Wednesday, April 21, 2010

Federal FBI, IRS agents raid Pedro Espada Jr.'s Soundview HealthCare Network

Wednesday, April 21st 2010, 9:09 AM

Investigators raided Democratic Senator Pedro Espada's health  non-profit Soundview Health Center a day after Espada was accused of  looting $14M from its funds.
Kamrass/Times Union
Investigators raided Democratic Senator Pedro Espada's health non-profit Soundview Health Center a day after Espada was accused of looting $14M from its funds.

Law enforcement agents descended on the office of Pedro Espada Jr.'s Bronx health care clinic Wednesday morning - dealing yet another blow to the embattled politician.

A team of 10 agents from the FBI and IRS began raiding the Soundview HealthCare Network around 7 a.m.

They unpacked boxes - some marked "payroll" and others labeled "timesheets" - from two trailers behind the building on White Plains Road.

A law enforcement source said investigators for Attorney General Andrew Cuomo were also on site. "It's part of an ongoing investigation with both criminal and civil implications," the source said.

Brian Nadeau from the FBI confirmed the two federal agencies were there, but wouldn't answer additional questions. Some patients were lined up outside the front of the clinic, wondering why the gates were closed.

Others walked into the clinic to find federal agents shuffling around the lobby. Passing motorists honked their horns in celebration.

"This is a bad thing," said Vernelle Jenkins, 69, a longtime patient who was there for dental care. Jenkins said Espada shouldn't have been using Soundview money for personal and political purposes, as Cuomo alleged Tuesday in a civil lawsuit.

"It's stealing at the expense of the people he should be helping," Jenkins said. Muriel Moreno, 48, who was at Soundview for pain treatment, was more blunt.

"He's a crook," she said of the senate majority leader. "These are poor people. He's using us to get away with illegal acts." She added: "He's a bottom-feeder. I'm glad (federal agents) are here, because we need this place clean."

The Daily News reported in Wednesday's editions that the feds are closing in on Espada Jr. in the wake of a state civil suit accusing him of looting $14 million from his taxpayer-funded health clinic.

The News reported that a joint criminal investigation by Cuomo and Brooklyn U.S. Attorney Benton Campbell is zeroing in on Espada for wire and mail fraud, sources said, adding that several search warrants have been issued.

Prosecutors are even considering a racketeering indictment of the Bronx Democrat, built around the allegations outlined in the civil suit.

Cuomo in the civil suit charged that Espada used his not-for-profit health center as a "personal piggy bank" to pay for family trips and $80,000 in restaurant bills - including $20,000 in sushi.

Sources say Espada stuck his health clinic with the tab for $9,480 in JetBlue tickets to San Juan and $20,000 in sports and theater tickets.

"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.

Cuomo said Espada, founder and president of the Bronx's Soundview HealthCare Network, used the organization as a line of credit, running up $450,000 in personal expenses on his corporate credit card and $100,000 in campaign expenses.

He also got Soundview to agree to a $9 million severence package that Cuomo says would bankrupt the health center if it is paid.

Soundview also is paying for Espada's Bronx co-op even though he primary residence is in Westchester County, the AG alleges. He got away with it, the suit alleges, by packing the Soundview board with family members, Senate staffers and other stooges, who rubberstamped his spending and also benefited from the scams.

The suit seeks repayment and the removal of Espada as Soundview's CEO and president, as well as the ouster of the entire board, which rubber-stamped his expenses.

Espada on Tuesday called the suit "lies and falsehoods" and dismissed it as political payback for the Senate leadership coup he helped launch last summer that briefly put Republicans in control.

He cautioned against a rush to judgment. Espada became majority leader after participating in a leadership coup that briefly left the Republicans in charge of the chamber.

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