News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 19, 2016

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A.G. SCHNEIDERMAN ANNOUNCES $4 MILLION PILOT PROGRAM TO HELP EVERYDAY NEW YORKERS TRANSFORM NEARBY VACANT HOMES INTO SAFE, AFFORDABLE HOUSING

Administered By Enterprise Community Partners, “Neighbors for Neighborhoods” Puts Power In Hands Of Community Members To Rebuild Decaying Properties, Revitalize Neighborhoods, And Expand Affordable Rental Housing While Keeping Predatory Landlords At Bay

$4 Million Grant Initiative Made Possible By Schneiderman’s Settlement Agreements With Citigroup And Bank Of America

Schneiderman: This Office Will Help Communities Bring Vacant Properties Back To Life And Provide Affordable Rental Homes For Their Neighbors

NEWBURGH – Attorney General Eric T. Schneiderman announced a new pilot program that will provide New York State land banks with $4 million in subsidies for everyday New Yorkers to take over individual, abandoned properties in their neighborhood – at little or no cost – and rehabilitate them into affordable rental housing. Created with affordable housing and community development nonprofit Enterprise Community Partners (Enterprise), the program requires the new housing units to remain affordable for at least 20 years. Funding for the program will come from the Attorney General’s 2014 and 2015 settlements with Citigroup and Bank of America over the banks’ conduct leading up to the 2008 housing crash.

Neighbors for Neighborhoods builds on the success of New York State’s non-profit land banks. Ten of these lands banks have, with support from the Office of the Attorney General, reclaimed over 1,600 abandoned properties across the state since 2013. Recently, five new land banks have formed and received capacity-building grants from the Office of the Attorney General, and a sixth is in the process of getting certified.

The initiative was inspired by such successful land bank efforts as 13 Chambers Street in Newburgh. The property, which was acquired by the Newburgh Community Land Bank in 2013, was renovated by a local architect and now provides three families with affordable rental housing.

 “Too many communities across this state are still plagued by the blight of vacant and abandoned properties, while at the same time suffering from a critical shortage of affordable housing,” said Attorney General Schneiderman. “Neighbors for Neighborhoods helps communities reclaim their neighborhoods from blight and will help generate the affordable housing stock that New York families need. Just as important, it empowers the people who have the most at stake in revitalizing their communities—the community members themselves. This is truly a win-win.”

The grant program will be administered by Enterprise, which for more than 30 years has created affordable housing opportunities for low- and moderate-income communities across the country, in addition to identifying programmatic solutions and advocating for policies that connect low-income communities to opportunity. In early fall, Enterprise will invite the 16 land banks across the state to submit their qualifications and select those land banks that:

• Demonstrate the capacity to oversee the rehabilitation of the properties and enforce the long-term affordable-rental requirement;
• Demonstrate that they are in an area with a concentration of potential rental properties and a set of local community members who have the capacity to own and manage a nearby rental property.

Land banks that meet the requirements will then be able to submit requests for the subsidy on a project-by-project basis. 

Once selected, land banks will transfer ownership of the dilapidated properties at low or no cost to the identified community members;  provide the new community-based property owners with a subsidy toward the costs of renovation (approximately $50,000 per unit); and dictate the terms and scope of the renovation. Importantly, the renovations must also include exterior rehabs—to provide “curb appeal,” a critical part of boosting property values in neighborhoods plagued by vacant homes. 

In exchange for the property and the renovation subsidy, the new property owners will convert the properties to affordable low- and moderate-income rental units for local families. This $4 million investment is estimated to yield up to 80 affordable rental homes for working families in the cities and towns where land banks are active.

Funding for the initiative will be drawn from the $7 billion settlement agreement with Citigroup and the $16 billion settlement agreement with Bank of America that Attorney General Schneiderman, as co-chair of the federal-state working group on residential-mortgage-based securities, negotiated in July and August 2014, respectively. Those two settlements together brought $982 million in cash and consumer relief to New York State alone.

Neighbors for Neighborhoods is but one component of Attorney General Schneiderman’s broad strategy to help New York families and communities recover from the housing crash. He has led the fight for strong bank settlements that hold the banks accountable for their recklessness and responsible for mitigating the damage they caused.  He has obtained settlements that brought more than $95 billion to communities across the country. 

More than $5.5 billion of that settlement money has flowed into New York. It allowed the Office of the Attorney General to establish the Homeowners Protection Program, HOPP, in 2012, which currently funds 90 agencies across the state to provide legal services and counseling to help families stay in their homes. More than 64,000 families have been served to date; and over a third of them have mortgage modifications pending or approved. 

The settlement money has resulted in over $30 million in grants to New York’s land banks since July 2013, making it possible for the land banks to reclaim those 1,600 properties from blight.

And the settlement money was used to establish the New York State Mortgage Assistance Program (MAP) in 2014. Since it began, MAP has provided $18 million in small loans to homeowners to clear other debts and qualify for mortgage modifications; it has prevented more than 650 foreclosures; and it has preserved $153 million in property value for nearby homeowners.

The Attorney General also pursued legislative responses to the state’s housing crisis, and in June 2016 his bill, the Abandoned Property Neighborhood Relief Act, was signed into law.  Among other provisions, that law requires banks to register any properties abandoned by their owners with the Department of Financial Services and to maintain those properties during the foreclosure process, and not just once the process has been completed. Banks face significant fines for non-compliance. The state will share the registry with localities and will run a toll-free hotline for individuals to report such properties.

And in July 2016, the Attorney General announced a $13 million grant initiative, the Zombie Remediation and Prevention Initiative, funded by an allocation from the Morgan Stanley settlement agreement, to help cities and towns maximize the impact of the Abandoned Property Neighborhood Relief Act. It provides funding to municipalities to catalog and monitor zombie properties within their jurisdictions, to boost local housing code enforcement, and to help the state ensure implementation of, and compliance with, the law.

“This program is a powerful opportunity to give community members ownership over what happens in their neighborhoods and involve them in the critical work of creating and preserving affordable housing throughout New York,” said Judi Kende, Vice President and New York Market Leader, Enterprise. “Enterprise is proud to partner with the Office of the Attorney General on such a creative and exciting initiative that will bring positive change to communities statewide for decades to come.”

“I thank Attorney General Schneiderman for his continued support of the City of Newburgh,” said Newburgh Mayor Judy Kennedy. “Funding through this innovative pilot program will help to ensure the continued revitalization of our neighborhoods by bolstering the availability of high-quality, affordable rental units while attracting local investors to invest in their community.”

“Rehabilitating dangerous, abandoned buildings and zombie homes will strengthen Hudson Valley communities like Newburgh by revitalizing our neighborhoods, providing housing for local families, and growing our economy – all while keeping ownership in local hands,” said Representative Sean Patrick Maloney (NY-18). “The Neighbors for Neighborhoods investment program is good for our communities, good for renters, and good for local businesses, and I want to thank AG Schneiderman for making this program possible in communities throughout New York, including the Hudson Valley.”

“This public/private partnership is an example of cooperation and teamwork producing positive results,” said State Senator Bill Larkin. “The Neighbors for Neighborhoods program will promote positive community development while providing much needed high-quality affordable housing for Hudson Valley residents.”  

“Attorney General Schneiderman has focused his attention on one of the most significant ways to improve neighborhoods and turn a city around - the restoration of decaying homes,” said Assemblyman Frank Skartados. “His continued commitment to help the land bank will prove to be a key element in Newburgh’s revitalization.”

“Sustained affordability for low income families in our area is crucial to maintaining a diverse community. Every high quality of affordable unit that is added to our City improves the quality of life for our residents and guarantees that families will remain in the City continuing to contribute to the fabric of our neighborhoods,” stated NewburghCouncilwoman Karen Mejia. 

“Attorney General Schneiderman’s leadership is critical to rebuilding neighborhoods decimated by the 2008 mortgage crisis,” said Newburgh City Manager Michael G. Ciaravino. “We appreciate Attorney General Schneiderman’s ‘Neighbors for Neighborhoods’ pilot program and are looking forward to our Land Bank’s application.” 

 “Attorney General Schneiderman’s support has been essential to the Newburgh Community Land Bank,” said Madeline Fletcher, Executive Director, Newburgh Community Land Bank. “And now, this new and innovative program bolsters the partnership between land banks and the communities we serve, provides community members who care about their neighborhoods with the tools they need to improve it, and expands affordable housing options.”

“Not too long ago, I was facing eviction,” said Joseph Williams, Tenant of 13 Chambers Street. “Having a stable place to live, with the help of the Newburgh Community Land Bank, has helped me improve my family's life. It’s great to know that Neighbors for Neighborhoods will give other New Yorkers the same opportunity I was given.”

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 22, 2016

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A.G. SCHNEIDERMAN ANNOUNCES SETTLEMENT WITH HEALTHNOW NEW YORK OVER WRONGFUL DENIAL OF $1.6 MILLION IN OUTPATIENT MENTAL HEALTH TREATMENT AND ENSURES COVERAGE FOR NUTRITIONAL COUNSELING FOR PATIENTS WITH EATING DISORDERS 

Company Will Reimburse Members Wrongfully Denied, Will Revise Policies, And Will Eliminate Practice of Automatically Reviewing All Outpatient Psychotherapy Claims Beyond Pre-Set Thresholds 

Settlement Based On Alleged Violation Of Laws Requiring Insurers To Treat Behavioral Health the Same As Medical Care

NEW YORK – Attorney General Eric T. Schneiderman today announced a settlement with HealthNow, New York, Inc., after an investigation uncovered the wrongful denial of thousands of claims for outpatient psychotherapy and more than one hundred claims for nutritional counseling for eating disorders. The wrongful denials totaled more than $1.6 million in patient claims. Under the agreement, the Buffalo-based company, a not-for profit health service corporation providing health care coverage for approximately 573,700 New Yorkers (including 291,000 who are enrolled in commercial health plans), will pay members for the wrongfully denied claims, revise its policies, and will eliminate a company policy that subjected all psychotherapy claims to review after a member’s 20^th visit.

