Los Cambios Se Producen A Menos De Un Día Después De Fiscal General Schneiderman Pidió A Siete Empresas Detener Su Publicidad Engañosa

Nueva York - El Fiscal General Eric T. Schneiderman Anunció Hoy Que Seis De Las Siete Empresas Que Recibieron Cartas De Cese Y Desista De Su Oficina Para La Comercialización De Productos Engañosamente Como "Zika-Preventivos" Han Reformado Su Publicidad. Las Empresas Habían Comercializado Sus Productos Con Afirmaciones De Que Podían  Prevenirse O Proteger Contra Virus Zika, Aunque Los Productos Son Conocidos Por Ser Ineficaces Para Ese Propósito. La Eliminación De Publicidad Engañosa Se Produce Menos De 24 Horas Después De Que El Fiscal General Inició Una Acción. Algunas De Las Compañías Han Eliminado Por Completo Sus Productos De La Internet.

"Me Complace Que La Acción De Mi Oficina Ha Dado Lugar A La Eliminación Inmediata De Casi Todas Las Engañosas Afirmaciones Relacionadas Con Zika Que Enfrentamos. No Vamos A Dejar Que Los Estafadores Se Aprovechan De Una Crisis De Salud Pública, Y Esto Debería Servir Como Una Advertencia A Otras Empresas Que Buscan La Participación En Las Mismas Prácticas Deshonestas. Insto A Los Consumidores A Informarse Sobre Los Repelentes Que En Realidad Le Protegen Contra Zika Para Evitar Ser Engañados Por Estos Fraudes", Dijo El Fiscal General Schneiderman.

Las Compañías Que Han Decidido Parar Su Publicidad Engañosa Son:

• Wildheart Outdoors Natural Mosquito Repellent Bracelet
• Mosquito Repellent Bracelet Wristband Band
• Igear Iguard 2.0 Ultrasonic Insect Pest Repellent
• Kenza High Quality Zika Mosquito Repellent Smiley Patch
• Mobile Pro Gear Zika Shield Mosquito Repellent Bands
• Star Ultrasonic Pest Repeller

La Investigación De La Fiscalía General Continúa. 

Newsfrom Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 5, 2016

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A.G. SCHNEIDERMAN ANNOUNCES $100K SETTLEMENT WITH E-RETAILER AFTER DATA BREACH EXPOSES OVER 25K CREDIT CARD NUMBERS

EZcontactsUSA.com Must Pay $100K In Penalties And Reform Business Practices Following Massive Breach

Schneiderman: We Will Keep Working To Protect New Yorkers From Credit Card Fraud

NEW YORK – Attorney General Eric T. Schneiderman today announced a settlement with Provision Supply, LLC, d/b/a EZcontactsUSA.com, involving a data breach resulting in the potential exposure of over 25,000 credit card numbers and other cardholder data.  EZcontactsUSA.com has agreed to pay $100,000 in penalties and to shore up its data security practices.

 “New Yorkers deserve an Internet marketplace that secures their personal information,” said Attorney General Schneiderman. “No one should be exposed to identity theft or financial fraud by simply buying something over the Internet. My office will continue working to help protect hardworking New Yorkers from credit card fraud.”

On August 7, 2014, a third party infiltrated EZcontactsUSA.com website, which is based in Brooklyn, New York.  On June 05, 2015, EZcontactsUSA.com's merchant bank notified it that fraudulent charges were appearing on customer credit card accounts. Shortly thereafter, EZcontactsUSA.com engaged a company to conduct a forensic investigation, which discovered and removed all the malware on the EZcontactsUSA.com website.

EZContactsUSA.com never provided notice to its customers or law enforcement about the breach, in violation ofGeneral Business Law § 899-aa, which requires notice be provided to affected individuals and various government agencies including Schneiderman’s office, in the most expedient time possible and without unreasonable delay.

Schneiderman’s office also found that EZContactsUSA.com violated Executive Law § 63(12) and General Business Laws §§ 349 and 350 by misrepresenting the safety and security of its website.  EZContactsUSA.com advertised its website as “100% safe and secure,” and “utilizing the latest security technology available.” However, a forensics investigation revealed that EZcontactsUSA.com’s website contained numerous security vulnerabilities. In particular, the investigation revealed that EZcontactsUSA.com did not maintain a written security policy addressing information security problems; deploy effective web server and host based firewall configurations designed to prevent unauthorized access and exploitation of commonly known vulnerable outgoing computer network port(s); implement anti-virus and anti-malware software on any computer systems; monitor and/or review the site’s performance and security configuration, or otherwise conduct vulnerability and penetration testing; or maintain firewall logs, which prevented investigators from determining the frequency of attacker visits and related information.

The settlement requires EZcontactsUSA.com to conduct thorough and expeditious investigations of any future data security breaches, provide prompt notice of data security breaches to affected New York residents and to New York law enforcement, maintain reasonable security policies and procedures designed to protect the personal information of consumers in accordance with New York State General Business laws, and to remediate the many security vulnerabilities contained in its website. EZcontactsUSA.com must also train employees with the most up-to-date data security practices, and pay a $100,000 penalty.

This case was handled by Bureau of Internet and Technology Deputy Bureau Chief Clark Russell and Resident Technologist Marc Kowtko. The Bureau of Internet and Technology is led by Bureau Chief Kathleen McGee and overseen by Executive Deputy Attorney General for Economic Justice Manisha Sheth.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 8, 2016

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A.G. SCHNEIDERMAN ANNOUNCES $100 MILLION MULTI-STATE SETTLEMENT WITH BARCLAYS OVER ROLE ARTIFICIALLY MANIPULATING INTEREST RATES  

Manipulated Interest Rates Hurt Government And Not-For-Profit Entities In New York And Across The Country 

NEW YORK – Attorney General Eric T. Schneiderman today announced a $100 million, 44-state settlement with Barclays Bank PLC and Barclays Capital Inc. for fraudulent and anticompetitive conduct involving the manipulation of U.S. Dollar (USD) LIBOR (the London Interbank Offered Rate) and other benchmark interest rates. Benchmark interest rates affect financial instruments worth trillions of dollars and have a widespread impact on global markets and consumers because LIBOR may determine how much they will be paid on their investments. New York and Connecticut led the working group of State Attorneys General investigating Barclays.  

“There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes big banks and other financial institutions that engage in fraud or impair the fair functioning of financial markets,” said Attorney General Schneiderman. “As a result of Barclays’ misconduct, government entities and not-for-profits were defrauded of funds that otherwise could have been used to benefit the people of New York.”

During the relevant time period, a panel of 16 banks made USD LIBOR submissions that were supposed to reflect borrowing rates in the interbank market. A daily LIBOR rate was calculated by averaging the middle eight submissions. The investigation found that, at times during the financial crisis period, roughly from 2007-2009, Barclays managers told LIBOR submitters to lower their LIBOR settings to avoid the appearance that Barclays was in financial difficulty and needed to pay more than some of its competitors to borrow money. The LIBOR submitters complied with the instructions and suppressed their LIBOR submissions. Also, from 2005 to 2007 and continuing at least into 2009, Barclays’ traders at times asked Barclays’ LIBOR submitters to change their LIBOR settings in order to benefit the traders’ positions, and the submitters often followed through on the requests, instead of setting LIBOR based on Barclays’ borrowing costs. Barclays also believed that other banks’ LIBOR submissions likewise did not reflect their true borrowing rates, and that therefore, published LIBOR did not reflect the cost of borrowing funds in the market, as it was supposed to do.

Government entities and not-for-profit organizations in New York and throughout the U.S., among others,  were defrauded of millions of dollars when they entered into swaps and other financial contracts with Barclays without knowing that Barclays and other banks on the USD-LIBOR-setting panel were manipulating LIBOR—a price component -- and, at times, colluding with other banks.

These entities with LIBOR-linked swaps and other investment contracts with Barclays will be notified if they are eligible to receive restitution from a settlement fund of $93.35 million. The balance of the settlement fund will be used to pay expenses of the investigation and for other uses consistent with state law.

Barclays is the first of several USD-LIBOR-setting panel banks under investigation by the State Attorneys General to resolve the claims against it, and Barclays has cooperated with the investigation from the outset. The Attorney General’s Office benefits from the information and evidence provided by corporations that choose to cooperate with the Attorney General’s investigations. Such cooperation can facilitate civil enforcement efforts, including restitution for victims of the offense.

Other states joining New York in the Barclays settlement include: Alabama, Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin & Wyoming. The investigation into the conduct of several other USD LIBOR-setting panel banks is ongoing.

