Sandy Annabi: Corruption Charges, Trial, and Appeal

Sandy Annabi, a former Yonkers, New York, city councilwoman, was convicted in March 2012 on federal corruption charges for accepting roughly $174,000 in secret payments in exchange for her votes on two major real estate development projects. She was sentenced to six years in federal prison and ordered to pay more than $1.4 million in fines, forfeiture, and restitution. The Sandy Annabi corruption case remains one of the more prominent local bribery prosecutions brought by the U.S. Attorney’s Office for the Southern District of New York during the early 2010s.

Who Sandy Annabi Was

Annabi was elected to the Second District seat on the Yonkers City Council on November 6, 2001, as a Democrat. She was reelected in 2003 and 2005 and eventually rose to Democratic Majority Leader of the Council.¹ Her political rise was aided by Zehy Jereis, the chairman of the Yonkers Republican Party from 2003 to 2007, who used his contacts and influence to help her win all three campaigns.² U.S. Attorney Preet Bharara later described their arrangement as a “bipartisan corruption pact.”³

What the Payments Bought

Beginning as early as 2002, prosecutors said, Annabi received a steady flow of financial benefits from Jereis and from Westchester County attorney Anthony Mangone, ultimately quantified at $174,104.58. The money went to down payments on two houses, mortgage and maintenance on a cooperative apartment, a Mercedes-Benz lease, student loan payments, cable and electric bills, and cash.⁴ In return, the government charged, she delivered two council votes.

Ridge Hill

The Ridge Hill project, a large retail and residential development by Forest City Ratner, needed a zoning change that required a supermajority on the City Council. Annabi had been one of its most vocal opponents. She voted against it, spoke against it publicly, and served as the lead plaintiff in a lawsuit trying to block the zoning changes.²

That changed after Jereis met with Forest City Ratner representatives and secured a $60,000 consulting contract, paid at $5,000 a month for twelve months, contingent on Annabi voting yes. On June 15, 2006, she issued a press release supporting Ridge Hill; Jereis and the developers had drafted it. On July 11, 2006, she cast the fifth vote needed to override a negative recommendation from the Westchester County Planning Board and approve the zoning change. Jereis got his contract shortly after.² Prosecutors called it a “no-show consulting job.”⁵

Longfellow

The Longfellow Project involved redeveloping two vacant school buildings, part of which sat in Annabi’s district, into market-rate housing. At a June 2005 council meeting, Annabi called the project “outrageous” and “a slap in the face to the taxpayers of Yonkers,” saying she would oppose it even if her whole community supported it.³

In April 2006, the developer, Milio Management, hired Mangone to change her mind. Mangone told the developer that Annabi’s support would cost $30,000 in cash. The developer paid. Mangone kept $10,000 and routed $20,000 through Jereis to Annabi.² After the money arrived, she took a business-class trip to Jordan costing $3,864 and bought a $3,847 Rolex and a $3,251 diamond cross necklace.⁴ In September 2006, she reversed her position and voted to award the project to Milio Management.

Forest City Ratner and Milio Management were never charged. A Forest City spokesman said the trial “was not about the actions of Forest City Ratner” and that the company had no knowledge of the financial relationship between Annabi and Jereis. A spokesperson for the U.S. Attorney’s office said only that the office makes “charging decisions based on the facts and the law” and does not publicly discuss its process.⁵

How the Scheme Was Hidden

Annabi omitted the payments from her annual Yonkers financial disclosure statements from 2002 through 2008 and did not report the income on her federal tax returns.⁴ She also used the money to buy properties outside her council district, which created a residency problem: Yonkers law required her to live in the Second District she represented. To paper over that, Jereis bought a cooperative apartment for her on Rumsey Road inside the district, covering the down payment and monthly mortgage installments, often through postal money orders to avoid a paper trail.³

To get financing for the properties, Annabi submitted loan applications that inflated her income, backed by fake pay stubs, fabricated W-2 forms, and falsified bank statements.² Those fraudulent loans became three separate mortgage fraud counts in the indictment, tied to properties on Patton Drive, Bacon Place, and Rumsey Road.⁶

Indictment

A federal grand jury indictment was unsealed on January 6, 2010, charging Annabi, Jereis, and Mangone with conspiracy, bribery, extortion, false statements, and tax crimes. A superseding indictment filed in May 2011 laid out eleven counts against Annabi, including conspiracy to accept corrupt payments, conspiracy to deprive Yonkers citizens of honest services through mail and wire fraud, receiving corrupt payments tied to the Longfellow and Ridge Hill projects, extortion, and making false statements to financial institutions.⁴

