State Prison System Food Operations a Hot Bed For Corruption

Meals and Gifts Traded for Millions in State Purchases
Audio Available

• In violation of the state public officers' law, for at least 13 years, Dean and other DOCS staff were provided free meals by at least two vendors - Global Food Industries (GFI) and Good Source - that had $2.5 million annually in purchases with the Food Production Center.
• Dean directed Sysco Food Services to use these two vendors as suppliers, thereby guaranteeing them $1.7 million annually in business with DOCS.
• Sysco's purchase of products from the South Carolina-based GFI at Dean's direction helped Dean and GFI skirt around New York State Finance Law which prohibits state agencies from doing business directly with companies that reside in states, like South Carolina, that discriminate against NYS businesses.
• Likewise, Dean directed NYS Industries for the Disabled, a preferred source of state purchases, to purchase products from GFI, again allowing GFI to make money off of state purchases contrary to the law.  GFI made $796,000 annually through this arrangement.
• Dean and his staff solicited free food and donations from vendors for an annual Christmas party and a three-day-long annual picnic.  Any left-over moneys were deposited in an employee benefit fund and used for food production center employee benefits throughout the year, including morning bagels.
• Vendors often bid on donated items with proceeds going to the employee benefit fund. All Correctional Services employees, including those at the highest levels of the organization, were invited to the picnic at no cost. Management should have questioned how such an event could be hosted by a state agency at no cost to employees or their families.
• DiNapoli's auditors found no documentation demonstrating that millions of dollars in purchases were based on open competition. In fact, one favored vendor was tipped off about the potential missing ingredient essential in the production of cheese sauce the Food Production Center wished to utilize. Because none of the other vendors had this inside information, the favored vendor received the state's business.
• Internal controls that might have prevented Dean from engaging in this conduct were virtually non-existent at DOCS.  One supervisor, Russell DiBello, former Correctional Services Chief Fiscal Officer, stated that he saw no need to monitor Dean - despite that Dean managed a $55 million budget - because he received no inmate complaints about food.

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Town of Turin Board Members Filed
False Documentation with the Unified Court System

Comptroller DiNapoli Identifies $37,000 Cash Shortage

Two board members in the Town of Turin filed documentation with the Unified Court System falsely certifying that they had conducted a 2008 annual audit of the justice court's financial operations, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. The audit covered the period January 1, 2008 to October 27, 2009.

"The town justices are personally responsible for all moneys received by their court," DiNapoli said. "And the town board is supposed to watch over the courts financial activity. This didn't happen in Turin. Falsifying documents is beyond unacceptable. Taxpayers have a right to honest reporting and better financial management."

DiNapoli's audit noted that the board failed to provide adequate oversight of the court's financial activity.  Furthermore, internal control weaknesses resulted in the court's known liabilities exceeding its available cash assets for a cash shortage of at least $37,199 as of October 27, 2009.  The audit findings were referred to the Lewis County District Attorney.

DiNapoli's audit also found that the justice did not ensure that the recordkeeping of the court was adequate. The court also failed to issue duplicate, pre-numbered receipts for all payments received, did not record all payments and money received accurately and timely, did not maintain a bail list or deposit composition records and did not submit accurate monthly reports to the State Comptroller's Justice Court Fund.

DiNapoli recommended town officials, the justice and the board:

• Take action to recover any moneys that are due to the town and/or New York State;
• Perform accountability reconciliations monthly, and investigate and resolve irregularities;
• Maintain adequate books and records, including issuing acceptable receipts for all moneys received; and
• Ensure that reports to the Justice Court Fund represent an accurate and complete record of the court's monthly activity.

Town officials generally agreed with DiNapoli's recommendations, and indicated they would take corrective action.

DiNapoli recently issued a report highlighting the more than 51 fraud and abuse cases totaling approximately $10 million that have been uncovered in local governments and school districts across New York since 2007.  The report also includes a list of "Red Flags for Fraud" - that is, a set of circumstances that is unusual in nature, or varies from the normal activity - that DiNapoli recommends local officials be aware of.

Click here for a copy of the Town of Turin Justice Court audit.

Click here to view the fraud report.

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NEWS FROM INDEPENDENT COUNSEL JUDITH S. KAYE

Judge Judith S. Kaye, Independent Counsel to the Office of the Attorney General, today released her final report entitled, "Report of Investigation into events arising from Governor David A. Paterson's acquisition of 2009 World Series Tickets."

The report is available at: http://www.ag.ny.gov/media_center/2010/aug/08_26_10_Kaye_Report.pdf

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ATTORNEY GENERAL CUOMO BRINGS CHARGES AGAINST WNY MAN WHO ALLEGEDLY RAN DEBT COLLECTION BUSINESS FROM PRISON

Lamont Cooper's employees posed as law enforcement, threatened to throw consumers in jail if they didn't pay debts ~Latest action in Cuomo's ongoing investigation into debt collection industry

Yesterday, Attorney General Andrew M. Cuomo announced criminal charges against Lamont Cooper, 38, formerly of Heritage Drive in Lancaster, for allegedly operating his Buffalo-based debt collection agency while incarcerated in federal prison on unrelated charges. Cooper was previously barred by court order from the debt collection industry in 2009 after Attorney General Cuomo's Office determined that his operation regularly used threats and intimidation against consumers.

According to the felony complaint, Cooper continued to operate CMC Recovery Services, Inc., d/b/a Legal Action Recovery located on Bailey Avenue in Buffalo in violation of a May 2009 court order barring him from the business. Cooper and CMC Recovery Services were charged in Buffalo City Court with Scheme to Defraud in the First Degree (class E felony) and Cooper was charged with Criminal Contempt in the Second Degree (class A misdemeanor). Today's action is the latest development in Attorney General Cuomo's ongoing probe into unlawful debt collection practices.

"This suspect is accused of continuing to run an abusive debt collection operation despite a court order barring him from doing so and despite being an inmate in federal prison," said Attorney General Cuomo. "Such disregard of the law will not be tolerated and we will hold him accountable for the harm he has caused to families throughout the country."

According to the felony complaint, consumers have complained that Cooper's employees continue to engage in the debt collection business despite the court order barring the practice. The complaint also alleges that Cooper's collectors continue to routinely pose as law enforcement officials and threaten to arrest consumers and throw them in jail unless they made arrangements to pay the company immediately.

The complaint alleges that Cooper's involvement in the scheme continued even after he was taken into federal custody in October 2009 for being found in violation of the terms of his release from a 1997 drug conviction. An investigation by multiple law enforcement agencies included the monitoring of his correspondence during his incarceration at a federal detention facility in Batavia. The surveillance determined that Cooper was still actively involved in the debt collection business, including instructing employees on how to manage accounts and personnel matters, and requesting that he be kept abreast of "all banking activity."

According to information obtained during the civil investigation into these actions, Legal Action Recovery collectors regularly demanded payment for non-existent debts and demanded payments for debts that had already passed the statute of limitations or were discharged in bankruptcy. Using false law enforcement identities, collectors coerced and cajoled terrified victims into agreeing to make payments. Frightened at the prospect of arrest and humiliation, many victims were asked to pay by credit/debit card, authorize withdrawals from their checking accounts, and/or send Western Union money grams. More details about the judgment and order against Cooper and his companies can be found at www.ag.ny.gov/media_center/2009/may/may27a_09.html.

Cooper will be arraigned on the charges once he is returned from federal custody. Scheme to Defraud in the First Degree carries a maximum sentence of up to four years in prison and Criminal Contempt in the Second Degree carries a penalty of up to one year in jail. CMC may be fined up to $10,000 or double the amount of the corporation's gain.

Today's actions are part of an ongoing investigation by Attorney General Cuomo into unlawful debt collection practices. Since commencing the statewide initiative in May 2009, Cuomo has shut down more than a dozen debt collection and affiliated process serving companies and required others to reform their deceptive practices. His office has also garnered criminal convictions against 12 individual collectors who engaged in especially egregious and threatening actions against consumers. Attorney General Cuomo urges consumers who wish to learn more to visit www.NYDebtHelp.com. The site explains consumer rights, allows victims of debt collection and debt settlement companies quick access to the Attorney General's Office to file complaints, and outlines the investigation.

The case was handled by Assistant Attorney General Paul McCarthy, under the supervision of Criminal Prosecutions Bureau Deputy Bureau Chief Richard Ernst and Criminal Prosecutions Bureau Chief Gail Heatherly. The investigation was handled by Investigators Sandra Migaj, Michael G. McCartney, and Paul R. Scherf, Jr., under the supervision of Deputy Chief Investigator James Domres.

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

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ATTORNEY GENERAL CUOMO ANNOUNCES GUILTY PLEA OF HUDSON VALLEY BUILDER WHO RIPPED OFF PROSPECTIVE HOMEOWNERS

Christopher Marnell stole more than $350,000 from families, never built houses

New York State Attorney General Andrew M. Cuomo today announced the guilty plea from a Hudson Valley builder who took more than $350,000 from several area families to build houses, and then used the money for other purposes without building the homes.

Christopher Marnell, 47 of West Main Street in Stony Point, pleaded guilty in Orange County Court to four counts of Grand Larceny in the Second Degree (class C felony) and one count of Grand Larceny in the Third Degree (class D felony). Marnell must pay restitution of $351,650. He will be sentenced October 22 and could face as much as 15 years in prison.

"Families paid this individual to build homes for them, but were left with absolutely nothing in return and now the builder must pay the price," said Attorney General Cuomo.

Marnell, owner of the now defunct Marnell Homes of Lakeridge, Inc., was indicted May 5 with stealing more than $350,000 from five families that paid him to build single-family homes in Lakeridge Estates in the Town of Wawayanda. The homes were never built and Marnell used the money toward other construction projects and for personal purposes.

The case is being prosecuted by Assistant Attorney General Emmanuel Nneji of the Attorney General's Criminal Prosecutions Bureau. The case was investigated by the New York State Police and Investigator Dennis Churns of the Attorney General's Investigations Bureau.

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State Potentially Paid $883,000 Inappropriately to Defunct After-School Program

• Educators for Children could not provide auditors with time and effort records, or any other payroll or personnel related documents for 19 of the employees charged to State Education Department (SED) contracts, but these employees collected $65,733 from the SED;
• Educators for Children requested that SED reimburse it for $20,137 in expenses that they had already been reimbursed for; and
• Under State Office of Children and Family Services (OCFS) contracts, Educators for Children could not provide auditors with supporting documentation for over 98 percent ($196,170) of the total $199,278 on its expenditure reports.

• Recover the respective payments made to Educators for Children for the unsupported and inappropriate claims.
• Investigate the support and propriety of the $1.4 million paid to Educators for Children that was not included in the audit.
• Review contract oversight procedures for grant recipients and determine how they can be strengthened to address the conditions cited in DiNapoli's report.

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State OCFS Paid for Care of Deceased Children

The State Office of Children and Family Services (OCFS) made $214,593 in inappropriate payments to adoptive parents of hard-to-place and handicapped children, according to an audit being released today by State Comptroller Thomas DiNapoli. This included $180,783 to support 25 children who were listed as deceased.

A subsequent check of records found that one child, who accounted for $2,613 of the inappropriate payments cited in the audit, had been incorrectly identified as deceased due to a data entry error by the Erie County social services district.

"Taking care of children - especially orphaned and disabled children - should be at the top of everyone's agenda," DiNapoli said. "But taxpayers shouldn't be paying for the care of children who have passed away. There's too little money and too many needy children; we can't let taxpayer dollars be wasted."

Of the 24 deceased children, 21 were adopted from the NYC area, and one each from the Albany, Syracuse, and Long Island areas. DiNapoli's audit covered the period January 2007 through January 2009. OCFS is seeking to recover all inappropriate payments.
 
In the course of the audit, OCFS stopped the inappropriate payments for 21 of the deceased children. DiNapoli's auditors recommended that inappropriate payments be stopped for the remaining children.  If the payments continued for the deceased children until age 21, the state will have made an additional $423,880 in inappropriate payments.

Other inappropriate payments included $33,360 paid after the adopted person had turned 21 years old; the payment resulted from an incorrect birth date in OCFS records.  If payments continue to this household, the parents would receive an additional $55,041 based on the incorrect date of birth.

DiNapoli's auditors recommended that OCFS:

• Investigate all overpayments identified in the audit report and make appropriate recoveries.
• Periodically verify the accuracy of key eligibility data used to support subsidy payments.

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Medicaid Overpaid for Dental Care by $40 Million

• Develop early warning systems that help to determine whether a recipient has exceeded their Medicaid limits before providing services;
• Recover the excessive payments identified in the audit; and
• Determine if New York's fees should be adjusted to match dental fees paid in other states.
  

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ATTORNEY GENERAL CUOMO SHUTS DOWN SEVEN COMPANIES FOR PROVIDING FRAUDULENT LEGAL SERVICES TO IMMIGRANT COMMUNITIES

Files Two Additional Lawsuits against Companies for Defrauding Thousands of Immigrants

Latest Stages of Cuomo's Ongoing Immigration Fraud Investigation

Yesterday, Attorney General Andrew M. Cuomo announced the latest actions in his ongoing effort to combat scams that target New York's immigrant communities. As part of his broad investigation into immigration fraud, Cuomo has shut down seven companies and sued two other organizations for providing fraudulent legal services to immigrants.

The following seven companies and their owners have been permanently barred from operating any immigration services businesses and must collectively pay $370,000 in damages to the State of New York: (1) Centro Santa Ana, Inc. and Ana Lucia Baquero, in Queens; (2) Margo's Immigration Services and Margarita Davidov a/k/a Margo Davidov, in Queens; (3) Miguel Fittipaldi, J.D., Ltd. and Miguel Fittipaldi, in Manhattan; (4) Arthur C. Hurwitz, in Manhattan; (5) Oficina Legal Para Hispanos, P.C. and Geoffrey S. Stewart, in Manhattan; (6) Asilos and Camilo Perdomo, in Queens; and (7) Mision Hispana, Inc. and Mayra Liz, in Queens.

The Attorney General began an investigation and issued subpoenas to these companies after receiving information that they were engaged in fraudulent and illegal business practices. The illegal conduct included, among other things, misrepresenting their authorization to submit documents on behalf of immigrants to the government and giving legal advice to immigrants. Further, some of these companies involved attorneys who aided others in the unauthorized practice of the law and simply lent their name to provide legitimacy to the business. Collectively, these companies abused hundreds of immigrants.

