NEW YORK – Attorney General Eric T. Schneiderman issued the following statement on the removal of speculative ticket listings from third-party ticket sale sites:

“The decisions by StubHub and TicketNetwork to respond to the concerns of my office by removing speculative ticket sales is a victory for consumers. Many of those listings resulted in advertised prices of more than $5,000 for Bruce Springsteen tickets that don’t even exist yet.  Unscrupulous speculators who sell tickets that they don’t have and can’t provide too often leave music fans holding the bag. This kind of predatory behavior drives up prices, hurts consumers, and sows distrust in the ticket industry. We will continue to work with this industry to root out speculative ticket sales in the future.”

NEW YORK—Attorney General Eric T. Schneiderman today sent a letter to leading civil rights and Muslim advocacy groups reiterating his commitment to enforce all laws protecting religious liberty and equality. As New York State’s chief law enforcement officer, Schneiderman wrote that he has a duty to safeguard the state’s tradition of “openness and tolerance of people from all parts of the world, from all walks of life, and from all religions.”

“Our nation was founded on a single, aspirational principle: ‘equal justice under law.’  That is equal justice for everyone, regardless of religion,” Attorney General Schneiderman said.“While some have chosen to exploit fear and anger by targeting certain religious minorities, I want to emphasize in the strongest possible terms that my office stands ready to enforce all state and federal civil rights laws protecting the liberty and equality of people of all religions.”

The Attorney General’s office has been proactive in protecting New Yorkers from religious discrimination. In 2011, the office launched the Religious Rights Initiative, which is dedicated to addressing religious discrimination claims and ensuring that anti-discrimination laws are aggressively enforced. In 2012, the office secured an agreement with the largest municipal healthcare organization in the country to safeguard all employees' rights to religious accommodations.  In February 2015, the office joined a coalition of states in filing a friend-of-the-court brief with the US Supreme Court in support of a Muslim woman who had been denied employment at an Abercrombie & Fitch store because she wore a hijab.

The letter urges groups or individuals who are aware of potential violations of laws protecting New Yorkers from discrimination to contact the Attorney General’s Civil Rights Bureau to make a complaint. To make a report, please call (212) 416-8250 or send an email to Civil.Rights@ag.ny.gov. 

Read the full letter here.

WESTCHESTER – Attorney General Eric T. Schneiderman today announced the guilty plea of Elisa Parto, owner of the restaurant Elisa’s Food & Plus, Inc., in Port Chester, NY for failing to pay minimum wage and overtime. As a condition of the plea, Elisa Parto will be required to pay $47,000 in restitution in unpaid wages. The Attorney General’s Office anticipates distributing the $47,000 in unpaid wages to 6 former employees. Elisa Parto and the corporation are set to be sentenced on March 10, 2016.

“My office has consistently taken a firm stance on minimum wage and overtime violations, including the filing of criminal charges where appropriate,” Attorney General Schneiderman said. “Protecting the livelihoods of hardworking New Yorkers is a priority for my office and this guilty plea demonstrates that commitment.”

Elisa’s Food & Plus, Inc., located at 73 Poningo St. in Port Chester, NY, opened for business in 2010. Between 2010 and 2014, Elisa Parto hired cooks, cleaners and cashiers who were all owed the minimum wage for hours worked, as well as overtime at one and one half times their regular rate of pay for all hours worked in excess of 40 hours a week.

New York Labor Law also requires employers to pay wages no later than seven days after the end of the week when the wages were earned. The defendant pleaded guilty for failing to pay the legally required minimum wage and overtime to at least one former employee who often worked close to 70 hours a week between 2012 and 2014.

Parto and Elisa’s Food & Plus, Inc. both plead guilty in Port Chester Village Court yesterday. Each plead guilty to one count of Failure to Pay Wages under Labor Law Section 198-a(1), an unclassified misdemeanor. As part of her plea, the Court promised to sentence Elisa Parto to 3 years’ probation, with a condition that Parto must pay $11,000 in restitution by the date of sentencing on March 10, 2016, and continue to pay $1,000 per month every month thereafter while on probation. However, Parto’s failure to pay the $11,000 in restitution by sentencing, or failure to make any monthly payment of $1,000 while on probation may result in a re-sentence of up to 1 year in jail. Elisa’s Food & Plus, Inc. will be sentenced to a 1 year conditional discharge and a $500 fine.

The case was investigated by Attorney General Investigator Edward Ortiz , Investigator Luis Carter, Deputy Chief Vito Spano and Chief Investigator Dominic Zarella. The case was prosecuted by Assistant Attorney General Matthew Ross, led by Labor Bureau Criminal Section Chief Richard Balletta, led by Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg.

NEW YORK—Today New York Supreme Court Justice Manuel J. Mendez granted the Attorney General’s motion to enjoin DraftKings and FanDuel “from doing business in the State of New York, accepting entry fees, wagers or bets from New York consumers in regards to any competition, game or contest run on” their websites.  Attorney General Eric T. Schneiderman today issued the following statement in response to the decision

"We are pleased with the decision, consistent with our view that DraftKings and FanDuel are operating illegal gambling operations in clear violation of New York law.  I have said from the beginning that my job is to enforce the law, and that is what happened today."

A copy of the decision can be found here

NEW YORK—Attorney General Eric T. Schneiderman announced his office has launched an online form where New Yorkers can test and then submit data on the Internet speeds they are receiving at home. In October, the Attorney General sent letters to Time Warner Cable, Verizon and Cablevision asking for documents related to whether the Internet speeds they advertise are actually what households are receiving. The new online test is an opportunity for consumers to discover whether the advertised speeds are accurate. 

“New Yorkers should get the Internet speeds they pay for.  Too many of us may be paying for one thing, and getting another,” Attorney General Schneiderman said. “By conducting these tests, consumers can uncover whether they are receiving the Internet speeds they have paid for.” 

Full instructions for taking the broadband test can be viewed here.   

The test at Internethealthtest.org provides a customer’s “throughput” Internet speeds – the speeds at which customers actually reach content on the Internet. Once a test has been taken on Internethealthtest.org, consumers can submit a screenshot of the results to the Attorney General’s office by filling out the online form on the webpage.

"Common Cause/NY applauds Attorney General Schneiderman for setting up this testing site to help New Yorkers hold their Internet providers accountable to provide access at the ‎speed promised,"said Susan Lerner, Executive Director, Common Cause/NY. No individual New Yorker acting alone can influence the giant telecom companies that conrol broadband in our state, so the Attorney General's investigation is very welcome and we look forward to helping gather the necessary data."

“As Consumer Reports has pointed out, internet speeds can vary considerably, and consumers do not always get  the ‘blazingly fast’ internet speeds they are are paying for,” said Chuck Bell, Programs Director for Consumers Union.  “We have heard from dozens of customers in New York who are concerned that they are not getting the internet speeds promised by internet providers.   We therefore welcome and applaud Attorney General Schneiderman’s statewide investigation to ensure consumers are getting the full benefit of what they are paying for.”

The letters sent to the Internet providers in October asked for the companies to provide documents related to the number of customers receiving different levels of Internet services, disclosures made to actual or potential broadband customers concerning actual or expected Internet speeds, and other documents related to Internet speeds and interconnection agreements. 

