YONKERS – Attorney General Eric T. Schneiderman today announced an agreement with Citigroup Global Markets, Inc. (CGMI), a subsidiary of Citigroup, to reimburse more than 31,000 Citi customers who were charged higher advisory fees than they negotiated. The agreement returns nearly $16 million to about 31,000 Citigroup customers. While some customers have already started to receive their refunds, thousands more are likely unaware that they are eligible to get money back.

“Often, it takes just one tip to uncover an error that affects tens of thousands of individuals. In this case, a bank customer complained to my office about her account. We investigated that complaint and found a widespread problem, one that cost bank customers, in New York and across the country, millions of dollars,” Attorney General Schneiderman said. “I want to thank Citigroup for its cooperation, and for ensuring that the agreements made with its customers will be honored – to the tune of $16 million.”

Customers with so-called “TRAK” accounts typically pay a fee for advisory services ranging from 1% to 1.5%. However, the fees were negotiable, and many customers were able to obtain a lower fee than the standard rate. An inquiry into that process, though, has determined that many customers were being charged higher-than-negotiated rates and unaware that they were paying more than they should.

To determine whether more customers were overcharged, the Attorney General’s investigation is continuing. Also, as part of CGMI’s continuing cooperation with the New York Attorney General’s Office, it is conducting a wider review of other types of accounts to ensure that any account holders who have been overcharged will also be paid restitution.  The NYAG will continue to oversee CGMI’s review and remediation efforts.  

The Attorney General’s office launched an inquiry based on a complaint from a Westchester resident who had been overcharged, seeking to determine whether other TRAK account holders were similarly affected.

Working collaboratively with Citigroup, the Attorney General’s Investor Protection Bureau has determined that at least 31,000 account holders have been overcharged. CGMI has agreed to ensure that restitution – totaling nearly $16 million in principal and interest – is paid to current and former TRAK account holders.  Of those, nearly 3,000 New Yorkers were overcharged and will get back more than $1.3 million.

The investment advisory services provided through the TRAK program start when a customer opens an account, and his or her objectives help direct particular investments. The advisory services then continue during the life of the account, and include periodic monitoring reports and recommendations regarding changes in a customer’s investments.

The standard fees for these services were negotiable, so customers were sometimes able to get CGMI to agree to a lower percentage fee than the standard rate.

In 2012, a customer complaint to the Attorney General’s Westchester office revealed that while the customer had negotiated a 1.2% initial fee for her account, she was nonetheless charged the standard 1.5% over a period of three years, causing her to be overcharged by more than $3,000 in fees. The office then launched an inquiry to determine whether other TRAK account holders who negotiated a lower fee were similarly overcharged.  

CGMI has cooperated with the Attorney General’s inquiry, and has already identified tens of thousands of TRAK accounts that were overcharged fees. As a result, restitution totaling $15,969,824.47 will go to 31,324 current and former TRAK account holders. That total includes 2,931 New York account holders who will receive a total of $1,305,197.08.

The investigation into Citgroup Global Markets, Inc., is led by Gary Brown, Assistant Attorney General-in-Charge of the Westchester Regional Office, Chad Johnson, Chief of the Investor Protection Bureau, and Katherine Milgram, Deputy Chief of the Investor Protection Bureau.  Karla G. Sanchez is the Executive Deputy Attorney General for Economic Justice.

The upcoming fall 2014 SOMOS El Futuro Conference presents an opportunity for all New Yorkers who are concerned about equal rights and social justice to renew their commitment to these essential ideals and to embark on new efforts to bring them closer to reality.E

The goals SOMOS espouses—political empowerment, civic engagement, advocacy on issues of fairness—are critically important to Latinos all over our state. SOMOS is a great vehicle for airing the concerns of New York’s Hispanic communities, informing elected officials and the business community about people’s aspirations, priorities and frustrations, and then translating those needs into action.

As Attorney General, I have been an active participant in SOMOS, co-hosting a welcome reception at the annual Albany spring conference, presenting workshops and organizing discussions on critical issues. I believe those programs have had a positive effect on public policy by fostering dialogue and educating participants about ways to address the needs of the community.

However, I believe there are even greater opportunities for engaging Latino New Yorkers—and the elected officials who represent them.

As attorney general, I have crisscrossed the state, holding town hall meetings and workshops in cities, towns and suburbs. There is no better way to learn about people’s concerns, experiences and struggles firsthand than to visit their neighborhoods and speak with them one on one.

That is why SOMOS’ chairman, Assemblyman Felix Ortiz, and I are forming a new partnership to reach out into communities across New York State and bring the great work of SOMOS directly to the people.

We will be expanding and broadening our longstanding collaboration, with the able participation of the Hispanic Legislative Task Force, which has produced the many important informational and educational panel discussions that we have presented at previous SOMOS conferences.

Those programs brought together policy experts, law enforcement officials, community outreach professionals and legislators to discuss areas of great concern to the Hispanic community, including illegal guns, gangs and drugs; the National Mortgage Settlement and what it means for New Yorkers, particularly Latino homeowners, who lost two-thirds of their median household wealth when the housing market collapsed in 2008; the critically important issue of language access and protecting the rights of people with limited English proficiency at the ballot box, in law enforcement, in healthcare and in education; and labor rights, reflecting my office’s focus on low-wage workers, immigrant workers and tipped employees—making sure all workers get an honest day’s pay for an honest day’s work.

But as important and enlightening as these presentations were, their effectiveness was limited because many members of the public do not have the time or the financial resources to travel to conferences.

So, we will be taking the conference out into the community.

Our expanded partnership will bring the resources, expertise and services of SOMOS to cities and towns throughout the state. We will connect legislative leaders with their constituents around New York and serve as a conduit for assistance and empowerment. We will give Latino New Yorkers, in their own neighborhoods, the opportunity to make their voices heard and to access SOMOS’ resources.

After the November conference is finished, we plan to meet to develop a calendar of events. And then, we will create programs to engage directly with people in the Latino community on the most important issues of the day.

By working together, with a new, broader vision, we can expand SOMOS’ important mission, moving together into the future.

NEW YORK – Attorney General Eric T. Schneiderman today announced that the state has entered into a settlement agreement with Sorkin’s Ltd Rx. d/b/a CareMed Pharmaceutical Services (“Sorkin’s”), a New York-based retail specialty pharmacy, resolving allegations that it made false statements to the New York State Medicaid Program to secure expeditious prior authorizations  for the coverage of specialty drugs, and that it submitted false claims to the New York State Medicaid Program for certain prescription medications  that were restocked and resold and for refills that recipients never obtained.

“Sorkin’s used dishonest and unscrupulous practices that resulted in hundreds of thousands of dollars in wasteful spending,” Attorney General Schneiderman said. “This settlement sends the clear message that companies that seek to defraud critical programs like Medicaid will be held accountable.”

Sorkin’s made the false statements in order to secure expeditious decisions on prior authorizations for the coverage of certain specialty drugs.  Furthermore, Sorkin’s restocked and resold unused dosages of the drugs, Rituxan and Procrit without reversing the previously submitted claims to Medicaid and Medicare Part D plans for amounts already paid.   Sorkin’s also submitted false claims for payment to Medicaid or Medicare Part D plans for refills of Rituxan and Procrit that were not actually delivered to and received by recipients. Under the terms of the agreement, Sorkin’s will return $846,224 to Medicaid, a program jointly funded by the state and federal governments. New York will receive $465,423 of the total Medicaid restitution funds.

As part of the settlement agreement, Sorkin’s admitted to the following conduct during the period of January 1, 2009, through December 31, 2012:

• When contacting insurance companies to obtain prior authorization for  coverage of specialty drugs prescribed for Medicaid recipients, some representatives of Sorkin’s falsely stated they were calling from the prescribing physician’s office. In some instances, Sorkin’s representatives responded to questions seeking clinical information based on their understanding of the prior authorization criteria for the particular drug, instead of obtaining patients’ actual clinical information from prescribing physicians and conveying that information.
• Sorkin’s failed to adequately oversee and train staff responsible for the prior authorization process.
• Sorkin’s had inadequate procedures and auditing processes in place to ensure that some claims submitted to certain third-party payors for Rituxan and Procrit, including claims for payment to Medicaid and Medicare Part D, were reversed when necessary or credited to the Medicaid or Medicare Part D plans after Procrit and Rituxan were returned to the pharmacy and restocked, or not delivered to and/or received by the recipient.

The agreements – one with the State and one with federal authorities – followed a joint investigation by the Attorney General’s Medicaid Fraud Control Unit and the United States Attorney’s Office for the Southern District of New York. The investigation came after a qui tam lawsuit was filed by whistleblower Panna Nahar, a former clinical care coordinator at Sorkin’s, alleging violations under the New York False Claims Act and federal False Claims Act. Following the investigation, the offices intervened in the whistleblower case against Sorkin’s.

The state case was handled by Special Assistant Attorney General Jill D. Brenner, Associate Special Auditor Investigator Karin Flynn and Supervising Special Auditor Investigator Stacey Millis. The Medicaid Fraud Control Unit is led by Acting Director Amy Held. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

SYRACUSE -- Attorney General Eric T. Schneiderman today announced that his Medicaid Fraud Control Unit filed a nine-count indictment charging John Tamba, 48, of Utica, a certified nurse’s aide formerly employed at Focus Rehabilitation and Nursing Center at Utica, with three counts each of Sexual Abuse in the First Degree, Endangering the Welfare of a Vulnerable Elderly Person or an Incompetent or Physically Disabled Person in the Second Degree, and Wilful Violation of Health Laws. If convicted, Tamba faces up to 21 years in prison.

