New York State Senator and son charged for embezzling $500,000 from nonprofit

New York State Senator and son charged for embezzling $500,000 from nonprofit

2010-12-15 09:40:16 GMT+7 (ICT)

LAS VEGAS (BNO NEWS) -- A federal grand jury in Brooklyn, New York on Tuesday returned an indictment charging a New York State Senator and his son for allegedly embezzling around $500,000 from a nonprofit health care network, prosecutors said.

57-year-old Pedro Espada, Jr., who is a New York State Senator for the 33rd Senatorial District in the Bronx, and his son, 37-year-old Pedro Gautier Espada, allegedly abused their positions at the Soundview Healthcare Center between 2005 and 2009.

Pedro Espada founded Soundview, a network of health care clinics located in the Bronx, in 1978 as a charitable not-for-profit organization. Soundview received more than $1 million per year in federal grant money from the U.S. Department of Health and Human Services, as well as millions of dollars more in Medicare and Medicaid reimbursements.

Among their alleged schemes, Pedro Espada caused Soundview to pay charges for his personal expenses on the Soundview corporate American Express card. Besides that, the father and son allegedly used a for-profit janitorial company known as Community Expansion Development Corporation (CEDC) and used them to divert funds from Soundview.

They allegedly diverted rental payments owed to Soundview to two different entities - CEDC and another for-profit janitorial company known as Soundview Management Enterprises (SME). They also allegedly rigged the awarding of a Soundview janitorial services contract by providing false contract requirements to other bidders, thereby ensuring that SME was awarded the contract at an inflated price.

The total amount allegedly embezzled by the defendants exceeded $500,000, according to the United States Attorney's Office for the Eastern District of New York .

Both men were charged with five counts of embezzlement from a nonprofit health care network while receiving federal funding, and one count of conspiracy.

If convicted, the defendants face a maximum sentence of 10 years' imprisonment on each of the embezzlement counts and five years' imprisonment for conspiracy, as well as a fine of $250,000 on each count of conviction.

Their initial court appearances are scheduled for Wednesday at 2.00 p.m. local time before U.S. Chief Magistrate Judge Steven M. Gold at the U.S. Courthouse in Brooklyn, New York.

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