The former chief of staff to state Rep. Bill Keller and a longtime business partner for the 11-term legislator pleaded guilty in federal court Wednesday to financial crimes in separate cases. The Daily News predicted those pleas in a story Wednesday (behind a pay-wall here, read for free with promo code H66A.)
Lorraine DiSpaldo, who was forced to retire after being indicted with Traffic Court Judge Robert Mulgrew and his wife on Sept. 13, pleaded guilty to 36 counts for misusing state grant money meant for two non-profits in Keller's district and for filing false income tax returns and bankruptcy court filings. Assistant U.S. Attorney Paul Gray said DiSpaldo improperly spent $70,000 to $120,000 in state grant money and hid $46,779 in income from 2006 to 2009.
Gray said DiSpaldo used the state money "hand out jobs" through the non-profits for friends and family of Mulgrew and Keller, who he mentioned several times by title but never by name during the hearing. That included "make-work" jobs for the children of friends during the summer and cleaning services for Keller's office, Gray said, adding that DiSpaldo filed false state reports on how the money was spent.
DiSpaldo also paid herself $43,000 from Keller's campaign account, including lump sums and $700 monthly payments she made to a middle-man who cashed checks and gave her the money, Gray said.