NEW YORK – Attorney General Eric T. Schneiderman issued the following statement today on today’s Amigone Funeral Home ruling:

"For years, my office has stood steadfastly with the Tonawanda community to protect their right to enjoy clean, fresh air. Today, the court agreed with my office, and required Amigone to obtain a state permit and implement effective pollution controls.  This ruling will ensure that the Amigone crematory never again fouls air and disrupts lives in this community, and sends the message that companies whose facilities pollute our neighborhoods will be held accountable.”

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has received an over 40% increase in data breach notifications involving New Yorkers so far this year as compared to the same time last year. Companies are required to provide notice to Attorney General Eric Schneiderman’s office, as well as consumers, pursuant to the New York State Information Security Breach & Notification Act. The Attorney General’s Office works with companies to protect consumers upon notification. To meet the increased volume and to provide efficiency in reporting, his office has now provided companies with the ability to file notice electronically via a web submission form on the New York State Attorney General’s office website here. 

“Data breaches are an escalating threat to our personal and national security, and companies need to do more to ensure reasonable security practices and best standards are in place to protect our most sensitive information,” said Attorney General Schneiderman. “I am committed to stemming the data breach tide.  Making notification to my office easier for companies who have experienced a data breach means quicker notification and quicker resolution for New York’s consumers.”

The office has received 459 data breach notices from the first of the year through May 2, 2016, as compared with 327 through the same time last year. In the year 2015 alone, the office received 809 data breach notices.  The office is expecting to receive well over 1000 notices for the year, a new record.

Companies may now notify the Attorney General’s Office of a data breach via a web submission form in order to expedite and streamline the process.  Previously, and consistent with most other state attorneys general offices, companies were required to mail, fax, or email a separate data breach form.

Last year, Attorney General Schneiderman proposed legislation in Albany to overhaul New York State’s data security law requiring new and unprecedented safeguards for the personal data of consumers. The bill would broaden the scope of information that companies would be responsible for protecting; requires stronger technical and physical security measures for protecting information; and creates a safe harbor for companies who meet certain security standards, incentivizing them to adopt additional measures to protect personal data.

In July 2014, Attorney General Schneiderman issued a report examining the growing number, complexity, and costs of data breaches in the New York State. Using information provided to the office pursuant to the New York State Information Security Breach & Notification Act, the report, titled "Information Exposed: Historical Examination of Data Security in New York State, analyzed eight years of security breach data and how it has impacted New Yorkers. The report revealed that the number of reported data security breaches in New York more than tripled between 2006 and 2013. In that same period, 22.8 million personal records of New Yorkers were exposed in nearly 5,000 data breaches, which cost the public and private sectors in New York upward of $1.37 billion in 2013. In addition, the report also found that hacking intrusions – in which third parties gain unauthorized access to data stored on a computer system – were the leading cause of data security breaches, accounting for roughly 40 percent of all breaches. Attorney General Schneiderman’s report also presented new recommendations on steps that both organizations and consumers can take to protect themselves from data loss.

ALBANY – Attorney General Eric T. Schneiderman today announced that he has obtained civil and criminal contempt findings against a Cortlandville resident for causing the flooding of a cemetery and state roadway.  New York Supreme Court Justice Hon. Phillip R. Rumsey, found James C. Stevens, III of Cortlandville, in contempt for failing to take court-ordered actions to remedy illegal diversions of water from his property onto St. Mary’s Cemetery and New York State Route 281.  The cemetery flooding has resulted in the desecration of grave sites, and necessitated the disinterment and reburial of eighteen people.

“New York’s environmental and public nuisance laws are in place to ensure that individuals, their families, and our communities are properly protected,” Attorney General Schneiderman said. “No one is above the law.  My office will remain vigilant in holding fully accountable those who put New Yorkers in harm’s way.”

Beginning around July 2012, Stevens altered the flow of stormwater runoff on his Ridgeway Avenue property by constructing a stormwater diversion project designed to capture as much runoff as possible, redirect it through a several hundred foot long drainage swale, and discharge it onto St. Mary’s Cemetery. As a result, stormwater from over 100 acres of land that had previously drained into a wooded area was redirected onto burial plots at St. Mary’s Cemetery and ultimately State Route 281.  

After the New York State Department of Environmental Conservation (DEC) referred this matter for prosecution, Attorney General Schneiderman’s office filed a lawsuit against the landowner in November 2014.  The suit charged that Stevens’ construction of the stormwater diversion project and discharge of stormwater without obtaining a DEC permit and implementing a stormwater pollution prevention plan violated the state’s Environmental Conservation laws. The suit also charged that his illegal activities injured the property, health, safety or comfort of a considerable number of persons and thus constituted a public nuisance under state law. 

In December 2014, Attorney General Schneiderman’s office obtained a court order, in the form of a preliminary injunction and consent order, in Cortland County Supreme Court, requiring – among other things – that Stevens cease discharging stormwater from the stormwater diversion project until he obtain a DEC permit and implement a DEC-approved stormwater pollution prevention plan. The preliminary injunction and consent order also directed Stevens to implement a DEC-approved engineering plan for controlling these discharges and preventing future down-gradient harm.

In December 2015, Attorney General Schneiderman’s office obtained a court order establishing Stevens’ liability on both the Environmental Conservation law and public nuisance causes of action. This order also found that the cemetery suffered from “significant” erosion following construction of Stevens’ stormwater diversion project and that storm water discharges from the project caused flooding and unsafe driving conditions on State Route 281.

In the decision and order announced today by Attorney General Schneiderman, New York Supreme Court Judge Phillip R. Rumsey found that Stevens admitted to willfully disobeying the December 2014 preliminary injunction and consent order by failing to submit to DEC an approvable plan for controlling stormwater pollution, including specifications for abating potential future impacts to St. Mary’s Cemetery and State Route 281. The order includes:

• a civil contempt penalty requiring Stevens to follow a specific timeline in the design, engineering, and construction of a comprehensive stormwater control system, including submittal to DEC of a project plan.  The civil contempt against Stevens will be purged if he completes the necessary  stormwater control system; and  
• a criminal contempt penalty of incarceration in the Cortland County Jail for 10 days, with this jail time suspended upon the condition that Stevens complete 20 hours of community service by serving meals through the Grace Episcopal Church of Cortland, New York Loaves and Fishes program. 

Attorney General Schneiderman’s efforts cited reports of the Catholic Cemeteries of the Roman Catholic Diocese of Syracuse, which owns St. Mary’s Cemetery, that several families have been forced to disinter and rebury eighteen of their loved ones due to significant erosion caused by Stevens’ illegal stormwater discharges.  The illegal discharges have transported sediment, gravel, and dirt from the Stevens’ property and caused significant soil erosion on cemetery property. On multiple dates, the discharges desecrated grave sites at St. Mary’s by covering them with debris and by eroding them. 

Attorney General Schneiderman’s office has also established that, in addition to the impacts at the cemetery, the illegal stormwater discharges had, on multiple dates, caused runoff to flow downslope onto Route 281 where it has overwhelmed the stormwater collection system, flooded the road, and threatened public safety.

The Attorney General thanks DEC engineer Carol Lamb-Lafay, Region 7 Regional Attorney Joseph Sluzar and Environmental Program Specialist Scott Cook for their assistance in the case.

This case is being handled by Assistant Attorneys General Joseph M. Kowalczyk, Michael J. Myers and Brian Lusignan, and Environmental Scientists Mauricio Roma and Charles Silver. The Environmental Protection Bureau is led by Lemuel M. Srolovic and is part of the Division of Social Justice, which is led by Executive Deputy Attorney General for Social Justice Alvin Bragg. 

NEW YORK – Attorney General Eric T. Schneiderman today applauded a decision by Commissioners of the federal Nuclear Regulatory Commission (NRC) to require NRC staff to conduct a re-analysis of the impacts caused by severe accidents at the Indian Point nuclear power facility and potential upgrades needed to protect the public against such accidents. 

“I am heartened that the NRC Commissioners agreed with my office that Entergy and NRC staff have systematically undercounted the costs and impacts associated with severe reactor accidents at the Indian Point plant,” Attorney General Schneiderman said. “The Commissioners’ decision requires the NRC staff to do what should have been done years ago: provide an accurate account of cost-effective upgrades at this aging nuclear plant that can prevent or minimize severe accidents.  While some might prefer to treat severe accidents as impossibilities, the millions of people who live and work near Indian Point deserve nothing less than a full and fair assessment of the plant upgrades needed to protect them against such accidents.”

In today’s unanimous decision, the Commission reversed an earlier administrative ruling, and found that NRC staff’s analysis of severe accident minimization at the Indian Point facility violates the National Environmental Policy Act.  The decision directs NRC staff to redo its analysis, and consider additional severe accident minimization at Indian Point.  NRC staff had relied on data from other sites, including sites surrounded by farmland, instead of site-specific data for Indian Point.  The ultimate source of the data used by NRC staff could not be found – but the agency went on using the data without substantiation. 

In its decision, the Commission explained that “[w]hile typically we decline to second-guess the Board on its fact-specific conclusions, here the decision contains obvious material factual errors and could be misleading, warranting clarification.”  The Commission found that New York State’s evidence and legal arguments were persuasive and had the potential to materially affect the analysis of severe accident minimization measures and their cost-effectiveness for Indian Point. 

Today’s decision by the NRC Commissioners represents a significant event in the history of the Indian Point site.

The Attorney General’s office has worked to improve Indian Point’s accident preparedness, and ensure the protection of public health and the environment of the surrounding region.   After Entergy submitted an application to the NRC to renew the operating licenses for an additional 20 years, the Attorney General’s Office submitted Contention 12, which argued that Entergy’s environmental report failed to accurately model the cleanup and decontamination costs for a severe accident in the area surrounding Indian Point, which includes the New York City Metropolitan Area. 

In 2010, NRC released its final supplemental environmental impact statement for Indian Point – a document that continued to fail to properly analyze and disclose to the public severe accident risk and mitigation.  In response, the Attorney General’s Office submitted expert testimony, reports, legal briefs, and over 100 exhibits demonstrating the inadequate analysis of severe accidents and severe underestimation of the costs of a severe accident at Indian Point.  Entergy and NRC Staff challenged the State every step of the way, repeatedly lodging challenges to the Attorney General’s arguments.  

In November 2013, the Board’s resolved Contention 12 in favor of NRC Staff and Entergy.  Almost immediately, Attorney General Schneiderman filed to a motion to reopen the record and for reconsideration of the contention, which the Board denied.  The State appealed the Board’s decision on Contention 12 to the NRC Commissioners, and briefing on the appeal was completed in 2014.  Today’s decision is in response to the appeal by Attorney General Schneiderman.

The Indian Point facilities are located 24 miles north of New York City, 35 miles from Times Square, and 38 miles from Wall Street.  The facilities are 6 miles from one of the reservoirs that make up the New York City drinking water system.  According to Entergy, approximately 19 million people will live within 50 miles of Indian Point by 2035.  Indian Point has the highest surrounding population of any US reactor; Indian Point has more than twice the surrounding population as the next nuclear plant site. 

The initial 40-year license terms expired in September 2013 for Indian Point unit 2 and December 2015 for Indian Point unit 3. 

