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N.Y. accuses state senator of charity scam

N.Y. Attorney General Andrew Cuomo announces a lawsuit claiming the majority leader of the state Senate siphoned $14 million from his government-funded clinic in the Bronx.
/ Source: The Associated Press

The majority leader of the state Senate siphoned $14 million from his government-funded clinic in the Bronx, Attorney General Andrew Cuomo said Tuesday as he announced a lawsuit against fellow Democrat Pedro Espada Jr.

The suit also names 19 other current and former officials of Espada's Comprehensive Community Development Corp., known locally as Soundview.

Cuomo said Espada diverted charitable assets to himself, relatives, friends and his political operation.

There was no immediate comment from Espada, who had called Cuomo's investigation a "witch hunt" to boost the attorney general's political career. Cuomo is widely expected to run for governor this fall but has not announced his candidacy.

Cuomo said the dealing included a severance package for Espada worth $9 million. Cuomo said the CEO and the Soundview board, which he said is "packed" with Espada's friends and relatives, approved the 2005 transaction. Cuomo said most of the clinic's funding is from the state and federal governments.

"Siphoning money from a charity would be egregious under any circumstances, but the fact that this was orchestrated by the state Senate majority leader makes it especially reprehensible," Cuomo said. "In New York, no one is above the law, and this suit should finally make that clear to Senator Espada."

Espada is the freshman senator who was instrumental in the coup that gridlocked the chamber last summer. The impasse ended when he left the Republican-led coalition to return the majority to Democrats, each time extracting a lucrative leadership title.

Cuomo said the clinic spent about $80,000 in restaurant bills for 650 meals for Espada or his supporters — an average of about $120 per meal — including more than 200 meals worth $20,000 at two sushi restaurants where Espada frequently ordered takeout. Cuomo also claims that funds were inappropriately used for Espada trips, including to Las Vegas and Puerto Rico and to rent a residence required to establish residency in the district for his Senate race in 2008.