SHEEPSHEAD BAY'S ONLY INDEPENDENT NEWS BLOG

Rasputin, the windowless, mausoleum-like restaurant and nightclub at 2670 Coney Island Avenue, has been shuttered and padlocked.

There is a notice taped near the entrance that shows it was closed by city marshals and turned over to the landlord.

It’s unclear if this is related to the criminal case against Michael Levitis, the owner of Rasputin Restaurant. Levitis is alleged to be the ringleader of a fraud scheme, in which a company he controlled – Mission Settlement Agency – preyed on debt-laden victims. The company claimed to reduce a client’s debt to creditors and make payments on their behalf. In reality, prosecutors say, the company collected fees and did little or nothing to help clients, and Levitis used the fees to pay operating expenses at Rasputin, lease two luxury Mercedes and pay off his mother’s credit card bills.

Prosecutors have filed to seize approximately 40 bank accounts connected to Levitis, as well as Rasputin Restaurant and two properties he owns in Manhattan Beach. The assets would be used to pay back his victims if Levitis is found guilty.

However, the property on which Rasputin sits is not owned by Levitis. Notices like the one above are often left when a lessee fails to pay his rent and the landlord wins an eviction in court. It’s unclear if that’s the case, or if the landlord was somehow able to wrangle back control of the property amid Levitis’ problems.

The landlord was not available to answer questions as we went to press, but we will update if we hear from them.

Meanwhile, a post on Michael Levitis’ Facebook page that had announced the closure late last week or over the weekend has since disappeared. In reply to comments left on the post, Levitis had credited the closure to “higher powers,” but had not elaborated beyond that point when we stumbled across it.

Three Sheepshead Bay child care operators were sentenced in Manhattan Federal Court yesterday in a bribery scheme where they attempted to pay off government officials $100,000 to perpetrate a fraud against the city’s Day Care Subsidy Program.

We first reported on the arrest of a group of childcare operators and city officials back in August of 2010. The child care operators had netted $18 million for 38 day care centers since 2007 by bribing seven city officials to help them abuse the Day Care Subsidy Program, a system that helps low-income families receive day care for their children.

A press release detailed how the scam worked:

[Liudmila] UMAROV, [Ella] SCHVARZMAN, and [Rimma] VOLOVNICK are each former child day care center owners in Brooklyn, New York, who collectively paid more than $100,000 in bribes to City officials to help the three defendants steal from the Day Care Subsidy Program. Each of the defendants admitted to paying bribes to officials in exchange for, among other things, providing identification information of children that were eligible for the Day Care Subsidy Program but did not attend day care. This identification information was used by the defendants to seek reimbursement from the City for providing day care services to those children, even though those children did not in fact attend day care. Each of the defendants also admitted to paying bribes to officials in return for those officials overlooking health code violations at their day care centers.

Umarov, Schvarzman, and Volonick each pleaded guilty to bribing government officials. Umarov and Schvarzman were sentenced to three years probation and Volonick was sentenced to two years. Umarov, 66, was ordered to pay $100,600 in fines, Schvarzman, 46, had to pay $25,400 in fines and Volonick, 57, was ordered to pay $25,500 in fines.

Source: aresauburn via flickr

While it seems that every major American city has its own brand of political corruption, New York’s scandal plagued politicians are marked by the high cost their misdeeds inflict on taxpayers. The New York Post is reporting that the accumulated cost of all the illegal and unethical actions of dirty politicians have cost taxpayers at least $49,710,630.64 since 2006.

The rogues gallery is led by former state Comptroller Alan Hevesi, who cost the state $36 million in pension-fund management fees after taking nearly $1 million in illegal gifts; ex-state Sen. Pedro Espada, who funneled $7 million to himself and family members through a Medicare-funded nonprofit; and Assemblyman Vito Lopez, who cost taxpayers $103,000 in secret settlements after staffers accused him of sexual harassment.

The huge sum of money does not include the $440,000 in bribes that have recently put State Senator John Sampson in hot water. It also doesn’t include money promised by politicians that was never distributed, including $80,000 in discretionary funds given to a dummy company by Councilman Dan Halloran in exchange for a bribe.

The list of crooked pols also includes former State Senator Carl Kruger, who was bribed into funneling $900,000 to certain nonprofits. Kruger is currently serving a prison sentence on federal corruption charges.

Alert Ambulette, an ambulette service located at 2702 Stillwell Avenue, is in big trouble with state auditors.

The company was audited by the Office of the Medicaid Inspector General (OMIG) and the New York City Human Resources Administration (NYCHRA) and, according to a press release, was found to be violating a slew regulations that will force them to pay back taxpayers over $4 million.

