Men Charged for Federal Program Bribery Fraud, Conspiracy and More

Men Charged for Federal Program Bribery Fraud, Conspiracy and More

A 13-count indictment was unsealed this morning in federal court in Central Islip charging Edward Mangano and John Venditto with conspiracy to commit federal program bribery and honest services fraud, as well as the related substantive counts, and charging Mangano with extortion.  The indictment also charges Edward Mangano, Linda Mangano, and Venditto with obstructing justice, and Linda Mangano and Venditto with making false statements.  Since January 2010, Edward Mangano has served as the Nassau County Executive.  Since January 1998, Venditto has served as the Town of Oyster Bay (the TOB or Town) Supervisor.

The defendants were arrested Thursday, October 20, 2016, Earlier Thursday, federal agents also executed two search and seizure warrants at the Manganos’ residence in Bethpage, New York, and at the County Executive’s Office in Mineola, New York.

I.          Background

As alleged in the indictment and other court filings, between January 2010 and February 2015, Nassau County Executive Edward Mangano, TOB Supervisor John Venditto, and others, engaged in a scheme to receive bribes and kickbacks from a businessman and restaurateur, identified in the indictment as Co-Conspirator #1, in exchange for performing official actions to benefit Co-Conspirator #1 in connection with that individual’s businesses in Nassau County and the TOB.  The official actions included: (a) the TOB’s guarantee of certain loans that Co-Conspirator #1 received from a bank and lender in connection with Co-Conspirator #1’s status as a TOB concessionaire (the “TOB Loan Scheme”); and (b) Nassau County’s award of certain contracts to Co-Conspirator #1’s businesses (the “Nassau County Contracts Scheme”).  In connection with these schemes, Mangano and Venditto are each charged with conspiring to commit federal program bribery and honest services wire fraud and related substantive counts, and Mangano is charged with extortion under color of official right.

II.        The TOB Loan Scheme

The indictment charges that Co-Conspirator #1 paid bribes and kickbacks to Edward Mangano and John Venditto in exchange for, among other things, the officials’ assistance in obtaining the Town’s guarantee of four loans totaling approximately $20 million that two of Co-Conspirator #1’s businesses received from a bank (identified in the indictment as the Bank) and from a private corporate financing company (identified in the indictment as the Lender).  As detailed in the government’s bail letter filed today, the first loan, which closed on June 9, 2010, was a $1,500,000 line of credit from the Bank.  The second loan, which closed on May 25, 2011, was a $3,400,000 loan from the Bank.  The third loan, which closed on November 18, 2011, was a $7,843,138 loan from the Lender.  The fourth loan, which closed on June 22, 2012, was a $12,273,748 loan from the Lender.  In late 2012 and 2013, Co-Conspirator #1 sought an additional loan of approximately $12 million from the Lender in connection with improvements to be made to Co-Conspirator #1’s facilities at two Town beaches – this loan was not ultimately extended.

Edward Mangano and John Venditto used their official positions to influence and reach a particular outcome, i.e., the Town’s guarantee of the loans for Co-Conspirator #1.  As a result of the guarantees, were Co-Conspirator #1’s entities to default on the loans, the Town would be responsible for repaying the Bank and/or the Lender the entire amount of the loans.  In or about November 2015, Co-Conspirator #1 defaulted on the repayment of the two loans with the Lender and the loans’ holder, which had previously been assigned the loans from the Lender, demanding that the TOB remit payment on the outstanding money due under the loan documents.

III.       The Nassau County Contracts Scheme

As set forth in the indictment, beginning in approximately late 2011 through December 2012, Co-Conspirator #1, through certain business entities, was awarded lucrative contracts by Nassau County, including certain contracts worth hundreds of thousands of dollars to provide food services to Nassau County agencies.  Specifically, as detailed in the government’s bail letter, Nassau County awarded two contracts to business entities of Co-Conspirator #1:  a 2012 Nassau County contract to supply bread and rolls to the Nassau County Correctional Center (the Bread and Rolls Contract), and November/December 2012 daily purchase orders with the Nassau County Office of Emergency Management (OEM) to supply emergency food services to OEM following Hurricane Sandy (the OEM Emergency Food Services Contract).  The Bread and Rolls contract was valued at approximately $200,000 and the OEM Emergency Food Services Contract was valued at approximately $237,000.  Edward Mangano used his official position to effectuate a specific outcome, i.e., the award of these contracts to Co-Conspirator #1.

