NEW YORK, N.Y. (WIVB) - Release: Attorney General Andrew M. Cuomo Tuesdayannounced his office has filed suit against Senate Majority LeaderPedro Espada Jr. for looting the Bronx based not-for-profit whereEspada serves as President and CEO. Nineteen current and formerofficers and directors of the Comprehensive Community DevelopmentCorporation
(“Soundview”) are also named in the lawsuit.
The lawsuit alleges Espada diverted Soundview’s charitableassets and used the money for himself, his family, his friends, andhis political operation. In the past five years, Espada hassiphoned more than $14 million out of Soundview, including anunconditionally guaranteed severance package worth an estimated $9million which was put into a contract signed in 2005. The ChiefFinancial Officer and the Soundview Board, which is packed withEspada’s family, friends, and Senate employees, approved thetransactions.
The lawsuit, part of Cuomo’s ongoing investigation, seeksto permanently remove Espada and current CFO Kenneth Brennan asofficers of Soundview and, similarly, to remove all ofSoundview’s directors from the Board.
Soundview was founded by Pedro Espada Jr. with the purpose ofproviding healthcare to the people of the South Bronx. It is anot-for-profit that receives a vast majority of its funding fromthe State and Federal Government.
“Taxpayer money was given to this not-for-profit toprovide healthcare services to underprivileged patients, but ourinvestigation has found the funds flowed into the pockets ofSenator Espada and his supporters,” said Attorney GeneralAndrew Cuomo. “Siphoning money from a charity would beegregious under any circumstances, but the fact that this wasorchestrated by the State Senate Majority Leader makes itespecially reprehensible. In New York, no one is above the law, andthis suit should finally make that clear to SenatorEspada.”
Specifically, the complaint filed by the Attorney Generalalleges that money from Soundview lined the pockets of Espada, hisfamily, his supporters and his campaign.
In terms of Espada, the investigation found:
Soundview gave Espada a severance package that is currentlyworth an estimated $9 million. The provision unconditionallyguarantees Espada the payment of one year’s gross pay forevery year of service. If the clause were triggered, Soundviewwould be forced into bankruptcy.
Soundview paid approximately $80,000 in restaurant bills for650 separate meals for Espada or his supporters. This includes morethan 200 meals totaling more than $20,000 from two sushirestaurants that regularly received orders from Espada’s wifeand delivered to the Espada home in Mamaroneck.
Soundview paid for trips for Espada, his wife and his familyto such places as Las Vegas, Miami, and Puerto Rico as purportedbusiness trips.
Soundview has provided Espada with what is essentially anunlimited line of credit on a corporate American Express card. From2006 through mid-2009, Espada charged more than $450,000 in itemshe later identified as personal.
Soundview gives Espada 14 weeks of annual leave on the firstof each year, before it accrued, and allowed him to convert it toits cash equivalent to pay personal expenses. In this way,Soundview extended Espada more than $75,000 in credit, a violationof the New York State Not-For-Profit Law.
Espada created a company that offered janitorial services,put his son, Pedro Gautier Espada, in charge of it, and thenGautier rigged the bids to make sure it won the Soundview contract- a contract worth almost $400,000 annually. In 2008, Pedro Gautierearned more than $150,000 from the for-profit company and fromSoundview.
In terms of Senator Espada’s improper funding of hispolitical operations, the investigation found:
More than 150,000 pieces of Espada’s campaign literatureat a cost of $100,000 were paid for by or funneled throughSoundview.
Soundview routinely pays for political campaign expenses puton Espada’s American Express card- a practice that continuesto this day.
In fact, in the month prior to the 2008 primary for New YorkSenate, Espada amassed tens of thousands of dollars in credit cardcharges, most were campaign expenses.
Soundview provides Espada, who resides in Mamaroneck, with ahousing allowance of approximately $2500 per month to pay for aBronx co-op which Espada claimed as his legal residence forpurposes of his
2008 Senatorial campaign. The total money spent on thissecond residence so far exceeds $50,000, and the allowance wasprovided so that Espada could establish a residence for hiscampaign at Soundview’s expense.
Soundview employees and resources were used in Espada’scampaign effort.
Soundview has also failed to pay hundreds of thousands ofdollars in payroll taxes. Despite these problems, Espada’sbills are paid on time. In 2008, despite owing $700,000 in federalpayroll taxes, Espada’s credit card charges, including$250,000 in personal expenses, were paid. The investigation foundthat the directive was to pay Espada and his family before anyother vendor or financial obligation.
of Soundview and its taxpayer dollars was possiblebecause many of the Board members had personal or financial ties toEspada.
State Senate employees serve as Directors of the Board.
Current Board member Victor Feliciano is Espada’s uncle.
Current Board member Marzetta Harris is an employee of theNew York State Senate.
Current Board member Monica Harris-Coleman is an employee ofthe New York State Senate.
Current Board member Victor Sierra is the boyfriend ofEspada’s sister.
Current Board member Jeanette Torres is the mother ofEspada’s grandchild and is also an employee of the New YorkState Senate.
Current Board member Lidisbelle Pacheco is the mother ofanother of Espada’s grandchildren.
Former Board member Jacqueline Collazo is Espada’sniece.
Former Board member John Feliciano is Espada’s uncleand was an employee of the New York State Senate while he was onthe Board.
Former Board member Lourdes Rivera was engaged toEspada’s son when she was on the board. They are now married.
Former Board member Andrew Yong is now employed by the NewYork State Senate.
The individuals named in today’s suit are:
Pedro Espada, Jr., President and CEO of Soundview, Bronx NY andMamaroneck, NY, Kenneth T. Brennan, Vice President of Finance andCFO, Tarrytown, NY, Lydia Almeyda, Bronx, NY, Barbara Braxton,Bronx, NY, Constance Bruno, Woodridge, NY, Jacqueline Collazo,Bronx, NY ,Beverly Crosby, New York, NY ,John Feliciano a/k/a JuanFeliciano, address unknown ,Victor Feliciano, Bronx, NY , MarzettaHarris, Bronx, NY , Monica Harris-Coleman, New York, NY , EvetteMaduro Pagan, Bronx, NY , Charlotte McDuffie, Bronx, NY,LidisbellePacheco, Yonkers, NY, Lourdes Rivera a/k/a Lourdes Mocete a/k/aLourdes Espada, Fairfield, CT , Victor Sierra, address unknown,Genoveva “Jenny” Torres, Bronx, NY ,Jeanette Torres,Mamaroneck, NY , Andrew Yong, New York, NY , Doris Yong, ForestHills, NY
The lawsuit seeks to:
â Remove Senator Espada and Brennan as officersof Soundview , Hold Senator Espada and Brennan liable to payrestitution and damages , Remove all the Director Defendantscurrently serving on the Board of Soundview , Declare SenatorEspada’s severance package void and unenforceable ,Enjoin anypayment by Soundview to Espada pursuant to his employment contract, Enjoin Senator Espada, Brennan or anyone working with them fromusing Soundview funds , Enjoin Senator Espada, Brennan and DirectorDefendents from serving as officers, directors, trustees, orequivalent positions of Soundview or any other not-for-profit
The civil lawsuit was filed today in the Supreme Court of theState of New York, New York County. The lawsuit alleges violationsby Espada of Not-for-Profit Corporation Law (NPCL) Sec. 716 and717. The lawsuit alleges violations by Brennan of NPCL Sec. 717.The lawsuit alleges violations by the board of NPCL Sec. 717. Thelawsuit alleges violations by all defendants of Estate Powers andTrust Law Sec. 8-1.4.
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