Top Executive At The New York Power Authority Pleads Guilty To Insurance Fraud Scheme

ALBANY, NY (June 25, 2007) – Attorney General Andrew M. Cuomo and state Inspector General Kristine Hamann today announced the guilty plea and resignation of New York Power Authority’s Deputy Counsel Carmine J. Clemente, who stole over $21,000 from the state and his insurance carrier by continuing to claim his ex-wife on his policy even though they divorced more than seven years ago.

Under the terms of an agreement entered in Albany City Court this morning, Clemente pleaded guilty to defrauding the state, will pay more than $34,000 in restitution and fines and will permanently resign from state service.

“Instead of setting an example as a longtime top-level public servant, Mr. Clemente chose to cheat the state and its taxpayers,” said Attorney General Cuomo. “My office is committed to restoring integrity to state government and today’s plea should serve as a warning to those who abuse their positions in government and engage in fraud and misappropriation of state funds. Working with Inspector General Hamann, state government now has the tools to root out those who break the law, and I thank the Power Authority for its cooperation in this matter.”

“The illegal acts committed by the defendant are especially outrageous,” said Inspector General Hamann. “Not only did he engage in fraud to obtain thousands of dollars in health care benefits to which he was not entitled, but in doing so, he abused the trust placed in him as a high-ranking public official. As a Deputy Counsel at the New York Power Authority, he should have been setting a good example for the agency, not stealing from the taxpayers. I hope this case sends a very clear and strong message that any State employee or official who breaks the law will be caught and prosecuted.”

Clemente, 64, of State Street, Albany, was employed at the New York Power Authority (NYPA) since 1996 and most recently served as its deputy counsel. He pleaded guilty today to Scheme to Defraud in the Second Degree (a class A misdemeanor) in Albany City Court. Under the plea agreement, Clemente will pay $13,046.83 in restitution to the state, $8,430 to the Capital District Physicians Health Plan, Inc. (CDPHP) and an additional $13,000 fine. As part of the plea, Clemente resigned today from NYPA and will not seek future employment in any capacity within New York State government.

Beginning in March 2000 and continuing through December 2006, Clemente claimed he was legally married to Hermina H. Clemente making her eligible for health insurance and other benefits from NYPA and CDPHP. In fact, the Clementes divorced in early March 2000, making her ineligible to receive such benefits during that time frame.

NYPA’s health care benefits through CDPHP involve a program called “FlexAbility” where employees are given a fixed yearly credit amount depending on the subscriber’s family size. The amount paid provides health, dental and vision coverage, and is substantially greater than the single subscriber plan. Therefore, by listing his ex-wife, Clemente was able to receive more benefits than he was legally entitled.

The case was handled by Deputy Attorney General Thomas P. Higgins and Assistant Attorney General Noah Falk of the Criminal Prosecutions Bureau under the supervision of Ellen Biben, Special Deputy Attorney General for Public Integrity. The investigation was handled by Investigator Leslie Arp of the Attorney General’s Office.

NOTE: Attorney General Cuomo and Inspector General Kristine Hamann will hold a teleconference at 1:30 p.m. today to discuss the case. To participate, members of the media should dial 877-807-5706 and enter participant code 803-370. When asked for location, members of the media should give the name of the outlet they represent.


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