DA Spota - CEO of bankrupt medical company charged with diverting workers’ 401K funds

The chief executive officer of a bankrupt Hauppauge diagnostic imaging and medical billing business pleaded not guilty today to grand larceny and scheme to defraud charges.

Suffolk County District Attorney Thomas Spota said an investigation by his office and the US Labor Department found that Om Soni of Oyster Bay, the Chief Executive Officer of Sonix Medical Resources, used approximately $300,000 he owed his employee’s 401K plan to “pay for his Bentley, Lamborghini, Porsche, an Oyster Bay mansion and to fund other executive salaries”.

Soni, 67, of 10 Belair Court, Oyster Bay, is charged with grand larceny in the second degree and first degree scheme to defraud.  The theft occurred from 2007 through 2009.

The New York Regional Office of the Employee Benefits Security Administration (EBSA), United States Department of Labor (USDOL) referred the case to the district attorney’s office. 

On One Side Residents and a Covenant - On The Other Side Insignia

Upscale Eatery Makes Appeal to Smithtown BZA

Amid parking complaints, zone change could cut into residential areaPhoto by Jennifer Klei

By Chad Kushins

March 8, 2012

This month, the owners of popular Smithtown’s upscale sushi steakhouse Insignia are slated to appear before the Board of Zoning Appeals and the Town Board, aiming to gain a zoning change which would expand their property’s parking lot.  The restaurant, standing at the former location of Boulder Creek Steakhouse on the corner of Nesconset Highway and Mount Pleasant Road, has already proven popular within the town – enough so that residents and surrounding establishments have begun complaining about the restaurant’s overwhelming parking situation. 

“The variance has two major elements,” Assistant Town Planning Director David Flynn explained to Smithtown Matters.  “Firstly, the request to set the parking lot from 100 feet down to 50 feet is one part.  The second element would be altering what has been deemed ‘environmentally sensitive land’ – which really encompasses the first part of the variance, as putting in the parking lot is the alteration in itself.”

According to the Smithtown Planning Department, the property on which Insignia now lies was already labeled environmentally sensitive due to its current groundwater table of less than 10 feet below the surface.  The owners previously received a summons for building an additional gravel parking lot without the granting of necessary permits.  The town had stipulated that co-owner Anthony Scotto and his partners leave a 100-foot gap – 50 feet of buffer and 50 feet of easement – between the restaurant and nearby residential properties when approving the building plans, further construction could bring the parking lot closer to the homes in back of the restaurant by half that distance.  Upon receiving the summons, the restaurant’s owners filed an application for an area variance to expand the parking lot and reduce the buffer from 100 feet to 50 feet, increasing the restaurant’s parking past what is required under town code. 

“The owners are, more than anything else, trying to legalize what they already did,” Flynn added, referring to Insignia’s gravel parking lot addition and their subsequent summons from the Town.  “Part of the property was already rezoned.  Overall, the property was rezoned so Boulder Creek could originally be built.  Things were low-key for a number of years, but when the owners changed the business to ‘Insignia’ and re-opened, they also changed the restaurant’s format … They then came to the BZA for a ‘special exemption’ for outdoor dining.”

Photo by Jennifer KleiFlynn added, “The exemption was granted, the restaurant opened, and the business was so successful that, evidently, the parking lot wasn’t enough.  The parking lot meets code, but as the business got busier, residents and other businesses saw cars parking on the grass and across the street in the Friendly’s parking lot … There weren’t enough spots.”

Insignia is owned and operated by more than one investor, including Scotto, one of the original owners of the Boulder Creek Steakhouse which initially stood on Insignia’s spot.  Scotto and Mario Sbarro, Boulder Creek’s other founder, ended their business partnership after it closed; Scotto now remains an owner of Insignia with three new partners.

Once closed in 2007, the Boulder Creek structure stood dormant for over two years, until plans for a massive renovation and reconstruction of the business was announced in June of 2010.  At that point, residents quickly voiced their concerns over the groundwater impact, as previously, flooding had been a substantial problem during Boulder Creek’s existence on the same property.  However, in April of 2011, the Smithtown Town Board unanimously approved Scotto’s site plan for the Insignia construction, which included a 3,011 square foot addition to existing building, increasing the total square footage of the building to 9,960 square feet.  An outdoor dining area, measuring 1,751 square feet, was also added to the restaurant – the reason for the owners’ original ‘special exemption’ application.