ALBANY - Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced the sentencing of Melinda “Mindy” Wormuth, the former Town of Halfmoon Supervisor, on state charges for stealing several campaign contributions donated to her campaign fund. The public corruption case arose out of a cooperative federal-state partnership between the Attorney General, the State Comptroller, the Federal Bureau of Investigation, and the United States Attorney's Office for the Northern District of New York.

“This sentencing makes it clear that if a public official misuses campaign funds, they will face consequences, including time in jail,” said Attorney General Schneiderman. “Through a collaborative effort with Comptroller DiNapoli, U.S. Attorney Hartunian, and the F.B.I., we were able to strike a blow against public corruption and ensure that justice is served.”

“New Yorkers have every right to expect their public officials to act with honesty and integrity,” said Comptroller Thomas P. DiNapoli. “We will continue to partner with Attorney General Schneiderman, United States Attorney Hartunian and the Federal Bureau of Investigations to hold accountable those who violate the public’s trust.”

“Ms. Wormuth was elected into office to represent her community,” said Special Agent in Charge Andrew W. Vale. “Instead she took advantage of the public’s trust for her own personal gain.  The actions of Ms. Wormuth erode the public’s trust in our elected officials.  The FBI is proud to have worked this investigation jointly with the United States Attorney’s Office, the Internal Revenue Service, the Attorney General’s Office and the Comptroller’s Office.  We stand committed to continuing to work with our law enforcement partners to investigate corruption at all levels.“

Wormuth previously pleaded guilty to Grand Larceny in the Fourth Degree in Saratoga County Court. The Honorable Matthew J. Sypniewski sentenced Wormuth to ten months of incarceration in the county jail with said term to run concurrent with a term of incarceration in a federal penitentiary stemming from related charges in federal court. As part of the plea agreement, Wormuth must also pay $1,250 in restitution to the Friends of Mindy Wormuth campaign committee and terminate the committee in accordance with the New York State Election Law. Wormuth also agreed to contribute any remaining funds of that campaign committee to a charity that is recognized by the Internal Revenue Service, but is not one over which she or a member of her family holds controls or decision making powers.

The charges against Wormuth claimed that between July 2009 and July 2013, Wormuth cashed seven contribution checks, totaling $6,250, intended for Friends of Mindy Wormuth. She then pocketed the proceeds without reporting the contributions to the committee’s treasurer, or on the Financial Disclosure Reports that were filed with the State Board of Elections.

The felony complaint relied, in part, on statements that Wormuth made to the FBI, including an admission that she cashed and spent certain checks made payable to her campaign. In one FBI interview, Wormuth attributed some of her actions to her bitterness at not receiving her political party’s endorsement for reelection in November 2013.  

From 2007-January, 2013, Wormuth served as the Supervisor of the Town of Halfmoon in Saratoga County. In that capacity, she headed the Halfmoon Town Board and served as the town’s representative on the Saratoga County Board of Supervisors.  

The case was handled by former Senior Assistant Attorney General Darren Miller and Assistant Attorney General Bridget Holohan Scally of the Public Integrity Bureau. The Public Integrity Bureau is led by Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. The investigation was conducted by Investigator Mitch Paurowski of the Investigations Bureau with assistance from Associate Forensic Auditor Jason W. Blair of the Forensic Audit Unit. The Forensic Audit Unit is led by Edward Keegan. The Investigations Bureau is led by Bureau Chief Dominick Zarrella and Deputy Bureau Chief Antoine Karam. The Criminal Division is led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan.

The case was investigated by the Comptroller’s Division of Investigations. The Attorney General and State Comptroller thank the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Northern District of New York for their partnership.

NEW YORK – Attorney General Eric T. Schneiderman today announced settlement agreements with 30 online retailers from across the country that sold illegal toy guns to consumers in New York State. The toy guns in question violate a state law that prohibits the sale of imitation weapons, which are toy guns that look too much like real guns. Today’s announcement follows a related investigation of major retailers this summer that included Walmart, Kmart, Amazon.com, and Sears. Those retailers paid of over $309,000 to settle the investigation and agreed to comply with applicable state laws.

The investigation announced today revealed that Amazon.com operated a retail marketplace platform where third party sellers can offer their products for sale and take orders to ship products into New York. The Attorney General sent cease and desist letters to the third party sellers in July to immediately stop their illegal operations and now has entered into settlements with 30 companies to permanently change their business practices in New York.

“When toy guns are mistaken for real guns, there can be tragic consequences,” said Attorney General Schneiderman. “New York State law prohibits the sale of imitation weapons that closely resemble real guns. I will continue to enforce this law so that we can avoid putting both children and law enforcement officials at risk.”

The following number of illegal toy guns were sold into major cities across the state, with the remainder of the over 5,000 being sold into neighboring suburbs:

• Albany-Troy-Schenectady: 67
• Binghamton: 13
• Buffalo: 52
• Elmira: 7
• New York City: 1,337
• Plattsburgh: 11
• Rochester: 99
• Syracuse: 29
• Utica: 13
• Watertown: 9

Attorney General Schneiderman’s efforts represent his continued commitment to protecting children’s safety. Under the terms of the agreements, these online retailers are required to sell only toys that are colored entirely white, bright red, bright orange, bright yellow, bright green, bright blue, bright pink or bright purple or a combination of these colors and will pay a fine. While New York State law requires these toys to either be brightly colored or have colored striping down the barrel, the retailers have agreed to voluntarily meet the even tougher standard required by New York City of all of these toys being brightly colored.

This case is being handled by Assistant Attorney General Benjamin Bruce, assisted by Consumer Frauds Representative Kirsten Cummings, both of the Rochester Regional Office. The Rochester Regional Office is part of the Division of Regional Affairs, which is led by Executive Deputy Attorney General For Regional Affairs Marty Mack.

NEW YORK - Attorney General Eric T. Schneiderman and Department of Environmental Conservation Acting Commissioner Basil Seggos today announced the last round of grant awards by the Greenpoint Community Environmental Fund (GCEF), bringing its total investment to $54.5 million. GCEF is a competitive grant program created from $19.5 million the state obtained from ExxonMobil in a 2011 settlement over the company’s massive oil spill in Greenpoint, Brooklyn.   The Attorney General’s office and the DEC are jointly overseeing the program’s implementation and selected the projects to be funded.  Today, the state is making GCEF’s final awards:  5 grants totaling $4.25 million, including 3 “large grants” (between $100,000 and $600,000) and 2 “legacy” grant (over $600,000) to projects addressing the environmental improvement priorities of the community. The GCEF funding will be matched by $12.7 million in total contributions from the grant recipients.

“The Greenpoint Community Environmental Fund was created to help reverse this vibrant community’s historical legacy of environmental abuse and neglect,” Attorney General Schneiderman said.  “Through the GCEF, New York State and Greenpoint residents have worked together to ensure that the settlement monies are directed to high-quality, locally-led projects that serve the community’s environmental improvement priorities.  We are proud to partner with the community to grow these funds into an investment of nearly $55 million in a greener, healthier future for Greenpoint” 

"The ongoing environmental restoration of the Greenpoint community has been tremendous and successful in large part due to the environmental fund supported projects," said DEC Acting Commissioner Seggos. "This transformation is continuing through these new projects that will bring residents together to enhance the community, restore the waterfront, and promote greater environmental education and stewardship efforts."

