Procedure Skyfall: AG James Announces Convictions In $3 Million Dollar Loan Fraud And Cash Laundering Scheme
Kenneth Martinez and Metropolitan EnterprisesConvicted for Stealing Over $455,000 in fees
<>Three Defendants and Three businesses Plead Guilty to Felony Chargesand Must Pay a complete of $1.5 Million in Restitution and Judgments
Kenneth Martinez, Owner of Metropolitan Enterprises, Sentenced to Three to Nine Years in jail
NEW YORK – Attorney General Letitia James today announced the felony beliefs of three people and three companies, because of an investigation that is three-year fraudulent techniques within the scaffolding industry carried out by the Attorney General’s workplace, with the Port Authority of the latest York and nj-new jersey, the newest York state dept. Of Taxation and Finance (DTF), while the new york School Construction Authority. The investigation that is joint dubbed “Operation Skyfall” — unveiled that the six co-defendants involved in a two-year scheme to defraud banking institutions away from huge amount of money, after which laundered the profits through numerous companies.
“We are all devoted to uncovering and businesses that are prosecuting have actually defrauded their state and various banking institutions away from millions, ” said nyc Attorney General Letitia James. “These fraudsters must now must pay right straight back taken funds and cease their operations that are illegal. Allow this be a class to each and every individual and company that individuals shall never ever stop fighting against those that seek to defraud New Yorkers. ”
In Suffolk County Court, Kenneth G. Martinez (51, of Lawrence), Shai Sellam a/k/a Sean Green (45, of Woodmere), and Hayim Jacob Barkol f/k/a Kadir Barkol (39, of Brooklyn), with their respective businesses, Metropolitan Enterprises, Inc., brand New Route asking Inc., and Lifting Up Management LLC were convicted of felonies for participating in a dollar that is three-million fraudulence and cash laundering scheme between October 2013 and April 2015.
Included in their bad pleas, the defendants and their corporations had been bought to pay for an overall total of $1.5 million in restitution and judgments to banking institutions and also to New York State. Defendant Martinez ended up being sentenced to nine years in State Prison regarding the Albany taxation instance; he could be planned become sentenced to a concurrent term of three to nine years in state jail regarding the Suffolk loan fraudulence instance on October 17, 2019.
“The result in this situation — for which a company and its own owner did not spend $455,000 in sales taxation gathered from customers — should act as a caution to any or all people who blatantly disregard our income tax laws, ” stated nyc State Commissioner of Taxation and Finance Michael Schmidt. “We will work with Attorney General James and all sorts of degrees of police force to split down with this variety of fraudulence, which deprives New Yorkers of revenue necessary for vital solutions and programs within their communities. ”
“I wish to thank the brand new York State Attorney General for accepting our recommendation with this matter and their effort that is joint in and prosecuting the 3 people and related three organizations, ” stated Port Authority Inspector General (IG) Michael Nestor. “The Port Authority IG commenced this research based on allegations that Metropolitan Enterprises, Inc., a scaffolding and business that is hoisting its President, Kenneth Martinez may possibly not be a valid Minority Business Enterprise business performing just work at the entire world Trade Center web site. Our joint research with all the Attorney General’s workplace, uncovered proof of criminal task with two other people and businesses. This investigation uncovered a cash laundering scheme and other relevant crimes. The Port Authority IG continues to be committed in preventing comparable conduct. ”
“This sentencing shows the significance of police force partnerships in rooting out corruption by contractors in this town, ” said new york Department of research (DOI) Commissioner Margaret Garnett. “This form of income tax fraudulence, in which the defendants pocketed a huge selection of thousands in sales and make use of fees that will have now been remitted to New York State, diminishes profits into the government and erodes the capability of federal government to completely serve the folks. DOI had been happy to join because of the State Attorney General’s workplace and our police force lovers about this research, which revealed and stopped these unlawful schemes. ”
Metropolitan ended up being considered among the biggest scaffolding and hoisting contractors in brand New York State between October 2013 and September 2015. Public records reveal that in 2015, Metropolitan had been a subcontractor for assorted work done in the George Washington Bridge as well as on the Oculus venture in the World Trade Center Transportation Hub. During this period, the defendants used unpaid income tax monies therefore the profits of fraudulently compensated loans to help keep the company afloat. Because of the period of the nyc Attorney General’s indictment that is first 2016, Metropolitan Enterprises, Inc. Sought out of company.
