Guest Column by Ted Carroll.
(PHOTO: Former RGC Manager and former prison resident Scott Yandrasevich.)
Tonight in the last regularly scheduled city council meeting of 2016 Mayor Sack and Corporation Counsel Kristen Wilson will announce the settlement of the longstanding class action litigation brought by the former Rye Golf Club employees cheated by former senior city manager Scott Yandrasevich who “hired” them using a series of shell companies in a gambit described as an outside staffing arrangement designed to “save costs.” The settlement is said to be $1 million for the ex-employees and their contingency-fee attorneys. Rye previously received a $1.5 million settlement from Travelers Insurance over this same swindle but legal costs on that suit, the original investigation of 2012 – 2013, related forensic accounting work and extra legal work continuing to this day have way more than exceeded the remainder of the Travelers settlement funds.
(PHOTO: RGC Workers want what is due to them…)
Mr. Sack, once a campaigner for accountability and transparency, is expected to announce that this last settlement now finally resolves the series of unfortunate occurrences at Rye Golf Club that resulted from errors and missteps generated outside of official controls and procedures in Rye. And nothing in this statement about a resolution will be further from the truth.
On July 8th, 2015 our then new city independent auditor, Mr. Brendan Kennedy, publically confirmed on council TV what many (including former Rye City Manager-Emeritus Frank Culross) have already said repeatedly. Which is, confirmed Mr. Kennedy, that the largest financial fraud in city history has its roots clearly in a circumvention of internal control or collusion. Circumventions and/or collusions are not solo criminal acts. These illegal maneuvers require multiple insider participants. Who were they?
In the late fall and winter of 2012 into early 2013, the city paid the forensic accounting firm of Breen & Associates to investigate this circumvention. Breen traveled to White Plains and Long Island to interview former Rye City Controllers Michael Genito (April 1996 -January 2009) and Jean Gribbins (August 2009 – June 2012). Both were asked who in the Rye City administration directed them to ignore the internal control provisions relating to un-bid and unwritten commercial contracts without rate schedules and to pay Mr. Yandrasevich personally for each invoice tendered by this mysterious RM Staffing Company.
People with knowledge of the Breen & Associates report findings say the controllers confirmed to the investigators that authorizations and directives came from the then City Manager O. Paul Shew, then Rye Mayor now NYS Assemblyman Steve Otis and then Rye Corporation Counsel and now Deputy County Executive Kevin Plunkett. Without their intervention, the controllers said, there would have been no six figure payments made personally to the hand of any senior city employee like Mr. Yandrasevich and no invoices and purchase orders approved to any vendor without a rate card to which charges could be verified. Transactions of this nature were prohibited by the city’s internal financial controls then in full force and effect.
While none of this circumvention tradecraft will come as a shock to any CPA who’s ever conducted a municipal audit it may come as a surprise to the taxpayers of Rye that the city now refuses to turn over an un-redacted copy of the Breen Report to the public. This special investigation was conducted by CPA’s of the professional work of CPA’s but somehow lawyers have now intervened and vigorously stamped everything related to this Breen forensic investigation “Attorney-Client Work-Product.” And apparently the client – in this case the Rye City administration of Joe Sack – objects to these facts being shared with the fraud’s taxpayer victims.
How very convenient for the circumventors, some of whom are in a position to reward those who vote to support this record suppression.
More on all this in the New Year but until then please have a Safe and Happy Holiday Season and remember – the 1st Amendment protects us all and you should never hesitate to question authority.
Ted Carroll is a lifelong Rye resident, a Certified Public Accountant, and a partner at Noson Lawen Partners, a media industry private equity firm.
See Carroll’s other recent MyRye.com commentaries here: