Investigative series: The Insiders


The Insiders

The Insiders

Suffolk judges violated rules while awarding Oheka Castle owner and associates at least $600,000 of foreclosure work


Insiders pocket $350G

Insiders pocket $350G

Twice what Nassau Democratic lawyer previously said he and Melius collected for overseeing building in foreclosure


Where the money went

Where the money went

Judge awarded the most lucrative foreclosure cases to Oheka Castle owner and associates


 $638,000 in unreported fees

$638,000 in unreported fees

Judges awarded appointments to Nassau Democrats’ lawyer, firm


Judge has links to Melius ally

Judge has links to Melius ally

Thomas Whelan’s ruling backed an effort by Melius to seize control of a company and name a close associate of the justice to its board


Councilman didn’t disclose ties

Councilman didn’t disclose ties

Mark Cuthbertson sponsored and voted for a zoning change that would benefit Oheka Castle the same week he was working with Gary Melius on receiverships


Overview

Reforms of court appointment process fail on LI

Newsday has found even routine oversight lacking and identified widespread rule violations and questionable court practices


Feds probe Melius

Feds probe Melius after report on $900G in court fees

Federal agents are investigating Melius over Newsday reports that he and a network of his associates collected more than $900,000 in fees from state court appointments


Judge seeks change

Judge seeks to end cronyism, abuse

The state’s chief judge moved to take political patronage out of the process in which judges appoint lawyers to carry out court directives

Photos: Key players

Read documents

See where the money went

New York Hall of Fame

New York has had no shortage of great athletes on its baseball and football fields, basketball courts and hockey arenas. You know most of the big names — Yankees slugger Babe Ruth, Jets quarterback Joe Namath, four-time Stanley Cup winner Mike Bossy of the Islanders.

But what about Jack Chesbro of the pre-Yankees New York Highlanders? Or Rangers right wing Bryan Hextall, a member of the 1940 championship team?

Explore the New York standouts residing in the Hall of Fame for each major U.S. sport.

Posted in Uncategorized

Nearly $2M in fees flow from family dispute

As three brothers feud in the Nassau County courts over control of their lucrative family business, court records show there’s a separate battle playing out over nearly $2 million in fees claimed by attorneys the judge in the case picked to be temporary stewards of the company.

The fee dispute started after Justice Timothy S. Driscoll in January 2013 appointed a receiver to oversee Laffey Fine Homes, a Long Island firm that specializes in selling luxury houses.

From a pool of more than 500 candidates approved to work as receivers in Nassau County, Driscoll selected attorney James Leonard to handle the business’ affairs while the brothers fight over the company.

According to state court records, it was the first such appointment for Leonard, who works for two organizations tied to Steven Schlesinger, the counsel for the Nassau County Democratic Party: Garden City law firm Jaspan Schlesinger and Shelter Rock Strategies, a lobbying firm. Court records show Leonard is seeking a total of nearly $1.5 million in fees for himself and other Jaspan Schlesinger attorneys, including $43,400 in fees to Schlesinger for nearly 70 hours of work.

Schlesinger himself was not available for a court appointment on the Laffey case because judges had awarded him more than $75,000 from appointments in 2012. If an individual’s awards exceed the $75,000 mark in a calendar year, state court rules bar them from appointments the next year.

Driscoll also appointed one of Schlesinger’s allies, Ronald Rosenberg, to serve as Leonard’s counsel on the Laffey case. Rosenberg, who is the personal attorney of Oheka Castle owner Gary Melius, has worked with Schlesinger on numerous cases. As Newsday reported in October, Melius, Rosenberg and Schlesinger were part of a network of receivers and property managers that had collected unreported fees from two Suffolk County justices.

Fees questioned

The bulk of Driscoll’s awards to Leonard and Rosenberg, Newsday found, had also not been reported. Driscoll made one award totaling $400,000 orally from the bench, leaving no record of the payments in the court file.

Following questions from Newsday, Driscoll, who assumed his judgeship in 2008 after being elected with Democratic Party backing, ordered a transcript of the hearing and this month began the process to comply with state court rules and properly report the fee awards.

