Councilman Pleads Not Guilty to Extortion, Fraud Charges

Feds say Democrat got his friends and family in on the action

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    City Councilman Larry Seabrook could be facing a slew of charges.

    A Bronx City Councilman surrendered Tuesday to face federal charges of money laundering, extortion and fraud.

    Larry Seabrook, a three-term councilman and former state senator was charged in a 13-count indictment  unsealed in Manhattan federal court.

    In a brief court appearance, he pleaded not guilty to the charges. He was released on $500,000 bond.

    The indictment allege that he tried to cheat the city of at least $2.5 million in council discretionary funds, funneling hundreds of thousands of dollars to his girlfriend and relatives, charging the city $177 for a bagel sandwich and spending $10,000 on a written report that was only six pages long.

    He has been under a cloud of suspicion for months over alleged misuse of funds involving Bronx non-profit organizations. 

    Prosecutors accused Seabrook Tuesday of diverting more than $1 million in taxpayer money to family and friends as well as shaking down a Yankee Stadium boiler subcontractor for $50,000.  

    "Councilman Seabrook basically operated his own corrupt city council funded friends and family plan," said Manhattan US Attorney Preet Bharara.

    Seabrook's girlfriend allegedly received about $370,000 -- the bulk of about a half million dollars in total that he also spread around to his brother, two sisters, and a nephew.

    Seabrook is also accused of spending the money on airfare to Florida, department store gift cards, luggage, parking fines and flowers for his sister, according to the 13-count indictment unsealed Tuesday.

    Seabrook's attorney, Murray Richman told NBCNewYork that they "are going to enter a plea of not guilty."  He added that they "deny each and every one of the allegations.  There is no basis in fact for any of them."

    In a statement, the Yankees said they  have cooperated fully in this investigation and are "simply a fact witness" and "there was no knowledge by anyone in the New York Yankees organization of  any wrongdoing."

    The indictment follows after a year of local and federal scrutiny of the city council for alleged improprieties in the way lawmakers used discretionary funds.

    In another creative expense "that he had not incurred," Seabrook submitted four separate receipts for gas from the same station pump ithin the span of 45 minutes, the indictment said. 
      
    Prosecutors say he funneled the stolen money to seven so-called on-profit groups that "that were basically his own alter egos," said Bharara. The councilman negotiated the leases for these allegednon-profits, packed their boards with his relatives and friends and created  their budgets, according to the charges.

    From 2002 to 2009, Seabrook tried to funnel at least $2.5 million in discretionary funds meant to help legitimate non-profits benefiting the community, officials said. Due to the ongoing probe of such "slush fund" city council spending, he stole only about half his goal, about $1 million dollars, said Department of Investigation Commissioner Rose Gil Hearn.

    Seabrook also inflated the rents these shady nonprofits paid, defrauding the city of more than $100,000 dollars, according to the indictment.
     
    The Bronx councilman was charged with receiving corrupt payments, fraud, conspiracy and money laundering.
         
    Council Speaker Christine Quinn said: "All of us in the City Council take the deeply troubling allegations against Council Member Larry Seabrook very seriously."

    Thus far, the ongoing slush fund probe has netted three convictions -- former City Councilman Miguel Martinez, who is serving five years in prison on corruption charges. Two former staffers to former Brooklyn councilman Kendall Stewart were convicted on embezzling charges.

     

    Jonathan Dienst WNBC

    WNBC Jonathan Dienst