WHITE PLAINS CITIZENETREPORTER SETS RECORD VISITS FOR YEAR 7,017,658 VISITS! 2,098,003 VISITORS MADE 6 VISITS A DAY EVERY DAY. 63,330 UNIQUE VISITORS MADE 133,730 VISITS IN DECEMBER. WPCNR AVERAGED 17,284 VISITORS A WEEK, VISITING 31,270 TIMES.

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WPCNR MILESTONES. From Westchester County Executive Robert Astorino. May 16, 1015:

Alfred DelBello, the first Democrat elected County Executive in   Westchester County in 1974, succeeding Edwin Michaelian, died at the age of 80 Friday.

Mr. DelBello was elected Lieutenant Governor in 1982 when Mario Cuomo was elected Governor, resigning from that position in 1984.

DelBello  was also a principal of the  well-known law firm specializing in development law, DelBello, Donnellan, Weingarten, Wise and Wiederkehr in White Plains. He was also a leading personality of the Westchester County

The present County Executive, Robert Astorino issued this statement on the death of Alfred Del Bello today:

“It was with great sadness that I learned today of Al’s passing. We were from different parties but we were good friends and I always appreciated his advice and counsel.  Perhaps the greatest advice he shared with me, and something I’ve always adhered to is, always make sure you get home and spend quality time with your family.  The job is hectic but always make time for your family. And today, the thoughts and prayers of my family go out to the DelBello family.”

Mr. DelBello grew up in Yonkers and was Mayor of Yonkers before becoming County Executive.

He was a resident of Lewisboro at the time of his death.

Funeral arrangements are pending.

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WPCNR WESTCHESTER LAW JOURNAL. From the U.S. Attorney’s Office. May 15, 2015:

Preet Bharara, the United States Attorney for the Southern District of New York, Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s (“HHS-OIG”) New York Region, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today that the United States has settled civil fraud claims under the False Claims Act against WESTCHESTER COUNTY HEALTH CARE CORPORATION d/b/a WESTCHESTER MEDICAL CENTER (“WMC”) related to WMC’s alleged violations of the Anti-Kickback Statute and the Stark Law and submission of costs reports to Medicare seeking reimbursement for charges WMC did not incur.

In connection with the settlement, which was approved by U.S. District Judge Lewis A. Kaplan on May 14, 2015, the defendant agreed to pay a total of $18,800,000 to resolve its liabilities, and made admissions as to its conduct.

Manhattan U.S. Attorney Preet Bharara said: “The conduct of Westchester Medical Center is the reason the Anti-Kickback Statute and the Stark Law are so important – they are laws that help to rid the healthcare industry of conflicts that can improperly influence medical judgment, potentially jeopardizing patient care and causing federal healthcare programs to pay for excessive or unnecessary treatments. Hospitals and medical practices have an obligation to patients, and taxpayers, to ensure their arrangements conform to the requirements of these laws.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “Westchester Medical Center’s aggressive, intricate kickbacks and other fraud schemes in this case threatened the impartiality of medical referrals, the financial integrity of Medicare, and the public’s trust in the health care system. Our agency will continue to investigate those who seek to cheat federal health care programs.”

FBI Assistant Director-in-Charge Diego Rodriguez said: “Westchester Medical Center participated in a coordinated shakedown of Medicare and, by extension, taxpayers. Today, they agreed to pay more than $18 million to resolve their liabilities and enable this government program to serve the seniors it was designed to help.”

According to the complaint-in-intervention filed in Manhattan federal court:

WMC operates a tertiary and quaternary care hospital in Valhalla, New York, and serves as the primary clinical affiliate of New York Medical College. From approximately 2000 through 2007, WMC maintained a financial relationship with Cardiology Consultants of Westchester, P.C. (“CCW”), a cardiology practice formerly operating on WMC’s Valhalla campus, which violated the Anti-Kickback Statute and the Stark Law. In particular, the complaint-in-intervention alleges that WMC advanced monies to CCW to open a practice for the express purpose of generating referrals to the hospital. When CCW began making payments to WMC purportedly repaying the advances, WMC entered into retroactive, no-work consulting agreements under which it paid CCW tens of thousands of dollars.

