Wednesday, May 6, 2015

Skelos FBI Complaint in plain text



JASON A. MASIMORERAHUL MUKHITATIANA R. MARTINs Assistant United States Attorneys
Before : THE HONORABLE MICHAEL H. DOLINGER
United States Magistrate Judge Southern District of New York
----------------, 15 MAG 1492
UNITED STATES OF AMERICA SEALED comPLAINT
: Violations of
* 18 U. S. C. §§ 666, 1343, DEAN SKELOS, and : 1346, 1349, 1951, and 2
ADAM SKELOS,
.. -- : COUNTY OF OFFENSE : Defendants. : NEW YORK
SOUTHERN DISTRICT OF NEW YORK, ss. :
PAUL M. TAKLA, being duly sworn, deposes and says that he is a Special Agent with the Federal Bureau of Investigation (FBI, and charges as follows:
COUNT ONE
(Conspiracy to Commit Extortion Under Color of Official Right)
1. From at least in or about 2010, up to and including in or about April 2015, in the Southern District of New York and elsewhere, DEAN SKELOS and ADAM SKELOS, the defendants, and others known and unknown, willfully and knowingly did combine, conspire, confederate, and agree together and with each other to violate Title 18, United States Code, Section 1951.
2. It was a part and an object of the conspiracy that DEAN SKELOS and ADAM SKELOS, the defendants, and others known and unknown, willfully and knowingly, would and did obstruct, delay, and affect commerce and the movement of articles and commodities in commerce by extortion as that term is defined in Title 18, United States Code, Section 1951, to wit, DEAN SKELOS, ADAM SKELOS, and others known and unknown, would and did arrange for DEAN SKELOS to cause entities with business before New York State to direct payments to ADAM SKELOS with


the expectation that DEAN SKELOS would use his official position on their behalf.
(Title 18, United States Code, Section 1951. )
COUNT TWO
(Conspiracy to Commit Honest Services Fraud)
From at least in or about 2010, up to and including in or about April 2015, in the Southern District of New York and elsewhere, DEAN SKELOS and ADAM SKELOS, the defendants, and others known and unknown, willfully and knowingly did combine, conspire, confederate, and agree together and with each other to violate Title 18, United States Code, Sections 1343 and 1346.
It was a part and an object of the conspiracy that DEAN SKELOS and ADAM SKELOS, the defendants, and others known and unknown, willfully and knowingly, having devised and intending to devise a scheme and artifice to defraud, and to deprive the public of its intangible right to DEAN SKELOSs honest services as an elected legislator, would and did transmit and cause to be transmitted by means of wire communication in interstate and foreign commerce, writings, signs, signals, pictures, and sounds for the purpose of executing such scheme and artifice, in violation of Title 18, United States Code, Section 1343, to wit, DEAN SKELOS, while serving as Majority Leader and Co-Majority Coalition Leader of the New York State Senate, would and did take official action in return for payments to his son, ADAM SKELOS.
(Title 18, United States Code, Section 1349.)
COUNT THREE
(Extortion Under Color of Official Right – Real Estate Developer)
From at least in or about 2010, up to and including in or about April 2015, in the Southern District of New York and elsewhere, DEAN.SKELOS and ADAM SKELOS, the defendants, willfully and knowingly, would and did obstruct, delay, and affect commerce and the movement of articles and commodities in commerce by extortion as that term is defined in Title 18, United States Code, Section 1951, to wit, DEAN SKELOS, aided and abetted by ADAM SKELOS, used his official


position to cause a real estate developer with business before New York State to make and direct payments to ADAM SKELOS.
(Title 18, United States Code, Sections 1951 and 2.)
COUNT FOUR
(Extortion Under Color of Official Right – The Environmental Technology Company)
From at least in or about 2010, up to and including in or about April 2015, in the Southern District of New York and elsewhere, DEAN SKELOS and ADAM SKELOS, the defendants, willfully and knowingly, would and did obstruct, delay, and affect commerce and the movement of articles and commodities in commerce by extortion as that term is defined in Title 18, United States Code, Section 1951, to wit, DEAN SKELOS, aided and abetted by ADAM SKELOS, used his official position to cause an environmental technology company with business before New York State to make payments to ADAM SKELOS.
(Title 18, United States Code, Sections 1951 and 2.)
COUNT FIVE
(Solicitation of Bribes and Gratuities – Real Estate Developer)
. From at least in or about 2010, up to and including in or about April 2015, in the Southern District of New York and elsewhere, DEAN SKELOS, the defendant, being an agent of a State and local government, to wit, a Member of the New York State Senate, and defendant ADAM SKELOS, as an aider and abetter of DEAN SKELOS, corruptly solicited and demanded for the benefit of a person, and accepted and agreed to accept, a thing of value from a person, intending to be influenced and rewarded in connection with a business, transaction, and series of transactions of such government and agency involving a thing of value of 5,000 and more, while such government and agency was in receipt of , in any one year period, benefits in excess of 10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, and other form of . federal assistance, to wit, DEAN SKELOS, in his capacity as a Member of the New York State Senate, and ADAM SKELOS, as an aider and abetter, solicited and accepted cash and things of value from a real estate


