Albany NY Medicare fraud: NY Senate majority leader accused of taking over $14M

2010-04-27 01:25:26 (GMT) (JusticeNewsFlash.com - Criminal law, Justice News Flash)

Wiki Image: Senate majority leader, Pedro Espada Jr., accused of taking millions from clinics.

Legal News for New York lawyers handing Medicare fraud cases. Senate majority leader, Pedro Espada Jr., accused of taking millions from clinics.

Andrew M. Cuomo filed a civil lawsuit against Senate majority leader, Pedro Espada Jr. for taking money from health care clinics for personal use.

Albany, NY—The Senate majority leader, Pedro Espada Jr., is being accused of taking over $14 million for personal and luxury expenses from a network of nonprofit health care clinics that he founded. Attorney General Andrew M. Cuomo filed the civil lawsuit against Espada, which also accuses his family and his political aides of using the network as a “personal piggy bank,” as reported by The New York Times.

According to the lawsuit, Mr. Espada who is a Bronx Democrat, is accused of draining money from the Comprehensive Community Development Corporation through his relatives and Senate employees who sit on the board. The money was reportedly used to pay for expenses over the lat five years, including $20,000 worth of take-out sushi and $50,000 for a Bronx apartment, where he allegedly dose not live at. In addition, he was given a $9 million severance package, which would ultimately leave the clinics bankrupt if he were to cash it out.

The lawsuit, which is also part of a continuing investigation by Mr. Cuomo, is asking to remove Mr. Espada as the president of the nonprofit corporation, which receives majority of its monetary funding from the federal state and local governments to run four health clinics in the Bronx. A total of 19 current and former directors of the corporation, in addition to Mr. Espada, are asked to be removed from the board by the suit.

The money was reportedly used to pay for Mr. Espada’s Mercedes-Benz, vacations for the senator and his family to Las Vegas, Miami and Puerto Rico; in addition to at least $100,000 worth of campaign literature that was funded by one of the clinics, Soundview HealthCare Network.

Federal officials are also looking into possible money laundering activities and whether Mr. Espada actually lives in his Bronx Senate district, as required by law.

According to the complaint, “As an outside accounting firm tried to clean up Soundview’s books in 2007, a Soundview official directed the accountants to ensure that Mr. Espada and his family were paid before any other financial obligations were met, including Soundview’s rent and utilities.” The suit also contends that “the clinics failed to pay hundreds of thousands of dollars in payroll taxes, an omission that led state officials to cancel a $3 million contract last year that would have allowed Soundview to build a new clinic.”

Legal News Reporter: Nicole Howley-Legal News for New York lawyers handing Medicare fraud cases.