NEW YORK – Attorney General Eric Schneiderman, Comptroller Thomas P. DiNapoli and United States Attorney for the Northern District Richard Hartunian today announced the arrest and indictment of New York State Assemblyman William Scarborough for allegedly stealing campaign funds and falsely collecting travel reimbursements. The 23-count state indictment accuses the Southeast Queens Assemblyman of withdrawing and diverting over $40,000 from the bank account of the “Friends of Bill Scarborough” campaign committee and then using those funds for personal expenses. The 11-count federal indictment charges Scarborough with improperly claiming “per diem” expenses in excess of $40,000 for travel that didn’t take place. If convicted on all charges, he faces up to 37 years in prison. 

“The crimes Mr. Scarborough is accused of committing would represent a shameful breach of the trust his constituents placed in him,” said Attorney General Schneiderman. “New Yorkers are repeatedly asked to have faith in our leaders, and every allegation of political corruption shatters that trust. Each time my office arrests a corrupt public official, it sends the message that there must be one set of rules for everyone and no one is above the law, no matter how powerful or well-connected. I also want to thank Comptroller DiNapoli and U.S. Attorney Hartunian – cases like that are made possible only through the great collaboration of our law-enforcement partners.”

"Elected officials cannot use taxpayer money or campaign funds as their personal piggy banks. Assemblyman Scarborough tried to game the system, thinking he could get away with it,” New York State Comptroller Thomas P. DiNapoli said. "Through our joint investigation, we revealed that Assemblyman Scarborough allegedly submitted fraudulent travel vouchers and filed false reports on his use of campaign funds. I will continue to partner with Attorney General Eric Schneiderman, U.S. Attorney Richard Hartunian, the Federal Bureau of Investigation and prosecutors across the state to root out corruption and bring corrupt officials to justice." 

U.S. Attorney Richard S. Hartunian said, “Today’s indictments demonstrate the commitment of state and federal authorities to combat the fraud and corruption that have plagued our political system. Our elected officials are expected to safeguard the integrity of their office and follow all the rules. When they fail to do so, law enforcement will respond. I heartily commend Attorney General Schneiderman and Comptroller DiNapoli for their vigorous pursuit of this case. The collaboration between state and federal investigators that has brought about these indictments has proven to be an effective tool in identifying and rooting out corruption in our state government.”

State Indictment

According to documents made public today in connection with the state investigation, part of an ongoing effort between Schneiderman and DiNapoli known as “Operation Integrity” and conducted with the assistance of the FBI, Scarborough engaged in a pattern of illegal activity over the last seven years. Bank records obtained as part of the investigation show that between January 2007 and March 2014, Scarborough made numerous withdrawals and transfers from his campaign committee’s account totaling approximately $38,000. Some of that money was taken out directly as cash withdrawals; some was transferred into his personal account, according to the indictment and court papers. Additionally, Scarborough deposited five checks made payable to “Friends of Bill Scarborough,” totaling $3,450, directly into his personal bank account. 

The state indictment, filed in New York State Supreme Court in Albany, accuses Mr. Scarborough of then spending that cash for his own personal use, in violation of New York State Election Law, which says that “[c]ontributions received by a candidate or a political committee … shall not be converted by any person to a personal use.” 

Mr. Scarborough also allegedly attempted to conceal his illegal conduct by not reporting the withdrawals to the state Board of Elections, as legally required. Between 2007 and 2014, there were 21 separate filings made with the Board of Elections that did not account for the withdrawals. Additionally, the money has never been accounted for in the campaign committee’s financial records. 

The indictment charges Scarborough with two felony counts of Grand Larceny and 21 felony counts of Offering a False Instrument for Filing.

Federal Indictment

The federal investigation, conducted by the United States Attorney’s Office and the Albany Division of the Federal Bureau of Investigation, focused on the alleged improper claiming of “per diem” payments and other travel-related expenses from 2009 to 2012.

In a federal indictment, filed today in United States District Court in Albany, Assemblyman Scarborough has been charged with four (4) counts of Theft Concerning a Program Receiving Federal Funds for allegedly submitting 174 false reimbursement vouchers for per diem expenses, mileage and tolls in excess of $40,000 between January 2009 and December 2012. If convicted, Scarborough faces a maximum term of imprisonment of not more than 10 years and a $250,000 fine.  Scarborough was also charged with seven (7) counts of Wire Fraud relating to communications directing payment of specific false New York State Travel Vouchers to his bank account. If convicted, these counts carry a maximum term of imprisonment of not more than 20 years and fine up to $250,000. 

Prosecuting the state case is Senior Counsel Darren Miller of the Attorney General’s Public Integrity Bureau, which is led by Deputy Bureau Chief Stacy Aronowitz and Bureau Chief Daniel Cort. Kelly Donovan is the Executive Deputy Attorney General for Criminal Justice. The state’s investigation was handled by Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam of the Investigation Bureau, which is led by Chief Dominick Zarrella. Forensic auditor Jason Blair and legal analyst Sara Pogorzelski provided additional assistance. 

The federal investigation was handled by the FBI, Albany Division. The federal case is being prosecuted by Assistant U.S. Attorney Jeffrey Coffman. 

The State Comptroller’s Division of Investigations assisted with both investigations.

All charges are merely accusations and all defendants are presumed innocent unless and until proven guilty in a court of law.

ROCHESTER – Attorney General Eric T. Schneiderman today announced that his office obtained a judgment against the chief executive officer of Rochester-based electronics company CandelTronics for intentionally defrauding investors. CEO Salvatore Candeloro repeatedly made fraudulent misrepresentations and omissions to promote the sale of securities to local investors. Monroe County Supreme Court Justice J. Scott Odorisi issued a consent order and judgment that holds Candeloro responsible for more than $365,000 in restitution to defrauded investors and $35,000 in penalties.

“This judgment sends a clear message that those who commit fraud will face consequences when they rip off New Yorkers,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and that includes those who would peddle a product or idea by misrepresenting the facts to investors.”

CandelTronics Corporation, founded in 1998 by Candeloro, developed a product called ExtendIt, an electrical device that allows consumers to pull power from an outlet in a room without having to use an extension cord. Over the course of nearly 17 years, Candelboro raised over $1.8 million from approximately 18 investors in the form of loans and from another 20 shareholders, promising that the money would help get the product to market. These investors began to complain to Attorney General Schneiderman’s Office in 2013 that they had not seen any return on their investment. 

The Attorney General’s office launched an investigation and revealing that Candeloro made false and misleading statements to investors and did not disclose that the company lost its corporate status in 2001 for failing to file and pay New York State taxes. Despite losing its incorporation, the company continued to raise money from investors. Candeloro also made misrepresentations that the product had obtained Underwriters Laboratory (UL) listing, which would be required to market the product to large-scale distributors.

In March 2014, the Attorney General’s Office filed a lawsuit against CandelTronics Corporation and Candeloro for fraud and deceptive acts and practices in connection with the investment scheme. As a result of the lawsuit, the Monroe County Supreme Court issued an order permanently enjoining Candeloro from owning, operating, or managing a business in New York State and from engaging in any business relating to the purchase or sale of, or offer to purchase or sell -- as principal, broker or agent, or otherwise -- any securities issued within New York State.  In addition, Candeloro must pay more than $365,000 in restitution and damages to compensate defrauded investors, and he will be divested of his shares of ownership in Candeltronics. Those shares will also be redistributed to the defrauded investors as restitution.  Additionally, the court imposed a $35,000 civil penalty against Candeloro.

As part of the investigation, the Attorney General’s Office obtained CandelTronics business records. However, due to poor recordkeeping by the company, some investors may not have been properly documented.  Any investors who believe they are eligible for restitution and damages may submit a claim with the Attorney General’s Office, postmarked or received by December 22, 2014.

The case is being handled by Assistant Attorney General Benjamin Bruce and Volunteer Assistant Attorney General Shannon O. Pozzuolo. The investigation is being handed by Senior Investigator Christopher Holland. All staff work in the Rochester Regional Office is led by Debra Martin, Assistant Attorney General-in-Charge. The Rochester Regional Office is a part of the Division of Regional Offices, led by Marty Mack, Executive Deputy Attorney General for Regional Offices.