"These companies took money from immigrants by promising to provide services that they could not deliver," said Attorney General Cuomo. "The fraudulent practices of these companies caused innocent people to face problems with their immigration status, even deportation. My office will continue to go after companies and individuals that defraud and abuse New York's immigrant communities."

As a result of the settlements with the Attorney General's office, these companies are also required to notify all former and current clients in writing that they are no longer providing any immigration-related services and must submit quarterly reports to the Attorney General of any complaints from the public. Complainants may be eligible for restitution for using these fraudulent businesses.

The Attorney General's office will coordinate with several New York legal associations to help handle the companies' existing cases and to protect innocent victims.

LAWSUITS AGAINST OTHER FRAUDULENT IMMIGRATION SERVICES COMPANIES

In a separate action, Cuomo filed two lawsuits against other organizations that are providing fraudulent legal services to immigrants.

The first lawsuit is against four companies that have been illegally providing unauthorized legal services to immigrants. The lawsuits were filed today in New York State Supreme Court against: Inmigración Hoy, Inmigración Hoy News Today, Forensic Immigration Law, and Inmigración Accounting Service, which are all controlled by Edwin Rivera in the Bronx. These companies all offered legal counsel to immigrants without being licensed attorneys or having the proper accreditation. In thousands of cases across New York City and Long Island, these companies gave unlicensed legal advice and unlawfully filed immigration petitions with the United States Citizenship and Immigration Services on behalf of immigrants and their families, jeopardizing their efforts to achieve legal status. Further, the companies failed to provide consumers with written contracts in both the consumer's native language and English, as required by law.

Today the Attorney General also filed a lawsuit against Thomas N. Toscano, a lawyer in Queens who worked with non-lawyers to illegally provide legal services to immigrants. Toscano failed to supervise his non-attorney employees and allowed them to operate a law office out of their home where non-attorney employees met with clients on immigration cases. Toscano advertised as an immigration attorney but had cases handled by his non-attorney employees, who often provided legal advice. Clients never got an opportunity to discuss their cases with an actual attorney admitted to practice law, and many immigration applications were later denied by immigration authorities.

The lawsuits seek to permanently bar the companies and their owners from providing immigration-related services in the future and seek penalties for these actions.

Chung-Wha Hong, Executive Director of the New York Immigration Coalition, said, "New York is celebrated throughout the world as a place of opportunity for all, and any company that lines its pockets by defrauding immigrants has no place in our city or our state. We applaud Attorney General Cuomo for his continued work to shut down fraudulent companies and stand up for New York's immigrant communities."

Jason Abrams, Chair of the Committee on the Unauthorized Practice of Law for the American Immigration Lawyers Association in New York, said, "Immigrants and their families can be subject to irreparable harm from unscrupulous individuals and fraudulent companies. The cost of this abuse is not just measured in dollars, but in torn families, stolen opportunities, and heartache. We are proud that Attorney General Cuomo is leading the way to shut down scams that prey on immigrants and we look forward to continuing to work with him to protect these vulnerable New Yorkers."

BACKGROUND INFORMATION

The illegal actions of fraudulent immigration services organizations have disastrous consequences on immigrant communities. In addition to being forced to pay substantial fees, victims and their families are put at risk of suffering permanent damage as a result of receiving incorrect immigration-related legal advice. Individuals who followed the advice of fraudulent organizations have been subject to deportation due to inadequate or negligent legal representation.

Under state and federal law, only lawyers or accredited representatives can represent individuals before immigration authorities. Under New York State law, it is unlawful to mislead or defraud any person in immigration-related services. New York law also requires anyone providing immigration services to comply with advertising, signage, and surety requirements, and to give consumers written contracts in both the consumer's native language and English that detail their services and cancellation policy. Further, it is illegal for not-for-profit immigrant service providers to charge excessive fees for services; the services must be provided free of charge or at a very nominal rate.

Today's action is the latest stage of Attorney General Cuomo's ongoing efforts to protect immigrants and their families from being targeted by fraudulent immigration services in New York. Other actions include:

• In July 2010, the Attorney General obtained a judgment of over $6.25 million against Immigration Community Service Corporation and its owner Vincent I. Gonzalez of Manhattan for engaging in the unauthorized practice of the law and defrauding thousands of immigrants who used their services for filing immigration applications with the federal government.
• In June 2010, the Attorney General sued several organizations and their principals - Chay Pa Lou Community Center, Inc.; Delegue Tax Consultant, Inc.; Jean Michel; Rincher's Bookstore a/k/a Rincher Associates, Inc. a/k/a Rincher Associates & Bookstore a/k/a Rincher's Multi Services; Haitian American Entrepreneur's Group, LLC a/k/a Delrin Associates, LLC; Deslande Rincher a/k/a Dislande Rincher; and Sharlene M. Seixas-Rincher - for defrauding Haitian nationals of thousands of dollars by illegally providing immigration services they were not authorized to provide and by misrepresenting a new law that granted special status to certain immigrants. These organizations targeted Haitian nationals who were recently affected by the devastating January 2010 earthquake in Haiti. The cases are currently pending in the New York Supreme Court.
• In April 2010, the Attorney General shut down American Immigrants Federation for defrauding immigrants with false promises of citizenship, engaging in the unauthorized practice of law, and illegally charging exorbitant fees for services. The organization, its president Estela Figueredo, and its affiliates had to shut down all of their operations and pay $1.2 million for restitution to victims.
• In March 2010, the Attorney General obtained a $3 million court judgment against a Queens County individual, Miriam Hernandez, for defrauding immigrants by claiming that she could help them gain citizenship.
• In January 2010, the Attorney General sued and obtained a temporary restraining order against International Immigrants Foundation, International Professional Association, and their President Edward Juarez for engaging in fraud and the unauthorized practice of law. The case is currently pending in the New York State Supreme Court.
• In August 2009, the Attorney General shut down three companies - Immigration Solutions and Systems, Inc. and its owner Mary DiSerio of Manhattan; Alisandra Multiservices, Inc. and its owner Sandra A. Peguero of Brentwood, Long Island; and All Immigration Services and its owners Ruth A. Shalom and Isaac Shalom of Great Neck, Long Island - for providing unauthorized and fraudulent legal services to immigrant communities and required them to pay full restitution to all victims. The companies were required to pay more than $100,000 in penalties and were permanently prohibited from operating immigration services businesses.
• In August 2009, the Attorney General sued Professional Solutions Consultants (d/b/a Reliable Clerical Services and Reliable Immigration Services) and its owner Clover A. Perez, located in Queens, for providing unauthorized and fraudulent legal services to immigrant communities and is seeking injunctive relief, restitution, and penalties. The case is currently pending in the New York Supreme Court.

The cases are being handled by Assistant Attorneys General Sandra Abeles and Vilda Vera Mayuga and Assistant Deputy Counselor Elizabeth De León, with the assistance of Assistant Attorney General-in-Charge of the Harlem Regional Office Guy Mitchell and Investigators John McManus and Angel Laporte, under the supervision of Special Deputy Attorney General for Civil Rights Alphonso B. David and Chief Counsel for Civil Rights Spencer Freedman.

If you have been a victim of immigration assistance fraud, please contact the Attorney General's Immigration Services Fraud Unit Hotline at (866) 390-2992 or visit www.ag.ny.gov.

Attachment:

• AOD - Margarita Davidov
• AOD - Camilo Perdomo
• AOD - Arthur C. Hurwitz
• AOD - Mayra Liz and Mision Hispana, Inc.
• AOD - Miguel Fittipaldi
• AOD - Oficina Legal Para Hispanos, P.C. and Geoffrey S. Stewart.pdf

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Gillibrand, Weiner: Pass New Law To Protect Queens Seniors From Financial Fraud

"Queens seniors have spent a lifetime saving and preparing for the golden years, and they deserve financial security and peace of mind," Senator Gillibrand said. "But far too many are being lured into bad investments, and getting scammed by criminals out of their savings and benefits. Queens seniors should have the resources they need to protect their investments against scam artists."

"While it's appalling to think that anyone would prey on seniors, sadly older New Yorkers do face an increased threat of fraud," Representative Weiner said. "This legislation will go a long way towards putting a stop to these scammers' shameful practices."

According to estimates from the Federal Trade Commission (FTC), 1 out of 5 seniors fall victim to fraud. A report from Senator Gillibrand's office shows approximately half a million New York seniors have fallen victim to consumer fraud - losing approximately $180 million.

Senator Gillibrand and Representative Weiner unveiled the following measures to combat this growing threat against Queens seniors:

Stopping Abusive Mail, Telemarketing and Internet Fraud Against Seniors
Queens seniors are often targeted for fraud through the mail or over the phone - where they may be more inclined to trust a salesperson. In 2007 alone, postal inspectors investigated nearly 3,000 mail fraud cases nationwide and arrested more than 1,200 mail fraud suspects. As more Queens seniors use e-mail and the Internet, criminals are also increasingly preying on seniors online- using "phishing," e-mail spamming and other Internet tactics to lure seniors into fraud.

The House passed legislation in July to stop abusive mail, telemarketing and Internet fraud against Queens seniors and educate them about financial fraud. Senator Gillibrand introduced similar legislation in the Senate.

The Senior Financial Empowerment Act would:

• Direct the FTC to establish a one-stop-shop for consumer education on mail, telemarketing and Internet fraud against seniors;
• Establish a grant program to give states and local organizations resources they need to initiate local mail, telemarketing and Internet fraud prevention and education programs for seniors;
• Declare a "National Senior Fraud Awareness Week" in May - coordinated with Elder Abuse Awareness Month - to increase public awareness of the enormous impact that mail, telemarketing and Internet fraud have on senior citizens in the U.S.

Increase Penalties for People who Commit Fraud Against Seniors
Once seniors retire, they face the challenge of making their savings last their entire retirement. Since a large portion of their assets are investable, seniors are often offered complicated investment products. While these products can be valuable to certain senior investors, they are often sold and offered by corrupt and dishonest would-be criminals.

To protect more seniors from fraud, Senator Gillibrand introduced and Representative Weiner co-sponsored the Senior Investor Protections Enhancement Act - legislation that would:

• Target those who commit securities violations against seniors, including selling products unsuitable for their age, failing to disclose fees, charging large penalty fees, or switching the investment product actually sold from the one that was marketed;
• Charge an additional $50,000 civil fine for each violation that is targeted or is committed against a senior.

Cracking Down on "Senior Advisor" Scams
Senator Gillibrand and Representative Weiner also pointed to a provision signed into law as part of the Wall Street Reform and Consumer Protection Act which would combat scams against Queens seniors involving financial advisors who use their misleading "senior designations" status to lure the elderly into fraudulent investment opportunities. The bill would establish a national grant program for states to adopt model rules to eliminate these misleading designations and help provide needed resources to prosecute cases of abuse, train law enforcement to prevent these scams, and educate seniors to help them avoid being lured into bad, fraudulent deals.

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Governor Paterson Announces Results of New Facial Recognition Technology by DMV

Last week, Governor David A. Paterson announced the initial results of the Department of Motor Vehicles (DMV) use of facial recognition technology to identify fraud cases. Use of the innovative software began in February, 2010, and in the six months since its implementation has been instrumental in identifying more than 1,000 cases of possible fraud.  "As we enter the new economy based on knowledge, technology and innovation, these tools provide us with enhanced abilities to protect and serve all New Yorkers. Through facial recognition technology we have bolstered national security, neighborhood security, and highway safety," Governor Paterson said. "I am tremendously proud of the success we have seen in the past six months and I look forward to seeing more progress in the months and years ahead."  Facial recognition software is used by the DMV to help identify persons across the State who try to obtain more than one driver license or non-driver identification document. The system is designed to advance DMV's important goals of "one driver, one license" and improving highway safety. Those seeking a second identity document may be trying to do so for a number of reasons including evading license suspensions, stealing an identity, committing financial fraud or presenting a false identity to law enforcement or transportation security officials.  DMV Commissioner David Swarts said: "Although we have essentially just begun to utilize this innovative technology, we are seeing amazing results. I applaud Governor Paterson for his ongoing efforts to ensure that the DMV has the most updated and advanced tools to better serve New Yorkers. Facial recognition software is already proving to be a strong tool to help our staff uncover identity fraud as well as keep our highways safer."  Facial recognition software essentially converts DMV's digital, facial photographs into mathematical algorithms. The software presents trained staff with photo images that have been identified as having similar algorithms. This review includes new photos taken each day at the DMV, as well as about 15 million photos already in DMV's database. Identity documents associated with a new photo are not produced until any photo identified as a potential match is reviewed by trained staff. The DMV strives to issue each applicant only one identity document and seeking a second identity document is a crime since it requires the submission of a false instrument.  As a result of this program, over 100 felony arrests have been made to date. Arrests have included an Egyptian citizen holding four New York licenses under separate names, one of which was on the Federal "no-fly" list, and a former hit man who sought to establish a second identity after release from prison. In April, DMV's facial recognition program identified an individual wanted for a 1990's-era bank robbery in Nassau County. As a result, the individual was arrested by the Nassau County Police Department. Others charged have had license suspensions or a large number of tickets and accidents under multiple identities. The Institute for Traffic Safety Management and Research (ITSMR), a research entity affiliated with the State University of New York, will conduct research on the impact the facial recognition program may have on highway safety. Thus far, of the more than 1000 cases of multiple identities uncovered by the facial recognition program, approximately 67 percent of the individuals holding multiple identities have one or more driving suspensions or revocations in place that appear to have been evaded by their having obtained a second license.   ###   The following statements were provided in support of utilizing facial recognition technology:   Senate Majority Conference Leader John L. Sampson said: "This is a great example of how government can use technology to be more efficient and effective in maintaining the safety of all New Yorkers. Given the great success of this program so soon after implementation, facial recognition software may well become one of the strongest weapons we have in preventing identity theft and other fraud-based crimes. I applaud the Governor and DMV for their ongoing efforts, as well as Senate Transportation Chair Martin Malavé Dilan for partnering with our colleagues in government to enact sensible safety measures."   Senator Martin Malavé Dilan said: "Facial recognition software offers the unique opportunity to cut the costs associated with fraud and the lasting damage it can have on New York families. In the little time this technology has been in use, already we are seeing great results. I applaud Governor Paterson for recognizing the importance of this technology and seeing to its implementation."   Assemblyman David Gantt said: "Facial recognition technology has proven effective in aiding Government and law enforcement in their effort to combat fraud and increase highway safety. The arrests that have been made as a result of this program provide evidence we're moving in the right direction."   Acting State Police Superintendent John Melville said: "Implementing this technology enhances the security for New Yorkers and all Americans. I commend Governor Paterson for his efforts on this initiative and for ensuring that this valuable law-enforcement tool is available to help us in our efforts to serve and protect all New Yorkers."   Derek Champagne, President of New York State District Attorney Association, said: "This new technology shows how government can work smarter and more efficiently. It will help us to prevent crimes such as identity theft, driving without a license and it will help us solve crimes that are currently being perpetrated on innocent victims. This new technology also provides an important new weapon in combating fraudulent claims for government benefits by making prosecutions for such crimes against revenue easier. This is particularly important at a time when the State's finances are a particularly precarious state."   Richmond County District Attorney Daniel M. Donovan, Jr. said: "The facial recognition software employed the DMV is not only a tool for safer roadways, but also the safety of our communities. This technology prevents those with a suspended or revoked driving privilege from obtaining a valid license under a new name, but can also prevent fraud, terrorism and criminals who are seeking to avoid justice by assuming a new identity."