This matter is being handled for the Environmental Protection Bureau by Assistant Attorneys General John Sipos, Kathryn DeLuca, and Laura Heslin, with the assistance of Environmental Scientist Jodi Feld.  The Environmental Protection Bureau is led by Lemuel M. Srolovic and is part of the Division of Social Justice, which is led by Executive Deputy Attorney General for Social Justice Alvin Bragg. 

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement today following the U.S. Food and Drug Administration’s announcement to extend its authority to all tobacco products:

“I applaud the FDA for expanding its authority to cover e-cigarettes and other tobacco products – all of which are dangerous public health threats, especially to our youth. Today’s rule change will protect young people from the dangers of nicotine addiction by prohibiting people under the age of 18 from purchasing these tobacco products and regulating the contents of these products. We hope that the FDA will take additional steps to protect young people from becoming e-cigarette users, such as banning flavors and requiring nicotine exposure warnings. It is my hope that these continued efforts will prevent young people from becoming addicted to nicotine.”

ROCHESTER – Attorney General Eric T. Schneiderman and State Comptroller Thomas P. DiNapoli today announced the sentencing of the remaining three defendants in an elaborate bid-rigging conspiracy that illegally steered multi-million dollar public works contracts for Monroe County to favored and connected companies, resulting in the restraint of competition. The defendants profited from this scheme and defrauded the taxpayers of Monroe County.

“There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes political insiders,” said Attorney General Schneiderman. “The politically connected shouldn’t be given the inside track to unfairly obtain lucrative government contracts, and I will continue to fight this kind of corruption whenever and wherever I find it.”

“As our audit and investigation revealed, and through the Attorney General’s prosecution, these individuals exploited LDCs to their benefit, saddling Monroe County taxpayers with millions in costs,” said State Comptroller Thomas P. DiNapoli. “These cases send a warning to any official who would abuse the public’s trust. I thank Attorney General Schneiderman for his continued partnership in our Operation Integrity.”

Daniel Lynch, a Rochester-area businessman was sentenced today by the Honorable Dennis M. Kehoe in Monroe County Court to serve 2 and 1/3 to 7 years in State Prison and to pay a total of $600,083.70 in restitution to Monroe County.  In February, Lynch pleaded guilty before Judge Kehoe in Monroe County Court to four felonies, including two counts of the class “C” felony charge of Grand Larceny in the Second Degree in violation of Penal Law § 155.40(1) and two counts of the class “E” felony charge of Combination in Restraint of Trade and Competition in violation of General Business Law §§ 340 and 341, also known as New York State’s Donnelly Act.

Nelson Rivera, former Chief Information Officer for Monroe County was sentenced today by Judge Kehoe to five years of probation, a condition being that he may never again serve as a New York public employee.  Rivera also gave up his government pension and disgorged all contributions previously made to his pension totaling $36,241.26 after mandatory withholdings.  Rivera  paid an additional $25,000.00 fine to New York State.  In February, Rivera pleaded guilty before Judge Kehoe to two class “E” felony counts of Combination in Restraint of Trade and Competition in violation of General Business Law §§ 340 and 341.

John Maggio, a Rochester-area businessman was sentenced today by the Honorable Dennis M. Kehoe in Monroe County Court to a one year conditional discharge, following a plea to one count of Attempted Combination in Restraint of Trade and Competition in violation of General Business Law §§ 110/340 and 110/341, a class “A” misdemeanor.  As part of his sentence, Maggio must perform 200 hours of community service, and has paid $350,000.00 in restitution to Monroe County and reimbursement for costs associated with the prosecution.

Robert Wiesner, the former Security Director for the Monroe County Water Authority, was previously sentenced by Judge Kehoe in January, to a three-year conditional discharge upon his plea of guilty to one class “E” felony count of Combination in Restraint of Trade and Competition in violation of General Business Law §§ 340 and 341.  At the time of his sentence, Wiesner paid a $5,000.00 fine and forfeited $3,000.00 of illegal gain.

The four defendants were originally indicted in November 2013 and charged with a scheme to rig the bidding processes for a number of multi-million dollar public works contracts in Monroe County.  Those contracts included a $99 million contract to provide upgrades and maintenance for the County’s IT infrastructure (the “IT project”), and a $212 million contract to provide upgrades and maintenance for the County’s public safety and security systems (the “Public Safety project”).  Each of these contracts was unlawfully awarded to a company connected to defendant Lynch.

Previously, all four defendants admitted to colluding to rig the bid for the $212 million contract for the Public Safety project so that the contract would be awarded to Navitech Services Corporation (“Navitech”), a company created by defendants Lynch and Maggio for the purpose of obtaining the Public Safety and IT contracts.

Among other things, defendants Rivera and Wiesner admitted to providing inside information to Lynch on several occasions well in advance of the release of the Request For Proposal (“RFP”) for the project and Lynch admitted to using that information to obtain an unfair and unlawful advantage in responding to the RFP.  Rivera, Lynch and Wiesner also admitted to working together to draft Navitech’s response to the RFP and to assembling the team of subcontractors that would join Navitech’s response months before the RFP was released.  Rivera further admitted to hiding the fact that the County intended to use a Local Development Corporation as a financing mechanism for the project, from any potential respondents to the RFP, other than Lynch, all but insuring that Navitech -  Maggio and Lynch’s company - would win the bid.  In addition, Rivera admitted to taking steps to keep Lynch’s role in Navitech secret in order to make sure that officials would approve the contracts between the County and the Local Development Corporation created to finance the project – Monroe Security and Safety Systems LDC (“M3S”) as well as between M3S and Navitech.  Rivera went so far as to give false answers to the County Legislature when asked directly about Lynch’s role in Navitech and whether  anyone from the County had spoken to anyone from Navitech about the project prior to the release of the RFP.  Navitech was ultimately awarded the Public Safety project contract, which, as the defendants admitted, was predetermined.

Lynch and Rivera also pleaded guilty to and admitted rigging the bid for the $99 million contract for the IT project.

Among other things, Lynch and Rivera admitted to working together to develop the IT project, draft the RFP for the IT project even though both Rivera and Lynch knew Lynch planned to respond to the RFP through his employer at the time - Siemens Building Technologies, Inc. (“Siemens”) - thus giving Lynch access to inside information that no other responding vendor had access to, and to working together to compose Lynch’s response to the RFP on behalf of Siemens.  Rivera and Lynch further admitted that the IT project was always designed to be financed through an LDC and that Lynch is the only responding vendor that had access to that crucial information.  Rivera and Lynch worked together to form the LDC that would finance the project – Upstate Telecommunications Corporation LDC months before the RFP was even released.  Because of this scheme, Siemens was ultimately awarded the IT project contract, which, Rivera and Lynch admitted, was predetermined.

Once the illegal manipulation of the County RFP process was complete, as Lynch admitted at the time of his guilty plea, he engaged in a complex scheme to steal from the County by inflating contracts and creating false contracts and invoices as part of these projects.  Lynch admitted to using the money stolen from Monroe County to, among other things, make political contributions, fund elaborate entertainment expenses, and purchase personal items for himself and others such as televisions, computers, and a residential alarm system.

This case and investigation were conducted as part of Operation Integrity, a joint partnership between the New York State Attorney General and New York State Comptroller to root out public corruption and abuse in local government.

Assistant Attorneys General Mary Gorman and Brian McDonald of the Attorney General’s Public Integrity Bureau are prosecuting the case, with assistance from analysts Morgan McCollum and Joseph Conniff, former analyst Kamla Sookram, and Auditor John Serrapica. The Public Integrity Bureau is led by Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz.  The investigation was handled by Investigators David Buske and Christopher Reidy of the Investigations Bureau, with support from Investigator Richard Doyle, Deputy Bureau Chief Antoine Karam, and Bureau Chief Dominick Zarrella.  Executive Deputy Attorney General Kelly Donovan leads the Criminal Justice Division.

The investigation was conducted jointly with State Comptroller Thomas P. DiNapoli’s Division of Investigations and Division of Local Government.

NEW YORK – Attorney General Eric T. Schneiderman today announced that Steven Croman, a major New York City landlord with more than 140 apartment buildings across Manhattan, surrendered on multiple felony charges for his role in an alleged scheme to fraudulently obtain several multi-million dollar refinancing loans between 2012 and 2014.

Croman was also named, along with private investigator Anthony Falconite, in a civil suit filed today by the Attorney General’s office for allegedly engaging in illegal, fraudulent, and deceptive conduct in connection with Croman’s real-estate business. The lawsuit alleges that Croman directs an illegal operation that wields harassment, coercion, and fraud to force rent-regulated tenants out of their apartments and convert their apartments into highly profitable market-rate units.

The lawsuit further alleges that Croman deployed Falconite, a former New York City police officer, to frighten and intimidate rent-regulated tenants into surrendering their apartments.

“My message to unscrupulous landlords is simple: if you put your own profits over your tenants’ legal protections, we will investigate you and prosecute you to the fullest extent of the law,” Attorney General Schneiderman said. “My office will not tolerate anyone who attempts to line their own pockets by gaming the system. No one is above the law – no matter how rich or powerful.”

Governor Andrew M. Cuomo said, “There was a time when tenant harassment by landlords and their agents was only tackled in housing court. For justice to be served and for tenants to be righteously protected, criminal and civil wrongdoing that harasses rent regulated tenants demands the weight of a prosecutorial solution. When allegations surface that landlords are stalking tenants to compel fraudulent buyouts, we need stronger remedies; this is it and I thank the Attorney General and his office for continuing to work closely with the Tenant Protection Unit to help safeguard the rights of more than one million rent regulated tenants.”

New York State Homes and Community Renewal Commissioner James S. Rubin said, “I thank the Attorney General for his commitment to keeping New York’s rent regulated tenants safe from harassment. The Attorney General’s office and the Governor’s Tenant Protection Unit are here to protect you from extreme harassment and intimidation. We want New York’s over 1 million rent regulated tenants to sleep peacefully at night, knowing the state at every level is protecting them from unsafe construction, fraud, and harassment.

The criminal and civil cases are the result of independent, parallel investigations during the past two years.

The Attorney General’s office thanks New York State Homes and Community Renewal and Governor Cuomo’s Tenant Protection Unit (TPU) for their close cooperation and assistance in the investigation. 

Details on Criminal Charges

Based on an extensive investigation by the Attorney General’s office, Croman allegedly submitted false mortgage documents to New York Community Bank and Capital One Bank, including rent rolls that falsely reflected market rate rents for units that were actually occupied by rent-stabilized tenants.  Croman also allegedly inflated the amount of rent charged for certain commercial spaces in his buildings in an effort to show greater rental income.  Croman allegedly falsified these rent rolls in order to inflate the annual rental income of his buildings, upon which his refinancing terms are partially based. 

All told, over a three-year period, Croman allegedly received more than $45 million in loans under these false pretenses.

A grand jury indicted Croman on 20 felony counts, including seven counts of grand larceny in the 1st degree, seven counts of falsifying business records in the 1st degree, one count of scheme to defraud in the 1st degree, four counts of offering a false instrument for filing in the 1st degree, and one count of criminal tax fraud in the 4th degree.

