this case.

The case is being prosecuted by Assistant Attorney General Chin-Ho Cheng and Senior Investigative Counsel Nina Sas with the assistance of Supervising Legal Analyst Paul Strocko and Legal Analyst Aislinn Appleby of the Criminal Enforcement and Financial Crimes Bureau’s Auto Insurance Fraud Unit.  The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary T. Fishman and Deputy Bureau Chief Stephanie Swenton.  The Attorney General's Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

The investigation was handled by Investigators Kevin McCann and Adrian Klapper, Supervising Investigators Natalie Shifrin and Edward Keegan and Deputy Chief of Investigations Leonard D’Alessandro of the Auto Insurance Fraud Unit.  The Investigations Division is led by Chief Dominick Zarrella.

NEW YORK - Attorney General Eric T. Schneiderman today announced agreements with two natural gas development companies that will ensure the public disclosure of information on the financial risks that hydraulic fracturing – commonly referred to as fracking – poses to their investors.   Under the agreements, Anadarko Petroleum Corp. (Anadarko) and EOG Resources, Inc. (EOG) commit to providing publicly accessible information on the financial effects of regulation, litigation, and environmental impacts of their fracking operations.   

“Investors and the public have a right to know all relevant information about the environmental, financial, and regulatory risks associated with the companies they are considering investing in,” said Attorney General Schneiderman. “By joining with my office to commit to greater public disclosure of the environmental and financial risks associated with their actions, these companies are setting a strong example for the rest of their industry.”

In their agreements with Attorney General Schneiderman, Anadarko and EOG committed to disclose certain detailed information related to fracking operations in their federal securities law filings such as the Form 10-K, the annual summary report on a company’s performance required by the Securities and Exchange Commission (SEC).  The agreements also committed the companies to make certain additional information related to their fracking operations available through other publicly accessible sources such as company websites, annual reports to shareholders, and environmental or safety reports. The agreement with Anadarko can be found here.  The agreement with EOG can be found here.. 

Under the agreements, the companies committed to disclose information and analyses concerning:

• financial risks posed by the environmental impacts associated with fracking -- such as effects on drinking water aquifers, as well as those arising from chemical use and handling, water use and wastewater handling and disposal, and air emissions – and detailed discussions of the companies’ efforts to minimize these environmental impacts;
• financial risks posed by present and probable future regulation and legislation related to fracking, such as state or federal moratoriums, local bans or restrictive ordinances, or requirements for disclosure of chemicals used in fracking fluids; and
• company strategies and actions for reducing, offsetting, limiting, or otherwise managing the financial effects of regulation, litigation, or environmental impacts related to fracking.

EOG explores for, develops, produces, and markets crude oil and natural gas.  The company has reported over 5,000 billion cubic feet of estimated net proved natural gas reserves, located predominately in the United States, Canada and Trinidad.  Anadarko’s operations in the United States include oil and natural gas exploration and production onshore and in the Gulf of Mexico.  Both EOG and Anadarko have conducted fracking in the Marcellus Shale formation in Pennsylvania, as well as in other geological formations and states.

Richard Liroff, Executive Director of the Investor Environmental Health Network,said, “These agreements give a boost to investors seeking increased disclosures about fracking.  Attorney General Schneiderman’s agreements represent important progress in illuminating for investors how well companies are managing fracking’s environmental risks and community impacts.”

Mindy Lubber, president of Ceres, a nonprofit sustainability group that coordinates a $11 trillion investor network,said, “Without robust reporting, shareholders cannot be assured that a company is taking tangible steps to minimize the risks associated with fracking.  These agreements with Anadarko and EOG will set a bar for stronger disclosure that the rest of the industry should follow."

In June 2011, the OAG subpoenaed Anadarko and EOG and other companies seeking information regarding their disclosure practices related to the development of oil and gas through hydraulic fracturing.  The Attorney General issued subpoenas under New York State’s Martin Act, a 1921 state securities law that grants the Attorney General broad powers to access businesses’ financial records. The companies subsequently provided responsive documents to the OAG and have voluntarily increased the information regarding natural gas development involving fracking that they provide to investors in their SEC Form 10-K filings, as well as on their websites.  The agreements being announced today, known as Assurances of Discontinuance, conclude the OAG’s investigations into Anadarko and EOG. 

