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DISTRICT ATTORNEY - NEW YORK COUNTY | ||
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News Release | Contact:
Barbara Thompson | |
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Charged in today's indictment are:
FINBAR O'NEILL, and his companies TERRA FIRMA CONSTRUCTION MANAGEMENT AND GENERAL CONTRACTING, LLC. ("TERRA FIRMA"), and KAFCI CORPORATION ("KAFCI") have also been charged with falsifying business records in the money laundering scheme. Specifically, GUY J. VELELLA, VINCENT J. VELELLA, MANUEL GONZALEZ AND HECTOR DEL TORO have been charged with, among other things, conspiracy and bribe receiving for their roles in agreeing to accept, and accepting, money in exchange for the Senator's assistance as a public official in obtaining funding on public works projects. HECTOR DEL TORO is also charged with extortion for pressuring applicants for public funding to retain the VELELLAs' law firm in order to receive favorable decisions on their applications. Both GUY J. VELELLA and HECTOR DEL TORO are also charged with various counts of violating the Public Officers Law which regulates what fees public officials can receive in their public and private capacities. MANUEL GONZALEZ served as an intermediary between some of the projects and the VELELLAs and as a self-described "bagman" for the receipt of corrupt payments. VINCENT J. VELELLA was a name partner in the law firm that served as the principal vehicle to receive bribe payments in the form of "legal fees" and to transfer the funds, or use them for the benefit of his son, GUY J. VELELLA. VINCENT J. VELELLA secretly split his partnership draw from the firm's profits with GUY J. VELELLA, who was not publicly associated with the firm. More than $250,000 in illegal payments was solicited by the defendants over the course of the conspiracy, which the indictment charges began in late 1995 and continued until June 2000. The illicit payments were made principally in the form of "legal fees" for which little or no legal work was actually done. It is alleged that the illegal payments were sought in connection with applications for publicly financed housing construction projects in the Bronx and Poughkeepsie, a social service project in the Hunts Point section of the Bronx, bids for bridge painting contracts for the Verrazano Narrows Bridge and the Dunn Memorial Bridge in the Albany area, and the lifting of tax liens on a vacant Bronx car dealership that was being sold. Mr. Morgenthau said that today's indictments are the result of a three-year long joint investigation conducted by the District Attorney's Office and the New York State Police. THE VELELLA LAW FIRMS The indictment charges that the bribery schemes were facilitated by the way the two VELELLA law firms were structured. In one firm, Velella, Velella, Basso and Calandra ("VVBC") both GUY J. VELELLA and his father, VINCENT J. VELELLA, shared equally in the firm's profits with its two other partners; each partner thereby received 25% of the firm's profits. The other firm, Velella, Basso and Calandra ("VBC"), was ostensibly established to do legal work that might present a conflict of interest between the Senator's official duties and the law firm's work. As a result, while VINCENT J. VELELLA was a partner in VBC, GUY J. VELELLA ostensibly was not and held himself out as not sharing in any of VBC's profits. However, GUY J. VELELLA was, in reality, a secret partner in VBC and split VINCENT J. VELELLA's 50% share of the profits of VBC. The indictment charges that applicants for public funding that wanted to enlist GUY VELELLA's assistance as a State Senator agreed to, or were extorted into, retaining VBC. The "legal fees" to VBC were paid by these clients in order to induce the Senator to take actions in his official capacity. Although publicly the Senator was not a member of VBC and did not share in its profits, secretly GUY VELELLA did share in the profits. The indictment alleges that VINCENT VELELLA secretly funneled one-half of his 50% share of VBC's profits to his son, after deducting for taxes. The indictment alleges that VINCENT J. VELELLA deposited his share of VBC's profits into a joint account he maintained with his son, GUY J. VELELLA. VINCENT J. VELELLA kept handwritten notes in an envelope marked "For Guy info" in his desk detailing what he owed his son with respect to VBC's profits. These notes reflected that VINCENT J. VELELLA kept a running balance of what "VJV owes GJV" crediting GUY J. VELELLA with a share of VBC's profits and debiting from the running balance payments VINCENT J. VELELLA made of behalf of GUY J. VELELLA. In at least one instance, VINCENT J. VELELLA made a cash transfer directly to the personal account of GUY J. VELELLA. At one point, the handwritten notes reflect that the amount VINCENT J. VELELLA owed GUY J. VELELLA became a substantial figure. On the handwritten notes, VINCENT J. VELELLA made a handwritten entry on or about November 1, 1999 that reads "11/1/99 To GJV 31810," which indicated that the amount he owed GUY J. VELELLA as of that date was $31,810. In order to reduce that balance, VINCENT J. VELELLA transferred $25,000 directly to GUY VELELLA's personal account. On October 30, 1999, VINCENT J. VELELLA received a partnership draw of $25,000 from VVBC by check (as did the other three partners including GUY J. VELELLA). On November 2, 1999, that check for $25,000, which was endorsed by VINCENT VELELLA, was deposited into the personal account of GUY J. VELELLA of which he is the sole account holder. The handwritten notes of VINCENT J. VELELLA next indicate
