NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has obtained a settlement from debt buyer Asta Funding, Inc. (“Asta”) for bringing improper debt collection actions against hundreds of New York consumers. For years, Asta sued New York consumers and obtained uncontested default judgments against consumers who failed to respond to the lawsuits, even though the underlying claims were untimely under New York law. Under the settlement, Asta will move to vacate more than 300 improperly obtained judgments totaling more than $1.7 million. Asta will also reform its debt collection practices and pay civil penalties and costs in the amount of $100,000.

“Filing lawsuits on debts that have surpassed the statute of limitations is an abuse of the court system and hurts New Yorkers,” said Attorney General Schneiderman. “My office will continue to hold debt collectors and lenders accountable, so that New Yorkers can keep more of their hard-earned money where it belongs – in their pockets.”

Asta is a debt buyer that purchases unpaid consumer debts such as credit card debts from the original creditor or from other debt buyers at deeply discounted prices. Asta’s subsidiaries, which include Palisades Collection, LLC and Palisades Acquisition XVI, LLC, then attempt to collect on the debt.

It is unlawful for a debt collector to bring suit against a consumer when the claims are outside of the applicable statute of limitations. Under New York law, for an action to be timely filed it must be commenced not only within New York’s statute of limitations, but also within the statute of limitations of the state where the cause of action accrued, if other than New York. In debt collection actions, a cause of action accrues where the original creditor resides. For example, while New York’s statute of limitations to collect on a debt is generally six years, if the original creditor was located in Delaware, which has a three-year statute of limitations, the shorter statute of limitations would govern the action.

The Attorney General’s investigation found that despite the clear requirements of New York law, Asta brought debt collection actions that were untimely under the statutes of limitations where the causes of action accrued. Because most consumers fail to respond when they are sued by a debt collector, Asta obtained default judgments in its favor based on these time-barred claims.

In addition to seeking to vacate more than 300 improperly obtained judgments and paying $100,000 in civil penalties and costs, Asta has agreed to several important reforms of its current practices in New York. These include:

• Disclosing in written or oral communications that a debt is outside the statute of limitations and that the company will not sue to collect on the debt.
• Disclosing in written or oral communications that a debt is outside the date for reporting the debt provided for by the federal Fair Credit Reporting Act and that because of the age of the debt the company will not report the debt to any credit reporting agency.
• Alleging certain information relevant to the statute of limitations in any debt collection complaint, such as the name of the original creditor, and the date of the consumer’s last payment on the debt.

In addition to filing time-barred debt collection actions, from 2006 through 2012, contrary to New York law, Asta permitted its employees to sign affidavits outside the presence of a notary and then deliver them to an employee who would notarize the affidavits in bulk. The settlement requires Asta to ensure that affidavits are notarized in a manner consistent with the requirements of New York law, including that the affidavit or other sworn statement is signed in the presence of a licensed notary.

This settlement is a part of the Attorney General’s continuing efforts to combat unlawful and abusive debt collection activity. In May 2014 and January 2015, Attorney General Schneiderman obtained settlements from three major debt buyers, Portfolio Recovery Associates, Sherman Financial Group, and Encore Capital Group, who filed time-barred debt collection cases. Those settlements resulted in the vacature of more than 7,500 improperly obtained judgments estimated at more than $34 million. More information on those settlements is available here and here.

In addition, in September 2014, New York’s Court System adopted a comprehensive set of reforms related to consumer debt collection actions that incorporate many of the recommendations of the Attorney General’s Office. More information on those reforms is available here.

Consumers facing default judgments arising from debt collection actions brought by Asta or its subsidiaries who believe that the default judgment was improperly obtained because the claim was time-barred should contact the Attorney General’s Office within 60 days. Such judgments may be eligible for vacature pursuant to the settlement.

This case was handled by Assistant Attorney General Melissa O’Neill and Bureau Chief Jane M. Azia, both in the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General of Economic Justice Karla G. Sanchez.

NEW YORK – Attorney General Eric T. Schneiderman today released the following statement in support of all those gathering across the country to demand fairness for low-wage workers:

“Today, across the country, workers are standing up to send an important message: They deserve a raise, and they deserve to be treated fairly. In a society as wealthy as ours, there is no reason that anyone who is willing to work full time should live in poverty. And in a society as advanced as ours, it is outrageous that many employers in our state fail to pay their workers even the minimum that they are legally owed. That’s called wage theft, and my office has been – and will continue to be - very aggressive in bringing both civil and criminal cases to stop it. I am proud to stand with these workers today in New York as they fight for a raise and for fairness.”

Since 2011, Attorney General Schneiderman has successfully returned more than $20 million in restitution to more than 17,000 workers across New York, and recovered more than $2 million in restitution and penalties for the state. This year alone, the Attorney General has taken a number of actions against labor law violations:

• On Tuesday, the Attorney General secured a total of $970,000 in settlements with current and former owners of 35 Domino’s franchise locations in 13 counties statewide, from Long Island to the suburbs of Buffalo, for violating workers’ basic rights.
• On Monday, his office sent letters to 13 major retailers seeking more information on their possibly disruptive ‘on call’ scheduling practices.
• Last week, with the NYC Department of Investigation, the Attorney General announced the arrests of five contractors charged with underpaying workers on public works projects in New York City by nearly $1 million.
• In February, a judge awarded a judgment of over $2 million in unpaid wages and penalties to the Attorney General against New Majority Holdings, LLC, a New York City-based Papa John’s franchisee, and its owner Ronald Johnson.
• In January, the Attorney General obtained a judgment for nearly $800,000 against Emmanuel Onuaguluchi, the operator of Emstar Pizza Inc., another New York City-based Papa John’s franchisee.

If you are aware of a violation of workplace rights in New York State, whether as a victim or a concerned witness, please file a complaint with the Attorney General’s Labor Bureau by filling out this complaint form or by calling the Labor Bureau at 212-416-8700. 

NEW YORK– Attorney General Eric T. Schneiderman today announced a $10 million settlement of a lawsuit filed against the auditing firm Ernst & Young LLP (“Ernst & Young”) over its involvement in a financial statement fraud at the now-defunct investment bank, Lehman Brothers Holdings, Inc. That money will be distributed as restitution to investors in Lehman securities, along with some $99 million being paid by Ernst & Young to settle a private federal class action that relied in part on facts uncovered by the Attorney General’s investigation. No other law enforcement authority has brought an enforcement action in connection with the 2008 collapse of Lehman. Moreover, today’s settlement resolves the first lawsuit brought against an auditor of a public company under New York’s securities laws. The case also resulted in an important decision by the Appellate Division’s First Department, which confirmed the Attorney General’s power to obtain disgorgement of professional fees received by a firm, in this case Ernst and Young’s fees.

“The basic duty and legal obligation of auditors is to ensure that the public companies they audit provide reliable and unbiased information about their operations to the investing public. If auditors issue opinions that are unreliable or provide cover for their clients by helping to hide material information, that harms the investing public, our economy, and our country,” Attorney General Schneiderman said. “Auditors will be held accountable when they violate the law, just as they are supposed to hold the companies they audit accountable.”

Under the terms of the settlement, Ernst & Young will pay $10 million—most of which will go to investors, with the remaining settlement funds to be used to reimburse New York State for investigation and litigation costs.

The Attorney General’s case, People v. Ernst & Young LLP, filed in Manhattan Supreme Court pursuant to the Martin Act and Executive Law § 63(12) in December 2010, concerned Ernst & Young’s role, as Lehman’s auditor, in an alleged fraud involving Lehman’s use of “Repo 105” transactions. Repo 105s were transactions in which Lehman transferred to various overseas counterparties investment grade securities in return for cash, with the binding understanding that Lehman would repurchase the same securities within a very short time, often just a few days. As alleged in the Attorney General’s lawsuit, Lehman, with Ernst & Young’s approval and complicity, treated the Repo 105s as sales, which enabled Lehman to temporarily remove tens of billions of dollars of securities from its balance sheet without requiring Lehman to disclose the Repo 105 transactions as financings on its financial statements. The Repo 105s served no legitimate business purpose. As alleged in the suit, Lehman used the funds derived from the transactions to pay down billions of dollars of liabilities, which had the effect of temporarily and misleadingly reducing Lehman’s leverage ratios, an important metric for analyzing Lehman’s liquidity and financial health.

As alleged by the Attorney General, Ernst & Young approved Lehman’s accounting for the Repo 105 transactions and issued unqualified opinions certifying Lehman’s financial statements, in spite of knowing that Lehman was not disclosing the existence or impact of the Repo 105s in its annual and quarterly consolidated financial statements, all of which Ernst & Young audited or reviewed. Ernst & Young also failed to object when Lehman allegedly misled analysts on its quarterly earnings calls regarding its leverage ratios, and did not inform Lehman’s Audit Committee about a highly-placed whistleblower’s concerns about Lehman’s use of Repo 105 transactions.

The lawsuit charged that Ernst & Young’s assent to Lehman’s failure to include any indication in its financial statements about the Repo 105 transactions was fraudulent and deceptive under the Martin Act and Executive Law § 63(12), as was allowing Lehman to the use the Repo 105s to manipulate its balance sheet and leverage ratios.

The case against Ernst & Young was prosecuted by Senior Trial Counsel David N. Ellenhorn, Assistant Attorneys General Armen Morian and Tanya Trakht, and Bureau Chief Chad Johnson, all of the Investor Protection Bureau, and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.

