UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

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UNITED STATES OF AMERICA,

-v.-

ANTHONY SEMINERIO,

Defendant.

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SENTENCING SUBMISSION OF THE UNITED STATES OF AMERICA______________________________________________________________

PREET BHARARAUnited States Attorney for theSouthern District of New York,Attorney for the United Statesof America.

WILLIAM J. HARRINGTONDANIEL L. STEIN

Assistant United States Attorney,Of Counsel.

I. Overview. . . . . . . . . . . . . . . . . . . . . . . . 1

II. Seminerio’s Explanation Of The Origin Of The Scheme. . . 3

III. Bank Records Demonstrate That Marc Consultants Was AShell Company. . . . . . . . . . . . . . . . . . . . . . 5

IV. Seminerio Established A Corrupt Relationship With Medisys. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

A. Overview. . . . . . . . . . . . . . . . . . 6B. Origin Of The Neighborhood Health Provider

Relationship. . . . . . . . . . . . . . . . 7C. JHMC Corruptly Retained Seminerio.. . . . . 9D. Seminerio Secured A $25,000 Grant For JHMC In

2002. . . . . . . . . . . . . . . . . . . . . 10

E. Seminerio Advised JHMC On Obtaining $19Million Loan Forgiveness In 2006. . . . . 11

F. Seminerio Sponsored Legislation in 2006 ToProvide Financing For JHMC. . . . . . . . 11

G. Seminerio Supported JHMC’s Drive ForDiscretionary Funding From The New York StateAssembly In April 2008. . . . . . . . . . 11

H. Seminerio Lobbied A New York State ExecutiveOffice On Behalf Of JHMC Efforts To AcquireNew Hospitals.. . . . . . . . . . . . . . 12

I. Seminerio Advocated For JHMC’s Interests InAugust 2008 Budget Deliberations. . . . . 13

V. Seminerio Extorted The Jamaica Chamber Of Commerce. . 15

VI. Seminerio Attempted To Extort Parkway Hospital. . . . 15

VII. Seminerio’s Corrupt Relationship With Winston Financial.17A. Overview. . . . . . . . . . . . . . . . . 17B. Seminerio Used His Influence To Pressure WHMC

To Keep Winston Financial In 2004.. . . . 17C. Seminerio Lobbied A New York State Executive

Official On Behalf Of WHMC’s CEO In Order ToProtect Winston Financial in 2007 and 2008.18

D. Seminerio Noted That WHMC Should Be PayingWinston Financial Because WHMC Just ReceivedState Funds. . . . . . . . . . . . . . . . . . . . . 21

E. Seminerio Guaranteed JHMC Continued BusinessIf Winston Financial Starts Paying SeminerioInstead of His Business Partner, GeorgeKalkines. . . . . . . . . . . . . . . . . 21

VIII. Seminerio’s Corrupt Relationship With Charles CallahanAnd Plaza College. . . . . . . . . . . . . . . . . . . 24

IX. Seminerio’s Corrupt Relationship With Bernard Gordon Ehrlich. . . . . . . . . . . . . . . . . . . . . . . . . . . 26

A. Seminerio’s Corrupt Relationship With EvenfloTransportation, Inc.. . . . . . . . . . . 28

B. Ehrlich And Seminerio Pressured WHMC To DoBusiness With Them. . . . . . . . . . . . 30

C. Ehrlich And Seminerio Pressured JHMC To DoBusiness With Them In April 2008. . . . . 31

X. Seminerio’s Corrupt Relationship With the Long IslandRail Road. . . . . . . . . . . . . . . . . . . . . . . 32

XI. Seminerio’s Corrupt Work For Wyckoff Heights Medical Center. . . . . . . . . . . . . . . . . . . . . . . . . . . 34

XII. Seminerio’s Corrupt Work For An FBI Undercover Agent. 34A. The Probation Services Privatization Scheme.35B. The Brownfield Redevelopment Proposal.. . 36

XIII. Conclusion Regarding Loss Amount. . . . . . . . . . . 37

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This memorandum sets forth the position of the UnitedStates of America as to the proper calculation of losses andbenefits attributable to Anthony Seminerio’s bribery andextortion scheme pursuant to United States Sentencing Guideline§ 2C1.1(b)(2). The memorandum also summarizes evidence theGovernment expects to present in connection with any sentencinghearing in this matter.

I. Overview

Since in or about 1978 until his resignation on June23, 2009, Anthony Seminerio served as a member of the New YorkState Assembly (the “Assembly”), representing New York’s 38thAssembly district. As a member of the Assembly, Seminerio’sofficial duties included voting upon legislation; acting as apublic advocate on behalf of constituents; and discussing,persuading, and influencing other legislators with respect tomatters before the Assembly. Prior to his election to theAssembly, Seminerio worked as a Corrections Officer within theNew York City Department of Corrections, and served as a memberof the executive board of the Corrections Officers BenevolentAssociation.

As a member of the Assembly, Seminerio owed a duty ofhonest services to the citizens of New York State. Seminerio’sduty of honest services arose, in part, from various provisionsof New York State law, which prohibit public officials fromaccepting payments in connection with official acts, fromlaboring under conflicts of interest, and from using theiroffices to extort illegal payments. More specifically, New Yorkstate law makes it a crime for a member of the Assembly toreceive payments of any kind for taking official action. SeeN.Y. Public Officers Law § 77. New York law also imposes a dutyon elected officials, including members of the Assembly, to avoidany business or professional engagements that are in substantialconflict with the proper discharge of their official duties. SeeN.Y. Public Officers Law § 74(2). Members of the Assembly arerequired to disclose, on an annual basis, “the nature and amountof any income in excess of $1,000,” including “consultant fees.” See N.Y. Public Officers Law §§ 73-a(2)(a) and (3). Notwithstanding the foregoing, however, New York’s publicdisclosure law permits a member of the New York State Legislature(the “Legislature”) to report income earned from a business “bythe name of the entity and not by the name of the individualcustomers, clients or tenants . . . .” Id.

From in or about 1998, through and including in orabout September 2008, Seminerio engaged in a scheme to defraud

Specifically, the Government intercepted the telephones1

using the following numbers: 917-741-7962 (“SeminerioCellphone”), 718-847-0770 (“Target Landline #1"), 718-847-0771(“Target Landline #2"), 718-847-2848 (“Target Landline #3").

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the public of his honest services as a member of the Assemblythrough the use of a purported consulting firm, named “MarcConsultants,” to solicit and receive payments from persons andentities having business before the State of New York, as well asbefore New York City and local governments, which are reliant onNew York State for their funding and authority. In truth and infact, Seminerio did little or no consulting work. Rather, asdemonstrated by the evidence summarized below, Seminerio receivedhundreds of thousands of dollars from various entities withbusiness before the State of New York - or from entities whoseclients have business before the State of New York – in exchangefor which Seminerio has taken official action for the benefit ofthose entities, resulting in favorable treatment for thoseentities in the Assembly and by New York State Officials. Moreover, in cases where persons expressed reluctance to retainSeminerio, he threatened to retaliate and did retaliate by usinghis official position to those persons’ detriment. Moreover,because New York’s Public Officers Law permits a member of theAssembly to report income in the name of a business, rather thanin the names of the individual clients of that business,Seminerio used the artifice of Marc Consultants to conceal thesecorrupt payments from public scrutiny.

To investigate the stream of corrupt payments receivedby Seminerio and his use of Marc Consultants to disguise thenature and source of those payments, the FBI has, among otherthings: (1) arranged for a cooperating witness to meet withSeminerio and record their conversations; (2) analyzed bankrecords; (3) sought and obtained court authorization to interceptcertain of Seminerio’s communications; (4) arranged for an FBI1

agent acting in an undercover capacity (the “Undercover”) to meetwith Seminerio posing as a new, prospective Marc Consultantsclient; (5) reviewed documents obtained by subpoena, by courtauthorized search warrants, and from voluntary disclosure; (6)interviewed persons who were clients of or who were solicited tobecome clients of Seminerio’s consulting company; and (7)interviewed Government officials whom Seminerio lobbied on behalfof paying clients.

The evidence demonstrates that Seminerio never providedbona fide consulting services, and that he was in fact paidconsulting fees as a way for private parties to secure his

This submission serves the limited purpose of setting2

forth the Government’s view of the loss attributable to AnthonySeminerio’s criminal acts for the calculation of the appropriateSentencing Guidelines range. On a number of occasions, thesubmission necessarily details particular financial relationshipswith third parties, and proffers relevant evidence tending todemonstrate Seminerio’s corrupt intent with respect to thoserelationships. It is worth noting that the third partiesdiscussed may not have shared Seminerio’s corrupt intent, andthat nothing in this submission is intended to convey anyconclusion by the Government that the third parties discussedherein have or have not committed any criminal act.

McLaughlin had been arrested and pled guilty to various3

federal charges, including corruption charges, and cooperatedwith the FBI in the hopes of obtaining a reduced sentence. Athis sentencing, the Government moved pursuant to Section 5K1.1and asked the Court to sentence him in light of his substantialassistance to the Government in this case and in others. JudgeSullivan sentenced him principally to a term of 120 months’

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support as a member of the New York State Assembly. Semineriohad no relevant prior experience in the business areas where heprovided consulting. Prior to his 30 years in the Assembly,Seminerio had worked in corrections. In a pre-arrest interview,Seminerio described his services as “opening doors” for people. The evidence gathered in support of the charges in this casedemonstrates that this was just a euphemism for selling hisoffice.2

Based on this evidence, the Government submits thatthere are $2,163,232 in total losses and benefits attributable tothis scheme. This total consists of corrupt payments made toSeminerio or those acting with him in connection with hispurported consulting services, monies that Seminerio sought fromNew York State or others in order to benefit himself and hisclients, and losses suffered by those who Seminerio’s attemptedto extort. The reasonableness of this figure is underscored bythe many hundreds of thousands - indeed, millions of dollars -that are not included in the estimate.

II. Seminerio’s Explanation Of The Origin OfThe Scheme

Starting in late 2007, Seminerio met with BrianMcLaughlin, who was then working as an FBI confidential source,on multiple occasions. McLaughlin had known Seminerio for3

incarceration.

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approximately fifteen years, and previously worked with Seminerioin the New York State Assembly. As discussed below, under thesupervision of the FBI, McLaughlin met with Seminerio andrecorded Seminerio discussing his reason for creating MarcConsultants, and the links between the consulting payments thathe received and his official acts. These conversationsdemonstrate that Seminerio’s consulting business was nothing morethan a scheme to start collecting payments in exchange for theservices he was elected to provide as a sitting member of NewYork State’s legislature.

