Saturday, July 1, 2017

Five Charged In $28 Million Nutraceuticals Credit Card Fraud Affecting Thousands Of Consumers


  Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and David E. Beach, Special Agent-in-Charge of the New York Field Office of the U.S. Secret Service (“USSS”), announced today the unsealing of charges against JAMES BECKISH, RICHARD WITCHER, JAMES TONER, PETER O’BRIEN, and JOSEPH ANTHONY DEMARIA for their respective roles in operating a series of companies between 2013 and 2016 that were used as a cover to place approximately $28 million of unauthorized charges on thousands of consumers’ credit cards.  The websites of the defendants’ companies purported to sell products like dietary supplements but, in reality, were primarily used to repeatedly bill consumers who never ordered their products, or even if they did, almost never received them.  All of the defendants were arrested today and presented before Magistrate Judges in the District of New Jersey, the Middle District of Florida, and the Southern District of Florida.
Acting Manhattan U.S. Attorney Joon H. Kim said: “These defendants allegedly created and operated more than 100 companies that specialized in one service: ripping off consumers and credit card companies.  By allegedly billing consumers for dietary supplements they didn’t order or receive, the defendants reaped millions of dollars, affecting thousands of consumers and leaving credit companies holding the bag.  Thanks to the U.S. Secret Service, this scheme is over.”
Secret Service Special Agent-in-Charge David E. Beach said:  “The Secret Service is committed to aggressively investigating these offenses.  Emerging technologies and cyber capabilities enable criminal networks to evolve and significantly impact financial markets. This case is another example of the transnational investigative capabilities of the United States Secret Service. Our developed partnerships with other federal, state and local law enforcement agencies as well as private sector stakeholders, enables us to focus our resources to uncover, investigate and prevent these crimes more effectively.”
According to the Complaint unsealed today in Manhattan federal court:[1]
Between 2013 and 2016, BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA and others, created and operated more than 100 companies that purported to sell dietary supplements and similar products called “nutraceuticals.”  Although the companies were purportedly distinct, they nonetheless marketed similar products on websites that contained similar photographs, were hosted by the same entity, had similar typographical errors, and used the same or nearly identical JavaScript coding.  These websites were used by the defendants and others to serve as justification for unauthorized and recurring charges that were placed on tens of thousands of credit card numbers that the defendants had illicitly purchased or obtained, or had acquired from consumers who had attempted to order the products in question.  For example, in one email between TONER and BECKISH in October 2013, TONER stated that they could simply charge unsuspecting customers by falsely “say[ing] they opted in online for something.”  In total, more than $28 million in fraudulent charges were placed during the duration of the scheme.  
BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA, and others created these different companies and websites, moreover, because they knew that credit card processors would stop doing business with them over time as consumers noticed the unauthorized charges and sought refunds.  These refunds, called “chargebacks” by credit card processors, are generally low for legitimate businesses but reached extremely high percentages for many of the companies associated with the defendants’ scheme.  In certain instances, the chargeback rates quickly approached or even exceeded 20 percent – that is, consumers were seeking refunds of more than 20 percent of the charges placed by certain of the defendants’ companies.  Credit card processors, in turn, paid millions of dollars in refunds for fraudulent charges associated with the defendants’ companies between 2013 and 2016 in attempts to refund affected consumers.
BECKISH, WITCHER, TONER, O’BRIEN, DEMARIA are each charged with one count of conspiring to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.  In addition, they each are charged with one count of aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.  The charges also carry a maximum fine of $250,000, or twice the gross gain or loss from the offenses. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants would be determined by the judge.
Mr. Kim praised the investigative work of the USSS and expressed his gratitude for the assistance of the Offices of the United States Attorney in the District of New Jersey, the Southern District of Florida, and the Middle District of Florida.
The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
 [1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.

