A Harlem real estate entrepreneur who backed the city comptroller bid of now-Lt. Gov. Brian Benjamin was arrested Friday and charged with fraud and identity theft in an alleged scheme to illegally secure public campaign matching funds, federal prosecutors announced.

An indictment unsealed Friday morning by U.S. Attorney for the Southern District of New York Damian Williams alleges Gerald Migdol conspired to create fake campaign donations for “Candidate-1” to rack in $8-to-$1 public matching dollars leading up to a 2021 primary bid for comptroller.

Earlier this year, THE CITY first reported suspicious donations to Benjamin’s campaign — including from security guards who said they had never heard of the candidate and from Midgol’s then 2-year-old grandson.

Gerald Migdol accepts an award from then-State Sen. Brian Benjamin. Credit: Screengrab/The Migdol Organization

Prosecutors allege that between October 2019 and at least January 2021, Migdol paid for or refunded contributions made in other people’s names. 

They also allege that a Migdol co-conspirator submitted fraudulent contributions “in the names of dozens of individuals” who did not make or authorize the donations and submitted falsified paperwork to the city Campaign Finance Board. 

The feds quote a July 2020 communication in which they claim Migdol plainly stated his plan: 

“We get 8×1 for money orders of $100. For Money orders of $250=8×1 for first $100 and the other $150 is not matched. So a MO for $250 is worth $950 for [Candidate-1]. Hopefully our next City Comptroller.” 

Funds Returned

After assuming the governor’s office following Andrew Cuomo’s resignation, Gov. Kathy Hochul named Benjamin as her lieutenant in August at a Harlem event.

A spokesperson for Benjamin’s campaign, Isaac Goldberg, said the charges against Migdol have nothing to do with the lieutenant governor.

“Neither Lieutenant Governor Benjamin nor his campaign are being accused of any wrongdoing and they are prepared to fully cooperate with authorities,” said Goldberg in a statement to THE CITY. 

Gov. Kathy Hochul and Lt. Gov. Brian Benjamin Credit: Hiram Alejandro Durán/ THE CITY

“As soon as the campaign discovered that these contributions were improperly sourced, they donated them to the Campaign Finance Board, pursuant to guidance obtained from the CFB,” he added.

A spokesperson for the board confirmed that the campaign returned all 23 donations that had been contributed via a Migdol associate — and more. While the campaign originally promised to give back $5,750 in donations, Benjamin’s team returned over $13,000 in donations from more than 60 contributions on Feb. 25, according to Matt Sollars, Campaign Finance Board spokesperson.

The case was referred to federal prosecutors by the Campaign Finance Board, he added.

Pile of Money Orders

In January, THE CITY identified 23 donations to Benjamin’s campaign made via an intermediary named Michael Murphy, who was employed by a nonprofit tied to Migdol. 

Each came in the form of a money order for $250 — potentially worth an additional $18,400 in public matching funds. While the Campaign Finance Board usually matches donations for citywide candidates on the first $250 of donations made by check or credit card, it treats money orders as cash and allows a match only on the first $100.

Migdol and others attempted to procure “at least tens of thousands of dollars” in public campaign matching funds, prosecutors alleged.

Benjamin’s campaign received $2 million in Campaign Finance Board matching funds, according to the indictment. He emerged in fourth place after primary voting, defeated by Councilmember Brad Lander (D-Brooklyn), who won the general election and will take office Jan. 1.

“Public programs, such as the one Migdol allegedly defrauded, exist to provide support for New Yorkers who want to represent their city in elections, but find themselves without the means to do so,” said FBI Assistant Director Michel J. Driscoll in a statement.

“Illegally subverting the requirements to be eligible for these funds so that the candidate of your choice receives more than their fair share is a federal offense, as highlighted by today’s charges,” he added. 

A spokesperson for the Campaign Finance Board highlighted the benefits of the matching funds system for democracy and campaigns.

“New York City’s campaign finance program allows more candidates from more diverse backgrounds to run, and win, competitive races for city office,” Sollars said. “The Campaign Finance Board conducts thorough reviews before, during, and after each election to protect the city’s investment in clean, fair elections and to ensure that campaigns are conducted in compliance with the law.” 

Tot Signature

The Migdol Organization highlights its connections to powerful Democrats on its website. At Migdol’s 70th birthday party in February 2020, he was joined by Benjamin, Attorney General Letitia James and Rep. Adriano Espaillat (D-Manhattan). 

But the donors who gave to the Benjamin campaign via Murphy were far humbler folks, most of whom had never made campaign contributions in their lives.

THE CITY called or knocked on doors for each of the donors, listed in campaign records as residing in every borough except Staten Island. 

The search identified three men — all of whom had worked for a  security firm called Prime Protective — who denied ever donating to Benjamin’s campaign or even having heard of the politician, then a Democratic state senator representing Harlem. 

Other dubious donations included one from Migdol’s grandson, who was just 2 years old at the time. 

Images THE CITY obtained of the records submitted to the Campaign Finance Board by the Benjamin campaign and the Chase money order used to make the child’s $250 contribution show signatures purporting to be the boy’s on both. 

Another $250 contribution, also using a Chase money order, came from Migdol’s wife and the boy’s grandmother, Sheri Perl, the records show.

A money order to Lt. Gov. Brian Benjamin’s failed comptroller campaign from Gerald Migdol’s spouse. Credit: Obtained by Freedom of Information Law request

Other money orders the Benjamin campaign submitted, made via Moneygram or Western Union, do not include the name of the person reportedly making the donation.

Calls to Migdol and to the Migdol Organization weren’t immediately returned on Friday. Migdol pleaded not guilty in court Friday, according to news reports.

The Campaign Finance Board says it conducts campaign audits as a routine matter and will be reviewing the Benjamin filings as part of its post-election process, Sollars said.

Tom Speaker, a spokesperson for the good government group Reinvent Albany, said that the indictment proves that the board’s checks and balances work.

“It’s more evidence showing that the system actually works,” said Speaker. “There’ve been finance cases in the past where donors have attempted to illegally exploit the public matching system and in most cases, it looks like they’re caught.”