“Insurers have a legal obligation to provide the same level of care to patients being treated for behavioral health conditions as they do for patients with other ailments,” said Attorney General Schneiderman. “Individuals confronting mental health conditions, eating disorders, or substance abuse should not be denied coverage for the treatment they need and deserve.” 

Attorney General Schneiderman’s Health Care Bureau launched an investigation in 2015 into HealthNow’s administration of behavioral health benefits following the receipt of consumer complaints. The complaints alleged that HealthNow had improperly denied coverage for treatments by requiring that all outpatient behavioral health visits be preauthorized after the first 20 visits per year, and by excluding coverage for nutritional counseling for eating disorders.

The Attorney General’s investigation revealed that since 2012, HealthNow conducted thousands of wrongful reviews in outpatient behavioral health cases under its  20-visit threshold, denying coverage for outpatient behavioral health services for approximately 3,100 members. HealthNow generally does not impose the same type of utilization review process for outpatient medical services.

HealthNow further denied approximately 125 sessions of nutritional counseling to members with eating disorders, on the grounds that the service was not a covered benefit. As a result, members were charged a total of approximately $14,000 for these medically necessary treatments. The company does, however, cover nutritional counseling visits for medical conditions – for example, for patients with diabetes.

Pursuant to the Attorney General's settlement, HealthNow has agreed to eliminate utilization review for outpatient behavioral health treatment based on set thresholds that trigger review, including but not limited to the 20-visit threshold it has applied since 2010.  HealthNow will also cover nutritional counseling for eating disorders, including anorexia nervosa and bulimia nervosa. HealthNow will reimburse members who paid out of pocket for treatment after their claims were denied under the 20-visit threshold or nutritional counseling exclusion. Health Now will also retrain its staff regarding these significant reforms. Under the settlement, HealthNow will also pay $60,000 to the OAG as a civil penalty.

The investigation was launched under Timothy’s Law, which mandates that New York group health plans provide “broad-based coverage for the diagnosis and treatment of mental, nervous or emotional disorders or ailments … at least equal to the coverage provided for other health conditions.” N.Y. Ins. Law §§ 3221(l)(5)(A); 4303(g)(1). Timothy’s Law also requires that plans provide coverage comparable to that provided for other health conditions for adults and children with biologically based mental illness – including bulimia and anorexia – under the terms and conditions otherwise applicable under the policy. N.Y. Ins. Law §§ 3221(l)(5)(B)(i); 4303(g)(2)(A).

The New York law is similar to the federal mental health parity law, which was enacted in 2008.

Many individuals with behavioral health disorders seek outpatient treatment.  According to the Substance Abuse and Mental Health Services Administration, outpatient therapy and counseling is an evidence-based treatment for mental and substance use disorders. Evidence from rigorous clinical research studies has shown that a variety of psychotherapies are effective with children, adults, and older adults, across diverse conditions. Additionally, evidence from numerous large scale trials and quantitative reviews supports the efficacy of cognitive-behavioral therapy for alcohol and drug use disorders.

Data from the National Institute of Mental Health show that anorexia nervosa is the most fatal mental disorder, with an estimated mortality rate of approximately 10 percent. Evidence-based medical guidelines confirm the important role of nutritional counseling in the treatment of eating disorders. According to the American Psychiatric Association’s Practice Guideline for the Treatment of Patients with Eating Disorders, nutritional counseling is “a useful part of treatment and helps reduce food restriction, increase the variety of foods eaten, and promote healthy but not compulsive exercise patterns,” and is an empirically supported strategy for the treatment of binge eating. The National Eating Disorder Association considers nutritional counseling “a necessary component of treatment” for eating disorders. 

Consumers with a complaint regarding health insurance coverage for behavioral health treatment, or any other health care-related complaint, may always contact the Attorney General’s Office Health Care Helpline at 800-428-9071.

The investigation of this matter was conducted by Assistant Attorney General Michael D. Reisman of the Health Care Bureau. The Health Care Bureau is led by Bureau Chief Lisa Landau. The Health Care Bureau is part of the Division of Social Justice led by Executive Deputy Attorney General for Social Justice Alvin Bragg.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 23, 2016

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A.G. SCHNEIDERMAN AND U.S. DEPARTMENT OF LABOR ANNOUNCE $500,000 AGREEMENT WITH PAPA JOHN’S FRANCHISEE OVER WAGE VIOLATIONS

New York City Franchisee Must Pay Over 200 Workers Restitution And Damages

NEW YORK – Attorney General Eric T. Schneiderman and the U.S. Department of Labor today announced a settlement totaling $500,000 with Sultan Ali Lakhani, Moregrace LLC, and Thegrace, Inc., the owners of three Papa John’s Pizza franchise stores in Manhattan and the Bronx. The three stores violated minimum wage and overtime requirements, and also took unlawful deductions from workers’ wages caused by failure to reimburse all work-related expenses. Restitution and damages will be distributed to over 200 underpaid workers.  

“When businesses brazenly violate the law by systematically failing to pay their employees minimum and overtime wages, they rip off some of our state’s most vulnerable workers,” said Attorney General Schneiderman. “I have called on corporate leaders in the fast food industry – including Papa John’s – to step up and stop these ongoing violations, which are so pervasive in this company and industry.”

“Employers who cheat their workers out of their hard earned wages also economically undercut law-abiding competitors who pay their workers properly,” said Mark Watson, regional administrator for the Wage and Hour Division at the U.S. Department of Labor. “This joint investigation and litigation effort sends a clear message to such employers: Violate both federal and state laws and you will face the consequences at both levels.”

“This resolution exemplifies the corrective action and restitution that can be achieved on behalf of workers when state and federal agencies work together on their behalf,” said Jeffrey S. Rogoff, the regional solicitor for the U.S. Department of Labor. “We look forward to continuing our successful partnership with Attorney General Schneiderman’s office to root out wage violators and ultimately improve compliance with federal and state wage laws.”

The Manhattan stores involved in today’s settlement, operated by Moregrace LLC, are located at 701 W. 179^th Street in Washington Heights and 4927 Broadway in Inwood. The Bronx store, operated by Thegrace, Inc. is located at 161 West 231st Street. The three stores are operated by Lakhani as one enterprise.

Today’s agreement follows a joint investigation into the franchisee, beginning in 2013. Lakhani admitted to the violations of law outlined in the settlement agreement. The admitted violations included the following:

• Workers were not paid the minimum wage and overtime wages required under the federal Fair Labor Standards Act and state law;
• Workers were not paid an additional hour at minimum wage when employees’ daily shifts were longer than 10 hours, violating New York State’s “spread of hours” regulations; and
• Delivery workers did not receive bicycle safety equipment and were not reimbursed for bicycle maintenance costs.

In addition to payment of $500,000 in restitution funds the stores must institute complaint procedures, post a statement of employees’ rights, and designate an officer to monitor ongoing compliance and submit quarterly reports to the Attorney General's Office for three years. 

The settlement announced today is the latest with Papa John’s franchisees in New York City. Over the past two years, the Attorney General's Office has investigated and found violations by eight separate Papa John’s franchisees, who, together, operated a total of over 30 restaurants, as follows:

• Syed Mehboob and his stores paid $400,000 in restitution and liquidated damages.  Mehboob owned and operated six individually incorporated franchise restaurants in Queens, as follows: 3320 Woodside Papa, Inc. (operating at 49-19 30^th, Woodside, New York 11377 ), 99 Food, Inc. (operating at 9906 Northern Blvd., Corona, New York 11369), Sunnyside Papa, Inc. (operating at 40-12 Greenpoint Ave., Sunnyside, New York 11104), Zeeshee, Inc. (previously operated at 23-33 Astoria Blvd., Astoria, New York 11102; closed in March 2015), 193 Papa, Inc. (previously operated at 193-18 Northern Blvd. Flushing, New York 11358; sold in November 2014), and Parson Papa, Inc. (previously operated at 147-14 45^th Ave., Flushing, New York 11355; closed in November 2014).  The settlement included restitution for violations from August of 2008 to August of 2014.

• AMHC Food Inc. and its owner Mohammed Hasnat, operators of  a Papa John’s restaurant at 2241 Westchester Avenue in the Bronx, New York, paid $40,000 in restitution and liquidated damages. The settlement included restitution for violations from January of 2014 to July of 2015.

• Ksara Corp. and owner Ghulam Fani, operators of a Papa John’s restaurant at 189 Avenue U in Brooklyn, New York.  The settlement with Ksara also included Zeman Associates, LLC, a prior owner of this franchise.  These operators paid $16,000 in restitution and liquidated damages. The settlement included restitution for violations from February of 2013 until July 2015.

• Judy & Jesenia, Inc. and owner Jesenia Diaz, who until November 2014 operated a Papa John’s restaurant located at 3528 Nostrand Avenue in Brooklyn, New York paid $13,355.78, in restitution and liquidated damages for underpayments beginning in June of 2013 through November of 2014.

• In February and March of 2015, Attorney General Schneiderman obtained judgments against two other Papa John’s franchisees, Emstar Pizza (6 locations) and New Majority Holdings (5 locations), for violating wage laws. Those judgments totaled almost $3 million.

