N.Y. State Sen. Pedro Espada Jr. (D- Bronx) called Attorney...

N.Y. State Sen. Pedro Espada Jr. (D- Bronx) called Attorney General Andrew Cuomo's accusations a litany of falsehoods. (July 4, 2009) Credit: AP

A day after New York Attorney General Andrew Cuomo sued him for allegedly misappropriating government funds, state Senate Majority Leader Pedro Espada Jr. found himself in the sights of federal prosecutors who raided the headquarters of his Bronx nonprofit clinics.

Armed with a search warrant, FBI agents descended early Wednesday on the Soundview HealthCare Network on White Plains Post Road and began poring over documents. Richard Kolko, a spokesman for the FBI in New York, would only say that the search was being conducted with a warrant.

During a news conference in Manhattan, Cuomo told reporters that the investigation was a joint probe of his staff and federal prosecutors in Brooklyn. Steven Cohen, a chief Cuomo deputy, said the investigation was looking into potential mail and wire fraud charges, as well as misappropriation of government funds.

Neither Espada, a Democrat who is founder and chief executive of Soundview, nor any of his associates have been charged.

In Albany Wednesday, Espada didn't show up for work, telling officials he needed "to deal with a personal business matter," a Senate spokesman said.

Three Democratic colleagues, including Sen. Craig Johnson of Port Washington, called on Espada to relinquish his posts at majority leader and housing committee chairman, which carries a $12,500 stipend. Espada receives base pay of $79,500.

In a statement, Espada praised federal agents for not disrupting patient care at Soundview. But he blasted Cuomo, saying the attorney general was trying to boost his unannounced candidacy for governor. Cuomo "is creating the impression of wrongdoing when there is no wrongdoing," Espada said.

On Tuesday, Cuomo sued Espada in state court, alleging that he used the healthcare operation as a "piggy bank" for himself, his family and associates. Cuomo charged that some $14 million was misappropriated through personal expenditures and an allegedly improper $9 million severance deal for Espada.

"These were public funds," Cuomo said Wednesday, adding that Espada's familiarity with the law "makes the particular circumstance more egregious."

Cuomo also charges in his lawsuit, which names 19 others in addition to Espada, that the senator used Soundview to illegaly fund his 2008 political campaign.

Cuomo stressed that his office was working jointly with federal prosecutors in Brooklyn and indicated he didn't think the criminal probe would delay his civil lawsuit. But one defense attorney not involved in the case, who didn't want to be named, said it was likely that the criminal matter would complicate Cuomo's lawsuit. The attorney said the civil suit could be delayed if Espada and others were to assert their rights against self-incrimination.

With James T. Madore

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