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ATTORNEY GENERAL CUOMO REACHES AGREEMENT WITH SECURITY COMPANY THAT TRICKED HOMEOWNERS INTO SIGNING CONTRACTS

Pinnacle Security Group Must Pay Restitution and Penalties and Reform Company Practices

Yesterday, Attorney General Andrew Cuomo announced a settlement with Pinnacle Security Group, LLC ("Pinnacle"), a Utah-based home security company that used deceptive door-to-door sales tactics to trick New York homeowners into signing contracts for unnecessary services. The settlement requires Pinnacle to pay restitution to New Yorkers, pay a $150,000 penalty, and reform its sales practices. Pinnacle has signed contracts with approximately 4,000 customers throughout New York since 2008.

Pinnacle's home security contracts were for a term of 39 months and included monthly service fees, installation fees, activation fees, and equipment charges. The Attorney General's investigation revealed that Pinnacle's door-to-door sales staff often targeted homeowners who had existing contracts with other security companies. In a deceptive practice known as "slamming," Pinnacle sales staff then made false representations to convince people to sign up for Pinnacle products even though the consumer had a contract with another home security company. Pinnacle misled homeowners into believing that their existing home security provider had gone out of business, had merged with Pinnacle, or was in some way already affiliated with Pinnacle.

As a result of this deception, unsuspecting homeowners signed up for a contract with Pinnacle when they were still bound by their prior home security contract. Homeowners were then stuck paying for redundant monthly services from two security companies, including upwards of $50 per month for Pinnacle. Consumers who tried to void the contract were often faced with substantial cancellation fees. For example, Pinnacle would demand full and immediate payment of the entire cost of their contract if consumers wanted to cancel early; these costs could amount to $1,900.

"Pinnacle used dirty tricks and deception to pressure New Yorkers who were simply trying to ensure the security of their homes," said Attorney General Cuomo. "This settlement holds Pinnacle accountable for their actions and makes fundamental reforms to the company to prevent such fraud from happening again."

The Attorney General's investigation revealed that Pinnacle's sales team:

• Made phony telephone calls to homeowners to tell them that their existing home security contract had been canceled;
• Misrepresented the actual terms and costs of their contracts;
• Changed the terms of contracts after consumers had signed them.

In addition, Pinnacle failed to properly train and monitor its sales force, and failed to respond promptly and adequately to consumer complaints. The Attorney General's investigation began when his office was contacted by a Pinnacle consumer.

The settlement with Pinnacle will provide full compensation to all New York consumers who signed up with the company since January 2008 and were subject to deceptive sales practices. All such consumers will have the option to cancel their contract with Pinnacle without incurring any early cancellation fees or other charges. Pinnacle must also pay $150,000 to New York State for penalties, costs, and fees. Further, the settlement requires Pinnacle to implement enhanced procedures to oversee its sales force and requires the company to provide clear disclosures to consumers about the terms of their contracts.

As a result of the settlement, Pinnacle must hire a third-party administrator to handle claims of restitution. This administrator is contacting New Yorkers who entered into a contract with Pinnacle after 2008 in order to inform them of their right to make a claim for restitution. New Yorkers who believe they may have been a victim of Pinnacle's deceptive practices can also submit a claim for restitution by calling the Attorney General's Consumer Helpline at 800-771-7755 or by visiting www.ag.ny.gov.

This matter was handled by Assistant Attorney General Matthew Eubank in the Attorney General's Brooklyn Regional Office and by Consumer Frauds Bureau Deputy Chief Jeffrey K. Powell, with the assistance of Investigator Percy Corcoran, under the supervision of Assistant Attorney General-in-Charge of the Brooklyn Regional Office Lois Booker-Williams, Special Deputy Attorney General for Consumer Frauds & Protection Joy Feigenbaum, Deputy Attorney General for Economic Justice Michael Berlin, and Executive Deputy Attorney General for Economic Justice Maria Vullo.

The settlement with Pinnacle is available at www.ag.ny.gov.

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Audit Finds Former Sodus Town Clerk

Embezzled Approximately $50,000 Over Eight Years

An audit released today by New York State Comptroller Thomas P. DiNapoli found that the former Sodus town clerk embezzled approximately $50,000 during the past eight years. The former clerk stole cash from the town's safe at night and altered bank deposit slips to hide the losses, DiNapoli said.

"Someone has to keep a closer eye on taxpayer dollars in Sodus," DiNapoli said. "Eight years of fraud is eight years too much. The town board must have systems in place to protect taxpayer dollars. When public officials steal, taxpayers pay the price. And taxpayers just can't afford it."

The audit covered the period January 1, 2008 to September 28, 2009.

DiNapoli's audit found that the board's examination of the clerk's activities was limited to a review of her monthly and annual reports and did not include an examination of the books, records, cancelled checks and check images. This created significant risk that resulted in a cash deficiency of more than $50,000 during the audit period.

Auditors from DiNapoli's office also found that when collecting taxes, water rents and clerk fees, the clerk took some of the cash payments and used the interest and penalties paid by others to cover the amounts taken.

In addition, DiNapoli's auditors noted that the board did not establish adequate policies and procedures to safeguard computerized data and assets. Town officials and employees had full access to all financial applications. DiNapoli said it's important that user access rights to computerized financial applications be based on the needs of particular job duties.

DiNapoli recommended the board and current clerk:

• Take appropriate action to recover town monies from the former town clerk;
• Adequately support and deposit all monies received into the proper accounts intact and in a timely fashion;
• Reconcile accounts on a monthly basis and analyze and reconcile available cash with liabilities;
• Perform or contract for a thorough annual examination of the town clerk's financial operations; and
• Adopt information technology policies and procedures that address user access rights.

Town officials generally agreed with DiNapoli's recommendations, and plan to take corrective action.

In March 2010, DiNapoli proposed legislation to strengthen municipal ethics laws after he identified widespread disparities in how local governments oversee financial disclosure rules and enforce ethics requirements. Comptroller DiNapoli also released a model code of ethics for local governments.

Click here for a copy of this report.

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ATTORNEY GENERAL CUOMO ANNOUNCES EXPANSION OF INDUSTRY-WIDE INVESTIGATION INTO PREDATORY HEALTH CARE LENDING THAT IS PUSHING CONSUMERS NATIONWIDE INTO DEBT

Health care credit card scheme preys on seniors and vulnerable patients ~Cuomo subpoenas health care clinics and credit card companies including Chase Health Advance, Citi Health, and GE Money's CareCredit

Yesterday, Attorney General Andrew M. Cuomo announced the expansion of an industry-wide investigation into predatory health care lending where consumers, especially seniors and vulnerable patients, are misled about financing, causing them to be pushed into debt.

An investigation by Attorney General Cuomo found that some health care providers use fast-talking sales pitches to pressure and deceive consumers into applying for health care credit cards such as Chase Health Advance, Citi Health, and GE Money's CareCredit. The investigation also found that CareCredit pays kickbacks in the form of rebates to the providers based on how much business they charge consumers on CareCredit cards.

The investigation was based in part on hundreds of consumer complaints received by the Attorney General's Office. Consumers reported that health care providers promised that the credit card had "no interest, " when it often carried retroactive interest of over 25 percent if not paid in full during a promotional period. Consumers were also unknowingly charged up front for services they never received, and their attempts to obtain refunds were often thwarted or ignored. Meanwhile, the credit card companies typically paid the health care providers in full within 48 hours of the charge.

The investigation also found that CareCredit charges the providers a fee for the right to offer the cards, and then rebates part of the fee based on the amount of money the providers generated through CareCredit sales. This kickback arrangement, plus CareCredit's payment in full to providers within two days of the charge, creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment. In fact, providers pushed CareCredit over cash.

"Our ongoing investigation has uncovered conflicts of interest and predatory practices in the health care industry that are hurting New Yorkers and patients across the country," said Attorney General Cuomo. "Patients are being misled into paying for services they never received by the people they should be able to trust the most - their doctors. Doctors are supposed to represent patients, not credit card companies, no matter what kind of kickbacks they are offered."

Cuomo issued subpoenas to 14 dental and health care clinics that promote CareCredit, as well as to GE's CareCredit, Chase Health Advance, and Citi Health Card. The subpoenas seek marketing materials, applications, terms of credit, contracts and rebate agreements, policies and procedures, consumer complaints, and regulatory inquiries. This investigation is ongoing.

In addition, Cuomo is asking several nationwide and state-based medical associations, including the American Dental Association and the New York State Dental Association, to explain why they endorsed CareCredit and whether they received compensation for doing so.

CareCredit is accepted by more than 125,000 health care practices nationwide. The New York State Dental Association asserts that more than 8 million dental patients and 80,000 dental practices use CareCredit nationwide. The credit card is advertised as a way to pay for services often not covered by insurance, including:

• Chiropractic procedures
• Cosmetic procedures
• Dental procedures
• Infertility treatment
• Hearing procedures
• Vision procedures
• Weight loss procedures
• Veterinary services

In recent years, Attorney General Cuomo's Office received hundreds of complaints from consumers indicating that they were lured and misled by providers into applying for, accepting, and using health care credit cards. Among the complaints received by the Attorney General's Office regarding the scam:

• A Nassau county woman went to a dental provider covered by her insurance for a root canal. The dentist told her that she had serious dental problems and needed $14,000 worth of work. When the consumer told the dentist she could not afford $14,000, the dentist said he would not do the root canal unless she applied for CareCredit. The following day, the consumer received a bill for $13,900 even though none of the work was performed.
• An elderly Brooklyn resident was advised by her dentist that she needed extensive dental work. The consumer agreed to allow the dentist to check her credit. A few days later, she received a bill from CareCredit for $6980. No dental work was performed.
• A Bronx resident had $17,500 worth of implants charged to a CareCredit account up front by a dental provider. The provider went out-of-business before completing the work. CareCredit repeatedly refused the consumers requests to refund the money.

Chuck Bell, Programs Director for Consumers Union, nonprofit publisher of Consumer Reports, said, "Attorney General Cuomo's investigation shines a badly-needed spotlight on deceptive practices used to market health care credit cards to elderly and low-income consumers. We are concerned that some health care providers are aggressively marketing these high-interest credit cards to patients, without providing appropriate disclosures, protections, or refunds. Consumers Union strongly supports the Attorney General's investigation, and applauds his ongoing efforts to protect consumers across the nation."

Catherine Dunham, President of The Access Project, a resource center for local communities working to improve health and health care access, said, "With the cost of health care already an enormous burden on Americans, we must do everything we can to filter out abusive or deceptive practices in how providers take payment for care. Attorney General Cuomo's investigation into health care credit cards will help protect millions of patients across the country who are struggling with debt. We applaud his efforts and look forward to continuing to partner with him to protect patients."

Consumers wishing to file complaints regarding deceptive health care credit card practices are urged to contact the Attorney General's Office at HealthCreditCards@ag.ny.gov or 800-428-9071. Consumer tips and more information about the investigation, including an example of the letters sent to trade groups, can be found online at www.ag.ny.gov.

The investigation is being conducted by Assistant Attorney General Carol Hunt of the Health Care Bureau under the supervision of Special Counsel to the Attorney General Linda A. Lacewell.

Subpoenas to Health Care Providers:

• Allcare Dental Management Inc. - Buffalo
• American Laser Centers - Farmington Hills, MI
• Aspen Dental Management, Inc. - East Syracuse
• East Syracuse Family Dental Arts - East Syracuse
• Laser Cosmetica - New York City
• Lifestyle Lift - Troy, MI
• Northern Lights Chiropractic - Watertown
• S & Y Diamond Dental P.C. - Brooklyn
• Sunshine Dental - Watertown
• Toothsavers - New York City
• Gentle Dentistry - East Aurora
• Judd Lesser, DDS - Hewlett
• Concerned Dental Care of Westchester P.C.
• Bernie Fialkoff DDS - Queens

Letters to Groups Endorsing CareCredit:

• American College of Eye Surgeons
• Society for Excellence in Eyecare
• American Dental Association
• Academy of General Dentistry
• American Academy of Periodontology
• American Association of Oral & Maxillofacial Surgeons
• New York State Dental Association
• American Society of Plastic Surgeons
• American Society of Dermatologic Surgery
• American Animal Hospital Association
• New York State Veterinary Medical Society
• American Hearing Aid Associates
• American Society of Bariatric Physicians
• Lite and Hope

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DiNapoli: Learning Center Collected Funds For Services Not Rendered

An audit released by State Comptroller Thomas P. DiNapoli found that the Rainbow Rhymes Learning Center (Rainbow) of the Bronx spent nearly a half million dollars in reported expenses that were either not adequately supported, not program appropriate or were claimed for a period Rainbow was not entitled to reimbursement. Furthermore, auditors found Rainbow did not provide significant contract deliverables including no after school program for inner city children at one facility.