“Those who are charged with protecting the health of the most vulnerable New Yorkers must do that – care for them and not hurt them,” Attorney General Schneiderman said. “My office will go after those who break the law and seek justice for those who cannot defend themselves.”

The indictment alleges that on May 21, Tamba engaged in forcible sexual contact with a female resident of the facility who is physically disabled. The nursing home is located at 1445 Kemble Street in Utica.

Tamba, who was arrested yesterday, was arraigned today before the Honorable Michael Dwyer in Oneida County Court. He was ordered remanded without bail to the Oneida County Jail.

The charges against Tamba are accusations, and the defendant is presumed innocent until proven guilty in a court of law.

The case was investigated by Special Investigator Keith Hall, with assistance from Medicaid Fraud Control Unit Rochester Regional Chief Investigator William Falk.

The case is being prosecuted by Special Assistant Attorney General Regional Director Ralph D. Tortora III of the Medicaid Fraud Control Unit’s (MFCU) Syracuse Regional Office. Catherine Wagner is Chief of Criminal Investigations-Upstate. The Medicaid Fraud Control Unit is led by Acting MFCU Director Amy Held. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

NEW YORK – Attorney General Eric T. Schneiderman today announced that he has reached a pair of agreements with two leading hospitality companies  - Hilton Resorts Corporation and Wyndham Vacation Resorts, Inc. –  that will help protect purchasers of timeshares from potential deception and confusion.  

“The purchase of an interest in a timeshare can be a confusing and expensive proposition,” Attorney General Schneiderman said.  “I am pleased to announce that these two industry leaders have agreed to make policy changes that will benefit and protect consumers. With their cooperation, we are making the timeshare industry safer, more transparent, and more accessible to investors.”

In the first agreement, Hilton agreed to stop using a clause in its timeshare purchase agreement that disclaimed responsibility for specific representations made by salespeople, particularly regarding the availability of reservations, hotel use rights, and the rental, resale, and buybacks of timeshare interests.  

In the second agreement, Wyndham agreed to stop offering reservation certificates, which allow members of its internal timeshare exchange program to make advance reservations at a timeshare hotel known as Midtown 45, prior to the acceptance for filing of the Midtown 45 offering plan. These certificates were given to purchasers of timeshares in other Wyndham properties, and they led some of those consumers to believe they were purchasing an interest in the Midtown 45 timeshare.

Sellers of timeshares are subject to New York’s Martin Act, which makes it unlawful to offer and sell timeshare interests in or from New York State without first having an offering plan or prospectus accepted for filing by the Attorney General’s Real Estate Finance Bureau. The law also makes it illegal to make representations in the sales process that are contradictory to the disclosures contained in the offering plan or prospectus.

The agreements come as the Attorney General’s Office continues to investigate sales and marketing practices of another timeshare company, known as the Manhattan Club. In July, the Attorney General obtained a court order preliminarily barring sales at the Manhattan Club pending an investigation into that company. More information about the investigation is available here.

The negotiations with Hilton and Wyndham were conducted by Assistant Attorney General Serwat Farooq, Deputy Chief Andrew H. Meier, and Bureau Chief Erica F. Buckley, all of the Real Estate Finance Bureau, as well as Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.  

NEW YORK – Attorney General Eric T. Schneiderman today announced a multi-state settlement with TD Bank, N.A. that resolves an inquiry into a 2012 data breach in which 1.4 million files were compromised. The $850,000 settlement requires the bank to reform its practices to help ensure that future incidents do not occur. New York State will receive $114,106.11 under the settlement.

"Consumers expect financial institutions to protect their personal information, and this settlement will help reform the policies and procedures that allowed this breach to happen,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and that includes the big banks and financial institutions entrusted with protecting the sensitive personal information of customers.”

The data breach occurred in 2012, when TD Bank reported the loss of unencrypted backup tapes in Massachusetts. The tapes contained 1.4 million files and 1,800 different file types that had been accumulated over a period of 8 to 10 years. In total, the files contained various personal information for 260,000 TD Bank customers nationwide, including 31,407 in New York State.

Attorney General Schneiderman was one of nine state attorneys general who worked for a year and a half to investigate the breach as well as the company’s policies and procedures and to negotiate an agreement with TD Bank.

The agreement requires TD Bank notify state residents of any future security breaches or other acquisitions of personal information a timely manner.

TD Bank also agreed to maintain reasonable security policies to protect personal information. The agreement ensures that no backup tapes will be transported unless they are encrypted and all security protocols are complied with. TD Bank will review on a bi-annual basis their existing internal policies regarding the collection, storage and transfer of consumers’ personal information and will make changes to better protect such information. TD Bank will also institute further training for its employees.

This case was handled by Herbert Israel of the Bureau of Consumer Frauds and Protection. The Bureau of Consumer Frauds and Protection, led by Bureau Chief Jane Azia. The Bureau of Consumer Frauds and Protection is part of the division of Economic Justice led by Executive Deputy Attorney General for Economic Justice Karla Sanchez.  

NEW YORK – Attorney General Eric T. Schneiderman today announced that New York State has joined with other states and the federal government to settle allegations that drug manufacturer Organon underpaid rebates to New York State’s Medicaid program, offered improper financial incentives to nursing home pharmacy companies, promoted its antidepressants for unapproved uses, and misrepresented its drug prices to New York’s Medicaid program. Organon was headquartered in Oss, Netherlands, and the company’s assets are now owned by Merck. The total value of the settlement is $31 million. As part of the settlement, New York will receive $2,489,999 in restitution and other recoveries.  

“Preserving the integrity of our Medicaid Program and weeding out those who seek to defraud it is a top priority for my office,” Attorney General Schneiderman said.  “We will keep fighting to ensure that companies that skirt the law for financial gain will be held accountable.”

The settlement resulted from two whistleblower lawsuits filed in the United States District Court for the District of Massachusetts and the United States District Court for the Southern District of Texas, and resolves four separate allegations:

• Underpaid Rebates: The government alleged that Organon did not include rebates and discounts in its best price reporting and therefore underpaid rebates owed to the New York Medicaid Program. The federal Medicaid Drug Rebate Program requires that all drug manufacturers which supply products to Medicaid recipients give the Medicaid programs the best price available for that product.
• Kickbacks:The government alleged that Organon offered nursing home pharmacy companies market share discounts and rebates to encourage the use of Remeron and Remeron SolTab over competing antidepressants, which violated the federal Anti-Kickback Statute and resulted in the submission of false claims to the New York Medicaid program.
• Off-Label Promotion:The government alleged that Organon promoted the sale and use of Remeron and Remeron SolTab for conditions that were not approved as safe and effective by the Food and Drug Administration (FDA). Specifically, Organon marketed drug side effects as possible benefits and promoted the use of Remeron in children and adolescents.
• Pricing Misrepresentations:The government alleged that Organon reported false and inflated prices to New York’s Medicaid program, then offered the drugs at a lower cost as a financial inducement to nursing home pharmacy companies by increasing the spread between the actual cost of the drugs to pharmacies and the amount the state Medicaid Program reimburses for the drugs.

A team from the National Association of Medicaid Fraud Control Units participated in the settlement negotiations with Organon on behalf of the states and included representatives from the Offices of the Attorneys General for the states of California, New York, Ohio and Texas.

Supervising Special Auditor Investigator Stacey Millis of the Attorney General’s Medicaid Fraud Control Unit served as a Data Analyst for the settlement team. The whistleblower cases were handled by Special Assistant Attorney General Carolyn T. Ellis and Counsel Jay Speers. The Medicaid Fraud Control Unit is led by Acting Director Amy Held.  The division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

SYRACUSE – Attorney General Eric Schneiderman today joined with elected officials and staff from the Syracuse Land Bank to announce that his office has awarded $20 million to New York State land banks that are working to rebuild and restore neighborhoods hit hard by the housing crisis. The Attorney General’s Land Bank Community Revitalization Initiative is making a new allocation of nearly $20 million to eligible land banks, in addition to the $13 million allocated through a competitive application process last year, bringing the total commitment to $33 million. Today’s announcement was made at 157 Maplewood Ave, one of 1,800 vacant and neglected structures in the City of Syracuse that negatively impact surrounding neighbor's quality of life and property values. This property is one of 50 homes undergoing renovation by the Greater Syracuse Land Bank, which has already received $3 million in funding from Attorney General Schneiderman’s office, and will be receiving nearly $2 million in additional funding as part of the second round of funding.

Funding for this new round will be drawn from the $25 billion settlement with the nation’s largest banks that the Attorney General helped negotiate in 2012. The following ten land banks in the State will receive funding: Greater Syracuse Land Bank; the Buffalo Erie Niagara Land Bank Investment Corporation; the Rochester Land Bank; Newburgh Community Land Bank; Suffolk County Land Bank; Chautauqua County Land Bank; Capital Region Land Bank; Albany County Bank; Troy Community Land Bank, and the Broome County Land Bank.

“Land banks are a critical tool to help communities recover from the housing crisis by ridding their streets of vacant and abandoned properties,” said Attorney General Schneiderman. “With this new round of funding, even more communities will reap the benefits of this powerful tool for urban revitalization. By funding and expanding land banks, we are empowering local communities to rebuild their own neighborhoods, house by house, block by block.”

“The additional funding from Attorney General Schneiderman’s Land Bank Community Revitalization Initiative is welcome news,” Onondaga County Executive Joanie Mahoney said. “The money helps ensure the Greater Syracuse Land Bank will continue working to transform individual properties and neighborhoods.”

“The Greater Syracuse Land Bank has received nearly $5 million in support from Attorney General Schneiderman and over $2.5 million in pledges for private investment,” Syracuse Mayor Stephanie A. Miner said. “The land bank is transforming our City property by property. I appreciate the Attorney General’s ongoing commitment to this program.”

"This award will enable the Greater Syracuse Lank Bank to continue the excellent work it is doing to revitalize our neighborhoods and improve the quality of life for residents,” State Senator David Valesky said. “I thank Attorney General Schneiderman for his continued leadership on this issue in Central New York and across the state."

“I applaud Attorney General Schneiderman for his efforts in holding banks accountable for their role in the mortgage crisis,” Assemblyman Bill Magnarelli said. “By utilizing these funds to support the Greater Syracuse Land Bank in its continued work to revitalize our blighted neighborhoods, the Attorney General demonstrates his commitment to our community."

“I commend Attorney General Schneiderman for this vital grant to the Greater Syracuse Land Bank,” Assemblyman Al Stirpe said. “Urban revitalization efforts like land banks benefit not only cities, but also surrounding towns. For districts like mine, the potential downstream effects of an urban land bank include rising property values, the attraction of new industries to our communities, and more middle-class jobs.”

“The Greater Syracuse Land Bank is excited to continue its partnership with Attorney General Schneiderman to clean up abandoned properties that blight our neighborhoods," Katelyn Wright, Executive Director of the Greater Syracuse Land Bank, said. "This second round of funding will provide us with the critical resources needed to address the community’s abandoned property crisis. This kind of public support from state and local sources is critical to our success in the years ahead."

“We are very proud to be working with Attorney General Schneiderman as he combats the challenges associated with vacant and underutilized properties in Syracuse,” Kerry Quaglia, Executive Director of Home HeadQuarters, Inc., said. “It is through innovative approaches such as this that Home HeadQuarters was able to renovate and restore the vacant property at 157 Maplewood Ave and sell it to a first-time homebuyer who is eager to call a place “home” and become part of a neighborhood.”

“This funding of over $1.25 million will be a critical resource in our ongoing efforts to address problems in certain neighborhoods that have experienced many years of blight and also to return vacant properties to the tax rolls,” Troy Mayor Lou Rosamilia said. “I would like to thank Attorney General Schneiderman for this commitment and we look forward to getting the Troy Community Land Bank up-and-running as quickly as possible.”

During the decade of the housing boom and bust, from 2000 to 2010, the number of vacant properties in New York State increased 27%. Following the collapse of the housing market, the New York State Legislature passed a law in 2011 establishing land banks — nonprofit organizations that can acquire vacant, abandoned, or foreclosed properties and rebuild, demolish, or redesign them. By restoring vacant or abandoned properties, land banks lower costs for local governments, benefit public schools, reduce crime and boost local economies.

However, the legislation that authorized land banks in New York did not provide funding for them. Attorney General Schneiderman launched the Land Bank Community Revitalization Initiative to fill that gap and allow land banks to fulfill their purpose. He has dedicated $33 million to fund that initiative. Earlier this year, the Attorney General’s bill to expand the number of land banks from 10 to 20 was passed by the Legislature and signed into law by the Governor.

The amounts awarded today are as follows: Greater Syracuse Land Bank (over $1.9 million); the Buffalo Erie Niagara Land Bank Investment Corporation ($2.5 million); the Rochester Land Bank (over $1.8 million); Newburgh Community Land Bank (over $1.9 million); Suffolk County Land Bank (over $1.9 million); Chautauqua County Land Bank ($1.3 million); Capital Region Land Bank ($3 million); Albany County Bank (over $2.8 million); Troy Community Land Bank ($1.25 million), and the Broome County Land Bank ($800,000).

Abandoned and vacant properties depress property values, discourage property ownership, and attract criminal activity, but land banks provide tools to quickly turn these properties back into assets that reinvest in the community's long-term vision for its neighborhood. Land bank programs act as an economic and community development tool to revitalize distressed neighborhoods and business districts. Land banks can benefit urban schools, improve tax revenues, expand housing opportunities, remove public nuisances, assist in crime prevention and promote economic development.

By transferring vacant and abandoned properties to responsible land owners, local governments benefit because they avoid the significant cost burden of property maintenance, such as mowing and snow removal. In addition, local governments benefit from increased revenue because the new owners pay taxes on the properties. In turn, local schools benefit because they receive more funding when there is an increase in the number of property owners in their school districts. Land bank programs can also increase the variety of mixed-income housing offered and provide more opportunities for affordable housing.

Land bank properties that become owner-occupied discourage criminal activity, benefiting public safety and decreasing the cost burden on local police and fire departments. Finally, the more residents and businesses that occupy property in a neighborhood, the more services and amenities will be needed, which boosts local economic activity.

The Attorney General’s office has partnered with Enterprise Community Partners to assist with the oversight and management of the Land Bank Community Revitalization Initiative. Enterprise is a nonprofit organization with more than 30 years of experience providing technical assistance and support to affordable community revitalization efforts. 

NEW YORK – Attorney General Eric Schneiderman and San Francisco District Attorney George Gascón today issued the following statement on the release of Google’s new version of Android software, which will incorporate theft deterrent technology for the first time.

“We applaud Google for including a ‘kill switch’ solution in its new version of Android, one of the most popular smartphone operating systems in the world.  The majority of smartphone owners now have access to an theft-deterrent solution. Through the work of the Secure Our Smartphones Initiative in concert with the smartphone industry, we are well on our way to safeguarding our loved ones from opportunistic thieves.

“But in order for these theft deterrents to effectively end the epidemic, they must be enabled by default so violent criminals lack the incentive to steal any smartphone.  We will continue to encourage every actor in the smartphone industry – including Google – to take the necessary, additional step of ensuring this technology is opt-out on all devices.”

As co-chairs of the Secure Our Smartphone (S.O.S.) Initiative – an international partnership of law-enforcement agencies, elected officials and consumer advocates – Attorney General Schneiderman and District Attorney Gascón led the effort to call on the wireless industry to address the global rise in smartphone thefts. The ultimate goal of SOS is for every mobile device to have a “kill switch” on by default.  A default solution is imperative because it ensures all device are worthless to thieves.

In a June 2014 report by the S.O.S. Initiative, new data showed that criminals now target devices not likely to be equipped with a kill switch.  In New York, London and San Francisco, robberies and grand larcenies involving iPhones plummeted following the release of Apple’s Activation Lock, while violent crimes against people carrying phones without a kill switch surged. This demonstrated the importance of immediately implementing life-saving technology by all manufacturers. Because kill switches are mostly available on a solely opt-in basis, not enough consumers are signing up. Kill switches must be a standard opt-out function on all phones and other mobile devices.

For more information on efforts by Attorney General Schneiderman and District Attorney Gascón to combat “Apple Picking,” visit the New York State Attorney General’s website and the San Francisco District Attorney’s website.

NEW YORK – A report issued today by Attorney General Eric Schneiderman found widespread illegality across New York City listings on the Airbnb website, with data indicating that as much as 72% of Airbnb reservations over the last several years violated New York law. The report, “Airbnb In The City,” also found commercial enterprises using Airbnb to operate multimillion-dollar businesses; in one instance, a single commercial user made $6.8 million in less than five years. The report is based on data obtained by the Attorney General’s Office as a result of a May 2014 subpoena for information about potential illegal hotels using Airbnb’s site.

Attorney General Schneiderman also announced the formation of a joint enforcement initiative with the City of New York to investigate and shut down illegal hotels in the five boroughs.  Together, the Attorney General’s Internet and Taxpayer Protection Bureaus and the City’s Departments of Finance and Buildings along with the Office of Special Enforcement will investigate violations of building and safety codes, tax regulations and the executive law.

“This report raises serious concerns about the proliferation of illegal hotels and the impact of Airbnb and sites like it on the City of New York,” said Attorney General Eric Schneiderman. “We must ensure that, as online marketplaces revolutionize the way we live, laws designed to promote safety and quality-of-life are not forsaken under the pretext of innovation. The joint city and state enforcement initiative is aimed at aggressively tackling this growing problem, protecting the safety of tourists and safeguarding the quality-of-life of neighborhood residents.” 

The data-driven report offers the first exploration of how users in New York City, one of Airbnb’s most important markets, utilize the online lodging rental platform. “Airbnb In The City” uses quantitative data to inform an ongoing debate about how best to embrace emerging technologies while protecting the safety and well-being of our citizens.

By analyzing Airbnb bookings for private stays between January 1, 2010 and June 2, 2014, the report offers a never-before-seen snapshot of how Airbnb is used and by whom. Among the key findings are:

• Up to 72% of Airbnb listings are illegal: Of the 35,354 private, short-term listings, data suggest that 25,532 of them violated either New York State’s Multiple Dwelling Law and/or New York City’s Administrative Code (zoning laws). Hosts generated approximately $304 million in revenue from these listings alone and, Airbnb itself earned almost $40 million from these transactions.
   
• Commercial users run multimillion-dollar businesses: Over 100 users controlled more than 10 different apartments that were rented out regularly through Airbnb. Together, these hosts booked 47,103 reservations and earned $59.4 million in revenue. The most prolific user administered 272 unique listings, booked 3,024 reservations and made $6.8 million in revenue. Additionally, while only 6% of hosts ran large-scale operations on Airbnb, that same group dominated the platform, generating 36% of all rental transactions and collecting 37% of total revenue – or $168 million. 
   
• Numerous units appear to serve as illegal hostels: New York law prohibits commercial enterprises from operating hostels. In 2013, approximately 200 units were booked through Airbnb for more than 365 nights during the year, indicating that multiple, unrelated guests shared the same unit on the same night, as they would in a hostel. The 10 most-rented units were booked for an average of 1,900 nights in 2013, with one top listing average 13 reservations per unit per night.
   
• Gentrified neighborhoods account for vast majority of Airbnb revenue: Bookings in just three Manhattan neighborhoods – Greenwich Village/SoHo, Chelsea/Hell’s Kitchen and Lower East Side/Chinatown – accounted for more than 40% of hosts’ revenue, or about $187 million. By contrast, all reservations in Queens, the Bronx and Staten Island combined brought in $12 million, less than 3% of the New York City total.
   
• Short-term rentals are displacing long-term housing options: In 2013, more than 4,600 units were booked for at least three months of the year. Of these, nearly 2,000 were booked for a cumulative total of six months or more, rendering them largely unavailable for use by long-term residents. Notably, the share of host revenue from units booked as short-term rentals for more than half the year increased steadily, accounting for 38% of the site’s revenue by 2013.

A copy of the report is available here.

NEW YORK – Attorney General Eric T. Schneiderman today filed a lawsuit in New York County Supreme Court against Papa John’s pizza franchisee New Majority Holdings, LLC and its owner, Ronald Johnson, for significantly underpaying delivery workers in violation of State Labor Law.  The violations include failing to pay delivery workers the minimum wage, shaving hours from their pay, and requiring them to pay for bicycles and safety equipment used to do their jobs.  The lawsuit seeks more than $2 million in restitution, damages, and interest for more than 400 delivery workers who were underpaid.  The lawsuit also seeks to halt the illegal business practices that are ongoing.

“Nobody who works 40 hours a week should have to live in poverty,” Attorney General Schneiderman said. “Like every other business in New York, fast-food employers must follow the law.  My office will combat wage theft whenever and wherever we see it in order to protect the rights of hardworking New Yorkers, including pizza delivery workers and others who toil at fast-food restaurants.”

The lawsuit stems from a year-long investigation by the Attorney General's Labor Bureau into New Majority’s pay practices.  As described in court papers, the evidence gathered over the course of the investigation, including Mr. Johnson’s testimony and the company’s time and payroll records, showed that the company:

• Brazenly shaved work hours, rounding down pizza delivery workers’ time for each pay period to the nearest whole hour and not paying them for the remainder;
• Paid pizza delivery workers as little as $5  an hour, far  less than the $7.25-per-hour minimum wage that was required for most of the time period covered by the lawsuit.  This $5-per-hour rate was below even the $5.65 rate available for some tipped service employees, when the employer has fulfilled the requirements for claiming a tip credit;
• Regularly failed to pay proper overtime to delivery workers who worked more than 40 hours in one week, by basing overtime on an unlawfully low hourly rate, and calculating overtime incorrectly in several ways; 
• Required workers to purchase and maintain all bicycle delivery-related equipment that New York City law requires an employer to provide, such as bicycles, helmets, locks, chains, and safety gear, at a cost of at least $500 per worker each year;
• Never paid delivery workers “spread of hours” pay, an additional hour of pay required by the Labor Law for shifts in which the interval between the start and end time was longer than 10 hours;
• Never compensated workers as required by the Labor Law for what is known as “call-in pay,” i.e., compensation for being called in to work and then being sent home early;
• Failed to provide delivery workers with required written notice of their pay rates and other employment information; and 
• Failed to maintain adequate records of wages and hours as required by the Labor Law.

The lawsuit notes that the majority of evidence in the case arises from the employer’s own admissions and documents.  The lawsuit also alleges that in addition to the corporation, Mr. Johnson is individually liable for damages owed to delivery workers, because he was their employer.  The Attorney General is seeking over $1 million in unpaid wage restitution for over 400 delivery workers, as well as liquidated damages and interest, bringing the total owed to over $2 million.  The Attorney General is also seeking injunctive relief, to ensure that the company properly pays delivery workers going forward and provides them with written notice of their terms and conditions of employment, as the law requires.

The lawsuit is the first to come out of ongoing investigations of numerous fast-food employers by the Attorney General’s Labor Bureau for labor law violations.  

The Attorney General has also reached several settlements with fast-food franchises.  In March 2013, the Attorney General secured a settlement with six Domino’s Pizza franchises, which collectively owned 23 restaurants, for unpaid minimum wages, overtime, and vehicle expense reimbursements for delivery drivers.  In a separate matter in March 2013, the Attorney General secured a settlement of almost $500,000 for mostly minimum-wage employees of McDonald’s franchises operated by the Cisneros Group and its owner Richard Cisneros.  In December 2013, the Attorney General obtained reinstatement for 25 workers at a Domino’s pizza franchise located in Washington Heights, in New York City.  

New Majority’s Papa John’s pizza restaurants, all in Manhattan, are located at 703 Lenox Ave, Suite 705, New York, NY 10039-4501, 301 Cathedral Parkway, New York, NY 10026, 2119 1st Avenue, New York, NY 10029, 3477 Broadway, New York, NY 10031, and 329 Lenox Avenue, New York, NY 10027 (now closed).  

"When I worked for Papa John's, I was cheated of my hours, and treated as less than human," said Darrell Roper, 51, a former New Majority Holdings employee. "Unfortunately that's the reality for so many delivery workers, but I know that today, we're on our way to getting justice."

“Fast-food workers all across the city and country are organizing for higher pay and union rights,” said Kendall Fells, organizing director of Fast Food Forward. “This suit shows why their campaign is so important. And it shows that Attorney General Schneiderman is serious about holding fast-food companies accountable for wage theft. Workers who make the minimum wage, or the even lower tipped minimum, cannot afford to have their employers stealing from their paychecks. The suit is a clear signal that unscrupulous employers will not be tolerated. And it is the latest reminder that giant fast-food companies like Papa John's must ensure that its franchise holders abide by the law and treat workers fairly.”

The case is being handled by Assistant Attorney General Elizabeth Wagoner and Section Chief Andrew Elmore in the Attorney General’s Labor Bureau, which is led by Bureau Chief Terri Gerstein.  Executive Deputy Attorney General for Social Justice is Alvin Bragg.

ROCHESTER – Attorney General Eric Schneiderman today joined with elected officials and staff from the Rochester Land Bank to announce that his office has awarded $20 million to New York State land banks that are working to rebuild and restore neighborhoods hit hard by the housing crisis, including $1.8 million to the Rochester Land Bank. The Attorney General’s Land Bank Community Revitalization Initiative is making a new allocation of nearly $20 million to eligible land banks, in addition to the $13 million allocated through a competitive application process last year, bringing the total commitment to $33 million. Today’s announcement was made at 279 Lake View Park, a property that has been fully renovated thanks to funds issued under the previous grant Attorney General Schneiderman’s Office awarded to the Rochester Land Bank. This property will be sold to a low-or-moderate-income first-time homebuyer upon successful completion of homebuyer services training.

“Land banks are a critical tool to help communities recover from the housing crisis by ridding their streets of vacant and abandoned properties,” said Attorney General Schneiderman. “With this new round of funding, even more communities will reap the benefits of this powerful tool for urban revitalization. By funding and expanding land banks, we are empowering local communities to rebuild their own neighborhoods, house by house, block by block.” 

Previous funds awarded to the Rochester Land Bank were used to expand the Home Rochester Program, which takes foreclosed, highly distressed properties, renovates them and resells them for homeownership. This year’s award of $1.8 million, bringing the total investment in Rochester to just over $4.5 million for three years, will enable the Rochester Land Bank to further expand its Home Rochester Program, increasing the number of home renovations they can complete by 10 to 15 properties. In addition, funds will also enable the land bank to launch two new programs: “Strategic Blight Removal” will allow the Land Bank to demolish 10-12 severely blighted homes in areas that are undergoing redevelopment; and a new construction program—“Neighborhood Builders”—that will create 6 new homes to be built on currently vacant land, which will then be targeted to low and moderate income families.

Funding for this new round will be drawn from the $25 billion settlement with the nation’s largest banks that Attorney General Schneiderman helped negotiate in 2012. The following ten land banks in the State will receive funding: Greater Syracuse Land Bank; the Buffalo Erie Niagara Land Bank Investment Corporation; the Rochester Land Bank; Newburgh Community Land Bank; Suffolk County Land Bank; Chautauqua County Land Bank; Capital Region Land Bank; Albany County Bank; Troy Community Land Bank, and the Broome County Land Bank.

“I would like to thank Attorney General Eric Schneiderman for securing $1.8 million in additional funding for Rochester’s Land Bank,” said Rochester Mayor Lovely Warren. “In just 14 months of operation, the Rochester Land Bank Corporation has proven to be critical in our continued efforts to strengthen and invest in our neighborhoods across the city. Despite difficult fiscal times, our Land Bank has been able to help us deal with our most challenged properties in new and innovative ways which, in turn, has led to neighborhood and community revitalization.”

"For Rochester neighborhoods at the tipping point between revitalization and sliding further into blight, new and creative methods of improvement and investment are needed,” said State Senator Ted O’Brien. “I applaud Attorney General Schneiderman for being a tireless advocate for the people of this state, using the proceeds of settlements wisely to help strengthen our communities, and being a very active partner in our ongoing work to transform Rochester's neighborhoods into thriving communities that provide safety and prosperity to every citizen."

“The Office of the Attorney General’s support of the Rochester Land Bank Corporation through the Community Revitalization Initiative has been the wellspring of our work in combating vacancy and blight in City neighborhoods,” said Carol Wheeler, Board Chair of the Rochester Land Bank Corporation. “The generous award provided under Round 2  will not only allow us to invest in refreshing some of the  City’s housing stock, but will allow us to impact properties that have had a destabilizing effect on neighborhoods and could not be addressed with the programs currently available.”

During the decade of the housing boom and bust, from 2000 to 2010, the number of vacant properties in New York State increased 27%. Following the collapse of the housing market, the New York State Legislature passed a law in 2011 establishing land banks — nonprofit organizations that can acquire vacant, abandoned, or foreclosed properties and rebuild, demolish, or redesign them. By restoring vacant or abandoned properties, land banks lower costs for local governments, benefit public schools, reduce crime and boost local economies. 

However, the legislation that authorized land banks in New York did not provide funding for them. Attorney General Schneiderman launched the Land Bank Community Revitalization Initiative to fill that gap and allow land banks to fulfill their purpose. He has dedicated $33 million to fund that initiative. Last month, the Attorney General’s bill to expand the number of land banks from 10 to 20 was passed by the Legislature and signed into law by the Governor. 

The amounts awarded today are as follows: the Rochester Land Bank (over $1.8 million); Greater Syracuse Land Bank (over $1.9 million); the Buffalo Erie Niagara Land Bank Investment Corporation ($2.5 million); Newburgh Community Land Bank (1.9 million); Suffolk County Land Bank ($1.9 million); Chautauqua County Land Bank ($1.3 million); Capital Region Land Bank ($3 million); Albany County Bank ($2.8 million); Troy Community Land Bank ($1.25 million), and the Broome County Land Bank ($800,000).

So far, the program has achieved great success in the six land banks that have already been funded.

Abandoned and vacant properties depress property values, discourage property ownership, and attract criminal activity, but land banks provide tools to quickly turn these properties back into assets that reinvest in the community's long-term vision for its neighborhood. Land bank programs act as an economic and community development tool to revitalize distressed neighborhoods and business districts. Land banks can benefit urban schools, improve tax revenues, expand housing opportunities, remove public nuisances, assist in crime prevention and promote economic development. 

By transferring vacant and abandoned properties to responsible land owners, local governments benefit because they avoid the significant cost burden of property maintenance, such as mowing and snow removal. In addition, local governments benefit from increased revenue because the new owners pay taxes on the properties. In turn, local schools benefit because they receive more funding when there is an increase in the number of property owners in their school districts. Land bank programs can also increase the variety of mixed-income housing offered and provide more opportunities for affordable housing.

Land bank properties that become owner-occupied discourage criminal activity, benefiting public safety and decreasing the cost burden on local police and fire departments. Finally, the more residents and businesses that occupy property in a neighborhood, the more services and amenities will be needed, which boosts local economic activity.

The Attorney General’s office has partnered with Enterprise Community Partners to assist with the oversight and management of the Land Bank Community Revitalization Initiative. Enterprise is a nonprofit organization with more than 30 years of experience providing technical assistance and support to affordable community revitalization efforts. 

BUFFALO – Joined by elected officials and staff from the Buffalo Erie Niagara Land Bank, Attorney General Eric T. Schneiderman today announced that his office has awarded $20 million to New York State land banks that are working to rebuild and restore neighborhoods hit hard by the housing crisis, including more than $2.5 million to the Buffalo Erie Niagara Land Bank Investment Corporation (BENLIC). The Attorney General’s Land Bank Community Revitalization Initiative is making a new allocation of nearly $20 million to eligible land banks, in addition to the $13 million allocated through a competitive application process last year, bringing the total commitment to $33 million. Today’s announcement was made on Northland Avenue on Buffalo's East Side, the heart of the community that BENLIC hopes to redevelop with funds provided by the Attorney General’s Office, in partnership with the City of Buffalo.

“Land banks are a powerful tool to help communities statewide rid their streets of vacant properties that attract crime and drag down property values,” said Attorney General Schneiderman. “With this new round of funding, we are doubling our commitment to Buffalo’s revitalization, including the ongoing redevelopment of the East Side. By expanding land banks, we can continue to empower more communities to rebuild their own neighborhoods, house by house, block by block.”

This year’s award of $2.5 million to BENLIC will bring the total investment in Buffalo to just over $4.5 million over three years. Those funds will enable BENLIC to expand their rehabilitation program to target the Northland Avenue Belt Line Corridor, a priority area for redevelopment on the East side of Buffalo. BENLIC expects to complete 12-16 rehabilitations of distressed homes, and 50-75 demolitions over the next two years throughout the region.

Funding for this new round will be drawn from the $25 billion settlement with the nation’s largest banks that Attorney General Schneiderman helped negotiate in 2012. The following ten land banks in the State will receive funding: Greater Syracuse Land Bank; the Buffalo Erie Niagara Land Bank Investment Corporation; the Rochester Land Bank; Newburgh Community Land Bank; Suffolk County Land Bank; Chautauqua County Land Bank; Capital Region Land Bank; Albany County Bank; Troy Community Land Bank, and the Broome County Land Bank.

“Vacant and abandoned property casts a shadow over neighborhoods across the City of Buffalo and Western New York,” said Congressman Brian Higgins.  “Attorney General Schneiderman’s successful fight to secure a federal settlement is providing needed resources to help local communities fight the blight and take back our communities.”

“The land bank has been a critical instrument in the fight against the dilapidated, abandoned houses that dot our communities and lower our property values," said Erie County Executive Mark Poloncarz. "Since its inception in 2012, the land bank has been a positive factor for change across our region, helping to restore housing to the tax rolls and mend the fabric of neighborhoods, I would like to thank my partner in government, Attorney General Schneiderman, for his focus on this issue and his commitment to addressing vacant properties.”

“I thank Attorney General Schneiderman for his continued focus on revitalizing neighborhood’s in Buffalo through the Buffalo Erie Niagara Land Improvement Corporation, giving our city the tools and resources needed to help us reach our full potential,” said City of Buffalo Mayor Byron W. Brown.  “Our Land Bank is an important tool for the revitalization of neighborhoods in Buffalo, creating jobs and opportunities for small businesses.”

“Western New Yorkers take pride in their homes and neighborhoods, however, we still have vacant and blighted properties tarnishing our community and bringing down home values,” said Senator Kennedy (D-Buffalo). “Land banks are a powerful resource for municipalities like Buffalo, Cheektowaga and Lackawanna, who can use this funding to bring distressed properties up to code and back on the tax rolls. A $20 million state investment in land banks will reverse the negative cycle of blight and decline that has hit Buffalo hard, and convert it into a positive cycle of neighborhood improvement and development.  I’d like to thank Attorney General Eric Schneiderman for recognizing the importance of this funding to continue our efforts to improve Western New York's neighborhoods."

Assemblywoman Crystal Peoples-Stokes said, “Buffalo is growing at a rate that has not been seen in generations, community redevelopment has to match that rate said. Abandoned and vacant properties have an effect on property values, more importantly the surrounding communities. The Buffalo Erie Niagara Land Bank Investment Corporation (BENLIC) focuses on this very issue; community redevelopment through returning delinquent properties to productive use. I applaud Attorney General Eric Schneiderman for the $2.5 million in funding to BENLIC and his continued efforts impacting the Queen City.”

Assemblyman Michael Kearns said, “Saving our  neighborhoods is essential to our community  and  $2.5 million is a great start to help address vacant and abandon properties.”

Assemblyman Sean Ryan said, “I thank Attorney General Schneiderman for working diligently to utilize settlement funding to invest in Land Banks all across our state. Here in Western New York, our Land Bank is working to combat the vacant housing crisis, and this funding will be a huge boost to our efforts. The Land Bank law was a game-changer that allowed Erie County, the City of Buffalo, and municipalities across New York create land banks that can significantly reduce the number of vacant properties that negatively impact our communities. This new funding will help to local governments save money, combat blight, and improve neighborhoods throughout Western New York."

Jocelyn Gordon, Executive Director of the Buffalo Erie Niagara Land Improvement Corporation, said, "Western New York is reinventing itself before our very eyes.  For those of us with a long history in this region, we are witnessing progress which we likely never imagined could occur in our lifetime.   Many thanks to the Office of the Attorney General for their continued confidence in BENLIC, and for providing this tremendous catalyst to spur continued development in Buffalo and beyond. "

During the decade of the housing boom and bust, from 2000 to 2010, the number of vacant properties in New York State increased 27%. Following the collapse of the housing market, the New York State Legislature passed a law in 2011 establishing land banks — nonprofit organizations that can acquire vacant, abandoned, or foreclosed properties and rebuild, demolish, or redesign them. By restoring vacant or abandoned properties, land banks lower costs for local governments, benefit public schools, reduce crime and boost local economies.

However, the legislation that authorized land banks in New York did not provide funding for them. Attorney General Schneiderman launched the Land Bank Community Revitalization Initiative to fill that gap and allow land banks to fulfill their purpose. He has dedicated $33 million to fund that initiative. Last month, the Attorney General’s bill to expand the number of land banks from 10 to 20 was passed by the Legislature and signed into law by the Governor.

The amounts awarded are as follows: the Rochester Land Bank (over $1.8 million); Greater Syracuse Land Bank (over $1.9 million); the Buffalo Erie Niagara Land Bank Investment Corporation ($2.5 million); Newburgh Community Land Bank (1.9 million); Suffolk County Land Bank ($1.9 million); Chautauqua County Land Bank ($1.3 million); Capital Region Land Bank ($3 million); Albany County Bank ($2.8 million); Troy Community Land Bank ($1.25 million), and the Broome County Land Bank ($800,000).

In the first round of funding provided by the OAG, six land banks received grants and to date they have each made tremendous progress. The Attorney General’s funds are assisting land banks in building their capacity so they are able to take on these types of community redevelopment initiatives, as well as enabling the land banks to begin implementing their local community development plans.

Abandoned and vacant properties depress property values, discourage property ownership, and attract criminal activity, but land banks provide tools to quickly turn these properties back into assets that reinvest in the community's long-term vision for its neighborhood. Land bank programs act as an economic and community development tool to revitalize distressed neighborhoods and business districts. Land banks can benefit urban schools, improve tax revenues, expand housing opportunities, remove public nuisances, assist in crime prevention and promote economic development.

By transferring vacant and abandoned properties to responsible land owners, local governments benefit because they avoid the significant cost burden of property maintenance, such as mowing and snow removal. In addition, local governments benefit from increased revenue because the new owners pay taxes on the properties. In turn, local schools benefit because they receive more funding when there is an increase in the number of property owners in their school districts. Land bank programs can also increase the variety of mixed-income housing offered and provide more opportunities for affordable housing.

Land bank properties that become owner-occupied discourage criminal activity, benefiting public safety and decreasing the cost burden on local police and fire departments. Finally, the more residents and businesses that occupy property in a neighborhood, the more services and amenities will be needed, which boosts local economic activity.

The Attorney General’s office has partnered with Enterprise Community Partners to assist with the oversight and management of the Land Bank Community Revitalization Initiative. Enterprise is a nonprofit organization with more than 30 years of experience providing technical assistance and support to affordable community revitalization efforts.

HAUPPAUGE – As part of his statewide gun buyback program, Attorney General Eric T. Schneiderman is holding a press conference at a gun buyback program in Hauppauge today along with Suffolk County Executive Steven Bellone. The program accepts working and non-working, unloaded weapons in exchange for compensation on site. The Long Island event, the seventh gun buyback program sponsored by Attorney General Schneiderman’s office, is a collaborative effort among the office, Suffolk County Executive Steven Bellone and the Suffolk County Police Department. 

“By providing a financial incentive for individuals to turn in unwanted weapons, we are helping to prevent dangerous firearms from ending up in the wrong hands,” Attorney General Schneiderman said. “My office’s gun buyback program is a critical component of our ongoing efforts to eradicate the devastating gun violence that has plagued our neighborhoods for far too long and give New Yorkers across the state the peace of mind they deserve.”  

County Executive Steve Bellonesaid, “I thank Attorney General Schneiderman for bringing this gun buyback program to Suffolk County. Providing the buyback opportunity for Suffolk residents to turn in unwanted firearms helps to make our communities safer.” 

Suffolk County Police Commissioner Edward Webbersaid, “Removing firearms from our streets is a key component in combatting violent crime in Suffolk County. The department would like to thank Attorney General Eric Schneiderman for securing funds for this program that will benefit all residents.” 

The event, which is running from 9 a.m. to 12 p.m., is being held at the H. Lee Dennison Building, at 100 Veterans Memorial Highway. 

Attorney General Schneiderman launched his statewide guy buyback program in Rochester in September 2013.  Saturday’s event in Hauppauge was the seventh the office has sponsored. The events resulted in the turning in of 749 firearms, not including weapons returned today.  

In 2011, close to 33,000 Americans were victims of gun-related deaths. The Brady Campaign to Prevent Gun Violence reports that an average of 268 people are shot every day in America. That's 97,820 people shot per year. 

At the events, the Attorney General's Office offers money in the form of debit cards when a gun is received by law enforcement officers. Debit cards with the appropriate amount are issued after each unloaded gun is received and screened by the officers on site. 

Guns must be transported to the drop-off site unloaded and placed in a plastic or paper bag or box. Both working and non-working firearms will be accepted. There is no limit on the number of firearms an individual can return. Licensed gun dealers and active or retired law enforcement officers are not eligible for this program. 

The Attorney General's Office will be providing the following compensation by debit card for firearms returned on site: 

• $25 for non-working or antique firearms;
• $75 for rifles and shotguns;
• $100 for handguns;
• $150 for assault weapons. 

The gun buyback program is one part of Attorney General Schneiderman’s broader initiative to protect New Yorkers from gun violence. In March, he toured the Long Island Gun Show in Hauppauge to highlight the success of his office’s Model Gun Show Procedures, which ensure that everyone who buys a gun at a gun show undergoes a background check. Virtually every gun show operator across the state has voluntarily signed on to the procedures, making sure that firearms stay out of the wrong hands. More information on the event is available here.

WESTCHESTER -- State Attorney General Eric T. Schneiderman announced today that his office has reached a settlement with Westchester Foreign Autos, Inc., d/b/a Westchester Toyota, a Yonkers auto dealer that was adding a bogus “buyout fee” to the price customers paid for buying their vehicle at the end of their lease. Under the settlement, Westchester Toyota will repay a total of $149,407 to 228 customers who were charged the bogus buyout fee.  The dealership will also pay $22,000 in costs and penalties to New York State.

“New York auto dealers, like all New York businesses, cannot charge hidden fees and offer nothing in return. If they do so, they are breaking the law, deceiving their customers and creating an unfair marketplace,” Attorney General Schneiderman said.  “My office will continue to monitor this dealer’s business practices and those of other auto dealers, to ensure that they are fair and honest.”

Between January 1, 2011, and January 31, 2013, Westchester Toyota, located at 2167 Central Park Avenue, charged its customers a Lease Buyout Processing Fee (“buyout fee”) in addition to the residual value of the vehicle, which is the amount the vehicle is worth and can be purchased for at the end of the lease (the “buyout price”).  The buyout fees ranged from $295 to $2,895.

The buyout fee was not disclosed to consumers when they leased their vehicles. They learned of it only when it was added to the vehicle’s buyout price at the expiration of their lease.

Westchester Toyota provided few, if any, services or benefits to consumers in exchange for the buyout fee.  The buyout fee was, for the most part, an extra fee for which consumers did not receive commensurate services or benefits.

The Westchester Toyota case was handled by Assistant Attorney General Sandra Giorno-Tocco and Senior Consumer Frauds Representative John Katzenstein. Gary Brown is the assistant attorney general-in-charge of the Westchester Regional Office and Marty  Mack is executive deputy attorney general for regional affairs.

NEW YORK – Attorney General Eric Schneiderman today issued a consumer alert warning New Yorkers about scams related to fears of Ebola. Scammers commonly use moments of heightened public fear to perpetuate frauds, and reports have surfaced of fundraising scams claiming to benefit victims of Ebola. There have also been dubious offers by companies selling bogus Ebola preparedness kits and preventative medications while there is not an FDA-approved vaccine for Ebola.
 
“New Yorkers should beware of fundraising solicitations and offers of goods and services related to Ebola,” said Attorney General Schneiderman. “Scammers are shamefully exploiting this moment of heightened concern about public health to defraud good people. These frauds detract from the positive work of the brave medical professionals fighting this disease and the charitable spirit of New Yorkers looking to help out.”
 
