New York and federal authorities on Tuesday indicted a high-ranking state senator and his son on six charges that they embezzled more than $500,000 from their New York City health clinic for lavish spending, including Broadway shows, a down payment on a Bentley automobile, and a pony for a birthday party.
Democrat Sen. Pedro Espada, the Senate majority leader who lost his fall re-election bid, and his son Pedro Gautier Espada are accused of taking money from Comprehensive Community Development Corp., a federally funded not-for-profit in the Bronx known as Soundview, which the senator founded 30 years ago.
Espada vowed to fight the charges.
Money that Espada and his son used to benefit themselves, as well as friends and family members, should have been spent on medical equipment and improving health care services in the impoverished neighborhood, said U.S. Attorney Loretta Lynch in Brooklyn.
“In these difficult economic times, the charged crimes are all the more reprehensible,” Lynch said.
State Attorney General Andrew Cuomo said taxpayer funds since 2005 were diverted for the Espadas’ personal use, including Broadway shows and fancy meals claimed as business expenses.
The indictment claims Espada used $49,000 from a Soundview subsidiary as a down payment on a $125,000 Bentley and $14,000 in tickets for sports and shows including Mamma Mia!, Jersey Boys, Mary Poppins, the Radio City Music Hall Christmas Spectacular and a Kenny G concert. The dealership never cashed the check for the car because Espada’s application to finance the purchase was rejected.
He also allegedly charged $110,000 in personal meals to a Soundview corporate American Express card. He spent $20,482 at just one restaurant, Toyo Sushi, near his home in Mamaroneck, N.Y., according to the indictment.
“There was no doubt he and his son were looting Soundview for a lavish lifestyle,” Cuomo, a Democrat, told reporters. He said the “cruel twist” was “they were using funds that were supposed to go to poor people.”
The elder Espada’s attorney, Susan R. Necheles, said the senator denies any wrongdoing in what Espada has called a political witch hunt.
“Soundview has provided high quality health care to thousands of families, children and senior citizens in the Bronx,” Necheles stated. Today is a sad day for Soundview … we intend to fight the charges in court.”
Hours before the indictment, Espada had issued a year-end report of the majority leader. He took credit for some legislative reforms in the Senate and said more are needed to make lawmakers accountable.
“I am proud to have served as the catalyst for this reform,” he stated in a press release Senate Democrats wouldn’t pay for.
After the indictment was released, Espada was immediately stripped of his majority leader title and removed as the Senate’s housing committee chairman.
Cuomo, who will become governor in January, said they could face up to 10 years in prison on each of five embezzlement charges, five years for the single conspiracy count and fines of $250,000 on each charge.
Authorities also alleged the men used a for-profit janitorial company to divert Soundview funds and spend it on rent for his campaign headquarters, pony rides and a petting zoo at a birthday party, and that Espada attempted to use a $49,000 check as a down payment on a Bentley automobile.
In earlier civil suits, which are still pending, Cuomo accused Espada of siphoning $14 million from his government-funded clinic, breaching his fiduciary duty, and seeking to remove him from the board.
“There’s a culture in Albany that has been too tolerant of legal violations and ethical absences,” Cuomo said. “As governor-elect I tell you I’m going to attack it as the next governor of the state of New York.”
Authorities said the difference in amounts represents liabilities on the Soundview books not yet spent, including a severance package of at least $9 million that Espada asked the board to guarantee him if he he was ever fired from the nonprofit.
Espada had called the court filings a politically motivated witch-hunt by Cuomo.
Espada and former Democratic Sen. Hiram Monserrate of Queens last year briefly joined with Republicans to form a coalition that claimed majority control of the Senate, with Espada in a leadership role, leading to a month of gridlock.
Espada and Monserrate later returned to the Democrats, with Espada named majority leader.
Monserrate was later expelled by the Senate because of his conviction for misdemeanor assault in a domestic incident.
Copyright © 2010 The Associated Press