GCEF provided  two rounds of grant funding, one in 2015 and one in 2014.   With the conclusion of this year’s grant round, the program’s project funding is now completed.    

The projects being awarded funding today– which range from helping to restore Greenpoint’s historic Monsignor McGolrick Park to creating a combination “green roof” and community space along Newtown Creek to designing a “living shoreline” at the proposed site of the Greenpoint Monitor Museum – were the top vote-getters in recent community voting organized by the GCEF.  Descriptions of these projects can be found here. 

Last month, the state awarded a total of $992,000 in “small grants” (between $5,000 and $100,000) to 17 environmental improvement projects in Greenpoint.  Descriptions of these projects can be found here. 

The total of $5.2 million in grants made by GCEF in 2015 will be combined with $13.3 million in matching funds provided by the grantees, bringing a total of $18.5 million to Greenpoint’s environmental priorities.   Combined with last year’s $36 million in total grants and matching funds, GCEF has brought a total investment in improving Greenpoint’s environment of $54.5 million – nearly tripling the $19.5 million obtained in the 2011 settlement. 

With its project funding now completed, GCEF will focus on ensuring the projects’ successful implementation.

State Senator Daniel Squadron said, "GCEF has been a tremendous asset to the Greenpoint community, and has highlighted the environmental needs and rich history of Greenpoint.  I thank the Attorney General and the DEC, their team and partners, as well as the organizations who have worked to bring millions of dollars in important green resources, programs, and initiatives to our community, and I look forward to continuing to see these green initiatives grow."

Assemblyman Joseph R. Lentol said, “Congratulations to the Large and Legacy grant winners. Over the past few years, the GCEF process has brought the community together in more ways than one.  I have witnessed an increase in civic participation and an overall desire to improve Greenpoint’s environmental future.  I am certain these Large and Legacy grant winners will improve Greenpoint’s ecosystem for years to come. The grants that have previously been awarded have already realized results, so I have no doubt that Greenpoint’s future is in good hands.  We have now seen an investment, including matching funds, of over $54 million, which speaks directly to Greenpoint residents’ commitment to their community.  I look forward to seeing the rest of the projects come to fruition.”

City Councilman Stephen Levin said, “The latest round of GCEF grants has shown that this process has been a model for the disbursement of public funds -- transparent, participatory, and effective. Greenpointers have lived with significant environmental hazards for generations. In this instance, thanks to Attorney General Eric Schneiderman and Acting DEC Commissioner Seggos and their staffs, as well as all the community partners, Greenpointers are seeing some real and lasting community benefits.”

"This may be the final grant cycle, but it's the start of a new era in Greenpoint.  This entire community has coalesced behind the idea of a greener future build on top of a polluted past.  Riverkeeper is proud to stand with them, the Attorney General, and the Department of Environmental Conservation - as well as all of the other organizations, advocates, and elected officials who have spent a decade working on restoring Greenpoint's economy, environment, and potential,” said Paul Gallay, President of Riverkeeper.

How the projects were selected:

After obtaining the $19.5 million from ExxonMobil in 2011, GCEF held community meetings in Greenpoint that were attended by roughly 300 residents and which identified community priorities for environmental improvements.   These priorities were used by GCEF to help shape Request for Proposals soliciting project funding proposals from the community.  

On April 28th of this year, GCEF put out a “Request for Proposals” soliciting grant proposals.   The RFP yielded 26 proposals for small grants, 12 proposals for large grants and 4 proposals for legacy grants.  These 42 proposals addressing Greenpoint’s environmental improvement priorities requested a total of $14 million.  

Small grant proposals were reviewed and scored by the program’s co-administrator – the National Fish and Wildlife Foundation (NFWF) – with respect to criteria presented in the RFP (i.e., environmental results, workplan, budget, Greenpoint support, and communication and results dissemination).  The resulting scores served as the basis for the state’s selection of the 17 small grant awards made in November.

Large and legacy grant were reviewed and scored by a panel of independent experts, also using the criteria presented in the RFP.  The panel was assembled by NFWF, according to its established procedures and best practices.  The purpose of the independent expert review was to identify the proposals of highest quality, greatest likelihood of success, and most environmental benefit to the community. 

The 9 proposals scoring the highest in the independent expert review where selected by the state to be shared with the Greenpoint community in order to solicit residents’ preferences among the projects.  Following extensive community outreach, GCEF held three community “preferencing” events over two days in November.  Greenpoint residents over the age of 16 were invited to review information detailing each of the 9 proposed projects and cast ballots in support of up to 4.  With 640 residents voting, the 5 projects selected to receive GCEF grants are the ones that received the most votes.

A partnership of the National Fish and Wildlife Foundation and the Greenpoint-based North Brooklyn Development Corporation, selected through a competitive process, is administering the GCEF for the state.  The administrator has day-to-day responsibility for implementing the program, including application review and grant management, fiscal and fiduciary management, community engagement and collaboration, and program tracking, recordkeeping, and reporting.

The RFP, the applicant assistance program, and the small grant application evaluation process were all developed in collaboration with the Greenpoint Community Advisory Panel (CAP), an advisory group comprised of Greenpoint residents, representatives of local organizations and elected officials that provides direct, on-going input to the state. Since the fund’s inception, the CAP has played an integral role in guiding the program’s development and implementation.

More information on the Greenpoint Community Environmental Fund can be found at www.gcefund.org.

“From the beginning, the GCEF has been committed to partnering with our community in the design and execution of a program that understands the residents of this community are also experts when it comes to our own legacy of environmental abuse.  The result has been a truly home grown effort – projects chosen by Greenpoint residents that not only address the community’s environmental priorities but also partner with local community organizations in finding solutions.  I am proud to have participated in this process,” said Christine Holowacz, Greenpoint resident and member of GCEF Community Advisory Panel.

Ingrid Bromberg Kennedy, Greenpoint resident and member of GCEF Community Advisory Panel said, “I have started to see the impact of the GCEF grants in my neighborhood already.  With funding from the program, the Audubon Society has created a garden in McGolrick Park to attract native birds back to our Park and tree beds along Nassau Avenue have been enlarged to help the trees grow larger.  I am very excited for the parks stewardship program to get underway – it should be a great support to our all-volunteer McGolrick Park Neighborhood Alliance.  GCEF has made a real and important contribution to my neighborhood and Greenpoint.” 

Katie Denny Horowitz, Greenpoint resident and member of GCEF Community Advisory Panel said “As a member of the Community Advisory Panel, I commend New York State for its leadership throughout this multi-year granting process, through which a community - previously struggling to be heard - was encouraged to lend a strong voice.  Together we developed a transparent, inclusive process to distribute nearly $20 million in grants and $55 million in total funding to address deep-seated vulnerabilities created by Greenpoint’s toxic history.  With the final round of grants now complete, dozens of innovative projects are underway or getting started, each leveraging additional funding and attracting new stakeholders from across the city, ultimately creating a critical mass of environmental interventions that will impact Greenpoint for generations to come.”

