Former state Sen. Pedro Espada Jr. pleaded guilty in federal court Friday to tax fraud related to his theft of hundreds of thousands of dollars from the Bronx-based health clinics he help found. Mr. Espada's son, Pedro Gautier Espada, pleaded guilty to stealing federal funding from the clinics and failing to file a tax return.
"Today's guilty pleas signal the end of an era," U.S. Attorney Loretta Lynch said in a statement. "For years, Pedro Espada Jr. betrayed the trust of the people of the Bronx by taking money designated to provide health services to a struggling community and using those funds to prop up his own lavish lifestyle."
Mr. Espada, who was majority leader of the state Senate from 2009 to 2010 before losing his seat in a Democratic primary, had for years denied that he pillaged his Soundview Healthcare Center clinics to pay for birthday parties, home renovations and restaurant meals for his family and friends. He accused federal prosecutors and Gov. Andrew Cuomo, who as attorney general sued Mr. Espada for fraud, of engaging in a political witch-hunt.
After Mr. Espada's guilty plea, Mr. Cuomo took a victory lap.
"Nearly three years ago, my attorney general's office brought a case against then-Sen. Pedro Espada for looting his taxpayer-funded not-for-profit and abusing his position of public trust," Mr. Cuomo said in a statement. "Mr. Espada's reaction was to lash out again and again and to falsely disparage and accuse my office of engaging in a politically-motivated witch hunt. Today, I give Mr. Espada the last word—when he says, 'guilty.' "
Mr. Espada, who founded Soundview in 1978, faces a sentence of up to 43 years in prison as well as fines, forfeiture and restitution of up to $2 million. He agreed not to challenge his earlier conviction on theft charges.
His network of clinics had been receiving more than $1 million a year in federal grants, plus millions more in Medicaid, Medicare and state money.
The tax fraud charge pertained to his 2005 return, in which he failed to report income he received from his janitorial company, which was paid by Soundview. He also avoided capital gains tax by falsely claiming that a Bronx house he sold was his primary residence, despite renting it out. Prosecutors said he actually lived in Mamaroneck, in Westchester County—which was an open secret in the Bronx for years.