Skip to main content

Rapfogel sentenced to 3 1/3 to 10 years in prison; questions remain unanswered about Forest City connections

From the press release yesterday, A.G Schneiderman And Comptroller DiNapoli Announce Sentencing Of Former Met Council Director:
Attorney General Eric T. Schneiderman and Comptroller Thomas P. DiNapoli today announced that William Rapfogel, former executive director and chief executive officer of the Metropolitan Council on Jewish Poverty (Met Council), has been sentenced to 3 1/3 to 10 years in prison and ordered to pay $3 million in restitution to Met Council. The Attorney General’s investigation revealed that Rapfogel and his co-conspirators stole approximately $9 million from the taxpayer-funded nonprofit organization in a 20-year grand larceny and kickback scheme. Rapfogel personally stole $3 million and used the money to fund a lavish lifestyle.

...From 1993 to 2013, Rapfogel served as the head of Met Council, a New York State not-for-profit organization that provides the poor and elderly in the New York City area with social, economic, housing, food and emergency financial assistance. Met Council receives funding through New York State and New York City grants, legislative member items and contracts. Before Rapfogel, David Cohen was Met Council’s executive director, and after Rapfogel took over in 1993, Cohen served as a consultant to the nonprofit.

The conspiracy began in 1992, when Cohen devised a scheme with Joseph Ross of Century Coverage Corporation in which the company would submit inflated invoices for insurance coverage to the nonprofit. Met Council knowingly paid the inflated premiums, and then Ross gave cash kickbacks to Cohen and Herb Friedman, Met Council's chief financial officer.

About six months after Rapfogel took over as executive director in 1993, he joined the conspiracy and began receiving kickbacks, either in envelopes of cash or through payments of personal expenses. Initially, Ross paid both Rapfogel and Cohen $20,000 to $30,000 annually, but the inflated amount on the insurance policies increased over time and so did the kickbacks, with Rapfogel ultimately receiving approximately $30,000 per month. 
As part of the scheme, Rapfogel and Cohen also directed Ross to make political donations to various candidates for elected office from Century’s accounts or from straw donors, using money obtained from the inflated insurance payments. These campaign contributions were made to politicians who Rapfogel and Cohen believed could help Met Council. Rapfogel obtained the largest share of the kickbacks. In August 2013, investigators from the Attorney General’s Office recovered more than $400,000 in cash that was hidden in Rapfogel’s various homes. 
Rapfogel, 59, pleaded guilty on April 23, 2014, to Grand Larceny in the First Degree (a class B felony), Money Laundering in the Second Degree (a class C felony), Criminal Tax Fraud in the Third Degree (a class D felony) and Offering a False Instrument for Filing in the First Degree (a class E felony). As part of his guilty plea, Rapfogel admitted that, while working with co-defendants David Cohen, Herb Friedman and Joseph Ross and with others, he stole from Met Council. Cohen, Friedman and Ross have all pleaded guilty in connection with the scheme.
And in court

Here's New York Times coverage, which noted that prosecutor Gary T. Fishman said in court that Mr. Rapfogel “attempted to mislead” investigators from the start and had demonstrated a “lack of contrition,” while Rapfogel read from a brief statement expressing regret for hurting the Met Council and admitting "what I did was seriously wrong."

His wife Judy, Assembly Speaker Sheldon Silver's Chief of Staff, was in court but made no comment, according to the Post.

What's missing

The announcements yesterday, on top of other information released in April (as I wrote), do not provide answers to a couple of potential Forest City Ratner connections.

While Rapfogel acknowledged giving $350,000 in stolen monies to "my son," the latter is not identified. (An earlier report had the gift at $100,000.) So it's not clear if that son was Michael Rapfogel, who works for Forest City Rater, or a brother.

Also, while William Rapfogel's co-defendent David Cohen asked their co-conspirator at insurer Century Coverage Corporation to make campaign contributions--using straw donors, in some cases--there's no explanation regarding specific acts.

As I wrote, it didn't make sense for College Point, NY resident Deborah Auletta, a Century employee, to give $175 to Delia Hunley-Adossa's longshot 2009 challenge to popular 35th District Council incumbent Letitia James, the leading Atlantic Yards opponent. 

Also not discussed are two more tangential angles, as I suggested last August:
  • Given that Forest City Ratner joined with the Met Council on an unsuccessful bid to redevelop the Seward Park Urban Renewal Area, the departure of Rapfogel cast a shadow on that bid and raised questions about Forest City's closeness to the organization.
  • The Barclays Center chose to give the Met Council--and a music camp--profits from a 2/28/13 cantorial concert. I thought investigators might look into any ulterior motives, like buffing the developer's relationship with Silver as a prelude to that Seward Park bid, but apparently they didn't go that far.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…