• In addition, in July of 2015, the Attorney General arrested Abdul Jamil Khokhar, the owner of nine Papa John's Pizza franchises in the ‪Bronx, and his company, BMY Foods, Inc. for failing to pay workers minimum wage and overtime. Khokhar and BMY Foods pled guilty to these charges and were sentenced on September 21, 2016. Mr. Khokar and BMY Foods, Inc. were sentenced to pay $230,000 in restitution to workers, and Mr. Khokhar was sentenced to serve 60 days in jail. The U.S. Department of Labor also filed a consent judgment against the enterprise in federal court, and recovered an additional $230,000 as liquidated damages from Khokhar and BMY Foods, and civil money penalties of $50,000.

The Wage and Hour Division’s investigations were conducted by its New York City District Office, with assistance from the U.S. Department of Labor, Office of the Solicitor. Senior Trial Attorney Daniel Hennefeld handled the case on behalf of the Department of Labor. 

This Attorney General's investigation was handled by Assistant Attorney General Claudia Henriquez of the Labor Bureau. The Labor Bureau Deputy Bureau Chief is ReNika Moore and the Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg. 

 News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 23, 2016

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A.G. SCHNEIDERMAN ANNOUNCES GUILTY PLEA OF NURSE AIDE WHO STRUCK AND SHOVED NURSING HOME RESIDENT

Samantha Grover Struck Elderly Man In the Face And Pushed Him To The Ground 

Schneiderman: My Office Will Fully Prosecute Nursing Home Abuse

SYRACUSE - Attorney General Eric T. Schneiderman today announced that Samantha Grover, 36, a Certified Nurse Aide, pled guilty in Onondaga County Court before the Honorable Anthony F. Aloi to Endangering the Welfare of an Incompetent or Physically Disabled Person in the First Degree.

“Caregivers are entrusted with the health and safety of nursing home residents, and to intentionally cause physical harm to a resident is a gross violation of that trust,” Attorney General Schneiderman said. “My office will continue working to root out and prosecute nursing home abuse.”

The incident occurred on October 17, 2015, at James Square Health and Rehabilitation Centre, a nursing home located at 918 James Street, when Grover struck a male resident in the face and pushed him causing him to trip and fall, hitting his shoulder on a piece of furniture.  As a result, the resident suffered from impingement syndrome of the right shoulder with a rotator cuff strain. 

Judge Aloi set sentencing for October 18, 2016.  Grover faces up to four years in prison.

Grover resides in Syracuse. She worked at the nursing home for four years.

The case was investigated by Special Investigator Keith J. 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 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 24, 2016

New York City Press Office / 212-416-8060
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A.G. SCHNEIDERMAN ANNOUNCES JOINT STATE AND FEDERAL $2.95 MILLION SETTLEMENT WITH HOSPITALS IN MOUNT SINAI HEALTH SYSTEM

Hospitals In Mount Sinai Health System Agree To $2.95 Million Settlement Of Reverse False Claims Act Allegations In Whistleblower Case

NEW YORK – Attorney General Eric T. Schneiderman and United States Attorney Preet Bharara today announced that three hospitals in the Mount Sinai Health System are paying a total of $2.95 million to resolve allegations that the hospitals knowingly retained over $844,000 in overpayments made by Medicaid in violation of the federal and New York False Claims Acts.  Knowing retention of an overpayment from the government for more than sixty days is known as a “reverse false claim” and is a violation of both federal and state false claim acts. The entities involved include Mount Sinai Beth Israel (“Beth Israel”) (formerly Beth Israel Medical Center), Mount Sinai St. Luke’s (“St. Luke’s”) (formerly St. Luke’s Hospital) and Mount Sinai Roosevelt (“Roosevelt”) (formerly Roosevelt Hospital) (together, the “Hospitals”) – and the Hospitals’ former partnership group, Continuum Health Partners, Inc. (“Continuum,” and together with the Hospitals, “Defendants”). The Mount Sinai Health System was formed in September 2013, when Continuum Health Partners combined the Hospitals’ operations with those of Mount Sinai Medical Center. New York State’s share of the settlement is over $1.7 million.

“Repaying Medicaid for false claims is not only vital to the integrity of the program, but it is also the law,” said Attorney General Schneiderman. “We will not allow hospitals to drain important resources from the system, and will continue to ensure that the program is properly reimbursed for the funds that it is owed.”

“My office’s audits first revealed the computer problem causing improper Medicaid claims, leading to today’s settlement in this case,” State Comptroller Thomas P. DiNapoli said. “Taxpayers should not have to foot the bill for waste, fraud and abuse of Medicaid. We will continue to partner with Attorney General Schneiderman in rooting out corruption in the Medicaid system.”

Medicaid is a jointly funded federal-state program that provides health care to needy individuals.  Pursuant to Medicaid regulations, the Hospitals were only entitled to receive payment for services rendered to Medicaid managed-care patients from their contracted managed care organization, and were not permitted to seek additional payments from Medicaid or, with certain limited exceptions, the patients.  The settlements resolve allegations in complaints filed by the State and United States in federal court that, as early as February 2011, Defendants became aware that they had wrongly billed Medicaid as a secondary payor for over $844,000 worth of claims in 2009 and 2010, and that Defendants knowingly avoided fully reimbursing Medicaid for those payments until March 2013.

As part of the settlements, Defendants admitted that, beginning in 2009 due to a software compatibility issue, a coding error caused Defendants to submit claims for payment above and beyond what they had received from the managed care organization, and that Medicaid paid these claims as a secondary payor. In September 2010, the New York Office of the State Comptroller brought to Continuum’s attention a small number of these claims, and Defendants admitted that in late 2010 they were made aware of the coding error.  Defendants admitted that in late 2010 and January 2011, Continuum employees gathered and analyzed Continuum’s billing data in order to discover possibly affected claims, and that on February 4, 2011, an employee (and the whistleblower in this case) sent an email to certain members of Continuum’s management, attaching a spreadsheet containing 890 claims, of which 444 had been erroneously billed to Medicaid. 

Continuum terminated the employee four days later, on February 8, 2011.  Continuum reimbursed Medicaid in February 2011 for only five of the improperly submitted claims.  Defendants admitted that Continuum never brought the employee’s analysis to the attention of government regulators. Thereafter, Defendants did not fully reimburse Medicaid for claims erroneously billed to Medicaid for over two years, and did so in more than thirty tranches after February 2011, beginning in April 2011 and concluding in March 2013.

This investigation was initiated after a whistleblower filed a lawsuit under the qui tam provisions of the federal and New York False Claims Acts, which allow private persons, known as “relators,” to file civil actions on behalf of the government and share in any recovery. The relator in this case will receive from the State a $354,000 share of the settlement proceeds after full payment by Defendants. 

The investigation and settlement were the result of a coordinated effort between the U.S. Attorney’s Office for the Southern District of New York, and the New York State Attorney General’s Office.  Attorney General Schneiderman would like to the Office of the New York State Comptroller for its assistance in the matter.  

The case is captioned United States and the State of New York, ex rel. Robert P. Kane v. Healthfirst, Inc., et al., and is docketed with the U.S. District Court for the Southern District of New York under Civil Action No. 11 Civ. 2325 (Ramos, J.).

The state case was handled by Special Assistant Attorney General Alee N. Scott, Senior Counsel Carolyn Ellis, and Senior Audit-Investigator Deowattie Persaud. 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 24, 2016

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STATEMENT FROM A.G. SCHNEIDERMAN ON ARMOR HEALTH SERVICES WITHDRAWAL FROM NASSAU COUNTY JAILS

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement in response to Armor Correctional Health Services’ decision to not renew its contract with Nassau County jails:

“This is an important and positive step forward for Nassau County taxpayers, who have been forced to foot the bill for a company that has failed to live up to its obligations and put patient health at risk in the process. Armor's history of poor and inadequate healthcare is exactly why my office filed suit against the company last month, and is why we sought an end to Armor's contract as part of our lawsuit. While I am pleased by today's news, the company's withdrawal from Nassau County does not erase Armor's history of failure, and our claims against the company on behalf of the people of New York will continue moving forward.”

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 25, 2016

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A.G. SCHNEIDERMAN ANNOUNCES ORDER REQUIRING CONTRACTOR WHO DEFRAUDED HOMEOWNERS TO PAY OVER $41K IN RESTITUTION; $17K IN PENALTIES

Daniel McInerney, Owner Of D Mac Design & Development LLC, Will Pay Over $41K In Restitution To 4 Homeowners, $17K In Costs And Penalties After Failing To Provide Contracted Services 

Schneiderman: We Will Hold Unscrupulous Business Owners Accountable

POUGHKEEPSIE – Attorney General Eric T. Schneiderman today announced that on August 12, 2016 an order was issued by Dutchess County Supreme Court Judge Peter Forman requiring home improvement contractor Daniel McInerney, doing business as D Mac Design & Development LLC., to pay $41,412.16 in restitution to four homeowners who were victims of his home improvement fraud, $15,000 in penalties and $2,000 in costs to the New York State Attorney General’s Office.  In many cases, consumers paid McInerney thousands of dollars only to have him disappear with their money without providing any of the contracted services. 

“When hardworking New Yorkers pay for home improvement services, those services should be performed fully, professionally, and in a timely manner,” Attorney General Schneiderman said. “My office is committed to holding unscrupulous business owners accountable for taking advantage of New York consumers”.

According to one homeowner who paid McInerney a total of $9,000 in advance payments toward removal and replacement of a patio, the work was done improperly resulting in damage to the siding on his house and central air conditioning system.  “In short”, the consumer reported, “he was doing as much damage as help in doing the removal phase of the job”.  After paying McInerney the last portion of the $9,000, he abandoned the job, completing almost nothing he promised to do and failed to return the consumers calls. 

In another case, a Newburgh homeowner contracted with McInerney to renovate her bathroom.  She paid the $10,800 agreed upon contract price, plus an additional $1,500 demanded by McInerney. When the project was barely a quarter of the way to completion, McInerney disappeared, leaving the job in disarray.  The job ended up costing the homeowner nearly $30,000, as she spent an additional $19,000 to have the work done right.

