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Thursday, May 7, 2015

U.S. Attorney Hartunian, New York Attorney General Schneiderman & Comptroller DiNapoli Announce Guilty Pleas on State and Federal Charges by Former Assemblymember

Former New York State Assemblymember William Scarborough, 69, of Queens, New York, has agreed to plead guilty on federal and state charges stemming from public corruption investigations, announced U.S. Attorney Richard S. Hartunian of the Northern District of New York, Attorney General Eric T. Schneiderman of the State of New York, State Comptroller Thomas P. DiNapoli of New York and Special Agent in Charge Andrew W. Vale of the FBI’s Albany Division.

Scarborough pleaded guilty this morning to federal charges and is scheduled to plead guilty to state charges at 12:30 p.m. in Albany, New York, County Court.

Appearing in federal court before Senior U.S. District Judge Thomas J. McAvoy of the Northern District of New York, Scarborough pleaded guilty to wire fraud and theft concerning a program receiving federal funds.  Scarborough is scheduled to be sentenced on Monday, Sept. 14, 2015, at 11:30 a.m., in Albany.  He faces up to 20 years in prison on the wire fraud count, 10 years in prison on the count charging theft concerning a program receiving federal funds and fines of up to $250,000 on each count.  As part of the plea agreement, Scarborough also agreed to resign his position as a member of the New York State Assembly, pay $54,355 in restitution to the State of New York and forfeit that amount to the United States.   

This afternoon, Scarborough will appear before Judge Stephen W. Herrick of the Albany County Court to plead guilty to a public corruption charge related to the misuse of over $40,000 from his Friends of Bill Scarborough campaign account.  As part of the plea agreement, Scarborough will plead guilty to grand larceny in the fourth degree and is expected to be sentenced to one year of jail time, will resign his position in the State Assembly and will donate all funds remaining in his campaign account to charity.

The federal charges and guilty plea arose from an investigation into travel voucher fraud.  As a New York State Assemblymember, Scarborough was entitled to receive the following types of payments when he traveled to Albany for legislative business: an allowance for overnight stays in Albany (full per diem), which varied from $160 to $171 per day, an allowance for travel not requiring an overnight stay in Albany (partial per diem), which varied from $49 to $61 per day and reimbursement for mileage actually incurred for travel between his home and Albany.  To receive those payments, Scarborough was required to submit travel vouchers to the New York State Assembly Finance Department certifying his dates of travel to and from Albany, the number of miles he traveled to and from Albany, the purpose of his travel, the days he was in Albany and his eligibility for payment for either full per diem or partial per diem on each of those days.   He also had to certify that the claimed amount was “just, true and correct.”

As part of his federal plea, Scarborough admitted that from January 2009 through December 2012 he submitted 174 fraudulent New York State Assembly travel vouchers to the assembly’s Finance Department causing the State of New York to pay him $54,355 that he was not entitled to receive.  In the fraudulent vouchers, Scarborough falsely certified that he had been in Albany for legislative business on specific days when he had not been in Albany at all, had been in Albany, for less time than he claimed on a voucher, or had not stayed overnight.  

The state charges arose from an ongoing effort between Schneiderman and DiNapoli known as “Operation Integrity” and conducted with the FBI’s Public Corruption Task Force.  In his state plea agreement, Scarborough will admit that between January 2007 and March 2014, he stole from the Friends of Bill Scarborough campaign committee by making over $38,000 in unauthorized cash withdrawals and transfers from his campaign account for his own personal use and taking checks totaling $3,450 which were intended as donations to the Friends of Bill Scarborough campaign and instead depositing them directly into his personal bank.  In furtherance of this scheme, Scarborough will admit that, over the seven year period, he caused his campaign committee to file 21 false reports to the New York State Board of Elections that failed to reflect these larcenies.

“My office is committed to rooting out corruption in the state legislature, without regard to party, position, power or popularity,” said U.S. Attorney Hartunian.  “There is no delight in the downfall of a duly elected representative, but Mr. Scarborough chose personal gain over the public trust.  Complaints of financial distress – something many people experience – provide a poor excuse for Mr. Scarborough’s misconduct, which involved a four year scheme to defraud by abusing the New York State Assembly’s travel voucher system.  He falsely obtained $54,355, and now must face the consequences of his actions.  I commend the Federal Bureau of Investigation, the Office of New York State Attorney General Eric Schneiderman and the Office of New York State Comptroller Thomas DiNapoli for their outstanding work and collaborative efforts here.  This case is the result of interagency cooperation at its best.”

“Today Assemblymember Scarborough pleaded guilty to crimes that betrayed his constituents and the taxpayers of the State of New York – crimes that will send him to jail under this plea agreement,” said Attorney General Schneiderman.  “While he will pay the price for his individual crimes, we need to channel public outrage at the ongoing corruption scandals into a movement for comprehensive reform.  We have done this before in New York, and we can do it again.”

The Attorney General’s Office thanked the FBI and the U.S. Attorney’s Office of the Northern District of New York for their collaboration on this case.

“Public service means just that: serving the public,” said Comptroller DiNapoli.  “Mr. Scarborough abused his public office for personal gain and now faces the consequences of his actions.  I commend Attorney General Schneiderman, U.S. Attorney Hartunian and the Federal Bureau of Investigation for their commitment and for our continued partnership in rooting out corruption and protecting public funds.”

“American taxpayers deserve honesty from public officials,” said Special Agent in Charge Vale.  “Those involved in acts of corruption and blatant greed will be held accountable for their actions and we will continue to pursue those like Mr. Scarborough who sell their integrity at the public’s expense.”

The federal case was investigated by the FBI’s Albany Division and is being prosecuted by Assistant U.S. Attorney Jeffrey C. Coffman of the Northern District of New York.

Prosecuting the state case is Assistant Attorney General Christopher Baynes of the Attorney General’s Public Integrity Bureau.  The state’s investigation was handled by Investigator Mark Spencer and Deputy Bureau Chief Antoine Karam of the Investigation Bureau.  Forensic Auditor Jason Blair and Legal Analyst Sara Pogorzelski provided additional assistance.

The New York State Comptroller’s Division of Investigations conducted the investigation for Comptroller DiNapoli's Office.

Updated May 7, 2015