A.G. Schneiderman Announces Convictions Of Sheep Farmer And Overseers For Unlawful Use Of Hazardous Pesticide – Causing Death Of Bald Eagles And Red-Tailed Hawk


Sheep Farmer William Wentling And Overseers Illegally Dispersed Carbofuran, Which Killed Three Protected Birds

   Attorney General Eric T. Schneiderman today announced the convictions of Tuscarora sheep farmer William Wentling, 67, and his overseers Eli Byler, 41, and Jonathan Byler, 19, for illegally using an acutely hazardous pesticide and causing the deaths of two bald eagles and a red-tailed hawk.  Wentling was convicted today of one count of Endangering Public Health, Safety, or the Environment in the Fourth Degree and two counts of Unlawful Use of a Restricted Use Pesticide, all unclassified misdemeanors. The Bylers were previously convicted of Endangering Public Health, Safety or the Environment in the Fourth Degree.

Wentling appeared before the Honorable Peter C. Broadstreet in Stuben County Court, where he was arraigned on an indictment. Immediately thereafter, he pleaded guilty to the charges above, and was sentenced to a one-year conditional discharge.
“Ensuring the safety of our state’s protected species is critical to New York’s environment,” Attorney General Schneiderman said. “The illegal use of hazardous pesticides not only killed three protected animals – but it also jeopardized the safety of nearby residents. I will continue working to protect our communities and all who inhabit them.”
In prior proceedings in the Town of Tuscarora Court on September 26, 2016, the Bylers pleaded guilty to Endangering Public Health, Safety, or the Environment in the Fourth Degree and were sentenced to a one-year conditional discharge.
“New York State has been a leader in the restoration and recovery of the bald eagle in the United States,” Department of Environmental Conservation (DEC) Commissioner Basil Seggos said. “This crime stands in stark contrast to DEC’s bald eagle efforts over the last several decades and shows blatant disregard for the environment and wildlife. I commend the work of our Environmental Conservation Officers (ECOs) and the Attorney General’s office in bringing this case to fruition.”
Today’s convictions are the result of a joint investigation conducted by the New York State Attorney General’s Office and the New York State Department of Environmental Conservation (“DEC”), in conjunction with the United States Fish and Wildlife Service. Today’s convictions are the result of a joint investigation conducted by the New York State Attorney General’s Office and the New York State Department of Environmental Conservation (“DEC”), in conjunction with the United States Fish and Wildlife Service. In addition to the charges filed by the Attorney General’s Office in this matter, charges were also filed by the United States Attorney’s Office for the Western District of New York. Earlier today, Wentling pleaded guilty in United States District Court, Western District of New York, to violating 16 United States Code 668(a) of the Protection of Bald and Golden Eagles act, a misdemeanor, and was sentenced to two years’ probation and fined $3,500.
According to the felony complaint filed by the Attorney General’s Office and statements made by the prosecutor in court, Wentling operated a sheep farm located in Tuscarora, New York, at which the Bylers were the overseers.  In the late winter and spring of 2015, the Wentling farm had been having problems with hawks killing lambs on the farm.  Wentling instructed the Bylers to stay on top of the bird problems with the sheep, directing them to a jug marked “poison” with a drawing of a skull and cross bones on it. The Bylers then poured the contents of the jug onto sheep carcasses located on the farm. 
In March 2015, DEC investigators executed a search warrant at Wentling’s farm and recovered the jug.  Laboratory analysis determined that the jug contained carbofuran. Pursuant to New York Codes, Rules and Regulations and the Environmental Conservation Law, carbofuran is an acutely hazardous substance and a restricted use pesticide.  It is illegal to knowingly release a substance acutely hazardous to public health, safety, or the environment and to possess or use any restricted use pesticide without a permit.
According to the Attorney General’s complaint, in March and May of 2015, two dead bald eagles were found on a property adjacent to Wentling’s sheep farm. In addition, in April of 2015, one dead red-tailed hawk was found on Wentling’s sheep farm near a sheep carcass. Laboratory analysis determined that the cause of death for the bald eagles and the hawk was carbofuran poisoning. Also, laboratory analysis of soil under the sheep carcass demonstrated the presence of carbofuran.
Bald eagles and red-tailed hawks are protected by the Bald and Golden Eagle Protection Act and the Migratory Bird Treaty Act.
Attorney General Schneiderman remains committed to protecting all who reside in New York, including animals. To that end, in May of 2013, he announced his office’s Animal Protection Initiative, which is aimed at shutting down criminal animal fighting rings, ensuring compliance with New York State's Pet Lemon Law, charging those who abuse or neglect animals, and cracking down on the abuses of so-called “puppy mills” in order to protect the welfare of the animals being sold and the consumers. Just last week, he announced the arrests of 43 individuals after the bust of a Herkimer County-based cockfighting ring. The raid resulted in the seizure of over 50 birds, which were then turned over to the local Humane Society.
Attorney General Schneiderman thanks the New York State Department of Environment and Conservation and the United States Fish and Wildlife Service for their valuable work on this investigation.

