Wednesday, January 19, 2005

Rabbi Abraham Taub, convicted Federal felon, was arrested again yesterday

5 Comments:

At 5:41 AM, Blogger jewishwhistleblower said...

1)
http://www.nypost.com/news/regionalnews/38428.htm
'BRIBE' RABBI IS ARRESTED
January 19, 2005 -- A Queens rabbi was arrested yesterday on charges of offering a free trip to Israel to a city employee evaluating his application to become a carting broker.
Rabbi Abraham Taub, 43, was charged with giving unlawful gratuities, punishable by up to a year in jail.

Authorities said Taub was in the process of applying to a become a licensed carting broker — someone authorized to help garbage haulers buy or sell commercial pick-up routes — when he offered the all-expense trip as a demonstration of his "appreciation and gratitude."

The city employee, who works for the Business Integrity Commission, reported the offer to the Department of Investigation, officials said. David Seifman

2)
http://inmateloc.bop.gov/locatordocs/home.jsp
Inmate Information for ABRAHAM TAUB
Inmate Register Number : 49011-053
Name : ABRAHAM TAUB
Age : 43
Race : WHITE
Sex : MALE
Date Released : 8/27/01

3)
Six charged with skimming funds from HUD projects in five states
Associated Press Newswires
November 5, 1997
NEW YORK (AP) - Six people were accused Wednesday of skimming millions from eight low-income housing projects in five states, federal officials here said Wednesday.

The six were charged with conspiring to embezzle, steal and obtain housing assistance payments made by the U.S. Department of Housing & Urban Development to the projects.

It was not immediately known how much money was taken from the projects since the investigation is still ongoing, said Peggy Long, a spokeswoman for the U.S. Attorney's Office in Brooklyn. But Long said it involved "millions of dollars."

From 1990 to 1997, the eight projects received more than $52 million in HUD funds, officials said. It's believed the six defendants ran their scheme between 1990 and 1994.

The HUD projects allegedly swindled of payments are: the RAC Garden Apartments in Red Hook, Brooklyn; the Hawthorne Apartments in Newark, N.J.; the Wade Manor Apartments in Jersey City, N.J.; the Lockwood Plaza Apartments and the Providence New City Apartments, both in Providence, R.I.; the Maclay Street Apartments, Phases I and II, both in Harrisburg, Pa.; and the Lowe Avenue Terrace Apartments in Chicago.

HUD Secretary Andrew Cuomo said "crimes like the ones alleged today are really triple crimes."

"First, the taxpayers' trust is abused; second the federal government's programs are undermined; and third, the residents and the intended beneficiaries of the housing programs are shortchanged," Cuomo said.

The alleged scheme worked like this: four of the defendants established limited partnerships to manage the projects. The four also formed companies to provide construction, maintenance and repair at the projects.

The four defendants were identified as: Abraham Woldiger, 33, of Monsey, N.Y.; Abraham Taub, 36, and Peter Hoffman, 56, both of Flushing, Queens; and David Abrahamson, 44, of Silver Spring, Md.

The other two defendants - Bella Schon and Joseph Sochaczewsky, both of Brooklyn - are accused of preparing invoices for non-existent and inflated repairs at the projects. Their ages were not given.

Hoffman, Schon and Sochaczewsky were arraigned Wednesday before Chief Magistrate Judge A. Simon Chrein in Brooklyn. Hoffman was released after posting $1 million bond. Schon and Sochaczewsky were released after they each posted $250,000 bonds.

Abrahamson was arrested Wednesday at his Maryland home and was to be arraigned in federal court there. The status of the court appearance was not immediately known.

Woldiger and Taub are not yet in custody, said Assistant U.S. Attorney Miriam Best in Brooklyn, who is prosecuting the case. She would not comment on whether officials know where they are.

 
At 5:54 AM, Blogger jewishwhistleblower said...

4 Nabbed in $52M HUD Scam
By Patricia Hurtado - staff writer
Newsday
November 6, 1997

Four partners in a Queens real estate firm that owned and managed eight low-income housing projects around the country have been charged with conspiring to steal millions of dollars in federal funds, U.S. Attorney Zachary Carter and Housing Secretary Andrew Cuomo announced yesterday.

The owners, who received more than $52.4 million in Section 8 HUD funds between 1990 and 1997, are charged with stealing the money by rigging bids and grossly inflating bills for work that was never done, officials said.

The partners were also charged in court papers with taking thousands of dollars a month from accounts to repair the buildings and used them to pay for personal expenses like their home mortgages, insurance, credit card bills, travel, vacation expenses and their children's parochial school tuition.

Named in a federal complaint unsealed yesterday in U.S. District Court in Brooklyn were: Abraham Woldiger, 33, of upstate Monsey, Abraham Taub, 36, of Flushing, Peter Hoffman, 56, also of Flushing, and David Abrahamson, 44, of Silver Springs, Md.

Two employees who worked for the partners, Bella Schon, who allegedly prepared the fake billing invoices, and her brother, Joseph Sochaczewsky, who worked as a building manager for the defendants, were also charged.

Cuomo said that since January, his office has begun a crackdown to curb misuse of HUD money. He said 1,400 arrests have been made since then and that 80 landlords have been "debarred" or permanently restricted from working with HUD because of their abuses. He said the government has recouped at least $12 million in damages.

According to the complaint, Woldiger, Abrahamson, Hoffman, as well as his son-in-law Taub, formed a limited partnership called the Blackstone Group, based in Rego Park, to buy and manage eight federally insured, low-income housing projects that house more than 1,000 tenants.

The buildings they owned and operated include the RAC Gardens apartments in the Red Hook section of Brooklyn as well as buildings in New Jersey, Illinois, Pennsylvania and Rhode Island.

The complaint charges that Taub and Woldiger also made tens of thousands of dollars in what appear to be charitable donations to several Jewish religious organization like the Beth Midrash of Kew Gardens Hills.

Taub is also charged with making a $30,000 donation to the Chaim Shel Shulem Gemilas Chesed Fund in January, 1994. But this June, DEA and IRS agents arrested Bernard Grunfeld, who controlled the Chaim Shel Shulem account, on charges the account actually was used to launder money for Colombian drug lords. That case is pending.

Carter said the investigation was looking into which donations
were legitimate.

Hoffman, Schon and Sochaczewsky were arraigned yesterday before U.S. Magistrate A. Simon Chrein. They were all released on personal recognizance bonds.

Abrahamson was slated to be arraigned late yesterday in Maryland and Carter said that arrangements were being made for Woldiger and Taub to surrender to federal authorities.

 
At 5:56 AM, Blogger jewishwhistleblower said...

http://www.nycourts.gov/comdiv/Law%20Report%20Files/October%202003/Bassman.htm

SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK:COMMERCIAL DIVISION

----------------------------------------X

HINDY ESCHEL, JOSEPH GREENBERG & ESTHER GREENBERG, Index No.600809/98

MARTIN KRESS, GOLDIE KRESS, SAMUAL WEISNER &

MICHAELA WIESNER, KEREN MEOR YITZCHOK TRUST OF

BNAIHATALMUD, AMERICAN FRIENDS OF THE SHEMAYA

SCHOOL FOR DEAF CHILDREN IN ISRAEL, INC., CONG. PRI

SHMUEL TRUST FUND/SHOMRE EMUNOH, ESHELL FAMILY

TRUST, WIESNER FAMILY TRUST, GREENBERG FAMILY

TRUST, KRESS FAMILY TRUST, CONG. GEULA V=YESHUA,

CONG BNEI TORAH CONG., AGUDATH ISRAEL KEREN RSM,

EZRA MUNK, RUTH MUNK, ABRAHAM MUNK, CONG. BNAI

AVROHAM, MENDEL BEER DEFINED BENEFIT PLAN, WILLY

WIESNER & VIOLET WIESNER, YALE BROKERAGE CORP.

PENSION PLAN, SAUL ROSENBERG & CELIA ROSENBERG, MAX

SAMET, MORRIS RUBIN, IRA ROSENBERG, JEFFREY

ROSENBERG, IRWIN SAMET, REGINA GROSSMAN,

Plaintiffs,

-against-

FLEET BANK, STERLING NATIONAL BANK and TRUST

COMPANY OF NEW YORK, CITIBANK N.A., REPUBLIC

NATIONAL BANK, NEIL SIMON AND JOHN DOES 1-10,

Defendants.

---------------------------------------------x

GERSHON BASSMAN, ABRAHAM SCHLAFRIG,

JULES NORDLICHT, LEON GOLDENBERG,

904 REALTY ASSOCIATES I, ROSELIN VEGH

and SOL MERMELSTEIN,

Index No.

Plaintiffs, 600891/98

-against-

BLACKSTONE ASSOCIATES, URI WOLDIGER,

ABRAHAM TAUB, REPUBLIC NATIONAL BANK,

STERLING NATIONAL BANK and TRUST COMPANY

OF NEW YORK, FLEET BANK, and NEIL SIMON,

Defendants.

----------------------------------------X

Charles Edward Ramos, J.S.C.:

In the Bassman action, motion sequence 15, defendant Republic National Bank (ARepublic@) moves pursuant to CPLR 3212 for summary judgment dismissing the amended complaint. In motion designated 016, defendant Fleet Bank (AFleet@) moves pursuant to CPLR 3211(a)(5) and (a)(7) for summary judgment dismissing the amended complaint. In motion sequence 017, Sterling National Bank (ASterling@) moves pursuant to 3211(a)(5) and (7) to dismiss the amended complaint.

In the Eschel action, motion sequence 018, Republic moves pursuant to CPLR 3212 for summary judgment dismissing the amended complaint. In motion sequence 019, defendant Citibank, N.A. moves pursuant to CPLR 3212 for summary judgment dismissing the amended complaint. In motion sequence 020, Fleet moves pursuant to CPLR 3211(a)(5) and (7) dismissing the amended complaint. In motion sequence 021, defendant Sterling moves pursuant to 3211(a)(5) and (7) to dismiss the amended complaint.