The OAG is continuing to evaluate information related to the disclosure practices of other companies.

This matter was handled for Attorney General Schneiderman by Assistant Attorneys General Andrew Gershon, Michael J. Myers and Isaac Cheng, and Policy Analyst Jeremy Magliaro of the Environmental Protection Bureau, with support from Bureau Chief Lemuel M. Srolovic, Executive Deputy Attorney General for Social Justice Alvin Bragg, and First Deputy for Affirmative Litigation Janet Sabel. 

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement in response to the latest news regarding a cyberattack at JPMorgan:

“The news that JPMorgan was targeted in a massive cyberattack affecting millions of account holders and small businesses is troubling for all New Yorkers. JPMorgan account holders can take some basic precautions to protect themselves against identify theft and harm to their credit rating.”

The Attorney General provided a list of tips for JPMorgan account holders and those who suspect they may be a victim of the security breach:

If you might be a victim:

• Report to any of the three credit reporting agencies (Equifax, Transunion or Experian) that you may have been a victim of identity theft. Make sure the credit reporting agency has your current contact information so it can get in contact with you.
• Ask the credit reporting agencies to put a fraud alert on your credit file.  This will still allow you to use your credit card. If you put a fraud alert on your file, you may ask for a free credit report from each of the credit reporting agencies. Contacting any one of the three credit reporting agencies above is enough to file a credit alert with all of them. A credit alert must be renewed every 90 days.
• You also have a right to put a credit freeze on your credit file. This will block someone from obtaining credit using your name or personal information. This means you won’t be able to apply for any new credit cards or loans while the freeze is in effect, but you can continue to use your existing cards. To freeze your credit file, you must notify each of the three major credit bureaus. You can remove the freeze temporarily or permanently by contacting each of the three agencies. There is no fee if you have been the victim of identity theft. You may be charged a fee of up to $5  if you have not been a victim of identity theft.
• You should also check your credit activity regularly with each credit issuer.  You don’t need to wait for your monthly statement, though you should check that as well.  Many banks provide online information to account holders about recent activity.  

If you are a victim:

• Create an identity theft fraud report.  To create one, file a complaint with the Federal Trade Commission and print your Identity Theft Affidavit. You can call the FTC at 1-877-438-4338 or visit this website.
• Use that to file a police report and create your Identity Theft Report.
• An Identity Theft Report will help you deal with credit reporting companies, debt collectors and any fraudulent accounts that the ID thief opened in your name.
• Put a freeze (not just a fraud alert) on your credit report by notifying each of the credit reporting agencies (Equifax, TransUnion or Experian). The freeze can be removed only by you. 
• Get your credit report from each of the three agencies. You are entitled to free reports once you post a fraud alert or put a freeze on your account. Read the reports carefully to see whether other fraudulent transactions or accounts are listed, and then take steps to correct the errors.
• Check your credit card account frequently to look for any irregular activity.

Contact information for the credit reporting agencies:

Equifax
1-800-525-6285

Experian
1-888-397-3742

TransUnion
1-800-680-7289

NEW YORK – Attorney General Eric T. Schneiderman released the following statement today in observance of Yom Kippur.

“This evening, I will join families across our state and around the world in observing Yom Kippur. As we seek forgiveness for our actions over the past year, let us all aspire to begin the New Year with a renewed commitment to making our community a better place.

“I wish all those observing an easy fast. May you and your families be inscribed for another year in the Book of Life.”

NEW YORK – Attorney General Eric T. Schneiderman today released a report highlighting the significant achievements of his Health Care Bureau’s Helpline, a free service offered by the Attorney General’s office that has investigated and resolved approximately 13,000 consumer complaints since 2011, resulting in over $12.5 million in health care expenses being saved or returned to New York consumers. The report, titled “Real Solutions For Real New Yorkers: Health Care Bureau Helpline,” offers a review of some of the assistance provided by Helpline staff, including securing payment of $200,000 from an insurance company for a claim that had been wrongfully denied for operations required after a dog attack, and $100,000 for a mental health hospitalization bill that was initially denied.   

