WPCNR POWER NEWS. News and Comment By John F. Bailey. July 24, 2014:
As the thermometer hit the low 90s with humidity feeling like a wet cotton sock on your face in the lazy July sun yesterday, I could not help but wondering how high my kilowatt hour charge was going to be?
Remember in January when your kwh charge from Con Edison went up 136% in a month.
In January the New York Independent Systems Operator told WPCNR it was a shortage of natural gas due to the high demand for power during a prolonged cold snap.
Now, the thermometer is pushing the 90s. Now they know it’s hot in the summer. They should be prepared for it.
But, hold on on minute, Con Edison. You know it’s hot in the summer. How come my electric bill kilowatt hour charge went from 7.73 to 10.32 cents kwh hour increase in June….34%… ALMOST DOUBLING in two months…from 5.7 cents to 10.32 cents?
I asked Bob McGee of Con Edison Media Relations to explain it all, knowing it is hot why aren’t electricity futures purchased at lower prices in advance to spare the comsumer this annual whacking in midsummer when it is hot and in January when it’s cold?
Bob McGee, spokesperson for Con Edison, says it is not demand that raised the rates
He issued this statement: the new Capacity charge dictated by FERC, the Federal Energy Regulation Commission was added to bills as “incentive” for energy companies to locate plants in the metro area capacity zone and existing companies to upgrade their capacity or build new sources of supply. As if we are going to build new power plants in the metropolitan area in a jiff. (Oh, those environmental reviews!)
McGee issued this statement to WPCNR:
“I’ve spoken to our folks in rate engineering.
Capacity costs are the main driver of increased costs so far this summer.
Energy prices have actually come down a bit because we’ve had a fairly mild summer to date.
Electricity cannot be stored like natural gas, so even if you were buying electricity futures in March or April for the summer, the price would still be higher projecting the summer price spike. It’s not like buying natural gas that can be stored in a gas storage facilty to be delivered later.”
I asked Mr. McGee what are “capacity costs?”
He defined them:
“That’s what’s paid to ensure reliability, i.e., that there will be enough power to draw upon.”
New York State Independent Systems Operator explains the capacity costs this way:
“Bottlenecks in the electric transmission system located north of the Mid-Hudson Valley constrain electric supply to southeast New York and Greater New York City area; in addition several regional generating plants have been or may be retired. Federal regulations mandate (d in the spring of 2014) that areas affected by transmission constraints are to create a “Capacity Zone,” which forces utilities serving the area to purchase virtually all their energy capacity within that zone only, rather than throughout the rest of the state. “
What is the objective of these capacity charges?
“By mandating that capacity be purchased within a limited zone, prices for electric supply will rise significantly. The intent by federal regulators is to raise market prices for electricity locally to encourage development of new power generation by independent companies. The result is that existing generators will be paid a higher price for their electricity by Mid-Hudson residents, negatively impacting househoulds, businesses and economic development efforts.”
What is interesting about the Con Edison electric bill is the capacity charge impact is not clearly broken out on the bill. The consumer cannot readily see, (at least this reporter could not find something called “Capacity Charge” on the bill.
I think would be logical to have so Con Edison would not be blamed for these increases, and consumers would know they have the federal government to blame.
So your bill is higher because the government thinks it should be higher.
WPCNR QUILL & EYESHADE. By John F. Bailey. July 22, 2014:
“Is it the rainbow or just a mirage?
Will it be tender and sweetor merely massage?
Is it a brainstorm in one of its quirks,
Or ,is it the best, the crest, the works?
Is it for all time or simply a lark?
Is it the Lido I see or only Asbury Park?
Should I say “Thumbs down” and give it a shove?
Or is it at long last love?
–At long Last Love written by Cole Porter © 1937,1938 Chappell & Company. All rights reserved. From the musical, YOU NEVER KNOW
That’s what White Plains is daring to hope as June sales tax numbers broke all records for a single month with White Plains receiving $5,389,048.64, the most money earned in one month since September, 2011, when the city earned $5 million (augmented by one-time adjustment).
This salvo of dollars closed the city 2013-14 fiscal year with $51,856,186.97 in total sales tax recepts, 3.9% higher than 2012-13 sales tax receipts OF $49,913,996.69. The pace of White Plains growth overtook Westchester County, the first time this has happened in over a year. Westchester County over the first six months of 2014.WAS UP 3.4% TO the 3.9% White Plains growth rate.