a handwritten notation that reads "11/-/99 Less 25000," which reflects
the transfer of the $25,000 check to GUY J. VELELLA's account. On November 6,
1999, VINCENT J. VELELLA made a handwritten entry in the notes that reads "due
to GJV 6810," which reflects the new running balance after the subtraction
of the $25,000. AHC PROJECTS The investigation disclosed that the bribery scheme involving some of the projects was made possible by the fact that HECTOR DEL TORO was also a public official. Besides being a close associate of GUY VELELLA's, HECTOR DEL TORO was an employee and Vice President of the New York State Housing Finance Agency ("HFA") and was in charge of the Affordable Hosing Corporation ("AHC"), a subsidiary of HFA. Each of these agencies approves contracts and dispenses state funds to build middle and low-income housing. Brook Avenue Gardens The indictment charges that in one such project, a contractor on a state funded project to build housing on Brook Avenue, in the Bronx, was seeking approval by the local community board. HECTOR DEL TORO bragged to the contractor that GUY J. VELELLA was his political patron, that the contractor needed to support VELELLA politically to continue to receive state funding, that the contractor could obtain VELELLA's help as a state senator by retaining VELELLA's law firm, that DEL TORO controlled who would get state funding, and that if the contractor was a "friend," his projects would be funded. As a result of these conversations, the contractor met with GUY J. VELELLA, retained VBC and was told by VELELLA that VELELLA could be helpful as a state senator in obtaining state funds for the contractor's projects. After the meeting, GUY J. VELELLA instructed a lawyer who worked for VBC, who was also HECTOR DEL TORO's wife, to draft two retainership agreements between the contractor and VBC, the law firm in which the senator ostensibly had no role. Legal fees amounting to $4,000 were paid on the first of the two retainerships and deposited into VBC's bank account; the second retainership was never entered into by the contractor. Poughkeepsie Housing Project According to the indictment, another contractor had a similar experience in trying to build housing in Poughkeepsie. This contractor also met with HECTOR DEL TORO and was told that DEL TORO was going to be taking control over AHC projects, that DEL TORO was appointed to his position through GUY J. VELELLA, that VELELLA was unhappy with the contractor, and that in order to get VELELLA's approval, the contractor should hire VELELLA's law firm. As a result, this contractor also met with GUY J. VELELLA and VELELLA discussed being retained for legal work on the project. The contractor told VELELLA that he would be seeking state funding from AHC for the project and VELELLA told the contractor that obtaining AHC funding should not be a problem. Thereafter the contractor received a bill from VBC for $5,000. The contractor paid the $5,000 by check, which was deposited into VBC's bank account. About two months after the initial meeting with VELELLA, an arrangement was made for the contractor to travel to Albany to meet GUY J. VELELLA. When the contractor arrived at the Capitol, he met Senator VELELLA as he was leaving the Senate chamber. Senator VELELLA introduced the contractor to another member of the legislature who could potentially be of help in the project. The contractor also subsequently met with HECTOR DEL TORO and told DEL TORO that he (the contractor) had retained VELELLA's law firm, to which DEL TORO responded approvingly. After the contractor's application for state funding was approved, GUY J. VELELLA instructed the lawyer working for VBC (DEL TORO's wife) to bill the contractor an additional $1,700. Again, the contractor paid the $1,700 by check, which was deposited in VBC's bank account. HUNTS POINT MULTI-SERVICE CENTER PROJECTS The indictment alleges that some of the projects involved in the bribery scheme resulted from the close association the VELELLAs had with defendant MANUEL GONZALEZ. GONZALEZ was a consultant to a Bronx not-for-profit agency, Hunts Point Multi-Service Center, Inc. ("Hunts Point"), which provided social services under contract with New York City and also participated in housing construction projects. GONZALEZ was also a consultant to defendant FINBAR O'NEILL and his companies KAFCI and TERRA FIRMA. Tinton Avenue Project According to the indictment, Hunts Point was applying