Croman’s mortgage broker, Barry Swartz, also faces 15 felony counts, including seven counts of grand larceny in the 1st degree, seven counts of falsifying business records in the 1st degree, and one count of scheme to defraud in the 1st degree.

If convicted of all counts, Croman and Swartz could face as much as 25 years in prison. The charges against Croman and Swartz are allegations and they are presumed innocent unless and until proven guilty in a court of law.

The Tenant Protection Unit of New York State Homes and Community Renewal provided the Attorney General’s office with a criminal referral that was pivotal to the process.

Details of Civil Lawsuit

The civil lawsuit, filed in New York Supreme Court in Manhattan and the product of an independent investigation, alleges that Croman used the following illegal tactics to push working-class and low-income tenants out of their homes:

• Harassing tenants into surrendering their apartments—and their rights under the rent-stabilization laws—in exchange for “buyouts,” which are often no more than a few thousand dollars or a few months of free rent.
• Incentivizing his employees and agents to obtain buyouts, at the expense of their other responsibilities. Employees allegedly refer to rent-regulated tenants as “targets” and compete with each other to obtain the most buyouts. In one characteristic exchange, Falconite allegedly wrote to a property manager that obtaining buyouts was a “team sport,” to which the property manager responded, “I know that!! Who’s our next target? We have to start lining them up!!!”
• Pressuring tenants into surrendering their apartments by repeatedly filing baseless lawsuits against them. In internal emails, company employees allegedly acknowledged that such lawsuits would “aggravate” tenants or pressure them to accept buyouts. In some cases, Croman’s employees allegedly created a false record for litigation by refusing to acknowledge receipt of tenants’ rent checks and then suing them for unpaid rent—a deliberate fraud upon the court.

The lawsuit also alleges that Falconite, whom Croman allegedly refers to as his “secret weapon,” used deceptive and frightening tactics to intimidate rent-regulated tenants. The lawsuit alleges that Falconite’s text messages with property managers show that he regularly uses false pretenses to gain access to tenants’ apartments, often posing as a repairman or building manager. For example, in text messages to a property manager, Falconite allegedly agreed to use “false pretenses” and pretended he was with the construction department.

The lawsuit alleges that Falconite routinely threatened tenants and improperly accused them of violating their lease. He also allegedly abused his position as a former NYPD officer to threaten and intimidate tenants.

In addition, the lawsuit alleges that Croman, in his rush to flip vacant rent-regulated apartments into high-rent units, presided over a disturbing pattern of illegal and hazardous construction. The lawsuit alleges numerous examples of illegal construction, including the following:

• On at least 175 occasions, Croman’s companies allegedly performed construction without obtaining permits.
• Croman allegedly regularly directed his employees to flout stop-work orders and conceal unlawful construction from Department of Building inspectors.
• Croman allegedly filed false documents with the Department of Buildings on dozens of occasions in an attempt to avoid stricter oversight of his construction projects and elude tenant protection measures. 
• Croman and his companies allegedly violated lead-safety laws repeatedly, exposing numerous tenants to lead-contaminated dust. On more than 20 occasions, the Department of Health (DOH) found impermissibly high levels of lead dust in Croman’s buildings, including levels up to 65 times the legal threshold.
• Croman allegedly defied DOH orders to address the lead hazards. On one occasion, after DOH order Croman to stop all work and begin lead-abatement measures, Croman directed his property manager to postpone the lead abatement so that the construction could continue.

Croman’s alleged illegal construction had devastating consequences for tenants. As alleged in the lawsuit, DOH identified lead-dust hazards in the apartment of a tenant who cared for her young grandsons, ages three and nine, both of whom were disabled. The tenant had to move her grandsons out of the apartment because of the dangers posed by the construction and lead dust and was forced to sue Croman to obtain repairs.

In addition, Croman allegedly repeatedly defied court orders to make repairs and address intolerable living conditions. The lawsuit alleges that throughout his portfolio, Croman has been issued hundreds of “hazardous” and “immediately hazardous” violations, which he has failed to correct. The suit further alleges that, on six occasions, the city has sued Croman’s companies for falsely certifying that they corrected violations on his properties.

Since 2012, The Tenant Protection Unit’s enforcement activities have led to the re-registration of over 50,000 improperly deregulated apartments, and the recovery of over $2.5 million dollars in overcharged rent for unsuspecting tenants through settlement agreements and administrative proceedings.

The Office of the Attorney General worked cooperatively with several city agencies, including DOH, DOB and the Department of Housing Preservation and Development during the civil investigation. 

The criminal case is being prosecuted by Special Counsel to the Criminal Justice Division John Spagna and Assistant Attorney General Travis Hill under the supervision of Bureau Chief Dan Cort and Executive Deputy Attorney General Kelly Donovan. Legal Support Analyst Mollie Krent contributed to the case

The civil case is being handled by Special Counsel Jessica Attie, Civil Enforcement Section Chief Mayur Saxena, Assistant Attorneys General Anjana Samant and Ajay Saini, and Volunteer Assistant Attorney General Joseph Abboud under the supervision of the Civil Rights Bureau Chief Lourdes Rosado and Executive Deputy Attorney General for Social Justice Alvin Bragg. Special Counsel Nicholas Suplina, Special Assistant to the Attorney General Dina Levy, and researchers Lacey Keller and Meredith McCarron contributed to the case. The case was investigated by Investigators Luis Carter, Angel Laporte, Brian Metz, Edward Ortiz, Anna Ospanova, and Elsa Rojas under the supervision of Deputy Chief Investigator John McManus and Chief Investigator Dominick Zarrella. 

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement today on labor protections for farmworkers:  

“I am very pleased that Governor Cuomo has taken this position on such an important issue to the lives of farmworkers and their families across New York State. Farmworkers, like all workers, deserve the dignity and respect that comes with a full day’s work. I have long fought for the rights of all farmworkers to both organize and receive strong and sensible labor protections. We look forward to representing the administration and resolving this important issue.” 

NEW YORK - Attorney General Eric T. Schneiderman today announced that his office has obtained a settlement with an upstate New York automobile service station company who charged customers an extra $2 fee for each oil change that the company performed for several years in violation of New York law.  Kost Tire Distributors, Inc., Binghamton-based owner and operator of 25 service stations throughout New York, including Binghamton, Ithaca, Rochester, Syracuse and Watertown, imposed an “oil and filter recycling fee” with each oil change on top of the quoted price for the work.   New York’s Environmental Conservation Law specifically prohibits such service stations from charging any fees for accepting and disposing of used oil.

“Service stations are required to collect and dispose of used oil free of charge,” said Attorney General Schneiderman. “By tacking on a $2 fee, consumers were being charged an inflated price for oil changes under the false pretense that the fee was required by the government. The agreement announced today will continue to protect our environment while also protecting consumers across Upstate New York.”

Attorney General Schneiderman’s investigation discovered that since January 1, 2012, Kost Tire collected over $181,500 in these improper fees from customers throughout New York.  As a part of the settlement, Kost Tire agreed that it will comply with New York’s Environmental Conservation Law and accept and properly dispose of used oil at no charge to customers and non-customers in quantities up to 5 gallons per day, each. 

Additionally, the settlement acknowledged that Kost Tire’s separately delineating and quoting a “oil and filter recycling fee” on its invoices is potentially misleading to customers in that it implies that these charges are mandated by law when such was not the case. 

As a part of the settlement, Kost Tire has agreed to pay the State of New York $181,511.36 as disgorgement of the “oil and filter recycling fees”, as well as a civil penalty of $93,488.64.

The case was handled by Assistant Attorney General Michael J. Danaher, Jr. of the Binghamton Regional Office.  The Binghamton Regional Office is led by Assistant Attorney General In-Charge James E. Shoemaker.  The Binghamton Regional Office is part of the Division of Regional Affairs led by Executive Deputy Attorney General for Regional Affairs Marty Mack.

New York State Residents Encouraged To Call Attorney General’s Health Care Helpline For Assistance Obtaining Treatment

Helpline Aims To Hold Health Insurers To Legal Obligation To Provide Necessary Medical Care

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office is offering assistance for individuals and families seeking substance abuse and/or mental health treatment. New York’s mental health parity law, known as Timothy’s Law, was enacted in 2006 and requires that insurers provide broad based coverage for the diagnosis and treatment of mental health disorders at least equal to coverage provided for other health conditions. The New York Insurance Law also requires health plans to administer substance abuse treatment coverage consistent with the federal Mental Health Parity and Addiction Equity Act, which was enacted in 2008, and prohibits health plans from imposing greater financial requirements or treatment limitations on mental health or substance use disorder benefits than on medical or surgical benefits.

In order to help protect the rights of patients, Attorney General Schneiderman today issued an alert encouraging those seeking treatment or facing barriers with their health insurer to call his office’s Health Care Helpline at 1-800-428-9071. 

“Under the parity laws, health insurers are required to handle claims for mental health and addiction treatment services the same as medical claims,” said Attorney General Schneiderman. “My office has taken an aggressive approach to enforcing these laws and will continue to take on those who ignore the law and, by doing so, reinforce the false and painful stigma often associated with substance abuse and mental health conditions.”

The alert from Attorney General Schneiderman aims to assist New York residents and their families who are struggling with substance abuse or mental health disorders. According to the Centers for Disease Control (CDC), the number of drug overdoses related to opioid abuses have increased dramatically over the past decade, including over 2,000 drug overdose deaths in New York in 2014. Today’s alert aims to assist residents with knowing their rights when accessing substance abuse treatment through their insurance provider, and encourages them to contact the Attorney General’s Health Care Helpline with any questions.

New York State law mandates group health insurance plans cover inpatient and outpatient mental health and substance use disorder treatment (including detoxification and rehabilitation services) subject to plan review of medical necessity. Plans must conduct medical necessity review and calculate co-payments and co-insurance for mental health and substance use disorder benefits in a manner consistent with medical/surgical benefits.

Over the past two years, the Attorney General’s Health Care Bureau has signed agreements with five major companies (Cigna, MVP, EmblemHealth, ValueOptions/Beacon, and Excellus), representing millions of members across New York State, after determining that these companies were not in compliance with federal and state mental health parity laws. The Attorney General’s investigation found that the companies were improperly denying patients who were seeking mental health and substance abuse treatment. The settlements required the companies to implement a host of reforms to comply with state and federal law, and gave members the opportunity to appeal medical necessity denials. The Attorney General’s office also recovered $2.9 million in penalties, and secured $1.6 million in consumer reimbursements for out-of-pocket treatment costs. Since the agreements were signed, ongoing monitoring has for most plans shown fewer barriers to treatment, including lower denial rates and more consumers accessing needed care. 

In addition, the Helpline has addressed numerous complaints about health plan coverage of mental health care, and has succeeded in many cases with obtaining approval of medically necessary care, or reimbursement where the consumer has paid for mental health care out-of-pocket.

Any resident who is denied substance abuse treatment should:

• Check the denial letter for accuracy and inform plan of mistakes.
• Ask the health provider to submit a letter of medical necessity, including facts that show that you meet the relevant medical necessity criteria, point-by-point.
• Request a written, detailed explanation of the denial from the health insurance company.
• Look for common improper denial flags, such as “fail first” requirements, reduced payments for out-of-network providers, insufficient or incorrect information in denial letters, refusing to provide medical necessity criteria or using criteria that do not match the health condition, and failure to consult with the health provider or consider medical evidence supplied.

