Politicians’ kin admits to embezzlement

Arroyos benefited from theft from low-income housing

The head of a Bronx non-profit has admitted that he embezzled $115,000 intended to help low-income tenants and funneled some of the money to Assemblywoman Carmen Arroyo, his grandmother, and Councilwoman Maria del Carmen Arroyo, his aunt.

Richard Izquierdo Arroyo, pleaded guilty in federal court on March 12, and faces a 10-year prison sentence.

Arroyo, who was indicted in June for stealing from SBCC Management Corp., a housing agency he headed, spent $20,000 of the embezzled funds to pay for a trip to Puerto Rico for the assemblywoman and councilwoman, to pay the salaries of interns in their legislative offices and their political club, to make contributions to their campaigns and to buy new flooring for the assemblywoman’s office, according to the indictment.

On a two-week trip to San Juan, Puerto Rico, in November 2008, he charged $10,500 on the company credit card for his hotel, room service, massages and spa treatments. All-told, over a four year period, he charged $90,000 to the card for personal expenses, according to the United States Attorney for the Southern District, Preet Bharara.

The money came from the federal Department of Housing and Urban Development through the state’s Section 8 subsidy program, which is intended to help low-income tenants afford their rent. SBCC Management Corp. managed the Judge Gilbert Ramirez Building at 455 E. 138th Street and the Carmen Parsons Building at 441 E. 155th Street.

Izquierdo Arroyo served as president of SBCC Management, and was also the chief of staff to his grandmother the assemblywoman. He was widely believed to be preparing to succeed his 74-year-old grandmother.

On March 2, Margarita Villegas, the executive director of SBCC, who was indicted with Izquierdo Arroyo, also entered a guilty plea to embezzling $50,000.

Her lawyer told the Daily News that she had not made a deal to testify against the Arroyos, and in announcing Izquierdo Arroyo’s guilty plea the U.S. Attorney made no mention of a cooperation agreement with him.

Izquierdo Arroyo has agreed to repay the $115,000. He is scheduled to be sentence on June 25. The embezzlement charge carries a maximum sentence of 10 years.