Bill sticking taxpayers with quite a tab

From the Daily News:

Add another $2.6 million to the city budget — to cover Mayor de Blasio’s legal bills.

The city quietly posted notice of a proposed $2.6 million contract between the Law Department and Kramer Levin Naftalis and Frankel LLP — Hizzoner’s law firm — in the City Record Friday.

The contract is “to provide Legal Services to the mayor in connection with an investigation by the U.S. Attorney’s Office for the Southern District of New York and related work” from 2016 to 2018.

The firm represented de Blasio and others at City Hall in a series of investigations into his dealing with fund-raisers — including Harendra Singh, the businessman who pleaded guilty to bribing the mayor. The mayor and his staff were not charged or convicted of any crimes during the year-long probes — but racked up quite a legal bill.

And the taxpayer-funded tab is expected to keep climbing.

“No,” spokesman Eric Phillips said when asked if the $2.6 million was the full legal bill to the city. “When there is a final, complete amount we will release that figure.”

The U.S. Attorneys and the Queens Machine

This article is lengthy and covers many topics, so we'll be linking to different segments of it over the next few days...

From Progress Queens:

Compounding the unknowns in the face of rapidly-changing circumstances facing the two, new Acting U.S. Attorneys in New York City are lingering questions about why some political corruption scandals are investigated, but not all. As reported in recent years by Progress Queens, questions have largely remained unanswered about funding received by a nonprofit group affiliated with New York State Senator José Peralta ; about reportedly preferential treatment showed to a campaign consulting company by the New York Democratic Senate Campaign Committee ; and with new allegations that politically-connected lawyers were earning enormous profits from, or wielding considerable influence as a result of, their connections to the Queens Democratic County Committee. The 2017 Municipal election cycle has raised new questions about the role of money in local politics and about public ethics, but there has been no apparent response from the U.S. Attorney's Office in Brooklyn, headed by Acting U.S. Attorney Rohde, who has jurisdiction over Queens.

Taxpayers on the hook for BDB legal fees

From the Daily News:

Mayor de Blasio has decided to “let” taxpayers foot most of the $2.3 million bill he owes the lawyers who defended him in probes that found he’d intervened on behalf of donors seeking favors from City Hall.

After months of insisting he would never ask the public to pay what he owed, the mayor put up a brief explanation of his reversal on Medium.com early Friday entitled “Our Legal Bills.”

He revealed that “after giving this a great deal of thought,” he’s decided the city will pay $2 million for legal work “tied to my government service.”

Another $300,000 in legal work he said is related to his non-governmental service will come from private donors via an as-yet-to-be created legal defense fund.

From 2016 through March, the Manhattan U.S. Attorney, the Manhattan District Attorney and the state Joint Commission on Public Ethics investigated de Blasio’s fund-raising activities.

On March 16 the U.S. Attorney and DA both announced they had closed their investigations without finding evidence of criminal culpability against de Blasio or his aides.

Acting U.S. Attorney Joon Kim, however, made clear that he did find evidence that de Blasio and his aides “solicited donations from individuals who sought official favors from the City.” In turn, Kim noted, “the mayor made or directed inquiries to relevant City agencies on behalf of those donors.”

De Blasio raised $4.3 million for a nonprofit Campaign For One New York that promoted his causes. The News found at least $3 million came from entities seeking favors from City Hall.

Prosecutors mum on Queens Machine

From Progress Queens:

Nearly one week after a special report was published by The New York Daily News, raising questions about the political influence wielded by a Queens law firm, Sweeney, Reich & Bolz, LLP, the top prosecutors with jurisdiction over Queens remained mum about whether the report will trigger any investigations. According to the report, three attorneys at the firm earn enormous profits from, or wield considerable influence as a result of, their connections to the Queens County Democratic Committee.

Last week, the press offices for each of Acting U.S. Attorney Bridget Rohde, who is the top Federal prosecutor for New York's eastern district, and District Attorney Richard Brown (D-Queens) declined to answer advance questions submitted for this report.

The special investigation published by The New York Daily News raised questions about how the attorneys, Gerard Sweeney, Michael Reich, and Frank Bolz, are referred cases before the Surrogate's Court, are able to gate-keep political primary races, or are able to exercise discretion over which judicial candidates receive support from the county committee.