The New York Attorney General’s investigation into LIBOR manipulation is led by Antitrust Deputy Bureau Chief Elinor R. Hoffmann, Assistant Attorney General Emily Granrud, Volunteer Assistant Attorney General Alex Cohen and Legal Assistant Arlene Leventhal of the Antitrust Bureau, and Senior Enforcement Counsel Roger Waldman and Assistant Attorney General Desiree Cummings of the Investor Protection Bureau.  Director of Economics, Guy Ben-Ishai, also provided valuable assistance. The Antitrust and Investor Protection Bureaus are part of the Economic Justice Division, which is led by Executive Deputy Attorney General for Economic Justice Manisha M. Sheth.

A copy of the Settlement Agreement can be found here.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 8, 2016

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A.G. SCHNEIDERMAN ANNOUNCES SETTLEMENT WITH SYNERGY FITNESS CLUBS FOR DECEPTIVE AND ILLEGAL PRACTICES; HIGHLIGHTS TIPS FOR CONSUMERS

Settlement Reached With Health Club With Six Locations In NYC & Nassau County

NEW YORK – Attorney General Eric T. Schneiderman today announced a settlement with nine Synergy Fitness health clubs located in New York City and Nassau County to resolve his investigation of their compliance with the state’s Health Club Services Law.  The office received numerous consumer complaints against Synergy alleging the health clubs improperly billed consumers for memberships, misrepresented and unfairly applied their cancellation policies, charged fees that were not part of the contract and were unresponsive to consumer complaints. The health clubs agreed to modify their contracts to comply with New York State law and to pay $60,000 in penalties and fines. 

 “Consumers join health clubs to get fit, not to spend energy avoiding improper fees or dealing with harassing collection calls concerning lawfully cancelled contracts,” said Attorney General Schneiderman.  “We won’t tolerate companies that employ opaque and illegal practices to line their pockets at the expense of New Yorkers.”

The complaints the office received from consumers about Synergy included allegations that:

• Synergy billed them without their consent or after the expiration or cancellation of their membership term. 
• Synergy’s collection agent harassed them seeking collection on contracts that were cancelled years earlier.   
• Synergy misrepresented their cancellation policies and failed to honor consumers’ valid cancellation requests. 
• Synergy added fees not provided for in their Membership Agreement.   

In addition, Synergy’s Membership Agreement contained provisions and terms that permitted automatic renewals without the consent of the consumer and failed to use the language mandated by statute for notice of cancellation without penalty in violation of the Health Club law.  Synergy also failed to post notices informing customers whether the facility filed a bond with the Secretary of State and how the consumer may obtain proof of the club’s compliance with the law. 

Three of the settling health clubs are no longer in operation.  The six in operation are:

• Synergy Fitness Astoria, Inc., 23-35 Broadway, Astoria, NY 11106
• 1781 Fitness Corp., 1781 Second Avenue, New York, NY 10128
• Pekic Fitness, Inc., 184 Lexington Avenue, New York, NY 10016
• Garden City Fitness Corp., 190 Broadway, Garden City, NY 11040
• Farm Fitness, Inc., 410 Conklin Street, Farmingdale, NY 11735
• ABDO Fitness Corp., 244 East 14^thStreet, New York, NY 10003

Under the terms of the settlement, in addition to complying with the terms of the Health Club law, the Synergy Clubs agreed to, among other things:

• Permit consumers to cancel their Membership by providing reasonable notice to Synergy according to the terms of the contract.  
• Verify all outstanding balances before they are sent for collection to a third party and transmitting proof of any outstanding balances to the third party collection agency.
• Cease and desist from engaging in harassing debt collection practices or in any collection activity, including referring to a debt collector, for any services provided after a contract has been cancelled.
• Establish a review procedure to investigate complaints received from consumers.   

The clubs will also have to provide restitution to consumers who can demonstrate that since January 1 2014, they paid for health clubs services after cancelling their membership. Consumers who seek restitution should contact the club with which they contracted or file a complaint online with the Attorney General’s office or call 1-800-771-7755 by December 1, 2016.

The Attorney General previously reached settlements with nearly 100 health clubs requiring them to modify their contracts to comply with New York law.

Attorney General Schneiderman offered the following tips to consumers when considering a health or fitness club:

• Before enrolling, ask about fees and when they must be paid, hours of operation, variety and frequency of classes and ability to use multiple locations.
• Do not give in to high pressure sales tactics or feel obligated to sign a contract immediately.  Tell the health club representative you need time to think about joining the club and ask for free passes to determine if the club is right for you. Talk to other members.
• If a health club requires you to pay a down payment or pre-pay your dues, ask if it is bonded or has filed the proper financial security to protect you against losses of pre-paid membership dues.  A notice indicating whether it is bonded must be posted conspicuously at the club’s entrance.  (A health club is exempted from this requirement under certain limited circumstances.) To verify a club's compliance with this requirement, consumers can call (518) 474-4429, fax (518) 473-6648 or write to the New York State Department of State, Division of Licensing Services at 84 Holland Avenue, Albany, New York 12208.
• Look for health clubs that allow members to make monthly dues payments and permits cancellation for any valid reason
• Make sure you can afford the monthly payments.  Monthly gym fees add up and after any introductory periods are over, the price could jump higher than your budget can handle.
• Read the contract carefully and make sure that all verbal promises made by the salesperson are included.

This matter was handled by Assistant Attorney General Herbert Israel, Special Assistant Attorney General Stephen Mindell, Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, all of the Consumer Frauds and Protection Bureau, part of the Division of Economic Justice, headed by Executive Deputy Attorney General Manisha M. Sheth. 

La manipulación de las tasas de interés afectó al gobierno y entidades sin fines de lucro a través de Nueva York y en todo el país  

NUEVA YORK - El Fiscal General Eric T. Schneiderman anunció hoy un acuerdo de $100 millones de 44 estados con Barclays Bank PLC y Barclays Capital Inc. por conducta fraudulenta y contraria a la competencia que implica la manipulación del dólar de Estados Unidos (USD) LIBOR (la tasa interbancaria ofrecida en London) y otras tasas de interés de referencia. Las tasas de interés afectan a instrumentos financieros por valor de miles de millones de dólares y tienen un impacto generalizado en los mercados mundiales y los consumidores debido a que LIBOR puede determinar cuánto van a pagar en sus inversiones. Nueva York y Connecticut lideraron el grupo de trabajo de fiscales generales de estados en la investigación de Barclays.

"Tiene que haber una sola regla para todos, no importa cuán rico o poderoso sea, y eso incluye a los grandes bancos y otras instituciones financieras que incurran en fraude o dificulten el funcionamiento correcto de los mercados financieros", dijo el Fiscal General Schneiderman. "Como resultado de la mala conducta de Barclays, entidades gubernamentales y sin fines de lucro fueron defraudadas de los fondos que de otro modo podrían haber sido utilizados para beneficiar a la gente de Nueva York".

Durante el período en cuestión, un grupo de 16 bancos hizo representaciones a USD LIBOR que debían reflejar las tasas de los préstamos en el mercado interbancario. Una tasa LIBOR diaria se calculó promediando las medias de ocho presentaciones. La investigación encontró que, a veces, durante el período de crisis financiera, más o menos desde 2007 hasta 2009, los gestores de Barclays dijeron a peticionarios LIBOR  que bajaran sus ajustes LIBOR para evitar la apariencia de que Barclays estaba en dificultades financieras y necesitaba pagar más que algunos de sus competidores para tomar dinero prestado.

Los peticionarios LIBOR cumplieron con estas instrucciones y suprimieron sus presentaciones LIBOR. Además, de 2005 a 2007 y continuando al menos hasta 2009, agentes de Barclays a veces le solicitaron a peticionarios LIBOR de Barclays cambiar sus ajustes de LIBOR con el fin de beneficiar a las posiciones de los comerciantes, y los peticionarios a menudo complacían a estas las solicitudes, en lugar de establecer un LIBOR basado en los costos de endeudamiento de Barclays. Barclays también cryó que las comunicaciones LIBOR de otros bancos del mismo modo no reflejaban sus verdaderas tasas de los préstamos, y que, por tanto, la tasa LIBOR, publicada no reflejaba el costo de la obtención de fondos en el mercado, como se supone que debe hacer.

Las entidades gubernamentales y organizaciones sin fines de lucro en Nueva York y en todo los EE.UU., entre otros, fueron defraudados de millones de dólares cuando entraron en “swaps” y otros contratos financieros con Barclays sin saber que Barclays y otros bancos en el panel de configuración USD-LIBOR estaban manipulando el LIBOR -un componente de precio - y, a veces, en complicidad con otros bancos.

