TOP HEADLINES
Following a joint investigation with the SEC and Massachusetts Attorney General’s Office, Attorney General Schneiderman reached a settlement with Standard and Poor’s regarding false and misleading statements
made by the credit rating agency in connection with its rating of
certain commercial mortgage backed securities. As part of the
settlement, S&P admitted specific facts concerning its
misrepresentations, agreed to pay New York a penalty of $12 million, and
to cease and desist from committing violations of the Martin Act.
S&P also agreed to refrain from rating any new commercial mortgage
backed securities for a year.
Attorney General Eric Schneiderman announced a settlement with Vacation Tours USA over a false advertising scam targeting consumers across New York State. The company sent letters to consumers
telling them they had won a vacation package, including airfare and
lodging, and invited them to attend a seminar at a local hotel. Once at
the hotel, consumers were forced to sit through a sales presentation,
where it became clear that there were no free tickets or lodging. As a result of the settlement, the company has ceased deceptive practices, and must pay restitution to victims and a $22,500 penalty.
On Martin Luther King, Jr. Day, Attorney General Schneiderman announced a settlement with Five Star Bank for participating in discriminatory mortgage practices in Rochester. An investigation by the office of the Attorney General found that Five Star excluded predominantly minority neighborhoods from its lending area; deemed loans secured by property outside of the bank’s lending area to be “undesirable”; and imposed a minimum mortgage amount
requirement that made many of the bank’s mortgage products effectively
unavailable in predominantly minority neighborhoods. In a landmark
agreement brokered by Attorney General Schneiderman, Five Star Bank is
required to open two new Rochester-area branch offices
located in neighborhoods with a minority population of at least 30%.
The agreement also requires Five Star to create a Special Financing
Program that will provide a total of $500,000 in discounts or subsidies
on loans to residents of majority-minority neighborhoods in the
Rochester metro area, as well as a marketing program that will devote $250,000 to advertising directed to minority communities.
Reacting to this year’s State of the State address,
Attorney General Schneiderman agreed that by working together, we can
make New York stronger for all communities. He looks forward to helping New York’s leaders
invest in our infrastructure to create jobs and ensure that all New
Yorkers get a fair shot by raising wages for the lowest-paid workers and
expanding opportunities for immigrants to pursue higher education,
among other things. The Attorney General also emphasized the need to
ensure our criminal justice system is as fair and effective as possible, praising a new policy change that would end the treatment of juvenile defendants as adults in a letter to The New York Times.
Attorney
General Schneiderman announced the arrest of an Orange County resident
that allegedly went to outrageous lengths, including creating a fake
identity, to trick his victim into trusting him with hundreds of
thousands of dollars. According to the indictment unsealed in New York
County Supreme Court, the individual held himself out as a millionaire fashion designer and sent numerous forged emails to the victim in order to make the investments appear legitimate and to conceal his theft. The Attorney General’s investigation into additional crimes by this individual against additional victims in New York and other states continues.
Attorney General Schneiderman announced the conviction of two individuals from the Bronx, who pleaded guilty to participating in a brazen identity-theft ring that targeted customers of local banks. The ring stole over $850,000 by using bank tellers to fraudulently obtain the personal information
of hundreds of unsuspecting customers, and then creating fake
identification cards to withdraw money from the accounts. This
conviction sends a strong message from the Attorney General’s office: if
you commit this kind of crime, you will face jail time.
Attorney General Schneiderman and State Comptroller DiNapoli announced that the guilty plea of a Florida woman who stole more than $120,000
from the New York State and Local Employees Retirement System. The
defendant failed to notify the Retirement System of her uncle’s death
and utilized power of attorney to withdraw pension benefits
paid on his behalf during a twelve year period. This case is the latest
joint investigation under the partnership of the Attorney General and
Comptroller which has resulted in dozens of convictions and more than $6
million in restitution.
With arguments
taking place this past week over the most recent challenge to the Fair
Housing Act, Attorney General Schneiderman encouraged the U.S. Supreme
Court to promote equal access to housing opportunities. He called on the
Court to uphold the longstanding interpretation of the federal Fair Housing Act
that allows challenges to practices that have a “disparate impact” on
protected groups, such as racial minorities. Last year, the Attorney
General led a coalition of 16 other states and filed a brief defending
the importance of this provision in rooting out entrenched discrimination.
Attorney General Schneiderman announced a settlement with a Middletown auto dealer
that charged customers an undisclosed $500 “processing fee” when those
customers bought vehicles at the end of their leases. No additional
services were provided for the payment of this fee. Pursuant to the
settlement, Middletown Honda will repay a total of $87,000 to 174 customers who were charged the bogus processing fee. In addition, if any other consumer files a complaint with the Attorney General’s office and also paid the bogus fee, they will be entitled to the same restitution.
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