Bloomberg News

Ex-N.Y. Senator Espada Found Guilty in Clinic-Theft Case

May 14, 2012

Pedro Espada Jr., the former New York state senate Democratic majority leader, was found guilty of stealing from nonprofit health-care clinics he runs in the Bronx.

A jury in federal court in Brooklyn, New York, convicted Espada today of four counts of theft, while failing to reach a decision on other counts of theft and conspiracy. The jury failed to reach a verdict on any of the charges against his son, Pedro Gautier Espada.

U.S. District Judge Frederic Block declared a mistrial on the remaining counts after the jury told him they couldn’t reach a unanimous verdict. The judge gave prosecutors until June 5 to decide whether they will retry the Espadas on those counts.

U.S. Attorney Loretta Lynch accused the Espadas of stealing more than $500,000 from Soundview Healthcare Center, which the elder Espada started in 1978 and which gets more than $1 million a year in federal funding.

“The people of the Bronx trusted Pedro Espada to have their best interests at heart,” Lynch said in a statement. “Instead, he abused that trust to the tune of more than half a million dollars.”

Both Espadas declined to comment on the verdict. Jurors declined to speak to the press.

“It’s a sad day for Mr. Espada and a sadder day still for Soundview and its community,” Susan R. Necheles, a lawyer for the elder Espada, said outside the court.

‘Very Resilient’

Necheles, who called her client a “very resilient person,” declined to say whether the verdict would be appealed.

The Espadas were charged in December 2010 when the elder Espada was still in the state senate. He had been defeated that September in the Democratic primary for his Bronx seat. The Espadas engaged in several illegal schemes from January 2005 to February 2010, prosecutors said.

The Espadas were tried on eight counts. Five charged them with stealing from Soundview, one count for each year from 2005 through 2009. They were also charged with conspiring to steal from Soundview, to defraud the U.S. Internal Revenue Service and to commit wire fraud. The theft counts carry maximum prison sentences of 10 years.

In April 2010, Andrew Cuomo, when he was New York’s attorney general, sued Pedro Espada and 19 others in state court in Manhattan. Cuomo accused them of looting Soundview, taking more than $14 million during five years.

Cuomo, who is now governor, sued Espada again a week later over labor violations. The state cases are on hold until the criminal matter is resolved.

‘Public Trust’

“Those who would abuse the public trust have a pointed lesson in the downfall of former Senator Espada,” Cuomo said in an e-mail statement. “My comments at the time I filed the original charges bear repeating: in New York, we will have no tolerance for government corruption.”

At the time, Espada called the civil charges “political payback” for his temporary defection to the Republicans in June 2009, which resulted in a monthlong Senate deadlock.

Then-Governor David Paterson, a Democrat, appointed Richard Ravitch as lieutenant governor, giving him the tie-breaking vote in the Senate. That brought Espada back to the Democratic caucus, which then made him majority leader.

The case is U.S. v. Espada, 10-cr-985, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporters on this story: Tiffany Kary in New York at tkary@bloomberg.net; Ian Thomas in Brooklyn federal court at ianthomas33@gmail.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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