Nine-Count Indictment for David Rubin and Associates

Yesterdays bombshell, coming off the heels of Mayor Langford's conviction, was pretty wild. On even further interest should be the Justice Department's claims that this is only the begining of their investigation, is this what the hints of a nationwide sweep were talking about? It sure sounds like it.

The nine-count indictment, issued by a federal grand jury and filed in U.S. District Court in Manhattan, accuses CDR Financial Products Inc. of steering business to investment firms that paid it kickbacks. Also charged in the indictment are the firm's owner and president, David Rubin; its vice president, Evan Andrew Zarefsky; and its former chief financial officer, Zevi Wolmark. The U.S. Justice Department issued a statement describing the indictment as the first in a continuing investigation of the municipal bond industry.


A spokesman for CDR and lawyers for Zarefsky and Rubin called the government's allegations false and said they stemmed from a misunderstanding by prosecutors of the bond industry. CDR had previously come under scrutiny in an investigation that derailed New Mexico Gov. Bill Richardson's hopes of becoming President Obama's secretary of Commerce. Thursday's indictment doesn't mention Richardson or New Mexico.


The three executives have not been arrested and intend to travel voluntarily to New York next week to make their initial court appearances, said Zarefsky's attorney, Jeffrey H. Rutherford of the law firm Crowell & Moring.


Rubin developed a niche helping local, county and state agencies invest money raised from bond issues for such things as school or road construction.
Because government agencies typically don't need to use the money immediately, they often hire companies such as CDR to arrange short-term and longer-term deals to invest the funds.


The indictment alleges that CDR engaged in a pay-to-play scheme in which investment companies secretly paid CDR kickbacks to win government contracts. The alleged scheme cost the government agencies money because the contracts did not always go to investment providers offering the best return, the indictment says.

All across this country state after state and city after city had been burnt by these deals, its about time something is being done.