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Pedro Espada tax evasion trial in November faces 40 years

October 5, 2012

Federal prosecutors are attempting to revoke the bond of former New York legislator Pedro Espada Jr., alleging he has continued stealing from the Bronx health-care clinic that he was convicted of embezzling from earlier this year.
Prosecutors asked U.S. District Judge Frederic Block in federal court in Brooklyn to jail Mr. Espada because the former Bronx state senator “in recent months, continued to improperly siphon funds from the Soundview Healthcare Network,” according to the letter submitted Tuesday. Susan Necheles, Mr. Espada’s lawyer, didn’t return a phone message and email seeking comment.
Mr. Espada posted a $750,000 bond following his arraignment in the case in December 2010. In May, the one-time powerful lawmaker was convicted of four counts of stealing $480,000 from the clinic that he founded three decades ago. Each count carries a maximum 10-year prison sentence.
But Mr. Espada has been allowed to remain free pending his sentencing, which Judge Block said will occur some time after Mr. Espada stands trial in November in Manhattan federal court on tax-evasion charges.
In June, the White Plains Road health-care clinic—whose operational responsibilities passed from Mr. Espada to one of his sons, Alejandro Espada, after his conviction—sold its medical equipment and the right to assume the lease to the Institute for Family Health for $600,000, according to the prosecutors’ letter.
“Immediately thereafter, the defendant and members of his family drained most of the $600,000 from Soundview’s account,” the letter states.
Records show that one day after the $600,000 was deposited into the clinic’s bank account, the son obtained three cashier’s checks and distributed more than $350,000 of that money, according to the letter. Prosecutors said that a $104,000 check was cut to Mr. Espada’s janitorial company, which hadn’t done business at the clinic in more than two years. A $50,000 check went to Mr. Espada’s lawyers, a $40,000 check was cashed by Mr. Espada and three other checks were paid to Mr. Espada’s sons and one of their consulting firms. Another $5,200 payment went to Mr. Espada’s bodyguard, the letter states.
Alejandro Espada couldn’t be reached for comment.
Prosecutors say that the clinic owes $2 million to creditors, such as medical-supply companies, and about $1 million in taxes. They requested that Judge Block make Mr. Espada account for the $600,000. A bail revocation hearing has been scheduled in Judge Block’s courtroom for Friday afternoon.

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