May 6 (Bloomberg) -- New York State Senator John Sampson pleaded not guilty to embezzlement charges in the latest corruption case involving state politicians.
Sampson, a Democrat who represents southeastern Brooklyn, was accused today of stealing as much as $440,000 from foreclosure proceedings while acting as a court-appointed referee. He used some of the money to fund an unsuccessful campaign to become Kings County District Attorney in “one of the most extreme examples of political hubris that we have seen,” Brooklyn U.S. Attorney Loretta Lynch said at a news conference.
The legislator faces two counts of embezzlement, five counts of obstruction of justice and two counts of making false statements, according to an indictment unsealed today in federal court in Brooklyn, New York. U.S. Magistrate Judge Viktor Pohorelsky set bail at $250,000.
The case follows last month’s announcements of bribery-related charges against New York Assemblyman Eric Stevenson of the Bronx and State Senator Malcolm Smith of Queens by prosecutors in Manhattan federal court. Stevenson pleaded not guilty today in Manhattan. His lawyer, Andrew Patel, declined to comment.
In January, former state Senator Shirley Huntley, also of Queens, pleaded guilty in Brooklyn to conspiring to commit mail fraud in an unrelated scheme. All are Democrats.
“Today, John Sampson has been added to the list of recently indicted New York elected officials,” FBI Assistant Director George Venizelos said in a statement. “The people of New York have a right to demand, at a bare minimum, that their elected representatives obey the law.”
Sampson, 47, faces as long as 20 years in prison on each of the most serious charges of obstruction of justice, which included allegations of witness tampering, according to prosecutors. The U.S. offered him a deal under which he could opt to plead guilty to one embezzlement and one obstruction-of-justice charge and face a possible sentence of 37 to 46 months in prison, prosecutors told Pohorelsky at a hearing today.
The legislator, formerly leader of the state’s Democratic Conference of the Senate and minority leader, is accused of stealing the excess proceeds of foreclosure sales from accounts he controlled as a court-appointed referee, a role he held from 1998 to 2008 in his capacity as a private attorney.
The funds belonged to prior owners of the properties or other parties who had a legal interest, prosecutors said today.
The government contended that he tried to cover his tracks in part with a purported $188,500 loan from an associate in the real estate business, who wasn’t named in court filings.
The loan was never repaid and Sampson failed to report it, as required, on state Senate financial disclosure forms, the government alleged.
When the government was investigating a mortgage-fraud scheme involving the associate, Sampson attempted to hinder the probe by reaching out to an acquaintance working in the U.S. Attorney’s Office, prosecutors alleged. The legislator asked the employee to gather information about the probe and identify potential cooperating witnesses so he could “take them out,” Lynch said today.
The employee, whose name was also not released, has since been terminated, she said. Sampson also tried to persuade the associate not to provide information, Lynch said.
In court today, Zachary W. Carter, a lawyer for Sampson, objected to the bail that prosecutors requested, saying his client was a notable member of the Brooklyn community and didn’t pose a risk of flight.
“You will always be able to find where he is,” said Carter, who served as Brooklyn U.S. attorney from 1993 to 1999. “I am fully confident that Mr. Sampson will make all appearances.”
Prosecutors argued that bail was warranted given Sampson’s alleged previous behavior.
He fits a “pattern of someone who doesn’t follow the rules and doesn’t obey court orders,” Assistant U.S. Attorney Daniel Spector told the judge.
In a statement today, Andrea Stewart-Cousins, current leader of the Democratic Conference, said Sampson has been stripped of ranking positions and committee assignments.
“These allegations are deeply disturbing,” she said. “The alleged activity represents an offensive violation of the public trust for which there is no place in our government.”
Across the river in Manhattan, Stevenson pleaded not guilty to charges that he had accepted bribes in exchange for proposing a bill to limit the opening of adult day-care centers.
Stevenson today was given a court-appointed lawyer after he told the judge he can’t pay for defense counsel. He was named in a felony indictment filed in Manhattan on May 3 which charges him with honest services conspiracy and bribery. U.S. District Judge William Pauley set a Jan. 6 trial date for Stevenson and four co-defendants.
The Manhattan U.S. Attorney’s Office said the public-corruption probe that ensnared Stevenson is “ongoing.”
Last month, New York Governor Andrew M. Cuomo announced proposals aimed at toughening state laws related to public corruption and bribery. Lynch said today that the bills would “bring state laws in line with federal laws” in prosecuting corruption.
Sampson’s arrest “provides more clarity and more certainty that this is the moment” to act on the bills, Cuomo said in a radio interview today.
The Brooklyn case is U.S. v. Sampson, 1:13-cr-00269, U.S. District Court, Eastern District of New York (Brooklyn). The Manhattan case is U.S. v. Stevenson, 13-cr-00161, U.S. District Court, Southern District of New York (Manhattan).
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