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Former Hospital CEO Sentenced In Manhattan Court To Three Years In Prison For Participating In Bribery Scheme Involving Three Members Of The New York State Legislature

FOR IMMEDIATE RELEASE
Monday May 7, 2012

Preet Bharara, the United States Attorney for the Southern District of New York, announced that DAVID ROSEN, the former CEO of MediSys Health Network, was sentenced today in Manhattan federal court to three years in prison for participating in a scheme to bribe New York State Senator Carl Kruger, New York State Assemblyman William Boyland, Jr., and former New York State Assemblyman Anthony Seminerio, with hundreds of thousands of dollars in exchange for their official acts.  ROSEN was convicted after a three-week bench trial in September 2011 of two counts of honest services fraud, one count of honest services fraud conspiracy, and two counts of conspiracy to commit bribery and to violate the Travel Act.  U.S. District Judge Jed S. Rakoff presided over the trial and imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said: “David Rosen cast a wide, corrupt net in his efforts to enrich himself and his company, bribing three State legislators over the course of nearly a decade.  Today’s sentencing brings to conclusion this case, which involved hundreds of thousands of dollars of illegal payoffs, sham contracts, and shell companies.  We will continue to aggressively pursue those who infect the political process and bring them to justice.”

According to the Superseding Indictment filed in Manhattan federal court, other court documents, and statements made during trial:

ROSEN was convicted of participating in a scheme to bribe Kruger, Boyland, and Seminerio in exchange for their official acts as New York State legislators.  Kruger served as a member of the New York State Senate since 1994, representing Bergen Beach, Flatlands, Mill Basin, and other communities in the 27th Senate District in Brooklyn.  Boyland has served as a member of the New York State Assembly since 2003, representing the 55th Assembly District in Brooklyn. Seminerio served as a member of the New York State Assembly from 1978 to June 2009, representing the 38th Assembly District in Queens.

In 2008, ROSEN attempted to bribe Kruger in connection with Kruger's efforts to provide official assistance to MediSys, including steering over $400,000 in New York State funds to MediSys and helping MediSys in its efforts to acquire the Caritas Hospitals in Queens, New York.  To that end, ROSEN caused Brookdale Hospital, a member of the MediSys Health Network, to enter into a contract with Compassionate Care Hospice, knowing that Kruger had an interest in the hospice contract.  Kruger's interest was based on an arrangement between Compassionate Care Hospice and Adex Management, Inc. (“Adex”), a marketing/consulting firm that brokered relationships in the healthcare industry, whereby Adex was paid to help them secure business.  Kruger was to receive the benefit of the money that Compassionate Care paid to Adex by passing it through a shell company, Olympian Strategic Development Corp., which was controlled by his close associate Michael Turano.  The contractual negotiation between Brookdale Hospital and the hospice care provider appears to have broken down when Seminerio was arrested.         

Between 1999 and 2008, ROSEN caused MediSys or its affiliates to make over $400,000 in payments to Seminerio through a sham consulting company.  In exchange, Seminerio advocated on his behalf with New York State agencies concerning the discharge of a $19 million loan in 2006.  He also co-sponsored legislation to provide a secured financing option to MediSys in 2006, and like Kruger, deliberated with New York State agency personnel on behalf of MediSys in connection with the acquisition of the Caritas Hospitals.

Between 2003 and 2008, ROSEN also caused MediSys to make corrupt payments to Boyland through a no-show consulting job that paid him approximately $35,000 a year.  In exchange for the approximately $177,000 that Boyland received between 2003 and 2008 from MediSys, he took official action to benefit the company, including requesting that the Speaker of the Assembly award millions of dollars to Brookdale Hospital.

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In addition to the prison term, Judge Rakoff sentenced ROSEN, 64, of Harrison, New York, to two years of supervised release and ordered him to pay a $500 special assessment fee.

Kruger, 62, and Turano, 50, who both reside in Brooklyn, New York, pled guilty in December 2011 and were sentenced on April 26, 2012, to seven and two years in prison, respectively. 

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

Seminerio pled guilty to one count of honest services mail fraud and was sentenced in February 2010 to six years in prison.  He passed away while his case was on direct appeal and the cause of action against him was abated.

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

The case is being handled by the Office's Public Corruption Unit.  Assistant U.S. Attorneys Glen G. McGorty, Michael Bosworth, and Kan Nawaday are in charge of the prosecution.                 

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