“My office’s Health Care Bureau helpline is a free and essential service that is available to all New Yorkers. Consumers should know we have their backs when insurance companies wrongly deny claims, or when a provider overbills,” Attorney General Schneiderman said. “Our Helpline resolves thousands of disputes in the favor of consumers every year. No problem is too big or too small for our Helpline advocates. We know that in America today, too many personal bankruptcies are the result of medical expenses, a situation that is often made worse by improper medical lending practices such as predatory loans or medical credit cards. My office’s Health Care Bureau is committed to ensuring fairness in the health care industry and, in the process, advocating relentlessly on behalf of health care consumers.”

The Attorney General’s toll-free Helpline – 800-428-9071 – is a place for New Yorkers to report, and for advocates to resolve, health care complaints and concerns ranging from simple payment processing errors to complex deceptive business practices. From January 1, 2011, through September 30, 2014, Helpline staff resolved 13,011 consumer complaints and provided another 7,281 consumers with requested information or referred them to an appropriate agency for assistance.

The $12.5 million in savings went to nearly 2,500 New Yorkers. Many of the other consumers who called the Helpline were not seeking help with billing issues but were seeking assistance for other urgent problems, including gaining access to medically necessary care. The Helpline staff has successfully mediated these time-sensitive complaints by obtaining reversals of incorrect denials of coverage and expediting insurers’ processing of requests for pre-authorizations for medical procedures, including surgeries, or for necessary in-patient treatment or for medication. Helpline advocates also take the extra step for consumers, working to ensure that any negative effects from improper medical billing or claims are removed from credit reports.  Of the more than 20,000 calls received by the Helpline since 2011, 64 percent resulted in an investigation and/or resolution by Helpline staff. Advocates opened an average of 13 cases a day.

The 10 counties with the most helpline callers in New York are:

“If you believe that you have been treated unfairly by your health insurance, do yourself a favor and let the NYS Attorney General's Office listen and help,” said Dan Benesh, a West Seneca dad who called the Helpline after his insurance company refused to pay for air ambulance transport after his son injured himself in the woods. 

Pati Robben, a Rochester area mom of a teenage daughter who was largely immobilized by back pain for a period of weeks this past Spring, said,  “My husband and I both work full time and have always had health insurance and paid our premiums.  It was extremely disheartening when the insurance company refused to cover a basic bill for a visit to the emergency room, even after my daughter’s doctor told us to take her to the ER. With one child in college and one soon to be - we contacted everyone we could think of, but could get no help. We were stuck. Ultimately, I called the Attorney General’s health care hotline and they were able to help up resolve the issue and the insurance company reversed its decision and paid the bill. We are so appreciative for the timely and supportive help we received – and we are so glad that our daughter is now happily in college!”

Erie County Executive Mark Poloncarzsaid, “Attorney General Schneiderman continues to demonstrate his commitment to New Yorkers through the Health Care Helpline, which has assisted over 20,000 callers since 2011.This toll-free and cost-free service helps consumers navigate the health care maze and find resolution for their complaints while also providing insights into possible abuse of the system by providers.Thanks to Attorney General Schneiderman, health care consumers in New York State have someone on their side to help them resolve their most urgent issues.”

New York State Senator Tim Kennedysaid, “Attorney General Schneiderman’s Health Care Bureau Helpline provides a crucial service to residents of New York state. As more and more New Yorkers gain access to health coverage and services, the Helpline is ensuring that state residents are receiving the care they need and are entitled to. As a State Senator, my office receives a number of calls from constituents who are having issues with their insurers and providers; Attorney General Schneiderman’s Helpline has provided these constituents with the assistance and support they need to resolve their concerns.This is a wonderful service, and I thank the Attorney General for his leadership on this issue.”

New York State Assemblymember Crystal Peoples-Stokessaid, “Buffalo's health industry is growing, with that growth there has to be accountability on the part of the health industry. The Health Care Bureau’s Free Helpline ensures that people’s problems are heard not ignored. Medical expenses can be overwhelming and crippling for patients and their families, some procedures which they never financially recover from. The health care industry has to focus more on improving access to and quality patient care, not forcing individuals to utilize medical credit cards. I applaud Attorney General Schneiderman for establishing the Health Care Bureau and its effective helpline.”