WESTCHESTER – Attorney General Eric T. Schneiderman today announced the arrest of Elisa Parto, owner of the restaurant Elisa’s Food & Plus, Inc., in Port Chester, NY.  The owner and company are charged with failing to pay more than $35,000 in legally required minimum wages and overtime to five former employees.  If convicted, Ms. Parto faces up to a year in jail.

“My office will take aggressive action, including criminal charges, where appropriate, against business owners who fail to properly compensate their employees for hours worked,” Attorney General Schneiderman said.  “Protecting the livelihoods of hardworking New Yorkers is a priority for my office.”

Elisa’s Food & Plus, Inc., located at 73 Poningo St. in Port Chester, NY, opened for business in 2010.  Over the last several years, Elisa Parto hired cooks, cleaners and cashiers who were all owed the minimum wage for hours worked, as well as overtime at one and one half times their regular rate of pay for all hours worked in excess of 40 hours aweek.

New York Labor Law also requires employers to pay wages no later than seven days after the end of the week when the wages were earned.  The defendant allegedly failed to pay the legally required minimum wage and overtime to at least five former employees who sometimes worked more than 70 hours a week between 2010 and 2014.  According to court papers, the defendant owes workers a total of more than $35,000.

Parto and Elisa’s Food & Plus, Inc. were arraigned in Port Chester Village Court today.  Each faces multiple counts of Failure to Pay Wages under Labor Law Section 198-a(1), an unclassified misdemeanor.  Elisa Parto faces a maximum jail term of one year, and both she and her company face maximum fines, in addition to restitution,  of $5,000 for each count.

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

The case was investigated by Attorney General Investigator Edward Ortiz , Supervising Investigator Luis Carter, Deputy Chief Vito Spano and Chief of Investigations Dominic Zarella.

The case is being prosecuted by Assistant Attorney General Matthew Ross. The Labor Bureau Criminal Section Chief is Richard Balletta.  The Bureau Chief is Terri Gerstein. The Executive Deputy Attorney General for Social Justice is Alvin Bragg.

NEW YORK – Attorney General Eric Schneiderman today announced the arrest and indictment of Jose E. Urena, a New York City police officer assigned to the NYPD’s 25th Precinct, for an alleged scheme to defraud insurance companies. Officer Urena is accused of making a series of fraudulent automobile insurance claims designed to free himself from financial responsibility for high-end vehicles he couldn’t afford, to pocket insurance money for personal use, to pay for repairs of pre-existing damage and to add expensive features to various vehicles. If convicted, he faces up to seven years in prison.

The indictment, filed today in New York County Supreme Court, accuses Officer Urena of submitting four fraudulent auto insurance claims in two years:  

• A May 2012 fraudulent vandalism claim for a 2009 Mercedes-Benz ML350;
• A January 2013 fraudulent theft claim for the same 2009 Mercedes-Benz ML350;
• A March 2013 fraudulent accident claim for a 2007 Mercedes-Benz S550; and
• A July 2014 fraudulent accident claim for a 2011 Dodge Charger.

“Today’s arrest sends a clear message: there must be one set of rules for everyone, particularly those sworn to uphold the law,” said Attorney General Schneiderman. “Gaming the system, whether to steal money or to avoid financial responsibility, is both unethical and illegal.”

According to the indictment and statements made by prosecutors at arraignment, in May 2012, Officer Urena falsely reported a claim to Nationwide Insurance Company that his leased 2009 Mercedes-Benz ML350 had been vandalized.   After Nationwide paid $9,289.39 for the vandalism claim, Urena allegedly used the money to repair pre-existing damage to the car.

In January 2013, Officer Urena filed another fraudulent claim for the same Mercedes-Benz, according to today’s allegations.  Just one day before his lease on the Mercedes was due to expire, when the car was almost $2,000 over the allowable mileage limit, and one week after cashing a $6,242.03 insurance check for repairs that were never made, Urena reported the car stolen. Just hours after the alleged theft took place, the Mercedes was found burned out in a warehouse district in the Bronx.

Just two months later, in March 2013, Urena was having trouble making payments on a financed 2007 Mercedes Benz S550.  To free himself from financial responsibility for that car, Urena allegedly staged an accident by rear-ending a U-Haul truck, after which his insurance company, GEICO, wrote off the Mercedes as a total loss.

Urena’s fourth false claim occurred in July 2014, when he submitted a claim to GEICO after his 2011 Dodge Charger was involved in an accident.  Urena inflated the amount of the claim to cover the cost of repairing pre-existing damage to the car and to make cosmetic improvements, according to documents made public in court today.  Urena used the part of the resulting $7,503.97 insurance payout to add features to the car including a new grille, expensive tires and a painted roof.

Urena was arrested today by investigators from the Attorney General’s Office and officers from the NYPD’s Internal Affairs Bureau. The 11-count indictment charges Insurance Fraud, Grand Larceny, Attempted Grand Larceny, Scheme to Defraud, Criminal Mischief and Falsifying Business Records, all of which are felonies. He was arraigned this morning in New York County Supreme Court before the Honorable Neil Ross.

The charges against the defendant are allegations and he is presumed innocent until proven guilty in a court of law.

The Attorney General's Office thanks the NYPD’s Internal Affairs Bureau, the National Insurance Crime Bureau, Nationwide Insurance Company, GEICO Insurance Company, Mercedes Benz, and the New York State Department of Financial Services for their valuable assistance in this case.

The case is being prosecuted by Assistant Attorney General Chin-Ho Cheng and Senior Investigative Counsel Nina Sas with the assistance of Supervising Legal Analyst Paul Strocko and Legal Analyst Aislinn Appleby of the Criminal Enforcement and Financial Crimes Bureau’s Auto Insurance Fraud Unit.  The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary T. Fishman and Deputy Bureau Chief Stephanie Swenton.  The Attorney General's Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

The investigation was handled by Investigators Kevin McCann and Adrian Klapper, Supervising Investigators Natalie Shifrin and Edward Keegan and Deputy Chief of Investigations Leonard D’Alessandro of the Auto Insurance Fraud Unit.  The Investigations Division is led by Chief Dominick Zarrella.

NEW YORK - Attorney General Eric T. Schneiderman today announced agreements with two natural gas development companies that will ensure the public disclosure of information on the financial risks that hydraulic fracturing – commonly referred to as fracking – poses to their investors.   Under the agreements, Anadarko Petroleum Corp. (Anadarko) and EOG Resources, Inc. (EOG) commit to providing publicly accessible information on the financial effects of regulation, litigation, and environmental impacts of their fracking operations.   

“Investors and the public have a right to know all relevant information about the environmental, financial, and regulatory risks associated with the companies they are considering investing in,” said Attorney General Schneiderman. “By joining with my office to commit to greater public disclosure of the environmental and financial risks associated with their actions, these companies are setting a strong example for the rest of their industry.”

In their agreements with Attorney General Schneiderman, Anadarko and EOG committed to disclose certain detailed information related to fracking operations in their federal securities law filings such as the Form 10-K, the annual summary report on a company’s performance required by the Securities and Exchange Commission (SEC).  The agreements also committed the companies to make certain additional information related to their fracking operations available through other publicly accessible sources such as company websites, annual reports to shareholders, and environmental or safety reports. The agreement with Anadarko can be found here.  The agreement with EOG can be found here.. 

Under the agreements, the companies committed to disclose information and analyses concerning:

• financial risks posed by the environmental impacts associated with fracking -- such as effects on drinking water aquifers, as well as those arising from chemical use and handling, water use and wastewater handling and disposal, and air emissions – and detailed discussions of the companies’ efforts to minimize these environmental impacts;
• financial risks posed by present and probable future regulation and legislation related to fracking, such as state or federal moratoriums, local bans or restrictive ordinances, or requirements for disclosure of chemicals used in fracking fluids; and
• company strategies and actions for reducing, offsetting, limiting, or otherwise managing the financial effects of regulation, litigation, or environmental impacts related to fracking.