for funding to construct housing on Tinton Avenue in the Bronx, from the New York State Division of Housing and Community Renewal ("DHCR"). At the direction of GUY J. VELELLA, DEL TORO's wife, who was of counsel to VBC, drafted a retainership agreement between VBC and Hunts Point in connection wth the Tinton Avenue project. The agreement called for the payment of $10,000 to VBC for services rendered before the signing of the retainership, and the payment of an additional $50,000 to be paid to VBC in the future. GUY J. VELELLA directed DEL TORO's wife to sign VINCENT J. VELELLA's name on the agreement on behalf of VBC. In late June 1999, MANUEL GONZALEZ and GUY J. VELELLA had a telephone conversation during which GONZALEZ told VELELLA that he (GONZALEZ) had heard that the Tinton Avenue project was "in jeopardy." GONZALEZ asked if VELELLA could do anything about that and VELELLA, appearing not to realize which project GONZALEZ was talking about, asked what was happening on "that other" project, the one where $10,000 was supposed to be paid. GONZALEZ replied that he was talking about that same project, the one where the legal fees would be "10 and 50." Upon hearing this, VELELLA indicated that he understood and promised to find out what was happening on the project. As a result, in July 1999, GUY J. VELELLA called DHCR and asked to speak to DHCR's Commissioner. When he was told that the Commissioner was not available, VELELLA spoke to another high-ranking DHCR official and berated the official for rejecting the Tinton Avenue project. VELELLA then threatened that he would become chairman of the State Senate Housing Committee to gain more influence over project funding and implied that he would get the DHCR official fired. Later in the summer of 1999, GUY J. VELELLA met with a different high-ranking official of DHCR to discuss, among other things, the Tinton Avenue project, and repeated his threats. VELELLA told the official that he (VELELLA) had prevented a reorganization which would have removed AHC from HFA and merged it into DHCR, VELELLA again threatened to become the chairman of the Senate Housing Committee, and expressed his anger at DHCR's approval of funding for people who were not VELELLA's friends. Hunts Point Social Service Contracts At the same time that Hunts Point was trying to get funding for the Tinton Avenue project, it was also trying to get payment on social service contracts it had with New York City. In order to receive payment on the contracts, they had to be registered by the City Comptroller's Office. Employees of Hunts Point asked MANUEL GONZALEZ to get Senator VELELLA to contact city officials to facilitate the process. While GONZALEZ was trying to get in touch with GUY J. VELELLA about this issue, he was also discussing with VINCENT J. VELELLA the status of the retainership agreement between Hunts Point and VBC. In one of their conversations cited in the indictment, VINCENT J. VELELLA told GONZALEZ that GUY J. VELELLA was "upset" with Hunts Point because nothing was happening with respect to the retainership agreement. GONZALEZ assured VINCENT J. VELELLA that the retainership agreement would happen. Subsequently, GONZALEZ called the Senator's district office and was told by a senate employee that GUY J. VELELLA was not going to make the calls on behalf of Hunts Point because all Hunts Point "does is take" and it is "not giving anything back," meaning that the retainership agreement had not been signed by Hunts Point and therefore no payments had been made. GONZALEZ told the senate staffer that he (GONZALEZ) would take care of it and would see the Senator himself. As a result, GUY J. VELELLA and GONZALEZ did meet, and GONZALEZ told the senate staffer that VELELLA had promised to make the calls on Hunts Point's behalf. Shortly thereafter, the senate staffer told GONZALEZ that the Senator had made the calls to "the City." At or about the same time, two Hunts Point contracts for social services were registered by the Comptroller and Hunts Point was able to get payments on the contracts. On or about September 1, 1999, Hunts Point entered into a retainership agreement with VBC for a term of one year that provided for the payment of $60,000 in legal fees to VBC. BRIDGE PAINTING CONTRACTS Some of the projects involved in the bribery scheme involved a contractor who was trying to get bridge painting contracts. Verrazano Narrows Bridge A contractor who had submitted the low bid on a $37.7 million dollar job to paint the Verrazano Narrows Bridge, but had not yet been awarded the contract, met with MANUEL GONZALEZ who advised the contractor that GUY J. VELELLA and VINCENT J. VELELLA could help obtain the contract through their political influence. As a result, the contractor met with VINCENT J. VELELLA and retained VBC by paying $5,000 by check to VBC, which was deposited in VBC's bank account. After that check cleared, GONZALEZ had a meeting with the contractor during which GONZALEZ told the contractor that there was a "matter of some money" that would need to be