Comptroller Stringer Audit: Major Breakdowns in DCAS Oversight of Auto Parts ContractComptroller Stringer Audit: Major Breakdowns in DCAS Oversight of Auto Parts Contract


DCAS allows late delivery of parts and leaves the City vulnerable to over-billing

  With tens of thousands of vehicles in use across all New York City government agencies, a new audit from Comptroller Scott M. Stringer found that the Department of Citywide Administrative Services (DCAS) has failed to ensure auto parts are delivered on-time and at the right price, potentially leading to delayed repairs, overpayments and an inefficient use of taxpayer dollars. This new audit of DCAS comes on the heels of a February report showing hundreds of recalled vehicles still in daily use by the Department of Sanitation. These audits highlight the need for the City to improve its contract oversight and management of its vital, heavily used vehicle fleet.

To support and expedite vehicle-repair and maintenance at six City agencies – including the New York City Police Department and the New York City Fire Department – DCAS contracts with the Genuine Parts Company to operate on-site auto parts supply rooms at City agency garages throughout the five boroughs. That five-year contract, executed in January 2013, provides the City with price protections and sets unequivocal deadlines for parts-deliveries, to ensure that the City’s vehicles can be repaired promptly and that taxpayer dollars are used efficiently. However, Comptroller Stringer’s audit found that DCAS never tracked the vendor’s delivery times even though the vendor repeatedly missed contract deadlines.  Auto parts arrived late an extraordinarily high percentage of the time, with no discernible action taken by DCAS to enforce the contract. And there was limited evidence that DCAS made sure that the City got the best possible prices.
“It’s not just the City’s fleet that needs fixing. The bureaucracy needs a tune-up, because there seems to be high levels of indifference here. DCAS has an obligation to make sure the vendor delivers the right parts at the right time, and that it gets the parts we need at the best price.  But our audit shows that DCAS doesn’t even check.  It is simply not doing its job. ” New York
City Comptroller Scott M. Stringer said. “Government employees work day-in and day-out to keep New York running, and to do that they need vehicles that are reliable and well-maintained, and that spend minimal time in the shop. This is about much more than paperwork and contracts — it’s about competently supporting our workforce so they can deliver much needed services to all New Yorkers.”
Auto Parts Were Routinely Delivered Late
Under DCAS’s contract with Genuine Parts Company, the company was obligated to provide most parts to agency personnel within ten minutes of a request. The contract grouped parts into four categories:
  • “A-mover” parts — these parts, which are typically ordered by agency employees on a weekly basis, must be delivered within 10 minutes 100 percent of the time;
  • “B-mover” parts — which are used biweekly to quarterly, and must be delivered within 10 minutes 90 percent of the time;
  • “C-mover” parts — those that are requested quarterly to yearly, and must be delivered within 10 minutes 80 percent of the time; and
  • Remaining parts, with the exception of customized parts, which are ordered by agencies less than once a year, and are supposed to be delivered in 24 hours.
The audit, however, uncovered that DCAS failed to track whether parts were delivered on time. When auditors sampled 641 parts ordered by the Department of Sanitation in June 2016, they found that parts among all categories were routinely delivered to agency staff late — increasing the risk that vehicle repairs could be delayed and the City employees who use those vehicles could be left unable to do their jobs.
Specific findings include the following percentages of late deliveries:
  • 96 percent of “A-mover” parts — those that are most-commonly ordered;
  • 77 percent of “B-mover” parts;
  • 62 percent of “C-mover” parts;  and
  • Of all the parts ordered, 25 percent took more than an hour to be delivered.
DCAS Needs to Improve Its Price-checking
To ensure that City resources are spent efficiently, the auto part supply contract includes price protections which require the Genuine Parts Company to charge the City no more than the wholesale cost the company pays for an item plus a fixed markup. If the City finds the company’s prices to exceed prior prices it has paid, the City can require the company to seek bids from multiple vendors and purchase parts that provide the best value for the City.
Auditors, however, found only limited evidence that DCAS checked to ensure that Genuine Parts Company was charging no more than the contract allowed or how its prices compared with those of other vendors. When auditors surveyed the five City agencies that procure parts from Genuine Parts Company, the agencies complained that the vendor’s prices were unclear and sometimes higher than those of other vendors. Those responses suggest that the City — and, by extension, taxpayers — may be paying more for parts than necessary.
Previous Audit
In February, Comptroller Stringer’s office found that the Department of Sanitation had kept hundreds of federally-recalled, defective cars in use, putting the safety of sanitation workers, drivers, and the public at risk. Despite federal recall orders from the National Highway Traffic Safety Administration as recently as January 2017 the DSNY was using 509 cars that may have had dangerous flaws. After discovering these hundreds of recalled vehicles with Sanitation alone, Comptroller Stringer called for an immediate top-to-bottom review of the City’s entire fleet of cars to ensure other departments are not utilizing vehicles that have been federally recalled.
Taken together, the two audits show that the City’s overall fleet management system needs an overhaul.
Recommendations to DCAS
The Comptroller’s Office made fourteen recommendations, including that DCAS:
  • Require Genuine Parts Company to prepare and  submit reports based on delivery times as it is required to do under the contract;
  • Conduct periodic audits of Genuine Parts Company’s wholesale invoices to ensure parts are being billed to agencies at the correct rate; and
  • Perform routine price comparisons to make sure the City is getting the best prices for parts ordered.
To view a full copy of the audit report, click here.

BRONX MAN SENTENCED TO 23 YEARS FOR FIRST-DEGREE RAPE OF WOMAN HE OFFERED TO ESCORT TO TRAIN STATION


Defendant Dragged Woman Off Street Into Alleyway; Brutally Attacked Her 

  Bronx District Attorney Darcel D. Clark today announced that a Bronx man has been sentenced to 23 years in prison for first-degree crimes of Rape, Criminal Sexual Act and Sexual Abuse of a woman who had asked him for directions to the train station in Morris Park. 

  District Attorney Clark said, “This horrifying crime shocked the community with its randomness and brutality. A jury convicted the defendant and now he will spend 23 years in prison, which we hope will bring a measure of justice to his courageous victim and assure the community the streets are safer with this predator behind bars.” 

   District Attorney Clark said the defendant, Francisco Delarosa, 30, of 2327 Grand Concourse, was convicted by a jury on June 9, 2017, after a two-week trial before Bronx Supreme Court Justice John Carter of first-degree Rape, first-degree Criminal Sexual Act, first-degree Sexual Abuse, and Petit Larceny. 

  The defendant was sentenced today to 23 years in prison. Upon his release, he will have to register as a sex offender. 

   According to trial testimony, on May 27, 2015, in the Morris Park section of the Bronx, the 32-year-old victim was walking down the street and asked the defendant where the train station was, and the defendant offered to show her. He then dragged her into an abandoned alleyway and raped and sexually abused her.

MAYOR DE BLASIO ANNOUNCES AETNA TO LOCATE CORPORATE HEADQUARTERS, 250 GOOD-PAYING JOBS IN NEW YORK CITY


Aetna and City partner to support public health, create access to quality jobs, and make NYC the global capital for healthcare innovation

  Mayor Bill de Blasio announced that, by the end of 2018, Aetna’s corporate headquarters will be located in New York City. The health company’s move to a new headquarters at 61 9th Avenue in Manhattan will result in 250 good-paying jobs and an estimated $146 million in economic benefit to the City.

This investment builds on three years of efforts led by Mayor de Blasio to create a 21st century healthcare system for all New Yorkers.

“New York City is where talent and technology come together,” said Mayor Bill de Blasio. “We’ve never been stronger, and that’s why companies like Aetna and their employees want to be here. We’re proud to support Aetna’s investment in the city.”

“New York City is a knowledge economy hub, and a driver of the innovations that will play a significant part in our ongoing transformation,” said Aetna Chairman and CEO Mark T. Bertolini.  “Many of the roles in our new office will be filled by innovators from the area’s deep talent pool, which will be an invaluable resource as we consider additional investments in the city.  I look forward to working closely with Mayor de Blasio as we build on our role as a responsible corporate citizen.”

As a large employer, Aetna will make the kinds of investments in healthcare innovations and medical technology that help commercialize new discoveries and support the city’s healthcare startups.

The healthcare and life sciences sectors are a core component of Mayor de Blasio’s New York Works plan, a series of 25 initiatives that will spur 100,000 jobs with good wages over the coming decade, to combat economic inequality and grow the middle class.

Aetna already has an established presence in New York City, including operations in Harlem. As part of the City’s commitment to support the new headquarters, Aetna and the City will work together to develop partnerships that support public health, healthy living, advance digital health innovation and increase access to quality jobs for New Yorkers.

“Attracting a major player in the health care industry like Aetna is a big win for New York City, helping to drive even more innovation and job creation throughout the sector,” said New York City Economic Development Corporation President and CEO James Patchett. “We’re excited to partner with Aetna to improve public health, and to help New Yorkers from all backgrounds access quality jobs as part of our New York Works plan.”

Governor Andrew Cuomo Should Bring Back the Commuter Tax


WHAT YOU SHOULD KNOW 
By Senator Rev. Rubén Díaz 
32nd Senatorial District, Bronx County, New York


You should know that an article titled “City Has to Pay Up If It Wants Better MTA Service, Cuomo Says” written by Ben Fractenberg in the June 23, 2017 edition of DNAInfo begins with the following sentence: “Governor Andrew Cuomo said the city should put its money where its mouth is in funding the MTA to help fix the beleaguered subway system.”

Instead of asking New York City to pay more money into the MTA, wouldn’t it be more responsible for Governor Andrew Cuomo to push for the reinstatement of the Commuter Tax? Shouldn’t our beloved Governor at least pose this as a possibility and open the subject for hearings, studies and political implications?

It is important for you to know that back on May 27, 1999, former New York State Governor George E. Pataki signed a bill into law to repeal the Commuter Tax.

That piece of legislation was rushed through the Senate and Assembly for a vote, with no hearings, no debate and no studies on the tax break for people who commute to New York City, use our police, fire, sanitation, hospital, parks and other municipal services when needed.

The commuter tax used to help defray the cost of municipal services that New York City provides to one and all, and when it was taken away, it was an additional financial burden placed on everyone who lives in the five boroughs of the City to pay for those services.

In other words, people who don’t live in New York City and come here to work and shop, expect for us to host them so they can take advantage of our municipal services, which include our failing subway system.