Plaintiffs in these and other cases before this Court were victims of David Schick, an attorney who enticed plaintiffs to invest in real-estate deals with guarantees of high returns and promises to keep their money secure in attorney escrow accounts, but who instead misappropriated their funds. The details of Schick=s Ponzi scheme are set forth in this Court=s decision dated April 12, 1999 and will not be repeated here. Subsequent to that decision sustaining plaintiffs= claim for negligence, but otherwise dismissing plaintiffs= initial complaint against the banks, plaintiffs served amended complaints dated March 6, 2000. To state a cause of action for negligence against the banks, plaintiffs must allege that their funds were deposited in attorney escrow or fiduciary accounts and that the bank A with

knowledge of the fiduciaries diversion of trust funds accepts such funds in payment of a personal obligation owed by the fiduciary to the bank@ or had constructive or actual knowledge of improper diversions from the accounts. Home Savings of America, FSB v Amoros, 233 AD2d 35, 39 (1st Dept 1997). Otherwise, a bank is not required to monitor accounts for misappropriation. In re Knox, 64 NY2d 434, 438 (1985). A bank=s potential duty to a non-customer is limited to activities in fiduciary accounts. Home Savings, supra.

Defendants argue that assuming that the limitations period began on the latest possible date, in May 1996 when Schick=s bankruptcy proceedings began, the three year statute of limitations for negligence claims, CPLR 214(4) expired in May 1999. Plaintiffs served the amended complaint on March 6, 2000. In addition to changing Neil Simon=s designation, plaintiff=s redrafted the complaint, adding a specific cause of action for negligence against the banks. According to defendants, service occurred 10 months too late.

Plaintiffs= amended complaints are not time-barred. In a decision dated April 12, 1999, the Court dismissed all but plaintiff=s negligence claim against the banks. In the initial complaint, although plaintiffs had not denominated a cause of action as Anegligence@ against the banks, plaintiffs listed negligence against all the defendants in the ad damnum clause and in the April 12, 1999 decision, the Court found that plaintiffs= allegations made out such a claim. The Court also granted plaintiffs= motion to file an amended complaint which simply sought to change the reference to defendant Neil Simon. Notice of motion dated August 31, 1998. In addition, in a footnote in its brief opposing the banks= initial motion to dismiss, plaintiffs also requested leave to amend the complaint to formally assert negligence claims which the parties briefed and the court addressed as if plaintiffs had formally listed it in the notice of motion.

The Court rejects defendants= argument because plaintiffs= negligence claim was never dismissed. Though the court found the complaint to be poorly drafted, it held in the April 1999 decision that plaintiffs had stated a cause of action for negligence. A pleading =s Asubstance prevails over its articulateness.@ Siegel, NY Prac '208, at 302 (2d ed). Contrary to Fleet=s argument, the Court made no distinction between Fleet and the other banks. Indeed, the activities in these actions following the April 12, 1999 decision demonstrate the parties= understanding that the action was not dismissed. The Court scheduled and the parties attended conferences and defendants moved to disqualify plaintiffs= counsel. None of this would have occurred if the action had been dismissed.

The complaints are dismissed against Republic. Schick placed funds entrusted to him by Bassman, Weisner and Rosenberg in account #3029 which was an IOLA account. It had negative balances on three days, March 1, 8 and April 4, 1996. Schick placed funds entrusted to him by plaintiffs Nordlicht, the Greenbergs, the Kress Family Trust, the Weisner Family Trust, and the Greenberg Family Trust in an account entitled ASchick & Simon, LLP Attorney Escrow Account.@ That account had a negative balance on one day, April 15, 1996. Schick=s wrongdoing became publicly known in April 1996. For the reasons discussed in this Court=s decision in Schmidt v Fleet Bank, Sup Ct, NY county, Feb. 16, 2000, Index No. 604946/98, affirmed 280 AD2d 260 (1st Dept), leave to appeal denied, 96 NY2d 715 (2001), the activity in these two fiduciary accounts does not support a claim against Republic under Home Savings. Schick placed funds entrusted to him by plaintiffs Goldberg, 904 Realty Associates I and Yale Brokerage Corp. into an account entitled ADavid Schick, Esq. Attorney at Law Account.@ Unlike the other two Republic accounts at issue, this account was not opened as an escrow or IOLA account. Rather, the client profile states that it was for Ageneral business, law related@ and the source of funds would be investments by partners in distressed real estate transactions and Alaw practice proceeds.@ As to funds deposited in this account Home Savings does not apply because it is not an escrow or IOLA account.

Plaintiffs= opposition to Republic=s motion focuses on the wrong accounts. First, overdrafts identified by plaintiffs in other accounts are irrelevant since none of the plaintiffs= funds were deposited in those accounts. Republic had no obligation to monitor non-fiduciary accounts. Knox, supra. Discovery by plaintiffs of activities in accounts in which plaintiffs= funds were not deposited would do nothing to contradict this documentary evidence. Alternatively, Republic cannot be held liable by plaintiffs whose funds were never deposited at Republic. Just as a building owner cannot be held liable for negligence to neighboring businesses when the building, a 39 story office tower, partially collapsed temporarily closing the businesses, one bank cannot be held liable to Schick=s clients whose funds were deposited in another banks. 532 Madison Ave. Gourmet Foods, Inc. v Finlandia Ctr., Inc., 96 NY2d 280 (2001). In that case, the Court of Appeals reasoned that:

Absent a duty running directly to the injured person there can be no liability in damages, however careless the conduct or foreseeable the harm. This restriction is necessary to avoid exposing defendants to unlimited liability to an indeterminate class of persons conceivably injured by any negligence in a defendant's act.