The plaintiffs’ attorney, William Garry, has questioned whether a receiver is needed in the case, let alone an additional attorney.

“Most of the legal work performed by the receiver was duplicative of the work performed by his counsel, or vice versa,” Garry wrote in a court filing.

Gary Lewi, a spokesman for Rosenberg, said his client has earned his fees and, in response to Newsday’s questions, had filed a report with the court documenting his work on Leonard’s behalf. Rosenberg is seeking a total of $471,000 in fees in the case.

According to the plaintiffs’ side in the case, which includes two of the three brothers, the fees Leonard and Rosenberg have claimed are unjustified.

Since the money paid to receivers comes from income generated by the business, Garry has tried to get Leonard removed. A court filing shows Garry complained to Driscoll that Leonard was charging $615 an hour, saying it was a lot for an attorney admitted to practice only in 2009.

Awards called ‘a waste’

The plaintiffs also retained Tom Suozzi, an attorney and the former Nassau County executive, to assess the impact of Driscoll’s awards to Leonard and Rosenberg. In an affidavit, Suozzi described the nearly $600,000 in awards so far as “a waste of corporate assets.”

David Mejias, a former Nassau legislator representing the brother who is the defendant, disputed Suozzi’s assessment of the fees.

“If not for the receiver, the plaintiffs would have destroyed the business,” Mejias said.

Though he has no formal role in the case, Schlesinger has appeared multiple times in Driscoll’s courtroom when awards were discussed, including at a September hearing where the judge decided whether to keep Leonard on as receiver.

Driscoll ruled that Leonard had performed with “diligence, care and grace” and that he would remain as receiver until the end of the year. Driscoll has yet to decide the amount of additional fee awards.

$638,000 in unreported fees

Steven Schlesinger Steven Schlesinger

Credit: Joseph D. Sullivan

When the Nassau County Democratic Party has to name judicial candidates, attorney Steven Schlesinger has been among the select group of party members making the picks.

And when Nassau judges have to make lucrative court appointments, they have repeatedly turned to Schlesinger, awarding at least $638,000 in payouts to him and others in his firm since 2010, a Newsday review of court records has found. None of those fee awards was publicly reported as required until Newsday began its review in August.

State court rules established in 2002 prohibit party leaders from receiving court appointments, which are typically made to private attorneys who perform various duties for the court. Party leaders were barred to limit judges from doling out appointments in return for political support. But the rules don’t stop influential party members like Schlesinger from getting the appointments, leaving the system open to the kind of abuses that the rules were designed to stop.

Bennett Gershman, a Pace Law School professor and former prosecutor who investigated judges, said that when judges tap Schlesinger, they violate the spirit of the state rules and undermine public confidence in the courts.

“He should not be getting appointments,” Gershman said. “The situation is so rife with the potential for corruption.”

Nassau Democratic leader Jay Jacobs said Newsday’s findings concerned him and that he planned to review Schlesinger’s position as his party’s legal counsel.

“I would be very upset over anything that looked like self-dealing or taking advantage of one’s party position to benefit themselves or others financially,” Jacobs said.

A complete picture of Nassau court appointments and fee awards to Schlesinger — or any other appointee — is not yet possible to provide. Newsday’s review of 150 Nassau court appointments since 2008 found that key records had not been properly filed and made public, as required.

However, the review shows that at least 11 Nassau judges violated court rules by not publicly reporting awards to more than a dozen appointees, including Schlesinger and others with political ties.

Newsday reported in October that Schlesinger, Oheka Castle owner Gary Melius and other well-connected individuals were part of a network that benefited from court appointments and awards from Suffolk County Supreme Court justices Thomas Whelan and Emily Pines. The judges named Schlesinger, Melius and the other members of the group to be property managers or receivers — in effect temporary landlords — at four office parks in foreclosure and awarded them more than $762,000 in fees that came from rental income.

As in Nassau, many of the Suffolk appointments and awards were not reported, shielding the group’s activity from public scrutiny. Newsday has found that Nassau and Suffolk judges have awarded Schlesinger and his firm at least $828,000 in unreported fees since 2010.

