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WPCNR FBI WIRE. From the Federal Bureau of Investigation. January 23, 2017:

Preet Bharara, the United States Attorney for the Southern District of New York, announced Monday that STEFAN LUMIERE, a former portfolio manager at Visium Asset Management, was convicted of conspiracy to commit securities and wire fraud, securities fraud, and wire fraud in connection with a scheme to mismark securities held in a particular fund from 2011 to 2013 in order to overstate the net asset value (“NAV”) of the fund that was reported to investors on a monthly basis.

LUMIERE was convicted following a six-day jury trial presided over by U.S. District Judge Jed S. Rakoff.

U.S. Attorney Preet Bharara said: “In a swift verdict, a federal jury convicted Stefan Lumiere, a former portfolio manager at Visium, of securities and wire fraud. For years, Lumiere mismarked securities in his portfolio, using sham broker quotes and fake purchase prices to vastly overstate the value of his fund. The securities Lumiere traded may have been complex, but his criminal scheme was simple: lie and make up numbers to make more money. As the verdict reflects, the jury quickly saw Lumiere’s conduct for what it was, criminal fraud.”

According to the allegations in the charging documents and statements made in court proceedings:

Visium Asset Management

At all relevant times, Visium Asset Management (“Visium”) managed hedge funds specializing in healthcare-related investments. Visium managed a credit fund (the “Credit Fund”), which operated from in or about 2009 until in or about September 2013, and invested primarily in debt instruments issued by healthcare companies.

The Scheme to Mismark Securities

From June 2011 through September 2013, LUMIERE and others participated in a scheme to defraud the Credit Fund’s investors and potential investors by deceptively mismarking each month the value of certain securities held by the Credit Fund. The objective of the scheme was two-fold:

(1) to inflate the Credit Fund’s NAV(Net Asset Value); and

(2) to mislead investors about the liquidity of the Credit Fund’s holdings. Visium assessed performance fees to be paid by investors each year based on the Credit Fund’s profits and losses.

LUMIERE’s mismarking was in violation of Visium’s internal valuation procedures and contrary to Visium’s representations to investors. The effect of the scheme was to overstate the Credit Fund’s NAV, often by tens of millions of dollars as calculated at the end of each month to investors.

In order to carry out the scheme, LUMIERE and others solicited, obtained, and relied on false and fraudulent price quotes from employees of broker-dealers in order to improperly override prices calculated by the Credit Fund’s administrator and artificially inflate the Credit Fund’s NAV each month.

For each month-end valuation, LUMIERE and others would begin by reviewing an inventory of the Credit Fund’s investments and proposed valuations for each prepared by the Credit Fund’s administrator and Visium’s back office.

LUMIERE and others would then identify those relatively illiquid securities as to which they disagreed with or disliked the proposed price, and create a list reflecting the prices at which they wanted each security to be marked for month-end valuation purposes.

That price was often significantly higher or lower than the price available from public price data. LUMIERE and others would then contact one or two “friendly” brokers and dictate to the friendly brokers the price quotes that they needed.

The brokers would then parrot back the price quotes from their Bloomberg email account, giving the price quotes the appearance that they had come from an independent broker, and thus were in compliance with the Credit Fund’s pricing methodology. The friendly brokers’ sham quotes were then submitted to Visium’s accounting department as purportedly independent bases for that security’s valuation, for the eventual submission to the Credit Fund’s administrator.

By obtaining these sham quotes, LUMIERE and others caused a number of the Credit Fund’s securities to be misclassified in order to mislead investors about the liquidity of the securities (i.e., how actively traded the securities were).

Specifically, for a number of illiquid bonds, LUMIERE and others fraudulently caused Visium to assign a classification that led investors to believe that the bonds were relatively liquid, when in fact they were entirely illiquid.

This was done contrary to disclosures to investors about the Credit Fund’s percentage of illiquid investments, in order to induce investors to invest in or keep their money in the Credit Fund.

As another method to carry out the scheme, LUMIERE purchased additional quantities of certain securities – in which the Credit Fund had an established position – at a deceptively inflated price, markedly higher than the prevailing market was offering that security, in a practice known as “painting the tape.” The inflated price was then reported to Visium’s accounting department for NAV purposes. In both cases – the sham broker quotes and the inflated purchase prices – it was LUMIERE’s intent to increase the price of certain securities in order to inflate the Credit Fund’s month-end valuation.

* * *

LUMIERE, 46, of New York, New York, was convicted of one count of conspiracy to commit securities fraud and wire fraud, which carries a maximum sentence of five years in prison; one count of securities fraud, which carries a maximum sentence of 20 years in prison; and one count of wire fraud, which also carries a maximum sentence of 20 years in prison. The charges also carry a maximum fine of $5 million, or twice the gross gain or loss from the offense.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the work of the FBI, and thanked the SEC for its assistance.

This case was brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established 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. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visitwww.StopFraud.gov.

The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Ian McGinley, Damian Williams, and Joshua A. Naftalis are in charge of the prosecution.

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Hundreds of men, women and some children strolled through aisles showcasing rifles, current handguns, antique historical weapons, accessories, hunting and outdoor equipment, knives, and information booths  at the Gun and Knife Show today at the County Center.

County Executive Robert P. Astorino in a news conference at 2 this afternoon, said he vetoed the Democrat legislation that would have banned gun shows on county property to preserve the rights of persons to experience firearms exhibitions. 