A duty may arise from a special relationship that requires the defendant to protect against the risk of harm to plaintiff. Landowners, for example, have a duty to protect tenants, patrons and invitees from foreseeable harm caused by the criminal conduct of others while they are on the premises, because the special relationship puts them in the best position to protect against the risk. That duty, however, does not extend to members of the general public. Liability is in this way circumscribed, because the special relationship defines the class of potential plaintiffs to whom the duty is owed. (citations omitted)

Id. at 53-4. Likewise, a bank has no duty to customers of other banks. With billions of banking transactions occurring in New York alone, this would be the equivalent of making New York banks liable to the world=s banking public. Therefore, Republic=s motion for summary judgment dismissing the complaint is granted. Unlike Republic, Citibank, Sterling and Fleet move to dismiss under CPLR 3211. Fleet argues that the complaint should be dismissed because plaintiffs fail to allege deposits in fiduciary accounts and Fleet cannot be held liable for diversions from other banks. Fleet also contends that the complaint must be dismissed because it was not the proximate cause of plaintiffs= losses; Schick was an intervening cause. Citibank and Sterling join Fleet=s motion. In addition, Citibank argues that the amended complaint is deficient because plaintiffs fail to identify Citibank accounts in which plaintiffs= funds were deposited and to allege any overdrafts in any Citibank accounts.

As to Fleet, Citibank and Sterling, plaintiffs= pleadings satisfy the Home Savings exception. In the complaint, plaintiffs conclusorily allege deposits into Ade facto@ attorney escrow accounts. This allegation improperly conflates the critical distinction between fiduciary and non-fiduciary accounts. Eventually, plaintiffs must establish that their funds were deposited in such accounts. However, at the pleading stage, all that is necessary is that defendants have notice of plaintiffs= claim. They do. The formalism that defendants seek to have the Court apply was abolished years ago. Foley v D=Agostino, 21 AD2d 60, 64-5 (1st Dept 1964). Likewise, defendants= reliance on Zaz-Huff Inc. v Chase Manhattan Bank, 277 AD2d 59 (1st Dept 2000) for the proposition that denominating accounts with names that imply a fiduciary relationship does not give the bank notice that the accounts are fiduciary in nature, is misplaced. Defendant Chase in the Zaz-Huff case made its summary judgment motion after extensive discovery.

In addition, defendants= objection to plaintiffs= failure to identify the specific accounts in which the funds were deposited, they argue that plaintiffs have had sufficient opportunity to ascertain the account numbers and whether the accounts were fiduciary or not. A stay of discovery was in place until February 2000. Judge Stallman imposed another stay due to Sterling=s bankruptcy in December 2001 which was lifted on October 12, 2002. While the Court agrees that too much time has elapsed in these cases, plaintiffs are entitled to determine if Schick deposited funds into escrow accounts at Citibank, Fleet and Sterling. However, the parties will be on a very tight discovery schedule. The parties are directed to initiate discovery and to contact the court immediately to schedule a conference.

Next, defendants argue that they were not the proximate cause of plaintiffs= loss. To state a claim for negligence, a plaintiff must allege that the breach was the proximate cause of plaintiffs= injury. Proximate cause is defined as Athat which in a natural and continuous sequence, unbroken by any new cause, produces the event, and without which that event would not have occurred.@ Hoggard v Otis Elevator Co., 52 Misc 2d 704, 707 (Sup Ct NY County 1966), aff=d, 28 AD2d 1207 (1st Dept 1967). An intervening cause that interrupts this sequence of events forecloses the imposition of liability on the original actor. Id. At 708. The intentional or criminal act of a third person may constitute such an intervening cause. Thomas v United State Soccer Fed=n, Inc., 236 AD2d 600, 601 (2d Dept 1997). AThe criminal intervention of third parties may, however, be a >reasonably foreseeable= consequence of circumstances created by the defendant.@ Bell v Board of Educ. of the City of New York, 90 NY2d 944, 946 (1997). AAs a general rule, the question of proximate cause is to be decided by the finder of fact, aided by appropriate instructions@ Derdiarian v Felix Contracting Corp., 51 NY2d 308, 312 (1980). Likewise, the issue of whether there is such an intervening cause which severs the causal connection between plaintiff and defendants is an issue for the jury. McCann v City of New York , 205 AD2d 668 (1994). Contrary to defendants= argument, this is not an issue which can be determined as a matter of law. See e.g., Olsen v Town of Richfield, 81 NY2d 1024 (1993). Other than citing to Thomas, a case involving an unprovoked assault upon a soccer player, defendants present no legal reasoning for making this determination as a matter of law. Therefore, whether Schick=s criminal acts constitute such an intervening cause cannot be determined on this motion to dismiss.

Plaintiffs= complaint must be dismissed to the extent plaintiffs seek to hold one bank liable for funds deposited in another bank. In Bassman, plaintiffs seek damages in the amount of $2.7 million against each of the defendant banks, but only $550,000 was deposited in Fleet, $860,000 in Sterling, and $1,050,000 in Republic.2 In Eshel, plaintiffs seek $10,396,000 in damages against each defendant bank, yet $1,725,000 was deposited in Fleet, $6,698,500 at Sterling, $805,000 in Citibank, and $632,000 at Republic.3 There is a limit to the liability that flows from negligent conduct. Deridian, supra. A[F]orseeability of harm does not define duty. Absent a duty running directly to the injured person there can be no liability in damages, however careless the conduct or foreseeable harm.@ 532 Madison Ave. Gourmet Foods, Inc., supra., at 289. There is simply no duty running from Sterling to plaintiffs because of money stolen by Schick from Schick=s account at Fleet or Citibank, for example.