City of Rochester Mayor Lovely Warrensaid, “Attorney General Eric Schneiderman has gone the extra mile in making sure that families aren't crippled by health care bills that rightfully should be covered. He is a powerful advocate for consumers and is making a real difference.”

New York State Senator Ted O'Briensaid, “Access to quality, affordable healthcare should be a given in New York, but too often people find themselves arguing with insurance companies rather than getting the care they need. The Attorney General’s Health Care Helpline has provided consumers with an effective advocate, saving families millions of dollars and ensuring people receive the treatment they are entitled to. I applaud Attorney General Schneiderman for making this important resource available to New Yorkers.”

New York State Assembly Majority Leader Joseph D. Morellesaid, “As elected leaders we have an obligation to protect New York’s health care consumers from predatory practices that expose them to financial exploitation. The Health Care Bureau Helpline has addressed this critical issue head on by acting as a powerful advocacy tool and resource that equips policy holders with the knowledge they need to safeguard themselves and their families when navigating the health care system.  I thank and applaud Attorney General Schneiderman for his leadership on this issue and continued efforts to protect New York’s consumers.”

Joseph Kelemen, executive director of the Western New York Law Center,said, “Medical expenses are one of the leading causes of consumer debt in Western New York, often leading to bankruptcy and foreclosure. Medical charges are often incorrectly assessed against consumers, and when they can’t resolve the billing disputes or pay the charges, they fall even further into debt because of interest rates assessed on the bills. The Western New York Law Center applauds Attorney General Schneiderman for giving people a mechanism for addressing this problem and for his strong advocacy on behalf of patients and consumers.”

Karen Nicolson, chief executive officer of Legal Services for the Elderly, Disabled or Disadvantaged of Western New York,said, “Attorney General Schneiderman ‘s dedication to helping New Yorkers eliminate medical debt has been a tremendous help to our elderly and disabled clients. In the past three years, we have regularly referred clients to the Helpline for assistance-- a vital tool in helping New Yorkers of all income levels. Inability to pay for health care can start a spiral of bankruptcy, poverty and homelessness that tears at the fabric of our community. Legal Services for the Elderly, Disabled or Disadvantaged of Western New York, Inc. is committed to continuing to work with A.G. Schneiderman and his dedicated staff to ensure that illness in New York State does not result in financial ruin.”

Trilby de Jung, chief executive officer of the Finger Lakes Health Systems Agency, said, “When trying to resolve medical billing or service disputes, consumers navigate a dauntingly complex health care system. The Attorney General’s Health Care Helpline provides one of the few resources available for free consumer advocacy. That assistance is not only critical for individuals, but is helping to shape a fairer and higher quality health care system for all New Yorkers.”

Geoffrey Hale, Senior Attorney in the Rochester office of the Empire Justice Center, said, “On behalf of Empire Justice Center, I would like to take the opportunity to applaud the exemplary work of Attorney General Eric Schneiderman’s Health Care Bureau. Through their efforts, thousands of New Yorkers have been able to correct erroneous bills, avoid needless expenditures, and receive critical medical care. More than just a resource for consumers, the Health Care Bureau also provides vital assistance to consumer advocates and organizations like Empire Justice. By partnering with the Health Care Bureau on specific issues we have been able to achieve better outcomes for our clients who often face incredibly challenging health coverage problems. We welcome the opportunity to work even more closely with Health Care Bureau in the future."

The Helpline also serves as an important source of consumer information for the Health Care Bureau, which helps providers implement best practices and enables the bureau to bring swift enforcement action when misconduct is discovered. Examples include a 2013 settlement agreement with GE Capital Retail Bank that imposed significant new protections for more than 500,000 New York consumers who had signed up for the company’s health care credit card, CareCredit, which can carry an interest rate of over 26%; and an April 2014 agreement with MyMedicalloan.com that stopped the company from making predatory medical loans, including loans with interest rates of up to 55%. The settlement required $230,000 in repayments or credits to more than 300 consumers.

Money returned or saved for New Yorkers by these Health Care Bureau settlements – totaling more than $24 million in restitution for consumers - are in addition to the $12.5 million saved for New Yorkers via the bureau’s hotline.