Further, the complaint-in-intervention alleges that around this same time, WMC also began permitting CCW to use WMC’s fellows in CCW’s private office free of charge, contrary to WMC’s historic practice.

As a result, WMC’s submission of claims to the Medicare Program for services rendered to patients referred to WMC by CCW’s shareholder physicians violated the False Claims Act. Additionally, during the same time period, through cost reports filed with the Centers for Medicare and Medicaid Services (“CMS”), WMC wrongly sought and obtained reimbursement for certain costs that WMC did not incur and that were not reimbursable under the relevant cost-reporting rules.

Under the Medicare Program, CMS makes payments to hospitals for inpatient and outpatient services after the services are rendered. Hospitals, like all healthcare providers, are required to comply with the Anti-Kickback Statute and the Stark Law, and in both cases, are prohibited from submitting claims tainted by such violations to the Medicare Program.

The Anti-Kickback Statute makes it illegal for a hospital to knowingly and willfully offer or pay remuneration to any person to induce that person to purchase, order, or recommend purchasing or ordering any good or item for which payment may be made under a federal health care program. The Anti-Kickback Statute arose out of congressional concern that remuneration given to those who can influence health care decisions would result in goods and services being provided that are medically unnecessary, of poor quality, or harmful to a vulnerable patient population.

The Stark Law provides that the government will not pay for certain designated health services prescribed by physicians who have improper financial relationships with entities to whom they refer patients because such financial relationships can compromise the physicians’ professional judgment as to whether a service is medically necessary, safe, effective, and of good quality.

As part of Thursday’s settlement, WMC admitted the following conduct:

• Kingston Practice Arrangement. In July 2001, WMC, through its practice management affiliate, Matrix Resources, L.L.C. (“Matrix”), entered into a management agreement with CCW through which WMC agreed to assist CCW in establishing and developing a medical office located in Kingston, New York, with the objective of expanding WMC’s referral base and service area to the upper reaches of the Hudson Valley.
• Pursuant to the terms of the management agreement, which had an initial term of three years, Matrix agreed to provide certain management services for CCW’s Kingston office and to advance working capital to establish and operate the office. Between 2001 and 2002, WMC, through Matrix, advanced to CCW approximately $450,000 to pay for certain costs of the practice, including payment of the monthly management fee due under the management agreement.
• The management agreement provided that CCW would repay the advances at a rate of 8.5 percent interest by the end of the three-year term, with the proviso that the management agreement could be extended for one year if full repayment had not been made.
• In July 2002, CCW and WMC began discussions regarding the termination of the management agreement. At the outset of these discussions, WMC received a memorandum from CCW requesting that WMC, among other things, postpone or eliminate certain interest payments, reduce the applicable interest rate to the then-market rate of 6.5 percent, and extend the repayment period in recognition of CCW’s efforts in developing clinical volume at the Kingston practice and the resulting referral benefit to WMC.
• As of April 25, 2003, CCW and WMC executed a promissory note and associated letter agreement providing for immediate termination of the management agreement and repayment of the then-outstanding advances over five years at an initial interest rate of 4.75 percent (subject to periodic adjustment based upon changes in the prime rate), beginning with an initial repayment of $116,936.15 on April 28, 2003.
• In addition, on April 25, 2003, three days prior to CCW’s initial repayment of the advance, WMC and CCW entered into a two-year consulting agreement, retroactive to July 2, 2002. Pursuant to this agreement, CCW was to provide various consulting services to WMC for an annual amount of $50,000. In April 2004, the contract was amended and extended.
• Between April 2003 and July 2005, WMC paid CCW approximately $190,000 under the original and amended consulting services agreement.
• WMC was not able to locate evidence that CCW performed the contracted services under this agreement.
• During the period of approximately April 2003 through July 2005, CCW referred patients for hundreds of medical procedures at WMC.
• Fellows. For certain years during the relevant period, WMC charged various physician practices for a portion of the salaries and expenses relating to residents and fellows who trained at WMC. During the relevant period, fellows in WMC’s cardiology fellowship program performed certain services within CCW’s private offices as part of their regular clinical rotation.
• Prior to 2003, CCW paid hundreds of thousands of dollars to WMC for the salaries and expenses relating to cardiology fellows.
• Beginning in 2003, CCW ceased paying the fellowship charges for which it was invoiced by WMC; after continuing to bill CCW, but failing to compel payment, WMC wrote off these amounts as uncollectible in April 2007.
• Cost Report Reimbursement. From 2000 through 2007 (“relevant cost report timeframe”), WMC submitted annual Medicare cost reports to the Health Care Financing Administration (“HCFA”), and later CMS, reflecting certain costs, referred to as Direct Graduate Medical Education (“DGME”) and Indirect Medical Education (“IME”), associated with its residency and fellowship programs.
• Pursuant to certain HCFA/CMS regulations applicable to the DGME and IME lines of Medicare cost reports in effect during the relevant cost report timeframe, hospitals were permitted to claim reimbursement for time spent by the residents or fellows at other hospitals and non-hospital settings only if the hospital incurred all or substantially all of the salary and fringe benefit expense of the residents and fellows being rotated through other hospitals or non-hospital settings and complied with other applicable regulatory requirements.
• For the relevant cost report timeframe, WMC included certain costs in its filed cost reports that corresponded to time spent by certain residents and fellows at other hospitals or at non-hospital settings, but did not incur all or substantially all of the costs associated with these fellows and residents, or otherwise did not meet applicable HCFA/CMS regulatory requirements.

