NEW YORK – Attorney General Eric T. Schneiderman today joined members of a state and federal working group he co-chairs to announce a $16.65 billion settlement with Bank of America. The settlement is the largest in U.S. history with a single institution, surpassing the $13 billion settlement with JPMorgan Chase that was secured by the same state and federal working group last November. The settlement includes $800 million – $300 million in cash, and a minimum of $500 million worth of consumer relief – that will be allocated to New York State. As part of today’s settlement, Bank of America acknowledged it made serious misrepresentations to the public – including the investing public – arising out of the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS) by Bank of America, as well as by Countrywide Financial and Merrill Lynch, institutions that Bank of America acquired in 2008. The resolution also requires Bank of America to provide relief to underwater homeowners, distressed borrowers, and affected communities through a variety of means, including relief that for the first time will assist certain homeowners with mortgages insured by the Federal Housing Administration (FHA) who were ineligible for relief under previous settlements.

The settlement requires Bank of America to pay $9.65 billion in hard dollars and provide $7 billion in consumer relief. New York State will receive at least $800 million: $300 million in cash and a minimum of $500 million in consumer relief for struggling New Yorkers. The settlement was negotiated through the Residential Mortgage-Backed Securities Working Group, a joint state and federal working group formed in 2012 to share resources and continue investigating wrongdoing in the mortgage-backed securities market prior to the financial crisis. Attorney General Schneiderman co-chairs the RMBS working group.

“Since my first day in office, one of my top priorities has been to pursue accountability for the misconduct that led to the crash of the housing market and the collapse of the American economy,” said Attorney General Schneiderman. “This historic settlement builds upon our work bringing relief to families around the country and across New York who were hurt by the housing crisis, and is exactly what our working group was created to do. The frauds detailed in Bank of America’s statement of facts harmed countless of New York homeowners and investors. Today's result is a major victory in the fight to hold those who caused the financial crisis accountable.”

The settlement includes an agreed-upon statement of facts that describes how Bank of America, Merrill Lynch and Countrywide made representations to RMBS investors about the quality of the mortgage loans they securitized and sold to investors.  Contrary to those representations, the firms securitized and sold RMBS with underlying mortgage loans that they knew had material defects. Bank of America also made representations to the FHA, an agency within the U.S. Department of Housing and Urban Development, about the quality of FHA-insured loans that Bank of America originated and underwrote. Contrary to those representations, Bank of America originated and underwrote FHA-insured mortgages that were not eligible for FHA insurance. Bank of America and Countrywide also made representations and warranties to Fannie Mae and Freddie Mac about mortgages they originated and sold to those Government Sponsored Entities (GSE’s). Contrary to those representations and warranties, many of those mortgages were defective or otherwise ineligible for sale to GSE’s.

As the statement of facts explains, on a number of occasions, Merrill Lynch employees learned that significant percentages of the mortgage loans reviewed by a third party due diligence firm had material defects. Significant numbers of loans—50% in at least one pool—that were found in due diligence not to have been originated in compliance with applicable laws and regulations, not to be in compliance with applicable underwriting guidelines and lacking sufficient offsetting compensating factors, and loans with files missing one or more key pieces of documentation were nevertheless waived into the purchase pool for securitization and sale to investors. In an internal email that discussed due diligence on one particular pool of loans, a consultant in Merrill Lynch’s due diligence department wrote: “[h]ow much time do you want me to spend looking at these [loans] if [the co-head of Merrill Lynch’s RMBS business] is going to keep them regardless of issues? . . . Makes you wonder why we have due diligence performed other than making sure the loan closed.” A report by one of Merrill Lynch’s due diligence vendors found that from the first quarter of 2006 through the second quarter of 2007, 4,009 loans that were part of loan pool samples reviewed by the vendor were not in compliance with underwriting guidelines or applicable laws and regulations, and were waived in to purchase pools by Merrill Lynch. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.

Attorney General Schneiderman was elected in 2010 and took office in 2011, when the five largest mortgage servicing banks, 49 state attorneys general, and the federal government were on the verge of agreeing to a settlement that would have released the banks – including Bank of America – from liability for virtually all misconduct related to the financial crisis. Attorney General Schneiderman refused to agree to such sweeping immunity for the banks. As a result, Attorney General Schneiderman secured a settlement that preserved a wide range of claims for further investigation and prosecution.

In his 2012 State of the Union address, President Obama announced the formation of the RMBS Working Group. The collaboration brought together the Department of Justice (DOJ), other federal entities, and several state law enforcement officials – co-chaired by Attorney General Schneiderman – to investigate those responsible for misconduct contributing to the financial crisis through the pooling and sale of residential mortgage-backed securities. The negotiations for settlement, which were led by Associate Attorney General Tony West of DOJ, were part of the RMBS Working Group.

Under the settlement, Bank of America will be required to provide a minimum of $500 million in creditable consumer relief directly to struggling families and communities across the state. The settlement includes a menu of options for consumer relief to be provided, and different categories of relief are credited at different rates toward the bank’s $500 million obligation. The agreement also requires Bank of America to provide minimum amounts of creditable relief under certain priority categories in New York. The Consumer Relief Credit Menu, available here, details the how each category of relief will be credited and the minimum amounts for each category where applicable.

The most significant priority on the Consumer Relief Credit Menu is a change that will allow first lien principal reductions for certain types of FHA-insured mortgages. Borrowers with these types of loans have previously been excluded from getting the benefits of principal reduction under past settlements, despite the fact that a significant number of distressed loans fall into this category. According to data collected by the Office of the Attorney General, roughly 23% of all distressed loans in New York have FHA insurance, and FHA-insured loans represent the largest portion of Bank of America’s remaining distressed loan portfolio in New York.

Attorney General Schneiderman made it a high priority to extend principal forgiveness to FHA-insured mortgages in negotiations with Bank of America, and their inclusion in this settlement represents a huge step forward in Attorney General Schneiderman’s ongoing commitment to helping families move past the foreclosure crisis.

“Empire Justice Center is very pleased that the settlement with Bank of America provides for principal balance reductions on FHA-insured loans,” said Kirsten Keefe, Senior Attorney at the Empire Justice Center. “This is a critical component that has not been included in prior bank settlements. It has left homeowners with FHA loans at a disadvantage when trying to negotiate with their bank to save their homes. We thank Attorney General Schneiderman for making this a priority in the Bank of America Settlement.”

Bank of America will provide a minimum of $60 million in first lien principal reductions in New York, including the FHA-insured portfolio. Other New York-specific minimum requirements for consumer relief under this settlement include:

• A minimum value of $20 million in donations, including cash and contributions of vacant and abandoned properties to land banks, units of local government and other nonprofits. Bank of America estimates that this will help address as many as 300 vacant properties—also known as zombie properties—across the state of New York.
• The bank must also earn at least $35 million in credits for making cash donations to legal service providers, housing counseling agencies, land banks and other community development nonprofits. These relief options are a direct compliment to the investment Attorney General Schneiderman has made to these types of programs over the past three years, including more than $60 million in funding to support a network of housing counseling and legal service provider across the state under the Homeowner Protection Program (HOPP), which has provided free, high-quality services to more than 30,000 homeowners since launching in 2012.
• Bank of America must also provide $125 million in credits to create and preserve hundreds of units of affordable rental housing across New York State. This initiative is particularly critical in New York, where affordable rental housing is scarce and many families are struggling to find decent and affordable alternatives to homeownership following the economic crisis.  

New York City Mayor Bill DeBlasiosaid, “We’re in the midst of an affordability crisis hitting New Yorkers from the very poor to those once solidly middle class. We are deeply grateful to the Attorney General for securing a historic settlement that will make a real difference for families struggling across the city and state. We are pushing hard to build and preserve an unprecedented amount of affordable housing to meet this crisis, and the Attorney General’s continued advocacy is proving vitally important in supporting that effort.”

“When the federal government bailed out ‘too big to fail’ banks, nearly every New Yorker felt the economic impact that followed. As Chair of the Council’s Housing and Buildings Committee, I am pleased Attorney General Eric Holder has held Bank of America responsible with this settlement, which in part expands income-targeted housing throughout the five boroughs. Individual people—not corporations—should be the only entity considered ‘too big to fail,’ and today’s announcement bring us closer to that goal,” said Council Member Jumaane D. Williams (D-Brooklyn), Deputy Leader and Chair of the Council’s Housing and Buildings Committee.

“We applaud AG Schneiderman’s efforts to hold the too-big-to-fail banks accountable to lower income communities,” said Josh Zinner, Co-Director of New Economy Project. “We are hopeful that this settlement will provide relief to people and communities that have been hardest hit by predatory lending and high rates of foreclosure.”          

Compliance with the settlement will be overseen by an independent monitor who will be responsible for ensuring that targets under the settlement are met and that quarterly reporting requirements, which will measure how relief is being allocated at a Census Tract level, are made available to the public.

