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FBI Probed Mayor's Fundraising Before DA Got State's 'Criminal Referral'

 Mayor Bill de Blasio answers questions following an NYPD briefing at the 105th Precinct in Queens Village on May 3, 2016.
Mayor Bill de Blasio answers questions following an NYPD briefing at the 105th Precinct in Queens Village on May 3, 2016.
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DNAinfo/Katie Honan

NEW YORK CITY — Federal authorities were already investigating Mayor Bill de Blasio’s 2014 fundraising efforts to unseat state Senate Republicans months before the Manhattan District Attorney received a "criminal referral" from a state elections official about "Team de Blasio," DNAinfo New York has learned.

A team of FBI agents from the bureau’s Public Corruption Unit started eyeing the mayor’s 2014 election efforts for upstate Democratic candidates as many as five months before Risa Sugarman, the state Board of Elections' Chief Enforcement Officer, wrote the DA that her team discovered "willful and flagrant" violations by the mayor and his associates, sources said.

The timing is significant because the mayor and his supporters maintain that the investigation into the upstate activities stemmed from Sugarman's referral, and that it was politically motivated by foes of de Blasio and his progressive agenda.

READ MORE: Here's What We Know About the Probe Into Mayor Bill de Blasio's Fundraising

In the detailed referral, which was leaked to the media, Sugarman, a former top Bronx prosecutor appointed by Gov. Andrew Cuomo, said her investigators determined “that reasonable cause exists to believe a violation warranting criminal prosecution has taken place.”

She claimed the fundraising apparatus used by “Team de Blasio” deliberately circumvented campaign donation limits in three races, channeling funds to candidates through county committees that could accept up to $103,000 from a single donor — well above the $10,300 allowed if a direct contribution was made to the candidate.

At the time of the Sugarman referral, the Manhattan DA's office had its own investigation going into aspects of the mayor's fundraising in his 2013 mayoral election, and questionable money transactions tied to his campaign to rid the city of carriage horses, the sources say.

The Sugarman issues, however, were not on their radar and opened yet another avenue to examine.

But sources say it was not long before the DA realized the feds had a "parallel" probe well underway, and they teamed up.

Two City Hall spokespeople did not return requests for comment.

The FBI also declined to comment.

During the 2014 election cycle, de Blasio launched his upstate fundraising because he felt the Democratic Party — and Cuomo — were not doing enough to retake the Senate.

Criticism of his methods soon surfaced and, sources say, eventually began to catch the attention of the FBI.

DNAinfo New York reported last week that the federal probe is now eyeing the mayor's entire fundraising apparatus as a potential criminal enterprise — with many of the same advisers, campaign officials or lobbyists acting in a "conspiracy" to circumvent election laws.

Such a federal charge would likely be accompanied by other offenses such as mail fraud, wire fraud, extortion and even money laundering, sources said.

The mayor has denied any wrongdoing and insists all his fundraising efforts were conducted lawfully.

But in the face of subpoenas served on several of his closest aides, de Blasio and the city have hired several more personal and corporate lawyers to handle the federal request for interviews, documents, emails and telephone communications, among other things.

In addition, some contributors later claimed they not only felt obligated to give, but their money went to causes they were not told about.

For example, DNAinfo New York reported that real estate developer Don Peebles said he felt he could not say "no" to de Blasio's request for $20,000 to support universal Pre-K.

Peebles later requested his money be returned when some of it went to other initiatives, including one that was working against Peebles' own interest to develop Long Island College Hospital.

Supermarket billionaire John Catsimatidis, meanwhile, has told federal investigators that de Blasio buttonholed him at a charity event in 2014 and asked him to give $50,000 for the Putnam County Democratic Party. He said he later was angry to learn the money almost immediately went to an upstate candidate’s campaign coffers.

DNAinfo New York has reported that the FBI probe began more than two years ago with a corruption tip about Philip Banks, the NYPD's former Chief of Department.

That allegation eventually led to an ongoing investigation over whether there was a pattern of fundraising and possible pay-for-favors schemes involving NYPD officials being wined, dined and flown to various cities by two wealthy businessmen, Jona Rechnitz and Jeremy Reichberg.

The duo donated heavily to de Blasio’s election campaign, and served on his Inauguration Committee. Rechnitz, who is a real estate developer, also gave $102,300 to the mayor’s upstate efforts.

In addition, DNAinfo reported that the feds are eyeing straw donors to the mayor's 2013 election campaign, unearthing curious donations by workers at a Queens-based beauty supply company where the owner donated heavily to the mayor.

Sources say violations of state law that do not rise to the federal levels will be ultimately be prosecuted by the Manhattan DA, whose office declined comment, as did the office of Manhattan U.S. Attorney Preet Bharara.