Avella calls on US Atty to investigate Queens Machine

DeBlasio skates after blaming lawyer

From DNA Info:

Mayor Bill de Blasio broke state law when he and his subordinates steered money towards Democratic state senate campaigns — but he can't be charged with a crime because his lawyer said it was OK, according to the Manhattan District Attorney's office.

"After an extensive investigation, notwithstanding the [Board of Elections'] view that the conduct here may have violated the Election Law, this office has determined that the parties involved cannot be appropriately prosecuted, given their reliance on the advice of counsel," DA Cyrus Vance.

The U.S. Attorney's office in Manhattan also concluded an investigation into the mayor's fundraising and determined on Thursday that no criminal charges would be brought.

Well that pretty much ends our chances of not having the Dope from Park Slope around for another 4 years. Paul Massey spoke with the Tribune recently, but he's running as a Republican in a Democratic town.

Preet asked to resign in the middle of major investigations

From NY1:

U.S. Attorney Preet Bharara has been asked to resign, along with 45 other prosecutors, as part of a nationwide purge of the Justice Department. But whether the hard-charging federal prosecutor will step down is unclear.

There are some possibilities here. One is that Bharara does not get any special treatment and he is out and he just had not accepted it yet.

Another possibility is that Bharara stays because sometime soon he is asked to re-apply for his position, or the president does not accept his resignation if it is offered. Two U.S. attorneys are being told that their resignations would not be accepted. One has been nominated for a top Justice Department position, and the other is in that spot now.

A third possibility for Bharara is that he dangles for a bit. It is possible that Bharara is something of a pawn in a battle between the Trump and Schumer. The president may be threatening to fire Bharara to get Schumer to speed up approvals of his nominees.

"Don't hurt my re-election chances" - de Blasio

From the Wall Street Journal:

In the wake of the presidential election last fall, lawyers for Mr. de Blasio expressed concerns to federal prosecutors about the lengthy nature of their probe and its potential proximity to the mayoral election cycle, requesting that, if possible, prosecutors bring any charges in coming weeks, so the investigation wouldn’t linger into the year of his re-election bid, according to people familiar with the matter.

As part of that effort, Mr. de Blasio’s lawyers urged prosecutors to question the mayor and any relevant aides as soon as possible, these people said.

A spokesman for Mr. Bharara declined to comment.

The probe, of course, has stretched well into Mr. de Blasio’s re-election year, and threatens to extend into campaign season. While public-corruption prosecutors often are mindful that their work may be seen as politicized, many are particularly sensitive to how their decisions might be viewed after Federal Bureau of Investigation Director James Comey endured criticism last year for taking public actions concerning the FBI’s investigation of Democratic presidential nominee Hillary Clinton days before the November election, people familiar with the office said.

The Manhattan U.S. attorney’s office takes into consideration the electoral context of any investigations and possible charges, said Daniel Stein, who was the office’s chief of the criminal division until November 2016, speaking generally about the office’s practices.

“Prosecutors would not bring a case, or close an investigation, before it makes sense to do so,” Mr. Stein said. “But where they can, prosecutors will try to do their work in a way that does not allow an investigation to cloud a candidate or unfairly affect a campaign.”

Around City Hall, some have suggested that if federal prosecutors decide against charging the mayor or any of his aides or allies, they should say so publicly. Such pronouncements, however, are rare.

Today's the day

From CBS 2:

Mayor Bill de Blasio will be questioned by federal prosecutors and the FBI on Friday, CBS2 has confirmed.

CBS2 Political Reporter Marcia Kramer confirmed through multiple sources Thursday night that de Blasio will be interviewed about the fundraising scandal that has swirled around the Mayor’s office for nearly a year.

The meeting will take place at the office of de Blasio’s attorney, Barry H. Berke of Kramer, Levin, Naftalis & Frankel, Kramer confirmed.

As CBS2’s Dick Brennan reported, sources said de Blasio’s team has agreed to meet with prosecutors for four hours tomorrow to answer questions.

CBS2 is told the interview was set originally set for two weeks ago, but was postponed until Friday.

DeBlasio and Preet to meet

From NBC:

NBC 4 has learned Mayor DeBlasio has agreed to discuss a corruption probe with federal prosecutors. Melissa Russo reports.

Multiple investigations into de Blasio fundraising

From the NY Post:

Mayor de Blasio and his top aides coordinated an illegal fundraising scheme to help elect Democrats to the state Senate in 2014, the top investigator at the state Board of Elections accuses in a blockbuster memo that recommends the DA investigate City Hall.