paid in order to get the contract. GONZALEZ asked for a pen and a piece of paper, wrote down the figure "150,000" and handed it to the contractor. The two men then discussed how the $150,000 would be paid and GONZLEZ indicated that while "checks aren't good," some of the money could be paid by making political contributions and some could be paid in cash. GONZALEZ acknowledged that $150,000 is a lot of money, but promised that in exchange for the money "those people down there don't fuck with you." As part of the arrangements made to pay the $150,000, GONZALEZ told the contractor that GONZALEZ would supply the contractor with a phony bill from a "subcontractor." GONZALEZ subsequently gave the contractor an invoice, purporting to reflect subcontractor charges, issued by KAFCI in the amount of $30,500 even though KAFCI had never been a subcontractor on any of the contractor's jobs. Upon receipt of the phony invoice, the contractor wrote a check for $30,500 to KAFCI and gave it to GONZALEZ. The next day, that check was deposited into KAFCI's bank account. The following week, two checks issued from TERRA FIRMA and one check from KAFCI totaling $27,824.34 were cashed at a check cashing location in Mount Vernon, NY. Late that same day, GONZALEZ visited the offices of TERRA FIRMA and KAFCI and the following morning, GONZALEZ entered VINCENT J. VELELLA's home, stayed there for approximately 21 minutes and then left. Further meetings were held between the contractor and VINCENT J. VELELLA, and further payments were made by the contractor. For example, the indictment charges that on April 26, 1999, the contractor attended a meeting with VINCENT J. VELELLA and MANUEL GONZALEZ at the law office to discuss the Verrezano Bridge contract. As he had been instructed, the contractor brought an envelope containing $25,000 in cash to the meeting. After leaving VINCENT J. VELELLA's office, GONZALEZ instructed the contractor to leave the envelope containing the cash on a table outside VINCENT J. VELELLA's office. On another occasion, in anticipation of another meeting with VINCENT J. VELELLA, GONZALEZ told the contractor that he should bring a check for $5,000 and another $5,000 in cash to the next meeting. When that meeting took place, on April 30, 1999, the contractor gave the check to VINCENT J. VELELLA, but when the contractor tried to hand VINCENT J. VELELLA the envelope containing the cash, VELELLA demurred and told the contractor to give the envelope to GONZALEZ "because that's something he takes care of, not me." As a result, the contractor gave the envelope of cash to GONZALEZ and left VINCENT J. VELELLA's office while GONZALEZ stayed behind with VELELLA. When GONZALEZ came out of the office, he told the contractor that now that the money had been paid, VINCENT J. VELELLA will "fight for you. Now he'll do anything." But GONZALEZ complained that he was embarrassed by the way VINCENT J. VELELLA had made him "the bagman" and said that GONZALEZ "had to go right back and give it to him. He opened up the drawer and I dropped it in the fucking drawer." Approximately one week after the payment of the check and cash totaling $10,000, a senate staffer employed in Senator GUY J. VELELLA's Albany office contacted an employee of the Triborough Bridge and Tunnel Authority ("TBTA"), which was letting the Verrazano Bridge contract, and told the TBTA employee that GUY J. VELELLA's father, VINCENT J. VELELLA, represented the contractor and would be seeking a meeting with the president of the TBTA. A few days later, VINCENT J. VELELLA made telephone calls to the TBTA seeking a meeting with the TBTA president. During the execution of court-authorized search warrants at VINCENT J. VELELLA's home on May 9, 2000, $40,100 in cash was seized. Of that, $5,440 was found that matched a portion of the $25,000 the contractor left in VINCENT VELELLA's office on April 26, 1999, which had been marked for identification purposes. Dunn Memorial Bridge According to the indictment, while discussions and meetings were taking place with respect to the Verrazano Bridge contract, the contractor was also seeking to obtain the contract to paint the Dunn Memorial Bridge in the Albany area. This contract was being let by the New York State Department of Transportation ("DOT"). While the contractor had submitted the low bid, he had not yet been awarded the contract because of DOT's concerns about whether to find him a "responsible" bidder because of past safety violations. MANUEL GONZALEZ told the contractor that GUY J. VELELLA could help obtain the contract because he had connections in DOT, including a high-ranking DOT official who had worked for VELELLA when he was a member of the New York State Assembly. GONZALEZ told the contractor that to get the Dunn Memorial Bridge contract, the contractor would have to pay $15,000 and that a portion of that money could be made as political contributions. As a result, the contractor made political contributions totaling $10,000 and also paid $5,000 by check to VBC. In order to set up a