An Accountant, an Auditor, and the Attorney with AmnesiaóMelissa Reimerís Disciplinary Hearing Final Session
October 3, 2013
The Town of Ramapoís hearing concerning its disciplinary action taken against whistleblower Melissa Reimer resumed Monday morning at 10:15 and ran through the day until after 4 pm. Three witnesses were cross-examined: a partner with the auditing firm OíConnor Davies; an accountant working in the Ramapo finance department; and Town Attorney Michael Klein.
The first witness was Domenick Consolo, a partner from OíConnor Davies, the accounting firm that does the financial audits for Ramapo. What he testified to was remarkable. In brief, Mr. Consolo admitted, under oath, that Ms. Reimer had made complaints and allegations of fraud to his firm, while they were in the process of auditing the town books, and he, as manager of the audit, did nothing to question her about her claims, did not investigate nor did he follow up on the charges she alleged. At the time, Reimer not only worked in the finance department, she was the Supervisor of Fiscal Services at Town Hall with a relatively unobstructed view of most financial transactions.
There were two gentlemen who accompanied Consolo to the meeting, but after listening to his testimony itís doubtful they were attorneys for the firm. Otherwise they would likely have prevented him from creating a sworn account that he will now have to justify as the larger federal investigation into town finances goes forward.
Reimerís attorney, Fred Lichtmacher, established early in his questioning that she, Reimer, did make allegations to one of the OíConnor Davies reps, Marci Moskowitz. Two specific complaints involved the sale of land to St. Lawrenceís Ramapo Local Development Corporation (the RLDC that built the ballpark and the Elm Street development), and the listing of assets, particularly one $3,080,000.00 receivable that kept getting carried forward on the town books from year to year without any funds justifying the listing. Moskowitz, apparently very upset by the allegations, contacted Consolo about the problem.
Lichtmacher then asked what sort of follow-up Consolo employed about the situation.
We had one conversation, Consolo answered, during which I asked her (Reimer) to stop harassing our rep.
There was a sign-off sheet that Reimer had to fill out for the OíConnor Davies audit, and it included specific questions about fraud and or improper accounting procedures. Lichtmacher turned his attention to the check-off section of the sheet. His client, Reimer, testified that she had been warned by her superior, Nate Oberman Deputy Director of Finance, to "fill out the form nicely." At this point the Supervisor and Oberman were aware of Reimerís allegations. On the form, she gave indications of where the problems existed, even though she knew she was doing so at the risk of losing her job.
Replying to a question about where fraud might occur, she answered the risk of fraud could be inappropriate transactions and the invoicing of funds.
Lichtmacher asked Consolo, Did you call Reimer to ask her about that?
Lichtmacher, You saw this, you read it, and you did nothing?
Consolo, No. (Recall, this was after Reimerís initial notification of fraud to the OíConnor Davies field rep.
Lichtmacher then asked, "Is it part of your job to detect fraud?"
Consolo, "Not really."
After going through a number of other items in the sign-off questionnaire, Lichtmacher followed each entry with questions about Consoloís response to her answers: did you look into that, did you take any action about that, did you investigate that, did you call Ms. Reimer to ask her about that? The consistent response to each inquiry was No.
Lichtmacher concluded with a rhetorical, "So she is there all year round, and you are not, and she is much more familiar [with the problems]. And bottom line is you took no actions?"
One number, a phantom asset, came up again and again. The sum of $3,080,000.00 was owed to the Town by St. Lawrenceís RLDC three years ago, and the number was entered on the town books as a receivable year after year, and yet the RLDC did not pay the town the three million owed. What the town, and its bookkeepers saw was a letter from Town Attorney Michael Klein that it was OK to carry the number forward and that the sum would be paid. It has not, the listing is fraudulent, and the accounting practice of carrying the fake asset to balance the books involves inappropriate accounting. All of which raises the question about the legitimacy of the town records and the books of the RLDC, OíConnor Daviesí audits, Michael Kleinís approval of the practices, and the legitimacy of the numbers for the bond applications made by the town. With bonding procedings you have moved into territory ruled by federal laws, the SEC, and federal penalties. When Consolo was shown the numbers for one of those bond applications, he said he had never seen it and had little to say about the specific assets Lichtmacher pointed to in the papers.
