Sheldon Silver indicted in New York asbestos kickback scheme

New York Assembly Speaker Sheldon Silver was indicted on Thursday for participating in an asbestos kickback scheme involving a New York doctor.

The indictment issued in the Southern District of New York came after Silver was charged Jan. 21 with accepting bribes and funneling $500,000 in state funds to a mesothelioma research center in July 2005 and November 2006 in exchange for asbestos client referrals.

“Silver used the power and influence of his official position to obtain for himself millions of dollars in bribes and kickbacks masked as legitimate income earned by Silver as a private lawyer...” the indictment states.

It also states that Silver created and maintained a corrupt arrangement with Dr. Robert Taub, a New York mesothelioma researcher and doctor, from late 2003 until about August 2014.

Taub, who is referred to as Doctor 1 in court papers, formerly headed up the Columbia University Mesothelioma Center before being removed from his post on Jan. 23. He treated mesothelioma patients and conducted mesothelioma research at the Mesothelioma Center and its affiliated hospital, New York Presbyterian Hospital.

As part of his duties in the Assembly, Silver was responsible for determining which legislation was brought to the floor for debate and exercised power over allocation of certain state funds. More specifically, he was able to distribute money from the New York State Health Care Reform Act Assembly Pool at his discretion with no public disclosure of the disbursement, its recipient or its intended purpose.

When the HCRA eliminated the Assembly Pool and all distributions were subject to disclosure, Silver stopped directing money to Taub, the indictment states.

In an effort to detect impropriety or conflicts of interest, Silver was required to file annual financial disclosure statements, which were not truthfully completed, prosecutors say.

They say that Silver made false and fraudulent representations and omissions concerning his outside income.

“Silver went to great lengths to prevent others, including his staff, colleagues and associates from learning about his [scheme],” the indictment states.

While Silver did disclose his annual income as counsel with the high profile asbestos firm Weitz & Luxenberg in New York, he failed to disclose just how deep the connection went and failed to disclose additional income from a real estate law firm – which was not named in the indictment.

In his disclosure forms, Silver claimed that his private legal work with Weitz & Luxenberg was not connected to his official position and consisted of spending several hours each week evaluating legal matters brought to him by potential clients and then referring cases to attorneys at the firm.

Furthermore, through his official spokesperson, Silver claimed that potential clients found him by virtue of his 40-years of experience as a lawyer and that his ability to find clients was no different than other attorneys.

The truth is, Weitz & Luxenberg hired Silver in September 2002 for his political influence in the asbestos-related products liability practice and he didn’t actually perform any legal work on the cases, the indictment states. Although, the firm claims it was not aware that Silver allocated state funding to Taub’s research in exchange for client referrals.

“Weitz & Luxenberg hired Silver because of his official position and stature and without the expectation that Silver would perform any work on cases, or that he would refer any asbestos cases to the firm,” the indictment states. “Indeed, at the time Silver joined Weitz & Luxenberg, Silver had no prior experience with asbestos cases, and he brought no cases, matters, or clients of any kind with him to the firm.”

Silver earned an annual salary of $120,000 and additional fees for referring asbestos patients to the firm, the indictment states. Specifically, Silver was entitled to receive 33 percent of the firm’s share of any recovery obtained by the firm on behalf of referred clients.

According to the indictment, Silver received a total of nearly $4 million in corrupt payments through Weitz & Luxenberg and the real estate law firm.

It also states that Silver obtained $700,000 in “undisclosed bribes and kickbacks” from the real estate law firm in exchange for using his power and influence to influence real estate developers to continue using the specific firm. And Silver obtained more than $3 million in payments from Weitz & Luxenberg in referral fees.

In addition to the state funding, Silver is accused of securing additional benefits for Taub’s family.

Silver allegedly directed $25,000 in state funding to a not-for-profit organization in 2008 on which Taub’s family member served as a member of its Board of Directors. In May 2011, Silver arranged for the Assembly to adopt an official resolution honoring Taub by a “nationwide cancer organization in Manhattan.” Then in 2012, Silver facilitated employment for Taub’s family member at a not-for-profit organization to which Silver had directed millions of dollars in state funding.

The case has connections to Madison County.

The Columbia research center headed by Taub received a $3.15 million grant from the Simmons Mesothelioma Foundation, established by the Simmons firm of Alton, on May 10, 2010.

The complaint against Silver states that Taub began referring cases to the "other asbestos firm." While the complaint does not identify Simmons as the other asbestos firm, the New York Times reported it as such.

And, according to research conducted by the Record, Taub is named as treating physician in at least one Madison County asbestos suit filed by the Simmons firm.

The Simmons Mesothelioma Foundation website lists the Columbia University Mesothelioma Center as one of six medical centers that it provides funding for “cutting edge research.”

The Simmons firm has filed the most asbestos cases in Madison County over the past decade, and most of the cases have been brought on behalf of plaintiffs suffering from mesothelioma. The vast majority of cases filed in Madison County, the busiest asbestos docket in the country, are filed on behalf of persons from outside of Illinois.