“If your health plan denies the treatment your provider recommends, remember, you have rights under New York State law,” said Avi Israel, President of the addiction recovery non-profit Save the Michaels of the World. “Your loved one shouldn’t have to ‘fail first’ and you have the right to appeal the plan’s denial. Don’t simply take no for an answer and walk away. Call Attorney General Eric Schneiderman’s Health Care Helpline and ask for help.”

“The radical transformation of the health care system has rendered people sometimes confused by the laws designed to improve access and quality of care for the people it serves,” said Jeremy Klemanski, President & CEO, Syracuse Behavioral Healthcare. “The Attorney General’s Helpline is a tremendous resource to help any of us verify the correctness of how our insurance is, or is not working to provide the care we are paying our premiums for. The average person may not have an attorney on speed dial, but every New Yorker has the Attorney Generals legal team on speed dial by calling the Health Care Bureau Helpline.”

“NCADD-RA supports the NYS Attorney General’s health insurance know-your-rights alert and supports the full implementation of NY’s parity law (Timothy’s Law),” said Jennifer Faringer, Director, DePaul’s National Council on Alcoholism and Drug Dependence – Rochester Area. “Until both substance use disorders and mental health disorders are regarded the same, viewed without stigma, and treated on par with coverage equal to that of any other disease, we will have not achieved true parity in NYS. We join the AG in encouraging individuals and their families to contact the AG Health Care Helpline with any questions.”

“Horizon is committed to providing necessary education and resources to our community on how best to navigate treatment services for patients and their families struggling with substance use and mental health disorders,” said Anne D. Constantino, President & CEO, Horizon Health Services. “We appreciate the efforts of the Attorney General’s office in bringing these issues to the attention of our community members, providing resources and assisting those members amongst this epidemic.”

“If our society is ever to stop the proliferation of opiate drug addiction, then it must make a commitment to treat the many addicts in dire need of help,” said John Socci, Board Member of HEAL of Cayuga County. “Our organization has seen many addicts denied treatment coverage and we believe under the law, health insurance companies have an obligation to provide such coverage.”

“We have an opportunity to save a life by providing treatment to those suffering with addiction,” said Monika Taylor, LCSW, CASAC Director at Crouse Hospital Chemical Dependency Treatment Services. “The helpline assists these individuals and their families navigate through the difficult process of getting treatment through their health insurance companies.” 

“Drug Crisis in our Backyard is in full support of the Attorney General's initiative to bring awareness of the mental health parity act,” said Susan Salomone, Executive Director of Drug Crisis in our Backyard. “Because of the stigma associated with this disease, those suffering do not know where to turn for help. The AG’s helpline is an important resource for people trying to access critical information regarding insurance coverage.” 

“As we continue to address this unprecedented health crisis, removing barriers to addiction treatment is absolutely critical and for families that often means doing battle with both a relentless disease and with their insurance company,” said Jeffrey L. Reynolds, President & CEO, Family and Children’s Association.“We are fortunate to have an Attorney General in Eric Schneiderman who is working to remove barriers to care and continues to be a champion for New York's families in need.”

“The Long Island Council on Alcoholism and Drug Dependence (LICADD) commends Attorney General Schneiderman for his continued care and concern for New York families struggling with substance use disorders,” said Steven Chassman, Executive Director, The Long Island Council on Alcoholism and Drug Dependence (LICADD). “In order to turn the corner on this devastating public health crisis that is taking the lives of too many New Yorkers, access to quality and affordable treatment is essential. It has been entirely too common and tragic that individuals are denied access to quality treatment based on cost saving models by insurance companies. As a result, the substance use crisis has only progressed to horrific levels of loss and destruction for thousands of New York families. An individual’s ability to access his/her insurance benefits and to be granted the opportunity to receive quality treatment, should be considered a basic right that should not be denied. LICADD offers gratitude and appreciation to Attorney General Schneiderman on behalf of the thousands of individuals we see each year who are denied access to quality treatment for substance use disorders.”

“We commend Attorney General Schneiderman for his tireless efforts in support and enforcement of Timothy’s Law (Mental Health Parity),” said Glenn Liebman, CEO of the Mental Health Association of NYS. “There has been a great deal of nationwide confusion about  the scope of mental health parity and the impact to families and individuals with mental health concerns. The Attorney General and his staff have contributed to helping to create an environment in New York that is pro-active and responsive to the needs of those impacted by mental illness. To that end, we strongly support the Attorney General’s  initiative to provide education and public awareness to the hundreds of thousands of New Yorkers who have a co-occurring mental illness and substance abuse issue.”

Consumers with questions or concerns about rights for those seeking drug abuse treatment or other health care matters may call the Attorney General’s Health Care Bureau Helpline at 1-800-428-9071.

Cynthia Elmore Struck 92-Year-Old Resident, Causing Elbow To Fracture; Will Serve 6 Months In Prison, 5 Years’ Probation 

Schneiderman: My Office Will Hold Accountable Any Professional Who Jeopardizes The Safety Of Those In Their Care

SYRACUSE – Attorney General Eric T. Schneiderman today announced that Cynthia Elmore, 51, a Certified Nurse Aide, was sentenced on her guilty plea to Endangering the Welfare of a Vulnerable Elderly Person or an Incompetent or Physically Disabled Person in the Second Degree in Onondaga County Court before the Honorable Anthony F. Aloi to six months in prison and five years’ probation for striking a 92-year-old nursing home resident, causing her elbow to fracture.

“For an aide to deliberately strike an elderly nursing home resident in their care is utterly reprehensible,” said Attorney General Schneiderman. “Nursing home residents and their families deserve to know that compassion and respect will be shown by nursing home staff. Under no circumstances should residents or their families have to fear that an aide might physically assault a resident. My office will keep working to hold accountable any professional who physically harms someone in their care.”

Elmore’s sentenced was based on her admission that on May 12, 2015, at Van Duyn Center for Rehabilitation and Nursing in the Town of Onondaga, she struck a 92-year-old female resident on her left elbow, causing it to fracture.  The entire incident was captured on a hidden tape recorder secreted in the resident’s room by her family. 

Elmore resides in Syracuse.  She worked at Van Duyn for five years. 

This case was investigated by Special Investigator Keith Hall.  The case is being prosecuted by Ralph D. Tortora, III, Regional Director, Syracuse Regional Office of the Medicaid Fraud Control Unit.  Catherine Wagner is Chief of Criminal Investigations-Upstate.  William Falk is the Deputy Chief Investigator Upstate.  The Medicaid Fraud Control Unit is led by Acting MFCU 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.

Russell Gerow Pleaded Guilty To A Felony Environmental Crime, Paid $65K Fine, Entered Order Of Consent With DEC For Strict Oversight

Schneiderman: Acts Which Endanger Our Natural Resources Will Not Be Tolerated

BATH – New York Attorney General Eric T. Schneiderman today announced the guilty plea of Russell Gerow related to the illegal discharge of waste whey into New York State waters without a permit. Gerow pleaded guilty yesterday before the Honorable Marianne Furfure in Steuben County Court to illegally making a point source discharge system in violation of the Environmental Conservation Law, a Class E felony. 

“New York’s waters are amongst our greatest resources, and we must vigilantly protect them,” said Attorney General Schneiderman.  “This plea sends the message, loud and clear, that my office will not tolerate illegal acts which endanger our natural resources.”

Gerow, 65, of Hartsville, New York, is the owner and operator of Skyline Farms, LLC, a waste removal business.  Gerow admitted to creating an outlet for the discharge of industrial waste on his property on Purdy Creek Road without a permit. 

According to the Attorney General’s felony complaint filed against Gerow, between May 2013 and September 2013, Gerow was hired by an Arkport cottage cheese manufacturer to haul away waste whey, a byproduct of the cheese production, and to lawfully dispose of the whey.  However, instead of lawfully disposing of the waste, Gerow allegedly illegally dumped it into his property using the discharge system he created.  Testing by chemists from the New York State Department of Environmental Conservation (DEC) revealed high levels of ammonia and phosphorus downstream from Gerow’s property but not upstream, demonstrating that the illegal discharge contaminated the waters of Purdy Creek.  

“This is yet another example of polluters putting profit over the health of our environment,” said Acting DEC Commissioner Basil Seggos. “Used correctly, this whey should have been returned to soil as a beneficial nutrient or transported to a waste water treatment facility for proper disposal. Instead, this defendant made the conscious decision to illegally dispose of the waste in a stream behind his property, degrading water quality with an excessive nutrient load.  I applaud our DEC Encon Police Investigators and program staff along with the Attorney General’s office who brought this case to a successful conclusion.”             

In August 2013, the DEC’s Division of Water received a complaint that Purdy Creek in the Town of Hartsville, Steuben County, was showing signs of distress. As a result, the DEC’s Division of Law Enforcement commenced an investigation into the matter, in conjunction with uniform members and the DEC’s Division of Water and Operations.  The DEC’s investigation, including a search warrant, revealed algae growth and contamination in Purdy Creek originating from Mr. Gerow’s Farm at 1520 Purdy Creek Road. DEC’s investigation revealed that Gerow had been illegally discharging whey at his farm and other locations, including a creek behind his property. 

As part of his plea, Gerow paid a $65,000 fine to the DEC and was sentenced to a conditional discharge.  Additionally, Gerow signed a Consent Order with the DEC requiring him to provide the DEC with access to the site on Purdy Creek Road and records of Skyline Farms, LLC. 

The Attorney General thanked the DEC for their assistance in this investigation. 

The investigation was conducted by Investigator Jeffrey Lamphier, former Lieutenant Richard Thomas and Environmental Conservation Officer Steven Farrand of the DEC’s Division of Law Enforcement, under the supervision of Major Scott Florence.  Assisting in the investigation were Investigator Sandra Migaj of the New York State Office of the Attorney General, under the supervision of Supervising Investigator Richard Doyle and Deputy Chief Antoine Karam.  The Investigations Division is led by Chief Dominick Zarrella.

The criminal case is being prosecuted by Assistant Attorney General Cydney Kelly of the Criminal Enforcement and Financial Crimes Bureau.  The Bureau is led by Bureau Chief Gary Fishman and Deputy Chief Stephanie Swenton.  The Division of Justice is led by Executive Deputy Attorney General Kelly Donovan.

Investigation Leads To Indictment Of 25 Individuals In Erie County Court; Seizures Of Over Half A Million Dollars In Heroin And Cocaine

In The Alleged Scheme, Defendants Traveled To New York To Obtain Heroin And Obtained Cocaine From Puerto Rico Through The U.S. Mail

Schneiderman:  My Office’s Organized Crime Task Force Will Keep Fighting To Put Drug Traffickers Behind Bars And Keep Our Communities Safe

BUFFALO – Attorney General Eric T. Schneiderman and the New York State Police (NYSP), the Buffalo Police Department (BPD), the Drug Enforcement Agency (DEA), the Bureau of Alcohol, Tobacco and Firearms (ATF), the Department of Homeland Security and the Niagara County Drug Task Force today announced that first degree narcotics possession and sale, conspiracy to distribute and other charges have been filed against 25 individuals accused of taking part in a drug distribution network that funneled heroin from New York City and Philadelphia to Buffalo and Western New York.