EOG explores for, develops, produces, and markets crude oil and natural gas.  The company has reported over 5,000 billion cubic feet of estimated net proved natural gas reserves, located predominately in the United States, Canada and Trinidad.  Anadarko’s operations in the United States include oil and natural gas exploration and production onshore and in the Gulf of Mexico.  Both EOG and Anadarko have conducted fracking in the Marcellus Shale formation in Pennsylvania, as well as in other geological formations and states.

Richard Liroff, Executive Director of the Investor Environmental Health Network,said, “These agreements give a boost to investors seeking increased disclosures about fracking.  Attorney General Schneiderman’s agreements represent important progress in illuminating for investors how well companies are managing fracking’s environmental risks and community impacts.”

Mindy Lubber, president of Ceres, a nonprofit sustainability group that coordinates a $11 trillion investor network,said, “Without robust reporting, shareholders cannot be assured that a company is taking tangible steps to minimize the risks associated with fracking.  These agreements with Anadarko and EOG will set a bar for stronger disclosure that the rest of the industry should follow."

In June 2011, the OAG subpoenaed Anadarko and EOG and other companies seeking information regarding their disclosure practices related to the development of oil and gas through hydraulic fracturing.  The Attorney General issued subpoenas under New York State’s Martin Act, a 1921 state securities law that grants the Attorney General broad powers to access businesses’ financial records. The companies subsequently provided responsive documents to the OAG and have voluntarily increased the information regarding natural gas development involving fracking that they provide to investors in their SEC Form 10-K filings, as well as on their websites.  The agreements being announced today, known as Assurances of Discontinuance, conclude the OAG’s investigations into Anadarko and EOG. 

The OAG is continuing to evaluate information related to the disclosure practices of other companies.

This matter was handled for Attorney General Schneiderman by Assistant Attorneys General Andrew Gershon, Michael J. Myers and Isaac Cheng, and Policy Analyst Jeremy Magliaro of the Environmental Protection Bureau, with support from Bureau Chief Lemuel M. Srolovic, Executive Deputy Attorney General for Social Justice Alvin Bragg, and First Deputy for Affirmative Litigation Janet Sabel. 

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement in response to the latest news regarding a cyberattack at JPMorgan:

“The news that JPMorgan was targeted in a massive cyberattack affecting millions of account holders and small businesses is troubling for all New Yorkers. JPMorgan account holders can take some basic precautions to protect themselves against identify theft and harm to their credit rating.”

The Attorney General provided a list of tips for JPMorgan account holders and those who suspect they may be a victim of the security breach:

If you might be a victim:

• Report to any of the three credit reporting agencies (Equifax, Transunion or Experian) that you may have been a victim of identity theft. Make sure the credit reporting agency has your current contact information so it can get in contact with you.
• Ask the credit reporting agencies to put a fraud alert on your credit file.  This will still allow you to use your credit card. If you put a fraud alert on your file, you may ask for a free credit report from each of the credit reporting agencies. Contacting any one of the three credit reporting agencies above is enough to file a credit alert with all of them. A credit alert must be renewed every 90 days.
• You also have a right to put a credit freeze on your credit file. This will block someone from obtaining credit using your name or personal information. This means you won’t be able to apply for any new credit cards or loans while the freeze is in effect, but you can continue to use your existing cards. To freeze your credit file, you must notify each of the three major credit bureaus. You can remove the freeze temporarily or permanently by contacting each of the three agencies. There is no fee if you have been the victim of identity theft. You may be charged a fee of up to $5  if you have not been a victim of identity theft.
• You should also check your credit activity regularly with each credit issuer.  You don’t need to wait for your monthly statement, though you should check that as well.  Many banks provide online information to account holders about recent activity.  

If you are a victim:

• Create an identity theft fraud report.  To create one, file a complaint with the Federal Trade Commission and print your Identity Theft Affidavit. You can call the FTC at 1-877-438-4338 or visit this website.
• Use that to file a police report and create your Identity Theft Report.
• An Identity Theft Report will help you deal with credit reporting companies, debt collectors and any fraudulent accounts that the ID thief opened in your name.
• Put a freeze (not just a fraud alert) on your credit report by notifying each of the credit reporting agencies (Equifax, TransUnion or Experian). The freeze can be removed only by you. 
• Get your credit report from each of the three agencies. You are entitled to free reports once you post a fraud alert or put a freeze on your account. Read the reports carefully to see whether other fraudulent transactions or accounts are listed, and then take steps to correct the errors.
• Check your credit card account frequently to look for any irregular activity.

Contact information for the credit reporting agencies:

Equifax
1-800-525-6285

Experian
1-888-397-3742

TransUnion
1-800-680-7289

NEW YORK – Attorney General Eric T. Schneiderman released the following statement today in observance of Yom Kippur.

“This evening, I will join families across our state and around the world in observing Yom Kippur. As we seek forgiveness for our actions over the past year, let us all aspire to begin the New Year with a renewed commitment to making our community a better place.

“I wish all those observing an easy fast. May you and your families be inscribed for another year in the Book of Life.”

NEW YORK – Attorney General Eric T. Schneiderman today released a report highlighting the significant achievements of his Health Care Bureau’s Helpline, a free service offered by the Attorney General’s office that has investigated and resolved approximately 13,000 consumer complaints since 2011, resulting in over $12.5 million in health care expenses being saved or returned to New York consumers. The report, titled “Real Solutions For Real New Yorkers: Health Care Bureau Helpline,” offers a review of some of the assistance provided by Helpline staff, including securing payment of $200,000 from an insurance company for a claim that had been wrongfully denied for operations required after a dog attack, and $100,000 for a mental health hospitalization bill that was initially denied.   

“My office’s Health Care Bureau helpline is a free and essential service that is available to all New Yorkers. Consumers should know we have their backs when insurance companies wrongly deny claims, or when a provider overbills,” Attorney General Schneiderman said. “Our Helpline resolves thousands of disputes in the favor of consumers every year. No problem is too big or too small for our Helpline advocates. We know that in America today, too many personal bankruptcies are the result of medical expenses, a situation that is often made worse by improper medical lending practices such as predatory loans or medical credit cards. My office’s Health Care Bureau is committed to ensuring fairness in the health care industry and, in the process, advocating relentlessly on behalf of health care consumers.”

The Attorney General’s toll-free Helpline – 800-428-9071 – is a place for New Yorkers to report, and for advocates to resolve, health care complaints and concerns ranging from simple payment processing errors to complex deceptive business practices. From January 1, 2011, through September 30, 2014, Helpline staff resolved 13,011 consumer complaints and provided another 7,281 consumers with requested information or referred them to an appropriate agency for assistance.

The $12.5 million in savings went to nearly 2,500 New Yorkers. Many of the other consumers who called the Helpline were not seeking help with billing issues but were seeking assistance for other urgent problems, including gaining access to medically necessary care. The Helpline staff has successfully mediated these time-sensitive complaints by obtaining reversals of incorrect denials of coverage and expediting insurers’ processing of requests for pre-authorizations for medical procedures, including surgeries, or for necessary in-patient treatment or for medication. Helpline advocates also take the extra step for consumers, working to ensure that any negative effects from improper medical billing or claims are removed from credit reports.  Of the more than 20,000 calls received by the Helpline since 2011, 64 percent resulted in an investigation and/or resolution by Helpline staff. Advocates opened an average of 13 cases a day.

The 10 counties with the most helpline callers in New York are:

“If you believe that you have been treated unfairly by your health insurance, do yourself a favor and let the NYS Attorney General's Office listen and help,” said Dan Benesh, a West Seneca dad who called the Helpline after his insurance company refused to pay for air ambulance transport after his son injured himself in the woods. 

