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Supreme Court of the State of New

Supreme Court of the State of New

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Published by Elizabeth Benjamin
cuomo espada
cuomo espada

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Published by: Elizabeth Benjamin on Jan 13, 2010
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11/06/2010

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SUPREME COURT
OF
THE
STATE
OFNEW YORK
COUNTY
OF
NEW
YORK
THE PEOPLE OF THE STATE OF NEW YORK,BY ANDREW
M.
CUOMO, ATTORNEYGENERAL OF THE STATE OF NEW YORK,Index No.:
---..../10
Petitioners,
AFFIRMATION
OF
-against -
MITRA
HORMOZI
SOUNDVIEW MANAGEMENT
Date filed: January 13,2010
ENTERPRISES LLCRespondent.Mitra Hormozi,
an
attorney duly admitted to practice
in
the courts
of
the State
of
NewYork, affirms the following statements
to
be
true under penalties of perjury:
INTRODUCTION
AND
SUlVIMARY
OF
ARGUMENT
1.
I
am
the Special Deputy Chief of Staff
in
the office
of
Andrew
M.
Cuomo,Attorney General of the State
of
New York.
2.
I
am
familiar with the facts and circumstances of this case and submit thisaffirmation
in
support of the Attorney General's motion under CPLR 2308(b)
to
compelRespondent Soundview Management Enterprises
LLC
to comply with a subpoena duces tecumissllcd and served by the Office
of
the New York State Attorney General ("OAG") pursuant
toNcw
York Executivc
Law
section 63(12),
Ncw
York Not-For-Profit Corporation
Law
scction112(b). and
New
York Estates, Powers and Trusts
Law
section 8-1.4(i). The subpoena was
 
served
on Respondent on August 25, 2009. A copy
of
the subpoena and the affidavit
of
serviceare attached hereto as
Exhibits
A and B respectively.
3.
The
facts set forth in this affinnation are based on
my
personal knowledge and oninformation
contained
in
OAG's
files and are believed to be true and correct.
4.
As set forth in detail below, for approximately nine (9) months
OAG
has been
conducting
an investigation
of
Comprehensive
Community
Development
Corp., a tax-exempt501(c)(3) corporation registered with the State
of
NewYork
and
doing
business as
"Soundview
Healthcare
Network"("Soundview").
In
the course
of
its investigation,
OAG
has developedextensive evidence
of
potential violations
of
the
New
York Not-For-Profit Corporation Law by
Soundview
and various
of
its officers and directors, including
but
not limited to Pedro Espada,Jr., a
New
York State Senator,
who
is also the President
and
Chief
Executive
Officer
of
Soundview.
5.
The
evidence
reveals, for example, that
Soundview,
a not-for-profit corporation,
entered
into contracts with a for-profit
company
owned
and controlled exclusively by Mr.
Espadacalled Soundview Management
Enterprises,
LLC ("Espada Management
Company"). Thiscontract allowed Mr.
Espada
effectively to siphon
off
and otherwise divert
money
from
Soundview
for Mr.
Espada's
own
personal and political benefit. Documentary
evidence
indicates that a significant portion
of
the funds paid by
Soundview
to
Espada Management
Company
were
Llsed
to pay Mr.
Espada's
campaign expenses
including printing, campaign officerent, and personnel costs.
It
also appears that
Sound
view directly,
or
indirectly through EspadaManagement
Company,
paid expenses relating to Mr.
Espada's
campaign
and paid workers
who
2
 
were dispatched to work on Mr.
Espada's
campaign, all in direct violation
of
the not-for-profitlaws.!6. Moreover, notwithstanding how the monies were used, it appears that the contractbetween Soundview and
Espada
Management
Company
is itself improper. Pursuant to thecontract,
Espada Management Company
was
and
is paid almost $400,000.00
per
year to providemaintenance services to Soundview. But
Board
minutes produced by Soundview provide novalid justification for awarding Mr.
Espada's
privately
owned company
such a lucrative
contract-especially
where,
prior
to the contract being executed, maintenance services wereprovided by
an
entity wholly
owned
by Soundview.
It
thus appears that the Mr.
Espada
(asPresident
of
Soundview) and
the Soundview Board members violated their fiduciary duties byapproving
and
entering into such a contract in the first place.
7.
GAG
is investigating claims
of
labor law violations at
Espada
Management
Company
and has uncovered evidence that Espada Management
Company
engages in myriad
labor
law violations designed to further enhance the
company's
profits at the expense
of
itsemployees.
GAG
is also investigating possible tax liability issues concerning Mr.
Espada
and theassociated companies.
1
These
types
of
improprieties are similar to cel1ain illegal acts that tainted at least one
of
Mr.
Espada's
earlier campaigns for public office.
In
2005, four (4) Soundview
employees-three
of
whom
still work for
Soundview-pleaded
guilty to diverting
Sound
view monies and grants topay campaign expenses for Mr. Espada.
The
legal fees
of
these convicted employees were paidby Soundview, which may also be a violation
of
the not-for-profit law, and
is
currently underinvestigation by
GAG.

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