"Our state's educational programs are meant to help our children grow and meet their full potential," said DiNapoli.  "But officials still need to keep a close eye on the bottom line, provide the services they're supposed to provide, and not waste taxpayer dollars. These are tough times.  It's more important than ever that we protect every taxpayer dime."

Rainbow's contract indicated that 200 children would be served at one facility Monday through Thursday from 3 p.m. to 6:30 p.m, on Saturday from 9 a.m. to 2 p.m. and during the summer. However, Rainbow did not provide any after school services at the Rainbow facility. The contract also indicated that an additional 100 children would be served after school at the Butler Memorial United Methodist Church (UMC), but the facility, on average, only served 27 children per day. Moreover, Rainbow operated an unlicensed after school program at the UMC for 18 months. During this unlicensed period, Rainbow was paid $256,206, which is included in the unsupported and inappropriate expenses noted above.

Rainbow was also charged with providing Family Literacy Services to 75 families at the UMC, but no such services were actually undertaken.

The audit also identified expenditures totaling $35,424 reimbursed to Rainbow but clearly unrelated to the funded program. This sum included a laptop computer that was reported to be at Rainbow's owner's personal residence, tuition and registration fees for the owner's children to participate in jujitsu and junior gym at a local college, as well as, equipment for a day care center operated by Rainbow's owner.

The audit attributed these deficiencies to ineffective oversight by the New York State Education Department (SED) officials.

A prior audit of certain grants awarded by the state Office of Children and Family Services (OCFS) to New York City-based child centers found that many such centers misused government funds and did not provide all contracted services. A copy of this audit report can be found here. As a result, Rainbow was assessed to be a high risk organization and an audit was initiated.

Rainbow Rhymes Learning Center was hired as a contractor by SED. It was established, in part, to help students, who may attend low performing schools, meet state and local academic achievement standards in subjects like reading and mathematics.

DiNapoli's auditors recommended the SED:

• Recover the $473,815 in unsupported and inappropriate Rainbow claims identified in the audit report.
• Review the $166,665 in payments to Rainbow that were not included in the audit. Recover those payments that are neither supported, nor appropriate.
• Develop and implement a monitoring system that would help ensure that contract related payments are supported and appropriate, and that all contract-related services are provided. If significant contracted services are not being provided, revise contract dollars to address the actual number of children and families served.

In response to the audit report, SED officials stated that they agreed with each recommendation and outlined their plans to implement them.

Click here for a copy of the audit.

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ATTORNEY GENERAL CUOMO FILES ANTITRUST LAWSUIT AGAINST PRICE FIXING CARTEL OF LCD PANEL MANUFACTURERS

Lawsuit seeks to recover damages suffered by New York State governmental and other public entities from illegal price fixing conspiracy

On Friday, Attorney General Andrew M. Cuomo filed an antitrust action against several major technology companies for illegally fixing prices for liquid crystal display ("LCD") screens used in computers, televisions, and cell phones.

The lawsuit seeks to recover damages suffered from 1996 to 2006 by New York State and other public purchasers - local governments, schools, hospitals, and colleges, among others - that purchased computers and other goods containing the price-fixed screens. The suit seeks damages, restitution, and civil penalties.

The lawsuit, filed in State Supreme Court in New York County, alleges that companies in Japan, Korea, and Taiwan, and their U.S. counterparts, engineered a cartel that dominated the $70 billion market for LCD screens for approximately a decade. The cartel ensured that LCD prices were set not by competition, but by detailed and explicit secret agreements among the competitors. New York State purchasers paid artificially higher prices for products containing LCD panels as a result of the illegal conspiracy.

"Our investigation shows that an illegal cartel eliminated competition in the marketplace for LCD screens, made its own secret decisions to boost prices, and then took steps to make those high prices stick," said Attorney General Cuomo. "As a result, hard-pressed New York cities, towns, schools, and hospitals spent hundreds of millions of dollars on LCD screens affected by the illegal conspiracy. My office is bringing this case to get those illegal overcharges back."

Specifically, the lawsuit cites evidence that:

• Top-level executives, including CEOs, attended secret meetings on a regular monthly or quarterly basis to agree on minimum prices, price targets and increases, and prices to be charged to specific computer manufacturers;
• Companies exchanged production information and agreed to certain output levels;
• In order to cover up the conspiracy, companies coordinated their messages to their customers and manipulated media announcements in order to give the false impression that their agreed upon price hikes were due to supply and demand conditions; and
• Because of the cartel, conspirators were able to avoid competition and keep LCD prices artificially high to the detriment of computer manufacturers and consumers.

The defendants named in the action are:

• AU Optronics Corporation;
• AU Optronics Corporation America, Inc.;
• Chi Mei Corporation;
• Chi Mei Optoelectronics Corporation;
• Chi Mei Optoelectronics USA, Inc.;
• CMO Japan Co., Ltd.;
• Hitachi Displays, Ltd.;
• Hitachi, Ltd.;
• Hitachi Electronic Devices (USA), Inc.;
• LG Display Co., Ltd.;
• LG Display America, Inc.;
• Samsung Electronics Co., Ltd.;
• Samsung Electronics America, Inc.;
• Samsung Semiconductor, Inc.;
• Sharp Corporation;
• Sharp Electronics Corporation;
• Toshiba Corporation;
• Toshiba Matsushita Display Technology Co., Ltd.;
• Toshiba America Information Systems, Inc.;
• Toshiba America Electronic Components, Inc.

This case is being handled by Assistant Attorneys General John Ioannou and Geralyn J. Trujillo and Acting Chief of the Antitrust Bureau Richard L. Schwartz, under the supervision of Deputy Attorney General for Economic Justice Michael Berlin and Executive Deputy Attorney General for Economic Justice Maria Vullo.

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ATTORNEY GENERAL CUOMO LAUNCHES INDUSTRY-WIDE INVESTIGATION INTO PREDATORY HEALTH CARE LENDING THAT IS PUSHING CONSUMERS NATIONWIDE INTO DEBT

Health care credit card scheme preys on seniors and vulnerable patients ~Cuomo subpoenas health care practices and credit card companies

Yesterday, Attorney General Andrew M. Cuomo announced an industry-wide investigation into predatory health care lending where consumers, especially seniors and vulnerable patients, are misled about financing, causing them to be pushed into debt.

An investigation by Attorney General Cuomo found that some health care providers pressure consumers into using GE Money's CareCredit, a health care credit card, through fast-talking sales pitches and deceit. The investigation also found that CareCredit often pays kickbacks in the form of rebates to the providers based on how much business they charge consumers on CareCredit cards.

The investigation was based in part on hundreds of consumer complaints received by the Attorney General's Office. Consumers reported that health care providers promised that the credit card had "no interest," when it often carried retroactive interest of over 25 percent if not paid in full during a promotional period. Consumers were also unknowingly charged up front for services they never received, and their attempts to obtain refunds were often thwarted or ignored. Meanwhile, CareCredit pays the health care providers in-full within 48 hours of the charge.

The investigation also found that CareCredit charges the providers a fee for the right to offer the cards, and then rebates part of the fee based on the amount of money the providers generated through CareCredit sales. This kickback arrangement, plus CareCredit's payment in full to providers within two days of the charge, creates an incentive for providers to push consumers to use CareCredit rather than other methods of payment. In fact, providers pushed CareCredit over cash.

"Health care debt is the number one cause of individual bankruptcy, and this scheme is contributing to the economic burden being felt by consumers," said Attorney General Cuomo. "People are being tricked by misleading offers that have them paying for services they never received as well as interest charges they never knew about - and they are ignored and given the runaround when they try to get their money back."

Cuomo issued subpoenas to 10 providers that promote CareCredit, as well as to the companies that manage CareCredit, Chase Health Advance, Visa Health Benefits, and Citibank Health Card. The subpoenas seek marketing materials, applications, terms of credit, contracts and rebate agreements, policies and procedures, consumer complaints, and regulatory inquiries. This investigation is ongoing.

In addition, Cuomo is asking several nationwide and state-based medical associations, including the American Dental Association and the New York State Dental Association, to explain why they endorsed CareCredit and whether they received compensation for doing so. 

CareCredit is accepted by more than 125,000 health care practices nationwide. The New York State Dental Association asserts that more than 8 million dental patients and 80,000 dental practices use CareCredit nationwide. The credit card is advertised as a way to pay for services often not covered by insurance, including:

• Chiropractic procedures
• Cosmetic procedures
• Dental procedures
• Infertility treatment
• Hearing procedures
• Vision procedures
• Weight loss procedures
• Veterinary services

In recent years, Attorney General Cuomo's Office received hundreds of complaints from consumers indicating that they were lured and misled by providers into applying for, accepting, and using CareCredit. Among the complaints received by the Attorney General's Office regarding the scam: 

• A Williamsville resident went to a dental provider with a toothache and was told he needed $9,000 in work done. He told the practice's office manager that he had the ability to pay for the service in cash, but he was still persuaded to sign up for financing through CareCredit. He ended up having the work done elsewhere, but the full amount of charges was billed to his card, despite receiving no services from the practice.
• An Onondaga County woman was told by a dental practice she needed a variety of procedures, and to get them she would have to sign a CareCredit agreement. After only having one $400 procedure done, which she paid for, she received a bill for $2,600. Her attempts to get a refund were rejected by both the provider and CareCredit.
• An Oswego woman was given a $6,000 estimate for dental procedures. She was urged to sign up for CareCredit, and was told this was an interest-free, monthly payment plan. However, she was charged up-front before the procedures were done, plus interest.
• A Monroe County man signed up for CareCredit to pay for an estimated $5,600 in services from his provider, but it was not made clear he was agreeing to a credit card. He left the medical office and sought treatment elsewhere, but continued to receive bills from CareCredit, which insisted he was delinquent on payments, resulting in a negative credit report and the reduction of his other lines of credit.
• A Syracuse-area consumer was told by his chiropractor that he needed two years of treatment and he was signed up for a CareCredit card without his consent. He was charged $3,000, which CareCredit refused to rescind. When the consumer switched to a different provider because the treatments at his chiropractor worsened his condition, the practice refused to release his medical records, claiming he still owed them money. 
• A woman from Tioga County went to a provider where an application to CareCredit was "thrown in (her) face." No other financing options were offered to her, and she was charged $5,000 for a procedure that failed multiple times and for which another provider later charged only $1,200.

Chuck Bell, Programs Director for Consumers Union, nonprofit publisher of Consumer Reports, said, "Attorney General Cuomo's investigation shines a badly-needed spotlight on deceptive practices used to market health care credit cards to elderly and low-income consumers. We are concerned that some health care providers are aggressively marketing these high-interest credit cards to patients, without providing appropriate disclosures, protections, or refunds. Consumers Union strongly supports the Attorney General's investigation, and applauds his ongoing efforts to protect consumers across the nation."

Catherine Dunham, President of The Access Project, a resource center for local communities working to improve health and health care access, said, "With the cost of health care already an enormous burden on Americans, we must do everything we can to filter out abusive or deceptive practices in how providers take payment for care. Attorney General Cuomo's investigation into health care credit cards will help protect millions of patients across the country who are struggling with debt. We applaud his efforts and look forward to continuing to partner with him to protect patients."

Consumers wishing to file complaints regarding deceptive health care credit card practices are urged to contact the Attorney General's Office at HealthCreditCards@ag.ny.gov or 800-428-9071. Consumer tips and more information about the investigation, including an example of the letters sent to trade groups, can be found online at www.ag.ny.gov.

The investigation is being conducted by Assistant Attorney General Carol Hunt of the Health Care Bureau under the supervision of Executive Deputy Attorney General for Social Justice Mylan Denerstein and Special Counsel to the Attorney General Linda A. Lacewell. 

Subpoenas to Health Care Providers:

• Allcare Dental Management Inc. - Buffalo
• American Laser Centers - Farmington Hills, MI
• Aspen Dental Management, Inc. - East Syracuse
• East Syracuse Family Dental Arts - East Syracuse
• Laser Cosmetica - New York City
• Lifestyle Lift - Troy, MI
• Northern Lights Chiropractic - Watertown
• S & Y Diamond Dental P.C. - Brooklyn
• Sunshine Dental - Watertown
• Toothsavers - New York City

Letters to Groups Endorsing CareCredit:

• American College of Eye Surgeons
• Society for Excellence in Eyecare
• American Dental Association
• Academy of General Dentistry
• American Academy of Periodontology
• American Association of Oral & Maxillofacial Surgeons
• New York State Dental Association
• American Society of Plastic Surgeons
• American Society of Dermatologic Surgery
• American Animal Hospital Association
• New York State Veterinary Medical Society
• American Hearing Aid Associates
• American Society of Bariatric Physicians
• Lite and Hope

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DiNapoli: State Dental Insurer Overcharged by $1.6 Million

Group Health Incorporated (GHI), the administrator for New York State's dental benefits plan, paid about $1.6 million in questionable claims by dentists for scaling and root planing procedures, according to an audit released today by New York State Comptroller Thomas P. DiNapoli. This represented nearly one-third of the amount GHI paid dentists for this procedure over the four-year period audited.

"Scaling and root planing are painful enough for the patient; they shouldn't cause even more pain for taxpayers," DiNapoli said. "GHI should be more vigilant. When a dentist bills for doing the same procedure seven times in four years, a flag should go up somewhere. Health care costs are high enough without taxpayers being forced to pay for procedures that were not needed or never done."

New York State Department of Health (DOH) guidelines recommend that dentists perform scaling and root planing procedures on no more than two quadrants of a patient's mouth during a single visit. Dentists are also discouraged from scaling and root planing the same quadrant more than once every three years.

These procedures are more extensive than a routine dental cleaning and more costly.  DiNapoli's audit, which looked at payments made by GHI between January 1, 2005 and December 31, 2008, found that they were frequently made outside of these guidelines. GHI never questioned the propriety of one dentist who billed GHI for performing scaling and root planing procedures on the same patient's mouth seven times in a four year period.

Auditors visited two dentists that frequently billed outside the accepted parameters and found the dental records often did not support the billings.  Auditors also tested GHI's compliance with its own internal processing procedures that required proper dental charts before payment. GHI paid many claims without proper supporting records.

DiNapoli recommends that GHI officials:

• Review claim payments to the two dentists visited by auditors;
• Investigate questionable billing patterns from other dentists; and
• Recover funds from any dentists who have overbilled.