On or about September 21, 2007, McLaughlin spoke inperson with Seminerio in a consensually-recorded meeting at theAtlantic Diner located in South Richmond Hill, New York. Duringthe meeting, Seminerio and McLaughlin discussed Seminerio’sconsulting business, Marc Consultants. McLaughlin told Semineriothat McLaughlin was considering starting his own consultingcompany, and that he wanted to get advice from Seminerio abouthow to go about this process.

During this September 21, 2007 conversation, Semineriotold McLaughlin that before he set up Marc Consultants, Semineriodid “favors” for individuals involved in the health care andhospital industries in New York State, and that these individualswere making “thousands” as a result. Seminerio indicated that inthe past he had assisted an individual, David P. Rosen, inobtaining millions of dollars worth of New York State financingfor a Queens-based hospital, Jamaica Hospital Medical Center(“JHMC”), controlled by Rosen and others. Seminerio toldMcLaughlin that at that point in time he changed the nature ofhis relationship with these individuals, commenting: “Screw you -- from now on I’m a consultant.” During his September 21, 2007,conversation with McLaughlin, Seminerio remarked that whenever heleft the New York State Assembly, he would lose “60 percent” ofhis consulting business.

On or about September 28, 2007, McLaughlin spoke inperson with Seminerio in a consensually-recorded meeting. Duringthe meeting, Seminerio and McLaughlin continued their discussionregarding Seminerio’s consulting business, Marc Consultants. Indescribing how he documented his relationships with hisconsulting clients, Seminerio told McLaughlin: “We don’t have nocontracts. We have handshakes.” Seminerio also told McLaughlinthat he introduced representatives of Winston Financial, acompany that provided administrative services to hospitals, to

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New York State hospital executives. According to Seminerio,while he had no involvement in the specific discussions betweenWinston Financial and the New York State hospital executives, henonetheless received a commission from Winston Financial if hisintroduction resulted in a contract with the hospitals. Seminerio and McLaughlin discussed the possibility thatMcLaughlin could introduce Winston Financial to individuals andbusinesses with whom he was familiar.

On or about November 15, 2007, McLaughlin spoke inperson with Seminerio in a consensually-recorded meeting. Duringthe meeting, Seminerio and McLaughlin continued their discussionregarding Seminerio’s consulting business. Seminerio toldMcLaughlin: “What the fuck does it mean that we are electedofficials –- it means shit. . . . What was the guy that youreplaced? . . . Who the fuck even remembers him . . . and hemust have done a lot of good things. . . .”

III. Bank Records Demonstrate That MarcConsultants Was A Shell Company

Bank records for an account held in the name of “MarcConsultants” (the “Marc Consultants Bank Account”) demonstratethat Seminerio used the Marc Consultants Bank Account not tohandle payments and receipts relating to a true consultingbusiness, but rather as an account through which to receivecorrupt payments in connection with official acts and to fund hispersonal expenses. For example:

a. According to bank records, the address listedon the Marc Consultants Bank Account is the home address ofSeminerio;

b. According to bank records, the soleindividuals with signature authority for the Marc ConsultantsBank Account are Seminerio and Seminerio’s wife;

c. According to bank records, there are nodisbursements from the Marc Consultants Bank Account to anyemployees or to any payroll companies; and

d. According to bank records, disbursements fromthe account include the following personal expenses, amongothers:

(I) numerous checks, for an aggregateamount of approximately $232,820, payable to“Seminerio,” which appear to have been signed bySeminerio and either cashed or deposited by Seminerio

These numbers are conservative estimates, because they do4

not include earlier years for which bank records are notavaiable.

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in one or more personal bank accounts;

(ii) numerous checks, for an aggregateamount of approximately $60,121, payable to “Cash,”which appear to have been signed by Seminerio and thenendorsed by Seminerio;

(iii) numerous checks, for an aggregateamount of approximately $112,955, payable to “AmericanExpress,” which appear to have been signed by Seminerioand used to pay credit card expenses; and

(iv) several checks to family members orfriends of Seminerio’s.

IV. Seminerio Established A Corrupt RelationshipWith Medisys

A. Overview

Between April 2000 and March 2008, Jamaica HospitalMedical Center (“JHMC”), a hospital in Queens, New York, paidapproximately $310,000 to Seminerio through the Marc ConsultantsBank Account. In addition, during the same time period,4

Neighborhood Health Providers, LLC, a Medicaid-managed healthcare plan that is licensed by the New York State Department ofHealth and is at least in part owned by Medisys paidapproximately $80,834 to Seminerio through Marc Consultants.

JHMC, Flushing Hospital, and Brookdale UniversityHospital and Medical Center (“BUHMC”) are constituent entities ofthe Medisys Health Network (“Medisys”). David P. Rosen is theCEO of JHMC and BUHMC, and he is also the CEO of the MedisysHealth Network. Neighborhood Health Providers administers itsinsurance services through Royal Health Care. These entities arealmost entirely dependent on Medicaid reimbursement payments fromNew York State. The rates for these reimbursements are set bythe New York State Legislature, and Medisys, through itsconstituent entities, receives annual payments that totalhundreds of millions of dollars.

The evidence elicited during the investigationconfirmed Seminerio’s statement to McLaughlin in September 2007.

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Namely, in the mid-1980s, Seminerio was an instrumentallegislator in passing the Secured Hospital Financing Program inthe New York State legislature. The program enabled certainhospitals to issue bonds backed by New York State. Thebeneficiaries of this bill were limited to a group of distressedhospitals, including JHMC and Wyckoff Heights Medical Center. JHMC obtained at least $105 million in financing, enabling it toconstruct a new hospital building, purchase new equipment, andpay down existing debts. In the case of JHMC and its affiliates,the executives at the helm of the hospital enjoyed great personalfinancial success as their hospitals grew with state funding. For example, in 2006, the CEO of JHMC and its related entities,David Rosen, earned total compensation of over $2.2 million.

As Seminerio explained in a recorded conversation withMcLaughlin, Seminerio had tired of watching others get rich offhis efforts as a member of the New York State Assembly. In thelate 1990s, Seminerio approached JHMC and its affiliates andrequested that Marc Consultants be retained. Seminerio providedno legitimate, bona fide consulting services in connection withthese payments. Instead, he used his position as an Assemblymanto advocate for JHMC and its affiliates with state and localgovernment organizations.

B. Origin Of The Neighborhood HealthProvider Relationship

Arlene Pedone was the founder of a Queens-basedconsulting company, who had done work with various health careentities. In approximately 1995, Pedone was retained by Medisys-owned Neighborhood Health Providers to provide assistance inrecruiting new Medicaid clients to their insurance program. Pedone had been a political ally, campaign worker, and supporterof Seminerio for many years. In 1996, Pedone had retainedSeminerio to assist with this recruitment project and had paidSEMINERIO approximately $20,000 for his services.

In the late 1990s, Seminerio contacted Pedone, anddemanded fifty percent of the gross receipts of her company. Atthe time, she was earning a gross amount of between $300,000 and$400,000 per year. Pedone told Seminerio that the consultingcompany’s profit was much smaller than the gross receipts. Seminerio then demanded access to the company’s books andrecords. Over time, he repeated his demands for a partnershipshare and access to financial records.

Eventually, Seminerio brought his demand for paymentsto David Rosen, the CEO of Medisys, and Steven Bory, the CEO of

At the time of this meeting, JHMC owned fifty percent of5

Neighborhood Health Providers. Because of this ownershipstructure, Bory effectively reported to Rosen.

Bory does not independently recall the specific purpose of6

the $5,000 check. Other near contemporaneous documents suggestan alternative explanation: namely, that this meeting and the$5,000 may have been a discussion of new contract whereinPedone’s company agreed to provide marketing services inconnection with a Child Health Plus program at NeighborhoodHealth Providers. In a letter agreement dated August 29, 1997,Bory memorialized a contract to pay Pedone’s company $35,000 perannum effective September 1, 1997 in bi-weekly wire payments. The letter also referenced a meeting between Bory and Pedone“last Tuesday.” The $5,000 check, however, predated the ChildHealth Plus Agreement and was not the method of payment set forthin the August 29, 1997 letter. Furthermore, the memo line on thecheck read “Anthony Seminerio.” Therefore, it appears that thepayment was related to Seminerio’s request at the August 13, 1997lunch meeting, and not to the Child Health Plus program.

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Neighborhood Health Providers. Rosen asked Bory to join5

Seminerio for lunch on August 13, 1998. Pedone attended thelunch as well. At the lunch, Pedone told Seminerio that heshould be paid directly by Neighborhood Health Provider, and notby her. Seminerio then told Rosen that he requested such directpayment. As Rosen and Bory left the restaurant, Rosen instructedBory to “take care of this.”

In the following weeks, Neighborhood Health Providerswrote a $5,000 check dated August 25, 1997 to Pedone’s company,Neighborhood Marketing Services, with a memo line saying “AnthonySeminerio.” While no witnesses the Government recalled couldrecall this specific check, the timing makes it appear that thecheck may have been in connection with the August 13, 1998lunch. Morever, Neighborhood Health Providers subsequently6

retained Marc Consultants pursuant to a November 11, 1998contract, and started making regular payments to Seminerio.

Meanwhile, Seminerio continued demanding half ofPedone’s income. When Pedone continued to resist his demands,Seminerio retaliated. Seminerio sent a letter and/or called manyof the Pedone’s clients in Queens, New York, stating that he wasno longer affiliated with her. Seminerio also pressured many ofthose individuals to stop paying Pedone. He informed theseclients that they really needed Seminerio, not Pedone, becauseSeminerio could do things that Pedone could not.

Based on representations by counsel at JHMC, the7

Government has learned that at some point in time Semineriointroduced Neighborhood Health Providers to executives atElmhurst Hospital and Queens Medical Center. Theseintroductions, in turn, led to a profitable business opportunityfor Neighborhood Health Providers. To date, Neighborhood HealthProviders cannot recall whether those introductions were madeprior to the execution of the Marc Consulting Agreement.

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As a result of Seminerio’s actions, Pedone’s companylost its client base. Pedone terminated her marketing businesswhich had once generated between $300,000 and $400,000 per year. In a futile effort to shore up her company, Pedone withdrewapproximately $200,000 from an IRA account, paying applicablepenalties.

Seminerio’s relationship, however, with NeighborhoodHealth Providers continued for the better part of the nextdecade. He received monthly payments that started at $1,500. Bory later reduced this to $500 because of Seminerio’sinactivity. Bory continued these payments because he understoodthat Seminerio could help introduce Neighborhood Health Providersto others in the hospital community (although these introductionsnever came to pass) and because Rosen had made it clear that hewanted the arrangement established. Indeed, if Rosen had notasked Bory to hire Seminerio, Bory would never have retainedSeminerio. Although Bory stated that he believed the payments toSeminerio were worthwhile, he could not articulate any valuableservices that Seminerio actually provided to Neighborhood HealthProviders, and Rosen never inquired about the value ofSeminerio’s services.7

C. JHMC Corruptly Retained Seminerio

As set forth above, at about the same time thatNeighborhood Health Providers retained him, Seminerio also beganreceiving payments from JHMC through Marc Consultants. In total,these payments were equal to at least $380,000.