“Today my office, with our partners in law enforcement, shut down a major drug pipeline into Western New York that was a top supplier of fentanyl-laced heroin and other drugs,” saidAttorney General Schneiderman. “This dangerous and potent variant of heroin is killing people across our state and I am pleased that we have cut off this supply and charged 25 individuals for their alleged roles.”

“The alleged crimes suggest that the suspects had absolutely no regard for the damage these narcotics were inflicting on our communities,” saidNew York State Police Superintendent Joseph D’Amico. “We will continue to work with our partners to target those trafficking drugs in our neighborhoods, shut their illegal operations down and put them behind bars.”

“Gang violence and drug trafficking are both public health and public safety threats,” saidSpecial Agent in Charge James Hunt, U.S. Drug Enforcement Administration, New York Division. “Wherever the Ramos organization allegedly sold heroin and cocaine, they left behind fear, intimidation and addiction in their wake. Law enforcement pooled resources to shut this operation down and identify all sources of supply in order to reclaim our neighborhoods from drug addiction and drug related violence.”

“I want to commend all of the agencies involved in this intensive investigation including the Attorney General's Office and State police,” said Commissioner Daniel Derenda, Buffalo Police Department. “Removing two dozen drug dealers from our streets will put a severe dent in the illegal drug trade in Buffalo and Western New York."

As part of a multi-agency investigation code-named Operation Rolling Thunder, state, federal and local law enforcement agents led by Attorney General Schneiderman’s Organized Crime Task Force (OCTF), NYSP’s CNET and the DEA conducted a 9­ month-­long investigation that included undercover operations, hundreds of hours of covert surveillance, and wiretaps.  The investigation led to the seizure of more than 1 ½ kilograms of heroin, some laced with fentanyl, and 6 kilograms of cocaine, all for distribution in Buffalo and Lockport, New York.

According to the indictment, members of the narcotics distribution organization would travel to New York City to obtain heroin and drive immediately back to Buffalo.  Heroin was found in packages in the columns of steering wheels, in engine compartments, and under seats of various vehicles used by the targets.  Jose Maldonado, Jonathan Ramos-Ramos, and their workers, sold heroin daily from a location on Pennsylvania Avenue in Buffalo.  Hector Santiago sold heroin laced with fentanyl in Niagara County, which he obtained from the same source of supply in the Washington Heights area of New York City.  Wiretaps caught the defendants discussing their drug transactions, in the Spanish language, in a cryptic and coded manner in the hope of avoiding detection by law enforcement.  Over one and a half kilograms of fentanyl-laced heroin were seized in the course of the investigation, which have a value of over $600,000, when sold on the street in bundles.

Jonathan Aleman-Gonzalez had more than two kilograms of cocaine mailed to Omar Vellon Aponte on Buffalo’s East Side, as well as to Gonzalez’ home.  In one instance, the narcotics were contained in two cans of pinto beans, which were opened and resealed.  An associate named Raul Lopez Sanchez drove from New Jersey, bringing a half kilogram of cocaine to Buffalo wrapped as a birthday gift, for delivery to Gonzalez, when he was stopped in the parking lot of the Days Inn near the Buffalo Niagara Airport and the package was seized.  The street value of the six kilos of cocaine seized during the course of this investigation is $1.2 million.

The 69-count indictment unsealed in Erie County Court today charges 25 people with crimes including Criminal Sale and Criminal Possession of a Controlled Substance in the First and Second Degrees and Conspiracy in the Second Degree (class A and B felonies), punishable by up to 25 years in prison, and various other counts of Criminal Possession of a Controlled Substance.

Charged in the Erie County indictment are:

Zoraida Acevedo-Santiago;

Jonathan Aleman-Gonzalez, a/k/a “Humedo”;

Bonifacio Barreto, a/k/a “Cano”;

Joemar Cruz, a/k/a “Yomo”;

Jorge Davila, a/k/a “Loiza”;

Joan Diaz;

Josue Diaz-Rodriguez, a/k/a “Kasko”;

Justo Kelvin Estevez Rodriguez;

Jonathan Lopez, a/k/a “Tato”;

Raul Lopez Sanchez;

Jose Maldonado, a/k/a “Naris”;

Hiram Morales, a/k/a “Buster”;

Jose Nunez Perez, a/k/a “Joe”;

William Ortega, a/k/a “Wilo”;

David Ortiz;

Juan Gabriel Ortiz, a/k/a “Gabby”;

Carlos Pizarro-Rodriguez, a/k/a “Bolo”;

Jonathan Ramos-Ramos, a/k/a “Pico”;

Shalynette Rosario;

Hector L. Santiago, a/k/a “Randy”;

Jesus Javier Santiago, a/k/a “Javi”;

Alexis Serrano-Alicea;

Omar Vellon Aponte, a/k/a “Chambo”;

Charles Vogel, a/k/a “Chuck”; and

Brian D. Zimmerman

The investigation was conducted by OCTF Investigator Pedro Pabon, Supervising Investigator Peter J. Talty, and Deputy Chief Eugene Black, and DEA Special Agents Anthony Casullo, Joseph Bongiovanni, and Supervisor Gregory Yensan, New York State Police Investigators, Buffalo Police Department Detective John Garcia and Sergeant Sean O’Brien.  With the assistance of the US Postal Inspection Service, Alcohol, Tobacco and Firearms, Homeland Security and the Niagara County Drug Task Force.

The case is being prosecuted by OCTF Assistant Deputy Attorney General Patricia I. Carrington.  Deputy Attorney General Peri Alyse Kadanoff runs the Organized Crime Task Force and Kelly Donovan is the Executive Deputy Attorney General for Criminal Division. 

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

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement today on the U.S. Environmental Protection Agency (EPA)’s announcement of final regulations to reduce emissions of the powerful greenhouse gas methane from new and modified sources in the oil and gas industry:

“Reducing emissions is crucial to combatting climate change.  My office and other states have urged EPA to fulfill its legal responsibility under the Clean Air Act to limit methane emissions from the oil and gas industry, the world’s largest industrial source of methane emissions.   The regulations finalized yesterday provide necessary and appropriate controls on methane emissions from new and modified sources in the oil and gas industry.  These regulations – along with regulations EPA announced in March that it would develop for controlling emissions of methane from existing sources – are key to staunching methane emissions from oil and gas development.  We applaud EPA for acting on its responsibility under the Clean Air Act to reduce methane emissions and urge the Agency to move forward promptly to address methane emissions from existing sources.” 

Background

In December 2012, Attorney General Schneiderman, leading a coalition of seven states, notified the federal Environmental Protection Agency of his intent to sue the agency for violating the Clean Air Act by failing to adopt limits on methane emissions from equipment used in oil and gas production, processing, and transmission.  The coalition charged that because EPA has determined that methane is a powerful climate change pollutant emitted by the industry in large quantities, and because affordable methods for controlling these emissions were then available, EPA had violated the Clean Air Act when it failed to directly limit methane emissions in the agency’s 2012 updates to air pollution standards for the oil and gas industry. EPA’s decision at the time not to directly limit the emissions left the vast majority of methane emissions from oil and natural gas operations unregulated.

In the summer of 2013, President Obama issued a Climate Action Plan that, among other things, committed his administration to developing a comprehensive, interagency strategy to reduce methane emissions. That strategy, which was released in March 2014, committed EPA to a number of activities, including assessing significant sources of methane and other emissions from the oil and gas sector, soliciting input from independent experts through a series of technical white papers, and determining how best to pursue further methane reductions from these sources. Attorney General Schneiderman’s coalition filed comments on the EPA white papers advocating for the direct regulation of methane from new and existing oil and gas development and delivery equipment, and has held the filing of the lawsuit in abeyance due to EPA’s actions considering the matter.

In September 2015, EPA proposed regulations to require new and modified equipment to meet standards to limit their methane emissions. Attorney General Schneiderman and several other Attorneys General submitted comments on the proposed limits on new and modified sources, and further urged EPA to move forward expeditiously with regulation of existing sources, which would be mandated under the Clean Air Act once the rule on new and modified sources is finalized.  The regulations announced yesterday finalize these regulations on methane emissions from new and modified equipment.

In March, EPA announced it would move forward with regulations on existing sources of methane emissions in oil and gas operations. Because existing sources comprise a lion’s share of methane emissions from these operations (an estimated 90 percent by 2018), an existing source rule is necessary to address the Agency’s legal duty and to reach the Agency’s announced target reduction of 40-45% less methane emissions by 2025 compared to 2012 levels.

Evidence Collected By Schneiderman Supports Conclusion That Constitution Authorized, Encouraged, Or Condoned Construction Activity Along Its Pipeline Right-Of-Way – Even Though Project Hasn’t Received Necessary Approvals

Schneiderman Petitioning Federal Energy Regulatory Commission To Investigate Constitution’s Alleged Illegal Actions, Take Appropriate Enforcement Against Company, And Stay Conditional Approval Of Project 

Schneiderman: FERC Must Take Strong Enforcement Action Against Constitution To Ensure Pipeline Companies Know They Can’t Simply Thumb Their Nose At Laws Protecting New York’s Landowners, Communities, And The Environment

NEW YORK - Attorney General Eric T. Schneiderman today petitioned the Federal Energy Regulatory Commission (FERC) to initiate an investigation and enforcement action against the Constitution Pipeline Company (Constitution) over alleged violations of federal law, regulations and authorizations resulting from construction activities undertaken on portions of its pipeline right-of-way in New York.  The Attorney General is also asking FERC to stay its December 2014 Order conditionally approving the pipeline until the investigation and enforcement action is completed, and until Constitution has all additional approvals required under federal law.

The Attorney General’s petition contends – based on evidence collected by his office since early March of this year – that widespread tree clear-cutting and other construction activity has occurred along the company’s pipeline right-of-way corridor in New York, even though the project has not received the necessary approvals to begin construction.   Additional evidence collected by his office demonstrates that Constitution expressly or tacitly authorized, encouraged, or condoned landowners to undertake this construction activity and failed to advise them of the accurate status of the project.

“Absolutely no proposed pipeline project construction can begin until all required state and federal approvals are issued,” said Attorney General Schneiderman. “My office has found compelling evidence that Constitution not only ignored widespread, unpermitted construction along its pipeline right-of-way corridor, but even authorized, encouraged, or condoned it.  Constitution also did not report this activity to FERC or to the State.  FERC must take strong enforcement action against Constitution to ensure that pipeline companies know they can’t simply thumb their nose at laws that protect New York’s landowners, communities, and environment.”

The Constitution Pipeline is a proposed 125-mile natural gas pipeline running from Susquehanna County, Pennsylvania through Broome, Chenango, Delaware, and Schoharie Counties in New York.  In New York, the pipeline’s route encompasses a 100 mile, 100 to 125 foot wide pipeline right-of-way corridor that crosses 220 water bodies – many of which are sensitive trout-spawning waters – and approximately 80 acres of protected wetlands.  The project would also require over 23 miles of construction on steep and often very steep slopes, and entail significant impacts to the habitats of endangered and threatened species. 