GHI generally agreed with the audit's findings.

Click here for a copy of the audit.

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Here's the latest episode of Steve De Castro's Lawyers Roundtable Series.

Assemblymember Micah Kellner proposes an "Honest Services" statute, to counter corruption in Albany.

Guest-starring Councilmember James Sanders.

Starring Bob Silversmith, Adam Leitman Bailey, Lucas Ferrara, Seth Miller, Carol Anne Herlihy, Bruno Bianchi.

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Michael Picozzi III wanted to buy property from Michael Marcantonio.

Although the parties' contract of sale reflected that a downpayment had been received, that apparently wasn't the case and the funds were deposited at "a later date."

After the house was sold, Marcantonio sued the buyer, and the law firm that processed the transaction, for fraud.

When the Nassau County Supreme Court dismissed the case, the dispute ended up before the Appellate Division, Second Department.

While it thought Marcantonio should have brought a "breach of contract" rather than fraud case, since the deed had been delivered, the AD2 was of the view any possible claim had been "extinguished" by the transfer and that the dismissal needed to stand.

That grief was not crowned with consolation.

To view a copy of the Appellate Division's decision, please use this link: Marcantonio v. Picozzi

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ATTORNEY GENERAL CUOMO SETTLES WITH BUFFALO DEBT COLLECTION COMPANY THAT HARASSED AND INTIMIDATED CONSUMERS

LHR violated state and federal debt collection laws; must reform practices, pay $125k in penalties/costs

Yesterday, Attorney General Andrew M. Cuomo announced a settlement with a Buffalo-based debt collection company that repeatedly harassed and intimidated consumers, including some who did not even owe the debt in question.

According to Cuomo's investigation, Lewis Hastie Receivables (LHR), Inc., located on Main Street in Hamburg, violated state and federal debt collection laws and, under the agreement, must immediately reform its business practices and pay $125,000 in penalties and costs. The action is the latest in Attorney General Cuomo's ongoing probe of illegal practices in the debt collection industry.

"This company's business model was to harass consumers by calling them multiple times a day, continuously calling them at work after being told not to, and repeatedly calling even after the alleged debt was disputed," said Attorney General Cuomo. "It is unacceptable for debt collection companies to use illegal tactics for their own profit and we will continue to put a stop to the practice."

According to complaints received by Attorney General Cuomo's Office:

• An LHR collector called an Oswego resident up to 16 times in one day in an attempt to collect a 10-year old debt that belonged to her husband. When she questioned the debt to LHR, the collector said, "You must not know your husband that well then." The collector illegally told her she would be arrested, have a lien put on her house, her vehicle confiscated and wages garnished.
• LHR wrongly targeted a Lackawanna man for a debt which he did not owe.
• LHR collectors called a Georgia resident 10 times per day in an attempt to collect a debt that was allegedly inflated to more than triple the original amount owed.
• LHR tried to recover a debt from a Mississippi man that was actually owed by his ex-wife. After explaining this and telling LHR to stop calling him, the collector told the man he would call every day at 8 a.m. until the bill was paid.
• LHR repeatedly called a California-based Iraq war veteran over a $2,500 cell phone contract from a company he never signed up with. Despite being provided proof that the debt was not his and that he was serving overseas at the time the company claimed he signed the contract, LHR collectors continued to call him.

The federal Fair Debt Collection Practices Act and the New York State debt collection and consumer protection laws prohibit the following conduct: posing as an attorney, threatening lawsuits or other legal action which cannot be taken, saying a consumer committed a crime or will be arrested, and talking with third parties except to get location information. The law further requires collection agencies to send a written notice within five days of initial communication with the consumer explaining how he or she can dispute the debt. If properly disputed, the collection agency must stop all collection attempts and send verification.

The settlement is part of an ongoing investigation by Attorney General Cuomo into unlawful debt collection practices. Since commencing the statewide initiative in May 2009, Cuomo has shut down more than a dozen debt collection and affiliated process serving companies and required others to reform their deceptive practices. His office has also garnered criminal convictions against 12 individual collectors who engaged in especially egregious and threatening actions against consumers. The investigation is ongoing and lawsuits against several other collection companies are pending.

Attorney General Cuomo urges consumers who wish to learn more to visit www.NYDebtHelp.com. The site explains consumer rights, allows victims of debt collection and debt settlement companies quick access to the Attorney General's Office to file complaints, and outlines the stages of the investigation.

The case is being handled by Assistant Attorney General Benjamin Bruce under the supervision of Assistant Attorney General-in-Charge of the Rochester Regional Office Debra Martin and Deputy Attorney General for Regional Affairs J. David Sampson.

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CUOMO ANNOUNCES ARRESTS OF ROCKLAND COUNTY MOTHER AND HOME HEALTH CARE NURSE FOR CONSPIRING TO BILL MEDICAID FOR SERVICES NEVER PROVIDED TO SICK CHILD

Investigation Used Undercover Video Surveillance as Part of AG's 'Operation Home Alone'

Yesterday, Attorney General Andrew M. Cuomo announced the arrest of a Rockland County mother and a home health care nurse who worked in tandem to defraud Medicaid of over $32,000, and then split the money.

According to the complaint, from October 2007 to May 2010, Anne Nellie Salvant, 68, of New Hempstead, and Michelle Timothee, 37, of Pomona, participated in a scheme in which Salvant, a licensed practical nurse, would submit nurses' notes and time sheets to Accucare Nursing and Homecare falsely claiming that she had cared for Timothee's disabled son. Accucare relied on these records to bill Medicaid and pay Salvant, who would then share the ill-gotten gains with Timothee. Undercover video surveillance was used in the investigation to establish that Salvant was not present at the home for the hours she billed Medicaid.

"The allegations in this case include a parent using her own child's need for medical care as a way to beat the system and steal taxpayer dollars," said Attorney General Cuomo. "My office will continue to do what is necessary, including using hidden cameras and undercover surveillance, to protect vulnerable New Yorkers as well as the taxpayer."

Salvant and Timothee are both charged with Grand Larceny in the Third Degree, a class D felony. In addition, Salvant is charged with three counts of Offering a False Instrument for Filing in the First Degree and Falsifying Business Records in the First Degree, both class E felonies. Both were released on their own recognizance pending a court date on October 13.

Attorney General Cuomo's ongoing investigation into the home health care industry, known as "Operation Home Alone," has used hidden cameras and other investigative tools to convict dozens of uncertified aides, registered nurses, managers of schools that provided false certifications, agencies that employed aides and nurses, and Medicaid recipients complicit in no-show billing schemes. In many of those cases, the aides and nurses were found to have been billing for services they did not provide.

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

Special Assistant Attorney General William McClarnon of the Medicaid Fraud Control Unit's Pearl River Regional Office is prosecuting the case. The investigation was led by Special Investigator Timothy Connolly and Associate Special Auditor/Investigator Melissa Stoebling.

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DiNapoli: Former Director Used Nearly $100,000 in
ComLinks Money For Her Own Personal Use

Board Failed to Act on Early Complaints About Abuse;
DiNapoli Referring Report to District Attorney

Former ComLinks Chief Executive Officer Nancy Reich diverted nearly $100,000 in grant moneys to support a lavish lifestyle for herself, according to an audit released yesterday by State Comptroller Thomas P. DiNapoli.  She was able to do this because the ComLinks board of directors failed in its oversight role of her and because ComLinks' chief financial officer did not take steps to stop it. The board eventually took action against Reich but it was only after employees complained to DiNapoli's auditors and the news media about the abuses.

DiNapoli has sent his report to Franklin County District Attorney Derek P. Champagne.

"What happened at ComLinks was awful - on so many levels.  When you're charged with helping people who need it, you don't take the money meant for them and stick it in your pocket.  These are taxpayer dollars meant to deliver services to those greatly in need.  These things happened either because someone was asleep at the switch or people let the executive director do whatever she wanted with a wink and a nod. She had a license to do whatever she wanted."

The findings in DiNapoli's report include the following:

• ComLinks reimbursed Reich for expenses without any backup paperwork to explain what they were for.
• When traveling for conferences, Reich would often remain after they were over, and pay for things like Swedish massages and charge these expenses to ComLinks.
• ComLinks paid more than $8,000 so Reich, the CFO, Reich's secretary and an outside attorney could attend a conference in San Francisco.
• The CFO failed in her professional responsibilities as a CFO and a Certified Public Accountant because she served Reich's interests rather than ComLinks and taxpayer interests.
• The then program director provided auditors with invoices that falsely indicated expenses for ComLinks but the expenses were really for appliances purchased for Reich's personal home.
• The program director himself (who was hired as executive director following Reich's departure) used his position to hire his wife and his son's former football coach to work for ComLinks. He also used ComLinks' taxpayer dollars to pay for expenses for him and his wife to remain in Florida for a mini vacation after he attended a work-related conference there.
• The board purchased vehicles from a board member who owned a car dealership in Malone.
• Arriving the day before a conference in Syracuse, Reich had room service deliver six glasses of wine. The next day she said she could not attend because she had the "flu" but she ordered an eggs Benedict breakfast from room service, and charged it to ComLinks (she was later directed to reimburse the agency for the wine).
• Although state grants do not allow for the purchases of gifts and flowers, ComLinks spent at least $6,682 on gifts and flowers.
• Contrary to state policy, Reich used $2,477 in ComLinks money to cover her membership at the Malone Golf Club and $1,839 to attend fundraisers for then gubernatorial candidate Eliot Spitzer.
• All these transactions and more occurred on the watch of the CFO, who is still employed by ComLinks.
• 40 staff members signed a petition to the ComLinks board raising allegations of wrongdoing, but the board ignored it.  The petition resulted in DiNapoli's audit.
• Reich threatened employees with loss of their jobs when they questioned her actions.
• Meantime, a CPA was fired after he informed ComLinks officials he had concerns with the fair presentation of ComLinks' financial statements.
• The board never took action until employees went to the news media about Reich's abusive behavior and inappropriate expenses.

The abuses were flagrant and the board should have identified and responded to them through its oversight role.

DiNapoli recommended that the ComLinks officials:

• Take legal action against Reich to recover grant moneys used for inappropriate and fraudulent expenses.  
• Enhance financial controls to prevent fraud, waste and abuse of grant moneys.
• Ensure all board members are aware of their responsibilities under the ComLinks by-laws including issues regarding conflicts of interest, code of ethics and fiduciary responsibility for operations.
• Hire a competent Executive Director and Chief Finance Officer and hold them accountable to high ethical standards.
• Review conflicts of interests of board members and employees and take appropriate action, including possible termination, to prevent similar acts in the future.

The ComLinks board has either taken corrective action or indicated it will do so.

Click here for a copy of the audit. 

ComLinks is a not-for-profit, Community Action Agency in Franklin County that is primarily funded by New York State (State) and federal grants. According to its website, ComLinks exists to meet the needs of the people in Franklin County... "to give them a decent and affordable place to live, to put food on their tables, and to give them the confidence to know that tomorrow will be a better day...Safety, Warmth, Food, & Dreams..."

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New Jersey Woman Sentenced for Committing Insurance Fraud and Selling Prescription Fertility Drugs via the Internet

Food and Drug Administration  Office of Criminal Investigations

BOSTON, Mass. - A Hackensack, New Jersey woman was sentenced today in federal court for selling via the internet prescription fertility drugs that were paid for by her health insurance company.

United States Attorney Carmen M. Ortiz; Mark Dragonetti, Special Agent in Charge of the Food & Drug Administration - Office of Criminal Investigations; Robert Bethel, Inspector in Charge of the U.S. Postal Inspection Service; and Susan Dukes, Special Agent in Charge of the Internal Revenue's Criminal Investigations - Boston Field Division, announced today that HEIDI BENHAM, 44, formerly of Newton, was sentenced today by U.S. District Judge Douglas P. Woodlock to three years imprisonment, to be followed by three years of supervised release, and restitution of $518,335.58 to Blue Cross/Blue Shield of Massachusetts.

At the earlier plea hearing, the prosecutor told the Court that had the case proceeded to trial the Government's evidence would have proven that beginning in approximately February 2001 and continuing through October 2005, BENHAM created a scheme to obtain prescription fertility drugs through fraud. As part of this scheme, BENHAM caused her health insurance plan, Blue Cross/Blue Shield of Massachusetts, to pay for the drugs and that BENHAM then sold these drugs for profit via classified advertisements that BENHAM placed on the internet.

BENHAM had been a patient seeking fertility treatments when she began her fraudulent scheme, and according to the prosecutor,  BENHAM called certain specialty pharmacies that carried prescription drugs used in fertility treatments and falsely claimed that she was a representative of a physician's office. In the call, BENHAM told the pharmacies that the physician had either prescribed or authorized a refill of a prescription of certain fertility drugs for herself. Relying upon these false statements, the pharmacies sent various prescription fertility drugs to BENHAM's residence and billed Blue Cross/Blue Shield of Massachusetts for the drugs. The Government stated that Blue Cross/Blue Shield of Massachusetts paid $518,335.58 in insurance claims in connection with fraudulent prescriptions for fertility drugs that were provided to BENHAM.

Upon receipt of the prescription fertility drugs, BENHAM sold the drugs for profit to customers throughout the country using internet classified advertisements that she posted on various internet bulletin boards. The Government estimated that BENHAM received approximately $160,000 from her sales of these drugs.

The case was investigated by the FDA's Office of Criminal Investigations, the United States Postal Inspection Service and the Internal  evenue Service. It is being prosecuted by Assistant U.S. Attorneys Amanda P.M. Strachan and James E. Arnold of Ortiz's Health Care Fraud Unit.

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ATTORNEY GENERAL CUOMO ANNOUNCES CONVICTION OF WNY HOSPITAL CONTRACTOR WHO BRIBED COUNTY WORKER IN MEDICAID SCAM

Hospital debt collecting company and its owner bilked Medicaid out of more than $725,000

Cuomo Medicaid Fraud Control Unit's court-ordered recoveries top $800 Million

Yesterday, Attorney General Andrew M. Cuomo announced the criminal conviction and civil settlement involving a Western New York hospital contractor who bribed a county worker as part of an extensive Medicaid scam. With this conviction, Cuomo's Medicaid Fraud Control Unit (MFCU) has now topped $800 million in court-ordered recoveries.

