FBI, IRS raid NY state senate leader’s Bronx clinic one day after state AG files civil action

FBI, IRS raid NY state senator’s Bronx clinic

NEW YORK — Federal authorities raided a government-funded health clinic Wednesday run by New York’s state Senate majority leader a day after he was accused of siphoning $14 million from the nonprofit operation.

Attorney General Andrew Cuomo confirmed that his office is assisting Brooklyn federal prosecutors in a corruption probe of state Sen. Pedro Espada Jr., with potential charges that could include mail fraud, wire fraud, theft of government funds and conspiracy.

In a civil lawsuit Tuesday, Cuomo accused Espada and relatives and friends on the clinic’s board of looting clinic funds for lavish restaurant meals, trips to Las Vegas and Espada’s campaign. Cuomo said Wednesday it was clear Espada had broken the law.

But Espada called the federal raids “an invasion” and denied any wrongdoing. He accused Cuomo of staging a politically motivated vendetta against him.

Espada was a leader of a Republican-backed coup last summer that he claims is motivating Cuomo’s lawsuit. Espada later rejoined the Democrats and received the majority leader title.

About a dozen FBI and IRS agents and investigators from Cuomo’s office spent eight hours Wednesday at the Soundview Healthcare Network in the Bronx, where a canopy above the front door lists Espada as its president and CEO.

Agents used bolt cutters to open an 8-foot-tall, 25-foot-long storage container behind the building and removed Espada campaign posters and other items. More than 30 boxes of files and materials were carted away in a van. Agents wearing blue or green gloves leafed through the contents, taking notes.

One box was marked, “Payroll 205.” Another said “Timesheets 205-206.”

In a late afternoon news conference, Espada said he would fight the “false and unfounded allegations made by the attorney general.” He called the raids “a media circus, a media show.”

“The attorney general wants to create this impression of wrongdoing when there is no wrongdoing,” he said.

Espada brushed aside several specific questions about the charges.

Cuomo’s civil action accuses Espada of diverting the clinic’s funding charitable assets to himself, relatives, friends and his political operation.

FBI spokesman James Margolin would not comment on what was seized from the clinic. A search warrant affidavit was sealed. The IRS declined to comment Wednesday.

In the civil suit, Cuomo also accused Espada of getting Soundview’s board, which he controls, to give him a guaranteed $9 million severance package that, if ever paid out, would bankrupt the clinic.

In 2004, then-Attorney General Spitzer charged two of Soundview’s vice presidents, Espada’s executive assistant and a clinic director with grand larceny and scheming to defraud. Two of them were accused of filing false reports, a concern Cuomo raised in his civil lawsuit on Tuesday.

Espada was not charged, but he and his campaign were later fined $61,000 by the city for campaign-finance violations involving Soundview employees who had been reimbursed for their contributions.

Cuomo’s lawsuit broaches the use of clinic money for campaign contributions, but a state Board of Elections spokesman said the allegations appear to center on tax law — with potential federal law enforcement jurisdiction — more than state election law.

The clinic remained open to patients throughout Wednesday’s raid.

Solsire Bobet, who was at the clinic with two toddlers for test results, described the clinic as “my second home” and said she came to the facility to see the dentist and for care during her four pregnancies.

“For everything I come here,” she said, adding she knew about Espada. “I know he is responsible for this place.”

Outside, a huge sign in the grass bears a picture of Espada surrounded by smiling children and a list of clinic services.

Espada was excused from the legislative session for the day but little was done in his absence. Without him, the Senate’s Democratic majority lacked the 32 votes needed to pass any legislation without Republican support and adjourned after less than an hour. With a state budget three weeks overdue and major legislation pending, the session had been expected to last several hours.

Associated Press writers Tom Hays and David B. Caruso in New York and Michael Gormley in Albany, N.Y., contributed to this report.