WMC also agreed to pay $18,800,000 to resolve its liabilities for this conduct.

*                      *                      *

Mr. Bharara praised the investigative work of the agents at HHS-OIG and expressed appreciation for their dedication to the case. Mr. Bharara also praised the investigative work of the FBI.

The case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Rebecca C. Martin and Christine Schessler Poscablo are in charge of the case.

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WPCNR SCHOOL DAYS. STATEMENT FROM PETER BASSANO, WHITE PLAINS BOARD OF EDUCATION to WPCNR. MAY 13, 2015:

I have been on the school board for 13 years.   I have decided that it is time to step down for several reasons but primarily because of my increased responsibilities and time commitment at work.

In order to do be an effective school board member and to add value to the process, the time commitment is substantial.  In addition to the meetings and the various other events requiring School Board presence, the considerable “homework” that needs to be done in order to make informed decisions usually means working late into the night.   This is far too important a job to do in a desultory manner.

While I am proud of the work we have done, I am also immensely frustrated by the many impediments to effective public education that a local school board can never overcome.

The changes that are so desperately needed in public education, more and more, seem out of reach and the misguided, politically expedient and usually ineffective solutions proffered by politicians in Albany and Washington fail to address directly the true problems with public education.

Moreover, these poorly crafted and horribly implemented “solutions” not only fail to correct the target problems but usually create new problems that further distract educators from the tasks at hand.

In my years on the Board, have had the opportunity to work with some extraordinary educators and gifted leaders – both in our schools and in our community.  They are people of integrity, people of honor and people who are eager to give their precious time for the greater good.  Working with these exceptional people has made me a better person.

I have great faith in, and tremendous admiration and affection for, the School Board members who are continuing on.  They are some of the smartest, most dedicated and honorable people with whom I have ever worked.

I am also thrilled that Dr. Paul Fried (incoming Superintendent of Schools) will be captaining the ship and Michele Schoenfeld, Clerk to the Board of Education will be his first mate.  I am confident that he is the right person to lead our district and that Michele will continue to be the district’s font of wisdom and experience.

Mostly, I will miss the kids.  I have also been privileged to witness firsthand how our schools transform the lives of the beautiful youngsters in our charge.  I will be forever grateful for this marvelous opportunity.

While being on the Board has certainly enriched my life, it is time to move to the next chapter.

Thank you John for your hard work.  There is little more important in the operation of our community than the free flow of truth.

Peter

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Governor Andrew M. Cuomo today announced the launch of a multi-agency Enforcement Task Force that will move immediately to prevent unlawful practices and unsafe working conditions in the nail salon industry. The Task Force will also recover unpaid wages and shut down unlicensed businesses and businesses out of compliance with state law.

