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State Sen. Sampson Stole $440K from Foreclosure Victims, Feds Charge

By  Janon Fisher and Murray Weiss | May 6, 2013 9:35am | Updated on May 6, 2013 5:55pm

 BROOKLYN - United States Attorney for the Eastern District of New York, Loretta E Lynch,  briefed the media at their Offices at 271 Cadman Plaza in connection with corruption charges unsealed against US Senator John Sampson. She was joined by George Venizelos, Assistant Director in charge of the Federal Bureau of Investigation New York Field Office.
US Attorney Loretta E Lynch Briefs The Media On Charges Against Senator John Sampson
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BROOKLYN FEDERAL COURT — State Sen. John Sampson used money embezzled from state-held foreclosure accounts to fund his failed 2005 bid to become Brooklyn District Attorney, federal prosecutors charged Monday.

Sampson turned himself into FBI custody Monday morning to face a nine-count indictment including charges that he embezzled $440,000 from foreclosure escrow accounts, obstructed justice, tampered with witnesses and evidence and lied to federal investigators.

"The voters of New York State rightfully expect their elected officials to represent the voters' interests, not to trade on their positions of power to line their own pockets," said Brooklyn federal prosecutor Loretta Lynch.

 State Senator John Sampson pleaded not guilty to charges that he embezzed from real estate foreclosure escrow accounts.
State Senator John Sampson pleaded not guilty to charges that he embezzed from real estate foreclosure escrow accounts.
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DNAinfo/Janon Fisher

He was stripped of all seniority and his state senate committee positions, said Senate Democratic Leader Andrea Stewart-Cousins in a statement.

Sampson pleaded not guilty at his arraignment Monday afternoon and was released on $250,000 bond.

He had to surrender his passports and is not permitted to travel outside of New York as a condition of his bond.

Federal prosecutors offered Sampson a plea deal of three to four years if he pleaded guilty to the embezzlement and obstruction charges.

He has until May 31, 2013 to decide.

Sampson, 47, whose district covers Crown Heights and East Flatbush as well as parts of Brownsville and Canarsie, was charged with using his position as a court-appointed lawyer in foreclosure proceedings to siphon off nearly half a million dollars from real estate escrow accounts that he controlled on four Brooklyn properties, prosecutors allege.

Part of that money went to pay expenses from his unsuccessful 2005 campaign to become Brooklyn's top law enforcement official, according to Lynch.

"Senator Sampson allegedly stole that money to fund his own ambition to become Brooklyn's top state prosecutor, then engaged in an elaborate obstruction scheme to hide his illegal conduct, going so far as to counsel lies and the hiding of evidence," she said.

He tried to cover up some of his embezzlement by taking a $188,500 "loan" from a business associate to replace the stolen money, federal prosecutors said.

Sampson lied about what amounted to a crony's gift on his Senate financial disclosure statements and never paid it back, federal prosecutors said.

He was also charged with obstruction of justice for trying to get information about a 2011 federal mortgage fraud case against his unidentified crony from an administrative employee in the Brooklyn U.S. attorney's office.

The senator, who enlisted the employee to get the names of cooperators in the case, was caught on a wiretap promising to  "take them out," once found out who they were.

The unnamed employee has since been fired, Lynch said.

Sources say the employee was a paralegal who was also arrested and had pleaded guilty to charges and is cooperating with authorities.

It's unclear what the paralegal's relation to Sampson was.

The FBI interviewed Sampson, last July, in his Brooklyn home and asked about the financial records from the illegal loan. Sampson told investigators that "he didn't have a recollection from it," according to federal prosecutors.

When agents said that they had proof Sampson had lied, the state senator allegedly said "not everything I told you was false."

"The people of this city and state have a right to expect there elected officials hold themselves to a higher standard than the people that they represent," said George Venizelos, assistant director-in-charge of the FBI's New York field office.

"We used to refer to elected officials as 'public servants.' But then you start to tally up the number of elected officials who have been treating incumbency like the keys to the treasury. It’s clear that too many of them are self-serving and not serving the public," Venizelos said.

Along with embezzlement and obstruction of justice, Sampson is also being charged with witness tampering, tampering with evidence, concealment of records and making false statements, according to federal prosecutors.

Lynch said that her office's investigation is ongoing.

Sampson's lawyer, Zachary Carter, downplayed the embezzlement charge, telling Pohorelsky: "This is a very simple transaction that has been sliced and diced by the U.S. attorney's office."

He also said that Sampson didn't do anything wrong in withholding a document.

"The document was not relevant to the proceeding, there were other reasons he wanted it withheld," he said.

The federal prosecutor would not say if Sampson was "State Senator 1"  a politician indentified in court papers caught on a wire asking disgraced Queens state senator Shirley Huntley to use her influence to help a business associate.

Huntley pleaded guilty in January to embezzling $87,000 from a phantom charity and taking a $1,000 bribe from businessman Edul Ahmad, a law client of Sampson’s, in exchange for helping him expand his business at JFK airport.

As part of her plea agreement, Huntley agreed to wear a wire for the FBI during which she allegedly snared three other politicians talking about illegal activity.

“Recordings of meetings [Huntley] held separately with State Senator #1 and two other elected  officials did yield evidence useful to law enforcement authorities," prosecutors wrote in a sentencing memo filed last week in Brooklyn Federal Court.

Sampson is neither permitted to contact Ahmad nor another individual named Sam Noel while he's out on bond.