The Real Deal New York

Sheldon Silver’s not alone: The corrupt NY pols who took real estate money

After speaker's conviction, TRD looks at politicians caught in shady real estate deals

December 03, 2015 11:37AM
By Rey Mashayekhi

(Video by Alistair Gardiner)

Sheldon Silver’s conviction this week — on seven counts of honest services fraud, extortion and money laundering — drew an end to one of the most storied careers in New York politics.

The former State Assembly speaker, who resigned from his position of more than two decades after his arrest earlier this year, will automatically forfeit the Assembly seat he has held since 1977 representing much of Lower Manhattan.

But Silver is far from the first New York politician, at both state and city level, to see his career marred by a criminal conviction. He’s also not the first whose crimes featured more than a cameo by New York real estate interests.

With Leonard Litwin’s Glenwood Management and Steve Witkoff both featuring prominently in the Silver case, The Real Deal took a look at disgraced politicians who also saw their fates tied, in one way or another, to real estate deals and players.

Assemblyman William Boyland Jr.

Boyland Jr., who hails from a prominent Brooklyn political family, was hit in March 2014 with a conviction on federal bribery charges.

In a 21-count indictment – which came three weeks after Boyland Jr. was acquitted on separate federal bribery charges in Nov. 2011 — the Democrat was accused of participating in four schemes that included soliciting and accepting bribes in exchange for political favors. In one such scheme, Boyland Jr. said he would set up a sweetheart real estate deal worth millions of dollars in exchange for $250,000 paid through a fake consulting job, according to the New York Times.

The deal, which Boyland Jr. suggested to undercover agents posed as businessmen, entailed buying a derelict Brooklyn hospital for $8 million and applying for public grants to be used for the property’s renovation. The buyers would then resell the hospital for $15 million to a nonprofit controlled by the assemblyman.

Boyland Jr., who represented a district comprising of Bushwick, Crown Heights, Bedford-Stuyvesant and Brownsville, was sentenced this past September to 14 years in federal prison – less than the 20-year term requested by prosecutors and recommended by federal sentencing guidelines, according to the Times.

Assemblyman Eric Stevenson

After several failed bids to win a State Assembly seat representing the Morrisania and East Tremont sections of the Bronx, Stevenson finally won office in January 2011.

And it didn’t take long for federal prosecutors to charge the Democrat with bribery, conspiracy to commit honest services fraud and extortion. In early 2013, Stevenson was accused of taking $22,000 in bribes in return for helping four senior care center developers with political favors.

Prosecutors said Stevenson wrote legislation for the developers to eliminate their competition. While the bill was never passed, it would have temporarily banned competing developers from building and opening new adult care centers for three years, according to the Times.

Stevenson was convicted on all four charges he faced after a one-week trial in January 2014. He was sentenced to three years in prison that May.

State Senator Carl Kruger

Kruger, a powerful Democrat who represented a district comprising Brighton Beach, Sheepshead Bay and surrounding neighborhoods, was indicted in March 2011 – alongside Boyland Jr. and six other defendants – on federal bribery charges. And one of the city’s biggest real estate players was central to the case.

Prosecutors said the state senator had amassed at least $1 million in bribes in exchange for political favors that included obtaining state money for real estate developers, according to the Times.

The criminal complaint against Kruger spotlighted a “significant real estate development firm” – easily recognizable as Forest City Ratner – for whom he tried to obtain public funds for three separate Brooklyn projects: $9 million for the Carlton Avenue Bridge, $2 million for a Mill Basin retail development and $4 million for the renovation of the Prospect Park skating rink.

The complaint said Bruce Bender, at the time Forest City’s vice president of governmental affairs and public relations, had asked Kruger for the funds, with the firm eventually having to settle for $4.5 million for the Prospect Park skating rink, according to the Times. Kruger allegedly took bribes from Forest City lobbyist Richard Lipsky in the process.

Kruger pleaded guilty in December 2011 to four of the five counts in the indictment against him, including two counts of conspiracy to commit mail fraud and two counts of bribery conspiracy. He was sentenced to seven years in federal prison in April 2012. No charges were ever filed against Forest City employees or its hired guns.

State Senator Vincent Leibell III

Leibell, a Republican from Putnam County who served for more than a decade in the State Assembly before getting elected to the State Senate in 1994, developed a reputation for getting things done in Albany. The problem? It came at a cost.

The senator pleaded guilty in December 2010 to federal felony charges of bribery, tax evasion and obstruction of justice.

Leibell doled out $6.5 million in so-called “member items,” funded by taxpayer dollars, to nonprofit groups that he himself controlled between 2005 and 2010, according to the New York Times. One of those nonprofits controlled by Leibell financed and developed senior housing in his district.

Leibell not only resigned from the State Senate the week before pleading guilty to the charges, but also resigned from the position of Putnam County Executive.

In May 2011, the disgraced politico was sentenced to 21 months in prison and three years of supervised release.

City Council Member Miguel Martinez

Martinez represented the 10th Council District, including parts of Upper Manhattan neighborhoods Washington Heights and Inwood, for more than seven years.

But the Democrat’s political career crashed and burned in July 2009, when he resigned abruptly from his seat and pleaded guilty to three felony counts of conspiracy for looting money from nonprofits he helped subsidize with pubic funds.

Martinez had stolen around $106,000 in council funds through various schemes from October 2002 through spring 2008, according to the New York Daily News, funneling money meant for children’s art programs and low-income housing into bank accounts he controlled under cover names.

The city’s Department of Investigation found that in 2004 and 2005, Martinez arranged for the Upper Manhattan Council Assisting Neighbors – a nonprofit affiliated with his sister Maria, who sat on the board – to partner with an unnamed developer to build low-income homes.

The developer enjoyed millions of dollars in tax credits from the deal, according to the Daily News, and Martinez had the developer pay the nonprofit $96,000 in return – $40,000 of which went into bank accounts Martinez directly controlled. A little something for everybody.

The former council member was sentenced to five years in prison in December 2009.