Manhattan-Based Lobbyist Pleads Guilty to Bribing Former New York State Senator Carl Kruger

Preet Bharara, the United States Attorney for the Southern District of New York, announced that RICHARD LIPSKY, a lobbyist, pled guilty today to two counts of bribing former New York State Senator Carl Kruger. LIPSKY pled guilty before U.S. District Judge Jed S. Rakoff.

Manhattan U.S. Attorney Preet Bharara stated: “As a lobbyist, Richard Lipsky was permitted to influence the legislative process on behalf of his clients with the power of his arguments, not the power of his checkbook. For too long and in too many ways, corruption has warped government in New York state and New York City. This office will take every step necessary to root out that corruption and restore the public’s faith in its government and its leaders.”

According to the indictment, the complaint, and statements made at today’s plea proceeding in Manhattan federal court:

LIPSKY is a professional lobbyist and has been the principal of Richard Lipsky Associates, Inc. since approximately 1981. LIPSKY’s clients include various unions and associations, food retail businesses, supermarkets, and beverage distributors. Between 2007 and 2011, LIPSKY paid over $250,000 to Olympian Strategic Development Corp. (“Olympian”) and Bassett Brokerage (“Bassett”), two consulting companies controlled by Michael Turano, a Manhattan-based gynecologist. Kruger had a close relationship with Turano and was effectively a member of Turano’s family. In exchange for the payments that LIPSKY made to Olympian and Bassett, Kruger undertook official action to benefit LIPSKY and his lobbying clients.

According to statements made by LIPSKY during today’s plea proceeding, in the Fall of 2007, Senator Kruger asked LIPSKY to retain Olympian, Michael Turano, and his brother Gerard Turano, to work with him on a project in Brooklyn. Over the course of one year, Olympian and the Turanos did little in the way of documented work. Subsequently, in 2008, Senator Kruger referred a number of clients to LIPSKY and asked that he pay Olympian, Bassett, and/or Michael Turano a referral fee from the money received from the referred clients. LIPSKY admitted that he agreed to make these payments knowing that, in return, Kruger would take official action as a member of the New York State Senate to benefit LIPSKY, his family, and his business. The government’s plea agreement with LIPSKY provides that the value of the actual bribes and/or a reasonable estimate of the benefits received in exchange for the bribes is between $120,000 and $200,000.

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LIPSKY, 64, of New York, New York, pled guilty to one count of conspiracy to commit bribery and one count of bribery. For each count, he faces a maximum potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense. He is scheduled to be sentenced by Judge Rakoff on May 4, 2012 at 4:00 p.m.

LIPSKY was initially charged on March 10, 2011, along with seven others, including Kruger, Turano, Solomon Kalish, the owner of marketing/consulting firm Adex Management, David Rosen, the former CEO of MediSys Health Network, Robert Aquino, the former CEO of Parkway Hospital, real estate developer Aaron Malinsky, and New York State Assemblyman William Boyland, Jr.

Kruger, 62, of Brooklyn, New York, pled guilty to two counts of conspiracy to commit honest services fraud and two counts of conspiracy to commit bribery on December 20, 2011. Turano, 50, of Brooklyn, New York, pled guilty to one count of conspiracy to commit bribery on December 20, 2011. They are scheduled to be sentenced by Judge Rakoff on April 26, 2012.

Rosen, 64, of Harrison, New York, was convicted at a bench trial before Judge Rakoff on September 12, 2011 for his involvement in schemes to bribe Kruger, former New York State Assemblyman Anthony Seminerio, and Boyland. He is scheduled to be sentenced by Judge Rakoff on March 2, 2012.

Aquino, 54, of Glen Head, New York, pled guilty to one count of conspiracy to commit bribery on January 3, 2012. He is scheduled to be sentenced by Judge Rakoff on May 3, 2012.

Boyland, 41, of Brooklyn, New York, was acquitted by a jury on November 10, 2011.

The government entered into a deferred prosecution agreement with Malinsky, 63, of New York, New York, on November 22, 2011.

Charges are still pending against Kalish, 61, of Rockville Centre, New York, and he is presumed innocent unless and until proven guilty. Kalish is scheduled for trial on April 23, 2012.

Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.

This prosecution is being handled by the office’s Public Corruption Unit. Assistant U.S. Attorneys Glen McGorty, William Harrington, Michael Bosworth, and Kan Nawaday are in charge of the prosecution.