Now, with all of the problems that the MTA faces, how could Governor Andrew Cuomo say that the citizens of New York City should pay even more money for these services?

Instead, if we reinstate the Commuter Tax, people from Long Island, Westchester, and Upstate New York who come to New York and use our transportation system can help to pull their fair share of the burden.

I urge Governor Cuomo to lead the way, and instead of asking New York City residents to chip in and pay more money, he should really help the City by bringing back the Commuter Tax.

I am Senator Reverend Rubén Díaz, and this is what you should know.

EDITOR'S NOTE:

Current State Senator Reverend Ruben Diaz Sr. is running for the 18th City Council seat whose current occupant is term-limited.

More Statements on Hospital Shooting From Local Elected Officials


STATEMENT FROM STATE SENATOR GUSTAVO RIVERA ON TODAY'S FATAL SHOOTING AT BRONX LEBANON HOSPITAL CENTER 

  "I'm deeply saddened and disturbed by today's fatal shooting at Bronx Lebanon Hospital Center. This senseless tragedy that has left our borough and our City in mourning, did not only take the life of a female doctor but left six others injured, some of them in critical condition. I want to express my condolences to the family and friends of the deceased and wish a swift physical and emotional recovery to those affected by this traumatic event. 

However, in the midst of this horrific tragedy, we are reminded of the many acts of heroism displayed today. I want to express my heartfelt gratitude to all of our first responders including the NYPD, especially police officers from the 44th and 46th Precinct, the FDNY and the EMT, for the courage and professionalism displayed under the most strenuous of circumstances. Further, I want to express my profound appreciation to the doctors, nurses and personnel at Bronx Lebanon for their work in putting their patients out of harm's way. 

It is indeed a very sad day for our City."

Statement from Assembly Member Michael A. Blake on Bronx Lebanon Hospital Shooting

Our thoughts and prayers go out to the families impacted by today's tragic shooting at Bronx Lebanon Hospital, where seven people were shot by the shooter; especially to the family of the doctor who had her life senselessly taken. Other persons are in surgery so please keep them and the medical staff lifted up in prayer. The gunman has taken his life.

I thank the first responders and Bronx Lebanon staff for responding so quickly. Our team is on site and in constant communication to get updates.

This tragedy is another reminder that there must be stronger gun laws in our country, and the need for greater awareness around mental health concerns that can lead to unspeakable loss.

Statement by Assemblymember Luis Sepulveda   
"This obviously was the work of a madman"
 
My prayers and heartfelt condolences go out to the family of the fatal shooting victim in today's terror-filled rampage at Bronx-Lebanon Hospital, and I wish a speedy recovery to the six other shooting victims.

I applaud the quick, heroic work of other doctors and nurses who sprang into action to help the wounded, even as the gunman was rampaging through the hospital. They truly are heroes.

I also applaud the swift response of the NYPD. While others flee from danger, they race toward it.

This obviously was the work of a madman, who vented his twisted fantasies with violence, going out in what he may have felt literally was a blaze of glory by setting himself on fire before shooting himself.

I hope, as part of the investigation, the authorities determine how he was able to obtain a deadly assault rifle, once again, a weapon of choice for lunatics committing mass murder and mayhem.

 When will this nation finally come up with a rational response to the crazy, illogical glorification of these weapons of horrific injury and murder? 

STATEMENT FROM ASSEMBLYMAN VICTOR PICHARDO  

   “Today’s senseless shooting at Bronx Lebanon Hospital, left 2 people dead and several people hurt. My thoughts and prayers go out to all the victims and their families during this tragedy.

     “I would like to thank NYPD, FDNY and all first responders for dealing with the situation as quickly as possible in order to keep our community safe.

     “My office will continue to monitor the situation and work with the Mayor and my colleagues in government to make sure that our community and the people of the Bronx feel safe and secured.”