“New York State has a long history of confronting wage theft and unfair labor practices head on and today, with the formation of this new Enforcement Task Force, we are aggressively following in that tradition,” Governor Cuomo said. “We will not stand idly by as workers are deprived of their hard-earned wages and robbed of their most basic rights. This Task Force will crack down on these kinds of abuses in the nail salon industry, enforce all of New York’s health and safety regulations, and help ensure that no one – regardless of their citizenship status or what language they speak – is illegally victimized by their employer.”

The immediate actions include:
· Multi-Jurisdiction Approach: Task Force member agencies will work together to implement new health and safety regulations for nail salon employees and engage in new enforcement actions to recover unpaid wages, issue fines and penalties for violations of all relevant laws and regulations, assess damages and evaluate whether to revoke the license of violators.

· New Health and Safety Regulations: Task Force members will implement new workplace safety regulations for nail salons that require the use of personal protective equipment (PPE) including gloves and face masks where warranted, and vigorously enforce existing regulations that grant all nail salon employees the right to demand and wear PPE at any time. New regulations will also require each work station to be equipped with personal fans. Laws and regulations regarding ventilation will be strictly enforced.

· Surety Required: Task Force members will implement new regulations requiring every nail salon to secure either a bond or expanded insurance policy to cover claims for unpaid wages as part of its licensure. In addition, where a nail salon fails to comply with an order to pay assessed back wages, an additional bond to cover those wages and two years’ worth of future wages will be demanded by the Department of Labor.

· License Revocation: Task Force members will move to revoke the business license of any egregious offender who is out of compliance with state law. The Department of State has jurisdiction to seek a license revocation of businesses out of compliance and will take such action where warranted.

· Mandatory Postings about Employee Rights: Nail salons will be required to post notices visible to all employees and in multiple languages that describe the employees’ right to full, legal wages and a safe working environment. Postings will include hotline numbers to report complaints and information about available resources

.· Shutting Down Unlicensed Businesses: The Department of State will immediately initiate proceedings to shut down unlicensed businesses

.· Notice Visible to the Public: The Department of State will issue new regulations requiring any nail salon noticed to appear at a cease and desist proceeding to post the legal notice in the window of the business in a manner visible to the public.· Education and Outreach: Task Force members will conduct a series of education and outreach actions that will inform workers of their rights under the law in multiple languages and offer resources and assistance. This outreach will include information regarding confidential reporting opportunities, to encourage workers – including those who may be undocumented – to come forward to report abuses. Outreach and education efforts will also target business owners as to their legal responsibilities regarding wages, health and safety.

· Community-Based Partnership: Task Force members will work with community based organizations to identify violators and to encourage workers to come forward.
Every worker complaint that is reported to the state is investigated. When a pattern of rampant violations within an industry appears, the state will conduct a proactive, multi-agency investigation and has done so in the carwash, restaurant and construction industries.

In May 2014, the Department of Labor conducted a comprehensive investigation into nail salons that was recently highlighted as part of a two-part series in The New York Times. The investigation of 29 nail salons resulted in the finding of 116 violations of state labor law. The disturbing worker stories reflect that the nail salon industry is rife with worker abuse. The Task Force announced today will greatly strengthen enforcement capabilities and bring new tools to bear in cleaning up the nail salon industry.

New York State continues to be a national leader in returning money to workers who were not paid the proper minimum wage, overtime pay or fringe benefits. In 2014, the Department of Labor disbursed $30.2 million — the highest amount in history — to nearly 27,000 New York workers. New York State also has the second largest enforcement staff in the nation.

The State employs dozens of investigators who speak multiple languages. All state agencies have comprehensive language access services in all languages available to employees and customers.

The Task Force strongly urges any worker who has not been paid the proper wages, or anyone concerned about safety, working conditions or other abuses at nail salons to contact the Task Force at 1-888-469-7365.

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WPCNR FBI WIRE. From the Federal Bureau of Investigation. May 4, 2015:

Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-In-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that New York State Senate Majority Leader DEAN SKELOS and his son ADAM SKELOS were taken into custody this morning on charges that they extorted those with business before New York State to make payments to ADAM SKELOS, with the expectation that such payments would result in official action by DEAN SKELOS.