In the damning eight-page report, delivered to the elections board on Jan.4, enforcement chief Risa Sugarman said the actions of the mayor, his political team and his state democratic allies led to “willful and flagrant violations” of state law.

“I have determined that reasonable cause exists to believe a violation warranting criminal prosecution has taken place,” Sugarman wrote in the memo, a copy of which was obtained by The Post.

From the Daily News:

The commissioners, during a closed-door vote, made the referral on Jan. 11, sources said, which is now part of a broader probe by the DA and Manhattan U.S. Attorney’s office.

Sugarman’s memo paints a picture of a coordinated effort by the mayor and his allies — dubbed interchangeably as “Team de Blasio” and “Team Coordinated” — to deliberately circumvent legal campaign donation limits in three upstate races in what turned out to be an unsuccessful effort to help Democrats win control of the state Senate in 2014.

The memo did not spell out exactly who could be charged. Deliberately evading campaign donation limits would constitute a felony.

Unions like the powerful Service Employees International Union Local 1199, SEIU 32BJ, the state Nurse's Association, and the Communications Workers of America were among those who gave big amounts to the county committees though they never had before. Developers and powerful businessmen who had business before the city like supermarket mogul John Catsimatidis ($50,000) and Alexis Lodde ($100,000) also gave mega contributions to the county committees.

Sugarman wrote that by serving as “straw donors” that simply passed through the donations to the candidate campaigns, the Senate Democratic Campaign Committee and the two county committees may have also violated the law.

From the Daily News:

A key donor to Mayor de Blasio’s fund-raising was subpoenaed Thursday, as it became clear the growing investigation is zeroing in on whether his campaign broke rules pursuing checks from powerful interests seeking favors from City Hall, the Daily News has learned.

The Manhattan U.S. attorney and the Manhattan district attorney both demanded documents from an anti-horse carriage group that has steered hundreds of thousands of dollars to de Blasio in its effort to ban buggies from Central Park, according to a source familiar with the probe.

Supporters of that group, New Yorkers for Clean, Livable and Safe Streets, NYCLASS, have written checks totaling $125,000 to Campaign for One New York, a so-called “independent spending” organization de Blasio formed to support his pet causes.

Late Thursday, Manhattan U.S. Attorney Preet Bharara and Manhattan District Attorney Cyrus Vance Jr. demanded documents dating as far back as 2013 from the group, which steered $100,000 to Campaign for One New York in March 2015 and hundreds of thousands more to the mayor’s 2013 campaign.

From the Daily News:

On its face, it makes no sense.

A handful of sophisticated New York developers write big campaign checks to rural backwoods political committees miles upstate.

Upon closer inspection, however, it all becomes clear.

The developers were told the money wasn’t meant to help elect some yahoo constable in Moosebreath Corners, N.Y. Instead, it would help Mayor de Blasio in his quixotic quest to flip the GOP-controlled state Senate to the Democrats.

And the developers who chose to give just happened to be seeking — or had in the past received — lucrative benefits from the de Blasio administration such as zoning changes and tax breaks.

All of this is now under investigation by Manhattan U.S. Attorney Preet Bharara and Manhattan District Attorney Cyrus Vance Jr.

Malcolm Smith probe may not yet be over

From Lohud:

The FBI and U.S. Attorney's Office used an Orthodox Jewish radio program in an elaborate sting operation that helped the government convict Malcolm Smith and other New York politicians in a corruption scandal, a four-month investigation by The Journal News/lohud revealed.

It is unclear whether there are other targets, including New York Attorney General Eric Schneiderman, who appeared on the show as a state senator prior to the 2010 election with Moses Stern, later revealed to be an FBI cooperator. Stern appeared twice on the show prior to election day using aliases, posing as both a political analyst and a resident from Brooklyn. He urged listeners to vote for Schneiderman.

Prosecutors disclosed little about the New York Jewish Communications Channel to defense lawyers for two people convicted in the sting operation. The show was hosted by longtime Orthodox radio personality Zev Brenner, who owns Talkline Communications Network, and registered with the state by Joseph Markowitz, whose name was linked to thousands in campaign donations to Schneiderman, who has not been accused of wrongdoing, and an illegal donation to Halloran. After the Smith arrests, Schneiderman pledged to donate the contributions from Markowitz and Markowitz's wife to charity.

Feds probing Sanders

From the NY Post:

A couple who run a small urban farm said powerful Queens lawmaker James Sanders offered them $1.7 million in taxpayer money to fund their operation — then demanded a $250,000 kickback.