This matter was led by former Deputy Attorney General for Economic Justice Virginia Chavez Romano, Chief of the Investor Protection Bureau Chad Johnson, Senior Enforcement Counsel for Economic Justice Steven Glassman, and Assistant Attorneys General in the Investor Protection Bureau Hannah Flamenbaum and Melissa Gable.

A copy of today’s global settlement can be viewed here.

ALBANY – Attorney General Eric T. Schneiderman and New York State Comptroller Thomas P. DiNapoli today announced the arrest and unsealing of a one-count indictment charging Graycelia Cizik, 64, a resident of Polk County, Florida, with the crime of Grand Larceny in the Second Degree, a class C felony, in Albany County Court.

Cizik is alleged to have stolen over $50,000 in pension benefits from the New York State and Local Employees Retirement System, payable to her deceased uncle, David Wynn. Wynn was a New York State pensioner who retired from the Port Authority of New York & New Jersey and passed away in 1988.  

“Those who defraud our state pension system are stealing from every individual who is counting on their pension for a secure retirement, and that is why our office will bring these fraudsters to justice,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and we will hold people accountable when they rip off honest New Yorkers.”

“Graycelia Cizik thought she could stay under the radar and game the state retirement system,” New York State Comptroller DiNapoli said. “Her arrest sends a strong message that we will find those who try and defraud the retirement system, and we will work with law enforcement to prosecute them to the full extent of the law and retrieve the stolen funds.” 

The Comptroller’s office uncovered Cizik’s uncle’s death, determined that Cizik had taken the payments, and referred the matter to the Attorney General’s Office as part of the Comptroller and Attorney General’s Joint Task force on Public Integrity.  According to authorities, Cizik failed to notify the Retirement System of Wynn’s death. Instead, authorities allege, Cizik submitted false information to Wynn’s bank indicating that he was still alive, while she utilized a power of attorney to access his account and withdraw pension benefits paid on his behalf. The indictment alleges that Cizik stole over $50,000 in pension benefits.

Cizik was arrested by agents of the Polk County Sheriff’s Office in Florida and extradited to Albany County to face the charge. She was arraigned on the indictment before Supreme Court Justice Roger McDonough in Albany County Court and entered a plea of not guilty. Cizik was remanded to custody in lieu of a written bail application and will next appear in court on August 27th.

The charges are accusations and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant would face up to 5 to 15 years in state prison.

Attorney General Schneiderman and State Comptroller DiNapoli thank the Polk County, Florida Sheriff’s Office and the Albany County, New York Sheriff’s Office for their assistance.

The case is being handled by Assistant Attorney General Benjamin Clark of the Criminal Enforcement and Financial Crimes Bureau. The Deputy Bureau Chief of the Criminal Enforcement and Financial Crimes Bureau for upstate New York is Stephen J. Maher. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary T. Fishman. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

The investigation was conducted by Investigator Dennis Churns and Deputy Chief Investigator Antoine J. Karam, who were assisted by Investigator Marcia Hinds of the Office of the New York State Comptroller. The Investigations Division is led by Chief Investigator Dominick Zarrella.

Op-ed published on The Huffington Post

By Eric T. Schneiderman

The historic settlement signed yesterday with Bank of America is welcome news for New York families still struggling to recover from the mortgage crisis. B of A, one of the nation’s largest mortgage lenders, will pay a record $16.65 billion for its reckless misconduct – and $800 million of that will go to assist New Yorkers at risk of losing their homes.

This is the largest settlement with a single institution in U.S. history – surpassing the record $13 billion deal with JPMorgan Chase entered into last November. And it is another major victory in the fight to hold accountable the major banks that caused the mortgage crisis and nearly brought down the U.S. economy.

As the state’s chief law enforcement officer – and as co-chair of President Obama’s Residential Mortgage-Backed Securities Working Group – my guiding principle is equal justice under law. There must be one set of rules for everybody, and everybody must play by the same set of rules. What Bank of America did was bend the rules for its own financial gain. Millions of Americans paid the price for that greed.

As Bank of America acknowledged in its own statement of facts, the bank made serious misrepresentations to the public in the packaging, marketing, sale and issuance of residential mortgage-backed securities, both by B of A itself and by Countrywide Financial and Merrill Lynch, which Bank of America acquired in 2008.

B of A, Merrill and Countrywide securitized and sold residential mortgage-backed securities with underlying mortgage loans that they knew were defective, misrepresenting the quality of those loans to investors.  That misconduct, and similar misconduct by other major banks, caused the financial crisis.

But when I took office in 2011,  the federal government and other state attorneys general  were about to sign an agreement releasing the banks – including Bank of America – from much of their liability. I refused to sign, and less than one year later, the President formed the working group and named me co-chair.

Since then, we have continued to investigate those banks and have negotiated deals totaling about $37 billion – roughly $2 billion of which has gone to help struggling New York families. If you include the 2012 National Mortgage Settlement, the total is more than $60 billion – and New York has gotten more than $4 billion.

The $16.65 billion Bank of America deal will funnel $800 million to New York – $300 million in cash and at least $500 million in creditable consumer relief.

That includes, for the first time, principal reductions on mortgages insured by the Federal Housing Administration. About 23 percent of all the distressed home loans in the state are FHA-insured, and these represent the largest portion of Bank of America’s remaining distressed loan portfolio in New York.

Previous settlements excluded families with these types of loans from getting this badly needed relief, which is why I made it a priority to help this neglected segment of New York homeowners. B of A will provide at least $60 million in first lien principal reductions, including for FHA-insured loans.

The bank will also transfer $20 million worth of distressed mortgages and abandoned properties to nonprofits and land banks, which help communities buy derelict homes, rehab them and put them back in the housing market. This includes $20,000 per property to assist with revitalization costs.

And, Bank of America will provide at least $17 million to land banks, housing counseling agencies and legal service providers, so these front-line agencies can expand their vital services.

This settlement sends a strong message that banks that prey on customers and investors will be held accountable. I will continue to investigate financial institutions that bend the rules for their own benefit, and pursue equal justice for all New York families.

NEW YORK -- Attorney General Eric T. Schneiderman announced today that Topline Appliance Center and its principal owner, Michael Moretti, have agreed to pay $1.56 million to settle allegations that they knowingly failed to collect and pay sales taxes and corporate franchise taxes to New York over an almost 10-year period. Topline Appliance Center has multiple locations in New Jersey, and it sells and delivers high-end appliances to New York customers. 

“Topline Appliance Center’s failure to collect and pay sales and corporate taxes is unacceptable,” said Attorney General Schneiderman. “Out-of-state companies that do business in New York without collecting or paying the proper amount of taxes have an unfair advantage over New York businesses that play by the rules. This settlement levels the playing field in the retail appliance industry and sends a message that cheating on taxes will not be tolerated.” 

Attorney General Schneiderman alleges that over the course of almost 10 years, Topline Appliance Center and Moretti sold or delivered high-end appliances to New Yorkers from their New Jersey stores without collecting any New York State and local sales taxes.  Topline also failed to pay proper New York corporate franchise taxes despite doing business in New York.  Failing to collect and pay these taxes gave Topline an improper competitive advantage over appliance stores located in New York.

This action began when a whistleblower filed a complaint in state Supreme Court in Manhattan.  Attorney General Schneiderman’s investigation concluded that Topline and its principal owner evaded approximately $668,000 in taxes. 

This settlement is the latest tax-related recovery resulting from an action filed under the New York False Claims Act. The Act is one of the state's most powerful civil fraud enforcement tools because it allows whistleblowers and prosecutors to take legal action against companies or individuals that defraud the government. Persons found liable under the False Claims Act must pay triple damages, penalties and attorneys’ fees. Under the False Claims Act, whistleblowers may be eligible to receive up to 30 percent of any money recovered by the government as a result of information they provide. The whistleblower in this action will receive $313,984 from the settlement proceeds. 

Raphael Katz of the law firm of Sadowski Fischer, PLLC, which represents the whistleblower, said, “Attorney General Schneiderman and his staff swiftly and effectively investigated the whistleblower’s claims, taking full advantage of the important partnership between law enforcement and whistleblowers.  The Attorney General’s important work prevented a New Jersey company from evading taxes and unfairly competing with New York businesses that pay sales tax.”

Attorney General Schneiderman expresses his appreciation to the New York State Department of Taxation and Finance for its important contributions to resolving this investigation.  Attorney General Schneiderman also expresses his thanks to the whistleblower and his attorneys at Sadowski Fischer, PLLC.

The Attorney General's investigation was conducted by Taxpayer Protection Bureau Senior Counsel Lisa M. White, with the assistance of Legal Support Analyst Rupinder Garcha and Supervising Forensic Auditor Edward J. Keegan.  Former Investigator Erin Wolfe, Investigators Andrew Scala, Bradford Farrell, and Michael Ward, former Supervising Investigator Kenneth Morgan, current Supervising Investigator Luis A. Carter, Deputy Chief John McManus, Deputy Chief Vito Spano and Chief Dominick Zarrella also assisted in the investigation.  

The Taxpayer Protection Bureau is overseen by Bureau Chief Thomas Teige Carroll and Deputy Bureau Chief Scott J. Spiegelman. The Taxpayer Protection Bureau is part of the AG’s Criminal Justice Division, which is led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan.

