Federal prosecutors have seized records involving the controversial Aqueduct Racetrack video-slots project awarded to the AEG group as part of a sweeping corruption probe, officials said yesterday.
The US Attorney’s Office in Manhattan subpoenaed the state Lottery Division on Tuesday for records filed by the winning consortium — Aqueduct Entertainment Group — whose partners include powerhouse minister and former Rep. Floyd Flake, a good friend of Gov. Paterson, sources said.
The sweeping probe involves the incestuous relationship between AEG and a Queens nonprofit group, New Direction Local Development Corp.
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The federal action follows a series of recent Post stories revealing that New Direction, founded by Rep. Gregory Meeks and state Sen. Malcolm Smith, both Democrats from Queens, provided only $1,392 of at least $31,000 raised to help victims of Hurricane Katrina.
Among the close ties between AEG and New Direction:
* Edwin Reid, treasurer of New Direction, heads the development arm of Flake’s church, the Greater Allen AME Cathedral in Jamaica, Queens.
* Cathy Greene was a founding member of New Direction. Her husband, Darryl Greene, and his firm, the Darman Group, just withdrew from AEG because of his past criminal conviction.
There has been a storm of controversy since Paterson last month announced the lucrative contract to build and run 4,500 video lottery terminals at Aqueduct.
Losing bidders have charged that the selection process — a decision made behind closed doors by Paterson, Senate Democratic leader John Sampson and Assembly Speaker Sheldon Silver — was politicized and are weighing legal action.
Meanwhile, the US Attorney’s Office in Brooklyn, which handles matters in Queens, also subpoenaed records of New Direction’s accountant, James Lee.
The Lottery Division is responsible for licensing video slots and conducts detailed background checks of those who seek a gaming license.
Paterson’s counsel, Peter Kiernan, issued a statement confirming the federal probe — but insisted it does not involve his selection of AEG.
But a high-ranking law-enforcement source told The Post that the federal probe does involve AEG.
“It’s definitely about Aqueduct. Looking at New Direction is part of the overall Aqueduct investigation,” the source said.
The Lottery Division refused to answer questions about what information the subpoena was seeking.
Lottery Director Gordon Medenica said he was “not familiar” with New Direction.
AEG said it did not believe the group is the subject of a criminal probe.
“We are unaware of any investigation,” said AEG partner Jeff Levine.
Additional reporting by Brendan Scott