The GCEF is being overseen for Attorney General Schneiderman by Environmental Policy Advisor Peter C. Washburn and for Acting Commissioner Seggos by DEC Regional Director for New York City, Venetia Lannon.  The state is being assisted in engaging the Greenpoint community by GCEF Outreach Consultant Laura Treciokas.

GOSHEN – Attorney General Eric T. Schneiderman today announced that Elant, Inc., a Mid-Hudson area nursing home chain, will pay $600,000 to resolve claims that it delayed the discharges of short-term residents at its facilities.  As part of a settlement, Elant admitted that between 2008 and 2011 it had a practice of postponing discharges of short-term residents who were clinically ready to leave Elant facilities against the wishes or without the informed consent of the residents or their families.  Elant, which is headquartered in Goshen, also admitted that it orchestrated the transfer of several long-term residents to one of its financially-troubled facilities to improve that facility's financial condition. 

"Nursing homes must not put their own financial interests above those of their residents – patients who rely on them for their care and treatment – and New York taxpayers,"Attorney General Schneiderman said. "All nursing home residents have a right to accurate and complete information about their options. Indeed, they need that information to make informed decisions about their care. My office will find those who use patients to siphon off critical taxpayer funds." 

"This settlement sends a clear and unmistakable message to those who seek to profit at the expense of vulnerable New Yorkers- and New York's taxpayers: you will be held fully accountable," said Dennis Rosen, Medicaid Inspector General. 

The settlement agreement follows a joint investigation of Elant by the Attorney General's Medicaid Fraud Control Unit and New York State Department of Health.  Elant currently owns six nursing homes in Orange, Dutchess, and Westchester counties, but it has announced plans to try to sell several of the homes.  

In the settlement agreement, Elant admitted that senior managers directed nursing home administrators to limit the number of planned discharges of short-term residents to two or three residents per week.  Most short-term residents at nursing homes receive physical or occupational therapy following events such as strokes or broken hips.  Elant admitted that the purpose of the delays was financial and that the practices were primarily directed at residents with Medicare or Medicaid coverage.  Elant also admitted that it prolonged short-term stays by giving residents additional services that were not clinically necessary, avoiding residents who were actively seeking discharge, and delaying the completion of discharge paperwork.

The investigation revealed that administrators and staff openly discussed efforts to delay discharges and thereby keep daily resident counts for each home, which were known as the census, as high as possible.  For instance, one former senior executive told other executives by email, "We need to slow discharges across the system.  I will send the message to Goshen but please let the other buildings know."  Similarly, another senior executive sent an email with the subject line "Census" that stated,  "As can be seen from this morning’s census report, we are down across the system.  Please manage your census this week and whatever discharges can be avoided, please do so.  Residents and families can be very obstinate."  In emails, Elant personnel acknowledged that they were holding residents to help Elant's census.  For example, one nursing home administrator began an update on discharges by noting, "We have held these discharges off in a number of cases due to low census."  Similarly, in another email thread about census in one facility, an Elant administrator acknowledged, "we are really holding these people against their will." 

The investigation also revealed that senior executives orchestrated the transfer of residents to Elant's financially-troubled facility in Westchester County, which used to be known as Elant at Brandywine.  One such effort in early 2009 was designed to increase the number of residents in advance of two meetings between executives and members of Elant's Board of Directors.  Elant targeted certain residents with Medicaid coverage for transfer.

In connection with the investigation, the Department of Health sought the revocation of the nursing home administrator licenses of two former Chief Executive Officers of Elant and two former administrators of Elant skilled nursing facilities.  Both of the former CEOs have surrendered their licenses, as has one of the former administrators.  The license proceeding against one of the former administrators is ongoing.

Under the settlement, Elant must undertake a series of steps to ensure residents' rights are protected.  Specifically, Elant agreed to adopt new policiesthat include prohibitions on deceiving residents about their discharge options and restrictions on taking Elant's finances into account when discharging residents.  The settlement also requires Elant to enter into a Corporate Integrity Agreement with the Office of the Medicaid Inspector General ("OMIG").  Corporate Integrity Agreements typically require an outside monitor to oversee the activities of an organization for several years.  In addition, the settlement allows OMIG to prevent Elant from employing people who were involved in the schemes to delay discharges or improperly transfer residents. 

The Attorney General would like to thank the Department of Health and the Office of the Medicaid Inspector General for their cooperation in connection with this case.  About $275,000 of the settlement will resolve civil claims relating to Medicaid resident stays at Elant facilities under the New York False Claims Act and other laws.  Elant will also pay about $275,000 in fines to the Department of Health.  About $50,000 of the settlement will reimburse the federal Medicare program for discharges that were delayed.

The Medicaid Fraud Control Unit's (MFCU) investigation was conducted by Special Assistant Attorney General Christopher Y. Miller, Senior Counsel Carolyn T. Ellis, Investigators Kenneth Deis and Lisa McDonald, Investigator Peter Markiewicz, Deputy Chief of Downstate Investigations Kenneth Morgan, Medical Analyst Stephanie Keyser, Associate Special Auditor Investigator Meghan E. Collins, and Chief Auditor Michael LaCasse. MFCU is led by Acting Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney and is within the Division of Criminal Justice, which is led by Executive Deputy Attorney General Kelly Donovan.

NEW YORK– Attorney General Eric T. Schneiderman announced an agreement today with the City School District of Albany to ensure that the District’s discipline policies and practices do not discriminate on the basis of race, national origin or disability status.  With this Agreement, both the Attorney General and the City School District of Albany reaffirm their commitment to fostering safe and effective school climates.

"The school to prison pipeline prevents some of the most vulnerable children in our schools from obtaining the services they need to succeed both in and outside the classroom," said Attorney General Schneiderman.  "My office is committed to shutting down the pipeline, and ensuring that all children in New York have access to educational opportunities.”

In February of this year, the Attorney General’s Civil Rights Bureau began investigating the administration of discipline policies in the City School District of Albany.  The investigation was a continuation of the Attorney General’s broader statewide initiative to reverse zero tolerance policies in school districts.  In Albany, the Bureau specifically reviewed the District’s policies and practices dating back to the 2009-10 school year for compliance with Title VI of the Civil Rights Act of 1964 the Individuals with Disabilities Education Act, and state education law. 

The investigation of the City School District of Albany revealed that between the 2009-10 and 2013-14 school years, the District suspended an average of one in eight students out of school, and that students lost over 7000 days of school each year to short term suspensions.  Black students were far more likely to be suspended in the District, than their white peers.  Overall, Black students received suspensions at three times the rate of White Students.  In addition to the racial disparities, students with disabilities were also far more likely to receive suspensions as their counterparts without disabilities.  Between 2009-10 and 2013-14, students with disabilities were twice as likely to receive one suspension out of school as compared to students without disabilities, and three times as likely as those without disabilities to receive multiple suspensions in a school year.     

The District has made efforts, both before and after the Attorney General’s Office began its investigation, to address these statistical disparities.  For instance, the District made changes to its Code of Conduct, updated its procedures for ensuring due process for students in the discipline context, and began rolling out approaches to discipline that do not rely on exclusion.  However, the investigation revealed that these measures have yet to be consistently implemented across the District.  