Estas entidades con intercambios de enlaces con LIBOR y otros contratos de inversión con Barclays serán notificadas si son elegibles para recibir la restitución de un fondo de liquidación de $93.35 millones. El saldo del fondo del acuerdo se utilizará para pagar los gastos de la investigación y para otros usos compatibles con la ley estatal.

Barclays es el primero de varios bancos de panel de ajustes USD-LIBOR  objeto de investigación por el Fiscal General del Estado para resolver las reclamaciones en contra del mismo, y Barclays ha cooperado con la investigación desde su inicio. La Fiscalía General se benefició de la información y las pruebas presentadas por las empresas que optan por cooperar con las investigaciones. Esta cooperación puede facilitar los esfuerzos de aplicación civil, incluida la restitución a las víctimas del delito.

Otros estados que se unen Nueva York en el acuerdo con Barclays incluyen: Alabama, Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, Distrito de Columbia, Florida, Georgia, Hawai, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, Nueva Hampshire, Nueva Jersey, Nuevo México, Carolina del Norte, Dakota del Norte, Ohio, Oregón, Pensilvania, Rhode Island, Carolina del Sur, Tennessee, Utah, Vermont, Virginia, Washington , West Virginia, Wisconsin & Wyoming. La investigación sobre la actuación de otros bancos en torno al panel de fijación de la tasa LIBOR USD sigue en curso.

La investigación del Fiscal General de Nueva York sobre la manipulación de la tasa LIBOR está dirigida por la Jefa Adjunta de la Oficina Antimonopolio Elinor R. Hoffmann, Fiscal Adjunta Emily Granrud, Fiscal Adjunto Voluntario Alex Cohen y Asistente Legal Arlene Leventhal de la Oficina de Defensa de la Competencia, y Asesor Principal de Aplicación Roger Waldman y Fiscal Adjunta Desiree Cummings, de la Oficina de Protección al Inversor. Director de Economía, Guy Ben-Ishai, también proporcionó una valiosa ayuda. Las Oficinas de Defensa de la Competencia y de la Protección de Inversionistas son parte de la División de Justicia Económica, el cual es dirigida por la Fiscal General Ejecutiva Adjunta para la Justicia Económica Manisha M. Sheth.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 9, 2016

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A.G. SCHNEIDERMAN ANNOUNCES TRIAL CONVICTION OF PHARMACIST WHO ILLEGALLY SOLD BLACK MARKET HIV MEDICATIONS 

Jury Finds Pharmacist Ira Gross Guilty Of Distributing Diverted Prescription Medications And Paying Millions In Bribe Money In Massive Black Market HIV Drug Scam; Gross Faces Prison Sentence Of Up To 25 Years

Schneiderman: The Perpetrators Of This Complex Scheme Not Only Cheated The State Medicaid Program Out Of Millions Of Dollars, But Preyed On Some Of New York’s Most Vulnerable Patients Just To Make A Quick Buck

RIVERHEAD—Attorney General Eric T. Schneiderman today announced the trial conviction of pharmacist Ira Gross, 63, and his shell company, Chaparral Services, LTD.  Both defendants were found guilty yesterday in Suffolk County Supreme Court after a four week jury trial before Hon. Richard Ambro.  Gross was accused of distributing HIV medication illegally obtained from the black market to patients, and faces a state prison sentence of up to eight and one-third to twenty-five years.  Medicaid and others were illegally billed $274 million through this scheme, with Gross personally receiving a profit of $25 million. The convictions were part of the Attorney General’s Medicaid Fraud Control Unit longstanding “Operation Black Market Meds” investigations.

“The perpetrators of this complex scheme not only cheated the state Medicaid program out of millions of dollars, but preyed on some of New York’s most vulnerable patients just to make a quick buck” said Attorney General Schneiderman. “These convictions should send a clear message that my office will not tolerate these types of abhorrent schemes. If you seek to line your pockets at the expense of the health and well-being of New Yorkers, you will be punished.”

In April of 2012, the Attorney General’s Medicaid Fraud Control Unit arrested Gross, the mastermind of the scheme, and three others for distributing HIV prescription medication obtained on the black market through MOMS pharmacy, a high-volume, online pharmacy located in Melville with satellite offices in Manhattan, Brooklyn and other states. MOMS, and its parent company Allion Healthcare, then dispensed the illegally obtained medication to Medicaid recipients, and billed the New York State Medicaid program for the tainted medication.  Dispensing diverted medications endangers the lives of patients by exposing them to drugs of unknown origin and potency and, in some cases, drugs which were mislabeled or potentially expired. The Attorney General also froze millions of dollars from defendants and their cohorts in an asset forfeiture action.

Ira Gross was the architect and brains behind this scheme and served as the broker between the buyer and seller of the diverted medications, taking a massive cut of the profits.  As a licensed pharmacist, Gross understood the regulations of pharmaceutical distribution and knew how to evade them.

In these types of black market schemes, medications are illegally obtained from a variety of sources, such as “buying back” drugs from patients, and are then often rebottled using fake labels and serial numbers, have broken seals, or contain different medications than what’s indicated on the labels.  As a result, the real patients are exposed to potentially adverse drug interactions, overdoses or a decline in their health from not receiving wholesome forms of medications they were prescribed.

Gross, his spouse Lois Gross of Babylon, and their adult children Dakota Gross and Chelsea Gross remain as civil defendants in the Attorney General’s forfeiture action, seeking return of the proceeds and substituted proceeds of the criminal scheme that are held in their names.  That action continues.

Glenn Schabel, the supervising pharmacist and compliance officer for MOMS pharmacy, who pled guilty in March, 2016, admitted that over a four year period he accepted over five million dollars in bribes. 

Stephen Manuel Costa, a Florida resident and another co-defendant who pled guilty on an earlier date, incorporated four separate entities as “wholesale” distributors in order to disguise the sale of the diverted medications to MOMS.  Costa procured millions of dollars of black market HIV medications, and sold them to MOMS through his four shell companies, and MOMS in turn dispensed them to its patients, many of whom were Medicaid recipients.   The prescription medications were obtained from the street using various illegal means and in batches which potentially included pills which had been previously dispensed to individuals, stolen from manufacturers, or had expired. 

A fourth defendant, Harry Abolafia, who also pled guilty on an earlier date, created false invoices for Costa’s companies—SMC Distributors, Fidelity Wholesale, Optimus Wholesale, and Nuline Pharmaceuticals—in order to make the transactions appear to be legitimate.  In total, on behalf of MOMS Pharmacy, Schabel purchased $274 million worth of black market HIV medications from Costa through Ira Gross.  For brokering the deal, Ira Gross personally amassed over $25 million in illegal profits.  For their efforts, Schabel and Abolafia were paid a smaller portion of the profit: over $5 million, and over $1 million, respectively.

In court today, a Suffolk County jury found Gross guilty of one count of Grand Larceny in the First Degree, a class B felony, one count of Criminal Diversion of Prescription Medications and Prescriptions in the First Degree, a class C felony, one count of Conspiracy in the Fourth Degree, a class E felony, one count of Attempted Grand Larceny in the First Degree, a class C felony, one count of Attempted Criminal Diversion of Prescription Medications and Prescriptions in the First Degree, a class D felony, three counts of Money Laundering in the First Degree, a class B felony, one count of Money Laundering in the Second Degree, a class C felony, and one count of Commercial Bribing in the First Degree, a class E felony.   Gross faces sentencing on September 8^th. Chaparral Services, Ltd., the shell corporation Gross used to conceal and distribute his criminal proceeds, was found guilty of three counts of Money Laundering in the First Degree, a class B felony, one count of Money Laundering in the Second Degree, a class C felony, and one count of Commercial Bribing in the First Degree, a class E felony. 

The Attorney General thanks the New York State Office of the Medicaid Inspector General,  particularly its staff of pharmacists and other specialists, as well as the New York City Office of Special Narcotics Prosecutor.  The Attorney General additionally thanks investigators from United States Drug Enforcement Administration, the United States Food and Drug Administration, the United States Department of Health and Human Services, Office of Inspector General, and the Federal Bureau of Investigation as well as investigators from the Florida Department of Law Enforcement and Assistant United States Attorneys from the United States Attorneys Offices for the Southern District of New York and the Southern District of Florida. All, individually and collectively, provided valuable information and assistance during the investigation.

Wiretap operations were supported by the Attorney General’s Organized Crime Task Force led by Deputy Attorney General Peri Kadanoff.