“When Boulder Creek came in, the original owners had promised us that it would be a low-key restaurant – and it was,” said Larry Vetter, a resident homeowner whose street, Brilner Drive, runs directly behind Insignia.  “They did a pretty good job, initially, and even installed the buffer and kept an eye on the groundwater situation.” 

According to Vetter, however, circumstances changed when the switch was made from Boulder Creek’s family steakhouse format to Insignia’s upscale reconstruction.  “On paper, [Insignia] sounded good as well – a very upper-crust restaurant, some of the same owners.  I was sure that the new restaurant would be the same size as the previous one, which hadn’t been much of a problem, but almost immediately, I could tell from the larger size of the building and the noise that parking was going to be an issue.”

Once Insignia opened, Vetter explained, the owner even came to his block and went door-to-door, looking for resident feedback.  “To their credit,” said Vetter, “they came around and asked all of us what we thought.  Most of us stressed the noise problem and our concerns for the groundwater control and the parking.  I mean, at that point, cars were parking everywhere to get inside the place … I’m just concerned that expanding the parking lot further back will remove the standing environmental easement that now exists.”

Vetter continued, “As far as the groundwater, during the winter, it’s not really too much of a concern.  In the past, however, spring and fall brought the most problems.  In a particularly rainy season, the whole area is impacted.”

According to David Flynn, if the Town Board sees fit to grant Insignia’s owners their variance, they will still need a recommendation from the Smithtown Department of Environment and Waterways, “unless,” said Flynn, “the Board wishes to deny it.  Then, no recommendation is needed.  But, two approvals are needed to this to go forward – the BZA and the Town Board.”

“From what we know, [Insignia’s owners] are experiencing a severe parking problem, but are trying to ease that as much as possible,” said Smithtown Town Councilman Ed Wehrheim.  “What they’re proposing is to ask the Town Board to amend the standing buffer and add approximately 50 new parking spots.  Initially, the complaints were about the cars everywhere and I believe that the restaurant owners want to fix that right away … Also, in previous preliminary discussions, it’s been said that they may be required to put in a sound barrier.”

Insignia’s owners could not be reached for comment.

The restaurant’s owners’ request for a variance to make its parking lot a permanent addition will go before the Smithtown Town Board at the regular meeting on March 22^nd at the Eugene Cannataro Senior Citizen Center.

Smithtown Dems Push For Probe Into Grand Jury Report

Smithtown Democrats to Probe Town Ethics

Committee launches investigation following lumber-yard debacle

By Chad Kushins

March 8, 2012

Smithtown Democratic Chairperson Ed MaherFollowing the Suffolk County District Attorney’s controversial findings in regards to the demolition of a defunct lumber yard on Smithtown’s Main Street, local democrats are now calling for the town’s ethics board to open an investigation to double-check and assess the Grand Jury’s findings. 

At a regular meeting of the Smithtown Town Board on February 23^rd, Smithtown Democratic Committee member Sandy Trehy read a letter drafted by chairman Ed Maher, officially asking the Town’s ethics board to determine which officials may have used a promised $40,000 tax break to pressure developers to violate the town’s code and illegally demolish the Nassau - Suffolk Lumber Yard.  The request, which was made during the “public comments” portion of the Thursday night meeting, saw the sitting Town Board members decline immediate comment and prompted Town Attorney John Zollo to instruct that committee members mail the letter to the ethics committee’s P.O. Box address. 

“At the Town Board meeting, we were asked to formally deliver the letter to Town Hall,” Maher told Smithtown Matters.  “So we did right away.”  According to Maher, no details of the Democratic Committee’s letter can be revealed publically, as protocol requires its contents remain “confidential”, at least until a response is given from Town Hall. 

Town Attorney John Zollo told Smithtown Matters that the letter was immediately sent to Joyce Boutindari, Secretary to the Ethics Commission.

According to the initial Grand Jury report, the end result of the unlawful demolition “constituted an utter disregard for the well-being of local citizens.”  According to the testimony of an unnamed New York State employee, the Department of Labor inspected the parcel of land, located at lumber yard demolition at 102 West Main Street, following the demolition.  After testing those samples, they found asbestos to be present.   Because of the significant health issues attributed to airborne asbestos there are strict rules regarding the removal of asbestos, yet the unlawful demolition did not adhere to accepted protocol for its removal – another key factor in the Grand Jury’s list of recommended amendments to the Town Board’s overall practices.

