Audit firm faulted Saddle Rock financial practices

Dan Glaun

An auditing firm found multiple financial irregularities and flawed bookkeeping practices in the Village of Saddle Rock last summer, according to a July letter from Satty, Levine & Ciacco CPAs.

 

Missing invoices, questionable charges on the village gas card, an un-accounted for purchase of a laptop and checks to a contractor personally cashed by Village of Saddle Rock Mayor Dan Levy were among the issues identified in an early warning memorandum to the village as Satty, Levine and Ciacco prepared an audit of the village’s finances for the fiscal year ending in February 2012.
 
“The combination of these exceptions not only demonstrate that the Village is not practicing or enforcing sound control policies over procurement of goods and services, but that the lack of evidence, as mentioned above, could be indicative that there is ongoing fraudulent activity,” wrote the auditors.
 
The existence of the letter was made public in trial proceedings for Sasha Masri, the former trustee candidate and political rival of Levy who is charged with assaulting the mayor following an argument about village finances on Oct. 3. The contents of the letter, a copy of which was obtained by the Great Neck News, have not yet been publicly released.
 
Village Attorney James Murphy said in an interview that the completed audit, released later that year, addressed the issues raised in the letter.
 
“The village stands by the audit that was conducted and finalized,” said Murphy. “At the end of the day the audit was completed, and these issues were all addressed.”
 
On some expenses reviewed by the auditors there were no invoices, vouchers or other documentation to support the legitimacy of the payments, according to the letter. Satty, Levine and Ciacco also took issue with financial accountability in the village.
 
“It was also noted that in almost all of our selections that the underlying support was apparently only reviewed by either the mayor or the village clerk, or some combination of both,” wrote the auditors. “It was not evident that someone without the authority to sign checks was ever reviewing the details of various expenditures.”
 
Levy, who succeeded long-time mayor Leonard Samansky after Samansky’s death in 2011, also cashed checks written out to Next Capital Corp., a contractor which was paid $22,200 for maintenance work and other jobs, according to the letter. Next Capital is a Queens-based company run by Yaniv Erez, who identified himself as a “close friend” of Levy’s in an interview with the Great Neck News, and one of the firm’s employees who did work for the village was Levy’s daughter.
 
“In fact, it was noted that on various selections the mayor would not only approve a voucher to be paid (with no invoice), but would sign the check, and cash the check which was intended to pay on outside vendor,” the auditors wrote.
 
The contents of the letter echo the testimony of Donna Perone, the former clerk-treasurer of the village who spoke about the village’s financial issues as a defense witness for Masri, the resident who allegedly attacked the mayor following an Oct. 3 board meeting. Perone testified that she created invoices for Next Capital after-the-fact and submitted them to the auditors.
 
“I created them,” Perone said. “I was given instructions to create them by the mayor.”
 
Levy’s attorney Elizabeth Kase has said the mayor will not comment on the village finances until Masri’s trial is complete, but issued a statement calling the issue a distraction from Masri’s attack.
 
“The case against Sasha Masri for his vicious assault is the only relevant news story of the day,” wrote Kase. “Any distraction from Sasha Masri’s acts of violence add insult to Mayor Levy’s serious injuries.”
 
The letter called for Perone to call a meeting with the mayor and the board to trustees to discuss the findings with auditors.
 
Testimony from Masri’s trial also pointed to the existence of signed affidavits by trustees and further communication between the village and Satty, Levine & Ciacco, the contents of which had not yet been made public as of the conclusion of the trial.
 
The specific transactions scrutinized in the letter shook the auditors’ confidence in the integrity of village finances.
 
Next Capital was paid in some cases with no voucher or invoice, and only a check, according to the letter. Auditors requested images of the checks, and indicated in the letter that they were endorsed by Levy and that some had “ok to cash” written on them.
 
“Based on our findings we cannot substantiate these expenses, and recognize that this is not prudent for the mayor to be cashing/endorsing checks payable to a vendor,” wrote the auditors.
 
Auditors also trained their eyes on $2,200 in payments to Fuelman for village gas cards used by the mayor and Next Capital. Auditors could not confirm that the gas cards were properly used, due to card holders not entering mileage at the gas pump each time they filled up, according to the letter.
 
The letter also noted heavy use of Levy’s gas card.
 
“On various occasions Driver #1 had filled up his vehicle twice in a 24 hour period. This was noted as a cause of concern, as it implies that the mayor had driven 300 miles in one day,” wrote the auditors.
 
Auditors also wrote that they could not account at the time for a laptop and GPS device purchased from Staples.
 
“It was communicated that [the laptop and GPS] were not at the village and alleged to be for personal use,” auditors wrote.
 
Payments to AT&T had doubled beginning in August, 2011, according to the letter, and insufficient records led the auditors to say they could not conclude that the payments were solely for the benefit of the village.
 
Attempts to reach village trustees were unavailing, and Satty, Levine and & Ciacco declined to comment.

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