Indicted Assemblyman Sheldon Silver’s Buffalo-area investments include the tech company Synacor and senior-housing developer Clover Management, according to new court filings.
When Silver, the former Assembly speaker, was indicted in February for “bribes and kickbacks,” FBI documents said about $340,000 of Silver’s money was managed by Buffalo entrepreneur Jordan Levy’s JoRon Management LLC.
The new filings show that JoRon invested some of Silver’s money in Clover Management’s “Clover Communities” funds, which include a fund for the Brighton Square complex in the Town of Tonawanda. Silver valued his stock at $170,000 to $295,000 in 2013, and it earned him between $20,000 and $50,000 that year, according to his latest personal financial statement filed with the Legislative Ethics Commission.
Silver valued his stock in Synacor, where Levy serves as chairman, at no more than $5,000 in 2013, and it did not provide him at least $1,000 in income, according to his financial statement.
None of the banks, brokerage houses and companies where Silver placed his money is accused of wrongdoing. All are complying with a court order to protect the assets and distribute any of Silver’s income to the U.S. Marshals Service until the case is decided. JoRon’s Levy, Clover’s Michael L. Joseph and the principals of a third local firm, Counsel Financial Services of Williamsville, agreed to the order before a judge signed it, according to one document.
Federal prosecutors in Manhattan contend that Silver, who led the Assembly for 21 years, used the powers of his office to steer clients to the law firm that employed him, enriching himself with nearly $4 million in referral fees. Prosecutors intend to demand that the Manhattan Democrat forfeit every dollar if convicted of the charges – “honest services fraud” and extortion. Silver’s lawyers are seeking to dismiss the case, calling it a “theory in search of a crime.”
FBI agents identified $100,000 that went in August 2010 to Counsel Financial, which provides loans and lines of credit to law firms, usually to help them through cases taken on contingency. But Silver’s Counsel Financial investments over the years were far larger, his financial disclosure form indicates – around $1.3 million, according to one source with a close view of the matter.
Silver and his wife earned interest income of $100,000 to $150,000 from Counsel Financial in 2013, he stated on his disclosure form. He also has a note valued at $500,000 to $750,000 coming due from Counsel Financial in September 2016, according to the statement.
A local lawyer representing Counsel Financial in the matter, Terrence M. Connors of Buffalo, said all of the assets are now with the authorities.
“Mr. Silver was, at one time, an investor in Counsel Financial. He was never an owner, employee or even a consultant,” Connors said last week. “Whatever funds he previously invested have been turned over to the U.S. Marshal to await final determination by the court or a jury. This was done with our full cooperation and ends our relationship with Mr. Silver and discharges our responsibility in this litigation.”
Counsel Financial has links to the Manhattan law firm Weitz & Luxenberg, where Silver was employed “of counsel” with the mission to bring in business. Counsel Financial’s chairman is Perry Weitz, a Weitz & Luxenberg founder. Counsel’s vice chairman is Arthur Luxenberg, the law firm’s managing partner.
Levy and Joseph are well-known around Buffalo. Levy served as chairman of the Erie Canal Harbor Development Corp. and co-founded Z80 Labs, an incubator for technology and biotechnology startups that for a time was housed in The Buffalo News building at Washington and Scott streets. Empire State Development and the state’s Innovate New York grant program deemed it worthy of millions of dollars in financing.
Joseph serves as chairman at Roswell Park Cancer Institute and served on the boards for the University at Buffalo Foundation and the Buffalo State College Foundation. Both men were named last year to the group tasked with examining the future for a new Buffalo Bills stadium.
Though Silver resigned as Assembly speaker, he continues to represent a district on Manhattan’s Lower East Side and earns the standard lawmaker’s pay of $79,500 a year plus a per diem to defray expenses while in Albany. He no longer collects the Weitz & Luxenberg salary that the FBI says gave him $10,000 a month. Nor does he collect client-referral fees. The law firm cut ties with him at the time of his arrest in January.
Silver, according to court papers, was serious about the money. Early in his association with Weitz & Luxenberg, he found it took as long as two weeks for the referral fees to be processed and then mailed to his home, FBI Special Agent Richard K. Wilfling said in an affidavit.
To hurry the checks along, Silver had the law firm create a stamp so one of its employees could endorse the checks and deposit them into a Silver account at HSBC, said Wilfling. The FBI tracked the money that went from Silver’s account to Levy’s JoRon Management and elsewhere over a period of about five years.
Among the court precedents that Silver’s lawyers cited in moving to dismiss the charges was the same U.S. Supreme Court decision that helped former State Senate Majority Leader Joseph L. Bruno, R-Brunswick, reverse his conviction for honest services fraud, setting the stage for a new trial in which he was found not guilty.
In Skilling v. United States, the nation’s highest court set a narrow definition of “bribes and kickbacks,” deeming them different than conflicts of interest or self-dealing, Silver’s lawyers wrote. They went on to argue that New York has long allowed its legislators to hold other employment, and Silver’s arrangement with Weitz & Luxenberg was common in the legal profession.
“What the government objects to in this case is not actual federal crimes but rather long-standing features of New York State government that the U.S. attorney finds distasteful,” Silver’s lawyers said in their 19-page motion. It followed an earlier move to dismiss the case by arguing that publicity stirred up by Bharara ruined Silver’s chance for a fair trial.
“Despite all the U.S. attorney’s rhetoric about bribes and kickbacks,” the lawyers added, “there simply is nothing wrong with an attorney earning referral fees for the business he brings in.”