Sampson’s Consultant Convicted of Fraud – National Legal & Policy Center

Melvin E. Lowe, a New York political consultant, was found guilty yesterday of conspiring with State Senator John Sampson of Brooklyn (in photo) to defraud the New York Senate Democratic Campaign Committee out of $100,000. Sampson is under indictment on unrelated charges of embezzlement, obstruction of justice and making false statements to the FBI. He allegedly embezzled $440,000 from escrow accounts on foreclosed properties.

Sampson and Lowe were caught up in an investigation prompted by NLPC’s exposé of former State Senator Shirley Huntley, who was jailed for looting a nonprofit organization she founded, for which political allies had arranged to secure taxpayer funds. The scheme was detailed in a New York Post article of March 6, 2011.

NLPC uncovered Huntley’s fraud while reviewing public documents of nonprofit organizations associated with New York politicians. The review was initiated after NLPC exposed financial irregularities in a nonprofit called New Direction Local Development Corporation, associated with U.S. Rep. Gregory Meeks (D-NY) and State Senator Malcolm Smith of Queens. The irregularities were described in a New York Post story of January 31, 2010. Among other problems, the group raised money for Hurricane Katrina victims who never got the money.

Sampson won a Democratic primary on Tuesday for his State Senate seat, while Smith lost his. Smith is facing a retrial in January for attempting to bribe Republican Party officials to allow him to run for New York City mayor as a Republican. The scheme was also reportedly uncovered in the course of the Huntley investigation.

Preet Bharara, the U.S. Attorney whose office prosecuted the Lowe case, said “As the jury found, Lowe participated in a series of back-room deals in which the bridge of corruption extended between the world of elected officials and their complicit consultants. Consultants, like elected officials, need to be held accountable in order to clean up our political system.”

A release by the U.S. Attorney’s office summarized the scheme:

Lowe was retained as a consultant by the DSCC after New York State Senator John Sampson was appointed as the Senate’s Democratic Conference Leader following the June 2009 “coup” that temporarily shifted the balance of power in the New York Senate from the Democrats to the Republicans. In early June 2010, Sampson asked Lowe to arrange for a covert payment of $20,000 to Michael Nieves, a Queens-based political operative who had previously worked for former New York State Senator Hiram Monserrate and who had helped engineer the resolution of the Senate coup that had brought Sampson to power. Lowe then arranged for a New Jersey-based political consultant to submit a false invoice to the DSCC for $100,000 in printing services. Sampson approved payment of the invoice and the DSCC sent $100,000 to the New Jersey-based consultant. Lowe instructed the consultant to send $20,000 of the proceeds to Nieves, $75,000 of the proceeds to Lowe’s consulting company and to keep $5,000 for himself. The jury heard evidence that Lowe and Senator Sampson had a close relationship of trust that included Lowe giving Sampson an envelope of cash.

Lowe received more than $2.1 million in consulting income from 2007 to 2012. He reported less than $25,000 in income in each of his returns for 2007 through 2009, which he did not file until late 2010. LOWE never filed returns for 2010 through 2012. He never made any payments toward his taxes for the years 2000 through 2012.

Lowe also caused an assistant manager of his bank to make a false statement to his mortgage lender regarding the balance in his checking account. When the mortgage lender sent his bank a Verification of Deposit form to verify Lowe’s claim that he had $65,000 in his checking account, Lowe caused the assistant manager to claim that Lowe’s account had a balance of more than $80,000. At that time, the balance in Lowe’s checking account was $2,156.

When asked by the New York Times, prosecutors would not say if they were planning to charge Sampson in relation to Lowe’s crimes.

It is also not known if prosecutors will charge Sampson in relation to missing cash and phantom refunds on Sampson’s campaign disclosure reports that were identified by NLPC and reported in the June 9, 2013 New York Post.

U.S. Rep. Gregory Meeks has not been charged with any crime. The indictment of a sitting member of Congress requires the approval of the Attorney General Eric Holder, who has political and personal connections to Meeks. While New York-area U.S. Attorneys have been allowed to prosecute state and local officials, Meeks seems to enjoy the protection of Holder.

New York Scandal Figure Malcolm Smith Defeated for Re-Election

Meeks Crony Baldeo Convicted of Obstruction of Justice

Meeks Pushed for Iran Sanction Exemption After Azerbaijan Junket

Azerbaijan Trip by House Members Broke Rules

NY Times: Cuomo ‘Hobble’ Anti-Corruption Moreland Commission

NYC Councilman Ruben Wills Busted

John Sampson Busted; He Also Got Loan From Fraudster Ed Ahmad

Queens Politics Paralyzed Amid Reports Ex-Sen. Shirley Huntley Wore FBI Wire

State Senator Malcolm Smith Busted in Scheme to Rig New York City Mayoral Race

Meeks Cronies Probed in Aqueduct Bid Rigging Scheme

NY State Sen. Shirley Huntley Says She Will Be Arrested; NLPC Exposed Her Sham Charity

Rep. Meeks Blames NLPC for Ethics Woes