Espada Charged With Stealing From Nonprofit.

It was just a matter of time. Now let’s see if thee charges will stick on what has appeared to be Mr. Teflon.

City Room  By William K. Rashbaum

New York Times (December 14, 2010) –  Pedro Espada Jr., the outgoing State Senate majority leader who was defeated in the September Democratic primary as scandal swirled around him, was indicted along with his son on Tuesday on charges that they embezzled more than $500,000 from the nonprofit health care network they operated in the Bronx. Federal prosecutors in Brooklyn announced that a grand jury had handed up a six-count indictment  naming Mr. Espada, 57, a Democrat from the Bronx, and a son, Pedro Gautier Espada, 37.

Both men were charged with five counts of embezzling money from the nonprofit, the Soundview HealthCare Network, which receives more than $1 million a year from the United States Department of Health and Human Services and millions more in Medicare and Medicaid reimbursements.

They were also charged with a single count of conspiring to steal government funds. The indictment details what prosecutors said were a series of schemes in which Mr. Espada and his son abused their position at Soundview between 2005 and 2009 to divert the nonprofit’s money for their own benefit and the use of family members and friends. Mr. Espada, the highest ranking Hispanic lawmaker in the state, founded the health care network in 1978.

The schemes detailed in the indictment ranged from the extravagant to the absurd, and included pony rides and a petting zoo for a family member’s birthday party to a $49,000 check the senator attempted to use as a down payment on a Bentley. They also included, according to prosecutors, the elder Espada using Soundview’s corporate American Express card to pay for his personal expenses.

Among the charges were more than $100,000 worth of meals for him and his family, window treatments for his home, and tickets to Broadway shows and sporting events. The charges were announced by the office of the Brooklyn United States attorney, Loretta E. Lynch, the F.B.I., the Internal Revenue Service and Andrew M. Cuomo, the New York attorney general and governor-elect. Mr. Cuomo’s office initiated a civil inquiry and brought a lawsuit in May against Mr. Espada and his son as well as against Soundview. “The indictment alleges that funds that could have been, and should have been, applied to purchase medical equipment and enhance health care services for an historically under-served population were diverted by the defendants for their personal use and to benefit friends and family members,” Ms. Lynch said in a statement.

“In these difficult economic times, the charged crimes are all the more reprehensible.” Ms. Lynch added that the government’s investigation was continuing. Mr. Espada’s lawyer, Susan R. Necheles, said that he and his son denied any wrongdoing and intended to fight the charges in court. “Soundview has provided high quality health care to thousands of families, children and senior citizens in the Bronx,” Ms. Necheles said. “Today is a sad day for Soundview and a sad day for the Esapada family.”