Pati Robben, a Rochester area mom of a teenage daughter who was largely immobilized by back pain for a period of weeks this past Spring, said,  “My husband and I both work full time and have always had health insurance and paid our premiums.  It was extremely disheartening when the insurance company refused to cover a basic bill for a visit to the emergency room, even after my daughter’s doctor told us to take her to the ER. With one child in college and one soon to be - we contacted everyone we could think of, but could get no help. We were stuck. Ultimately, I called the Attorney General’s health care hotline and they were able to help up resolve the issue and the insurance company reversed its decision and paid the bill. We are so appreciative for the timely and supportive help we received – and we are so glad that our daughter is now happily in college!”

Erie County Executive Mark Poloncarzsaid, “Attorney General Schneiderman continues to demonstrate his commitment to New Yorkers through the Health Care Helpline, which has assisted over 20,000 callers since 2011.This toll-free and cost-free service helps consumers navigate the health care maze and find resolution for their complaints while also providing insights into possible abuse of the system by providers.Thanks to Attorney General Schneiderman, health care consumers in New York State have someone on their side to help them resolve their most urgent issues.”

New York State Senator Tim Kennedysaid, “Attorney General Schneiderman’s Health Care Bureau Helpline provides a crucial service to residents of New York state. As more and more New Yorkers gain access to health coverage and services, the Helpline is ensuring that state residents are receiving the care they need and are entitled to. As a State Senator, my office receives a number of calls from constituents who are having issues with their insurers and providers; Attorney General Schneiderman’s Helpline has provided these constituents with the assistance and support they need to resolve their concerns.This is a wonderful service, and I thank the Attorney General for his leadership on this issue.”

New York State Assemblymember Crystal Peoples-Stokessaid, “Buffalo's health industry is growing, with that growth there has to be accountability on the part of the health industry. The Health Care Bureau’s Free Helpline ensures that people’s problems are heard not ignored. Medical expenses can be overwhelming and crippling for patients and their families, some procedures which they never financially recover from. The health care industry has to focus more on improving access to and quality patient care, not forcing individuals to utilize medical credit cards. I applaud Attorney General Schneiderman for establishing the Health Care Bureau and its effective helpline.”

City of Rochester Mayor Lovely Warrensaid, “Attorney General Eric Schneiderman has gone the extra mile in making sure that families aren't crippled by health care bills that rightfully should be covered. He is a powerful advocate for consumers and is making a real difference.”

New York State Senator Ted O'Briensaid, “Access to quality, affordable healthcare should be a given in New York, but too often people find themselves arguing with insurance companies rather than getting the care they need. The Attorney General’s Health Care Helpline has provided consumers with an effective advocate, saving families millions of dollars and ensuring people receive the treatment they are entitled to. I applaud Attorney General Schneiderman for making this important resource available to New Yorkers.”

New York State Assembly Majority Leader Joseph D. Morellesaid, “As elected leaders we have an obligation to protect New York’s health care consumers from predatory practices that expose them to financial exploitation. The Health Care Bureau Helpline has addressed this critical issue head on by acting as a powerful advocacy tool and resource that equips policy holders with the knowledge they need to safeguard themselves and their families when navigating the health care system.  I thank and applaud Attorney General Schneiderman for his leadership on this issue and continued efforts to protect New York’s consumers.”

Joseph Kelemen, executive director of the Western New York Law Center,said, “Medical expenses are one of the leading causes of consumer debt in Western New York, often leading to bankruptcy and foreclosure. Medical charges are often incorrectly assessed against consumers, and when they can’t resolve the billing disputes or pay the charges, they fall even further into debt because of interest rates assessed on the bills. The Western New York Law Center applauds Attorney General Schneiderman for giving people a mechanism for addressing this problem and for his strong advocacy on behalf of patients and consumers.”

Karen Nicolson, chief executive officer of Legal Services for the Elderly, Disabled or Disadvantaged of Western New York,said, “Attorney General Schneiderman ‘s dedication to helping New Yorkers eliminate medical debt has been a tremendous help to our elderly and disabled clients. In the past three years, we have regularly referred clients to the Helpline for assistance-- a vital tool in helping New Yorkers of all income levels. Inability to pay for health care can start a spiral of bankruptcy, poverty and homelessness that tears at the fabric of our community. Legal Services for the Elderly, Disabled or Disadvantaged of Western New York, Inc. is committed to continuing to work with A.G. Schneiderman and his dedicated staff to ensure that illness in New York State does not result in financial ruin.”

Trilby de Jung, chief executive officer of the Finger Lakes Health Systems Agency, said, “When trying to resolve medical billing or service disputes, consumers navigate a dauntingly complex health care system. The Attorney General’s Health Care Helpline provides one of the few resources available for free consumer advocacy. That assistance is not only critical for individuals, but is helping to shape a fairer and higher quality health care system for all New Yorkers.”

Geoffrey Hale, Senior Attorney in the Rochester office of the Empire Justice Center, said, “On behalf of Empire Justice Center, I would like to take the opportunity to applaud the exemplary work of Attorney General Eric Schneiderman’s Health Care Bureau. Through their efforts, thousands of New Yorkers have been able to correct erroneous bills, avoid needless expenditures, and receive critical medical care. More than just a resource for consumers, the Health Care Bureau also provides vital assistance to consumer advocates and organizations like Empire Justice. By partnering with the Health Care Bureau on specific issues we have been able to achieve better outcomes for our clients who often face incredibly challenging health coverage problems. We welcome the opportunity to work even more closely with Health Care Bureau in the future."

The Helpline also serves as an important source of consumer information for the Health Care Bureau, which helps providers implement best practices and enables the bureau to bring swift enforcement action when misconduct is discovered. Examples include a 2013 settlement agreement with GE Capital Retail Bank that imposed significant new protections for more than 500,000 New York consumers who had signed up for the company’s health care credit card, CareCredit, which can carry an interest rate of over 26%; and an April 2014 agreement with MyMedicalloan.com that stopped the company from making predatory medical loans, including loans with interest rates of up to 55%. The settlement required $230,000 in repayments or credits to more than 300 consumers.

Money returned or saved for New Yorkers by these Health Care Bureau settlements – totaling more than $24 million in restitution for consumers - are in addition to the $12.5 million saved for New Yorkers via the bureau’s hotline.

The Attorney General’s report also highlights important trends that will help New Yorkers become more educated health care consumers. It offers consumer alerts and tips, the most important of which is that if you encounter a problem with your provider’s billing or business practices or health insurance coverage, you can call the Helpline for assistance.

While not all calls can be resolved in the consumer’s favor, the helpline plays a crucial role in providing reliable, objective information.

For more information about services provided by the Attorney General’s Health Care Bureau Helpline, click here.

NEW YORK – Attorney General Eric T. Schneiderman issued the following statement regarding the decision by the Supreme Court of the United States declining to review seven lower-court decisions that struck down same-sex marriage bans in Indiana, Oklahoma, Utah, Virginia and Wisconsin. The result of the Supreme Court denying certiorari for these cases is that temporary stays are immediately lifted on decisions striking down same-sex marriage in those states, allowing same-sex marriages to go forward as soon as each court of appeals issues its mandate.

“This is a joyous day for same-sex couples in Indiana, Oklahoma, Utah, Virginia and Wisconsin, and for believers in equality everywhere. These five states will now join New York and 18 other states, plus the District of Columbia, in extending marriage equality to LGBT couples who have waited far too long. Moreover, this may open the door to marriage equality for other states in the Fourth, Seventh, and 10th Circuits as well. The families whose relationships will now be formally recognized by their respective states through marriage have not only gained legal rights, but have shed the unjust stigma that comes with being victims of legally sanctioned discrimination. As my office has argued many times in both state and federal courts, there is no excuse for denying same-sex couples equal protection under the law, and I look forward to the day when marriage equality becomes the law of the land in all 50 states.”

Attorney General Schneiderman has long been committed to advancing marriage equality. He filed an amicus brief with the Supreme Court last year in United States v. Windsor, successfully arguing that the Defense of Marriage Act violated the U.S. Constitution. He also successfully defended New York’s Marriage Equality Act from legal challenge in New York State’s highest court. On October 23, 2012, the New York State Court of Appeals sided with A.G. Schneiderman’s office in rejecting a challenge to the Marriage Equality Act.