The Attorney General’s report also highlights important trends that will help New Yorkers become more educated health care consumers. It offers consumer alerts and tips, the most important of which is that if you encounter a problem with your provider’s billing or business practices or health insurance coverage, you can call the Helpline for assistance.

While not all calls can be resolved in the consumer’s favor, the helpline plays a crucial role in providing reliable, objective information.

For more information about services provided by the Attorney General’s Health Care Bureau Helpline, click here.

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement regarding the decision by the Supreme Court of the United States declining to review seven lower-court decisions that struck down same-sex marriage bans in Indiana, Oklahoma, Utah, Virginia and Wisconsin. The result of the Supreme Court denying certiorari for these cases is that temporary stays are immediately lifted on decisions striking down same-sex marriage in those states, allowing same-sex marriages to go forward as soon as each court of appeals issues its mandate.

“This is a joyous day for same-sex couples in Indiana, Oklahoma, Utah, Virginia and Wisconsin, and for believers in equality everywhere. These five states will now join New York and 18 other states, plus the District of Columbia, in extending marriage equality to LGBT couples who have waited far too long. Moreover, this may open the door to marriage equality for other states in the Fourth, Seventh, and 10th Circuits as well. The families whose relationships will now be formally recognized by their respective states through marriage have not only gained legal rights, but have shed the unjust stigma that comes with being victims of legally sanctioned discrimination. As my office has argued many times in both state and federal courts, there is no excuse for denying same-sex couples equal protection under the law, and I look forward to the day when marriage equality becomes the law of the land in all 50 states.”

Attorney General Schneiderman has long been committed to advancing marriage equality. He filed an amicus brief with the Supreme Court last year in United States v. Windsor, successfully arguing that the Defense of Marriage Act violated the U.S. Constitution. He also successfully defended New York’s Marriage Equality Act from legal challenge in New York State’s highest court. On October 23, 2012, the New York State Court of Appeals sided with A.G. Schneiderman’s office in rejecting a challenge to the Marriage Equality Act.

Attorney General remains committed to combating discrimination based on sexual orientation. To file a complaint, contact the Attorney General’s Civil Rights Bureau at 212-416-8250 or Civil.Rights@ag.ny.gov.

NEW YORK – Attorney General Eric T. Schneiderman today praised the agreement between the University of Michigan and Bloomberg LP to distribute the university’s consumer confidence survey through Bloomberg’s news service. Bloomberg will take over distribution of the survey from Thomson Reuters, which charges investors a fee for an advance copy of the survey. Bloomberg announced that it will end that practice.  

“By ending early access to critical market-moving survey data information, this deal strikes a major blow in our effort to promote fairness and avoid unfair distortions in the securities markets by cracking down on what I call 'Insider Trading 2.0,'” Attorney General Schneiderman said. “Ensuring there is one set of rules for the entire market is critical to restoring confidence in securities markets, and that's good for everyone involved.”

On July 8, 2013, Attorney General Schneiderman announced an agreement with Thomson Reuters to discontinue the practice of providing high-frequency traders with access to the Michigan consumer survey results prior to the release of that information to its other subscribers. The move was prompted by an investigation by the Attorney General's office into the early release of market-moving information to selected clients, and Thomson Reuters agreed to suspend the practice pending the results of the investigation. The university’s move to distribute the information through Bloomberg ends the practice permanently.

The University of Michigan’s consumer survey results are among the most closely watched indicators of consumer sentiment in the United States. High-frequency traders were able to access and act on this information two seconds earlier than other Thomson Reuters subscribers. That two-second advantage was more than enough time for these traders to take unfair advantage of their early access to this information, as they can execute enormous volumes of trades in the blink of an eye.  

The investigation into Thomson Reuters is part of Attorney General Schneiderman’s broader effort address unfair advantages that are provided to elite and technologically sophisticated market players at the expense of others. The Attorney General has reached interim agreements with a number of prominent financial firms to stop their practice of cooperating with analyst surveys administered by certain elite, technologically sophisticated clients at the expense of others—a practice that can put other investors at an unfair disadvantage.

Those agreements followed a groundbreaking settlement with BlackRock, the world’s largest asset manager, to end its practice of systematically surveying Wall Street analysts for their opinions on firms they cover.  

