WHITE PLAINS CITIZENETREPORTER SETS RECORD VISITS FOR YEAR 7,017,658 VISITS! 2,098,003 VISITORS MADE 6 VISITS A DAY EVERY DAY. 63,330 UNIQUE VISITORS MADE 133,730 VISITS IN DECEMBER. WPCNR AVERAGED 17,284 VISITORS A WEEK, VISITING 31,270 TIMES.

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WPCNR SCHOOL DAYS. From Michele Schoenfeld. March 5,2012:

            White Plains High School Guidance Counselor Alvera Pollard received the University of  Miami School Counselor of the Year Award for Excellence in Counseling.  A plaque was presented to Ms. Pollard at the School Counselor College Conference at the University, in Coral Gables, Florida, in February. 

            Ms. Pollard was nominated for the award by a University of Miami student, Michael Valentino, who graduated from White Plains High School in 2010.  Criteria for the honor specified a guidance counselor who was “motivating, inspiring and encouraging throughout the student’s high school career.” 

The essay written by Valentino was selected to be read at the opening ceremony of the conference, and related the difficulties he faced in an effort to pursue his education.  Both he and his sister, whom Ms. Pollard also counseled at the High School, overcame underprivileged backgrounds and benefited greatly from her faith and support.  Valentino said, “Ms. Pollard inspired him to be the best than I can be and I will carry that inspiration with me throughout life.”

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WPCNR FBI WIRE. From the Federal Bureau of Investigation. March 1, 2012:

Preet Bharara, the United States Attorney for the Southern District of New York; Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”); and Raymond W. Kelly, the Police Commissioner of the City of New York (“NYPD”), announced today the unsealing of charges against 36 defendants involved in a systematic scheme to defraud private insurance companies of more than $279 million under New York’s no-fault automobile insurance law.

The indictment includes racketeering charges against eight members and associates of a criminal organization consisting primarily of individuals of Russian descent who were the owners and controllers of fraudulent medical clinics (the “No Fault Organization”), as well as 10 licensed doctors and three attorneys. The alleged scheme identified today is the largest single no-fault automobile insurance fraud ever charged, and the first case of its kind to allege violations of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act.

All of the defendants were arrested this morning in connection with today’s charges. Thirty-five were taken into custody in New York and New Jersey and will be presented and arraigned in Manhattan federal court before U.S. Magistrate Judge Theodore H. Katz later this afternoon. One defendant was arrested in Duluth, Minnesota and will be presented tomorrow in federal court in the District of Minnesota.

Manhattan U.S. Attorney Preet Bharara said: “Today’s charges expose a colossal criminal trifecta, as the fraud’s tentacles simultaneously reached into the medical system, the legal system, and the insurance system, pulling out cash to fund the defendants’ lavish lifestyles. As alleged, the scheme relied on a cadre of corrupt doctors who essentially peddled their medical licenses like a corner fraudster might sell fake IDs, except those medical licenses allowed unlawful entry, not to a club or a bar, but to a multi-billion-dollar pool of insurance proceeds.”

FBI Assistant Director in Charge Janice K. Fedarcyk said: “Our investigation uncovered a pattern of lucrative fraud exploiting New York’s no-fault auto insurance system to the tune of more than a quarter-of-a-billion dollars. The criminal enterprise, while it lasted, was obscenely profitable. The scheme not only unjustly enriched the defendants and defrauded insurance companies. Auto insurance fraud is also a crime that indirectly victimizes every driver in New York.”

NYPD Commissioner Raymond W. Kelly said: “Our undercover officers were treated like thousands of other ‘patients’ receiving therapy, tests, and medical equipment they didn’t need. I want to congratulate the U.S. Attorney’s Office and the agents and detectives assigned to the joint FBI-NYPD Organized Crime Task Force for bringing this investigation to a successful conclusion.”

The following allegations are based on the unsealed indictment and other documents filed today in Manhattan federal court:

Under New York state law, every vehicle registered in the state is required to have no-fault automobile insurance, which enables the driver and passengers of a registered and insured vehicle to obtain benefits of up to $50,000 per person for injuries sustained in an automobile accident, regardless of fault (the “No-Fault Law”). The No-Fault Law requires prompt payment for medical treatment, thereby obviating the need for claimants to file personal injury lawsuits in order to be reimbursed. Under the No-Fault Law, patients can assign their right to reimbursement from an insurance company to others, including medical clinics that provide treatment for their injuries. New York state law also requires that all medical clinics in the state be incorporated, owned, operated, and/or controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No-Fault Law. Insurance companies will not honor claims for medical treatments from a medical clinic that is not actually owned, operated, and/or controlled by a licensed medical practitioner.