Attorney General remains committed to combating discrimination based on sexual orientation. To file a complaint, contact the Attorney General’s Civil Rights Bureau at 212-416-8250 or Civil.Rights@ag.ny.gov.

NEW YORK – Attorney General Eric T. Schneiderman today praised the agreement between the University of Michigan and Bloomberg LP to distribute the university’s consumer confidence survey through Bloomberg’s news service. Bloomberg will take over distribution of the survey from Thomson Reuters, which charges investors a fee for an advance copy of the survey. Bloomberg announced that it will end that practice.  

“By ending early access to critical market-moving survey data information, this deal strikes a major blow in our effort to promote fairness and avoid unfair distortions in the securities markets by cracking down on what I call 'Insider Trading 2.0,'” Attorney General Schneiderman said. “Ensuring there is one set of rules for the entire market is critical to restoring confidence in securities markets, and that's good for everyone involved.”

On July 8, 2013, Attorney General Schneiderman announced an agreement with Thomson Reuters to discontinue the practice of providing high-frequency traders with access to the Michigan consumer survey results prior to the release of that information to its other subscribers. The move was prompted by an investigation by the Attorney General's office into the early release of market-moving information to selected clients, and Thomson Reuters agreed to suspend the practice pending the results of the investigation. The university’s move to distribute the information through Bloomberg ends the practice permanently.

The University of Michigan’s consumer survey results are among the most closely watched indicators of consumer sentiment in the United States. High-frequency traders were able to access and act on this information two seconds earlier than other Thomson Reuters subscribers. That two-second advantage was more than enough time for these traders to take unfair advantage of their early access to this information, as they can execute enormous volumes of trades in the blink of an eye.  

The investigation into Thomson Reuters is part of Attorney General Schneiderman’s broader effort address unfair advantages that are provided to elite and technologically sophisticated market players at the expense of others. The Attorney General has reached interim agreements with a number of prominent financial firms to stop their practice of cooperating with analyst surveys administered by certain elite, technologically sophisticated clients at the expense of others—a practice that can put other investors at an unfair disadvantage.

Those agreements followed a groundbreaking settlement with BlackRock, the world’s largest asset manager, to end its practice of systematically surveying Wall Street analysts for their opinions on firms they cover.  

Since federal and state regulators face many challenges in tracking and preventing these new forms of Insider Trading 2.0, the Office of the Attorney General has established a hotline for financial industry insiders to confidentially report improper or illegal conduct. Confidential witnesses have already come forward and offered substantial help with this effort. Anyone else who knows of front-running schemes, efforts to trade in illicitly gained confidential information, or firms selling early access to market-moving data is asked to call 800-771-7755.

BUFFALO – Attorney General Eric T. Schneiderman today announced that his office has reached a settlement of $71,640 with New Beginnings NY, Inc., a payment processor located in Cheektowaga, and its owner, Kenneth Newton, to provide restitution to customers paid for and never received identity theft protection from Phoenix Trust. New Beginnings NY, Inc. had served as Phoenix Trust’s payment processor. A payment processor is an entity that, for a fee, processes, verifies, and accepts or declines credit card transactions on behalf of a business when customers pay for a service or product online or over the telephone.

“Mr. Newton allowed scam artists to prey upon innocent consumers who were, in fact, trying to ensure their financial security, violating their trust and taking their hard-earned money,” Attorney General Schneiderman said. “This settlement sends the clear message that businesses that process payments for scam artists will be held accountable.”

Newton operated New Beginnings as a payment processing company, electronically withdrawing funds from bank accounts and depositing them into another account as payment for a service or product. According to Newton, he provided payment services to a company called Phoenix Trust from June 26, 2013, to July 11, 2013. Newton stated that it was his understanding that Phoenix Trust was selling identity theft protection for $398 to consumers.

According to Newton, Phoenix Trust would give him a spreadsheet with the names and bank routing numbers of consumers that it said it sold the kits to.  Newton would then create a physical check for $398 with the consumer’s bank account information on it and deposit the checks in his account, then transmit payment to Phoenix Trust after taking a commission. However, in reality, Phoenix Trust failed to provide identity theft protection, and consumers received nothing in return for the $398 deducted from their accounts.

As a result of the settlement, Newton is required to pay $71,640, which will provide complete restitution to defrauded consumers.  Newton is also required to shut down his payment processing company as well as  a company called Ironwood Management Group, which collected on consumer debt.

In light of a recent cyberattacks and security breaches, Attorney General Schneiderman offers the following tips to consumers who suspect they’ve been a victim:

If you might be a victim:

• Report to any of the three credit reporting agencies (Equifax, Transunion or Experian) that you may have been a victim of identity theft. Make sure the credit reporting agency has your current contact information so it can get in contact with you.
• Ask the credit reporting agencies to put a fraud alert on your credit file.  This will still allow you to use your credit card. If you put a fraud alert on your file, you may ask for a free credit report from each of the credit reporting agencies. Contacting any one of the three credit reporting agencies above is enough to file a credit alert with all of them. A credit alert must be renewed every 90 days.
• You also have a right to put a credit freeze on your credit file. This will block someone from obtaining credit using your name or personal information. This means you won’t be able to apply for any new credit cards or loans while the freeze is in effect, but you can continue to use your existing cards. To freeze your credit file, you must notify each of the three major credit bureaus. You can remove the freeze temporarily or permanently by contacting each of the three agencies. There is no fee if you have been the victim of identity theft. You may be charged a fee of up to $5  if you have not been a victim of identity theft.
• You should also check your credit activity regularly with each credit issuer.  You don’t need to wait for your monthly statement, though you should check that as well.  Many banks provide online information to account holders about recent activity.  

If you are a victim:

• Create an identity theft fraud report.  To create one, file a complaint with the Federal Trade Commission and print your Identity Theft Affidavit. You can call the FTC at 1-877-438-4338 or visit this website.
• Use that to file a police report and create your Identity Theft Report.
• An Identity Theft Report will help you deal with credit reporting companies, debt collectors and any fraudulent accounts that the ID thief opened in your name.
• Put a freeze (not just a fraud alert) on your credit report by notifying each of the credit reporting agencies (Equifax, TransUnion or Experian). The freeze can be removed only by you.  
• Get your credit report from each of the three agencies. You are entitled to free reports once you post a fraud alert or put a freeze on your account. Read the reports carefully to see whether other fraudulent transactions or accounts are listed, and then take steps to correct the errors.
• Check your credit card account frequently to look for any irregular activity.

Contact information for the credit reporting agencies:

Equifax
1-800-525-6285

Experian
1-888-397-3742

TransUnion
1-800-680-7289

This case was handled by Assistant Attorney General James Morrissey, Senior Consumer Fraud Representative Karen Davis, Assistant Attorney General In-Charge Michael Russo and Executive Deputy Attorney General for Regional Offices Marty Mack. 

NEW YORK – New York Attorney General Eric T. Schneiderman and Pennsylvania Attorney General Kathleen G. Kane today announced the creation of the Northeast and Mid-Atlantic Heroin Task Force (NEMA-HTF), a multistate heroin task force that will marshal the resources of top law-enforcement officers across Northeast and Mid-Atlantic states. In addition to New York and Pennsylvania, which will co-chair the effort, New Jersey and Massachusetts have also joined the coalition; additional states are expected to be announced in the coming weeks. NEMA HTF will bring together state attorneys general in an unprecedented law-enforcement collaboration to combat the growing problem of heroin distribution and abuse in communities throughout the region.

In the last two years, over 98% of the large-scale heroin trafficking cases prosecuted by the New York Attorney General’s Office have involved heroin flowing between New York and either Pennsylvania, New Jersey or Massachusetts.

“For too long, drug organizations have tried to outmaneuver law-enforcement agencies by crossing state lines. This task force will ensure that our borders do not become our boundaries,” said Attorney General Eric Schneiderman. “By joining together, we can prevent defendants from using state borders as a shield from law-enforcement and allow us to shut down the pipelines and cut off the heroin supply.”

