Feds drop case against Kruger ‘crony’

Federal prosecutors have dropped charges against a developer they claimed funneled nearly $500,000in bribes to state Sen. Carl Kruger — the second suspect to beat the wrap in the government’s pronged attack against the embattle Brighton Beach legislator.

Feds say they will dismiss the charges against Aaron Malinsky, who was arrested on March 10 alongside Kruger (D–Brighton Beach) — as long as he keeps his nose clean for six months, according to the developer’s lawyer, Scott Mollen.

Mollen said the Nov. 22 deal was struck after a review of Malinsky’s e-mails and other documents showed that he paid $472,500, in good faith to Olympian Strategic Development not knowing the money was going to what feds claim was a shell company established by Kruger and his purported gay lover, Michael Turano, to receive bribes from a select circle of deep-pocketed lobbyists and developers.

“The interests of the United States will be best served by deferring prosecution [against Malinsky],” federal prosecutors noted in court papers, which indicate that the deal would be voided if Malinsky is caught interacting with known criminals or fails to report to the court his whereabouts until next May.

The news is the latest twist in the case against Kruger, who is accused of swapping sweetheart land deals and construction contracts for nearly $1 million in payoffs.

The feds arrested Kruger, Turano and six other defendants following a widespread corruption investigation that also netted Assemblyman William Boyland (D–Queens), WHO was acquitted two weeks ago of charges that he accepted a $177,000 no-show job in exchange for doling out millions of taxpayer dollars to three hospitals.

But Former Brookdale Hospital C.E.O. David Rosen, another suspect in the bribery scheme, found guilty in September of securing $400,000 in state funding from Kruger after promising that Brookdale Hospital would do business with a hospice company that was on the payroll of the legislator’s other consulting firm, Adex Management.

The government is not requiring Malinsky to testify against Kruger, Mollen said, adding that the developer did not plead guilty to any charges.

“There was no trade off here,” he said.

Malinsky may be off the hook, but the scandal cost him a lucrative contract developing the $60-million ShopRite supermarket at the corner of Flushing Avenue and Navy Street, after the Brooklyn Navy Yard canned him for his alleged misdeeds. He was also fired from a $750 million project being built at the Albee Square, Downtown, which is expected to bring a four-story shopping mall and 700 units of housing to the Fulton Mall.

A spokesman for the U.S. Attorney’s office declined to not comment on the ruling.

Prosecutors claim that, in return for the money Malinsky paid to Olympian Strategic Development, Kruger greased the wheels so the developer could build a $65-million shopping center on city-owned land at the corner of Avenue D and Remsen Avenue in Canarsie. The site is home to a BJ’s.

The feds also accused Kruger of:

• Trying to get Forest City Ratner Companies, the lead developer on the proposed Four Sparrows Retail Center on the southern tip of Flatbush Avenue, to give a portion of the project to Malinsky so he could build a department store on the city-owned site.

• Promoted Malinsky’s plans to put a small-scale clothing store at Four Sparrows Retail Center during a scoping session on the project.

Malinsky and Rosen were among five men prosecutors say Kruger accepted bribes from between 2006 and 2011. The remaining three suspects, which include union lobbyist Richard Lipsky, have yet to go to trial.

Benjamin Brafman, Kruger’s attorney, did not respond to a request for comment.

Kruger’s trial begins in January.

— with Thomas Tracy

Reach reporter Dan MacLeod at [email protected] or by calling (718) 260-4507. Follow his tweets at twitter.com/dsmacleod.