SYRACUSE – Attorney General Eric T. Schneiderman today announced awards to law enforcement agencies in Central New York, as well as the New York State Police, through the Attorney General’s inVEST Partnership, a statewide program that helps law enforcement agencies purchase bulletproof vests for sworn officers. The funding awarded today includes $91,375 to support the purchase of 215 vests for the Syracuse Police Department, $37,613.16 to purchase 92 vests for the Onondaga County Sheriff’s Office, $19,375 to support the purchase 50 vests for the City of Utica Police Department, and $111,960.50 to support the purchase of 277 vests for the New York State Police. In total, the Attorney General announced $289,852.94 in grants today to support the purchase of 708 bulletproof vests. This is the fourth round of awards. Previously, Attorney General Schneiderman announced more than $2.4 million to support the purchase of almost 7,000 bulletproof vests for law enforcement agencies in Western New York, the Capital Region, the North Country, New York City, Long Island, Westchester, and the Hudson Valley.

“When our brave law enforcement officers go to work to keep our communities safe, we owe it to them to do everything we can to keep them safe,” said Attorney General Schneiderman. “The inVEST Partnership grants we are announcing today will arm hundreds of brave officers in Central New York and troopers across the state with life-saving vests they might not otherwise have, adding a critical layer of safety to one of the most dangerous jobs in the world.”

In 1998, the federal government passed the Bulletproof Vest Partnership (BVP) Grant Act, which established a competitive grant program to provide up to 50 percent matching funds for state, county and local law enforcement organizations to purchase bulletproof vests. Unfortunately, because of partisan gridlock in Washington, BVP grants to departments in New York State have dropped precipitously in recent years.  In fact, since peaking in 2010, grants awarded to law enforcement agencies in New York State decreased by 81 percent, or approximately $3.27 million. In June, Attorney General Schneiderman announced the inVEST Partnership to replace funds cut from the BVP program.

The danger that law enforcement officers face on a daily basis cannot be overstated: Since 1984, 71 officers in New York State have been shot and killed in the line of duty, including four in the Hudson Valley, and 29 different law-enforcement agencies have experienced gunfire fatalities. The National Institute of Justice (NIJ) estimates that bulletproof vests have saved more than 3,000 police officers’ lives nationwide during the same time period.

On July 28th, New York Police Department Detective Mario Muniz was shot multiple times, including once in the chest, while attempting to execute an arrest warrant on a suspected sex offender. The round that struck his chest was stopped by his bulletproof vest, likely saving his life, according to NYPD Commissioner William Bratton.

New York State Police Superintendent Joseph D’Amico said, “This grant money will be used to equip our recruit class with bulletproof vests, a vital piece of equipment that not only can prevent injury, but saves officers’ lives. It is critical that our members have the necessary equipment to be able to safely and effectively perform their duties. I want to thank the Attorney General for his commitment to the safety of the members of the New York State Police.”

City of Syracuse Police Chief Frank Fowler said, “On behalf of the Syracuse Police Department, I thank Attorney General Eric Schneiderman for his commitment to the safety of our officers. The financial support couldn’t come at a better time. Yesterday, the department welcomed over 30 new officers. Each officer who was sworn in will be receiving a bulletproof vest courtesy of the Attorney General’s inVEST program.”

“It is imperative that we keep our officers safe so, in turn, they can keep our neighborhoods and families from harm. I'm pleased that the Syracuse Police Department will be receiving significant support from the inVEST program, and I thank the Attorney General for his leadership on this issue,”State Senator David J. Valesky said.

Assembly Member William Magnarellisaid, “Funding through Attorney General Eric Schneiderman’s inVEST program provides needed funding to update police equipment in the form of bulletproof vests that strained local budgets may not allow. It is important to keeping our police safe on the job. The announcement demonstrates the Attorney General’s commitment to our law enforcement officers.”

Assembly Member Albert Stirpesaid, “By supplying our police officers with this protective equipment, we continue to ensure they have full access to the tools needed to continue protecting our citizens and strengthening our community. I thank the Attorney General’s office for sharing my commitment to our officers.”

The Attorney General’s Office committed $3.5 million from criminal and civil forfeiture funds to create the inVEST Partnership. The office began accepting applications for the inVEST Partnership on June 9th. The awards announced today represent the fourth round of funding. Subsequent rounds will be announced in the coming weeks. For those departments that receive awards, matching funds will cover up to 50 percent of the total costs of vests, vest carriers, attachments, inserts, fitting, shipping and applicable taxes. Funding is available to equip newly hired officers or to replace expiring vests for veteran officers. Vests must conform with the performance standards delineated by NIJ in its most recent testing report.

The inVEST Partnership will provide matching funds for up to 10,000 vests. Although the initial priority application deadline for the inVEST Partnership has passed, law enforcement agencies still in need of funding for protective vests are encouraged to apply. Late applicants will be reviewed based on funding availability, on a first-come, first-served basis. In order to apply, an agency must be a member of or join the United States Department of Justice Asset Forfeiture and Money Laundering Equitable Sharing Program. Approved departments will be required to submit receipts for reimbursement by the end of this year.

The breakdown of today's awards is as follows:

The first round awards for Western New York, the Capital Region and the North Country can be found here. The second round awards for New York City and Long Island can be found here. The third round of awards for Westchester and the Hudson Valley can be found here.

$289K In inVEST Partnership Grants Will Support Purchase Of 708 Life-Saving Bulletproof Vests For 13 Law Enforcement Agencies

ROCHESTER – Attorney General Eric T. Schneiderman today announced the guilty plea of Deborah Cleveland, 42, of Rochester, for stealing approximately 650 prescription narcotics from a total of eight elderly patients at the Heather Heights Assisted Living and Memory Care Facility in the Town of Pittsford. Cleveland was previously employed as a medication technician at the facility, where she stole prescription narcotics for personal consumption and attempted to conceal the theft by substituting pills with a similar appearance. Cleveland pled guilty to the misdemeanor crime of Attempted Scheme to Defraud in the 1st Degree before The Honorable John Bernacki in Pittsford Town Court.  

“All New Yorkers expect caregivers to provide appropriate treatment to seniors in our state’s nursing facilities, and our office will hold caregivers accountable when they violate the considerable trust that is placed in them,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and that is why our office is committed to protecting everyday New Yorkers, including the elderly.” 

Cleveland is expected to receive a sentence of probation and four weekends in the Monroe County Jail when she is sentenced by Judge John Bernacki on October 16th. 

The investigation was conducted by the New York State Attorney General’s Medicaid Fraud Control Unit, in conjunction with the New York State Department of Health’s Bureau of Narcotics Enforcement. Victims include patients ranging in age from 66 to 98. In the case of one victim, identified in court documents as resident “A.G.,” Cleveland stole 230 Oxycodone pills from the victim’s narcotic packs and replaced those pills with similar-looking non-narcotic medications.  

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

BALLSTON SPA – Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced the arrest and indictment of Bruce C. Tanski of Clifton Park, Katina M. Fogarty of Latham, and Nicholas M. DiNova, Jr. of Halfmoon for their roles in an alleged scheme to circumvent campaign finance laws. 

The case, being prosecuted by Attorney General Schneiderman’s office, is the product of a joint investigation with the Federal Bureau of Investigation (FBI) and Comptroller DiNapoli’s Office. The three defendants are accused of evading requirements that donations be in the true name of the donor. Tanski is accused of evading campaign contribution limits. The contributions were allegedly funneled to then-Town of Halfmoon Supervisor Melinda “Mindy” Wormuth, who, in a public corruption case pending in Saratoga County Court, is separately charged with stealing thousands of dollars from campaign accounts.

“The law applies to everyone equally, no matter how rich or how powerful, and that is why my office has aggressively prosecuted over 50 individuals in public corruption cases since 2011, including a sitting state senator, a current member of the New York City Council, and elected officials from both parties across New York State,” said Attorney General Schneiderman. “Public corruption undermines faith in government, and that is why I have made cracking down on public corruption a top priority.”

“These individuals allegedly attempted to secretly funnel money into the town supervisor’s campaign chest, breaking the law and breaking the trust of the public,” said New York State Comptroller DiNapoli. “My office will continue to work with law enforcement across the state to fight corruption and the abuse of taxpayers. The public should be able to put its trust into government, and I’ll do my part to find those who violate that trust.” 

“Individuals who seek to circumvent election laws undermine the entire election process thus denying a level playing field for all candidates,” said Andrew W. Vale, Special Agent in Charge of the Albany Division of the FBI. “The FBI will continue to work closely with our law enforcement partners to see that public corruption is rooted out at all levels.”

Tanski is accused of circumventing election law and campaign contribution limits, with the assistance of six persons who allegedly served as straw donors, including co-defendants Katina Fogarty and Nicholas DiNova, Jr. Tanski, who has several businesses with interests in the Town of Halfmoon, allegedly contributed a total of $6,000 to the campaign of Wormuth through the straw donors, in violation of the $1,000 contribution limit. 

