2011-09-16 / Top Stories

MediSys Big Guilty Of Offering Bribes

By Howard Schwach

The man who once ran Peninsula Hospital Center in Rockaway, as well as a number of other Queens and Brooklyn hospitals and health centers, was convicted in a bench trial on Monday of bribing three New York politicians in exchange for helping the health-care providers with favors in the Albany statehouse.

The federal criminal conviction of ex- MediSys CEO David Rosen, who now faces up to 70 years in prison at sentencing, comes as bad news for state Sen. Carl Kruger and Assemblyman William Boyland Jr., who, in November, will go on trial for related charges.

The third politician involved in the payoffs, former Queens Assemblyman Anthony Seminerio, died in federal prison last year, serving time on a related bribery conviction.

Manhattan US Attorney Preet Bharara, whose office prosecuted Rosen and has cases pending against Kruger and Boyland, told reporters, “If there were any doubt about the pervasive nature of public corruption in Albany, this multicount conviction of David Rosen should put it to rest once and for all.”

“This is a sad, even tragic case,” wrote Manhattan federal Judge Jed Rakoff in his decision, which found Rosen guilty of mail and wire fraud and conspiracy charges after a nonjury trial this summer. “Given the dominant role that these corrupt relationships came to play in his work in the period from 2003 and 2008, it is fair to say that in coming to work, he was also coming to bribe.”

Rosen led Medisys – which once operated

PHC and still operates Jamaica, Flushing and Brookdale hospitals – for three decades before he was indicted with Kruger, Boyland and several other people in April.

Rakoff, in his decision, wrote that Rosen’s bribery of the Brooklyn Democrats Kruger and Boyland and Seminerio of Queens was motivated to get them to perform “official acts . . . largely centered on the two issues that Rosen cared about most”: state financial support for MediSys and “the state’s facilitation of MediSys’ continued expansion and growth.”

For years, Rosen had MediSys regularly pay Boyland and Seminerio funds that Rosen attempted to cloak as compensation for their “virtually nonexistent ‘consulting’ services,” Rakoff wrote.

Seminerio, who died behind bars in January while serving a sentence for corruption, received $410,000 from MediSys for the bogus work, the judge said, and Boyland received $175,000.

In the case of Kruger, Rosen “found it easy to enter into an even more blatantly illegal relationship” by directing MediSys to “award a lucrative vendor contract” to a hospice-care provider called Compassionate Care, Rakoff wrote.

Kruger, along with several others, ran a consulting firm that was helping Compassionate Care, for a monthly retainer of $5,000 per month, to obtain hospital contracts.

“Rosen understood Kruger to have a strong personal interest” in the contract MediSys gave Compassionate Care, Rakoff wrote. “In direct return for these benefits, Seminerio, Boyland Jr. and Kruger all took official acts to benefit MediSys.”

MediSys officials continue to say that the money directed to the politicians had nothing to do with the financial state of the local hospital, nor did it contribute to its near-demise in recent months.

Rosen’s lawyer, E. Scott Morvillo, told the Associated Press, “After 40 years of diligent service to the health-care community, David Rosen is devastated by the court’s findings.’’

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