NEW YORK - Attorney General Eric Schneiderman sent a letter to the New York State Board of Elections (“BOE”) today, urging board members to immediately close a loophole in NYS law that allows individuals and corporate interests to contribute virtually unlimited amounts to political campaigns across the state. The letter comes just one day before the BOE is scheduled to consider the loophole at a public meeting in Albany. 

Last month, Attorney General Schneiderman called on state lawmakers to close the LLC loophole as part of a comprehensive ethics and campaign finance reform package. However, as the A.G.’s letter today explains, “with the prospects for real reform on hold indefinitely, the BOE must not squander this chance for progress.”

In his letter to the BOE, Attorney General Schneiderman also notes that the LLC loophole allows donors to conceal their identity through multiple business entities and, as a result, “defeats the transparency and accountability that are the bedrock principles of the existing campaign finance system.”

Read the full letter here.

Op-Ed Published In The New York Daily News

By Eric T. Schneiderman

On Tuesday, my office announced the latest in a string of enforcement actions against unscrupulous employers who cheat their employees out of wages, tips and overtime. Since I took office in January 2011, we’ve recovered more than $20 million for 17,000 workers.

Morally bankrupt wage practices and laws cannot hold. Enforcement actions by my office and others are having an impact, and pressure is building: Wednesday, fast-food workers across the country protested against unconscionably low minimum wages that leave even fully paid employees below the poverty line, unable to support themselves and their families.

We must use every tool at our disposal to lift the living standards of low-wage employees. Here in the Empire State — birthplace of historic labor reforms enacted by Gov. Al Smith in the aftermath of the Triangle Shirtwaist Factory fire — a 55-year-old provision of our Labor Law creates the opportunity to overcome gridlock and provide a more livable wage for our most hard-pressed workers.

While the statewide minimum wage is set by the Legislature and the governor, state law endows the state’s commissioner of labor with the authority to investigate and increase the minimum wage for any occupation if the commissioner determines that a substantial number of employees “are receiving wages insufficient to provide adequate maintenance and to protect their health.”

The law spells out in detail how the commissioner must proceed, beginning with convening a “Wage Board” to investigate and make recommendations about wage levels.

This process has been used twice in recent years, in limited ways, to raise wages for certain categories of workers. It is clearly lawful for our commissioner of labor to increase wage minimums, provided the statute’s guidelines and procedures are followed. New York courts have consistently held this process to be constitutional.

With President Obama’s proposal to increase the federal minimum wage dead on arrival, attention is turning to state and local laws. Twenty-nine states and the District of Columbia now have minimum wages that exceed federal wage law requirements; Seattle made history by enacting a plan to raise its minimum to $15.

But progress in New York has stalled: The governor’s proposal to include a modest minimum wage increase in the state budget was not enacted, and Mayor de Blasio’s laudable call for a more substantial minimum-wage hike in the city was embraced only by the state Assembly.

The state’s minimum wage remains a paltry $8.75 an hour, on track to go up to $9 at year’s end.

As a practical matter, faced with the real prospect of action by the commissioner of labor, legislators would be much more likely to pass an increase that could otherwise be held up for years. Lawmakers zealously guard their prerogatives and, as much as some might oppose a minimum-wage increase, they will not want to see the issue taken out of their hands.

Low-wage workers have power themselves to get the ball rolling. In a strikingly populist provision of the law, a petition by 50 employees in any occupation forces the commissioner of labor to conduct an investigation into the adequacy of their wages. The investigative process itself could shine a massive spotlight on the struggles of low-wage workers. And any fair examination of their conditions would almost certainly demand relief.

Just over 50 years ago, when Lyndon Johnson outlined his priorities as President, he spoke of his personal experiences with poverty and his longstanding desire to help those who suffered under its burdens. “Now I do have that chance,” he said, “and I’ll let you in on a secret: I mean to use it.”

The secret’s out: New York’s Labor Law provides the power to help low-wage workers earn enough to meet their basic needs. It may be time to use it.

Schneiderman is New York’s attorney general.

WATERTOWN—Attorney General Eric T. Schneiderman today announced that his office has issued a cease and desist letter to LeRay 300, LLC, a Virginia-based company owned by Jeffrey S. Lewis, also of Virginia. The business operates as a rental property company near Fort Drum under the name of Woodcliff Community. The letter orders Woodcliff Community to immediately cease charging service members illegal fees in violation of the Servicemember Civil Relief Act and collecting undisclosed, non-refundable "reservation deposits" in violation of New York State law, among other allegations. The rental property, located in Calcium, New York, is approximately one mile from the main gate at Fort Drum and advertises itself as the "finest neighborhood serving the Fort Drum community."

"Protecting New Yorkers from unscrupulous landlords concerned only with their bottom line, particularly when the tenants are the brave men and women of our nation's military, is a top priority for my office," said Attorney General Schneiderman. "My office will continue to stand with tenants across New York State to ensure landlords follow the law.”

The Servicemember Civil Relief Act is a vital federal law that provides rights and protections to active duty and recently separated members of the military and their families in order to ensure they are able to devote their time and energy to their military duties. Among the protections provided is the ability to terminate a residential lease without penalty prior to the end of the lease term under certain circumstances, including deployment or a permanent change of station. Attorney General Schneiderman's ongoing investigation has resulted in allegations that Woodcliff Community frequently assesses various move-out penalties when soldiers assert their right to terminate their lease early pursuant to the Servicemember Civil Relief Act.

Consumers who have unresolved complaints with LeRay 300, LLC, Woodcliff Community or any other business are urged to contact Attorney General Schneiderman's Regional Office in Watertown at 315-523-6080.

This case is being handled by Assistant Attorney General In Charge Deanna R. Nelson and Assistant Attorney General Alicia M. Lendon, both of the Watertown Regional Office. The Watertown Regional Office is part of the Division of Regional Affairs led by Executive Deputy Attorney General for Regional Affairs Martin J. Mack. 

RENSSELAER – Attorney General Eric T. Schneiderman and State Comptroller Thomas P. DiNapoli today announced the sentencing of Ronald Foust and Jeffrey Clark, former employees of the City of Rensselaer Department of Public Works, for teaming with DPW Commissioner Thomas Capuano to divert $46,000 from the city by pocketing the cash from scrap metals acquired as part of their jobs with the city.

Foust pleaded guilty to Fourth Degree Grand Larceny and was sentenced to five years of probation. Clark pleaded guilty to Attempted Fourth Degree Grand Larceny. Each must repay one-third of what was stolen. The sentencing took place in Rensselaer County Court before Judge Andrew Ceresia.

“In an effort to combat public corruption and root out the misuse of taxpayer funds, my office has partnered with Comptroller DiNapoli to form Operation Integrity,” said Attorney General Schneiderman. “These sentences echo our ongoing message that those who violate the public trust by stealing from their communities will be brought to justice.”

"Public resources do not exist for the profit of city employees," said State Comptroller Thomas P. DiNapoli. "These defendants conspired with their supervisor to steal scrap metal from the city taxpayers and line their pockets. This behavior will not be tolerated, and I will continue to partner with Attorney General Schneiderman to expose corruption and protect taxpayer resources at all levels of government ."

According to documents filed in court, surveillance videos from a local scrap yard showed Foust and Clark cashing in items discarded by city residents. Foust and Clark later implicated their supervisor Thomas Capuano, the Commissioner of the Rensselaer Department of Public Works, in the scheme.

The Sanitation Division within the City’s Department of Public Works collects the city’s metals, including refrigerators, stoves, and copper coil that city residents leave on their curbs for home pick-up. The Sanitation Division then takes collected items to Rensselaer Iron, a scrap yard in Rensselaer County where the city has an account. In exchange, Rensselaer Iron writes a check to the city for the value of the metal turned in.

Court documents indicate that Foust, who was the foreman of the sanitation crew, told investigators that at some point prior to 2010, he had the idea that rather than take both the bulk metal and scrap metal to Rensselaer Iron, he could separate the scrap metal from the bulk metal, and take the scrap metal to another scrap yard in Albany, Capitol Scrap, that paid out cash. In doing so, he could pocket some extra money without the bulk metal even appearing to have been stripped of its parts. Foust took this idea to his supervisor, Mr. Capuano, who approved of the idea and allowed him to use a city truck to make the trips during business hours. According to documents filed in court, Foust and Clark shared part of the proceeds with Mr. Capuano. This scheme involved at least $46,000 in theft from the city during the four- year period.

Capuano is due in court for sentencing May 21.

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

Prosecuting the case is Assistant Attorney General Christopher Baynes of the Attorney General’s Public Integrity Bureau, Former Assistant Attorneys General Rachel Doft and Colleen Glavin also worked on the case. 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 Division of Criminal Justice led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan. The investigation was handled by Investigator Dennis Tomasone, with support from Deputy Chief Investigator Antoine Karam and Chief Investigator Dominick Zarrella of the Attorney General's Investigations Bureau.

The joint investigation was conducted with the Comptroller’s Division of Investigations.

