Steve Lieberman

slieberm@lohud.com

Ramapo Supervisor Christopher St. Lawrence plans to head back to work Friday, one day after his arrest on federal criminal charges tied to the financing of the town's controversial baseball stadium and other projects through its economic development agency.

Both St. Lawrence and Aaron Troodler, the former executive director of the Ramapo Local Development Corporation and once an assistant town attorney, pleaded not guilty to 22 charges of federal securities fraud, wire fraud, and conspiracy charges for allegedly selling $150 million in municipal bonds based on fabricated town financial documents.

They and two others - Town Attorney Michael Klein and deputy finance director Nate Oberman - also face related civil charges brought by the federal Securities and Exchange Commission. The SEC can issue financial penalties and sanctions upon convictions.

"I have no comment, I pleaded not guilty and I look for my day in court. Thank you," St. Lawrence told reporters as he exited the federal courthouse in White Plains shortly after 5 p.m. He did not respond to their questions, including: "How are you going to run the town?"

U.S. Attorney Preet Bharara said the dawn arrest of St. Lawrence marked the first time the U.S. Attorney’s Office has charged elected officials with crimes under SEC laws, "but I suspect, it will not be the last."

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Bharara outlined the charges during a Manhattan news conference with Rockland District Attorney Thomas Zugibe, FBI New York Director Diego Rodriguez and SEC Enforcement Director Andrew Ceresney.

Bharara said St. Lawrence and Troodler "kicked truth and transparency to the curb" by conspiring with others to repeatedly lie about the town's financial health in bond proposals, hurting taxpayers and investors in the $3.7 trillion municipal bond industry.

"The Ramapo and RLDC bonds were built on a foundation of fraud," Bharara said. "They did an end run around the voters and ensured no public funds would be used. They lied. There were other, more pressing needs than a shiny, new sports stadium."

Zugibe, whose office was part of the investigation, said the indictments were a prime example of elected officials' hubris. He said St. Lawrence "shamelessly exploited his public position for a personal agenda."

The fraud predated the construction of the stadium, Bharara said, but Ramapo's financial problems were largely strained by the nearly $60 million stadium the 65-year-old St. Lawrence hoped would be a triumphant accomplishment of his administration. Town taxpayers paid more than half the cost.

Ramapo officials "resorted to fraud to hide the strain in the town's finances caused by the approximately $60 million cost to build a baseball stadium as well as the town's declining sales and property tax revenues," the SEC said. "They cooked the books of the town's primary operating fund to falsely depict positive balances... during a six-year period when the town had actually accumulated balance deficits as high as nearly $14 million.

"And because the stadium bonds issued by the Ramapo Local Development Corp. were guaranteed by the town, certain officials also masked an operating revenue shortfall at the RLDC and investors were unaware the town would likely need to subsidize those bond payments and further deplete its general fund."

St. Lawrence, a Wesley Hills resident, and Troodler, 42, now of Bala Cynwyd, Pennsylvania, are each charged with eight counts of securities fraud; 13 counts of wire fraud; and one count of conspiracy. Both fraud charges each carry 20 years in prison.

Bharara said the investigation was continuing, but declined comment on whether any additional arrests were expected or if Klein and Oberman were also criminal targets.

St. Lawrence and Troodler appeared Thursday afternoon in U.S. District Court in White Plains before Magistrate Lisa Smith. Troodler surrendered late Thursday morning to face the charges. His mother, Meryl Troodler, is a deputy Ramapo town attorney.

Both were released on $500,000 bail each. St. Lawrence appeared in court in a black sweatshirt and jeans, while Troodler wore a black suit, checkered blue shirt, glasses and a yarmulke.

Smith required that both men surrender their passports. They will also have their travel restricted: St. Lawrence to parts of New York, Connecticut and northern New Jersey; Troodler to Pennsylvania, New York and New Jersey.

St. Lawrence and Troodler are accused of inflating the town's general fund with fake receivables to show on paper that the town's finances were in the black. One $3.1 million phony revenue line was for the supposed sale of the Hamlets in western Ramapo - a sale that never went through because development was blocked by environmental concerns about timber rattlesnakes in the area.

