The accused were booked following an order from the Sessions Court order which directed the ACB to probe the alleged irregularities in Slum Rehabilitation Authority -SRA project in suburban Bandra
Maharashtra Anti-Corruption Bureau (ACB) has filed a first information report (FIR) against principle secretaries of the state's housing and woman and child development departments, HDIL Group chairman and the company's ten directors in connection with alleged irregularities in Slum Rehabilitation Authority (SRA) project in suburban Bandra.
The accused were booked following a Sessions Court order, which directed the ACB to probe the matter brought before it by a complainant.
The FIR was filed on Tuesday against Principle Secretary (Housing) Debashish Chakrabarty, Principal Secretary (Woman and Child Development) Ujjwal Uke, HDIL Group Chairman and the company's 10 directors.
They have been charged under relevant IPC sections including 166 (public servant disobeying law, with intent to cause injury to any person), 167 (public servant framing incorrect document with intent to cause injury), 420 (cheating and dishonestly inducing delivery of property), 465 (forgery), 467 (forgery of valuable security, will, etc), 471 (using as genuine a forged document or electronic record), 409 (criminal breach of trust by public servant, or by banker, merchant or agent) and 34 (acts done by several persons in furtherance of common intention) and sections pertaining to the Prevention of Corruption Act.
According to ACB's Assistant Police Commissioner Rajesh Bagalkote, the complainant owned a commercial space at the Motilal Nehru Nagar in suburban Bandra.
The complainant alleged that the area had been redeveloped under SRA scheme by real estate and construction company HDIL in 2005-2006, but he was not allotted a shop after he was deliberately declared ineligible, police said.
"However, those who are ineligible were provided shops in the redeveloped area. It was also discovered that more than allotted area had been used for the redevelopment project. All these illegal activities were carried out allegedly in connivance with government officials, including Chakrabarty and Uke, who were executive officers in SRA. Various documents were allegedly forged for the purpose," Bagalkote said.
The victim approached the court following which Special Sessions Judge SV Ranpise ordered ACB to probe the complaint and take appropriate action against the persons concerned.
Following the court order, the FIR was registered against Chakrabarty, Uke, HDIL's Wadhwan, the then additional collector in suburbs, office-bearers of Motilal Nehru Nagar Cooperative Housing Society and 10 directors of the HDIL for their alleged role in the irregularities in allotment of the space.
Company's "interest free" financing hides important information from consumers
Bob’s Discount Furniture needs to come clean about the “interest free” financing it heavily promotes to consumers before inviting them in commercials to “come on down.”
Consumers are being set up to fail with minimum monthly payments that fall short of paying off the purchase in time and subsequent hidden interest charges that are not readily disclosed in the company’s advertising of its so-called “gimmick-free” financing, a TINA.org investigation has found.
TINA.org has called on state officials to take action against these deceptive practices and the Department of Consumer Protection confirmed it has opened an investigation.
Chief among our findings:
Bob’s fails to adequately disclose to consumers the need to make more than the minimum payment appearing on their monthly statements to pay off the balance in full within the required time period in order to avoid interest charges.
Bob’s does not make clear to consumers that the interest will be back-charged from the date of purchase if they don’t pay off their entire balance in time.
A high interest rate (27.99 percent) that’s not readily apparent.
TINA.org first started investigating Bob’s financing last year after a reader alerted us to her experience with hidden interest charges. Since then, TINA.org has received several more complaints about the company’s 6- and 12-month payment plans that are offered through Wells Fargo.
In response, TINA.org contacted Bob’s again, but the Connecticut-based company, which has 58 stores in 11 states from Maine to Virginia, failed to take adequate measures to respond to readers’ complaints that they had been left with a large bill for interest they never expected to have to pay.
When contacting Bob’s about the issue this fall, John Sullivan, executive vice president and chief financial officer for the company, told TINA.org that all consumers at the point of purchase receive a flier that discloses the stipulation regarding the back-charged interest.
But our own first-hand research at three separate Bob’s stores found that none of the staff handed out any such fliers.
The findings and Bob’s insufficient response led TINA.org to file a complaint with Connecticut Attorney General George Jepsen and Department of Consumer Protection Commissioner William Rubenstein requesting the state take action to end the company’s deceptive practices.
‘I would have paid in cash’
One Bob’s customer, Amalio Salerno, who contacted TINA.org in November, said he was billed more than $600 in back-charged interest 12 months after a salesperson in the company’s Newington store persuaded him to sign up for the financing plan.
Salerno said he was prepared to pay in cash for the furniture but the sales representative talked him into signing up for the monthly payment plan.
“They talked me into the financing crap,” Salerno said. “If they would have said nothing about the financing, I would have paid in cash.”