SYRACUSE – Attorney General Eric T. Schneiderman announced today that an expanded version of a bill he proposed last year, the Abandoned Property Neighborhood Relief Act, has been reintroduced in the New York State Legislature. The modified bill, which addresses so-called “zombie properties” – vacant and abandoned homes that are not maintained during a prolonged foreclosure proceeding – includes several new key provisions to expedite the foreclosure process for properties that are confirmed to be vacant and direct penalties for noncompliance to a fund to aid local enforcement of the law. The bill (A.6932/S.4781), reintroduced this month by Assembly Judiciary Committee Chairwoman Helene Weinstein (D-Brooklyn) and Senate Coalition Co-Leader Jeffrey D. Klein (D-Bronx/Westchester), comes amid new data showing a troubling increase in the number of zombie properties across New York State. According to data analyzed by the Office of the Attorney General (OAG), zombie property foreclosures increased by 50% from 2013 to 2014, bringing the total number of zombie properties in NYS to 16,701. As a result, almost 1 in 5 residential foreclosures is now a zombie property.

“New York will never be able to fully recover from the devastation of the financial crisis until we seriously reckon with the crisis of zombies,” said Attorney General Schneiderman. “The Abandoned Property Neighborhood Relief Act, which enjoys the support of local elected officials, law enforcement, and fair housing advocates all across New York, will equip our local communities with the resources they need to halt the spread of abandoned and vacant homes. Albany can finally alleviate the burden that these blighted properties impose on our towns and cities by passing the Abandoned Property Neighborhood Relief Act during this legislative session.”

Attorney General Schneiderman’s bill, the Abandoned Property Neighborhood Relief Act, would address the problem of zombie properties in several ways.

Since many families do not understand that they have the right to remain in their home until a judge declares the foreclosure complete, the bill would require that homeowners be provided with early notice that they are legally entitled to remain in their homes until ordered to leave by a court. The bill would also make it unlawful for a mortgagee or loan servicing agent, or a person acting on their behalf, to enter a property that is not vacant or abandoned for the purpose of intimidating, harassing or coercing a lawful occupant in order to induce them to vacate the property, thereby rendering it vacant and abandoned.

In the event that homeowners do leave their property before the foreclosure is complete, the bill would require mortgage lenders and their servicers to take responsibility for properties soon after they have been vacated – and not, as under current law, at the end of a lengthy foreclosure process. Under this provision, lenders and their servicers are required to identify, secure, and maintain vacant and abandoned properties and pay for their upkeep. The bill would also establish a periodic inspection requirement for mortgagees and loan servicing agents to determine if property subject to a delinquent mortgage is currently occupied.

To help municipalities secure zombie properties, the bill would require mortgagees or their agents to electronically register these properties with a newly-created statewide Vacant and Abandoned Property Registry to be established and maintained by the OAG. The registry would be supplemented by a toll-free hotline that community residents can use to report suspected vacant and abandoned properties to the OAG and receive information regarding the status of registered properties, including the identity of the mortgagee or agent responsible for maintaining them. Banks that fail to register an abandoned property will be subject to civil penalties.

One of the new provisions of this year’s Abandoned Property Neighborhood Relief Act would direct penalties for noncompliance into a fund for local municipalities to support code enforcement within the municipality where the violations occurred. Another new provision would create an expedited foreclosure process for properties that are confirmed to be vacant.

"The foreclosure crisis left neighborhoods scarred by vacant and abandoned properties. The introduction of the Abandoned Property Neighborhood Relief Act brings New York State a step closer to curing the blight these properties bring to neighborhoods by holding banks accountable for their upkeep,” said New York State Senator Jeff Klein, Senate Coalition Co-Chair and sponsor of S.4781. “We expect banks to maintain properties and we will keep a list of empty homes. We want to support towns and counties who have been dealing with the blight of zombie properties for too long. With the support of Attorney General Eric Schneiderman, my colleagues in the Senate and the Assembly, I hope we can pass this crucial package of legislation for New Yorkers."

"In too many neighborhoods across New York State, lenders have permitted vacant and abandoned residential properties to fall into disrepair,” said New York State Assemblywoman Helene Weinstein, Assembly Judiciary Committee Chair and sponsor of A. 6932. “These properties are a blight on neighborhoods and bring down the property values in communities. I commend Attorney General Eric Schneiderman for proposing this bill that I am proud to sponsor. I look forward to working with him to help protect our neighborhoods by identifying and ensuring maintenance of properties early on.”

“Improving the quality of life in our neighborhood starts with ensuring we have a good housing stock and this has been a top priority of my administration,” said Syracuse Mayor Stephanie A. Miner. “Vacant, blighted properties become havens for criminal activity and reduce the values of neighboring homes. In Syracuse, we have taken steps to address this issue by starting a vacant property registry and establishing one of the first land banks in New York State. Attorney General Schneiderman appreciates the importance of urban housing needs and has supported our land bank with generous funding and pushed for important legislation, like the Abandoned Property Neighborhood Relief Act, which has the potential to help address even more abandoned properties. I am pleased to join with the Attorney General in calling on the legislature to pass this important bill.”

“Foreclosed and abandoned properties have become a serious problem in our neighborhoods, affecting quality of life for residents and forcing localities to spend precious resources on maintaining them,” said New York State Senator David J. Valesky. “I commend Attorney General Schneiderman and Senator Jeff Klein for recognizing the seriousness of this issue, and working on legislation to address the problem of zombie properties. I am confident it will make a difference here in Syracuse and across the state.”

“For too long, local communities in Onondaga County and the City of Syracuse have been suffering from the growing plague of zombie properties,” said New York State Assemblyman William Magnarelli. “I applaud Attorney General Schneiderman for continuing to work with the state legislature to protect our homeowners and the communities in which they live.”

“The blight of abandoned homes attracts crime, lowers property values and hurts communities, placing an unfair economic burden on local taxpayers who are already struggling,” said New York State Assemblyman Al Stirpe. “This continues to be a problem for Central New York, which has one of the highest incidences of vacant properties in the state. Attorney General Schneiderman’s efforts will help keep more families in their homes, protect taxpayer dollars and revitalize neighborhoods throughout Central New York. I commend him for his leadership and I encourage my colleagues in the Legislature to pass this important legislation necessary to ensure the safety and stability of our communities."

“Zombie properties are a growing problem in our neighborhoods, and I commend Attorney General Schneiderman for his leadership and proactive approach in working with local governments to address this serious issue,” said Utica Mayor Robert Palmieri. “I fully support this legislation and appreciate and thank Attorney General Schneiderman for his efforts.”

“Abandoned and vacant properties attract crime and put the lives of our law enforcement officers and other first responders at risk,” said Syracuse Police Chief Frank Fowler. “This isn’t just about the tax base or property values or the aesthetic appeal of our neighborhoods; it’s about the basic safety of the people who live and work in these communities, too. The state legislature should pass the Abandoned Property Neighborhood Relief Act and give local municipalities the resources they need to keep their streets safe.”

"Land banks are designed to get vacant and abandoned properties back into productive use, but are best equipped to address tax-delinquent vacant properties,” said Katelyn Wright, Executive Director of the Greater Syracuse Land Bank. “About 2/3 of the vacant structures in Syracuse are not tax-delinquent and are more challenging to address. Complementary tools like the Abandoned Property Neighborhood Relief Act will better equip communities like ours to address the full range of vacant buildings that negatively impact our neighborhoods."

“Zombie properties are a scourge on our neighborhoods and frustrate the residents who need to live near them, non-profits and public officials alike,” said Kerry Quaglia, Executive Director of Home HeadQuarters. “One bad property can negatively affect an entire block, so someone or some entity needs to have accountability for that property – it’s just common sense.”

Attorney General Schneiderman’s Abandoned Property Neighborhood Relief Act is one component of his broad strategy to help New York homeowners and communities recover from the foreclosure crisis. He successfully fought for a strong National Mortgage Settlement that delivered more than $2 billion in relief to New York families. He dedicated $100 million from the settlement to create the Homeowner Protection Program (HOPP), a network of free legal and housing counseling services that has served more than 40,000 families statewide. 

Attorney General Schneiderman has also pursued relief for communities by directing funds from the National Mortgage Settlement to community “land banks,” which are nonprofit organizations that can acquire property that is tax delinquent, tax foreclosed, vacant, or abandoned and use it for a variety of purposes to counter neighborhood blight.

In June of 2013, Attorney General Schneiderman announced the Community Revitalization Initiative (CRI), which has provided $33 million in funding to land banks that are working at the local level across New York State to rebuild and revitalize their communities. In the first round of funding, which took place in October 2013, OAG disbursed $13 million to eight land banks. After passing legislation to increase to double the maximum allowable number of land banks, Attorney General Schneiderman disbursed an additional $20 million in a second round of funding in October 2014.

NEW YORK – Kicking off Earth Week, Attorney General Eric T. Schneiderman today showcased a variety of statewide environmental protection initiatives that his office has championed, and provided a map demonstrating the reach and impact of the Environmental Protection Bureau over the past year. 

"Having a healthy and sustainable New York is not only important for today’s residents, but also critical to ensuring the well-being and strength of our state for generations to come,” said Attorney General Schneiderman. “Just this year, my office has taken action against those who polluted our groundwater on Long Island, directed resources to improve water quality in New York City and defended the right of New Yorkers to navigate public waters in Adirondack Park. But while we have made great progress in safeguarding our environment, there is still work to be done. This Earth Week, we must continue to reaffirm our commitment to protecting and improving the natural resources in our state and on our planet.”