Under the agreement between the District and the Attorney General, the parties will work together to reduce the use of exclusionary discipline, and to encourage the use of alternative approaches that ensure safety while promoting an effective learning environment.  The District will amend its policies to provide more clarity, and to ensure that the use of exclusion as a form of discipline is reduced.  In addition, the District agreed to create and expand existing programs that emphasize alternative approaches to discipline, including preventative techniques and additional supports for struggling students.  The District will also provide staff with additional training programs, and parents with opportunities to learn more and discuss the District’s policies.  Finally, the District will improve the data it records regarding discipline, and expand the manner in which it analyzes that data. 

To help implement the agreement the District will appoint an independent monitor.  The monitor will audit the District’s compliance with the Agreement and with state and federal laws periodically and report his or her findings to the Attorney General’s Office.    

“While this information is not new to us, we are grateful to the members of the Attorney General’s Office for their partnership in helping us move forward in our collective work to provide a safe, supportive learning environment for all of our students,” said City School District of Albany Superintendent Marguerite Vanden Wyngaard, Ph.D. “As a school district and as a community, we are more prepared than ever to come together to ensure that every student in every school has full access to high-quality academic and support programs, as well as caring, competent staff who have the skills they need to help each child succeed to her or his fullest potential.”

“On behalf of all of our students and families, the Board of Education is fully committed to providing every child in our community with the best possible education,” said Board President Ginnie Farrell. “We are confident that through the support and leadership of the Attorney General’s Office, and the dedication of our caring staff and community partners, we will continue to build a school district that will be a source of pride for all.”

"A successful quality education is the great equalizer for all students. The disciplinary disparities for black students and students with disabilities compared to white students and students without disabilities prevents equal access to this opportunity for success," said Carolyn McLaughlin, Albany Common Council President. " I am pleased to see that State Attorney General Schneiderman has taken steps to address this issue in the Albany City School District. I am encouraged that leadership in the Albany City School District has taken steps to address this disparate treatment of our students. Going forward I am confident all students will be able to enter school with a reasonable expectation that their educational activities will proceed in a safe and fair environment. Going to school should not make you susceptible to prison but rather set you on course for college as it is intended."

“Zero tolerance policies in the classroom are not only unjust, they are proven ineffective,” saidRosemary Rivera, Organizing Director of Citizen Action of New York. “We know overuse of suspensions increases dropout rates, and pushes kids into the juvenile justice system.  The Attorney General’s efforts in Albany should encourage other districts across the state to reform their policies to conform with the best interests of New York’s children.” 

“School districts that rely on exclusion as a form of discipline disproportionately burden the most vulnerable students, including those students with disabilities,” saidJennifer Monthie, Esq. Director PADD, PAAT, & PATBI Programs of Disability Rights New York. “This agreement provides those students much needed protection, and helps ensure that they have the opportunity to remain in school and succeed in the classroom."

The investigation was part of the Attorney General’s initiative to address issues related to school discipline across the state.  In July 2014, the Civil Rights Bureau and the Syracuse City School District agreed to reform that District’s discipline policies.  Since that agreement was signed, the District has reduced the number of office referrals, suspensions and arrests in its schools.  It has accomplished those reductions while creating new programs and policies to emphasize alternative approaches to discipline that do not rely on exclusion, by expanding programs for training teachers and reaching out to parents, and by improving its capacity to record and analyze student data. 

This matter was handled by Assistant Attorneys Generals Ajay Saini and Sandra Pullman of the Civil Rights Bureau. The Civil Rights Bureau is part of the Division of Social Justice led by Executive Deputy Attorney General for Social Justice Alvin Bragg.

The Civil Rights Bureau of the Attorney General's Office is committed to promoting access to equal employment opportunities and combating discrimination for all New Yorkers. To file a civil rights complaint, contact the Attorney General’s Office at (212) 416-8250, civil.rights@ag.ny.gov or visitwww.ag.ny.gov.  

NEW YORK – Attorney General Eric T. Schneiderman announced today that New York has joined with up to 47 states and the federal government in an agreement in principle with Qualitest Pharmaceuticals, Inc., a manufacturer of generic pharmaceutical products, and its parent company, Endo Health Solutions, to resolve civil allegations of unlawful labeling practices. According to the whistleblower lawsuit, Qualitest unlawfully labeled and marketed multivitamin tablets with fluoride as containing the American Dental Association (ADA) recommended amount of fluoride, when the tablets actually contained less than half that amount. Under the settlement in principle, Qualitest has agreed to pay over $5 million resolving claims relating to New York's Medicaid program.

“Companies have an obligation to accurately report the ingredients in the drugs they market,” Attorney General Schneiderman said. “My office will continue to work to ensure that patients and health care providers can rely on drug labels being accurate.”

Physicians, dentists, and pharmacists rely on the fluoride strength indicated on the label that accompanied the multivitamin with fluoride tablets.  The whistleblower in this case, Dr. Stephan Porter, tested various fluoride tablets manufactured by Qualitest between 2008 and 2013 and determined that, on average, they contained about 45% of the amount of fluoride ion indicated on the product label.  This was later confirmed by the FDA, and Endo, which had purchased Qualitest in 2010, stopped distributing the multivitamin with fluoride products by October 2013.

By mislabeling the strength of its fluoride products, Qualitest caused these healthcare providers to submit false reimbursement claims to Medicaid and various federal health care plans.  The government plans paid for a multivitamin with fluoride product that did not contain the amount of fluoride ion indicated on the label and their clients were likely exposed to a higher risk of cavities and related health problems.

New York would like to thank whistleblower Dr. Stephan Porter for initiating this case, which resulted in the product being removed from the market; he will receive a portion of the settlement.  Endo is headquartered in Malvern, Pennsylvania; Qualitest Pharmaceuticals’ corporate name is Generics International (US Parent), Inc., which is a wholly-owned subsidiary of Endo.  The case is captioned U.S. ex rel. Porter, et al. v. Vintage Pharmaceutical, No. 13-CIV-1506, and was filed in the United States District Court for the Southern District of New York. 

The case was handled by the Medicaid Fraud Control Unit, which worked closely with the U.S. Attorney's Office for the Southern District of New York and a multi-state team that included representatives of New York, Texas, Washington, Florida and Oregon.  Of the $5 million related to the New York Medicaid program, about $2.8 million will go to New York and $2.2 million will go to the federal government.  

New York led the national team; the matter was handled by Counsel to the NY MFCU Jay Speers and Special Assistant Attorney General David G. Abrams.  Special Auditor-Investigators Matthew Tandle and Deowattie Persaud served as members of the state team. Investigator Lisa McDonald also handled the case. The Medicaid Fraud Control Unit is led by Acting Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney.  The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.     

NEW YORK – Attorney General Eric T. Schneiderman wrote an op-ed in the Albany Times Union about a new, groundbreaking agreement with the Albany school district to reform school disciplinary practices and prevent the criminalization of ordinary school misconduct.

Highlights from the op-ed are below:

ON GOALS OF ALBANY AGGREEMENT:  The agreement between my office and the Albany school district will help make sure all of our children can go to school in a safe, effective, and supportive environment. It builds upon the success achieved in Syracuse over the past year, and strives for the principles of fairness and equality that form the backbone of every high achieving school system.