The Grand Jury report did not identify town officials or the land developer; instead, letters were used to identify each of the parties involved.  (Editor’s note **(Although they have not formally acknowledged their identities it is understood that Supervisor Vecchio is Town Employee A, Planning Director Frank DeRubeis is Employee B and Former Town Assessor Greg Hild is Employee C) According to the report, the developer of the property, identified as “Developer A,” was pressured into demolishing the property by “Town Employee A”, and at one point received a handwritten, unsolicited tax map chart from a town official, identified in the report as “Town Employee C,” which showed a tax reduction of more than $40,000 if the land were vacant.

The report indicated that after being notified of the potential $40,000 tax reduction if the demolition was done before the March assessment deadline, the developer began the demolition and was issued a Stop Work Order.  Soon after the issuance of the stop work order, in a phone conversation, “Town Official A” pressured Developer A to continue the demolition.  Additionally, Developer A was fined $3,500.  The report indicated that Town Employee “C” reconsidered the $40,000 reduction after the District Attorney’s office started its investigation.  The property taxes were reduced by $4,000.

Maher’s February 23^rd letter focused on the specific town official indentified by the Grand Jury as “Employee A” who committed a “a clear abuse of political power for personal profit” by persuading another town official to offer the tax abatement to an unnamed developer in exchange for demolishing the buildings.”  According to the Grand Jury, the motive was allegedly tied to the politician’s re-election campaign. 

Following a comprehensive and critical report by a Suffolk County Grand Jury, members of the Smithtown Town Board have begun considering changes to codes and practices regarding ethics, and demolition and construction protocol. The 42-page report had been critical of certain members of the Town Board and their handling of the 2009 lumber-yard demolition.  The report ended with 17 “suggestions” the town should enact to avoid violations of its Town Code in future construction dealings.  

Town Councilman Edward Wehrheim,(has identified himself as Town Employee E) indicated to Smithtown Matters, that numerous suggestions from the report should be drafted into law, although, he feels that appointing a Board of Site Plan Review could face the problem of having to pay additional employees selected for such positions.

According to Wehrheim, upon the release of the Grand Jury’s report, members of the Town Board quickly contacted the Town Attorney, asking that the Grand Jury’s list of suggestions be officially considered and considered for feasible entries into the Town Code.  “After that,” continued Wehrheim, “the full Board will convene and discuss which of the Jury’s ideas we can do, and which – as a governing body – we can’t.”  Wehrheim added, “Some are easier than others, while ones such as the Board not being able to work with a prospective developer, may be more difficult.  But many of them seemed logical.”

Supervisor Vecchio’s office did not return our phone calls.  Smithtown Matters Founder and Editor, former Councilwoman Pat Biancaniello, has acknowledged being “Town Employee H”.  

The Democratic Committee’s letter, delivered immediately following the Town Attorney’s request, is yet to be made public.  As of this writing, the Committee is waiting for the Town’s response.

Grand Jury Conclusions:

CONCLUSIONS

The Grand Jury finds that Town Employee A aggressively pursued the demolition of structures at Commercial Parcel A. Town Employee A was aware of the requirement of Site Plan Review as a predicate to receiving any demolition permit. Town Employee A was also aware of the amount of time the process of Site Plan Review required. As a result, Town Employee A solicited other Town Officials about legal alternatives that would allow for the removal of these structures without the necessity of Site Plan Review.

The Grand Jury finds that Town Employee A, in an attempt to expedite demolition through the process of Site Plan Review, offered Developer A three incentives to motivate Developer A to submit a site plan application. Town Employee A directed Town Employee C to furnish Developer A with a tax chart depicting the potential tax savings demolition would realize at Commercial Parcel A. Town Employee A orchestrated an arrangement whereby Developer A would be temporarily permitted to store demolition debris on site at Commercial Parcel A, thus allowing Developer A additional time to deal with the costs of carting and disposal of this debris. Finally, Town Employee A communicated to Developer A that he would support an application with the Town Board to help offset some of the site plan fees Developer A would incur as a result of his project.