Marion Moses and Malisa Rivera said they refused Sanders, then a city councilman, during a 2012 sit-down. Sanders, now a state senator running for Congress, became irate, and the couple believe their charity has been blacklisted by government officials ever since, they told The Post.

Three weeks ago, Moses filed a civilian crime report with the office of Manhattan US Attorney Preet Bharara. Sources said the feds were already investigating Sanders for steering City Council discretionary funds to other nonprofits.

Mike Duvalle, a former Sanders staffer, told The Post that he met with the FBI last month in connection with that probe.

CB7 agrees to hand over records to Feds

From the Queens Courier:

“A subpoena was issued requesting meeting records and committee reports,” according to a CB 7 statement on Monday. “In discussions with the city Law Department and the U.S. Attorney, we made it clear we would disclose the issuance of the subpoena to the full board membership.”

The U.S. Attorney’s office subsequently agreed to rescind the subpoena in exchange for full compliance from CB 7 regarding the matter. The documents provided to the grand jury are all available to the public.

CB 7 insisted that the investigation related to the rescinded subpoena does not center on the board or any of its members.

Feds closing in on Skelos

From the Daily News:

Federal prosecutors are expected to announce criminal charges against state Senate Majority Leader Dean Skelos and his son as early as Monday, sources told the Daily News.

Prosecutors from U.S. Attorney Preet Bharara’s office have been investigating the Long Island Republican and his son, Adam Skelos, regarding a possible conflict of interest and violations of federal corruption statutes.

The two could be hit with corruption and other charges tied to a lucrative contract awarded to an Arizona-based engineering firm that once employed Adam Skelos, 32, as a consultant, a source familiar with the matter told The News.

The company, AbTech, won the contract even though it was not the low bidder, and the feds were trying to determine whether Sen. Skelos played a role.

A spokesman for the U.S. Attorney’s office declined to comment on the matter.

The FBI did not respond to a request for comment on Friday.

Odometer ripoffs tied to Queens man and Israeli brother

From Consumer Affairs:

A Queens, New York, man and his Israeli brother were charged in indictments unsealed today with offenses related to a long-running odometer tampering and money laundering scheme, the U.S. Attorney’s Office for the Eastern District of New York announced.

Chaim Gali and John Triculy, 40, of Queens Village, New York, and Shmuel Gali, 42, of Israel, are charged in a 15-count indictment in the Eastern District of Pennsylvania (EDPA) with conspiracy, securities fraud and false odometer statements. The Galis are also charged in a related two-count indictment in the Eastern District of New York (EDNY) with mail and wire fraud conspiracy, and money laundering conspiracy.

“Mileage is one of the most important factors in a consumer’s decision to purchase a used car,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Misrepresenting the mileage on a used car fraudulently induces a consumer to pay more money for less value, and it hides necessary information that will affect how a consumer maintains and repairs that vehicle.”

The indictments allege that the Galis devised a scheme to defraud buyers of used cars by misrepresenting the mileage of approximately 690 vehicles they sold beginning as early as 2006 and through at least 2011.

The indictments charge that the Galis used fictitious dealer names to purchase high-mileage, used motor vehicles from a national vehicle leasing company. The defendants are charged with conspiring to alter the odometers in these vehicles, which they purchased in Florida, Maryland, Missouri and elsewhere, to reflect false lower mileages.

The indictments allege that the Galis then fraudulently altered the motor vehicle titles to reflect the false lower mileages and as a result, the commonwealth of Pennsylvania issued motor vehicle titles reflecting the altered mileages.

The defendants subsequently sold the vehicles at wholesale automobile auctions in Pennsylvania and New Jersey using various dealerships, including Chase Auto Center and Conestoga City Autos.

At the auctions, the Galis provided the buyers with Pennsylvania titles bearing the false lower mileages. The EDPA indictment alleges that in some instances, the title indicated mileage more than 100,000 miles less than the true mileage of the vehicle.

“The defendants created an elaborate odometer tampering and money laundering scheme to con would-be buyers into purchasing used cars at inflated prices,” said U.S. Attorney Loretta E. Lynch for the EDNY. “They then used the proceeds of their crimes to continue their fraud against additional unsuspecting consumers."

Silver under investigation

From the NY Times:

Federal authorities are investigating substantial payments made to the State Assembly speaker, Sheldon Silver, by a small law firm that seeks real estate tax reductions for commercial and residential properties in New York City, according to people with knowledge of the matter.

