Feds, AG's Office Raid Espada's Bronx Nonprofit - NBC New York

Feds, AG's Office Raid Espada's Bronx Nonprofit

Raid comes a day after Cuomo accuses senator of siphoning $14 million from health clinic



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    Investigators executed a search warrant this morning on the Bronx nonprofit of Senate Majority Leader Pedro Espada, who is accused of looting millions of dollars from the government-funded health clinic.

    About a dozen FBI and IRS agents in cooperation with investigators from Attorney General Andrew Cuomo's office appeared at the Soundview Healthcare Network in the Bronx this morning where they removed items from a large storage container behind the building. They also stacked boxes on the grass, leafing through their contents and writing notes.

    The raid was "part of an ongoing investigation," Rich Bamberger told NBCNewYork.

    Attorney General Cuomo filed a civil suit in Manhattan Supreme Court yesterday alleging Espada and his family siphoned more than $14 million over five years out of Soundview, a clinic he founded to provide care to the people of the South Bronx.

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    [NY] Investigators Pull Files from Espada's Nonprofit
    State and federal officials pull documents from Sen. Pedro Espada's nonprofit.
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    The suit also accuses the Democrat, who serves as President and CEO of Soundview, of packing the board with relatives and Senate employees to rubber stamp expenditures designed to line their own pockets, buy lavish meals and trips to Las Vegas.

    In a press conference last night, Espada accused Cuomo of using a civil lawsuit against him as political payback for the Bronx politician's role in a Senate coup last summer.
    Espada said Cuomo was encouraging the partisan political coup, which froze New York state government last summer for more than a month. Espada refused to comment on the suit, except to say that he would address the issues in court. Espada also accused Cuomo of wiretapping his home.

    Cuomo's lawsuit names 19 current and former officers and directors of Soundview in addition to Espada, and marks the first official charges filed against the Bronx politician amid a variety of ongoing probes.

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    "It dwarfs anything we've even seen ... one year's bonus for each year worked," Cuomo said of the severance package on an afternoon conference call regarding the investigation. "Senator Espada and his family used Soundview as its piggy bank."

    Cuomo's investigation found that Soundview paid about $80,000 in restaurant bills for 650 meals for Espada and his supporters, including more than 200 meals totaling $20,000 from two sushi restaurants that regularly received orders from Espada's wife and delivered to the politician's home in Mamaroneck. 

    The suit, part of Cuomo's ongoing investigation, also alleges that the health clinic paid for family vacations as purported business trips, and that it gave him an essentially unlimited line of credit on a corporate American Express card on which he racked up nearly half a million dollars in charges he later identified as personal.

    Cuomo's office also found that Soundview gives Espada 14 weeks of annual leave on the first of each year before it accrued, enabling the senator to convert the time off into cash to offset personal expenses, including legal fees. Soundview thus allegedly extended Espada more than $75,000 in credit -- a violation of the state's nonprofit law.

    Asked whether Espada's alleged misconduct highlights a need for nonprofit law reform, Cuomo said changing the law isn't the answer.

    "The answer here is not that we need a new law ... the not-for-profit laws are clear," the attorney general said. "The answer here is that someone simply broke the law."

    Espada said He said "will be responding to this complaint in the near future and will continue to work as Majority leader doing the work the people of the 33rd district elected me to do."