Inspector General Releases Report on $1 Million Payment in Armory Case

ALBANY, NY (11/19/2008)(readMedia)-- New York, NY (November 19, 2008) - Attorney General Andrew M. Cuomo and Inspector General Joseph Fisch announced today that Marc Jacobs International has paid New York State $1 million for its conduct related to payments made to the former superintendent of the 69th Regiment Armory, James Jackson, for use of the Armory's drill hall to host fashion shows. Cuomo and Fisch also announced that Jackson has pled guilty to the top count of a larceny and bribery indictment for demanding cash from Armory exhibitors over an eight-year period.

The agreement with the fashion house of Marc Jacobs International, a subsidiary of international luxury goods giant Louis Vuitton Moet Hennessy, stems from allegations that the firm made cash payments, through an agent, to the defendant Jackson in exchange for use of the Armory's drill hall. Once Jackson's conduct was brought to the attention of Marc Jacobs' executives they cooperated fully with the Office of the Attorney General and today's agreement resolves the investigation with respect to Marc Jacobs.

"New York City is a global epicenter for fashion and cultural events, and we will not allow corruption and greed to tarnish one of our most lucrative industries. Places like the 69th Regiment Armory are a key part of ensuring that cultural enterprises across the state continue to thrive." said Attorney General Cuomo. "I'm happy to have partnered with Inspector General Fisch, and know that one of our top priorities moving forward will be to continue to root out these kinds of entrenched and corrupt practices, which dishonestly tap New York's coffers and interfere with progress and industry across the state."

"The state's 58 armories were created for use by the military and as community assets and offer lower rental rates than many commercial spaces. The Lexington Avenue Armory serves as a unique venue in New York City for cultural and commercial events, in addition to functioning as a home for military units serving in Afghanistan and Iraq - including New York's storied Fighting 69th," said Inspector General Fisch. "I am pleased to join with the Attorney General in the investigation and exposure of these types of problems. I look forward to future efforts with Attorney General Cuomo's office."

From around February 2000 to February 2007, Marc Jacobs International used an intermediary to pay Jackson cash and goods valued in excess of $35,000 to use the Armory to host fashion shows. Pursuant to the agreement, the Marc Jacobs firm agreed to pay New York State $1 million, and to engage the services of a private monitoring agency for a two-year period to review Marc Jacobs' operations and report to the Attorney General.

Up until his arrest, Jackson, 57, was superintendent of the New York State Armory located on Lexington Avenue and 25th Street in Manhattan. Jackson demanded cash, computer equipment, exercise equipment and other merchandise with a value of up to $10,000 per show, from small and large organizations seeking to utilize the Armory's vast drill hall. A 32-year employee of the State Division of Military and Naval Affairs, Jackson resigned after an undercover officer from the Inspector General's Office caught him on tape accepting a bribe.

Jackson pled guilty to Grand Larceny in the Second Degree, a class C felony carrying a maximum possible term of five to fifteen years' imprisonment. He is scheduled to be sentenced before Justice L. Bart Stone on December 15, 2008.

The case was handled by Assistant Attorney General John Carroll and Deputy Chief of the Public Integrity Bureau Stacy Aronowitz, under the supervision of Special Deputy Attorney General for Public Integrity Ellen Nachtigall Biben. The Inspector General's investigation, which included the use of two undercover investigators, was conducted by Attorney Paul Ryan and Investigator Robert Santana under the supervision of First Deputy Inspector General Kelly Donovan.