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Office Of A.G. Schneiderman Unveils Year-End Review

Review Cites Progress For New York On Economic Justice, Public Safety, Taxpayer Protection, Public Integrity, Civil Rights, Labor Enforcement & Environmental Protection

A.G. Schneiderman Named National Co-Chair Of RMBS Working Group; I-STOP Rx Drug Plan Signed Into Law; New Rules For Charities Engaging In Electioneering; Hundreds Of Millions Recovered For Taxpayers; Record-Setting Drug Busts Statewide; Established New Standards At Gun Shows; Rooted Out Synthetic Narcotics

Last week, the Office of Attorney General Eric T. Schneiderman issued an end-of-the-year review detailing many of its accomplishments in areas including economic justice, public safety, taxpayer protection, public integrity, civil rights, labor enforcement and environmental protection.

“Across every bureau, our office has worked diligently this year to restore New Yorkers’ faith in the public and private sectors, and I am proud of the results we’ve delivered for the people of this state,” said Attorney General Schneiderman. “From pursuing the financial frauds that were at the heart of the economic crisis, to cracking down on government corruption, to rooting out fraud against taxpayers and consumers, to keeping our streets safe from crime, we are moving closer to fulfilling the goal of building the best public law firm in the country to serve and protect all New Yorkers.”

The following are some of the actions Attorney General Schneiderman has taken since January:

Economic Justice and Consumer Protection

Protecting New Yorkers From The Mortgage Crisis

  • Was appointed to the chairmanship of the new Residential Mortgage-Backed Securities Working Group, a multi-agency task force created by President Barack Obama to investigate the illegalities that contributed to both the financial collapse and the mortgage crisis, and to bring justice for the victims of this misconduct.
  • As co-chair of the Residential Mortgage-Backed Securities Working Group, filed a lawsuit against J.P. Morganfor the fraudulent misrepresentations and omissions made by the former Bear Stearns to promote the sale of mortgage-backed securities, which contributed to the collapse of the housing market.
  • In his second lawsuit as co-chair of the Residential Mortgage-Backed Securities Working Group, filed a Martin Act lawsuit against Credit Suisse Securitiesfor deceiving investors as to the care with which they evaluated mortgage loans packaged into securities prior to the 2008 foreclosure crisis.
  • Protected homeowners as a national leader by fighting for a fair50-state mortgage settlementthat held banks accountable. Attorney General Schneiderman eventually reached a $130+ million settlementfor New York with the nation’s five largest mortgage servicers over foreclosure abuses, the most per “underwater” borrower of any state involved in the federal-state settlement. Along with ensuring relief for victims of wrongful foreclosure conduct, the settlement also imposed strong national standards for mortgage servicing and fulfilled the Attorney General’s demand that he retain the right to bring legal action over misconduct that had not yet been investigated.
  • Committed $60 million over three years to fund housing counseling and legal servicesfor struggling New York homeowners, as part of his Homeowner Protection Program. In the first year of funding, 35 legal services organizations and 59 housing counseling agencies will receive over $16.1 million to provide free foreclosure prevention services throughout New York State.
  • Introduced the Foreclosure Fraud Prevention Act of 2012in the state Legislature, a bill that wouldprotect New Yorkers from fraudulent business practices in the foreclosure process with tough new criminal penalties for those who intentionally engage in such conduct.
  • Obtained a multi-million dollar settlement with foreclosure firm Steven J. Baum P.C.,a sum that will be used in part to fund state programs that offer assistance to homeowners facing foreclosure or victims of predatory lending practices. The agreement stems from the Attorney General’s previous investigation finding that the Buffalo-based Baum Firm had routinely brought foreclosure proceedings without taking appropriate steps to verify the accuracy of the allegations or the plaintiff's right to foreclose.
  • Warned Wells Fargoto reverse a policy that temporarily suspended the review of mortgage relief applications from New York homeowners as the state recovered from Hurricane Sandy, which violated the terms of the National Mortgage Settlement.

