The Real Deal New York

Malinsky indicted on more charges in Kruger bribery scandal case

April 08, 2011 07:28AM
By David Jones

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City Point rendering and Aaron Malinsky

A federal grand jury handed down a new 11-count indictment in the state Sen. Carl Kruger ongoing bribery scandal charging the defendants, including real estate developer Aaron Malinsky and lobbyist Richard Lipsky, with conspiracy to commit mail and wire fraud.

Malinsky was previously indicted for allegedly making $500,000 in bribes to Kruger, a Democrat from Brooklyn, who later stepped in to help move forward several major real estate developments.

Lipsky, who represented various high-profile clients including Forest City Ratner, also allegedly paid off Kruger.

Malinsky, a principal at PA Associates, and Lipsky allegedly funneled hundreds of thousands of dollars in bribes to Kruger through a series of bank accounts set up by Manhattan gynecologist Michael Turano, who was Kruger’s long-time companion.

According to the indictment, Kruger, on Dec. 28, 2010, directed a Senate staff member to give $500,000 in state funds to one of Lipsky’s clients. On Feb. 11 of this year, Lipsky allegedly met with Kruger inside Lipsky’s car near the corner of Fifth Avenue and 18th Street in Manhattan.

Kruger also met with Malinsky in the lobby of a luxury hotel in Midtown Manhattan on Jan. 28.

The indictment alleges that a check from Richard Lipsky Associates’ account was paid to a bank account set up by Turano for $11,250 on March 10, 2010. Malinsky allegedly issued a check for $45,000 on March 15, 2010 from the P/A Associates account. Turano had allegedly set up this account, under the name Olympian Strategic Development in November 2006.

After the initial indictment in March, PA Associates was removed by Acadia Realty Trust as a partner at City Point, a mixed-use high-rise tower at the former Albee Square Mall site in Downtown Brooklyn. Malinsky’s firm was also removed as developer for a $60 million ShopRite project by the Brooklyn Navy Yard Development Corp. 

Several leading politicians, including Sens. Charles Schumer and Kirsten Gillebrand returned campaign contributions from Malinsky after the initial indictment.

Others mentioned in the indictment are David Rosen, former chief executive of the MediSys Health Network, health care consultant Solomon Kalish and Robert Aquino, former chief executive of Parkway Hospital.

The defendants are scheduled for arraignment April 11 in Manhattan federal court.

A spokesperson for Herrick Feinstein, the firm representing Malinsky, was not immediately available for comment and Malinsky could not be reached for comment.

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