Since federal and state regulators face many challenges in tracking and preventing these new forms of Insider Trading 2.0, the Office of the Attorney General has established a hotline for financial industry insiders to confidentially report improper or illegal conduct. Confidential witnesses have already come forward and offered substantial help with this effort. Anyone else who knows of front-running schemes, efforts to trade in illicitly gained confidential information, or firms selling early access to market-moving data is asked to call 800-771-7755.

BUFFALO – Attorney General Eric T. Schneiderman today announced that his office has reached a settlement of $71,640 with New Beginnings NY, Inc., a payment processor located in Cheektowaga, and its owner, Kenneth Newton, to provide restitution to customers paid for and never received identity theft protection from Phoenix Trust. New Beginnings NY, Inc. had served as Phoenix Trust’s payment processor. A payment processor is an entity that, for a fee, processes, verifies, and accepts or declines credit card transactions on behalf of a business when customers pay for a service or product online or over the telephone.

“Mr. Newton allowed scam artists to prey upon innocent consumers who were, in fact, trying to ensure their financial security, violating their trust and taking their hard-earned money,” Attorney General Schneiderman said. “This settlement sends the clear message that businesses that process payments for scam artists will be held accountable.”

Newton operated New Beginnings as a payment processing company, electronically withdrawing funds from bank accounts and depositing them into another account as payment for a service or product. According to Newton, he provided payment services to a company called Phoenix Trust from June 26, 2013, to July 11, 2013. Newton stated that it was his understanding that Phoenix Trust was selling identity theft protection for $398 to consumers.

According to Newton, Phoenix Trust would give him a spreadsheet with the names and bank routing numbers of consumers that it said it sold the kits to.  Newton would then create a physical check for $398 with the consumer’s bank account information on it and deposit the checks in his account, then transmit payment to Phoenix Trust after taking a commission. However, in reality, Phoenix Trust failed to provide identity theft protection, and consumers received nothing in return for the $398 deducted from their accounts.

As a result of the settlement, Newton is required to pay $71,640, which will provide complete restitution to defrauded consumers.  Newton is also required to shut down his payment processing company as well as  a company called Ironwood Management Group, which collected on consumer debt.

In light of a recent cyberattacks and security breaches, Attorney General Schneiderman offers the following tips to consumers who suspect they’ve been a victim:

If you might be a victim:

• Report to any of the three credit reporting agencies (Equifax, Transunion or Experian) that you may have been a victim of identity theft. Make sure the credit reporting agency has your current contact information so it can get in contact with you.
• Ask the credit reporting agencies to put a fraud alert on your credit file.  This will still allow you to use your credit card. If you put a fraud alert on your file, you may ask for a free credit report from each of the credit reporting agencies. Contacting any one of the three credit reporting agencies above is enough to file a credit alert with all of them. A credit alert must be renewed every 90 days.
• You also have a right to put a credit freeze on your credit file. This will block someone from obtaining credit using your name or personal information. This means you won’t be able to apply for any new credit cards or loans while the freeze is in effect, but you can continue to use your existing cards. To freeze your credit file, you must notify each of the three major credit bureaus. You can remove the freeze temporarily or permanently by contacting each of the three agencies. There is no fee if you have been the victim of identity theft. You may be charged a fee of up to $5  if you have not been a victim of identity theft.
• You should also check your credit activity regularly with each credit issuer.  You don’t need to wait for your monthly statement, though you should check that as well.  Many banks provide online information to account holders about recent activity.  

If you are a victim:

• Create an identity theft fraud report.  To create one, file a complaint with the Federal Trade Commission and print your Identity Theft Affidavit. You can call the FTC at 1-877-438-4338 or visit this website.
• Use that to file a police report and create your Identity Theft Report.
• An Identity Theft Report will help you deal with credit reporting companies, debt collectors and any fraudulent accounts that the ID thief opened in your name.
• Put a freeze (not just a fraud alert) on your credit report by notifying each of the credit reporting agencies (Equifax, TransUnion or Experian). The freeze can be removed only by you.  
• Get your credit report from each of the three agencies. You are entitled to free reports once you post a fraud alert or put a freeze on your account. Read the reports carefully to see whether other fraudulent transactions or accounts are listed, and then take steps to correct the errors.
• Check your credit card account frequently to look for any irregular activity.