This case was handled by Assistant Attorneys General Stephen Barry and Nick Garin. The investigation was conducted by Investigators Stephanie Brideau and Adrienne DeGaetano of the Poughkeepsie Regional Office. The Buffalo Regional Office is led by Assistant Attorney General In Charge Jill Faber. The Division of Regional Offices is led by Executive Deputy Attorney General for Regional Affairs Marty Mack.

Daniel McInerney, dueño de D Mac Design & Development LLC, pagará más de $ 41,000 en restitución a 4 propietarios de viviendas, $ 17,000 en los costos y penalizaciones después de no poder proveer los servicios contratados

Schneiderman: Vamos a hacer rendir cuentas a negociantes sin escrúpulos

NUEVA YORK- El Fiscal General Eric T. Schneiderman anunció que una orden emitida por el juez Tribunal Supremo del Condado de Dutchess Peter Forman requiere al contratista de obras Daniel McInerney, que opera como D Mac Design & Development LLC,  pagar $ 41,412.16 en restitución a cuatro propietarios de viviendas que fueron víctimas de su fraude en mejoras para el hogar, $ 15,000 en multas y $ 2,000 en costos a la Oficina del Fiscal General del Estado de Nueva York. En muchos casos, los consumidores pagaron McInerney miles de dólares sólo para verlo desaparecer con su dinero sin proporcionar ninguno de los servicios contratados.

“Cuando los trabajadores neoyorquinos pagan por los servicios de mejoras para el hogar, estos servicios deben realizarse plenamente, profesionalmente, y en el momento oportuno”, dijo el Fiscal General Schneiderman. “Mi oficina está comprometida con hacer rendir cuentas a  negociantes sin escrúpulos que se aprovechan de los consumidores de Nueva York”.

De acuerdo con un dueño de casa que pagó a McInerney un total de $ 9,000 en pagos por adelantado para la reconstrucción de un patio, el trabajo se realizó de forma inadecuada resultando en daños en el revestimiento de su casa y el sistema de aire acondicionado central. "En pocas palabras", informó el consumidor, "que estaba haciendo tanto daño que el trabajo que remoción que estaba supuesto a hacer". Después de pagar a McInerney la última porción de los $9.000 éste abandonó el trabajo, completando casi nada de lo que se comprometió a hacer y no contestó las llamadas de los consumidores.

En otro caso, un propietario Newburgh contrató con McInerney para renovar su cuarto de baño. Ella pagó el precio acordado en el contrato de $10,800, más $ 1,500 adicionales exigidos por McInerney. Cuando el proyecto estaba apenas una cuarta parte, McInerney desapareció, dejando el trabajo en desorden. El trabajo terminó costando el dueño de casa cerca de $30.000, ya que tuvo que gastar una suma adicional de $ 19.000 para corregir el trabajo y hacerlo correctamente.

Este caso fue manejado por los Fiscales Adjuntos Stephen Barry y Nick Garin. La investigación fue realizada por investigadores Stephanie Brideau y Adrienne Degaetano de la Oficina Regional de Poughkeepsie. La Oficina Regional de Buffalo está dirigida por la Fiscal Adjunta a Cargo Jill Faber. La División de Oficinas Regionales está dirigida por el Fiscal General Ejecutivo Adjunto para Asuntos Regionales Marty Mack.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 26, 2016

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A.G. SCHNEIDERMAN ANNOUNCES DURING PRIDE DAY AT NEW YORK STATE FAIR A NEW OFFICE POLICY SUPPORTING EMPLOYEES UNDERGOING GENDER TRANSITION 

New Policy Aims To Ensure Inclusive, Respectful Workplace And Establishes Clear Guidelines For Supervisors And Other Staff 

NEW YORK – Attorney General Eric T. Schneiderman today attended Pride Day at the New York State Fair in Syracuse and announced that his office (OAG) has adopted policies supporting the right of employees to undergo a gender transition. The new policy, announced during the fair’s rainbow flag raising ceremony, explicitly affirms the right of employees to openly be who they are, including expressing gender identity, without fear of consequences. Employees are encouraged under the policy to work with a trusted supervisor, coworker, or Human Resources official to develop a Workplace Transition Plan. The policy requires supervisors, management, and coworkers to follow nondiscriminatory policies that support the transitioning individual, including through:

• Appearance Standards;
• Restroom Access;
• Pronoun And Name Changes;
• Name Changes On Professional Licenses And Registrations; and
• Rights To Privacy.

“Attracting and retaining top talent starts with creating a workplace that is inclusive and respectful,” said Attorney General Schneiderman. “This new policy affirms the basic rights and dignity of all of our office’s employees and will ensure a hospitable environment for our team of outstanding public servants.”

“It is great to see such leadership from state officials taking steps to make the workplace more inclusive and welcoming to transgender employees,” said M. Dru Levasseur, Director of the Transgender Rights Project at Lambda Legal. “These policies not only clarify existing legal protections, but also set a standard of respect and provide a model for the rest of the country.”

“This new policy is a clear and welcome plan helping ensure transgender state employees are able to work - and transition on the job - without fear of discrimination,” said JoDee Winterhof, Human Rights Campaign Senior Vice President for Policy and Political Affairs.“All New Yorkers, regardless of their gender identity, deserve to be able to live as their authentic selves and be treated respectfully in the workplace as they do so.  Now thanks to the leadership of Attorney General Eric Schneiderman, his transgender employees have the peace of mind they need and deserve.”

Under the office policy, an employee may develop a Workplace Transition Plan that includes the following considerations:

• Identifying various stakeholders (e.g., supervisors, co-workers, clients, vendors, etc.) – who are all the people in the OAG you may need to engage at some point during the transition.
• A communication plan: when and how to inform the various stakeholders of your transition or intent to transition (e.g., a letter, a face-to-face meeting, individual discussions, your supervisor/HR explaining).
• The date on which you want to begin your transition at work.  This is likely the point at which you will begin to present consistently with your gender identity, which may include change of name, pronouns, dress, grooming, and restroom use.
• The date on which OAG materials will be changed to reflect your transition (e.g., OAG directory, website, ID badge, email address, telephone listing, payroll information, etc.).
• The date on which your legal name change (if any) will take effect.
• Changes to external professional information (e.g., Lexis ID, bar and court registrations, ECF logins, bar association information, etc.).
• Any anticipated time off or leave required for medical treatment. Remember that the OAG’s normal sick pay and leave policies will apply.
• Identifying OAG benefits that are available to support the transition and affected by the transition.
• Are there any specific issues that need to be addressed sooner rather than later?
• Confirm who will be the OAG’s main point of contact (you or someone else from your Support Team) to manage the OAG’s involvement during the transition.

All employees remain subject to the Office of the Attorney General’s pre-existing Non-Discrimination and Anti-Harassment Policy. In addition to prohibiting various forms of work place discrimination, the policy also allows a transgender employee, regardless of whether or not they plan to medically or legally transition, to dress consistently with his or her gender identity. Any complaints or concerns raised by transitioning individuals or his/her co-workers will be handled consistent with the policy. The New York Attorney General’s Office relied on best practices from the transgender advocacy community in developing the policies issued today.

The full policy is available here.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 26, 2016

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A.G. SCHNEIDERMAN’S SPECIAL INVESTIGATIONS AND PROSECUTIONS UNIT ANNOUNCES DETAILED REPORT AND FINDINGS OF INVESTIGATION INTO DEATH OF JOSEPH SEGUIN IN CARMEL

NEW YORK –Attorney General Eric T. Schneiderman today released a detailed report from his Special Investigations and Prosecution Unit regarding the death of Carmel resident Joseph Seguin following a November 2015 interaction with members of the Carmel Police Department. The investigation, led by Chief of the Special Investigations and Prosecutions Unit Alvin Bragg, found no criminal culpability in the death of Mr. Seguin.

Evidence uncovered during the investigation showed that the use of force by Carmel Police officers against Joseph Seguin on November 30, 2015, was justified under New York Penal Law, due to Seguin’s repeated, and at times violent, resistance to arrest by officers attempting to arrest Seguin shortly after he physically attacked a woman on the premises.

According to the report, officers responded to a residence shortly after 1:34 a.m. after receiving a 911 call about a woman being assaulted. Officers arrived to find Seguin assaulting a woman in his bedroom.

According to several civilian witnesses and police accounts, when police arrived Seguin violently resisted arrest, kicking and punching officers, and grabbing a dog cage that contained a pit bull. When officers were finally able to free Seguin’s hands from the dog cage, he locked his hands beneath his body to prevent officers from applying handcuffs.  In their attempt to effectuate an arrest, officers deployed a Taser dart into Seguin’s abdomen; Seguin died shortly thereafter.

According to an autopsy, microscopy, and toxicology conducted by the Putnam County Medical Examiner, Mr. Seguin’s cause of death was “cardiac arrest during [an] excited state, while under the influence of phencyclidine [PCP], after being Tasered and handcuffed.”

As part of the investigation, investigators reviewed autopsy, microscopy, and toxicology records from the Putnam County Coroner / Medical Examiner; interviewed civilian witnesses who saw or heard various parts of the incident; interviewed Carmel Police Department officers and Emergency Medical Technicians wh0 responded to the scene; and reviewed 911 dispatch recordings, video captured by one civilian witness, and video and audio captured by a Taser used during the incident.

“The death of Mr. Seguin is a tragedy, and we extend our condolences to his family and friends,” Attorney General Schneiderman said. “Our exhaustive review of this case has concluded that Carmel police were justified in their use of force, including their use of a Taser, in their effort to arrest Mr. Seguin. My office remains committed to a thorough and transparent accounting of any case that falls under the Executive Order.”