It also by WPCNR estimate will allow the city to slip perhaps $7 Million into the Fund Balance Stabilization Fund, a balance used ostensibly to build back city fund balance, but serves to fund rising labor costs each year in a quid pro quo exhange.
Had April and May not been so cold and rainy, the city might have done even better.
Kevin Nunn, Executive Director of the White Plains Business Improvement District, called the June handle, “Good news. We’d like to see it continue.”
He said several events in June might have contributed to the increase, such as the Criterion Bike Race that took place on a Sunday, and the Leisure Expo.
Asked if the BID was concerned about the number of empty storefronts in the White Plains downtown Business Improvement District, Nunn said “it (vacant storefronts) is more than we’d like.” He told WPCNR the business owners that make up the BID are concerned about it have voted to commission a profession organization, RES Group to undertake a detailed survey of the White Plains commercial properties in the district in an effort to define how the downtown might focus its efforts on what companies and tenants to attract and how the district can make itself more attractive
The firm he said will be survey customers enterting establishments at various times of the week; they will send out a mail survey to residents, which can be completed online (no need to mail it in) for which they will receive amazon.com coupons if they go on line and fill it out.
The group will also be taking a survey of rents and lease arrangements to ascertain what kind of deals White Plains is offering to prospective retail tenants to analyze if that is a factor that keeps.
Parking will be analyzed as part of the survey, as will consumer interest in what retail products they come to White Plains for and what they want through national trends analyzed by the firm ESRI
Nunn said the survey would be commenced in September “when everybody is back in town.”
Nunn said the survey was the idea of the BID Membership generated from discussion among members.
Involved in doing part of the survey is VHB, the firm that acquired Saccardi & Schiff three years ago. VHB will be surveying the walkability, streetscape and convenience of the downtown.
RES the parent firm has done such surveys for the Museum of Modern Art and Metrotech, among others.
PEOPLE TO BE HEARD
“Where People Who Have Something to Say, Have their Say.”
Westchester’s Most Relevant Interview Show
Bob Funking, Bill Stutler and Von Ann Stutler
Founders of Westchester Broaway Theatre
Celebrating their 40th Year in Show Business
The program may be seen on Verizon Channel 45 throughout Westchester County or in White Plains on Cablevision Channel 76 at 8 P.M. Thursday and instantly on the net now at
How they got the idea.
Secrets of their Success
Why they are successeful in good times and bad.
Must viewing for would-be Lerner and Leowes, Merricks, and Rodgers and Hammersteins
WPCNR CAMPAIGN 2014. July 21,2014 UPDATED with Correction in BOLD FACE July 21, 2014:
Yesterday at an annual summer picnic in his home community of Rye, Senator George Latimer formally launched his re-election campaign for the 37th State Senate District.
“Over an extended period of time, I’ve put partisan politics aside in the interest of getting real results that our constituents demand of us and I’ve done that at every level of government that I’ve been privileged to serve at,” Latimer said. “It’s important after two years in the Senate to continue those efforts and reach all of the people in all parts of this district. This campaign will be about the people of this district and the State issues that face them, not the interests of political parties and cynical insiders. We’ve made some significant progress over the last two years fighting to improve the economy, our classrooms, and our communities as a whole. There are issues that remain incomplete; it’s important for the people of this district to elect the best advocate to fight for their needs.”
Latimer’s announcement comes on the conclusion of the formal party designating process where candidates collect signatures on a petition for their name to appear on the ballot. Latimer will appear on the Democratic and Working Families Party ballot lines. His campaign announced last week that they had completed the petition process with approximately 4,000 signatures, nearly 4 times the minimum amount required.
Latimer said, “Our strength during the petition drive reaffirms that there is tremendous grassroots support for my candidacy and now, it has manifested in every corner of the district, from Bedford to Yonkers.”
Latimer served in the Rye City Council, County Legislature and State Assembly representing the Sound Shore communities only until he was elected to the Senate in 2012. The 37th District encompasses East Yonkers, Bronxville, Tuckahoe, Eastchester, White Plains, Harrison, North Castle, Armonk, Bedford, Larchmont, Mamaroneck, Port Chester, Rye Brook, Rye City and New Rochelle.
“I’ve worked hard over the last two years to develop relationships in the 15 communities,” Latimer explained. “I’m fully prepared to go to every voter I can to ask them to put their faith in me again for another 2 years. I plan on running a spirited campaign about the issues, and their impact on Westchester families, not a slash and burn campaign that focuses on who controls the institution.”
