` Three Men Found Guilty of Payroll System Scam in New York City Get Sentenced to 20 Years in Prison ‘

#AceFinanceNews – NEW YORK – (Reuters) – Three men found guilty of engaging in a scheme to line their own pockets while implementing a payroll system for New York City whose costs ballooned to $700 million were each sentenced to 20 years in prison on Monday.

U.S. District Judge George Daniels in Manhattan, in sentencing Mark Mazer, Gerard Denault and Dimitry Aronshtein, also had sharp criticism for the city, which he said for years failed to stop the men’s “brazen scheme.”

The judge called New York’s contracting process an invitation for waste and fraud and said that until changes are made, criminal cases connected to it would remain “routine.”

“The process is in need of significant reform,” he said.

A spokeswoman for the New York City Law Department had no immediate comment on the judge’s remarks.

Mazer, Denault and Aronshtein received the maximum sentence for each count on which they were convicted in November, with the sentences for each man to be served concurrently.

The three were part of what prosecutors called a network of relatives and other conspirators involved in a massive fraud and kickback scheme.

(NYDN) – Gerard Denault, Mark Mazer and Dmitry Aronshtein were found guilty in November of siphoning away nearly $100 million associated with CityTime in a kickback and money laundering scheme.

A Manhattan federal judge gave the men the maximum sentence for each count Monday, but will allow the sentences to be served concurrently, meaning each will spend about 20 years behind bars.
BY Daniel Beekman
NEW YORK DAILY NEWS

Ace Related News:
1. Reuters – April 29 – http://tinyurl.com/mw2s239
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Bankers Panic of the 1907 Knickerbocker Crisis that led to the Creation of the Federal Reserve

Wall Street Panic's as bankers lose their shirt!

Wall Street Panic’s as bankers lose their shirt!

The Panic of 1907 – also known as the 1907 Bankers’ Panic or Knickerbocker Crisis  was a United States financial crisis that took place when the New York Stock Exchange fell almost 50% from its peak the previous year. Panic occurred, as this was during a time of economic recession, and there were numerous runs on banks and trust companies. The 1907 panic eventually spread throughout the nation when many state and local banks and businesses entered bankruptcy. Primary causes of the run included a retraction of market liquidity by a number of New York City banks and a loss of confidence among depositors, exacerbated by unregulated side bets at bucket shops. The panic was triggered by the failed attempt in October 1907 to corner the market on stock of the United Copper Company. When this bid failed, banks that had lent money to the cornering scheme suffered runs that later spread to affiliated banks and trusts, leading a week later to the downfall of the Knickerbocker Trust CompanyNew York City’s third-largest trust. The collapse of the Knickerbocker spread fear throughout the city’s trusts as regional banks withdrew reserves from New York City banks. Panic extended across the nation as vast numbers of people withdrew deposits from their regional banks.

The panic might have deepened if not for the intervention of financier J. P. Morgan,  who pledged large sums of his own money, and convinced other New York bankers to do the same, to shore up the banking system. At the time, the United States did not have a central bank to inject liquidity back into the market. By November, the financial contagion had largely ended, only to be replaced by a further crisis. This was due to the heavy borrowing of a large brokerage firm that used the stock of Tennessee Coal, Iron and Rail-road Company (TC&I) as collateral. Collapse of TC&I’s stock price was averted by an emergency takeover by Morgan’s U.S. Steel Corporation—a move approved by anti-monopolist president Theodore Roosevelt. The following year, Senator Nelson W. Aldrich, father-in-law of John D. Rockefeller, Jr., established and chaired a commission to investigate the crisis and propose future solutions, leading to the creation of the Federal Reserve System. 

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