The report was produced as part of Schneiderman’s role as the state’s special prosecutor. In July 2015, Gov. Andrew Cuomo appointed the Attorney General to that role to oversee investigations into incidents where unarmed civilians die during interactions with police or in incidents where there is significant question as to whether the civilian was armed.

The investigation, as detailed in the report, describes the following timeline of events:

• In the early hours of November 30, 2015, three Carmel police officers responded to a 911 call at Seguin’s home. When they arrived, they found him assaulting a woman. After Seguin ignored their demands to release the woman, officers pulled Seguin away from her.

• As observed by several civilian witnesses, Seguin then violently resisted arrest. He kicked and punched officers and grabbed a dog cage containing a pit bull. When officers were able to free Seguin’s hands from the dog cage, he locked his hands beneath his body so that the officers could not handcuff him and continued to struggle with the officers.

• An officer warned Seguin that he was going to be Tasered and then tried to deploy his Taser in “drive-stun” mode (by pressing the instrument directly against Seguin’s skin), but it malfunctioned and had no effect.

• Officers continued to struggle with Seguin and again advised him that he would be Tasered if he did not stop resisting arrest. One officer used a pain compliance technique whereby he pinched the skin on the back of Seguin’s arm.  After that technique did not work, another officer Tasered Seguin in his lower waist/back area; although the Taser functioned properly, Seguin continued to fight with the officers. 

• Finally, an officer used a Taser in dart-probe mode (i.e., rather than just pressing it into Seguin, the Taser released darts designed to cause temporary neuromuscular incapacitation into Seguin’s side-abdomen). The device was activated eight times over the course of 91 seconds before the officers were able to handcuff Seguin.  Shortly thereafter, Seguin lost consciousness, stopped breathing, and died. 

• The coroner found that the cause of death was “cardiac arrest during [an] excited state, while under the influence of phencyclidine [PCP], after being Tasered and handcuffed.”

The report also recommends that the Carmel Police Department reevaluate its policy regarding the use Tasers in light of this incident, specifically:

• Courts generally deem Taser use as non-lethal force, but there are limited scientific studies about the effect of Tasers on people under the influence of drugs; therefore police agencies should be mindful of possible concerns and take these concerns into account when developing use-of-force policies.
• Officers should be made aware that certain vulnerable populations, including those under the influence of drugs, may be at heightened risk of serious injury or death when subjected to a taser.
• The CPD in particular should consider developing policies specifically addressing Taser use on individuals suspected of being under the influence of drugs.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 29, 2016

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STATEMENT FROM A.G. SCHNEIDERMAN ON UNITED STATES DISTRICT COURT’S DECISION IN CITIZENS UNITED V. SCHNEIDERMAN

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement in response to today’s decision by the United States District Court for the Southern District:

“Today’s decision is a victory for common sense oversight of New York’s vast nonprofit sector. New Yorkers deserve to know their donations are protected against fraud and abuse, and today the court protected that right by dismissing each and every one of Citizen United’s claims.”

The full opinion can be read here.

This case was handled by Assistant Attorney General Linda Fang and Assistant Attorney General Eva L. Dietz, supervised by Deputy Bureau Chief Christine A. Ryan and Bureau Chief Lisa R. Dell, all of the New York City Litigation Bureau, which is overseen by Kent T. Stauffer, Executive Deputy Attorney General of the State Counsel Division.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 30, 2016

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A.G. SCHNEIDERMAN ANNOUNCES 109-COUNT INDICTMENT CHARGING SIX INDIVIDUALS IN MASSIVE MULTI-YEAR AUTO INSURANCE FRAUD SCHEME

Defendants Charged With Filing Forged And Falsified Documents To Fraudulently Obtain Over $250K In Commercial Policies And Vehicle Registrations 

Schneiderman: Auto Insurance Fraud Leads To Increased Insurance Rates Passed Along To Hardworking New Yorkers

NEW YORK – Attorney General Eric T. Schneiderman today announced the charges against six individuals in a 109-count indictment for their roles in a multi-year scheme to fraudulently obtain commercial car insurance policies and vehicle registrations. The Attorney General's indictment, unsealed in the Kings County Supreme Court before Justice Danny Chun, charges alleged ringleader Jean Myrtho Davilmar, insurance brokers George Thomas and Keith Ashman, and co-conspirators Joe Sainvilus, Jr., Hermaine Celestin and Jessica Davilmar. The defendants obtained over a quarter-million dollars in fraudulently discounted commercial insurance policies, and then falsely registered cars with the New York State Department of Motor Vehicles (“DMV”), by filing forged and falsified documents with the Kings County Supreme Court Clerk’s Office, DMV, automobile insurance carriers and others.

“Auto insurance fraud leads to increased insurance rates passed along to many hardworking New Yorkers,” said Attorney General Schneiderman. “Insurance fraud is a crime, and my office will continue to vigorously prosecute those who attempt to game the system.” 

“The Department of Financial Services is committed to aggressively fighting auto insurance rate evasion to protect hardworking and honest New Yorkers from paying unnecessary higher insurance premiums,” said Maria T. Vullo, Superintendent of the New York State Department of Financial Services.“DFS values its working relationship with the Attorney General’s office and we look forward to continuing our partnership in fighting insurance fraud and combatting consumer abuse.”

The defendants were arrested on a Kings County Grand Jury indictment charging 109 counts, including Grand Larceny in the Second Degree (a class C felony), Insurance Fraud in the Third Degree (a class D felony), Offering a False Instrument for Filing in the First Degree (a class E felony), Falsifying Business Records in the First Degree (a class E felony), Criminal Possession of a Forged Instrument in the Second Degree (a class D felony), Scheme to Defraud in the First Degree (a class E felony), and other crimes.

According to the indictment, as part of the scheme, the defendants created fictitious business partnerships by filing false documents with the Kings County Supreme Court Clerk’s Office. The defendants then allegedly fraudulently obtained commercial automobile insurance for multiple vehicles under the names of these fictitious business partnerships. In order to obtain lower premiums, on the applications for commercial insurance, the defendants allegedly falsely represented that the vehicles insured under the policies would be engaged in low-risk businesses such as delivering packages, performing carpentry or photography. To further lower premiums, defendants allegedly made additional misrepresentations including providing false pedigree information for purported members of the business partnerships, falsely stating the geographical location where the vehicles were operated and garaged, and misrepresenting the actual operators of the vehicles.

Additionally, after fraudulently obtaining insurance for vehicles under commercial policies, the defendants submitted false registration and title applications to DMV, registering the vehicles under the names of the fictitious partnerships. These DMV applications allegedly included forged signatures, false addresses, and fictitious individuals listed as the buyers and sellers of the vehicles. In support of their falsified registration and title applications, defendants also allegedly submitted copies of the fraudulently obtained insurance cards as proof that the vehicles had valid insurance in New York State, a prerequisite before DMV could issue registrations and license plates. 

According to statements made by the prosecutor at arraignment, when a policy canceled for nonpayment or because the defendants could not maintain the façade that the cars were being used in low-risk businesses, the defendants allegedly opened another policy under a fake partnership and transferred the cars onto the new policy. Additionally, when vehicles in this scheme were towed by offices of the New York City Marshal for non-payment of accrued parking violations in New York City, the defendants allegedly submitted false documents to the Marshal’s Office in order to have the vehicles released.

As a result of their scheme, between May 2006 and June 2014, the defendants allegedly fraudulently obtained commercial automobile insurance and DMV registrations valued in excess of $250,000 dollars.  

The indictment charges the following defendants with multiple felonies:

• Jean Myrtho Davilmar, age 73, of Kings County, New York
• George M. Thomas, age 44, of Nassau County, New York
• Keith M. Ashman, age 37, of Suffolk County, New York
• Joe Sainvilus Jr., age 32, of Kings County, New York
• Hermine Celestin, age 57, of Kings County, New York
• Jessica Davilmar, age 30, of Kings County, New York

The Honorable Justice Danny Chun set $250,000 cash/ $1 million bail bond for defendant Jean Davilmar, $50,000 cash/ $100,000 bail bond for defendant George Thomas, $7,500 cash/ $15,000 bail bond for defendant Keith Ashman, $5,000 cash/ $15,000 bail bond for defendant Joe Sainvilus, Jr., $5,000/ $15,000 bail bond for defendant Hermine Celestin, and $2,500 cash/ $10,000 bail bond for defendant Jessica Davilmar.

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

These arrests are the culmination of a long-term investigation conducted by the Attorney General’s Automobile Insurance Fraud Unit. The Attorney General thanked the New York State Department of Financial Services, DMV, and the New York Automobile Insurance Plan for their valuable assistance in the investigation. The Attorney General also thanked the New York City Marshal’s Office, Progressive Insurance Co., Maidstone Insurance Co., National General Insurance Co., Farm Family Casualty Insurance Co., Assigned Risk Solutions, American Transit Insurance Co., GEICO Insurance Co., Travelers Insurance Co., the CARCO Group, the New York City Marshal’s Office, the Kings County Clerk’s Office, the  Massachusetts Registry of Motor Vehicles and the United States Social Security Administration’s Inspector General’s Office for their assistance. 

The case is being prosecuted by Assistant Attorney General Irwin Weiss of the Auto Insurance Fraud Unit, with the assistance of Supervising Legal Analyst Paul Strocko and Legal Analyst Brandon Shapiro. The Auto Insurance Fraud Unit is led by Chief Joseph G. D’Arrigo. 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. 

The Attorney General’s investigation was conducted by Investigator Patrick Lubin, with the assistance of Investigators Zylona Silva and Michael Houlihan, under the direction of Supervising Investigators Edward Keegan and Natalie Shifrin and Deputy Chief Leonard D'Alessandro. The Investigations Bureau is led by Chief Dominick Zarrella. 

