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Evidence shows tangled web involving judge, ‘Unc Steve’

Court papers tell the story of a powerful politician named G. Steven Pigeon and an ambitious judge named John A. Michalek, and how that relationship corrupted the judge.

Michalek already had a great job as a State Supreme Court justice, but he wanted jobs for two family members. He also wanted one of Pigeon’s friends – Gov. Andrew M. Cuomo – to promote him to a more prestigious and higher-paying job in the state appellate court, the court papers say.

“Wonder if you could help,” Michalek emailed to Pigeon in December 2012.

“I will start talking u up,” Pigeon responded.

In a later email about the same topic, Michalek referred to Pigeon as “Unc Steve.” Authorities believe that “Unc” was short for “Uncle.”

But Pigeon wanted a favor from Michalek, according to court papers. He wanted the judge to appoint a young Buffalo attorney as receiver in a big case Michalek was handling, even though the young man was not yet on a list of attorneys qualified for such an appointment.

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Pigeon also asked Michalek for help on some cases pending before the judge – cases involving business friends, lawyer friends and political associates of Pigeon, the court papers say.

It was a mutually beneficial friendship.

But it all began to unravel when state and federal investigators raided Pigeon’s home and took his computer in May 2015. That is when they began examining emails between Pigeon and Michalek. Now, the political dealings that the two men had with each other have landed them in state court. Michalek pleaded guilty to two felonies and resigned from his judgeship.

And after hearing Michalek’s testimony, a grand jury indicted Pigeon on nine felony counts of bribery, rewarding official misconduct and grand larceny by extortion.

Both face possible prison terms – up to seven years for Michalek and up to 15 years for Pigeon.

“He vehemently denies these allegations and looks forward to his day in court,” defense attorney Paul J. Cambria Jr. said of Pigeon on Thursday. “People should not jump to conclusions. … The grand jury only hears one side of the story. There will be another side presented when we go to trial.”

A new element from Michalek and Pigeon’s relationship emerged in court over the last two days – an extortion charge against Pigeon.

One of the favors Pigeon allegedly asked from Michalek was for the judge to appoint a young local attorney as a receiver. Appointment of a receiver to temporarily manage a business, property or other entity involved in a foreclosure action or some other litigation can be lucrative for an attorney, according to legal experts.

“Depending on the length and complexity of the litigation, a receivership can earn an attorney anywhere from a few thousand dollars to six figures,” one knowledgeable Buffalo attorney told The Buffalo News.

Michalek admitted in court that, in 2012, Pigeon asked him to appoint a local lawyer as a receiver in a case Michalek was handling. The attorney was a recent law school graduate and had not yet been approved by the state courts as a qualified receiver. Nonetheless, Michalek gave him the assignment.

“We pushed it through anyway … have to give them a spec reason etc. … will figure it out … John,” Michalek emailed to Pigeon in May 2012.

Later, according to state prosecutors, Pigeon pressured this receiver to hire some of Pigeon’s “cronies” to do some work on a property the receiver was overseeing. The receiver refused to hire the “cronies,” and Pigeon retaliated by taking $5,000 from the receiver by “extortion,” according to court papers.

That receiver was Edward A. Betz, a former Pigeon associate who is now general counsel for the Buffalo Public Schools.

While declining to talk in any detail about the receivership or the alleged extortion, Betz told The News: “My only involvement in this matter is that I was asked to violate my ethical responsibilities as a receiver, and I steadfastly refused to do that.”

While Betz confirmed that he was the attorney appointed to the receivership, he declined to address any further questions about the Pigeon case. Sources said he has cooperated with the state attorney general’s investigation.

Cambria said Pigeon has denied all of the prosecutors’ allegations, including the charge of extortion.

Betz graduated from University at Buffalo Law School in 2009, according to public records. He was named an assistant corporation counsel for the City of Buffalo in 2010, and was named associate counsel of the Erie County Water Authority, earning $117,000 a year, in 2011. A year later, he became general counsel of the Water Authority at a salary of $124,000.

Betz served as a counsel to the State Senate for seven months in 2015 before become a partner in a Buffalo law firm.

In May 2015, Betz told The News that he was representing Seneca Nation businessman Aaron J. Pierce, one of the largest supporters of Pigeon’s political action committee, the WNY Progressive Caucus. State records show that one of Pierce’s businesses donated $30,000 to Pigeon’s political committee in September 2013.

And in January of this year, the Buffalo Public Schools hired Betz as general counsel at $160,000 annually.

In the court documents entered with Michalek’s guilty plea, state attorneys cited several instances in which Pigeon and the judge helped each other after meeting for “breakfast, lunch and coffee at various times between February 2012 and early 2015.”

“Pigeon, while acting in his capacity as a consultant, had an interest in several lawsuits pending in front of Judge Michalek. Between 2011 and 2014, during the pendency of some of the lawsuits, Pigeon directly and indirectly received money from one of the parties to the lawsuit. Pigeon’s colleagues and acquaintances were also financially involved in a number of the lawsuits,” according to a court document. “At the same time that Judge Michalek sought benefits from Pigeon, Pigeon had an interest in lawsuits pending before Judge Michalek. During this period, Judge Michalek kept Pigeon apprised of the status of the lawsuits, engaged in ex parte communications with Pigeon about them, sought Pigeon’s advice and input on various issues that arose when the cases came up on his calendar, provided Pigeon with advice as to how the cases should be handled, and made favorable rulings in certain situations to protect Pigeon’s, his clients’ and his business associates’ interests. In addition, Judge Michalek selected an attorney of Pigeon’s choosing to handle a receivership. According to an email, Judge Michalek assigned Pigeon to work on a foreclosure. Emails written between Pigeon and Judge Michalek illustrate the official conduct that Judge Michalek engaged in and the benefits that Pigeon provided to him and his family members.”

Michalek never was appointed to an appeals court.

Asked by a television reporter whether he thinks Pigeon was targeted for prosecution for political reasons, Cambria said: “I’m not a mudslinger. The community can make its own judgment whether politics are involved.”

Based on his past experiences in the courts, Cambria said he doubts that Pigeon’s case will go to trial before next spring.