The state court system’s Office of the Managing Inspector General for Fiduciary Appointments and the State Commission on Judicial Conduct, which investigates complaints against judges and disciplines them, opened investigations after Newsday’s stories on Suffolk’s court system. Those inquiries are ongoing.

In addition, Suffolk District Administrative Justice C. Randall Hinrichs pledged to fix the problems and assigned clerks to dig through files to identify appointments and awards that had not been disclosed.

Nassau Administrative Justice Thomas A. Adams declined to be interviewed and referred questions to state courts spokesman David Bookstaver. Adams is “following almost the same processes that the Suffolk County courts followed to put a laser focus on the rules and any deficiencies in compliance,” Bookstaver said.

Schlesinger declined to comment and directed questions to CommCore Consulting Group, a Washington, D.C.-based public relations company representing his law firm, Jaspan Schlesinger.

CommCore senior vice president Nick Peters, whose company specializes in crisis management, declined to answer questions about Schlesinger’s appointments or to provide the fee awards that are supposed to be public. Peters attributed his reluctance to a possible federal investigation, previously reported in Newsday, into how local state court judges get on the ballot.

“Our client does not believe that it makes sense to provide additional information at this time,” Peters wrote in an email.

Influential lawyer

Schlesinger wields considerable clout in Nassau politics and in the county’s legal community, and not just because of his role on the Nassau Democratic Party’s judicial screening committee.

Steven Schlesinger Steven Schlesinger

Credit: Dick Yarwood

He is a managing partner in his Garden City law firm and works for Shelter Rock Strategies, a lobbying firm that represents clients locally, in Albany and in Washington, D.C. Schlesinger has done free legal work in election-law cases for numerous candidates, he sits on a state Character and Fitness Committee, which vets individuals joining the state bar, and has chaired the Professional Ethics Committee of the Nassau Bar Association.

Although Democratic Party leader Jacobs ultimately decides which judicial candidates will have the party’s backing, Newsday spoke with five court or party officials who said Schlesinger’s opinion carries significant weight on a screening committee that includes top Nassau Democrats, several of whom have held public jobs or elected office.

According to three people who have attended the screenings, Schlesinger typically champions a handful of contenders. This year, he lobbied to have his wife, Caryn Fink, an attorney whom he married at Oheka Castle in Huntington, nominated to run for a County Court judgeship. She lost the election.

The state court system maintains a list of more than 500 individuals in Nassau County it has approved to handle receiverships, although many of them have gone years without receiving one assignment.

That has not been a problem for Schlesinger.

There are a variety of appointment types, including receivers who oversee distressed businesses and properties, referees who preside at foreclosure auctions, and administrators who manage the estates of those who have died with no executor. Schlesinger has held them all.

In the past six years, court records show Nassau judges have named Schlesinger a court appointee at least five times. Because Nassau judges have not properly logged appointments and fee awards, it’s unclear whether the five represent all of Schlesinger’s cases.

The five cases include two in which there is no record of a fee award, meaning Schlesinger’s award was not documented or the case involved no payment. In a third case, Schlesinger was appointed by a Nassau judge and collected $18,000 from a Queens judge after the case was moved.

In another case, a Surrogate’s Court judge named Schlesinger the administrator of an estate worth $10 million. Schlesinger has earned at least $131,323 in fees from the case. Fees awarded to estate administrators are not subject to reporting requirements.

In the fifth case, Judge F. Dana Winslow awarded Schlesinger $52,325 in fees in 2010 after appointing him the previous year to be a receiver at a foreclosed Hempstead office building.

Winslow, who was re-elected in 2010 with the backing of the Democratic Party, awarded Schlesinger an additional $65,047 in 2011 and another $62,680 when the case ended in 2012.

None of the $180,052 in total fees Winslow awarded Schlesinger was reported to court administrators.

Winslow responded to questions with an email that said he’d not been given the form used to report fee awards that a clerk typically relays to parties involved in a case. He thanked a reporter for bringing the matter to his attention.