According to the OMIG and NYCHA, Alert Ambulette had received over $5 million for 89,847 services rendered to 6,993 Medicaid recipients. The audit reviewed a random sampling of 100 services and 91 Medicaid enrollees and found that the service had committed a number of violations:

The auditors discovered practices ranging from improperly licensed and/or registered vehicles, inappropriate procedure codes used for billing, and inaccurate or missing information on claims. In more than 50 percent of the claims examined, license plate and/or driver’s license number information was missing. In more than one-third of the claims, drivers were unlicensed by the New York City Taxi & Livery Commission (TLC), a Medicaid as well as New York City requirement for ambulette drivers.

Levitis (Source: Facebook)

Rasputin owner and Russian Dolls co-star Michael Levitis pleaded not guilty to charges of wire fraud, mail fraud and conspiracy and was released on $1 million bail after his indictment yesterday. But, more interestingly, Levitis claims he’s a victim of government neglect who had tried to tip off authorities to malfeasance by “rogue employees.” He said he was ignored.

This nugget from the New York Times has all you need to know:

Mr. Levitis, who was charged with conspiracy, mail fraud and wire fraud, pleaded not guilty and was released on $1 million bond. His lawyer, Jeffrey Lichtman, said by phone that his client had known about the investigation for several months, had cooperated fully and had tried to provide information to the government about certain employees he believed were responsible for wrongdoing. Mr. Lichtman said his client was ignored.

“The frustrating part about this is we repeatedly attempted to present evidence to the government that there were rogue employees that were working at Mission and were engaging in the sort of fraud that we now see in the indictment,” Mr. Lichtman said.

“We’re prepared to fight it to the end,” he added.

The Times also notes that the investigation into Mission Settlement Agency and Michael Levitis was aided by undercover agents and a cooperating witness who posed as a customer.

As we first reported yesterday, Levitis is alleged to be the ringleader of a fraud scheme, in which a company he controlled – Mission Settlement Agency – preyed on debt-laden victims. The company claimed to reduce a client’s debt to creditors and make payments on their behalf. In reality, prosecutors say, the company collected fees and did little or nothing to help clients, and Levitis used the fees to pay operating expenses at Rasputin Restauraunt, lease two luxury Mercedes and pay off his mother’s credit card bills.

Prosecutors have filed to seize approximately 40 bank accounts connected to Levitis, as well as Rasputin Restaurant and two properties he owns in Manhattan Beach. The assets would be used to pay back his victims if Levitis is found guilty.

Levitis and three other co-conspirators face 20 years in prison for each charge. Two additional employees were charged, pleaded guilty, and are aiding the investigation.

His attorney, Jeffrey Lichtman, has represented high-profile clients including John Gotti, Jr., and rappers The Game and Fat Joe.

Levitis’ home at 1001 Oriental Boulevard. Prosecutors are moving to seize it to repay his alleged victims. (Source: Google Maps)

Prosecutors have filed papers to restrain approximately 40 bank accounts operated by Michael Levitis or those connected to him, and have moved to seize two Manhattan Beach properties in order to preserve funds for victims of his alleged fraud, according to statements by U.S. Attorney Preet Bharara.

The home at 132 Norfolk, also owned by Levitis, which prosecutors are moving to seize. (Source: Google Maps)

According to the indictment, investigators have identified several bank accounts in the name of Levitis, Rasputin, Mission Settlement Agency and alleged co-conspirators which may be turned over to victims of the debt settlement fraud charges revealed this morning. They are also targeting his stake in Rasputin Restaurant, at 2670 Coney Island Avenue.

They also list two properties owned by Levitis – his home at 1001 Oriental Boulevard, and another property at 132 Norfolk Street.

If Levitis is found guilty and ordered to compensate as many as 2,200 victims of fraud through Mission Settlement Agency’s services, the properties will be liquidated to reimburse the victims.

The charges revealed this morning allege that Levitis and three co-conspirators offered debt settlement services, in which they collected fees without doing the services they advertised. Moreover, they are believed to have made false claims about their fees and their track record. And while clients forked over millions of dollars to be paid to their creditors, little if any ever made it that way. Instead, Levitis used it to pay operating expenses at Rasputin, lease two luxury Mercedes, and pay down his mother’s credit card debt.

Aside from the four that were charged this morning, two other Mission sales representatives were also charged: Felix Lemberskiy and Zakhir Shirinov. These two employees have been separately charged and have already pleaded guilty.

