Statement of FBI Assistant Director in Charge Janice Fedarcyk at Press Conference on Public Corruption
|FBI New York March 10, 2011|
This morning, eight men were placed in FBI custody after a long-term investigation into public corruption. Two state legislators, a lobbyist, a real estate developer, and two hospital executives are among the defendants.
The criminal complaint outlined by the U.S. Attorney lays out a roadmap of bribery, money laundering, influence-peddling, and official misconduct that is eye-opening even to seasoned investigators and prosecutors.
Carl Kruger has been a New York state senator representing Brooklyn since 1994. For at least the last five years, while he nominally represented the people of the 27th Senate District, Kruger took official action aimed at furthering the interests of a much smaller circle of people.
Kruger sponsored or supported legislation, lobbied other officials, or directed state funds for the benefit of businesses whose officers or advocates lined Kruger’s pockets, directly or indirectly, with more than $1 million.
Kruger attempted to conceal the bribe payments by having them funneled into bank accounts for shell companies established by defendant Michael Turano, a person described in the complaint as a particularly close personal friend of Kruger.
In fact, the complaint says, “Kruger acted like a member of the Turano family,” and “is closest with Michael Turano.” Bribe payments funneled into the accounts of Olympian Strategic Development and Bassett Brokerage were funds Kruger had direct access to.
Assemblyman William Boyland, Jr. has represented the 55th Assembly District since 2003. He had been—and remained after his election—on the payroll of MediSys Health Network.
In return for official action seeking millions of dollars in state funding for MediSys hospitals, Boyland was paid a “salary” as a “consultant” to MediSys. Witnesses interviewed by the FBI established that Boyland’s consultancy position was really a no-show job for which MediSys CEO David Rosen paid Boyland nearly $180,000.
Rosen is also charged with bribes to Kruger through a scheme involving the steering of Brookdale Hospital business to a hospice care provider in which Kruger had an economic interest. Rosen sought to have Kruger take official action in support of MediSys efforts to acquire certain hospitals.
In connection with this scheme, the hospice company paid Adex Management (and thereby Kalish and Kruger) $5,000 a month. Each month, before the money was due, Kalish would routinely call the person at the hospice company who sent the checks and say, “Carl wants to know where the money is.”
In this instance, Kruger took bribes from competing parties, because at around the same time, Robert Aquino paid $60,000 to Adex, half of which Kalish funneled to Kruger through Olympian. This money was to induce Kruger to take action on behalf of Aquino and Parkway Hospital to acquire the same hospitals MediSys wanted to acquire.
In addition to the payments to Boyland and Kruger, Rosen had also paid $390,000 in bribes to now-deceased long-time Assemblyman Anthony Seminerio. In return, Seminerio took official actions favorable to MediSys.
The Rosen-Seminerio quid pro quo resulted in Seminerio’s indictment, plea, and six-year prison sentence. Now Rosen must answer for his end of the illicit bargain—and for the Boyland and Kruger schemes.
Kruger didn’t confine his bought-and-paid-for advocacy to the hospital arena. Lobbyist Richard Lipsky paid bribes to Kruger on behalf of lobbying clients that included a major real estate developer, beverage distributors, and a supermarket retailer.
In return for bribes, Kruger took official action in the interests of Lipsky’s clients. For example:
- Kruger introduced legislation to delay the start date of the law that required bottle deposits on bottled water.
- Kruger issued a statement in support of a law to permit liquor stores to extend hours of operation.
- Kruger opposed the opening of a retail superstore in Brooklyn, which was also opposed by a coalition of small-store retailers that hired Lipsky.
Real estate developer Aaron Malinsky paid bribes to Kruger by funneling nearly half-a-million dollars to Olympian. In return, Kruger took actions in support of Malinsky and his company, P/A Associates, including in connection with a commercial retail center in Mill Basin, Brooklyn.
The complaint is filled with factual detail we are only summarizing here. Those details do not paint a pretty picture. The web of graft and corruption, of buying and selling influence, is not what representative democracy is supposed to look like.
We remain committed to rooting out official corruption wherever it exists.