Mangone, the attorney who had linked developers to Jereis and Annabi, split off from his co-defendants. He began cooperating with prosecutors in March 2010 and pleaded guilty on November 29, 2010, to conspiracy to bribe Annabi, aiding corrupt payments, extortion, and a separate tax evasion charge.⁷

The Trial and the “Sugar Daddy” Defense

Annabi and Jereis went to trial in early 2012 before U.S. District Judge Colleen McMahon. The proceedings lasted seven weeks.² The central question was not whether Jereis had given Annabi roughly $174,000 over seven years, which was uncontested, but why.⁸

Jereis testified that he was infatuated with Annabi and that the money was a series of personal gifts from a lovesick benefactor. The press called it the “sugar daddy” defense. He said he fell in love with her in 2001 and “was not interested in her politics.”⁹ Annabi did not testify.⁸

Prosecutors picked the romantic story apart with call records and forensics. Assistant U.S. Attorney Jason Halperin noted that Annabi and Jereis exchanged only four calls on Valentine’s Day, while on June 9, 2006, the day Annabi met with Forest City Ratner executives to discuss switching her vote on Ridge Hill, the two exchanged 81. A forensic expert also found irregularities in the section of Annabi’s computer where emails Jereis cited as proof of his feelings were stored.⁸

On March 29, 2012, after five days of deliberation, the jury convicted both defendants on all eleven counts, including bribery, extortion, conspiracy, honest services fraud, mortgage fraud, and tax fraud.⁵

Sentence and Financial Penalties

On November 19, 2012, Judge McMahon sentenced Annabi to six years in federal prison. Jereis received four years. McMahon called Annabi’s acceptance of the payments a “Faustian bargain” and told her: “You opened yourself up to the possibility that he would some day ask you to do a favor.” She added: “The cynicism that most Americans seem to feel about the ethics of elected officials is a crying shame. It sickens me and it should sicken every citizen.”¹⁰

The financial penalties were heavy. Annabi and Jereis were each ordered to forfeit $209,501.99. Annabi alone was ordered to forfeit an additional $1,060,800 tied to the three mortgage fraud counts: $480,700 for the Patton Drive property, $522,500 for Bacon Place, and $57,600 for the Rumsey Road apartment. She was also ordered to pay $13,884 in restitution to the City of Yonkers for salary she received while holding office through fraud, $64,071 to reimburse the city’s legal fees, $164,460.68 to PNC Bank for mortgage losses, and $33,000 in prosecution costs.²

Appeal

Annabi appealed her conviction and forfeiture order to the U.S. Court of Appeals for the Second Circuit. On March 25, 2014, a three-judge panel affirmed her convictions on all eleven counts, finding sufficient evidence on bribery, extortion, and conspiracy, and rejecting claims of jury misconduct and a prosecution failure to disclose exculpatory evidence.¹¹

She did win a partial forfeiture reversal. The panel affirmed the forfeiture orders for Bacon Place and Rumsey Road but ordered the district court to vacate the $480,700 forfeiture on the Patton Drive property. The reason was procedural: the government had cited only a civil forfeiture statute in the indictment for that count, and under that statute, Annabi was entitled to a credit for the portion of the loan she had already repaid.⁶

Release

Annabi served her sentence at the Satellite Prison Camp in Danbury, Connecticut. On August 24, 2017, she was released from Danbury and transferred to a Residential Reentry Center in the New York area. Her stay was scheduled to run through May 24, 2018, the completion date of her six-year sentence.¹²

1
FBI. Former Yonkers City Councilwoman Sandy Annabi Indicted
2
FBI. Former Yonkers City Councilwoman Sandy Annabi and Former Republican Chairman Zehy Jereis Sentenced
3
U.S. Department of Justice. Annabi, Jereis, and Mangone Indictment Press Release
4
Cause of Action. Annabi Superseding Indictment
5
WNYC. Former Yonkers City Councilwoman and Associate Convicted in Bribery Scheme
6
FindLaw. United States v. Annabi
7
U.S. Department of Justice. Mangone Plea Press Release
8
New York Magazine. Yonkers Trial: The Sugar Daddy Defense
9
The New York Times. Two Convicted in Yonkers Corruption Case
10
The New York Times. Ex-Yonkers Lawmaker Sandy Annabi Gets 6-Year Sentence
11
The Journal News (lohud.com). Annabi, Jereis Convictions Upheld
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The Journal News (lohud.com). Sandy Annabi Released From Federal Prison