Standing Up For Consumers And Investors

  • Secured a $410 million settlement with J. Ezra Merkin, who controlled four funds that invested over $2 billion with Bernard M. Madoff on behalf of hundreds of New York-based investors as part of history’s largest Ponzi scheme.
  • Obtained a $210 million settlement with Ivy Asset Management, a firm that advised clients to invest with notorious Ponzi schemer Bernard Madoff, despite its knowledge of Madoff’s fraudulent operation. The settlement helped return nearly all the original investment to those defrauded in the case.
  • Achieved a $7.8 million settlement with eAppraiseIT, formerly one of the nation's largest real estate appraisal management companies, for colluding with Washington Mutual to inflate the values of homes, compromising the health of the housing market.
  • Resolved complaints against GlaxoSmithKlinethat led to a $3 billion settlement and guilty pleas to federal criminal charges, after the pharmaceutical corporation engaged in various illegal schemes related to the marketing and pricing of drugs it manufactures.
  • Took part in the largest multi-state consumer protection-based pharmaceutical settlement in history, reaching a record $181 million settlement with Johnson & Johnson to settle claims that the pharmaceutical giant improperly marketed two anti-psychotic drugs.
  • Reached a $1.6 billion global settlement with Abbott Laboratoriesregarding the illegal promotion of the anti-seizure drug Depakote for off-label uses.
  • Ended an illegal price-fixing scheme among several major LCD manufacturers, including AU Optronics Corporation, LG Display Co., Ltd., and Toshiba Corporation, and secured a $571 million national settlement to compensate consumers affected by the scam.
  • Reached a $612 million agreement with biotechnology giant Amgenfor engaging in various illegal marketing practices – including kickbacks to health care professionals and the submission of false Medicaid claims – to promote sales of drugs for unapproved uses.
  • Reached a $95 million settlement with Boehringer-Ingelheim Pharmaceuticals, Inc.for engaging in various illegal schemes in order to promote its products, including deceptive marketing practices and kickbacks to medical professionals.
  • Ceased the deceptive marketing by Skechers, USA, Inc.of its footwear products, including Shape-Ups, Tone-Ups, and the Skechers Resistance Runner athletic shoes, through a record $45 million dollar nationwide settlement.
  • Secured a settlement of $64 million in restitution with the drug distribution company McKesson Corporation, which overbilled the state’s Medicaid program by reporting inflated pricing information for over 1,400 brand name prescription medications
  • Resolved civil and criminal charges against Merck Sharp & Dohme Corp.for using deceptive marketing practices to misrepresent the cardiovascular safety of its drug Vioxx. As part of the corporation’s settlement, New York State will receive $61 million in compensation.
  • Secured a $9.5 million settlement with SmartBuy, a retailer and financing firm based in North Carolina after the company fraudulently charged thousands of soldiers who purchased electronics near Fort Drum and ruined their credit. The Attorney General’s settlement will clear debt fraudulently charged to hundreds of New York soldiers at a shopping mall near Fort Drum and thousands of soldiers nationwide. This was the second settlement the Attorney General has reached with SmartBuy and its affiliated companies, wiping out a total of $12.9 million in debt for service members.
  • Resolved charges of Medicaid fraud in drug and alcohol treatment services against New York Downtown Hospitalwith a $13.4 million settlement.
  • Secured refunds totaling almost $2 million for 2,700 New York State customers of Columbia Utilities LLC and Columbia Utilities Power LLC, after the utility companies lured consumers with false promises of lower rates, and instead fleeced customers with much higher bills. The Attorney General’s settlement also imposed new restrictions on the companies’ marketing practices to prevent future frauds.
  • Held health care providers to their obligations to New York taxpayers by recovering $1.6 million spent in excess Medicaid payments on claims for dental services provided by Kaleida Health through the Buffalo Women’s & Children’s Hospital Dental Clinic.
  • Busted an identity theft ring that hijacked over 180 people’s store credit accountsat Home Depot, Sears, Kmart, Kohl’s, and other retail stores to obtain over $1 million in merchandise, gift cards and store credits, and then resold the merchandise and gift cards for a profit. The Attorney General subsequently secured the guilty pleasof eight members of the ring, all of whom face jail time.
  • Following the receipt of hundreds of consumer complaints statewide, opened an investigation into price gouging, the inflation of prices of essential goods and services instigated by the market disruption caused by Hurricane Sandy. As part of this investigation, the Attorney General’s office has thus far notified 25 gas station operatorsin New York City, Westchester, and Long Island of his office’s intent to commence enforcement proceedings against them for gouging consumers in the wake of Hurricane Sandy.
  • Ended the unlawful conduct of 47 home improvement contractors in the North Countryafter an investigation revealed widespread violations of New York’s Home Improvements Contracts Law.
  • Reached a settlement to protect the privacy of consumers scammed by Game Theory, a mobile-content corporation that was sending text messages to New Yorkers in order to trick them into signing up for texting services.
  • Partnered with the Department of Justice to file an antitrust lawsuit challenging an illegal joint venture of two iconic operators, Gray Line and City Sights, that resulted in a monopoly in the market for hop-on, hop-off bus tours in New York City.
  • Sued the owners of Buffalo furniture retailer FWSfor failing to provide consumers who made advanced payments for merchandise with either furniture or refunds following the store’s closing.
  • Took action against a Lake George tree removal business, American Tree Company, for price gouging New York consumers in the wake of Tropical Storm Irene.
  • Won restitution against the owner of a Brooklyn auto dealershipthat used illegal business practices in the sale and financing of automobiles, ruining the credit of some New Yorker consumers in the process.
  • Partnered with the Consumer Financial Protection Bureau (CFPB), the Department of Defense, and the Federal Trade Commission to develop the Repeat Offenders Against Military (ROAM) Database, a new system to combat consumer financial frauds by tracking completed enforcement actions against companies and individuals who repeatedly scam military members, veterans, or their families.
  • v Launched the statewide “Smart Seniors”elder abuse prevention program, designed to help seniors identify and avoid potential scams and abuses – including financial exploitation, identity theft, home improvement rip-offs, and physical abuse – before they happen.

