NEW YORK – State Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman today announced that Joseph Ross, the former insurance broker for the Metropolitan Council on Jewish Poverty (“Met Council”), has been sentenced to 18 months in jail. Ross also paid $534,000 in restitution to Met Council and agreed to a judgment against him in the amount of $956,000 in favor of Met Council. The joint investigation revealed that Ross, together with former Met Council CEO William Rapfogel and other co-conspirators, stole approximately $9 million from the taxpayer-funded nonprofit organization as part of a 20-year grand larceny and kickback scheme. Ross personally stole $1.5 million from Met Council.
"This callous and heartless scheme enriched the defendants at the expense of New Yorkers in need,”said Comptroller DiNapoli. “Mr. Ross’sentence serves as a warning to other potential scammers that we will investigate and prosecute public corruption. I thank Attorney General Schneiderman and his staff for partnering with us to recover millions of dollars in funds stolen from vulnerable New Yorkers.
“If you rip off the neediest New Yorkers by stealing from the charities that provide them with vital services, you will face jail time. That applies to all New Yorkers, including the rich or powerful,”said Attorney General Schneiderman. “We have brought charges against more than 60 public officials and their cronies for abusing state funds, and with through my partnership Comptroller DiNapoli, we will continue to pursue anyone who violates the public’s trust.”
Ross previously pled guilty to Grand Larceny in the Third Degree (a class D felony), Money Laundering in the Third Degree (a class D felony) and Criminal Tax Fraud in the Third Degree (a class D felony). As part of his guilty plea, Ross admitted that from 1992 to 2013, he conspired with co-defendants William Rapfogel, David Cohen and others to steal from Met Council through an elaborate kickback scheme.
Ross was the principal 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 Ross 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 Ross gave cash kickbacks to Cohen and Herb Friedman, Met Council's former chief financial officer.
In 1993, William Rapfogel took over as the head of Met Council, and Cohen served as a consultant to the nonprofit. About six months after Rapfogel took over as Met Council executive director, 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.
In July 2014, William Rapfogel was convicted and 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. In February 2015, Solomon Ross and William Lieber, former insurance brokers for Met Council, were each sentenced to five years of probation and $1.5 million in restitution.
This conviction and sentence are the results of an ongoing investigation 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. The joint investigation was conducted with the Comptroller’s Division of Investigations. 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.
Anyone with additional information on this or any other public corruption matter is encouraged to contact the Attorney General’s Office at 1-800-996-4630 or the Comptroller’s Office at 1-888-672-4555; file a complaint online at [email protected]; or mail a complaint to: Office of the State Comptroller of Investigations Unit, 110 State Street, 14th floor, Albany, NY 12236.