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MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York; PATRICIA J. HAYNES, the Special
Agent in Charge of the New York Field Office, Criminal
Investigation, Internal Revenue Service (“IRS”); and MARK MERSHON,
the Assistant Director in Charge of the New York Office of the
Federal Bureau of Investigation (“FBI”), announced today that
BERNARD B. KERIK, the former New York City Police Commissioner and
Commissioner of the New York City Department of Corrections, has
been indicted by a federal grand jury sitting in White Plains on
conspiracy, tax fraud, and false statements charges.
According to the Indictment, KERIK conspired with others
to deprive the City of New York and its citizens of his honest
services by: 1) receiving benefits — namely, approximately
$255,000 in renovations to KERIK’s Riverdale, New York, apartment
(“the Riverdale Apartment”) — from a company seeking to do
business with the City; 2) concealing those benefits by, among
other ways, failing to disclose them as required on financial
disclosure reports KERIK filed with the City; and 3) taking steps
to convince City regulators that the contractors were free of mob
ties and should be approved to do business requiring City permits.
KERIK’s receipt of the benefits and his actions on behalf of the
company occurred while KERIK was the Commissioner of the New York
City Department of Corrections, and his acts of concealment
occurred while he held that post and while he held the post of New
York City Police Commissioner.
The Indictment also charges KERIK with impeding the
Internal Revenue Service and with multiple counts of false tax
returns in connection with: 1) his failure to declare the value of
the above renovations as income; 2) his failure to report as income
approximately $236,000 in rent payments for a Manhattan apartment,
which payments were made by a Manhattan developer with whom KERIK
had agreed to conduct business; 3) his failure to report
approximately $75,000 in income received from a book publisher; 4)
his taking of approximately $80,000 in phony charitable deductions;
5) his failure to report approximately $20,000 in income received
from a computer software company; 6) his failure to report wages
paid to a domestic employee; and 7) his taking of a false home
office expense deduction in connection with a home in New Jersey
when he was not yet living in that home.
The Indictment also charges KERIK with making false
statements on a loan application in connection with purchase of the
Riverdale apartment. Specifically, it charges that KERIK borrowed
part of the down payment from a Manhattan realtor, but falsely
denied that he had done so to the bank that extended him the
mortgage loan for his purchase of the apartment.
The Indictment also charges the defendant with making
multiple false statements to the White House and other federal
officials in connection with his application for positions as
advisor to the President’s Homeland Security Advisory Council and
in connection with his nomination to be Secretary of the United
States Department of Homeland Security. The Indictment charges
that when KERIK was being vetted for these positions, he made
numerous false statements including: 1) failing to disclose as
required, and affirmatively misrepresenting, his relationship with
the contractors who paid for the renovations on the Riverdale
apartment or the fact of the payments; 2) failing to disclose as
required that he had submitted false financial disclosure reports
to New York City (as described above) and that he had committed a
crime by doing so; 3) failing to disclose as required that he had
made false statements on a loan application (as described above)
and that he had committed a crime by doing so; 4) failing to
disclose as required a $250,000 loan that he had taken from a
Brooklyn businessman who, in turn, had obtained the funds from an
Israeli industrialist who did business with the U.S. Government;
and 6) falsely stating that he had no household employees on a
regular basis, and that he had not failed to withhold appropriate
taxes for any such employee.
KERIK faces, if convicted, a maximum aggregate sentence
of 142 years of imprisonment and $4,750,000 in fines. The
Indictment also seeks forfeiture of the proceeds of the conspiracy
crime in the amount of $255,000.
The defendant is expected to be presented before United
States Magistrate Judge GEORGE A. YANTHIS this morning, at which
time Judge YANTHIS will hear arguments on bail and a United States
District Court Judge will be assigned to the case.
Mr. GARCIA praised the IRS Criminal Investigation
Division and the FBI for their fine work during the investigation.
He also thanked the New York City Department of Investigation, the
Westchester District Attorney’s Office, the Bronx District
Attorney’s Office and the New Jersey Division of Gaming Enforcement
for their assistance.
He added that the investigation is ongoing.
Assistant United States Attorneys PERRY A. CARBONE and
ELLIOTT B. JACOBSON are in charge of the prosecution.
The charges contained in the Indictment are merely
accusations, and the defendant is presumed innocent unless and
until proven guilty.
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