Manhattan City Councilman Miguel Martinez admits he stole tens of thousands of taxpayer dollars

Manhattan City Councilman Miguel Martinez

admitted Thursday he stole tens of thousands of taxpayer dollars from children's arts and low-income housing programs funded with a shadowy council slush fund.

The two-termer became the first council member to fall in a year-old investigation of misuse of the millions of taxpayer dollars the council doles out to pet projects.

In Manhattan Federal Court, Martinez admitted he had siphoned off $106,000 in public funds through several ruses, using fake invoices, shell corporations and bogus names on bank accounts.

"I received the monies as a direct result of the conspiracy," he said.

Martinez - who resigned suddenly on Tuesday - pleaded guilty to three federal conspiracy counts, including two involving mail fraud and one involving money laundering.

Under a plea agreement, he faces between 57 and 71 months in prison. He was released on $250,000 bond.

The disgraced pol admitted he was able to carry out the scheme "because I was a New York City councilman."

The plea follows a city Department of Investigation inquiry that followed the Daily News' revelation in April 2008 that Martinez was funneling money to a non-profit his sister helped run.

Today he admitted $40,000 of his ill-gotten gains came from that group, the Upper Manhattan Council Assisting Neighbors (U-CAN). In the last two years, Martinez has sponsored nearly $800,000 in public funds for U-CAN.

In 2004 and 2005 he launched a scheme to steal money through U-CAN's involvement in an affordable housing project in the Bronx.

At Martinez's directed the developer paid U-CAN $96,000 and received millions of dollars in tax credits in return. A cooperator who works for U-CAN funneled $40,000 of that through various bank accounts to Martinez.

The councilman even used fake names to conceal his corruption, controlling one account under the name Samajulis.

Martinez also stole from children, pocketing $15,000 in taxpayer money meant to tutor children in the arts through a non-profit called the Washington Heights Arts Center.

The center has received $163,000 between 2003 and 2005 from the council - the bulk of its funding.

And he even padded his council expense reimbursements. From October 2002 through May 2008, he regularly submitted fake invoices to collect $51,000 in bogus payments.

In one case, he funneled money to a shell corporation, the Greater Manhattan Group, he claimed was performing services for his office such as "media outreach" and "constituent workshops."

The long-running probe of the council's slush fund by DOI and Manhattan U.S. Attorney's office dates back to late 2007.

Two aides to Brooklyn Councilman Kendall Stewart have pleaded guilty to stealing thousands of dollars from a council-subsidized non-profit. Stewart has denied wrongdoing and has not been charged.

Bronx Councilwoman Maria del Carmen Arroyo's nephew was arrested last month on charges of misusing funds via the South Bronx Community Council, a non-profit Arroyo helps fund. She has declined to comment on the ongoing probe.