2 suburban NY officials charged in securities fraud case
RAMAPO, N.Y. (AP) - A town supervisor and the former head of a development corporation were charged with securities fraud Thursday, accused of "repeatedly and brazenly" lying about town finances as they secretly funded construction of a minor-league baseball stadium that the public had rejected.
The deceit in the suburb of Ramapo means that one of the state's most fiscally distressed towns has had to take on more debt, raise taxes, face higher borrowing costs and operate a money-losing 4,500-seat stadium, U.S. Attorney Preet Bharara said.
"Ramapo can ill-afford a scandal like this," Bharara said as he announced charges against Ramapo Supervisor Christopher St. Lawrence and N. Aaron Troodler, former executive director of the Ramapo Local Development Corp.
The prosecutor said he believed it was the first-ever municipal bond-related criminal securities fraud charges to be brought against public officials.
"I suspect it won't be the last," he added.
St. Lawrence, 65, of Wesley Hills, and Troodler, 42, of Bala Cynwyd, Pennsylvania, appeared in court Thursday and were released on $500,000 bail.
"I pleaded not guilty and I look for my day in court," St. Lawrence shouted as he left the federal courthouse in White Plains. Troodler declined to comment on his way out of court. His attorney, Joseph Poluka, said earlier that his client would plead not guilty, but he had no other comment on the accusations.
The defendants "kicked truth and transparency to the curb, selling over $150 million of municipal bonds on fabricated financials," Bharara said. "In doing so, they defrauded both the citizens of Ramapo and thousands of municipal bond investors around the country."
He said the charges resulted from a "yearslong scheme to lie - repeatedly and brazenly - about the town of Ramapo's financial health."
St. Lawrence is accused of inflating town assets to obtain the $25 million in municipal bonds used in 2012 to build Provident Bank Park, a stadium outside Pomona used as a sports and concert venue. That same year, Ramapo was first in the state on a list of New York's fiscally distressed towns, Bharara said.
Investigators were looking into the movement of money between the development agency and town accounts. They also want to know whether the Ramapo Local Development Corp., which oversaw the stadium project, generated money and repaid the town.
The charges come three years after the FBI and the district attorney's office raided Ramapo Town Hall and seized records.
A political party called Preserve Ramapo and others had criticized St. Lawrence, saying he had manipulated financial regulations and laws to build the stadium.
In 2010, Ramapo voters defeated the plan to finance its construction for a team in the Can-AM League, an independent baseball league. St. Lawrence then used the town to guarantee $25 million in bonds over five years issued for the development corporation. The five-year period bypassed the law allowing for a public vote. But a state judge upheld the decision and declined to halt the construction.
The town attorney didn't immediately respond to email and phone requests for comment.