“The drug dealers don’t stop at the state border, and with this partnership, neither will law-enforcement,” said Attorney General Kathleen Kane. “By sharing intelligence and other resources, we are taking this war to them, not waiting for them to infiltrate our communities. Today we are putting them on notice – we’re here and we are working together. You can’t hide by crossing the state line.”

“We know all too well how heroin is devastating communities and families,” said Attorney General Martha Coakley.  “We must find innovative ways to stop illegal drug trafficking and prevent these sophisticated networks from moving across state lines. This partnership strengthens our commitment to sharing information and resources.”

“New Jersey is in the midst of an opiate crisis affecting countless numbers of our young citizens who are falling victim to addiction. In addition to our prevention, treatment and recovery efforts, we are executing major drug busts, in which a constant theme is that the dealers we are arresting are suppliers of heroin to other dealers in New York and Philadelphia, or they are getting their heroin from those cities,” said New Jersey Acting Attorney General John J. Hoffman. “In New Jersey, all levels of law-enforcement already are collaborating to target those trafficking this poison. The NEMA Heroin Task Force will maximize this collaboration across state borders.”

Heroin abuse is one of the most significant drug problems facing law enforcement and public health officials in the United States. Reports of first-time heroin use have nearly doubled since 2006, according to the U.S. National Institutes of Health. States across the Northeast and Mid-Atlantic regions are struggling to cope with the drastic influx of the drug into their communities. According to the U.S. Drug Enforcement Administration, over half of law-enforcement agencies in these two regions reported “high heroin availability” in their jurisdictions in 2013. Skyrocketing demand for the drug and higher profit margins for traffickers are driving the flow of heroin. Using a sophisticated network of narcotics distributors, interstate drug rings are able to traffic large quantities of heroin with increased effectiveness.

The two largest cities on the East Coast with a combined population of about 10 million people, New York City and Philadelphia are the two primary nodes for heroin trafficking in the Northeast. As the head of the DEA’s New York Division recently noted, New York City is “ground zero of heroin distribution networks supplying the Northeast” and a prime market for Mexican cartels given both the large customer base and easy access to the Eastern seaboard. Similarly, Philadelphia has become a source city for pure, cheap heroin, which enters the city by land, sea and air. Heroin is then distributed from Philadelphia to the largest drug market in the world, New York, as well as New England, western Pennsylvania and down the eastern seaboard to Baltimore, Washington, D.C. and southward. Intelligence and ongoing investigations show direct links to at least three Mexican cartels responsible for trafficking heroin in Pennsylvania.

New Jersey and Massachusetts are also confronting sharp increases in heroin trafficking and addiction problems. In New Jersey, the number of people seeking treatment for heroin abuse hit a five-year high of 25,442 in 2012. In 2013, there were 559 heroin-related deaths in New Jersey. Massachusetts declared a public health emergency in March in response to heroin overdoses and opioid addiction. State police there report almost 200 deaths from suspected heroin overdoses in the last year.

The foremost goal of the NEMA HTF is the collaboration, coordination and information-sharing between state attorneys general and other law enforcement officials designed to combat narcotics enterprises whose sophistication and organization make them so much more effective at flooding our streets with heroin.  Each participating agency brings unique experience, methodology, analytical techniques and technologies; joining forces will allow for more targeted investigation and prosecution of these drug rings and pipelines.

The Task Force will expand the exchange of information between various agencies. Information that can be shared might include specific subjects, phone numbers, addresses, distribution routes and stash houses used to store heroin pending street level distribution. Information shared, coupled with active enforcement collaboration within the NEMA-HTF, will lead to larger and stronger criminal cases targeting large scale distribution operations spanning multiple states, which are funneling heroin into our communities.  

For example, during the course of wire investigations, an agency in one state might identify heroin suppliers and their related networks operating in other states. The NEMA Heroin Task Force will provide the framework for interstate coordination, allowing other states to pursue subjects who might otherwise remain at large.  Additionally, authorities often identify informants who have information about heroin trafficking activities in other states, and the Task Force will allow for better use of that information.

NEW YORK – Attorney General Eric T. Schneiderman today announced that his office, along with the Attorneys General of 49 other states and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission, reached a $105 million settlement with AT&T Mobility LLC. The settlement resolves allegations that AT&T Mobility placed on consumers’ mobile telephone bills charges for third-party services that had not been authorized by consumers, a practice known as “cramming.” One common cramming charge is a $9.99-per-month premium text message subscription service (also known as PSMS) for horoscopes, trivia, and sports scores that consumers often never requested.

“No one is above the law, including powerful multinational corporations, and I am pleased today’s settlement with AT&T Mobility protects consumers against being billed for services they did not request,” said Attorney General Schneiderman.“Illegal cramming raises cell phone bills for consumers and picks the pockets of ordinary New Yorkers.”

The Attorneys General and federal regulators allege that cramming occurred when AT&T Mobility placed charges on consumers’ mobile telephone bills for text-based services—provided not by AT&T, but by an independent third party—without consumers’ knowledge or consent.  AT&T Mobility is the first mobile telephone provider to enter into a national settlement to resolve allegations regarding cramming; AT&T Mobility was among the four major mobile carriers—in addition to Verizon, Sprint and T-Mobile—that announced it would cease billing customers for PSMS last fall.

The settlement requires AT&T Mobility to pay $20 million to states and the District of Columbia, including $572,960.6o to the State of New York, $80 million to the Federal Trade Commission to pay restitution to consumers, including New York consumers, who were charged for third-party services they did not authorize, and $5 million in penalties and legal costs to the Federal Communications Commission. The settlement also requires AT&T Mobility to take steps designed to ensure that it bills consumers only for third-party charges that have been authorized, including the following:

• AT&T Mobility must obtain consumers’ express consent before billing for third-party charges and must ensure that consumers are  charged for services only if they have been informed of all material terms and conditions of payment;
• AT&T Mobility must provide a full refund or credit to consumers who are billed for unauthorized third-party charges at any time after this settlement;
• AT&T Mobility must inform its customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and the company must inform consumers about how to block those charges; and
• AT&T Mobility must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from AT&T Mobility’s charges, and must include in that same section information about consumers’ ability to block third-party charges.

AT&T customers who believe they were billed for third party charges that they did not authorize can file a claim at ftc.gov/att through May 1, 2015.

This case was handled by Assistant Attorneys General Kate Matuschak and Jeanna Hussey of the Consumer Frauds and Protection Bureau. The Consumer Frauds and Protection Bureau is led by Bureau Chief Jane Azia. The Consumer Frauds and Protection Bureau is part of the Division of Economic Justice led by Executive Deputy Attorney General for Economic Justice Karla Sanchez.

YONKERS – Attorney General Eric T. Schneiderman today announced an agreement with Citigroup Global Markets, Inc. (CGMI), a subsidiary of Citigroup, to reimburse more than 31,000 Citi customers who were charged higher advisory fees than they negotiated. The agreement returns nearly $16 million to about 31,000 Citigroup customers. While some customers have already started to receive their refunds, thousands more are likely unaware that they are eligible to get money back.

“Often, it takes just one tip to uncover an error that affects tens of thousands of individuals. In this case, a bank customer complained to my office about her account. We investigated that complaint and found a widespread problem, one that cost bank customers, in New York and across the country, millions of dollars,” Attorney General Schneiderman said. “I want to thank Citigroup for its cooperation, and for ensuring that the agreements made with its customers will be honored – to the tune of $16 million.”

Customers with so-called “TRAK” accounts typically pay a fee for advisory services ranging from 1% to 1.5%. However, the fees were negotiable, and many customers were able to obtain a lower fee than the standard rate. An inquiry into that process, though, has determined that many customers were being charged higher-than-negotiated rates and unaware that they were paying more than they should.

To determine whether more customers were overcharged, the Attorney General’s investigation is continuing. Also, as part of CGMI’s continuing cooperation with the New York Attorney General’s Office, it is conducting a wider review of other types of accounts to ensure that any account holders who have been overcharged will also be paid restitution.  The NYAG will continue to oversee CGMI’s review and remediation efforts.  