The criminal case was prosecuted by Medicaid Fraud Control Unit Special Assistant Attorneys General Adam Shlahet and Imran Ahmed, with trial support by Principal Auditor Investigator Patricia Iemma and with the assistance of MFCU’s Chief of Criminal Investigations-Downstate Thomas O’Hanlon and NYC Regional Director Christopher M. Shaw; the forfeiture action was handled by Special Assistant Attorneys General Andrew Gropper and Diana Elkind. The investigation was conducted by MFCU Supervising Investigator Victor Maldonado, Lawrence Riccio and Special Investigator Denitor Guerra and Principal Special Auditor Investigator Cristina Marin and NYC Deputy Chief Auditor Jonathan Romano.  The Deputy Chief Investigator for MFCU is Kenneth Morgan and the Regional Chief Auditor is Thomasina Smith.  The Medicaid Fraud Control Unit is led by 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.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 9, 2016

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Updated: A.G. Schneiderman And I.G. Leahy Scott Announce Guilty Plea Of DEC Employee For Illegally Diverting Money From Contractor 

Defendant Plead Guilty To Stealing More Than $60K Through Two Schemes Involving Work At New York State DEC; Will Pay $67K In Restitution

ALBANY—Attorney General Eric T. Schneiderman and New York State Inspector General Catherine Leahy Scott today announced the guilty plea of David Comenale, a DEC employee, for diverting money from companies doing business with the state. At the time of the alleged crimes, Comenale was employed by the NYS Department of Environmental Conservation as a project manager, primarily responsible for asbestos abatement projects.

Comenale, 50, of New York Mills, New York, was previously charged with two counts of Grand Larceny in the Third Degree, a class D felony, in Oneida County Court. 

“When government employee exploits their position by taking advantage of a company doing business with the state, it is a flagrant abuse of power and contributes to an atmosphere of mistrust,” said Attorney General Schneiderman. “We remain committed to rooting out government corruption and holding those responsible accountable.”

“This defendant used his State job to facilitate an elaborate series of financial frauds to enrich himself,” said Inspector General Leahy Scott. “I will continue using the resources of my office to pursue anyone who uses their public position for criminal self-entitlement.”

“We are glad to be able to bring this defendant to justice. He was involved in an intricate financial scam defrauding Adirondack Bank, a fraud brought to light when a former bank employee was caught creating false loans at the bank,” said District Attorney McNamara.

Comenale admitted to stealing over $35,000.00 in 2013 from Midlantic Environmental Inc., a New Hartford asbestos contractor doing business with DEC. According to the Attorney General’s Office indictment, Comenale convinced Midlantic to advance $62,500 to a company controlled by Comenale for a DEC project. He then allegedly stole $35,000, in part by diverting money to companies he controlled.

Comenale was also charged with stealing approximately $26,000 in a 2014 fraudulent loan scheme involving Adirondack Bank and a company with DEC contracts.

Comenale will be back in court November 28 for sentencing.

The case is being handled by Assistant Attorney General Christopher Baynes of the Public Integrity Bureau. The Public Integrity Bureau is led by Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

The investigation was conducted by the Office of the New York State Inspector General with the assistance of Investigator David Buske and Deputy Chief Investigator Antoine J. Karam and Legal Analyst Sara Pogorzelski. Forensic auditing analysis was provided by Associate Forensic Auditor Jason W. Blair from the Forensic Audit Section, led by Chief Auditor Edward J. Keegan, Jr.  The Investigations Division is led by Chief Investigator Dominick Zarrella.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 10, 2016

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A.G. SCHNEIDERMAN ANNOUNCES AGREEMENT BARRING TANNING SALON CHAIN FROM MAKING MISLEADING HEALTH CLAIMS 

Total Tan, Inc. Failed to Comply with NYS Tanning Regulations; Company is Prohibited from Making Health Representations and will be Subject to Fines for Future Violations or Health Misrepresentations at any of their 25 Upstate NY Locations 

Schneiderman: We Will Not Tolerate Consumers Being Led to Believe there is Anything Safe about Dangerous Indoor UV Tanning Devices 

NEW YORK - Attorney General Eric T. Schneiderman today announced that Justice Alice Schlesinger of the New York Supreme Court approved a settlement with Total Tan, Inc., a New York Company that provides indoor tanning services at 25 locations across upstate New York and three locations in Pennsylvania.  The agreement resolves a lawsuit filed by the Attorney General in April 2015.  It prohibits Total Tan from making health misrepresentations and from failing to comply with New York State tanning regulations.  Total Tan has agreed to pay $5,000 per day for any future health misrepresentations and $500 for each future violation of New York tanning laws.

“Today’s agreement is part of our continuing efforts to protect consumers from the documented skin cancer risks of indoor tanning,” said Attorney General Schneiderman.  “I am especially concerned with rising cancer rates associated with indoor tanning, particularly for young people.  Advertising and marketing cannot be used as a tool to confuse and endanger New York consumers.”

Indoor tanning increases the risk of melanoma, the deadliest form of skin cancer – which is responsible for 9,000 deaths in the United States each year.  Indoor tanning also increases the risk of other skin cancers, such as basal cell carcinoma and squamous cell carcinoma.  While usually not fatal, these skin cancers can cause noticeable disfigurement.  In addition to increasing the risk of skin cancer, UV exposure can also harm the immune system and cause premature skin aging.  New York State tanning law currently prohibits tanning for children under 17 and requires parental consent for children between the ages of 17 and 18.  Additionally, New York law requires that current tanning hazards information sheets and acknowledgement forms be distributed to tanning patrons and that free protective eyewear be made available to tanning patrons.  The Attorney General’s office has released a brochure on indoor tanning safety that provides important information on the risks and harms associated with UV tanning.

Despite the clear dangers of tanning, Total Tan’s website featured a number of claims that downplayed the inherent risks of indoor tanning, including representations that “the risks associated with UV light have been overstated and the benefits ignored” and that indoor tanning “is the smartest way to maximize the potential benefits of sun exposure while minimizing the potential risks.”  Total Tan also touted the purported health benefits of indoor tanning, including that indoor tanning is a good source of vitamin D and helps treat and prevent an array of diseases, including heart disease, asthma, cancer and Alzheimer’s disease.  These claims, which were not supported, led consumers to believe that indoor tanning is not only risk-free, but also contributes to improved health.  Indoor tanning is neither a safe nor a desirable way to obtain vitamin D or any other health benefits.  Vitamin D can safely be obtained through diet and supplements, so obtaining vitamin D through indoor tanning poses unnecessary risks.

As part of the Attorney General’s inquiry, investigators visited a number of Total Tan salons and were informed by Total Tan employees at different locations that indoor tanning would only damage the skin if it were “excessive” and that indoor tanning would not cause skin damage because “only burning is bad for your skin.”  The investigators also found that Total Tan violated New York State tanning laws by failing to provide protective eyewear at no additional cost.

The action announced today is one of a number of steps taken by the Attorney General to help educate the public and raise awareness of the harms associated with indoor tanning.  In 2013, the Attorney General launched an investigation into suspected misleading advertising in the indoor tanning salon industry.  The Attorney General reached settlements in March 2014 with HT Franchising Management LLC, the franchisor of the Hollywood Tans salons, and Hollywood Tans NYC, a Manhattan-based franchise of the national chain, requiring them to stop making health-related representations to promote tanning services.  The Attorney General also reached a settlement in November 2015 with Planet Fitness, which offers UV tanning at certain gyms, to stop offering “unlimited” tanning, to provide adequate training to employees who oversee indoor tanning services, and to stop making health-related claims to promote red-lamp devices.  Planet Fitness also paid costs and penalties.  In April 2016, the attorney General reached a settlement with Salon Management USA, LLC and BBT Retail, Inc., which license the use of the “Beach Bum Tanning” trademark under which Beach Bum Tanning salons operate.   That agreement prohibits the companies from making health claims, offering “unlimited” tanning packages, and targeting high school students. 

The Attorney General also has a  lawsuit currently pending against Portofino Spas, LLC (“Portofino”), alleging that the franchise engaged in false advertising by denying or minimizing scientific evidence linking tanning to an increased cancer risk; promoting indoor tanning as a safe way to reap the benefits of vitamin D and other purported health benefits; and asserting the safety of indoor tanning compared to tanning outdoors.  In addition, the Attorney General alleged that Portofino violated certain New York indoor tanning laws by failing to provide the required notification of tanning health hazards and consent forms.  

