Former New York State Senate Majority Leader Dean Skelos And His Son, Adam Skelos, Convicted Again Of Corruption Offenses In Manhattan Federal Court
Robert Khuzami, Attorney for the United States, acting under authority conferred by 28 U.S.C. § 515, announced the convictions of former New York State Senate Majority Leader DEAN SKELOS and his son ADAM SKELOS on bribery, extortion, and honest services fraud counts, following a five-week jury trial before the U.S. District Judge Kimba M. Wood. As a unanimous jury found for a second time, DEAN SKELOS repeatedly abused his official position to obtain more than $300,000 in bribes and extortion payments made to his son, ADAM SKELOS. The defendants had previously been found guilty of the same offenses by a jury in December 2015, but their convictions were overturned by the U.S. Court of Appeals for the Second Circuit as a result of the Supreme Court’s decision in McDonnell v. United States.
Deputy U.S. Attorney Robert Khuzami said: “Yet again, a New York jury heard a sordid tale of bribery, extortion, and the abuse of power by a powerful public official of this State. And yet again, a jury responded with a unanimous verdict of guilt, in this case of Dean Skelos and his son Adam – sending the resounding message that political corruption will not be tolerated.”
According to the evidence introduced at trial, court filings, and statements made in Manhattan federal court:
From 2011 to 2015, DEAN SKELOS served as Majority Leader and Co-Majority Leader of the New York State Senate, a position that gave him significant power over the operation of New York State government. DEAN SKELOS repeatedly 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 who made the payments, and punish those who did not. In total, DEAN SKELOS obtained over $300,000 in payments to ADAM SKELOS through persistent and repeated pressure applied to senior executives of three different companies that needed legislation passed in the New York State Senate and other official actions from DEAN SKELOS.
The Glenwood Scheme
Beginning in late 2010, and continuing for approximately two years, DEAN SKELOS repeatedly solicited payments for ADAM SKELOS from representatives of Glenwood Management Corp. (“Glenwood”), a major New York City real estate company. DEAN SKELOS’s solicitations for payments to ADAM SKELOS took place during the same meetings when Glenwood’s representatives were asking for DEAN SKELOS’s assistance with New York State legislation that was crucial to Glenwood’s profitability. As a result of the sustained pressure from DEAN SKELOS, representatives of Glenwood arranged for a $20,000 direct payment to ADAM SKELOS and further arranged for Abtech Industries (“Abtech”), an Arizona-based stormwater technology company in which Glenwood’s founding family owned a stake, to make $4,000 monthly payments to ADAM SKELOS. Glenwood arranged for these payments to ADAM SKELOS due to the company’s substantial dependence on DEAN SKELOS for real estate tax abatements and other real estate legislation favorable to Glenwood, and based in part on statements from DEAN SKELOS that he would punish those in the real estate industry who defied him.
The Abtech Scheme
After successfully obtaining ADAM SKELOS’s Abtech consulting contract for $4,000 per month, DEAN SKELOS and ADAM SKELOS then threatened to use DEAN SKELOS’s official powers to block Abtech’s bid for a Nassau County contract unless the company sharply increased ADAM SKELOS’s payments. Abtech ultimately agreed to increase ADAM SKELOS’s payments to $10,000 per month because the company feared that, if it did not meet the defendants’ demands, it would lose the Nassau County contract that was critical to its business. In return for the payments to ADAM SKELOS, DEAN SKELOS took and agreed to take numerous official actions to benefit Abtech.
For example, when Abtech and ADAM SKELOS believed Nassau County was withholding funding due to Abtech under its contract, DEAN SKELOS pressured Nassau County officials to make additional funds available. In January 2015, DEAN SKELOS was intercepted in a call with the Nassau County Executive in which he raised the issue, complaining on behalf of ADAM SKELOS that “somebody feels like they’re getting jerked around the last two years.” The next day, DEAN SKELOS traveled with the County Executive and his Deputy to the funeral of a New York City Police Department officer, where DEAN SKELOS reiterated in person his demand that the County make payments to Abtech, which the County subsequently did.
DEAN SKELOS also used his official position in an attempt to direct State funding that had been recovered in litigation with financial services companies (the “Settlement Funds”) in a way that would benefit water projects and contracts being pursued by Abtech. For example, at the same time ADAM SKELOS was attempting to obtain additional Abtech stormwater projects with local municipalities by claiming that the projects could be funded with State money, DEAN SKELOS advocated for a portion of the Settlement Funds to be allocated for stormwater projects.
The PRI Scheme
During the same time period as the Glenwood and Abtech schemes, DEAN SKELOS solicited payments for his son ADAM SKELOS from yet another company, Physician Reciprocal Insurers (“PRI”). PRI, a medical malpractice insurance firm whose existence depends on the renewal of certain New York State legislation, complied with the request, giving ADAM SKELOS a full-time job with benefits. Even though ADAM SKELOS was expected to work 40 hours per week, he treated his PRI position as a “no show” job from the outset of his employment. When ADAM SKELOS’s supervisor told ADAM SKELOS that he was expected to show up to work, ADAM SKELOS berated him and said, “Guys like you couldn’t shine my shoes. Guys like you will never amount to anything, and if you talk to me like that again, I’ll smash your f**king head in.” When the CEO of PRI told DEAN SKELOS that ADAM SKELOS was not showing up to work and was mistreating the other employees, DEAN SKELOS expressed no concern about ADAM SKELOS’s conduct and simply told the CEO to “work it out.” Based on this conversation, among others, the CEO understood that if he did not continue to pay ADAM SKELOS, despite his non-performance and misconduct at work, he was risking DEAN SKELOS taking legislative action against PRI.
During the time period that PRI was paying ADAM SKELOS, DEAN SKELOS repeatedly voted to extend PRI’s legislative protection from liquidation as well as other legislation that was being sought by PRI.
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DEAN SKELOS, 70, and ADAM SKELOS, 36, each face a maximum sentence of 20 years in prison on Count One (conspiracy to commit extortion), a maximum sentence of 20 years in prison on Count Two (conspiracy to commit honest services fraud), a maximum sentence of 20 years in prison on each of Counts Three through Five (extortion), and a maximum sentence of 10 years in prison on each of Counts Six through Eight (bribery). 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 Judge Wood. Both defendants are scheduled to be sentenced on October 24, 2018.
Mr. Khuzami praised the work of the Criminal Special Agent Investigators of the United States Attorney’s Office and the Federal Bureau of Investigation, who jointly conducted this investigation.
This case was prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Edward B. Diskant, Thomas McKay, and Douglas S. Zolkind are in charge of the prosecution.