IV.       The Receipt of Bribes and Kickbacks

As set forth in the indictment and, in greater detail, in the government’s bail letter, Co-Conspirator #1 provided Linda Mangano with a “no-show” job for approximately three and one-half years, from April 2010 to August 2014, at a restaurant owned and operated by Co-Conspirator #1, identified in the indictment as Restaurant #2.  The payments from Co-Conspirator #1 to Linda Mangano in connection with her “no-show” job totaled over $450,000.  In addition, Co-Conspirator #1 paid for various hotel and travel expenses for the Mangano family, including vacations to Niagara Falls in 2010, Marco Island Florida in December 2011, St. Thomas in July 2012, Turks and Caicos in July 2013, and Amelia Island, Florida in July 2014, as well as an ergonomic office chair in January 2010 ($3,371.90), massage chair from Brookstone in September 2012 ($3,623.73), a Panerai Luminor watch in November 2012 ($7,304), and hardwood flooring and its installation in the Manganos’ bedroom in January 2013 ($3,701.81).   Co-Conspirator #1 also provided free meals to Edward Mangano and his family and associates.

From July 2011 to December 2013, Co-Conspirator #1 additionally provided Venditto and his family members and associates with free limousine service.   Co-Conspirator #1 also allowed Venditto to hold fundraisers at Co-Conspirator #1’s restaurants at a discounted rate and permitted Venditto to use a conference room in the basement of one of Co-Conspirator #1’s restaurants.

V.        The Obstruction of Justice

The indictment further alleges that Edward Mangano, Linda Mangano, and Venditto engaged in obstruction of justice in connection with their attempts to cover-up their wrongdoing, and Linda Mangano and Venditto are also charged with making false statements to federal law enforcement authorities.

As alleged in the indictment, between January 2015 and the present, the Manganos engaged in a conspiracy intended to obstruct a grand jury investigation.  Specifically, they repeatedly met with Co-Conspirator #1, and fabricated stories in an attempt to explain Linda Mangano’s employment by Co-Conspirator #1 and Co-Conspirator #1’s payments of gifts and vacation expenses to the Mangano family.

On January 13, 2015, FBI agents interviewed Linda Mangano at her residence.  On May 20 and 24, 2015, prosecutors and FBI and IRS agents interviewed her at the U.S. Attorney’s Office in Central Islip.  On all three occasions, Linda Mangano was advised that lying to federal officials was a federal crime.  Nevertheless, on each occasion, when asked about her employment by Co-Conspirator #1, Linda Mangano fabricated examples of work she allegedly did for Co-Conspirator #1.

On October 23, 2016 and December 18, 2015, prosecutors and FBI and IRS agents interviewed Venditto at the U.S. Attorney’s Office in Central Islip.  At the beginning of each interview, Venditto was advised that lying to federal officials constituted a federal crime.  During the December 18, 2015 interview, Venditto stated that he had not received anything of value, including the payment for limousine services, from Co-Conspirator #1.  Records from the limousine company, bank records for Co-Conspirator #1, and interviews with numerous witnesses, establish that Co-Conspirator #1 paid for the limousine service.

If convicted, Edward Mangano and John Venditto each face a term of imprisonment of up to 20 years for each honest services wire fraud charge, the conspiracy to commit honest services wire fraud charge, up to 10 years for the federal program bribery charge, up to five years for the conspiracy to commit federal program bribery.  Edward Mangano faces a term of up to 20 years for the extortion charge.  Edward Mangano, Linda Mangano, and John Venditto each face a term of imprisonment of up to 20 years for each obstruction of justice charge, and up to five years for each false statement charge.  The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

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