NORA ANDERSON CHARGED WITH FRAUD

This just in from the New York Times :

December 10, 2008

New Judge Is Charged With Campaign Finance Fraud

Nora S. Anderson, Manhattan incoming Surrogate's Court judge, was indicted for campaign finance fraud.

Nora S. Anderson , who last month won the election for Manhattan Surrogate's Court judge, was indicted Wednesday on charges that she concealed the source of $250,000 deposited into her campaign account to make it appear as though the payments came from herself .

Prosecutors said that the money, in fact, came from Seth Rubenstein, Ms. Anderson's boss and campaign adviser, and he, too, was charged in the indictment.

Under election law, Ms. Anderson was allowed to contribute as much money as she wanted to her own campaign account. Outside donors were limited to $33,122.50 for the primary, prosecutors said.

In need of money to print and mail campaign materials, and to pay staff members to work for her on primary day, Ms. Anderson in August made two large deposits into her bank account.

The first, for $100,000, was posted to her campaign account on Aug. 20, one day after Ms. Anderson deposited a check from Mr. Rubenstein for the same amount into her personal bank account, prosecutors said.

The second payment, for $150,000, was wired into Ms. Anderson's campaign account on Aug. 26, the same day Mr. Rubenstein transferred that exact amount of money into Ms. Anderson's personal brokerage account.

"Here you have $250,000 coming from Rubenstein made to appear like it was coming from Anderson," said Robert M. Morgenthau , the Manhattan district attorney . "That's the crux of the case."

Both Ms. Anderson and Ms. Rubenstein face felony charges of offering a false instrument for filing and falsifying business records. If convicted, they could face up to four years in prison. They also face misdemeanor counts of knowingly and willfully violating contribution limits, punishable by up to a year in jail if convicted.

After riding a well-financed campaign to victory in the Democratic primary in September, Ms. Anderson came under suspicion when a $225,000 campaign loan from Mr. Rubenstein remained unpaid. Loans not paid by the primary date would be considered campaign contributions, prosecutors said.

But Ms. Anderson, 56, later repaid that original loan by liquidating her brokerage account and taking a loan from her retirement account, said Daniel J. Castleman, the chief assistant district attorney. She was not charged in connection with that initial loan, even though it could have been considered a contribution that exceeded limits.

Even as charges were pending against her, Ms. Anderson had been preparing to take the bench.

Ms. Anderson took the oath of office during a private ceremony last week, according to Janet Mishkin, the principal law clerk for Kristin Booth Glen, one of the two current Manhattan Surrogate's Court judges.

It is customary for judges to hold private swearing-in ceremonies before they take the bench. But their oath does not become official until Jan. 1, after it is filed with the city clerk's office.

If she takes the bench, Ms. Anderson will serve alongside Ms. Glen, who administered the oath. She would replace Renee R. Roth.

But whether Ms. Anderson takes the bench in January remains unclear, said her lawyer, Gus Newman.

That decision will depend on powers "above her and above me," he said.

Mr. Newman said his client would be vindicated and was qualified to serve as a judge on the Surrogate's Court.

"This case is not about any corruption or banality," he said. "It's about a claimed violation of election law. "Before these charges she had a totally unblemished reputation. When all the facts come out in the courtroom, it'll be clear that Nora's reputation will be restored and that she's totally innocent of any wrongdoing."

Mr. Rubenstein's lawyer, Frederick P. Hafetz, said his client did not commit a crime.

"Mr. Rubenstein acted totally within the election law," Mr. Hafetz said. "We are confident he will be vindicated at trial. He has a long and distinguished career at the bar. There are no charges of corruption whatsoever in this case."

Mr. Rubenstein and Ms. Anderson turned themselves in to the authorities on Wednesday morning. They were scheduled to be arraigned later in the afternoon.

Ms. Anderson is a lawyer in the firm headed by Mr. Rubenstein. For the past 10 years, she has only handled Surrogate's Court cases, Mr. Newman said. Ms. Anderson also spent about a combined five years as the deputy clerk and the head clerk of the Surrogate's Court in Manhattan.

Surrogate's courts have a notorious reputation for corruption because their judges -- as the handlers of wills, estates and guardianships -- have the power to appoint lawyers to lucrative families' cases.

In 2005, Michael H. Feinberg, a Surrogate's Court judge in Brooklyn, was removed after the State Commission on Judicial Conduct found that he had awarded $8.6 million in fees to a friend without verifying that the lawyer had done the work.

In July, The Daily News reported that the city was investigating Lee Holzman , the Bronx Surrogate's Court judge, for fees he awarded to politically connected lawyers.

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To download a copy of the Times article, please use this link: Nora Anderson Charged with Fraud

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This story shouldn't come as a surprise to readers of our blog.

An opponent, John Reddy, made Anderson's questionable financing an issue in the Surrogate's campaign, but the topic didn't resonate with voters (or the New York Times -- which endorsed Anderson despite the brewing scandal).

To view Reddy's campaign literature on this subject, please use this link: The $250,000 Question