From at least 2007 through 2012, the No-Fault Organization has engaged in a massive and sophisticated scheme to defraud automobile insurance companies of hundreds of millions of dollars by, among other things, creating and operating medical clinics that provided unnecessary and excessive medical treatments in order to take advantage of the No-Fault Law. In order to mislead New York authorities and private insurers, the true owners of these medical clinics (“Clinic Controllers”), almost all of whom were also members and associates of a criminal organization consisting primarily of individuals of Russian descent, paid licensed medical practitioners, including doctors, to use their licenses to incorporate the professional corporations, through which the medical clinics billed the private insurers for the bogus medical treatments. These doctors effectively operated as “straw owners” of the clinics.

The Clinic Controllers paid thousands of dollars in kickbacks to runners who recruited automobile accident passengers to receive medically unnecessary treatments from the no-fault clinics. They also instructed the clinic doctors/straw owners to prescribe excessive and unwarranted referrals for various “modality treatments” for every patient they saw. The treatments included physical therapy, acupuncture, and chiropractic treatments—as many as five times per week for each—and treatments for psychology, neurology, orthopedics, and audiology. Clinic doctors also prescribed unnecessary MRI’s, x-rays, orthopedics, and medical supplies. The Clinic Controllers received thousands of dollars in kickbacks for patient referrals from the owners of the modality clinics (“Modality Controllers”), who were members and associates of the same criminal organization to which the members of the No-Fault Organization and Clinic Controllers belonged.

The Clinic Controllers also referred patients to personal injury lawyers who filed bogus lawsuits on behalf of the patients and coached them on what injuries to claim in order to get as many treatments as possible. The personal injury lawyers also paid the Clinic Controllers thousands of dollars in kickbacks for these referrals.

In order to conceal and disguise the millions of dollars in claims paid by the automobile insurance companies, the members of the No-Fault Organization laundered the money through shell companies and corrupt check-cashing services. Often, checks would be written from the No-Fault or Modality Clinics with the payee line left blank, and in amounts less than $10,000 in order to avoid potential financial institution reporting requirements and other scrutiny. The checks were then cashed through check-cashers who made the checks payable to shell companies they controlled in order to conceal the true nature and purpose of the checks. The cash was then returned to members of the No-Fault Organization to fund kickbacks and for their personal use. At other times, the members and associates of the No-Fault Organization paid themselves through their own shell companies and then used the criminal proceeds to fund expensive vacations and to purchase luxury goods.

***

A chart identifying each defendant, the charges, and the maximum penalties, is below. The case is assigned to U.S. District Judge J. Paul Oetken.

U.S. Attorney Preet Bharara thanked the FBI and the NYPD for their work in the 18-month investigation, which he noted is ongoing. Mr. Bharara also thanked the National Insurance Crime Bureau and the investigative units of the insurance companies that provided invaluable assistance with the investigation, as well as the Manhattan District Attorney’s Office.

The case is being prosecuted by the office’s Organized Crime Unit. Assistant U.S. Attorneys Daniel S. Goldman, Nicholas L. McQuaid and Carolina Fornos are in charge of the prosecution. Assistant U.S. Attorney Jason L. Cowley of the office’s Asset Forfeiture Unit is responsible for the forfeiture of assets.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

– Prepared remarks of ADIC Fedarcyk at press conference

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WPCNR QUILL & EYESHADE. By John F. Bailey. February 28, 2012:

I have been fitting my mind around the stratospheric numbers involved in financing the new Tappan Zee Bridge.

Under the current plan for paying for the bridge,  the cost of handling the debt service on $6 Billion to build the Governor Andrew Cuomo Bridge would raise the new Tappan Zee Bridge toll to $11.50, and that is conservative.

WPNCR using standard municipal loan projects provided by the Municipal Capital Markets Group, notes that to handle the debt service on $6 Billion of loans at 3.11% (this week’s current bargain rate from TIVIA), the New York State Thruway Authority would have to pay $196 Million in debt service a year for 35 years in a combination of public and private financing, beginning in 2022, or earlier.

To handle this load through tolls as the governor suggests, at a minimum demands an increase to  $11.50 a trip on the New Tappan Zee by 2022, the year the TIFIA (Transportation Infrastructure Finance and Innovation Act) loan for $2 Billion would start having to be repaid, if the most favorable terms are granted New York State.