meeting at DOT to discuss the Dunn Memorial project, GUY J. VELELLA called a high ranking official at DOT during which GUY J. VELELLA told the official that his father, VINCENT J. VELELLA represented the contractor and that the Senator would appreciate any "courtesies" that the DOT officials could extend to his father. GUY J. VELELLA also indicated that his father would call the DOT official to set up a meeting. In November 1998, a meeting was held at the Albany headquarters of DOT between the contractor, GONZALEZ and VINCENT J. VELELLA and high-ranking officials of DOT. During that meeting, a DOT official indicated that DOT would give the contractor preferential treatment because of the intercession of GUY J. VELELLA and out of respect for the Senator and his father. The DOT official told the contractor that a favorable resolution for the contractor would be for DOT to throw out all of the bids on the Dunn Memorial contract. In this manner, the contractor could avoid a finding by DOT that he was not a "responsible" bidder and DOT could monitor his work on the Verrazano Bridge so that when they let the Dunn Memorial contract again, DOT could find the contractor to be a "responsible" bidder. Subsequently, DOT did throw out all of the bids on the Dunn Memorial Bridge contract. NEW YORK STATE TAX LIEN In the mid 1990's the New York State Department of General Services ("OGS") leased a vacant Cadillac dealership from its owner in order to put a New York State Department of Motor Vehicles ("DMV") office there. During May 1995, GUY J. VELELLA met with a high-ranking official at OGS who informed VELELLA that the lease had to be terminated because the building was encumbered by, among other things, state tax liens of more than $2 million. Following the termination of this lease the owner of the property approached OGS with the proposal to sell the property to a developer conditioned on OGS entering into a lease with the developer to put a DMV office at the location. The indictment charges that in order to facilitate the sale, GUY J. VELELLA referred the legal work having to do with the sale of the property to a lawyer he knew. Shortly after GUY J. VELELLA made this referral, the lawyer had a conversation with VINCENT J. VELELLA during which VINCENT J. VELELLA said he expected a referral fee in the amount of one-half of what the lawyer received. In April 1997, GUY J. VELELLA, in his capacity as a State Senator, met with a high-ranking official of the New York State Department of Taxation and Finance ("NYS Tax") to discuss the lifting of the tax liens on the dealership property so that a sale could take place. Subsequently, in October 1997, GUY J. VELELLA wrote a letter on his Senate stationery to NYS Tax recommending that NYS Tax accept an amount significantly lower than the amount of the tax liens so that the property could be sold. In November 1997, GUY J. VELELLA and the dealership owner met with a high-ranking official at NYS Tax to discuss a resolution of the owner's tax problems and the sale of the dealership property. In early 1998, the sale of the property was about to fall through and the lawyer GUY J. VELELLA had referred the transaction to sent VELELLA a fax indicating that the sale was in jeopardy and that the tax liens had to be paid or lifted before any closing could take place. A few weeks later, GUY J. VELELLA sent a fax to a high-ranking official at NYS Tax detailing the proceeds the dealer would receive in settlement of a civil law suit and asking to be informed if there were any problems in resolving the dealer's tax issues. As a consequence of GUY J. VELELLA's actions, the tax liens on the property were lifted in exchange for a payment of $700,000 to NYS Tax, allowing for the closing of the sale of the property to take place in July 1998. At the closing, legal fees in the amount of $35,000 were paid to the lawyer to whom GUY J. VELELLA had referred the matter. The next day, that lawyer made a check payable to VVBC in the amount of $17,500 noting that it was the forwarding of a fee with respect to the dealership owner. For their role in the investigation, Mr. Morgenthau thanked: New York State Police Superintendent James W. McMahon, Captain Thomas Fresenius, Senior Investigator Gustave Talleur and State Police Investigators assigned to the District Attorney's Labor Racketeering Unit; and New York State Inspector General Roslyn Moskaupf and Deputy Inspector General Jean Walsh. Within the District Attorney's Office, the case was presented to the Grand Jury and will be prosecuted by Senior Investigative Counsel Kelly L. Donovan and Assistant District Attorney Vincent G. Bradley both of whom are assigned to the Labor Racketeering Unit, and Deputy Chief of the Rackets Bureau Eric Seidel. They were assisted by Michael Kelly, Deputy Chief of the Financial Crimes Unit and Investigative Analysts Daria Fisher and Hilary Foster.
Grand Larceny in the Second Degree and Bribe Receiving in the Second Degree are
class C felonies which are punishable by up to 15 years in prison. | ||