On the form Winslow referred to, judges must identify the appointee getting money and the amount awarded. A clerk then sends the form to state court administrators, and the information is made available on a dedicated public website.

Procedure skirted

That process has not been followed in Nassau.

Newsday’s review found that in most of the 150 receivership cases identified in Nassau since 2008, the appointments had been reported. However, payments to receivers were reported in only 41 of the cases.

Timothy Driscoll Timothy Driscoll

Credit: Patrick McCarthy

Records show that those who received court awards that were not reported include:

James Leonard, a partner in Schlesinger’s law firm and his lobbying group, has gotten $457,742 so far from Justice Timothy S. Driscoll in an ongoing receivership case. Jaspan Schlesinger’s public relations firm declined to make Leonard available for an interview.

– Harold Damm, the law partner of former Nassau County Legis. John Ciotti, has gotten two receiverships since 2010. In 2012 Justice Arthur Diamond approved a final payment to Damm in a case where fees totaled $56,350. Damm did not return calls for comment.

– Jerome Murphy, son-in-law to former Sen. Alfonse D’Amato, got the final portion of a $43,252 fee award in December 2011. Murphy had been elected a judge in Nassau the month before getting the award from Driscoll but had not yet taken the bench. Murphy did not return a call for comment.

– William Garry, a Uniondale lawyer whose family has long-standing ties to the Democratic Party, has received at least four court appointments from Driscoll since 2010. A fee award of $3,250 was reported to the state in only one of the cases.

Garry said he had not yet been paid in one case, and that in the other two he’d sent the required paperwork to the Nassau clerk who is supposed to coordinate reporting.

Garry said he did not know why his awards, which he disclosed to a Newsday reporter, do not appear on the public website.

Gershman, the Pace Law School professor, said that the failure of judges to make public their awards to fiduciary appointees puts the integrity of the court system at risk, especially when it comes to courtroom regulars like Schlesinger.

“This is not accidental,” Gershman said. “That’s not what’s going on here. What’s going on here is this particular person is getting special treatment because of who he is and what he has done for the judges and what he will do in the future.”

To read the original comments on this story, click here to view the thread in Disqus.

amNewYork: The Talk of NYC

Place your advertising with amNewYork – the brand that New York media can’t stop talking about.
Our print and digital editions are produced by New Yorkers – and for New Yorkers – something reflected in our continuous pick up from NYC media outlets.

amNewYork on Fox 5 News

Recent story by Ernie Anastos on Fox 5 News that showcases amNewYork’s professional street teams – calling them part of “the symphony of the city”.

amNewYork on NY1 News

A recent selection of amNewYork mentions on NY1’s daily “In The Papers” segment. Many other papers (including Metro) are NEVER featured on this round up of what matters to New Yorkers.

amNewYork on Live with Kelly & Michael

True blue New Yorkers Kelly Ripa and Michael Strahan know where to go for their news. Shouldn’t you?

BECOME A PART OF THE STORY.

CALL US TODAY AT (646) 293 9499
OR EMAIL US AT amnymarketing@am-ny.com

Accident data doesn’t support school zone speed camera locations, Newsday analysis shows

In the face of criticism from the public and county legislators over the unpopular speed camera program, Nassau County executive Edward Mangano and administration officials have so far fended off calls to repeal the program with a simple rebuttal: It’s about safety.

But a Newsday computer analysis of traffic accident data shows that the speed cameras are monitoring dozens of areas with no history of speed-related accidents, supporting the public’s perception that there was a rush to set up the cameras and help fill the county’s coffers with the program’s $80 tickets.

When looking at crashes that occurred during daylight hours on a weekday — when school might be in session — and where speed was reported as a factor, Newsday’s analysis found no such accidents between 2009 and 2013 in 57 of the 76 school zones the county has said it is monitoring with speed cameras. There were a total of 23 speed-related crashes in the other 19 monitored locations over the five-year period Newsday analyzed.

Even when looking at all types of crashes that occurred on any day, and at any time of the day, eight of the 76 school zones did not see a single accident during the five years Newsday analyzed. Meanwhile, the newspaper’s analysis found 10 school zones where at least one accident was reported that are not on the list of locations the county is monitoring.

