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Feds – NBC New York

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  • The leader of a non-profit organization that operated soup kitchens, homeless shelters and affordable-housing facilities in New York City is accused of a scheme involving bribery and kickbacks from contractors, according to federal prosecutors.
  • Victor Rivera, 61 and of Stony Point, New York, is charged with one count of honest services wire fraud conspiracy, one count of honest services wire fraud, and one count of money laundering, United States Attorney for the Southern District of New York Audrey Strauss and Commissioner of the New York City Department of Investigation Margaret Garnet jointly announced Wednesday.
  • Rivera laundered some of the corrupt payments through intermediary entities he controlled, including through an alleged consulting company nominally owned by one if his relatives, according to prosecutors.

The leader of a non-profit organization that operated soup kitchens, homeless shelters and affordable-housing facilities in New York City is accused of a scheme involving bribery and kickbacks from contractors, according to federal prosecutors.

Victor Rivera, 61 and of Stony Point, New York, is charged with one count of honest services wire fraud conspiracy, one count of honest services wire fraud, and one count of money laundering, United States Attorney for the Southern District of New York Audrey Strauss and Commissioner of the New York City Department of Investigation Margaret Garnet jointly announced Wednesday.

If found guilty, each count carries a maximum potential prison sentence of 20 years, according to federal prosecutors. Attorney information for Rivera was not immediately known.

Rivera, who was the president and CEO of a non-profit, which annually spent millions of dollars in public funds on real estate, security, cleaning, construction, and food expenses, among other costs related to the housing and social services the organization provided, according to prosecutors. Allegedly, from around 2013 until 2020, Rivera is took part in a scheme to enrich himself and his relatives by soliciting and accepting bribes and kickbacks from contractors doing work for the non-profit. Rivera allegedly ended up pocketing at least hundreds of thousands of dollars in illicit gains. Rivera laundered some of the corrupt payments through intermediary entities he controlled, including through an alleged consulting company nominally owned by one if his relatives, according to prosecutors. 

“Many of the over 8.4 million residents of New York City rely on government-assisted non-profits to provide food, affordable housing, and other essential services for their well-being. As alleged in today’s charges, by accepting bribes and kickbacks, Victor Rivera sought to leverage his position as the CEO of a non-profit into a very much for-profit situation for himself,” Strauss said in a statement. “The vast majority of organizations in New York City’s non-profit networks honorably provide assistance to those in need, but when any individual selfishly exploits one of those organizations for their own personal gain, they will find themselves facing criminal charges for corruption.”

According to Garnett, corruption at the nonprofit social services contractors level remains an investigative priority for DOI.

“As CEO of a City-funded nonprofit, this defendant should have been serving the underprivileged, including the homeless;  instead, according to the criminal information, he schemed to enrich himself and his relatives, taking bribes and kickbacks from those doing business with his organization,” Garnett said in a statement. “New York City provides billions of dollars to support nonprofits, many of which run organizations with integrity and provide valuable, essential services. But corruption at nonprofit social services contractors remains an investigative priority for DOI, and today’s arrest should serve as notice to any individual who sees the City’s coffers as a path to personal profit.”


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Judge Eyes Shorter Sentence for Ex-NYC Jails Union Boss – NBC New York

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The former union boss for the nation’s largest correction officers’ union might have gotten too harsh a prison sentence when he was ordered to spend nearly five years behind bars for corruption convictions, a judge said.

U.S. District Judge Alvin K. Hellerstein, who sentenced Seabrook to four years and 10 months in prison in early 2019, said in a ruling Friday that the length of Norman Seabrook’s prison term deserves a second look. He noted disparities in the sentence given to Seabrook, who is Black, and co-conspirators who are white.

But he also said in a written ruling that the former head of the New York City Correction Officers’ Benevolent Association did not deserve a new trial after his 2018 conviction on conspiracy and honest service wire fraud charges.

Prosecutors said he accepted $60,000 in bribes in 2014 to funnel $20 million in union funds to a risky hedge fund. All but $1 million was lost. Seabrook has said there was no evidence he ever intended to “lose a dime” of union members’ money.

Seabrook, 62, is scheduled for a July 2025 release from the Beckley Correctional Center in Beckley, West Virginia. He was arrested in June 2016 after he’d been a powerbroker in New York City for more than two decades, representing guards in the city’s 10,000-inmate jail system.

In October 2021, Seabrook asked Hellerstein to grant him a new trial on several grounds including ineffective assistance of counsel and unjust rulings against him, which Hellerstein said in his Friday ruling all fall “well short of the mark.”

But Hellerstein said Seabrook’s claims that his sentence was disproportionately harsher than the sentences his co-conspirators received “may possess merit.”

The judge noted that one co-conspirator, Murray Huberfeld, who is white and was originally sentenced to 2 1/2 years in prison after pleading guilty to defrauding his own investment company, was ultimately given seven months in custody after the 2nd U.S. Circuit Court of Appeals decided that the amount of financial harm his crimes had done needed to be measured differently that it had when he received the sentence of over two years.

“The result is a significant disparity of sentences, an appearance of arbitrariness, and potential disrespect of the community because of the appearance of racial differentiation,” Hellerstein wrote.


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Tesla Should Accept That It Violated Labor Laws If Elon Musk Is Serious About Inviting the UAW to Organize Workers, Union Chief Ray Curry Says – NBC New York

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  • Tesla should accept that it violated labor laws if Elon Musk is serious about inviting the UAW to organize workers, union chief Ray Curry said.
  • Curry said that such an action would be a “good faith effort” and “demonstrate a commitment to the workers of the facility” in Fremont, California.
  • “The UAW stole millions from workers, whereas Tesla has made many workers millionaires (via stock grants). Subtle, but important difference.”

