Former Chief of Staff to Ex-New York State Senator Pleads Guilty in White Plains Federal Court to Obstruction of Justice
PREET BHARARA, the United States Attorney for the Southern District of New York; JANICE K. FEDARCYK, the Assistant Director in Charge of the New York Field Division of the Federal Bureau of Investigation (“FBI”); and CHARLES R. PINE, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation Division (“IRS-CID”), announced that RAYMOND MAGUIRE pled guilty today in White Plains federal court to a one-count information charging him with obstructing a federal grand jury investigating whether a New York State Senator (“the Senator”) for whom MAGUIRE worked had received a sweetheart deal from a contractor.
Manhattan U.S. Attorney PREET BHARARA said: “As he admitted today, Raymond Maguire corrupted the federal judicial system. Our system of justice, and the grand jury’s search for the truth, depends on people being honest rather than providing the grand jury with phony documents. No one, least of all a public official, can be permitted to hide the truth from the grand jury.”
FBI Assistant Director in Charge JANICE K. FEDARCYK said: “Public corruption is a serious breach of the public trust, and obstructing an investigation into it impedes our effort to see that justice is done.”
IRS Special Agent in Charge CHARLES R. PINE stated: “Anyone who thinks that they can get away with a financial fraud and erase paper trails and invent cover stories is sadly mistaken. Our investigators will follow through and recommend criminal charges whenever warranted.”
According to the information and statements made during today’s proceeding:
Starting in or about 2003, MAGUIRE worked on the staff of the Senator, serving as his chief of staff from 2005 until December 2010, when the Senator resigned.
The Senator sponsored the award of millions of dollars in New York State member item grants to a not-for-profit organization (“The NFP”) that was controlled, in part, by the Senator and administered, in part, by MAGUIRE. Millions of dollars in lucrative construction work was awarded by The NFP to a favored contractor.
Beginning in or about 2004, the Senator was having constructed for himself an approximately 6,000 square-foot house in Putnam County at a cost of more than $1.7 million. In addition to his duties as the Senator’s chief of staff, MAGUIRE acted as the Senator’s general contractor during the construction of the house. As the general contractor, MAGUIRE helped arrange the hiring of a number of the favored contractors who had been awarded contracts by the NFP to perform the actual design and construction work on the Senator’s new home. One such contractor, referred to in the information as “the Favored Contractor,” provided deeply discounted construction services to the Senator. The Favored Contractor received a total of nearly $10 million over an eight-year period (including millions during the period of construction).
Beginning in or about April 2010, a federal grand jury sitting in White Plains, the FBI, and the IRS were investigating allegations that, among other things, the Senator had demanded or received well-below-market-value deals from contractors who had worked on the construction of the Senator’s personal home and who had received lucrative construction contracts from the NFP. The investigation focused on, among other things, the nature and value of the services provided by the Favored Contractor. Specifically, as charged in the Information, the Favored Contractor provided construction services to the Senator valued at approximately $50,000 and, prior to April 2010, the Senator had paid the Favored Contractor only $5,000 for these services.
MAGUIRE approached the Favored Contractor after he became aware of the pending federal investigation and directed him to “clean up the paper” regarding the work that the Favored Contractor had done on the Senator’s house. MAGUIRE instructed the Favored Contractor to create phony, backdated invoices to make it appear as though the Senator had paid for the full value of the services rendered by the Favored Contractor when in fact the Senator had received well below market rates for services.
MAGUIRE further instructed the Favored Contractor to falsely tell the government that the reason there was a somewhat lengthy delay in the Senator’s payment to the Favored Contractor was that the Senator and the Favored Contractor had entered into a payment plan. MAGUIRE also instructed the Favored Contractor to take the scheme to obstruct the pending grand jury investigation “to the grave.”
MAGUIRE, 47, of Patterson, Putnam County, New York, pled guilty to one count of obstruction of justice. He faces a maximum sentence of 10 years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or loss derived from the crime.