According to court papers, Tanski evaded the $1,000 limit by providing each of six individuals with $1,000, who then issued a personal check for $1,000 to the campaign in his or her own name and from his or her bank account. The indictment charges that these contributions caused the treasurer of the Friends of Mindy Wormuth campaign account to file false financial disclosure reports with the state Board of Elections. The Wormuth Campaign received the $6,000 in donations between March 2013 and July 2013. In 2011, Tanski was admonished by the state Board of Elections for exceeding the $1,000 contribution limit to Wormuth’s campaign in 2007 and 2009.

Tanski is charged in the indictment with Offering a False Instrument for Filing, a class E felony, as well as six counts of violating Election Law § 14-120(1), a class A misdemeanor, titled Campaign Contributions to be Under True Name of Contributor; and one count of violating Election Law § 14-126(4), a class A misdemeanor, for violating the campaign limit established by the Election Law.  Fogarty and DiNova are each separately charged with one count of violating Election Law § 14-120(1).  The case is pending before Saratoga County Court Judge Jerry J. Scarano.

The Attorney General and Comptroller thank Special Agents Timothy Coll and Vinesh Manglavil of the FBI (Albany office) for their cooperation and assistance in this investigation.  

Prosecuting the case are Senior Counsel Darren Miller and Assistant Attorney General Bridget Holohan-Scally of the Public Integrity Bureau of the Attorney General’s Office. The Public Integrity Bureau is led by Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. The Public Integrity Bureau is part of the Criminal Justice Division led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan. The investigation was handled by Investigator Mitch Paurowski, with support from Antoine Karam and Dominick Zarrella of the Attorney General's Investigations Bureau, with assistance provided by Jason Blair, forensic auditor for the Attorney General’s Office, and legal analyst Sara Pogorzelski. 

The Comptroller’s investigation was handled by the Division of Investigations.

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

The investigation into allegations of corruption in the Town of Halfmoon continues.  Anyone with additional information on this matter should call the Attorney General’s Office at 518-474- 8686.

NEW YORK    Attorney General Eric T. Schneiderman today announced the guilty plea of Hyun Ok Yoon Ung, the lead defendant charged in connection with a criminal ring which sold so-called “party packs,” involving cocaine and prostitutes, and laundering the illegal proceeds through front businesses that included a clothing wholesaler, a wig wholesaler, a limousine service and a beauty supply wholesaler. A joint undercover investigation by the Attorney General’s Organized Crime Task Force and the New York Police Department busted 18 individuals, including Hyun Ok Yoon Ung, in January, at a time when the gang was marketing its services to a high-end clientele coming to the New York metropolitan area for the Super Bowl.

Hyun Ok Yoon Ung, 41, of Woodbury, New York, pled guilty in Manhattan Supreme Court today to Promoting Prostitution in the Third Degree, a “D” felony. She faces a prison term of 1 to 3 years when she is sentenced on October 24.  She has also agreed to forfeit more than $700,000, proceeds from her criminal business. 

“Those who poison our communities with drugs and exploit women by promoting prostitution will be held accountable,” Attorney General Schneiderman said. “My office will continue to work with our partners in law enforcement on multi-agency investigations like this one to keep our communities safe.”

Hyun Ok Yoon Ung was arrested as part of “Operation Out of Bounds,” an 11-month investigation utilizing undercover investigators, physical and electronic surveillance and analysis of business records.  The Attorney General’s Organized Crime Task Force and the New York Police Department determined that the defendant and her co-conspirators, targeted wealthy out-of-town customers as prospective clients, especially before and during large events in the tri-state area. For example, just 10 days before this year’s the Super Bowl, a text message was blasted to frequent customers noting that “new sexy & beautiful girls R in town waiting for u.” The criminal ring also promoted its prostitution business with numerous advertisements on the internet and public access television. In addition to selling sex, the ring sold cocaine to the same customers. Transcripts of conversations that were intercepted by electronic surveillance revealed that the ring used various code names for cocaine, including “party,” “powder,” “maek” or “Maekjoo,” a Korean term for beer and “Soojaebi,” a Korean noodle and vegetable soup. Intercepted conversations also revealed that prostitutes would bring cocaine with them to meetings with johns who had ordered the drugs in advance. This is what they referred to as “party.” 

A copy of the Attorney General’s January press release on the case is here.

Cases against the other defendants are pending.

The investigation was directed by OCTF Senior Investigator Joel Poccia, OCTF Supervising Investigator Paul Grzegorski and Downstate OCTF Deputy Chief Christopher Vasta. Dominick Zarrella is chief of the Attorney General’s Investigations Bureau. New York Police Department Detective Walter Harkins, Sergeant Sunghoon Kim and Lieutenant Michael Morales of the Vice Enforcement Major Case Team worked on the case, as did Homeland Security Investigations Special Agent Jeffrey Bashara, Group Supervisor Michael Conlon and Deputy Special Agent In Charge Anthony Scandiffio.

The case was prosecuted by OCTF Assistant Deputy Attorney General Howard Feldberg and Deputy Bureau Chief Tarek Rahman, with assistance from Deputy Attorney General Peri Alyse Kadanoff. The Executive Deputy Attorney General for Criminal Justice is Kelly Donovan. 

NEW YORK – Attorney General Eric T. Schneiderman today filed a lawsuit in New York County Supreme Court against four interrelated companies and their principals for operating a fraudulent loan modification scam. The lawsuits were filed against Home Affordable Direct, Inc. (Farmingdale, NY), Home Affordable Solutions, Inc. (Farmingdale, NY), JR Holding Group Corp (Babylon, NY), Clear Solutions and Settlements, Inc. (Tampa, FL) and their principals, Javier Gutierrez and Shadi Soumekh.  The companies and their principals are alleged to prey upon financially vulnerable consumers by claiming they can provide substantial relief from unaffordable mortgage payments through loan modifications and other forms of foreclosure prevention.  The firms allegedly collect illegal advance fees and routinely fail to deliver on their promises. The lawsuit seeks to stop the illegal practices, provide restitution and damages to consumers, obtain disgorgement of profits, as well as penalties and costs.   

“There has to be one set of rules for everyone, no matter how rich or powerful, and that is why our office has aggressively cracked down on those who prey upon vulnerable consumers at risk of losing their home,” said Attorney General Schneiderman. “I am proud to stand up for middle class New Yorkers against predatory scammers seeking to exploit those still reeling from the housing crisis.”

Earlier today the Attorney General’s office secured a temporary restraining order barring the companies from collecting illegal advance fees from homeowners before they accept and execute a loan modification agreement and advertising and operating their business without providing the disclosures required by the federal Mortgage Assistance Relief Services (MARS) Rule.  The court also placed a freeze on company bank accounts.  

Attorney General Schneiderman’s lawsuit alleges that the companies engaged in fraudulent and illegal practices in the marketing and operation of their foreclosure rescue and loan modification business involving consumers from New York and outside the state. Through frequent radio advertisements and their website, they falsely represent that they are affiliated with the United States Treasury Department’s Home Affordable Modification Program (HAMP), that they have the ability to “pre-qualify” homeowners for a modification under HAMP and can determine whether a homeowner qualifies for HAMP during a single phone call. These advertisements lacked critical disclosures required by law that are designed to protect consumers, such as informing the consumer that Home Affordable Direct is not associated with the government, that their services are not approved by the government or the consumer’s lender, and that the consumer’s lender may not agree to modify the consumer’s mortgage loan even if the consumer uses Home Affordable Direct.  

Company salespersons furthered the fraud by falsely representing to homeowners that they could get their mortgage servicing company to reduce the principal balance of their mortgage loan to the value of their home or that they would be able to obtain a specific reduction in their monthly mortgage payment. The companies failed to provide required disclosures that would have alerted consumers to be wary of these misleading claims, particularly the disclosure that the consumer can stop doing business with the companies at any time and that they do not have to pay anything to the company if they reject the offer of mortgage assistance obtained from the consumer’s lender or servicer. The companies collected hefty upfront fees from homeowners, ranging from $1,500 to over $11,000, in violation of the law. The companies usually refused to refund the illegal advance fees once consumers realized they were victims of a scam.

If you were a victim of Home Affordable Direct or any of its affiliated companies or if you believe you were a victim of another mortgage fraud, please file a complaint with the Attorney General’s Office.  Complaint forms are available here.  You may also call the Attorney General’s Consumer Hotline at 1-800-771-7755.

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

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

This case is part of a joint federal-state sweep by the Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states targeting scam operations that prey on financially struggling homeowners and those facing foreclosure. Along with the FTC and CFPB, attorneys general from the following states participated in the sweep: Arizona, Delaware, Florida, Indiana, Illinois, Kansas, Louisiana, Maryland, Michigan, New Mexico, New York, North Carolina, Ohio, Washington and Wisconsin. Also participating is the Maryland Commissioner of Financial Regulation and Washington Department of Financial Institutions.

