Racketeering, threats of violence used
The U.S. Attorney’s Office for the Southern District of New York recently announced the arrest of nine people, many of them gang members, who are accused of racketeering and extortion to try to take over the entire New York City area fire mitigation industry.
The group allegedly infiltrated the First Response Cleaning Corporation and utilized violence to command dominance and compliance over their competitors within the insurance industry. First Response is a Brooklyn-based emergency mitigation services (EMS) company which provides clean-up services to properties damaged by fire.
The defendants, many of whom are members of the Bloods street gang, worked together to take control of First Response. After doing so, crew leader Jatiek Smith and the others then used force and threats of force against other EMS companies and public adjusters to exert control over the entire fire mitigation industry. Defendant Octavio Peralta was a public adjuster who participated in the enterprise’s efforts to defraud and who helped the conspirators solidify their control over the industry. The enterprise’s threats included threats to kill or shoot their victims and members of the victims’ families. With the backing of these threats of force, they imposed a system of rules upon other EMS companies and on public adjusters, including a strict rotation system in which the defendants dictated which companies got which losses.
The enterprise also extorted money from EMS companies and public adjusters and required these other companies to pay if they wanted to continue to work without being attacked. On multiple occasions, the enterprise used force against other EMS companies and public adjusters to ensure that they submitted to the rules, including physically assaulting victims. They sometimes created video recordings of this violence and distributed the recordings within the industry to threaten other victims. The enterprise also helped submit false insurance claims for damaged properties and threatened violence or retaliation against potential witnesses who were believed to be cooperating with the federal investigation into the enterprise’s crimes.
All nine defendants are charged with one count of conspiracy to commit racketeering and one count of conspiracy to commit extortion. Each count carries a statutory maximum of 20 years in prison, for a combined statutory maximum of 40 years in prison.
LMA Newsletter of 7-25-22
