The Village of Saddle Rock defended its financial practices at Wednesday night’s board meeting, with board members saying the village had already addressed concerns raised by auditors last year and that no illegal activity had taken place.
The payments to a village contractor scrutinized by auditors were part of improvement projects launched after the death of long-time Village of Saddle Rock Mayor Leonard Samansky in 2011, said Deputy Mayor Avery Modlin.
No money, Modlin said, was misappropriated and the projects generated savings for the village.
“When a question arose regarding some expenditures relating to the improvements, we reviewed the situation and confirmed that all monies were retained by the employees of the general contractor hired to complete the work, and no monies went to anyone except as allocated and approved by the board,” Modlin said. “This fact was confirmed by our auditors.”
Modlin’s statement addressed concerns described in a July 2012 letter from village auditors Satty, Levine & Ciacco CPAs as the firm sought to complete the village’s 2012 audit. The letter indicated that Village of Saddle
Rock Mayor Dan Levy had signed village checks written out to contractor Next Capital Corp., a Queens-based company run by a friend of Levy’s.
A December letter from the auditors, sent after the 2012 audit was finalized, found “significant deficiencies” in the village’s financial controls.
Modlin said the village had put in place new procedures to increase accountability for village spending.
“The letter did not find or suggest that any illegalities took place, but rather pointed to methods the board could employ to tighten controls required to complete fiscal responsibility, a matter this board addresses with the utmost seriousness,” Modlin said. “We have complied with the auditors recommendations and successfully implemented them.”
Modlin also said the village had commissioned an investigation by special counsel into the issue, and that the counsel had found no wrongdoing.
The existence of the auditors’ questions became public during the trial of Sasha Masri, a former Saddle Rock trustee candidate who was convicted in June of misdemeanor attempted assault and acquitted of more serious charges for a fight with Levy after an October 2012 board meeting.
When questioned by Masri’s defense attorney about village finances, Levy repeatedly took the Fifth Amendment. His lawyer wrote in a statement that the questions were a distraction from Masri’s alleged attack on Levy.
“These attempts to deflect attention from Mr. Masri’s criminal conduct only adds further insult to Mayor Levy’s serious injuries,” wrote Kase. “My client has a distinguished record of public service, and any questions regarding Village audits will be addressed at an appropriate time and venue. This trial is not the time nor place, and defense counsel is not a prosecutor or an agent of law enforcement.”
A subsequent review of auditor communications, obtained by the Great Neck News via sources and freedom of information law requests, showed that Satty, Levine & Ciacco had questioned both payments to Next Capital Corp. and other financial issues, including missing invoices from Next Capital’s work and unaccounted-for charges on a village gas card.
Village officials submitted affidavits to auditors after the July letter, saying Levy’s signing of contractor checks was a mistake but that no fraud had taken place, and provided invoices for Next Capital’s work.
The validity of those invoices was disputed at Masri’s trial by then-Clerk Treasurer Donna Perone, who testified under oath that Levy had directed her to create the invoices after auditors raised concerns.
Modlin said at the board meeting that the auditors’ communications with the village were public record and subject to freedom of information law requests.
The board also indicated that it would not be making further comment on the auditors’ reports.
“We have nothing further to say on that subject,” Levy said after a resident asked about the audit during open time.
In other agenda items, Levy said the village had obtained nearly $200,000 in state funds for repaving, and that the village would use the money to launch the second phase of its road repair project.
Levy also announced that the village’s federal restitution for the costs of Sandy recovery had been upped from 75 percent to 90 percent, saving the village more than $15,000.
