NEW YORK (Legal Newsline) - New York Attorney General Andrew Cuomo has filed a lawsuit against Senate Majority Leader Pedro Espada Jr. for looting a Bronx-based not-for-profit.
Nineteen current and former officers of the Comprehensive Community Development Corporation, also known as Soundview, were also named in the lawsuit.
Espada, a Democrat who serves as Soundview's president and CEO, is alleged to have diverted charitable assets, using the money for himself, his family, friends and political operation.
Cuomo alleges that Espada has siphoned more than $14 million from Soundview in the past five years, including an unconditionally guaranteed severance package worth an estimated $9 million that was put into a contract signed in 2005.
The transactions were approved by the Soundview Board, which is packed with family, friends and Senate employees of Espada, and the not-for-profit's chief financial officer, Cuomo claims.
The lawsuit seeks to hold Espada and CFO Kenneth Brennan liable to pay restitution and damages, to declare Espada's severance package void and unenforceable and to enjoin any payment by Soundview to Espada pursuant to his employment contract.
Additionally, the lawsuit seeks to enjoin Espada, Brennan or anyone working with them from using Soundview funds and to enjoin Espada, Brenn and other defendants from serving as officers, directors, trustees or equivalent positions of Soundview or any other not-for-profit.
Pedro Espada Jr. founded Soundview with the purpose of providing healthcare to the people of the South Bronx. The vast majority of the not-for-profit's funding is received from the state and federal government.
"Taxpayer money was given to this not-for-profit to provide healthcare services to underprivileged patients, but our investigation has found the funds flowed into the pockets of Senator Espada and his supporters," Cuomo said.
"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.
"In New York, no one is above the law, and this suit should finally make that clear to Senator Espada."
Cuomo's investigation found that, in addition to the $9 million severance package that unconditionally guarantees the payment of one year's gross pay for every year of service, approximately $80,000 in restaurant bills for 650 separate meals was paid by Soundview for Espada or his supporters. Included in that amount was $20,000 in regular orders from Espada's wife from two sushi restaurants that were delivered to the Espada home in Mamaroneck.
Trips for Espada, his wife and his family to Las Vegas, Miami and Puerto Rico, purported to be business trips, were also paid for by Soundview, which provided Espada with a corporate American Express card, Cuomo claims. More than $450,000 was charged by Espada on items he identified as personal from 2006 through mid-2009, Cuomo claims.
Improper funding of Senator Espada's political operations were also found by the investigation, which revealed that more than 150,000 pieces of Espada's campaign literature, at a cost of $100,000, were paid for by of funneled through Soundview, which routinely paid for political campaign expenses on Espada's American Express card.
Soundview resources and employees were also found to have been used in Espada's campaign effort.
Soundview, which has failed to pay hundreds of thousands of dollars in payroll taxes, pays Espada's bills on time, Cuomo claims. The company owed $700,000 in federal payroll taxes in 2008 but paid Espada's $250,000 in personal credit card charges on time, Cuomo says. The directive, Cuomo's investigation found, was to pay Espada and his family before any other vendor or financial obligation.