developer with business before New York State intending for DEAN SKELOS to be influenced and rewarded.
(Title 18, United States Code, Sections 666 (a) (1) (B) and 2.)
COUNT SIX
(Solicitation of Bribes and Gratuities – The Environmental Technology
Company)
From at least in or about 2010, up to and including in or about April 2015, in the Southern District of New York and elsewhere, DEAN SKELOS, the defendant, being an agent of a State and local government, to wit, a Member of the New York State Senate, and defendant ADAM SKELOS, as an aider and abetter of DEAN SKELOS, corruptly solicited and demanded for the benefit of a person, and accepted and agreed to accept, a thing of value from a person, intending to be influenced and rewarded in connection with a business, transaction, and series of transactions of such government and agency involving a thing of value of 5,000 and more, while such government and agency was in receipt of, in any one year period, benefits in excess of 10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, and other form of federal assistance, to wit, DEAN SKELOS, in his capacity as a Member of the New York State Senate, and ADAM SKELOS, as an aider and abetter, solicited and accepted cash and things of value from an environmental technology company with business before New York State intending for DEAN SKELOS to be influenced and rewarded.
(Title 18, United States Code, Sections 666 (a) (1) (B) and 2.)
The bases for deponents knowledge and for the foregoing charges are, in part, as follows:
9. I am a Special Agent with the FBI, and I have been personally involved in the investigation of this matter, which has been handled jointly by Special Agents of the FBI and Criminal Investigators in the United States Attorneys Office for the Southern District of New York (USAO) . I have been employed by the FBI for approximately 10 years and both I and other members of the investigative team have experience in fraud and political corruption investigations and techniques associated with such investigations, including wire interceptions, financial analysis, and working with informants.


10. This affidavit is based in part upon my own observations, my conversations with other law enforcement agents and others, my examination of documents and reports by others, my review of recordings of meetings and calls, my interviews of witnesses, and my training and experience. Because this affidavit is being submitted for the limited purpose of establishing probable cause, it does not include all the facts that I have learned during the course of the investigation. Where the contents of documents and the actions, statements and conversations of others are reported herein, they are reported in substance and in part, except where specifically indicated otherwise. -
OVERVIEW
11. This case involves a scheme by defendant DEAN SKELOS, the New York State Senate Majority Leader, and his son, defendant ADAM SKELOS, to monetize DEAN SKELOSs official position by extorting money from others for ADAM SKELOS, with the expectation that such payments would influence the official actions of DEAN SKELOS. As part of this scheme, DEAN SKELOS and ADAM SKELOS pressured an individual cooperating with the Government identified herein as -1, " who is a senior executive of a major real estate development firm
(Developer-1), to arrange for ADAM SKELOS to be paid hundreds of thousands of dollars in order to influence official actions by DEAN SKELOS. Developer-1 arranged these payments to ADAM SKELOS in response to a series of demands made to Developer1 by DEAN SKELOS, including during time periods when Developer-1 was lobbying DEAN SKELOS concerning legislation that was crucial to its business success and during specific meetings when DEAN SKELOS discussed his efforts to secure legislation favorable to Developer-1.
12. Beginning in or about late 2010, Developer-1 arranged for defendant ADAM SKELOS to receive (a) a one-time 20,000 payment disguised as a commission for title work that ADAM SKELOS did not perform, and (b) continuing payments of 4,000 per month from an environmental technology company (the Environmental Technology Company) seeking to win government-funded contracts in New York State. In 2013, when Nassau County was considering awarding the Environmental Technology Company a multi-milliondollar contract, the defendants threatened to block the contract unless payments to ADAM SKELOS were substantially increased. In response to the threat, the Environmental Technology Company agreed to increase ADAM SKELOSs payments to 10,000 per month and received the assurance that if the Environmental Technology Company took care” of ADAM SKELOS, DEAN SKELOS would "take care" of the Environmental Technology Company.