BINGHAMTON – Attorney General Eric T. Schneiderman today announced awards to law enforcement agencies in the Finger Lakes and Southern Tier, through the Attorney General’s inVEST Partnership, a statewide program that helps law enforcement agencies purchase bulletproof vests for sworn officers. The funding awarded today includes $16,817 to support the purchase of 71 vests for the Steuben County Sheriff’s Office, $10,465 to support the purchase of 26 vests for the City of Binghamton Police Department, $4,847.94 to support the purchase of 12 bulletproof vests for the Village of Watkins Glen Police Department, and $4,387.50 to support the purchase of 9 vests for the Horseheads Police Department, among others.

In total, the Attorney General announced $60,535.95 in grants today to support the purchase of 175 bulletproof vests. This is the fifth round of awards. Previously, Attorney General Schneiderman announced more than $2.6 million to support the purchase of over 7,500 bulletproof vests for law enforcement agencies in the Southern Tier, Western New York, the Capital Region, Central New York, the North Country, New York City, Long Island, Westchester, and the Hudson Valley.

“When our brave law enforcement officers go to work to keep our communities safe, we owe it to them to do everything we can to keep them safe,” said Attorney General Schneiderman. “The inVEST Partnership grants we are announcing today will arm brave officers at 14 law enforcement agencies in the Finger Lakes and Southern Tier regions with life-saving vests they might not otherwise have, adding a critical layer of safety to one of the most dangerous jobs in the world.”

In 1998, the federal government passed the Bulletproof Vest Partnership (BVP) Grant Act, which established a competitive grant program to provide up to 50 percent matching funds for state, county and local law enforcement organizations to purchase bulletproof vests. Unfortunately, because of partisan gridlock in Washington, BVP grants to departments in New York State have dropped precipitously in recent years.  In fact, since peaking in 2010, grants awarded to law enforcement agencies in New York State decreased by 81 percent, or approximately $3.27 million. In June, Attorney General Schneiderman announced the inVEST Partnership to replace funds cut from the BVP program.

The danger that law enforcement officers face on a daily basis cannot be overstated: between 1984-2014, 71 officers in New York State have been shot and killed in the line of duty. The National Institute of Justice (NIJ) estimates that bulletproof vests have saved more than 3,000 police officers’ lives nationwide during the same time period.

On July 28th, New York Police Department Detective Mario Muniz was shot multiple times, including once in the chest, while attempting to execute an arrest warrant on a suspected sex offender. The round that struck his chest was stopped by his bulletproof vest, likely saving his life, according to NYPD Commissioner William Bratton.

Binghamton Mayor Richard C. Davidsaid, “Bulletproof vests are critical tools in keeping our police officers safe while protecting our neighborhoods. I thank Attorney General Schneiderman for recognizing the importance of public safety in our community and sharing in the City’s commitment to protect those who put their lives on the line every day.”

Binghamton Police Chief Joseph Zikuski said, “I thank Attorney General Eric Schneiderman for demonstrating his commitment to the safety of our law enforcement officers. With recent cuts in federal funding for bulletproof vests, the funding his office is providing will help save lives and keep our officers safe.”

“Each day our law enforcement officers go to work to protect us, and we need to do all we can to protect them,” said Assemblywoman Donna Lupardo. “The inVEST Partnership will equip more officers in our community with life-saving vests, and I thank Attorney General Eric Schneiderman for his efforts to provide this critical funding.”

The Attorney General’s office committed $3.5 million from criminal and civil forfeiture funds to create the inVEST Partnership. The office began accepting applications for the inVEST Partnership on June 9th. The awards announced today represent the fifth round of funding. Subsequent rounds will be announced in the coming weeks. For those departments that receive awards, matching funds will cover up to 50 percent of the total costs of vests, vest carriers, attachments, inserts, fitting, shipping and applicable taxes. Funding is available to equip newly hired officers or to replace expiring vests for veteran officers. Vests must conform with the performance standards delineated by NIJ in its most recent testing report.

The inVEST Partnership will provide matching funds for up to 10,000 vests. Although the initial priority application deadline for the inVEST Partnership has passed, law enforcement agencies still in need of funding for protective vests are encouraged to apply. Late applicants will be reviewed based on funding availability, on a first-come, first-served basis. In order to apply, an agency must be a member of or join the United States Department of Justice Asset Forfeiture and Money Laundering Equitable Sharing Program. Approved departments will be required to submit receipts for reimbursement by the end of this year.

The breakdown of today's awards is as follows:

The first round awards for Western New York, the Capital Region and the North Country can be found here. The second round awards for New York City and Long Island can be found here. The third round of awards for Westchester and the Hudson Valley can be found here. The fourth round of awards for Central New York can be found here.

NEW YORK – Attorney General Eric T. Schneiderman today announced the arrests of four individuals for allegedly practicing dentistry without a license at two Brooklyn dental clinics, which are separately owned by a father and his son who are licensed dentists. The men, arrested on felony charges, are Konstantin Shtrambrand, Ilya Zolotar, Sergey Tolokolnikov, and Hakob Gahnapetyan. If convicted, they face up to four years in prison. 

“New Yorkers deserve to have confidence that the people providing them healthcare are licensed professionals,” Attorney General Schneiderman said. “Plain and simple: there is one set of rules for everyone and my office will not tolerate those who seek to skirt the rules, including in the medical profession.”

In court filings, the Attorney General’s Office charged that Shtrambrand, 43, Zolotar, 48, and Tolokolnikov, 54, held themselves out to be dentists and were practicing dentistry at J.S. Atlantic Dental, P.C., located at 1707 Avenue P, Brooklyn. Gahnapetyan, 44, held himself out as a dentist and practiced dentistry at the dental office of Grigory Shyknevsky, D.D.S., at 2523 Ocean Avenue in Brooklyn.  J.S. Atlantic Dental is owned by Joseph Grigory Shyknevsky, DDS, the son of Grigory Shyknevsky.  At the time of the arrests, search warrants were executed at their practice locations; the investigation is continuing.

The unlicensed defendants were arrested yesterday following an undercover investigation by the Attorney General’s Medicaid Fraud Control Unit (MFCU). During the undercover operation, undercover investigators allegedly observed each of the defendants examining patients inside the dental offices. The defendants wore medical clothing, plastic gloves and performed dental work. The investigators also witnessed a defendant performing dental procedures on another patient.

During each observed examination, each defendant allegedly placed their hands in a patient’s mouth. Shtrambrand, Gahnapetyan, Tolokolnikov gave medical advice – something that only a licensed dentist can do.  In one instance, Zolotar was seen drilling a patient’s tooth, an invasive and potentially dangerous procedure that only a licensed dentist can perform. The defendants’ alleged actions routinely placed patients at risk because they received dental care from an unqualified person. 

Under the New York State Education Law, only a person licensed to practice dentistry can practice dentistry in New York or use the title “dentist.” Anyone who practices, offers to practice or holds himself out as being able to practice dentistry without a New York State license is committing a crime.

Following their arrest by investigators from MFCU, the defendants were arraigned in New York City Criminal Court, Brooklyn before Criminal Court Judge Matthew Sciarrino. They each face one felony count of Unlawful Practice of a Profession (Dentistry), a class E Felony.  MFCU’s investigation into defendants’ employers continues.  

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

The investigation was conducted by MFCU Special Investigator Alex Kats and Special Auditor Investigator Robyn Irby-Organ with the assistance of Senior Special Investigator Al Maiorano, Deputy Chief Investigator Kenneth Morgan, Senior Special Auditor Investigator Cristina Marin and Regional Chief Auditor Thomasina Smith.  

The Attorney General thanked the US Department of Health and Human Services, Office of Inspector General, Office of Investigations (Region II) for referring this matter to his office.

The criminal case is being prosecuted by Special Assistant Attorney General Herman Wun with the assistance of Deputy Regional Director Larissa Payne and Regional Director Christopher M. Shaw.  Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations – Downstate.  MFCU is led by Acting Special Deputy Attorney General Amy Held.  The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

Op-Ed Published in the Ithaca Journal, the Press & Sun-Bulletin and the Elmira Star-Gazette

By Eric T. Schneiderman

The historic settlement with Bank of America is welcome news for families still struggling to recover from the mortgage crisis. B of A will pay a record $16.65 billion for its reckless misconduct — and $800 million will go to assist New Yorkers at risk of losing their homes.

This is the largest settlement with a single institution in U.S. history — surpassing the record $13 billion JPMorgan Chase deal — and is another major victory in the fight to hold accountable the major banks that caused the mortgage crisis and nearly crashed the U.S. economy.

As the state's chief law enforcement officer — and as co-chair of President Barack Obama's Residential Mortgage-Backed Securities Working Group — my guiding principle is equal justice under law. There must be one set of rules for everybody, and everybody must play by the same rules. Bank of America bent the rules for its own financial gain, and millions of Americans paid the price.

As acknowledged in the settlement's statement of facts, Bank of America, Countrywide Financial and Merrill Lynch — which B of A acquired in 2008 — securitized and sold residential mortgage-backed securities with underlying mortgage loans that they knew were defective, misrepresenting the quality of those loans to investors. That misconduct, and similar misconduct by other major banks, caused the financial crisis.

