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Post date: February 13 2015

A.G. Schneiderman And Comptroller DiNapoli Announce Sentencing Of Former Met Council Insurance Brokers

Solomon Ross And William Lieber Each Sentenced To Five Years Of Probation And Will Make Restitution Of $1.5 Million

All Six Defendants That Were Charged In Connection To Scheme Have Pleaded Guilty

NEW YORK –Attorney General Eric T. Schneiderman and State Comptroller Thomas P. DiNapoli today announced that Solomon Ross and William Lieber, former insurance brokers for the Metropolitan Council on Jewish Poverty (“Met Council”), each have been sentenced to five years of probation and will each pay $1.5 million in restitution to Met Council. As part of their sentence, they will also surrender their broker’s licenses to the New York State Department of Financial Services.

The joint investigation revealed that Ross and Lieber, together with former Met Council CEO William Rapfogel and others, stole approximately $9 million from the taxpayer-funded nonprofit organization as part of a 20-year grand larceny and kickback scheme. Ross and Lieber personally stole $1.5 million each from Met Council. To date, they have each paid back $1 million to Met Council.

“This sentence sends the message that there has to be one set of rules for everyone, no matter how rich or powerful, and that those who rip off the neediest New Yorkers will be prosecuted,” said Attorney General Schneiderman. “My office has brought charges against more than 60 public officials and their cronies for abusing state funds, and I look forward to continuing to work with Comptroller DiNapoli to pursue anyone who violates the public’s trust.”

"This broad conspiracy was an insult to those who donated money in good faith to help the needy," said State Comptroller Thomas P. DiNapoli. "I am glad to see these conspirators brought to justice. I will continue to work with Attorney General Schneiderman to hold wrongdoers accountable."

Both Ross and Lieber previously pled guilty to Grand Larceny in the Third Degree (a class D felony), Criminal Tax Fraud in the Third Degree (a class D felony), and Conspiracy in the Fourth Degree (a class E felony). As part of their guilty pleas, Ross and Lieber admitted that from 1992 to 2013, they conspired with Joseph Ross to steal from Met Council through an elaborate kickback scheme.

Ross and Lieber were insurance brokers of the now defunct Century Coverage Corporation, an insurance company that serviced Met Council from 1992 to 2013. Met Council is 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.

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

All six defendants that were charged in connection to this scheme have pleaded guilty. In July 2014, William Rapfogel was sentenced to 3 1/3 to 10 years in prison, and ordered to pay $3 million in restitution to Met Council. Herb Friedman was convicted and sentenced to four months in jail, and ordered to pay $775,000 in restitution to Met Council. Joe Ross is expected to be sentenced on March 9, 2015, to 18 months in jail along with restitution for the monies he stole.

These convictions and sentences are the results of an investigation conducted by the Attorney General’s Office in conjunction with New York State Comptroller DiNapoli, as part of the Joint Task Force on Public Integrity. Attorney General Schneiderman and Comptroller DiNapoli would like to thank the New York City Department of Investigation, the New York State Department of Financial Services and the New York State Department of Taxation and Finance for their assistance with the investigation.

Supervising Investigator Gerard Matheson from the Attorney General’s office is the lead investigator assigned to this case. The Investigations Bureau is led by Chief Investigator Dominick Zarella. Also assisting in the investigation are Supervising Auditor Edward J. Keegan, Associate Auditor Matthew Croghan, Supervising Analyst Paul Strocko of the Criminal Enforcement and Financial Crimes Bureau, and Legal Support Analyst KerryAnn Rodriguez of the Public Integrity Bureau.

This case is being prosecuted by Gary T. Fishman, Chief of the Criminal Enforcement and Financial Crimes Bureau, with Assistant Attorney General Jihee Suh of the Public Integrity Bureau. The Attorney General's Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

The joint investigation was conducted with the Comptroller’s Division of Investigations.