The Attorney General’s office launched an inquiry based on a complaint from a Westchester resident who had been overcharged, seeking to determine whether other TRAK account holders were similarly affected.

Working collaboratively with Citigroup, the Attorney General’s Investor Protection Bureau has determined that at least 31,000 account holders have been overcharged. CGMI has agreed to ensure that restitution – totaling nearly $16 million in principal and interest – is paid to current and former TRAK account holders.  Of those, nearly 3,000 New Yorkers were overcharged and will get back more than $1.3 million.

The investment advisory services provided through the TRAK program start when a customer opens an account, and his or her objectives help direct particular investments. The advisory services then continue during the life of the account, and include periodic monitoring reports and recommendations regarding changes in a customer’s investments.

The standard fees for these services were negotiable, so customers were sometimes able to get CGMI to agree to a lower percentage fee than the standard rate.

In 2012, a customer complaint to the Attorney General’s Westchester office revealed that while the customer had negotiated a 1.2% initial fee for her account, she was nonetheless charged the standard 1.5% over a period of three years, causing her to be overcharged by more than $3,000 in fees. The office then launched an inquiry to determine whether other TRAK account holders who negotiated a lower fee were similarly overcharged.  

CGMI has cooperated with the Attorney General’s inquiry, and has already identified tens of thousands of TRAK accounts that were overcharged fees. As a result, restitution totaling $15,969,824.47 will go to 31,324 current and former TRAK account holders. That total includes 2,931 New York account holders who will receive a total of $1,305,197.08.

The investigation into Citgroup Global Markets, Inc., is led by Gary Brown, Assistant Attorney General-in-Charge of the Westchester Regional Office, Chad Johnson, Chief of the Investor Protection Bureau, and Katherine Milgram, Deputy Chief of the Investor Protection Bureau.  Karla G. Sanchez is the Executive Deputy Attorney General for Economic Justice.

The upcoming fall 2014 SOMOS El Futuro Conference presents an opportunity for all New Yorkers who are concerned about equal rights and social justice to renew their commitment to these essential ideals and to embark on new efforts to bring them closer to reality.E

The goals SOMOS espouses—political empowerment, civic engagement, advocacy on issues of fairness—are critically important to Latinos all over our state. SOMOS is a great vehicle for airing the concerns of New York’s Hispanic communities, informing elected officials and the business community about people’s aspirations, priorities and frustrations, and then translating those needs into action.

As Attorney General, I have been an active participant in SOMOS, co-hosting a welcome reception at the annual Albany spring conference, presenting workshops and organizing discussions on critical issues. I believe those programs have had a positive effect on public policy by fostering dialogue and educating participants about ways to address the needs of the community.

However, I believe there are even greater opportunities for engaging Latino New Yorkers—and the elected officials who represent them.

As attorney general, I have crisscrossed the state, holding town hall meetings and workshops in cities, towns and suburbs. There is no better way to learn about people’s concerns, experiences and struggles firsthand than to visit their neighborhoods and speak with them one on one.

That is why SOMOS’ chairman, Assemblyman Felix Ortiz, and I are forming a new partnership to reach out into communities across New York State and bring the great work of SOMOS directly to the people.

We will be expanding and broadening our longstanding collaboration, with the able participation of the Hispanic Legislative Task Force, which has produced the many important informational and educational panel discussions that we have presented at previous SOMOS conferences.

Those programs brought together policy experts, law enforcement officials, community outreach professionals and legislators to discuss areas of great concern to the Hispanic community, including illegal guns, gangs and drugs; the National Mortgage Settlement and what it means for New Yorkers, particularly Latino homeowners, who lost two-thirds of their median household wealth when the housing market collapsed in 2008; the critically important issue of language access and protecting the rights of people with limited English proficiency at the ballot box, in law enforcement, in healthcare and in education; and labor rights, reflecting my office’s focus on low-wage workers, immigrant workers and tipped employees—making sure all workers get an honest day’s pay for an honest day’s work.

But as important and enlightening as these presentations were, their effectiveness was limited because many members of the public do not have the time or the financial resources to travel to conferences.

So, we will be taking the conference out into the community.

Our expanded partnership will bring the resources, expertise and services of SOMOS to cities and towns throughout the state. We will connect legislative leaders with their constituents around New York and serve as a conduit for assistance and empowerment. We will give Latino New Yorkers, in their own neighborhoods, the opportunity to make their voices heard and to access SOMOS’ resources.

After the November conference is finished, we plan to meet to develop a calendar of events. And then, we will create programs to engage directly with people in the Latino community on the most important issues of the day.

By working together, with a new, broader vision, we can expand SOMOS’ important mission, moving together into the future.

NEW YORK – Attorney General Eric T. Schneiderman today announced that the state has entered into a settlement agreement with Sorkin’s Ltd Rx. d/b/a CareMed Pharmaceutical Services (“Sorkin’s”), a New York-based retail specialty pharmacy, resolving allegations that it made false statements to the New York State Medicaid Program to secure expeditious prior authorizations  for the coverage of specialty drugs, and that it submitted false claims to the New York State Medicaid Program for certain prescription medications  that were restocked and resold and for refills that recipients never obtained.

“Sorkin’s used dishonest and unscrupulous practices that resulted in hundreds of thousands of dollars in wasteful spending,” Attorney General Schneiderman said. “This settlement sends the clear message that companies that seek to defraud critical programs like Medicaid will be held accountable.”

Sorkin’s made the false statements in order to secure expeditious decisions on prior authorizations for the coverage of certain specialty drugs.  Furthermore, Sorkin’s restocked and resold unused dosages of the drugs, Rituxan and Procrit without reversing the previously submitted claims to Medicaid and Medicare Part D plans for amounts already paid.   Sorkin’s also submitted false claims for payment to Medicaid or Medicare Part D plans for refills of Rituxan and Procrit that were not actually delivered to and received by recipients. Under the terms of the agreement, Sorkin’s will return $846,224 to Medicaid, a program jointly funded by the state and federal governments. New York will receive $465,423 of the total Medicaid restitution funds.

As part of the settlement agreement, Sorkin’s admitted to the following conduct during the period of January 1, 2009, through December 31, 2012:

• When contacting insurance companies to obtain prior authorization for  coverage of specialty drugs prescribed for Medicaid recipients, some representatives of Sorkin’s falsely stated they were calling from the prescribing physician’s office. In some instances, Sorkin’s representatives responded to questions seeking clinical information based on their understanding of the prior authorization criteria for the particular drug, instead of obtaining patients’ actual clinical information from prescribing physicians and conveying that information.
• Sorkin’s failed to adequately oversee and train staff responsible for the prior authorization process.
• Sorkin’s had inadequate procedures and auditing processes in place to ensure that some claims submitted to certain third-party payors for Rituxan and Procrit, including claims for payment to Medicaid and Medicare Part D, were reversed when necessary or credited to the Medicaid or Medicare Part D plans after Procrit and Rituxan were returned to the pharmacy and restocked, or not delivered to and/or received by the recipient.

The agreements – one with the State and one with federal authorities – followed a joint investigation by the Attorney General’s Medicaid Fraud Control Unit and the United States Attorney’s Office for the Southern District of New York. The investigation came after a qui tam lawsuit was filed by whistleblower Panna Nahar, a former clinical care coordinator at Sorkin’s, alleging violations under the New York False Claims Act and federal False Claims Act. Following the investigation, the offices intervened in the whistleblower case against Sorkin’s.

The state case was handled by Special Assistant Attorney General Jill D. Brenner, Associate Special Auditor Investigator Karin Flynn and Supervising Special Auditor Investigator Stacey Millis. The Medicaid Fraud Control Unit is led by Acting Director Amy Held. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

SYRACUSE -- Attorney General Eric T. Schneiderman today announced that his Medicaid Fraud Control Unit filed a nine-count indictment charging John Tamba, 48, of Utica, a certified nurse’s aide formerly employed at Focus Rehabilitation and Nursing Center at Utica, with three counts each of Sexual Abuse in the First Degree, Endangering the Welfare of a Vulnerable Elderly Person or an Incompetent or Physically Disabled Person in the Second Degree, and Wilful Violation of Health Laws. If convicted, Tamba faces up to 21 years in prison.