The cases cited by plaintiff are not contrary. In High Point Chemical Co. Inc., 39 Misc2d 974 (Sup Ct, NY County 1963) the bank which negligently permitted the unauthorized withdrawal of the balance of plaintiff=s account was the proximate cause of plaintiff=s loss. The bank could not shift liability to another bank, the drawee of check, nor the bank where the check was deposited. In fact, this case completely undermines plaintiff=s argument. In Allen v Chase, 49 Misc2d 514 (NY County 1966)the issue was whether a bank ignored a restraining order against a husband could be liable for funds the husband removed from his wife=s account at that bank, not a subsequent bank. Therefore, one bank cannot be held liable for funds deposited in another bank and stolen by Schick.

Accordingly, it is

ORDERED, in the Bassman action, in motion 015 and in the Eschel action, motion sequence 018, Republic=s motion for summary judgment is granted and the action is dismissed the amended complaint; and it is further

ORDERED, that Fleet=s motion designated 016 in the Bassman action, to dismiss the amended complaint is denied except that plaintiffs= damages are limited to the $550,000 deposited in Fleet; and it is further

ORDERED, that Sterling=s motion sequence 017 in the Bassman action to dismiss the amended complaint is denied except that plaintiffs= damages are limited to $860,000 deposited in Sterling; and it is further

ORDERED, that Citibank=s motion sequence 019 to dismiss the amended complaint in the Eschel action is denied except that plaintiff=s damages are limited to $805,000 deposited in Citibank; and it is further

ORDERED, that Fleet=s motion 020 to dismiss the amended complaint in the Eschel action is denied except that plaintiff=s damages are limited to $1,725,000 deposited in Fleet; and it is further

ORDERED, that Sterling=s motion sequence 021 to dismiss the amended complaint is denied except that plaintiff=s damages are limited to $6,698,500 deposited in Sterling.

Dated: July 17, 2003

_________________________

J.S.C.

 
At 6:07 AM, Blogger jewishwhistleblower said...

1)
Feds sue to seize, freeze Maclay Street Apartments // Owners charged with defrauding government
by Pete Shellem
The Harrisburg Patriot
November 15, 1997

Federal prosecutors in New York have filed suit to seize the Maclay Street Apartments in Harrisburg and six other low-income housing projects across the country.

The suit filed in Dauphin County asks the court to freeze the properties and bank account of Blackstone Realty Management of Rego Park, N.Y., and its owners, who are charged with conspiring to defraud the government of $52 million during the last six years.

They operate the 174-unit Maclay Street property plus housing projects in New York, New Jersey and Rhode Island.

Assistant U.S. Attorney Gail Matthews said the buildings are now being operated by a receiver who is making sure the money is being spent appropriately. She said the action will have no negative impact on residents.

City spokesman Randy King said the city has for years heard complaints about the Maclay Street property.

`It's our understanding the tenants up there have not been getting very good service and they've had difficulty determining who even owned the projects,` King said. `Hopefully the receivership will have greater control and response to tenant complaints and needs.`

A manager at the complex referred all questions to receiver Jeffrey P. Goldstein, who could not be reached for comment yesterday.

The U.S. Attorneys Office for the Eastern District of New York alleges owners and managers Abraham Woldiger, Abraham Taub, Peter Hoffman, David Abrahamson, Bella Schon and Harry Schwartz routinely inflated or invented bills for repairs to the projects that were paid by the Department of Housing and Urban Development.

They were charged earlier this month with conspiring to defraud the government through program fraud and equity skimming and have been released on bond. The complaint alleges the owners of the buildings illegally owned companies that contracted for repairs and submitted work orders with the labor and materials left blank.

`They were not allowed to take funds out as owners because the buildings were in non-surplus cash positions,` said assistant U.S. Attorney Miriam Best. `In order to get around that, these guys would inflate the bills as the management owner of the projects. They billed for the same work over and over again, billed for work that was never done and inflated labor costs.`

For example, HUD paid $128 to replace a towel rack in the Maclay Street complex, when investigators discovered the defendants had actually installed a broken broom handle in the bathroom. The owners also billed HUD $3,948 to repair a toilet in one apartment 13 times in a two-month period in 1993 and charged $35 an hour for labor that actually cost $11 an hour, according to the suit.

They also billed for fixing a pilot light on a stove that investigators found was electric, the suit says, and billed more than $40,000 for outdoor painting that was allegedly performed in the middle of winter in Rhode Island.

When received from HUD, the money would be placed in contractor accounts, then transferred to the personal accounts of the owners of Blackstone, or third-party accounts to conceal them, prosecutors said.

It was used to pay their personal living expenses and some was transferred to Jewish charities in New York, that prosecutors allege were money-laundering fronts.

The suit alleges that the scheme was still going on as late as two weeks ago, according to a review of documents and interviews performed by HUD auditors.

The suit seeks triple damages from the defendants, plus $5,000 to $10,000 in penalties per violation.

The prosecutors also are asking the court to freeze Blackstone's bank accounts, forfeit the properties to the United States and appoint a trustee to oversee the projects and their financial operations.