The defendants were also charged with bribery and honest services fraud schemes. Among other things, DEAN SKELOS is accused of illegally obtaining a $20,000 payment for ADAM SKELOS from a large real estate developer dependent on DEAN SKELOS for tax breaks and a $10,000 monthly payment from an environmental technology company seeking government-funded contracts in New York State.

DEAN SKELOS and ADAM SKELOS surrendered to the FBI in Manhattan, this morning, and are scheduled to appear before U.S. Magistrate Judge Henry B. Pitman in Manhattan federal court later today.

U.S. Attorney Preet Bharara said: “As the Complaint charges, in six counts, Dean Skelos unlawfully used his power and influence as Senate Majority Leader, repeatedly, to illegally enrich his son, Adam, and indirectly, himself. And, more specifically, the Complaint, in multiple places, alleges that Dean Skelos’s support for certain infrastructure projects and legislation was often based, not on what was good for his constituents or good for New York, but rather on what was good for his son’s bank account. By now, two things should be abundantly clear. First, public corruption is a deep-seated problem in New York State. It is a problem in both chambers; it is a problem on both sides of the aisle. And second, we are deadly serious about tackling that problem.”

FBI Assistant Director-In-Charge Diego Rodriguez said: “The charges announced today describe the alleged criminal activity of Dean and Adam Skelos. In particular, the defendants are alleged to have conspired to take advantage of Dean Skelos’s powerful position within state government to influence and extort those with business before the state. When all was said and done, Dean Skelos is charged with having caused more than $200,000 to be paid to Adam Skelos in exchange for backdoor bribes. We hold our elected representatives to the highest standards, and will continue to root out corruption in all forms and at all levels of government: municipal, state, and federal.”

According to the allegations contained in the Complaint unsealed today in Manhattan federal court:

Since his re-election in 2010, DEAN SKELOS has served as Majority Leader or Co-Majority Leader of the New York State Senate, a position that gives him significant power over the operation of New York State government. DEAN SKELOS used this power to pressure companies with business before New York State to make payments to his son, ADAM SKELOS, who substantially depended on these companies for his income. DEAN SKELOS and ADAM SKELOS were able to secure these illegal payments through implicit and explicit representations that DEAN SKELOS would use his official position to benefit those making the payments, which DEAN SKELOS in fact did when it was necessary to ensure that the payments to ADAM SKELOS continued.

DEAN SKELOS, as charged, obtained over $200,000 in payments to ADAM SKELOS through persistent and repeated pressure applied to a senior executive of a major real estate developer (“Developer-1”) who is cooperating with the Government and referred to in the Complaint as CW-1. In response to this pressure, CW-1 arranged for Developer-1 to pay $20,000 to ADAM SKELOS and further arranged for an environmental technology company (the “Environmental Technology Company” or “Company”) in which Developer-1’s founding family and CW-1 owned stakes to make $10,000 monthly payments to ADAM SKELOS. CW-1 arranged for these payments to ADAM SKELOS due to Developer-1’s substantial dependence on DEAN SKELOS for real estate tax abatements and other real estate legislation favorable to Developer-1, and based in part on a statement from DEAN SKELOS that he would punish those in the real estate industry who defied him. In return for the payments to ADAM SKELOS, and to ensure that they would continue, DEAN SKELOS took numerous official actions to benefit both Developer-1 and the Environmental Technology Company, including promoting State legislation beneficial to the companies.

Dean Skelos’s Demands For Payments To Adam Skelos

Beginning in approximately 2010, DEAN SKELOS met repeatedly with CW-1 and other representatives of Developer-1 to request that Developer-1 provide sales commissions to his son, ADAM SKELOS, claiming that ADAM SKELOS was suffering financially. DEAN SKELOS met repeatedly with CW-1 to request payments for his son, including during meetings where CW-1 and others from Developer-1 were lobbying DEAN SKELOS with respect to real estate legislation. CW-1 was concerned about Developer-1 making payments to ADAM SKELOS but did not want to ignore DEAN SKELOS’s repeated requests in light of his position as Senate Majority Leader and his importance in ensuring the passage of real estate legislation beneficial to Developer-1.