Immediately prior to Seminerio’s arrest, on September5, 2008, the FBI interviewed Medisys’s CEO, David Rosen, in orderto learn the purported services that Seminerio, a formercorrections officer, could offer to a consortium of hospitals. Rosen explained that Seminerio does not do anything “specific innature,” but “provides guidance on issues, tells [Rosen] aboutthe political landscape, makes introductions to the New YorkState Assemblymen and the New York State Senators as well as

Both of these relationships are discussed in greater8

detail below. Bernard Gordon Ehrlich, who has previously beenconvicted of federal bribery charges, was separately compensatingSeminerio for his help in persuading hospitals to retain theservices of his company in providing care to military veterans.As discussed below, the potential investor was actually an FBIundercover officer, and there was no serious discussion of DavidRosen’s interest in obtaining financing.

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others outside the legislative body.” When asked for examples ofwork Seminerio had done as a consultant in the previous 6 months,Rosen could only provide two: Seminerio introduced him to GordonEhrlich and a potential investor. In fact, both the potentialinvestor and Ehrlich were separately paying Seminerio to be theirconsultants.8

Wire intercepts and Medisys records demonstrate thetrue nature of Seminerio’s relationship. Seminerio’s involvementin Medisys’s business repeatedly involved state matters, such asthe annual Medicaid budget passed by the legislature and mattersbefore the State Department of Health.

Indeed, Seminerio frequently made requests for promptpayment in connection with such help or when otherwise describinghis influence in Albany. For example, on or about April 23, 2008,at approximately 3:15 p.m. (#7960), Seminerio used TargetLandline #1 to speak with Rosen. During this call, Semineriotold Rosen that he was calling about “my check” and Rosen said hewould “follow up” and “go rattle some cages.” Seminerio toldRosen about a recent thank-you note he and New York State SenatorSerf Maltese received from Local 1199 - a primary union of healthcare workers - for help in connection with Medicaid and the NewYork State budget. Also during this call, Rosen asked Seminerioif he was “looking okay on the upcoming election,” and Seminerionoted he was receiving the Conservative and Republicanendorsements. Seminerio told Rosen during this call thatSeminerio could walk into “Bruno’s office,” a reference to thethen-Senate leader Joseph L. Bruno, like he walks into Rosen’soffice, and “I talk to Bruno like I talk to you ... that kind ofrelationship you can’t buy for a million dollars.”

D. Seminerio Secured A $25,000 Grant ForJHMC In 2002

In or about February 2002, Seminerio and a New YorkState Senator from Queens, Serphin Maltese, secured a $25,000grant for JHMC as part of the 2001-02 New York State Budget.

In an interview with the FBI, Cahill stated that he does9

not recall Seminerio having any involvement in connection withJHMC’s effort to persuade New York State to eliminate this loan,but he does recall David Rosen advocating very strongly for it.

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(MHN10132).

E. Seminerio Advised JHMC On Obtaining$19 Million Loan Forgiveness In 2006

On June 26, 2000, Medisys assumed management ofBrookdale Hospital Medical Center (“BHMC”) at the request of theNew York State Department of Health, the Dormitory Authority ofNew York State, a major health care union Local 1199 and variouselected officials. (MHN07010). At the time BHMC had asignificant negative net worth of approximately $140 million. (Id.) This included a $19 million loan made from the New YorkState Dormitory Authority made with New York State funds. As lateas January 2006, JHMC undertook efforts to persuade New YorkState to forgive this loan. These efforts included meetings withSeminerio in Albany, (MHNE0007975), who helped set up meetingswith John Cahill, who served as the Chief of Staff to New YorkState Governor George Pataki. (MHNE0007975, MHNE0007781). 9

F. Seminerio Sponsored Legislation in 2006To Provide Financing For JHMC

In or about June 2006, JHMC engaged in a lobbyingeffort to pass a secured loan program bill A11773/S8167 in theNew York State Legislature. (4995). According to a memorandum insupport of the bill, the legislation would “allow eligibleSecured Hospital Loan Program borrowers to refinance outstandingdebt and borrow additional funds in order to undertake arestructuring project that would be approved by the Department ofHealth.” (4999). The bill would “reduce the debt services costsof the associated borrowing,” and permit JHMC to, among otherthings, “expand ambulatory and acute care capacity on the Jamaicacampus by acquiring and renovating its affiliated nursing home.”(4999). The Assembly version of the bill had five sponsors,including Seminerio. (4996).

G. Seminerio Supported JHMC’s Drive ForDiscretionary Funding From The New YorkState Assembly In April 2008

In or about April 2008, an employee of JHMC met withvarious politicians in Albany, New York in order to advance

Ultimately, no sale was made and both hospitals have10

closed.

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JHMC’s drive to obtain discretionary funds from the New YorkState Legislature. In a subsequent report about the drive, theemployee reported on the status of their efforts in the New YorkState Assembly:

They are at “ease” until 12pm (or thereabouts) today -I have spoken to all the members that cover our areas.Vivian Cook is going to spearhead the funding for JHMCsupported by Seminerio and Pheffer.

(MHNE000040).

H. Seminerio Lobbied A New York StateExecutive Office On Behalf Of JHMCEfforts To Acquire New Hospitals

As set forth below, during the time the Government wasintercepting his telephones, Seminerio lobbied New York Stateofficials on behalf of Medisys’s efforts to acquire an interestin competing hospitals located in Queens - St. Johns and MaryImmaculate Hospitals. By way of background, St. Johns and MaryImmaculate Hospitals had been financially troubled for manyyears. In January 2007, Wyckoff Heights Medical Center (“WHMC”)formed a holding company called Caritas and purchased the twohospitals with the approval of the New York State Department ofHealth. WHMC management, including its CEO Dominick Gio,immediately began to run into severe funding problems, and failedto manage the three hospitals. In about April 2007, afterCaritas requested emergency funding from New York state, theState Department of Health advised Caritas to retain arestructuring company. Ultimately, Dominick Gio was replaced bythe restructuring officer, Tom Singleton, and Caritas wasrequired to sell St. Johns and Mary Immaculate Hospitals. Thepossible sale of these hospitals set off lobbying efforts bynearby competitors who were interested in owning thoseentities.10

In connection with this matter, On or about July 9,2008, at approximately 1:08 p.m. (#5110), Seminerio used TargetLandline #2 to call Rosen. Seminerio informed Rosen that DennisWhalen, a New York State healthcare official, was not retiring(as apparently had been expected), and that instead he was goingto get a promotion. Seminerio informed Rosen that Whalen was adear friend of his. Rosen replied that Whalen had not been

This call is discussed and described in greater detail11

below, regarding Seminerio’s attempted extortion of ParkwayHospital.

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helpful to him. Seminerio told Rosen that he should tellSeminerio these things so that Seminerio "know[s] what to breakhis balls about.”

On or about July 10, 2008, at approximately 2:16 p.m.(#13461), Seminerio used Target Landline #1 to call Whalen. Inthe call, Whalen noted that he was talking to Senator Carl Krugerabout Parkway Hospital acquiring St. Johns and Mary ImmaculateHospitals. Seminerio replied that he would rather see “JamaicaHospital” get it. Seminerio said that there are no morecommunity minded people than “Jamaica” (a reference to JHMC), andasked again that Whalen consider them. Whalen replied that hewould be happy for them to get Mary Immaculate.11

On or about July 10, 2008, at approximately 2:23 p.m.(#13462), Seminerio used Target Landline #1 to call Rosen. Seminerio informed Rosen that he had just spoken to Dennis Whalenabout JHMC purchasing Mary Immaculate Hospital. He informedRosen that Senator Carl Kruger was supporting Parkway Hospital,but that Seminerio informed Whalen that he supported “Jamaica.” Rosen and Seminerio further discussed JHMC’s financial planregarding hospital purchases.

I. Seminerio Advocated For JHMC’s InterestsIn August 2008 Budget Deliberations

According to publicly available information, on orabout August 11, 2008, New York State Governor David Patersoncalled a special session of the New York State legislature andproposed cutting hospital funding in order to close projectedstate deficits.

On or about August 12, 2008 at approximately 11:27 a.m.(#1857), Seminerio used Target Landline #3 to call SheldonSilver, the Speaker of the New York State Assembly. Seminerioasked Silver whether he thought the hospital budget cuts wouldhappen. Silver said that the cuts would not happen. Seminerioexpressed approval and explained his belief that funding healthcare was more important than funding education.

On or about August 12, 2008 at approximately 11:31 a.m.(#5681), Seminerio used Target Landline #2 to call Rosen. Duringthe call, Seminerio informed Rosen that he had just spoken with

George Kalkines practices law in a private firm in New12

York State. He served as outside counsel to JHMC in connectionwith the Secured Hospital Financing Program during the mid 1980s,and has been a lawyer for JHMC and its affiliates since thattime. Kalkines also formed a business partnership withSeminerio, and they shared fees paid by Winston Financial for itsbusiness with JHMC, Kalkines’s client. Kalkines also knew ofSeminerio’s consulting agreement with JHMC and NeighborhoodHealth Providers.

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“Shelly” (a reference to Silver), who said that there would notbe any budget cuts. Seminerio and Rosen then discussed Silvermore generally, and Seminerio made a statement suggesting thatRosen would like Silver more if Rosen went through Seminerio tocontact him.

According to publicly available records, on or aboutAugust 12, 2008, Silver scheduled a meeting in New York, New Yorkof Assembly Democrats for August 14, 2008. The purpose of themeeting was to discuss the reaction to Governor Paterson’sproposed budget cuts.

On or about August 13, 2008, at approximately 11:50a.m. (#14990), Seminerio used Target Landline #1 to call attorneyGeorge Kalkines. Upon learning that Kalkines was in a meeting,12

Seminerio stated to the person who answered the line that hewould fax Kalkines information about Governor Paterson’s budgetcuts and that Kalkines should call him back. Seminerio statedthat he had a meeting the next day on the issue.