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 30, 2016

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A.G. SCHNEIDERMAN ANNOUNCES SETTLEMENT BARRING MAJOR NYC DEVELOPER FROM PARTICIPATING IN REAL ESTATE OFFERINGS 

Jeshayahu Boymelgreen Barred From Participating In Condominium Development In Or From New York State For A Period Of Two Years; Failure To Abide By All Terms Of Settlement Agreement Will Lead To Permanent Ban

Schneiderman: We Will Not Hesitate To Take Tough Action Against Unscrupulous Individuals Who Continually Violate The Rights Of Purchasers And Tenants

NEW YORK—Attorney General Eric T. Schneiderman today announced a settlement with real estate developers Jeshayahu Boymelgreen, Itzhak Katan, and Domenick Tonacchio and several of their entities. The settlement ends the Attorney General’s investigation of potential Martin Act violations at six condominiums in Manhattan and Brooklyn that were developed by Boymelgreen either in partnership with others or on his own. The agreement also bars Boymelgreen from participating in the offer or sale of securities, including condominiums, in or from New York State for a period of two years.  The Attorney General’s investigation found numerous violations at the properties, including failure to complete construction projects after selling residential units and failure to remedy alleged construction defects. Should Boymelgreen fail to fulfill his obligations under the settlement, he will be automatically and permanently barred from participating in the offer and sale of securities in or from New York State.

“Today’s settlement should serve as a lesson to other developers who choose to ignore and break the rules,” said Attorney General Schneiderman. “We will not hesitate to take tough action against unscrupulous individuals who violate the rights of purchasers and tenants. I am pleased that this settlement will return restitution to those who have been harmed by these illegal practices.”

The six properties included in the settlement are:

• The Downtown Condominium at 15 Broad Street in Manhattan;
• The 20 Pine Condominium in Manhattan;
• Beacon Tower at 85 Adams Street in Brooklyn;
• The Novo Condominium at 353 Fourth Avenue in Brooklyn;
• The Crest Condominium at 302 Second Street in Brooklyn; and
• The Newswalk Condominium at 535 Dean Street in Brooklyn.

The parties to the agreement are Boymelgreen, Katan and Tonacchio, along with Boymelgreen Family LLC; 343 LLC; and City View Gardens Phase II, LLC.  Boymelgreen Family LLC is an operating company through which Boymelgreen acted in developing the properties at 15 Broad Street, 20 Pine Street and 85 Adams Street. 343 LLC is the named sponsor of the Novo Condominium, which Boymelgreen developed with Tonacchio and Katan. City Views Gardens Phase II, LLC is the named sponsor of the Crest Condominium, which Boymelgreen developed with Katan.  Boymelgreen and entities he controlled were the sole developers involved in the Newswalk Condominium. 15 Broad, 20 Pine and 85 Adams were developed by Boymelgreen in a joint venture with subsidiaries of the publicly-traded conglomerate Africa Israel Investments Limited. In January, the Attorney General reached a separate settlement with Africa Israel relating to 15 Broad, 20 Pine and 85 Adams. Details of that agreement can be found here.

The Martin Act, New York’s blue sky law, requires offerors of real estate securities, such as cooperatives and condominiums, to disclose the terms of the offering to purchasers in an offering plan.  The law also gives the Attorney General broad enforcement powers to compel developers to fulfill their legal obligations and promises made in the offering plan. For example, developers are required to complete construction of their projects by procuring the permanent certificate of occupancy (PCO) promised in the offering plan, and they must set aside money necessary to complete the project. Developers are also required to deliver properties that conform to the New York City Building Code which establishes standards for fire-safe construction and prevention of water leaks.

The 15 Broad Street property is a 400-unit condominium that sits directly across the street from the New York Stock Exchange and includes 23 Wall Street, a landmarked property. The Boymelgreen-Africa Israel joint venture undertook renovation of the building in 2002.  The property received a generous tax exemption and abatement under Section 421-g of the Real Property Tax Law designed to spur conversion of office buildings in lower Manhattan to residential use to revitalize the Financial District.

By 2008, Boymelgreen and Africa Israel had sold all units in the building, collecting at least $360 million.  Up until the units were sold, they also collected the 421-g tax break on each unit.  However, the developers abandoned all efforts to complete the renovation and failed to procure the legally-required PCO and drained the funds escrowed to pay for the costs of completing the project, both clear-cut violations of the Martin Act With the building left unfinished, the iconic 23 Wall Street remained untenanted and almost completely unused for eight years, depriving the City of the Downtown revitalization that developers were supposed to deliver in exchange for the 421- tax break.  .  Current estimates indicate that the work needed to get a PCO will not be completed until 2018 and will cost more than $750,000.

The failure to get a PCO imposed real harm on unit ownersat 15 Broad Street because under the offering plan, Boymelgreen and Africa Israel retained control of the board of managers until a PCO was issued.  The developers used their control of the board to delay and derail a lawsuit filed by unit owners seeking damages for construction defects.

In February 2014, the Attorney General obtained a court order barring Boymelgreen and his partners on the 15 Broad project from conducting securities offerings in New York pending a public fraud investigation before a State Supreme Court Justice. 

20 Pine Street is a 409-unit condominium in lower Manhattan that the Boymelgreen-Africa Israel venture began developing in 2004.  As at the 15 Broad property, the developers sold out of all units, collecting about $500 million in gross revenue, drained funds needed to complete the project from the required escrow account and walked away from the obligation to secure a PCO.  And as at 15 Broad Street, the developers controlled the 20 Pine board of managers until a PCO issued and they used that power to impede a lawsuit filed by unit owners against Boymelgreen and Africa Israel relating to construction defects.  At the 20 Pine property, the developers got a PCO only after the NYAG started its public investigation into the offering.

The 85 Adams Street property is a 79-unit condominium in downtown Brooklyn which the Boymelgreen-Africa Israel joint venture began developing in 2004.  They had sold all units at the property by 2008, grossing at least $60 million.  In 2009, unit owners brought suit against Boymelgreen and his partners alleging serious construction defects, including an almost complete lack of the fire-rated construction required by the New York City Building Code.

The January agreement required Africa Israel to escrow with the Attorney General the funds needed to secure a permanent certificate of occupancy for the 15 Broad Street property and to obtain that certificate by April 1, 2018. If the company fails to do so, it is required to pay the unit owners $20,000 in restitution for each 90-day period that goes by without the required certificate of occupancy.  The agreement also requires Africa Israel to permanently surrender control of the 15 Broad board.

Under the January settlement, the developers also compensated the City for the receipt of 421-g benefits at 15 Broad by depositing $2 million into the Affordable Housing - AG Settlement Fund, which was established in June 2014 to help finance affordable housing for low-income New Yorkers. 

As to the construction defect claims at 15 Broad, 20 Pine and 85 Adams, the January settlement required Africa Israel to establish a restitution escrow with the Attorney General.  By the terms of the January agreement, the funds in the escrow would be released to unit owners at the 15 Broad Street, 20 Pine Street and 85 Adams Street buildings if Africa Israel failed to resolve the construction defect claims by unit owners at the three buildings by a date certain.  Since January, Africa Israel has entered into and paid on settlements of the construction defect claims at 15 Broad and 20 Pine have been resolved. It has not yet resolved the 85 Adams defect claims.

Today’s settlement with Boymelgreen resolves the Attorney General’s investigation into these properties in its entirety.

The Novo at 353 Fourth Avenue is a 113 unit condominium in Park Slope, Brooklyn which respondents Boymelgreen, Katan and Tonacchio started developing in 2006.  They sold all units by 2010, collecting $68 million in revenues and, as at the other Boymelgreen projects, never got a PCO.  In its investigation, the Attorney General collected evidence of a serious lack of fireproofing, water leaks and other construction defects.  Today’s settlement requires that the developers get a PCO by November 1, 2016. For each 60 days that PCO is late, the developers will pay $15,000 to the Novo board as restitution. And, the developers will pay $250,000 to the Novo board as restitution for the claimed construction defects at the property.

The Crest is a 68 unit condominium at 302 Second Street, also in Park Slope, developed by Boymelgreen and Katan in 2006.  The sponsors sold all units by 2013, grossing at least $60 million.  As with the other offerings, respondents Boymelgreen and Katan promised to deliver a building constructed in accord with New York City Building Code. The Attorney General has collected evidence indicating that the building lacks fireproofing and suffers from other construction defects.  Unit owners sued Boymelgreen, Katan and others in a private action, which was settled during the pendency of the investigation.

Newswalk is a 137-unit condominium in Prospect Heights, Brooklyn. Boymelgreen began development of the property in 2000 and all residential units have been sold.  Respondent Boymelgreen promised to deliver a building compliant with the New York City Building Code. The Attorney General has collected evidence indicating that the building is lacking fireproofing and suffers from other construction defects.  Newswalk unit owners sued respondent Boymelgreen in a private action nine years ago and Boymelgreen has failed to resolve that litigation. Today’s settlement requires Boymelgreen to deposit funds with the Attorney General and, if the Newswalk case is not resolved by a date certain, those funds will be released to the Newswalk homeowners.

Also under the settlement the respondents will pay the Attorney General $100,000 to cover the cost of its investigation.

In addition to the relief outlined above, the agreement provides that if Boymelgreen offers condominiums again after the two-year bar expires, he will have to make special disclosures relating to the failure of Liberty Pointe Bank (a bank he founded which was closed by the New York State Banking Department), unpaid judgments against him or his entities in state or federal court and pending litigations against him or his entities relating to real estate.  Moreover, should Boymelgreen fail to fulfill his obligations under the agreement, he will be immediately and permanently barred from New York State securities offerings. 