Mission Settlement Agency also went by the names Mission Abstract LLC and Alpha Debt Settlement.

View the U.S. Attorney’s remarks on the case, as well as the indictment.

Michael and Marina Levitis (Source: James Edstrom)

Rasputin Restaurant owner and Russian Dolls co-star Michael Levitis, and three others, were charged with fraud this morning, as prosecutors claim they operated a debt settlement company that swindled more than 1,200 people out of a total of millions of dollars

The offices of Mission Settlement Agency at 2713 Coney Island Avenue, (Source: Google Maps)

Levitis, who owns Mission Settlement Agency at 2713 Coney Island Avenue in addition to Rasputin, was charged with mail and wire fraud along with three employees: Denis Kurlyand, its vice president of sales; Boris Shulman, a sales representative; and Manuel Cruz, an employee who assisted with customer solicitation.

(UPDATE: Prosecutors are moving to seize Levitis’ properties. Additionally, two other co-conspirators were identified and have already pleaded guilty.)

Prosecutors say that Mission Settlement Agency claimed to help customers struggling with credit card and bank debt by helping them reach settlements that could cut the amount owed. But the company “systematically exploited and defrauded” customer, the criminal complaint says, by charging fees without ever rendering services.

Mission also served as the middle man, collecting payments from customers that were supposed to be passed on to those they owed. Instead, the indictment says, from mid-2009 to March 2013, about 2,200 customers paid nearly $14 million, of which only $4.4 million went to the creditors.

The company kept $6.6 million for itself as fees. As many as 1,200 of the clients paid $2.2 million in fees without “a single penny” reaching their creditors.

Meanwhile, Levitis used the remaining funds as his personal piggy bank, directing some of it to pay his own debts on Rasputin Restaurant (2670 Coney Island Avenue), as well as to lease two luxury Mercedes cars. He did also manage to pay down the credit card debt of his mother, Eva, who owned the company on paper, the Post reports.

According to the indictment, as part of his sales pitch, Levitis touted an affiliation with the federal government and one of the three leading credit bureaus in the U.S., relationships that prosecutors say was all smoke.

It’s not the first time Levitis has claimed a government relationship he may not have had.

Back in 2010, Levitis was charged with lying to federal agents after he got caught up in a bribery case involving former State Senator Carl Kruger.

Levitis told a fellow nightclub owner, who was secretly recording the conversation for the FBI, that he had an inside line to the state pol, and could assist him with a liquor license issue if he steered thousands of dollars to Kruger – with a kickback for Levitis’ role in setting it up.

As the case moved forward, Levitis’ claim that he had influence in Kruger’s office began to unravel, and Levitis, who is also an attorney, later pleaded guilty to lying to federal agents, sentenced to three years probation and fined $15,000.

In April, Levitis was also hit with a six month suspension of his license to practice law – retroactive to January 2012 – for his role in the case. According to Reuters:

The appeals court said it took into account mitigating factors presented by Levitis, including “the aberrational and unplanned nature of his misconduct,” his remorse, his cooperation with the grievance committee’s investigation and his reputation as an “ethical and honest attorney.”

Levitis, his mother and his wife, Marina, were also the co-stars of Russian Dolls, a failed Lifetime reality series canceled less than two months after its premiere.

The case against Levitis and Mission is being hailed as historic, as it’s the first criminal referral from the U.S. Consumer Financial Protection Bureau, an agency established after passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The CFPB is also bringing civil charges against Mission, Levitis and others.

Source: wmfawmfa/Flickr

The alleged leader of a tax fraud ring employing Kazakh student visa-holders and a phony job placement website pleaded guilty on Tax Day yesterday, the Manhattan District Attorney announced.

We first wrote about Petr Murmylyuk last year, when he was charged in Newark as the alleged leader of a $1 million securities fraud scheme that involved hacking into the online trading accounts of unsuspecting individuals, and forcing them to engage in losing trades that benefited a network of phony accounts he and his cohorts set up. Later that day, Manhattan prosecutors expanded an earlier indictment of Murmylyuk, 31, charging him with stealing the identities of more than 300 unemployed people and collecting phony tax returns in their names.

According to the DA’s press release:

 He recruited a network of eleven Kazakh student visa-holders, typically holders of J-1 Visas, to open bank accounts to receive the unauthorized refunds. MURMYLYUK pleaded guilty to Grand Larceny in the Second Degree and Money Laundering in the Second Degree, and is expected to be sentenced on May 6, 2013.