Payments To Adam Skelos Arranged By CW-1

As charged, CW-1 responded to the requests from DEAN SKELOS by arranging for payments to ADAM SKELOS that would be difficult to trace to Developer-1. First, CW-1 caused a $20,000 check to be issued to ADAM SKELOS from a title insurance company dependent on Developer-1 for business, even though ADAM SKELOS did no work whatsoever in connection with the real estate transaction for which title insurance was being issued. CW-1 made this payment after ADAM SKELOS forwarded to his father, DEAN SKELOS, an e-mail that ADAM SKELOS had sent to CW-1 requesting a title insurance commission. After receiving the e-mail, DEAN SKELOS responded “Following up, be patient” during the same time period DEAN SKELOS was contacting CW-1 and a lobbyist working for Developer-1 to renew his request for payments to his son.

In addition to the $20,000 payment CW-1 convinced the CEO of the Environmental Technology Company to hire ADAM SKELOS as a $4,000 per month “consultant” by telling the CEO that, through payments to ADAM SKELOS, DEAN SKELOS would be able to assist the Environmental Technology Company in winning government-funded contracts in New York State. For example, CW-1 e-mailed the CEO that “there is great potential for [ADAM SKELOS] to exploit his father’s contacts statewide.” Likewise, ADAM SKELOS arranged a conference call between DEAN SKELOS and a senior executive with the Environmental Technology Company who is cooperating with the Government (“CW-2”) to demonstrate that his father would assist the Company in return for payments. Later, after ADAM SKELOS had been hired by the Company on a $4,000 per month contract, CW-1 told the CEO on behalf of ADAM SKELOS and DEAN SKELOS that they would block Nassau County’s approval of a $12 million contract with the Environmental Technology Company unless payments to ADAM SKELOS were sharply increased. In addition, CW-1 e-mailed the CEO that ADAM SKELOS’s “dad called” and “I think they don’t think [the Nassau County contract is] worth pushing through” absent higher payments to ADAM SKELOS. The CEO then agreed to increase ADAM SKELOS’s payments to $10,000 per month, and CW-2 responded in an e-mail that the Environmental Technology Company was being “held hostage.”

Official Actions By Dean Skelos

As charged in the Complaint, DEAN SKELOS took official actions beneficial to Developer-1 in return for the $20,000 payment to ADAM SKELOS and Developer-1’s role in arranging for payments to ADAM SKELOS from the Environmental Technology Company. Among other things, DEAN SKELOS voted for real estate-related legislation lobbied for by Developer-1, including the renewal of tax abatement and rent regulation legislation crucial to the financial success of Developer-1 enacted in 2011, and an expansion of the tax abatement program in 2013.

With respect to the Environmental Technology Company, DEAN SKELOS and ADAM SKELOS periodically communicated to the CEO and CW-2 directly and indirectly that DEAN SKELOS would use his official position to benefit the Company so as to induce the Company to continue making payments to ADAM SKELOS. And, when the Company at times became frustrated with the limited progress in obtaining and collecting on government-funded contracts, DEAN SKELOS took official action to benefit the Company, including the following actions described in the Complaint:

• DEAN SKELOS used his official position to assist the Environmental Technology Company in applying and obtaining approvals for a $12 million contract with Nassau County, including by consulting with CW-2 on the Environmental Technology Company’s proposal and making calls to Nassau County officials to expedite the contracting process. Through these actions, ADAM SKELOS’s monthly payment from the Company more than doubled from $4,000 to $10,000.
• DEAN SKELOS pressured Nassau County officials to make payments to the Environmental Technology Company, stating at one point that his son could lose his job if payments were not expedited. For example, DEAN SKELOS was intercepted over a Court-authorized wiretap in a call with the Nassau County Executive in which he asked for an explanation for the lack of payments, complaining on behalf of ADAM SKELOS that “somebody feels like they’re getting jerked around the last two years.” Nassau County officials were concerned that if they did not pay ADAM SKELOS then DEAN SKELOS would not be responsive to the County’s legislative needs. Indeed, when Nassau County was slow in making payments to the Company, ADAM SKELOS told CW-2 on an intercepted call that Nassau County was “burning bridges left and right” and that the “State is not going to do a fucking thing for the County” because “they haven’t helped us with what we needed.”
• DEAN SKELOS used his official position to promote hydrofracking wastewater treatment regulations which would essentially require the use of a product of the type marketed by the Environmental Technology Company, and that would result in additional commission payments to ADAM SKELOS. To this end, DEAN SKELOS met privately with ADAM SKELOS and CW-2 on the Company’s fracking proposals and directed a member of his Senate Staff to arrange a meeting with a New York State government official and employees of the Environmental Technology Company. When the Governor of New York announced in December 2014 that New York State would continue to ban fracking, DEAN SKELOS repeatedly reassured ADAM SKELOS that “we’re going to totally focus on the other thing now,” referring to other legislative action that could benefit the Company.
• DEAN SKELOS used his official position in an attempt to direct a portion of a $5.4 billion sum that the State had recovered in litigation with financial services companies (the “Settlement Funds”) in a way that would benefit water projects and contracts that were being pursued by the Environmental Technology Company. For example, when ADAM SKELOS expressed concern in an intercepted call that the Governor was “pushing to spend all that money on his own” in his budget proposal, DEAN SKELOS told his son “don’t worry” and referred him to the speech that a fellow Senator would give in response to the Governor, in which DEAN SKELOS had inserted language advocating for using the Settlement Funds for “sewer and water systems.”
• DEAN SKELOS also used his official position in an attempt to enact State “design-build” legislation that Nassau county officials had explained was necessary to fully implement the $12 million contract with the Environmental Technology Company. Nassau County officials provided Dean Skelos with proposed legislation which Dean Skelos stated he would support if backed by the Governor. In a recorded call, ADAM SKELOS told CW-2 that DEAN SKELOS was “going to be sure that gets done” and that the plan involved the Nassau County executive lobbying the Governor to “[k]ind of make [the Governor] think it’s his idea and you’re supporting his agenda.” ADAM SKELOS later told CW-2 and the CEO that while design-build legislation would not be enacted as part of the budget process, DEAN SKELOS would continue to pursue it in the legislative session continuing through June 2015.

Caution Following the Arrest of the Assembly Speaker

After the Speaker of the New York State Assembly was arrested on January 22, 2015 and media outlets reported shortly thereafter that DEAN SKELOS was under investigation, the defendants became more cautious in pursuit of the Company’s legislative goals. ADAM SKELOS, for example, obtained what he referred to as his “burner phone”—a common slang term to refer to a phone that is not traceable to the user—to use for speaking to CW-2 about DEAN SKELOS’s progress in obtaining legislative benefits for the Environmental Technology Company. DEAN SKELOS is also caused the cancellation of a meeting Adam Skelos had arranged in furtherance of the scheme, commenting in an intercepted phone call “right now we are in dangerous times Adam.”

At the direction of the Government, CW-2 informed ADAM SKELOS in late March of this year that due to the limited progress on the Company’s legislative goals, the CEO of the Environmental Technology Company was considering terminating his $10,000 monthly payment. ADAM SKELOS then placed an intercepted call to DEAN SKELOS, telling his father he “lost something that I had . . . the water . . . the water thing.” In response, DEAN SKELOS told ADAM SKELOS that “we’ll try to get it back at some point.” DEAN SKELOS advised ADAM SKELOS not to “panic over this” and not to “burn bridges,” but rather to just tell the Environmental Technology Company that “hopefully we can get it all going again.” ADAM SKELOS then placed an intercepted call to the CEO of the Environmental Technology Company and stated he would draft a letter of separation “just in case I ever get questioned by anyone” but that “really nothing is going to change.”

* * *

DEAN SKELOS, 67, and ADAM SKELOS, 32, both of Rockville Centre, New York, are each charged with three counts of extortion under color of official right, two counts of soliciting bribes in connection with a federal program, and one count of conspiracy to commit honest services fraud. The extortion and honest services counts carry a maximum penalty of 20 years in prison and the soliciting bribes counts carry a maximum of 10 years. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

U.S. Attorney Bharara praised the work of the FBI and the Criminal Investigators of the United States Attorney’s Office, who jointly conducted this investigation.

This case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Jason Masimore, Rahul Mukhi, Tatiana Martins, and Thomas McKay are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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