Criminal defense work in New York often involves defending against the so-called white-collar offenses that are charged against business and professional people. These often involve charges against elected officials who are accused of illegally conspiring with persons or companies from the private sector. A recent arrest by federal authorities alleges felony charges of securities fraud, wire fraud and conspiracy against an elected supervisor in the city of Ramapo and a former executive director of the Ramapo Local Development Corp.
The U.S. Securities and Exchange Commission also filed suit against numerous individuals and agencies, including the town of Ramapo. The charges stem from the financing of a minor league baseball park and the alleged criminal distribution of municipal bonds through deception and fraud. It is alleged that the defendants concealed Ramapo’s deteriorating financial condition when marketing the municipal bonds.
The alleged fraud is tied into the 2010 vote in which voters rejected financing for the baseball park by a very wide margin. Ramapo allegedly raised $300 million during the five years after the project was rejected by the voters. Prosecutors say that investors lost millions of dollars because of the deception regarding the weakening finances of Ramapo. The ballpark itself cost $58 million to build, which contributed to the town’s failing finances.
The probe by authorities was triggered by a whistleblower complaint. The FBI entered the picture in 2013, and the New York state comptroller revealed the improper funding and cost to taxpayers. This is reportedly the first time in the state that there has been a securities prosecution on felony charges dealing with the criminal mishandling of municipal bonds. The prosecuting authorities are seeking restrictions on the sale of bonds by Ramapo unless certain assurances of accuracy are made in the future.
Source: Reuters, “New York suburb, officials charged in landmark bond fraud case“, Nate Raymond and Jonathan Stempel, April 14, 2016