An indictment was unsealed this morning in federal court in Brooklyn
charging New York State Senator John Sampson with two counts of
embezzlement, five counts of obstruction of justice, and two counts of
making false statements to the Federal Bureau of Investigation. Since
1997, Sampson has served in the New York State Senate (the “Senate”)
representing the 19th Senate District in southeastern Brooklyn. From
June 2009 to December 2012, Sampson was the leader of the Democratic
Conference of the Senate. From January 2011 to December 2012, Sampson
was also the Senate minority leader. Sampson has also served as the
chairman of the Senate Ethics Committee and the Senate Judiciary
Committee. Sampson will be arraigned later today before United States
Magistrate Judge Viktor V. Pohorelsky at the U.S. Courthouse at 225
Cadman Plaza East in Brooklyn, New York.
The indictment was announced by Loretta E. Lynch, United States
Attorney for the Eastern District of New York, and George Venizelos,
Assistant Director in Charge, Federal Bureau of Investigation (FBI), New
York Field Office.
“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,” stated United States
Attorney Lynch. “As charged in the indictment, for years, Senator John
Sampson abused his position of public trust to steal from New Yorkers
suffering from home foreclosure and from the very county he was elected
to represent. But the former Senate ethics leader didn’t stop there.
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.” United States Attorney Lynch
thanked the FBI and the Federal Deposit Insurance Corporation Office of
the Inspector General for their investigative efforts, as well as the
Public Integrity Section and the Office of the Inspector General of the
Department of Justice for their assistance in this case.
FBI Assistant Director in Charge Venizelos stated, “Today, John
Sampson has been added to the list of recently indicted New York elected
officials. We could view this as an achievement for the FBI and federal
prosecutors. But we share what may well be the concern of many New
Yorkers that ‘incumbent’ and ‘defendant’ cannot be accepted as
interchangeable. Elected officials are referred to as ‘public servants’
and that should not be confused with ‘self-serving.’ The people of New
York have a right to demand, at a bare minimum, that their elected
representatives obey the law.”
The Embezzlement Scheme
As charged in the indictment, Sampson is an attorney licensed to
practice law in the state of New York, and his law practice has included
legal work involving the sale of foreclosed properties. Beginning in
the late 1990s, Sampson served as a court-appointed referee for
foreclosure proceedings conducted by the Kings County Supreme Court. As
referee, Sampson controlled escrow accounts holding proceeds of
foreclosure sales of Brooklyn properties. Between 1998 and 2008, Sampson
embezzled approximately $440,000 in surplus funds from the foreclosure
sales of four Brooklyn properties. The prior owners of the Brooklyn
properties, and other parties with a lawful interest, had a right to
receive the funds embezzled by Sampson. Sampson indicated that he had
illegally diverted the stolen funds to pay expenses arising from his
unsuccessful run for Kings County District Attorney in 2005.
As alleged in the indictment, in July 2006, Sampson asked an
associate who worked in the real estate industry (the “associate”) for
$188,500. The associate agreed and, at Sampson’s direction, provided him
with these funds in the form of three bank checks payable to third
parties (the “associate transaction”). Sampson characterized the
associate transaction to the associate as a loan that he would repay,
the proceeds of which he would use to cover the tracks of his
embezzlement before it was uncovered. However, Sampson took this “loan”
without written documentation or any rate of interest. Sampson never
repaid the associate. Further, Sampson concealed the associate
transaction by lying on his Senate financial disclosure forms, falsely
claiming that he had incurred no liabilities in excess of $5,000 or
gifts or income in excess of $1,000.
The indictment further alleges that Sampson used a portion of the
associate transaction funds to pay back some of the money he embezzled
from two of the escrow accounts. However, Sampson never repaid any of
the approximately $160,000 he stole from the two escrow accounts that
are the subject of the embezzlement charges in the indictment.
John Sampson’s Obstruction of Justice
In the summer of 2011, the United States Attorney’s Office for the
Eastern District of New York (the USAO) filed bank and wire fraud
charges against the associate in relation to a mortgage fraud scheme
(the “mortgage fraud case”). As charged in the indictment, after the
associate’s arrest, Sampson engaged in a multifaceted scheme to obstruct
justice so as to prevent the associate from cooperating with law
enforcement authorities and disclosing Sampson’s criminal conduct.
Evidence of Sampson’s obstructive conduct includes intercepted phone
calls from Sampson’s cellular telephone.