Recent environmental victories include: 

On Long Island

• Obtained $5.31 million from owners of industrial facilities in the New Cassel Industrial Area in North Hempstead to recover the costs of the state’s investigation of groundwater pollution emanating from the site and related natural resource damages.  Toxic industrial chemicals from the site had reached local drinking water supply wells.
• Resolved contempt of court charges against Gerald Cohen, the owner of a former aviation plant in Port Jefferson Station, related to the cleanup of petroleum and hazardous wastes dumped at the site. The settlement gives the state access to the site to perform cleanup, includes a fine and holds Cohen liable for costs. 

In New York City

• With the New York State Department of Environmental Conservation (DEC), awarded $11 million in grants from the Greenpoint Community Environmental Fund, a community grant fund created from money obtained by the state in a 2011 settlement with ExxonMobil over its Greenpoint, Brooklyn oil spill.  The environmental improvement grants will be combined with $23.8 million in matching contributions from the recipients, bringing the total investment in Greenpoint to nearly $35 million.
• Sued New York City landlord Florence Edelstein for widespread violations of state oil spill prevention laws that govern the safe handling and storage of heating oil at residential properties.  Edelstein had been found liable for 90 violations of state laws at 25 properties in the Bronx and Manhattan. 
• Joined by the DEC, reached an agreement with New York City directing $960,000 to improving water quality in the upper East River and Long Island Sound.  The City’s payment is in partial resolution of penalties assessed by the State for falling behind on scheduled upgrades to nitrogen pollution controls at its Tallman Island wastewater treatment plant in Queens. 

In the Hudson River Valley:

• With DEC, reached an agreement with Gary Prato, a Putnam County landowner, to clean up an illegal landfill that discharged pollution into the Croton Falls Reservoir – a waterbody that has historically provided drinking water to New York City. The agreement also requires Prato to pay $245,000 in penalties.
• Joined the Attorneys General of Connecticut and Vermont in challenging recently-issued rules of the Nuclear Regulatory Commission (NRC) that govern the long-term storage of highly radioactive nuclear wastes on-site at more than 100 reactors around the country – including the three Indian Point reactors in Westchester County – for 60 or more years after the reactors close.

In Central New York:

• Obtained a court order against a Cortland County property owner for allegedly causing the flooding of a cemetery leading to the desecration of grave sites, and the disinterment and reburial of several bodies. The order requires James C. Stevens, III of Cortlandville to cease diverting stormwater from his property unless he secures a DEC permit to do so. A previous suit filed by Attorney General Schneiderman alleged that Stevens was illegally diverting water from his property in violation of state environmental and public nuisance laws.
• Resolved a suit brought against Triple Cities Metal Finishing Corp. Zurenda Enterprises, and Binghamton Realty for allegedly contaminating soils and groundwater in the Hillcrest neighborhood of Fenton in Broome County with hazardous substances.  The Consent Decree requires the companies to pay the State a total of $55,000. 
• Won a case against the owners and operators of a car-crushing facility in Town of Volney in Oswego County who illegally discharged petroleum products, metals, PCBs and other chemicals into groundwater and an adjacent wetland
• Settled a civil case against Gary A. Royce, Jr. for improperly installing septic systems in a subdivision located in the Town of Granby in Oswego County, resulting in odors and raw sewage seeping to a number of yards.  The settlement requires Royce to replace, at his own expense, approximately 35 septic systems in the subdivision. 

In The North Country:

• Won a ruling upholding the public's right to travel on recreationally navigable waters in the Adirondack Park.  The courts agreed with Attorney General Schneiderman that the Adirondack waterway between Lilypad Pond and Shingle Shanty Brook was navigable-in-fact, and that attempts by local landowners to deny public travel along this state waterway are illegal and constitute a public nuisance.

In Western New York:

• Reached a court-ordered settlement requiring The Juice Factory Corp., based in Monroe County, to pay the state nearly $80,000 for repeatedly violating multiple provisions of New York’s Bottle Bill.  Investigations revealed that, for more than two years, the company collected deposits on beverage containers it sold in Monroe and Erie counties but failed to pay the unclaimed deposits to the state, as required by law. 
• Joined the DEC and Livingston County in reaching an agreement with Akzo Nobel addressing environmental impacts relating to the collapse of the company’s salt mine in The agreement requires the company to pay $20 million toward local environmental restoration projects, including drinking water supply protection, water supply infrastructure improvements, environmental monitoring, and other projects.

Statewide:

• Reintroduced legislation to ban “microbeads,” tiny plastic particles that are an emerging pollution threat in New York waters.  The Microbead-Free Waters Act will prohibit the sale in New York of personal care products that contain microbeads. The Attorney General also released a report entitled Unseen Threat: How Microbeads Harm New York Waters, Wildlife, Health And Environment that explains the scope of the environmental and public health risks posed by microbeads, and outlines solutions to address this insidious pollution.
• Sent letters to Toys R Us and other major retailers in New York State reminding them of their legal obligation to ensure the safety of children’s products. The letter focused on toys that contain toxic chemicals that present risks to human health.  The Attorney General also released a tip sheet to help consumers protect their children from toxics in children’s products.
• Released a report that, for the first time, details the increasing frequency and intensity of extreme rainfall events across New York State.  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.  The report underscores the need to focus on greater resiliency planning and response measures in order to respond to climate change’s predicted impacts in New York.
• Proposed legislation that would require electric and gas utilities to ensure that the critical services they provide to New Yorkers are properly protected from the impacts of climate change. The proposal would require these utilities to assess their systems’ vulnerability to climate change, and to document for public review and comment how they intend to address these vulnerabilities.

Nationally:

• Leading a coalition of states, NY joined clean air and public health advocate groups in reaching a court-ordered settlement with the U.S. Environmental Protection Agency (EPA) that required the agency to finalize updated air pollution standards for new residential wood heaters.  Wood stoves, pellet stoves, masonry heaters, central wood boilers, forced-air furnaces, and other residential wood heaters have proliferated in many areas of New York.  The final standards, which hadn’t been revised in 25 years, were issued by EPA on February 4th of this year. 
• After a more than two-year legal effort, EPA agreed with Attorney General Schneiderman and acted on its responsibility under the Clean Air Act to regulate emissions of methane– a powerful climate change pollutant – from the oil and gas industry. The regulations, to be proposed this summer, will require the oil and gas industry to limit methane emissions fromnew and modified equipment. 
• Reached agreements with two natural gas development companies that will ensure the public disclosure of information on the financial risks that hydraulic fracturing – commonly referred to as fracking – poses to their investors.   Under the agreements, Anadarko Petroleum Corp. and EOG Resources committed to providing publicly accessible information on the financial risks associated with of regulation fracking, litigation related to fracking, and the environmental impacts of their fracking operations. 
• Led a coalition of states in backing the “Waters of the United States Proposed Rule,” a federal proposal designed to ensure that the nation’s lakes, rivers, streams, and wetlands receive proper protection under the federal Clean Water Act.  The types of waters covered by the Act has become muddled by recent U.S. Supreme Court decisions, potentially stripping large numbers of waterways of federal protection and leaving them vulnerable to pollution.
• Led a 13-member coalition in fighting back against a court challenge – brought largely by coal-producing states – to a 2010 settlement that committed EPA to adopt climate change pollution emissions standards for new and existing fossil-fuel electric generating power plants. The EPA has undertaken the rulemaking process for two rules to establish these standards for power plants, in accordance with the settlement agreement.

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has released a first-of-its-kind report demonstrating that microbeads, tiny plastic abrasives that are added to many beauty and personal care products, are systematically passing through wastewater treatment plants across New York State and entering bodies of water. The microbeads contained in many personal care products are washed down the drain when used and end up at wastewater treatment plants. When bits of plastic pollute lakes and oceans they act as sponges for toxic-chemicals, attracting these chemicals to their surfaces and threatening the health of wildlife when the plastic bits are ingested. The study, conducted by the Attorney General’s office with the help of Dr. Sherri Mason of the State University of New York at Fredonia, examined samples provided by 34 municipal and private treatment plants across the state. The study,Discharging Microbeads to Our Waters: An Examination of Wastewater Treatment Plants in New York, detected microbeads in 74% of the samples, across plants of various sizes, treatment types, and locations. The report is accompanied by five fact sheets detailing regional findings in Western New York, Central New York, the Mid-Hudson, Northern New York and Downstate.

Last year, Attorney General Schneiderman sent a program bill to the legislature, the Microbead-Free Waters Act, to prohibit the distribution and sale of personal cosmetic products containing microbeads less than 5 millimeters in size.

“Today’s report confirms that from Lake Erie to the Long Island Sound, microbeads, a harmful form of plastic pollution, are finding their way into waters across New York State,” said Attorney General Schneiderman. “New York has been at the forefront of national progress when it comes to combating plastic pollution, and we need to continue this leadership by passing legislation that will prevent microbeads from contaminating our waters, and threatening the health of both New Yorkers and their environment.”

In late 2014, Attorney General Schneiderman’s Office initiated a study to determine whether plastic microbeads were being discharged from sewage and wastewater treatment plants into water across the state. With assistance from Dr. Mason at the State University of New York at Fredonia, the New York Water Environment Association – a nonprofit, educational organization for New York’s water quality professionals — and operators at 34 municipal and private treatment plants from across the state, collected samples from treated waste water for analysis. The study detected microbeads in the effluent samples submitted by 25 of the 34 treatment plants, suggesting that microbeads are being discharged by most of New York’s more than 600 wastewater treatment plants. The study provides direct evidence that microbeads are being released into bodies of water across New York State, including the Great Lakes, the Finger Lakes, Lake Champlain, the Hudson River, the Mohawk River, the Delaware River, the Long Island Sound, and the Atlantic Ocean. Microbeads were found in samples provided by treatment plants operating in the following 17 counties: Albany, Chautauqua, Columbia, Delaware, Erie, Essex, Greene, Kings, Monroe, Nassau, Niagara, Orange, St. Lawrence, Tompkins, Warren, Wayne, and Westchester.

There is variation in the shape and size of microbeads found in various consumer products. Products can contain spherical or speckled microbeads, irregularly shaped microbeads, or a combination of both. The overwhelming majority of plastic abrasives in personal care products are irregular microbeads, with only 6% being spherical or speckled. For testing purposes, the study only looked for the easily identifiable spherical or speckled microbeads. Because the study found microbeads in these small-volume, one-time samples, while only testing for 6% of the universe of microbeads, the results suggest that many more irregular microbeads are also slipping past treatment and into New York waters.

The findings also suggest that the problem cuts across regions of the state and that more rigorous waste water treatment employed at some treatment plants may not be effective at removing microbeads.

As a whole, the study results affirm that the only effective way to halt the plastic pollution of New York’s waters by microbeads is to eliminate plastic microbeads in beauty and personal care products and thus prevent these pollutants from entering treatment plants in the first place.

“I applaud the work of the Attorney General to build upon the scientific understanding on the transportation of microbeads from the tube to the environment,” said Dr. Sherri Mason, Professor of Chemistry at the State University of New York at Fredonia, a researcher on the forefront of microplastic pollution. “The field of microplastic pollution is rapidly emerging and this research provides critical information that treatment plants are not designed to capture microbeads and passage through treatment plants is likely pervasive.”

“Wastewater treatment plants across the state are committed to protecting New York’s water resources and we believe that stopping tiny microbeads from ever making their way into the wastewater treatment plants protects public health, the quality of New York State waters and marine life,” said Patricia Cerro-Reehil, Executive Director of the New York Water Environment Association. “We applaud the leadership of Attorney General Eric Schneiderman undertaking this groundbreaking study and thank the operators across the state who volunteered to provide data and demonstrate how necessary it is to pass the The Microbead-Free Waters Act.”

Plastic microbeads from personal care products have been found in alarmingly high levels in the New York surface waters of Lake Erie and Lake Ontario and can persist in the environment for centuries. Last May, Attorney General Schneiderman released a report documenting the threat posed by microbeads, finding that 19 tons of microbeads are being washed down the drain by unsuspecting New York consumers each year. Microbeads are commonly found in more than 100 products, including facial scrubs, soaps, shampoo and toothpaste, where they replace ground walnut shells, sea salt, and other natural materials as an abrasive.

The Attorney General’s Microbead-Free Waters Act (S3932-2015) would prohibit the distribution and sale of personal cosmetic products containing microbeads less than 5 millimeters in size. The bill was greeted by widespread expressions of support from the environmental advocacy, scientific and sport fishing communities across New York State and versions of the bill are currently being considered in the Assembly and Senate.

Op-Ed Published In Politico

By Eric T. Schneiderman

State laws and regulators are increasingly important as gridlock in Washington makes broad federal action on important issues an increasingly rare event. From environmental protection to civil rights to the minimum wage, the action is at the state level. Ironically, one thing that may get done soon in Washington is a trade agreement, the Trans-Pacific Partnership, which has the potential to undermine a wide range of state and local laws.

One provision of TPP would create an entirely separate system of justice: special tribunals to hear and decide claims by foreign investors that their corporate interests are being harmed by a nation that is part of the agreement. This Investor-State Dispute Settlement provision would allow large multinational corporations to sue a signatory country for actions taken by its federal, state or local elected or appointed officials that the foreign corporation claims hurt its bottom line.

This should give pause to all members of Congress, who will soon be asked to vote on fast-track negotiating authority to close the agreement. But it is particularly worrisome to those of us in states, such as New York, with robust laws that protect the public welfare — laws that could be undermined by the TPP and its dispute settlement provision.

To put this in real terms, consider a foreign corporation, located in a country that has signed on to TPP, and which has an investment interest in the Indian Point nuclear power facility in New York’s Westchester County. Under TPP, that corporate investor could seek damages from the United States, perhaps hundreds of millions of dollars or more, for actions by the Nuclear Regulatory Commission, the New York State Department of Environmental Conservation, the Westchester Country Board of Legislators or even the local Village Board that lead to a delay in the relicensing or an increase in the operating costs of the facility.

The very threat of having to face such a suit in the uncharted waters of an international tribunal could have a chilling effect on government policymakers and regulators.

Or consider the work my office has done to enforce the state of New York’s laws against wage theft, predatory lending and consumer fraud. Under TPP, certain foreign targets of enforcement actions, unable to prevail in domestic courts, could take their cases to TPP’s dispute resolution tribunals. Unbound by an established body of law or precedent, the tribunals would be able to simply sidestep domestic courts. And decisions by these tribunals cannot be appealed.

Proponents of TPP note that similar tribunal constructs have been included in other international trade agreements involving the United States, often in order to encourage and protect our investments in countries with shaky, corrupt or even nonexistent civil justice systems. But more than in past trade agreements, a number of the nations expected to participate in TPP have the resources and legal sophistication to exploit the agreement and turn it against our laws and system of justice.

Maybe that’s why the agreement is being negotiated in secret. If it weren’t for WikiLeaks and a few media outlets, we wouldn’t even know about this dangerous provision. The effort by negotiators to keep their discussions from the public is telling.

The beneficiaries here would be a discrete group of multinational business interests that should be entitled to treatment no better and no different than any other plaintiff receives in the trial and appellate courts of this country. The separate and unaccountable system of justice that TPP would create poses a major risk to critical statutes and policy decisions that protect our citizens — and it has no place in a nation committed to equal justice under law.

Eric T. Schneiderman is the 65th attorney general of New York state.

WATERTOWN—Attorney General Eric T. Schneiderman today announced that, after reviewing evidence submitted by his office, Supreme Court Justice James P. McClusky has issued an order to show cause to the business formerly known as Legal Docs by Me and its owner, Derek Distenfield, as to why they should not be held in contempt of court for violating two court orders which partly required Legal Docs by Me to pay restitution to consumers. In a case brought last summer, Attorney General Schneiderman accused the business—now operating as NextGenJustice—of engaging in the unauthorized practice of law and deceiving consumers by regularly misrepresenting its pricing, its expertise in the preparation of legal documents, and the nature of the services it provided.

"This company's refusal to provide restitution to consumers is just the latest in its pattern of disrespect for the courts and people of New York," Attorney General Schneiderman said. "My office will fight to ensure that those taken advantage of by unscrupulous business owners get the refunds they deserve, and to prevent additional consumers from being victimized.

The evidence submitted in this contempt proceeding alleges that Legal Docs by Me has violated the consent order by failing to pay restitution to consumers and also violated the court's prior temporary restraining order. The Attorney General seeks full restitution to all consumers harmed by the business's contempt, along with other fines and costs.

As part of the consent order entered last October, Legal Docs by Me was required to provide restitution to "every consumer for all money collected." Despite the clear mandate, the company has failed to issue refunds to a number of consumers. They have further violated the consent order by continuing to use deceptive advertising, primarily with regard to their new tax return preparation services. For example, though NextGenJustice advertises that they are "fully credentialed by the IRS" and licensed to prepare tax returns in all fifty states, investigation has demonstrated that the business has no IRS-recognized credentials and is not a licensed tax-preparer in many states.

The Attorney General also contends Legal Docs by Me violated the temporary restraining order which was in place "to protect the public from likely damaging legal consequences" during the pendency of the litigation. The court's order was signed in June 2014 and in effect until the consent order was finalized in October. The restraining order barred the business from providing any legal services other than simply handing out official form legal documents for completion by the consumers themselves. Legal Docs by Me, however, blatantly disregarded the court's directive and continued to provide unlicensed legal services to consumers, including the sale of divorce documents, living trusts, and a deed.

A hearing on the contempt application is scheduled for May 14, 2015 at 9:30 A.M.

The contempt proceedings in this case are being handled by Assistant Attorney General Alicia M. Lendon, Senior Investigator Chad Shelmidine, Assistant Attorney General In Charge Deanna R. Nelson and Executive Deputy Attorney General for Regional Offices Martin J. Mack.

NEW YORK — Attorney General Eric T. Schneiderman today issued an open letter urging participants in the New York residential real estate market to take advantage of a recent change to the State’s Real Property Law confirming that real estate agents may rebate a portion of their commissions to clients. Attorney General Schneiderman’s letter explains that this change, which his office helped initiate, has the potential to reinvigorate price competition among real estate brokers in New York. His letter also emphasizes that his office will investigate any allegations of discrimination against brokers engaged in rebating.

“Rebating by real estate brokers can greatly reduce the costs of buying and selling property and even facilitate new and innovative business models,” said Attorney General Schneiderman. “I urge the real estate community to embrace this opportunity to be more competitive, and improve the choices available to New York homeowners. I also encourage buyers and sellers alike to take advantage of your right to bargain with your broker for a lower commission.”

Last year, the Attorney General’s Office worked with members of New York’s real estate community to propose an amendment to Section 442 of the New York Real Property Law clarifying that it is lawful for a broker to pass through, or “rebate,” part of his or her commission to the client. In December, this amendment was signed into law. The legislation was sponsored by Senator Zeldin and Assembly Member Lavine.

In particular, the updated law makes it clear that when a buyer’s agent receives a portion of the transaction commission from the seller or the seller’s agent, he or she is permitted to rebate a portion of those funds to the buyer in the transaction. As Attorney General Schneiderman’s letter explains, because of the way that the real estate market works, this kind of rebating is often the only practical way for a buyer’s agent to offer a discount for his or her services.

The legislative change arose out of an investigation by the Attorney General’s Office into market factors that were preventing greater price competition among residential real estate brokers. Attorney General Schneiderman’s letter stresses that any complaints of boycotting or discrimination against brokers engaged in rebating will also be fully investigated by his office.

For the text of Section 442 highlighting the recent amendment and additional information about competition in New York’s real estate industry, real estate market participants can visit the Attorney General Office’s Antitrust Bureau here.

A full copy of the letter is available below.

April 20, 2015

Dear participant in New York’s real estate industry:

I am writing to alert you to a recent change in New York State’s Real Property Law that was strongly supported by my office. This law has the potential to breathe new life into competition in the residential real estate brokerage industry, to the benefit of all New Yorkers. I urge you take advantage of this law and help reinvigorate price competition among real estate brokers in New York.

In December, a statute was signed into law amending Section 442 of the New York Real Property Law to make it completely clear that it is lawful for a broker to pass through, or “rebate,” part of his or her commission to the client. This legislation arose out of an investigation by my office into competition in the residential real estate brokerage industry. My office worked together with the New York Department of State, the New York State Association of Realtors, and others in the industry to initiate the clarifying legislation.

As you know, for most residential real estate sales in New York State, including New York City, the seller’s broker is usually compensated by receiving a contractually set commission from the seller. The buyer’s broker, however, is not typically paid by the buyer; he or she instead receives a fraction (often half) of the seller’s broker’s commission. Due to this payment structure, often the best way for a buyer’s broker to compete on price is to offer to rebate part of his or her commission to the buyer. Such buyer rebates are legal in most states, including New York. But until recently, some people in the industry may have read Section 442 to suggest that this type of rebating was not permitted in New York. As of December’s legislative fix, there is no room for debate: commission rebating in New York State is legal.

Such rebating is also procompetitive and good for consumers. One reason my office helped initiate this legislative change was because we were concerned that confusion over the legality of rebating may be hindering efforts of real estate brokers to employ more innovative, consumer-friendly business models. For example, the widespread use of sophisticated real-estate search websites now allows buyer-side brokers to offer more limited-service, lower-fee models, under which clients do more of their own legwork when searching for properties. Brokers adopting such models can offer lower commissions (by rebating) and, in principle, may also be able to serve a larger number of clients.

I encourage all real estate brokers and salespersons in New York to consider enhancing the choices available to real estate buyers by offering lower commissions (by means of rebates) to some or all of your clients. I also emphasize that my office will investigate any allegations of boycotting or discrimination against brokers engaged in rebating or other lawful discounting practices. Finally, I urge consumers and other buyers of real estate in New York to take note of your right to bargain with your broker for a lower commission.

For the text of Section 442 highlighting the recent amendment, and additional information about competition in the real estate industry in New York, see my office’s Antitrust Bureau webpage at here.

Sincerely,

Eric T. Schneiderman
Attorney General
State of New York

NEW YORK — Attorney General Eric T. Schneiderman today announced that the creation of a new $1.8 million program to fund the development of local responses to climate change. The Community Climate Initiative will provide competitive grants to locally-based organizations across the state to respond to climate change in their communities, from fostering public awareness in fighting air pollution that contributes to climate change to promoting energy efficiency or renewable energy. Funding for the Community Climate Initiative was obtained through a 2007 court-ordered settlement with American Electric Power, the largest U.S. power company, for violations of the federal Clean Air Act.

“The unprecedented risk posed by climate change demands a transformation not only in how we view this threat, but also in how we respond to it,” Attorney General Schneiderman said. “This grant program recognizes that New York’s communities are on the front lines of climate change, so they must also be our first line of defense against it. With this funding, we hope to empower local organizations to develop innovative responses to climate change, tailored specifically to their communities.”

To foster local creativity and innovation – as well as to cultivate locally-driven approaches – Attorney General Schneiderman intends to solicit a wide range of proposals from community-based organizations to lead efforts to address climate change in their communities. In general, the Community Climate Initiative will be designed to fund the best ideas that local organizations across the state have for addressing climate change in their communities. However, the program will seek geographic diversity in granting as well as to serve those communities which have traditionally suffered the greatest from environmental impacts.

For example, community-based organizations could propose projects to increase public awareness about climate change or to build new partnerships – such as those among municipal governments, environmental advocates, labor groups, and business to work together to reduce air pollution that contributes to climate change. In addition, organizations could propose programs to reduce climate change pollution, such as by encouraging energy efficiency or conservation, supporting renewable energy, and providing access to clean power or public transportation.

Grants awarded through the Community Climate Initiative – which the Attorney General anticipates beginning to make in the fall of this year – will be made through a competitive a grant process to be run by a program administrator selected by the Attorney General. The selection of the program administrator will also be competitive. All final selections of projects to be funded will be made by the Attorney General’s office.

NEW YORK – Attorney General Eric T. Schneiderman today released the following statement to mark the celebration of Earth Day:

“In the forty-five years since the first celebration of Earth Day, this country has made tremendous strides in protecting our environment. Legislation to safeguard our water, air and endangered species has been enacted and signed into law and a global movement has led to increased awareness about the dangers of a shifting climate and the need to maintain a healthy and stable environment.”

“But despite the progress we have made, we need to continue to act aggressively to protect our environment. With problems such as severe weather and storms, a strained water supply in many areas of the country and an ever fragile ecosystem, we cannot afford to delay. So today on Earth Day we must recommit ourselves to become better stewards of our environment, and ensure that our planet will remain healthy and sustainable in the future.”

ALBANY – Attorney General Eric T. Schneiderman today released the following statement applauding the State Assembly’s passage of A. 5896, sponsored by Assemblymember Michelle Schimel, which would prohibit the sale in New York State of personal care products that contain tiny plastic particles known as microbeads. The bill, proposed by Attorney General Schneiderman, is now awaiting action in the State Senate.

“From the Great Lakes to the Long Island Sound, our state’s waterways are an invaluable resource. By passing a ban on products containing these harmful particles for the second year in a row, the Assembly has reiterated its commitment to protecting New York’s waters, wildlife, and outdoor economy. The bill passed by the Assembly today would be the most effective bill passed anywhere in the country. I am grateful to Assemblywoman Schimel for her partnership in the fight to keep this harmful form of plastic pollution out of our waterways, so that they may be enjoyed by generations of New Yorkers to come.”

Earlier this week, Attorney General Schneiderman issued a first-of-its-kind report called Discharging Microbeads to Our Waters: An Examination of Wastewater Treatment Plants in New York, showing that microbead “toxic-sponges” are systematically passing through wastewater treatment plants and entering waterways across the state.

NEW YORK – Attorney General Eric T. Schneiderman today announced a lawsuit against Evgeny “Gene” Freidman, and four taxicab companies owned in part by Freidman, for allegedly violating taxi drivers’ rights and for breaching a settlement agreement that they entered into with the Attorney General in December 2013. That settlement required Freidman to pay $746,406 in restitution to drivers who were charged rates higher than the legally permissible amounts to lease cabs and medallions – including approximately $115,000 to reimburse drivers for unlawful healthcare fund deductions – as well as $500,000 in fines to the Taxi & Limousine Commission (TLC). As alleged in the suit filed today, Freidman did not provide proof or accurate information showing that drivers had been fully reimbursed for the healthcare fund portion of the settlement, as was required by the agreement. Freidman and his companies also failed to comply with provisions of the agreement that required them to cooperate with ongoing compliance monitoring by the Attorney General.

Today’s lawsuit also alleges that one of the Freidman Companies, Woodside Management, Inc. committed new violations by paying drivers late for rides charged to credit cards. The lawsuit also alleges that Woodside provided drivers and the Attorney General with false receipts showing, inaccurately, that the fares were paid on time, in an effort to hide the violations from the Attorney General.

With control of more than 860 medallions, Freidman oversees one of the five largest fleets in New York City.

“The conduct alleged in today’s lawsuit demonstrates a basic disregard for the struggles and rights of hard-working taxicab drivers, as well as for the laws and rules that apply to everyone in the taxi industry,” said Attorney General Schneiderman. “No one is above the law, and all companies must follow the rules protecting the rights of working New Yorkers.”

“We appreciate the Attorney General’s ongoing commitment to protecting drivers’ rights,” said TLC Commissioner and Chair Meera Joshi, “and to the accountability that is so crucially central to our regulated industries. We look forward to the continued close working relationship between the TLC’s Driver Protection Unit and the Attorney General’s committed staff, so that our licensees may always count on these protections.”

The Freidman Companies sued in today’s action are 28th Street Management, Inc.; Downtown Taxi Management, LLC; Tunnel Taxi Management, LLC; and Woodside Management Inc. As agents for medallion owners, these companies control over 860 medallions out of the total 13231 medallions currently in existence in New York City. 

In addition to restitution to drivers, fines, and damages in an amount to be determined, the lawsuit also seeks $100,000 for the purpose of appointing a monitor to ensure that the rights of hundreds of taxi drivers are protected.

Today’s lawsuit alleges that nearly a year after the settlement was signed, Woodside drivers were paid late – sometimes as much as a month late -- for fares they earned by credit card, putting drivers in serious financial distress. Woodside is accused of creating false receipts purporting to show timely payment, and providing those false receipts to drivers and to the Attorney General’s Office as part of the settlement’s reporting requirements. Woodside is also accused of providing the Attorney General’s Office with additional false documents to hide late payments. 

Because many taxi drivers earn fares from customers who pay by credit card, TLC Lease Rules contain specific provisions about how drivers are to receive those fares. Most frequently, managing agents collect credit card receipts through a wireless system in the cabs, and then pass these fares on to the drivers who have earned them. A managing agent is required to pay earned credit card fares to taxicab drivers leasing a medallion on a weekly basis. 

The lawsuit alleges that Freidman and his companies failed to comply with their reporting obligations under the settlement and failed to provide the Attorney General’s Office with information required under the agreement to confirm compliance. 

The lawsuit seeks both monetary and injunctive relief for the Freidman companies’ new violations of law and for breaches of the settlement agreement. It also seeks production of documents and an accounting to determine the exact amount of restitution, fines, and damages owed. Finally, the lawsuit seeks payment of $100,000 that Freidman and his companies committed to pay if they violated the settlement for purposes of hiring an external compliance officer to monitor their compliance with the Lease Rules.

The case is being handled by Assistant Attorney General Elizabeth Wagoner, Special Assistant Attorney General David Ross, Special Assistant Attorney General Jason Gonzalez, Special Counsel Patricia Kakalec, and Labor Bureau Chief Terri Gerstein. The Labor Bureau is part of the Social Justice Division, which is led by Executive Deputy Attorney General Alvin Bragg.

NEW YORK – Attorney General Eric T. Schneiderman today announced that he is teaming with the Rochester Area Community Foundation and Home HeadQuarters, Inc. in Syracuse to launch a $2 million sustainable homes program. The program will help low-income families lower their energy bills and eliminate serious home health and safety hazards in older homes. The program is funded with money from a $9.5 million court-ordered settlement with American Electric Power (AEP), the largest U.S. power company, over violations of the federal Clean Air Act.

“Aging homes, modest incomes, and scarce community resources force too many low-income families to live in houses that are unsafe, unhealthy, and energy inefficient," said Attorney General Schneiderman. “These investments will help alleviate these problems by giving families the resources they need to make needed improvements that will help keep them safe while cutting energy consumption. These programs will also serve to strengthen our neighborhoods and revitalize our communities."

The $2 Million investment will create sustainable homes programs in both Rochester and Syracuse that are modelled on the highly-successful Buffalo Green and Healthy Homes Initiative (BGHHI). The Buffalo initiative is implemented by the Community Foundation for Greater Buffalo with partial funding from the Attorney General’s office. That initiative has helped more than 379 of Buffalo’s neediest families to lower their energy bills and eliminate serious home health and safety hazards in older homes.

As with the Buffalo program, the monies provided by the Attorney General's office from the American Electric Power settlement will be used by Rochester Area Community Foundation and Home HeadQuarters, and their implementing partners, to directly fund energy efficiency and weatherization improvements in targeted owner-occupied housing, while serving as a catalyst to attract parallel funding for health and safety improvements such as lead poisoning intervention, asthma trigger reduction (reducing mold, dust and vermin infestation), and correction of home accident hazards. 

Much of the housing stock in Rochester and Syracuse is aged. For example, in Syracuse, more than 50% of the housing units were built before 1939 and, in some of the city's most distressed neighborhoods, this rate rises to almost 90%. In Rochester, more than 60% of the housing stock was built prior to 1940. 

Both cities have also faced chronic economic challenges, leading to low incomes and poverty. In Rochester, the median household income is 42% lower than the national average. In Syracuse, 30% of the population -- and 60% of children -- live below the national poverty level. The combination of aged housing stock and economic distress results in a deterioration of housing and unaddressed home energy efficiency, health and safety needs within both cities low-income communities.

“Improving energy efficiency will lead to more affordable energy bills, more money in the pocket of consumers, and a better environment for the City of Syracuse,” said Syracuse Mayor Stephanie A. Miner. “The City of Syracuse enjoys the benefits of a good partnership with Home Headquarters. With this funding, they will be able to further their critical mission of giving Syracuse the best housing stock available for its residents. This is just another example of how Attorney General Schneiderman has put a major emphasis on urban housing needs during his time in office. As Mayor, I appreciate his support for these important quality of life issues.”

“A person’s ability to sustain a good job, get a quality education and contribute to a vibrant neighborhood all begins with having a safe place to call home,” said Rochester Mayor Lovely A. Warren. “With Rochester’s aging housing stock, many families are challenged to keep their homes in good repair, so the sustainable homes program will go a long way toward helping our families and revitalizing our streets and our neighborhoods. I applaud Attorney General Schneiderman for looking out for Rochester’s homeowners, and I’m confident that the Rochester Area Community Foundation will be able to put these funds to good use.”

“On behalf of Rochester Area Community Foundation’s board and donors, I want to thank New York State Attorney General Eric Schneiderman and his team for their leadership and financial support on behalf of Rochester homeowners,” said Jennifer Leonard, President and CEO, Rochester Area Community Foundation. “Healthier, safer, greener homes help create a more equitable community -- one of the Community Foundation’s top grantmaking goals. We are proud to be a partner in this collaborative effort.”

“Medical and educational research has demonstrated the harm that housing contaminants, such as mold or lead, can have on the health of families, especially children,” said Trilby de Jung, CEO, Finger Lakes Health Systems Agency, a project partner of the Rochester Area Community Foundation. “This funding from Attorney General Schneiderman will provide critical help to homeowners in our most challenged neighborhoods. The initiative will bring together some of Rochester’s most successful players in community development, housing, environmental health, job training and weatherization to create a foundation for neighborhood health and revitalization."

“We are thrilled to be selected by Attorney General Schneiderman as the local Project Administrator for this effort, as it lends itself to Home HeadQuarters’ mission to help homeowners access programs and services to make their homes safe,” said Kerry Quaglia, Executive Director, HomeHeadquarters, Inc. “In addition, we are lucky to have supportive partners from the community, including nonprofit agencies, the City of Syracuse, Onondaga County, Central New York Community Foundation and Health Foundation of Western and Central New York, who have been working on this issue locally to ensure the success of the program. Together, we will collectively improve the lives of homeowners and work towards positive systems change."

“By offering financial and facilitation support, the Central New York Community Foundation is pleased to join the multiple community partners collaborating with Attorney General Schneiderman and Home HeadQuarters to help in this initiative,” said John Eberle, Vice President, Grants & Community Initiatives, Central New York Community Foundation, a project partner of Home Headquarters. “This collaborative initiative will help improve the quality of life for hundreds of Syracuse homeowners in a safe, health, and energy efficient manner – and the system-wide improvements to services deployed will live on for years to come.”

“We are sincerely grateful to Attorney General Schneiderman for his strong support of New York families, and dedication to creating healthy, safe, and energy efficient homes,” said Ruth Ann Norton, president and CEO of the national Green & Healthy Homes Initiative (GHHI). “This critical investment will improve health, social, and educational outcomes for children, seniors and families in these two communities. We look forward to supporting the efforts of the Rochester Area Community Foundation and Home HeadQuarters.”

About Rochester Area Community Foundation

The Rochester Area Community Foundation is a Rochester-based independent not-for-profit regional community foundation that works to improve quality of life by evaluating and addressing community issues, promoting responsible philanthropy, and connecting donors to the community’s critical needs in an eight‐county service area, centered in Monroe County and the City of Rochester, that also includes Genesee, Livingston, Ontario, Orleans, Seneca, Wayne, and Yates counties. 

About Home HeadQuarters, Inc.

Home HeadQuarters, Inc. is a Syracuse-based independent not-for-profit housing and community development organization. Home HeadQuarters is one of the largest housing and neighborhood revitalization organizations in Central New York as well as one of the largest regional providers of affordable home improvement loans and grants for homeowners in Central and Upstate New York.

About The Buffalo Green and Healthy Homes Initiative

The Buffalo Green and Healthy Homes Initiative, which the Attorney General's office helped create in 2010, is administered by the Community Foundation for Greater Buffalo. The key innovation of the Buffalo program, which will be replicated in Rochester and Syracuse , is its use of "resource-braiding" to attract funding from a range of governmental and philanthropic sources. With additional resources, money is coordinated and focused on “whole-home” remedies. This approach has allowed the program to address the full range of energy efficiency and weatherization improvements, as well as health, and safety needs of homeowners through single, comprehensive interventions.

The Buffalo program has an established an impressive track record of accomplishments. To date, the initiative has:

• Assisted 379 of Buffalo's neediest families – including almost 200 children – with crucial home health, safety and weatherization interventions; 
• Grown the $2.6 million of initial investments in the initiative into more than $10.3 million in program funds; 
• Engaged more than 50 public and private-sector partners in implementing the initiative;
• Achieved home rehabilitations at an extremely cost-effective average investment of just over $10,500 per home -- with the Attorney General office’s funding averaging roughly 1/3 of the total per-home allocation; 
• Trained more than 270 unemployed or underemployed Buffalo residents (most of whom are re-entering the work force following criminal justice histories) for careers related to home improvement. More than 175 of those receiving training through the BGHHI, have been placed in jobs; and 
• Received numerous awards and recognitions, including Buffalo's designation as the 15th national Green and Health Homes Initiative site by the U.S. Department of Housing and Urban Development.