The Environmental Technology Company has paid a total of at least 198,000 to ADAM SKELOS through February 2015.
13. In obtaining these and other financial benefits, DEAN SKELOS and ADAM SKELOS, the defendants, made explicit and implicit representations that DEAN SKELOS would use his official position on behalf of the entities paying his son. At times, in order to ensure that the payments to ADAM SKELOS would continue, DEAN SKELOS took official actions to benefit Developer-1 and the Environmental Technology Company, including but not limited to :
a . DEAN SKELOS promoted and voted for various real estate legislation sought by and favorable to Developer-1, including legislation concerning rent regulation and property tax abatements, and he rebuffed legislative initiatives put forth by interests adverse to Developer-1.
b. DEAN SKELOS used his official position to facilitate the approval by Nassau County of a 12 million contract with the Environmental Technology Company, causing the Company to more than double its monthly payment to ADAM SKELOS.
DEAN SKELOS pressured Nassau County officials (i) to obtain additional funding so that work on the contract could progress, and (ii) to make payments to the Environmental Technology Company so that the Company would continue making monthly payments to ADAM
d. DEAN SKELOS assisted the Environmental Technology Company in its (ultimately unsuccessful) attempt to secure the issuance of hydrofracking regulations by the New York State Department of Health sought by the Environmental Technology Company.
. DEAN SKELOS attempted to secure changes to New York States 20152016 budget to include additional funding for stormwater infrastructure projects and changes to New York State Law that would have permitted designbuild" contracts, both of which would have benefitted the Environmental Technology Company.
14. The defendants DEAN SKELOS and ADAM SKELOS used various methods to conceal their illegal scheme, including but not limited to the following:
a . After DEAN SKELOS made an urgent request that Developer-1 give ADAM SKELOS a title insurance commission, CW-1 and


ADAM SKELOS disguised a 20,000 payment to ADAM SKELOS both to falsely make it appear that the payment was in return for work by ADAM SKELOS and so that it could not be traced back to Developer-1.
b. ADAM SKELOS did not register as a lobbyist as required under New York State law even though he lobbied New York State and county officials, including his father, on behalf of the Environmental Technology Company.
When discussing the scheme, DEAN SKELOS and ADAM SKELOS used coded language and, in the case of ADAM SKELOS, used a self-described burner" phone, in an attempt to limit possible electronic surveillance by law enforcement.
d. DEAN SKELOS and ADAM SKELOS increased their acts of concealment, including by changing their behavior and the manner in which they communicated, following the federal Criminal charges brought against the Speaker of the New York Assembly on January 22, 2015 and the subsequent public focus on corruption investigations.
RELEVANT INDIVIDUALS AND ENTITIES
DEAN SKELOS
15. Since his election in 1984, DEAN SKELOS, the defendant, has represented a portion of Nassau County as a Member of the New York State Senate (the "Senate), which, along with the Assembly, constitutes the New York State Legislature (the Legislature). Additionally, DEAN SKELOS has been Majority Leader andor Co-Majority Coalition Leader of the Senate since at least in or about January 2011. On January , 2015, DEAN SKELOS was elected Majority Leader of the Senate for the 2015-2016 session. I know from publicly available federal and New York State government documents, public reports, and my training and experience that, in each year relevant to this Complaint, the governments of New York State and Nassau County received funds from the federal government in excess of 10,000 per year.
16. I know from witness interviews and my review of publicly available sources that, pursuant to the Rules of the Senate and other provisions of State law and practice, the Majority Leader holds significant power. For example, the Majority Leader appoints the chairpersons of all Senate committees, determines who is listed as the sponsors of legislation, and controls if and when legislation is brought to the floor for vote. The Majority Leader, along with


the Speaker of the Assembly and the Governor, play the principal roles in negotiating the State budget and related legislation. -
17. In a call intercepted pursuant to a Court-authorized
wiretap (AS1066), defendant DEAN SKELOS described his substantial power as Majority Leader during the 2015-2016 session to defendant ADAM SKELOS as follows: "Im going to be President of the Senate, Im going to be Majority Leader, Im going to control everything, Im going to control who gets on what committees, what legislation goes to the floor, what legislation comes through committees, the budget, everything."
ADAM S KELOS AND HIS BUSINESS INTERESTS
18. I know from witness interviews, emails and financial records that defendant ADAM SKELOS, now 32, is the son of DEAN SKELOS, and has been dependent on his father for financial support during periods relevant to this Complaint. In particular, from in or about 2010 through in or about 2014, DEAN SKELOS has given ADAM SKELOS more than 100,000. When ADAM SKELOS sought a mortgage loan to purchase a property for 675,000 in early 2013, DEAN SKELOS gifted ADAM SKELOS 50,000 and promised him an additional 125,000 for a down payment.”
19. Aside from direct financial support from his father, ADAM SKELOS has generated income as a commissioned salesman for various services marketed principally to businesses that made political contributions to DEAN SKELOS andor had substantial interests before New York State and local governmental entities. ADAM SKELOS, with the awareness and support of DEAN SKELOS, has relied heavily on his
l Certain evidence referred to in the Complaint was obtained
through Court-authorized wiretaps on cellular phones belonging to DEAN SKELOS and ADAM SKELOS. Each intercepted call described herein is referred to by its session number" when intercepted and the initials of the phones user (AS or DS) . The descriptions, and quotations of intercepted calls herein are based on my preliminary review of those conversations andor draft transcripts of the calls.
2 Ultimately, it was not necessary for DEAN SKELOS to pay the
additional 125,000 directly because ADAM SKELOS was able to collect the down payment through other sources, including through a title insurance commission of more than 100,000 he obtained through a Long Island-based real estate developer following a lunch meeting between the developer and ADAM SKELOS and DEAN SKELOS, as well the separate 20,000 payment arranged by Developer-1 described in detail below.