Public Safety: Keeping Streets Safe and Communities Strong

Internet System for Tracking Over-Prescribing Act (I-STOP)

  • Secured a major victory for New Yorkers when the New York State legislature unanimously passedthe Attorney General’s Internet System for Tracking Over-Prescribing Act, or I-STOP. The law provides health care practitioners and pharmacists with centralized information to avoid over-prescribing, help shut down prescription drug trafficking, as well as identify and treat patients who seek to abuse prescription drugs. Governor Cuomo signed the legislationinto law on August 27.
  • Apprehended Bronx resident Suzanne Beniziofor heading an illegal prescription drug operation that forged more than 250 prescriptions for narcotics, including addictive painkillers. The arrest highlighted the direness of New York’s prescription drug crisis as well as the significance of the Attorney General’s I-STOP legislation: A real-time database would have invalidated Benizio’s forged prescriptions and prevented this supply of addictive painkillers from reaching communities across the state.
  • Continued his crackdown on New York’s prescription drug crisis with the arrest of a Westchester doctorwho conspired to deal prescriptions for 15,000 oxycodone pills, worth over $450,000.

Gun Safety Enforcement

  • Reached agreements with two gun show operatorsto implement a new set of rules that go beyond New York State’s current regulation of gun sales, establishing important precautions to ensure background checks take place before sales. These agreements came following an undercover investigation last year that busted 10 gun sellersfrom across New York State for jeopardized the public’s safety by violating the state's background check requirement for the sale of firearms at gun shows.
  • Won a major court victory in defense of New York State’s gun safety laws. In a unanimous decision in the case of Kachalsky, et al. v. Cacace, et al, the U.S. Court of Appeals for the Second Circuit rejected a constitutional challenge to New York's handgun licensing statute, ruling that the law requiring individuals to demonstrate “proper cause” to obtain a license to carry concealed handguns in public does not violate the Constitution’s Second Amendment.
  • Headed a coalition of ten states urging the U.S. Senate to reject two gun billsthat would force states like New York to recognize concealed carry permits issued by any other states, even those with poor oversight and weaker permitting standards.

Cracking Down On Synthetic Drugs

  • Combated New York’s growing synthetic drugs crisisby filing lawsuits against a total of 23 head shopsstatewide for selling illegally mislabeled designer drugs. To date, eight of the lawsuits have resulted in the permanent removalof bath salts and other synthetic drugs from the store shelves, and penalties. In addition, the Attorney General won a major court victory that ruled synthetic drug vendors are liablefor selling products they know will be used in dangerous, off-label ways.

Protecting New Yorkers From Crime

  • Safeguarded New York children from predators on video game networks through “Operation: Game Over,”an ongoinginitiative that has so far purge more than 5,600 registered sex offenders from their accounts on relevant online platforms. The database sweep was a first-of-its-kind effort, initially involving participation from Microsoft, Apple, Blizzard Entertainment, Electronic Arts, Disney Interactive Media Group, Warner Brothers, and Sony, and subsequently including Gaia Online, NCSOFT Corporation, Funcom and THQ, Inc.
  • Established the Conviction Review Bureauas part of a statewide initiative to address issues related to wrongful convictions, maximizing the ability of our justice system to sentence the real perpetrators of crimes while preventing innocent people from being penalized for crimes they did not commit.
  • In the largest single take down in the history of the Attorney General’s Organized Crime Task Force, arrested and indicted 52 members of a violent narcotics network code-named “OGK”that distributed massive quantities of cocaine, heroin and various illegal prescription medications from New York City to the Capital Region, as well as Greene, Orange, Rensselaer, Rockland, Schenectady, Ulster and Warren Counties.
  • Partnered with the NYPD to bring down a tri-state, prostitution and narcotics ringthat made millions of dollars by profiting off of the exploitation of women, rescuing two human trafficking victims in the process.
  • Following a nine-month, multi-agency investigation, took down a major New York City-Syracuse drug pipeline, securing the arrests of 39 individuals and the seizure of more than $1 million in cocaine.
  • Obtained guilty pleas from five pharmacistswho bilked the state’s Medicaid program of $9.9 million by submitting bills for drugs that they never dispensed to their patients.
  • Stopped a major Staten Island drug trafficking operationthat was dealing a supply of illegal narcotics, including thousands of oxycodone pills, obtained through false auto insurance claims and doctor shopping through Medicaid. The operation’s ringleader was convicted and sentencedto seven years in state prison.
  • Busted a major narcotics distribution network in Erie, Allegany, Cattaraugus and Genesee Countiesthrough “Operation Babcock,” securing the arrest of 24 traffickers and seizing several kilograms of cocaine and approximately $58,500 in cash.
  • Returned funds stolen from New York taxpayers in a $1.2 million settlement with a Brooklyn pharmacist who defrauded Medicaidby improperly billing for prescription medications he purchased from suppliers’ cars and dispensed to patients.
  • Shuttered a massive scheme to distribute black market prescription HIV drugsand defraud the state’s Medicaid Program, an illegal operation that endangered patients by exposing them to drugs of unknown origin, potency, and expiration dates.
  • Partnered with the NYPD to collar 14 individuals who operated a sophisticated international luxury-vehicle theft ringthat stole dozens of vehicles valued at more than $1 million in New York City, and its surrounding areas.
  • Secured a jail sentence for convicted securities fraudster Charles Raspa, whose scheme defrauded 800 victims out of more than $6.2 million in unlawful commissions.
  • Shut down a large scale tax evasion schemethat used doctored wholesale invoices from tobacco sellers to hide purchases from auditors, costing the state more than $700,000.
  • Secured the arrest and indictment of Bronx fraudster Robert H. "Bob" Van Zandtfor operating a massive multi-million dollar Ponzi scheme, which spanned years and victimized dozens of New Yorkers. The Attorney General later filed a civil lawsuit in the matter, charging that Van Zandt targeted clients of his tax-preparation business, the Van Zandt Agency, and abused his knowledge of clients' finances to lure unsophisticated investors into high-risk bets.
  • Pursued and arrested Schenectady builder Angelo Rossi, who forged document to steal over $640,000 in loan funds from the mortgage company Countrywide Home Loans, and then fled to Florida.
  • Abated a staged automobile accident schemethat put the lives of innocent New Yorkers in danger so the ringleaders could fraudulently receive $400,000 in insurance payouts.
  • Defended some of the most vulnerable New Yorkers with the arrest of a former NYPD officer who ran a scheme in Dutchess County to con immigrantsseeking drivers licenses and assistance out of thousands of dollars.
  • Shut down a massive insurance fraud ringthat used forged documents and stolen identities in order to fraudulently obtain thousands of dollars in discounted commercial car insurance policies and New York City Taxi and Limousine Commission licenses.
  • Brought justice for wronged New York patients by busting fake "plastic surgeons”who allegedly performed cosmetic surgeries on women without general anesthesia, leaving them permanently disfigured as a result.
  • Joined forces with the Office of the State Comptroller to investigate, prosecute, and secure the guilty plea of a Brooklyn dentistwho defrauded the Medicaid program by recruiting homeless patients with cash and illegally billing taxpayers.
  • Apprehended two Chinatown-based "doctors"who practiced medicine without a license, examining and treating patients by injecting them with unknown substances and giving them a variety of unidentified pills.
  • Pursued jail time for Putnam County’s “Dirtman,”who illegally operated a debris landfill containing hazardous waste materials within the New York City Watershed, jeopardizing New Yorkers' drinking water.
  • Won full restitution for New Yorkers scammed by Jessica Vega, who posed as a terminally ill brideto receive thousands of dollars from citizens and others from the Mid-Hudson region.

