Avraham “Avi” Cohen of Great Neck pleaded guilty along with eight others to a long-running scheme to defraud New York government agencies.
All collaborated using different businesses to submit false and inflated bids, overcharging the New York State Office of Victim Services and the New York City Human Resources Administration for their moving services.
New York Attorney General Letitia James, in collaboration with New York City Department of Investigation Commissioner Jocelyn E. Strauber, announced the guilty pleas and sentencings of the individuals and corporations on Oct. 31.
The individuals involved in the scheme are Cohen, Derek T. Barney of Carteret of New Jersey, Frank Lopez, Jr. of Queens, Cynthia Yeje Ramsaroop of Winter Haven, Flq., and Gennovee Yeje of Land o’ Lakes, Fla.
The corporate entities they used in the scheme are Avi Moving & Trucking Inc. (Avi Moving) of Queens, Baya Inc. of Queens, Fastrac Processing LLC of Queens, and Prime Moving & Trucking LLC out of Delaware.
On Oct. 17, Cohen and Avi Moving pleaded guilty to violations of New York Penal Law and General Business Law. They were sentenced to a one-year conditional discharge and paid $600,000 to New York State and New York City.
On Oct. 26, Lopez and Baya Inc. pleaded guilty to violations of New York Penal Law and General Business Law, were sentenced to a one-year conditional discharge, and paid restitution of $200,000 to the New York City.
All defendants were also ordered to not seek to do moving business with HRA and other agencies.
The scheme involved the submission of thousands of false and inflated bids that overcharged the New York State Office of Victim Services and the New York City Human Resources Administration by up to three times the fair market value for moving services.
The diverted funds were intended to assist public benefits recipients, domestic violence survivors, and other crime victims in urgent need of relocation services.
“It is essential that vulnerable New Yorkers are able to access the help they need to escape dangerous situations quickly and safely,” said James. “This corrupt scheme stole funds from vital programs that provide moving services to those most in need. Through their actions, the perpetrators of this fraud put profits over people, and put victims of crime and low-income New Yorkers at risk.”
Strauber said the defendants had defrauded city and state agencies for two decades, targeting programs designed to aid crime victims and public benefits recipients.
“With today’s guilty pleas, all of the defendants now have accepted responsibility for their criminal conduct and defendants Avi Cohen, Derek Barney, and Frank Lopez have agreed to pay restitution totaling $850,000,” said Strauber. “The vast majority of that amount will go to the city. Avi Cohen and his company are banned from doing business with DSS and its related agencies for one year; the remaining defendants and their business are banned until fall of 2024.”
The fraudulent activities date back to around 2001, according to the Attorney General’s office, when the defendants initiated a scheme to defraud OVS and HRA.
These agencies funded moving and storage services for public benefit recipients and crime victims and required clients to submit three competitive bids to ensure the lowest possible government payment.
The defendants used various tactics to manipulate the market and inflate moving and storage service prices by submitting rigged and false bids.
Together, Barney, the co-owner of Prime Moving, Cohen, the owner of Avi Moving, and Lopez, the owner of Baya Inc., formed and operated a sham trade association called the “United Movers Association,” using the business to submit false bids to OVS and HRA.
To maintain the appearance of legitimacy, a false letter was submitted to HRA, falsely claiming that the association was formed to combat fraud in the industry. In reality, it existed solely to facilitate fraudulent bids.
The defendants also operated a deceptive entity called the “Office of Eviction Services,” which falsely represented itself as a governmental or non-profit organization dedicated to helping those in need apply for emergency relocation assistance.
The Office of Eviction Services advertised its services to public benefits recipients and HRA caseworkers, distributing flyers and operating a website for the fake entity.
Clients who contacted the Office of Eviction Services were promised assistance in obtaining and submitting the three required bids but, in reality, received fraudulent, rigged, and inflated bids for the same moving services.
On July 18, the men behind the Office of Eviction Services scheme pleaded guilty to Scheme to Defraud in the second degree and were each sentenced to a one-year conditional discharge with the conditions that they perform 100 hours of community service, not commit any further crimes, and not seek to do business with HRA and other agencies.