ON THE TROUBLING GROWTH OF SCHOOL-TO-PRISON PIPELINE: One major factor in this growing trend is the rise of severe discipline policies like suspensions, expulsions, and zero-tolerance that push children – especially children of color -- into the justice system.

ON THE SUCCESS OF A SIMILAR AGREEMENT IN SYRACUSE: Between the 2013-14 to 2014-15 school years [in Syracuse], we’ve seen a 30 percent drop in the number of referrals that resulted in punitive discipline – and a dramatic 77 percent plunge in out-of-school suspensions at elementary schools, according to data provided to my office by the district.

ON WHAT NEEDS TO HAPPEN NOW: It is up to public officials, school leaders, and parents to come together to make sure our kids have access to the most safe and effective learning environment possible. It is time for school districts nationwide to learn from these examples and reform their policies to be more inclusive and supportive of all students.

Read the full op-ed here.

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has reached a settlement agreement resolving a lawsuit brought against the Brooklyn-based National Children’s Leukemia Foundation (“NCLF”), its founder and leader Zvi Shor, its president Yehuda Gutwein, the founder’s son, Shlomo Shor, and its auditor, Shlomo Donn.  The Attorney General had filed a nine-count petition to shut down NCLF in July 2015 in Kings County Supreme Court.

Through this settlement, NCLF will be permanently closed, its former officers barred from serving as fiduciaries of any New York charity, with nation-wide bans for the founder and his son. The former officers will also be barred from soliciting funds on behalf of any charity.  The Attorney General will also recover $380,000 dollars, most of which will be directed to charities helping children with leukemia.  Shor, age 64 and a resident of Brooklyn, New York, forfeited claims to an additional $612,844 in back-pay, in addition to a claim to a life-time pension and other benefits.  NCLF’s former accountant and auditor must report the identities of any non-profit clients to the Attorney General’s Charities Bureau for the next three years.  The settlement is subject to approval by the court. 

“My office will continue to go after so-called charities that cynically assume a sympathetic name and then deceive generous New Yorkers into making generous donations for persons in need,” said Attorney General Schneiderman. “We are committed to ensuring that funds contributed by donors reach their intended recipients.”

The defendants in the Attorney General’s suit admitted to their misconduct, including the following: 

• Contrary to NCLF’s fundraising solicitations, which represented that it had medical expertise to provide significant services to sick and terminally ill children, NCLF did not operate a bone marrow registry; it did not bank umbilical cord blood; and it did not operate a cancer research center.  In addition, NCLF heavily promoted a “Make A Dream” program for terminally ill children, but in fact NCLF did little more in several years than donate one laptop computer to one child and send another child to Disney World.  Over the five years of the Attorney General’s investigation, from 2009 through 2013, NCLF’s actions had the effect of deceiving donors, who contributed a total of $9.7 million – 85% of which NCLF spent on fundraising costs. 
• NCLF pretended to meet its obligation to have a functioning board of directors by falsely listing as board members persons who in fact had no involvement with the organization.
• Gutwein, who is a Certified Public Accountant, admitted that he was only a “straw” president and that Shor continued to lead NCLF even after Shor’s resignation.  Shor relinquished the title of president when his 1999 criminal conviction for bank fraud became public.  Demonstrating that he had no actual role at NCLF, Gutwein admitted that he had little or no knowledge of NCLF’s programs, and that he never even visited NCLF’s office.  Gutwein admitted that NCLF made representations in its solicitations about programs that it did not conduct, and that Shor approved of the falsehoods.
• Donn, a C.P.A. who worked for Gutwein, was responsible for auditing NCLF’s finances.  Donn prepared and submitted reports that purported to represent valid audits, but, in fact, Donn’s reports did not meet basic auditing standards. 
• Shlomo Shor, Zvi Shor’s son, became an officer and director of NCLF merely for the purpose of signing official checks and contracts at his father’s behest.  Despite his title of vice-president, Shlomo Shor was ignorant of the organization’s finances and its programs.NCLF further deceived donors by filing with the Charities Bureau required annual reports that minimized its fundraising expenses and that created a false appearance that it was spending substantially more on programs than it did.

The fully text of the defendants' admissions is available here and here. 

The investigation into NCLF developed from the Bureau’s annual Pennies for Charities report, which reveals that charitable donations obtained by many professional fundraisers are largely spent on fundraising and administrative expenses, with only a small fraction left for charitable work. The latest Pennies for Charities report may be accessed here.

This case is being handled by Assistant Attorney General Yael Fuchs, with the support of Charities Bureau accountants Judith Welsh-Liebross and Joseph Stoffel, and Legal Assistants Carolyn Fleishman and Jacqueline Sanchez.  Senior Investigator Edward Conlan provided assistance, under the direction of Chief Investigator Dominick Zarrella.  Sean Courtney is the Enforcement Section Chief of the Charities Bureau.  James Sheehan is the Charities Bureau Chief.  Alvin Bragg is Executive Deputy Attorney General for Social Justice.

More information about the Attorney General’s Charities Bureau and organizations regulated by the Bureau may be found at www.charitiesnys.com.

BUFFALO – Attorney General Eric T. Schneiderman today announced that Justice John F. O’Donnell sentenced George Anna, a Western New York home improvement contractor, to 360 days in jail. In 2012, the Attorney General obtained a court order barring Anna from the home improvement business unless he first posted a $100,000 performance bond. In the 2012 case, the Attorney General proved that, time and time again, Anna took money from consumers and failed to provide the home improvement services for which he had been paid. 

“When Western New Yorkers hire a home improvement contractor, they expect the contractor to keep their end of the bargain,” said Attorney General Schneiderman. “Today’s sentencing shows that those who scam consumers and fail to provide promised services will be held accountable.”

In May of 2015, Attorney General Schneiderman’s office learned that Anna was holding himself out as a home improvement contractor, despite never having posted the bond. An investigation by the Attorney General showed that, despite the court order, Anna again was taking money for home improvements, but not providing the services – the very conduct that led to the court order in the first place. The Court sentenced Anna to 90 days in jail.

In August 2015, Attorney General Schneiderman’s office learned that Anna was again holding himself out as a home improvement contract and again was ripping off consumers.  As a result, Attorney General Schneiderman’s office moved to have Anna held in criminal contempt of the Court’s order leading to today’s sentencing of Anna to 360 days in jail.

Attorney General Schneiderman offers the following tips for consumers dealing with home contractors:

• Never agree to have work done on the spot, especially when potential contractors are door-to-door marketing;
• Determine exactly what you want done, then seek out a qualified contractor;
• Shop around: get at least three estimates from reputable contractors that include specific information about the materials and services to be provided;
• Ask for references: check with the Better Business Bureau, banks, suppliers, and neighbors; always contact any references provided to you;
• Insist on a written contract that includes the price and description of the work needed;
• Do not pay unreasonable advance sums: negotiate a payment schedule tied to the completion of specific stages of the job; never pay the full price up front; and
• Remember that you have three days to cancel after signing a home improvement contract, but all cancellations must be in writing.