(After launching the speed camera program in September, county officials said they are monitoring more locations than the original 76 they listed in October. Newsday’s analysis does not include those additional school zones because the county has declined to reveal their locations).

The state legislation that authorized the speed camera program required county officials to review crash history in determining where to place speed cameras. Mangano spokesman Brian Nevin said county officials did review crash history, but he did not provide any records detailing that review despite repeated requests.

Nevin said officials also picked areas to monitor based on visits to the school zones and requests from school administrators.

In response to questions for this story, Nevin cited county data showing 42 percent of those receiving tickets from the speed cameras were exceeding the speed limit in school zones by more than 15 mph. Instead of answering questions for this story, Nevin provided statements about the program from previous news releases.

VIEW ACCIDENT MAP

Based on the revenue generated, the cameras have caught a lot of speeding drivers, who must exceed the limit by more than 10 mph in a school zone to be ticketed. According to a Dec. 3 county financial report, the program has raised $16.6 million — the equivalent of more than 200,000 tickets.

The money from those tickets helped county officials lift a three-year freeze on employee pay raises, but the county’s approach to selecting camera sites has in part fueled criticism that the program was focused more on money than safety.

Even county legislators who voted unanimously to implement the speed camera program are now moving to repeal it in the face of increased public anger. Local lawmakers have blamed a rushed rollout that has already seen county officials refund $2.4 million in tickets because camera were operating in front of schools that were not in session.

Nassau’s Democratic minority legislators gathered outside the Theodore Roosevelt Executive and Legislative Building in Mineola just before the November election and called for the program to be scrapped. And Tuesday, Presiding Officer Norma Gonsalves (R-East Meadow), the leader of the county legislature’s GOP majority, introduced legislation that would repeal the program. County officials tried to quell the criticism by getting additional signs installed to warn drivers of the school zones and, in early December, reduced the hours the cameras operate to times when children usually arrive and leave school, 7-9 a.m. and 2-4 p.m. on school days.

Russ Rader, a spokesman for the Insurance Institute for Highway Safety, an organization that supports speed cameras, said winning public support for a speed camera program is not “rocket science.” Rader said using accident data to identify a safety issue is one way of winning public support.

If the public understands that you are trying to solve a safety problem, they will support you,

Rader said.

If they believe that you are trying to solve a budget problem, it is a recipe for trouble.

Limited to school zones

The state legislation Gov. Andrew M. Cuomo signed in June authorizing the speed camera program called for cameras to only monitor school zones.

A review of transcripts from state hearings did not uncover the sort of accident analysis conducted by Newsday, and requests for similar information to sponsors of the state legislation produced no results. In addition, Nassau lawmakers were not presented with an analysis of school zone accidents before approving the speed camera program on the local level.

Months after Nassau County implemented its program, the Tri-State Transportation Campaign, a nonprofit advocacy group that supports speed cameras, released a study showing nearly 40 percent of the county’s 37 fatal pedestrian accidents in 2012 happened within a quarter-mile of a school — the maximum size of a school zone allowed under law.

However, the Tri-State analysis looked at accidents within a quarter-mile as a bird flies. As a result, only one of the accidents occurred within an actual school zone, and that was on a Sunday and not speed related, according to the database used by the nonprofit.

Tri-State Executive Director Veronica Vanterpool said whether a pedestrian was killed inside, or just outside, of a school zone is not the issue when it comes to preventing fatalities.

We stand by our analysis just as much as you do by yours,

Vanterpool said.

For its analysis, Newsday created an electronic map of each of the 76 school zones, basing the length of each zone on a review of photos of traffic signs in the area taken by Google’s Street View Cameras. When such imagery was not available, Newsday created school zones that were the maximum length allowed by law.

Newsday matched the school zones to a statewide New York Department of Transportation database of 2.6 million accidents that occurred between 2009 and 2013. The same database can be used by local agencies, including Nassau County, to identify dangerous stretches of road.

The database shows there are 379 stretches of road at least one-tenth of a mile that each had more speed-related accidents than the most crash-prone school zone, where only two such accidents occurred during daytime, weekday hours.

