Senate Leader Espada Charged with 'Looting' $14M
Tuesday, April 20, 2010
New York, NY —
Senate Majority Leader Pedro Espada has been charged by the state Attorney General with stealing more than $14 million dollars from a Bronx not-for-profit run by the Senator and his family.
Attorney General Andrew Cuomo has filed a lawsuit against Senator Espada alleging he “looted” more than $14 million from a Bronx organization that he controls, a scale of fraud that Cuomo says he’s never before seen at a not-for-profit.
“It is outrageous,” said Cuomo.
The organization, known as Soundview, provides health care to lower income residents of the South Bronx, and is financed with taxpayer money in the form of state and federal health grants. But Cuomo’s lawsuit claims that the not-for-profit also provided Espada with a lucrative living. It charges Espada siphoned millions from the charitable organization, including a $9 million severance package, $80,000 in restaurant bills, and $450,000 charged to a corporate credit card for personal expenses. Soundview also paid for vacations for the Senator and his family to Las Vegas, Miami, and Puerto Rico, which the Attorney General says were falsely claimed as business trips.
Cuomo says Espada was able to do all of this because he controlled Soundview by stacking the board of directors with family, loyal friends, and Senate employees.
“He had control and domination over them,” said Cuomo.
Espada says the charges are a litany of mischaracterizations and falsehoods and says he's being punished for leading a Senate coup last summer.
Espada was a central figure in that Senate coup, which paralyzed the chamber for over a month. Espada, a Democrat, sided with Senate Republicans for a month, and split the Senate into two factions with 31 members each. Although Espada holds the title of Majority Leader, Senate Democratic Leader John Sampson currently leads the Senate.
The attorney general's lawsuit seeks to remove Espada from the Soundview board, force him to pay restitution, and declare his $9 million severance package null and void.
The investigation also found Espada had a fondness for sushi, charging 200 take out meals from a Mamaroneck restaurant, and delivered to his Mamaroneck home. Cuomo was asked what conclusions could be drawn from the take-out bills.
“He likes sushi,” said Cuomo, in jest.
The sushi bills are significant because they could establish a case for other potential charges against Espada. It’s been alleged that the Senator does not actually live in his district, and the take out orders could provide a paper trail of days spent in Mamaroneck, which is outside his district.
The lawsuit also alleges that Espada paid for a Bronx apartment with proceeds from the not-for-profit, an apartment that established the Senator’s residency in his district.
While no criminal charges have been filed against Espada at this time, Cuomo says future criminal charges are a distinct possibility. He says, “Stay tuned."