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

NEW YORK — Attorney General Eric T. Schneiderman released the following statement on the decision by Pier 1 Imports stores to end on-call scheduling:

“Following discussion with my office, Pier 1 Imports has agreed to end on-call shifts at all store locations across New York State by January 17 and anticipates ending on-call shifts at all store locations nationwide by the end of March. Pier 1 Imports will also require managers to post store schedules a minimum of 10 to 14 days in advance.

Today’s agreement is part of an ongoing inquiry by my office into the practice of on-call scheduling. Since April, my office has sent letters to 14 parent companies of major retailers.  Six companies, representing numerous brands, have agreed to end the practice of on-call scheduling, and have also agreed to provide employees with their work schedules at least one week prior to the start of the workweek.  The other eight indicated that they were not currently using on-call scheduling, though some acknowledged doing so in the past.

I commend Pier 1 Imports for recognizing the importance of giving employees predictable schedules, which allow workers to plan for child care and other family responsibilities, enable workers to manage their household budgets more effectively, and avoid the negative consequences of unpredictable work hours.”

Since Attorney General Schneiderman launched an inquiry into on-call scheduling, brands including Abercrombie & Fitch, Gap (parent company of Gap, Banana Republic, and Old Navy), J.Crew, Urban Outfitters, and Bath & Body Works and Victoria’s Secret (both under the parent company L Brands) have previously agreed to end this practice.

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has obtained a settlement with Florida-based Profinity, LLC and Family Savings, LLC (collectively, “Profinity”), for tricking consumers into enrolling in a variety of membership programs without customer knowledge. Under the settlement, Profinity will provide total refunds of $150,000 to certain New York consumers who were charged unauthorized fees and will pay $100,000 in penalties, costs, and fees.  Profinity has also agreed to reform its online marketing practices.

“Consumers, some of whom were simply seeking jobs or rental apartments online, were tricked into paying for services with monthly fees that they did not want or need,” said Attorney General Schneiderman. “My office will aggressively investigate companies that scam New Yorkers out of their hard earned money through misleading Internet and phone offers.”

The Attorney General’s investigation found that Profinity deceptively marketed a variety of membership programs to consumers for a monthly fee.  These programs purported to provide benefits such as grocery coupons, retail discounts, restaurant vouchers, magazine subscriptions, roadside assistance, legal referral services, tech support, identity theft protection, credit scores, and credit monitoring services.   Consumers were frequently tricked into signing up for one or more of Profinity’s fee-based membership programs through misleading telemarketing calls promising “free gifts” and “risk free” trials. 

Other consumers, who had purchased products from third-party companies, were misled into enrolling in Profinity’s membership programs during verification calls with the company’s representatives. On these calls, the company misled consumers into believing that the person they were speaking to was a representative of the original company from which consumers purchased products and that the purpose of the call was to verify their purchases.   Instead, consumers were tricked into providing their credit or debit card information and then enrolled in one of Profinity’s fee-based membership programs.

In many cases, consumers were duped into enrolling in Profinity’s credit monitoring program by responding to deceptive advertisements placed by Profinity’s affiliate marketers for fictitious jobs, apartments, and government benefits on third-party websites such as Craigslist, which asked consumers to obtain their “free” credit score by clicking on an embedded hyperlink that led to Profinity’s enrollment page.  Between December 15, 2011 and October 9, 2012, Profinity attempted to “upsell” consumers who enrolled in its credit monitoring program into paying an additional $29.95 to access their credit scores and reports from the three national credit reporting agencies.  The two onscreen options for consumers to either accept or decline this offer were labeled in a confusing manner.  Many consumers mistakenly chose the more prominent, brightly colored “Get All 3 Reports & Scores” upsell option and were immediately charged $29.95.  Only consumers who chose the less prominent, “No Thanks.  Proceed to my Member Benefits” option received their free credit score and a free credit report. 

Consumers often incurred monthly fees for several months without realizing that they had been enrolled in one of Profinity’s membership programs.  Even after consumers noticed these charges on their credit or debit card statements, many consumers experienced difficulties cancelling these fee-based membership programs when they contacted Profinity.  With respect to refunds, Profinity instructed its representatives not to “give them away like candy.” 

The monthly fees for joining Profinity’s discount or credit monitoring programs were buried in fine print and inconspicuous text on the webpage so that most consumers were not aware that by accepting the “free” trial they were being enrolled in Profinity’s fee-based membership programs.  These programs may have offered actual discounts and benefits but few “members” actually utilized them, presumably because they did not know they were enrolled in the programs.

In addition to paying $150,000 for consumer restitution and $100,000 in penalties, fees, and costs, Profinity has agreed to several important reforms of its current practices in New York.  These include:

• Reforming its online marketing practices to ensure consumers understand that they are enrolling in a Profinity membership program;
• Obtaining the consumer’s express informed consent prior to billing any consumer for a Profinity membership program;
• Ensuring that all upsell offers are clearly labeled and are of equal prominence so that consumers are not confused and can easily accept or decline the offer;
• Improving its customer service policies to make it easier to consumers to stop recurring charges and cancel their enrollment.

New York consumers who enrolled in Profinity’s Pro Credit membership program between December 15, 2011 and October 9, 2012 and paid $29.95 for their credit scores and reports from the three national credit reporting agencies will receive a full refund.

In addition, New York consumers who were enrolled in Profinity’s Family Savings, Pro Save & Protect, or Pro Credit membership programs since April 2010, or who purchased an upsell to Profinity’s Total Identity Protection membership program may submit a written complaint to the NYAG within the next six (6) months to be considered for a refund.

Consumers who believe they may be entitled to a refund should notify the Attorney General’s office.  Consumers can file a complaint online at www.ag.ny.gov.  Consumers can also call the Attorney General’s consumer helpline at 1-800-771-7755.

This matter was handled by Assistant Attorney General Melissa O’Neill, Deputy Bureau Chief Laura J. Levine, and Bureau Chief Jane M. Azia, all of the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.

HAMBURG – Attorney General Eric T. Schneiderman today announced that his office has entered into an Assurance of Discontinuance with Hush Day Spa, LLC, located at 420 Southwestern Boulevard in Hamburg. Hush Day Spa went out of business in September 2015 and at the time, had $40,000 in outstanding gift certificates.

“It is critical that consumers are able to receive reimbursement for gift cards and services paid in advance when businesses are forced to close their doors,” Attorney General Schneiderman said. “I encourage consumers to keep records of their purchases, and as always, to contact my office if they need assistance in these matters.”

The spa opened in January 2010 and provided a wide array of services commonly associated with day spa including manicures, pedicures, facials and massages.  Hush Day Spa also sold gift certificates ranging in value from $10.00 to $330.00.  Hush Day Spa, however, did not keep a record of the persons to whom it sold the gift certificates.  Rather, it treated the gift certificates like bearer bonds; anyone who presented a gift certificate received its value.

Hush Day Spa went out of business in September 2015.  According to Rachel Goodberry, its owner, Hush Day Spa’s business thrived reaching a high of 22 employees. Thereafter, however, Ms. Goodberry stated that Hush Day Spa experienced a steady loss of business, which she attributed to the opening of a national chain that offered the same services as Hush Day Spa but at a much lower price.

