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Pedro Espada Charged With Stealing

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I had hard time choosing where to post this story - under Politics or Crime & Punishement. My choice is obvious.

Attorney General Andrew Cuomo today announced a lawsuit against State Senate Majority Leader Pedro Espada, charging that he and his family stole more than $14 million from his Bronx non profit.

The lawsuit alleges that for over five years, Espada "looted" the state- and federally-funded Comprehensive Community Development Corporation, also known as Soundview.

The organization was founded by Espada in 1978 with the purpose of providing health care to residents of the South Bronx.

Espada, who serves as the president and chief executive officer of the non-profit organization, is accused of diverting its charitable assets to his family, friends and his political operations.

The money was allegedly used for a wide variety of expenses including vacations, campaign bills and thousands of dollars in restaurant visits – many located in Westchester where critics charge Espada makes his primary residence. Funds were also allegedly used to pay the mortgage on Espada's Bronx apartment.

Nineteen current and former executives, which includes Espada's niece, daughter-in-law, boyfriend of his sister, two uncles and employees of the New York State Senate, were also named in the suit filed in New York State Supreme Court.

Cuomo says the majority leader packed the clinic's leadership with people who blindly followed his orders – and gave him an "extravagant" compensation package.

"This was not an independent objective board of directors; this was a packed board of directors filled with family or friends who Mr. Espada could control directly or indirectly," Cuomo said.

Cuomo's lawsuit aims to remove Espada and the officers of Soundview from the board. It also seeks to require Espada and Chief Financial Officer Kenneth Brennan to pay restitution and damages and attempts to nullify a $9 million severance package that Espada allegedly received.

Espada has repeatedly denied all charges and called the investigation politically motivated.

He came to power last year as one of the orchestrators of the State Senate coup, which briefly put the legislative body in Republican control.

Cuomo says the investigation is still ongoing and criminal charges could be forthcoming.

The expected gubernatorial candidate also ripped into the state political culture as a whole – saying the dysfunction in Albany is bi-partisan.

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Peter Treadway, PhD

is an independent consultant and money manager and Adjunct Professor in Asia. He is currently is principal of Historical Analytics, LLC. Historical Analytics is a consulting/investment management firm dedicated to global portfolio management. Its investment approach is based on Dr. Treadway’s combined top-down and bottom-up Wall Street experience as economist, strategist and securities analyst. A monthly letter entitled The Dismal Optimist is produced for clients. Dr. Treadway also serves in a part time capacity as Chief Economist, C T RISKS, a new Hong Kong company that will assist Asian financial institutions with their risk management problems. On the educational front, Dr. Treadway has developed a special Masters level course focusing on securities analysis and discounted cash flow and incorporating elements of standard equilibrium pricing models, behavioral finance and historical trends. This course has been given as Adjunct Professor at the Shanghai University of Finance and Economics (SUFE) and the City University of Hong Kong. From 1965-2000 Dr. Treadway had a distinguished career on Wall Street and with major American financial institutions. For example, from 1978-1981 he served as Chief Economist at Fannie Mae. From 1985-1998 he served as institutional equity analyst and Managing Director at Smith Barney following savings and loans and government sponsored entities(GSEs). He was ranked as “all star” analyst eleven times by Institutional Investor Magazine. Dr. Treadway holds a PhD in economics from the University of North Carolina at Chapel Hill, an MBA from New York University and a BA in English from Fordham University in Bronx, New York.