The Total Tan litigation was handled by Assistant Attorney General Kate Matuschak and Bureau Chief Jane M. Azia of the Consumer Frauds and Protection Bureau, Assistant Attorney General Laura Mirman-Heslin and Environmental Scientist Charles Silver of the Environmental Protection Bureau, and Bureau Chief Lisa Landau of the Health Care Bureau.  The Consumer Frauds and Protection Bureau is in the Division of Economic Justice, led by Executive Deputy Attorney General Manisha M. Sheth.  The Health Care and Environmental Protection Bureaus are in the Division of Social Justice, led by Executive Deputy Attorney General Alvin Bragg.

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

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 10, 2016

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A.G. SCHNEIDERMAN AND PINE BARRENS COMMISSION ANNOUNCE SETTLEMENT WITH SUFFOLK COUNTY GOLF COURSE FOR UNAUTHORIZED CONSTRUCTION IN PINE BARRENS 

Owners Of Hampton Hills Golf And Country Club Conducted Clearing, Excavation, and Construction In Protected Area Of Pine Barrens Without First Obtaining Required Permission 

Hampton Hills Associates Required To Revegetate Impacted Area, Pay Penalty of $75,000 

Schneiderman: Long Island’s Pine Barrens Are One Of New York’s Crown Natural Resource Jewels

NEW YORK – Attorney General Eric T. Schneiderman and John Pavacic, Executive Director of the Central Pine Barrens Joint Planning and Policy Commission, announced today a settlement with owners and operators of the Hampton Hills Golf and Country Club over alleged violations of state law protecting the Long Island Pine Barrens.  The Attorney General and Commission had charged that owners and operators of the Club – Hampton Hills Associates – violated New York’s Long Island Pine Barrens Protection Act when they engaged in development prohibited within the Pine Barren’s “core” preservation area without first obtaining a waiver from the Commission. 

In December 2015, Attorney General Schneiderman, representing the Commission, brought suit against Hampton Hills Associates for violating of the Pine Barrens Act.  The settlement, which was filed in the Suffolk County Supreme Court, requires Hampton Hill Associates to develop and implement a plan to revegetate the impacted area, and pay a penalty to the Commission of $75,000.

“Long Island’s Pine Barrens are one of New York’s crown natural resource jewels – home to thousands of plant and animal species, and essential to ensuring clean, healthy drinking water for millions of Long Island residents,” Attorney General Schneiderman said.  “The owners of the Hamptons Hills Golf Course chose to ignore the law protecting the Pine Barrens, and this settlement holds them accountable.  My office will continue to join with the Commission in enforcing the law’s requirement in order to protect Long Island’s Pine Barrens for future generations.”

Richard Amper, Executive director, Long Island Pine Barrens Society, said, “This settlement sends a clear message that neither the Attorney General’s office nor the Pine Barrens Commission will tolerate a ‘build first, apologize later’ approach to development in the Core Preservation Area of the Pine Barrens.  Development in the core without a waiver is not a smart business decision. Protection of the Pine Barrens is the law.”

Jay Schneiderman, Southampton Town Supervisor and Commission member, said, "I commend all parties for reaching a settlement that will re-vegetate the disturbed area and by paying a significant financial penalty, will deter anyone in the future from degrading this important natural resource.”

John Pavacic, Executive Director of the Commission, said, "We are very grateful for the efforts of Attorney General Schneiderman in vigorously enforcing the Pine Barrens Act and pursuing a swift and sure resolution that continues to protect the considerable natural resources of the Central Pine Barrens.  We are confident that the penalty in this case will serve as a significant deterrent in the future for those who may contemplate violating the Act and potentially causing harm to the Pine Barrens ecosystem."

The Long Island Central Pine Barrens, so-named due to its abundance of pine trees and the infertility of its sandy soil, is a more than 100,000 acre natural area located in Suffolk County.  According to the Long Island Pine Barrens Society, the area boasts New York’s greatest diversity of plant and animal species, many of which are endangered or threatened.   The Pine Barrens also overlies and recharges a portion of Long Island’s federally-designated sole source aquifer, helping to protect and purify Long Island's drinking water supply. 

In 1993, the New York adopted the Long Island Pine Barrens Protection Act, landmark legislation designed to safeguard the Pine Barrens’ ecological, recreational, and economic values.  The state law established the Central Pine Barrens Joint Planning and Policy Commission to create and oversee a comprehensive land use plan for the Pine Barrens.  Land use regulations adopted and enforced by the Commission designate 55,000 acres of the Pine Barrens as “Core Preservation Area.”  Any entity wishing to engage in development activities – defined by the law and including clearing, excavation, and construction – in the Core Preservation Area must apply for and receive an “extraordinary hardship waiver” from the Commission before undertaking such activities.  

The Hampton Hills Golf and Country Club is located in the Core Preservation Area of the Pine Barrens.  On several occasions between January and May 2015, Commission staff observed clearing of vegetation, including the removal of trees, excavation, and construction of a golf care storage building at the club.  Commission staff informed Hampton Hills Associates that, under the Pine Barrens Act, such development activities were prohibited in the Core Preservation Area without the necessary waiver from the Commission.  Hampton Hills Associates did not apply for a hardship waiver before commencing the development, but submitted a waiver application to the Commission in June 2015 – after the building was completed.  

The Attorney General thanks the following Commission staff for their assistance in the case: Julie Hargrave, Principal Environmental Planner; Lawrence Hynes, Compliance and Enforcement Coordinator, and John Pavacic, Executive Director.

This case was handled by Assistant Attorney Yueh-ru Chu and General Litigation Section Chief Norman Spiegel.  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.   

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 12, 2016

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A.G. SCHNEIDERMAN ANNOUNCES INDICTMENT OF SUFFOLK COUNTY MEDICAL EQUIPMENT STORE FOR ALLEGEDLY DEFRAUDING MEDICAID OF $2 MILLION

Company And Its Majority Shareholder Allegedly Stole More Than $2M From Medicaid Using Customers’ Medicaid Identification Numbers

SUFFOLK COUNTY—Attorney General Eric T. Schneiderman announced today the arrest and arraignment of Bennett Surgical Supply, Inc. and its majority shareholder, Katia Donnelly, on a fifty-count indictment for allegedly submitting thousands of false claims to Medicaid.  As a result, Medicaid paid more than two million dollars over six and a half years, according to the charges.  Donnelly is alleged to have used the Medicaid identification numbers of her customers to fraudulently bill for items she never purchased or delivered to them.  In addition to being charged with Grand Larceny in the First Degree, the defendants are also charged with seventeen counts of Offering a False Instrument for Filing in the First Degree and sixteen counts each of Criminal Possession of a Forged Instrument in the Second Degree and Falsifying Business Records in the First Degree. If convicted, Donnelly faces up to 8 1/3 to 25 Years in State Prison.

The Attorney General's investigation revealed that during the period from January 1, 2006 through June 30, 2012, Katia Donnelly was the operator and 51% owner of Bennett Surgical Supply, Inc., a now defunct durable medical equipment vendor located at 382 New York Avenue, Huntington, New York. During that period, Donnelly allegedly falsified thousands of claims to Medicaid causing the program to pay Bennett more than two million dollars for dispensing durable medical equipment and supplies that it had never possessed, that were not medically necessary, that its customers’ medical professionals never ordered, and that its customers in fact never received.  The vast majority of those alleged bogus claims were for specialty wound dressings, ostomy supplies, custom orthotics and even high priced hospital beds.  In fact, Bennett was the highest biller statewide for at least thirteen DME procedure codes, including eight wound dressing codes, three ostomy supply codes, one bariatric hospital bed code and one pressure reducing mattress code.

“Stealing from Medicaid drains resources from a program that is designed to help some of our most vulnerable members of society,” said Attorney General Schneiderman. “Our message is simple: no matter how elaborate or complex the scheme, we will root out Medicaid fraud and punish those responsible.” 

Donnelly also allegedly falsified hundreds of records contained in Bennett’s customer files, including Official New York State Prescriptions, to make it appear that physicians and a physician assistant had ordered wound dressings and other items for their patients.  In reality, the prescriptions were forged and the doctors had never heard of the patients for whom the prescriptions were written.  In addition, the investigation uncovered that after Bennett received legitimate physician orders, they were subsequently altered by the addition of items that were never ordered by the physicians or needed by or delivered to their patients.

It is also charged that Donnelly also falsified Bennett’s books and records to make it appear that she purchased and paid for inventory that she billed Medicaid for dispensing to her customers.  A review of her suppliers’ records and Bennett’s bank account records revealed that she never purchased the two million dollars’ worth of inventory she claimed to have dispensed to Medicaid recipients and that the checks that she recorded as paying suppliers for that inventory were, in fact, used to pay her personal expenses such as a time share in the Dominican Republic which she visited frequently, a car loan and numerous credit cards used for travel and on-line shopping, among other things.

The arraignment on the indictment was conducted by Supreme Court Justice John B. Collins.  Donnelly is being held on $500,000 cash bail with a $2 million bond alternative.

The Attorney General thanks the New York State Office of the Medicaid Inspector General for referring this matter to his Office for investigation and prosecution.

The charges against the defendants are accusations and the defendants are presumed innocent unless and until proven guilty.

The investigation was conducted by Investigator Stephen Clarke of the Attorney General’s Medicaid Fraud Control Unit (MFCU) Long Island Regional Office, with the assistance of Supervising Investigator Greg Muroff.  The Deputy Chief Investigator-Downstate for MFCU is Kenneth Morgan.   The audit investigation was conducted by Principal Auditor Investigator Mary Gail Kowtna.  Kathleen Yoos is the Regional Chief Auditor.

This case was handled by Special Assistant Attorney General Veronica Bindrim-MacDevitt. Jane Zwirn-Turkin is the Regional Director of the MFCU Hauppauge Regional Office. The Medicaid Fraud Control Unit is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney.  The Criminal Justice Division is led by Kelly Donovan.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 15, 2016

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A.G. SCHNEIDERMAN AND COMPTROLLER DiNAPOLI ANNOUNCE ARREST OF ARIZONA MAN FOR THEFT OF OVER $100,000 IN NYS PENSION BENEFITS

John H. Eydeler, III Allegedly Stole Pension Benefits Intended For His Deceased Mother

ALBANY – Attorney General Eric T. Schneiderman and New York State Comptroller Thomas DiNapoli today announced the unsealing of an indictment charging John H. Eydeler III, 66, a resident of Glendale, Arizona, with Grand Larceny in the Second Degree, a Class C felony. Eydeler is alleged to have stolen over $100,000 in pension payments from the New York State and Local Employees Retirement System intended for his deceased mother, Dorothy Eydeler, a retired nurse who died in October of 1998.

“When individuals illegally pocket pension funds that were intended for retirees, it harms all New Yorkers who count on their pension for a secure retirement,” said Attorney General Schneiderman. “Comptroller DiNapoli and I will continue our partnership to protect the state pension system from theft and abuse.”

“After his mother passed away, Mr. Eydeler hid her death and stole more than $100,000 in pension payments,” said State Comptroller Thomas P. DiNapoli. “Through our Operation Integrity partnership with Attorney General Schneiderman, our investigation expanded to three states and led to Mr. Eydeler's arrest in Arizona.”

According to investigators, Eydeler concealed his mother’s death in 1998 from the New York State and Local Employees Retirement System. As a result, between October 1998 and January 2010, over $100,000 in pension benefits were deposited into a bank account in the name of Eydeler’s deceased mother. Eydeler then allegedly diverted these monies to himself by claiming to have power of attorney for his mother and writing checks to himself every month for over a decade.

Eydeler allegedly altered his scheme to conceal the theft, and used the monies to prop up a small automotive repair business that he owned in Glendale, Arizona.

Eydeler was arraigned today on the indictment by the Honorable Stephen W. Herrick in Albany Supreme Court, and entered a plea of not guilty. The defendant was released on recognizance. The next court date is scheduled for August 30, 2016. If convicted, Eydeler faces up to five to fifteen years in state prison.

This case is the latest joint investigation under the Operation Integrity partnership of the Attorney General and Comptroller, which to date has resulted in dozens of convictions and more than $11 million in restitution. 

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

The Attorney General’s investigation was conducted by Investigator Mitchell Paurowski and Deputy Chief Antoine Karam. The Investigations Bureau is led by Chief Dominick Zarrella. 

The Comptroller’s investigation was conducted by the Comptroller’s Division of Investigations, working with the New York State and Local Retirement System.

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

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 15, 2016

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A.G. SCHNEIDERMAN ANNOUNCES GUILTY PLEA OF THE LEADER OF A BROOKLYN BASED GUN TRAFFICKING RING

Dubbed “Operation Midnight Run,” Joint AG-NYPD Investigation Leads To A Top Count Plea For Lead Defendant Natasha Harris; Harris Will Be Sentenced To 15 Years In Prison

Schneiderman: If You Bring Deadly Illegal Weapons Into Our State, We Will Catch You And Prosecute To The Fullest Extent Of The Law

NEW YORK – Attorney General Eric T. Schneiderman announced today the top count plea of Natasha Harris for her role as the leader of a high-volume gun trafficking ring. Harris will be sentenced to 15 years in prison. Harris pled guilty to seventeen counts including multiple counts of Criminal Sale of a Firearm in the First Degree and Criminal Possession of a Weapon in the First Degree. 

“Natasha Harris led a dangerous gun trafficking ring that used Chinatown buses as a method to bring guns into our communities and fuel the epidemic of gun violence,” Attorney General Schneiderman said. “Today’s guilty plea sends a clear message– if you bring deadly illegal weapons into our state, we will catch you and prosecute to the fullest extent of the law.”

The investigation, led by the Attorney General’s Organized Crime Task Force and the NYPD’s Firearms Investigation Unit, began in the spring of 2014. The investigation involved a high-volume gun trafficking ring that allegedly funneled firearms from Florida to New York City, often beneath Chinatown buses. According to the 196-count felony indictment the investigative team seized more than 70 illegal guns bought at gun shows in Florida, many of which were then resold in New York for up to four times their original price.

Defendant Octavio Batista was previously sentenced to 12 years in prison. Defendant Michele Cantres was also sentenced to seven years in prison and five years post release supervision.

 The case is being prosecuted by OCTF Assistant Deputy Attorney General – Downstate Deputy Chief Diego Hernandez. Deputy Attorney General Peri Alyse Kadanoff runs the Attorney General’s Organized Crime Task Force. The Executive Deputy Attorney General for Criminal Justice is Kelly Donovan.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 15, 2016

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STATEMENT FROM A.G. SCHNEIDERMAN DEFENDING EPA’S REGULATIONS TO CUT METHANE EMISSIONS FROM OIL AND GAS INDUSTRY

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement opposing a challenge to U.S. Environmental Protection Agency (EPA)’s regulations to reduce emissions of the powerful greenhouse gas methane from new and modified sources in the oil and gas industry. The Attorney General is part of a 9-state coalition that today filed a motion to intervene in the U.S. Court of Appeals for the District of Columbia.

The oil and gas industry is the country’s largest source of emissions of methane, an extremely potent greenhouse gas.  Controlling these emissions is essential to combatting climate change. The regulations adopted by EPA in May reflect the ready-availability of proven, effective, and affordable measures for reducing methane emissions from new and modified sources in the oil and gas industry. They also fulfill EPA’s legal responsibility under the Clean Air Act to limit the industry’s methane emissions from these sources.

We can no longer afford to disregard the overwhelming evidence of climate change, and the threat that it poses to our families, communities, and economy.  My office is proud to stand with our fellow coalition members in aggressively defending these important controls on climate change pollution.

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, transmission, and distribution.  The coalition charged that because EPA 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 violated the Clean Air Act by failing 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. 

EPA finalized regulations on methane emissions from new and modified equipment in May 2016.

The coalition of states that Attorney General Schneiderman is joining today in defense of these regulations includes California, Connecticut, Illinois, Massachusetts, New Mexico, New York, Oregon, Rhode Island, and Vermont, and the City of Chicago. 

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 16, 2016

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A.G. SCHNEIDERMAN SECURES RESTRAINING ORDER AND ANNOUNCES LAWSUIT AGAINST NEW YORK BASED COMPANY FOR ALLEGEDLY SELLING K2 ONLINE

Court Issues Temporary Restraining Order Prohibiting Sales By New York Based LegalHerbalBud.com, Online Store That Allegedly Sold And Promoted Mislabeled Synthetic Marijuana To Retail And Wholesale Buyers

A.G.'s Undercover Agents Purchased Designer Drugs From An Online Seller Of Synthetic Marijuana For Delivery To East Harlem, According To Lawsuit

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office has filed a lawsuit against the online company Legalherbalbud.com, operated by Niaz Khan, Phillip Pulcca, Aida Guach and Lisanka Sanchez for allegedly selling hallucinogenic drugs and street drug alternatives known as “synthetic marijuana” or K2. Synthetic marijuana, a subcategory of designer drugs, causes auditory and visual hallucinations, sedation, euphoria, and other street drug effects. It can also lead to addiction, psychosis, acute arrhythmia, asphyxiation and in some cases, even death. 

“Illegal designer drugs like K2 are wreaking havoc on our streets and damaging quality of life in communities across New York State,” Attorney General Schneiderman said. “The uptick in synthetic marijuana consumption and dramatic rise in Emergency Room visits last month in New York City is a stark reminder that the scourge of K2 continues to be a serious problem. My office will continue to aggressively investigate and prosecute businesses and individuals who sell designer drugs.” 

“The availability of untested synthetic drugs has become an undeniable safety concern for the residents of New York City,” said New York City Council Speaker Melissa Mark-Viverito. “The City Council has passed legislation aimed at getting K2 and similar drugs off local shelves, but the rise in online vendors has created a renewed need for city and state officials to join together in targeting those responsible for peddling such dangerous drugs to our citizens. I commend Attorney General Schneiderman for leading the effort to put an end to this widespread problem, and look forward to continued work on addressing this issue.”

State Senator Jeff Klein (D-Bronx) said, “Synthetic marijuana poses an incredible health risk to all New Yorkers as our state has struggled to keep ahead of the chemists' curve. Last year, I released a report detailing the dangers that online drug dealers present to our communities, as they continue to pump K2 into our neighborhoods. We must do all that we can to keep this poison off our streets and out of our neighborhoods, whether that is to pursue legal action, or adopt my analog legislation. I want to thank Attorney General Schneiderman for taking these steps toward shutting down this designer drug-dealer. I remain committed to working to pass my bill in both houses of the legislature, to ensure that our law enforcement receives the support it needs to protect our residents.”

As alleged in the petition, filed in Supreme Court in New York County, an undercover investigation revealed that Legalherbalbud.com was violating state labeling laws by selling and promoting dangerous and illegal drugs in New York by using its online store to sell synthetic marijuana to consumers in New York.

The Attorney General’s investigation found that Legalherbalbud.com branded dangerous products with names and images to attract adolescents such as “Scooby Snax,” “Green Giant,” and “The Incredible Hulk.” It also promoted and marketed these products as “legal highs” on its Facebook page. Legalherbalbud.com advertised its brands of synthetic marijuana as “herbal incense,” “potpourri,” and “not for human consumption,” while simultaneously advertising its products as legal intoxicants fit for human consumption. As detailed in the lawsuit, most products had practically no label information and lacked comprehensive ingredient lists, warnings, and directions for use, as required by law. Without ingredient disclosure, adequate usage or warning information, the lawsuit alleges that the labels are deceptive and that the drugs are dangerous for consumers. The Attorney General’s office purchased 123 packets misbranded and mislabeled packets of synthetic marijuana from the seller since January.

The lawsuit seeks an accounting of all commodities sold or offered for sale by Legalherbalbud.com, including the name of each product, the manufacturer and distributor of each product, a description of each product, the wholesale and retail prices of each product, the number of units sold, and a listing of the customers it sold its products to. Federal and state laws and regulations require that all consumer commodities, at a minimum, be labeled to describe net contents, identity of the product, and the name and place of business of the product’s manufacturer, packer, and distributor.  Drugs of any kind must be further labeled with particularized directions for use and comprehensive, intelligible warning information.

In response to the Attorney General's lawsuit, a New York County Supreme judge issued a temporary restraining order, shutting down sales until the court can make a further determination.

Synthetic marijuana has psychoactive effects similar to those of more commonly known street drugs, but is typically packaged with innocuous labels and graphics to give the misleading impression that they are harmless. Synthetic marijuana has contributed to a public health crisis in New York State and across the nation, and attempts to stop their spread by outlawing specific chemicals have been of limited success.

This lawsuit is part of an ongoing effort by Attorney General Schneiderman’s office to stop the sale of designer drugs, including synthetic marijuana. This initiative, which began in 2012, has successfully removed street drug alternatives and designer drugs from the shelves of numerous head shops and online sellers across New York State. The Attorney General’s office has filed dozens of lawsuits against head shops and online merchants who sold designer drugs, which resulted in judges across the state issuing permanent injunctions barring 23 stores from selling these products. These successful court rulings came after the office proved that the products were illegal because their contents were not properly labeled, thus violating state and federal laws. 

Between January and July of this year, senior investigators from the Attorney General’s Office made multiple buys from Legalherbalbud.com.  Operating exclusively by way of the internet, the agents purchased a variety of well-known synthetic marijuana brands including: AK47; Black Lion, California Chronic; Caution, Diablo; Green Giant; iBlown; Joker; Kisha Cole; Psycho; Red Eye Jack; Red Giant; Scooby Snax; Smacked, and the Incredible Hulk. The synthetic marijuana was shipped to a location in East Harlem.

Although federal and state authorities have outlawed certain chemicals that are used in designer drugs, including synthetic marijuana, and their analogs, in order to remove these items from commerce, these efforts continue to fall short as the chemists and producers providing the products to online merchants, bodegas and head shops simply alter formulas and formats to stay ahead of legislation and the public's notice.

The Attorney General’s office has obtained an affidavit from a medical expert supporting his efforts to combat these drugs. Metropolitan Hospital Center’s Chief Medical Officer Dr. John Pellicone told the Attorney General’s office that patients who have taken these street drug-alternatives are frequently violent and present a definite danger to the public and first responders who care for them. The Attorney General thanks Dr. Pellicone and Blanche Greenfield, Chief Employment Counsel with the NYC Health and Hospitals Corporation for their assistance in support of this lawsuit.

In October of 2015, the Attorney General’s office sued two businesses in Erie and Rockland County for allegedly selling and shipping synthetic marijuana and other designer drugs. It was alleged that Surrealistic Sensations, which is based in Lackawanna in Erie County, sold designer drugs online to consumers in the Bronx and elsewhere. Another retailer, Liquid Shop, promoted and sold designer drugs at a storefront located in Nyack. In March of 2016, the office won a permanent injunction against Surrealistic Sensations. Further information about previous cases is available here. 

The investigation was conducted by Attorney General Investigators Chad Shelmidine, Cynthia Kane, and Supervising Investigator Deputy Chief Jonathan Woods.

This case is being prosecuted by Assistant Attorney General Jason M. Clark of the Attorney General’s Harlem Regional Office, with the assistance of Volunteer Assistant Attorney General Daniel Palmisano, under the supervision of Assistant Attorneys General In Charge Roberto Lebron (Harlem Regional Office), Deanna Nelson (Watertown Regional Office), and Martin Mack, Executive Deputy Attorney General for Regional Affairs.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 17, 2016

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A.G. SCHNEIDERMAN ANNOUNCES SENTENCING IN CASE INVOLVING THEFT FROM SUNY BINGHAMTON CONSTRUCTION PROJECT 

Donald McManus Worked As Project Executive On East Campus Dorm Construction Project At SUNY Binghamton And Must Pay Over $8K In Restitution To SUNY Binghamton From Theft Of Proceeds Of Copper From Project

Schneiderman: We Will Continue Rooting Out Fraud And Prosecuting Those Who Defraud The SUNY System

VESTAL – Attorney General Eric T. Schneiderman today announced the sentencing of Donald McManus, 56, of Apalachin, following allegations that McManus pocketed $8,200 worth of the proceeds from the sale of leftover copper used as part of the East Campus dorm construction at the State University at New York – Binghamton (SUNY Binghamton).  McManus was sentenced in Vestal Town Court by the Honorable Joseph B. Meagher to three years of probation. As conditions of probation, McManus must pay restitution to SUNY Binghamton in the amount of $8,256.59, and is prohibited from working in a construction job or in any capacity for SUNY Binghamton. 

“Those who steal from our SUNY system are picking the pockets of hardworking New York State taxpayers,” said Attorney General Schneiderman. “We will continue working to root out fraud and fully prosecute those responsible.”

McManus entered a plea of guilty on March 4, 2016 before Judge Meagher, to the charge of Attempted Grand Larceny in the Fourth Degree, a class “A” misdemeanor. 

According to documents filed in court, in 2008, SUNY Binghamton and the Dormitory Authority of the State of New York (DASNY) began the construction of dormitories for the East Campus of SUNY Binghamton. DASNY contracted with LeChase Construction Services to be the General Contractor for the project. McManus was a LeChase employee and the project executive for the construction project who supervised the LeChase construction team, as well as some of LeChase’s subcontractors on the project. As part of the construction project, temporary copper wire was installed at the construction site. Once it was no longer needed, the temporary wire was sold, and the proceeds belonged to SUNY Binghamton. McManus admitted in court that between July and December 2011, he kept proceeds from the sale of the copper wire that belonged to SUNY Binghamton, and agreed to provide restitution in the amount of $8,256.59 to SUNY Binghamton.