If Tesla CEO Elon Musk is serious about welcoming organizing efforts of the company’s U.S. workforce, the automaker should rehire a fired employee and stop attempting to overturn a ruling that it violated federal labor laws, said an automotive union leader.

United Auto Workers President Ray Curry said that such actions would be a “good faith effort” and “demonstrate a commitment to the workers of the facility” in Fremont, California.

In 2018, Musk tweeted a comment that was found to have violated federal labor laws after Tesla had already fired a union activist, Richard Ortiz. The National Labor Relations Board ultimately ordered Tesla to rehire the employee and to have Musk delete the tweet, which they saw as threatening workers’ compensation.

Tesla is appealing the administrative court’s decision, however.

Curry spoke on Tuesday during an Automotive Press Association webinar. His remarks followed more provocative tweets by Musk earlier in the day. The CEO, who has a following of 79.5 million on Twitter, wrote: “The UAW stole millions from workers, whereas Tesla has made many workers millionaires (via stock grants). Subtle, but important difference.”

The Detroit-based union is under federal oversight through a court-approved monitor as part of a settlement between the UAW and the government following a multiyear corruption probe that sent 15 people to prison, including two recent UAW presidents and three Fiat Chrysler executives.

The investigation uncovered years of bribery and kickback schemes involving millions of dollars and several top union leaders.

Earlier this month, Musk said on Twitter that he was “inviting” the UAW to try and organize employees at his company’s plant in Fremont. “Tesla will do nothing to stop them,” he wrote.

Curry said the union “definitely would welcome that opportunity, but clearly know that there’s some current appeals that are out there.”

United Auto Workers President Ray Curry speaks at the General Motors Factory ZERO electric vehicle assembly plant on November 17, 2021 in Detroit, Michigan.

Nic Antaya | Getty Images

United Auto Workers President Ray Curry speaks at the General Motors Factory ZERO electric vehicle assembly plant on November 17, 2021 in Detroit, Michigan.

“A key piece out of all of this is not the whim of a tweet or anything else, an exchange between the UAW and Tesla, it’s about the workers in those locations having a voice inside of their workplace. That’s the most important part of this whole process,” Curry said.

Musk’s open invitation to the UAW on March 3 followed Musk earlier in the day tweeting a YouTube video that he says “helps explain why former UAW members who work at Tesla are not huge fans of UAW.” The clip was published in 2010 by the World Socialist Web Site channel on YouTube.

In the video, workers at the NUMMI plant, which would later become the Fremont Tesla plant, are seen complaining that a union member was prevented from recording a UAW meeting in the local union hall.

Tesla didn’t respond to a request for comment.




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Accused Bitcoin Launderer Heather Morgan in Plea Talks With Prosecutors, Court Documents Say – NBC New York

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  • Federal prosecutors said they were in plea negotiations with a New York woman recently arrested with her husband on charges of trying to launder $4.5 billion worth of bitcoin stolen in a hack.
  • The talks were cited in a request by prosecutors asking a judge to postpone by 40 days a hearing for Heather “Razzlekhan” Morgan, in U.S. District Court in Washington, D.C.
  • Morgan was arrested with her husband “Dutch” Lichtenstein on Feb. 8 in their Manhattan apartment.
  • Prosecutors allege that the couple illegally tried to hide the source of almost 120,000 bitcoin stolen during the 2016 hack of the Bitfinex cryptocurrency exchange.

Federal prosecutors on Monday said they were in plea negotiations with a New York woman recently arrested with her husband on charges of trying to launder $4.5 billion worth of stolen bitcoin cryptocurrency.

The talks were cited in a request by prosecutors asking a judge to postpone by 40 days Friday’s scheduled status hearing for the woman, Heather “Razzlekhan” Morgan, in U.S. District Court in Washington, D.C.

Prosecutors said in a court filing that the postponement would “facilitate … plea discussions between the parties,” as well as give them time to assemble and share evidence that could be used against Morgan with her attorneys.

Morgan, 31, was arrested with her husband, 34-year-old Ilya “Dutch” Lichtenstein, on Feb. 8 in their Manhattan apartment. The arrests were on the same day the Justice Department has said it seized more than $3.6 billion worth of bitcoin that was part of the alleged laundering scheme.

Prosecutors allege that the couple illegally tried to hide, through a complex series of transactions, the source of almost 120,000 bitcoin stolen during the 2016 hack of the Bitfinex cryptocurrency exchange. Neither of the defendants is charged with the hack itself.

At the time of the hack, the stolen bitcoin was worth $70 million. But the value of bitcoin has soared since then.

Morgan’s lawyers do not oppose the postponement of her hearing, according to Monday’s filing by the U.S. Attorney’s Office for the District of Columbia.

Prosecutors disclosed in court on Feb. 28 that they were discussing a possible “resolution” of Morgan’s criminal case to avoid a trial.

But until Monday, they had not publicly used the words “plea discussions” to describe those talks with her lawyers.

Morgan’s lead attorney did not immediately respond to a request for comment on the filing.

It is common for prosecutors and defense attorneys to discuss possible plea deals in criminal cases, and for those discussions to lead to postponements of court hearings.

However, Morgan’s case is unusual for the relatively short time between her arrest and the disclosure of plea talks.

Morgan, an aspiring rapper and entrepreneur, is free on a $3 million bond.

Lichtenstein has been in jail since his arrest and has been denied bail.

Netflix last month announced that a series on the couple will be directed by Chris Smith, who was executive producer of the company’s Covid pandemic smash hit “Tiger King.”


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