In an earlier report today, WPCNR reported that Liz Feld, former Mayor of Larchmont, was the Republican candidate opposing Latimer. This is not correct.. Liz Feld’s office at Autism Speaks told WPCNR this is incorrect, due to an old posting on the New Yorkers for Growth website.
To date the Republican Party has not advised who they are running against Latimer.
WPCNR BUMPER TO BUMPER. July 19, 2014:
Commuters who drive into White Plains, and White Plainsians who commute to rail into New York City from the White Plains Metro North railroad station will find their passage to the station possibly delayed by street repaving in the vicinity of the railroad station beginning Monday.
The disruption is expected to last throughout August
The Business Improvement District warns that the city will be repaving Lexington Avenue North South from New Street to Main Street, putting more of a traffic overflow onto Dr. Martin Luther King Boulevard and Bank Street in the vicinity of the White Plains railroad station.
South Lex will be repaved from Bank Street to Quarropas Street.
Main Street (the eastbound main artery into the city from Route 119 will be repaved from Bank Street to Dr. Martin Luther King Junior Boulevard.
Work will be executed from 8 A.M. to 4:30 P.M., and possibly on Main Street at night, but nightwork is not planned at this time.
WHEN DEATH STRIKES TOO SOON.
THE MALAYSIAN AIRLINES SHOCK
THE SALES TAX $$ RECORD YEAR
WHITE PLAINS DEVELOPMENT A WPW WALK AROUND TOWN SHOWS YOU WHAT’S COMING AND WHERE THE BUILDINGS ARE TODAY
WHO’S RUNNING FOR THE BOYKIN COMMON COUNCIL SEAT THIS FALL AND WHO’S NOT.
THE NEW WELCOME TO WHITE PLAINS FEATURE ON THE CITY WEBSITE
SHAKESPEARE IN THE PARK
OR IF YOU MISS IT–SEE IT NOW
THE ONLY NEWS SHOW IN THE TRI STATE AREA PEOPLE TALK ABOUT
IT LIFTS YOU RIGHT OUT OF YOUR CHAIR!
WPCNR CITY HALLMARKS. From the Mayor’s Office. (EDITED) July 18, 2014:
The White Plains Common Council is considering a petition submitted by Urstadt Biddle Properties, Inc., to amend the Zoning Ordinance to change the zoning designation for 60 South Broadway (The Westchester Pavilion Site) (The Project Site) from the current B-6 District to the CB-3 District and to extend the boundary of the Central Parking Area to include the Project Site (Proposed Amendment).
On Monday July 7, the White Plains Common Council, as Lead Agency under SEQR, accepted the Draft Generic Environmental Impact Statement (DGEIS) dated July 2, 2014, as adequate for the purpose of commencing public review and comment regarding issues addressed in the Adopted Scoping Document for the Proposed Action described below.
The DGEIS provides a description of the Proposed Action and a discussion of existing conditions, potential impacts associated with the Proposed Action, measures designed to avoid or minimize identified impacts and project alternatives, as appropriate.
The DGEIS has been posted on the City of White Plains website, www.cityofwhiteplains.com, and is also available for review at the White Plains Public Library, 100 Martine Avenue, White Plains, NY 10601 (Telephone Number 914-422-1480)during normal Library hours. Copies of the DGEIS are available on disk for purchase from the Contact Person upon receipt of a written request.
A public hearing regarding the DGEIS will be held during the regularly scheduled meeting of the Common Council on August 4, 2014, starting at 7:30 P.M., in the Common Council Chambers, White Plains Municipal Building, 255 Main Street, White Plains, New York for the purpose of receiving public comments on the DGEIS.
Written comments regarding the DGEIS will be accepted by the Common Council until the close of business on August 15, 2014, at 5:00 P.M., or, if adjourned, 10 days following the close of the hearing. Written comments should be addressed to the White Plains City Clerk, Municipal Building, 255 Main Street, White Plains, New York 10601.
WPCNR CITY HALLMARKS. From the Mayor’s Office. July 18, 2014:
The White Plains Common Council approved legislation last week to phase out the use of the dirtiest fuel oils in all commercial and residential buildings throughout the City.
These oils are commonly referred to as # 6 and # 4 fuel oils and are primarily burned for heat. With the passage of this legislation, White Plains became the first municipality in Westchester County to take this proactive approach.
The legislation was championed by Mayor Roach, who directed City staff to determine how use of these fuel oils could be phased out. “These are the dirtiest oils in use for heating today,” said Mayor Roach. “Phasing out their use is the right thing to do from an environmental and public health perspective. It also makes good economic sense.”