John Sampson’s Use of a USAO Employee to Obstruct Justice
According to the indictment, Sampson attempted to obtain
confidential, non-public information regarding the mortgage fraud case.
Soon after the associate’s arrest, Sampson informed the associate that
he knew an individual who, at that time, was an administrative employee
in the USAO (the “employee”). Sampson told the associate that he could
persuade the employee to give inside information that would assist the
associate’s defense in the mortgage fraud case.
As alleged in the indictment, Sampson then asked the employee to
determine whether the USAO was conducting a criminal investigation of
Sampson and whether certain mortgage fraud defendants were cooperating
with the government’s investigation. Sampson told the associate that he
was attempting to determine the identities of cooperating witnesses in
the mortgage fraud case and that if they were able to identify those
witnesses, Sampson could arrange to “take them out.”
According to the indictment, when the associate asked Sampson about
his efforts to use the employee to obtain information about the mortgage
fraud case, Sampson was reluctant to discuss those illegal efforts over
the telephone. For example, while meeting with the associate in
November 2011, Sampson stated, “I can’t talk on the phone....From now
on, our conversation is, ‘I don’t have no contacts, you don’t know
nothing.’ When we talk, that’s how we talk.”
The indictment alleges that FBI agents later confronted the employee
concerning his contacts with Sampson. Immediately thereafter, agents
searched the employee’s office and located a slip of paper that
contained the handwritten names of several individuals who were
defendants in proceedings related to the mortgage fraud case. The
employee was then suspended and subsequently terminated from his
employment at the USAO.
John Sampson’s Witness and Evidence Tampering
As charged in the indictment, Sampson also obstructed justice by
directing the associate to withhold evidence regarding the associate
transaction from the government. During a meeting on February 22, 2012,
the associate told Sampson that the federal government had subpoenaed
the associate’s business records, including a check register page that
documented the associate transaction (the “check register page”). Before
disclosing the check register page to the government, the associate
showed it to Sampson. At that time, Sampson took possession of the check
register page, examined it, and stated, “That’s a problem...I mean for
me.”
Sampson instructed the associate not to disclose the check register
page to the government. When the associate stated that it might be a
problem to withhold the document from the government, Sampson told the
associate to claim that the associate did not maintain all of the
associate’s records. Sampson instructed, “Don’t say you don’t have it.
Just say you don’t know. I don’t want you to lie, just say you don’t
know.”
In addition, Sampson told the associate to remove other items from
the business records the associate provided to the government to make it
appear as though the associate’s records were incomplete. Sampson
counseled the associate to falsely claim that the associate transaction
was payment for legal work Sampson had performed. Later during this
conversation, Sampson instructed the associate that, if the government
asked whether the associate ever loaned Sampson money, the associate
should say “No.” Sampson also suggested that, alternatively, the
associate could falsely claim that the associate “forgave” the associate
transaction “loan.” Sampson kept the check register page during and
after this meeting and never returned it to the associate.
John Sampson’s False Statements to the FBI
On July 27, 2012, FBI special agents interviewed Sampson outside his
Brooklyn residence. When shown a copy of the check register page, which
he had taken from the associate on February 22, 2012, Sampson stated
that the document “didn’t ring a bell,” that he “didn’t have a
recollection from it,” and that he did not recall seeing it previously.
Sampson admitted that he had asked the employee for information on the
mortgage fraud case but claimed that he only requested public
information from the employee, such as the name of the judge assigned to
the mortgage fraud case. When asked why he would request public
information from an employee of the USAO, when Sampson himself was an
attorney, Sampson stated that he was not “good” with computers. At the
conclusion of the interview, the agents advised Sampson that he had lied
to federal agents, which constituted a federal crime. When asked
whether he wished to revise his statement, Sampson stated, “Not
everything I told you was false.”
If convicted, Sampson faces up to 10 years of imprisonment for each
embezzlement charge, up to 10 years of imprisonment for a charge of
obstruction of justice under 18 U.S.C. § 1503(a), up to 20 years of
imprisonment for each of the remaining four charges related to
obstruction of justice, and up to five years of imprisonment for each
false statement charge, as well as restitution, forfeiture, and fines.
The government’s case is being prosecuted by Assistant United States
Attorneys Daniel Spector, Paul Tuchmann, and Alexander Solomon.
Defendant: John L. Sampson
Age: 47
Residence: Brooklyn, New York
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