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Former New York State Senator Pleads Guilty To Fraud Charges – American Law Newswire

LawFuel.com –
LEV L. DASSIN, the Acting United States Attorney for
the Southern District of New York, ROSE GILL HEARN, the
Commissioner of the New York City Department of Investigation
(“DOI”), and RONALD J. VERROCHIO, the Inspector-in-Charge of the
New York Office of the United States Postal Inspection Service
(“USPIS”), announced today the guilty plea of EFRAIN GONZALEZ,
JR., a former New York State Senator from the Bronx, to four
federal fraud charges. GONZALEZ pleaded guilty in Manhattan
federal court before United States District Judge WILLIAM H.
PAULEY III.

According to the superseding Indictment and statements
made at the guilty plea proceeding:
From October 1999 to January 2005, GONZALEZ designated
member items, totaling approximately $200,000, to a not-forprofit
corporation, Pathways for Youth, Inc. (“Pathways”), based
in the Bronx, New York. Pathways also received funding from
numerous federal agencies.

Part of Pathways’ mission was to “improve and further
generally the welfare and happiness of young people,” and, to
those ends, to receive donations and take and manage gifts of
property. GONZALEZ directed the member items to Pathways as part
of a scheme to have Pathways send money to another not-for-
profit, West Bronx Neighborhood Association, Inc. (“West Bronx”).
West Bronx did not engage in any substantial amount of not-forprofit
activity; instead, it primarily served to pay the personal
expenses of GONZALEZ and his criminal associates. From October
1999 through January 2005, Pathways directed a total of
approximately $462,000 to West Bronx. During this time, GONZALEZ
then directed West Bronx to pay more than $500,000 worth of his
personal credit card and other bills for expenses that had
nothing to do with the work of Pathways or West Bronx.
GONZALEZ’s personal bills included expenses for, among other
things:

• Membership fees in a vacation club called Coral
Vacation Club in the Dominican Republic used by
GONZALEZ,
• Rent payments for a luxury apartment used by
GONZALEZ’s wife in the Dominican Republic,
• Cigar band design, set-up, and printing relating
to logos for GONZALEZ’s own, private cigar
manufacturing and distribution company,
• Construction and renovations to a house in the
Dominican Republic used by GONZALEZ’s mother-inlaw,
and
• A variety of other personal expenses, including
rent for a residence in Monroe, New York, used by
GONZALEZ; New York Yankees tickets; jewelry;
clothing; and college tuition for GONZALEZ’s
daughter.

GONZALEZ also entered into a similar scheme, involving
payments totaling approximately $150,000 from Pathways to another
non-profit organization, United Latin American Foundation, Inc.
(“ULAF”), and arranged for ULAF to pay at least $75,000 in his
personal expenses.

GONZALEZ, 60, pleaded guilty to Counts Two, Three, Six,
and Eight of the superseding Indictment. Counts Two and Three
charge GONZALEZ with conspiracy to commit mail fraud, which
carries a maximum sentence of five years in prison on each of
these charges. Counts Six and Eight charge GONZALEZ with mail
fraud, which carries a maximum sentence of twenty years in prison
on each of these charges. GONZALEZ also faces forfeiture of the
proceeds of his crimes. GONZALEZ is scheduled to be sentenced by
Judge PAULEY on August 7, 2009 at 12:00 p.m.

GONZALEZ’s co-defendant NEIL BERGER, Pathways’ former
Executive Director, pleaded guilty on March 30, 2009, to one
count of federal program fraud, and co-defendant MIGUEL CASTAÑOS,
a former GONZALEZ aide, pleaded guilty on April 6, 2009, to one
count of wire fraud. Trial of co-defendant LUCIA SANCHEZ, the
Secretary of West Bronx, is scheduled for May 12, 2009; as to
her, the charges and allegations contained in the superseding
Indictment remain merely accusations and she is presumed innocent
unless and until proven guilty.

Mr. DASSIN praised the investigative work of DOI and
USPIS.
The prosecution is being handled by the Office’s Public
Corruption Unit. Assistant United States Attorneys PABLO
QUIÑONES and MICHAEL LEVY are in charge of the prosecution.
09-136 ###

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Four attorneys from Clifford Chance’s litigation department in New York have left to set up an arbitration boutique.

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