Contact information for the credit reporting agencies:

Equifax
1-800-525-6285

Experian
1-888-397-3742

TransUnion
1-800-680-7289

This case was handled by Assistant Attorney General James Morrissey, Senior Consumer Fraud Representative Karen Davis, Assistant Attorney General In-Charge Michael Russo and Executive Deputy Attorney General for Regional Offices Marty Mack. 

NEW YORK – New York Attorney General Eric T. Schneiderman and Pennsylvania Attorney General Kathleen G. Kane today announced the creation of the Northeast and Mid-Atlantic Heroin Task Force (NEMA-HTF), a multistate heroin task force that will marshal the resources of top law-enforcement officers across Northeast and Mid-Atlantic states. In addition to New York and Pennsylvania, which will co-chair the effort, New Jersey and Massachusetts have also joined the coalition; additional states are expected to be announced in the coming weeks. NEMA HTF will bring together state attorneys general in an unprecedented law-enforcement collaboration to combat the growing problem of heroin distribution and abuse in communities throughout the region.

In the last two years, over 98% of the large-scale heroin trafficking cases prosecuted by the New York Attorney General’s Office have involved heroin flowing between New York and either Pennsylvania, New Jersey or Massachusetts.

“For too long, drug organizations have tried to outmaneuver law-enforcement agencies by crossing state lines. This task force will ensure that our borders do not become our boundaries,” said Attorney General Eric Schneiderman. “By joining together, we can prevent defendants from using state borders as a shield from law-enforcement and allow us to shut down the pipelines and cut off the heroin supply.”

“The drug dealers don’t stop at the state border, and with this partnership, neither will law-enforcement,” said Attorney General Kathleen Kane. “By sharing intelligence and other resources, we are taking this war to them, not waiting for them to infiltrate our communities. Today we are putting them on notice – we’re here and we are working together. You can’t hide by crossing the state line.”

“We know all too well how heroin is devastating communities and families,” said Attorney General Martha Coakley.  “We must find innovative ways to stop illegal drug trafficking and prevent these sophisticated networks from moving across state lines. This partnership strengthens our commitment to sharing information and resources.”

“New Jersey is in the midst of an opiate crisis affecting countless numbers of our young citizens who are falling victim to addiction. In addition to our prevention, treatment and recovery efforts, we are executing major drug busts, in which a constant theme is that the dealers we are arresting are suppliers of heroin to other dealers in New York and Philadelphia, or they are getting their heroin from those cities,” said New Jersey Acting Attorney General John J. Hoffman. “In New Jersey, all levels of law-enforcement already are collaborating to target those trafficking this poison. The NEMA Heroin Task Force will maximize this collaboration across state borders.”

Heroin abuse is one of the most significant drug problems facing law enforcement and public health officials in the United States. Reports of first-time heroin use have nearly doubled since 2006, according to the U.S. National Institutes of Health. States across the Northeast and Mid-Atlantic regions are struggling to cope with the drastic influx of the drug into their communities. According to the U.S. Drug Enforcement Administration, over half of law-enforcement agencies in these two regions reported “high heroin availability” in their jurisdictions in 2013. Skyrocketing demand for the drug and higher profit margins for traffickers are driving the flow of heroin. Using a sophisticated network of narcotics distributors, interstate drug rings are able to traffic large quantities of heroin with increased effectiveness.

The two largest cities on the East Coast with a combined population of about 10 million people, New York City and Philadelphia are the two primary nodes for heroin trafficking in the Northeast. As the head of the DEA’s New York Division recently noted, New York City is “ground zero of heroin distribution networks supplying the Northeast” and a prime market for Mexican cartels given both the large customer base and easy access to the Eastern seaboard. Similarly, Philadelphia has become a source city for pure, cheap heroin, which enters the city by land, sea and air. Heroin is then distributed from Philadelphia to the largest drug market in the world, New York, as well as New England, western Pennsylvania and down the eastern seaboard to Baltimore, Washington, D.C. and southward. Intelligence and ongoing investigations show direct links to at least three Mexican cartels responsible for trafficking heroin in Pennsylvania.