Social Justice: Environmental Protection, Civil Rights, Health Care, Labor, Charities

  • Proposed new regulations requiring nonprofit groups, including 501(c)(4) organizations, to report the percentage of their expenditures that go to federal, state and local electioneering, with those disclosures to be released to the public. These groups have spent more money on political ads in the last two election cycles than political action committees, but they have not been required to disclose their donors, as PACs do.
  • Protected the right to vote of minority language votersin New York by reaching agreements with the Rockland, Ulster and Schenectady County Boards of Elections to help ensure the provision of necessary resources at the polls, including bilingual ballots, bilingual election-related materials and language assistance.
  • Filed a friend-of-the-court briefin the case of Windsor v. United States in the U.S. Court of Appeals for the Second Circuit, together with the Attorneys General of Vermont and Connecticut, challenging the constitutionalityof the federal Defense of Marriage Act (“DOMA”), which rejects same-sex marriages valid under state law for all federal purposes. The Second Circuit sided with Attorney General Schneiderman, ruling that DOMA is unconstitutional. The United States Supreme Court has now agreed to hear the case. The Attorney General’s brief argues that DOMA violates same-sex couples’ right to equal protection under the law as required by the U.S. Constitution and should be viewed with great skepticism because it is an unprecedented intrusion on the authority of States to regulate marriage and enhance equality for their citizens.
  • Won an important victory in the United States District Court for the District of Columbia requiring the EPA to take prompt action to propose updated soot air pollution standards, as mandated by the Clean Air Act.
  • Was recognized by the National Association of Attorneys General with its “Best Brief Award”for legal excellence in advocacy before the U.S. Supreme Court in the case of State of Arizona v. United States of America. The brief argued that a controversial Arizona measure targeting undocumented immigrants is unconstitutional because it is inconsistent with federal law, threatens civil rights, and undermines federal law enforcement priorities.
  • Leading a coalition of seven states, notified the EPA of his intent to sue the Agency for violating the Clean Air Act by failing to address methane emissionsfrom the oil and natural gas industry through various procedures, including hydrofracking.
  • Was joined by 14 states, the District of Columbia, and the U.S. Virgin Islands in filing an amicus brief to urge the Supreme Court to uphold the undergraduate admissions system of the University of Texas at Austin, which considers applicants’ race and ethnicity among many other factors as part of individualized admissions decisions.
  • Formed a bipartisan coalition of 22 states and the District of Columbia to file a brief urging the Supreme Court to uphold state campaign finance lawsin American Tradition Partnership v. Bullock, in the wake of its Citizens United decision. The attorneys general argued the states have a compelling interest in regulating corporate spending in state and local elections, and that the Court should not automatically invalidate state campaign finance laws without a full hearing.
  • Issued a list of best practices to promote transparency in “pink ribbon” cause marketingcampaigns, in which companies advertise that the sale of a product will result in a contribution to breast cancer charities. Two of the nation’s largest breast cancer charities, Susan G. Komen For The Cure and Breast Cancer Research Foundation, agreed to adopt the best practices.
  • Won a decision from the Nuclear Regulatory Commission rejecting Indian Point’s requestfor more than 100 exemptions from fire safety requirements. The Attorney General continues to urge the NRCto address risk associated with the operation of Indian Point before making any relicensing decisions.
  • Filed a civil lawsuit against Kelli Conlin, the former President of NARAL Pro-Choice New York, for abusing her position and using more than $250,000 in charitable funds for her own personal benefit.
  • Protected workers from wage theft, prevailing wage violations and other violations of labor rights, in industries including health care, hospitality, car washes, construction, and manufacturingby bringing both criminal and civil cases. These actions have resulted in jail time for violators and hundreds of thousands of dollars worth of restitution to workers who were cheated.
  • Sued the directors of the Thoroughbred Retirement Foundation(TRF), one of the nation's largest nonprofit organizations devoted to retired thoroughbred racehorses, for driving TRF into insolvency and failing to provide the funding needed to care for the 1,100 horses in its herd. As a result of the directors' actions, retired racehorses entrusted to TRF have been neglected and deprived of even basic care.
