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Title: N.Y. Senate Democrat Majority Leader Indicted for Stealing
Source:
Bloomberg Businessweek
URL Source: http://www.businessweek.com/news/20 ... der-indicted-for-stealing.html
Published: Dec 14, 2010
Author: Thom Weidlich
Post Date: 2010-12-14 19:51:54 by Murron
Keywords: None
Views: 1425
Comments: 1
N.Y. Senate Democrat Majority Leader Indicted for Stealing Dec. 14 (Bloomberg) -- Pedro Espada Jr., the New York Senate majority leader, and his son were indicted on charges of embezzling more than $500,000 from nonprofit health-care clinics in the Bronx section of New York City. From 2005 through 2009, Espada, 57, and his son, Pedro Gautier Espada, 37, abused their positions at Soundview Healthcare Center in the Bronx, which gets more than $1 million a year in federal funding, according to U.S. Attorney Loretta Lynch in Brooklyn, where the case is filed. “The indictment alleges that funds that could and should have been applied to purchase medical equipment and enhance health-care services for an historically under-served population were diverted by the defendants for their personal use,” Lynch said today in a statement. Attorney General Andrew Cuomo in April accused Espada in a civil lawsuit of taking $14 million over five years from his Bronx health clinics. In September, Espada was defeated in the Democratic primary for his Bronx seat. He and his son are scheduled to make their initial court appearances tomorrow. “Today is a sad day for Soundview and a sad day for the Espada family,” Espada’s lawyer, Susan R. Necheles of Manhattan, said in an e-mailed statement. “Senator Espada and his son deny any wrongdoing and we intend to fight the charges in court.” Russell M. Gioiella, a lawyer for Espada’s son, didn’t immediately return a call for comment. ‘Obnoxious Abuse’ Cuomo, in a conference call with reporters today, called Espada’s case “one of the more outrageous abuses of public office.” Cuomo, who will become governor in January, said he couldn’t leave the attorney general’s office “on a better note.” “He was looting Soundview to pay for a lavish lifestyle,” Cuomo said. “It was really an obnoxious abuse of the taxpayer. The Espadas are each charged with four counts of embezzlement and one count of conspiracy. Each embezzlement count carries a maximum sentence of 10 years’ imprisonment. The conspiracy count brings as many as five years. In Cuomo’s earlier lawsuit, he claimed that Espada charged the clinics for $20,000 in takeout sushi dinners and billed them for $250,000 in personal expenses. The clinics spent more than $100,000 on campaign literature for Espada’s 2008 Senate bid, Cuomo said. Cuomo also sued Espada a second time, saying he cheated clinic workers by designating them as “trainees” to avoid minimum-wage laws. Senate Defection Espada called the civil charges “political payback” for his temporary defection to the Republicans last year, which resulted in a monthlong Senate deadlock. Governor David Paterson, a Democrat, appointed Richard Ravitch as lieutenant governor, giving him the tie-breaking vote in the Senate. That brought Espada back to the Democratic caucus, which then made him majority leader. “This case predated anything having to do with the Senate coup with Mr. Espada,” Cuomo said today. The case is U.S. v. Espada, 10-cr-985, U.S. District Court, Eastern District of New York (Brooklyn). --With assistance from Karen Freifeld and Henry Goldman in New York. Editors: Stephen Farr, Fred Strasser.
