No jail for Brooklyn construction company owner who hid illegal donations to Mayor Adams' campaign

A Manhattan federal court judge sentenced the owner of a Brooklyn construction company to 1 year of probation, a $9,500 fine and $18,000 in restitution for a scheme to hide donations to Mayor Eric Adams’ election campaign through straw donors.

Erden Arkan, 76, of KSK Construction Group, pleaded guilty in January to conspiracy to commit wire fraud after prosecutors said that he undermined the public matching funds system when he funneled illegal cash to Adams' 2021 election bid.

The restitution will be paid to the New York City Campaign Finance Board to recoup the money given to the mayor’s campaign as a result of the illicit donations.

He is the only person so far to be sentenced for what prosecutors described as a nearly decadelong conspiracy among Turkish-born businesspeople to influence Adams and garner favorable treatment with the city government.

The Department of Justice under President Donald Trump intervened in February in the Manhattan federal prosecutors’ case, asking a judge to drop charges of bribery and campaign finance offenses against the mayor. The government argued that the charges, which were dismissed, distracted Adams from carrying out the White House’s aggressive migrant deportation plan. The Justice Department also accused the Biden administration of bringing the case to undermine the mayor’s reelection campaign after Adams criticized the former president for what he said was a lax immigration policy.

In court on Friday, defense attorney Jonathan Rosen sought to highlight the discrepancy between dropping the case against Adams and prosecuting his client, citing the Justice Department’s statement that it was a "tainted prosecution."

"The government has mistaken power for justice," Rosen said, though he did not dispute his client’s guilt.

On Tuesday, Mohamed Bahi, who worked as the Adams administration's chief liaison with the city’s Muslim community, pleaded guilty to conspiring with the Adams campaign to hide $10,000 in campaign funds. He will be sentenced on Nov. 18. The mayor’s campaign received matching public campaign money as a result of those donations as well.

Candidates who apply for matching funds must agree to cap the amount they receive from a single donor at $2,100. In exchange, the campaign is eligible for up to $8 for every dollar donated.

Both men were charged with plotting to undermine the matching-funds system, a blow to public trust, a lawyer for the New York City Campaign Finance Board wrote in a letter to the court.

"The straw donor fraud at issue in this matter wasted taxpayer dollars. The scheme resulted in the Board disbursing taxpayer matching funds to the 2021 Eric Adams Campaign for these fraudulent contributions," attorney Joseph Gallagher wrote to the court. "This act deteriorated the integrity of the Program — such fraudulent schemes can give rise to public perception that the program is both wasteful and a potential tool for corruption."

Arkan apologized to the court and the city for his crime.

"I feel profound sadness," he said. "I’m sincerely sorry for the New York City taxpayers who support the matching campaign funds. I love this city. It pains me to know that I have harmed it. I accept full responsibility for my actions."

U.S. District Judge Dale Ho, in handing down his sentence, agreed that Arkan’s offense was "a serious crime that deserves a serious punishment."

But he cited the business owner’s age, lack of prior criminal history and the letters of support from his family and friends submitted to the court.

"Mr. Arkan has otherwise led an exemplary life," the judge said, adding that he "exemplifies the American dream."

"People say, and I think it’s true, that a life is not reduced to a single act," Ho told Arkan in court. "We’re all a collection of our actions. I hope you don’t let this one mistake define you."