On or about August 13, 2008, at approximately 12:17p.m. (#1868), Seminerio used the Target Landline #3 to receive acall from George Kalkines. During the call, Kalkines confirmedthat he received the breakdown from Seminerio regarding theproposed budget cuts. They then discussed how the cuts weredistributed among hospitals. Kalkines recommended making thepoint that the “outerborough” facilities, all of which werefacing major financial problems, and that the “safety nethospitals” like “Brookdale” and “Jamaica” (a reference to BUHMCand JHMC), could not afford these cuts. Seminerio informedKalkines that he had spoken to “Shelly” (a reference to SpeakerSilver), who said that the cuts were not going to happen. Seminerio told Kalkines that “Shelly” had called an emergencymeeting for the next day, and he (Seminerio) would be yelling andscreaming about it. Kalkines said that Seminerio had to startintroducing the concept that safety net hospitals that serve poorcommunities could not endure any further cuts. Kalkines thanked

15

Seminerio for the information he had provided on the budget cuts. Seminerio stated that he told “Shelly” to leave his (Seminerio’s)hospitals alone.

V. Seminerio Extorted The Jamaica Chamber OfCommerce

Also in or about 1999, at about the time he hadestablished his relationship with JHMC, Seminerio repeatedlycontacted Robert Richards, the president of a Queens, New York,based non-profit organization. Richard’s non-profit organizationreceived a majority of its funding from the State of New York,including in the form of member items, the New York StateDormitory Authority, and the New York State Economic DevelopmentCorporation. Seminerio falsely informed Richards that Pedone hadstolen funds from Seminerio, and warned that he would “bury”Richards for dealing with Pedone. Richards was aware thatSeminerio’s previous efforts had terminated Pedone’s business. In the summer of 1999, Seminerio asked Richards to become aclient of Seminerio’s consulting company, Marc Consultants. After Richards refused to respond, Seminerio repeatedly askedRichards to retain Seminerio as a consultant.

In or about January 2000, Seminerio met with Richardsat Seminerio’s legislative office in Albany, New York. Semineriostated that he had been patient with Richards for too long, andrepeated the demand that Richards hire him. Seminerio warnedthat if Richards failed to hire him, Seminerio would “kill” anybill that Richards tried to pass in Albany. Seminerio alsostated that he would pursue any legislator working with theExecutive and ruin that relationship. After this meeting,Richards agreed to hire Seminerio. Explaining that he would notbe a “gavone” about the fee, Seminerio proposed a monthly fee of$700.

Richards, through the Jamaica Chamber of Commerce, paidMarc Consultants for approximately a two-year period. Richardsterminated the relationship in or about 2002 by, among otherthings, retaining an adviser who told Seminerio that it would bea conflict of interest for Seminerio to be compensated forconsulting work on official matters, including with city andlocal governments.

VI. Seminerio Attempted To Extort ParkwayHospital

In or about July 2004, private investors took controlof Parkway Hospital, located in Queens, New York. In the fall of

This call is discussed in abbreviated form above.13

16

2004, Seminerio and others met for lunch with Robert Aquino, asenior executive of Parkway Hospital. Seminerio discussed hisconsulting firm and explained that Aquino never knew when ahospital might need help, and that Seminerio could be of help tohim. Seminerio said that he would only charge “a couple ofbucks” per month. Shortly after the lunch meeting, Semineriosent Aquino a proposed contract with Marc Consultants, but Aquinodid not sign the contract.

Seminerio renewed his request that Aquino retain MarcConsultants a number of times in 2005. In one such conversationin or about July 2005, Aquino told Seminerio that it was notappropriate for the hospital to retain a public official. Inresponse, Seminerio asked if Aquino knew how miserable Semineriocould make Aquino’s life.

Eventually, Seminerio retaliated in response toAquino’s refusal to hire him by trying to block ParkwayHospital’s acquisition of the Caritas hospitals. On or aboutJuly 10, 2008, Seminerio called Dennis Whalen, a senior New YorkState health department official. During the call, Seminerio13

assured Whalen that he had “a friend of (sic) me in theAssembly.” Whalen mentioned that he had been speaking withSenator Carl Kruger who supported the acquisition of certainhospitals by Parkway Hospital. Seminerio replied that he wouldrather see JHMC “get it.” When told by Whalen that Kruger wasusing Seminerio’s name, Seminerio responded “I hate, I hateParkway.” Whalen responded that Parkway Hospital claimed to havecapital of approximately $50 million, and Seminerio againresponded, “I’m a street guy. This guy never went for threecents out of his own pocket.” Seminerio again dismissed thepossibility that Parkway Hospital would provide capital,explaining that Aquino “never went for three cents in 20 years Iknow him.” Seminerio then praised the JHMC and David Rosen, andreiterated his request that JHMC be able to complete theacquisition. Seminerio explained that “there’s never been a morecommunity-minded and more benevolent people” than JHMC. Whalenreplied that he would “like nothing better than to see Rosen get”one of the hospitals.

At no point in this call, or in any other conversationwith Whalen, did Seminerio disclose to Whalen that Seminerio wasa paid consultant of JHMC and that Parkway Hospital had refusedto retain him.

Beginning in or about 2004, Seminerio arranged for some14

payments from Winston Financial to go to his business partner,George Kalkines. Kalkines was paid a total of $170,000 as aresult. In an effort to advocate for a conservative loss amountfigure, this amount has not been included in the loss amountcalculation set forth, notwithstanding the fact that Seminerio isliable under the guidelines for amounts earned by those acting inconcert with him.

17

VII. Seminerio’s Corrupt Relationship With WinstonFinancial

A. Overview

Winston Financial has paid monies to Seminerio throughMarc Consultants in connection with contracts through whichWinston Financial provides insurance brokerage services tovarious hospitals, including Wyckoff Heights Medical Center(“WHMC”) and JHMC. For his part, in his capacity as anAssemblyman, Seminerio has both advocated for these hospitals toretain Winston Financials services, and corruptly offered to takeand taken official acts on behalf of those hospitals. Seminerioprovided no consulting services with respect to the work done byWinston Financial and has no expertise in the area of insuranceor brokerage companies. Instead, Seminerio served to guaranteethat the hospitals - who were dependent on New York State aid -continued to utilize Winston’s services. On multiple occasionswhen Winston Financial’s hold on business at these hospitals wasthreatened, Winston Financial called upon Seminerio to useinfluence at the hospital and/or New York State to protect itsinterests.

Based on an analysis of bank records for the MarcConsultants Bank Account, between April 2000 and March 2008,Winston Financial, paid approximately $176,512 to Semineriothrough Marc Consultants. This represents 25% of the total feesthat Winston Financial earned from business generated withWyckoff Heights Medical Center. The total loss attributed toWinston Financial is thus $706,048.14

B. Seminerio Used His Influence To PressureWHMC To Keep Winston Financial In 2004

In or about November 2003, WHMC hired a new VicePresident of Human Resources, Fred Eisgrub. At the time, WinstonFinancial was already WHMC’s brokerage firm for certain employeesupplemental insurance benefits. Shortly after his arrival,

18

Eisgrub began to complain to Winston Financial’s CEO, RobertBradley, about various shortcomings that Eisgrub had identifiedin Winston’s services. Eisgrub also shared his complaints withWHMC’s CEO, Dominick Gio.

In the summer of 2004, while Eisgrub was on vacation,he received a call on his cellular phone from Seminerio. Identifying himself as “Assemblyman Seminerio,” he asked Eisgrub“What the fuck is the problem with Winston?” Eisgrub, who hadnever before spoken to Seminerio, told him that he (Eisgrub)would look into it, and Seminerio advised Eisgrub to “fix it.” After the call, Eisgrub called Gio and relayed Seminerio’sconcern about Winston. Gio instructed him to set up a meetingand tell Winston at the meeting what problems WHMC was having. Eisgrub scheduled the meeting, Gio attended, and Eisgrub outlinedhis complaints about Winston. The representatives from Winstonwho were present committed to fix the problems, and therelationship with WHMC improved after that. Eisgrub never heardfrom Seminerio again in connection with Winston, even thoughSeminerio regularly collected 25% of all fees paid to WinstonFinancial for the WHMC work.

C. Seminerio Lobbied A New York StateExecutive Official On Behalf Of WHMC’sCEO In Order To Protect WinstonFinancial in 2007 and 2008

In 2007, Winston Financial’s position at WHMC was againthreatened. As mentioned above, in January 2007, Wyckoff HeightMedical Center (“WHMC”) acquired two hospitals with the approvalof the New York State Department of Health. In about April 2007,after it became clear that WHMC management could not manage thethree hospitals’ cash flow, the State Department of Healthadvised them to retain a restructuring company. Tom Singletonbecame the Chief Restructuring Officer, effectively demotingDominick Gio, WHMC CEO.

In October 2007, Robert Bradley, Winston Financial’sCEO, learned by email that Tom Singleton had directed WHMC toexplore replacing Winston with a Tennessee brokerage firm, TheHanback Group. Eight minutes later, he sent a message toSeminerio’s business partner, George Kalkines:

What is going on? Why the involvement of Hanback (a 3man shop in Tennessee)? Do we need Tony’s involvementin this from an Albany political perspective?

Seven minutes later, Bradley sent Kalkines another email:

It is worth noting that Seminerio himself is not15

licensed, and may not legally share in a percentage of brokeragework.

19

In follow-up, I don’t expect that with the investmentof time and energy Winston has spent over the yearsbuilding political relationship in New York, I do notexpect to lose New York business, in which we done asuperb, loyal job, to some hokey’s from TN because oftheir relationship with Cambio [the restructuringgroup].

(001029). At first blush, these emails demonstrate Bradley’sclear understanding that he had been paying Seminerio to providepolitical pressure on WHMC to retain Winston Financial. In aninterview with the U.S. Attorney’s Office and in statementsrelayed to this Office by Bradley’s attorney, Bradley denied thatthis email referenced using Seminerio’s political influence tohelp preserve the WHMC business. He claimed that the “time andenergy Winston has spent building political relationships” wasnot a reference to money paid to Seminerio, but to work Winstonhad done at the Caritas hospitals for free. He further claimedthat his desire to involve “Tony . . . from an Albany politicalperspective” was a reference to a possible complaint that theTennessee company was not licensed to provide brokerage servicesin New York. Bradley further claimed that he never involved15

Seminerio in his efforts to prevent WHMC from switching brokeragefirms and that he never conducted state business with Seminerio.

Court-authorized interceptions belie Bradley’sexculpatory denials, and demonstrate that the true purpose ofSeminerio’s role in Winston Financial’s business was exactly whatthe emails appear to say. The recorded conversations demonstratethat Winston Financial used Seminerio to attempt to persuade theState Department of Health to favor restoring Dominick Gio andousting Singleton. This personnel change would have removed thethreat to Winston Financial’s business at WHMC.