Deborah Kantor, 55 of Tonawanda, is the owner and operator of H.I.S. Holdings, Inc. (H.I.S.), a debt collection agency that serviced Niagara Falls Memorial Medical Center and other Western New York hospitals. Kantor and H.I.S. bribed Michael Albrecht, a Niagara County Department of Social Services employee, in exchange for Medicaid client identification numbers and his approval of Medicaid applications that had incomplete or false information.

From 2000 to 2007, Kantor and H.I.S. paid Albrecht more than $17,749 in checks and cash as part of the scheme, including $50 for each active Medicaid client identification number that he provided. By obtaining Medicaid client identification numbers and the approval of sub-standard Medicaid applications, Kantor enabled her hospital clients to unknowingly obtain reimbursement from Medicaid for claims that should not have been paid. She benefitted from the scheme by getting a percentage of the fraudulent reimbursements.

Today's court action also settles a lawsuit filed by the Attorney General's Office seeking recovery of approximately $725,000 from Kantor, which represents the amount of fraudulent Medicaid benefits the State paid as a result of the scheme.

"This Medicaid scam involved bribes, kickbacks, and the unauthorized gathering of confidential information from government computers," said Attorney General Cuomo. "My office's actions to end abuses of the Medicaid system have resulted in unprecedented court ordered recoveries topping $800 million, a vital return of taxpayer money during a time of economic uncertainty and belt-tightening across New York."

Kantor pleaded guilty today to one count of Bribery in the Third Degree and three counts of Rewarding Official Misconduct in the Second Degree. A guilty plea was also entered on behalf of her company, H.I.S., to one count of Bribery in the Second Degree. Kantor faces a maximum sentence of 7 years in prison on these charges, while H.I.S. faces a fine of up to $10,000 or twice the amount of the corporation's gain from the crime, whichever is greater.

In January, Kantor and H.I.S., along with another H.I.S. employee, Amy Gardner, 31, of Tonawanda, were found guilty, after trial by a Niagara County jury, for submitting a Medicaid application that they knew falsely reported the address of the applicant in order to get the Niagara County Department of Social Services to approve the applicant's Medicaid eligibility.

Kantor will be sentenced on all charges related to the scheme on August 12. Albrecht previously pleaded guilty to Attempted Bribe Receiving in the Third Degree, a class E felony, and will be sentenced in September.

All proceedings took place before the Honorable Sara Sheldon Sperrazza in Niagara County Court. Attorney General Cuomo thanked the administration and staff of the Niagara County Department of Social Services for their cooperation and assistance in the investigation.

Today's convictions and settlement brings the total court-ordered monetary recoveries by Attorney General Cuomo's Medicaid Fraud Control Unit since January 1, 2007 to over $800 million. Some examples of Attorney General Cuomo's Medicaid fraud cases include:

• Last week, two Brooklyn-based Medicaid providers pleaded guilty to grand larceny and were ordered to repay $44 million to taxpayers.
• New York state reached a settlement for $45 million as part of a $520 million federal and multi-state agreement with AstraZeneca concerning allegations that the company provided kickbacks to doctors and engaged in an off-label marketing campaign to promote its antipsychotic drug Seroquel.
• A $24 million settlement with three home health agencies that used aides with little or no required training.
• New York secured $66 million from Pfizer in the largest health care fraud settlement ever for kickbacks and illegal marketing campaigns.

The criminal case was prosecuted by Gary A. Baldauf, Director of Attorney General Cuomo's Medicaid Fraud Control Unit's Buffalo Regional Office. Senior Special Investigator Kathleen Donahue and Special Auditor/Investigator Mary Henry assisted in conducting the investigations. The civil case was brought by Special Assistant Attorney General Jacob M. Bergman of the Medicaid Fraud Control Unit's Civil Enforcement Division.

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Free Immigration Fraud Workshop Sunday, July 18, 11am-3pm

Join me and Make the Road New York at a free workshop for victims of fraud by an immigrant service provider. This is a free workshop led by a lawyer where you will receive instructions on how you may be able to recover your funds. You will also receive Information on how to file a complaint against an immigration service provider.

When:             Sunday, July 18, 2010, 11 am to 3 pm

Where:            Make the Road New York,  92-10 Roosevelt Avenue, Jackson Heights, NY 11372

Spanish interpreters will be available, and your information will be kept confidential. Bring acopy of your immigration file.  If you do not have a copy of your file, you should bring whatever documents you have in your possession, including any correspondence or notices you may have received from immigration authorities. This workshop is for informational purposes and is not meant to substitute the advice of a lawyer.

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When Joseph Rosenzweig sought to foreclose on a mortgage he had given to Radiah Givens -- his then paramour, who later became his wife -- Givens countered that Rosenzweig had secured the mortgage by way of fraud, overreaching, and, by exploiting a fiduciary relationship he had with her.

Givens claimed that in order to facilitate the condo's purchase, she was asked to sign a mortgage document which identified Rosenzweig as the lender.

Three years into their marriage, when Givens discovered Rosenzweig was hitched to someone else, Rosenzweig demanded payment of the "loan."

After the Appellate Division, First Department, rebuffed Rosenzweig's request for relief in his favor, he headed on to the Court of Appeals, which shared the view a trial was warranted.

This I tell you brother ....

To view a copy of the Court of Appeals' decision, please use this link: Rosenzweig v. Givens

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ATTORNEY GENERAL CUOMO ANNOUNCES PRELIMINARY PENSION PADDING REPORT SHOWING THE PROBLEM IS WIDESPREAD AND IS COSTING TAXPAYERS MILLIONS

Additional 23 Letters Sent to Public Employers in Expanding Investigation

Cuomo Launches Website that Outlines Problem to New Yorkers

Yesterday, Attorney General Andrew M. Cuomo released a preliminary report in his ongoing investigation into pension padding that shows some workers across the state are significantly inflating their pensions by dramatically increasing their overtime hours in the final few years of employment. Additionally, the Attorney General's investigation is being expanded with 23 more letters sent to public employers asking for payroll information.

Cuomo also launched a Web site, www.nypensionpadding.com, that contains the preliminary report, examples of data collected, and suggested best practices to help curb overtime abuses, along with other information related to the investigation.

As part of the investigation, Attorney General Cuomo's office requested payroll data from 64 state agencies, local agencies, municipalities, and authorities that participate in the Common Retirement Fund. The preliminary report analyzed data from 50 of those 64 employers representing 3,688 retirees from 2009. The data indicates that employees are boosting their overtime to inflate their pension benefits, which are based on an employee's total income, not their base salary. Specifically, the investigation found two patterns that demonstrated increased accumulation of overtime in many workers' final years of service. The first pattern is employees who start getting overtime only when they near retirement. The second pattern is employees who greatly increase overtime only when they near retirement. The report found that 28 of the 50 employers from 13 different counties across the state showed one or both patterns, and 12 of the 28 employers showed both patterns.

"Our ongoing investigation into pension padding has so far identified problems that transcend occupation, region, or job title," said Attorney General Cuomo. "More critically, we have developed solutions and tactics that, if implemented, can reduce the abuses of the pension system. While we expand the scope of our probe, I urge all public employers to closely examine how they can improve the way they do business for the sake of the state and taxpayers."

The first pattern involves employees who start working substantial amounts of overtime only when they are near retirement. This pattern is found in 14 of the 50 public employers analyzed. Based on this pattern, some employees start to work overtime when it would likely be included in calculating their pension benefits. Here are some examples:

• A highway maintenance employee went from no overtime to working 539 hours of overtime in the final years before retirement.
• A police officer went from no overtime to working more than 800 hours of overtime in his final years before retirement.
• A Deputy Commissioner of Civil Defense/Disaster Preparedness went from no overtime to working 1,629 hours of overtime in the final years before retirement. The data shows that this employee took in more than $50,000 in overtime pay the years before his retirement and had twice as many overtime hours as his co-workers.

The second pattern involves employees who worked some amount of overtime during their career, but showed a substantial increase in the amount of annual overtime hours during the period approaching retirement. This pattern was found in 26 of the 50 public employers in the preliminary analysis. In some instances, average annual overtime hours in the period approaching retirement increased by more than 10 times the amount in earlier periods. Here are some examples:

• A 2009 retiree who was a shovel operator averaged 144 hours of overtime annually from 2002-2005. From 2007-2008 that employee averaged 820 hours of overtime annually.
• A 2009 retiree who was a journeyman operator averaged 150 hours of overtime annually from 2002-2005. From 2007-2008 that employee averaged 551 hours of overtime annually. The average annual overtime hours for other employees was around 300 hours.
• A 2009 retiree who was an operator group supervisor averaged 434 hours of overtime annually from 2002 to 2005. From 2007-2008 that employee averaged 1,191 hours of overtime annually. This employee had a $69,000 annual salary and then received $67,000 in overtime pay in the year prior to retirement.

At a minimum, this data confirms that employees are indeed inflating their pension benefits by boosting overtime as they near retirement and may be engaging in pension padding. If only 2 percent of new pension recipients followed some of the practices found in the Attorney General's investigation, taxpayers could face an additional $120 million in pension benefit payments over the next 20 years. At 5 percent, this could mean an additional $300 million over the next 20 years.

The preliminary report also identifies the following practices that may help prevent overtime abuses and pension padding:

• Institute overtime caps: Adopt overtime caps and implement a specific reporting system to monitor overtime per employee. When an employee's overtime exceeds a certain threshold of their salary, it should trigger an inquiry. This type of monitoring would allow an employer to reevaluate the work and staff needs in their department and possibly to adopt measures to reduce overtime, such as hiring new personnel, using flexible schedules, or reallocating seasonal employees.
• Move away from seniority-based assignment systems: As expected, assigning overtime based exclusively on a seniority system seems to correspond to employees working more overtime hours as they near retirement. In many cases, this type of system is granted in a Collective Bargaining Agreement. Consequently, while the agreement is in affect, the employer is legally bound to assign overtime based on seniority. However, not all employees are bound by Collective Bargaining Agreements and the agreements only apply to union members. Nonetheless, some public employers that are not bound by such an agreement are still using a seniority based system. The report shows that must be revisited.
• Centralize overtime practices: Establishing a centralized system for overtime with uniform policies and procedures should help employers effectively limit overtime excesses. If overtime is handled by a number of independent departments, districts, and sub-agencies, it can result in inconsistent overtime practices and reduction in the monitoring and prevention of overtime abuses.
• Reduce overtime generally: Management should plan for adequate staffing rather than relying on overtime to meet needs. While in some cases overtime is unavoidable, employers should regularly review overtime use and take steps to reduce overtime needs, including adopting flexible schedules and providing for more coverage over different shifts.

The pension padding investigation is ongoing and the Attorney General's Office is sending out an additional 23 letters to public employers. The new data combined with the old data will identify areas vulnerable to abuse and mechanisms to address these abuses. But the preliminary report is clear: it appears pension padding exists and is widespread across the state and ultimately legislative reform must be considered to effectively address this problem.

Carol Kellermann, President of the Citizens Budget Commission, said, "This report provides convincing evidence of increased overtime purposefully incurred to enhance already ballooning pension benefit payouts. While management reforms, such as overtime caps, are common sense ideas that should be adopted immediately, the only way to totally eliminate pension padding through excessive overtime is to exclude overtime from pension formulas entirely."

Stephen J. Acquario, Executive Director of the New York State Association of Counties, said, "Due to the severe economic recession, all levels of government are operating under strenuous financial circumstances. Governments must continue to provide important public services while striving to achieve maximum operational efficiencies. Attorney General Cuomo's investigation into pension costs has revealed important information that should help lower the cost of government operations. County leaders applaud this smart investigation and corresponding recommendations and remain committed to working with Attorney General Cuomo to implement employment based practices to reduce pension costs for New York taxpayers."

RISING PENSION COSTS AND ITS EFFECT ON PROPERTY TAXES

According to recent census data, New York State had an overall pension cost of $486 per resident in 2007, which was the highest in the nation. The New York State Common Retirement Fund (CRF), which funds the Employees' Retirement System (ERS) and the Police & Fire Retirement System (PFRS), has assets of more than $129 billion and covers more than 1 million members and retirees from more than 3,000 government employers. The CRF is primarily funded by taxpayers who pay an estimated $2.5 billion to the fund each year.

Pension payments to retirees in ERS and PFRS have increased from $3.5 billion in 1999 to more than $7.3 billion in 2009. New Yorkers end up bearing the burden caused by excesses in pensions through increases in their property taxes. New Yorkers already face some of the highest property taxes in the nation. In a ranking of the counties with the highest property taxes in the United States, Nassau County ranks fourth, Westchester County ranks fifth, Rockland County ranks seventh, and Suffolk County ranks eleventh. Although pension costs typically make up only about 2 percent of expenditures in cities, towns, counties, and villages, in certain localities pension costs represent over 7 percent of expenditures.

In light of these rising pension costs, state and local employers will be required to make significantly higher contributions to fund the state pension system starting in 2011. For public employers participating in ERS, their mandated contributions will increase from 7.4 percent of payroll to 11.9 percent of payroll; for those participating in PFRS the costs will go from 15.1 percent to 18.2 percent.

OTHER INVESTIGATIONS INTO THE NEW YORK STATE PENSION SYSTEM

Curbing all types of pension abuse and manipulation is a top priority for Attorney General Cuomo. One ongoing investigation conducted over the past three years with respect to allegations of "pay-to-play" practices at the CRF has led to a number of criminal charges to date. 15 investment firms have agreed to sign the Attorney General's Public Pension Fund Reform Code of Conduct to resolve their roles in the Attorney General's investigation. Through the investigation, a combined total of more than $130 million has been returned to the CRF and New York State.

In a separate investigation, Attorney General Cuomo uncovered abuses by independent contractors throughout the state who defrauded the pension system by holding themselves out as public employees entitled to pension benefits, resulting in the return of more than $1.9 million to taxpayers through actions involving the conduct of more than 70 attorneys and other professionals. As a permanent fix, the Attorney General spearheaded legislative reform to curb pension fraud and other pension abuses.

The Attorney General's office urges individuals with knowledge of any questionable pension padding practices to contact the Attorney General's Public Integrity Bureau at 212-416-8090 or public.integrity@ag.ny.gov.