The Grand Jury finds that Town Employee A was advised during the final week of February 2009 that Developer A would not be successful in securing Site Plan Review and approval prior to the taxable status date of March 1, 2009. Town Employee A knew as a result that Developer A would receive no demolition permit in that same time period. Town Employee A was also aware that Developer A received a Stop Work Order after a limited amount of demolition occurred at Commercial Parcel A during this time period. Regardless, Town Employee A advised Developer A to proceed with the demolition anyway.The Grand Jury finds that Town Employee C played a substantial role in propelling Developer A’s demolition of structures of Commercial Parcel A on March 2, 2009. Town Employee C was aware that Developer A could not lawfully proceed with demolition at Commercial Parcel A. The Grand Jury finds that Town Employee C, upon determining that Developer A did not in fact complete demolition by the taxable status date of March 1, 2009, incorrectly advised that Developer A had an additional day to complete the demolition. After the completion of this March 2, 2009 demolition, Town Employee C was prepared to reward this demolition with a tax benefit of approximately $40,000.

The Grand Jury finds that Town Employee C became aware of an investigation by the Suffolk County District Attorney’s Office into the unlawful demolition at Commercial Parcel A, only eight days after the demolition of March 2, 2009. At this time, Town Employee C became specifically aware that his interpretation of the taxable status date, and the motives behind it, were being called into question. As a result, Town Employee C took great pains to solicit a legal opinion which would allow him to use March 2 as the taxable status date, a measure which would allow him to grant Developer A the approximate $40,000 tax break. At the same time, Town Employee C made material misrepresentations to Town Employee G in an attempt to disavow any personal knowledge of the circumstances of this demolition. Town Employee C utilized March 1 as the taxable status date for Commercial Parcel A only after being unable to secure a legal opinion that would allow him to do otherwise. As a result, Town Employee C was forced to grant Developer A the more modest tax savings of approximately $4,000 based upon the unlawful demolition.

The Grand Jury finds that the favorable tax adjustment for Developer A consequently deprived the Town, County, and school districts of these additional revenues.

The Grand Jury finds that Developer A benefited from the unlawful demolition of Commercial Parcel A. Though Developer A did not secure the initial tax benefit proposed by Town Employee C, a tax

savings of approximately $4,000 was realized. Developer A also avoided approximately $10,000 - $11,000 in site plan fees as a result of the unlawful demolition. Though Developer A was issued a series of summonses by the Town Building Department for this transgression, Developer A’s penalty was only $3,500 in fines.

The Grand Jury finds that the actions of Town Employee A and Town Employee C produced a sequence of events that ultimately eliminated the process of Site Plan Review at Commercial Parcel A. The Grand Jury finds that the review of a demolition proposal at Commercial Parcel A was mandated by Town Code, and that notification of the County and State was also required by State and local law. The elimination of this review and notification resulted in a loss of input and control that necessarily impacted how demolition was conducted at Commercial Parcel A.

The Grand Jury finds that the failure to employ Site Plan Review at Commercial Parcel A initially precluded the Town Building Department from issuing a demolition permit. As a result, the Town Building Department was deprived of an opportunity to provide input and control into the demolition at Commercial Parcel A.

The Grand Jury finds that the unlawful demolition conducted at Commercial Parcel A occurred in a dangerous and unacceptable manner. This demolition constituted an utter disregard for the well- being of local citizens, in particular those residents living next to Commercial Parcel A. The Grand Jury finds that the homeowners who resided adjacent to Commercial Parcel A were afforded no advance notice of the demolition, and had to live with legitimate concerns about the safety of their property until the site was effectively cleaned up under an emergency demolition permit.

The Grand Jury finds that the Town Building Department failed to subject the asbestos documentation furnished by Developer A to a rigid level of scrutiny. The Grand Jury finds that the Town Building Department accepted the documents as sufficient and communicated that same sentiment to

the Township. The Grand Jury finds that this documentation, prepared by Survey Corporation A, was insufficient in all respects. It is impossible to know whether the Building Department’s recognition of these insufficiencies would have had any impact on the sequence of events that resulted in the unlawful demolition at Commercial Parcel A.

The Grand Jury finds that the demolition of Commercial Parcel B was also pursued by Town Employee A. The Grand Jury finds that while demolition was realized through the lawful issuance of a Town Building Department permit, the process of Site Plan Review was once again inexplicably and unacceptably avoided. The Grand Jury finds that at a minimum, the cost of failing to employ this process at Commercial Parcel B was allowing it to fall into an aesthetically offensive site condition.

The Grand Jury finds that the Office of the Town Assessor requires residential property owners to provide proof that they possess permits before acting on a formal request to reassess the property. The Grand Jury finds that the Office of the Town Assessor does not require commercial property owners to satisfy this same burden before a request for reassessment is entertained.

The Grand Jury finds that the Town Code of Ethics does not include an affirmative action provision which mandates that public servants report activities known to violate the Town Code to an appropriate Town Department or authority.

