Valley Stream firm at center of kickback probe, says source

William Rapfogel speaks during the Met Council's 40th William Rapfogel speaks during the Met Council's 40th anniversary celebration in Manhattan on April 25, 2013. Photo Credit: Michael Priest

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A Valley Stream insurance agency has emerged at the center of a criminal investigation into an alleged campaign finance kickback scheme involving the former executive director of a New York City nonprofit.

William Rapfogel, an influential power broker and longtime head of the Metropolitan Council on Jewish Poverty, was fired Monday after the council said it "became aware of specific information regarding financial irregularities and apparent misconduct in connection with the organization's insurance policies."

Attorney General Eric Schneiderman and Comptroller Thomas DiNapoli are investigating the matter and a source close to the probe said it focuses on payments by Rapfogel to the insurance firm, Century Coverage Corp. of Valley Stream. The investigation is looking into whether those payments turned into kickbacks to Rapfogel and campaign contributions to political candidates, the source said.

Century Coverage employees have donated at least $140,000 to Democratic candidates in New York City since 1999, according to the New York Campaign Finance Board website, as well as at least $62,000 to statewide races.

Rapfogel issued a statement Monday saying he regretted unspecified "mistakes," and promised to "make amends." His wife, Judy Rapfogel, is Assembly Speaker Sheldon Silver's chief of staff. Rapfogel's attorney, Paul Schechtman, said neither Rapfogel's wife nor Silver "knew anything about" the alleged scheme.

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The Metropolitan Council, which has at least $16.5 million in state contracts, reported in its consolidated 2012 and 2011 audited financial statements that its annual insurance expenses totaled $1.15 million and $1.17 million, respectively.

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Among the biggest recipients of contributions from Century Coverage, its employees and family members was Christine Quinn, who received at least $25,000 -- all of it from a 2007 fundraiser while she was running for City Council.

"In a desire to ensure that no questionable contributions related to this matter are part of our campaign fundraising, we have decided to return any and all donations that are associated with Century Coverage Corp.," said Quinn spokesman Mike Morey. Quinn is now a Democratic mayoral candidate.

Among other current city mayoral candidates who have received donations tied to Century since 1999 are Bill Thompson, who received a total of $16,350 for races in 2005 and 2009; Anthony Weiner, who received $4,900; Adolfo Carrion Jr., who received a total of $4,500 for campaigns in 2005 and 2009; and Bill de Blasio, who received $1,475 for a 2009 campaign. John Liu also received a contribution of $250 for a 2009 campaign from one of the company's employees. Nearly all have said they would return the money.

Among Century executives who have made contributions, according to city and state records, are chief executive Joseph Ross and president William Lieber, as well as their spouses.

In addition to $3,500 in direct donations to the Friends of Silver, Century and Ross in 2006 donated $4,500 and $2,500 to SpeakerPAC, a political action committee controlled by Silver.

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William Brafman, an attorney for Joseph Ross, declined to comment on the investigation other than to say, "Mr. Ross is aware of the investigation and intends to address all issues in a responsible manner."

Lieber did not return a call seeking comment.

Century Coverage, an insurance agency that acts as an intermediary between insurance carriers and those seeking insurance, in 2009 reported $2 million in revenue from commissions on property casualty insurance such as homeowner's, automobile and business insurance, according to a spokesman for Independent Insurance Agents & Brokers of New York Inc. Century let its membership in the group lapse three years ago, said the spokesman, Timothy Dodge.

In 2009, the company reported it had 15 full-time employees and 16 part-timers, Dodge said.

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With Yancey Roy and Maura McDermott

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