New York State Senator John Sampson (D-Brooklyn) was arrested today, charged with embezzelment, obstruction of justice and making false statements to the FBI.
Also, the New York Daily News reports today that the FBI is investigating a $188,500 “loan” to Sampson from Edul Ahmad, the Guyanese-American businessman who pled guilty to charges in a multi-million dollar mortgage fraud scheme.
Ahmad also made a $40,000 loan to U.S. Rep. Gregory Meeks (D-NY) who failed to disclose it until the FBI reportedly began reviewing his finances, apparently prompted by headlines about a nonprofit called New Direction Local Development Corporation. Among other irregularities exposed by NLPC, New Direction raised money for Hurricane Katrina victims who never received the assistance.
In December 2012, the House Ethics Committee announced that it could find nothing wrong with the Ahmad loan, even though the Office of Congressional Ethics, a separate entity, found:
…there is a substantial reason to believe that Rep. Meeks failed to properly disclose the $40,000 as a gift on his 2007, 2008, and 2009 Financial Disclosure Statements in violation of House rules, standards of official conduct and federal law.
The Meeks loan, which was probably not a loan at all, was a loose thread to a much larger body of corruption. The Ethics Committee investigation was a missed opportunity, and again underscored the ineffectiveness of the Committee.
Prior to Ahmad’s arrest, Meeks defended the loan and blamed the controversy on NLPC. Of course, Meeks faces greater potential jeopardy from prosecutors than the Ethics Committee as the G-men as close in on his close associates.
Beginning in the late 1990’s, Sampson served as a court-appointed referee for foreclosure proceedings conducted by the Kings County Supreme Court. As referee, Sampson controlled escrow accounts holding proceeds of foreclosure sales of Brooklyn properties. Between 1998 and 2008, Sampson embezzled approximately $440,000 in surplus funds from the foreclosure sales of four Brooklyn properties. The prior owners of the Brooklyn properties, and other parties with a lawful interest, had a right to receive the funds embezzled by Sampson. Sampson indicated that he had illegally diverted the stolen funds to pay expenses arising from his unsuccessful run for Kings County District Attorney in 2005.
In October 2012, Albert Baldeo, another Meeks crony, was arrested by the FBI. Baldeo is a Democratic Party leader in New York City. He is accused of using phantom donors to funnel illegal campaign contributions to his unsuccessful 2010 campaign for City Council in order to fraudulently increase the amount of matching funds provided by the city.
The scheme was first publicly described in an October 2011 New York Post story based on information provided by NLPC. Baldeo and Meeks shared an office from 2006 to 2009. The two have jointly sponsored workshops and programs on immigration and mortgage foreclosure. Meeks even arranged for a Congressional Proclamation in 2009 that called Baldeo a “visionary leader” and thanked him for his service to the community.