On or about December 18, 2007, at approximately 1:08p.m., Bradley called Seminerio at Target Landline #3. Duringthis call, Bradley explained to Seminerio that they are having“major issues over at Wyckoff” (a reference to WHMC), and that hehad spoken to “Dominick,” (a reference to Dominick Gio). Bradleyexplained to Seminerio that Gio said that the “only way out ofthis thing is for someone to lift the veil . . . so Whalen (areference to Dennis Whalen, the then-Deputy Secretary of Healthand Humans Services for the State of New York) will have a

20

meeting with him.” Bradley stated that Gio “kind of asked”Bradley to call Seminerio to see if Seminerio “could intervene”on behalf of Gio and WHMC. Seminerio replied that he would doso.

On or about December 19, 2007, at approximately 1:25p.m. (#131), Seminerio used Target Landline #3 to speak withDennis Whalen. During this call, Seminerio asked Whalen for a“favor,” and Seminerio told him that Gio said he could not get ameeting with Whalen. Whalen explained that, as far as he knew,Gio had not called for a meeting and Whalen would be happy tomeet with Gio. Seminerio said that he would tell Gio to callabout setting up a meeting with Whalen.

On or about January 4, 2008, at approximately 1:31p.m., Seminerio used Target Landline #1 to speak with Gio. During this call, they discussed the fact that they were meetingwith “Dennis” (a reference to Dennis Whalen) on Thursday morningof the following week.

On or about January 16, 2008, at approximately 12:19p.m., Seminerio used Target Landline #1 to speak with CraigButler. Seminerio told Butler that he took Gio to meet “thehead people in Albany, the health department.” Semineriocommented that Gio was “happy” with the meeting, and that Gio“thought he was dead but I brought him back to life.”

To fix the problem, Winston Financial and Seminerioattempted to intervene to change senior management at WHMC. Onor about January 22, 2008, at approximately 2:15 p.m., Seminerioused the Seminerio Cellphone to speak with Gio. During thiscall, Gio told Seminerio that “Singleton (a reference to TomSingleton, a hospital restructuring officer for the parentcompany of WHMC) and his group went up to ask the state for moremoney.” Gio indicated to Seminerio that Singleton and his groupwere told by state officials that unless Gio was terminated, theywould not help. Gio further indicated to Seminerio that he doesnot want to be in the way of “Wyckoff growing.” Seminerio toldGio that he would talk to “Whalen,” and get back to Gio.

Ultimately, these efforts were unavailing. On or aboutJanuary 25, 2008, at approximately 12:37 p.m., Seminerio usedTarget Landline #2 to speak with Gio. During this call Semineriotold Gio that he “called up to Dennis Whalen, he don’t knownothing about it.” Gio told Seminerio that “it’s not worthfighting . . . I’ve made a decision just to resign.”

21

D. Seminerio Noted That WHMC Should BePaying Winston Financial Because WHMCJust Received State Funds

On or about May 22, 2008, at approximately 2:29 p.m.,Seminerio used the Seminerio Cellphone (#2876) to call CraigButler, another senior executive at Winston Financial. Duringthis call, Seminerio asked Butler: “What is happening withWyckoff? Do I have check coming?” Butler responded: “Yeah it isgoing to be coming but, Tony, I have to tell you this, they (areference to WHMC) are not paying any of their bills – none ofthem.” Seminerio replied: “We just got them some money to keepthem alive.” Butler responded, “They (a reference to WHMC) owe$300,000 plus in back payments to Empire Blue Cross, I can’t tellyou how much money they owe, just from the first quarter.” Seminerio responded: “I know the Indian guy took it over . . . .I will speak to Dr. Aria. These hospitals, they have got all thefucking glory, they don’t go for the cash.” Butler then stated:“Yeah, they really don’t – this is the worst I have ever seenit.”

E. Seminerio Guaranteed JHMC ContinuedBusiness If Winston Financial StartsPaying Seminerio Instead of His BusinessPartner, George Kalkines

In addition to WHMC, Seminerio also helped WinstonFinancial obtain business with JHMC. As with WHMC, Semineriomade it clear to JHMC that the Winston Financial Business wasimportant to him personally. For example, on February 14, 2008,Seminerio called David Rosen and left a message:

Called to thank you for your help with bringing onWinston. They treated him well. He said that “thiswill be my annuity when I retire.”

(MHNC0011222). From the beginning of the relationship,Seminerio’s only role in helping Winston Financial obtain JHMC’sbusiness was to make it clear that paying Winston Financial was away to win Seminerio’s favor. Seminerio had no expertise oruseful experience in the insurance brokerage business, and heprovided no consulting services with respect to this business.

At some point in about 2004, Seminerio began sharingJHMC fees from Winston Financial with George Kalkines, a long-time lawyer for JHMC who, along with Seminerio, played a pivotalrole in the Secured Hospital Financing Program. Winston paidKalkines annual amounts of $50,000, $50,000, $40,000 and $30,000

22

in 2004, 2005, 2006, and 2007 respectively. (2732-2737). Kalkines instructed Winston Financial to make the payments to histwo children, even though his children provided no services toWinston Financial. Winston Financial complied with this demand.

By the summer of 2007, Seminerio began demandingrevenue from JHMC/Medisys contract, putting pressure on WinstonFinancial to change its arrangement with Kalkines. (000673). This conflict was discussed in multiple recorded calls involvingSeminerio, and these calls make one thing clear. WinstonFinancial never considered, and Seminerio never mentioned, thequality of services provided by either Kalkines or Seminerio indetermining who to pay. The only relevant question was whetherWinston Financial would lose JHMC if they terminated payments toJHMC’s longtime lawyer, Kalkines, in favor of payments toSeminerio, the Assemblyman who had done so much for JHMC in NewYork State. In intercepted conversations, Seminerio made itclear that JHMC was “obligated” to him.

On January 29, 2008, Seminerio spoke with Bradley overthe Seminerio Cellphone. (1648). Bradley informed Seminerio thathe “told George (a reference to Kalkines) that the relationship’snot working out, and, uh, you know, I don’t see how it’s gonnawork out. This whole convoluted process that got into. I don’teven know who we got into it. All I know is you (a reference toSeminerio) brought him to us, we had a deal, you guys were gonnasplit commission. Next thing I know, for a year, you know, hewants to get paid separately, and he’s not under you.” Bradleycomplained that Kalkines was not bringing in any new business.

On February 14, 2008, Seminerio again spoke withBradley over the Seminerio Cellphone. (1766). Bradleyexplained:

And I said to him, I said “George, I just can’tcontinue this thing.” I said, “It’s unfair toeverybody involved.” I said, “You can’t sit there andexpect to get paid money with no performance.”

Seminerio complained about not being paid himself: “Now where doI come in on this? I mean, his son’s (a reference to the factthat Winston Financial was paying Kalkines through his children)been gettin’ the check. I’ve been gettin’ nothin’.” Later inthe call, they discussed the ramification of terminating paymentsto Kalkines:

23

Bradley This thing with George may not beheaded to a good ending. Okay?

Seminerio Let me tell you something. JamaicaHospital and those you’ll always have,as long as I’m alive.

Bradley Okay. ‘Cause he’s…

Seminerio Nobody’s gonna hurt you there.

Bradley Yeah, well he kinda intimated that,you know, he’ll have to take hiscontacts elsewhere. And I’m thinking .. .

Seminerio [raising his voice] Where? Who? Thewhat? Jamaica Hospital?

Bradley Well that’s the only one he’s got,‘cause he doesn’t have any at Wyckoff.

[Voices overlap]

Seminerio You tell him, you tell him JamaicaHospital is Tony Seminerio’s piece.Nobody’ll touch that thing.

Bradley Well you know Tony, we really hadthese all before he came into thedeal.

Seminerio Without a doubt!

Bradley And so . . .

Seminerio They’re all, they’re, they’re my,they’re obligated to me on that.

Bradley Yeah. He’s actually introduced us tono new business whatsoever.

Seminerio Ah, but, but that’s his fault.

On February 22, 2008, Seminerio and Craig Butler spokeon the Seminerio Cellphone. (1866). Seminerio complained that “Everybody made fucking money but me on the Jamaica Hospitalthing.” When Butler told him that they would try to develop astrategy for fixing it, Seminerio continued “I hope they dosomething because now I’m, now I’m hot.” Seminerio continued,“When I found out that what’s-his-name’s son was on the payroll

24

(a reference to Kalkines’s kids), what are they kidding me orwhat? Well, what do they, what do they produce.”

VIII. Seminerio’s Corrupt Relationship WithCharles Callahan And Plaza College

Records for the Marc Consultants Bank Accountdemonstrate that between April 2000 and September 2007,Collegiate Management Associates, a shell company funded by PlazaCollege, paid approximately $170,350 to Seminerio through MarcConsultants. The CEO of Collegiate Management Associates,Charles E. Callahan III, is also the vice president and provostof Plaza College in Queens, New York. Plaza College isauthorized by New York State to confer Associate degrees and wasrecently authorized to confer Bachelor degrees in BusinessAdministration. Plaza College is owned, at least in part, by theCallahan family.

On a nearly annual basis, Seminerio has sought tointroduce legislation that would have the effect of crowding outfor-profit competitors to Plaza College. For example, on orabout January 11, 2007, Seminerio introduced bill A1966 in theNew York State Assembly. The bill, if passed, would haverequired that New York State higher education institutionsseeking the authority to confer associate degrees –- namely,institutions that would compete with Plaza College –- beevaluated by the New York Board of Regents for a three-yearperiod before being permitted to confer such degrees. This bill,if passed, would increase the costs of entry that any competitorto Plaza College would face, by making it more difficult forPlaza College’s competitors to obtain New York Stateaccreditation to confer degrees.

Seminerio also played a role in advocating thatCallahan be appointed to various New York State positions,including Callahan’s failed attempt to become a member of the NewYork State Board of Regents and his successful appointment to theNew York Workforce Investment Board. For example, in a letterdated August 23, 1991, Seminerio formally nominated Callahan tothe New York State Workforce Investment Act Government Board.

In an effort to better understand the full nature ofthis relationship, the Government interviewed Callahan on fouroccasions. In these interviews, Callahan indicated thatCollegiate Management was founded in 1988. Initially, Callahanrefused to disclose the clients of Collegiate Management,describing the list as “confidential.” He subsequently relented,and admitted that the clients are just Plaza College and his

25

family members. Its purpose is to provide services to PlazaCollege and to “shield Plaza College” from liability inconnection with those services.

Callahan indicated that although Seminerio asked him toretain Marc Consultants, he never felt pressured by Seminerio todo so. Callahan believed that the money he paid for MarcConsultants was a “good value,” that Seminerio has a “hugeRolodex,” and could effectively expedite the response time whenthere is a problem.

