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UPDATE: A House Is Not A Home In Yonkers Political Corruption Case
Written: November 20, 2012

This is an update of a “Street Sweeper” column that ran on March 30, 2012.

Start the shower before you sit down to read this story.  My guess is that you may want to clean up afterwards.  It’s yet another in an apparently unending stream of criminal prosecutions of dirty, corrupt politicians who lie and cheat their way into and out of our pockets.

Elected Officials

Sandy Annabi was first elected to the Yonkers City Council in November 2001 to represent the Second District and was subsequently re-elected in 2003 and 2005. She served as the Democratic Majority Leader of the Council during the latter part of her third term in office.

Zehy Jereis served as Chairman of the Yonkers Republican Party from the fall of 2003 through the fall of 2007. Oddly, Jereis used his considerable influence and contacts to assist Annabi with all three of her successful campaigns.

The Longfellow Project

In 2003, Yonkers developer Milio Management was seeking to redevelop an area of land known as the Longfellow Project. And, wouldn’t you just know it but, too bad, some of the project was partially located within Annabi’s district.

Why, you might ask, would I say “too bad?”

Well, it’s because Annabi was that rare beacon of light in the darkness of politics. She was a highly principled and dedicated civil servant, willing to sacrifice personal aggrandizement for the good of her voters.

I mean, c’mon now, we can’t be cynical about every politician. When Annabi heard about Milio Management’s Longfellow Project she dug in her heels at a City Council meeting on June 14, 2005, and called the plans “outrageous” and a “slap in the face to the taxpayers of Yonkers.” Wow, that’s taking on the big real estate interests in Yonkers.  And, for good measure, Annabi said “Even if the entire community supported [it], I would be opposed.”

Frankly, them thar were fightin’ words because with Annabi standing in the way, Milio Management was pretty much stymied.

So, what do you do when you’re a developer at Point A, and your project is at Point C, and you have the feisty Annabi blocking you at Point B? Well, in April 2006, Milio Management hired Westchester County attorney Anthony Mangone, and hoped that he could show Annabi the error of her ways when it came to the lovely Longfellow Project.

Shortly thereafter, Mangone got in touch with Republican Party powerbroker Jereis.  Why the hell would you go to a Republican when you’re trying to change the mind of the Democratic Majority Leader in the same city?  Maybe it’s got something to do with the nature of politics and theyou-scratch-my-back-and-I’ll-scratch-yours way of that profession.

Mangone The Facilitator arranged a meeting between Jereis and a representative of Milio Management.  Milio must have loved what it heard – Mangone said that he could get Annabi onboard with the Longfellow Project.  Afterwards, Mangone explained that there would be a price tag for that persuasion. In the summer of 2006, a la Tinkers to Evans to Chance, the tidy sum of $30,000 in cash went from Milio to Mangone to Annabi – double play! Thereafter, $20,000 bucks went round the horn from Mangone to Jereis to Annabi, which prompted Annabi to make  several purchases, including airline ticket upgrades, a Rolex watch, and a diamond necklace.

Rolex. Diamonds. Gee, politics can be a very rewarding line of work, at least in Yonkers, it seems.

Ah yes, the pangs of conscience being what they are, the brave Ms. Annabi firmly wobbled and at a City Council meeting that September 2006, voted in favor of the Longfellow Project.

The Ridge Hill Project

Then there was the equally sad tale of developer Forest City Ratner frustrated plan to develop the Ridge Hill Project, an 81-acre tract of land destined to be turned into retail, restaurant, and office space with hundreds of residential housing units, a hotel, and a conference center.  Annabi was also opposed to this deal and, yet again, was the immovable object in the way of approval.  Twice she voted against the project, and twice it went down in defeat before the Yonkers City Council. And to rub salt in an oozing wound, Annabi and others also filed a civil lawsuit to effectively block the project.

On June 2, 2006, Jereis The Greaser amazingly found himself at yet another meeting with another Yonkers developer, and, once again, he explained to Forest City Ratner how he had this “in” with Annabi and, you know, maybe I could do sumthin’ for you guys here.

And do sumthin’ he did!  Within five days, Jereis managed to get Annabi to attend two meetings with him and representatives of Forest City Ratner.  Then, zounds!!!, on June 15, 2006, Annabi issued a press release  (drafted by Jereis and representatives of Forest City Ratner) declaring her support for the project, which was underscored on July 11, 2006, when she voted in favor of the zoning changes at a City Council meeting.

Not that anyone would ever suggest, even remotely, some kind of quid pro quo but, how nice, Forest City Ratner gave Jereis a consulting job after Annabi changed her mind about the  Ridge Hill Project.  Following Annabi’s vote in favor of the deal, Jereis go a $60,000 per annum consulting contract.