If financing through other sources at the same interest rates could be arranged with payback starting in 2022 in the TIFIA loan, or earlier the bulk of the financing would have to start being paid earlier.

Here is what the initial cost of the bridge will roughly be if the state borrows $6 Billion. There is also the possibility of borrowing from state pension funds, another option put out by the governor. These figures are derived from the Municipal Capital Markets Group  Municipal Bond Issue Calculator

Funds Needed: $6 Billion

Term:  35 Years (payback in a TIFIA loan begins in 2022)

Interest: 3.11 % (current TIFIA rate)

Net Monthly Payment (beginning in 2022): $16.3 Million

Annual Payment over 35 years:  $195,657,912

The Thruway Authority in their Letter of Interest to apply for a TIFIA, said the state would need $1.5 Billion over the next decade to keep the old Tappan Zee Bridge active ($150 Million a year). That would add 65 Cents per trip to the present Tappan Zee Bridge toll.

The Letter of Interest did not say what the regular maintenance costs of the bridge are, so lets raise the toll $1 to $6 for the 50 million trips across the bridge a year (45 million trips were made in 2010).

Beginning in 2022, the state will have to begin paying back the $6 Billion in loans, unless of course the non-TIFIA financing  from private sources  ($4 Billion) has to begin to be paid back earlier by the state. To simplify matters, let us assume the governor can extract favorable terms that dovetail the start-pay dates to 2022.

The thruway has to generate $195,657,912 in annual debt service beginning in 2022, or earlier, plus costs of maintaining the new bridge, whatever that may be , let’s say $150 Million, keeping expenses of maintenance the same (assuming they will go up due to inflation). The toll would have to go up 130%

The  $5 toll would have to more than double to cover the cost of the debt service $5 to $11.50 one way.

Now bear in mind, the $6 Billion cost is estimated right now. The designated qualified contractors may come in higher.

Either way from a rough numbers standpoint, I would guess that the New Tappan Zee will be the most expensive toll in the metropolitan area if not the country, rivaling the Chesapeake Bay Bridge tunnel – five years from now – if it is finished.

Last week, Governor Cuomo told his cabinet the bridge will be paid for by a $2 Billion in TIFIA funds and $4 Billion in toll-financed loans. It was the first time the state had indicated that the $2 Billion and change money promised from Washington last fall was a loan, not a grant.

Other matters that need to be clarified very quickly and should be considered by any thinking transit executive are whether the state should use the opportunity to raise tolls to inflate the bridge cash flow now to ease commuters into the new bridge toll shock. They could raise the toll in increments to provide for the new bridge future. They could decide to raise tolls to

1.) Pay for the increased maintenance of the old TZB while NTZB is built.

2.)  To build a fund for the “down-the-road” mass transit option—bus rapid transit or rail—to add the mass transit piece to the new bridge as quickly as possible, shortly after it is scheduled to open in 2017.

3.) Build additional operating funds to pay down loans faster, hold tolls steady after the new bridge opens.

4.) Provide excess cash for unforeseen cost overruns. (an intriguing way the state could come up with found- money.)

5.)The MTA could grab a share of the tolls for its expansion of bus and rail that the Governor promises will be added to  the new bridge.

6.) Generate intriguing money for the always beleaugured state general fund to get the state over cost crunches. All they have to do is legislate it.

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WPCNR MR. AND MRS. AND MS. WHITE PLAINS POLL. February 24, 2012:

This week, Governor Andrew Cuomo got solidly behind Town of Greenburgh Supervisor Paul Feiner’s idea of turning the old Tappan Zee Bridge into a pedestrian walkway, rather than destroying the bridge after the new replacement bridge is opened.

This got the WPCNR Editorial Board thinking. The Tappan Zee Bridge ‘Walkway” would be 3.1 miles long, which is a lot longer, and a lot wider than popular High Line in lower Manhattan.

It is the opportunity for a lot more attractions that could make the Tappan Zee Bridge “Walkway” a money maker. Our editorial board came up with just a few attractions that could go on the Walkway over the Hudson, and just might help pay off the astronomical cost of the new bridge and keep the tolls down (perhaps $20-$25 to pay off the cost of that bridge? Just guessing).

So what do you think? Select some of the attractions you think might be good!

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WPCNR CITY HALL CIRCUIT. UPDATE 5:30 P.M. E.S.T. February 22, 2012: