New York corruption case: Feds cast a wide net

Spring Valley Mayor Noramie Jasmin, right, walks into Spring Valley Mayor Noramie Jasmin, right, walks into the Charles L. Brieant Federal Courthouse in White Plains to be arraigned on corruption charges. (April 23, 2013) Photo Credit: Lili Holzer-Glier

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Moses "Mark" Stern has been seen as the linchpin of the public corruption investigation that led to the arrests of Spring Valley Mayor Noramie Jasmin, deputy Mayor Joseph Desmaret, and four New York City political figures on charges they conspired in multiple bribery schemes.

The political fixer and felon -- enlisted as a government informant -- was the key go-between for bribes exchanged among the six political figures and an undercover FBI agent posing as a real estate developer, according to court documents and sources with direct knowledge of the case.

Federal records, however, reveal that the investigation had a broader base.

FBI agents tapped at least six phones for a combined 720 days during the two-year investigation, according to documents reviewed by Newsday.

Among those whose phones were tapped -- in this instance for 120 days -- was Spring Valley real estate developer Eli Gestetner. Gestetner's plan to build 85 rental apartments on Sneden Place, near Village Hall, was endorsed by Jasmin at public meetings and approved by the planning and town boards in 2010.

The 52-year-old Monsey resident told Newsday that he had no idea his phone was bugged. "There would be no reason for them to do this," he said Friday.

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Gestetner has not been charged in the ongoing investigation, and a spokeswoman for the U.S. attorney's office declined to comment.

Gestetner received more than $2 million in financing from multiple investors interested in the Sneden Place project in 2005 and 2006, according to a lawsuit filed by investor Sol Menche in Rockland State Supreme Court in 2010. In the suit, Menche charged that Gestetner diverted investors' money for his own use.

"As a result of Gestetner's misappropriation of Menche's investment, as well as funds invested by others in the condominium project, this project was rendered insolvent and Gestetner was unable to complete the project," Menche's lawyers claimed in the suit.

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Gestetner never responded to the suit. As a result, on April 29, 2011, he was ordered to pay Menche $633,335.

Menche, 64, of Monsey, could not be reached for comment.

During a phone interview on Friday, Gestetner denied any wrongdoing in the apartment development case. He said he had no personal connection with Jasmin or any other Spring Valley officials.

"This is all a surprise to me," he said of the FBI phone tap. "I still hope to build the apartments, but it is difficult to get bank financing."

Gestetner declined to comment on Menche's accusations.

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GESTETNER, JASMIN TAPPED AT SAME TIME

Federal investigators tapped Gestetner's phone in January 2012, when a judge signed an order allowing the tap to run for 60 days. That authorization was renewed in late March, for another 60 days.

At the same time, FBI agents had taps on two of Jasmin's phones. Federal investigators first tapped one of the mayor's phones in November 2011, according to federal documents. The agents received permission from a judge to tap a second Jasmin phone in December 2011. The first tap was extended an additional 60 days later that month, according to the documents.

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On Feb. 8, 2012, FBI agents and federal prosecutors received permission from a federal judge to tap a third phone belonging to Jasmin.

In all, federal investigators had Jasmin's phones bugged from November 2011 through April 2012, according to the documents.

It was during that time that Jasmin allegedly met with Stern at a Suffern hotel and proposed an under-the-table deal where she would steer the contract to build a village community center to Stern and the undercover FBI agent, in return for a secret 50 percent cut of the contract.

Jasmin has pleaded not guilty to mail fraud, a charge that could land her behind bars for up to 20 years if she's convicted.

Her lawyer, Benjamin Ostrer, could not be reached Friday for comment.

TAPS KEY TO THE OTHER BRIBERY CHARGES

Federal investigators used phone taps aggressively in a related bribery scheme, as well.

State Sen. Malcolm Smith, (D-Queens), used Stern as a go-between to bribe Republican Party county chairmen to set up a New York City mayoral bid as a Republican, officials contend. In return, Smith promised Stern that he would help secure $500,000 in state transportation funds to build an access road to the proposed Spring Valley community center.

FBI agents tapped the phones of Smith and his chief fundraiser, Robert Calentine, beginning in November 2012, records show. The agents renewed the taps in January and again in March of this year.

Smith's lawyer did not return calls seeking comment. Calentine has not been charged in the case. He could not be reached for comment.

The final extension of taps on Smith's and Calentine's phones was approved by a federal judge less than three weeks before FBI agents arrested Jasmin, Desmaret, Smith, Bronx GOP chairman Joseph Savone, Queens GOP vice chairman Vincent Tabone, and New York City Republican City Council member Daniel Halloran on April 2. They have all pleaded not guilty.

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