2012-05-11 / Top Stories

MediSys Big Sentenced To Three Years

By Howard Schwach

David Rosen, former CEO of MediSys, which owned Peninsula Hospital Center until last summer, has been sentenced to three years in prison for bribing state officials. David Rosen, former CEO of MediSys, which owned Peninsula Hospital Center until last summer, has been sentenced to three years in prison for bribing state officials. The former CEO of the giant healthcare firm MediSys, which many believe drove Peninsula Hospital Center into the ground and then deserted it to fail, has been sentenced to three years in prison in relation to a scheme to bribe a number of New York State legislators, federal prosecutors say.

Preet Bharara, the United States Attorney for the Southern District of New York, announced on Tuesday that David Rosen was sentenced in Manhattan federal court for participating in a scheme to bribe New York State Senator Carl Kruger, New York State Assemblyman William Boyland, Jr., and former New York State Assemblyman Anthony Seminerio, with hundreds of thousands of dollars in exchange for their official acts.

Rosen was convicted after a threeweek bench trial in September 2011 of two counts of honest services fraud, one count of honest services fraud conspiracy, and two counts of conspiracy to commit bribery and to violate the Travel Act. U.S. District Judge Jed S. Rakoff presided over the trial and imposed today’s sentence.

Bharara said, “David Rosen cast a wide, corrupt net in his efforts to enrich himself and his company, bribing three State legislators over the course of nearly a decade. Today’s sentencing brings to conclusion this case, which involved hundreds of thousands of dollars of illegal payoffs, sham contracts, and shell companies. We will continue to aggressively pursue those who infect the political process and bring them to justice.”

According to the Superseding Indictment filed in Manhattan federal court, other court documents, and statements made during trial, Rosen was convicted of participating in a scheme to bribe Kruger, Boyland, and Seminerio in exchange for their official acts as New York State legislators. Kruger served as a member of the New York State Senate since 1994, representing Bergen Beach, Flatlands, Mill Basin, and other communities in the 27th Senate District in Brooklyn. Boyland has served as a member of the New York State Assembly since 2003, representing the 55th Assembly District in Brooklyn. Seminerio served as a member of the New York State Assembly from 1978 to June 2009, representing the 38th Assembly District in Queens.

In 2008, Rosen attempted to bribe Kruger in connection with Kruger’s efforts to provide official assistance to MediSys, including steering more than $400,000 in New York State funds to MediSys and helping MediSys in its efforts to acquire the Caritas Hospitals in Queens, New York.

To that end, Rosen caused Brookdale Hospital, a member of the MediSys Health Network, to enter into a contract with Compassionate Care Hospice, knowing that Kruger had an interest in the hospice contract. Kruger’s interest was based on an arrangement between Compassionate Care Hospice and Adex Management, Inc. (“Adex”), a marketing/consulting firm that brokered relationships in the healthcare industry, whereby Adex was paid to help them secure business. Kruger was to receive the benefit of the money that Compassionate Care paid to Adex by passing it through a shell company, Olympian Strategic Development Corp., which was controlled by his close associate Michael Turano. The contractual negotiation between Brookdale Hospital and the hospice care provider appears to have broken down when Seminerio was arrested.

Between 1999 and 2008, Rosen caused MediSys or its affiliates to make over $400,000 in payments to Seminerio through a sham consulting company. In exchange, Seminerio advocated on his behalf with New York State agencies concerning the discharge of a $19 million loan in 2006. He also co-sponsored legislation to provide a secured financing option to MediSys in 2006, and like Kruger, deliberated with New York State agency personnel on behalf of MediSys in connection with the acquisition of the Caritas Hospitals.

Between 2003 and 2008, Rosen also caused MediSys to make corrupt payments to Boyland through a no-show consulting job that paid him approximately $35,000 a year. In exchange for the approximately $177,000 that Boyland received between 2003 and 2008 from MediSys, he took official action to benefit the company, including requesting that the Speaker of the Assembly award millions of dollars to Brookdale Hospital.

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