Callahan described a range of projects on whichSeminerio proved useful, and provided a list of those projects tothe Government. These included matters before a range of NewYork City governmental agencies, including the LandmarkCommission, the Environmental Commission, the Parks Department. Plaza College has increasing interest in educational medicalprograms, and Seminerio also introduced Callahan to executives atNew York areas hospitals in connection with those plans.

Callahan claimed that he only discussed legislativematters for “informational purposes.” The first two occasions onwhich he was shown the legislation Seminerio sponsored regardingthe candidacy bill, Callahan indicated that he did not recognizeit because, in Callahan’s view, he “has better connection withthe necessary state officials than Seminerio does.” Callahannoted that Seminerio had not been on the New York State AssemblyHigher Education Committee for awhile. Callahan also stated thathe had no “burning issues in Albany,” but admitted that seventypercent of Plaza College students receive state aid in the formof Tuition Assistance Program grants (“TAP”).

The Government has obtained documents from a lobbyingfirm demonstrating that Callahan’s account of his relationshipwith Seminerio was less than candid. In fact, the legislationthat Seminerio sponsored on a regular basis bears a strongresemblance to proposals that Callahan himself advocated in 1997. For example, in a letter dated July 21, 1997, Callahan wrote to astate government lobbyist indirectly retained by Plaza Collegeregarding the “Candidacy Bill.” In the letter, Callahandescribed the bill as “of paramount importance, and attachedmaterials that, in his words, “list many reasons as to why.” Oneattachment was an equity research analysis report recommendingthe stock of for-profit post-secondary education companies for,among other reasons, the “[h]igh barriers and entry” in thesector. In a second letter, dated November 21, 1997, Callahanprovided the same lobbyist with “documents regarding thecandidacy bill” and suggested a sit-down meeting with the New

26

York State Education Commissioner. Among other things, Callahanattached a “memorandum in support of legislation,” summarizingthe change as a proposed amendment to the Education law toestablish a candidacy period for institutions seeking theauthority to grant degrees.

Moreover, Seminerio’s interest in this subject matterdates back to the same time period when Callahan was advocatingthese ideas. In a letter dated August 5, 1999, Seminerio wroteto the Deputy Commissioner of the New York State EducationDepartment:

As a member of the Higher Education Committee of theNew York State Assembly I am concerned with informationI have received. It is my understanding that youroffice has been inundated with requests for degree-granting powers by a variety of schools . . . .

As you are aware, I am the Assembly sponsor of acandidacy bill that is designed to protect the studentsof New York State. . . .

I have been a tremendous supporter of TAP during mytenure in Albany because it truly provides access toall sectors of higher education. I am extremelyconcerned that the Legislature support the Office ofQuality Assurance to ensure that State dollars are usedmost efficiently.

In the letter, Seminerio asks for a list of all entities applyingfor such permission.

Given the close relationship, It is not reasonable tobelieve that Seminerio was sponsoring a bill that Callahanhimself advocated, but that there was no coordination betweenthem. The Government submits the facts - the flow of money andlegislative efforts - demonstrate that Seminerio’s value toCallahan was not in the occasional dispute with New York Cityagencies, but in Seminerio’s ability to influence New York StateGovernment on matters of great financial importance to Callahan’sschool.

IX. Seminerio’s Corrupt Relationship With BernardGordon Ehrlich

Two companies controlled by Bernard Gordon Ehrlich, Ridge Associates and Wingfoot, paid Seminerio approximately$233,364 in connection with his efforts to persuade hospitals to

Wingfoot was nominally owned by Robert and Beatrice16

Wedinger, but was operated by Robert Wedinger and Ehrlich.

27

retain his services through Ridge Associates, Wingfoot, andGordon Ehrlich.16

Prior to his involvement with Seminerio, Ehrlich had ahistory of corrupt activities. In August 1988, he was convictedof federal bribery and extortion charges in connection withservices he and his law partner, Mario Biaggi, a then sittingUnited States Congressman, provided to a third company, Wedtech. United States v. Biaggi, 909 F2d. 6612 (2d Cir. 1990). Ehrlich’sactivities as a member of the national guard had also come underscrutiny in the case of Stanley Friedman, a former BronxDemocratic leader who was found guilty in New York State Court onOctober 25, 1988 of paying a $7,500 bribe to Ehrlich, a formerMajor General in the National Guard, in an effort to sell the NewYork National Guard hand-held computers produced by Citisource, acompany in which Mr. Friedman was the largest shareholder.

After these convictions, and starting sometime in thelate 1990s, Ehrlich became the owner of Evenflo Transportation,Inc and provided ambulette services to JHMC and WHMC. Seminerio’s role was similar to the role he played with WinstonFinancial: seeking to protect Evenflo’s business at the hospitalsand, when necessary, using his influence to ensure promptpayment.

In more recent years, Ehrlich sought to persuade anumber of hospitals, including JHMC and WHMC, to retain hiscompany, Wingfoot Services a/k/a Military Associates, inconnection with the Tricare medical program. Ehrlich was seekinghospital partners to provide a variety of health care options toreturning military veterans to be paid for by the federalgovernment. Ehrlich would be paid in connection with thebusiness brought to the hospitals. Seminerio’s role was topersuade hospitals to meet with Ehrlich and retain his services. Seminerio had no real knowledge of or expertise in the healthservices that Ehrlich was seeking to establish. He was usefulbecause hospitals were reliant on state funds, and Seminerio wasthus an important ally for local hospitals. In exchange for hisassistance, Ehrlich through Ridge Associates paid Semineriothrough Marc Consultants.

Seminerio explained his role in this business during aconsensually-recorded meeting with McLaughlin, on or aboutSeptember 28, 2007, Seminerio described his relationship with two

28

“generals”: “We set up a nice retainership. We charge aconsulting fee. He (a reference to Ehrlich) charges theconsulting fee to the hospital. I work for his consulting firm. And so it works out nicely. And we don’t have to do nothing. Imean, I don’t have to do nothing.”

Emails obtained from Medisys demonstrate that beginningin at least May 1999, Seminerio was advocating for JHMC to takean interest in Ehrlich’s veteran health care proposals. Inaddition, these requests were sometimes mixed with implicit tiesto favorable treatment from New York State. For example, onAugust 20, 2001, William Lynch sent an email to David Rosenregarding “Military and other shit!”. (MHNE0005538). In theemail, Lynch noted the following:

I just heard from my buddy, the general, who informedme that they are trying to get us a $200,000 grant fromthe Assembly for our Military program. AssemblymenSeminario [sic], Scarborough and Townes will bepresenting this to Silver. Just thought you should knowso that you're prepared for the pay-back.

(emphasis added). Other, more recent emails demonstratecomplaints about Ehrlich’s inability to deliver on these militaryprograms. For example, shortly after Seminerio’s arrest, onSeptember 22, 2008, Angelo Canedo sent an email to William Lynch,copying Bruce Flanz asking whether he could work with someoneother than Ehrlich on the providing certain medical services tothe military. (MHNE0056993). He reported on a series ofpromises or commitments made by Ehrlich over time, and in eachcase Ehrlich failed to deliver. He concluded “In fact I amgetting tired of meeting with this guy and being promised theworld and then nothing happens but a bunch of disjointed emailswith tons of articles and attachments.”

As set forth below, intercepted conversations confirmthat Ehrlich used Seminerio to apply pressure to the hospitals(and not to consult on the specifics of any business proposal),and that Seminerio willingly obliged.

A. Seminerio’s Corrupt Relationship WithEvenflo Transportation, Inc.

Beginning in the early 1990s, Evenflo TransportationInc. provided ambulette services to JHMC and WHMC. According todocuments obtained from JHMC, Evenflo provided transportationservices for patients at JHMC until at least 2006 and, at somepoint, Seminerio and Ehrlich became affiliated with Evenflo.

While the author of this email believes that17

Seminerio’s offer to get money was said in a joking fashion, itis also apparent that Seminerio’s expression of interest inprompt payment and his reference to his ability to obtain statefunds are intentional.

This email does not appear to refer to Evenflo. The18

reference to two generals makes it more likely that this relatesto Seminerio’s efforts to collect monies owed to Ehrlich andRobert Wedinger for his military health care proposals. In anyevent, the relevance is the same: Seminerio lacked any expertisein these areas, and provided no substantive work. His role wasto make sure the money flowed to them.

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There are no documents indicating Seminerio’ssubstantive involvement in Evenflo’s work. Instead, thedocuments demonstrate that Seminerio’s role was to make sureEvenflo got paid. For example, on February 5, 1999, an employeeat JHMC emailed senior management about a message Semineriorelayed concerning payment of Evenflo bills:

I WENT TO TODAY'S LUNCHEON AT THE JFK HILTON. THE USUALSUSPECTS WERE THERE, INCLUDING TONY SEMINERIO. HE SAID "HI"TO ME AND THEN ASKED WHY YOU GUYS DON'T RETURN HIS CALLS. HE BROUGHT UP THE EVENFLO ACCOUNT PROBLEM AND SAID IF YOUNEEDED MONEY HE WOULD GO TO BAT FOR YOU TO GET SOME FUNDING.

(MHNE0011818). Seminerio followed up several weeks later. On17

or about February 12, 1999, Seminerio called JHMC to complainabout payment issues. (MHNE0011681). In an email regarding“Subject: TONY SEMINERIO,” a JHMC employee relayed the message tomultiple JHMC executives, including David P. Rosen:

[Seminerio] CALLED THIS AM TO COMPLAIN THAT HE HAD SPOKEN TOYOU (DPR) AND YOU HAD SAID YOU WOULD TAKE CARE OF THEEVENFLOW BILL ($5,100). NOTHING HAS BEEN DONE.

Further, as described below, Seminerio’s role as debt collectorfor Ehrlich continued even beyond Evenflo and into the otherbusiness relationship with JHMC. For example, on February 7,2005, Seminerio was again calling JHMC’s CEO when Ehrlich’s billswere not being paid fast enough. (MHNE0042390). In an email onthat day, a JHMC employee wrote JHMC’s CEO, Rosen regarding“Subject: Tony Seminerio:”

Met with the Generals over the weekend. They still haven'tbeen paid and he’s reminding you.18

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B. Ehrlich And Seminerio Pressured WHMC ToDo Business With Them

On or about March 25, 2008, at approximately 2:52 p.m.,Seminerio and Ehrlich met in Seminerio’s legislative office inQueens, New York, for approximately a half hour. During thecourse of this meeting, which was intercepted pursuant to courtauthorization, Seminerio and Ehrlich discussed persuading WHMC tomove on Ehrlich’s military health care proposals.