Fuel oils # 6 and # 4 pose a health risk to those who live in and immediately around the buildings where they are burned and can exacerbate conditions such as asthma. They are bad for the environment, particularly # 6, because when burned they release fine particles that contain high levels of nickel, sulfur and other pollutants into the air. Changing over to a cleaner burning fuel, such as # 2 oil or natural gas also makes economic sense.
Conversions have shown a reasonable timetable for return on investment as well as long term fuel cost savings.
The City’s legislation requires the phase out of # 6 fuel oil by July 31, 2016 and # 4 by June 30, 2020. The Department of Building will be responsible for overseeing the implementation of the legislation.
Several state and local entities offer incentive programs for just this type of conversion, including Con Edison, New York State Energy Research and Development Authority (NYSERDA), and the Energy Improvement Corporation (EIC)’s Energize NY Property Assessed Clean Energy (PACE) program, in which White Plains participates.
The Department of Building will be reaching out to property owners in the near future about this new law and providing them with information about these incentives to facilitate the conversion process.
In developing it, the City met and initiated discussions with property owners and/or their
representatives, environmental groups and staff at New York City’s Department of
Environmental Protection (DEP), which implemented a similar phase out a couple of years
earlier. The phase out timetables were developed based on this outreach.
WPCNR FBI WIRE. From the Federal Bureau of Investigation. July 17, 2014:
A ten-count indictment was unsealed Thursday morning in federal court in Brooklyn, New York, against seven defendants, Abraxas J. Discala, also known as “AJ Discala,” the Chief Executive Officer of OmniView Capital Advisors LLC (“OmniView”); Marc Wexler, the Managing Director of OmniView; Ira Shapiro, the Chief Executive Officer of CodeSmart Holdings, Inc. (“CodeSmart”), a publicly traded company; Matthew Bell, a registered broker and investment adviser representative; Craig Josephberg, a registered broker; Kyleen Cane, an attorney; and Victor Azrak, the Vice President and Director of Excel Corp., a publicly traded company.
The charges include securities fraud, wire fraud and conspiracy to commit securities fraud, mail fraud and wire fraud in connection with the fraudulent market manipulation of four publicly traded companies—CodeSmart, trading under the ticker symbol ITEN; Cubed, Inc. (“Cubed”), trading under the ticker symbol CRPT; StarStream Entertainment Inc. (“StarStream”), trading under the ticker symbol SSET; and The Staffing Group, Ltd. (“Staffing Group”), trading under the ticker symbol TSGL.
In addition, the government restrained Discala’s residence in Norwalk, Connecticut, worth over $1 million, and seized a dozen bank and brokerage accounts containing criminal proceeds.
The indictment was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Discala and his company insiders, registered brokers, investment advisers, an attorney and corrupt investors designed an elaborate but fraudulent scheme built on lies, deceit and manipulated trading activity to defraud the securities markets and the investing public.
They took companies with essentially no assets or activity and deceived the market into believing they were worth hundreds of millions of dollars through a dizzying round of insider and unauthorized trades. When the defendants stopped their criminal game of musical shares it was the unsuspecting investors who were left holding the bag.
The defendants abused their positions of trust and preyed upon unsuspecting and elderly investors, oftentimes placing worthless stocks in their retirement accounts, to perpetrate this far-reaching fraud,” stated United States Attorney Lynch. “Today’s seven arrests, across five states, reflect the scope of this fraud and our commitment to aggressively locate and bring to justice those who abuse our financial markets in order to fraudulently enrich themselves.”
Ms. Lynch expressed her grateful appreciation to the FBI, the United States Securities and Exchange Commission and the Texas State Securities Board for their significant cooperation and assistance in the investigation.
“As outlined in the indictment, the defendants engaged in a coordinated and sophisticated scheme to manipulate the share price and trading volume of four publicly traded stocks for personal gain. This lucrative scheme to manipulate our financial markets made the defendants money, while draining the bank accounts of innocent investors. Their client-victims trusted them to manage their money as if it were their own, not to steal it. Together with our partners in both law enforcement and the private sector, to include the Securities and Exchange Commission, we remain vigilant in identifying and bringing to justice those who look to profit at the expense of hard-working Americans,” stated FBI Assistant Director-in-Charge Venizelos.
