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By KATI CORNELL
December 14, 2006 -- State Sen. Efrain Gonzalez ripped off $423,000 in grant money earmarked for a Bronx kids' charity - and frittered away the cash on luxury digs, clothes, jewelry and even personalized cigar labels, an indictment says.
Gonzalez is accused of teaming up with the heads of three not-for-profit organizations in a complex scheme to use coveted state "member item" grants "to line his own pocket," U.S. Attorney Michael Garcia said in announcing the charges yesterday.
The Bronx senator sent $50,000 to pay rent on his wife's luxury apartment in the Dominican Republic - even as he carried out his alleged crimes with his live-in girlfriend, who directs a not-for-profit group and is also a defendant in the case, a source said.
Gonzalez, 58, is accused of directing $467,000 in grants over five years to Pathways for Youth - an organization that funds Little League baseball and a number of other programs - then diverting most of the money to two other charities under his control.
"The senator designated hundreds of thousands of dollars of member-item money to Pathways, ostensibly to help develop programs for children in The Bronx. Unfortunately, the children . . . received no such benefit from that tax money," said Rose Gill Hearn, commissioner of the city's Department of Investigation.
Gonzalez was previously arrested in August for allegedly looting $37,000 from Pathways and the West Bronx Neighborhood Association. He was re-elected anyway.
Asked about the new indictment yesterday, Gonzalez told The Post, "I'm innocent. Obviously, they don't have anything, to do this again. Talk to my lawyer."
Defense attorney Murray Richman said, "We will beat those charges in court. We were aware that they were forthcoming. It should be pointed out that the voters knew that the indictment was pending. Nevertheless, he got 87 percent of the vote."
Gonzalez allegedly withdrew cash directly from the United Latin American Foundation and the West Bronx Neighborhood Association, which is run by girlfriend Lucia Sanchez, 50.
Gonzalez allegedly squandered the money on jewelry, college tuition for his daughter, a home in upstate Monroe, Yankees tickets, and his mother-in-law's house and wife's apartment, both in the Dominican Republic.
Gonzalez is also accused of pouring $9,000 into his Gonzalez Rojas Cigar Company - designing personalized cigar labels with names like "Assembly," "Council" and "Speaker."
The new indictment charges Gonzalez and three others with crimes ranging from fraud and conspiracy to theft of honest services and federal funds. The others are Sanchez, Pathways Executive Director Neil Berger and Miguel Castanos, whose apartment is the home base for ULAF.
State lawmakers distribute nearly $200 million in member-item money annually, in a process that takes place behind closed doors with no oversight.
kati.cornell@nypost.com
http://www.usdoj.gov/usao/nys/pressreleases/December06/gonzalezs2indictmentpr.pdf
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