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Controversies Facing Pedro Espada Pedro Espada Storms Off TV Set When Asked About Residence: STORY HERE Pedro Espada claims a co-op in Bedford Park as his district residence. However, his primary residence is a $700,000 house in the expensive Westchester County suburb of Mamaroneck. Several residents of the Bronx co-op say they never see him there. The Bronx District Attorney has opened an investigation, the resulting media attention forcing Espada to move into his vacant Bronx apartment. By the time Espada was elected to the Senate in 2008, he owed in excess of $60,000 in fines to the New York City Campaign Finance Board related to races as far back as his 2001 run for Bronx Borough President. The campaign for his 2008 State Senate run had not registered with the New York State Board of Elections and fines were assessed against Espada's 2000 Senate campaign for required reports that had not been filed. Espada acknowledged that mistakes had been made but insisted that some of the accusations were unfair. Steven Pigeon, who is a former Erie County, NY Democratic chairman is currently the counsel to Espada. Mr. Pigeon's name has been mentioned in connection with an election scandal in 2007 of the county executive campaign of former West Seneca Supervisor Paul T. Clark. Erie County’s Republican elections commissioner has alleged that former Democratic Chairman G. Steven Pigeon laundered thousands of dollars from Buffalo Sabres owner B. Tom Golisano’s political committee and others in an attempt to conceal the origin and circumvent contribution limits, in violation of state election law. Espada is also being investigated by federal investigators and the IRS for his ties with a consulting firm called "A-1 Multi-Service LLC" over suspicions that the firm, which appears to not have a valid office, may be a shell company for tax fraud and money laundering. On April 29, 2010, Espada was hit with yet another civil lawsuit for allegedly pocketing $1.35 million in a sham job trainings program. The suit focuses on "Espada Management Company," a company run by Espada's son and the company that was hired to provide janitorial services for Espada's Soundview Health Clinics. According to the suit, Espada paid the trainees below minimum wage - as little as $1.70/hr - to mop floors and scrub toilets. Soundview Controversy and Investigation Espada has also been repeatedly criticized for unethical usage of the non- profit Soundview Health Clinic for political reasons. In 2000, he was acquitted on charges of using $200,000 from a Soundview HMO in order to pay off campaign debts from 1996. He was found not guilty by arguing that the HMO was allowed to do as it wished with federal money. Four employees were found guilty of using taxpayer funds to help the campaigns of Espada and his son. In 1996, he was indicted for using $70,000 from a city-financed HMO to fund his unsuccessful reelection campaign. As of 2009, New York State Attorney General Andrew Cuomo was investigating Espada's use of the Soundview Health Clinic for personal political reasons. Clinic offices also advertise Espada's name on the front canopy, display campaign posters on clinic grounds, and display posters of Espada surrounded by smiling children. In 2002, the State of New York pulled funding for some of his non-profits due to "administrative deficiencies and apparent misuse of funds." On April 20, 2010, New York State Attorney General Andrew Cuomo formally sued Espada for siphoning $14 million from Soundview Health Clinic for personal expenses. The lawsuit covers 5 years of spending, expenditures which include $80,000 in restaurant bills (which includes $20,000 in sushi delivered to Espada's Mamaroneck home), personal trips - including to Las Vegas and Puerto Rico - and renting a residence required to establish residency in the district for his Senate race in 2008. Attorney General Cuomo stated: "Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the state Senate majority leader makes it especially reprehensible. In New York, no one is above the law, and this suit should finally make that clear to Senator Espada." The investigation is ongoing and, though there are currently no criminal charges, they may be forthcoming. The lawsuit also seeks to remove Espada from the board of directors of Soundview and replace the current board, which Cuomo has characterized as not an independent body, and "packed with family and friends that Mr. Espada could control directly and indirectly." Federal and IRS agents raided two of Espada's offices in the Bronx on April 21, 2010 and his office records were subpoenaed the following day. When being interviewed by WCBS-NY, Espada walked out of the taping of the show "Eye on New York" on April 24, 2010, after reporter Marcia Kramer revisited issues of his actual residence. Espada got testy when Kramer reminded him that when she approached him last year outside his Mamaroneck home, he donned an orange ski cap and held a baby in front of his face to hide from the camera before speeding off in a car driven by his wife. In "Up Close with Diana Williams" on WABC-NY, Espada's defense has been characterized as turning personal against Andrew Cuomo. Espada has repeatedly called Attorney General Cuomo the "Prince of Darkness" and claims Cuomo's success to be because of the success of his father, former Gov. Mario Cuomo. Reactions to the Espada Investigations Several state senators, including fellow Democrats Sen. Neil Breslin, Sen. Darrel Aubertine and Sen. David Valesky, have called for Espada to step down from his leadership positions in the New York State Senate. State Sen. Martin Golden of Brooklyn has also introduced an amendment that would force Espada from his majority leader position. Nassau County District Attorney Kathleen Rice also says that Espada "cannot lead anymore" amid the investigations against him. State Sen. Eric Schneiderman, a declared Democratic candidate for New York State Attorney General this year, also called for Espada to not only step down from his senate position, but also forfeit his stipend. On June 9, 2010, residents from the 33rd Bronx district, which Espada currently represents, descended upon Espada's out-of-district Mamaroneck home in Westchester County to protest for his ousting. On August 3, 2010, Pedro Espada was confronted with protestors at the State Capitol. Espada reacted angrily, took out some money, crumpled it and threw it at the protestors.
"I really wanna care. I wanna feel somethin'. Let me dig a little deeper:. No, My give-a-damn's busted"~ Jo Dee Messina
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