The investigation was led by Assistant Attorney General Elissa Rossi and the Real Estate Finance Bureau, under the supervision of former Bureau Chief Erica F. Buckley. Bureau Chief Brent Meltzer now oversees the Real Estate Finance Bureau, which is led by Executive Deputy Attorney General for Economic Justice Manisha M. Sheth.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 31, 2016

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A.G. SCHNEIDERMAN ANNOUNCES ORDER FORCING FORMER PET ADOPTION CENTER THAT SOLD DYING PETS TO PAY OVER $28K TO HUMANE SOCIETY 

Consent Order Transfers Pet Adoption Center’s $28K Assets To Local Humane Society After Center Sold Dying Pets To Unsuspecting Families 

Schneiderman: Through Our Animal Protection Initiative, We Will Work To Protect New York Families And Animals From Businesses That Exploit Them For Profit 

ROCHESTER – Attorney General Eric T. Schneiderman today announced that a Monroe County Supreme Court has ordered the former Scottsville Veterinary Adoptions, Inc. to distribute its assets to the Humane Society of Rochester and Monroe County FPCA commonly known as Lollypop Farm, another similar charitable organization.  In May, the Attorney General obtained an order dissolving the not-for-profit pet adoption center operating in Scottsville, New York. After a financial review requested by the Attorney General, the former pet adoption center has agreed to give-up its assets that were purchased from donations it received when it was as a not-for-profit organization. Based on the court order filed today, Scottsville Veterinary Adoptions, Inc. will pay the Rochester Humane Society $28,366.

“Businesses that hide behind a non-profit status to evade the consumer protections of the Pet Lemon Law take advantage of unsuspecting consumers who are looking to rescue a pet in need of a home,” Attorney General Schneiderman said. “Through our Animal Protection Initiative, my office will continue fighting to protect all New Yorkers – humans and animals alike –  from unscrupulous businesses that exploit them for profit.”

The adoption center sold sick pets to consumers that died shortly after purchase.  As a not-for-profit corporation, Scottsville Veterinary Adoptions, Inc. was not required to comply with minimum standards of animal care required by Agriculture and Markets Law section 410, which only apply to pet stores and commercial breeders. Furthermore, pet adopters have no recourse under General Business Law section 753 (the so-called "Pet Lemon Law") when adopting from a not-for-profit corporation, even though the name "Scottsville Veterinary Adoptions" implies that the pets offered were fully screened and healthy.  Moreover, the adoption center is located in the same facility as Scottsville Veterinary Hospital a for-profit business which is owned by Stephen R. Berghash, D.V.M., the incorporator and president of Scottsville Veterinary Adoption, Inc.

The Attorney General’s investigation revealed many instances of sick pets that were not diagnosed as sick and not quarantined.  As a result, the adoption center sold sick pets that were supposedly examined and cleared by the veterinary hospital at the same facility.  As a result of the dissolution, the adoption center can no longer operate as a non-profit organization and from now on will be subject to inspections by the New York Agriculture and Markets department and comply with the New York Pet Lemon Law. 

New York State's Pet Lemon Law is designed to safeguard the public and to ensure the humane treatment of dogs and cats by requiring pet dealers to guarantee the good health of any such animal sold by a pet dealer to a consumer.

The Attorney General’s Animal Protection Initiative aims at ensuring compliance with New York State's Pet Lemon Law, designed to safeguard the public and to ensure the humane treatment of dogs and cats by requiring pet dealers to guarantee the good health of any such animal sold by a pet dealer to a consumer.

The Attorney General acknowledges the assistance of Inv. Reno Di Domenico, Director of Law Enforcement at the Humane Society of Greater Rochester. The investigation was handled by Assistant Attorneys General Audrey Cooper and Benjamin Bruce both of the Rochester Regional Office which is headed by Ted O’Brien, the Rochester Regional Office is in the Division of Regional Affairs headed by Executive Deputy Attorney General Marty Mack.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
August 31, 2016

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A.G. SCHNEIDERMAN AND STATE EDUCATION COMMISSIONER ELIA RELEASE GUIDANCE AND MODEL MATERIALS TO HELP SCHOOL DISTRICTSCOMPLY WITH THE DIGNITY FOR ALL STUDENTS ACT 

Guidance Based Upon Results Of Joint School District Survey Of Compliance With The Dignity For All Students Act, Which Requires Districts To Implement Measures Combating Bullying And Discrimination

Schneiderman: It's Vitally Important That Students Feel Comfortable Coming Forward With Fears Of Discrimination Or Harassment In Our Schools

NEW YORK – Attorney General Eric T. Schneiderman and New York State Education Department Commissioner MaryEllen Elia today released guidance and model materials to aid school districts in complying with the Dignity For All Students Act.  The Dignity Act is New York’s first comprehensive statewide anti-bullying legislation and stands as a powerful tool against discrimination and harassment in public elementary and secondary schools.  The Attorney General and Commissioner based the guidance on the needs identified in a joint statewide survey of school districts concerning compliance with the Dignity Act.  The guidance and training materials were developed after a comprehensive review of district responses to the joint survey, and consideration of steps districts have taken across New York to provide their students with safe school environments.  

"It's vitally important that students feel comfortable coming forward with fears of discrimination or harassment in our schools, and equally important that schools honestly report their responses to these issues,” Attorney General Schneiderman said. “I am pleased to continue our partnership with the New York State Education Department to ensure that all of our students have the safe and welcoming learning environments they deserve.  I deeply appreciate the participation of school districts that responded to the survey.  Their thoughtful responses, and the challenges and successes they described, greatly assisted our agencies in developing additional guidance and materials to help schools keep their students safe.”

New York State Commissioner of Education Mary Ellen Elia, said, “Far too many children go to school in fear every day – afraid they will be taunted, teased, bullied and even physically harmed, just because others perceive them as different. It is a national tragedy that can’t be ignored or allowed to continue. The Regents and I are grateful for Attorney General Schneiderman’s partnership as we continue to bring awareness about this critical issue to our schools and to the public. We are grateful, as well, for the Attorney General’s assistance in disseminating guidance and training materials to help our school leaders establish policies and procedures to create school environments that are free from harassment, bullying and discrimination.” 

Assemblymember Daniel O’Donnell said, “The passage of the Dignity for All Students Act was one of my greatest accomplishments as a legislator because it mandated that public schools in New York create a school culture that is inclusive to all and prevents harassment and bullying of students. I applaud Attorney General Eric Shneiderman and the New York State Department of Education for continuing to look for ways to improve this legislation and support New York's students.”

State Senator Brad Hoylman said. "The idea behind the Dignity For All Students Act is that all children, regardless of race, gender, ethnicity or sexual orientation, deserve to feel safe at school. But we can’t stop what we can’t see. With these thoughtful new guidance and training materials, we’ll be able to more completely implement DASA by helping schools and families – particularly those who don’t speak English – effectively identify, report and address bullying. I’m truly grateful to Attorney General Schneiderman and Education Commissioner Elia for this comprehensive joint survey, which will go a long way towards stamping out bullying across New York's 733 school districts."

The Dignity Act, which became law in 2010, requires school districts to (i) modify theirCodes of Conduct to include prohibitions on harassment, bullying, and discrimination, and disseminate the updated code to students and their parents, (ii) train school employees on topics of bullying, harassment, and discrimination, (iii) designate Dignity Act Coordinators for each district school, and (iv) provide students with instruction intended to discourage harassment, bullying, and discrimination. 

The Act became law in 2010, with an effective date of 2012 for its major provisions.  In the decade leading up to the bill’s passage, awareness grew nationally about the epidemic nature of bullying within schools.  In 2009, more than 7 million U.S. students ages 12 to 18 – 28 percent – reported being bullied at school. A 2011 survey of New York high school students revealed that nearly 18 percent had been bullied on school property.  Prior to passage of the Dignity Act, only 1 in 5 students in New York State attended a school with a comprehensive anti-bullying and anti-harassment policy.

The dear colleague letter issued by the Attorney General and Commissioner analyzed data on material incidents of bullying, harassment, and/or discrimination that districts were required to provide to the State Education Department for the 2013-14 school year. That data suggested underreporting of such incidents in districts across New York State. The data also contained a high percentage of reported incidents being classified as “other” in nature, and not identifying one of the protected bases in the Dignity Act – e.g., race, gender, sexual orientation – as motivating the incidents. 

The letter also includes recommendations and areas for improvement in school districts, including ensuring that districts (1) timely appoint Dignity Act Coordinators to fill positions when they are vacated, (2) have procedures in place to maintain records and accurately report material incidents of harassment or bullying to the Commissioner, (3) develop materials and regularly train school employees on their duties under the Dignity Act, including duties to identify, investigate, and report incidents of harassment or bullying, and (4) provide language access to district codes of conduct, and other materials concerning schools’ expectations for student conduct, for non-native English speakers. 

Along with the dear colleague letter, the two agencies enclosed a document entitled, “Dignity for All Students Act:  Guidance on Investigating, Responding, and Reporting.” The document describes best practices for school districts in investigating alleged incidents of harassment and bullying; districts’ recordkeeping requirements; and how and when schools should aggregate data about incidents to ensure accurate reporting of data to the Education Department. 

The full survey analysis and recommendations can be found here.

Based upon the survey results provided by districts, the Attorney General and Commissioner also developed and released a set of model training materials to assist districts in training school employees on a variety of topics, including the nature of harassment, bullying, and discrimination; how to identify such behavior; and school employees’ duties concerning the reporting, investigation, and documenting of alleged incidents of harassment, bullying, and discrimination. The model training materials can be found here.

