Guilty Plea From Worker in State Mental Health Money Scam

From 1010 WINS Radio in New York

A well-paid veteran state employee pleaded guilty to grand larceny on Tuesday after scamming the state out of $1.2 million over more than eight years, state Attorney General Andrew Cuomo said.

Cuomo said James Leggiero faces up to 10 years in prison when he is sentenced July 2 after pleading guilty to a felony count of first-degree grand larceny. He also must reimburse the state for the $1.2 million, Cuomo said.

The arrest and plea Tuesday marked the first high-profile state ethics case brought by Cuomo's public integrity unit. Democrat Cuomo, elected in November to replace Eliot Spitzer, had vowed to make public integrity a major part of the work of the attorney general's office.

"If there is corruption, we will be diligent in policing it,'' Cuomo told The Associated Press on Tuesday as Leggiero was pleading guilty.

Leggiero, 50, was a $79,000-a-year principal auditor for the state Office of Mental Health. He had worked for the state since 1980.

Cuomo's investigators said Leggiero had created a company, Very Important Property Inc., that would bill the state office for phony site feasibility studies for its residential treatment program. Leggiero would then approve the vouchers.

The scam allowed Leggiero to support a lavish lifestyle that included three homes and fancy automobiles, including a vintage 1958 Corvette.

Cuomo said Leggiero might have assets the state could claim immediately that could be worth "several hundred thousand dollars.'' The attorney general also said the length of Leggiero's prison sentence may depend, in part, on how much restitution he can make now and what sort of plan he develops for paying off the rest of the debt.

Cuomo said that as part of the investigation he was also announcing the creation Tuesday of a toll-free hot line that can be used to report possible government corruption.

The new attorney general told the AP the Leggiero case was a clear sign that state agencies had to do a better job policing their own operations and have better checks and balances on state spending.

"This whole area of state operations, this is where the money is ... $50 billion a year. Follow the money,'' said Cuomo.

In fact, Leggiero was only caught after the state comptroller's office implemented a new system in November for reviewing the more than 20 million payments made each year by the state to various vendors.

"The payments turned up right away,'' said Dan Weiller, a spokesman for Comptroller Thomas DiNapoli.

The case was referred to Cuomo by the comptroller's office in February.

"There was a problem with the internal controls at OMH,'' Cuomo told a news conference Tuesday afternoon when pressed about how the fraud could go undetected as long as it did.

"The good news is, it was found out,'' DiNapoli said.

"The Office of Mental Health is aggressively reviewing its internal control processes, and is implementing changes that have been identified to strengthen its financial systems,'' said OMH spokeswoman Jill Daniels when asked about Cuomo's criticism.

Leggiero was suspended without pay by OMH after Cuomo began his investigation.

AG's Public Integrity Hotline: 800-428-9072