Steve Lieberman

slieberm@lohud.com

RAMAPO – A year after the FBI seized boxes of financial records from Ramapo as part of a fraud investigation, the U.S. Securities and Exchange Commission has also taken records from the town and its development arm.

The SEC subpoenas and request for voluntary disclosure of records came in May.

The agency sought documents from Jan. 1, 2009, to the present. Its demand was only recently disclosed in a memorandum by the town's bond counsel related to a $2.49 million bond request.

The SEC subpoenas were issued May 21 to Ramapo, its Local Development Corporation (LDC), the town's auditor and financial advisor, and Ramapo Supervisor Christopher St. Lawrence.

The LDC has been the financial arm behind the town's $60 million baseball stadium, a $48 million housing development on Elm Street, and other projects.

The SEC can only take civil action, not bring criminal charges like the U.S. Attorney's Office and FBI. The two agencies sometimes end up working together on investigations; one example being the Bernard Madoff investment fraud case.

A federal grand jury already is reviewing Ramapo's financial and other records covering a time span from 2009 to May 15, 2013.

The U.S. Attorney's Office last year also subpoenaed records relating to Ramapo financial dealings with Provident Savings Bank. The bank, now called Sterling, provided the financing for the housing development on Elm Street, which borders Spring Valley.

Federal investigators are reportedly trying to determine whether St. Lawrence and other officials overstated assets, such as incoming revenue, for the bonds and their refinancing. They also are looking into the movement of money among accounts and possible commingling of funds, among other issues, a source familiar with the probe said.

Among the documents seized by the FBI in May 2013 were emails from St. Lawrence, Town Attorney Michael Klein and Finance Officer Nat Oberman.

"We are cooperating with the SEC and gave them whatever information they required," St. Lawrence said. "They told us this was a non-public inquiry. If they have any recommendations or best-practice ways we can do better, we're interested."

The LDC's executive director, Aaron Troodler, a deputy town attorney, declined comment, as did Town Attorney Michael Klein.

Councilman Daniel Friedman said Klein recently told the board the SEC had requested information from the town. Friedman said he only learned the request was actually in the form of subpoenas by reading the 120-plus page report on the bond request written by the town's bond counsel, Pannone Lopes Devereaux & West LLC

Friedman has accused St. Lawrence, Klein and other town officials of financial improprieties and violating the law on appointments and other issues. He has filed complaints with law enforcement agencies, including the New York state Attorney General's Office and New York state Comptroller's Office.

"Obviously, I am very concerned about a number of things in town," Friedman said. "There have been major financial improprieties. I will support any investigations to uncover any and all inappropriate and illegal actions. If there are violations, they need to be prosecuted and all offenders need to be punished."

The FBI and U.S. Attorney's Office do not comment on ongoing investigations.

One town finance employee, Melissa Reimer, claims she was brought up on disciplinary charges by the town partly because she provided information to the FBI. The Town Board has yet to act on recommendations to fire or suspend her.

Michael Castelluccio, a leader of Preserve Ramapo and a longtime critic of St. Lawrence and Ramapo policies, called the SEC action "encouraging."

He said Ramapo is underwater financially as "St. Lawrence and the board continue to borrow slush money between funds and make financial decisions with resolutions that show up unannounced as new business at board meetings."

"For all who have become impatient waiting for the federal indictments, these subpoenas indicate that the investigation continues and is probably branching out," he said.

Ramapo Republican leaders also said the SEC's involvement makes it appear the investigation is moving ahead.

Marino Fontana, the party vice chair, and party treasurer Bill Weber said they also have been seeking town financial records.

"We remain concerned that the town may be in even worse financial shape than originally thought as officials appear to be juggling things to stay afloat," Fontana said. "We hope that this investigation coupled with the ongoing FBI investigation will wrap up soon and shed light on what transpired in its entirety."

The reference to the SEC subpoenas is contained in one paragraph on page 29 of the report. It reads:

"The Securities and Exchange Commission (the "SEC") has issued subpoenas and voluntary requests for documents relating to the Town and the Corporation from January 1, 2009 to the present to participants in the offering of the securities of the Town and the Corporation. The Town auditor, O'Connor Davies, and the Town financial advisor, Environmental Capital LLC, each received a subpoena from the SEC dated February 24, 2014. Both the auditor and the financial advisor are cooperating with the SEC. The Town, the Corporation and Christopher St. Lawrence in his personal capacity each received a subpoena from the SEC over the first week of May 2014. Each party anticipates cooperating with the SEC. The Town auditor previously received and complied with a voluntary request from the SEC for documents in the summer of 2013. In addition, Jefferies received and complied with a voluntary request for documents from the SEC in the summer of 2013."