Prosecutors from the United States attorney’s office for the Southern District of New York and agents of the Federal Bureau of Investigation have found that the law firm, Goldberg & Iryami, P.C., has paid Mr. Silver the sums over roughly a decade, but that he did not list that income on his annual financial disclosure forms, as required, the people said.

The prosecutors, from the office of the United States attorney, Preet Bharara, and the F.B.I. agents were seeking to determine precisely what Mr. Silver, a Manhattan Democrat, has been doing for the payments, the people said. Spokesmen for the F.B.I. and Mr. Bharara’s office declined to comment.

Part-time work by legislators has long been a focus of federal investigators because corrupt lawmakers have used payments for ostensible part-time jobs or consulting work to mask political payoffs. It has also been a source of concern among government watchdog groups because of the potential for conflicts of interest.

McLaughlin sprung from the pokey

From the Queens Chronicle:

Brian McLaughlin is a free man.

The former Flushing assemblyman, who served six years for racketeering and other charges, was released Friday from Schuylkill Federal Correctional Institution in Pennsylvania.

He will remain on supervised release, under supervision of the Department of Probation for three years. Probation will also be monitoring his employment as part of his release, according to the U.S. Attorney’s Office for the Southern District of New York.

McLaughlin, 62, was sentenced to a 10-year term, but in May a federal judge reduced the sentence as a reward for his cooperation with the government.

According to court papers, prosecutors said that his help, by wearing wires and taping conversations, assisted the government in putting away state Sen. Carl Kruger of Brooklyn, Assemblyman Anthony Seminerio of Ozone Park and David Rosen, CEO of the MediSys Health Network, which operates Flushing and Jamaica hospitals.

The judge also applauded McLaughlin for working as a counselor in prison for drug addicts and alcoholics.

Brian getting out early

From the NY Times:

There may have been more corrupt politicians in New York than former State Assemblyman Brian M. McLaughlin, even though he admitted stealing from his campaign, the state government, labor unions, even a Little League program in Queens.

But there may not be many who have cooperated with the government as fully as he has.

Mr. McLaughlin’s assistance, prosecutors said in court papers, helped them win convictions for bribery and corruption against State Senator Carl Kruger, Assemblyman Anthony S. Seminerio and David Rosen, the chief executive of the nonprofit MediSys Health Network.

Mr. McLaughlin also was the prosecution’s main witness against Santo Petrocelli Sr., an electrical contractor who pleaded guilty in 2009 to paying bribes for labor peace, those papers said.

On Wednesday, Mr. McLaughlin was rewarded for that cooperation when Judge Richard J. Sullivan of Federal District Court in Manhattan reduced his prison sentence to six years, from the original term of 10, the United States attorney’s office in Manhattan said.

Mr. McLaughlin has served nearly five years at a low-security prison in Otisville, N.Y., and will most likely receive time off for good behavior, his lawyer, Michael F. Armstrong, said. He will be eligible for release this year.

Grim news for Grimm

From Capital New York:

Rep. Michael Grimm surrendered to federal authorities on Monday morning, shortly before prosecutors at the U.S. attorney's office in Brooklyn unsealed a 20-count indictment related to Grimm's ownership of a health foods store in Manhattan.

Loretta Lynch, the U.S. Attorney for New York's Eastern District, presented the indictment at a press conference in Brooklyn, detailing a tax-evasion scheme that she said was "almost breathtaking in its simplicity."

The indictment accuses Grimm of pocketing more than a million dollars in cash payments at the Upper East Side store called Healthalicious.

"When it came to his restaurant, Michael Grimm never met a tax he didn't lie to evade," Lynch said.

The charges include mail, wire, health care and tax fraud, along with two counts of perjury.

According to the indictment, "Grimm paid a large portion of Healthalicious’ employees’ wages in cash and did not report those cash wages to federal and state authorities, thereby lowering the restaurant’s payroll tax costs."

In 2013, two former Healthalicious employees filed a federal civil lawsuit against Grimm alleging the congressman did not pay them minimum or overtime wages as required by law. During a deposition hearing for the case, Grimm allegedly lied "about several material matters in connection with the lawsuit including whether he paid his employees in cash, and if he had interacted with a payroll processing company," according to prosecutors.

The indictment comes after a two-year investigation that was believed to focus on Grimm's congressional fund-raising.