That includes a quarter-mile stretch of Sheridan Boulevard between Solomon Avenue and Oak Avenue in Inwood that saw 14 speed-related accidents. It also includes a quarter-mile stretch of Woodbury Road between Syosset-Woodbury Road and Hunting Hill Road that saw eight speed-related accidents.

According to the New York DOT data, there was only one fatal crash in Nassau County’s monitored school zones that occurred during weekday, daytime hours — and speed was not listed as a factor.

That fatal crash happened in 2009 near Theodore Roosevelt Elementary School in Oyster Bay. A 90-year-old woman died when her car went off the road, through a parking lot, onto a beach and into a tree “for unknown reasons,” according to the report of the crash.

Frequent crashes were reported at some of the school zones Newsday reviewed, including eight zones with more than an average of five crashes per year during weekday, daytime hours. Speed was rarely a factor, though.

For instance, an average of 23 accidents per year occurred during those hours on the roads abutting Harbor Hill Elementary in Greenvale during the five years reviewed — none of them speed-related.

Richard Retting, a traffic engineering researcher with more than 30 years of experience who has conducted several studies of speed camera programs, said examining crash data is an important step in selecting camera enforcement sites and winning public support, but it doesn’t need to be the justification for ensuring motorists obey the speed limit.

I have five children of my own,” Retting said. “There’s something to be said for wanting to make school zones places where children are not exposed to speeding vehicles, whether there has been a crash there or not.

No crashes near school

Hundreds of residents gathered in the Cantiague Elementary School auditorium in Jericho in October to demand that the county remove the speed camera in front of the school. Gary Strauss, a local homeowner in attendance, said during the meeting that the school zone had no known history of accidents.

Strauss was right. The Cantiague Rock Road school zone is one of eight where Newsday found no reported accidents, of any kind, between 2009 and 2013.

Strauss, a member of the Cantiague Rock Road Speed Zone Fairness Coalition, the group that organized the public meeting, said the results of Newsday’s analysis don’t surprise him.
“That is because of what we have been stressing all along,” Strauss said. “This is a stretch of road that has always been safe.”

Newsday’s analysis did find that some cameras have been placed on roads with historically high numbers of accidents, just not in the portions of those roads with the highest numbers of accidents.

For example, there were 81 speed-related accidents — resulting in 80 injuries and five fatalities — on the nine miles of Jerusalem Avenue from Hempstead to North Amityville. However, none of the accidents occurred in the two school zones with cameras on that road: Turtle Hook Middle School in Uniondale and Schwarting Elementary School in Massapequa.

Newsday also found 10 school zones where at least one accident occurred that the county has not said it is monitoring. For example, an unmonitored school zone on Peninsula Boulevard near Lawrence High School in Cedarhurst saw 74 accidents during the five years analyzed, including two speed-related accidents that occurred during weekday, daytime hours.

Strauss said his group, one of several protesting the camera program, supports cameras placed in areas where there are safety problems. But he said placing them in areas with no accidents makes it look like the program is about money.

If they did it the right way, it could have improved safety,Strauss said. “But now if they don’t change quickly, they are going to have a hard time convincing the public that this program is for safety.

With Celeste Hadrick

Speed Cameras Video

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus id porta massa. Nam feugiat feugiat arcu a condimentum. Maecenas auctor ut ipsum nec suscipit. Integer eu pretium velit. Ut feugiat posuere mi. Nunc porttitor imperdiet leo, sed congue orci iaculis ac. Suspendisse eleifend magna sed odio elementum mollis. Aenean varius ac lectus in volutpat. Cras vestibulum nisl non finibus facilisis. Fusce mauris nisl, luctus eu augue eu, porttitor rhoncus urna. Phasellus quis lectus ut sem fringilla porta. Maecenas tempus eros non arcu elementum, in rutrum ante vulputate. Vestibulum pulvinar sapien ut dictum tempus. In imperdiet aliquam lacus nec tristique. Nunc venenatis ipsum imperdiet, ultrices libero id, pharetra leo.