Several other points from Domenick Consoloís testimony:
The next witness was Loretta Furlong who has been employed in the finance department at town for more than 10 years as an accountant. Melissa Reimer is her direct superior.
Ms. Furlongís testimony essentially corroborated many of the points made by Reimer in her testimony. Some of the corresponding assertions elicited in her testimony involved Reimerís allegations and the Townís reactions to those charges.
As to what Reimer was complaining about, Furlong cited possible fraud relating to receivables on the books and fixed assets. Specifically, $3,080,000 carried forward from year to year, unpaid by the RLDC. Her boss, Furlong said, told officials at Town Hall and the auditoróspecifically the senior accountant on the job, Marci Moskowitz.
Concerning emails, Furlong was also warned by Nate Oberman not to discuss financial matters in emails. She was told that, in person, by Oberman.
Lichtmacher asked, "As an accountant, did you have suspicions about the no emails request."
Furlong: "Yes. I think they didnít want it to be FOILable." (Accessible to anyone who submitted a freedom of information act request to the Town Clerk.)
Furlong then explained that Reimer complained of fraud to Town Attorney Michael Klein as well as the auditors and Nate Oberman.
In a press release from the Town (June 18, 2013), one month after the FBI raid on Town Hall, Melissa Reimer was accused of purposely presenting the state with misleading information on Town finances in the AUD (Annual Update Document) leading to the Town being rated by the Comptroller as the worst in the state for fiscal stress. Furlong was asked if Melissa Reimer did anything wrong with the figures presented in the AUD. Her answer was, No, she did not. That press release is now at the center of a multi-million dollar defamation lawsuit against the Town and Christopher St. Lawrence. When Michael Klein, whose name is the only one that appears on the press release, was asked during his testimony if he drafted that document, he said he reviewed it but didnít write it. Lichtmacher then asked who did draft it, and the hearing Judge Jonas Gelb upheld an objection so Klein was not required to answer. That question will likely be answered at another time in another courtroom or deposition area in attorneyís offices.
Near the end of her testimony, Furlong was asked about the series of letters from Michael Klein, reassuring from year to year that the $3 million bogus entry on the Town books was going to be paid. Lichtmacher asked if this was one of the things Reimer was complaining about to others. Her answer was yes.
Before she left, Furlong was asked by Judge Gelb, When did Ms. Reimer begin to expose the practices and situations she thought were fraudulent. She answered, Probably in 2010 or 2011.
The last witness, Town Attorney Michael Klein, began his testimony with a series of not very convincing "I donít recalls". Then there came a dramatic moment when the court had an opportunity to listen to an absolutely clarifying moment about Kleinís credibility as a witness. Judge Gelb abruptly shut off the lie detector as Lichtmacher was told he could not play a recording which the lawyer promised would expose Kleinís testimony as something far less than honest. The CD was in the computer but Gelb didnít want to hear it. He mumbled something about the normal rules of evidence not applying in this kind of hearing except the one he would apply here, so turn it off and move on.
It was clear from the opening questions that Klein was not going to provide his full cooperation.
The first five questions from Mr. Lichtmacher were about Kleinís duties as Town Attorney: who did he represent, did he participate in drawing up the two sets of charges against Melissa Reimer, and who presented the facts in those matters.
Did Melissa Reimer ever complain to you about irregularities in the finance department?
Klein: I donít recall.
Did she ever report fraud to you?
Klein: I donít recall.
Did she ever use the word fraud in discussions with you?
Klein: I donít recall.
Did she ever use the word inappropriate?
Klein: I donít recall.
Did you ever have a conversation with Domenick Consolo?
Klein: I donít recall. Then he added: Yes.
Did Melissa Reimer ever report inappropriate practices to you?
Klein: I donít recall.
Did she have specific discussions with you about inappropriate practices?
Klein: I donít recall.
Are you an accountant?
Did you ever make decisions about accounting decisions?