This settlement comes on the heels of Attorney General Schneiderman’s announcement earlier this month that he and 23 other states, along with the District of Columbia, had reached a settlement with former retailer Radio Shack to ensure that holders of gift cards were able to recover the unused balance on their cards.

At the time that it went out of business, Hush Day Spa had outstanding gift certificates with a face value of over $40,000.  Pursuant to its agreement with the Attorney General, Hush Day Spa will issue refunds to consumers who submit complaints to the Attorney General by February 5, 2016. Complaints can be submitted here, or by calling the Attorney General’s Buffalo Regional Office at 716-853-8404.

This matter was handled by James M. Morrissey in the Buffalo Regional Office and Karen Davis, Senior Consumer Fraud Representative. The Buffalo Regional Office is led by Michael Russo. The Division of Regional Offices is led by Executive Deputy Attorney General for Regional Affairs Marty Mack. 

WATERTOWN – Attorney General Eric T. Schneiderman today announced that, in the final chapter of Rome Finance Company, Inc. and its related entities, the federal Consumer Financial Protection Bureau announced that over 3,000 victims were issued partial compensation from a victim fund. The total amount of compensation paid exceeded $3.7 million dollars. Eligibility for these funds stemmed from a global settlement led by Attorney General Schneiderman and the CFPB along with several other states. Eighty-two victims in New York State will receive compensation from these funds.

“The financial exploitation of anyone is inexcusable, but to specifically target the brave men and women of our military is truly deplorable,” Attorney General Schneiderman said. “My office will continue to aggressively pursue predatory lenders and fight to protect the financial wellbeing of those who sacrifice so much to protect us.”

The case dealt with a military consumer lender commonly known as Rome Finance Company, based in California and Georgia. The settlement liquidated Rome Finance and its successor corporations, and provided nearly $92 million in debt relief to over 17,800 affected United States service members worldwide, marked all outstanding debt “paid in full” with consumer finance reporting agencies, and banned new business by the company and its principals. Service members kept all merchandise purchased, but debts associated therewith were erased and judgments vacated on request, including approximately 5,400 judgments located to date. Over 550 New York State service members, with a combined total of over $2.2 million in Rome Consumer debt, benefited directly from this settlement and ancillary resolutions.

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

Consumers receiving partial compensation were contacted directly by the CFPB based upon a calculation formulated by the federal agency.

Those who think they may be eligible for reimbursement should visit the CFPB’s website or calling the administrator at 1-866-591-7261. Those with additional questions are encouraged to contact Attorney General Schneiderman’s Watertown Office at 315-523-6080.

The case was handled by Assistant Attorney General In Charge Deanna Nelson. The regional offices are led by Executive Deputy Attorney General for Regional Offices Martin J. Mack.

NEW YORK - Attorney General Eric T. Schneiderman today released the following statement on Christmas:

“I wish all families in New York and across the country a merry Christmas to all those celebrating. I hope that today is a relaxing day spent with family and loved ones who brighten our lives all year long.  And as we reflect on the holiday season and prepare to ring in the New Year, let us all share in the season’s spirit of goodwill and compassion.”

ALBANY—Attorney General Eric T. Schneiderman today announced an agreement with WorkFitMedical, LLC, a provider of occupational and urgent care services, to provide clear, detailed information to consumers about its participation with health plans.   The agreement is the result of an investigation into WorkFit, a health care company that had purchased an urgent care center in Albany. While attempting to contract with UnitedHealthcare/Empire Plan, WorkFit represented to consumers that it participated in UnitedHealthcare’s network, and then billed consumers for the entire cost of the visit - over and above the consumer's co-payment.  The agreement requires that WorkFit provide nearly $17,000 in restitution to consumers who paid for services rendered in excess of the amount of co-payment required by UnitedHealthcare/Empire Plan (Empire Plan) for seeing an in-network participating provider. WorkFit has also agreed to pay $12,500 in costs and penalties to the state.

“Consumers deserve to know whether a provider is in-network or out-of network so that they know the costs before they choose a medical provider,” said Attorney General Schneiderman. “My office will continue to make it a priority to ensure that New Yorkers aren’t duped by confusing and deceptive representations made by urgent care centers.”

The Attorney General’s investigation determined that for approximately 15 months, WorkFit represented to patients that it was in Empire’s network at a time when WorkFit did not yet have a contract with the Empire Plan, and so was “out-of-network.” As a result of being out-of-network, WorkFit balance billed 325 Empire Plan members in the amount of approximately $197,000 more than the member responsibility would have been if WorkFit had actually been in-network.   While WorkFit adjusted many patient bills after having been contacted by patients with complaints, the adjustments did not cover all Empire members who were improperly billed, and some members paid the bills.  Given WorkFit’s error, Empire Plan members were entitled to refunds of almost $17,000 and adjustments to zero of outstanding bills for those members whose accounts reflected a current outstanding balance. 

The facts underlying this case occurred before the New York “Surprise Bill Law,” which became effective on March 31, 2015, but serve as an example of a type of problem that the “Surprise Bill Law” is specifically designed to remedy.  The law requires, in part, that providers disclose in writing or through a website the health care plans in which the provider participates.  In addition, fee information must be made available to consumers so that consumers know in advance which providers participate in the health plan’s network, and the cost of services if the provider is out-of-network.

In addition to restitution and adjustment to patient accounts, the agreement requires WorkFit to strengthen disclosures and increase the instances of notification, including:

• On its website, identify all health plans with which it has contracted to be an in-network participating provider.  If the center does not participate with all products that the health plan offers, it shall identify with specificity those insurance products for which it is an in-network, participating provider.
• Post and provide the information in writing to the patient at the time of registration.
• Cease using the term “works with” or “accepts” in relation to a health careplan.  Instead, the terms “in-network participating provider” or “out-of-network” will be used.  The centers shall also explain that “out-of-network” will lead to higher charges than in-network services.
• Take steps to ensure the patient does not incur out-of-network costs if the required information is not communicated to the patient. 
• Require all health care providers billing at the center to be an in-network participating provider with all health care plans with which the center contracts as an in-network participating provider.
• Disclose to patients the availability of fee information, and, upon request, disclose to the patient the total cost for services that the center will bill the patient.

This agreement is part of the continuing work of the Attorney General to ensure health plans and health care providers clearly disclose critical information to consumers so that consumers can make the best choices for themselves and their families.  Recently, Attorney General Schneiderman entered into agreements with four urgent care centers to improve disclosure of accepted insurance plans.  The Health Care Bureau continues to work to make sure that consumers have information to make informed choices. 

The Attorney General’s Health Care Bureau helps consumers navigate the complex health care system, challenges insurers who won’t cover provided service, and targets organizations that have fraudulent, misleading or deceptive business practices. Consumers who believe they may have been treated unfairly by a health care provider, HMO or health insurance plan, should call the Attorney General’s Health Care Helpline at 800-428-9071.

The investigation of this matter was conducted by Assistant Attorney General Adrienne Lawston, of the Attorney General’s Health Care Bureau, which is led by Bureau Chief Lisa Landau. The Health Care Bureau is a part of the Social Justice Division, led by Executive Deputy Attorney General for Social Justice Alvin Bragg.