New Jersey and Massachusetts are also confronting sharp increases in heroin trafficking and addiction problems. In New Jersey, the number of people seeking treatment for heroin abuse hit a five-year high of 25,442 in 2012. In 2013, there were 559 heroin-related deaths in New Jersey. Massachusetts declared a public health emergency in March in response to heroin overdoses and opioid addiction. State police there report almost 200 deaths from suspected heroin overdoses in the last year.

The foremost goal of the NEMA HTF is the collaboration, coordination and information-sharing between state attorneys general and other law enforcement officials designed to combat narcotics enterprises whose sophistication and organization make them so much more effective at flooding our streets with heroin.  Each participating agency brings unique experience, methodology, analytical techniques and technologies; joining forces will allow for more targeted investigation and prosecution of these drug rings and pipelines.

The Task Force will expand the exchange of information between various agencies. Information that can be shared might include specific subjects, phone numbers, addresses, distribution routes and stash houses used to store heroin pending street level distribution. Information shared, coupled with active enforcement collaboration within the NEMA-HTF, will lead to larger and stronger criminal cases targeting large scale distribution operations spanning multiple states, which are funneling heroin into our communities.  

For example, during the course of wire investigations, an agency in one state might identify heroin suppliers and their related networks operating in other states. The NEMA Heroin Task Force will provide the framework for interstate coordination, allowing other states to pursue subjects who might otherwise remain at large.  Additionally, authorities often identify informants who have information about heroin trafficking activities in other states, and the Task Force will allow for better use of that information.

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office, along with the Attorneys General of 49 other states and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, reached a $105 million settlement with AT&T Mobility LLC. The settlement resolves allegations that AT&T Mobility placed on consumers’ mobile telephone bills charges for third-party services that had not been authorized by consumers, a practice known as “cramming.” One common cramming charge is a $9.99-per-month premium text message subscription service (also known as PSMS) for horoscopes, trivia, and sports scores that consumers often never requested.

“No one is above the law, including powerful multinational corporations, and I am pleased today’s settlement with AT&T Mobility protects consumers against being billed for services they did not request,” said Attorney General Schneiderman.“Illegal cramming raises cell phone bills for consumers and picks the pockets of ordinary New Yorkers.”

The Attorneys General and federal regulators allege that cramming occurred when AT&T Mobility placed charges on consumers’ mobile telephone bills for text-based services—provided not by AT&T, but by an independent third party—without consumers’ knowledge or consent.  AT&T Mobility is the first mobile telephone provider to enter into a national settlement to resolve allegations regarding cramming; AT&T Mobility was among the four major mobile carriers—in addition to Verizon, Sprint and T-Mobile—that announced it would cease billing customers for PSMS last fall.

The settlement requires AT&T Mobility to pay $20 million to states and the District of Columbia, including $572,960.6o to the State of New York, $80 million to the Federal Trade Commission to pay restitution to consumers, including New York consumers, who were charged for third-party services they did not authorize, and $5 million in penalties and legal costs to the Federal Communications Commission. The settlement also requires AT&T Mobility to take steps designed to ensure that it bills consumers only for third-party charges that have been authorized, including the following:

• AT&T Mobility must obtain consumers’ express consent before billing for third-party charges and must ensure that consumers are  charged for services only if they have been informed of all material terms and conditions of payment;
• AT&T Mobility must provide a full refund or credit to consumers who are billed for unauthorized third-party charges at any time after this settlement;
• AT&T Mobility must inform its customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and the company must inform consumers about how to block those charges; and
• AT&T Mobility must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from AT&T Mobility’s charges, and must include in that same section information about consumers’ ability to block third-party charges.

AT&T customers who believe they were billed for third party charges that they did not authorize can file a claim at ftc.gov/att through May 1, 2015.

This case was handled by Assistant Attorneys General Kate Matuschak and Jeanna Hussey of the Consumer Frauds and Protection Bureau. The Consumer Frauds and Protection Bureau is led by Bureau Chief Jane Azia. The Consumer Frauds and Protection Bureau is part of the Division of Economic Justice led by Executive Deputy Attorney General for Economic Justice Karla Sanchez.