Pedro Espada Jr., the former New York state Senate Democratic majority leader, didn’t steal from nonprofit health-care clinics he and his son run, his lawyer told the jury at the end of their criminal trial.
“You can’t talk about a theft case unless you acknowledge Mr. Espada gave hundreds of thousands of dollars to the entity he supposedly stole from,” when he gave up money he was owed in vacation and sick days, Susan R. Necheles said today in closing arguments in federal court in Brooklyn, New York. “It makes no sense.”
Espada, 58, and Pedro Gautier Espada, 38, abused their positions at Soundview Healthcare Center in the Bronx section of New York City, which gets more than $1 million a year in federal funding, prosecutors in the office of U.S. Attorney Loretta Lynch said.
They stole more than $500,000 from the company, the government says. Pedro Espada started Soundview in 1978.
The Espadas, who continue to run Soundview, were charged in December 2010 when the elder Espada was still in the Senate. He had been defeated that September in the Democratic primary for his Bronx seat. The Espadas engaged in illegal schemes from January 2005 to February 2010, prosecutors said.
U.S. District Judge Frederic Block is presiding over the trial, which began March 14.
Assistant U.S. Attorney Todd Kominsky finished his closing argument for the government yesterday.
Much of the Espadas’ alleged illegal activity centered on two for-profit janitorial-services companies Pedro Espada founded: Community Expansion Development Corp., or CEDC, in 1980, and Soundview Management Enterprises, in 2007. Both provided services to the clinics. In January 2005, Espada transferred ownership of CEDC to Soundview Healthcare, the government said.
Even after Soundview Healthcare owned CEDC, the Espadas operated it as if it was still theirs, using it to pay personal expenses, including for political campaigns, prosecutors allege. That scheme totaled $175,000, they said.
Norma Ortiz, who was one of Espada’s executive assistants, testified that Espada had Soundview Healthcare pay a $1,976 tab for his wife’s birthday party in April 2008 at the Harbor Restaurant on City Island, east of the Bronx mainland. He also had the company pay for his wife’s birthday gifts, including $523 for a spa treatment, $344 for balloons and $76 for 13 peach-colored roses, Kaminsky said.
Pedro Espada charged more than $100,000 for personal meals on Soundview Healthcare’s corporate American Express card, including more than $20,000 at Toyo Sushi in Mamaroneck, New York, prosecutors said. He also failed to identify more than $115,000 in charges on Soundview Healthcare’s credit card as his own, they said.
“No question that Mr. Espada was authorized by the board to use the AmEx,” Necheles told jurors today. “This was straight up. This was permitted by the company.”
“You cannot steal if you’re permitted to get it,” she said.
Necheles said Espada was allowed to pay off the American Express bill with unpaid vacation and sick time.
The Espadas took about $200,000 by renting Soundview Healthcare conference rooms and other facilities to medical professionals and religious groups and keeping the money for themselves, according to the indictment.
The Espadas are being tried on eight counts. Five charge them with stealing from Soundview, one count for each year from 2005 through 2009. They are also charged with conspiring to steal from Soundview, to defraud the U.S. Internal Revenue Service and to commit wire fraud.
Each substantive count carries a maximum sentence of 10 years’ imprisonment. The conspiracy counts bring as many as five years each.
The case is U.S. v. Espada, 10-cr-985, U.S. District Court, Eastern District of New York (Brooklyn).