A House Is Not A Home

At least from 2002 and through 2007, Annabi and Jereis had this very profitable mutual admiration society.  During that time, Jereis secretly gave Annabi money and purported loans to finance the purchase of two residential properties located outside of her Council District.  To obtain favorable financing, Annabi submitted applications to two different banks.

You might want to get out a pen and paper and chart what’s coming up because this is going to get a tad complicated.

Annabi told both banks that she was personally going to live in the house for which she was seeking financing.  That’s an owner-occupied deal – you got that? As in supposedly living in more than one place at a time.

Annabi was playing a bit of hide-and-seek with the banks.  Not telling the first lender about the second, or the second lending bank about the first – and also not disclosing that she was looking to borrow funds for two houses in total.  Lucky for her, the closings went off without a hitch two-days apart.

Of course, maybe she didn’t think this all out too carefully because one of the houses that she was living in wasn’t located in her Council District. For you and me, maybe not that big a deal, but state and local laws have this ticklish requirement that a Council member has to live within her District.  Oops.

Not to worry — Jereis stepped up to the plate and purchased a cooperative apartment for Annabi within her Council District so she could meet the residency requirement. In fact, this supposed political foe, Jereis the Republican, paid the apartment’s down payment and made the monthly mortgage payments for his Democratic counterpart.  Oddly, even with all of Jereis’s generosity, in her loan applications for one of the two houses and for the apartment, Annabi falsely inflated her income with fake pay stubs, W-2′s, and bank statements.

The Feds Step In

According to federal prosecutors, since 2001, Annabi received nearly $200,000 in secret payments from Jereis and others in exchange for taking favorable actions in her official City Council capacity. In January 2010, theUnited States Attorney for the Southern District of New York charged Annabi with concealing the illegal benefits she received from Jereis and others by

  • filing annual financial disclosure statements that intentionally omitted the illegal payments; and
  • failing to report the illegal payments she received on federal income tax returns.

On November 29, 2010, Mangone pled guilty to conspiracy, bribery, extortion, and tax evasion charges and is awaiting sentencing.  He faces a maximum prison sentence of 45 years.

On March 29, 2012, Annabi, 41, and Jereis, 40, were each convicted of one count of:

  • conspiracy to make and accept corrupt payments
  • conspiracy to deprive the City of Yonkers and its citizens of Annabi’s honest services,
  • receiving corrupt payments, and
  • extortion.

Separately, Annabi was also convicted of

  • one count of receiving corrupt payments,
  • two counts of filing false tax returns, and
  • three counts of making false statements to a bank.

Similarly, Jereis was also separately convicted of making corrupt payments.

Annabi faces a maximum sentence of 161 years in prison, and Jereis faces a maximum sentence of 65 years in prison.

Bill Singer’s Comment

So lemme see how this works.  I’m interested in developing some property, maybe I want to build some much-needed housing in an inner city or convert some squalid stretch of abandoned property into a new commercial center. So, now what — I’ve got to factor in the cost of paying off a friend of a friend of a friend of a politician, and then each of the individuals in that line?  No wonder our real estate sector is a mess, and, yeah, it’s not as if some of the players in that arena weren’t fudging their own numbers too.

Still, you look at the relatively tough times that some major developers and builders are having trying to get traction these days. KB Homes, DR Horton, Lennar, Toll Brothers, PulteGroup, and other companies are hoping for the flicker of some buyers’ interests. Millions of laid-off workers and their families in the construction industry and its allied sectors are hoping for a recover. But standing in the way of jobs and profits are too many politicians and their cronies, with hands out for bribes and kickbacks.

Raise taxes? Lay off teachers? Raise tolls?  Cut essential services? Hey, how about you put some of these elected thugs in a jail cell and throw away the key?  I bet that will cut down on costs and speed the belabored zoning approval process.

Once again, hats off to US Attorney Preet Bharara and his staff. Bharara is the hardest working federal prosecutor in the business, and one of the few remaining obstacles between us and the bad guys.  No, he’s not without fault as I noted in my “Street Sweeper” column: “UPDATE: Bill Singer Criticizes US Prosecutor For Expressing Disappointment With Jury’s Not Guilty Verdict” On the other hand, he’s still the Sheriff of Wall Street, and he still seems to be sincere in his focus on corruption.

The worst tax on the American taxpayer is the hidden cost of political corruption.


UPDATE

On November 19, 2012, Annabi was sentenced to six years in prison and two years of supervised release. Further, Annabi was ordered to forfeit $209,501.99 and $1,060,800; and pay $164,460.68 to PNC Bank and $33,000 for the costs of the federal prosecution.

Jereis was sentenced to four years in prison and two years of supervised release. Further, Jereis was ordered to forfeit $209,501.99.

The defendants were also ordered to pay $13,884 in restitution to the City of Yonkers, representing a portion of Annabi’s salary, and $64,071 to reimburse the City of Yonkers for legal fees.


 
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