Tuesday, April 3, 2012

Rent too damn sly! Tenants say Espadas diverted checks

Last Updated: 7:42 AM, April 3, 2012

Posted: 1:17 AM, April 3, 2012

Bronx residents lost weight while Pedro Espada Jr.’s wallet got fatter, prosecutors charged yesterday.

A Weight Watchers manager testified in the former state senator’s federal corruption trial that she rented space in his nonprofit health center — but wrote rent checks payable to a for-profit cleaning company Espada’s family controlled.

The manager, Laurie Stauber, said the weight-loss gurus cut a deal to operate at the Soundview Health Center after an invitation from Norma Ortiz, Espada’s obese top aide, who wanted to become a Weight Watchers client.

DAMNING TESTIMONY: Former state Sen. Pedro Espada Jr. (above) and son Pedro Gautier Espada at federal court in Brooklyn yesterday.
DAMNING TESTIMONY: Former state Sen. Pedro Espada Jr. (above) and son Pedro Gautier Espada at federal court in Brooklyn yesterday.

“Norma Ortiz contacted me and asked me to come in” as a tenant in 1999, Stauber testified in Brooklyn federal court.

At first, there was no charge.

But then the outfit was told it had to cough up $300 a month for rent and make the checks out to CEDC, the acronym for Community Expansion Development Corp., which was run by Espada and his co-defendant son, Pedro Gautier Espada.

Prosecutors charge the Espadas used the cleaning company as their personal piggy bank, funneling money that should have gone to the health center to CEDC to pay for fancy cars, meals and other luxury items totaling more than $500,000. They face up to a decade in prison if convicted of embezzlement and other corruption charges.

Weight Watchers’ rent went up to $500 in 2005, and in November 2008 Ortiz asked that Stauber make the checks out to Soundview Management Enterprises, the new name for CEDC after it was purchased by the nonprofit.

She was one of five witnesses who testified that they rented space at Soundview but were ordered to write checks to CEDC, in some cases for rent and in others for janitorial services.

Two also said they were pressured into making campaign contributions to Espada in 2007.

Dentist Henry Schwartz paid $1,500 rent and $1,000 for janitorial services each month, both to CEDC — and contributed $3,000 to Espada’s campaign.

Under questioning by prosecutors, Schwartz said he felt pressured to make the donation to get a spot in the health center.

Radiologist Boris Kovler said Espada told him he had to pay $2,800 monthly rent to CEDC and $2,500 a month for janitorial services to Soundview Management Enterprises.

“I didn’t question him,” said Kovler, who also gave $6,000 to Espada’s campaign in 2007

Kovler also testified that Espada stole money from him — by billing his patients for services performed by Kovler’s clinic and keeping the money.

jsaul@nypost.com


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