While Seminerio and Ehrlich were meeting in Seminerio’slegislative office in Queens, New York, on or about March 25,2008, at approximately 3:16 p.m. (#2300), Seminerio used theSeminerio Cellphone to call Dr. Aria of WHMC. Seminerioidentified himself over the phone as “Assemblyman Seminerio.” During this call, Seminerio asked Dr. Aria who was in charge atWyckoff, and Dr. Aria said that Dr. Mattoo was the new chiefexecutive officer. Seminerio told Dr. Aria that he wanted Dr.Aria to speak with “General Ehrlich” to “try and get this thingdone . . . for the Tricare” (a reference to Ehrlich’s businessproposal related to health care for returning veterans of war). Dr. Aria agreed to call Ehrlich and to take care of “everything.” Seminerio gave Ehrlich’s telephone number to Dr. Aria, andSeminerio indicated that “Tom” (a reference to Tom Singleton, theChief Restructuring Officer at WHMC) liked the idea that Ehrlichwas proposing but nothing was getting done. Dr. Aria said: “Giveme a chance to do it and I’ll make sure everything will be done.”

After Seminerio’s call with Dr. Aria, Semineriocontinued speaking with Ehrlich in Seminerio’s legislative officein Queens, New York. Seminerio told Ehrlich that when Dr. Ariacalled Ehrlich, he should tell Dr. Aria that “the Assemblyman”(believed to a reference to Seminerio) made a commitment toWyckoff and that he wanted to keep it, and that they needed toknow what Wyckoff was doing because “others” (a reference toother hospitals) were interested.

On or about April 10, 2008, at approximately 2:30 p.m.,Seminerio again met with Ehrlich in his legislative office. During the meeting, Seminerio asked Ehrlich if he had heardanything from WHMC, and Ehrlich replied that he had not “heard aword after you spoke to them.” Seminerio told Ehrlich to callDr. Aria and tell him he must make a decision.

During a meeting with Ehrlich, on or about April 17,2008, that was intercepted by the FBI in Seminerio’s legislativeoffice in Queens, New York, Seminerio discussed the New YorkState budget. Seminerio told Ehrlich that he had done a “big

31

favor” at budget time for WHMC. Seminerio said that he sent aletter to the “head guy” and gave him a whole outline of thebudget and what was voted on. Seminerio said he told Dr. Ariabecause he “was planning ahead,” and that he said: “Doctor I wantyou to read everything here, if there’s something you thinkyou’re not getting, let me know and I’ll get it included.”

On or about May 2, 2008, at approximately 11:43 p.m.,Seminerio met in Seminerio’s legislative office in Queens, NewYork, with Ehrlich. During the meeting, Seminerio asked Ehrlichhow things went with “Wyckoff,” and Ehrlich indicated that aftera WHMC official returned on May 15 they would discuss theth

proposal. During the course of this meeting, Seminerio toldEhrlich: “You gotta nail down Wyckoff,” and Ehrlich indicatedthat he would speak with the WHMC official when he returned onMay 15 . Ehrlich also indicated that he might discuss a feeth

with this WHMC official.

On or about June 20, 2008, at approximately 12:23 p.m.(#11713), Seminerio used Target Landline #1 to receive a callfrom William F. Green, an executive at WHMC. Seminerio talkedwith Green about Tricare, and stated that he set up a meetingwith another hospital. Green told Seminerio that the medicaldirector at WHMC could resolve things. Seminerio responded thatWHMC was "making an end turn on us." Green indicated that hewanted Seminerio and “the general,” a reference to Ehrlich, tomeet with Aria. Seminerio noted that he was angry, and that theveterans were coming back and needed service. Green said that ifhe had his way, it would have been done, but they had cut himout. Seminerio then promised to talk to “Paterson” (a referenceto New York State Governor David A. Paterson) about getting a jobfor Green’s son.

C. Ehrlich And Seminerio Pressured JHMC ToDo Business With Them In April 2008

Multiple electronic and oral interceptions alsodemonstrate that Seminerio and Ehrlich made efforts to useSeminerio’s position to persuade JHMC to retain Ehrlich’sservices, an arrangement that would benefit both Seminerio andEhrlich. For example:

a. On or about April 17, 2008, at approximately 12:11p.m., Seminerio met in Seminerio’s legislative office in Queens,New York, with Ehrlich. During the course of this meeting, whichwas intercepted by the FBI, Seminerio asked Ehrlich if he had“heard from Jamaica Hospital.” Ehrlich noted that he was presentwhen Bruce Flanz (a reference to JHMC’s Chief Operating Officer)

Review of Seminerio’s bank records to the extent obtained19

in the course of the investigation has revealed no personal giftsby Seminerio to CUNY or SUNY Schools. It is therefore reasonableto infer that Seminerio was referring to funding he brought toSUNY and CUNY schools a member of the New York State Assembly.

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spoke with Bill Lynch (a reference to a Vice President of JHMC),and Flanz told Lynch that “the Assemblyman is very concernedwe’re not doing anything.” According to Ehrlich, Lynchresponded: “You know the problems I’ve had here . . . I’ve goteverything done and I’m gonna take care of it.”

b. While Ehrlich was meeting with Seminerio inSeminerio’s legislative office in Queens, New York, atapproximately 12:22 p.m. (#7429), Seminerio used Target Landline#1 to call Bill Lynch. Seminerio told Lynch that he had heardfrom “the General” that Lynch’s relative was looking at colleges. Seminerio told Lynch that he had “good connections” at both CUNYand SUNY schools, and that Lynch should let him know and “I’llhook you in with the big guys.” Seminerio said: “I’m here if youwanna use me, you use me . . . I give them a ton of money, andI’ve been on higher ed for over 30 years, I’ve been on thecommittee and I just got off it this year ... they all love me.” Just after he ended this call with Lynch, Seminerio told Ehrlich:“Between you and I . . . I just did Bruce Flanz’s [relative] afavor.”19

c. On or about May 2, 2008, at approximately 11:43p.m., Seminerio met in Seminerio’s legislative office in Queens,New York, with Ehrlich. Ehrlich indicated that he had spokenwith “Fred Beekman” (a reference to the Vice President at BUHMC)and a “Dr. Angelo Canedo.” Ehrlich indicated that he might havea meeting on May 22 with Beekman. Seminerio said that he wouldnd

let Bruce Flanz know about that meeting, and asked if theirfriend “Bill” (a reference to Bill Lynch) would be there, andEhrlich responded that he would be there. Seminerio alsoindicated to Ehrlich that he told Rosen that “this” was a“godsend,” and “you people are fucking it up.”

X. Seminerio’s Corrupt Relationship With theLong Island Rail Road

Seminerio also used his position as an Assemblyman to securejobs for friends and associates at the Long Island Rail Road(“LIRR”) in exchange for securing state funds for the transitsystem. In the November 15, 2007 meeting with McLaughlin asrelated above, Seminerio also discussed a corrupt relationship he

33

had with executives at the Long Island Railroad: “Same thingwith Long Island Railroad. You know how many people I got jobsin the railroad? . . . Anytime that I would . . . ah . . . givethem a $250,000 contribution or $500,000 for repair of therailroad, I need two jobs. Even if I didn’t have anybody, then Ifind two people and get them jobs. . . . Forget about it. . . .I need two jobs, you got two jobs for me, you got $500,000.”

Subsequent interception demonstrated that Seminerioregularly practiced the art of trading state monies for theability to secure LIRR jobs for friends and associates. On orabout Thursday, February 21, 2008, at approximately 11:48 a.m.(#4430), Seminerio received a call from his son John Seminerio atTarget Landline #1 at Seminerio’s legislative office in Queens,New York. During this call, John Seminerio told Seminerio thathis friend George Dilieto would stop by Seminerio’s legislativeoffice in Queens, New York, because he was looking for a job withthe LIRR. Seminerio told his son that he would see “what I cando for him.”

On that same day, February 21, 2008, at approximately11:59 a.m. (#4432), Seminerio used Target Landline #1 to call JoeCalderone at the LIRR. Calderone told Seminerio that he knew him“by reputation.” During this call, Seminerio said that a “dearfriend of the family” took a test for a machinist position withLIRR, and that he was calling on behalf of this person – GeorgeDilieto. Seminerio mentioned that he had assisted LIRR withfunding for projects in the past, and he mentioned that heobtained a lot of funding for the LIRR. Seminerio mentioned thatif “they” (a reference to LIRR) had “something” going (areference to projects that might need funding), Seminerio wouldbe happy to meet with him. Seminerio said that this was a“favor” to help this family who had been good to Seminerio.

On that same day, February 21, 2008, at approximately12:06 p.m., Seminerio used his office in Queens, New York, tomeet with George Dilieto. During the course of this meeting,Seminerio indicated to Dilieto that what would likely happen wasthat “they” (a reference to the LIRR) would propose a project,Seminerio would fund it, and that should get the job for Dilieto.

The Government does not have a precise estimate of theamount of money that Seminerio steered to the LIRR in exchangefor the privilege to secure jobs for friends and associates, orthe total amount earned from the LIRR by such persons. Thus, forloss calculation purposes, the Government has taken theconservative figure of $500,000. This is the amount thatSeminerio detailed for the appointment of only 2 people, when he

34

stated that he participated in this activity on a regular basis.

XI. Seminerio’s Corrupt Work For Wyckoff HeightsMedical Center

In 2000 and 2001, an entity called “397 Himrod” paidMarc Consultants at least three separate $5,000 payments. Thechecks were dated June 9, 2000, September 20, 2000, and March 29,2001, but were sequentially numbered 1011, 1012, and 1013,respectively.

Notwithstanding its name, the 397 Himrod account wasentirely owned by Wyckoff Heights Medical Center.

According to a former employee of WHMC, these paymentswere made at the direction of Dominick Gio, WHMC’s CEO. Theformer employee believed that the payments were made inconsideration for “favors” by Seminerio. The employee alsodescribed 397 Himrod as a “slush fund,” and stated that he andGio had talked about making the payments to Seminerio in a waythat avoided using one of WHMC’s regular bank accounts.

According to Gio, the payments were made in connectionwith WHMC’s purchase of a nearby building from the City of NewYork. WHMC converted the property into a Women’s Health Center. Prior to the building’s sale, competing groups in the communitywere eager to convert it to different uses. Vito Lopez, anothermembers of the New York Assembly in a nearby district toSeminerio, supported a proposal to use the building for a seniorcitizens’s center. WHMC retained Seminerio to lobby the DeputyMayor of New York City on its behalf. Gio contended that the 397Himrod account, rather than WHMC usual bank accounts, was usedbecause this purchase involved real estate, and 397 was a realestate account. At one point, Gio, Seminerio, Assemblyman Lopezand others met with the Deputy Mayor of New York to discuss thedifferent ideas on the property in question. Sometime after thatmeeting, the City of New York awarded WHMC the property.