When I took office in 2011, the federal government and other state attorneys general were about to sign an agreement releasing those banks from much of their liability. I refused to sign, and less than one year later, the president formed the working group and named me co-chair.

Since then, we have negotiated deals totaling about $37 billion — including roughly $2 billion to help struggling New York families. With the 2012 National Mortgage Settlement, the total tops $60 billion — more than $4 billion of that for New York.

The $16.65 billion Bank of America deal will funnel $800 million to New York — $300 million in cash and at least $500 million in creditable consumer relief.

That includes, for the first time, principal reductions on Federal Housing Administration-insured mortgages, which make up about 23 percent of New York's distressed home loans. Previous settlements excluded these types of loans, which is why I made it a priority to help this neglected segment of New York homeowners. B of A will provide at least $60 million in first lien principal reductions, including for FHA-insured loans.

The bank will also transfer $20 million worth of distressed mortgages and abandoned properties to nonprofits and land banks, which help communities buy derelict homes, rehab them and put them back in the housing market. This includes $20,000 per property to assist with revitalization costs.

And, Bank of America will provide at least $17 million to land banks, housing counseling agencies and legal service providers, so these front-line agencies can expand their vital services.

This settlement sends a strong message that banks that prey on customers and investors will be held accountable. I will continue to investigate financial institutions that bend the rules for their own benefit, and pursue equal justice for all New York families.

NEW YORK – On behalf of New York State’s workforce and in recognition of Labor Day, Attorney General Eric T. Schneiderman today issued a Labor Day report containing highlights of his office’s labor enforcement work over the past three years. The Labor Day report, Standing Up For Working New Yorkers, features the results of an ongoing effort to pursue both criminal and civil cases against unscrupulous business owners and bring fairness to workplaces across the State of New York.  Schneiderman announced the report during a press conference with labor leaders before marching in the Buffalo Labor Day Parade.

As the report reveals, since Attorney General Schneiderman took office in January 2011, his Labor Bureau has successfully brought cases against employers that cheated their workers out of wages and otherwise violated state labor laws, returning over $17 million in restitution to almost 14,000 workers and recovering more than $2 million in restitution and penalties for the state.

“Vigorously enforcing our labor laws to protect workers’ rights is an essential component of our commitment to enforcing one set of rules for everyone,” said Attorney General Schneiderman. “Depriving workers of their wages or other lawful benefits hurts families and communities, and creates an unfair advantage for employers that disregard the laws. This report demonstrates my office’s aggressive enforcement to protect workers’ rights; it shows that my office will use every tool at its disposal to do so.”  

The Labor Day report contains highlights of cases involving many different industries, affecting a many different types of workers, and resolving a variety of labor law violations --from wage theft to retaliation.

“I want to thank Attorney General Eric Schneiderman for releasing this report in Buffalo at our annual Labor Day parade,” said Richard Lipsitz, President of the Western New York Area Labor Federation. “Time and time again, the Attorney General has demonstrated his commitment to hardworking men and women. He has also sent a message that depriving workers of fair wages and equal employment opportunities will not be tolerated in New York State.”

Liz Smith, the Worker Center Project Organizer with the Western New York Council on Occupational Safety & Health,said, "We commend the great leadership of NY state Attorney General Eric Schneiderman and the work he has done to protect workers from wage theft, retaliation and to ensure that staffing agencies and businesses comply with the law and treat workers fairly and with dignity."

The report describes the Attorney General’s actions:

• Protecting the rights of fast food and car wash workers;
• Enforcing the prevailing wage laws, which require a higher rate of pay for construction and maintenance of governmental buildings;
• Combating unlawful employer retaliation against employees who have stood up for their rights;
• Criminally prosecuting employers who commit egregious violations, showing extreme disregard for workers’ basic rights and the rule of law;
• Innovating to protect workers who are not covered by traditional labor laws; and
• Protecting workers in a digital world.

Attorney General Eric T. Schneiderman believes that in New York, there must be equal justice under law and one set of rules for everyone.  He encourages every worker who feels that his/her rights have been violated to contact the Office of the Attorney General’s Labor Bureau by calling (212) 416-8700 or visiting the Office of the Attorney General's website here.

BUFFALO – Attorney General Eric T. Schneiderman announced the filing of a lawsuit today against Evans Bank, N.A. and Evans Bancorp, Inc. (together, “Evans”) alleging that the regional bank engaged in unlawful discrimination by “redlining,” or denying access to mortgage loans to predominantly African-American neighborhoods in the City of Buffalo because of the racial composition of those neighborhoods.

The lawsuit, filed in the U.S. District Court for the Western District of New York, alleges that Evans has systematically denied its mortgages and services to African-Americans in the Buffalo metro area. From at least 2009 to the present, Evans has redlined the predominantly African-American neighborhoods, intentionally excluding these neighborhoods from its lending area; developing mortgage products that it made unavailable to these neighborhoods, notwithstanding the creditworthiness of the applicants; and refusing to solicit customers, market mortgages, or provide banking facilities in those predominantly African-American neighborhoods.

“Redlining is illegal, discriminatory, and must be made a thing of the past, once and for all,” Attorney General Schneiderman said. “It is crucial that all New Yorkers, regardless of the color of their skin or the racial composition of their neighborhood, be afforded an equal opportunity to obtain credit. This is especially true as families continue to recover from the mortgage crisis--and as we work to achieve a fairer, and more just, New York State. My office will continue to do all it can to restore the health of our economy and ensure that all New Yorkers are treated equally, regardless of race or ethnicity.”

The lawsuit alleges that Evans created a map defining its lending area that included most of the City of Buffalo and its surroundings, but excluding the predominantly African-American neighborhoods on Buffalo’s Eastside. Evans called the included areas on its map its Trade Area. By excluding certain neighborhoods from its Trade Area, Evans automatically disqualified Eastside residents—regardless of their creditworthiness—from obtaining certain mortgage products. Evans designed these mortgage products to be available only to borrowers in certain limited geographic areas, none of which included the Eastside.

This action is part of an ongoing, wider investigation by Attorney General Schneiderman’s Civil Rights Bureau into mortgage redlining by banks operating in New York, and it was prompted by concerns that banks had stopped lending to minority communities in the wake of the mortgage crisis and financial collapse of 2008. Historically, banks have engaged in redlining in racially segregated areas, and according to U.S. Census Data from 2005 to 2009, New York ranks as the most highly segregated state in the United States. According to U.S. Census data, the Buffalo metro area was among the most highly segregated large metro areas in the nation in 1980, 1990, 2000, and as recently as 2010, when it was the sixth most highly segregated large metro area in the United States.

The lawsuit further alleges that Evans refused to solicit customers and market its loan products outside its Trade Area, including in the Eastside neighborhoods.  Evans further avoided locating its branch offices and other facilities in the Eastside neighborhoods, instead locating them so as to form an exclusionary ring around those neighborhoods.

The court papers allege that, by redlining the Eastside neighborhoods, which are home to more than 85,000 people, Evans has excluded an area that is home to over 75% of Buffalo’s African-American population from the marketing and sales of its mortgage products and services.  The lawsuit alleges that a statistical analysis shows the racially discriminatory effects of the bank’s practices, demonstrating that Evans failed to draw mortgage applications from and make mortgage loans to African-American borrowers and Eastside residents at the rates expected based on the performance of comparable banks operating in the same area during the same period as Evans.

The complaint alleges, for example, that Evans received 1,114 residential mortgage applications in the Buffalo metro area from 2009 to 2012, only four of which were reported as from African-American applicants.  Similarly, of these 1,114 residential mortgage applications, the lawsuit alleges that only eight came from the Eastside neighborhoods, only one of which was reported as from an African-American applicant.  The lawsuit alleges that Evans’s rates of attracting loan applications from and originating loans to African-American borrowers and Eastside residents lag far behind comparable banks and that these discriminatory effects are the result of Evans’s racially discriminatory policy of redlining the Eastside neighborhoods.

Marc Morial, president and CEO of the National Urban League, said, "It is imperative that we work to close the wealth chasm that exists between African Americans and white Americans.  Today's redlining lawsuit is an important part of the economic empowerment discussion happening nationally and in our communities.  When banks open their doors for business, they should provide equal and open access to all individuals, regardless of race.  I thank the Attorney General's Civil Rights Bureau for confronting ongoing redlining of minority communities."

Joseph Kelemen, executive director of Western New York Law Center, said, "Buffalo and Erie County are still suffering from the mortgage crisis. Redlining compounds the effects of that crisis by denying individuals access to homes, jobs, and economic opportunity, and the result is that entire neighborhoods are prevented from recovering and developing.  The Western New York Law Center applauds Attorney General Schneiderman for addressing this problem."

The lawsuit alleges violations of the Fair Housing Act, 42 U.S.C. § 3601 et seq., the New York State Human Rights Law, N.Y. Exec. L. § 290 et seq., and Chapter 154 of the Code of the City of Buffalo, § 154-1 et seq.

This matter is being handled by Assistant Attorney General Mayur Saxena and Special Counsel Jessica Attie of the Attorney General’s Civil Rights Bureau, which is led by Bureau Chief Kristen Clarke. Executive Deputy Attorney General for Social Justice is Alvin Bragg.

The Attorney General's Office is committed to protecting all New Yorkers from unlawful discrimination. To file a civil rights complaint, contact the Attorney General’s Office at (212) 416-8250, civil.rights@ag.ny.gov or visit www.ag.ny.gov.

A copy of today's complaint can be read here.

NEW YORK – Leading a coalition of 11 states, the City of New York, and the District of Columbia, New York State Attorney General Eric T. Schneiderman today announced that his office is filing a motion to intervene in a court challenge to a 2010 settlement agreement with the federal Environmental Protection Agency (EPA) that committed the agency to adopt greenhouse gas emissions standards for new and existing fossil-fuel electric generating power plants. The 2010 settlement agreement is being challenged by a coalition of 12 states, led by West Virginia, many of which are in coal-producing regions. The EPA has undertaken the rulemaking process for two rules to establish greenhouse gas emissions standards for power plants, in accordance with the settlement agreement.

“From extreme droughts to extreme storms, we’re already seeing impacts associated with uncontrolled climate change across the country – and we must rise to meet its challenge with all the urgency it demands,” said Attorney General Schneiderman. “Effectively combating climate change requires every state to play by the same set of rules and to do their fair share. I am proud to lead this coalition of states and to put New York at the forefront of this effort.”

Joining Attorney General Schneiderman in the motion filed today are the states of California, Connecticut, Delaware, Maine, New Mexico, Oregon, Rhode Island, Vermont and Washington, the Commonwealth of Massachusetts, the District of Columbia, and the City of New York.

In 2006, this coalition and others challenged the EPA’s then-refusal to curb greenhouse gas emissions from power plants under the federal Clean Air Act in the case New York v. EPA.  After the U.S. Supreme Court ruled in its landmark 2007 decision Massachusetts v. EPA that carbon dioxide is an air pollutant subject to regulation under that federal law, the EPA was legally compelled to address greenhouse gas emissions from power plants. In 2010, in response to the coalition lawsuit, the EPA agreed to a schedule for proposing and taking final action on regulating greenhouse gas emissions from both new and existing power plants.

The EPA has since commenced the rulemaking process to limit climate change-causing pollution from power plants, including a January 2014 proposal to limit emissions from new power plants and a recent June proposal to limit emissions from existing power plants. The EPA’s June proposal on existing power plants seeks to establish a partnership between the EPA and the states—with EPA setting an emissions-reduction goal and the states deciding on the best cost-effective means of achieving those goals within each state. The EPA has been conducting hearings across the country on the rulemakings. The EPA estimates that between $55 billion and $93 billion in public health and climate benefits would result from implementing the power plant rules by 2030.

The lawsuit challenging the EPA’s commitments to limiting greenhouse gas emissions from power plants under the New York v. EPA settlement agreement was filed by the States of West Virginia, Alabama, Indiana, Kansas, Kentucky, Louisiana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota and Wyoming.

The motion filed today by Schneiderman’s coalition in the U.S.  Court of Appeals for the District of Columbia disputes the West Virginia claim that invalidating the 2010 agreement would block the ongoing EPA rulemaking and seeks, among other things, to ensure that the EPA encounters no further delays in finalizing the rules.

Power plants that generate electricity from coal, oil, and natural gas are the largest source of greenhouse gas emissions in the United States, contributing almost one-third of all greenhouse gas emissions in the country.  Left unchecked, climate change – spurred by greenhouse gas emissions from power plants and other sources – threatens public health, safety, the environment, and our economy by increasing the spread of disease and heat-related illness, increasing the frequency and severity of extreme rainfall in some areas and drought in other areas, damaging coastal areas through rising sea levels, disrupting natural ecosystems, and reducing the availability of drinking water in many areas.

The case is being handled by Assistant Attorneys General Michael J. Myers, Morgan Costello, and Brian Lusignan of the Environmental Protection Bureau, with support from Deputy Bureau Chief Lisa M. Burianek, Bureau Chief Lemuel M. Srolovic, Executive Deputy Attorney General for Social Justice Alvin Bragg, and First Deputy for Affirmative Litigation Janet Sabel.  

NEW YORK – In remarks delivered during a forum titled “Beyond Gridlock: State Leadership on Energy and Environmental Issues” at Pace University School of Law, Attorney General Eric T. Schneiderman today released a report that, for the first time, details the increasing frequency and intensity of extreme rainfall events across New York State and outlined the unique approach his office has taken on environmental issues in the last 3 ½ years.  The report, “Current And Future Trends In Extreme Rainfall Across New York State,” highlights this disturbing weather trend in recent years in virtually every part of the state, including Long Island, the Southern Tier, the Capital Region, the North Country and Western New York.   

According to data from a recent United States National Climate Assessment, there have been dramatic increases in the frequency and intensity of extreme rain storms across New York. Just last month, a record 13.57 inches of rain fell in a single microburst in Islip – an amount equal to an entire summer’s worth of rain for Long Island – causing massive damage and disruptions in the area. 

While no individual storm can be tied to climate change, the trends in extreme rainfall already being felt across New York State are consistent with scientists’ predictions of new weather patterns attributable to climate change. Those extreme rainfall trends are causing untold damage to our communities and to our environment. The report highlights the need to focus on greater resiliency planning and response measures for our infrastructure, neighborhoods and landscape in order to promote a safer and more sustainable New York. In his remarks at Pace University, Attorney General Schneiderman also highlighted the unique efforts his office has taken over the last three years to combat climate change, to make our air and water cleaner and our communities healthier and more sustainable.

“The extreme weather events that have been overwhelming our communities, damaging critical infrastructure and harming our homes, are the latest evidence of the need to take immediate action to protect our climate and our environment,” said Attorney General Schneiderman. “While Washington seems to be unwilling to take on the tough fights required to protect our environment, our homes and our communities, we in New York have chosen to act. No single storm can be attributed to climate change, yet scientists tell us climate change ‘loads the dice,’ making extreme weather events more likely.  That is why I am committed to fighting to ensure that New York’s communities – and the critical services they rely upon – are protected, and that every New Yorker has access to clean air and water. That is why I have pushed for legislation that would require utilities to improve resiliency planning, and why my Environmental Protection Bureau has been aggressive and creative in cracking down on polluters.”

The report issued today by the Attorney General includes a historical analysis of 2-inch rainfall events in New York, which was conducted by the National Oceanographic and Atmospheric Administration (NOAA) Northeast Regional Climate Center at Cornell University.  That research shows a marked increase in the occurrences of two2-inch rainfalls beginning in the mid-1990s.  Research from the Center also found that intervals between extreme “100-year” rainfall events shortened dramatically for the years 1978 to 2007, to a frequency of only 60 years.  

The report also finds that the best-available scientific projections of precipitation trends suggest that we can expect the frequency of extreme rainfall events to increase in the future. According to the recent United States National Climate Assessment report, if current trends in greenhouse gas emissions remain as high as they are today for the remainder of this century, the frequency of extreme rainfall as measured by the 20-year daily storm may increase by up to 300% to 400% before the end of the 21st century.

The extreme weather affecting New York has put the real and present dangers of climate change into sharp focus.  In many cases, tens of thousands of New Yorkers are affected, with recovery efforts costing hundreds of millions of dollars.  With New York businesses, governments, and institutions challenged to minimize these risks, the report highlights the need for a response to these challenges that includes reducing emissions of heat-trapping greenhouse gases that contribute to a changing climate; increasing the resiliency of our communities by requiring consideration of current and projected trends in extreme rainfall and climate change in construction projects and building codes, and expanding New York State’s engagement in national and international efforts to limit emissions of climate change pollution.

Under Attorney General Schneiderman’s leadership, the office’s Environmental Protection Bureau has worked aggressively and creatively to reduce greenhouse gases, fight for greater resiliency in our critical infrastructure, and ensure clean air and water for every community in New York.  Among his office’s accomplishments:

            Addressing Climate Change and Resiliency Planning

• Successfully defending the Regional Greenhouse Gas Initiative, a multi-state agreement that puts a price on carbon pollution in order to reduce emissions.  
• Introducing first-in-the-nation legislation requiring the state’s electric and gas utilities to assess their vulnerability to climate change, and to document how they intend to protect vital public services from climate impacts.
• Intervening in the Con Edison storm-hardening proceeding before the state Public Service Commission in order to focus attention on the real and increasing threat that climate change posed to Con Edison’s infrastructure and, ultimately, its customers, and to ensure that any proposal by Con Ed to harden its system accommodated future climate impacts such as an increase in sea level. As a result of expert testimony submitted by Attorney General Schneiderman’s office and others on potential climate impacts, the PSC required Con Ed to ensure that any new infrastructure it builds can withstand a future with more extreme coastal storms and rising sea levels.
• Leading a coalition of seven states in filing a notice of intent to sue the EPA for violating provisions of the Clean Air Act by failing to address methane emissions from the oil and gas industry, including those from fracking. As a heat-trapping gas, methane is more than 20 times as potent as carbon dioxide, and the oil and gas industry is the single largest source of man-made methane emissions in the United States.  
• On Tuesday, September 2, 2014, leading a coalition of 10 states, the District of Columbia and New York City to intervene in a lawsuit to defend a 2010 settlement between New York and the federal Environmental Protection Agency (EPA) that requires the EPA to establish emissions standards for fossil-fuel fired electric generating facilities.  The settlement is being challenged by a coalition of 12 states, many of which are located in coal-producing regions.

            Protecting New York’s Right to Clean Air and Water

• Suing the Environmental Protection Agency (EPA) for violating the Clean Air Act by refusing to effectively limit air pollution from wood heaters, including outdoor wood boilers used in many areas of New York.  In response, the EPA proposed stronger air pollution standards for new wood heaters for the first time in 25 years, and for outdoor wood boilers for the first time ever.
• Leading a coalition of 11 states in securing a settlement with the EPA that compelled the Agency to update national air quality standards for soot pollution.  Soot has been linked to heart attacks, strokes, and aggravated asthma in children.  The new tighter standards for soot pollution could prevent more than 35,000 premature deaths annually, according a report prepared for the American Lung Association, the Clean Air Task Force, and Earthjustice. 
• Taking aggressive action to protect our water by going after polluters, defending our state’s clean water standards and pushing for stronger laws to protect water quality. 
• Securing a unique felony conviction and jail time for the operator of an illegal landfill who was dumping potentially carcinogenic debris within the New York City watershed, which provides drinking water to nearly half the State’s population.  
• Securing a landmark agreement with New York City to significantly reduce discharges of nitrogen from municipal wastewater treatment plants into Long Island Sound and Jamaica Bay. These nitrogen discharges reduce oxygen in coastal waters, harming fish and other marine life, so the city also agreed to fund extensive marshland restoration in the Jamaica Bay.
• Proposing first-in-the-nation legislation to ban microbeads, a form of plastic pollution that presents an emerging threat to our lakes and rivers. Approximately 19 tons of microbeads are washed down the drain in New York State every year, and because they’re so small and buoyant, many of them pass right through wastewater treatment plants into our lakes and rivers.  In our waters, the microbeads act like tiny sponges, accumulating toxic chemicals, before they are eaten by fish. People who eat those fish may be exposed to those harmful chemicals, including some that have been linked to birth defects, cancer, and developmental deficits in children.

Peter Lehner, Executive Director, Natural Resources Defense Council, said: "Attorney General Schneiderman's report underscores the pressing need for improved resiliency planning and concerted effort to reduce climate change pollution.  From Hurricane Sandy to a flooded Long Island Expressway this summer, New Yorkers know more frequent and heavy rainfall is our new reality. Green infrastructure—like porous pavement, green roofs, park space and sidewalk trees—is a cost-effective way to prevent flooding from the start, while also helping to improve local water quality, cool and beautify city neighborhoods. By boosting our natural flood defenses and moving critical infrastructure out of harm’s way—from  hospitals and schools, to roads and our electric supply—we can better weather the next big storm."

Peter Iwanowicz, Executive Director of Environmental Advocates of New Yorksaid, "The latest findings from Attorney General Eric Schneiderman highlight the impacts that New Yorkers are experiencing as our climate changes.  As the findings make clear, New York needs to adopt a climate action plan to lower the pollutants that fuel climate change, to address the impacts in a socially just way, and to harness the tremendous economic potential of clean energy."

Abigail Dillen,Vice President of Litigation, Climate and Energy, Earthjusticesaid: "This important report on our extreme new weather will come as no surprise to New Yorkers. We know climate change is here because we are getting hit with one terribly damaging storm after another. The Attorney General's Office is showing extraordinary leadership in confronting our climate threat. Now, it's time for our leaders in Washington to follow suit."

For a copy of the new report, “Current And Future Trends In Extreme Rainfall Across New York State,” or more information on the Office of the Attorney General’s work to protect New York’s environment, visit www.ag.ny.gov.  

NEW YORK – Attorney General Eric Schneiderman today released the following statement on the decision by CVS Health to stop tobacco sales as of September 3, nearly a month earlier than planned:

“By accelerating its plan to remove tobacco from store shelves, CVS has prioritized public health over corporate profit, and I applaud them for that. CVS clearly recognizes  the contradiction of having these dangerous and devastating tobacco products on the shelves of a retail chain that services consumers’ health care needs.

“I call on other major pharmacy chains across the country – including Wal-Mart, Walgreens, Rite-Aid, Safeway and Kroger – to remove tobacco products from their shelves immediately. As pharmacies increasingly market themselves as a source for community health care, they send a mixed message by continuing to sell deadly tobacco products. The fact that these stores profit from the sale of cigarettes and tobacco must take a backseat to the health of New Yorkers and customers across the country.”

In March, Attorney General Schneiderman and Ohio Attorney General Mike DeWine led  the Attorneys General of 28 other states and territories in a national effort calling on major pharmacies to stop selling tobacco products.

Tobacco-related disease is the leading cause of preventable death in the United States, causing more than 480,000 deaths in the last year alone – more than AIDS, alcohol, illegal drug use, car accidents and firearm-related deaths combined.  Since 1965, more than 20 million Americans have died prematurely as a result of smoking. The devastating health effects of these tobacco products have been well documented for more than 50 years, since the 1964 Surgeon General’s report on the health consequences of smoking.

Furthermore, health care costs and productivity losses attributable to smoking cost the nation at least $289 billion each year. Almost 90% of all adult smokers start smoking by 18 years of age. “Big Tobacco” relies on getting young people addicted to cigarettes and keeping them as life-long smokers.

Attorney General Schneiderman has successfully undertaken a number of efforts to keep tobacco out of the hands of young New Yorkers. Under his leadership, the state’s Tobacco Compliance Bureau has cracked down on websites illegally selling cigarettes, which provide teens with easy access to tobacco, and shut down so-called “roll your own” cigarette shops in New York City, which were popular among teenagers and young adults. The Attorney General’s Criminal Prosecution Bureau has also taken down a cigarette trafficking ring that operated up and down the Eastern Seaboard.

NEW YORK – Attorney General Eric Schneiderman today released the following statement on the decision by the organizers of the New York City St. Patrick’s Day parade to lift the ban on gay groups participating in the march:

“The decision by the organizers of the St. Patrick’s Day Parade to open the parade to LGBT groups is an important step forward in the fight to ensure equal justice and opportunity for all New Yorkers. Next March, by taking the simple step of marching alongside their fellow St. Patrick’s Day celebrants, the members of NBCUniversal.com will be sending a powerful message. I congratulate the organizers of the parade for taking a strong first step forward in the fight for justice and equality. I also want to applaud NBCUniversal.com for standing up for the rights of all New Yorkers.  I look forward to next year’s parade, which will serve as the latest example of New York leading the way in equality.”   

HAUPPAUGE – Attorney General Eric T. Schneiderman today announced the unsealing of a felony indictment charging Vicki Price, a licensed practical nurse, in connection with a morphine overdose of a wheelchair-bound resident at Bayview Nursing and Rehabilitation Center, at 1 Long Beach Road in Island Park. If convicted, Price, 46, faces up to 4 years in prison.

“New York’s health care professionals take an oath to care for their patients – and that care is their first duty,” Attorney General Schneiderman said. “Our most vulnerable patients deserve our care, and my office will pursue justice when our basic tenets of care are not met. There is one set of rules for all caregivers, and those rules must be enforced.”

The overdose was allegedly caused by Price, who administered morphine instead of a prescribed muscle relaxant to a 46-year-old resident on February 16, 2012, and then attempted to cover up her mistake by allegedly falsifying documents. Price did not reveal the mistake even after the resident, who suffers from spina bifida, lost consciousness and was admitted to Long Beach Medical Center.  The resident was released from the hospital five days later, after being treated with Narcan, a medication used to counter the effects of an opiate overdose.   

Price, of Freeport, is charged with one count of endangering the welfare of a vulnerable elderly person, or an incompetent or physically disabled person, in the second degree, a class E felony; one count of endangering the welfare of an incompetent or physically disabled person, a class A misdemeanor; one count of wilful violation of the public health laws, an unclassified misdemeanor; and two counts of falsifying business records in the first degree, a class E felony.  She faces up to 1 1/3 to 4 years in prison if convicted. She is no longer employed at the nursing home.

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

Price was arraigned today in Nassau County Court before Judge Anthony Paradiso.  She was released on her own recognizance and is due back in court on October 16, 2014.

The case was investigated by Special Investigator Christopher Ward and Regional Chief Investigator Greg S. Muroff.  

The case is being prosecuted by Special Assistant Attorney General Megan Gallagher, of the Medicaid Fraud Control Unit’s Hauppauge Regional Office. Jane Zwirn-Turkin is regional director for the Regional Office. 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.