The Grand Jury finds that the Town Code of Ethics does not adequately provide for the removal of its public servants. While the Code of Ethics allows for the removal of a limited category of appointed officials pursuant to a violation of the Ethics Code, this provision fails to cover all public servants.

To read the full report click here

U.S. Department Of Energy BNL Announces Commack Middle School Winner of Regional Science Bowl

Commack Middle School Wins Regional Science Bowl

Students from Commack Middle School placed first in the Regional Science Bowl at the U.S. Department of Energy’s Brookhaven National Laboratory.  Commack’s “team one” narrowly won out over R.C. Murphy Junior High School’s “team one” during the March 3 competition’s tense final round.  Students from 11 Long Island middle schools participated in the fast-paced question-and-answer tournament designed to test students’ knowledge of mathematics, life sciences, physical sciences, earth sciences, and general science.
The competition was sponsored by Brookhaven Science Associates, the company that manages and operates the Laboratory for the U.S. Department of Energy.

Longwood Junior High School’s “team two” and Hunter College High School’s “team two” came in third and fourth place, respectively.  

The day’s activities also included a riveting model electric car challenge, wherein students raced cars they constructed on mini raceways.  Lawrence Middle School placed first, with its car speeding down the track in 5.03 seconds.   Our Lady of the Hamptons Regional Catholic School placed second, with its car completing its run in 5.25 seconds.  Bellport Middle School placed third, with a time of 5.50 seconds. R.C. Murphy Junior High School “team three” was recognized for “Best Car Design.”

For the academic champions, the competition continues.  As regional champions, the Commack Middle School team moves on to the National Science BowlT coordinated by the U.S. Department of Energy’s Office of Science, to be held in Washington, D.C., April 26 - 30, 2012.
Each student on the winning teams received a medal, and each winning academic team received a trophy for its school. 

By taking part in the “Jeopardy”-style academic contest and model electric car challenge, students are encouraged to excel in science and math and to pursue careers in those fields.

Gratulation! Es war gut!

“Sprachfest 2012”

“Events like this are very important to show students that commonalities exist, not just here on Long Island, but across the State and even other countries…” Ed Ehmann, Superintendent of Smithtown Schools.

Sallie Culloton and Ed EhmannOn Saturday, March 3, 2012, Accompsett Middle School hosted the 23^rd Annual Sprachfest. The event was run by Smithtown High School West LOTE (Languages other than English) and AATG (American Association of Teachers of German).  Sallie Culloton, a teacher at Smithtown High School and President of the Long Island Chapter of AATG, was the host along with Samantha Specht, Joel Sidwell and Accompsett students.

“Sprachfest 2012” is an event that brought together students from nine school districts across Long Island. The annual event provides students a fun forum to compete in events including: (German) Vocabulary Bee, Geography Bee, Scrabble and Culture Bowl.  In addition to competitive events there were opportunities for students to celebrate the richness of the German language and its culture by participating in instrumental, vocal, poetry and folk dance events.

According to Ms. Culloton many of the students, but not all who take German as a foreign language have relatives or descendants who originate in Germany. Germany is increasingly becoming a big factor in our global society and especially within the European Union. Kids today who follow current events are aware of the role Germany is playing in the European Union and the financial crisis. Some like what they hear about Germany and choose to study German.

Included in the group of people having a link to Germany is Superintendent of Smithtown schools Ed Ehmann. “The attendance here is impressive… I spent two years in Germany.  I was drafted in 1971 by the US Army and was sent to Augsburg, Germany.  It’s a beautiful country and the Germans are wonderful people.”

According to the AATG almost 300 students and teachers were expected to attend. There were nine school districts represented and sixteen schools. In addition there were volunteers from the community and parents who worked together to create a greater understanding and appreciation for German culture. 

“It’s important that these students are eager to learn other languages and about other cultures.  Aside from the importance of language study in a global economy, as human beings we share many similarities.  And it’s wonderful that these students see those similarities and have a chance to share those similarities with other kids” said Mr. Ehmann.

There was something for everyone: food, competition, singing, dancing and the very popular “scrabble”.

Of course it could not happen without the volunteers, and there were many! Mr. Ehmann was appreciative of all the work that went into Sprachfest 2012 and credited Sallie Culloton for its success. “It’s also great that the teachers go above and beyond to come out on a Saturday and help ensure the success of such a great event.”