MAGUIRE will be sentenced by U.S. District Judge CATHY SEIBEL on December 16, 2011, at 3:30 p.m.
* * *
Mr. BHARARA praised the work of the FBI and the IRS Criminal Investigation Division in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys JASON P.W. HALPERIN and PERRY A. CARBONE are in charge of the prosecution.
Manhattan U.S. Attorney PREET BHARARA said: “As he admitted today, Raymond Maguire corrupted the federal judicial system. Our system of justice, and the grand jury’s search for the truth, depends on people being honest rather than providing the grand jury with phony documents. No one, least of all a public official, can be permitted to hide the truth from the grand jury.”
FBI Assistant Director in Charge JANICE K. FEDARCYK said: “Public corruption is a serious breach of the public trust, and obstructing an investigation into it impedes our effort to see that justice is done.”
IRS Special Agent in Charge CHARLES R. PINE stated: “Anyone who thinks that they can get away with a financial fraud and erase paper trails and invent cover stories is sadly mistaken. Our investigators will follow through and recommend criminal charges whenever warranted.”
According to the information and statements made during today’s proceeding:
Starting in or about 2003, MAGUIRE worked on the staff of the Senator, serving as his chief of staff from 2005 until December 2010, when the Senator resigned.
The Senator sponsored the award of millions of dollars in New York State member item grants to a not-for-profit organization (“The NFP”) that was controlled, in part, by the Senator and administered, in part, by MAGUIRE. Millions of dollars in lucrative construction work was awarded by The NFP to a favored contractor.
Beginning in or about 2004, the Senator was having constructed for himself an approximately 6,000 square-foot house in Putnam County at a cost of more than $1.7 million. In addition to his duties as the Senator’s chief of staff, MAGUIRE acted as the Senator’s general contractor during the construction of the house. As the general contractor, MAGUIRE helped arrange the hiring of a number of the favored contractors who had been awarded contracts by the NFP to perform the actual design and construction work on the Senator’s new home. One such contractor, referred to in the information as “the Favored Contractor,” provided deeply discounted construction services to the Senator. The Favored Contractor received a total of nearly $10 million over an eight-year period (including millions during the period of construction).
Beginning in or about April 2010, a federal grand jury sitting in White Plains, the FBI, and the IRS were investigating allegations that, among other things, the Senator had demanded or received well-below-market-value deals from contractors who had worked on the construction of the Senator’s personal home and who had received lucrative construction contracts from the NFP. The investigation focused on, among other things, the nature and value of the services provided by the Favored Contractor. Specifically, as charged in the Information, the Favored Contractor provided construction services to the Senator valued at approximately $50,000 and, prior to April 2010, the Senator had paid the Favored Contractor only $5,000 for these services.
MAGUIRE approached the Favored Contractor after he became aware of the pending federal investigation and directed him to “clean up the paper” regarding the work that the Favored Contractor had done on the Senator’s house. MAGUIRE instructed the Favored Contractor to create phony, backdated invoices to make it appear as though the Senator had paid for the full value of the services rendered by the Favored Contractor when in fact the Senator had received well below market rates for services.
MAGUIRE further instructed the Favored Contractor to falsely tell the government that the reason there was a somewhat lengthy delay in the Senator’s payment to the Favored Contractor was that the Senator and the Favored Contractor had entered into a payment plan. MAGUIRE also instructed the Favored Contractor to take the scheme to obstruct the pending grand jury investigation “to the grave.”
MAGUIRE, 47, of Patterson, Putnam County, New York, pled guilty to one count of obstruction of justice. He faces a maximum sentence of 10 years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or loss derived from the crime.
MAGUIRE will be sentenced by U.S. District Judge CATHY SEIBEL on December 16, 2011, at 3:30 p.m.
* * *
Mr. BHARARA praised the work of the FBI and the IRS Criminal Investigation Division in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorneys JASON P.W. HALPERIN and PERRY A. CARBONE are in charge of the prosecution.
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