XII. Seminerio’s Corrupt Work For An FBIUndercover Agent

From in or about January 2008 through September 2008,an FBI special agent working in an undercover capacity (the“Undercover”) retained Seminerio as a consultant by paying moniesto Marc Consultants. A total of $25,000 in payments were made.

35

A. The Probation Services PrivatizationScheme

On or about January 8, 2008, at approximately 3:30p.m., at the direction of the FBI, McLaughlin called Seminerioand stated that he wanted to introduce Seminerio to someone who,unbeknownst to Seminerio, was the Undercover. Shortlythereafter, on December 20, 2007, McLaughlin introduced theUndercover to Seminerio. The Undercover told Seminerio that herepresented a group of investors interested in financing a newventure that wanted to administer probation supervision for acertain category of non-violent offenders in New York State. TheUndercover identified his companies as Bedrock Capital and at asubsequent meeting as Gallant Ventures.

On or about February 14, 2008, the Undercover spoke bytelephone with Seminerio. By the time of this conversation, theUndercover had supplied Seminerio with literature describing theprivatization of probation supervision that the Undercover wasseeking. During their conversation, Seminerio confirmed thatwhat the Undercover needed was legislation. Initially, Semineriotold the Undercover that he could not help the Undercover withlegislation and offered to put the Undercover in touch with alobbyist. Once the Undercover began to pay “consulting fees” toSeminerio however, through Marc Consultants, Seminerio providedthe Undercover with substantial assistance in promoting thislegislation with the Assembly. For example:

In or about March 2008, Seminerio arranged a meetingin Albany at the Capitol between the Undercover and the New YorkState Assemblyman Jeffrion Aubry who was the chair of the NewYork State Assembly Corrections Committee, in connection with theUndercover’s legislative proposal. As Chair of the CorrectionsCommittee, Assemblyman Aubry was in a position to havesignificant influence on any legislation to privatize probationsupervision.

On or about April 14, 2008, at approximately 12:31 p.m.(#2518), the Undercover called Seminerio at the SeminerioCellphone. During this call, Seminerio told the Undercover thathe would contact Assemblyman Jeffrion Aubry to see if he wasavailable for lunch or dinner on April 15 with the Undercover.Seminerio informed the Undercover that, with respect toprobation, Aubry “is the guy.” Seminerio promised to call theUndercover as soon as he heard from Aubry. Also during thiscall, Seminerio told the Undercover that he had not received“anything” for March and “April’s almost gone.” The Undercovertold Seminerio that they would “settle up” when he saw Seminerio

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on April 15.

Later that same day, at approximately 4:15 p.m.(#2525), the Undercover and Seminerio spoke by telephone. Duringthis call, Seminerio told the Undercover that AssemblymanJeffrion Aubry was available for lunch at 12:30 p.m. at an Albanyrestaurant. The Undercover told Seminerio that he had a checkfor him, and Seminerio told the Undercover to give him the checkin the restaurant because it was “against protocol” to give himthe check in the building. Seminerio suggested to the Undercoverthat he write out a list of questions to address to Aubry at thelunch.

On or about April 15, 2008, the Undercover had lunchwith Seminerio and Assemblyman Jeffrion Aubry at Lombardo’sRestaurant in Albany. During the course of this lunch, theydiscussed the Undercover’s interest in the privatization ofmisdemeanor probation services in New York State. Seminerio didnot inform Aubry during this meeting that the Undercover was aconsulting client of Seminerio. After Assemblyman Jeffrion Aubrydeparted the lunch, the Undercover gave Seminerio a check for$5,000 payable to Marc Consultants. Seminerio indicated to theUndercover that this check for $5,000 was “none of [Aubry’s]business.”

B. The Brownfield Redevelopment Proposal

In or about June 2008, the Undercover asked Semineriofor assistance with another business venture, this time involvingopportunities to invest in “brownfield” redevelopments. Abrownfield redevelopment involves a New York State program thatprovides government assistance in connection with the clean-upand development of environmentally contaminated lands. Inresponse, Seminerio arranged multiple meetings between theUndercover and leaders in the New York State legislature withresponsibility for brownfield redevelopment projects:

For example, on or about June 10, 2008, atapproximately 5:00 p.m., Seminerio met with the Undercover inSeminerio’s office inside the State Legislative Office Buildingin Albany, New York. Seminerio informed the Undercover that hehad arranged for the Undercover to meet with another member ofthe Assembly, Vito Lopez, who was the chairman of the HousingCommittee and was involved in brownfield redevelopment. TheUndercover left Seminerio’s office and proceeded to the office ofAssemblyman Vito Lopez in the State Legislative Office Building. Lopez arrived for the meeting at approximately 6:10 p.m. TheUndercover and Lopez discussed brownfield redevelopment, and the

37

Undercover asked Lopez for his guidance. Lopez advised theUndercover that Pfizer in Williamsburg and the Gowanus Canalwould be two of the biggest brownfield developments sites inBrooklyn.

Based on conversations with the Undercover, I have alsolearned the following:

a. On or about June 17, 2008, at approximately 10:43a.m., the Undercover went to Seminerio’s office inside the StateLegislative Office Building in Albany, New York, to attend a pre-arranged meeting. One of Seminerio’s staff members escorted theUndercover to the Assembly Chambers, and the Undercover met withSeminerio outside of the Chambers. Seminerio introduced theUndercover to the Chambers’s security guard, and requested thatthe security guard let the Undercover enter the Chambers.

b. At 11:11 a.m., Seminerio took the Undercover tothe sitting area of the Senate Chambers and introduced theUndercover to a New York State Senator, Carl Marcellino, who wasChairman of the Senate Environmental Conservation Committee. TheUndercover thanked Senator Carl Marcellino for taking time out ofhis busy schedule for the meeting, and Marcellino explained thatSeminerio was “an old friend.” The Undercover and Marcellinothen discussed brownfield redevelopment. Senator Carl Marcellinoprovided the Undercover with a business card and agreed to meetagain at a later date.

c. At the conclusion of his meeting with Senator CarlMarcellino, the Undercover went to find Seminerio. Seminerioasked other members of the New York State Assembly for the nameof the Chairman of Assembly Environmental Conservation Committee. After learning that this person was Robert Sweeney, Seminerioasked the Undercover whether he would like to meet AssemblymanRobert Sweeney, and the Undercover said that he would. Semineriostated that he would send him right out.

d. Shortly thereafter, Seminerio introduced the Undercover to Sweeney. The Undercover and Assemblyman RobertSweeney discussed brownfield redevelopment, and Sweeney statedthat the Assembly was currently working on a brownfield reformpackage. Assemblyman Robert Sweeney gave the Undercover hisbusiness card.

XIII. Conclusion Regarding Loss Amount

With respect to the calculation of the recommendedsentencing range, United States Sentencing Guidelines

The time period includes bank records from April 25, 200020

through March 24, 2008.

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(“Sentencing Guidelines”) § 2 C1.1(b)(2) provides that theoffense level be adjusted based upon:

[T]he value of the payment, the benefit received or to bereceived in return for the payment, the value of anythingobtained or to be obtained by a public official or othersacting with a public officials, or the loss to thegovernment from the offense, whichever is greatest . . . .

The Sentencing Guidelines further provided that in “a caseinvolving more than one incident of bribery or extortion, theapplicable amounts . . . are determined separately for eachincident and then added together.” U.S.S.G. § 2C1.1 ApplicationNote 2. Moreover, solicitations and attempts are treated asequivalent to the underlying offense.” U.S.S.G. § 2C1.1Background. Finally, the Court “need only make a reasonableestimate of the loss.” U.S.S.G. § 2B1.1 Note 3(C).

Based on this evidence, the Government submits thatthere are three separate category of losses and benefitsattributable to this scheme. Category One consists of corruptpayments made to Seminerio or those acting with him in connectionwith his purported consulting services. They are as follows:20

Payments ToSeminerio

Jamaica Hospital MedicalCenter $310,000

Neighborhood HealthProviders $80,834

FBI Undercover Agent $25,000

Jamaica Chamber of Commerce $21,000

Winston Financial $706,048

Charles Callahan III &Collegiate Management Inc. $170,350

As explained below, Seminerio lobbied hospitals with21

interests before New York State Government to retain theinsurance brokerage services of Winston Financial. Seminerio waspaid $176,512 which represents 25% of these amounts. Therefore,the total number attributed to the scheme for Winston Financialis $706,048, which is four times the amount paid to Seminerio.

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The total Category One benefits are thus at least $1,313,232. 21

Moreover, this is a cautious estimate, and certainly a reasonableestimate, of the total benefit for these incidents in that itdoes not include at least $403,364 in fees paid by other clientseven though, as set forth above, there are significant indicia offraud attached to each of those relationships. Specifically,Seminerio was paid $29,017 by Ridge Associates and $204,347 byWingfoot in connection with Seminerio’s efforts to protectbusiness for Bernard Gordon Ehrlich. Winston Financial also paid$170,000 to Seminerio’s business partner, George Kalkines, inconnection with their help retaining business with JHMC. Finally, the Government has not included $15,000 paid by WyckoffHeights Medical Center in connection with Seminerio’s efforts tolobby the Deputy Mayor of New York City in connection with WHMC’seffort to purchase a building from the city.

Category Two losses are the monies that Semineriosought from New York State or others in order to benefit himselfand his clients. Those amounts are as follows:

LIRR $500,000

Total Category Two losses are $500,000. This is again a cautiousestimate that excludes benefits that Seminerio sought for hisclients. For example, it includes no loss amount associated withSeminerio’s advocacy on behalf of JHMC for more generous medicaidpay levels, including his efforts to persuade the state in 2005to forgive a $19,000,000 loan to the Medisys owned BrookdaleHospital or the $25,000 grant he obtained in 2002. It alsoprovides no loss amount associated with Seminerio’s efforts tocause WHMC to retain Dominick GIO as their CEO, a job thatcarried hundreds of thousands of dollars in annual compensation.

Finally, Category Three losses are losses suffered by thosewho Seminerio’s attempted to extort. Those amounts are asfollows:

Arlene Pedone $350,000

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This $350,000 estimate of losses is also cautious andconservative. First, it calculates losses as only one year oflost income for Pedone’s business and excludes $200,000 in moniesthat she personally invested in her business in an effort to keepit afloat. Second, the figure does not include any monies foranother extortion victim, Parkway Hospital, even though,consistent with Seminerio’s attempts to lobby state officials,Parkway Hospital failed in its bid to acquire two hospitals. Parkway Hospital has since been closed by New York State.

Accordingly, total Category One, Two and Three losses areequal to $2,163,232. The cautiousness and reasonableness of thisfigure is underscored by the many hundreds of thousands that arenot included in the estimate. Thus, the benefits and lossesattributable to the scheme easily exceed $1 million.