  • Provided important information to New Yorkers looking to donate to charities in his office’s Pennies for Charityfundraising report, which revealed that for-profit telemarketers have received the lion's share of donations they raised on behalf of nonprofits. In 2011, fundraisers took in an average of 61.5 cents of every charitable dollar they raised, with just 38.5 cents of the funds going to charity.
  • Secured opportunity for New York landowners who were locked into unfavorable natural gas leases with Chesapeake Appalachiato renegotiate with the energy corporation for a better land deal.
  • Utilized the Americans with Disabilities Act to reach a settlement with Eastern Coach, a bus company operating in New York that neglected to provide services to customers in wheelchairs, illegally depriving New Yorkers with disabilities of equal access to transportation.
  • Safeguarded the rights of employees to religious accommodations within the New York City Health and Hospitals Corporation (HHC), the largest municipal healthcare organization in the country.
  • Settled with health care insurer Excellus Bluecross Blueshield, requiring that the company pay $3.1 million in refunds to plan members and providers who overpaid for claims as a result of improper accounting.
  • Filed a lawsuit against Aldon James, the former president of the National Arts Club, for years of self-dealing and mismanagement that resulted in more than $1.75 million in lost income to the institution.
  • Appointed the New York Community Trust to administer The Brooke Astor Fund for New York City Education, a $42 million fund established under his settlement of the Astor estate to support programs that benefit disadvantaged NYC students.
  • Sent letters to 75 nonprofits requesting information on their fundraising and relief activities related to Hurricane Sandyto be reported to the public, as part of the Attorney General’s efforts to promote transparency and to ensure that funds raised for Sandy relief are properly used.
  • Cracked down on “Roll Your Own”businesses that sell cigarettes in violation of applicable tax and other regulatory statutes by facilitating the production of untaxed and unsafe cigarettes. In one case, the Attorney General filed a lawsuit against Tobacco House C.C.W., Inc., which provided customers with loose tobacco, tubes of cigarette paper and access to machinery that instantly produces assembled cigarettes for customers.
  • Obtained a $5.5 million settlement with Educational Housing Services, a New York City student housing provider, for siphoning money from consumers to subsidize the lavish lifestyle of its president. Settlement funds will be used to reduce student rents and improve the conditions of the students' rooms.
  • Reached an $850,000 settlement with AXA Equitable Life Insurance Companyafter an investigation revealed the corporation made an undisclosed change to its medical claim reimbursement policy, resulting in lower reimbursements for many members.
  • Filed a complaint against King Mountain Tobacco Companyfor manufacturing and distributing contraband cigarettes across New York, cheating the state of hundreds of thousands of dollars of much needed tax revenue and putting law-abiding businesses at a competitive disadvantage.
  • Honored New York workers’ rights to religious accommodations in their place of work by requiring Milrose Consultants, an architectural and engineering consulting firm, to establish a lawful religious accommodations policy.
  • Secured a new court order establishing a buffer zone to protect a Utica Planned Parenthoodcurrently undergoing expansion from threatening and obstructive action by protesters.
  • Arrested two Brooklyn motor vehicle inspectorsfor issuing fraudulent inspection certificates to diesel trucks that were not actually tested.
  • Unveiled a bold plan to reform and revitalize New York’s nonprofit sector. The Attorney General’s plan includes legislation to eliminate outdated and costly burdens on nonprofits, strengthen oversight and accountability, and reaffirm his office’s commitment to policing fraud and abuse. Acknowledging that organizations throughout New York State face historic financial and strategic challenges, the Attorney General’s plan also includes several new partnerships with the business and academic communities to enhance nonprofit governance. This announcement of this plan followed a report by the Attorney General’s Leadership Committee for Nonprofit Revitalization, which he convened in 2011 with 32 nonprofit leaders across the state to recommend proposals that would reduce regulatory burdens on nonprofits, while strengthening governance and accountability.
  • Established a new system for charities registeredin New York State to complete and file their annual state and federal financial reports electronically, allowing for quicker dissemination of key information to the public and increased transparency.