Dawn Yuster, School Justice Project Director at Advocates for Children, said, “I applaud the Attorney General and the Commissioner for providing additional resources to school districts statewide as they seek to provide safe school environments for all students.  Each year, Advocates for Children receives many calls on our Helpline from parents struggling with the bullying their children experience in school, and our School Justice Project is working on behalf of those children who live in fear of harassment and bullying because of who they are or how they are different from other kids.  I am confident that technical assistance in the form of guidance, model forms, and training materials will help districts understand their duties under DASA and other civil rights laws, and work toward the goal we all share:  to make sure our kids have a safe and welcoming place to go to school.”

This initiative is part of a partnership, launched in the 2014-15 academic year, between the Attorney General’s Office and the New York State Education Department to jointly promote equal educational opportunity across New York State.  In addition to the joint initiative on bullying and harassment, the Attorney General’s Office and the Education Department work together to promote broad compliance with various state and federal civil rights requirements, and to address such issues as barriers to student enrollment, academic diversion of limited English proficient students, and school discipline. 

This matter is being handled by Assistant Attorney General Justin Deabler and Bureau Chief Lourdes M. Rosado of the Civil Rights Bureau.  The Executive Deputy Attorney General for Social Justice is Alvin Bragg.

The Attorney General's Office is committed to ensuring access to equal educational opportunity. To file a complaint, contact the Civil Rights Bureau at (212) 416-8250, civil.rights@ag.NY.gov or visit www.ag.NY.gov.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
September 1, 2016

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A.G. SCHNEIDERMAN AND COMPTROLLER DINAPOLI ANNOUNCE ARREST OF FLORIDA MAN FOR THEFT OF OVER $180,000 IN NYS PENSION BENEFITS 

Robert Schusteritsch Allegedly Stole Pension Benefits Intended For His Deceased Brother For Over 7 Years; Also Charged With Impersonating Deceased Brother In Effort To Maintain Eligibility For Benefits 

Schneiderman: Comptroller DiNapoli And I Will Keep Working To Root Out And Prosecute Pension Abuse 

DiNapoli: Attorney General Schneiderman And I Will Continue Our Successful Partnership in Rooting Out The Theft Of Public Money 

ALBANY - Attorney General Eric T. Schneiderman and New York State Comptroller Thomas P. DiNapoli announced today the unsealing of an indictment charging Robert J. Schusteritsch, 71, a resident of Florida, with the crimes of Grand Larceny in the Second Degree, a class C felony, and Criminal Impersonation in the Second Degree, a class A misdemeanor, in Albany County Court. Schusteritsch is alleged to have stolen over $180,000 in pension benefits issued by the New York State and Local Employees Retirement System to his deceased brother, Martin Petschauer, between July 2008 and September 2015. 

“Illegally pocketing pension funds intended for a deceased relative is not only reprehensible, it hurts hardworking New Yorkers who depend on their pension for a secure retirement,” said Attorney General Schneiderman. “Comptroller DiNapoli and I will continue working together to root out pension system theft and hold accountable those who abuse this system.”

“This  arrest is a  warning to those who might steal a deceased relatives' pension,” said State Comptroller DiNapoli. “We will track down anyone who tries to defraud our state pension system, and they will be charged accordingly. I thank Attorney General Schneiderman for our successful partnership in rooting out the theft of public money."

According to documents filed with the court today, Petschauer was a New York State pensioner who retired as Chief of the Pooling and Audit Review Section of the New York Metro Milk Marketing Area in approximately 1986.  He passed away on July 9, 2008.  At the time of Petschauer’s death, his pension benefits were being direct deposited into a bank account held in a trust for the benefit of Petschauer; Schusteritsch was the sole trustee for his brother and had exclusive access to the bank account. 

When Petshauer died, Schusteritsch concealed his brother’s death from the bank and the Retirement System and kept the trust account open to maintain the direct deposits. He then routinely accessed the pension deposits and spent the money for his own benefit. All told, prosecutors allege Schusteritsch stole over $180,000 in pension benefits until the Retirement System discovered Petschauer’s death in October 2015.

The prosecution also alleges that when the Retirement System learned of Petschauer’s death and stopped paying benefits into the trust account, Schusteritsch called the customer help line on November 2, 2015, pretended he was Petschauer, and asserted that he was not actually dead, in an effort to maintain eligibility for the pension benefits.  

Schusteritsch was arrested by agents of the Charlotte County Sheriff’s Office in Florida and brought to Albany County to face the charges. He was arraigned on the indictment today before Honorable Peter A. Lynch in Albany County Court, and entered a plea of not guilty.  Bail was set at $10,000 cash or bond, and he was remanded in lieu of posting.  If convicted, Schusteritsch faces up to five to fifteen years in state prison.

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

The 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.

Attorney General Schneiderman and Comptroller DiNapoli thanked the Charlotte County Sheriff’s Office for their assistance.

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

The case is being handled by Assistant Attorney General Benjamin S. Clark 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.

The Attorney General’s investigation was conducted by Investigator Sam Scotellaro and Deputy Chief Antoine Karam. Forensic accounting was performed by Meaghan Scovello. The Investigations Bureau is led by Chief Dominick Zarrella.  The Forensic Audit Section is led by Chief Auditor Edward J. Keegan.

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
September 5, 2016

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A.G. SCHNEIDERMAN RELEASES 2016 LABOR DAY REPORT HIGHLIGHTING PAST YEAR’S MAJOR ACCOMPLISHMENTS IN ADVANCING THE RIGHTS OF WORKERS

A.G. Recovered Almost $5.7 Million In Back Wages For More Than 3,300 Workers Over The Past Year, In Both Civil And Criminal Enforcement Actions; Has Recovered Almost $27 Million In Stolen Wages For More Than 20,000 Workers Since Assuming Office

A.G. Also Filed Groundbreaking Lawsuit Alleging Domino’s Is Joint Employer With Franchisees And Accountable For Wage-And-Hour Violations At Three Franchise Stores

A.G. Helped End On-Call Scheduling At Six Major Retailers And Halted Unlawful Non-Compete Clauses, Bolstering Working Families’ Security And Opportunities For Advancement

NEW YORK – In honor of Labor Day, Attorney General Eric T. Schneiderman issued his third annual Labor Day report, Working for Justice, covering the robust enforcement actions of his Labor Bureau and the key policies he has promoted on behalf of working men and women. The labor cases he has pursued and the policies he has championed cover workers across the state and across industries; those working for small businesses, large corporations, or on public works projects. 

“As Attorney General, I remain steadfastly committed to ensuring that workers are paid for the work they do, that their pay lifts them out of poverty, and that undue obstacles aren’t placed in their path to job security and economic advancement,” Attorney General Schneiderman said. “I celebrate the progress we made over the past year, and will continue fighting for the working men and women who contribute so much to our great state.”

Some of the AG’s biggest achievements on behalf of workers this year include:

• Recovering almost $5.7 million for more than 3,300 low-wage workers, including fast-food employees, home health aides, taxi drivers, restaurant employees, and construction workers, among others. Since taking office, Attorney General Schneiderman has recovered nearly $27 million for more than 20,000 workers victimized by wage theft, and levied $2.5 million in penalties against unscrupulous employers. 
• G. Schneiderman’s first-of-its-kind lawsuit against Domino’s Pizza as a joint employer responsible along with three franchisees for repeated violations of law and underpayment of workers at the three franchisees’ restaurants. Since taking office, A.G. Schneiderman has recovered $1.5 million for some 1,200 workers at 61 Domino’s stores across New York. His lawsuit against Domino’s corporate enterprise rightfully seeks to hold the company responsible for the wage theft endemic to its franchises nationwide, given the level of control exercised by Domino’s over franchisees’ operations, including labor relations.
• Successfully pursuing criminal prosecution for particularly egregious violators, including a home-health-care-agency owner who repeatedly failed to pay his employees; a Papa John’s franchise owner who created fake records after being investigated by the U.S. Department of Labor; and, in joint investigations with the New York City Department of Investigations and the Inspector General of the Port Authority of New York and New Jersey,  contractors on public works projects that paid below the legally required prevailing wage rates. 
• Obtaining agreements from six retail corporations comprising 13 brands, such as the Gap, Victoria’s Secret, Bath & Body Works, and J. Crew, to end the harmful practice of “on-call scheduling,” in which workers are required to call in to work a few hours in advance to find out if they are needed; such shifts require employees to obtain child care and forego other employment and educational opportunities without compensation.
• Ending unscrupulous non-compete agreements for workers at multiple companies, including Law360 and Jimmy John’s, after investigations by the AG’s Labor Bureau. Non-compete clauses are legal in New York only when a worker has highly specialized skills or access to trade secrets. 

Full details of the Office of the Attorney General’s work on behalf of workers can be found in the report released today.  

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
September 6, 2016

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A.G. SCHNEIDERMAN LAUNCHES ANTITRUST INVESTIGATION INTO MYLAN PHARMACEUTICALS INC., MAKER OF EPIPEN

NEW YORK – Today, Attorney General Eric T. Schneiderman announced his office has commenced an investigation into Mylan Pharmaceuticals Inc, the maker of EpiPens. A preliminary review by the Office of the Attorney General revealed that Mylan Pharmaceuticals may have inserted potentially anticompetitive terms into its EpiPen sales contracts with numerous local school systems. Mylan’s EpiPen is the predominant epinephrine autoinjector—a device and drug used in cases where an individual suffers a severe allergic reaction, which could otherwise lead to death—in the U.S. market.

“No child’s life should be put at risk because a parent, school, or healthcare provider cannot afford a simple, life-saving device because of a drug-maker’s anti-competitive practices,” Attorney General Eric T. Schneiderman said. “If Mylan engaged in anti-competitive business practices, or violated antitrust laws with the intent and effect of limiting lower cost competition, we will hold them accountable. Allergy sufferers have enough concerns to worry about—the availability of life-saving medical treatment should not be one of them. I will bring the full resources of my office to this critical investigation.”