St. Lawrence, as acting finance director, also inflated the general fund balance by taking $12 million from the town's ambulance fund from 2009 to 2014, authorities charge. He told auditors the general and ambulance fund had the same tax base when they did not, making such transfers illegal, authorities said.

TIMELINE: Ramapo corruption investigation

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BELOW: Read the indictment

Federal officials said the town's assets were overstated in documents to obtain the $25 million in municipal bonds used to build Provident Bank Park off Route 45 outside Pomona in 2012. Investigators also looked into the movement of money between the local development corporation and town accounts, including possible commingling of funds, and whether the LDC that oversaw the stadium project generated money and repaid the town.

The arrests came nearly three years after FBI agents and Rockland District Attorney’s Office detectives seized boxes of documents and computer hard drives on May 15, 2013, from Town Hall offices, including records from the finance department and the offices of the supervisor, town attorney and tax departments.

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Asked about the length of the investigation, Bharara said it takes time in a complicated financial investigation "to connect the dots." In court, authorities said the government has 150,000 documents in the case, including 10 boxes seized from Town Hall, as well as audio recordings.

Bharara also referred to a whistleblower who "got the ball rolling in a significant way." He did not name former Ramapo finance official Melissa Reimer, but she recorded conversations with St. Lawrence, Klein and other officials, according to a lawsuit she filed against the town. Federal prosecutors spent months blocking the release of her audiotapes, saying they needed to protect the secrecy of their criminal probe.

Joseph Poluka, Troodler’s lawyer, did not comment. St. Lawrence's lawyer, Patrick Burke of Suffern, said, "I'm not going to discuss the facts of the case." He told reporters St. Lawrence would be back at work at Town Hall on Friday.

Ramapo Deputy Supervisor Patrick Withers, a retired New York City police officer, said Thursday that the arrests had

"cast a dark cloud over our town.”

“While the criminal charges filed against these individuals are not a surprise, coming as they are on the heels of a multi-year federal investigation, the nature and extent of the charges are shocking,” he said.

Withers said he was working to ensure that town government would continue to function.

Town Board member Yitzchok Ullman would not comment on the arrests, referring all comments to Klein, who did not return messages. Town Board members Brendel Logan-Charles and Samuel Tress could not be reached for comment.

St. Lawrence's critics, including the grassroots political party Preserve Ramapo, have accused him for years of manipulating financial regulations and laws to get the stadium built.

On Aug. 25, 2010, Ramapo voters overwhelmingly rejected a $16.5 million plan to finance the construction of the 4,500-seat baseball stadium for a team in the independent Can-Am League. The stadium had been known as “Project Grand Slam,” with a $20 to $25 million price tag. But the price ballooned to more than $60 million, according to a critical New York state Comptroller’s audit.

St. Lawrence promised not to use town funds for the stadium after the referendum defeat. But he then used the town to guarantee $25 million in bonds over five years issued for the LDC. The five-year period bypassed the law allowing for a public referendum, a decision upheld by a state judge, who declined to stop construction of the ballpark and stadium.

(Story continues after map)

Map: Ramapo and its villages (in blue)

The Town Board eventually refinanced that $25 million debt over 30 years when the town couldn’t meet its yearly obligations.

The Comptroller’s Office's in a February 2012 audit said Ramapo taxpayers could end up paying the $60 million and Ramapo appeared to have “inappropriately mingled its activities” with the development corporation.

In addition to the charges it brought today, the SEC said it is seeking a court order seeking the appointment of an independent consultant for both Ramapo and the RLDC to recommend financial reporting and disclosure improvements, and monitor their implementation over the next five years.

St. Lawrence is the second Town Board member arrested in a matter of weeks. On March 3, the Rockland District Attorney’s Office charged Tress with felony counts accusing him of voting for a zoning change on a housing development in which he held a financial stake.

Michael D'Onofrio and Robert Brum contributed to this story.

Twitter: @lohudlegal

READ: Indictment of Christopher St. Lawrence, Aaron Troodler