Public Integrity and Taxpayer Protection

  • Exposed a nonprofit set up by New York State Senator Shirley L. Huntleythat funneled member item funds to those associated with it. Four individuals allegedly participating in the scheme have been indicted, including the senator’s aide and an individual who shares a residence with the senator. The investigation was part of a groundbreaking public integrity initiative between the Offices of the Attorney General and State Comptroller. On August 27, Attorney General Schneiderman announced the arrest and arraignmentof Senator Huntley on charges related to falsifying business records, conspiracy and tampering with his investigation of the scheme.
  • Brought charges against Clement Gardnerfor embezzling at least $75,000 while serving as a fiscal officer of the Christian Community Benevolent Association, Inc., a taxpayer-funded, Bronx nonprofit organization.
  • Secured arrest of Dennis Bassat, the former head of a Troy nonprofit rehab, who embezzled $20oK from the taxpayer-funded center. The center was part of Peter Young Housing, Industry and Treatment.
  • Utilized New York’s strengthened False Claims Act-- which was amended by Attorney General Schneiderman while he served as a state senator – to secure an $18 million settlement with food management services provider Compass Group USA, Inc.for improperly withholding discounts and overcharging 39 New York schools and school districts statewide.
  • Sued Sprint-Nextel Corp.for deliberately underpaying New York state and local sales taxes on flat-rate access charges for wireless calling plans. Under the New York False Claims Act, the lawsuit could require Sprint to pay three times its underpayment of over $100 million, plus penalties if found liable.
  • Indicted Eddie Calderon-Melendez, the founder and former CEO of the beleaguered Williamsburg Charter High School and Believe High Schools Network, for receiving over $1.4 million in compensation but failing to pay over $70,000 in taxes.
  • Held accountable the administrator of two Brooklyn nursing homes, Marcus Garvey Nursing Home and Ruby Weston Manor, who abused the system to award herself $871,000 in excessive compensation. The administrator agreed to repay all unauthorized compensation and to reimburse the Attorney General’s office for the cost of litigation.
  • Convicted and secured jail time for a former Project Manager for the New York City Department of Parks & Recreationwho pocketed more than $20,000 in bribes to rig Bronx playground contracts.
  • Took another major step in bolstering transparency in state governmentby launching “New York Open Government,”a new website designed to provide the public with comprehensive, up-to-date, and user-friendly information on campaign contributions, lobbying, and state contracts.
  • As part of his continued effort to pursue elected officials abusing their public office and the voters’ trust for their own personal gain, arrested former Pitcairn Town Supervisor Susan Smithfor embezzling over $35,000 from her St. Lawrence County town and a failed cover-up attempt.
  • Obtained the guilty plea of a former employee of Lakeview Mental Health Services– a state funded nonprofit that supports individuals with mental illnesses – who stole from the institution, cheating both taxpayers and the mentally ill.

For additional announcements made in 2012 by the Office of the Attorney General, please click here.


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