Wednesday, September 19, 2012

Ex-Sen. Espada Jr. helped himself to one last payday by taking money from sale of Bx. clinic: court papers

Last Updated: 1:57 PM, September 19, 2012
Posted: 11:49 AM, September 19, 2012

Disgraced former State Sen. Pedro Espada helped himself to one more big payday, selling off tattered remains of his Bronx health clinic and pocketing the dough, prosecutors said in court papers unsealed today.
The US Attorney’s Office in Brooklyn is asking a federal judge to revoke bail and lock up Espada, who was convicted earlier this year of using his Soundview Health Center as his personal slush fund.
Brooklyn federal judge Frederic Block ordered everyone to court for a hearing on Friday.
Following Espada’s May 14 conviction, state and federal authorities moved in and prevented the disgraced pol and his family from operating the clinic, which served poor patients in the south Bronx.
Chad Rachman/New York Post
Former New York Sen. Pedro Espada
Espada’s family then secretly sold medical equipment, other assets and rights to Soundview’s lease on White Plains Road to a new operator, the Institute for Family Health, for $600,000, prosecutors said.
That’s when pol’s son Alejandro Espada took out more than $350,000 and doled it out to to himself, his dad, brother Pedro Gautier Espada and other accounts close to the family, according to federal prosecutors.
"The defendant has demonstrated that he cannot be trusted to follow the court’s rulings, and, as a result, the Court should revoke the defendant’s bail and remand him into custody,” wrote Assistant US Attorney Todd Kaminsky.
A defense lawyer for Espada could not be immediately reached for comment.
The allegedly looted dough was intricately spread through several accounts, feds said:
--Soundview Management Enterprises, Sen. Espada’s janitorial company that cleaned the clinic, allegedly received $104,000 on June 29 -- even though the cleaning firm hasn’t worked at the Bronx clinic for the past two years.
Less than a week later, Sen. Espada allegedly took out $50,000 cash from Soundview Management Enterprises and made out a $45,000 cashier’s check to his wife. Espada’s wife then deposited that draft into her own bank account and withdrew the same amount of cash
--Sen. Pedro Espada, sons Pedro Gautier and Alejandro got $40,000, $42,045 and $38,000, respectively, from the big sale.
--Soundview Health Group, a shell company under family control, got $81,500. Judge Block issued an order yesterday, freezing all funds that came from Soundview Health Group.
--Sen. Espada’s former defense lawyer, Susan Necheles, also allegedly got $50,000 from the big, final sale.
“These transactions appear designed to hide the defendant’s assets from the court,” Kaminsky wrote.
Feds said they still haven’t accounted for all $600,000 and believe the family has pocket the loot though several accounts: "At present, records show that the defendant has no more than a few thousand dollars maintained in any single bank account."
Feds claim the shady money transaction violates terms of Pedro Espana’s bail, which bar him from any involvement with Soundview.
Espada is on the hook for court-ordered restitution expected to be set at $500,000, $2 million to judgement creditors and $1 million to the IRS in unpaid payroll taxes. No funds from this allegedly crooked sale went to pay those debts, prosecutors said.
Espada is free on bail, pending his appeal on the May 14 convictions. He’s awaiting retrial on federal charges that hung in front of Brooklyn jurors in May.
Pedro Espada and son Pedro Gautier Espada are both fighting tax fraud charges in another matter that’s set for trial in Manhattan federal court.
Additional reporting by David K. Li

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