Klein: I donít recall.
Did Ms. Reimer discuss with you a $3,080,000.00 receivable?
Klein: I donít recall.
It was clear by this point that Klein was not going to answer any question he could duck. One member of the public present noted that he had the same posture you would expect to see in a Junior High classroom. He was slouching in his seat, and by the third or fourth question he would avoid looking at Lichtmacher and was answering to the ceiling tiles. The feigned disinterest disappeared when the CD that had a recorded conversation was produced later in the examination.
Although this is just the observation of an amateur, it seems when the response from a witness evolves into a litany of "I donít knows" the temptation is to assume that the responder is using the other rhetorical function of that phraseóthat is, as a "qualified liarís no". Say I donít remember, and the answer no longer has to do with facts but becomes a matter of your personal recall, and you have an out if thereís objective evidence that shows you were involved, were told, or knew about something. Then you can slide to oh yes, now I remember. Youíll look bad but technically you have not perjured yourself.
Lichtmacher frequently returned to the question about whether the auditor told Klein that Reimer had alleged fraudulent practices (No) and whether he heard rumors around town hall about her complaining about accounting irregularities (No). When he asked Klein who she could go to if she thought there was fraud involving Supervisor St. Lawrence and Deputy Director of Finance Nate Oberman Klein answered, She could go to me. Lichtmacher followed, But you canít recall her ever going to you? Klein: Thatís correct.
There are two interesting larger questions here. Previous testimony has revealed that there exist somewhere two iPhones and copies of recordings made on those iPhones containing information of great concern to Ms. Reimer once she realized how isolated she was in trying to report what she thought were improper and illegal happenings in the finance department. The attorney for the town in these hearings demanded copies of those recordings, but was denied them, and itís assumed by most that that evidence, today, is in the hands of federal prosecutors. St. Lawrence, Oberman, Klein and others are now in the position where they have to avoid setting themselves up by contradicting this record. By not recalling, Klein is insulating himself, at least temporarily, against self-recrimination.
A snag in this hearingís testimony offers what might be foreshadowing of a problem for the town officials in future procedings.
There was a memo from Mona Montal that town attorney Michael Specht asked to enter into the record. That document prompted a short discussion.
Lichtmacher asked Klein who Mona Montal was, and he answered. Sheís the town purchasing agent. He then asked, Do you believe Mona to be a person of integrity? Klein responded while oddly grinning, I believe so. Yes, I believe her to be a person of high integrity.
Lichtmacher then asked if he remembered a specific conversation with Melissa Reimer about Mona. Klein said, No. And at this point Licthmacher produced a CD in a white envelope and his assistant moved to a laptop with external speakers set up on a side table.
He played a few seconds of the recorded conversation and asked if Klein recognized Melissa Reimerís voice. Klein said he did.
He played a few seconds more, and Kleinís relaxed slouch was replaced with curious, caterpillar-like contortions. Do you recognize your voice on the recording?
Judge Gelb objected that in order to enter the evidence, Lichtmacher had to question Klein to establish the possible importance of that evidence.
Lichtmacher asked, Did you speak to Ms Reimer in July of 2012 about bond resolutions? Klein responded I donít recall.
Lichtmacher: Did you tell Melissa that Mona is one of the most dishonest persons you know? Klein, I donít recall.
Lichtmacher: Is Mona Montal a liar?
Gelb then launched into a confusing discussion about evidence and claimed there was no relevance, even though the recording might shed some light on the credibility of the witness being questioned, and he wouldnít allow the rest of the recording to be played.
Any comments about Monaís character or whatever else is on the recording of that particular conversations now wait for a future deposition or grand jury. There are, it seems likely from previous testimony, recordings like this one that range back over several years, and are now in the hands of prosecutors.
There was another interesting dance between the two attorneys concerning Kleinís suspicion of Melissa Reimerís connection to the FBI raid and the eight-hour ransack of the offices by the Evidence Recovery Team. Now recall that Klein has been saying throughout his testimony that he has no recall of Melissa Reimer alleging fraud or illegal activity in her department and at Town Hall. No rumors around the office, nothing from the auditors. "He didn't hear it--He didn't see it--No one said nothing to no one ever in his lifeóhe was the legal departmentís veritable Tommy.