Under the federal Natural Gas Act, FERC has authority over the approval and regulation of interstate natural gas pipelines.  In December 2014, FERC issued an order providing conditioned authorization for Constitution Pipeline project.  The order’s conditions included a requirement that, before commencing any construction activity on the proposed pipeline, the company must have received all applicable federal and state approvals, including permits required under the federal Clean Water Act, and must have received authorization to proceed with the work from FERC.  Neither the New York State Department of Environmental Conservation (DEC) nor the U.S. Army Corps of Engineers have issued the required Clean Water Act permits for the pipeline in New York, and FERC hasn’t issued an authorization to proceed.

Constitution holds pipeline right-of-way agreements granting easements on the properties on which these construction activities occurred.  As such, Constitution is responsible for ensuring that the requirements of the 2014 FERC order,  federal Natural Gas Act, and the Commission’s regulations – including prohibitions on beginning construction before the pipeline has received necessary federal and state approvals – are met within the right-of-way that the company controls. 

In March 2016, Attorney General Schneiderman’s office was informed that – despite the prohibitions on construction contained in the 2014 order – clear-cutting of trees and other vegetation by landowners had begun on Constitution’s right-of-way at locations in New York.  The Attorney General’s office investigated the matter and collected evidence – including that from first-hand observations – that confirmed not only widespread clear-cutting,  but also clearing, road building, heavy equipment use in or adjacent to state protected streams and wetlands and other sensitive environmental areas, and other construction-related activities along the pipeline right-of-way at locations in Broome, Delaware, and Schoharie Counties.  Additional evidence  – including reports of third-party monitors of the pipeline project – indicates that Constitution was aware of the activities within the right-of-way, but, contrary to its legal responsibility, took no action to stop or report them to FERC. 

Evidence collected by Attorney General Schneiderman’s office shows that Constitution failed to advise landowners that clear-cutting and other construction activities in right-of-ways on their property would likely violate the 2014 FERC order,  federal Natural Gas Act, and Commission regulations.  Further, this evidence suggests that Constitution expressly or tacitly authorized, encouraged, or condoned the alleged illegal cutting and other construction activities. 

For example, on January 29, 2016, FERC denied a request by Constitution to allow it begin construction of the pipeline project by initiating tree cutting in New York.  However, Constitution never advised New York landowners of the FERC’s denial; instead, the company sent a letter to landowners the next day stating its intention to begin pipeline construction in spring of 2016 – leading some New York landowners to reasonably conclude that pipeline construction on the right-of-way in New York was imminent and prompting them to prematurely harvest timber within the right-of-way on their property in order to save the timber’s monetary value.  

In today’s complaint and petition, Attorney General Schneiderman alleges that Constitution’s knowledge, and authorization, encouragement, or condoning of clear-cutting and other construction activities on portions of its pipeline right-of-way violate the 2014 FERC order because the company has not received required state and federal approval necessary to being construction on the project.  In addition, the petition alleges that these activities, in the absence of required permit approvals and an authorization to proceed from the Commission, violate the federal Natural Gas Act and the Commission’s regulations.  

Because Constitution is legally responsible for ensuring construction activity doesn’t begin in advance of the receipt of necessary approvals, and because of evidence that landowner activity was expressly or tacitly authorized, encouraged, or condoned by the company, the Attorney General’s petition today emphasizes that his office does not seek – and would oppose – any enforcement action by FERC against the involved landowners. 

Today’s complaint and petition calls on FERC immediately to initiate an investigation into Constitution’s alleged illicit actions with respect to tree-cutting and other construction activities on the pipeline right-of-way.   The petition also calls on FERC, based on the information provided by the Attorney General in the petition and any other evidence obtained by the Commission in its investigation, to take appropriate legal enforcement action against Constitution for these actions, including assessing appropriate monetary penalties.  The Natural Gas Act provides for a penalty of up to $1 million per day, per violation.  The complaint and petition also asks FERC to stay its prior order until the investigation and enforcement action is completed and until Constitution has obtained all other authorizations required.

This matter is being handled for the Environmental Protection Bureau by Bureau Chief Lemuel Srolovic, Assistant Attorney General Maureen Leary, Environmental Policy Analyst Jeremy Magliaro, and Environmental Scientist Mauricio Roma-Hernandez.  The Environmental Protection Bureau  is part of the Division of Social Justice, which is led by Executive Deputy Attorney General for Social Justice Alvin Bragg.  The matter was investigated by Investigator Kathleen Coppersmith of the Attorney General’s Binghamton Regional Office and Deputy Chief Investigator Jonathan Wood of the Investigations Bureau.  The Investigations Division is led by Chief Dominick Zarrella.

NEW YORK – Attorney General Eric T. Schneiderman, New York State Police (NYSP) Superintendent Joseph A. D’Amico, and Syracuse Police Chief Frank Fowler today announced the indictment of 72 people charged with operating two drug distribution rings: one that allegedly transported heroin, cocaine and narcotic pills between New York City and Syracuse; and a second that allegedly sold cocaine in the suburbs of Syracuse and in adjacent Oswego County. 

Along with “Operation Rolling Thunder” in Buffalo on May 12, the Attorney General’s Office and the New York State Police have now announced the indictments of nearly 100 alleged narcotics distributors in the region in the past five days.

“Operation Smackdown is a significant attack against the heroin epidemic that continues to plague Central New York,” Attorney General Schneiderman said. “I will not tolerate those who sell death in our neighborhoods. My office and our partners in law enforcement will use all of the tools and resources at our disposal to fight this epidemic in every New York community.”

State Police Superintendent Joseph A. D’Amicosaid, “Today’s arrests are part of an aggressive strategy to target the networks that are bringing heroin and other dangerous narcotics into upstate communities. State Police will continue to partner with local law enforcement and the Attorney General’s Office to shut these illegal operations down and put the perpetrators behind bars.” 

“Operation Smackdown continued the efforts that law enforcement has been taking to combat the heroin issues facing our communities,” Syracuse Police Chief Frank L. Fowler said. “We will continue our efforts and working with other agencies, with the ultimate goal of eradicating this problem.”

Over the course of the eleven-month investigation, which was led by the Attorney General’s Organized Crime Task Force (OCTF), New York State Police, and the Syracuse Police Department, authorities seized:

• 10,750 ready-to-sell baggies of heroin
• 2 ounces of bulk heroin capable of being packaged into another 2,100 bags of heroin.
• More than 1 pound of cocaine
• 65 oxycodone pills
• 21 hydrocodone pills
• 2 hand guns
• An electronic stun gun (disguised as a flashlight)
• 9 rifles, including an assault rifle
• 7 shot guns, and
• $40,000 in cash

The four separate indictments charge 72 individuals with 227 crimes including Operating as a Major Trafficker, and various counts of Criminal Sale and Criminal Possession of a Controlled Substance (class A and B felonies), and Conspiracy to commit those crimes. The Operating as a Major Trafficker statute (§220.77 of the Penal Law of the State of New York), authored by Attorney General Schneiderman when he was a legislator, went into effect in November 2009, as part of reforms to the Rockefeller-era drug laws and is the only felony narcotics charge in the state that carries a possible life sentence.

“Operation Smackdown” focuses on two major distribution rings:

The first ring – codenamed “Flowers” -- was allegedly comprised of at least 37 individuals, who are charged on three separate indictments. This ring would allegedly send heroin from New York City to Syracuse and then distribute it in and around Syracuse. Over the course of the eleven-month investigation, authorities seized 10,750 bags of heroin, and more than two ounces of bulk heroin capable of being packaged into another 2,100 bags of heroin.

This ring includes the three people charged with “Operating as a Major Trafficker”:

• JULIO SANTOS of Camillus, New York
• REINALDO SANTOS of Syracuse, New York
• MAGEN SOLANO of Syracuse, New York

The three traffickers allegedly arranged for narcotics to be transported from New York City to Syracuse.

The second ring – codenamed “Over the River” -- alleges that 35 individuals sold cocaine in the suburbs of Syracuse and adjacent Oswego County.

Those charged in today’s four indictments include:

• JULIO SANTOS of Camillus, New York (Charged with Operating as a Major Trafficker)
• REINALDO SANTOS of Syracuse, New York (Charged with Operating as a Major Trafficker)
• MAGEN SOLANO of Syracuse, New York (Charged with Operating as a Major Trafficker)
• HENRY AGUAYO of Syracuse, New York
• ZEZELL MONIQUE BEYENE AGUAYO of Liverpool, New York
• JORGE ALVARADO of Syracuse, New York
• WENDI BURKE of Cicero, New York
• CHARLES BUSKE of Oswego, New York
• TRISTAN FONTANEZ CIRINO of Syracuse, New York
• ASHLEY CORSETTE of Liverpool, New York
• JERRY CRAW of Fayetteville, New York
• EDDY CUELLO of Syracuse, New York
• DANIEL P. DOHERTY of Camillus, New York
• JOSEPH DONAHUE of Minoa, New York
• DOUGLAS ELFORD of Canastota, New York
• DANIEL EMOND of East Syracuse, New York
• FRANCISCO FLORES of Syracuse, New York
• JOHN FOLEY of Pulaski, New York
• ELLIOT FREELON of Syracuse, New York
• CATHERINE FUOCO of Central Square, New York
• TIMOTHY GALARNEAU of Brewerton, New York
• ADAM GILKEY of Minoa, New York
• RONALD HALL of Cicero, New York
• BRENT HARRINGTON of Central Square, New York
• JAMES HARRIS of Syracuse, New York
• ALFRED HOFFMAN of Syracuse, New York
• THOMAS HOLMQUIST of Hastings, New York
• BRIAN HONORS of Minoa, New York
• STEVEN HOYT of Kirkville, New York
• LAMYKE KELLY of Syracuse, New York
• JOSHUA KINGSLEY of East Syracuse, New York
• GEORGE KLAPAN of Pulaski, New York
• JACQUELIN LANDO a/k/a JACQUELIN SHOWERS of Oswego, New York
• JULIE LONG of Kirkville, New York
• DENISE MAHONEY of Minoa, New York
• DIANA MALDONADO of Syracuse, New York
• KEVIN MALDONADO of Syracuse, New York
• YVETTE MALDONADO of Syracuse, New York
• ANTONIO MARTINEZ of Syracuse, New York
• ALASHA MESSIER of Syracuse, New York
• IRMA DIAZ ORTIZ of Syracuse, New York
• DINA PECK of Kirkville, New York
• CLAYTON PIEROPAN of Clay, New York
• MICHAEL PIRAINO of Central Square, New York
• CARLOS QUINONES of Syracuse, New York
• JOHAN QUINONES of Syracuse, New York
• MICHAEL RAMOS of Syracuse, New York
• LORI RAUM of Bridgeport, New York
• LORRIE REDINGTON of Tully, New York
• DAVID REVETTE of Central Square, New York
• LUIS RIVERA of Syracuse, New York
• MIGUEL CRUZ RIVERA of Syracuse, New York
• JOSE LOPEZ ROBLES of Syracuse, New York
• MAGALEY ROMAN of Syracuse, New York
• GILSANDRO ROSADO of Syracuse, New York
• MARIO RUSSO of Syracuse, New York
• JOSE DELGADO SANTANA of Syracuse, New York
• JAIME SANTOS of Syracuse, New York
• WILFREDO SANTOS of Syracuse, New York
• SUSAN VERTICHIO SCHMIDT of Liverpool, New York
• TOSHIRO SCOTT of Syracuse, New York
• DANIEL SMITH of Central Square, New York
• KYSHAUN SMITH a/k/a KYSHAUN WILLIAMS of Syracuse, New York
• ANTHONY SPARKS of Syracuse, New York
• MARK SPRATT of Kirkville, New York
• CYNTHIA THOMPSON of Solvay, New York
• JEAN TORRES of Syracuse, New York
• LUIS UNDANETA of Syracuse, New York
• ANGEL DIAZ VEGA of Syracuse, New York
• LUIS CIRINO VEGA of Syracuse, New York
• HILARY WASHO of East Syracuse, New York; and
• JOSEPH WELLS of Minoa, New York

Several additional agencies participated in the investigation, including the Oswego County Drug Task Force, the Onondaga County Sheriff’s Office, the Onondaga County District Attorney's Office, Onondaga County Probation Department, Cortland County Sheriff’s Department, New York State Parole, U.S. Border Patrol, U.S. Department of Homeland Security, the Solvay Police Department and Syracuse University Police.

The investigation was conducted by OCTF Investigator William Elsenbeck, OCTF Investigator Paul Pendergast, Supervising Investigator Thomas M. Wolf and Deputy Chief Eugene Black.  The Investigations Bureau is led by Chief Investigator Dominick Zarrella.  The New York State Police Community Narcotics Enforcement Team under the supervision of New York State Police Superintendent Joseph D’Amico, and Syracuse Police Detective Raul Santana under the supervision of Special Investigation Division Captain Timothy Gay and Syracuse Police Chief Frank Fowler.

The case is being prosecuted by OCTF Assistant Deputy Attorney General and Senior Investigative Counsel James J. Mindell.  Deputy Attorney General Peri Alyse Kadanoff runs the Organized Crime Task Force and Kelly Donovan is the Executive Deputy Attorney General for Criminal Division.

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

Investigation Finds Alleged Violations Of State “Nutrient Runoff Law” At 90% Of Home Depot And Lowe’s Stores Inspected In New York; Stores To Pay Penalty, Comply With Law

Schneiderman: Retailers In New York Have Legal Duty To Help Consumers Protect Clean Water By Avoiding Improper Use Of Fertilizers

NEW YORK – Attorney General Eric T. Schneiderman today announced separate settlements with The Home Depot, Inc. and Lowe’s Home Centers, LLC over alleged violations of a 2010 state law designed to reduce water pollution caused by excess phosphorus running off lawns into New York waters.  New York’s Nutrient Runoff Law requires stores to display lawn fertilizers containing phosphorous separately from those that are phosphorus-free, as well as to post signs that notify consumers about the legal restrictions on using phosphorus-containing lawn fertilizer. 

The settlements are based on the results of a 2014 investigation by Attorney General Schneiderman that found 90% of Home Depot stores – 19 of 21 – and Lowe’s stores – 16 of 18 – in New York inspected by his office had one or more alleged violations of the law, either displaying phosphorus-containing lawn fertilizers without the required signage or failing to display phosphorus-containing lawn fertilizers separately from phosphorus-free fertilizers or both. The Attorney General reached a settlement with Wal-Mart Stores, Inc. in May 2015 over alleged equally widespread violations of the state’s Nutrient Runoff Law.

“Clean water is not only essential for New Yorkers’ health, but it also underpins our state’s economy,” Attorney General Schneiderman said.  “The state’s Nutrient Runoff Law requires retailers to help consumers protect clean water by avoiding improper use of lawn fertilizers.  We will continue to enforce this important environmental law in order to ensure New York’s waters are safe and healthy for today and the future.”

According the companies’ websites, there are 100 Home Depot and 70 Lowe’s stores located in New York.  

Between June and August of 2014, the Attorney General’s Office inspected 21 Home Depot and 18 Lowe’s stores across New York that sell lawn fertilizer.  At all of the 19 of the Home Depot stores that sold fertilizers containing phosphorous and 16 of the Lowe’s stores, the office found that – in violation of the state Nutrient Runoff Law – phosphorous-containing fertilizers were commingled with phosphorus-free fertilizers or displayed without the required signage, or both.  Follow-up inspections at three Home Depot and Lowe’s stores in September 2014 found additional alleged violations.   The Attorney General’s investigation discovered evidence that Lowe’s had taken steps to comply with the Nutrient Runoff Law when the law first went into effect, and found some Lowe’s stores in the state complied or partially complied with the law’s requirements.

The 21 Home Depot stores that were visited by investigators from the Attorney General’s office were in Albany (2), Chautauqua (2), Erie (4), Kings (5), Nassau (1), Niagara (1), New York (2), Queens (3), and Richmond (1) counties. The 18 Lowe’s stores visited by investigators were in Albany (3), Erie (5), Kings (2), Onondaga (4), Ontario (1), Richmond (2), and Saratoga (1) counties. 

The settlements require Home Depot and Lowe’s to bring their stores in New York into full compliance with the Nutrient Runoff Law, including providing required signage and displaying fertilizers containing phosphorous separately from phosphorous-free fertilizers. Further, to assist the state in assessing the effectiveness of the law, Home Depot is required to compile and disclose several years of past and future data related to their sales of fertilizers in New York. 

Finally, Home Depot will pay $78,000 and Lowe’s will pay $52,000, in penalties to New York State for the alleged violations.

Attorney General Schneiderman’s May 2015 settlement with Walmart required the company to comply fully with the law and pay penalties to the state.  The company decided to comply with the law by halting sales of phosphorus-containing fertilizers intended for use on lawn or non-agricultural turf at Walmart stores and Sam’s Club stores in the state.  Additionally, Walmart decided not to sell phosphorous-containing fertilizers intended for use on lawn or non-agricultural turf at Walmart.com to consumers in New York.

Phosphorus is an element added to fertilizer to promote plant growth. While the soils in New York State typically contain enough phosphorus to support healthy lawns, homeowners and landscapers often apply phosphorus-containing fertilizers to lawns, and the excess phosphorus can then wash into our lakes, rivers, streams, and drinking water reservoirs. According to the New York State Department of Environmental Conservation, the use of fertilizers containing phosphorous can double the amount of the nutrient that washes off lawns. Once in the water, excess phosphorus causes rapid algae growth – known as algae blooms – which in turn can produce green slime on water bodies, as well as offensive odor and taste. In addition, algae blooms can deplete oxygen in the water that fish and other aquatic organisms need to survive. In some cases, these blooms produce toxins harmful to humans. In 2015 alone, DEC documented 126 harmful algae blooms in bodies of water across New York, many of which had toxins at levels high enough to cause serious health impacts including nausea, vomiting, skin, eye, and throat irritation, and allergic reactions or breathing difficulties.

According to DEC, phosphorus levels exceed state water quality standards in over 100 waters of the state – including reservoirs in the New York City drinking water watershed, Lake Champlain, Onondaga Lake, Chautauqua Lake, Greenwood Lake, and parts of Lake Ontario.  DEC has identified curbing excess phosphorus-containing fertilizer use on lawns as a key element of its plans to improve the health of many of these waters.

New York enacted the Nutrient Runoff Law specifically to reduce phosphorus runoff from non-agricultural sources. Among its provisions, the law applies to retailers who sell fertilizers that contain more than 0.67 percent phosphate, a form of phosphorus (for reasons involving the measurement of phosphorus in fertilizers, those containing less than 0.67% phosphate are referred to as “phosphorous-free”).  The law requires retailers that sell phosphorus-containing fertilizers intended for use on lawns and other non-agricultural turfs to:

• display phosphorous-containing fertilizers separately from those containing 0.67 percent or less available phosphorus; and
• post a clearly-visible sign in the vicinity of phosphorus-containing fertilizers advising consumers about the harm phosphorus runoff has on water quality and the circumstances, under New York law, that phosphorus-containing fertilizer may be legally applied. 

Under New York law, phosphorus-containing fertilizer may only be applied to lawn or non-agricultural turf when:

• A soil test indicates that additional phosphorus is needed for growth of that lawn or non-agricultural turf; or
• The fertilizer is used for newly established lawn or non-agricultural turf during the first growing season.

 A retailer who sells phosphorous-containing fertilizers without complying with these requirements is subject to penalties of up to $500 for the first violation and up to $1,000 for each subsequent violation.

This case is being handled by Assistant Attorneys General Brian Lusignan and Michael J. Myers, and Environmental Scientists Jennifer Nalbone and Charles Silver. The Environmental Protection Bureau is led by Lemuel M. Srolovic and is part of the Division of Social Justice, which is led by Executive Deputy Attorney General for Social Justice Alvin Bragg.

Raul D. Kelley Sentenced To 2 To 6 Years in Prison For Submitting Forged NYC Transit Authority W2 Statements And Preparing Over 700 Fraudulent Tax Returns

Schneiderman: If You Intentionally Lie On Your Taxes, You Will Be Caught And You Will Be Held Responsible

ALBANY – Attorney General Eric T. Schneiderman today announced the sentencing of Raul D. Kelley, 49, of the Bronx, NY for submitting forged W2 statements and preparing over 700 fraudulent tax returns while acting as an unregistered tax preparer. Kelley also submitted fraudulent documents and information on his own personal income taxes in an effort to illegally take more than $25,000. Kelley was sentenced today in Albany County Supreme Court to 2 to 6 years in state prison on his pleas of guilty to the crimes of Criminal Possession of a Forged Instrument in the Second Degree, a class “D” felony, and Attempted Grand Larceny in the Third Degree, a class “E” felony.

“When individuals attempt to cheat on their taxes, it shifts the burden to other honest New Yorkers,” said Attorney General Schneiderman. “Today’s sentencing makes it clear that if you intentionally lie on your taxes, you will be caught and you will be held responsible.”

In January 2015, as a result of a joint investigation by the Attorney General’s Criminal Enforcement and Financial Crimes Bureau and the New York State Department of Taxation and Finance’s (DTF’s) Criminal Investigations Division, Kelley was arrested on felony charges regarding his operation of an unregistered tax preparer business, in which he submitted fraudulent tax returns on behalf of taxpayers. 

According to the indictment and statements made to prosecutors, Kelley worked for the NYC Transit Authority from 2007 until 2008 as a train operator. However, after leaving the NYC Transit Authority, Kelley continued to submit forged W2 Statements through the 2012 tax year, claiming thousands of dollars in fraudulent tax withholdings. In addition, Kelley claimed thousands of dollars in deductions and credits that he was not entitled to, all in an effort to personally wrongfully collect more than $25,000 in New York State tax refunds.

The investigation by the Attorney General and the DTF uncovered additional crimes linked to Kelley’s role as an unregistered tax preparer, including the submission of over 700 fraudulent New York State personal and corporate income tax returns for tax years 2009 through 2012. These submissions resulted in the theft from the DTF of $267,425 and the attempted theft of an additional $506,572.

On April 5, 2016, Kelley pleaded guilty to the crimes of Criminal Possession of a Forged Instrument in the Second Degree (a Class “D” felony) and Attempted Grand Larceny in the Third Degree (a Class “E” felony).  At the time of his plea, Kelley admitted that these crimes were related to Kelley’s role as an unregistered tax preparer and his submission of fraudulent New York State personal and corporate income tax returns for clients between January 1, 2010 and December 31, 2013.

