Former Queens State Senator Hiram Monserrate pleaded not guilty to political corruption charges in Manhattan federal court Tuesday.
Monserrate surrendered to face charges that in 2006, as a City Council member, he allegedly helped to steal tens of thousands of dollars of taxpayer money intended for community services. Instead, sources tell NBCNewYork he used the stolen cash in part to pay his campaign workers.
Monserrate treated money allocated to the nonprofit group LIBRE, which was meant to help the community, as his own "political piggy bank," said Manhattan US Attorney Preet Bharara.
LIBRE, the Latino Initiative for Better Resources, was funded by the City's Department of Youth and Community Development. But more than $200,000 dollars issued to this community group was unaccounted for, according to sources familiar with the case.
While a City Council member, Monserrate diverted about a third of $300,000 in taxpayer funds that he had procured for the nonprofit LIBRE, the indictment said. He used that $109,000 to finance his failed 2006 State Senate campaign, spending it on a voter's registration drive, canvassing and a petition drive and to pay LIBRE employees for this work, Bharara said.
"No campaign should ever be funded by fraud," said Bharara. "Public officials who act like they they are above the law may get away with it for a while, but eventually we will find you and we will prosecute you."
LIBRE's former executive director, Javier Cardenas, pleaded guilty Monday to mail fraud and conspiracy to commit mail fraud and is cooperating with the investigation, said Bharara.
The city Department of Investigation Commissioner called Monserrate "a corrupt official charged with manipulating the public funding of a nonprofit for his personal campaign."
The 14-page indictment charges Monserrate with one count of conspiracy to commit mail fraud and one count of mail fraud -- charges that each carry a maximum prison term of 20 years.
"LIBRE's stated mission, for example, was to provide assistance to the very community this defendant represented," said DOI Commissioner Rose Gill Hearn. "But in reality, Hiram Monserrate's political ambition became the main beneficiary, as charged in the indictment."
Monserrate and at least one worker at his Queens office are accused of faking expense reports in 2006 as well as other billings to improperly collect the money, sources said. At the time, Monserrate was in a heated campaign to try to win a state senate seat.
In the past, Monserrate has denied any wrongdoing in connection with 'Libre' and its accounting. City officials cut off funding to the group several years ago when questions were first raised about how the organization was using the tax dollars it received.
Outside of court Monserrate stood silent as his defense attorney, Joe Tacopina, said he would vigorously fight the charges.
"Obviously he's disappointed to have to go through the process again and to be here," said Tacopina. "He's had a rough couple of years and wants to get on with his life and is going to do it."
Monserrate was convicted last December on an unrelated misdemeanor assault charge for attacking his girlfriend, Karla Giraldo. He was sentenced to probation and counseling, and was subsequently expelled from the State senate by a vote of his colleagues in February. Monserrate then lost an attempt to win back his senate seat at the polls. He later tried to run for the state assembly from the same area, but lost that race as well.
Giraldo was a no show but Monserrate's parents were in the Manhattan courtroom for his arraignment. His parents parents put up their home as a guarantee for the $500,000 personal recognizance bond that was Monserrate's bail.
A city official said 'Libre' has long been suspected of 'improprieties in bookkeeping." The official said a city audit first exposed the alleged wrongdoing. The matter was then referred to the city's Department of Investigation.
Queens District Attorney Richard Brown - whose office helped start the corruption probe - issued a statement saying Monserrate used taxpayer funds for his "own political machine."
"His alleged misconduct represents a betrayal of the public trust," Brown said.
In the summer of 2009, Monserrate was one of two democratic state senators who briefly switched party allegiance, throwing state government into chaos for weeks. He eventually switched back to support Democrats.