The Attorney General's pension padding investigation is being conducted by Assistant Attorneys General Lauren Ellis, Renée Jarusinsky, and Jessica Silver, and Director of Economics Kitty Kay Chan, under the supervision of Deputy Chief of the Public Integrity Bureau Monica Stamm and Special Deputy Attorney General for Public Integrity Ellen Nachtigall Biben.

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Livingston Mandel Deans, his father (Byron), and his second wife (Sharon), each shared a one-third interest in a Queens property.

After his death in 2001, Livingston's property went to his wife Sharon and to his two surviving children. But in 2003, Sharon supposedly forged her step-daughter's signature onto a deed and -- using documents executed by an imposter claiming to be Byron -- obtained a $370,000 mortgage from Real Spec Ventures, LLC.

After the Queens County Surrogate's Court found the deed and mortgage fraudulent and cancelled the recording of those documents, Real Spec appealed.

Because the Surrogate's Court lacked the power to decide "independent matters involving controversies between living persons," the Appellate Division, Second Department, thought the mortgage's cancellation (in its entirety) was an error.

Who reported that to the Deans?

To view a copy of the Appellate Division's decision, please use this link: Matter of Deans

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Pharmacy Owner Sentenced to Over 4 Years for Health Care Fraud, Aggravated Identity Theft and Conspiracy to Misbrand Drugs

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ATTORNEY GENERAL CUOMO ANNOUNCES ARREST AND GUILTY PLEA OF THE FOUNDER OF A SHAM CAR DONATION CHARITY

Queens-based "Hope for the Disabled Kids, Inc." Spent Over $2 Million on Personal Expenses and Real Estate Instead of Helping Families

Latest Action in Cuomo's Industry-Wide Investigation into Car Donation Charities

Yesterday, Attorney General Andrew Cuomo today announced the arrest and guilty plea of the founder of a sham car donation charity for looting over $2 million in charitable funds. Shoba Bakhsh, of Queens-based "Hope for the Disabled Kids, Inc.," pled guilty to lying to donors and misusing funds for herself and her family. As a condition of the plea, the charity will immediately shut down. Today's action marked the latest stage of the Attorney General's ongoing, industry-wide investigation into car donation charities.

Hope for the Disabled Kids took in thousands of cars and had more than $2 million in revenue between the charity's founding in 2001 and 2009. When soliciting donors, Bakhsh promised that over 90% of donations would go to help disabled children. However, no funds were used for any legitimate charitable purposes from 2007 to 2009. No records were produced to prove that funds were used for legitimate purposes prior to 2007 because Bakhsh destroyed documents and filed false paperwork.

"This individual manipulated donors and exploited children with serious medical needs in order to enrich herself and her family," said Attorney General Cuomo. "As a result of her actions, millions of dollars that should have gone to help disabled children were instead spent on department store bills and real estate. As our investigation continues, my office encourages New Yorkers to be generous and informed donors."

On its Web site, Hope for the Disabled Kids claimed that:

• Funds will "be utilized to benefit disabled children by purchasing medical equipment;"
• Funds will "help pay for medical expenses for families who are unable to afford [them];"
• Funds will "purchase books, toys, games and food during the holidays to distribute to children in hospitals."

Instead, Bakhsh spent funds donated to Hope for the Disabled Kids on herself and her family, including:

• Close to $500,000 in connection with the purchase of real estate in Florida and payments of real estate taxes on properties owned by Bakhsh and her husband;
• Payments on two different Macy's credit card accounts;
• School tuition for Bakhsh's children;
• Additionally, Bakhsh's personal checking account received cash deposits of nearly $250,000 between 2007 and 2009. During this period, she supposedly had no employment other than her job at Hope for the Disabled Kids, which reported paying her less than $50,000 per year.

Hope for the Disabled Kids solicited the donation of vehicles through print advertising outlets and its Web site. Bakhsh and Hope for the Disabled Kids intentionally made false representations about the charity in order to trick people into donating their vehicles, including saying that more than 90% of the proceeds from the sales of donated vehicles would be spent on children in need. Bakhsh also posted forged testimonials on the charity's Web site that made it seem that it had made legitimate contributions to hospitals and health care facilities.

Bakhsh, of South Ozone Park, Queens, pled guilty in New York County Supreme Court to one count of Scheme to Defraud in the First Degree (class E felony) and two counts of Offering a False Instrument for Filing in the First Degree (class E felony). As a condition of the plea, Hope for the Disabled Kids, Inc. will immediately shut down. Bakhsh is also forbidden from serving on the board or as an officer of a not-for-profit and from being employed at any entity engaged in the car donation industry. Bakhsh is expected to be sentenced on September 23, 2010 by the Honorable Michael Obus. The Attorney General's office will be seeking penalties from Bakhsh at that time.

BACKGROUND INFORMATION

Charities involved in the car donation industry solicit contributions in the form of used vehicles, which they then sell to raise funds for humanitarian causes. Attorney General Cuomo's ongoing, industry-wide investigation into car donation charities has shown that some charities mislead donors about how much money is used for charitable purposes as well as where the money goes. In some cases, the car donation charity is a complete sham, with little or no money going to the causes the charity purports to support.

As part of the investigation, the Attorney General recently sent subpoenas to sixteen charities, fundraisers, and individuals seeking materials relating to the funds that charities and for-profit fundraisers have collected through car donation programs. Cuomo also sued to shut down a sham car donation charity, Feed the Hungry, Inc., for misusing funds meant for the homeless.

Today's action is part of Attorney General Cuomo's ongoing initiative to fight charitable fundraising scams and to safeguard donors:

• In June 2010, the Attorney General secured a permanent injunction against the United Homeless Organization that shut the group down for deceiving donors;
• In April 2010, the Attorney General sued to shut down a fake Long Island-based breast cancer charity, Coalition for Breast Cancer Cures, Inc., for misusing over $500,000;
• In January 2010, the Attorney General sued to shut down four professional fundraising companies that used fraudulent and deceptive practices;
• In November 2009, the Attorney General released his annual "Pennies for Charity" report, which shows the percentage of donations collected by charities that go to professional fundraisers as opposed to charitable purposes.

For more information on making vehicle donations, or to report an instance of charitable solicitation fraud, New Yorkers are encouraged to contact the Attorney General's office at www.ag.ny.gov or www.charitiesnys.com or by calling (212) 416-8402.

The criminal case is being prosecuted by Assistant Attorneys General Nathan Reilly and Risa Sugarman, under the supervision of Special Deputy Chief of Staff Mitra Hormozi. The investigation was handled by Investigator Gerard Matheson, with the assistance of Analyst Kayla Arslanian.

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ATTORNEY GENERAL CUOMO ANNOUNCES FORMER STATE EMPLOYEE ADMITS TO USING TAXPAYER MONEY TO FINANCE HIS EBAY BUSINESS

On Monday, Attorney General Andrew M. Cuomo announced the guilty plea of a former state worker who used the Department of Health's postage meter to send items he had auctioned on eBay, and other personal mail, costing taxpayers in excess of $16,000.

Robert Pagini, 57, of Rensselaer, worked for the New York State Department of Health, from 1997 until January of this year as a Senior Mail & Supply Clerk. For most of that time, he was the Supervisor-in-Charge of the mailroom located in the Hedley Building in Troy. To process outgoing mail, the Department of Health maintains a mailing system machine which weighs, seals and affixes metered postage strips to the mail that the mailroom receives.

From March 2004 through January 2010, Pagini was selling items over eBay, predominantly coins and currency. He would then use the Department of Health's postage machine to pay the postage for the items that he was sending to his eBay customers. Furthermore, he would use the Department of Health's postage machine to pay for the postage on personal mail. All together the postage amounted to a theft from taxpayers of more than $16,000.

"This individual repeatedly fleeced taxpayers to subsidize both his eBay business and years worth of personal mail," said Attorney General Cuomo. "He abused the public trust and this case once again reinforces the need to do everything we can to bring honesty and integrity back to government."

Pagini pleaded guilty before Rensselaer County Court Judge Andrew G. Ceresia to Grand Larceny in the Fourth Degree, a class E felony. As part of the plea agreement, Pagini must pay full restitution and never again seek nor obtain employment with a government agency. Pagini was released without bail pending sentencing on August 27th.

As part of the investigation, the New York State Inspector General's Office purchased two coins; an 1882-O $1 Morgan Silver Dollar, and a 1988 $1 Canada Silver Saint-Maurice Ironworks Proof from Pagini through eBay. When the coins arrived, the envelopes bore postage meter strips which belonged to the Department of Health's account.

The Attorney General thanked State Inspector General Joseph Fisch for his office's assistance in the investigation.

The case is being prosecuted by Criminal Prosecutions Bureau Deputy Bureau Chief Richard S. Ernst under the supervision of Special Deputy Attorney General for Public Integrity Ellen Biben. This case was investigated by Office of the Attorney General Investigator Leslie M. Arp under the supervision of Deputy Chief Investigator David Adams in conjunction with Office of the Inspector General Investigative Counsel Jonathan Masters and Deputy Chief Investigator Sherry Amarel.

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Statement by Secretary Kathleen Sebelius Regarding the Low-Income Home Energy Assistance Program (LIHEAP)

I am very disturbed by the findings in an upcoming GAO report on the Low Income Home Energy Assistance Program (LIHEAP) that found instances in which benefits were given to ineligible individuals and areas where the program could be vulnerable to fraud.  Public resources are limited, and a dollar spent on ineligible families is one less dollar available for those who genuinely need help.  

This Department has zero tolerance for fraud. All cases of suspected LIHEAP fraud will be turned over to the HHS Inspector General.  In addition, HHS has been taking major steps to work with states to prevent fraud and abuse in order to ensure program integrity.

On May 5, in a break with prior policy, HHS issued new guidance strongly encouraging states to require LIHEAP applicants to provide Social Security Numbers as a condition of receiving assistance. States were also advised to make enhanced use of state prisoner databases and other existing databases, such as the Social Security Administration's Enumeration Verification System, to verify the identities of applicants.

Earlier this month, HHS asked all states to supplement their LIHEAP plans for the coming fiscal year with information on the mechanisms they will use to prevent waste, fraud and abuse. HHS will work with state LIHEAP programs and state governments to pinpoint areas of vulnerability and to disseminate best practices. HHS will also seriously consider legislative proposals that mandate state action to address fraud and abuse in the program.

Fighting fraud and ensuring program integrity are central to the mission of HHS.  Last month I created the first-ever Secretary's Council on Program Integrity, comprised of the heads of every division within the Department.  This Council brings together the Department's senior leadership on a regular basis to conduct risk assessments of programs or operations most vulnerable to waste, fraud and abuse; to enhance existing program integrity initiatives or create new ones; to share best program integrity practices throughout HHS; and to measure the results of these efforts.  I hold this Council accountable for working closely with the Inspector General, and for providing me with practical solutions to address longstanding program integrity issues.

 Additionally, HHS has created a "hotline" on the website of the Administration for Children and Families (the agency responsible for administering LIHEAP) to enable citizens - including government employees -  who want to do the right thing to tell us if they have reason to believe that funds are being misused in any ACF program.

This Department has an obligation to be good stewards of the American people's tax dollars, and HHS is firmly committed to fulfilling that responsibility.  It is essential that we do everything in our power to ensure the vital resources we administer are reaching the people who need them most, and to protect the low-income families, seniors, and people with disabilities who depend on LIHEAP.

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This piece appeared in the Real Estate Section of Sunday's New York Times.

Promises, Promises Should Be in Writing

BY: JAY ROMANO

Q I recently used Craigslist to find an apartment. The person showing the place said the building had a laundry room. But when I moved in, I discovered the building did not have on-site laundry. The management company acknowledged that the agent who showed the unit had made a "misrepresentation" and said it would try to find another tenant -- but would hold me to the lease until then. I don't see any urgency in its efforts. Is there anything I can do?

A Lucas A. Ferrara, a Manhattan real estate lawyer, says most lease forms provide that the tenant does not rely on any oral representations made by anyone before the signing of the agreement -- unless those promises were incorporated into the written lease. "If the lease is silent as to the availability of laundry-related equipment or services," Mr. Ferrara said, "the tenant will be hard pressed to assert a claim that she was somehow misled." He said the tenant could ask to be released from the lease, and perhaps offer to forfeit the security deposit.

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ATTORNEY GENERAL CUOMO ANNOUNCES INDICTMENT OF BRONX RECYCLER FOR FALSIFYING DOCUMENTS TO HIDE ILLEGAL DUMPING

Yesterday, Attorney General Andrew M. Cuomo announced an indictment of Salvatore Cascino and Bronx County Recycling, LLC for filing false documents with the State of New York to hide illegal disposal of solid waste.

According to the indictment, Cascino failed to list on three annual filings (2008, 2009, 2010) with the Department of Environmental Conservation (DEC) that unauthorized solid waste was received at Bronx County Recycling. Cascino was arraigned on three counts of Offering a False Instrument for Filing in the First Degree before Acting Supreme Court Justice Daniel Lamont, in Albany County Supreme Court. Cascino was released on own recognizance pending a July 1 court date.

"This recycler dumped dangerous construction debris and then routinely filed false reports with the State to hide his crime, as charged in today's indictment," said Attorney General Cuomo. "My office is committed to the protection of New York's citizens and the conservation of the environment."

This indictment follows a previous indictment in Columbia County, alleging that between December 2008 and July 2009, Cascino and Bronx County Recycling recklessly operated an unpermitted landfill on New York State Route 9G in the Town of Clermont, where more than 70 cubic yards of solid waste was disposed of illegally. Attorney General Cuomo also filed a motion to force compliance with a consent decree prohibiting Cascino and his companies from accepting any solid waste at Copake Valley Farm. A 2009 search revealed that more solid waste had been dumped there since the effective date of the Consent Decree. Recent results of sampling of the solid waste revealed that it contained low levels of friable asbestos, which is regulated by DEC as a hazardous air pollutant. The motion is pending and seeks an order requiring Cascino and the other defendants to promptly clean up the waste under DEC supervision.

"Once again, Mr. Cascino is facing charges for allegedly flouting environmental laws and putting public health and safety at risk. This is simply unacceptable," said State Environmental Conservation Commissioner Pete Grannis. "Our agency is committed to working with the Attorney General to prosecute such cases to the fullest extent in order to prevent improper dumping and ensure a safe environment."

