Thomas Bransky, the former CEO of Childrens Community Services (CCS), and Peter Weiser, who formed and partly funded the Queens, New York-based nonprofit homeless services provider, were arrested in and charged with conspiracy to defraud the City of New York of millions of dollars.
Bransky allegedly steered service contracts billed to the city to entities controlled by Weiser, and both men intentionally concealed Weiser’s involvement with CCS, according to a statement from The U.S. Attorney’s Office for the Southern District of New York.
Bransky and Weiser were charged with one count of conspiracy to commit wire fraud and one count of wire fraud, as well as one count of embezzlement of government funds. Weiser was additionally charged with one count of money laundering. The wire fraud charges carry maximum sentence of 20 years in prison for each count, and the embezzlement charge carries a maximum sentence of 10 years. Both men entered not guilty pleas and were released on bail.
According to the U.S. Attorney’s Office statement, CCS was awarded 12 contracts worth roughly $913 million from 2014 through January 2020 CCS. Around $50 million of those funds was then transferred to what officials called “fly-by-night companies with no or few employees” controlled by Weiser, but with “straw owners” listed as their heads. Bransky, Weiser and other co-conspirators allegedly made false statements to city officials regarding ownership of the supply companies, their interconnectivity, the selection process and the ability of the companies to actually provide that for which they were contracted.
Weiser is alleged to have realized more than $7 million in what was characterized in the statement as “illicit profits,” while Bransky earned more than $1.2 million in salary as CEO of CCS.
According to a note on the organization’s federal Form 990 for the year ending June 30, 2022, “Effective April 2021, CCS ceased operations.” In the year before it ceased operations, CCS reported $61.8 million in total revenue, including $59.8 million in program service revenue. Those numbers were substantially down from the $176.1 million in revenue and $174 million the organization reported for the year ending June 30, 2021. Two of the three executives listed in the most recent Form 990 shared the title of Temporary Receiver/CEO.
The organization does not appear to currently have a website: its primary online presence consists of a bare-bones LinkedIn page and a Facebook page last updated in 2019. The address listed on its Form 990s appears to be a UPS Store location in Jamaica, Queens in New York City.
“In most cases, the Weiser Entities obtained goods and services from legitimate third-party vendors and then re-sold these goods and services to CCS at marked-up and, in some cases, grossly inflated prices,” according to prosecutors. Typical transactions to Weiser-controlled entities allegedly included:
* Delta IT Solutions LLC, which was created around December 2016 for the purpose of selling IT services and hardware to CCS “at inflated prices and in violation of the City’s conflict-of-interest policies,” according to the statement. Good such as routers, printer cables and surge protectors, along with telecom services, were marked up by around 330%, the U.S. Attorney’s Office alleged.
* AMX Distributors, LLC, which Weiser and an associate supposedly created for the purpose of selling consumer goods, including beds, mattresses, sheets, towels, pillows, sofas, cribs, microwaves, refrigerators, chairs, tables and toiletries, at markups of up to 309%.
* 511 Realty Management, LLC which was supposed to provide leasing services, but allegedly served only to make monthly rent payments to third-party landlords on CCS’s behalf. 511 Realty allegedly charged hefty markups to CCS and, as a result, New York City “for essentially doing nothing more than writing a check,” according to the statement. Markups allegedly ranged from 37% to 46%.
* Pronto Cleaning Services, LLC, which entered into a deal with a legitimate janitorial services company to provide cleaning services at CCS offices and facilities, according to the statement. “Pronto, which had no employees, resold those cleaning services to CCS at an approximately 56% markup, which was paid for by the City,” according to the statement.