With additional financial support of $193,000 from Attorney General Schneiderman provided in 2013, the Buffalo program has worked to reduce communication and cultural barriers that prevent Nepali and Burmese refugees – groups with the highest rates of homeownership among Buffalo’s resettled political refugees community – from fully accessing the initiative. To date, the “New Americans Project” has reached over 1,000 members of Nepali and Burmese refugee community.

This matter is being handled for Attorney General Schneiderman by Assistant Attorney General Jane Cameron and Policy Advisor Peter C. Washburn of the Attorney General's Environmental Protection Bureau, with support from Deputy Bureau Chief Monica Wagner, Bureau Chief Lemuel M. Srolovic, Executive Deputy Attorney General for Social Justice Alvin Bragg, and First Deputy for Affirmative Litigation Janet Sabel.

NEW YORK— Attorney General Eric T. Schneiderman today filed lawsuits against Portofino Spas, LLC (“Portofino”) and Total Tan, Inc., accusing both franchises of false advertising by denying or minimizing scientific evidence linking tanning to an increased cancer risk; promoting indoor tanning as a safe way to reap the benefits of vitamin D and other purported health benefits; and asserting the safety of indoor tanning compared to tanning outdoors. Portofino operates five retail tanning salons across Manhattan. Total Tan operates 26 retail tanning salons in Albany, Buffalo, Erie, Rochester, and Syracuse.

Today’s lawsuits are part of a continuing effort to protect consumers from the documented skin cancer risks of indoor tanning. The Attorney General today sent a notice of intent to bring a similar action against Beach Bum Tanning Salons, which has 14 locations in New York City and on Long Island, for its misleading representations about the healthfulness of indoor tanning. The Attorney General also sent a notice of intent to Planet Fitness, which operates 101 gyms with tanning services statewide, for violations of the New York State tanning laws, including failure to provide required warnings to consumers.

“Make no mistake about it: There is nothing safe about indoor tanning. The use of ultra-violet devices increases exposure to cancer-causing radiation and puts millions of Americans in serious danger – young adults, in particular,” said Attorney General Schneiderman. “Irresponsible businesses that seek to rake in profits by misleading the public about the safety of their services will be held accountable by my office. Advertising and marketing cannot be used as a tool to confuse and endanger New York consumers.”

Over the past decade, scientific evidence has clearly documented the harms of indoor tanning. By 2009, the World Health Organization added indoor tanning to its list of most dangerous forms of cancer-causing radiation and placed it in the highest cancer risk category: “carcinogenic to humans,” the same category as tobacco. Even more recently, in July 2014, the U.S. Surgeon General issued a “Call to Action To Prevent Skin Cancer,” a report documenting the rise in skin cancers and outlining action steps to prevent these cancers going forward, including reduction of intentional, and unnecessary, ultraviolet (UV) light exposure for the purpose of tanning.

Indoor tanning increases the risk of melanoma, the deadliest form of skin cancer – which is responsible for 9,000 deaths in the United States each year. Indoor tanning also increases the risk of nonmalignant skin cancers (basal cell carcinoma and squamous cell carcinoma). While not deadly, these nonmalignant cancers can cause noticeable disfigurement. In addition to increasing the risk of skin cancer, UV exposure can also harm the immune system and cause premature skin aging.

Every year, approximately 3,500 New Yorkers are diagnosed with melanoma and another 100,000 are diagnosed with basal or squamous cell carcinoma. Skin cancers not only cause illness and death, but also cost about $8.1 billion to treat in the United States each year. Lost workdays and restricted activity days add to the costs of those illnesses.

New York law currently prohibits tanning for children under 17 and requires parental consent for children between the ages of 17 and 18.

Additionally, New York law requires that warning signs be posted outside of tanning beds, that tanning hazards information sheets and acknowledgement forms be distributed to tanning patrons, and that free protective eyewear be made available to tanning patrons. The Attorney General’s lawsuit alleges that Portofino did not post the required state warning sign near every tanning devices as required by the law and that total tan required patrons pay for protective eyewear when the eyewear is required to be provided without cost to consumers.

In the face of the scientific evidence linking indoor tanning and early onset of skin cancer, some indoor tanning salon businesses have sought to counter the scientific evidence by purposefully advertising the opposite message – that indoor tanning actually improves health. For example, the complaint alleges that Portofino and Total Tan made various statements on their websites and through social media channels, including:

Portofino

• “There actually is no clear direct experimental evidence showing a causative mechanism between tanning and melanoma. Even the American Academy of Dermatology admits this.”
• “Conflicting data exist questioning the UV-melanoma relationship. Some independent dermatology researchers question whether UV and melanoma are related at all.” 
• “Indoor tanning is an excellent, reliable source of Vitamin D. During a typical tanning session your body naturally creates as much Vitamin D as you would get from drinking 100 glasses of milk or eating 25 servings of salmon.”

Total Tan

• A testimonial from “cancer survivor Kurt Hollis” where he asserted to have treated his kidney cancer by tanning at Total Tan.
• “Tanning Fact! A Tanning unit can produce as much Vitamin D as drinking 100 glasses of milk! Wow!!!”
• Claims that vitamin D from indoor tanning will assist in either treatment or prevention of an array of serious diseases including cancer, heart disease, asthma, high blood pressure, diabetes, and blood clots.

In addition to the two tanning salons that are the subjects of the Attorney General’s lawsuits, the Attorney General sent notices of intent to sue to BBT Retail, Inc. and Salon Management, Inc, LLC, which owns Beach Bum Tanning Salons, and Planet Fitness. Beach Bum, similar to Total Tans and Portofino, has allegedly made a series of misleading statements downplaying the documented skin cancer risks of tanning. Beach Bum also allegedly misrepresented the healthfulness of indoor tanning, including claiming that tanning appears to retard or prevent many forms of cancer such as breast, colon, prostate and ovarian tumors. According to the notice, Planet Fitness, best known as a fitness center, offered inexpensive monthly “unlimited” tanning bed access, with little oversight on member usage, and violated the disclosure and safety requirements of New York State tanning laws.

To help educate the public and raise awareness of the harms associated with indoor tanning, the Attorney General’s office has today released a brochure on indoor tanning safety. The brochure provides important information on the risks and harms associated with UV tanning. The Attorney General’s office has also made available to the public the “Expert Report” it used in its lawsuits. The Expert Report was prepared by four leading public health experts and serves to document the harms of indoor tanning while refuting any of the salons’ health claims, since the experts can find no scientific evidence to support the salons’ claims.

The actions announced today are simply the next step in a series of steps taken by the Attorney General. In 2013, the Attorney General launched an investigation into suspected misleading advertising in the indoor tanning salon industry. In March of 2014, as part of that investigation, settlements were reached with HT Franchising Management LLC, the franchisor of the Hollywood Tans salons, and Hollywood Tans NYC, a Manhattan-based franchise of the national chain, requiring them to stop making health-related representations to promote tanning services.

In August 2013, the Attorney General submitted comments to the Food and Drug Administration supporting a proposed agency order that would provide important protections for consumers and new warnings on UV radiation tanning beds and other sunlamp devices. A copy of the FDA letter is available here. The FDA’s final order became effective in September 2014, strengthening protections for consumers by requiring manufacturers to place additional performance and safety controls on sunlamp products, and to include contraindication statements and warnings.

The Portofino lawsuit is being handled by the Health Care Bureau’s Assistant Attorney General Brant Campbell together with the Health Care Bureau’s Assistant Attorney General Elizabeth Chesler and the Consumer Fraud and Protection Bureau’s Assistant Attorney General Kate Matuschak. In addition, Robert Pompey-Goodman, from the Investigations Bureau assisted with the Portofino matter. The Total Tan lawsuit is being handled by the Environmental Protection Bureau’s Kathryn DeLuca. Environmental Scientist Charles Silver, Ph.D. of the Environmental Protection Bureau provided additional scientific and research support in development of the tanning investigation and the lawsuits. The Beach Bum and Planet Fitness matters are being handled by Ellen Fried, Assistant Attorney General in the Consumer Fraud and Protection Bureau.  The Health Care Bureau is led by Lisa Landau, the Consumer Frauds and Protection Bureau is led by Jane Azia, and the Environmental Protection Bureau is led by Lemuel Srolovic. The Health Care and Environmental Protection Bureaus are in the Division of Social Justice led by Executive Deputy Attorney General Alvin Bragg. The Consumer Frauds and Protection Bureau is in the Division of Economic Justice led by Executive Attorney General Karla G. Sanchez.

Consumers with questions or concerns about health care matters may call the Attorney General’s Health Care Bureau Helpline at 1-800-428-9071.

NEW YORK — Attorney General Eric T. Schneiderman today released the following statement on the confirmation of Loretta Lynch as U.S. Attorney General:

"I applaud the confirmation of Loretta Lynch as the next Attorney General of the United States. I have supreme confidence that she will be an outstanding Attorney General. She has a tireless work ethic, a wide breadth of experience and a strong commitment to public service and ensuring that all Americans will be afforded equal justice under the law. I am pleased that the Senate has finally, after a record delay, recognized her strong qualifications for the office. And because she will be the first African-American woman to lead the Department of Justice, this is a historic day for the United States, and I am proud to call Ms. Lynch our next Attorney General."