County Executive Astorino told the assembled press he made the decision based on law and the belief that having a gun show at a county-owned facility such as the Westchester County Center, made such a show a venue that presented greater control of security and execution of the legal procedures required at gun shows across the state.

Mr. Astorino strolled about the show floor prior to the conference, getting congratulations for his veto from vendors, and show goers alike. During the news conference, persons waiting in the long line to get into the show shouted  “Thank you, Rob,” and “Thanks, Rob!” as they  strolled slowly by the developing news conference.

Peter Tartaglia, the Commissioner of Recreation and Parks for Westchester County told WPCNR over 3,000 persons had passed through the turnstiles, at $13 admission,  as of 2 PM, an all-time record for attendance at a center event (according to Mr. Astorino).

Astorino in his comments to the press said persons could not buy a handgun and walk out with it (from the four tables this reporter saw selling handguns, all of the handguns and rifles for sale which had ties in the barrels, on the triggers, and magazines preventing the guns from being loaded). You could not handle a handgun that was for sale without presenting a Gun License. You could not purchase a rifle or other long gun without a National Instant Criminal Background System (NICS) that would be conducted  on the premises in the manager’s office.

Asked how long it took to get a Gun License, Astorino said there were a number of steps that could take awhile, but did not know how long.

County Legislator John Testa (left, in above photograph)added it would take approximately five weeks to be processed, then you would have to go back to the dealer and get the gun registered. WPCNR, speaking with a Gun Licensee familar with the procedure found it could take six months to a year to get the handgun in your possession. Testa added that the success of the event meant the show would become a “perennial ” event at the County Center.

Questioned about the compromise legislation that Republicans said would replace the vetoed gun show ban on county property, Mr.Astorino said the legislation the County Legislature will take up Tuesday at a public hearing in The Little Theater in the County Center, did not add any regulations or procedures that were new.

He said the procedures codified in the compromise legislation bill supported by the Republicans are being observed in all gun shows across the state.

The compromise legislation was developed because Mr. Astorino said many persons in the county had expressed concern that a gun show was not “secure.”

Astorino said the compromise was to assure citizens worried about security at gun shows that if a gun show was held privately at other non county-owned venues in Westchester that those private property shows were subject to the same regulations the New York State requires of all gun shows and “they would feel safe and secure.”

Astorino noted that a gun show was taking place in Albany at a government -owned property, just as the County Center.

Line of firearms enthusiasts to get into the County Center wrapped around the venue and up the Bronx River Parkway as of 12 noon..it was just as long at 3 PM

The showfloor was still crowded at 3 PM

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JOHN BAILEY AND PETER KATZ

WHITE PLAINS WEEK OF FRIDAY JANUARY 20

ON VIEW WORLDWIDE INSTANT ON THE INTERNET

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TRUMP IN TRANSITION — THE FINAL REPORT

HOUSING OPTIMISM IN WESTCHESTER — BUT FLAT PRICES

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WPCNR TRUMP THE PRESIDENT. JANUARY 20,  2017:

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WPCNR DOCKET . From the Office of the Westchester County District Attorney. January 18, 2017:

Westchester County District Attorney Anthony A. Scarpino, Jr. announced that Michelle Bonet (DOB 07/28/73) of 9 Stonewall Circle, White Plains, New York was arraigned on an indictment today before Judge Anne Minihan and charged with:

• three counts of Aggravated Vehicular Homicide, class “B” Felonies,
• two counts of Manslaughter in the Second Degree, class “C” Felonies,
• one count of Aggravated Driving while Intoxicated Per Se, a Misdemeanor,
• one count of Driving While Intoxicated, a Misdemeanor,
• one count of a Driving While Ability Impaired by the combined influence of drugs or of alcohol and any drug or drugs, a Misdemeanor

in the deaths of Henrietta and Carmelo Sbezzi.

On October 28, 2016 at approximately 2:15 p.m., the defendant was driving north by west on West Hartsdale Road in Greenburgh.

Michelle Bonet

While driving her Chrysler minivan, the defendant was observed by witnesses crossing over the double yellow line multiple times. Just prior to the fatal event, the defendant nearly collided head-on with a vehicle being operated by a seventeen year old student coming from Maria Regina High School.

A few moments later, the defendant who was driving over the speed limit, crossed the double yellow line on West Hartsdale Avenue and collided head-on with a Lexus sedan being driven by Carmelo Sbezzi (DOB 09/06/34). In the front passenger’s seat was his wife, Henrietta (DOB 11/23/35).

The force of the impact pushed the victims’ car off the road. The vehicles came to rest with the front of each vehicle nearly touching each other and the defendant’s car almost entirely in the opposite lane of traffic.

Police, EMS and Fire units responded to the scene. The victims had to be extricated from their vehicle. The defendant, who was the sole occupant of her vehicle, was found slumped over unconscious.

The defendant and victims were taken to Westchester Medical Center. Both victims died at the hospital.

Two separate blood samples were drawn from the defendant at the hospital at different times. Testing of those samples revealed a BAC of .29 and .25 respectively. The testing also revealed an amount of Diazepam also referred to as Valium.

The defendant pled not guilty.

Her bail was continued.

She faces a minimum of one to four to a maximum of eight and one-third to twenty-five years in state prison.

Her next court date is January 31, 2017.

This case is being prosecuted by Assistant District Attorney James Bavero of the Superior Court Trial Division.