If you receive solicitations about Ebola, consider the following tips:

• Do your homework on the disease. With scammers selling bogus emergency preparedness kits and medical treatments, be sure to know the facts. There are no FDA-approved vaccines, medications, or dietary supplements to prevent or treat Ebola, so be wary of offers promising otherwise. Stay informed about the disease, the latest emergency preparedness measures, and the most medically accurate information by visiting the Centers for Disease Control and Prevention website and the New York State Department of Health website.
  • Consumer Reportspublished an article referencing a bogus e-mail solicitation offering a $29 “surplus protection kit” supposedly designed for emergency response teams and law enforcement agencies.
  • The Federal Trade Commission has warned that there are no FDA-approved medical treatments for Ebola and that consumers should file complaints with the FTC and the FDA if they encounter a fraud.
  • According to USA Today, at least three companies have been issued warnings by the Food and Drug Administration in the past month for selling bogus treatments, solutions, or therapies for Ebola.
• Donate to reputable charities. Fraudulent solicitations have been received claiming to pay funds to families of Ebola patients and promising to fight the disease. If you receive a charitable solicitation, do some research to determine whether the charity is legitimate. The Better Business Bureau (BBB) has a website called www.give.org that allows users to look up charities and see whether they meet various standards of accountability. Charity Navigator also offers a listing of reputable charities responding to the Ebola outbreak that can be found online here.
  • According to a report in Daily Finance, the Better Business Bureau’s New York office has received complaints about fraudulent telephone solicitations involving a charity claiming to raise funds to help Ebola victims. There have also been reports of door-to-door frauds claiming to raise money for a Texas nurse who became infected with the disease.
• Do not click on unsolicited links in e-mail or online.Scammers sometimes utilize a technique called phishing, in which victims are baited into clicking on harmful links or entering personal information under false pretenses. Consumers have reported receiving fraudulent e-mails linking to dubious websites where charitable donations can be made. Learn more about an organization before clicking on links or providing donations or personal information.
  • CBS News has reported that fake e-mail solicitations about Ebola have been linked to malware.
• Ask tough questions.If you receive a charitable solicitation, ask what percentage of your donation will go to the organization and how much will go to professional fundraisers and overhead costs. Ask the charity to send you written information, such as brochures.
• Pay close attention. Some fraudsters will use names similar to those of legitimate charities or mimic the appearance of a legitimate charity’s website to deceive potential donors.
• Report potential scams.If you believe you are the victim of a scam or have been solicited by a scammer, take the time to report the incident. One of the best ways to fight back against scammers is to report them.
  • Report the unlawful sale of bogus medical products to the U.S. Food and Drug Administration.
  • Report suspicious charitable solicitations: If you believe an organization is misrepresenting its work or that a scam is taking place, contact Attorney General Schneiderman’s Charities Bureau at charities.bureau@ag.ny.gov or (212) 416-8402.

NEW YORK — Attorney General Eric T. Schneiderman today announced an agreement with the Newburgh Police Department that will help strengthen language access services for residents who are limited English proficient (LEP). The agreement will improve the ability of officers in the Newburgh Police Department to provide interpretation and translation services when needed. Newburgh’s Police Department protects a diverse population.  

“Equal justice under law requires that all New Yorkers have access to the important public safety services provided by law enforcement agencies, regardless of their language ability,” Attorney General Schneiderman said. “This agreement with the Newburgh Police Department — and similar agreements my office has reached with other police departments around New York state — will help us ensure that the delivery of police services are not limited or restricted by language barriers.” 

In cooperation with the Attorney General’s Civil Rights Bureau, the police department has agreed to improve its language access policies for individuals who are limited English proficient. The department will: 

• Ensure that its officers, and its civilian employees who have regular contact with the public, effectively communicate with LEP persons, including when responding to calls for assistance; making traffic stops; taking complaints; interviewing crime victims; making public service announcements, and issuing safety alerts;
• Ensure effective communication with LEP subjects of criminal investigations;
• Provide annual training on how to effectively communicate with LEP persons;
• Take steps to recruit, hire and retain bilingual officers and staff and maintain a mechanism for testing proficiency levels;
• Translating vital documents, and relying upon translated materials made available through other law enforcement entities, agencies and courts;
• Making English- and Spanish-language Personnel Complaint Forms available at all Newburgh Police Department buildings and on the department’s website; and
• Regularly meet with the Attorney General’s Office to discuss the success of its language access program. 

According to Census data, approximately 2.5 million New Yorkers do not speak English as their primary language and have a limited ability to read, speak, write, or understand English. More than 44 percent of residents in the City of Newburgh, age 5 and over, speak a language other than English at home, and more than 19 percent of Newburgh’s residents speak English less than “very well.” Newburgh’s population is nearly 48 percent Hispanic, among the largest percentage of any city in the state.  The police department’s strengthened language access program will help ensure that all individuals in its communities have full access to vital police services, regardless of language ability.   

Michael Ferrara, Chief of the Newburgh Police Department,said, “As a professionally trained police department here in the City of Newburgh, it is our responsibility to constantly strive for improvement in the way we relate with our diverse population.  Our language access plan was designed to help us diminish language barriers that may arise in any situations the police department may encounter.  The purpose is for our officers to be more effective in every aspect of their work.  Communicating with witnesses, victims, complainants, suspects or any member of the general public with language barriers is challenging even in the best of circumstances. Newburgh officers regularly encounter susceptible LEP persons in crisis situations, at times when the need for accurate communication is paramount.”

Newburgh Mayor Judy Kennedy said, “We applaud the Attorney General for ensuring that the substantial number of farm laborers, rising number of limited English proficient Latinos, domestic violence victims and vulnerable crime victims are able to access the important public safety services of the police department regardless of their ability to speak English. Newburgh is a city where nearly fifty percent of its population is of Latino descent, and it’s critical we are being responsive to this population." 

Newburgh City Manager Michael Ciaravino said, “The City of Newburgh Police Department implemented a new language access policy to establish guidelines for assisting individuals with limited English proficiency.  The policy is intended to ensure maximum communications between law enforcement and all segments of our community and will enable the City of Newburgh Police Department to improve communication with our residents.  The City of Newburgh is committed to ensuring that all officers and civilian employees who have contact with the public are able to communicate effectively with those individuals seeking the assistance or services of the City of Newburgh Police Department. We appreciate the opportunity to work with the Attorney General’s Office to promote compliance with our goals and objectives.” 

Newburgh Police Department joins the Nassau County Police Department, the Rochester Police Department, the Ontario County Sheriff’s Department and the Middletown Police Department in working with the New York State Attorney General’s Office to strengthen language access.  These agreements come as we mark the 50th Anniversary of Title VI of the Civil Rights Act of 1964. Upon signing the act, then-President Lyndon B. Johnson observed: “This Civil Rights Act is a challenge to all of us to go to work in our communities and our states, in our homes and in our hearts, to eliminate the last vestiges of injustice in our beloved country.” 

Attorney General Schneiderman has made promotion of compliance with the language assistance requirements of the act a core civil rights priority. His Civil Rights Bureau is committed to promoting civil rights compliance and language access across New York State. To file a complaint with the Bureau, contact 212-416-8250 or Civil.Rights@ag.ny.gov.

The matter is being handled by Civil Rights Bureau Chief Kristen Clarke and Assistant Attorney General Anjana Samant. Executive Deputy Attorney General for Social Justice is Alvin Bragg.

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement in response to the settlement announced today by Governor Cuomo and the New York Civil Liberties Union in the case of Hurrell-Harring v. New York State:

“The right to effective legal representation for every criminal defendant is a fundamental tenet of our criminal justice system.  As has often been said, the right to a lawyer is the right that protects all the rest of our freedoms. That is why, during my time in the State Senate, I proposed legislation that would have improved defense counsel for every New Yorker, not just the rich and powerful or those living in more affluent communities.  It is also why I congratulate Governor Cuomo and the New York Civil Liberties Union for reaching a settlement that will create a system to provide effective representation for criminal defendants in the five counties covered in this lawsuit. Now that this matter has been resolved, it is my hope that the approach outlined in this agreement can be a building block toward the kind of statewide reforms we need to move closer to the ideal of providing every criminal defendant in every part of our state with effective legal representation.”

A copy of the settlement can be read here.

NEW YORK – Attorney General Eric T. Schneiderman today announced the arrest and indictment of the top two executives of Narco Freedom, a nonprofit organization that provides treatment for substance abuse to tens of thousands of New York City residents at ten locations in Brooklyn, Queens and the Bronx. The organization’s director, Alan Brand, allegedly received personal kickbacks for housing some of Narco Freedom’s facilities in the buildings of a particular real estate developer. He then used the proceeds of these illegal dealings to fund a lavish lifestyle, according to today’s indictment. Alan Brand has been charged with bribery, grand larceny and money laundering for this part of the alleged scheme; if convicted, he faces a maximum of 15 years in prison. 

Brand’s son, Jason, was also indicted this morning and, along with his father, accused of falsely filing a $3.5 million insurance claim for the restoration of a Narco Freedom treatment facility in Brooklyn. Like his father, Jason Brand is accused of spending the organization’s funds for his personal use. If convicted of this part of the alleged scheme, Jason and Alan Brand each face a maximum of 25 years in prison.

“People motivated solely by personal greed have no business administering to the serious health needs of other New Yorkers,” said Attorney General Schneiderman. “New York has the greatest nonprofit sector in the nation, but a case like this reminds us of the need to remain vigilant and strengthen our oversight of the industry.”

In addition to the criminal indictment, the Attorney General obtained a civil court order freezing the bank accounts, property and possessions of both Alan Brand and Jason Brand and corporations they control. In accordance with the court order, four properties have been frozen: 23 Barrington Place, Melville (Jason Brand’s N.Y. home), 18 Phaetons Drive, Melville (Alan Brand’s N.Y. home), 8140 Santalo Cove Court, Boynton Beach (Florida property belonging to Jason Brand) and 99 SE Mizner Blvd, Boca Raton (Florida property belonging to Alan Brand). The order also freezes the Bronx headquarters of both Narco Freedom (250 Grand Concourse) and Jason Brand’s construction company, DASO Development (1735 West Farms Road). Additionally, investigators seized six cars today belonging to Alan and Jason Brand, including a 2013 Tesla Model S, a 1969 Chevy Corvette and a 2002 Jaguar X.