As alleged in the indictment and other court filings, between October 2012 and July 2014, the defendants, together with others, agreed to defraud investors and potential investors in four public companies: CodeSmart, Cubed, StarStream and Staffing Group (collectively, the “Manipulated Public Companies”) by artificially controlling the price and volume of traded shares in the Manipulated Public Companies through, among other things:
(a) false and misleading press releases; (b) false and misleading SEC filings; (c) fraudulent concealment of the defendants’ and their co-conspirators’ ownership interests; (d) engineering price movements and trading volume in the stocks; and (e) unauthorized purchases of stock in accounts of unwitting investors.
II. The CodeSmart Manipulation Scheme
In early May 2013, Discala and his co-conspirators engineered a reverse merger of CodeSmart, a private company, with a shell public company. After gaining control of CodeSmart’s three million unrestricted shares, Discala and his co-conspirators, on two occasions, fraudulently inflated CodeSmart’s share price and trading volume and then sold the unrestricted CodeSmart stock at a profit when the share price reached desirable levels—a scheme commonly referred to as a “pump and dump.”
The first pump and dump occurred between approximately May 13, 2013 and August 21, 2013. During this period, Discala and his co-conspirators manipulated CodeSmart’s stock price by raising it from $1.77 to a high of $6.94 (a 291% increase), before causing it to drop to $2.19 (a 217% decrease). The second pump and dump occurred between approximately August 21, 2013 and September 20, 2013. During this period, Discala and his co-conspirators manipulated CodeSmart’s stock price by raising it from $2.19 to a high of $4.60 (a 104% increase), before causing it drop to $2.13 (a 116% decrease).
CodeSmart’s market capitalization at its highest closing price of $6.94 per share on July 12, 2013 was $86,347,800. However, that same day, CodeSmart filed with the SEC an amended Form 10-K, signed by Shapiro, in which CodeSmart listed only $6,000 in total assets, $7,600 in revenue and a net loss of $103,141. By December 30, 2013, CodeSmart’s stock was trading at $0.66 per share, and on July 9, 2014, CodeSmart’s stock closed at $0.01 per share. On one occasion, Discala boasted that his manipulation of CodeSmart’s stock “should be in the hall of shame.”
To successfully orchestrate the two pumps and dumps, Discala and his co-conspirators coordinated their trading activity with the issuance of company press releases and public filings with the SEC, a number of which contained false and misleading information. Shapiro played a leading role in disseminating such information to the public.
During the pump phase of the first pump and dump, CodeSmart issued a press release which stated that it was “the exclusive strategic partner” to provide medical coding and consulting services to the State University of New York at Binghamton. Contrary to this representation, CodeSmart was not the “exclusive strategic partner” for ICD-10 education courses at Binghamton University—the university also offered courses through other providers and had no plans to exclusively market CodeSmart University to its students.
Similarly, during the pump phase of the second pump and dump, CodeSmart filed with the SEC a Form 8-K, signed by Shapiro, in which CodeSmart announced that Shapiro, its Chief Executive Officer, had purchased 25,000 shares of the company’s stock from the public market at the market value of $3.21 per share for a cost of $80,250. In this SEC filing, Shapiro extolled his purchase of CodeSmart stock, stating that it was “symbolic of [his] confidence in the Company and its mission.”
In reality, Shapiro did not actually pay for the 25,000 CodeSmart shares purchased in his brokerage account—the same day he paid $81,278 from his personal bank account to his brokerage firm for the 25,000 shares, Discala transferred $81,278 to Shapiro’s personal bank account.
Shapiro’s role in this scheme is further illustrated by his fluctuating revenue forecasts in SEC filings. After estimating $10 million in revenue over the next twelve months during the first pump, approximately one month later, on August 19, 2013, Shapiro stated that CodeSmart did not have sufficient funds and “may need to curtail or cease [its] operations” until it obtained sufficient funds. As the second pump began, a mere seven days later, Shapiro announced, “If we continue on the track we are on, I believe we will achieve our revenue and profit goals that were previously disclosed for 2013 and beyond.”
Discala and his co-conspirators profited by selling CodeSmart stock, issued to them at pennies, to investment adviser representative Bell’s clients and broker Josephberg’s customers.
On some occasions, the CodeSmart shares were sold to Bell’s clients and Josephberg’s customers without their clients’ and customers’ knowledge and consent. Additionally, Bell and Josephberg were selling CodeSmart shares in their personal trading accounts at the same time that they were purchasing CodeSmart stock in their clients’ and customers’ accounts.
During the first pump and dump, Discala and his co-conspirators sold approximately 800,000 shares of CodeSmart in their personal accounts while Bell and Josephberg purchased virtually the identical amount in their clients’ and customers’ accounts.