PHOTO; Caption: Maclay apartments have 174 units.; Credit: FERNANDEZ

2)
IT'S YOUR MONEY PAYING THE PRICE FOR CROOKED LANDLORDS
JOHN MARTIN, PETER JENNINGS
World News Tonight
December 2, 1997

PETER JENNINGS: Tonight in our report on how the government spends your money -- paying the price for crooked landlords. More than four million Americans live in housing that is privately owned but subsidized by the government. The goal is to provide a nice place to live for people who need a little extra financial assistance. The results are often not so nice, and it's the landlords who are living on easy street on your dime. Here's ABC's John Martin.

JOHN MARTIN, ABC News: (voice-over) It was supposed to be their version of the American dream here in Brooklyn --safe, well-maintained, government-subsidized apartments. But something is horribly wrong. Myrna Galindez (ph) and her neighbors must pay rent to appalling conditions.

MYRNA GALINDEZ, Tenant: This is the bathroom. This is where you take a shower in here. All your water comes out the kitchen cabinets.

JOHN MARTIN: (voice-over) Tens of thousands of families like this are victims of landlords who embezzle money from the government for maintenance and repairs they never make. This costs taxpayers at least $80 million a year.

(on camera) Here's what you're paying for. There are no doors on the bedroom. Part of the wall is missing. This is just a piece of wood that's been nailed up here to cover a gaping hole to the outside. And worst of all, the ceiling is falling in from water damage.

(voice-over) Myrna's landlord, Abraham Taub (ph), didn't want to talk to us. He's one of six men accused of pocketing perhaps $10 million to maintain apartments in five states.

AUDREY GOODING, Tenant: The real story is that he was getting rich at our expense, OK? We're living like this, and he's living large.

JOHN MARTIN: (voice-over) In Washington, Housing Secretary Andrew Cuomo admits abuse has been rampant but says HUD is now cracking down.

ANDREW CUOMO, Housing Secretary: We'll find you. We'll convict you. We'll go to the full extent of the law --literally zero tolerance.

JOHN MARTIN: (voice-over) This year, HUD has tried to remove 92 landlords. Five years ago, it was only 15. It's too soon to tell if HUD can end long-time corruption, but this tenant lawyer says the agency must be a lot tougher.

RICHARD WAGNER, Legal Services Corp.: Unless these owners are seriously faced with the prospect of incarceration and loss of title to the premises, then everything is just good intentions.

JOHN MARTIN: (voice-over) In Brooklyn, they're still waiting for repairs. We asked Myrna about her landlord.

(on camera) If you could say something to him now, what would you say?

MYRNA GALINDEZ: I would ask him why? Why did he make us live like this? We deserve better.

JOHN MARTIN: (voice-over) So do taxpayers. That's $80 million landlords skim each year, "It's Your Money." John Martin, ABC News, Brooklyn, New York.

PETER JENNINGS: And another sign today that the economy is in good shape.

(voice-over) The index of leading economic indicators, which forecasts future economic growth, rose 0.2 percent in October.

(on camera) When we come back, we'll go to the bowels of the aircraft carrier...

(voice-over) ...Nimitz in the Persian Gulf.

(Commercial Break)

3)
Five indicted for misappropriating HUD rent subsidies
Associated Press Newswires
February 6, 1998

WASHINGTON (AP) - A federal grand jury in New York has indicted five people on charges they diverted federal rent subsidies to enrich themselves, officials announced Friday.

The five are associated with companies that received more than $52 million from the Department of Housing and Urban Development from 1990 to 1997, HUD Secretary Andrew Cuomo, Attorney General Janet Reno and U.S. Attorney Zachary Carter said in a joint statement.

Authorities believe at least $2 million was diverted illegally from eight low-income apartment developments in five states owned by Blackstone Realty Management Co. of New York, the statement said. The states are Illinois, New York, New Jersey, Pennsylvania and Rhode Island.

"Broken windows and graffiti-stained walls are a welcome mat for criminals," Reno said. "By cracking down on landlords who pocket federal funds intended for repairs, we can save taxpayer dollars and also help cut crime in the process."

The crackdown is part of a joint effort that Reno and Cuomo launched in March, called the "Get Tough" campaign, to act against landlords accused of abusing federal housing programs to enrich themselves.

The five people were indicted last week in U.S. District Court in Brooklyn, N.Y. Complaints filed by the Justice Department accuse three owners of Blackstone - David Abrahamson of Silver Spring, Md., Abraham Taub of New York, and Abraham Woldiger of Monsey, N.Y. - of illegally taking thousands of dollars each month in rental subsidies that should have been used to operate and maintain the apartments.

Two employees of a contractor working for Blackstone, Bella Schon and Joseph Sochaczewsky, both of New York, are accused of involvement in creating phony invoices.

Each defendant was indicted on charges of conspiracy, equity skimming, theft from programs receiving federal funds and obstruction of federal audits. If convicted, each defendant faces 10 years in prison on the theft count and a maximum sentence of five years in prison and a $250,000 fine on the other charges.

A report released by HUD Friday has found that under the "Get Tough" campaign:

-Last year, 122 landlords were prohibited from doing business with federal agencies, up from 30 landlords in 1996,

-The number of civil cases and settlements resulting in recoveries against landlords of HUD-assisted housing rose to 46 in 1997, up from 24 in 1996,

-HUD and the Justice Department recovered nearly $25 million in money owed to HUD by landlords last year, up from about $18 million the year before.

