Senior Managers Of Soundview Health Center Indicted On Multiple Counts Of Grand Larceny

New York State Attorney General Spitzer, joined by New York City Campaign Finance Board (CFB) Executive Director Nicole Gordon, today announced the indictment of four senior managers at the Soundview Health Center who are charged with stealing state funds earmarked for programs designed to serve impoverished women, children and persons diagnosed with HIV and AIDS and using the funds to finance political campaigns.

The four individuals charged are: Sandra Love, Soundview Senior Vice President, Maria Cruz, Vice President of Operations, Norma Ortiz, Executive Assistant to the President and Esther Hill, former Director of the Women Infants and Children ("WIC") Program. The four are charged with multiple counts of Grand Larceny in the Third Degree as well as a Scheme to Defraud in the First Degree. Defendants Love and Hill are also charged with filing false documents.

If convicted, each individual faces up to seven (7) years in prison on the most serious charge of Grand Larceny.

According to the indictment, the four above-named defendants engaged in a scheme to fraudulently obtain money intended for Soundview’s WIC and HIV programs and applied those funds to pay for costs incurred in advancing the political campaigns of Soundview’s President, including a bid for Bronx Borough President in 2001. The amount of diverted funds is estimated to be more than $25,000.

"This type of betrayal of the public trust, if proven to be true, is particularly egregious," said Attorney General Spitzer. "To pervert public programs designed to aid some of the neediest in our communities, including young children, for the advancement of partisan objectives is inexcusable."

Spitzer thanked the State Department of Health for its help in bringing this case.

"The critical nutritional and health services WIC provides for New York’s women and children, many of our most vulnerable citizens, cannot be put in jeopardy," said State Health Commissioner Antonia C. Novello. "I am pleased that the Health Department was able to ensure that the 4,200 WIC participants previously served by Soundview continued to receive WIC through other NYC WIC providers without an interruption in services."

"I would like to thank the Attorney General’s Office and the Campaign Finance Board staff – particularly the audit unit – for uncovering this apparent fraud. In the 2001 election, under the new 4-to-1 matching formula, more than $42 million in public funds were disbursed to nearly 200 candidates. The vast majority
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of these candidates use this Program as intended. But the opportunity to receive public funds carries with it serious responsibilities for the candidates. This case is a regrettable reminder of the Board’s continued responsibility to be vigilant in its compliance and enforcement efforts on behalf of the public," said CFB Executive Director Gordon.

The scheme is alleged to have included the following:

• Directing workers in Soundview’s WIC & AIDS programs to stop doing their healthcare jobs and instead work on various political campaigns, including election day work, petitioning, and handing out campaign literature. Defendants then had Soundview seek reimbursement from the State for those workers’ salaries, claiming that the workers had really been engaged in healthcare work.
• Paying bonuses to certain WIC workers who had been most active in the campaigns – including a $6000 bonus to defendant Hill – and then billing the State for the bonuses by claiming that they were for overtime and other salary expenses for healthcare related work.
  
• Taking food designated to go to impoverished AIDS patients and handing it out at political rallies for Soundview’s President.
• Seeking four-to-one campaign matching funds from the New York City Campaign Finance Board for contributions claimed to be made by Soundview employees but in fact reimbursed by defendant Cruz.

Soundview’s President, Pedro Espada Jr., is a former member of both the State Senate and City Council and has run in at least six New York elections including the 2001 race for Bronx Borough President. Defendant Ortiz served as Espada’s campaign manager for the last of those elections.

The State Health Department terminated Soundview’s $700,000 annual WIC contract in March 2003.

Spitzer also thanked the New York State Comptroller’s Office and the Bronx District Attorney’s Office for their contributions to the investigation.

"I am proud that auditors from my office aided this investigation with an audit that helped expose the actions of these individuals and by working with the Attorney General’s staff. I want to commend the auditors for their diligence and dedication," said State Comptroller Alan Hevesi. "As State Comptroller, I have made it a high priority to work closely with law enforcement agencies throughout New York State to uncover malfeasance and pursue those who break the law and violate the public trust."

In addition to the four above noted defendants, three other Soundview employees – Joyce Oates, Leonard Frazier and Dora Garcia – were indicted on perjury charges for lying to the Grand Jury that has been investigating this matter.

The charges in the indictment are accusations only and the defendants are presumed innocent unless and until proven guilty.

The investigation was led by Chief of the Public Integrity Unit Mark G. Peters, with Assistant Attorneys General Lesley Brovner and Brian Stettin, and Investigators Richard Friedman, Lester Dier and Ed Elie.