Narco Freedom is a New York State Medicaid provider; it receives nearly $40 million annually in taxpayer-funded state Medicaid reimbursements and additional money from the New York State Office of Alcoholism and Substance Abuse Services. In addition to treatment facilities, the organization provides medical, mental health and other support programs to tens of thousands of people across New York City. 

The investigation into the Brands’ criminal conduct, which was spearheaded by the Attorney General’s Medicaid Fraud Control Unit (MFCU), began in 2013. Between 2009 and 2014, Alan Brand allegedly solicited and received a monthly kickback of $13,000 from a real estate developer who rented buildings to Narco Freedom. In exchange for the monthly payments, Brand agreed to house many of the nonprofit’s facilities in the developer’s buildings, using taxpayer dollars to pay the rent, according to documents made public today. Through this arrangement, Brand was profiting personally, pocketing money rightly due to his charitable organization.

Narco Freedom is registered as a tax-exempt, not-for-profit corporation; Alan Brand is the Director and sole shareholder and was, until recently, its Chief Executive Officer. Under State law, shareholders of not-for-profit charitable organizations owe their organizations a duty of loyalty, a duty of care and a duty of obedience which mandates that they place their organization’s interests above their own, that they abide by all rules and regulations applicable to that organization and that they operate the organization in furtherance of its core mission.  Prosecutors allege that Alan Brand violated all three of these duties by entering into the aforementioned kickback scheme and by concealing the scheme from various individuals and regulatory agencies. 

In addition to the kickback scheme, today’s indictment alleges that Alan Brand, while C.E.O. of Narco Freedom, along with Jason Brand, while a high-ranking manager there and the owner of the DASO Development Corporation, defrauded Arch Insurance Company by filing a false insurance claim in connection with the restoration of 217 Court Street in Brooklyn, the location of a former treatment facility operated by Narco Freedom.  

The Brooklyn facility suffered substantial damage from a 2009 storm and, as the insured party, Narco Freedom received a $3.5 million payment with Arch to restore the location. During settlement negotiations, Jason Brand, negotiating on behalf of Narco Freedom, allegedly represented that restoration work would be completed by union employees; instead, day laborers were hired in an apparent effort to lower the cost of the project. The Brands also failed to disclose that Jason Brand owned the company hired to restore the facility, DASO Development Corporation, according to prosecutors. According to the indictment, Narco Freedom’s intentional misrepresentations and material omissions resulted in a significant loss to Arch, as the insurance company agreed to an unnecessarily large settlement.

As a result of today’s indictment, Alan Brand has been charged with Commercial Bribe Receiving in the First Degree, Grand Larceny in the Second Degree and Money Laundering in the Second Degree.  Alan and Jason Brand, as well as Narco Freedom and DASO Development Corporation as separate entities, have been charged with Insurance Fraud in the First Degree and Grand Larceny in the Second Degree.

The Attorney General’s investigation into the operation of Narco Freedom continues and additional charges are anticipated.

Throughout this investigation, the Attorney General’s office has worked closely with those state agencies that regulate Narco Freedom’s treatment programs. The goal of this coordinated effort is to ensure the continuity of care for all patients that use Narco Freedom’s services. In particular, the Attorney General would like to thank the Office of Alcoholism and Substance Abuse Services, the Office of the Medicaid Inspector General and the New York State Department of Health. 

The criminal case is being prosecuted by Assistant Attorneys General Kristen Conklin and Jihee Suh. The civil case is being handled by attorneys Carolyn Ellis, Alee Scott and Dave Abrams. The investigation was led by Deputy Chief Kenneth Morgan, Senior Investigator Albert Maiorano, Supervising Investigator Michael Casado and Investigators Dominic DiGennaro, Steven Broomer, Dave Ryan, Julie Clancy and Valerie Patrick. Audit support was provided by Special Audit Investigators Patricia Iemma and Giovanni Liotine. Christopher M. Shaw is MFCU’s New York City Regional Director, Thomas O’Hanlon is its Chief of Criminal Investigations – Downstate and Thomasina Smith is its Chief Auditor. Amy Held is the Acting Director of MFCU. The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

The charges filed in this case are accusations. The defendants are presumed innocent until proven guilty in a court of law.

NEW YORK – Attorney General Eric T. Schneiderman today announced a lawsuit alleging that Monroe County-based The Juice Factory Corp. for repeatedly violating multiple provisions of New York’s Returnable Container Act, otherwise known as the Bottle Bill.  Investigations by the Attorney General’s Office and the New York State Department of Environmental Conservation (DEC) revealed that for over two years, The Juice Factory collected deposits on beverage containers it sold in Monroe and Erie counties but failed to send $79,571 in unclaimed deposits to the State, as required by law. 

 The suit was filed in the Supreme Court of the State of New York, Monroe County.  

“The Bottle Bill is one of New York’s hallmark environmental laws.  Companies that skirt the Bottle Bill not only hurt recycling and litter prevention efforts, but also cheat the State out of money that benefits the public,” Attorney General Schneiderman said. “As our suit alleges, The Juice Factory broke the law by pocketing tens of thousands of dollars in unclaimed deposits that it owed to the State.  We will continue to aggressively enforce New York’s Bottle Bill and other environmental laws by ensuring that everyone plays by the same set of rules.” 

“Unclaimed deposits support important environmental programs that protect our environment, reduce the amount of waste disposed in landfills and save energy,” DEC Commissioner Martens said. “Companies have a responsibility to comply with our state’s environmental laws, but in this case, the Juice Company violated those laws and the public trust.  I commend DEC investigators and our partners in the Attorney General’s Office and Tax Department for taking decisive action to ensure compliance with New York’s Bottle Bill law and put an end to deceptive practices that took advantage of consumers.”

According to the DEC, New York’s Bottle Bill has done a great deal to create a cleaner and healthier New York. The Bottle Bill program has reduced roadside container litter by 70 percent; recycled 90 billion containers, equal to 6 million tons of materials, at no cost to local governments; saved more than 52 million barrels of oil, and eliminated 200,000 metric tons of greenhouse gases each year.

New York’s Bottle Bill requires that there be a deposit of at least a 5-cents indicated on every beverage container covered by the law and that the deposit is collected on every beverage container that is sold in the State.  The entity that first sells or offers the beverage for sale in the State, and collects the first nickel deposit, is the “deposit initiator.”  The deposit initiator must register with the New York State Department of Taxation and Finance before selling in the State, and maintain a refund account for the deposits collected and from which to reimburse retailers and redemption centers that return empty containers that have been redeemed by consumers. Deposit initiators must remit to the State 80% of the unclaimed deposits held in the account on a quarterly basis.

The requirements that deposit initiators register with the State, establish a refund account, and remit 80% of all unclaimed deposits that accrue in that account was added by the State Legislature in 2009 to allow for a large portion of the unclaimed deposits to be paid over to the State, which were all previously kept by distributors.  Amendments to the law in 2013 provide for all monies collected through enforcement efforts to be deposited into the Environmental Protection Fund.  

The investigation conducted by Attorney General Schneiderman and DEC found that, between August 2009 and December 2011, The Juice Factory acted as a deposit initiator within the meaning of the Bottle Bill and repeatedly sold and collected deposits on Day’s brand soda it sold in Monroe and Erie counties, according to the suit.  Throughout this time, The Juice Factory failed to register as a deposit initiator with the State, failed to create a separate deposit refund account, and failed to remit the required 80% of unclaimed deposits to the State. Records indicate that the company collected $99,464 in deposits for a period spanning more than two years. However, The Juice Factory allegedly failed to remit to the State any of the required 80% of unclaimed deposits, an amount totaling $79,571. 

According to the complaint, State officials notified The Juice Factory on several occasions during the course of its investigation that the company was in violation of provisions of the Bottle Bill and instructed the company to come into compliance.  However, The Juice Factory ignored these warnings.  

In the lawsuit filed today, Attorney General Schneiderman asks the court to take several actions against The Juice Factory for its multiple, repeated violations of the state Bottle Bill.  These include ordering The Juice Factory to:  

• pay penalties, as provided for in the law, for violations of the Bottle Bill; 
• pay $79,571, plus interest, in restitution to the state; and
• fully comply with all requirements of the Bottle Bill in the future.  

Under a 2013 amendment to the Bottle Bill, all enforcement proceeds are to be deposited in the state’s Environmental Protection Fund.

In January, Attorney General Schneiderman obtained a settlement against a New Jersey-based company that underpaid New York nearly $330,000 in bottle deposits.

Attorney General Schneiderman thanks the DEC and the New York State Department of Taxation and Finance for their assistance.

This matter was handled by Assistant Attorneys General Jane Cameron and Andrew Gershon of the Environmental Protection Bureau, which is led by Bureau Chief Lemuel M. Srolovic. The Social Justice division is led by Executive Deputy Attorney Alvin Bragg. DEC Investigator Christopher T. Didion, Lieutenant Richard Thomas, Senior Attorney Cristin T. Clarke, and Environmental Program Specialist Jennifer Krumanassisted in this matter, as did Department of Taxation and Finance Deputy Counsel Deborah R. Liebman and Taxpayer Assistance Specialist David Foster.