The OAG thanks the Dormitory Authority of the State of New York and DASNY Investigator Tom Vasile for their assistance with this investigation.

This case was prosecuted by Assistant Attorney General Mary Gorman of the Public Integrity Bureau. The Public Integrity Bureau is led by Bureau Chief Daniel Cort and Deputy Bureau Chief Stacy Aronowitz. The investigation was handled by Investigator Mitchell Paurowski of the Investigations Bureau, Deputy Bureau Chief Antoine Karam, and Bureau Chief Dominick Zarrella.  The Public Integrity Bureau is part of the Division of Criminal Justice led by Executive Deputy Attorney General Kelly Donovan. 

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 17, 2016

New York City Press Office / 212-416-8060
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A.G. SCHNEIDERMAN ANNOUNCES INDICTMENT OF FORMER NURSING HOME COUNSELOR FOR ALLEGED SEXUAL ABUSE OF RESIDENTS WHO SUFFERED FROM TRAUMATIC BRAIN INJURIES 

Jacky Stanley Arraigned On Indictment Alleging He Sexually Abused Impaired Residents 

Schneiderman: Those Who Use Position As Caretaker To Abuse Others Will Be Prosecuted 

PEARL RIVER– Attorney General Eric T. Schneiderman today announced the indictment of Jacky Stanley, a former employee of Northeast Center for Special Care.  Stanley is charged with sexually abusing six residents of the facility, all of whom suffered from traumatic brain injuries.

“Sexual assault of New York’s impaired residents is beyond reprehensible – it’s inconceivable,” said Attorney General Schneiderman. “Those who use their position as trusted caretakers to abuse others will be prosecuted.”

Northeast offers care and rehabilitation to individuals who have suffered traumatic brain injuries caused by stroke, motor vehicle accidents, falls and other catastrophic events. Stanley was employed as a counselor at Northeast and was responsible for helping new residents acclimate to the Center. Stanley’s duties included managing the social environment and ensuring that residents participated in their required programs.

Between July 2014 and February 2015, Stanley allegedly used his position to gain access to six residents and forcibly perform sex acts on them, including oral sex on three of his victims, one of whom was asleep at the time.  Stanley is also accused of abusing one of the residents on three different occasions. Stanley was suspended and then terminated from the facility based upon allegations of sexual abuse.  Orders of protection were issued for each of the victims. 

Stanley, 50, of Kingston, is charged in a 33-count indictment with Predatory Sexual Assault, a class A- II felony, multiple counts of Criminal Sexual Act in the First Degree, a class B felony, and multiple counts of Sexual Abuse in the First Degree, a class D felony, and related charges. He faces from ten years to life in prison. He was arraigned today before the Hon. Donald A. Williams in Ulster County Court. The defendant pled not guilty and was remanded without bail. The next court date is September 27, 2016, at 2:00 PM.

The charges against the defendant are merely accusations and the defendant is presumed innocent unless and until proven guilty.

The Attorney General thanks the Town of Ulster Police Department, particularly Detectives William Moylan and Joshua Normann, and the Northeast Center for Special Care for their assistance in this matter.  

The investigation was led by Investigators Frank Bluszcz and Peter Olsen with the assistance of Supervising Special Investigator Peter Markiewicz and Deputy Chief Kenneth Morgan. Special Assistant Attorney General William McClarnon of the Medicaid Fraud Control Unit’s Pearl River Regional Office is prosecuting the case under the supervision of Regional Director Anne Jardine.  Thomas O’Hanlon is MFCU’s  Chief of Criminal Investigations–Downstate.  Director Amy Held and Assistant Deputy Attorney General Paul Mahoney lead MFCU.  The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 17, 2016

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
nyag.pressoffice@ag.NY.gov
Twitter: @AGSchneiderman

A.G. SCHNEIDERMAN ANNOUNCES $1.1 MILLION SETTLEMENT WITH A MINNESOTA PILLOW RETAILER FOR FAILING TO COLLECT NEW YORK SALES TAXES

Tax Whistleblower Uncovers Failure By “My Pillow” To Collect Sales Tax On Millions Of Dollars In Sales To New York State Customers

NEW YORK – Attorney General Eric T. Schneiderman today announced a $1.1 million dollar settlement resolving a whistleblower case against My Pillow, Inc., a Minnesota corporation that sells pillows and other sleep-related products. The lawsuit alleged that My Pillow knowingly failed to collect and remit New York sales taxes on sales made to New York customers through its website and over the telephone. 

The action began when a whistleblower filed a complaint in state Supreme Court in Manhattan. Based on its investigation of the whistleblower’s allegations, the Attorney General’s Office contends that from 2011-2015, My Pillow failed to collect and remit approximately $537,000 in sales taxes on taxable sales made over the phone and through the Internet to New Yorkers. My Pillow was required to collect and remit sales taxes because the company sold products at trade shows in New York through independent contractors and other representatives, among other reasons.  The Attorney General’s Office claims that My Pillow knowingly made false records or statements concerning the sales taxes it was required to collect and remit. 

“Out-of-state companies like My Pillow cannot shirk their obligations to New York. Companies that fail to collect and remit applicable sales taxes harm the State and local governments—something that cannot be tolerated,” said Attorney General Schneiderman. 

This settlement is the latest tax-related recovery resulting from an action filed under the New York False Claims Act.  The Act is one of the state’s most powerful civil fraud enforcement tools because it allows whistleblowers and prosecutors to take legal action against companies or individuals that defraud the government.  Persons found liable under the False Claims Act must pay treble damages, penalties and attorneys’ fees.  Under the False Claims Act, whistleblowers may be eligible to receive up to 30 percent of any money recovered by the government as a result of information they provide.  The whistleblower in this action will receive $221,800.00 from the settlement proceeds. 

Attorney General Schneiderman expresses his thanks to the whistleblower and its attorneys, and to the New York State Department of Taxation and Finance, for their assistance in bringing this case to resolution.

The investigation was led by Assistant Attorney General Maureen A. Fitzgerald and Deputy Bureau Chief Scott J. Spiegelman of the Attorney General’s Taxpayer Protection Bureau, with assistance from Legal Support Analyst Joseph Onwu. 

Bureau Chief Thomas Teige Carroll oversees the Taxpayer Protection Bureau within the Criminal Division of the New York Attorney General’s Office, which is led by Executive Deputy Attorney General for Criminal Justice Kelly Donovan.

 News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 19, 2016

New York City Press Office / 212-416-8060
Albany Press Office / 518-776-2427
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Twitter: @AGSchneiderman

A.G. SCHNEIDERMAN ANNOUNCES SENTENCING OF FORMER PRIVATE DUTY NURSE SENTENCED FOR STEALING OVER $19K FROM STATE’S MEDICAID PROGRAM

Jill Tiefel Falsified Timesheets Resulting In Medicaid Payments Of Over $19K 

Schneiderman: Medicaid Fraud Hurts Taxpayers And Those Responsible Will Be Fully Prosecuted

ROCHESTER – Attorney General Eric T. Schneiderman today announced the sentencing of Jill Tiefel, a licensed practical nurse who formerly provided in-home nursing services to a Medicaid recipient. Tiefel, 34, of Rochester, has been sentenced to three years of probation and restitution in connection with her falsification of timesheets that resulted in Medicaid payments made to her in excess of $19,000. 

“The Medicaid program is an integral component of our state’s commitment to the care of those in need and relies on the honesty and integrity of those who implement it,” Attorney General Schneiderman said. “Any fraud or abuse increases the potential burden on taxpayers and as such, will not be tolerated by my office. I will continue to prosecute perpetrators of fraud to the fullest extent of the law.”

Tiefel pleaded guilty to Petit Larceny based on her payment from the Medicaid program for approximately 269 hours of services that were either not provided or provided by other individuals. She will be required to pay restitution in the amount of $7,564.02. In addition to restitution, a judgment was entered in the amount of $12,121.65, representing the remainder of the total loss to Medicaid as a result of Tiefel’s false representations to the program.

The matter has now been referred to the New York State Office of the Professions, which has jurisdiction over most healthcare licenses in New York.

The case was investigated by Special Investigator Debra Clementi with assistance from MFCU Deputy Chief Investigator William Falk and Auditor Investigator Kaitlynn Zaffuto supervised by Rochester Chief Auditor Thomas Clarke.  The case was prosecuted by Special Assistant Attorney General Margaret A. Jones in the MFCU Rochester Office.  Catherine Wagner is the Regional Director and the Upstate Chief of Criminal Investigations for MFCU. The Medicaid Fraud Control Unit is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.