Lichtmacher: Did you relate the FBI raid to a complaint against Melissa when the agents raided Town Hall?
Klein: I suspected Ms Reimer had spoken to the FBI.
Lichtmacher: Why did you make that assumption?
Klein: The subpoena related to records from her department. (Note-the agents also had warrants for the RLDC Office and the legal department, and perhaps elsewhere in the buildingóone might suspect the IT department.)
Lichtmacher: Did you believe that something Ms Reimer did brought the FBI?
Klein: I presumed.
Lichtmacher: Did you assume Ms Reimer was the reason for the FBI raid?
Klein: I canít speculate.
Lichtmacher: In your opinion, did you think Melissa caused the FBI raid?
Klein: This is pure speculation. I think she was the reasonable person to suspect.
So, to follow Kleinís train of thought: The lead attorney for the town assumed that because an employee had disciplinary charges brought against her by her employer, in a snit, she contacted the Federal Bureau of Investigation and somehow persuaded them to send a cadre of 40 Evidence Recovery Agents along with personnel from the Rockland DAís Office to descend on Ramapo Town Hall on May 15, disrupt business by kicking out all the personnel except three or four officials, and then spend eight hours carting out hard drives, and skids of paper documents. And he, Klein, wasnít making any connection to financial fraud and political malfeasance charges because he had not heard anything, had not seen anything, no one had said nothing. Anyone else see a logical disconnect here?
In his summary, Lichtmacher said his clientís job was placed in jeopardy because she reported illegal activity going on in and around her department involving Supervisor St. Lawrence, Nate Oberman, and the legal department. What we have heard so far has been nothing. Lynda Condonís story was rebutted by other witnesses and video evidence. There were the false claims about her breaking into her office contradicted by others and the tape. She was accused of not showing up at a meeting when the written demand for her appearance was sent out after the time of the meetingís commencement.
She lost her job and her health coverage because she was brave enough to talk about corruption here in the Town of Ramapoís offices. This is a classic example of attacking the messenger. He then spoke of two lawyers who show up here, both remembering very little. And he concluded by saying that this is going to be going on for a long time.
Judge Gelb asked both sides to provide any legal precedents to support their case, and he said he would have his decision in the second or third week of November.
Lichtmacher asked what if the Town Board met and decided to fire his client before Gelbís determination. He wanted to know wouldnít that make this entire procedure moot. Gelb said he didnít know how to answer that, and would deal with it if it became a real contingency.
Stepping back and taking a wider look at events surrounding this matter, there are three stages to consider.
Gelb will make a determination as to whether he thinks the disciplinary action taken against Melissa Reimer should be dropped or continued with his own recommendations about its outcome. The Ramapo Town Board, itself the focus of a current federal investigation, will be asked to make a decision as to Ms Reimerís future as Supervisor of Fiscal Services in the Finance Department.
There is a personal lawsuit that has been drawn up against the town and Christopher St. Lawrence. The reason for the lawsuit are the defamatory charges made against Ms Reimerís behavior and personal character in a press release issued by the town to local media on June 18, 2013.
And finally, there are those government agencies that have collected evidence from the offices of the Town of Ramapo on May 15, 2013. The FBI was self-identified in the news coverage of that raid, but it still remains an open question whether they were accompanied by personnel from the Securities and Exchange Commission. A national news service claimed that a grand jury has been convened as a result of that raid, and that subsequent subpoenas for evidence have been issued by that grand jury. We have reported FBI requests for files and information from Provident Bank and the auditing firm involved in these hearingsóOíConnor Davies. Sources have told us that the investigation is focusing on a number of officials, including Christopher St. Lawrence, the Ramapo Local Development Corporation and its officers, and several departments within Ramapo government. The investigation, weíve been told, is ongoing and is progressing. We donít expect any indictments before the November election for Supervisor and two Town Board positions, but they look to be inevitable any time thereafter.
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