Kelley was sentenced today by the Honorable Andrew G. Ceresia in Albany County Supreme Court to 2 to 6 years in state prison.

Commissioner Boone encourages taxpayers to ensure that tax preparers are registered with New York State by using the Tax Department’s searchable online database of 40,000 tax preparers. Certified public accountants, attorneys and enrolled agents have other professional requirements and are, therefore, not required to be registered.

The Attorney General thanked the DTF’s Criminal Investigations Division for its cooperation in the case.

The case is being prosecuted by Assistant Attorney General Philip V. Apruzzese of the Criminal Enforcement and Financial Crimes Bureau. The Bureau is led by Bureau Chief Gary T. Fishman and Deputy Chief Stephanie Swenton. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

The Attorney General’s investigation was conducted by Investigators Michael Leahy, Elsa Rojas, and Mark Spencer, under the supervision of Deputy Chief Investigators Antoine Karam and John McManus.  The Investigations Bureau is led by Chief Dominick Zarrella.

Individuals And Corporations Charged With Receiving Over $600,000 In Illegal Kickbacks

NEW YORK—Attorney General Eric T. Schneiderman today announced the indictment and arraignment of Yury Baumblit and Rimma Baumblit, “three-quarter house” operators in New York City, and their corporate entities #1 Marketing Service, Inc., R Y B Realty, LLC, Steps to Better Living Inc., and Orbit Management Group Inc., on charges of Grand Larceny in the Second Degree, Money Laundering in the Second Degree, and violations of the Social Services Law prohibiting the payment of kickbacks related to the provision of services under the State’s Medicaid program.  The Attorney General’s office arrested Yury and Rimma Baumblit on April 13. Both have remained in custody since their arrest.

At the time of the defendants’ arrest, the Attorney General, in a separate proceeding in State Supreme Court, obtained an order freezing the bank accounts and other property held by the couple and attaching up to $1.9 million of their assets.  Court orders issued at the time preclude the defendants from dissipating or transferring any of their assets without court permission and further prohibit anyone with notice of these orders from giving money or property to any criminal defendant. That proceeding is pending and both sets of orders remain in effect.

“As we allege in our indictment, the defendants orchestrated a deliberate scheme that defrauded taxpayers and ripped off Medicaid, while showing little regard for the well-being of their residents,” Attorney General Schneiderman said. “My office will not stand for those who put profits over the health of some of our most vulnerable members of society.”

Prosecutors allege the defendants engaged in a monthly kickback scheme with a Medicaid-enrolled drug treatment provider.  In exchange for a monthly payment, they forced the residents at their homes to attend a specific drug treatment provider, irrespective of each resident’s actual medical need for drug treatment services. The payments were based on the number of substance-abuse treatment sessions attended by residents of the defendants’ three-quarter houses.  During the course of this scheme, Yury Baumblit and Rimma Baumblit allegedly received over $600,000 in illegal kickbacks through one of four corporations they controlled: #1 Marketing Service, Inc., R Y B Realty, LLC, Steps to Better Living Inc., and Orbit Management Group Inc., all operating in Kings County.

Today, Kings Country Supreme Court Acting Justice Daniel Chun arraigned the defendants on one count of Grand Larceny in the Second Degree, Money Laundering in the Second Degree, and a violation of Social Services Law prohibiting the payment of kickbacks related to the provision of services under the State’s Medicaid program.  Justice Chun also arraigned the defendants’ four corporate entities: #1 Marketing Service, Inc., R Y B Realty, LLC, Steps to Better Living Inc., and Orbit Management Group Inc., on charges of Grand Larceny in the Second Degree and a violation of the Social Services Law prohibiting the payment of kickbacks related to the provision of services under the State’s Medicaid program.  

Grand Larceny in the Second Degree and Money Laundering in the Second Degree are each Class C felonies and the defendants face a maximum term of incarceration of fifteen years. 

Yury Baumblit and Rimma Baumblit were arrested on April 13, 2016 and initially charged by felony complaint. Judge Marguerite Dougherty set bail at five hundred thousand dollars for Yury Baumblit and three hundred thousand dollars for Rimma Baumblit.  The defendants’ bail conditions remain unchanged following today’s arraignment on the indictment. 

The current indictment focuses on the defendants’ alleged kickback arrangement with one particular substance abuse treatment program; MFCU’s investigation is ongoing. The charges filed in this case are accusations. The defendants are presumed innocent until and until proven guilty in a court of law.

Throughout this investigation, the Attorney General’s office has worked closely with the various City, State, and Federal Agencies.  In particular, the Attorney General would like to thank the New York City Human Resources Administration for its cooperation, partnership and valuable assistance throughout the investigation and notably the work of its Medicaid Provider Investigations & Audit Unit.   In addition, the Attorney General thanks the New York State Office of Alcoholism and Substance Abuse Services, the Office of the Medicaid Inspector General, and the United States Department of Homeland Security for their assistance. 

The criminal case is being prosecuted by Special Assistant Attorneys General Megan Friedland and Erin Kelsh under the supervision of NYC Regional Director Christopher M. Shaw. Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations–Downstate.  The civil case is being handled by Special Assistant Attorneys General Alee Scott and Christopher Y. Miller and Senior Counsel Carolyn Ellis.  The investigation was led by Senior Investigator Albert Maiorano, with the support of Investigator David Ryan and Supervising Investigator Dominick DiGennaro and Supervising Investigator Michael Casado; all under the supervision of Deputy Chief Investigator Kenneth Morgan. Audit support was provided by Special Audit Investigators Patricia Iemma and Nicholas Thottam under the supervision of MFCU Principal Special Auditor Investigator Emmanuel Archer and MFCU Chief Auditor Thomasina Smith. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney.  The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

NEW YORK – Attorney General Eric T. Schneiderman today announced that New Paltz-based construction company Lalo Drywall, Inc. and its owner Sergio Raymundo, 28, were sentenced in Manhattan Supreme Court after a conviction related to wage theft for underpaying workers at a mixed-use, commercial, and low-income residential project in Harlem. 

Raymundo and Lalo Drywall, Inc. admitted to cheating eight workers at a Harlem housing project out of approximately $800,000 in wages during a 17-month period.  The defendants attempted to conceal the underpayments by signing false checks drawn on the company’s account indicating that employees on the job were paid properly under the law. However, those checks were never actually given to the workers.

“Wage theft is a crime - one that frequently involves companies exploiting low and middle income workers for their own gain,” said Attorney General Schneiderman. “My office will continue to aggressively prosecute those who commit wage theft and ensure that workers received the compensation they have earned.”

“Contractors who cheat workers out of their rightful pay must be held accountable and DOI, along with the Attorney General and our partner agencies, will continue to aggressively seek out and expose the individuals and businesses who attempt to line their pockets with the hard-earned wages of workers,” said New York City Department of Investigation Commissioner Mark G. Peters.

This conviction marks the seventh  plea stemming from the April 8, 2015 arrests of seven subcontractors as part of a joint initiative by Attorney General Eric T. Schneiderman and New York City Department of Investigation Commissioner Mark G. Peters to combat wage theft at public works projects in New York City.  The other six arrests have all led to guilty pleas, recovering nearly $1.5 million for underpaid workers, and resulting in the debarment of the subcontractors, which prevents them from bidding on or being awarded public works contracts in New York State for a period of five (5) years. 

Today’s sentencing follows the March 18, 2016 guilty pleas in this case. Specifically, Sergio Raymundo pleaded guilty to one count of Falsifying Business Records in the First Degree under New York State’s Penal Law, a class E felony, as well as to one count of Failure to Pay Wages under New York State’s Labor Law, an unclassified misdemeanor. Lalo Drywall, Inc. pleaded guilty to one count of Falsifying Business Records in the First Degree, a class E felony. Pursuant to the plea agreement, both defendants were required to pay $793,509.60 in restitution and $83,143.76 in unpaid unemployment contributions due to the New York State Department of Labor – Unemployment Division. 

On the date of plea, Sergio Raymundo and Lalo Drywall, Inc. paid $300,000 to the OAG for restitution for workers and $50,000 for unpaid unemployment insurance contributions. Today, Raymundo and Lalo paid an additional $200,000 to the OAG for restitution and an additional $10,000 for unpaid unemployment insurance contributions. Under the plea agreement, Raymundo must make monthly payments of the remaining $293,509.60 in restitution and $24,640.96 in unemployment insurance contributions.  Raymundo was also sentenced to three (3) years probation. Lalo was sentenced to a conditional discharge and is jointly responsible for payment of the remaining restitution and unemployment insurance contributions.  In addition, both Raymundo and Lalo are barred from bidding on or being awarded public works contracts in New York State for a period of five (5) years from sentencing.

The prior six convictions involved the following individuals and companies: Tariq Mahmood, 57, and his company Peral General Contractor LLC; Mohammad Chatha, 57, and his company M.B. Din Construction, Inc.; Shamas Mian, 52, and his company United Construction Field, Inc.; Jagdish Singh, 58, and his company Navico B & S Construction Corp.; and Baldev Singh, 40, and Avtar Singh, 37.

The Attorney General thanks the Inspectors General for the New York City Department of Investigation.  This case was investigated by Deputy Inspector General David Jordan and Assistant Inspector General Ondie Frederick under the supervision of Inspector General Jessica Heegan.

The Attorney General also thanks the Inspectors General for the School Construction Authority and their staffs for their assistance on the other five investigations and prosecutions.  Those cases were investigated by William O’Brien and Lee Callier of the School Construction Authority, Office of the Inspector General under the supervision of First Assistant Inspector General Gerard McEnroe and Inspector General Maria Mostajo.

The Attorney General also thanks the Inspectors General for the New York City Housing Authority for their assistance on this investigation. The case was investigated by Special Investigator Robert Diienno and Edward Bradley, Deputy Inspector General under the supervision of Inspector General Ralph Ianuzzi.

The Department of Investigation’s effort to combat prevailing wage violations was overseen by Senior Associate Commissioner Michael Carroll and Associate Commissioner William Jorgenson.

Attorney General investigators working on these cases were Elsa Rojas, Sixto Santiago, Edward Ortiz, Ismael Hernandez, Brian Metz, Michael Leahy, Naomi Jimenez, Michael Yun and Senior Investigators Salvatore Ventola and Lawrence Riccio with assistance by Supervising Investigators John M. Sullivan and Michael Ward. The investigation was conducted under the supervision of Supervising Investigator Luis Carter, under the direction of Deputy Chief Investigator John McManus. The Attorney General’s Investigations Bureau is led by Chief Investigator Dominic Zarrella.

The criminal cases were prosecuted by Assistant Attorney General Matthew Ross, Assistant Attorney Benjamin Holt, and Assistant Attorney General Richard Balletta, the Attorney General Labor Bureau’s Criminal Section Chief, with assistance from Stephanie Swenton, the Deputy Bureau Chief of the Criminal Enforcement and Financial Crimes Bureau.

The Labor Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg and Kelly Donovan is the Executive Deputy Attorney General for Criminal Justice.