4)
Chicago) Five People Associated With Firms Receiving $52 Million in HUD Funds Indicted on Charges of Diverting Funds in Five States
PR Newswire
February 6, 1998

CHICAGO, Feb. 6 /PRNewswire/ -- Five people associated with companies that received over $52 million in Department of Housing and Urban Development rental assistance subsidies from 1990 to 1997 have been indicted on charges alleging they fraudulently diverted some of the HUD funds, HUD Secretary Andrew Cuomo, Attorney General Janet Reno and U.S. Attorney Zachary W. Carter of the Eastern District of New York announced today.

The amount of HUD assistance allegedly diverted from eight low-income apartment developments in five states owned by Blackstone Realty Management Co. of New York City remains under investigation, but it is believed to total at least $2 million.

The eight low-income developments owned by Blackstone, which have a total of about 1,000 apartment units, are: Lowe Avenue Terrace Apartments in Chicago; RAC Gardens Apartments in New York City (Brooklyn); Hawthorne Apartments in Newark, N.J.; Wade Manor Apartments in Jersey City, N.J.; Lockwood Plaza Apartments and Providence New City Apartments, both in Providence, R.I.; and Maclay Street Apartments and Maclay Street Apartments, Phase II, both in Harrisburg, Pa.

Three owners of Blackstone and two employees of a contractor working for Blackstone were indicted by a grand jury last week in U.S. District Court in Brooklyn. They are: Abraham Taub of New York City (Queens); Abraham Woldiger of Monsey, N.Y.; David Abrahamson (also known as David Asp) of Silver Spring, Md.; Bella Schon (also known as Barbara Schon) of New York City (Brooklyn); and Joseph Sochaczewsky (also known as Harry Schwartz) of New York City (Brooklyn). Woldiger, Taub and Abrahamson are owners of Blackstone, and Schon and Sochaczewsky are employees of a contractor associated with Blackstone.

"Landlords who pocket federal funds end up shortchanging their hardworking tenants," Reno said. "By working together with HUD, we can cut down on these violations."

"These indictments show the success of the coordination and teamwork that exists between HUD, the Justice Department and U.S. Attorneys' offices as we work together to ensure the highest standards of integrity in HUD programs and to protect taxpayer dollars," Cuomo said. "We are moving forward aggressively to wipe out waste, fraud and abuse involving HUD funds."

Cuomo and Reno launched a Get Tough partnership last March to crack down on landlords who abuse HUD programs to enrich themselves while failing to provide safe and decent housing for the poor. The joint efforts of HUD and the Justice Department have been focused on filing civil and criminal charges where warranted against such landlords.

Blackstone established limited partnerships between 1990 and 1992 to purchase the eight low-income apartment developments. Blackstone also established companies that provided maintenance and repair services for the apartments.

Complaints filed by the Justice Department accuse Woldiger, Taub, and Abrahamson of illegally taking thousands of dollars each month in HUD Section 8 rental subsidies that should have been used to operate and maintain the apartments. The three owners are accused of skimming the HUD funds by devising a plan to have their contractors overbill Blackstone for repair work on the apartments.

Workers who performed the repair work were allegedly paid salaries that were far less than the labor charges reported by the owners to HUD. Schon and Sochaczewsky are accused of involvement in creating phony invoices as a way of misappropriating funds.

The indictments arose from a joint investigation of Blackstone by the FBI, the U.S. Attorney's Office in the Eastern District of New York, HUD's Office of General Counsel and HUD's Inspector General.

Each defendant was indicted on charges of conspiracy, equity skimming, theft from programs receiving federal funds, and obstruction of federal audits. If convicted of the charges against them, each of the five defendants faces a maximum sentence of five years in prison and a $250,000 fine on the conspiracy, equity skimming and obstruction counts, and 1O years in prison on the theft count.

A civil complaint has also been filed by the U.S. Attorney's office asserting that the five defendants submitted false claims to HUD in violation of the False Claims Act and HUD contracts. The civil complaint seeks three times the losses HUD allegedly suffered due to Blackstone's activities, plus civil penalties of $5,000 to $10,000 for each false claim allegedly made to HUD. The civil complaint also seeks to have seven of the apartment developments owned by Blackstone (excluding the one in Chicago) turned over to the U.S. government.

Both the criminal and civil complaints allege similar wrongdoing by Blackstone and the five defendants. Examples of the false invoicing scheme alleged in the civil complaint include:

-- Blackstone allegedly recorded payments of $3,948 to Old Heritage, a contractor, for 13 toilet repairs in one apartment over a two-month period.

-- Blackstone allegedly created false invoices with labor charges of $35 per hour. HUD found that the worker had actually been paid only $11 per hour.

-- Blackstone allegedly created a false invoice of $128 to repair a towel rack in an apartment. HUD found that a broken broom handle had been installed in the resident's apartment instead of a towel rack.

5)
Five Indicted in Scheme Involving Federal Rent Subsidies
By NICK RAVO
The New York Times
February 7, 1998

Five people have been indicted in connection with a false-invoice scheme that bilked the Government out of about $2 million in rent subsidies from the Department of Housing and Urban Development, Federal officials said yesterday.

The indictments, which were handed down last week in Federal District Court in Brooklyn, assert that the three owners of the Blackstone Realty Management Company of Queens illegally diverted Federal funds intended for the operation and maintenance of eight company-owned low-income apartment developments in five states, including New York and New Jersey.

The two others who were indicted yesterday had connections to a contractor hired by Blackstone, court papers said.

The Blackstone owners under indictment are Abraham Taub of Queens, Abraham Woldiger of Monsey, N.Y., and David Abrahamson of Silver Spring, Md. Also indicted were Joseph Sochaczewsky of Brooklyn, who is an employee of Old York Inc. of Queens, the contractor, and Bella Schon of Brooklyn, who worked for a separate company owned by Mr. Sochaczewsky. Investigators would not release the name of that company.

The complaints filed by the Justice Department accuse Mr. Woldiger, Mr. Taub and Mr. Abrahamson of illegally taking thousands of dollars each month between 1990 and 1997 in HUD Section 8 rental subsidies by having their contractors overbill Blackstone for repair work on the apartments.

The Justice Department also contends that workers who performed the repair work were paid salaries that were much less than the labor charges reported by the owners to HUD. Ms. Schon and Mr. Sochaczewsky are accused of creating phony invoices as a way of misappropriating funds.

Examples of the allegations include payments of $3,948 for 13 toilet repairs in one apartment over a two-month period; labor charges of $35 an hour when a worker had actually been paid only $11 per hour, and a false invoice of $128 to repair a towel rack in an apartment when in truth part of a broom handle had been installed to hold towels.

The five defendants were indicted on charges that included conspiracy, theft from programs receiving Federal funds, and obstruction of Federal audits. If convicted, each could face a maximum sentence of 25 years in prison and a $250,000 fine. The defendants are scheduled to be arraigned on Tuesday.

The apartment developments, which have a total of about 1,000 units, are the RAC Gardens Apartments in Brooklyn, Hawthorne Apartments in Newark, Wade Manor Apartments in Jersey City, the Lowe Avenue Terrace Apartments in Chicago, Lockwood Plaza Apartments and Providence New City Apartments in Providence, R.I., and the Maclay Street Apartments in Harrisburg, Pa.

6)
5 INDICTED IN DIVERSION OF $2M FROM FEDERAL RENT AID PROGRAM
The Associated Press
The Record, Northern New Jersey
February 7, 1998

A federal grand jury in New York has indicted five people on charges that they diverted federal rent subsidies to enrich themselves, officials announced Friday.

The five are associated with companies that received more than $52 million from the Department of Housing and Urban Development from 1990 to 1997, HUD Secretary Andrew Cuomo, Attorney General Janet Reno, and U.S. Attorney Zachary Carter said in a joint statement.

Authorities believe at least $2 million was diverted illegally from eight low-income apartment developments owned by Blackstone Realty Management Co. of New York, the statement said. The developments are in five states _ Illinois, New York, New Jersey, Pennsylvania, and Rhode Island.

"Broken windows and graffiti-stained walls are a welcome mat for criminals," Reno said. "By cracking down on landlords who pocket federal funds intended for repairs, we can save taxpayer dollars and also help cut crime in the process."

The eight low-income developments at issue in the Blackstone case are the Lowe Avenue Terrace Apartments in Chicago; RAC Gardens in Brooklyn; Hawthorne Apartments in Newark; Wade Manor Apartments in Jersey City; Lockwood Plaza Apartments and Providence New City Apartments, both in Providence, R.I.; and Maclay Street Apartments and Maclay Street Apartments, Phase II, both in Harrisburg, Pa.

The crackdown is part of a joint effort that Reno and Cuomo launched in March, called the "Get Tough" campaign, to act against landlords accused of abusing federal housing programs to enrich themselves.

The five people were indicted last week in U.S. District Court in Brooklyn. Complaints filed by the Justice Department accuse three owners of Blackstone _ David Abrahamson of Silver Spring, Md., Abraham Taub of New York, and Abraham Woldiger of Monsey, N.Y. _ of illegally taking thousands of dollars each month in rent subsidies that should have been used to operate and maintain the apartments.

Two employees of a contractor working for Blackstone, Bella Schon and Joseph Sochaczewsky, both of New York, are accused of involvement in creating phony invoices.

Each defendant was indicted on charges of conspiracy, equity skimming, theft from programs receiving federal funds, and obstruction of federal audits. If convicted, each defendant faces 10 years in prison on the theft count and a maximum sentence of five years in prison and a $250,000 fine on the other charges.

A report released by HUD on Friday has found that under the Get Tough campaign:

{BUL} Last year, 122 landlords were prohibited from doing business with federal agencies, up from 30 landlords in 1996.

{BUL} The number of civil cases and settlements resulting in recoveries from landlords of HUD-assisted housing rose to 46 in 1997, up from 24 in 1996.

{BUL} HUD and the Justice Department recovered nearly $25 million owed to HUD by landlords last year, up from about $18 million the year before.

 
At 7:21 AM, Anonymous Anonymous said...

This morning, in response to yesterday's tragedy, 4 American yeshiva students were arrested for dealing drugs in Israel

http://www.jpost.com/servlet/Satellite?pagename=JPost/JPArticle/ShowFull&cid=1106104798643&p=1078027574097

 

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