Bronx City Councilman, Larry Seabrook, Found Guilty In Manhattan Federal Court On Nine Counts For Public Corruption Crimes
FOR IMMEDIATE RELEASE
Thursday July 26, 2012
Seabrook Steered More Than $1 Million in New York City Council Discretionary Funds to Non-Profits He Controlled to Benefit His Friends and Family
Preet Bharara, the United States Attorney for the Southern District of New York, announced that New York City Council Member LARRY SEABROOK, who represents the 12th Council District in the Bronx, was found guilty today by a jury in Manhattan federal court of nine counts of public corruption crimes, including mail fraud and wire fraud. SEABROOK was convicted after a five-week trial presided over by U.S. District Judge Deborah A. Batts.
United States Attorney Preet Bharara stated: “Councilman Larry Seabrook abused the power of his office to influence public contracts and to fund his own corrupt friends and family plan. Today’s conviction ensures that the Councilman will pay for betraying the public trust. Rooting out public corruption and restoring the public’s faith in honest government remains a vital mission of this office.”
According to the Indictment, other court documents, and the evidence presented at trial:
SEABROOK has served as a member of the New York City Council (the “Council”) since January 2002. In that capacity, his official duties have included: voting on legislation, representing and advocating for the interests of his constituents, and allocating New York City funds to non-profit organizations.
The Council Discretionary Funds Scheme
SEABROOK fraudulently steered more than $1 million in Council discretionary funds to non-profits he controlled that employed his friends and family. From 2002 through 2009, SEABROOK directed or attempted to direct at least $2.5 million of Council discretionary funds to purportedly independent non-profit organizations doing work to benefit the community. In truth and in fact, however, SEABROOK controlled these non-profit organizations, negotiating the leasing of their office space, creating their budgets, and making their personnel decisions. In the end, more than $1 million in Council discretionary funds were disbursed to the non-profit organizations that SEABROOK controlled.
The non-profit organizations SEABROOK controlled were funded exclusively by funds allocated, in the first instance, by the Council, primarily at the direction of SEABROOK. Of the funds that the non-profit organizations received from the Council, hundreds of thousands of dollars ultimately was disbursed among SEABROOK’s girlfriend, brother, two sisters, and nephew.
SEABROOK knew these non-profit organizations were not doing enough legitimate work to justify the funds they were receiving from the Council. In order to continue the City’s disbursement of funds to the groups, however, SEABROOK and others made misrepresentations to the City and to the Council, specifically by failing to disclose that the non-profit organizations were associated with him, and that the funds allocated to the organizations would benefit his friends and family.
SEABROOK and others also made false and inflated claims to the City and to the Council about the expenses that the non-profit organizations were incurring, in order to continue the flow of Council discretionary funding. Furthermore, rather than leasing space directly from the landlords of the properties they used, SEABROOK arranged for his non-profit organizations to enter into forged “sub-leases” with another organization he controlled (called the African-American Bronx Unity Day Parade, or the “Unity Day Parade”) which in turn leased the space directly from the actual landlords. Each year, three of SEABROOK’s non-profit organizations paid the Unity Day Parade a substantially greater amount than the rent paid to the actual landlord. In connection with this rent scheme alone, SEABROOK and his co-conspirators defrauded the City of approximately $95,000.
The FDNY Diversity Program Scheme
In the summer of 2005, in an effort to increase diversity in the ranks of the New York City Fire Department (the “FDNY”), the Council allocated approximately $1.5 million to, among other things, recruit and train minorities to pass the firefighter examination.
In 2006, SEABROOK recommended that one of the non-profit organizations he controlled, the North East Bronx Redevelopment Corporation (“NEBRC”), receive approximately $300,000 of funds that the Council had allocated to the FDNY diversity initiative through John Jay College of Criminal Justice (the “College”). The Council ultimately allocated $750,000 to the College, and directed the College to subcontract with NEBRC in the amount of $300,000.
SEABROOK made these recommendations even though he knew that a certain City agency (the “City Agency”) had audited NEBRC’s contracts to receive Council discretionary funding and found widespread financial mismanagement and accounting improprieties, as well as a failure to achieve the performance goals set by those contracts. Furthermore, SEABROOK and others did not disclose to the Council that the City Agency had identified serious problems at NEBRC, that the non-profit was under investigation by the City’s Department of Investigation, or that the funds allocated to NEBRC would benefit individuals close to SEABROOK. Although NEBRC ultimately did engage in some limited recruitment activity in connection with the FDNY diversity initiative, it did not provide any of the mentoring, training, or physical conditioning that it had represented it would provide. Ultimately, the Council funds that NEBRC received for the FDNY diversity initiative were disbursed to, among others, SEABROOK’s girlfriend; SEABROOK’s sister, who served as a “consultant” for the initiative and was paid $10,000 to write a six-page report; and SEABROOK’s nephew.
The “Jobs To Build On Program” Scheme
In 2007, the Council allocated millions of dollars to the Jobs To Build On Program (“JTBO”), a job training and employment initiative spearheaded by SEABROOK and others. A certain workers’ education and training organization (the “Workers’ Organization”) ultimately was charged with the responsibility of administering JTBO funds.
The Workers’ Organization sought to identify community-based organizations with which it could partner to more effectively provide employment and training services throughout the City in connection with the JTBO initiative. SEABROOK recommended that the Workers’ Organization partner with NEBRC, falsely representing that it was an entity with whom the Workers’ Organization could contract to effectively provide recruitment for employment and training services. The Workers’ Organization entered into a $350,000 contract with NEBRC.
On a number of occasions when a program coordinator for the Workers’ Organization made an unannounced visit to NEBRC’s office, the office was closed. The Workers’ Organization also found that NEBRC grossly underperformed the services it was obligated to provide under the contract and provided inadequate or false documentation in support of the services it was allegedly providing and the expenses it was incurring pursuant to its contract. And again, the Council funds that NEBRC received for the JTBO initiative were disbursed to, among others, SEABROOK’s girlfriend and SEABROOK’s nephew.
* * *
SEABROOK, 61, of the Bronx, New York, was convicted of Counts Four through Twelve, which include three counts of conspiracy to commit mail and wire fraud, three counts of mail fraud, and three counts of wire fraud. He was acquitted of Counts One, Two, and Three, which related to a fourth alleged scheme. A chart containing the maximum potential penalties and fines for each offense for which he was convicted is attached. In total, SEABROOK faces a maximum term of 180 years in prison. He is scheduled to be sentenced by Judge Batts on January 8, 2013, at 11:00 a.m.
Mr. Bharara praised the work of the New York City Department of Investigation in this case.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant United States Attorneys Karl Metzner, Randall Jackson, and Steve Lee are in charge of the prosecution.
Count |
Charge |
Maximum Penalties |
4 |
Mail/Wire Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
5 |
Mail Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
6 |
Wire Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
7 |
Mail/Wire Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
8 |
Mail Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
9 |
Wire Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
10 |
Mail/Wire Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
11 |
Mail Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
12 |
Wire Fraud |
20 years in prison; a fine of the greater of $250,000 or twice the gain or loss from the offense |
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