In line with the felony grievance along with other papers, the defendants perpetrated their loan fraudulence scheme by publishing invoices that are fake a phantom deposit check purporting to market scaffolding and hoisting equipment from 1 of Barkol’s entities to Metropolitan. The truth is, the purported gear either merely would not occur or existed but had been owned by Metropolitan or currently encumbered by another standard bank.
To market and conceal their loan fraudulence scheme, the defendants laundered the taken funds through multiple business reports. Barkol would cut checks from their business account returning to Metropolitan within a matter of times of receiving the fraudulently acquired funds, totaling very nearly the entire number of the amount of money gotten through the lender. Monies had been then relocated between Metropolitan’s reports and utilized to pay for debts owed to many other finance institutions, to pay for negative balances, also to spend present and payroll that is outstanding union dues.
In July 2019, the six defendants had been arraigned in the 1st District Court of Suffolk County for a felony problem charging you Money Laundering when you look at the 2nd Degree, a course C felony; Grand Larceny within the 2nd Degree, a course C felony; and Scheme to Defraud in the 1st Degree, a course E felony. On August 7, 2019, the defendants joined the next pleas that are guilty Suffolk County Court:
- Kenneth Martinez pleaded accountable to cash Laundering when you look at the 2nd Degree, a course C felony;
- Shai Sellam pleaded accountable to cash Laundering into the Third Degree, a course D felony;
- Hayim Jacob Barkol pleaded responsible to Scheme to Defraud in the 1st Degree, a course E felony;
- Metropolitan Enterprises, Inc. Pleaded accountable to Grand Larceny into the Degree that is second course C felony;
- New Route asking Inc. Pleaded responsible to cash Laundering into the Third Degree, a course D felony; and
- Raising Up Management LLC pleaded responsible to cash Laundering into the Degree that is second course C felony.
Martinez is anticipated to be sentenced up to a of three to nine years in State Prison on October 17, 2019. Sellam faces as much as two to six years in State Prison whenever sentenced on August 12, 2020. Barkol is anticipated to be sentenced to a phrase of 5 years of probation for their part into the scheme when sentenced on October 17, 2019. Each one of the entities is anticipated to be sentenced to a three-year conditional release whenever sentenced on October 17, 2019. The defendants must pay restitution and execute confessions of judgments on behalf of the financial institutions, totaling $1.5 million as part of their sentences.
As well as the loan fraudulence scheme, in June 2017, defendants Martinez and Metropolitan joined bad pleas to Grand Larceny when you look at the Degree that is second in County Court, associated with their theft of product sales and employ fees. Yesterday, Martinez had been sentenced to nine years in State Prison. Also, both defendants executed confessions of judgments for the advantage of the NYS Department of Taxation and Finance, more than $455,000.
These situations are now being prosecuted as an element of ny Attorney General’s Combatting Upstate Financial Frauds and Schemes (CUFFS) Initiative, led by Director Philip V. Apruzzese — an Assistant Attorney General into the Criminal Enforcement and Financial Crimes Bureau. The CUFFS Initiative had been implemented by Attorney General James in an attempt to help regional police force and District Attorney’s workplaces into the research and prosecution of complex monetary crimes and cash laundering situations.
Assistant Attorney General Apruzzese is prosecuting these situations, with all the help of Legal Support Analysts Kira M. Russom and Supervising Analyst Paul Strocko. The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Stephanie Swenton and Deputy Bureau Chief Joseph D’Arrigo, and it is area of the Criminal Division, led by Chief Deputy Attorney General Josй Maldonado.
The Attorney General’s research ended up being carried out by Investigator Mark J. Terra, beneath the guidance of Supervising Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam. The Investigations Bureau is led by Chief Oliver Pu-Folkes. Forensic accounting had been carried out by Chief Auditor Edward J. Keegan and Principal Auditor Investigator Jason Blair associated with the Forensic Audit part.
The Attorney General’s Office thanks DTF’s Criminal Investigations Division, DOI’s workplace of this Inspector General for the NYC School Construction Authority, and, particularly, Investigator Charles Shevlin and Assistant Inspector General Nicholas Scicutella, plus the Port Authority of NY/NJ – workplace of this Inspector General, and, especially, Investigator Louis Matirko, with their priceless assistance about this research.