Bronx County Recycling, LLC, is a registered construction and debris processing facility located at 475 Exterior Avenue in the Bronx,. A registered construction and debris processing facility is permitted to accept only uncontaminated, rock, asphalt, dirt and concrete and reprocess it for limited designated and permitted uses.

Attorney General Cuomo thanked the DEC for its assistance in the investigation. The case is being handled by Assistant Attorney General James Woods and Assistant Attorney General Catherine Leahy Scott under the supervision of Criminal Prosecutions Bureau Deputy Chief Richard Ernst and Bureau Chief Gail Heatherly with assistance by Michael Myers from the Attorney General's Environmental Protection Bureau.

The charges against Cascino and Bronx County Recycling are merely accusations. The defendants are presumed innocent until and unless proven guilty.

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ATTORNEY GENERAL CUOMO SUES NYC DEVELOPER FOR ILLEGALLY RAIDING CONDOMINIUM'S RESERVE FUND

Lawsuit Seeks $7.4 Million in Restitution and to Bar Developer from Future Sales

Yesterday, Attorney General Andrew M. Cuomo filed a lawsuit charging the developers of the Rector Square Condominium in Battery Park City with defrauding purchasers out of approximately $7.4 million by raiding a reserve fund meant to ensure the health and safety of residents and instead using the money for personal and unrelated business purposes.

The Attorney General's investigation revealed that while developers YL Rector Street, LLC and its principal, Yair Levy, had promised tenants and owners that the reserve fund would be set aside for making repairs, improvements and replacements necessary for their health and safety, they instead depleted the fund leaving residents with a mere $70. A review of the Condominium's financial records uncovered that Levy misused millions of dollars of the residents' money for personal and general business expenses, including making credit card payments and writing checks to himself and relatives.

"It is unconscionable that the developer pocketed a fund established to protect residents," said Attorney General Cuomo. "Today's lawsuit sends a clear message to property developers that deception and fraud will not be tolerated. Purchasers and tenants are entitled to full and honest disclosure and must be able to rely on all representations made to them."

The lawsuit, filed in New York State Supreme Court in Manhattan, alleges that YL Rector Street, LLC and Levy violated New York's Martin Act for fraudulent conduct in connection with the sale of real estate securities and Executive Law 63(12) for persistent fraud and illegality in the conduct of a business. The suit seeks restitution, damages and penalties from Levy and YL Rector Street LLC, and also seeks to bar Levy from offering real estate securities for sale in New York State in the future.

The Rector Square Condominium conversion plan was filed with the Attorney General in May 2007, and the developers undertook renovations in 2007 and 2008. Under New York City law and the Attorney General's regulations for condominium conversions, the developers were required to create a reserve fund of approximately $7.4 million for Rector Square residents to address health and safety issues that may arise in the future. Although the developers represented they would comply with this law, they instead raided the reserve fund for personal and unrelated business purposes.

The case is being handled by Assistant Attorney General Jeffrey Rendin and Assistant Attorney General Lewis Polishook under the supervision of Deputy Attorney General for Economic Justice Michael Berlin and Executive Deputy Attorney General for Economic Justice Maria Vullo.

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FTC Warns of Oil Spill Scams

It's no secret that scam artists follow the headlines, and the daily news of the oil spill in the Gulf of Mexico is no exception. The Federal Trade Commission (FTC), the nation's consumer protection agency, cautions consumers and businesses to be on the alert for fraudulent activity related to the explosion aboard the Deepwater Horizon drilling rig and the resulting spill - and to report their experiences to federal and state authorities. British Petroleum (BP) leased the rig, which was owned and operated by Transocean.

The FTC says it's likely that scammers will use e-mails, websites, door-to-door collections, flyers, mailings and telephone calls to make contact and solicit money. Some may claim they're raising money for environmental causes or offer fraudulent services - like remediation services - related to the oil spill. Others may claim they can expedite loss claims for a fee. Still others may knock on your door and talk about placing booms or checking for oil on your property. Chances are they're trying to gain your trust to get inside your home or get access to your personal information.

The FTC says that at the very least, you will want to do some homework before making a donation or entering into an agreement for services.

Regarding Claims

• Expect some scam artists to pose as authorized adjusters and ask for fees to expedite services. ESIS, BP's authorized claims administrator, is not charging individuals or companies any fee to process claims. If you make a claim, you are assigned a claims number through the BP hotline at 1-800-440-0858. An authorized ESIS adjuster will contact you to further verify and process the claim for payment. If you are not satisfied with the resolution, you should call the U.S. Coast Guard's National Pollution Funds Center (NPFC) at 1-800-280-7118, or visit the NPFC for more information at: www.uscg.mil/npfc/Claims/default.asp
• Expect other scam artists to pretend to be government officials - and then require a processing fee to provide government services. The government does not require processing fees.

Regarding Insurance

• Verify that you are dealing with authorized representatives of BP, and don't sign waivers of liability too quickly without getting adequate legal and financial counsel.
• Report anyone who is making false or exaggerated insurance claims to your state insurance commissioner.
• Report anyone who is making insurance claims but lives outside the disaster zone.

Regarding Contractors

• Don't do business with contractors who require up-front payment for services: You will be out the money if they fail to perform the work or finish the job to your specifications or satisfaction.
• Require any contractors you use to detail the services they will perform on a written contract.
• Use only licensed contractors.

Regarding Donations to Charities

• Some people may misrepresent an affiliation with an environmental organization when they ask for donations via e-mail or social networking sites. If you're tempted to contribute, check out the charity at www.bbb.org/us/charity, the website of the Better Business Bureau.
• Some sham organizations may use copy-cat names to cash in on the reputations of older, more established charities.
• Rather than clicking on a link to a purported website, verify the legitimacy of a nonprofit organization by using search engines and other online resources to confirm the group's existence, history, mission and nonprofit status.
• To ensure your contributions are received and used for the purposes you intend, contribute directly to organizations you know rather than relying on other people to make a donation on your behalf.
• If you get pressure to make a contribution, look for another charity. Reputable charities don't use those kinds of tactics.
• Avoid donating cash if possible. Pay by debit or credit card, or write a check directly to the charity.
• If an organization suggests you wire your donation to them, cross them off your list. Legitimate charities usually do not solicit donations via money transfer services.
• Most legitimate charities websites end in .org rather than .com. For more information on the warning signs of a charity scam, visit www.ftc.gov/charityfraud.

Regarding Employment and Volunteer Opportunities

• Avoid any job or volunteer opportunities that require you to pay a fee before the job begins.
  

For More Information

For updates on the oil spill, visit usa.gov. Enter "Gulf Oil Spill" in the search field.

Where to File a Complaint

If you suspect that someone is committing fraud related to the oil spill, contact the National Center for Disaster Fraud (NCDF). Call: 1-866-720-5721; email: disaster@leo.gov; or fax: 225-334-4707. The NCDF was originally established by the Department of Justice to investigate, prosecute, and deter fraud in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region. Its mission has expanded to include suspected fraud from any natural or
man-made disaster. More than 20 federal agencies, including the FTC, participate in the NCDF.

To File a Complaint

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

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ATTORNEY GENERAL CUOMO SUES IMMIGRATION SERVICES COMPANIES FOR TARGETING AND DEFRAUDING HAITIANS IMPACTED BY RECENT EARTHQUAKE

Victims Paid Large Sums for Legal Services that the Companies Were Not Authorized to Perform and Often Did Not Provide

Lawsuits Seek to Shut Down Companies and Obtain Restitution for Victims

Attorney General Andrew M. Cuomo today announced lawsuits against several companies for targeting the Haitian community with fraudulent immigration services after the January earthquake that devastated much of the Haitian capital region.

The lawsuits allege that the companies and their owners - who are not lawyers - have been illegally providing legal advice and services to Haitian immigrants. As non-lawyers, the owners are prohibited from providing legal advice or representing anyone before immigration authorities. Further, the lawsuits allege that the companies are charging Haitian immigrants thousands of dollars for processing immigration applications that could be filed for free through a waiver. This case is part of the Attorney General's ongoing investigation into immigration fraud.

The Attorney General filed lawsuits against: Chay Pa Lou Community Center, Inc., Delegue Tax Consultant, Inc., and their owner and operator Jean Michel; as well as Rincher's Multi-Service a/k/a Rincher Bookstore a/k/a Rincher Associates a/k/a Haitian American Entrepreneur's Group, LLC, and their owners and operators Deslande Seixas-Rincher, and Sharlene Seixas-Rincher. All companies are located in Brooklyn, New York.

"In light of the recent devastating earthquake in Port-au-Prince, New York's Haitian residents have sadly been a target for immigration scams, bringing further pain to a community that has already suffered so much," said Attorney General Cuomo. "These cases are a part of my office's ongoing crackdown on immigration scams throughout New York and I urge anyone who has been affected by this type of fraud to contact my office."

After the earthquake in Haiti in January 2010, the United States Department of Homeland Security allowed Haitian citizens in the United States to seek Temporary Protected Status ("TPS") to stay in the country for eighteen months. After Homeland Security made its TPS announcement, the Attorney General's office received complaints that Haitian immigrants were being targeted through advertisements by companies offering fraudulent and illegal immigration services at exorbitant prices.

The Attorney General's investigation revealed that these companies charged Haitian immigrants for processing immigration applications that could be filed for free through a waiver or for a nominal fee. The companies also charged some immigrants for processing applications even when they were not even eligible to stay in the United States. Further, some immigrants paid for application processing and legal services that were never provided.

The lawsuits seek to permanently shut down these companies and prevent them from providing immigration legal services. The lawsuits also seek restitution for the victims who have paid thousands of dollars for legal services the companies were not authorized to provide and in many instances did not provide. The Attorney General is authorized to seek an injunction, penalties of up to $7,500 per violation and restitution. The companies owned and operated by Jean Michel face liability for over 100 known violations; the companies owned and operated by the Seixas-Rinchers face liability for over 30 known violations. The Attorney General previously obtained a court order against Chay Pa Lou Community Center, Inc., which has frozen their assets and precludes them from destroying documents and transferring assets.

The Office of the Attorney General will coordinate with several New York legal associations to help handle the companies' existing cases and to protect innocent victims.

Under state and federal law, only lawyers or accredited representatives can represent individuals before immigration authorities. Under New York State law, it is unlawful to mislead or defraud any person in immigration-related services. New York law also requires anyone providing immigration services to comply with advertising, signage, and surety requirements, and to give consumers written contracts in both the consumer's native language and English that detail their services and cancellation policy. Further, it is illegal for not-for-profit immigrant service providers to charge excessive fees for services; the services must be provided free of charge or at a very nominal rate.

• In April 2010, the Attorney General shut down American Immigrants Federation for defrauding immigrants with false promises of citizenship, engaging in the unauthorized practice of law, and illegally charging exorbitant fees for services. The organization, its president Estela Figueredo, and its affiliates had to shut down all of their operations and pay $1.2 million in restitution.

• In March 2010, the Attorney General obtained a $3 million court judgment against a Queens County individual, Miriam Hernandez, for defrauding immigrants by claiming that she could help them gain citizenship.


• In January 2010, the Attorney General sued and obtained a temporary restraining order against International Immigrants Foundation, International Professional Association, and their President Edward Juarez for engaging in fraud and the unauthorized practice of law. The case is currently pending in the New York State Supreme Court.


• In August 2009, the Attorney General shut down three companies - Immigration Solutions and Systems, Inc. and its owner Mary DiSerio of Manhattan; Alisandra Multiservices, Inc. and its owner Sandra A. Peguero of Brentwood, Long Island; and All Immigration Services and its owners Ruth A. Shalom and Isaac Shalom of Great Neck, Long Island - for providing unauthorized and fraudulent legal services to immigrant communities and required that they pay full restitution to all victims. The companies were required to pay more than $100,000 in penalties and were permanently prohibited from operating immigration services businesses.


• In August 2009, the Attorney General sued three companies - Immigration Community Service Corporation and its owner Vincent I. Gonzalez; Professional Solutions Consultants (d/b/a Reliable Clerical Services and Reliable Immigration Services) and its owner Clover A. Perez; and Centro Santa Ana and its owner Ana Lucia Baquero - all located in Queens for providing unauthorized and fraudulent legal services to immigrant communities and is seeking injunctive relief, restitution, and penalties. These cases are currently pending in the New York Supreme Court.

Edward Dominguez, Executive Director of Catholic Migration, said, "As Haitians continue to focus on recovery and rebuilding, it is reassuring to know Attorney General Cuomo is taking these steps to ensure that victims, their families, and others in the community are not being taken advantage of by fraudulent immigration organizations. We look forward to continuing to work with the Attorney General's Office in identifying perpetrators and bringing them to justice."

Chung-Wha Hong, Executive Director of New York Immigration Coalition, said, "We welcome our growing Haitian community to New York, many of whom have been displaced by a horrible and unspeakable tragedy. For any individual or group to try to scam these families who are trying to rebuild their lives is akin to another atrocity. Attorney General Cuomo's efforts to protect Haitian immigrants and all New Yorkers from scam artists and deceptive ploys are to be commended."

The immigrant community is a vital part of the fabric of New York State. There are more than 3,000,000 immigrants living in New York State. Immigrants from 148 different countries represent thirty-six percent of New York City's population, forty-three percent of its workforce, and sixty percent of homeowners.

All New Yorkers should be aware of organizations and not-for-profits providing immigration services for exorbitant fees and without the proper accreditation. A list of free and low-cost immigration services that are available through not-for-profits and attorneys can be found through the U.S. Department of Justice, the New York State Immigration Hotline, and the Board of Immigration Appeals. Haitians staying in the United States only have until July 20, 2010 to apply for TPS.

The cases are being handled by Assistant Attorney General Vilda Mayuga and Assistant Deputy Counselor Elizabeth De León, and Investigators John McManus and Angel Laporte, under the supervision of Special Deputy Attorney General for Civil Rights Alphonso B. David and Chief Counsel for Civil Rights Spencer Freedman.

If you have been a victim of immigration assistance fraud, please contact the Attorney General's Immigration Services Fraud Unit Hotline at (866) 390-2992 or visit www.ag.ny.gov.

The lawsuits are available at www.ag.ny.gov.

Attachments:

• Chay Pa Lou Community Center, Inc. Complaint
• Rinchers Complaint

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