father and his fathers official position to generate sales income, including by making implicit and explicit references to DEAN SKELOSs position and powers. For example, I know the following from emails and intercepted communications:
a . On January 28, 2011, ADAM SKELOS emailed a supervisor at the title insurance company then employing ADAM SKELOS stating that the president of a major commercial real estate developer based in New York, New York (Developer-2) and ADAM SKELOS were having lunch on February] 10and he wants to start giving me his work." DEAN SKELOSs Senate calendar reflects a lunch meeting with ADAM SKELOS and the president of Developer-2 at Developer-2s office on February 10, 2011. One month later, a managing director of Developer-2 emailed ADAM SKELOS asking him to produce a title report for a 250 million mortgage of the Chrysler Building complex in Manhattan, owned by Developer-2.
b. In or about August 2011, DEAN SKELOS and ADAM SKELOS attempted to secure title insurance work for the refinancing of hundreds of millions of dollars of bonds related to a large hospital system in Long Island, which required approval through the Nassau County Industrial Development Agency (IDA), a public benefit corporation regulated by the State Legislature. On or about August , 2011, ADAM SKELOS emailed one of his colleagues the following: "with my dad right now calling ] head of Nassau IDA. Were going to try to get half the deal. " I know from documents that ADAM SKELOS subsequently became employed by a title company that performed the title insurance work for the transaction and received commissions for the deal.
DEAN SKELOS agreed to have official meetings with customers who purchased products through ADAM SKELOS. For example, on or about October 26, 2011, the owner of a grocery store emailed ADAM SKELOS about purchasing energy services through ADAM SKELOS. DEAN SKELOSs Senate calendar reflects that, less than a month later, on November 16, 2011, DEAN SKELOS went to the grocery store chain and met with its owner. That same day, the grocery store owner emailed DEAN SKELOS to thank DEAN SKELOS for the meeting and copied ADAM SKELOS. The next day, the grocery store owner emailed ADAM SKELOS a signed contract for purchasing gas and electricity through ADAM SKELOS .
d. ADAM SKELOS sought and obtained from his fathers Senate Office records of top donors to DEAN SKELOS, so that ADAM SKELOS could attempt to sell products to these donors. For example, on December 19, 2011, DEAN SKELOSs Director of District Operations
9


emailed ADAM SKELOS a document containing a list of individuals who had contributed to DEAN SKELOSs campaign. ADAM SKELOS then forwarded the document to individuals at companies whose services ADAM SKELOS marketed on a commission basis.
. DEAN SKELOS worked at a Long Island law firm (the Law Firm) that steered title insurance work to ADAM SKELOS at the request of DEAN SKELOS, including at least one real estate transaction for more than 32.6 million.”
DEVELOPER – 1 & WCW-1
20. I have learned from emails, financial records, publicly available information, and witness interviews, including interviews with CW-1, that :
a . Developer-1 is a large real estate development firm that, through various corporate affiliates, builds, owns, and manages residential rental properties across the New York City metropolitan area. Developer-1s business model depends in substantial part on favorable tax abatements and rent regulations that must be periodically renewed by the New York State Legislature. Accordingly, Developer-1 is one of the largest contributors to candidates for State office and political action committees controlled by leaders of the Legislature, including DEAN SKELOS.
b. CW-1 has been employed by Developer-1 as a senior executive since in or about 2001. Among other responsibilities, -1 is involved in managing Developer-1s political operations, including Developer-1s political relationship with DEAN SKELOS. In this role, as reflected in emails, DEAN SKELOS has directed CW-1 to make hundreds of thousands of dollars in campaign contributions through various limited liability companies, or "LLCs, " controlled by Developer-1. CW-1 has been cooperating with the Governments investigation since in or about April 2015.
3 DEAN SKELOS has worked for the Law Firm since in or about 1994, and has been paid more than 2.6 million over that time. Based on evidence gathered during the ongoing investigation, it appears that DEAN SKELOS did not perform any actual legal work for the Law Firm, but instead was paid largely for referring clients to the firm
(including companies with business before the State) and meeting with Law Firm clients, including about legislative matters.