He said his unpaid balance at the time he received the statement containing the surprising $600 interest charge was only about $200.
Salerno said there was no indication whatsoever that he’d be back-charged from the date he purchased a living room set, bed and mattress, much less at a 27.99 percent interest rate — a figure TINA.org also found to be hidden from consumers.
‘A gimmick in itself’
Salerno also said he didn’t realize until about his fifth monthly statement that the amount listed was just a minimum payment and not the full amount he needed to make to pay off the entire account in time to avoid being saddled with back-charged interest.
“That was a gimmick in itself,” Salerno said. “You think you pay the minimum and you’re all set. They told me I had 12 months to pay it off; they said nothing about a minimum payment.”
After he realized the minimum payments wouldn’t pay off the purchase, Salerno said he increased his monthly payment and planned to pay off the balance in time. But the statement with the back-charged interest arrived less than 12 months after he received his first statement last December, Salerno said.
Salerno’s experience was echoed by several other customers who contacted TINA.org.
Salerno said Bob’s and Wells Fargo eventually agreed to split the $600 interest charge but only after he threatened to bring the issue to the attorney general.
Inside the showroom
This fall, TINA.org reporters visited three Bob’s stores in Connecticut to investigate how the company’s interest-free financing was presented to consumers. Our investigation corroborated consumer complaints that important terms and conditions of the financing were not adequately disclosed at the point of purchase.
In fact, there were large variations from store to store about the plans. The number, type and placement of signs about the plan differed from store to store and none readily revealed all the terms.
In Bob’s Orange store, there were no signs about the plan on the main floor other than a small photo of a piggy bank that said, “KEEP YOUR MONEY IN YOUR PIGGY BANK…
TAKE ADVANTAGE OF BOB’S INTEREST FREE FINANCE,” with no explanation of what that entailed.
In the Niantic store, sales representatives wore tags on their lapels asking consumers to inquire about the gimmick-free financing plans, thus leaving it to the staff to adequately explain the details of the plans if consumers did inquire.
But a saleswoman in Orange who brought up financing as soon as TINA.org staff stepped in the store and started looking at furniture, said that not all sales representatives fill their customers in on all the details.
And salespeople at all three stores acknowledged the possibility that customers could be deceived. “You got to pay it out by 12 months or that’s how they get you,” a salesperson at the Bob’s in Niantic told TINA.org reporters who posed as customers.
Bonnie Patten, executive director of TINA.org, called on state officials to take action.
“It is completely deceptive for Bob’s to market its financing as gimmick- and interest-free without simultaneously explaining to customers all the ways in which consumers can be saddled with 28 percent interest from the time of purchase,” Patten said.
Jake Bernstein and Steve Engelberg from ProPublica discuss the Federal Reserve Bank of New York’s weak oversight and the aftermath of the Carmen Segarra tapes
The inner workings of the Federal Reserve Bank of New York rarely come to light. But excerpts from a bank examiner’s secret recordings have made the Fed’s struggles to be a watchdog over Wall Street’s biggest banks more transparent.
“We never get to sit inside these rooms and hear these conversations and really watch as the regulatory process unfolds. I think a lot of the people were surprised at what they heard,” says ProPublica’s Jake Bernstein to Editor-in-Chief Steve Engelberg on this week’s podcast.
In September, ProPublica teamed up with radio program This American Life to tell the story of Carmen Segarra, a Fed examiner who made secret audio recordings while embedded at Goldman Sachs. Bernstein continues to investigate the New York Fed after Segarra’s whistle blowing, which has led to a review by the Federal Reserve Board, Senate hearing on regulatory capture, and a bill introduced by Sen. Jack Reed, D-R.I. to make the Fed’s president subject to Senate confirmation.
After the financial crisis of 2008, the New York Fed actually received more authority from Congress to supervise the big banks under its umbrella, including Goldman Sachs, JPMorgan, Citigroup, and more, but some of the new specialized examiners sent into these banks like Segarra faced resistance to doing their jobs from their Fed supervisors.
Bernstein describes how an outside consultant attributed much of the Fed’s weak oversight to a “culture of passivity,” deference to big banks, and “fear among the employees of the New York Fed to step out of line and contradict their superiors.” Engelberg points out that Fed accountability is seemingly one of the few bipartisan issues that both Democrats and Republicans can agree on.
Both political parties have called for reform at the Fed, especially after the financial crisis in 2008. “The right seems to be a little more concerned about monetary policy and the left seems to be a little more concerned about supervision,” Bernstein says. “But what I think unites [Republicans and Democrats] is the idea of transparency and the idea that the Fed operates in a very secretive manner.”