III. The Cubed Manipulation Scheme
In March 2014, Discala and his co-conspirators took Cubed public through an asset purchase agreement. On April 22, 2014, Cubed’s stock began trading in earnest. Between April 22, 2014 and April 30, 2014, Discala and his co-conspirators concocted trading volume in this stock by purchasing more than 50% of the total number of Cubed shares purchased during this period.
Between May 2, 2014 and June 29, 2014, law enforcement authorities conducted a judicially-authorized wiretap of Discala’s cellular telephone (the “Discala Wiretap”). The Discala Wiretap revealed that Discala, Wexler, Bell, Josephberg, Cane and Azrak, together with others, fraudulently manipulated Cubed’s stock by artificially controlling the price and volume of that stock through, among other things, wash trades and match trades.
Rather than generating significant market interest and causing a quick pump and dump that would elicit regulators’ scrutiny this time, the defendants gradually increased the price of Cubed’s stock to give it the appearance of a legitimate company with genuine and steady market demand for the security.
For example, on May 6, 2014, while Cubed was in a period of gradual increase from $5.20 on April 22, 2014 to $5.42 on May 22, 2014, Discala sent a text message to Josephberg stating, “Go 531. Please.” That day, Cubed’s stock closed at $5.32 per share.
The defendants used an escrow account maintained by Cane to successfully control the price and volume of Cubed’s stock. For example, on May 20, 2014, during a telephone call between Discala and Azrak, Discala emphasized his control over Cubed’s share price through the use of the escrow account, stating,
“I’m the [expletive] brake and the gas, [expletive]. If I take my foot off the brake it’s 55 [dollars] tomorrow (laughter).”
On June 23, 2014, Cubed reached its highest closing price of $6.75 per share, resulting in a market capitalization of approximately $200 million. Previously, however, Cubed had filed with the SEC a Form 10-Q and reported less than $1,500 in cash, zero revenue, negative stockholders’ equity, a net loss of $15,000 and accrued professional fees of $131,824.
IV. The StarStream and Staffing Group Manipulation Schemes
In addition to the CodeSmart and Cubed stocks, Discala and his co-conspirators were simultaneously fraudulently manipulating StarStream’s and Staffing Group’s stocks by artificially controlling the price and volume of the stocks through the use of, among other things, text messages and telephone calls. Below are examples of text messages intercepted on the Discala Wiretap.
On May 7, 2014, Wexler sent a text message to Discala, stating, “We may need to buy SSET at close. I think EJA has some $. Got get it to 15 cents. LOL what a joke.” That day, StarStream’s stock price closed at $0.30 on 41,100 trading volume, a significant decrease from the previous day’s closing price of $0.48 on 16,200 trading volume. The following day, on May 8, 2014, StarStream’s stock price closed at $0.15 per share, exactly the price proposed by Wexler.
Similarly, on May 13, 2014, before trading commenced, Discala sent a text message to Bell, stating, “We got good stuff going. Sset. Should be over a buck today.” That day, StarStream’s stock price, which opened at $0.35 per share, reached an intraday high of $1.05 per share, before closing at $0.80 per share.
Staffing Group Manipulation
On May 7, 2014, Bell sent a text message to Discala, stating, “TSGL is tanking. We still good?” In response, Discala stated, “Yes. Buy all u can at 20 or better. We’re cleaning it up.” That day, Staffing Group’s stock price closed at $0.25 on 178,300 trading volume, a significant decrease from the previous day’s closing price of $0.36 on no trading volume. Similarly, on May 30, 2014, Discala sent a text message to Wexler, stating, “Buy 5k more ts [TSGL] market im gonna get this thing flying.” That day, Staffing Group’s stock price closed at $0.42 per share on 187,300 trading volume, which was almost double the closing price of $0.23 on 6,000 trading volume on the previous day.
* * *
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes, Walter M. Norkin, Shannon C. Jones and Claire Kedeshian.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
- ABRAXAS J. DISCALA, also known as “AJ Discala” Age: 43 Residence: Norwalk, Connecticut
- MARC WEXLER Age: 52 Residence: Colts Neck, New Jersey
- IRA SHAPIRO Age: 53 Residence: Congers, New York
- MATTHEW BELL Age: 47 Residence: Boerne, Texas
- CRAIG JOSEPHBERG Age: 41 Residence: New York, New York
- KYLEEN CANE Age: 59 Residence: Las Vegas, Nevada
- VICTOR AZRAK Age: 32 Residence: Brooklyn, New York