“Those who are charged with protecting the health of the most vulnerable New Yorkers must do that – care for them and not hurt them,” Attorney General Schneiderman said. “My office will go after those who break the law and seek justice for those who cannot defend themselves.”

The indictment alleges that on May 21, Tamba engaged in forcible sexual contact with a female resident of the facility who is physically disabled. The nursing home is located at 1445 Kemble Street in Utica.

Tamba, who was arrested yesterday, was arraigned today before the Honorable Michael Dwyer in Oneida County Court. He was ordered remanded without bail to the Oneida County Jail.

The charges against Tamba are accusations, and the defendant is presumed innocent until proven guilty in a court of law.

The case was investigated by Special Investigator Keith Hall, with assistance from Medicaid Fraud Control Unit Rochester Regional Chief Investigator William Falk.

The case is being prosecuted by Special Assistant Attorney General Regional Director Ralph D. Tortora III of the Medicaid Fraud Control Unit’s (MFCU) Syracuse Regional Office. Catherine Wagner is Chief of Criminal Investigations-Upstate. The Medicaid Fraud Control Unit is led by Acting MFCU Director Amy Held. The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

NEW YORK – Attorney General Eric T. Schneiderman today announced that he has reached a pair of agreements with two leading hospitality companies  - Hilton Resorts Corporation and Wyndham Vacation Resorts, Inc. –  that will help protect purchasers of timeshares from potential deception and confusion.  

“The purchase of an interest in a timeshare can be a confusing and expensive proposition,” Attorney General Schneiderman said.  “I am pleased to announce that these two industry leaders have agreed to make policy changes that will benefit and protect consumers. With their cooperation, we are making the timeshare industry safer, more transparent, and more accessible to investors.”

In the first agreement, Hilton agreed to stop using a clause in its timeshare purchase agreement that disclaimed responsibility for specific representations made by salespeople, particularly regarding the availability of reservations, hotel use rights, and the rental, resale, and buybacks of timeshare interests.  

In the second agreement, Wyndham agreed to stop offering reservation certificates, which allow members of its internal timeshare exchange program to make advance reservations at a timeshare hotel known as Midtown 45, prior to the acceptance for filing of the Midtown 45 offering plan. These certificates were given to purchasers of timeshares in other Wyndham properties, and they led some of those consumers to believe they were purchasing an interest in the Midtown 45 timeshare.

Sellers of timeshares are subject to New York’s Martin Act, which makes it unlawful to offer and sell timeshare interests in or from New York State without first having an offering plan or prospectus accepted for filing by the Attorney General’s Real Estate Finance Bureau. The law also makes it illegal to make representations in the sales process that are contradictory to the disclosures contained in the offering plan or prospectus.

The agreements come as the Attorney General’s Office continues to investigate sales and marketing practices of another timeshare company, known as the Manhattan Club. In July, the Attorney General obtained a court order preliminarily barring sales at the Manhattan Club pending an investigation into that company. More information about the investigation is available here.

The negotiations with Hilton and Wyndham were conducted by Assistant Attorney General Serwat Farooq, Deputy Chief Andrew H. Meier, and Bureau Chief Erica F. Buckley, all of the Real Estate Finance Bureau, as well as Executive Deputy Attorney General for Economic Justice Karla G. Sanchez.  

NEW YORK – Attorney General Eric T. Schneiderman today announced a multi-state settlement with TD Bank, N.A. that resolves an inquiry into a 2012 data breach in which 1.4 million files were compromised. The $850,000 settlement requires the bank to reform its practices to help ensure that future incidents do not occur. New York State will receive $114,106.11 under the settlement.

"Consumers expect financial institutions to protect their personal information, and this settlement will help reform the policies and procedures that allowed this breach to happen,” said Attorney General Schneiderman. “There has to be one set of rules for everyone, and that includes the big banks and financial institutions entrusted with protecting the sensitive personal information of customers.”

The data breach occurred in 2012, when TD Bank reported the loss of unencrypted backup tapes in Massachusetts. The tapes contained 1.4 million files and 1,800 different file types that had been accumulated over a period of 8 to 10 years. In total, the files contained various personal information for 260,000 TD Bank customers nationwide, including 31,407 in New York State.

Attorney General Schneiderman was one of nine state attorneys general who worked for a year and a half to investigate the breach as well as the company’s policies and procedures and to negotiate an agreement with TD Bank.

The agreement requires TD Bank notify state residents of any future security breaches or other acquisitions of personal information a timely manner.

TD Bank also agreed to maintain reasonable security policies to protect personal information. The agreement ensures that no backup tapes will be transported unless they are encrypted and all security protocols are complied with. TD Bank will review on a bi-annual basis their existing internal policies regarding the collection, storage and transfer of consumers’ personal information and will make changes to better protect such information. TD Bank will also institute further training for its employees.

This case was handled by Herbert Israel of the Bureau of Consumer Frauds and Protection. The Bureau of Consumer Frauds and Protection, led by Bureau Chief Jane Azia. The Bureau of Consumer Frauds and Protection is part of the division of Economic Justice led by Executive Deputy Attorney General for Economic Justice Karla Sanchez.  

NEW YORK – Attorney General Eric T. Schneiderman today announced that New York State has joined with other states and the federal government to settle allegations that drug manufacturer Organon underpaid rebates to New York State’s Medicaid program, offered improper financial incentives to nursing home pharmacy companies, promoted its antidepressants for unapproved uses, and misrepresented its drug prices to New York’s Medicaid program. Organon was headquartered in Oss, Netherlands, and the company’s assets are now owned by Merck. The total value of the settlement is $31 million. As part of the settlement, New York will receive $2,489,999 in restitution and other recoveries.  

“Preserving the integrity of our Medicaid Program and weeding out those who seek to defraud it is a top priority for my office,” Attorney General Schneiderman said.  “We will keep fighting to ensure that companies that skirt the law for financial gain will be held accountable.”

The settlement resulted from two whistleblower lawsuits filed in the United States District Court for the District of Massachusetts and the United States District Court for the Southern District of Texas, and resolves four separate allegations:

• Underpaid Rebates: The government alleged that Organon did not include rebates and discounts in its best price reporting and therefore underpaid rebates owed to the New York Medicaid Program. The federal Medicaid Drug Rebate Program requires that all drug manufacturers which supply products to Medicaid recipients give the Medicaid programs the best price available for that product.
• Kickbacks:The government alleged that Organon offered nursing home pharmacy companies market share discounts and rebates to encourage the use of Remeron and Remeron SolTab over competing antidepressants, which violated the federal Anti-Kickback Statute and resulted in the submission of false claims to the New York Medicaid program.
• Off-Label Promotion:The government alleged that Organon promoted the sale and use of Remeron and Remeron SolTab for conditions that were not approved as safe and effective by the Food and Drug Administration (FDA). Specifically, Organon marketed drug side effects as possible benefits and promoted the use of Remeron in children and adolescents.
• Pricing Misrepresentations:The government alleged that Organon reported false and inflated prices to New York’s Medicaid program, then offered the drugs at a lower cost as a financial inducement to nursing home pharmacy companies by increasing the spread between the actual cost of the drugs to pharmacies and the amount the state Medicaid Program reimburses for the drugs.

A team from the National Association of Medicaid Fraud Control Units participated in the settlement negotiations with Organon on behalf of the states and included representatives from the Offices of the Attorneys General for the states of California, New York, Ohio and Texas.

Supervising Special Auditor Investigator Stacey Millis of the Attorney General’s Medicaid Fraud Control Unit served as a Data Analyst for the settlement team. The whistleblower cases were handled by Special Assistant Attorney General Carolyn T. Ellis and Counsel Jay Speers. The Medicaid Fraud Control Unit is led by Acting Director Amy Held.  The division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.