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Beefed-up indictment says Silver took official actions at investor's request

ALBANY – Former Assembly Speaker Sheldon Silver took “certain official actions” requested by a private investment executive believed to be Buffalo's Jordan A. Levy, a longtime Silver friend whose advice helped make the once-powerful Democratic leader a wealthy man, according to a new indictment handed up by a federal grand jury on Thursday.

The indictment filed by U.S. Attorney Preet Bharara in Manhattan does not identify the investor, who was not paid any fees by Silver but who allegedly did get the former Assembly boss to move on undisclosed official acts in his longtime role as one of Albany's most powerful government leaders. The new indictment does not allege any criminal acts by the investor and goes out of its way to stress that Silver did not reveal to the investor the source of what prosecutors say were the former Assembly leader's “crime proceeds.”

Levy, a partner in JoRon Management LLC, an investment firm, has been represented in the Silver probe by lawyer Dennis C. Vacco, a former state attorney general and former U.S. attorney from Western New York.

“Throughout the course of this investigation,” Vacco said Thursday, “Jordan Levy and JoRon have cooperated fully with the federal authorities. We provided them with all of the documentary evidence that they asked for and met with them several times at their request. The only time, during the time period articulated in the indictment that Jordan Levy ever had conversations with Sheldon Silver in his official capacity as speaker was when Jordan Levy would talk about Buffalo-based projects, UB 2020, the Erie Canal Harbor and similar community-based initiatives.”

Levy was the first chairman of the Erie Canal Harbor Development Corp., but resigned to begin 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.

The amended charges against Silver beef up the original February indictment with new details in what has grown from a three-count case to seven counts alleging illegal acts by Silver.

A federal grand jury Thursday signed off on a superseding indictment brought by Bharara that includes a new count – “monetary transactions involving crime proceeds” – outlining how prosecutors believe Silver shifted illegal financial gains into various high-yield investments, including at least two with Buffalo connections.

The superseding indictment stretches over 33 pages, compared with the original 24-page indictment against Silver in February. The gist of the original charges are all there: how Silver used his state post to boost his income from a Manhattan trial law firm, helping steer state money to a doctor who then retained Silver's firm and how Silver helped negotiate with Gov. Andrew M. Cuomo and Senate leaders to put an end to the anti-corruption Moreland Commission investigative panel as it was probing Silver's outside business interests.

The amended indictment again identifies Silver's connections in Buffalo where he invested some of his alleged illegally obtained money. Silver had cash investments, the original and new indictments say, in JoRon Management LLC and Counsel Financial Services. JoRon is an investment management company run by Levy, a longtime personal friend of Silver, and partner Ronald M. Schreiber. Counsel Financial is a Williamsville-based firm.

The case against Silver alleges that he enriched himself with nearly $4 million in payments by steering real estate interests to a firm run by a former top Assembly staffer and from a Manhattan law firm with which he was long associated; the firm, Bharara alleges, paid Silver referral fees for asbestos-related cases from a Manhattan physician who Silver helped get a state contract.

Silver has maintained his innocence and his lawyers have sought to get the case dismissed. Silver stepped down from the Assembly speaker's post, which he held since 1994, but is still a member of the Assembly Democratic conference.

Silver's attorneys, Joel Cohen and Steven Molo, said in a statement that the rewritten indictment was an indication of the weakness of the prosecutors' case.

“This new filing is an attempt by the government to address defects in the indictment that we raised in our motion to dismiss. We are reviewing this new pleading and we will respond as before, in court,” according to the statement reported on the web site of the New York Daily News.The amended indictment includes separate mail and wire fraud in the asbestos and real estate-related matters – adding up to six distinct counts against Silver. The seventh count alleges Silver from 2006 through January 2015 took what prosecutors say was “crime proceeds” and put them into investments – which he sought to hide – that were “not available to the general public.”

The new indictment says Silver used his connections with an investor – identified only as “Investor-1” – who provided Silver access to high-yield investment opportunities, including a low-risk source referred to as “Investment Vehicle-1.”

The indictment alleges Silver did not pay the investor any fees “although Silver took certain official actions as requested by Investor-1,” the superseding indictment states.

The new indictment, though, adds: “At no time did Silver truthfully disclose to Investor-1 or Investment Vehicle-1 the source and origin of the funds that Silver provided for these investments.”

The indictment states Silver in 2011, with new disclosure requirements for lawmakers' outside incomes, shifted more than $340,000 in Investment Vehicle-1 from his name to the name of a family member. By 2015, that investment account grew to more than $1.4 million, prosecutors say.

It has been public knowledge for several weeks that Silver entrusted several hundred thousand dollars to Levy and his JoRon Management. Levy bought stock for Silver in, among other things, tech firm Synacor and in Clover Management, a local builder and manager of housing projects for senior citizens. Through JoRon, Silver also placed money into Counsel Financial, which provides loans and lines of credit to law firms, usually to help them through legal cases taken on contingency. Silver continued to place money into Counsel Financial through his own channels. The company's principals are leading figures of the law firm that employed Silver, Weitz & Luxenberg.

While the role of “Investor-1” parallels the role of Levy,  “Investment Vehicle-1” is believed to be loans to Counsel Financial.

Silver eventually placed some $1.3 million into interest-bearing loans to Counsel Financial. On the personal financial disclosure form he gave the Legislative Ethics Commission, Silver revealed that a note worth $500,000 to $750,000 would come due from Counsel Financial in September 2016, and that he and his wife collected interest income of $100,000 to $150,000 from Counsel Financial in 2013.

Later in the new indictment, JoRon is named as one of the many stewards of Silver's investments that are expected to protect his assets so that the government may claim them should Silver be convicted. JoRon, Clover Management and Counsel Financial already have agreed to a court order freezing Silver's funds and demanding that they pay any future income due Silver to the U.S. Marshals Service. Counsel Financial went beyond the order and  transferred all Silver money to the Marshals Service, according to a lawyer representing the firm in this matter, Terrence Connors of Buffalo.

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