…  According to his guilty plea, MURMYLYUK created a fake employment-related website with the address www.jobcentral2.net. The site offered fictitious job placement services through a program it claimed was “sponsored by the government and intended for people with low income.” MURMYLYUK sent e-mails with a link to his fake website through legitimate job search forums and college listservs and, in the weeks that followed, hundreds of people visited his site and submitted personal identifying information.

MURMYLYUK collected the information submitted to his website, and used it to forge tax returns in victims’ names. Using an e-filing vendor, the defendant claimed fraudulent refunds ranging from approximately $3,500 to $6,500 each. MURMYLYUK successfully obtained refunds in the names of 108 of the approximately 300 different victims who had visited www.jobcentral2.net, yielding more than $450,000 in stolen taxpayer funds.

MURMYLYUK recruited a group of students from Kazakhstan, many located on Russian-language social networking sites, to open accounts at banks across the country and provide their account numbers, online passwords, and other data to MURMYLYUK for use in the scheme. Many of the students returned to Kazakhstan shortly after opening the accounts for MURMYLYUK, were charged in the indictment in absentia.

Steven Koifman, one of the defendants (via Facebook)

Authorities unsealed charges against a Manhattan Beach man and six others last Thursday, claiming they conspired to commit securities fraud, but when the deal soured they turned on a co-conspirator and threatened to “put slugs into” him if he failed to come up with $350,000.

Alex Puzaitzer, 52, of Manhattan Beach, was one of the seven arrested in three states. The other defendants are Alexander Goldshmidt, 47, of New Jersey; Michael Vax, 54, of New Jersey; Paul Orena, 38, of New York; Yitz Grossman, 58, of New York; Efim Aksanov, 39, of Florida; and Steve Koifman, 41, of Florida.

According to authorities, the group operated what’s known as a “pump and dump” scheme, in which they acquired control of a large block of penny stock shares of Face Up Entertainment Group, a Valley Stream-based online gaming company that operates poker platforms and social media games. The alleged fraudsters inflated the prices and trading volumes of stock in the company, then sought to unload them on the public and reap hundreds of thousands of dollars in ill-gotten gains.

Investigators from the FBI and U.S. Attorney’s office wiretapped the group, capturing the defendants discussing ways to seize ownership of stock and then inflate the value through false press releases disseminated online. They coordinated trading to create an impression of high trading volume and attract unsuspecting investors.

However, their tactics failed, and they did not reap a profit, according to investigators.

As a result, the seven indicted members of the ring turned on an eighth co-conspirator, who then began cooperating with authorities. Several members of the ring, including Puzaitzer, allegedly met with the cooperating conspirator in Manhattan, demanding they pay him $350,000 and return his shares – or else Efim Aksanov, one of the Florida-based members of the ring, would “put slugs into” his chest.

The cooperating conspirator was allegedly harassed by the defendants in subsequent phone calls and meetings, and, during a meeting in March, Puzaitzer, Goldshmidt, Orena and Vax issued more threats to the conspirator and his family if he didn’t come up with the money.

All seven defendents are each charged with one count of conspiracy to commit securities fraud, which carries a maximum penalty of five years in prison, and one count of conspiracy to commit extortion, which carries a maximum penalty of 20 years in prison.

Hynes

Healthcare scammers – y’know, not like we have any of those around here – better watch their backs, as Brooklyn District Attorney Charles Hynes has launched a new Healthcare Fraud Division.

The new unit hopes to combat fraud against Medicare and Medicaid committed by doctors, pharmacists and other healthcare providers. The city is hoping to stop scammers like Dr. Naveed Ahmad, who scammed half a million dollars from Medicare and Medicaid over a three-year period. The DA’s press release explained how scammers like Ahmad operate, and the huge extent of his crimes:

Dr. Ahmad is charged with getting patients through “steerers” who would pay Medicaid and Medicare recipients up to $300 to visit the doctor, bill their health plans and then fill prescriptions, which they then turned over to the steerers. Some of the steerers are also charged with using their own government health plans to make office visits and fill prescriptions. Dr. Ahmad is charged with providing patients only cursory examinations, before prescribing them HIV medications. Steerers and patients are charged with selling the medication on the black market, to actual HIV patients, or on a grey market, to wholesalers who would then sell them back to pharmacies for a profit. He is also charged with billing for services not rendered, and in some cases sending in monthly bills to provide patients with repeated procedures, such as endoscopies, which he never, in fact, performed.

The creation of the Healthcare Fraud Division is a collaboration of many federal and city agencies including the U.S. Department of Justice, U.S. Department of Health and Human Services and the New York City Human Resources Administration.